Institutionalising Innovation- Harsh Mariwala

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This slide deck was presented at a TiE Peer Forum- roundtable for TiE Mumbai Charter Members by Harsh Mariwala (Marico) in April,2010

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Institutionalising Innovation- Harsh Mariwala

  1. 1. A Presentation By HARSH C. MARIWALA Chairman & Managing Director Marico Limited INSTITUTIONALISING INNOVATION
  2. 2. BOMBAY OIL INDUSTRIES … family managed Turnover Rs. 5 crores … amongst three businesses No Professionals
  3. 3. BOMBAY OIL INDUSTRIES & Edible oils in bulk… Contributing Rs. 50 Lakhs sales turnover…….
  4. 4. <ul><li>Acquired Consumer Products Division of Bombay Oil Industries Limited in 1990 - opportunity to take a quantum step </li></ul><ul><li>Opportunity to re-design the organization structure and address skill gaps </li></ul><ul><li>Staffing - attracting managerial talent </li></ul>FORMATION
  5. 6. DIFFERENTIATION THROUGH A UNIQUE CULTURE <ul><li>Induction of professionals from different companies </li></ul><ul><li>Manifestation of different styles </li></ul>Melting Pot of Diverse Cultures
  6. 7. <ul><li>Draft note - ‘Corporate Values’. </li></ul><ul><li>Top Management Discussions </li></ul><ul><li>Work with a group of 3 levels of managers </li></ul><ul><li>Communicating to members </li></ul>CULTURE & VALUES
  7. 8. MARICO CULTURE Sharing of Information OPEN First names – artificial barriers not there INFORMAL Consensus, task force – group work PARTICIPATIVE Autonomy within direction EMPOWERING No Gossip !! APOLITICAL Influence does not work – loyalty not rewarded MERIT BASED Higher responsibilities, cross functional exposure LEARNING Stimulus to organization & person JOB ROTATION
  8. 9. PARACHUTE JOURNEY…. THROUGH INNOVATION Created the coconut oil usage explosion in consumer packs with HDPE Parachute WM created all season usage ease
  9. 10. <ul><li>First edible oil in laminated pouches </li></ul><ul><li>Helped establish a new rural category for Parachute </li></ul>OUR INNOVATION JOURNEY
  10. 11. PARACHUTE JOURNEY…. THROUGH INNOVATION Parachute Flip – Top – enables ease of identification of genuine Parachute and leak – proofing of pack <ul><li>Market expansion through : </li></ul><ul><li>PCNO pouches </li></ul><ul><li>Parachute Mini ‘B’ Pack </li></ul>
  11. 12. <ul><li>HUL entered the coconut oil market through the acquisition of TOMCO </li></ul><ul><li>In 1999 HUL acquired Cococare </li></ul><ul><ul><ul><li>Clear expression of interest in category </li></ul></ul></ul><ul><li>Could Marico survive an MNC onslaught ? </li></ul><ul><li>Would Marico sell out ? </li></ul>THREAT FROM HUL
  12. 13. <ul><li>1999-2000: Nihar from HUL positioned as challenger to Parachute: </li></ul><ul><ul><li>Backed by disproportionate advertising spends </li></ul></ul><ul><ul><li>Strong distribution muscle </li></ul></ul><ul><ul><li>A mind set to be leaders in the category </li></ul></ul><ul><ul><li>Acquisition threat by Levers to take over Marico entirely </li></ul></ul><ul><ul><li>Marico shares in the stock market fell dramatically </li></ul></ul>MARICO’S RESPONSE
  13. 14. <ul><li>On all fronts… </li></ul>MARICO’S RESPONSE Product Distribution Promotion Superior product quality of Parachute Our Passion “ Contemporarizing” purity with the Shuddhata ki Seal Hi Value promotions on Parachute Ramping up our own distribution Parachute Ki Kasam launched for internal sales force
  14. 15. <ul><li>Nihar met with little success: Only took share from smaller players </li></ul><ul><li>Marico acquired Nihar in 2006 </li></ul>OUTCOME Critical take-aways Single-minded focus can overcome brute force Motivating people down the line critical in crisis times An emotional & psychological victory for Marico.
  15. 16. <ul><li>Drove the concept of ‘champi’ with Parachute before shampooing </li></ul><ul><li>Building “additional” values to the Champi. </li></ul>INNOVATION ON PARACHUTE CONTINUES “ PERSONAL” CHAMPI “ HOT OIL”
  16. 17. From a Coconut Oil to a Beauty Brand
  17. 18. FROM A COCONUT OIL TO A BEAUTY BRAND Innovations in the look and packaging of hair oil Aftershower-Gels & Creams Starz-Flavored shampoo & oil for Kids Night Repair Crème-contemporarize use of Parachute Therapie-First scientific solution for Hairfall Jasmine – Expand the market through lighter, fragrant oils
  18. 19. OUR INNOVATION JOURNEY Built strong equity of Oil on a Heart Platform Saffola
  19. 20. <ul><li>Strong equity of oil on Heart Platform </li></ul>OUR INNOVATION JOURNEY <ul><li>15 ltr tap – to enable ease of usage </li></ul><ul><li>Blends – creating a First in the </li></ul><ul><li>industry </li></ul><ul><li>Saffola Gold Losorb </li></ul>Saffola
  20. 21. CREATING THOUGHT LEADERSHIP via INNOVATION From Cooking Oil to a Thought Leader <ul><li>Thought leadership stance on World </li></ul><ul><li>Heart Day </li></ul><ul><li>Core equity of Saffola </li></ul><ul><li>Propagated ‘Walking everyday’ </li></ul>
  21. 22. : FROM AN EDIBLE OIL TO A HEALTH BRAND From an Edible Oil to a Health Brand
  22. 23. SAFFOLA : FROM AN EDIBLE OIL TO A HEALTH BRAND Lifestyle Products First to introduce oil ‘blends’ – Kardi, Corn Oil blend etc. Diabetes & Cholesterol Management - Entry into the Functional Foods Space Low-Sodium Saffola Salt Edible Oil
  23. 24. OTHER INNOVATIONS Instant Starch for the harried housewife - Revive Mediker launched in an oil format for greater acceptability
  24. 25. <ul><li>Culture & values </li></ul><ul><ul><li>Openness – Meritocracy – Informal </li></ul></ul><ul><ul><li>Experimentation/ Learning from failures </li></ul></ul><ul><ul><li>Flat Structure </li></ul></ul><ul><ul><li>Cross functional forums </li></ul></ul>ENABLERS TO INNOVATION
  25. 26. <ul><li>Emergence of an experimentation culture </li></ul><ul><li>Experiments over the years: </li></ul><ul><ul><li>New Product prototypes </li></ul></ul><ul><ul><li>Marketing programme experiments </li></ul></ul>BRAND WORKSHOPS
  26. 27. <ul><li>Jump in strike rate of new product launches: example: MALO, Shanti Amla,Saffola Gold, Silk-n-Shine </li></ul><ul><li>Growth in existing brands: Parachute, Saffola and Mediker </li></ul>GROWTH IMPACT
  27. 28. <ul><li>C laim E xpenses A gainst S elf A uthorization (CEASE) </li></ul><ul><li>‘ Members’ maintain their own leave records on the Intranet </li></ul><ul><li>1000 Crore Celebrations </li></ul><ul><li>2000 Crore Celebrations </li></ul>INNOVATION PRACTICES
  28. 29. <ul><li>Organization Structure </li></ul><ul><ul><li>Two Bands – Manager & Partner </li></ul></ul><ul><ul><li>Not more than 5 levels from bottom to top </li></ul></ul><ul><li>Remuneration Structure </li></ul><ul><ul><li>Individual freedom to choose - Flexi </li></ul></ul>INNOVATION PRACTICES : HUMAN RESOURCES
  29. 30. <ul><li>IBG – Initial Days.. </li></ul><ul><ul><li>A total Indian- Centric approach driven by : </li></ul></ul><ul><ul><ul><li>Access to clusters of Indian expatriates in Gulf, US, Canada, Singapore & Malaysia </li></ul></ul></ul><ul><ul><ul><li>Common Ethnicity/ Hair Oiling habits Bangladesh, Nepal, Pakistan, Bhutan </li></ul></ul></ul>JOURNEY FROM INDIAN TO GLOBAL
  30. 31. <ul><li>Shift in IBG strategy over time </li></ul>JOURNEY FROM INDIAN TO GLOBAL Using common ethnicity/ Hair oiling habits <ul><ul><li>Fiancee & Haircode – hair care brands in Egypt </li></ul></ul><ul><ul><li>Consumer Products Division of Enaleni – in South Africa </li></ul></ul><ul><ul><li>Code 10 – Hair Creams & Gels in Malaysia </li></ul></ul>Developing New Categories Promoting Own Brands <ul><ul><li>Aggressive Acquisitions </li></ul></ul>India Centric Developing Localized Offerings
  31. 32. <ul><li>Largest Indian Company in Bangladesh </li></ul><ul><li>Parachute is the biggest brand in the Personal Products category in Bangladesh </li></ul>JOURNEY FROM INDIAN TO GLOBAL IBG over the years 17 % 56 %
  32. 33. JOURNEY FROM INDIAN TO GLOBAL
  33. 34. INCUBATION CELL Emergence of new businesses like
  34. 35. <ul><li>Journey from </li></ul><ul><li>Products </li></ul><ul><li>to </li></ul><ul><li>Solutions </li></ul>JOURNEY FROM PRODUCTS TO SOLUTIONS What is a solutions approach? This will enhance the efficacy of service Home Care Product Zeroing on the Customer need and Finalizing the solutions required Personal Diagnostic This will be the in clinic service Service Will include diet, lifestyle related advice Advice
  35. 36. RAPID GROWTH OF KAYA Revenue – Strong Growth Present in India & Middle East
  36. 37. KAYA <ul><li>Critical Takeaways </li></ul><ul><li>Create room for nurturing innovative, new ideas </li></ul><ul><li>Remove escape buttons for people when you want an outstanding result </li></ul><ul><li>Seek opportunities continuously </li></ul>
  37. 38. <ul><li>KEY INGREDIENTS FOR CREATING CULTURE OF INNOVATION </li></ul><ul><li>Mindset creation for all – training is a good medium </li></ul><ul><li>Experiencing success critical to buy in </li></ul><ul><li>High collaboration - continuously align all stakeholders </li></ul><ul><li>Over commitment of resources - no escape buttons </li></ul><ul><li>Persistence - keep integrating new member </li></ul><ul><li>Beyond great ideas - need high rigor in implementation & detailed execution </li></ul><ul><li>Creation of in-house facilitation </li></ul><ul><li>Perpetual reinforcement – Top Management reviews of brand plans, sales plans, workshops </li></ul>INNOVATION : THE MARICO EXPERIENCE
  38. 39. <ul><li>C&D Model </li></ul><ul><li>Diversity </li></ul><ul><li>Co-Creation </li></ul>FUTURE INITIATIVES
  39. 40. RAPID GROWTH Turnover - 1991 to 2009 100 400 700 1000 1300 1600 1900 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Rs. Crore Sweekar and Launch Parachute Cream Kardi Corn Blend CAMELIA & Bangladesh & HAIR CODE - Egypt Hair & Care Revive Dubai Office Saffola Salt MBL formed New Business entry - Kaya Sundari Advansed Parachute After Shower Parachute Relaunch Saffola Gold Silk - N - Shine Parachute Jasmine Parachute Hair Cream - Gulf SIL MEDIKER OIL OF MALABAR AROMATIC - NIHAR MANJAL FIANCEE Acquisition in SOUTH AFRICA 2400 2009
  40. 41. SHAREHOLDER VALUE SHARE PERFORMANCE ON STOCK EXCHANGES
  41. 42. <ul><li>Kaya Ltd. won the ‘ Most Admired Retailer for Health & Beauty ' at the Images Retail Award 2009. </li></ul><ul><li>Parachute was ranked the 2 nd Most Trusted Brand in Bangladesh - The Bangladesh Brand Forum </li></ul><ul><li>Marico was awarded NDTV Profit Business Leadership Award 2009 - in the FMCG (Personal Hygiene) category. </li></ul><ul><li>Parachute was awarded the Super Brand Status in the UAE by the Super brands Organization in 2009. </li></ul><ul><li>Mr. Harsh Mariwala wins the Talent Management Award at the CNBC TV18 India Business Leader Awards – 2009 </li></ul><ul><li>Mr. Harsh Mariwala wins the Ernst & Young ‘Entrepreneur of the Year Award’ 2009 in the Manufacturing Category </li></ul><ul><li>Marico is awarded the IMC Ramkrishna Bajaj National Quality Award (RBNQA) 2009 – Outstanding Achievement Trophy, in the Manufacturing Category </li></ul>THE MOST AWARDED FMCG
  42. 43. SNAPSHOT OF MARICO Local Global Low margin High margin Low value add High value add Oils FMCG Products FMCG Products Beauty and Wellness solutions
  43. 44. ENTREPRENEURSHIP (Start Up Phase) <ul><li>Skill Gaps </li></ul><ul><ul><ul><li>Consultants </li></ul></ul></ul><ul><ul><ul><li>Doing it yourself </li></ul></ul></ul><ul><li>Ambiguity </li></ul><ul><ul><ul><li>Flexible </li></ul></ul></ul><ul><ul><ul><li>Courage of Conviction </li></ul></ul></ul><ul><ul><ul><li>Resilience </li></ul></ul></ul><ul><li>Evolving Business Model </li></ul><ul><li>Hard Work </li></ul><ul><li>Learning Curve </li></ul><ul><li>High uncertainty about future </li></ul>
  44. 45. ENTREPRENEURSHIP (Consolidation Phase) <ul><li>Medium & Short Term </li></ul><ul><li>Organisation Structure, In House Functions </li></ul><ul><ul><ul><li>CQA, Safety, Legal, HR </li></ul></ul></ul><ul><li>Culture Building </li></ul><ul><li>Systems </li></ul><ul><li>Team Building </li></ul><ul><li>Image Building </li></ul><ul><li>Delegation – Trust </li></ul>
  45. 46. ENTREPRENEURSHIP (Scaling Up) <ul><li>Sustenance </li></ul><ul><li>Public Company </li></ul><ul><ul><ul><li>Investor Relations, Quarterly Pressures, CSR </li></ul></ul></ul><ul><li>Board Management </li></ul><ul><li>Vision, Values & Culture </li></ul><ul><li>Safety, Health & Environment </li></ul><ul><li>Succession Planning </li></ul><ul><li>Acquisitions </li></ul><ul><ul><ul><li>Starting New Business </li></ul></ul></ul><ul><ul><ul><ul><li>Kaya, IBG </li></ul></ul></ul></ul><ul><li>Culture of entrepreneurship in a large organization </li></ul><ul><li>Understand Family dynamics and leverage </li></ul>
  46. 47. <ul><li>Show interest in softer aspects </li></ul><ul><ul><li>Strong Belief in People </li></ul></ul><ul><ul><li>Be open to ideas </li></ul></ul><ul><ul><li>Operate from trust paradigm </li></ul></ul><ul><ul><li>Build constructive “no men” & not “yes men” </li></ul></ul><ul><ul><li>Willingness to experiment & learn from failures </li></ul></ul>ROLE OF CEO / TOP MANAGEMENT
  47. 48. To SUM UP…… Needs a lot of hard work, rigour and persistence Innovation is a journey…. It is exciting, but tough….
  48. 50. <ul><li>Apply conventional thinking and you will only come up with Conventional Solutions </li></ul><ul><li>But open your mind and you will find a world of opportunities opening up before you. </li></ul><ul><li>Thank You </li></ul>

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