Nestle Ingenium

1. Yeshoda Kalyan
Soumya Sarkar
Yogesh Sharma
SEASON III
CAMPUS ROUND

2. Proposed Structure of NIL Sales Function
Unity of Command Sales Head –
Divisional Structure | Large
business, geographically dispersed
and produces variety of goods
Division of Labor:
Departmentalization &
Specialization | Enable Strategy:
Sell More, Sell Smart
Optimize layers of hierarchy |Act
on right opportunities at the right
time – To increase CAGR
Task variability and problem
analyzability
Tata Institute of Social Sciences
India (E1)
Sales Head,
Culinary (E1&E2)
Regional Sales
Manager*,
Culinary (E3)
Area Sales
Manager,
Culinary (E4)
Sales officer,
Culinary (E5 &
E6)
Sales Head,
Confectionary
(E1&E2)
Regional Sales
Manager*,
Confectionary
(E3)
Area Sales
Manager,
Confectionary
(E4)
Sales officer,
Confectionary
(E5 & E6)
Sales Head,
Beverages
(E1&E2)
Regional Sales
Manager*,
Beverages (E3)
Area Sales
Manager,
Beverages (E4)
Sales officer,
Beverages (E5 &
E6)
Sales Head,
Dairy and
Nutrition
(E1&E2)
Regional Sales
Manager*, Dairy
& Nutrition (E3)
Area Sales
Manager, Dairy
& Nutrition (E4)
Sales officer,
Dairy &
Nutrition (E5 &
E6)
Principles of Design
* - North/South/West/East

3. Proposed Plan For Next Three Years
Promoting
High
Performers
Tackling
Attrition
Tata Institute of Social Sciences
Succession
Planning
E1
E2
E3
E4
E5
E6
4 Years
3- 4 Years
4-5 Years
5-7 Years
Movement of
Employees
Progression
Structure
No, we are not hiring from outside for the
coming three years.
We believe the positions can be filled
internally
Current incumbent
continues
Lateral movement
from another sub-structure
Promotion from
below
Hiring from outside
> 6 Years
1. Depending on performance, the sales
officers (E6) and Area sales managers (E5)
shall be sent on cross-divisional stints
2. Ageing managers who have performed
exceptionally well shall be sent to other
teams like Marketing and Innovation

4. People Plan
Band Current Propos
ed
Tata Institute of Social Sciences
Surplus Attrition Retrenched
E5&E6 410 410 0 90 0
E3&E4 97 84 13 8 5
E1&E2 25 21 4 1 3
Savings is addition of -
• ( Mean salary average * No of people attrition +
Retrenchment)
= Rs. 1,22,76,000 + Rs. 1,68,87,000 = Rs. 2,91,63,000
All India
Head Sales
Head
Nutrition
(1)
Regional
Heads (4 E1
&E2)
State Heads
(37 E3 & E4)
Sales
Officers (175
E5 & E6)
All India
Head Sales
Head
Culinary (1)
Regional
Head (4 E1
& E2)
State Heads
(24 E3 & E4)
Sales
Officers (120
E5 & E6)
Head
Confectiona
ry (1)
Regional
Heads (4 E1
& E2)
State Heads
(13 E3 &E4)
Sales
Officer (70
E5 & E6)
Head
Beverages
(1)
Regional
Heads (4 E1
& E2)
State Heads
(11 E3 & E4)
Sales
officers (70
E5 & E6)
Regions – North, South, East, West
Continuous Training –
(Sales, Products,
Partners)
Cross Divisional
Opportunities
Marketing Programs
& Sales Tools
Dual Career Paths
Career
Accelerator
Counseling Coaching
PIP
Sales Diet Training
Division Nutritio
n
Culinary Confecti
onary
Beverag
es
Contributi
on to Sales
47.1% 31.5% 12.2% 9.2%

5. Division of Budget
Performance Curve
10
15
70
60
50
40
30
20
10
0
0 1 2 3 4 5 6
Tata Institute of Social Sciences
Band No. of
people
rated ‘5’
Salary Increase
(in Rs.)
…
…
….
Increase in Expense
(in Rs.)
E1 1 5,19,300 …. 14,54,040
E2 1 4.01,400 …. 14,45,040
E3 4 9,72,600 …. 41,49,760
E4 2 2,93,100 …. 13,87,340
E5 12 8,44,800 …. 45,90,080
E6 20 11,10,000 …. 65,90,240
Allowed Increase – (5% of Current
Salary Bill) = Rs. 2,07,98,980
…. Total - 2,07,15,300
50
15
10
Rating 5- Point 4- Point 3 - Point 2- Point 1- Point
Hike 15% 7% 5% 0% 0%
Percentage of Employees (in %)
Rating Scale
As Is
E1 E2 E3 E4 E5 E6
<= 5 yrs 55% 71% 71% 53% 76% 99%
> 5 yrs 45% 29% 29% 47% 24% 1%
Allowed Salary Bill = Rs. 2,07,98,980
Total Expenses = Rs. 2,07,15,300
Total Savings = Rs. 83,860
After Year 3
E1 E2 E3 E4 E5 E6
<= 5 yrs 44% 91% 75% 70% 100% 100%
> 5 yrs 56% 9% 25% 30% 0% 0%
Tackling High Mean Age and Stagnation

6. Appendix - Approach & Assumptions
Some crucial data points from the case which moulded our approach
1. “We need to sell more and we need to sell smart” – Mr. T  Business Strategy: Sell more,
sell smart  Specialisation in selling  Make product categories
2. “With an ageing workforce, NIL wasn’t the black horse it used to be”  Move ageing
workforce to other functions or give promotions and if found incompetent retire them
3. “it was just that if ‘they needed change’ OR ‘they needed to be changed’ “  We are looking
at providing change. And if employees do not respond they shall be changed  We are
removing the mandatory 5% inflationary hike for those scoring 2/1 points in appraisal
Assumptions:
1. We assume NIL to be similar to Nestle in terms of product portfolio, market share and
revenue
2. Those recruited at E6 are Graduates from Tier-I colleges or Post graduates from Tier-III
colleges
3. Going by tournament theory, the difference between salary hikes given to a 5 pointer and to
a 4 pointer is 8%. Therefore, the competition among the sales people will increase leading to
better performance.
Tata Institute of Social Sciences

7. Appendix – Budgetary Implications of
Proposed Plan
Band 5 Point
(No. of
people)
Tata Institute of Social Sciences
Salary
increase (in
Rs.)
4 Point
(No. of
people)
Salary
increase
(in Rs.)
3 Point
(No. of
people)
Salary
increase
(in Rs.)
2 &1 Point
(No. of
people)
Total (in Rs.)
E1 1 5,19,300 1 2,42,340 5 8,65,500 4 14,54,040
E2 1 4.01,400 2 3,74,640 6 8,02,800 5 14,45,040
E3 4 9,72,600 8 9,07,760 32 25,93,600 21 41,49,760
E4 2 2,93,100 6 4,10,340 16 7,81,600 8 13,87,340
E5 12 8,44,800 26 15,81,280 70 24,64,000 46 45,90,080
E6 20 11,10,000 28 13,79,840 127 44,70,400 79 65,90,240
5% on Current Salary Bill (in Rs.) 2,07,98,980 Grand total 2,07,15,300
Savings after following the proposed system 5% on Salary Bill – Proposed salary increase
structure
83,860

8. Appendix – Proposed Plan For Next Three
Years (Tackling Mean Age & Stagnation)
Tata Institute of Social Sciences

9. Appendix – Standard vs Accelerated
Career Path
E1
E2
E3
E4
E5
E6 25 Years
29 Years
Tata Institute of Social Sciences
33 Years
38 Years
44 Years
49 Years
After the proposed structure is
adopted, a new joiner will find
himself at the given bands at
approximately the mentioned age.
25 Years
29 Years
32 Years
36 Years
42 Years
47 Years
E1
E2
E3
E4
E5
E6
Career Accelerator

10. References
1. PWC paper on key aspects of organizational design
2. http://choo.fis.utoronto.ca/fis/courses/lis1230/lis1230sharma/od1.htm
3. Bain’s report –
“BAIN_BRIEF_Taking_the_mystery_out_of_developing_market_brand_growth”
4. BAIN_BRIEF_Winning_operating_models
5. http://kevinokeefe.net/sitebuildercontent/sitebuilderfiles/HowtoturnaroundSales.pdf
Tata Institute of Social Sciences