Review: Harsh Realities
Harsh Mariwala’s book–Harsh Realities–was a highly anticipated Indian business story of one of the biggest FMCG conglomerates in the world. Mr. Arun Bewoor, a marketing and advertising professional, and a former President of MMA, digs deep into the book and shares his insight on some of the points touched by the narrative.
When the Philadelphia Mayor unveils the statue of Rocky Balboa in the eponymous movie Rocky III, he says: “Every once in a while, a person comes along who despite the odds defies logic and fulfils an incredible dream. Touched by your accomplishments we today celebrate the indomitable spirit of Man.”
Was Harsh Mariwala a similar maverick in a similar situation when he decided to enter the tough, competitive FMCG market in the country? Unlike the boxer who needs only his gloved fists and strong legs to win a match, Mr Mariwala realised, to compete in the arena, he would need a team of experts who could help in the challenges ahead. He quotes Steve Jobs: “Great things in business are never done by one person. They are done by a team of people.”
One of the interesting chapters (no. 8) in the book relates to the hunt to recruit talent. There could be no compromises or any shortcuts. The chapter delineates the search and quest for managers with multi-disciplined skills and who shared his vision. At the best of times, a family-owned company based in Masjid Bunder in Bombay was not an attractive inducement. But Harsh Mariwala was obviously good at sharing the revelation of what he had seen and planned for Marico. Here, he elaborates to the identified candidates that it was an opportunity to not just perform on a portfolio offered but to build an enterprise and create an institution for posterity. He obviously succeeded in transferring his dreams to the persons selected for critical functions of Marico. They served the company with rigour and energy and certainly laid the bedrock for how the firm evolved over the next three plus decades. He accesses external sources where needed and also acknowledges the unstinted support he received from his paternal uncle (Kishore Mariwala), who possibly envisioned that Marico could develop into a branded FMCG firm to compete with the best. Later in the volume there is a certain poignancy as some of these stalwarts appreciate that Marico has outgrown them and they may have outreached it in turn. They exit with dignity, satisfaction and pride at what they leave behind. This is where Harsh Mariwala displays nerve and faith to execute what he proclaimed.
Bill Gates (Microsoft) once said: “One of the most difficult tasks for an entrepreneur is to have the confidence (or is it courage?) to ‘let go’.” Not just step back from Operational Management but to literally and figuratively hand over the reins to professional managers. No primogeniture succession, no looking over the shoulder, no ‘continuous’ meetings to review progress. Despite reluctance from family and protests from well-wishers, Harsh did ‘Let go’–a rare occurrence at the best of times. And his gamble, as this story unfolds, has paid off. Competent and capable executives took charge and have more than met the standards that Mr Mariwala set for himself and them. The book inevitably starts with the wrenching decision to break away from an established, recognised family business in commodities and do what all companies desire but not always have the wherewithal to actually do: Add Value. Internecine battles followed with endless meetings and negotiations to reach an acceptable decision to satisfy all components. Persistence was the key, and it succeeded. Mr Mariwala was the Captain of his boat, the sails of Marico were unfolded to catch the wind. The journey had started.
The buying of the key raw material (Coconut Oil) had been built through a reliable relationship on quality, price and export. The inefficient and lengthy distribution chain was shortened, eliminating intermediaries and offering a better value to the Farmer. One brand (Parachute) was already well recognised by consumers to represent a level of quality. That emotion needed to be reinforced and spread. Marico’s coconut oil could not and should not be considered a commodity. At the start, as expected, funds were a serious barrier. Borrowing was not easy. But again, resilience mattered. The reputation and stature of the Mariwala clan helped while negotiating with lenders. Uday Kotak turned out to be a white knight. This was critical with Marico’s IPO. It allowed investment and spending on a scale that otherwise would have cramped expansion and resulted in moribund and inadequate efforts.
Building the brands–Parachute and Saffola (Cooking Oil)–was a challenge in a market with tough competition from strong players. And here is where Marico scored with innovation, strategic thinking, use of technology, deep consumer understanding, creative advertising, wider and deeper distribution, making allies with the trade and something as simple (and yet revolutionary) as packaging. Altering the shape of the final pack for easier stacking, using pilfer-proof caps and having better graphics made an impact on the cooking oils market on a scale not witnessed before. And as any corporation realises the daring to remain ahead is continuous – no marking time, no pause. With success, other brands followed. Sweekar (later discontinued) was launched on a price platform. More significant was the diversified portfolio into hair care, fabric care. The food business (an undoubtedly difficult market to battle in) was entered through cereals. Skincare was more elaborate with Kaya clinics–specialising in complexion, hair removal, enhancing beauty. This was a first for Marico in a Direct-to-Consumer business. The participation in the market via a broader product range with decreased dependence on one or two categories, marketing became more robust as seasonal variations were ironed out.
M&As to accelerate growth followed with focus on similar product lines and geographies, with expertise more readily available. In hindsight, some acquisitions and JVs seem a knee-jerk reaction without much forethought. Some ended before really fructifying. Others succeeded and formed an integral component of the Marico universe. Time gave the perspective and experience provided the maturity for more surer and reliable partners and ventures. One theme that streams through the book is about the set of values which were defined, elaborated, communicated and ingrained into the very soul of the company, which is now rapidly expanding with new managers, trainees, and technicians on the Board. The values went beyond the vision and strategy. They cut across company departments, budgets and reviews. Rather, they propagated norms of behaviour and practices which are repeated and reinforced. As founder and CEO, Harsh Mariwala felt that the business had to be conducted under certain norms and within a framework that was enunciated in the values. An entire chapter (no. 9) is devoted to this subject. What did it mean and how did it impact the manner business was conducted? Values become an almost core competence.
The text right throughout the book is straightforward and candid. It reflects the author’s profile of humility to the point of self-effacement. The influence of Ram Charan (co-author and Harsh Mariwala’s guru) is obvious. Events of importance, milestone markers, decisive times, inflexion points are written without drama or histrionics. This reviewer feels some parts could have been spiced up. Particularly the episode on the rather savage call from the Hindustan Lever Chairman threatening to buy out Marico or else…. Mr Mariwala makes no dramatic sweep, except displaying restlessness that converts to resolution and defiance. How the saga ended with Marico buying the very brand Unilever wanted to leverage (pun intended) is well told and forms part of company lore.
Since its founding in 1990, the company’s sales, market cap, and stature have grown leaps and bounds. Marico personnel are valued and respected. Marico brands are well-known. Awards and recognitions followed. Marico is a respected FMCG company in the Indian economy. It is included in relevance and with reverence when business papers comment on Unilever, Nestles, Colgate, Godrej and others.
The book later covers the author’s encouragement to entrepreneurship, a meaningful CSR, the Ascent Foundation, Health Initiatives and others.
To quote Ralph Waldo Emerson: An institution is but the lengthened shadow of one man.
So, what next? The vision will set the pace. Values will hold the company. Innovation will keep it ahead. The journey continues as it must. The road ahead beckons.