‘Leading By Example’
Afew minutes with Sanjiv Mehta, CEO & Managing Director, Hindustan Unilever (HUL) and it is evident that one of his greatest strengths is the ability to actually listen, and understand — whether it is listening to his immediate team, understanding the feedback from across departments of the gigantic organisation he leads, paying heed to the voice of a constantly changing industry and economy, or of the young leaders from within or outside his company. Over the last four years that he has been mandated with the charge of HUL, the second largest operation for Unilever globally, he has brought the wisdom of his several leadership roles at the company to the table, along with his own personal brand of collaborative working, long-term thinking, speed and the ability to transform.
In this interview with Noor Fathima Warsia, Mehta details what it is to be the leader of an organisation as dynamic, and constantly under pressure, as HUL, and what are some of the traits that define his style of inclusive leadership.
Edited excerpts:
Q: HUL is among one of Unilever’s largest operations globally — what does this entail?
Yes, HUL is the second largest Unilever operation in the world and a crown jewel. We have a great interdependent relationship with Unilever and, are proud of our lineage. We draw from Unilever’s rich knowledge and expertise, and in turn, provide thought leadership when it comes to business in the emerging world.
Q: Much is changing in India. What is the responsibility on a company such as HUL to lead in times such as these?
We operate with a very simple philosophy: ‘what is good for India is good for HUL’. Take GST for instance, we worked with all our stakeholders including the government for a smooth transition and also took the lead in passing the benefits to our consumers. As a leader, we have to lead the way.
Q: Why has the fixed asset turnover dipped so drastically?
We are a lean fixed asset company. Our turns are very high. Therefore, whenever there is a spurt in investment — such as the set-up of a new factory in Assam last year, the asset turns come down. I would instead draw your focus on the ‘return on capital employed’ (ROCE). Ours is a business that has consistently been giving ROCE of more than 100 per cent. We are a very capital efficient business.
Q: What are the newer companies/ sectors in digital or other sunrise industries that you are watching out for?
Let me first state that I don’t believe my industry is sunset. I am very excited about the potential for growth in FMCG (fast-moving consumer goods). We are keen observers of other industries not only to understand what is shaping the economy but also to get a sense of the changes that could impact our industry.
Q: Listed companies can at times be burdened under the quarter-to-quarter pressure — how do you stay focussed on thinking long-term?
That is where Unilever’s long-term value creation philosophy comes into play. We don’t run the business for a quarter. We don’t get hugely euphoric with a great quarter or massively dismayed with a modest one. It is important to ensure that the long-term strategic agenda of the business does not get derailed with short-term imperatives. For instance, in the last two years, when the times were relatively tough and markets were subdued, we did not cut back our expenditure on market development or in building capabilities because we believe it is important for the future of our business.
Q: How do you effectively collaborate to get disruptive ideas?
Several ways I would say. First is the open culture that we have created in the organisation. Our young leaders come up with bright disruptive ideas and we encourage them to go out and experiment with experts in the field. About two years back, we started collaboration platforms called the ‘Unilever Foundry’ and the ‘Content Day’. Through the Foundry, we build and cultivate strategic partners for the future. These are mostly small startups who get an opportunity to work with a large organisation like ours. We get access to disruptive technology and they get access to our scale and our business acumen.
Similarly, during Content Day, we have several content providers come and ideate for our brands. In fact, the idea of Six Pack Band for Brooke Bond Red Label came from content day. Then, there’s of course the concept of open innovation. For the innovation of Lever Ayush, we collaborated with Arya Vaidya Pharmacy (AVP). We brought in the best of Unilever R&D to work with AVP, and the result was truly excellent products.
Q: Why is Unilever Sustainable Living Plan (USLP) important to the company? What would you have missed if there wasn’t an USLP?
Not having USLP would have meant redefining the company itself. USLP is our key differentiator. It is designed to drive profitable growth and fuel innovation and to do so in a responsible manner. When we speak about purpose and values, it is not just articulating something and hanging it up on the wall. We live our purpose and values through our USLP.
Q: Why can a product not just be about utility?
There is no gainsaying that every product or brand must deliver on its functional promise. But what makes the transition from a good brand to a great brand, is when it occupies an emotional space in the consumer’s mind. Having a purpose makes all the difference for a brand. Take for example, Brooke Bond Red Label’s ‘taste of togetherness’ or Surf Excel’s ‘ready for life’ or Dove’s ‘real beauty’ campaigns. These campaigns define what these iconic brands stand for.
Q: What is HUL doing for gender diversity at the workplace?
This is a subject very close to my heart. If we look at about seven to eight years back, only 18 per cent of the managerial workforce comprised women; today, it is over 36 per cent. It is one of the highest in the industry, but I am very clear that we have to move towards parity. There is a very strong business case in our industry, where a large number of consumers and shoppers are women. Second, there is clear evidence that when you have women in a team, you are much more innovative. Also, having more women facilitates the kind of culture we want to promote in the company.
Q: The proverbial buck stops at you. How do you prepare to deliver on expectations?
I have been leading Unilever companies for the last 15 years in different parts of the world. It has been a privilege and a great honour, more so when it comes to running an amazing business like HUL. Personally, I don’t subscribe to the view of a ‘great leader’ who stands on the summit of an organisation. I believe in the greatness of teams. We are what we are because of ‘Team HUL’. I am blessed to have very constructive support from our excellent board of directors led by Harish Manwani, and a truly outstanding management committee. Also, our global CEO Paul Polman is a great supporter of India and he has backed me through thick and thin.
We have a very inclusive and participative culture when it comes to decision making. Having said that, I am conscious that the buck will stop with me, and rightfully so. At the end of the day, there are times when the leader has to take the call. And Unilever, known for its leadership development, has over the years prepared me to take such calls.
Q: What are some of your biggest concerns? What keeps you awake at night?
Contrary to what you may think, I put my head on the pillow and I go to sleep. The softest pillow in the world is your conscience.
If you asked me about concerns however, I would like to see rural growth bounce back. Around 70 per cent of our countrymen live in rural areas. And both penetration and consumption is very low compared to urban markets — that is where a large quantum of growth will come in from and we would want more income in the hands of our rural consumers.
Q: What is that one advice that you give to any new joinee to your direct team?
Be a student all your life.
