Change Of Guard At HUL: How “Desi” MNC “Won In Many Indias”
If Sanjiv Mehta were to be given back his last 31 years, “he would do exactly what he did in his stellar innings at Hindustan Unilever Limited, and Unilever, in the last three decades”.
As Mehta passes on the baton to a highly accomplished Rohit Jawa, Mehta’s heart is filled with gratitude. He credits his team, starting from the management committee, for the outstanding run as CEO of HUL in the last ten years. Numbers speak for themselves: In 2013, when Mehta took over as HUL CEO, it was a Rs 25,000 crore company. As he prepares for his next innings – Mehta is clear, his best is yet to come – HUL is almost a Rs 60,000 cr company. Among many landmarks, HUL has expanded the FMCG pie, and “created new segments worth nearly Rs 10,000 crore”.
For the CA turned CEO, Unilever was part of everyday folklore. Mehta, in fact, looked up to iconic HUL leaders like Ashok Ganguly and T Thomas. Students of Indian business history and India Inc would now perhaps be tempted to bracket Mehta along with these greats.
Mehta’s stint at HUL is not about numbers alone. He led from the front while “Reimagining HUL” and also devising newer strategies to expand far and wide, in India. Clearly, “Winning in Many Indias (WIMI)” would be one case study that will be a staple for business leaders and management students for long.
“When I was running North Africa, Middle East for Unilever. I was looking after businesses in 20 countries. And, in these 20 countries, it was predominantly the Arabic language and Islamic Arabic culture. When I came to India, and travelled around after I took over as the CEO, one realized, in a much more profound way, how heterogeneous our country is,” Mehta recounts, in an interview with BW Businessworld.
The learning was that a company of HUL’s size and scale could not treat India as a homogenous entity. Mehta, in 2014, then led HUL in having different and distinctive strategies for Tamil Nadu, Andhra Pradesh, Karnataka and Kerala. Within six months, it was evident that “Winning in Many India’s” was an idea whose time had come.
The strategy was rolled out in 2015. India was then divided into 15 clusters. Today, HUL treats India as a 16-cluster geography. “It's a very distinctive strategy, which is not easy to replicate, because we add complexity. But like I always say, it's like the good cholesterol. If you can manage this complexity well, it gives you huge dividend,” says Mehta.
Brands like Surf Excel, for instance, have different formulations across regions, depending on the hardness of the water. Similarly, for the Brooke Bond Red Label tea brand, there are different blends.
A 2018 paper by Keerthan Raj and P S Aithal “A ‘Desi’ Multinational – A Case Study of Hindustan Unilever Limited” concluded: “…HUL has achieved all this by careful planning and strategizing with the realisation that global knowledge alone is not enough. In a much diversified market such as India, the most critical path to success would be only by partnering locally, reaching out to the grassroots consumers and localising products and sales techniques”.
Data and tech, too, played a huge role in the company’s transformation. With the country divided into 15 clusters, disparate data for brand managers and marketing teams became important. Thus was born the idea of the digital council in 2015-16. Data and technology were at the centrestage.
HUL portfolio includes homecare, beauty and well-being and personal care, and foods and refreshments. Asked about big growth opportunities in different segments, while Mehta is upbeat about the entire portfolio, beauty and well-being come in for a special mention as new frontiers of growth.
A firm believer in the India story, Mehta believes that the unfolding consumption story in today’s India would be somewhat akin to China’s consumption story in the first two decades of the millennium.
When asked what his advice to Jawa, Mehta says: “Mr Jawa is a seasoned player. He's been working in the company for nearly 35 years. He led businesses in the Philippines and China. My job is to give him insights of what I've seen in the last 10 years explain to him the context, and answer the questions that he may have in the mind”.
Mehta is a firm believer in the India story (“the world is conspiring to make India win”). He says that India@100 document brought out by FICCI during his presidentship was an important policy work.
“From a long term perspective, we have to increase the farmers’ income. We have to create the 10 million jobs per annum over the next 25 years. Very importantly, it is not just about GDP growth. It is about per capita income. It’s about how that increase in the income is dispersed over a large section of the population. We must accept that for an FMCG company, what is important is more income in the hands of more people,” says Mehta.
HUL has consistently emerged as an employer of choice among graduates and B-School graduates. A 2022 all-India survey said HUL was at third spot in the category of “Dream Companies to work for”, among B School and engineering graduates.
His advice to younger business leaders, especially budding entrepreneurs? “One of the things that we have seen people getting obsessed with is valuation. I think youngsters, or budding entrepreneurs, should focus on creating value. Once you focus on creating value, valuations do happen,” says Mehta by way of a parting shot.
