Financial Daily from THE HINDU group of publications
Sunday, Jun 26, 2005
HLL's growth will be category-led, says Manwani
Mumbai , June 25
MR Harish Manwani, Chairman, Hindustan Lever Ltd (HLL), wants to inject some of the lost aura back into the company.
"In a resurgent India, HLL must give thought leadership. That is my vision," he told newspersons during an informal chat here on Saturday.
"What I expect from my team is vision and then the behaviour to achieve it. You may target 50 and get 35. But I will be happy with it because the behaviour is there. The whole approach is to make sure your mindset is that of a number one."
Organisations, he said, can have two types of people - those who add revenue and those who cut cost. "If you can't build revenue or cut cost, as in efficiency, then you have to ask what you are doing here. I am keeping life simple."
While it is true that some of HLL's brands resemble small companies in turnover, the company's growth will be category-led. "The space we are going to play in will not be defined by brand, but by category."
Category penetration in the country is low. That gives headroom for growth; further room can be had by competing for space.
Within categories, HLL will have a differentiated portfolio. Its power brands would occupy distinct slots. "We operate in 21 categories. I am very clear - it is the category which matters."
Evaluation will be based on market share in the category and the health of the brands therein, the usual pattern being a cornerstone brand with an array of flanking brands. "If you do not have a category focus, you will not develop the right capabilities," said Mr Manwani.
The capabilities desired include competitiveness against local and global players, leveraging Unilever's might wherever required, learning to "juice" innovation better ("You can be an innovation junkie but you must know how to get the most out of it."), enhancing HLL's go-to-market model and managing the mix of modern and traditional trade better.
"Building the new capabilities is going to be absolutely critical. The ability to manage change will be key."
HLL's strategy is sound. "It is not a business that has gone under. It is a business that has not met the growth it should have. Between this year and the next, we will focus on implementation.
The business has to be given a cutting edge - that is not strategy. We are not going to recast strategy. We are going to focus on implementation. Fiddling with strategy can only give you benefits on the fringe," said Mr Manwani.
The company, he said, must show market, cost and thought leadership, locally as well as in the international context. "It is all about external benchmarking."
For the next couple of years, HLL would have a "single-minded external focus." He said, "We have an organisation in place. As far as I am concerned, we have a great team that is now beginning to rock `n' roll.
Everything that happens from now on - the good, the bad and the ugly - is the responsibility of the current management of the company."
The "big agenda for the future" is competitiveness - the ability to attract the best talent being critical therein.
"The war for talent is the biggest challenge. We have to create an employee proposition that is uniquely HLL," Mr Manwani said, harking back to the days when the DNA of HLL managers was founded in hands-on training from the ground up. The company has to articulate "that something" about HLL, which used to be there.
"HR is going to be a big part of our agenda. In the next 10 years, if we can't produce more leaders, we would have failed in the business."
The Chairman said he found nothing wrong in the series of acquisitions, followed by divestments, which HLL underwent in the past decade.
"We would not be where we are if HLL hadn't gone through all that. HLL has been successfully built because the company is much larger than any single strategy. This company has always managed to change."
Mr M.K. Sharma, Vice-Chairman, said all the divestments were of businesses that had been organically grown. "It is a misconception to think that what we divested in the new millennium were what we acquired in the 90s."
UNDER Unilever's new management structure, India falls in the business group comprising Asia, Africa, West Asia and Turkey. The other two groups are Americas and Europe.
The group India belongs to accounts for 75 per cent of the global population. It has a GDP growth rate that is twice that of the rest of the world.
By 2010, 45 per cent of the world's consumer spending in PPP (purchasing power parity) terms will be from this block.
"This region is expected to be the powerhouse for Unilever's future growth," Mr Manwani, who is also President (Asia & Africa), Unilever said.
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