Financial Daily from THE HINDU group of publications
Saturday, Dec 17, 2005
`Cos must manage biz with change, continuity'
Mr Harish Manwani (left), President, Unilever Asia & Africa and Chairman, Hindustan Lever Ltd, and Mr Arun Adhikari, who has been appointed Chairman, Unilever Japan, at a press conference in Mumbai on Friday. - Paul Noronha
Excerpts from CNBC-TV18's exclusive interview with the HLL Non-Executive Chairman, Mr Harish Manwani:
What is the reason for appointing Douglas Baillie as CEO of HLL when in June you were quite convinced that a national management committee was enough to manage Lever operations?
I think it is enormously useful for a company like Unilever to ensure that lot of their senior managers and top leaders get the opportunity to work in different kind of markets.
For example, Arun Adhikari after handling a market like India, which is dynamic, complex and developing will now work in Japan and Korea, which are unarguably the most developed markets in the world. I classify these changes as changes pretty much within my own region, I run Asia and Africa region and I make these changes because I really believe that these changes are good. For both these individuals these moves are good, plus it is good for our business because both will give a different and refreshing unique perspective.
You put the National Management Committee in place only last year - didn't you think you wanted to give it a little bit of time to work?
The National Management was designed when we had a company structure, which had two businesses running fairly independently, and we wanted to create a coordinating mechanism between these companies. We now want to make sure that we have only one Hindustan Lever, which is one company where we are able to take all the advantages of scale, synergies and most importantly, simplicity in terms of organisation, which is one, a unitary command not to do away with business units. We are going to ensure that focus is required but functional synergies, which are important like customers, supply chain management, finance we want to streamline all these areas in terms of one Hindustan Lever approach.
You have got Arun Adhikari as Chairman for Japan and Korea - clearly you have seen that he is someone competent enough to become a Chairman of a big region in Asia-Africa sphere of things then why couldn't he have become Chairman of India? Why did you have to choose an expat?
People like Adhikari, I believe have the capacity to go much further in the Unilever organisation. I also believe that for someone like him to get a shot at running a business in a different kind of environment in one of our most developed markets will add to his experience and ensure that he will be a contender for bigger things as he rolls along. So this is a career development move for him and at the same time a big show of confidence for Hindustan Lever managers and for Arun in specific.
In the last one year from 2004-05, you had three top management shuffles and one more in offing in January - this looks less like a planned strategy but more like a shot in the dark?
I can assure that the business is very well anchored. Do not forget that when one talks about changes, these have been changes pretty much in the way we are trying to manage the top. If you look at the people within these changes, then in none of the moves that have happened, have we changed people in the move. For example, Arun ran the personal care business, then he ran the HPC (home and personal care) business and he was continuing all the way through.
In the food business, Ravindranath was handling beverages and then he handled the whole foods business; these were changes but there was a continuity in all this.
But you are breaking that continuity?
If you take someone like M.K. Sharma there has been a continuity here in terms of him being into legal, corporate affairs, HR etc. If we come back to HPC, then within HPC one has to remember that we have a huge depth of talent and indeed we must, because we run a big business and if you go down one level to Arun and look at Arun's direct reports you will find that there are people who have been doing their jobs for a long time. For example, Nitin Paranjpe who runs our home care business and our laundry business, we have continuity there too. The bottomline is that at the operating level, the company is well anchored and second, from time to time one has to have a mix of change and continuity and that's where I want to go. Now we have a situation where we have a unitary command, so at the operating level we now have one person who can take the call and second, we have some people who will provide the continuity and by third week of January, we will appoint some new people on the management committee and that is exactly how companies must manage their businesses; a bit of change and a bit of continuity.
You spoke earlier about the depth of talent within HLL itself. What an expert such as Douglas Baillie can bring in, with respect to strategy for Hindustan Lever business, which has been decentralised in terms of its on-ground operations for quite some time, that someone within Hindustan Lever could not have managed?
You have to look at the total picture. So many Hindustan Lever managers in the past and at present have found top positions within Unilever. I run Asia and Africa one of the three regions that Unilever reorganised itself into. I have a colleague of mine who is also part of the same top team, who is also an Indian, also at HLL; who sits there. I was posted and assigned in Latin America as one of my responsibilities. I was assigned North America; I was the business group president of North America. In these assignments, no one took a view saying that he is from India; he can only work in India; what is he doing here? Therefore, this is pretty much a part of developing people because at the end the experience and leadership is transferable. So when you send someone into a new environment, there is learning for that person because they have to learn in a new environment. But believe me, they also bring experience and leadership, which are common.
What does someone like Baillie bring; give me some specifics?
First of all, Douglas is a hugely experienced person. He incidentally is running a business today, which is the Africa, West Asia and Turkey business. Many operating companies report directly to him, so he knows how to run a complex business running across some several operating companies. This is not the easiest part of the world to deal in, when I talk about Africa, West Asia , Turkey. So he is used to complexity. Two, he has been the Chairman of one of the most successful companies that Unilever has. South Africa like India is one of the jewels that Unilever has. So he has an excellent track record of running a region and running a company, being the Chairman of a big company. He has worked in London in personal products co-ordination. He has worked in Australia and he has experience of working. For example, in markets, which have diversity; there is a general trade, there is modern trade; there are poor consumers, there are rich consumers. But most important, when you hire a person or whenever a new person comes in, the critical ability that you look at this level is also the ability of a person to lead and adapt. I have still to meet a guy who is as good as Douglas.
So you are really looking at leadership qualities? Anything specific you want him to bring at HLL's table?
To my mind he will bring leadership and his vast experience of working in a more international context into Hindustan Lever. And that will combine with the huge depth of talent and the top team that will surround him. And don't forget, I am still the Chairman of the company. I know HLL, I know India. I also happen to be the President of the whole region, Asia and Africa. So there is going to be an interface, a very important interface between both him and me, and between him and his top team. I have absolutely no doubt that he will bring in some refreshing thinking on the table, which every business requires. At the same time he has continuity and some strong stalwarts in that business, which will ensure implementation.
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