How Harsh Mariwala turned the tables on FMCG giant Unilever

Harsh Mariwala, Founder and Chairman, Marico

Harsh Mariwala, 72, is one of the most respected entrepreneurs and visionaries. He built a domestic consumer goods company, Marico, on the strong pillars of transparency, governance, innovation, and a consumer-centric approach. Despite crises and stiff competition, Marico held up to the towering might of large MNCs and created lasting value for its stakeholders.

“I have built Marico from a small business to medium to large to now an institution which will survive beyond me. I have put in those processes, people, who will be in charge of the business even if something happens to me. Things like the strategy, purpose, culture, and values of the organisation and role of the board are very well defined. I have created an organisation which will last for perpetuity,” Mariwala says in part one of an exclusive conversation on Forbes India Pathbreakers.
But there’s more to Marico’s founder and chairman. He is a doting grandfather and his zest for life is unmissable. His days are packed with a bit of everything: Golf, Pilates, gym, leadership conferences, mentoring sessions, overseeing strategic plans at Marico, and a lot more. Mariwala, a life-long learner, has found balance and kept pace in a chaotic and rapidly changing world. Edited excerpts:       

‘There’s always a silver lining to every problem’

My belief that everything happens for the good has been reinforced many times. There is always a positive side. There is always a silver lining to every problem. But sometimes some things are not in your fortune or destiny. Not getting into a B-school left me thinking how I would manage the company. I always wanted to recruit very good talent which was professional in terms of qualifications and capability. There are always ways to overcome that lack of formal education by doing short term programs, reading books, interacting with thought leaders. I have tried to constantly update myself. Learning is life-long. There is no end destination, it is a journey. I have seen many leaders who are open to learning. They are searching for meaning and solutions by talking to other individuals and trying to improve themselves. Such leaders have done very well in business and relationships.

Also read: Small to XXL: How Dabur is resizing its FMCG business

‘Align all stakeholders in critical issues’  

Apart from team-building, the larger learning for me was to align all stakeholders in critical issues. I was able to convince the family (elders) to allow me to take the family business of Bombay Oil Industries into a new company—Marico. That took two-three years. It required a lot of thinking, involving others, a lot of persuasion and grit which made that happen. So, looking back those three years were well spent. If I had not done that in a proper manner, I would still be battling family issues. For me, the learning was that when you want to bring in changes on critical matters, where many people are involved, it is better to build consensus and involve everyone to make the change happen.

‘Crisis helped us take steps to improve’

The biggest example is the case of Unilever (attempting a hostile takeover of Marico) when they wanted to enter the coconut oil segment. It was a big threat for Marico because they were 10 times larger than us in terms of turnover, the capacity to spend, and distribution. From my analysis, based on various people I met, from Karsanbhai Patel to my internal team to finding out how they will handle it at Hindustan Unilever (HUL), I realised that we could take them on because on the product side they couldn’t have done much. We already had a superior product. We were weak on advertising and distribution. This crisis helped us take steps to improve our distribution. We were not impacted. Over a period of time, we acquired their brand which was threatening us.

‘Build a culture of innovation’

One big problem with leaders is that they think they know it all. Some leaders have seen a downfall mainly because of their ego and believing that they know it all and they do not need to talk to others. To me it is the opposite. Because I had not learnt anything in a management school there was a hunger to learn which translated into very good results and reinforced my desire to constantly learn and search for answers. That is very important for success. In our innovation journey, whenever we are trying something new, we talk to customers, trade, and incorporate their view point so that when we are actually launching that product the chances of success are that much higher.

Few innovations in the early stages of my journey worked well. Converting the coconut oil market from tins to plastic paid a huge dividend. My belief in innovation started from very early days of success and since then we are trying to build a culture of innovation for which we need to have very good talent and diversity. You need to empower people and have a flat organisation structure. You need to have an open and trusting environment. You need to encourage people to take risks and remove the fear of failure. When you combine all these things and demand innovation from your people then the chances of innovation emerging from within the organisation are higher.

Also watch : Money, beyond a point, doesn't interest me: Harsh Mariwala

‘Fairness is very important in negotiations’

We are not a B2B business where we need to negotiate for selling our products. We are a B2C business and I do not even know many of our customers. I’ve seldom had to negotiate. In the earlier days, I used to manage industrial relations at our factories, and I had to negotiate with our trade unions. That opened my eyes. We had two strikes of six and three months. During the first strike, I had wanted to tire them out and ensure that they will never fight with me. But it was a win-lose negotiation where I won and they felt they lost. That was very haunting and within a year we had another strike because they felt they had lost. I realised that if I had to succeed it had to be a win-win negotiation, so that at the end of the negotiation it is a fair deal for both the parties. Fairness is very important in negotiations. You may take advantage of an opportunistic situation in some cases where you have an upper hand, but at some stage, if you have to negotiate with that party again, it will come back to you because they will try to take revenge for the loss they had suffered earlier.

‘Not selling Marico’

I still keep getting offers (to sell my stake in Marico) but I am not selling out. Money is not important to me. What will I do with more money? I can spend that money, if I want to, today also. I don’t need more money. You can’t equate the satisfaction of creating something with money. My children tell me Marico is my third child. There has been a lot of involvement and a lot of pride. I made mistakes but it is okay to make mistakes. I have built Marico from a small business to medium to large to now an institution that will survive beyond me. I have put in those processes, people, who will be in charge of the business even if something happens to me. Things like the strategy, purpose, culture, and values of the organisation, and the role of the board are very well defined. I have created an organisation which will last for perpetuity.

(Stay tuned for part 2 of the conversation as Harsh Mariwala guides budding entrepreneurs on what it takes to build a world-class organisation in a highly competitive business environment)