- I owe my success to Teachers, family, relatives and colleagues who were a part of my journey
- Sounding board R Gopalakrishnan, KK Dadiseth, KK Sridhar, V Balaraman
- Greatest strength Resilience
- Most touching moment When someone else trusts you
- Humbling experience Receiving the distinguished alumnus award from both IIT-M and IIM-C
- Biggest fear If you’re not constantly learning and unlearning, you will not be relevant
- Greatest gratification Seeing people you have worked with go to greater responsibility
- Special work moment Nokia topping the most trusted brand survey, supplying shampoo charts with Rajnikant Sabnavis for CK Prahalad’s book The Fortune at the Bottom of the Pyramid
- Most difficult decision Shutting down Nokia Money
- An all-time challenge The search for authenticity
- If I could redo something I would go international much earlier, as a middle manager
- My dream To leave a legacy, write about contemporary society and management issues
I woke up the second morning to find my swanky VIP suitcase missing. Every single certificate and citation I had won since my schooldays was in that suitcase — it felt as if my life had vanished with that suitcase. I got off the train at Howrah station, exhausted after the nearly 40-hour journey from Bombay, and headed straight to the police station. After filing my complaint, I reached IIM Calcutta with my airbag and tennis racquet, which had surprisingly not been stolen. I told the administration manager, Deepak Chatterjee, I had nothing left to identify myself but several of my friends were on campus and could vouch for me — apart from me, about 17 other people from my IIT Madras class had made it to IIM Calcutta that year. Mr Chatterjee called IIT Madras and the dean, Dr Srinivasan, told him to admit me; he would ensure that whatever documents were needed would be faxed to IIM-C. For the next 13 weeks, I made a trip every week to the Howrah police station but I never recovered my suitcase or my certificates. Even now, I don’t collect anything — whatever I receive, I send to my mother in Bangalore. She is the custodian of my scrapbooks.
My parents had wanted me to take the civil services exam but an uncle who was a police commissioner of Bangalore city had suggested getting an MBA instead. I took his advice, which was how I had reached IIM in 1982. IIM was a very different experience from what I had been used to, even though I had years of experience of living away from home — Sainik School in Bijapur and IIT Madras weren’t like this. There was no attendance and students could smoke openly in class — I didn’t because I don’t smoke; IIM-C truly treated you as an adult. I have always kept that at the back of my mind — treat people like adults; 80% of the time you get the results, 20% of the time you may not because some people may always misuse the freedom that you give them. But the good is far more important than the downside.
I was fascinated by marketing, so much so that I would attend the second-year marketing classes that were held after 6.30 pm. I would spend hours in the library, reading everything on management and marketing that I could lay my hands on. It was a running joke on campus that Shiv writes to all the professors — which was true; I wrote letters to gurus such as Peter Drucker, Benson Shapiro, Michael Porter, Theodore Levitt. But the amazing thing was that they would reply and they even sent me their articles. I’ve still got those. I was just a student but they responded and I corresponded with Drucker for a long time until his death.
Given my interest in marketing, it was only natural for me to land up at Hindustan Lever. When you finish B-school you always want to be a brand manager and that is what you look forward to. After becoming a brand manager, you want to change things instantly, but one lesson that I have learnt over the years is to be patient. Brands are like human beings. They don’t change overnight, nor does their audience. Consumers in many parts of the world take to a brand slowly and give up on it gradually. Having handled close to 50 brands, I can tell you that when you tamper with the core of the brand, it will fail or will not do well.
HLL of the 1980s was an outstanding company — it still is — especially in how it invested in the next generation and was considered a gurukul for managers. All these years later, I still count my ex-chairmen as my mentors and reach out to them anytime that I feel I am in a tricky situation. HLL’s philosophy was to put what was good for India first, what was good for HLL next and then what was good for the individual employee. I think that is where I learnt the concept of being a company man. But it’s a different world today and you have to balance between what is right for the individual and what is right for the company. You can do only what’s right for the company by following the rule book; if you manage only what is right for the employees, there will be anarchy because every employee is unique and you can’t have an employee value proposition for every single individual. One of the most difficult aspects of being a CEO is managing this balance between what’s good for the company and what’s good for the employee.
The bulk of my time in HLL was spent in marketing and I had such diverse experiences over the years. There was an instance that reinforced the idea that if you worked your heart out; it really took care of you. In 1992, I was reporting to two managers and trying to please both of them. Despite my best intentions one of them didn’t consider my job good enough.
One day I met the second manager at an airport lounge with the agency and their presentation. The agency made some mistake, which resulted in him calling them a bunch of goons and he also reprimanded me for not having filtered it out before taking it up to him. I agreed to that bit but he went further on to calling me a disaster and conveyed his plans of repeating the same to the director of the unit once he landed in Calcutta.
There were no cell phones those days. I returned to the office and went to the first manager and narrated the episode. I also expressed my unhappiness because I was giving it all I had. I knew what I was getting into when I began reporting to two managers but I wanted to make it work. That’s when he said, “Shiv, I think we’re doing something wrong with you.” He then recounted the incident to the vice chairman. Before the second manager landed in Calcutta, the management had issued a notice that I would no longer report to him. When you are a 30-year old and your company backs you, then you swear to do anything for your manager and the company. That simple closure made me invest even more than I was capable of into HLL.
Then another time, I remember going by train to Nellore when I was the area sales manager for Andhra Pradesh. When the train reached the station at 4 am amidst the pouring rain, our salesperson named Munir was waiting with an unfurled umbrella. It’s an act of kindness I will never forget. And sales managers can give you many more acts of kindness.
Those days, there were five big wholesalers in Vijayawada who would never buy from HLL. Still, I would visit them every week along with my stockist Mastanbhai, asking for business. They would always refuse, saying our rates in Hyderabad, Nagpur and Bombay were cheaper. After 18 months, I was transferred, so that last Tuesday, when I visited them, I mentioned that I wouldn’t be coming by any longer. One of them said, “You are the only one who has come every week, even though we have not given you any orders because of the difference in tax.” And he whipped out a notebook, gave it to me and said, “Whatever price you want, just write it here. We’ll take it.” They gave Mastanbhai an order for Rs 5 lakh, I think, even though it didn’t make financial sense for them.
Mastanbhai’s story is equally interesting. During the period nobody wanted to be a distributor for HLL, we appointed him the stockist for Vijayawada. He and his partner invested Rs 2 lakh each as capital. Today, he is a manufacturer of detergents and runs a school also. To see him grow like that is a humbling experience; it goes to prove that if you work hard in this country, you will succeed.
HLL used to give general managers breaks– early, so I ended up as a regional manager in south India. I have always been inclined towards HR and I had some outstanding HR people working with me: Georgie Antony, who moved to Nokia before me and is now on his own in Singapore; and Debashish Roy, who now heads HR for Europe and Africa at Colgate. These guys redefined the kind of HR work we did. We had spoken with the employees to find what they truly wanted from the company. And the feedback was, “I have come this far in life, but if you can do something for my children, it would be fantastic.” We selected children in the 13 to 16 year age group and invested in them, taught them computer skills; every Saturday, a certain LSN Gupta would groom them in life skills. Two of the children from that group went on to the US and two joined HLL.
Another incident I remember vividly is the renegotiation with the unions in 1994. After the earlier agreement ended, we sat with the unions and told them what we had to offer. After Georgie and I finished detailing the offer, the union leader Govindarajan asked for some time to discuss it and also asked me to get my stenographer along. When we reassembled, Govindarajan said they were willing to accept the offer. Historically, agreements have never been signed on the first day of negotiations. My lesson from that was unions and union leaders are not your adversaries. They have as much stake in the success of the company as the management and as long as you are open and have a trustworthy relationship, it pays back handsomely.
In 1996, we launched a tea mixed with jaggery called A1, and the entire tea industry was against us. The UPASI, the CTC guys said how could you do this to tea; now, everybody is adding all kinds of things to tea but, back then, everybody lampooned us. Then there was a UPASI meet in Coonoor, which is typically addressed by the HLL chairman or vice chairman. That year, the communications department advised against his going; they decided to send me instead. They told me to make a presentation in under 20 minutes about changing trends and just leave, without taking any questions from the audience. So, we went to Coonoor by car and I presented to them what rural consumers want and the balance of being price-led and feature-led for rural audiences., I finished in 15 minutes and then bravely stood up and asked if there were any questions. Everybody was silent, and then applauded and nodded in agreement.
I had prepared so hard for those 15 minutes since I felt I had to salvage HLL’s reputation. That was a Saturday; on Monday when I reached office, Gopal (R Gopalakrishnan, vice chairman, HLL) called me to his office and said, “I got such positive responses for your presentation that from now on, you will work on all my presentations.”
In fact, years later, when Vindi Banga was the chairman, CK Prahalad wrote The Fortune at the Bottom of the Pyramid, he wanted a case study from HLL. My marketing manager, Rajnikant Sabnavis, and I provided all the charts on shampoo. It was quite a special moment when the book was published and Prahalad used all the slides we gave him.
I’ve had some of the finest and also some of the most humbling moments of my career at HLL. As marketing manager for foods, I had a couple reporting to me and that batch was coming up for promotion. The girl was getting promoted but not her husband. She got wind of it and spoke with me about it: “How can I go home and tell my in-laws I got promoted but your son didn’t?” I took the matter to my boss, Sanjay Khosla, who agreed to discuss the matter with the HR director. We couldn’t reach a decision and finally Gopal called us into his office to sort out the matter. When the facts were laid before him, he lost his cool and told me in no uncertain terms that I need not get emotionally involved with the subordinates; only the most deserving would be promoted and that was that. We gave the letter of promotion to the girl and the matter ended. We never discussed it again but it was a lesson well learnt: I was a professional manager, not a marriage counsellor.
Leaving HLL for Philips and then Nokia was emotionally draining because you put so much into a company and then you leave behind all these wonderful relationships. In India, we derive our identity from our company. For many people, the name of the company and designation is very important. So leaving a company is not easy if you have had a long innings and have invested a lot. But you need to move on. I had a serious disagreement on the strategy. Like a good soldier, I followed what the board wanted even though I could sense that this will not work. After it didn’t work, we went back to the strategy we had originally proposed and that grew volume and the business back again. I had always worked 24x7 thinking this was my company and I did what was right for the company. This experience just didn’t sit with my deep belief and hence I moved on.
I moved to Philips to run consumer electronics and the technology sector is a huge learning on cost management, on technology obsolescence and opening up new categories. And being the boss, you had no one else to pass anything to. The lonely days had arrived in my life.
Nokia interviewed me to death — I was interviewed by 13 people! But when I met the CEO, Olli-Pekka Kallasvuo, and the HR head, I liked their humility and their focus on India. The final interview with Mr Kallasvuo was scheduled to last an hour. But after 15 minutes he said, “I’m giving you the job. Now, for the next 45 minutes let’s discuss how you are going to do your job.”
HLL shaped me for the future. I always wanted to do things very well and never wanted to be a run-of-the-mill manager. Carrying the team with me and ensuring you get things right is extremely crucial for me. Many people criticise me saying, I have a long fuse but that’s fine — it’s better than having a short fuse. If the situation warrants it, you should be tough and get the right message across, but if you are permanently on a short fuse, nobody will tell you the truth. In fact, that is one of the dangers of being a senior manager — people don’t tell you stuff just when it is crucial that you know what’s happening; otherwise, you can be isolated and do all the wrong things. To succeed, any CEO needs to have DEF : discipline, energy and focus. In my career, I have seen that less than 5% of senior managers are disciplined. They ignore time management or are unprepared for meetings and thus fail to honour and respect other people’s time.
Nokia gave me the platform to be a CEO in an industry that was extremely volatile and constantly changing. At Nokia’s core was frugality and humility. Never did I see the board members travel first class nor did I see anyone in Nokia talking ill of competitors. Their review meetings included deliberations for a couple of hours over a page or two pages. The emphasis was on knowing your business as opposed to presenting it. So, if you didn’t know your stuff you couldn’t answer the Nokia CEO. You had to have every single detail of your company at your fingertips. That was a very big shift and a lesson I learnt over there.
At Nokia, it was quite okay to go to the next level, if you had been refused something by your immediate superior because of company constraints. In 2007 we had lost about 8% of our market share to Motorola after it launched Razr. We had the 6300 model lined up but that was scheduled for a launch closer to the end of the year. Worse, we had no money and our marketing team had completely blown up its budget. We needed at least $15 million to launch this new phone. I called my boss in Singapore and told him I need this budget. He said, “No, we can’t give it to you; the books are closed. However, you can take your case higher to the head office in Finland.”
I had to go to Helsinki in about three days for my regular update on how we were doing. After the usual briefing on the business, the economy and the competition, Mr Kallasvuo asked me as a matter of course whether there was anything he could help with. I immediately said,“I need $15 million for three months.” He asked me who I had talked to and I explained that my boss and the business unit head had already declined the request. He then asked me if I was sure that I needed that kind of money. I said yes, adding that if things didn’t work out, I would leave. He called my boss in Singapore and said, “Give the money to India; we will figure it out later on.” That paid off handsomely, and the 6300 was one of the bestselling phones Nokia had. In the coming years, both these bosses would use this incident as an example, saying, “If you don’t find an answer on the first level, go to the next one. That is what Shiv did and it worked, because he was not doing it for himself, but for the company.”
It wasn’t always good news. The same year, we had a battery crisis due to which the entire media was after us. For us, it was a product advisory, not such a big deal, but it taught me how to deal with a crisis. At such times, it is not only about you but also your ecosystem partners. We always had Pankaj Mohindroo, the then-president of the Indian Cellular Association, or a battery expert or a scientist with us during interviews. When you have two people, the other person can come into the frame and add necessary information.
Nokia was a big brand in India and I learnt again how much trust matters. As a result of handling that crisis, Nokia became a very trusted name. Never had a tech brand broken into the list of the most-trusted brands post crisis. Nokia moved from No.44 to No.4 to No.1 and stayed there for four years. My lesson was that a crisis is a big opportunity to build on something, and a crisis should never be wasted. Sometimes, you might not know what it is. We never handled the crisis thinking that we would become the most trusted brand. That was not our intention; we always wanted to do the right thing for the consumer and the ecosystem but, in the process, we got several other benefits we had not accounted for. Bottomline: don’t run away from a crisis; handle it with utmost honesty instead.
Nokia’s success was about dependent growth. We would have never succeeded but for the support of the ecosystem. We wanted to put 1,000 vans into rural India and decided to share the cost equally with Airtel. After the execution, we realised that 60% of the value was coming to us and 40% was going to Airtel. I told Manoj Kohli (CEO, Bharti Aitel) that. He told me not to worry, saying Airtel would get new subscriptions every month [as a result of the vans]. All through my years with Nokia I never signed an agreement with Airtel or Vodafone or Idea; the relationship was entirely based on trust.
In hindsight, I think Nokia not choosing Android was a big mistake. We were losing the battle in the consumer’s mind and the phone had moved from being just a phone to a device that had content. Developers were not creating apps for us because Nokia was on the Symbian and Windows platform. It was very niche and their ability to monetise was a big challenge. Sometimes it’s better to cut your losses and move on.
One of the worst day of my life was 3rd September 2013, when Nokia was sold off. I had already moved on. But I wrote a piece on its culture and it was up on all walls in Finland.
You have to be resilient and willing to accept that nothing in life is permanent. Your job, your company, your contacts… nothing is permanent. So, never get carried away by success or depressed by failure. Nokia taught me that more than any other brand.
I see many parallels between the corporate world and sports. I have always been a great fan of all sports but especially Manchester United and Barçelona. I’ve been to three Championship finals to watch United and you can learn a lot from Sir Alex Ferguson. Talent is not a problem when you are running a club such as Manchester United or Barçelona, it is the culture. You should get the guys together and working. The difference between a CEO and a club manager is that the manager has absolute control. A manager can decide to drop this player or that player and then he can be held accountable. But when you are a CEO, you have to carry people along hoping that they will change, it’s not easy to sack people. In professional sports there is nothing called hoping they will change; you will be changed, not them.
There was this match at Wembley, Manchester United against Barçelona. At halftime, the score was 1:1 and all United supporters thought we would win. But the final score was 1-3. Barça played very well and Sir Alex said we lost to the best team in the world. As a leader many times you have to recognise that sometimes your best is not good enough. How do you get to be terrific enough to win as opposed to good enough to compete? For that you look at the statistics of this match. I am a great believer in numbers — if you interrogate a number long enough, it will confess to something. You then take the learning forward. When I looked at the stats for the match, I found Barça had 337 passes and the bulk of those were between Messi, Iniesta and Xavi who were the forwards. United, by contrast, had 170 passes and the bulk of the passes were between the goalkeeper and the defenders. The bottomline — If you are not playing to win, you will never win. That day, I think, United was playing not to lose. Many companies do the same.
I have been to the British Open regularly and a couple of times I walked with Tiger Woods’ coach, Hank Haney. He told me that the thing with high quality talent is that you don’t need to tell them anything; especially when things go awry, they tend to recognise it themselves. Haney recalled a conversation where play had not proceeded as planned. He and Woods just sat in a room. No conversation. And after about 40 minutes Woods said, “I think I made a mistake at the 6th.” Haney said that’s when the conversation begins. He said anybody who works for you, who is high value talent — let them open up, then the conversation is very different and both of you will learn from it. Basketball coach Phil Jackson must have realised that much earlier. That is why he said to Michael Jordan, “I am not going to teach you basketball, but I’ll make you a better basketballer.”
Sport teaches you more about teamwork than anything else. But, no matter how talented you are, you have to practice endlessly. I went to watch golfer Vijay Singh when he was world No.1. He practised at 7 am and even at 6 pm, after the game, he was practising. When he was interviewed by Channel 4, they asked him, “You are world No.1, why do you practise so hard?” He pointed to the entrance and said, “People walking through that gate are paying £50 to see me, I don’t want to disappoint them.” Vijay was emotionally invested. That’s how it works in business as well. Many leaders forget that the livelihood of so many people depends on them. As a CEO you have to invest a lot of emotion and your personal space and, many times, neither your employees nor your bosses will value it. They don’t see the emotional equity you are investing, but it is that emotional equity that builds legacy.
Someone looking at me from the outside may think here is someone with power. But life at the top is very difficult and lonely. You need to have strong emotional anchors, and typically they tend to be your partner, your parents or very good college friends. If you don’t have that emotional fortitude, you will never leave behind a legacy.
Post script: Some random jottings
I think everything you learn in the B-school curriculum lacks practicality and ignores the emotional side of business. The fundamentals of distribution are very different in the marketplace versus theory and the concept of business models also varies. While HR is a process in the classroom, in real life, people management is full of emotions. Finally, the concept of leadership taught during an MBA course is very idealistic. The MBA degree needs to reinvest its own curriculum to stay relevant in a fast changing world.
There are many times in your career when you lose to a brand that has picked up consumer insights in a much better way. You have to appreciate that and find a new way to outsmart that person or that brand. I think if you don’t fail, you are not trying hard enough. That’s my personal experience and you have to try hard and you have to try many things. A 70:30 success ratio is fine; you should be able to fail 30% of the time and accept and learn from it.
The place where leaders fail the most is while taking decisions. And the toughest challenge for a CEO is to pick the right talent. Despite all the checks and balances, the one thing you cannot judge in an interview is the kind of commitment and energy somebody brings to the table. It all looks good on paper, but how deeply is this guy committed to the company is difficult to judge. Most people end up doing a 9 to 5 job. Leaders can’t do a 9 to 5 job; leadership is a 24x7 job. The other ingredient you will never know on a CV is luck. Some people have luck on their side and as a CEO you need to have some lucky people in your team.
My assistant, Monica, has been working with me for the last 11 years and she is one of the best hires I have ever made. I am 25% -30% more effective because of her. We did make some hiring errors in HLL and Nokia. We promoted some people internally and it didn’t work out because the person did not recognise that the job has changed and he or she needs to do something different and innovative.
When you part ways with people you should have the ability to be honest with them and to say why it is not working the way it should — that counts for a lot. The most difficult thing to do is ask people to leave with whom you have worked closely. Everybody wants to be a CEO at 45, so if you are not able to give him that job and he is getting it elsewhere, you shouldn’t hold him back. In any company a certain amount of attrition at the senior level is good because there is renewal of the company and people are realising their aspirations. The last thing you want is for people to be unhappy working for you because you are not able to fulfil their aspirations.
You also need to jolt performers when they start coasting and start taking it easy. What I do is meet and tell them, on these parameters you are not performing and I want you to know that you have been great guys for the past but right now you are not. That’s a constant challenge you face in an organisation. Second, how do you give tough messages to underperformers? That’s another big emotional dilemma because if you give a very tough message, he could leave the next day and you are not prepared for that. But you still want to give that message. So you discuss the way things have to be done but if they still don’t get it, one has to move on. You have to invest that time and effort because the team below is watching him and you. If they see that you have done the right thing, it builds morale.
I have had a fairly long stint with HLL before I became CEO. I have moved from working for an Anglo-Dutch company to a Finnish company and now an American company. I have been a CEO for 12 years now but back in B-school I did not know there was a company called Nokia. Sometimes people think that you know everything about your future and you planned it but it’s seldom that way. I never set out to be a CEO; all I wanted to do, then, was to be a well-regarded marketing man.
(Shiv did not talk about PepsiCo India citing it has been too short a stint).