CEO Speak

Aditya Birla Group's D Shivakumar on dealing with economic slowdowns

He has seen various crises in his years working in companies such as PepsiCo, Nokia, and HUL. He believes a slowdown is when you draw your teams closer and go shopping for bargain buys

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Published 2 years ago on Dec 24, 2019 6 minutes Read

How do you define a slowdown?

I see a slowdown in three contexts. One, your company has slowed down; your industry is growing and your country is growing. This gives sleepless nights to CEOs. The board, the analysts and the media have a field day. You have to act fast. Context two, your company has slowed down, your industry has slowed down, but the country is growing. So, you have an industry issue. The industry is down and hence you have some time to regroup and plan for the future. Context three, your company has slowed down; your industry has slowed down and the country has slowed down. This is the best situation for CEOs to externalise everything and buy time! 

As a good CEO, you have to ask if you have done the best of what’s in your control. Today, 90% of the countries in the world have slowed down, that is, growing slower than before. We don’t know if this will be the new normal. World output is at 3%, but world trade is at 1%. Nationalist sentiment is strengthening in every country. The earlier leaders recognise this slowdown, the better.

What is the most important thing a leader must do during a slowdown?

I’ll explain that with a personal experience. During an El Nino in 1994, coffee production in Brazil was severely impacted. That was when I was the regional manager-South for Hindustan Unilever (HUL). Coffee was one of the categories we sold and prices in India had doubled. Naturally, sales took a hit. The morale wasn’t great at the sales unit level and the marketing department started blaming the sales team for not doing its job. They would say that sales is not covering outlets, they are not using discounts and so on… all futile. Sales executives would come and say they simply couldn’t sell, and there was a lot of infighting between sales and marketing. When we did a study a few months later, we found that when it came to coffee, an average household in Tamil Nadu was spending as

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