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Photograph by Vishal Koul

Secret Diary Of A CEO 2017

"If you treat employees and stakeholders with respect, you can find your way out of any crisis"
Secret Diary of Suresh Narayanan Part-3

N Mahalakshmi

Suresh Narayanan, CMD, Nestle India

The Maggi crisis had just unfolded and Wan told me the board had decided I was the right man to go and fix the mess — if at all it could be fixed. Soon after, the CEO of Nestlé also called me to say they wanted me to go to India. When I told her, my wife’s first comment was succinct: “I don’t know why it always has to be you.”

I thought about it after she mentioned it: Why me? Why was I being pulled out? There are so many other people in this company. But I always have a very optimistic view on life — perhaps this was the time to repay the organisation for all it has done for me. Because I owe a lot to Nestlé India.

As with all major decisions, I also consulted my father before taking up this assignment. He was very positive: “This is a badge of honour. The company is trusting you with the biggest crisis it is facing. You don’t send your biggest idiot to fight your biggest crisis, you send your best person. Do what is right and do it well.” So, I said I would take up the challenge, though I didn’t even know the full extent of the crisis and just how big a challenge it was.

It was big. It was being compared with the Bhopal gas tragedy, Arnab Goswami had called for the arrest of the CEO of Nestlé and people were being shown burning packs! And it had global ramifications, thanks to the ubiquity of digital and social media. So I came to India and my boss, Wan, was also here. “I don’t want this to be brutal either for you or for the organisation. I want to be here to ensure that doesn’t happen,” she said.

My advantage in India was that people here know me — this was my third stint here. More importantly, every company has a DNA and Nestlé’s DNA is food safety and quality. That’s what we stand for. The reason you buy the Nestlé brand is because it is the safest and has the highest quality. It may be more expensive than the others. You may not like our advertising; you may not like our promotions or whatever. But you can be 100% sure that what you eat is absolutely of the best quality and it’s completely safe. I knew my backbone was strong. I knew the company would not have done anything even remotely wrong.

First though, I had to restore confidence in my people. We have 7,200 employees across eight factories. Five of these had been sealed; 35,000 tonnes of stock was being taken back and incinerated. We had about 2,000 distributors who had lost anywhere between 30% and 50% of their business. We had 400,000 wheat farmers who were supplying us through their flour millers, whose sales had dropped to zero overnight. We had 15,000 other suppliers — carton makers, packaging suppliers, spice suppliers — whose business had suddenly crashed. On top of this, we had almost 4 million outlets that were stocking our products. And the thousands of outlets that were preparing and selling Maggi. It was a huge blow for all these people.

The second task was to ensure that the narrative of the company was explained, talked through in a manner in consonance with the Nestlé values of decency, respect, transparency and humility. People tend to compare this with what happened to Coke and Pepsi or the problem at Cadbury’s, but this was very different. Cadbury’s was an internal problem that was corrected very quickly and very well. Coke and Pepsi was a problem with the pesticide measurement as done by the Centre for Science and Environment. But here, it was the Union of India versus Nestlé. When the government, the FSSAI, is after you, it’s like the father of the family going after the children. After all, as a company we are children of this country. So, it was much more serious.

Then, we had to manage our stakeholders — we have 100,000 shareholders. Normally, a change of guard at Nestlé India finds mention in a couple of lines in the pink papers. My appointment made it to a banner headline in The Economic Times — “Shake-up at Nestle”, or something similar. One of my first interviews was a live one on TV for 45 minutes, when I didn’t even know the full facts yet. My media exposure is probably more than that of all my predecessors combined — each of them gave only two or three interviews in their entire term at Nestlé India. Mine was every two or three days.

In a sense, this was the worst crisis I’ve had to handle in my career. My grandmother, though, had given me a unique perspective on the issue when I had gone to seek her blessings on returning to India. The first thing she asked me was, who is behind this? I said I didn’t know — I still don’t, in fact. Her advice: Janangala pattuko (take care of the people). It was such a wise remark because ultimately, it is people who matter.

We took a decision not to terminate anybody: the 3,500 employees from the five sealed factories were put on an extensive training programme. And our people responded with immense ability, support and dignity at a time when our company was the most tested, the most trashed and the most vilified for something we did not even do. We didn’t have a single industrial relations incident — no strike, no lockout. We had so many suppliers who were out of business. Not one went to the media or the government, not one filed a suit against the company. Not one of our 2,000 distributors gave us any trouble. Our sales people are taught to sell — they didn’t know how to take back stock. But we worked out a system. We said we would reimburse distributors the same day for returned stocks, but many refused to raise bills. Many of these are partnerships of decades, running into generations and the relationship with the company is a deep, strong one.

Our stock price tanked 30-40%. But not one of our 100,000 shareholders took us to court. In fact, I had my first AGM in May 2016 and I was expecting to be crucified. Instead, it turned out to be one of the most emotional AGMs I have seen. We had shareholders going up on stage and breaking down. Such a thing should have never happened to this company, they said. In good times, everybody is everybody’s friend. It’s only in bad times that the power of relationships matters. And I think that, in all humility, is the biggest learning Nestlé had in this: if you treat partners, employees and stakeholders with respect and fairness, you can find your way out of any crisis.

One more thing that really helped in this crisis was how the Bombay High Court tried this matter every single day. Imagine if they had adjourned the case for three, six or nine months — we would have been dead as a company. But they understood the seriousness of the matter; the standing of the organisation also helped, I feel. Many people I spoke with were full of praise for Nestlé, saying the only problem was we kept quiet when the matter started. That was the only thing we were faulted on.

Speaking of communication, we did one a few months later that was one of the craziest decisions I’ve ever taken. Maggi was off the market but the buzz on social media was all for bringing it back asap— of course, there was plenty of negative commentary as well. The question was, should we respond. Conventional marketing tells you that you advertise only when you have the brand on the shelf. We didn’t have a product at the time. Advertising would be unrequited. Worse, we could be seen as thumbing our noses at the regulator.

But the crisis committee that discussed the issue every day (and night) came to the conclusion that Maggi is more than a brand; it is an emotion. So, we would issue a communication without the product. Just a simple statement: We miss you too. And real-life situations of young adults missing their midnight snack, couples fighting over not having their food or the young man having to beg food from the neighbour he’s never spoken with. It went on to become one of the most successful digital campaigns done by us. But it could just as easily have boomeranged and been the biggest marketing disaster ever. As it turned out, it was the best decision.

I have learnt a lot from all my bosses, from Amit Bose at Lipton, KK Sridhar at Brooke Bond, Jayaraman at Colgate. My current boss, Wan, is my first woman boss and a source of great inspiration for me. She has enormous courage — it takes a lot of guts to unsettle a person in one place and put him into this situation. She is very trusting of people but at the same time has what I teasingly call a feminine instinct — she is very perceptive and the kind of person who values people very much. Conversations with her begin with questions about my family and only then turn to work — with my other bosses, it was the other way around.

If I consider influences on my life, other women stand out — especially my two grandmothers and my mother. In fact, when we first conceptualised the ‘educate the girl child’ initiative, my grandmothers were the first women I thought of. My mother was a silver medallist at Mysore University. But she was married off when she finished her exams — she was not given the opportunity to study further. Of my Paatis, one had studied till class 9 while the other only till class 2 or 3. I used to tease my paternal grandmother on this — when she signed E Rukmini on cheques, the signature would look different each time. Paati was virtually unlettered but was amazingly enlightened and forward thinking for someone of her generation. When my daughter was heading for university, the first thing she told me was to educate her well and not get her married too early!

I don’t know how many women have been through their lives without the benefit of education, even though they were bright and capable of doing so much more. I was lucky that I could give my daughter the benefit of a good education; if I can help more girls through this initiative, why not?

For a guy who didn’t know the M of management, it is ironic that today I hold a very responsible position where people look up to me for advice on management. At the same time, this is what I call “give back time” to the company, where leadership and power can do good for people. As a practising Hindu, the teachings of the Bhagavad Gita are always top of mind: life is transitory; what you have today will be someone else’s tomorrow. So, don’t attach too much importance to the position or the attention. I am fully aware that many of the invites I get and the people I get to meet are because I happen to hold an important chair in the corporate world. At the same time, I realise I can use my position and 35 years of experience to do good — there is a huge sense of satisfaction in that. I spend a lot of time with the youngsters in the company and outside. My experience may not always be relevant but at least the general principles of how to look at challenges, manage work pressure and balance work assignments and your personal life, could be useful.

I am very passionate about my work. I love what I do because I feel I can make a difference. And I want to make that difference because I owe it to my people. So, my attitude to work is somewhere between passion and duty. Actually, it’s a bit of both: I am bound to the duty and I am also happy to do it. And I think that’s been something that has driven me in all my assignments. I have always had slightly tough, unpredictable roles with uncertain outcomes, and I love it. My biggest fear is that I will be stuck at a workstation, just sending out emails day after day. I need action, blood pressure going up, some laughter and emotion. That’s why even when I prepare myself for a new life after retirement I will teach or coach as that involves giving. I won’t be sitting at home, writing my memoirs.

Post script: Management lessons from a non-MBA manager

  • Revive the art of storytelling. Most of my speeches invariably have a poem, some that I have written myself or a verse I read and liked. I have always tried to use the idiom of a verse to diffuse a situation or heighten the joy of an occasion. When Maggi was relaunched, I wrote a short poem in Hindi that I read out at the launch conferences. I don’t discount the importance of facts and figures but if I explain a leadership lesson through a story, you are more likely than not to remember it and recount it to someone else. Any strategy, any direction that I seek to give the organisation, should be understood by the least educated and by the person of average competence in the company. 
  • Simplify to energise. The challenge of leadership is to try and decomplexify the world around us into meaningful nuggets for people to imbibe and act upon. The more I make it complicated, the more it is an intellectual exercise of trying to show my superiority, which honestly doesn’t matter. We have an outgoing CEO of our company called Paul Bulcke. I really love his presentations: four words, three images. He is the global CEO of a $95 billion company but he makes it so simple. The purpose of communication and leadership is to leave a residue, an impact and to leave a few questions that people ponder about to act upon for the future.
  • Consistency, differentiation and sustainability over a period of time are the three important dimensions for any brand. Be it a product, a person or an organisation. Consistency demands behaviour that is predictable over a period of time. Differentiation is what you bring to the table. And sustainability is, are you capable of doing this over a period of time?
  • Don’t copy your competition. And don’t fear it. I like competition because it helps me energise my proposition, to differentiate myself sharper, and to enable the organisation to respond to the environment faster. If there is no competition in a category, we tend to become slothful and less innovative. That is why I like the current environment in India: it is competitive and nobody can take advantage of their historical position and make a straight-line prediction of the future.
  • Millennials are not a different species. I work with many millennials in my company; I don’t think I get special millennials. So, I tell people who make a hullabaloo about how millennials are different from, say, my generation — if you have leaders who are credible, walk the talk, have a consistent point of view and a management style that is inclusive, empathetic and considerate, people respond well. Regardless of which generation they belong to. 
  • Respect is no longer given because of hierarchy. Respect has to be earned every day and through every action. Millennials may not be very different from you and me but the workforce today is a little irreverent towards authority, because of the democratisation of the family as well as the numerous opportunities available. I had the same aspirations as people do even today — a decent life, a happy family and to make a difference in whatever I did. Today’s kids, if they can’t make a difference, they move on. In my time, that wasn’t the case simply because the opportunity didn’t exist. If I had left HLL, where the hell could I go? Or, I if would have left Nestlé, where the hell could I go?
  • Nice guys do win. You don’t have to be mean to be a great leader. Be clear about your expectations, be deeply respectful and transparent. Empathy and sympathy are important dimensions of my leadership style. At the same time, I am ambitious with targets and I stretch my team. With me there is no question of not achieving your targets, but I like to do it in a way where I don’t demolish people.

This is the third of a three-part series. You can read part one here and part two here.

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