Friday, November 26, 2010

Meeting Notes from In Conversation with Harsh Mariwala - Meeting 2

Meeting Date: November 26, 2010.
Time: 10:00 am to 1:00 pm

Meeting Notes:

Reflection from previous meeting:

- Finalize measurable goals for every member of the team. (two to four goals for every member).
- Review goals every quarter.
- Rewards system can be built more gradually as it gets a little complicated. Help from HR Consultant or senior HR person advised.
- Create the right image for the company especially when hiring from Universities, IITs, IIMs. Engage with key personnel at the prospective institutes from where the future staff will come from.
- Difficult to find good HR Managers. HR Consultants cost more but provide superior value.

Participative Culture:

- Always put an emphasis on creating the right culture. This is the bedrock for innovation.

- Example from Marico experience in 1990s:

Marico was considering a new factory for coconut crushing in Kerala. There were warnings of bad environment and bad union structures.

Marico took it up as a challenge. Got key personnel - the "right" people for the job. Kept the factory staff occupied. Divided the factory into four houses and encouraged activities amongst different houses to spur competitive spirit in the organization. The results were spectacular.

- Job rotation is one of the key HR policies at Marico that motivates employees to perform better.

- Innovation in HR and discontinuous ways of solving problems is the key to success of individuals and the organization alike at Marico.

- Business plan is prepared for three years. Bright minds with innovative ideas is the key to structured business planning and business plan execution.

- Business plan review plays a very important role. Healthy brainstorming leading to alternatives exploration is the key.

- Whole process of business plan preparation takes up about three months.

- Assign specific goals for task forces to resolve complex problems leads to the required focus amongst the team members.

- Marico depends on a lot of MBAs to drive growth. Organizations like IIMs are key to job positions.

- Individual Personal Development Plan (PDP) is assigned to team members. Individual goals are aligned with organizational goals. Every individual has two to four specific goals starting from the CEO to every member of staff.

- MBAs find job rotation highly motivational. Maximum time in one job role (subject to right fit) is about three years.

- Marico assigns levels to different partners - distributors, vendors, etc. Assigns gold, platinum, silver levels to different partners.

- Train subcontractors as well as partners' staff - execute six-sigma certification and trainings for different distributors and vendors. Emphasis on growth of partners leading to growth of Marico.

- Benefits of close working with vendors and distributors is the key to overall success.

- People and Innovations are the key to competitive advantage.

- Motivational videos and courage of conviction of the top management are some keys to strong leadership that lead to expand the mindset of staff.

- Changing coconut oil packaging from tin to plastic inspite of resistance from all quarters was the key innovation in packaging that led to phenomenal increase in profits for Marico.

- Re-invested profits in brand building and more innovation.

- Marico went public in 1996 due to problems with cash-flow.

- Faced tough competition from Hindustan Lever. The classic battle between Parachute brand and Nihar culminating in HLL selling the Nihar brand to Parachute - truly inspirational.

- Improved products, improved quality, emotional bonding in advertisements was the result of stiff competition from HLL.

- Process innovation especially in the field of IT has been phenomenal in the success of Marico over the last decade.

- Innovations led to entry into various markets - edible oils - Saffola, revive starch, Kaya skin care, acquired Mediker brand from P&G.

Keys to open culture

- Open to fail.

- Flat structure.

- Cross functional forums and task forces to solve complex problems example - SAP ERP implementation in eight months flat by choosing key employees working solely on ERP implementation - SAP recommended Marico example as a case study.

- Market research has limitations. - Once 80% of plans are ready, go in for prototyping is the mantra for entry into new markets.

- Innovations in self authorization of expenses governed by policy and audits led to efficient working environment.

Key innovations in HR.

- No muster. Employees maintain their own leave record. Highly flexible work culture and timings.

Growth:

Going international. Lobbied the government to lift export of coconut oil restrictions. Lot of products for local overseas markets - South Africa, Egypt, Middle East and Africa - key drivers of success in international markets.

New Businesses follow small company culture.

Incubation cell with one or two members reporting directly to the CEO.

Remove escape buttons for every member of the team by bringing focus into every incubation member's role.

Kaya skin care is one successful example of such an idea from evaluation to implementation.

Key steps: Evaluate idea - Visit key places - small team reporting to CEO - Prototyping - Consumer insight - Training and R&D.

Key attributes of growth:

- High collaboration.
- Persistence.
- High Rigor in execution to follow up idea with execution.
- Connect and Develop model from P&G.
- Leverage innovations using networking.

Key to growth is DELEGATION and TRUST. Try to make yourself REDUNDANT.

Lead by example - Do not expect people under you to behave different from you.

Brilliant and Inspiring session overall. Time for action.

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