Books

Lever-aging Hindustan

Sandip Ghose | Updated on December 30, 2019 Published on December 30, 2019

Title: The CEO Factory: Management Lessons from Hindustan Unilever Author: Sudhir Sitapati Publisher: Juggernaut Price: ₹599

While mapping corporate lessons from Hindustan Unilever, Sudhir Sitapati is selective in his revelations

It must be very difficult to write a book about a company one is currently working with. And it would equally tough for an alumnus to review it. Hence, I — an ex-‘Leverite’ — was sceptical about reviewing The CEO Factory: Management Lessons from Hindustan Unilever, but gave in to the curiosity to find out how Sudhir Sitapati has treated a subject close to the hearts of all ex-Leverites.

Sitapati joined the company as a management trainee in 1999, and became a confirmed manager in the early 2000s. Around the time, many of my “batchmates” (from the 1980s lot) and I were looking for opportunities outside. The two periods can be broadly divided as HLL (Hindustan Lever), as it was then known, and HUL (Hindustan Unilever) as it was later renamed. The HLL-era veterans have a healthy disdain for the young Turks of HUL. Some of it is out of sheer paternal envy.

Sitapati quotes the current chairman Sanjeev Mehta’s mantra on people cost — “Pay six people the salary of eight people and get them to do the job of 10 people”. In our days, the old Lever’s adage ran “HLL managers are like HLL shares — highly valued but under-priced”. There were several such jokes in circulation. There was another one was about a Sewri (Mumbai) factory manager going to the Mahim fish market wearing his company ID card. The chatty woman fish-seller told him: “Saheb, woh ID card nahin rehne se bhi mein apse jyada paisa nahin leti.”

Indeed, the culture of austerity was sometimes extreme. Sitapati cited some amusing incidents, like when the commercial manager at a branch was asked to change the lock of his room instead of buying a new steel almirah. Or how the project manager at Haldia took hours to convince his director that they should have western-style toilets in the managers’ quarters.

One recalls the first major exodus from HLL in the early 1990s, when more than 20 fast-trackers left to join Pepsico. This was viewed as a betrayal. The “Lever Leavers” were said to have sold out for lucre! ‘Lehar Pepsi’ was then mockingly called as “Lever Pepsi”. But things changed under Keki Dadiseth (first as personal director and then chairman). There was a reluctant realisation that remuneration had to be marked to market in order to attract and retain talent.

That said, Sitapati has desisted from delving much into history, which would be of interest only to the limited few who have either worked at or seen the company from close quarters. Of course, there are reminiscences of some retired generals — mostly to enunciate the company’s culture and its value systems.

Shrouded in mystery

HUL always had a mystique around it. Outsiders found it difficult to put their finger on what made the company tick. As Sitapati writes, HUL executives had strong middle-class moorings. They were decidedly non-glamorous compared to the box-wallah MNCs as well as some large Indian houses. So, it was an enigma as to how such “ordinary people delivered extraordinary results year after year”, to quote Ashok Ganguly, HLL’s fourth Indian chairman.

Sitapati jokes that HUL’s old corporate office in Churchgate, Mumbai had a KGB-HQ feel. The analogy may not be entirely inappropriate, as there were many myths surrounding the workings of the company. It was widely believed that new recruits were sworn to secrecy via a Masonic ritual and that HUL had a manual for everything. Nothing could be farther from reality. Much like the Magna Carta, most systems and processes in HLL were unwritten. They were more imbibed than handed down; thus imprinted into the DNA of people across the board.

Sitapati has done well to distil the processes and put them into neat structures with real examples to support the theoretical construct. He has drawn from his own experiences and conversations with past and present stalwarts. Some of it might appear retro-fitted logic. Still, it provides readers a peek into the company’s innards.

But, has Sitapati given out classified “state secrets”? That question seems to claw his conscience. He resolves this dilemma by applying marketing expert Shunu Sen’s “Bikini Theory” — reveal what is suggestive but hide what is vital.

Company anecdotes

The CEO Factory focusses more on the recent happenings of the past decade or so, that would be of greater interest to contemporary readers. Someone who is part of the company will naturally talk more about triumphs rather than tribulations. But, mistakes and setbacks are an essential part of the evolution of an organisation. This is what is missing from the book, excepting a few instances like the ‘pricing fiasco’ of the 2000s.

Sitapati elaborates on the major gamble HUL took by relaunching the iconic soap brand, Lifebuoy. Apparently, Gopal Vittal (who would have been the head of marketing for home and personal care at the time) bowled over the chairman of the day, Vindi Banga, with a presentation provocatively titled the “Red Whore”. While only the launch was highlighted, one would have liked to know how Lifebuoy has fared since then in comparison with HUL’s main competitors in the space, such as Reckitt Benckiser’s Dettol.

An official historian has to be politically correct in sharing credit. And this is a path that Sitapati has trodden delicately. He is decidedly partial towards his bosses and their close peer group. In the bargain, however, there are some conspicuous omissions. For example, while recounting the historic ‘Doom Dooma’ airlift operation in 1991, the role that PM (Suman) Sinha (director, corporate affairs) and Aniruddh Lahiri (GM for the eastern region) played was skipped.

But Sitapati eschews anecdotes as they tend to digress from the narrative. PL Tandon, the legendary first Indian chairman of HLL — whom I met a few times — used to say: “I may be anecdotal, but hopefully not an anecdotage”. In the book, former vice-chairman R Gopalakrishnan has shared with Sitapati PL Tandon’s parting advice to him when he was about to join Tata Sons: “Gopal, it is time to say ‘Ok Tata’ and not look back.”

The same counsel holds true for many of us. The old HLL is dead, but long live HUL!

The reviewer worked with Hindustan Unilever for two decades, and left in 2002 as country manager and MD, Unilever Nepal

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Published on December 30, 2019
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