Thank you for your overwhelming response to the first section of this post.
Why did the change not work? The CEO and I found ourselves a comfortable place in a bar and continued our conversation over a few drinks.
He drank and spoke; I chose to ask questions and listen instead of drinking. Here is how the conversation progressed.
The CEO – Ravi (name changed) said, “I was doing very well in Unilever successful with a big role. I was itching to run my own company. The opportunity seemed terrific. The company, an MNC had promise, some good products and brands in its stable, a laid-back culture, moved slowly but had incredible potential. They got a new CEO globally and he hired me. He wanted to drive this company in India out of the woods and into growth. You know Unilever at that time was growing 18% YoY and this company was growing a mere 6% and losing market share in all key product categories.”
So I asked Ravi, “What was your mandate?”
Ravi: “I was told they wanted to shake up this place”.
Me: “What do you mean by ‘shake up’?”
Ravi: “My predecessor was an old hand. He had been around for 25 years. Was hard-wired in his thinking. He was not open to taking on aggressive sales growth targets. He had a fixed way of doing things. He was not open to launching new products in India, which were successful in other markets. He was resistant to any change. They wanted a new man at the helm. They wanted me to take a hard look at the leadership, assess their capability and determine if we had the right horses in the stable. They were not sure who they could bet on. They did not trust my predecessor’s assessment of the situation and the leadership team. I was told I should do what it takes to grow the company at par with competitors, which means 6% to 18% annual growth. That is how the market was growing at that time.”
Me: “So after you joined what was your assessment of the situation & the leadership?”
Ravi: “Boy, a ton of issues. In most cases the global assessment was right. The company was truly laid back. They had no measures around performance. Starting with manufacturing; factory productivity was low, poor quality processes, safety standards were pathetic, compliance was at bare minimum standards and much more. I was concerned that with these standards, scalability of output will be big challenge. R&D ; had been pumping ‘000’s of $ into this thing and nothing had come out in the last 5 years. Can you believe it? The first time I reviewed R&D work and results, I decided – I have to shut this down completely. It is not worth the money we poured into it. There were positives – the sales engine worked well, we had a strong distribution model and it made me happy. In product marketing and branding, there were a few good people but I knew we had to invest in this place. Therefore, I did invest and bring in some good people from Unilever.”
Me: “So what was your plan? How did you think about the change you wanted to see?”
Ravi: “I decided to approach it in three phases. Phase 1 – I went around the country and met all people. I reviewed all the work that they were doing, got to understand their issues and challenges. I also used the opportunity to assess the people and inform my thinking. So I met the factory and supply chain leadership, the sales and marketing teams, distributors and retailers, my own Management Committee (MC) and spent around three months doing just this. Phase 2 – I shared my vision and growth strategy for the company. I aligned my global CEO and his team to my thinking. I recommended that I will shut India R&D and I shall leverage global R&D to drive innovation in both product and packaging. He agreed. I also shared my vision and growth strategy with my MC. Phase 3 – I identified people who might be challenged in executing my vision & strategy and decided to change them.”
My reflection: Wow, …, my brain began humming with questions & more questions. I am sure yours’ is also ….
Me: “So, Ravi did you execute on your approach?”
Ravi: “Yes, I did to the hilt. I had a plan, I worked very hard at it. We also made a lot of progress.”
Me: “What was the progress? How did you achieve the growth results like sales, market share etc.. for which you framed this 3 phased approach?”
Ravi: “We did reasonably well. We grew 5% in the first year but we bounced back to 8% in second year. We had 6 new product launches, - The last time the company had a new product launch was 10 years ago. We did six in just 2 years. My global stakeholders should have been thrilled. They could never achieve any of this with my predecessor for the last decade. Our profits margins continued to be strong. I improved our net margin from 12% to 16%. We made the highest profits ever. I brought in some good leadership talent from outside and we had lots of people change in manufacturing and supply chain. You know more than 50% of the organization were tenured less than two years with us. From a slow lethargic set up with old fashioned people, we had a bunch of young and bright talent. I made that happen. They saw promise in my story – my vision & strategy.”
Me: “So what went wrong?”
Ravi: “My global CEO said I had not achieved what I set out to do? I had promised him 18% sales growth, but we did 5% and 8% over 2 years. He wasn’t satisfied. In his view, I missed my target. But you tell me, how can growth happen overnight? It would take 4-5 years for us to get there – right? We were on track. He said my MC was not happy with my style. They thought I was going too fast and not consulting them enough. Come on, I hired half this team! They knew my vision and strategy, they agreed in our MC meeting. We were losing share – did we expect the customer to wait for us longer? The third reason I was told that the employee satisfaction scores went down. This shocked me completely. I raised the compensation costs by 24%, hired smart people and I just can’t get to understand why would people be unhappy?”
My reflection: It was then that it struck me, Ravi is such a smart guy, high achiever, has the right ideas, great intent but the best of people can have blind spots.
Me: “How committed was your Global CEO and his team on your vision & strategy for India?”
Ravi: “Oh.., my boss said, it is for me to decide and drive India.”
Me: “You have not answered my question?”
Ravi: “I think he was committed, why do you ask?”
Me: “That’s ok Ravi. I just want you to reflect on it. My next question is how committed was your MC on your Vision & strategy?”
Ravi: “You know what? They were over-awed when they saw it? A few walked up to me and said, “this is the best strategy they ever saw in their careers”.”
Me: “Were they committed or were they just over-awed with YOUR strategy?”
Ravi: “Why do you ask that question…, I thought they were committed?”
Me: “You said you went around the country meeting people and sharing your thinking? Did your MC also do the same?”
Ravi: “eh..eh.., not really. I guess they left that job to me?”
Me: “Who did you work with to make your decisions around people, Org changes etc.?”
Ravi: “Ah.., I knew exactly what I wanted to do. A few of us from the MC like my Marketing and Sales Leads worked with me in defining these changes. Many others you know were the old timers, who did not quite understand what I was trying to do. Besides, they were always questioning and cautioning me.”
Me: “Did you ever consult Amitabh, your HR Lead? I think he was not an old timer. He had joined a few months prior to you.”
Ravi: “I did try to talk to him, but he sounded more of an old timer than the actual old timers. He was really an old school guy. He would often insist we move more cautiously. He wanted me to give more time for the old timers to change and improve. While he was one guy who voiced strong support to my vision and strategy, he often questioned my decisions on people. He felt many old timers could embrace change and align with the strategy. But I had my doubts.
He often came to me with feedback from my team. He would never tell me who? He seemed to be leading crib sessions and people tended to gravitate to him. They seemed to like him. He was a nice guy, probably. He would come and play that all back on me. I had no patience for all of that. We were on a flying plane and changing engines while on flight. It had to be done ASAP. Change is the only constant. I was communicating that in all my town halls and country tours. I do not understand why can’t people just accept it?”
Me: “So what did you do?”
Ravi: “I fired Amitabh and got myself another HR guy. But you know what, later when I was asked to go and I was completely down and out, Amitabh got to know and he called me and spoke with me. He was so professional. He had no hard feelings on what I did to him. He spoke so nicely to me. He was so concerned about me and inquired my well-being. His graciousness really touched my heart. I guess he was a nice man.”
Me: “Wow!! This has been some story Ravi. Do you realize what you did & what could have gone wrong those two years?”
Ravi gets into a deep reflection mode. He was a few drinks down and a bit emotional by now….. and after a few minutes of total silence he says…., oh GOD what a jerk I have been…!!
Let me take a last pause here and ask you my readers - what do you think was Ravi’s reflection?
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