CEO
SPEAK - Lessons From The Frontline
Why
the front-end of the business provides greater business insights for these CEOs
than any amount of meetings and presentations
One hot May afternoon a couple of
years ago, Atul Singh, President & CEO, Coca-Cola India and South West Asia
landed up at a rural market in UP to visit local retail outlets selling the
company’s brands. Singh was dismayed to see that many of these outlets did not
have any chilling equipment and instead, were using ice boxes containing more
ice water than ice. On asking shop-owners, he ascertained that the lack of
continuous electric supply was getting to be a major obstacle in the acceptance
of the brand. Despite huge preference for Coca-Cola brands, the sales weren’t
picking up owing to the products not being chilled.
Singh moved fast. Within a few months, Coca-Cola piloted 20 solar coolers in Agra (UP). Next thing they knew, the outlets where these coolers were deployed showed a five-fold jump in sales. The company has already installed 110 solar coolers so far and has ordered 500 more. “Modern day companies must start from the consumer’s requirement and then work backwards if they have to run a sustainable business. Therefore, market visits are part of the plan when I am travelling,” Singh says.
The need for business heads to have an ear to the ground is a top management compulsion. But it’s not an easy job. Chris Zook and James Allen write in their book Repeatability: Build Enduring Businesses for a World of Constant Change, that the complexity of most businesses is growing exponentially, drawing senior management farther and farther away from the front line, a trend that can lead to strategy mistakes. Harsh Mariwala, chairman of Marico Industries, says that he cannot imagine a modern day CEO, especially in consumer businesses, not performing this job. “It is the duty of a CEO to connect the dots. When I go to the frontline and meet people, I am able to take the learnings from one experience or area and apply it to another.”
And that’s what Sunil Duggal did. Nine months ago, the CEO of Dabur India, who started his career in sales, was in Gorakhpur, a town he last visited a decade ago. At that time, he found women sitting in rickshaws with their heads covered. “This time, I was surprised to see that women in Gorakhpur were wearing jeans and riding scooters…there was a high level of empowerment, which was encouraging.”
That set him thinking. If this was the outside manifestation of change, how would it translate into a business opportunity? Duggal called upon his senior managers for a list of beauty parlours in Gorakhpur. But the list he got, with 40-odd parlours, was far from convincing. After all, Dabur had acquired Fem in 2009 and was in the business of selling beauty products. So he went to a wholesaler there and got a totally different set of numbers. “He said there were 250 beauty parlours that came to him regularly for beauty products,” he says. Duggal guessed even that number was understated as the catchment area of Gorakhpur would be far bigger.
Dabur then deployed a sales lady to go to the parlours in Gorakhpur and explain its products and new launches, prices and promos. There are three such women doing the rounds today. Since the Fem acquisition in 2009, Dabur’s sales in Gorakhpur have doubled. Over the last six months, sales in the region have shot up by about 50%.
But that doesn’t just mean that learning comes only from customers; employees can be a valuable source of insights as well. Mariwala recalls an incident that occurred 4-5 years ago when he attended a company event where Marico teams from different regions were staging plays. To his surprise, he saw that the theme most teams had picked was the importance of achieving sales targets and their plays depicted bosses driving employees to sell more. Mariwala picked up on the hidden messages. “It became obvious that people were under tremendous pressure. I told them that we want our people focusing on the key issues and not just pushing products into the market. I would never have learnt this if I had not attended that event,” he says.
Harish Manwani, non-executive chairman of Hindustan Unilever is a firm believer in this go-to-market mantra. “I have no temptation to stay busy in meetings all day. In fact, I find market visits refreshingly useful and energising,” he says. When CD catches up with him, Manwani is on a whirlwind one-day trip to Ahmedabad to speak to IIM students. But directly after his morning flight touches down in the city, he’s off to explore the market. He spends 15 minutes with a lady shopper who walks into a kirana store, asking her what kind brands she normally buys and why she prefers certain products over others after which he meets a salesman working for his distributor to learn how the latter operates his hand-held inventory management system. “They are the real heroes of our business,” he says. GROUND RULES
Manwani isn’t just paying lip service to the task. He ensures that the action points of every visit are drafted immediately so that he knows what’s been discussed at each outing and what action needs to be taken later by the relevant people within the organisation. “You have to make sure the right people in your organisation learn about the observations made from these market visits,” he says.
But then again, CEOs in the consumer space don’t always have to go to the field to get feedback. They get feedback from friends, relatives and from perfect strangers at social gatherings. Marten Pieters, managing director and CEO of Vodafone India says he gets
feedback at every party he goes to. “This kind of feedback can be dangerous, since it’s all anecdotal and not really representative of the customer base. Our average customer doesn’t speak English and I wouldn’t normally get a chance to speak to them.”
Instead, Marten visits Vodafone stores and speaks to his managers to get market feedback. Twice a year, he takes part in a roadshow that covers four major centres and the whole event is broadcast on-line for all employees. Recently he was in Srinagar, where his retail manager told him the Rs 20 full talk time scheme that we introduced was not a good idea. “It came as surprise,” says Pieters. “We had thought it would make our pre-paid service more competitive in smaller places, but our retailer didn’t think so. He said full talk time schemes should only be for recharges of Rs 50 or more.”
Given the rate at which the market is changing, one’s knowledge has to be constantly updated. Kishore Biyani, Future Group chairman says, “Sometimes CEOs start to think they know it all. That’s where the problem begins.” Biyani visits at least two stores a week and to get the most out of every visit, he always goes alone. And there is no prior intimation either. “I have this tendency to find 20 things that are not right. If I don’t like something, I crib a lot and force people to take action then and there,” he says.
At Godrej Consumer Products, managing director A Mahendran trades his Jaguar for an Indica and ditches the suit and tie when he goes on retail visits. “If they see you drive up in a big fancy car and know who you are, they aren’t going to talk as freely,” he says. Similarly, he prefers to meet his frontline sales team over a breakfast or lunch or dinner rather than talk to them with their supervisors or regional heads in the vicinity. This way, they are far more relaxed and the information, far more authentic.
All of this enables him to provide better solutions when his teams share their problems at the monthly reviews. “Typically, the b-school guys who rapidly climb the ladder to the top are more inclined to spend their time in boardrooms. I’m an entrepreneur and have always done this. And am happier going out there by myself rather than inform all my managers and make it a planned formal affair,” he says.
Sameer Suneja, MD, Perfetti van Melle says that if one truly wants to benefit from these exercises, it is crucial to do it on a regular basis. “If you visit infrequently, the visit would be hyped and it would be an artificial environment where everything would be rehearsed and the business prepped up.” Suneja believes such meetings should not be an opportunity for fault-finding. “I prefer to brainstorm and talk about new trends and ideas and focus on what
we can do better,” he says.
But when the occasion demands it, a stern order can work wonders. Vsevolod Rozanov, President and CEO, MTS India has been in the country for four years now. He conducts impromptu checks on retailers to gauge business performance in the market first-hand. About six months ago, during one such random check, he walked into three or four Mumbai-based mono-brand shops. He found that the retailers had poor point of sale promotion material as well as a marked absence of people within shops to promote MTS products. “I immediately called up the retail head of Mumbai and told him to fix it.”
Rozanov hops across regions countrywide to confer with his retailers at least twice a month. Perhaps it is this interaction that resulted in the launch of smartphones in the CDMA category in India, since MTS only provides CDMA services. “Historically, CDMA is known as a ‘poor man’s friend’ in India and it was important to change that perception as CDMA handsets were available at lower price points only,” Rozanov claims adding that he met up with retailers of MTS personally to get such insight. That’s when he decided to introduce upgraded categories of CDMA handsets to wean away customers of GSM handsets or even upgrade MTS’ own subscribers. The company already has a few smartphone tieups with manufacturers and is gradually scaling the price curve in the CDMA space.
Even if these field visits don’t always result in concrete changes, they serve as an important tool for the bosses. During his first few weeks at the helm of HCL Technologies in 2005, Vice Chairman and CEO Vineet Nayar travelled across the globe to meet HCL employees and customers. One of these meetings he attended with the HCL team was with a customer who was happy with the way the company had delivered a project, and interestingly, another one was for exactly the opposite reason. In the first meeting, the customer completely ignored Nayar and eulogised the HCL team while in the other one, the customer put the blame squarely on the shoulders of the HCL management who he felt had not enabled the team appropriately. Neither customer had said a word about HCL’s services or products. They had talked only about the team members, the employees they had worked with. “These experiences provided a bold underline to a thought that our employees were the value we offered to our customers. Eventually, these thoughts and inputs led to the creation of HCL’s ‘Employee First, Customers Second’ philosophy, which is today the cornerstone of our success,” says Nayar.
Nikhil Menon and Moinak Mitra ETCD120817
Singh moved fast. Within a few months, Coca-Cola piloted 20 solar coolers in Agra (UP). Next thing they knew, the outlets where these coolers were deployed showed a five-fold jump in sales. The company has already installed 110 solar coolers so far and has ordered 500 more. “Modern day companies must start from the consumer’s requirement and then work backwards if they have to run a sustainable business. Therefore, market visits are part of the plan when I am travelling,” Singh says.
The need for business heads to have an ear to the ground is a top management compulsion. But it’s not an easy job. Chris Zook and James Allen write in their book Repeatability: Build Enduring Businesses for a World of Constant Change, that the complexity of most businesses is growing exponentially, drawing senior management farther and farther away from the front line, a trend that can lead to strategy mistakes. Harsh Mariwala, chairman of Marico Industries, says that he cannot imagine a modern day CEO, especially in consumer businesses, not performing this job. “It is the duty of a CEO to connect the dots. When I go to the frontline and meet people, I am able to take the learnings from one experience or area and apply it to another.”
And that’s what Sunil Duggal did. Nine months ago, the CEO of Dabur India, who started his career in sales, was in Gorakhpur, a town he last visited a decade ago. At that time, he found women sitting in rickshaws with their heads covered. “This time, I was surprised to see that women in Gorakhpur were wearing jeans and riding scooters…there was a high level of empowerment, which was encouraging.”
That set him thinking. If this was the outside manifestation of change, how would it translate into a business opportunity? Duggal called upon his senior managers for a list of beauty parlours in Gorakhpur. But the list he got, with 40-odd parlours, was far from convincing. After all, Dabur had acquired Fem in 2009 and was in the business of selling beauty products. So he went to a wholesaler there and got a totally different set of numbers. “He said there were 250 beauty parlours that came to him regularly for beauty products,” he says. Duggal guessed even that number was understated as the catchment area of Gorakhpur would be far bigger.
Dabur then deployed a sales lady to go to the parlours in Gorakhpur and explain its products and new launches, prices and promos. There are three such women doing the rounds today. Since the Fem acquisition in 2009, Dabur’s sales in Gorakhpur have doubled. Over the last six months, sales in the region have shot up by about 50%.
But that doesn’t just mean that learning comes only from customers; employees can be a valuable source of insights as well. Mariwala recalls an incident that occurred 4-5 years ago when he attended a company event where Marico teams from different regions were staging plays. To his surprise, he saw that the theme most teams had picked was the importance of achieving sales targets and their plays depicted bosses driving employees to sell more. Mariwala picked up on the hidden messages. “It became obvious that people were under tremendous pressure. I told them that we want our people focusing on the key issues and not just pushing products into the market. I would never have learnt this if I had not attended that event,” he says.
Harish Manwani, non-executive chairman of Hindustan Unilever is a firm believer in this go-to-market mantra. “I have no temptation to stay busy in meetings all day. In fact, I find market visits refreshingly useful and energising,” he says. When CD catches up with him, Manwani is on a whirlwind one-day trip to Ahmedabad to speak to IIM students. But directly after his morning flight touches down in the city, he’s off to explore the market. He spends 15 minutes with a lady shopper who walks into a kirana store, asking her what kind brands she normally buys and why she prefers certain products over others after which he meets a salesman working for his distributor to learn how the latter operates his hand-held inventory management system. “They are the real heroes of our business,” he says. GROUND RULES
Manwani isn’t just paying lip service to the task. He ensures that the action points of every visit are drafted immediately so that he knows what’s been discussed at each outing and what action needs to be taken later by the relevant people within the organisation. “You have to make sure the right people in your organisation learn about the observations made from these market visits,” he says.
But then again, CEOs in the consumer space don’t always have to go to the field to get feedback. They get feedback from friends, relatives and from perfect strangers at social gatherings. Marten Pieters, managing director and CEO of Vodafone India says he gets
feedback at every party he goes to. “This kind of feedback can be dangerous, since it’s all anecdotal and not really representative of the customer base. Our average customer doesn’t speak English and I wouldn’t normally get a chance to speak to them.”
Instead, Marten visits Vodafone stores and speaks to his managers to get market feedback. Twice a year, he takes part in a roadshow that covers four major centres and the whole event is broadcast on-line for all employees. Recently he was in Srinagar, where his retail manager told him the Rs 20 full talk time scheme that we introduced was not a good idea. “It came as surprise,” says Pieters. “We had thought it would make our pre-paid service more competitive in smaller places, but our retailer didn’t think so. He said full talk time schemes should only be for recharges of Rs 50 or more.”
Given the rate at which the market is changing, one’s knowledge has to be constantly updated. Kishore Biyani, Future Group chairman says, “Sometimes CEOs start to think they know it all. That’s where the problem begins.” Biyani visits at least two stores a week and to get the most out of every visit, he always goes alone. And there is no prior intimation either. “I have this tendency to find 20 things that are not right. If I don’t like something, I crib a lot and force people to take action then and there,” he says.
At Godrej Consumer Products, managing director A Mahendran trades his Jaguar for an Indica and ditches the suit and tie when he goes on retail visits. “If they see you drive up in a big fancy car and know who you are, they aren’t going to talk as freely,” he says. Similarly, he prefers to meet his frontline sales team over a breakfast or lunch or dinner rather than talk to them with their supervisors or regional heads in the vicinity. This way, they are far more relaxed and the information, far more authentic.
All of this enables him to provide better solutions when his teams share their problems at the monthly reviews. “Typically, the b-school guys who rapidly climb the ladder to the top are more inclined to spend their time in boardrooms. I’m an entrepreneur and have always done this. And am happier going out there by myself rather than inform all my managers and make it a planned formal affair,” he says.
Sameer Suneja, MD, Perfetti van Melle says that if one truly wants to benefit from these exercises, it is crucial to do it on a regular basis. “If you visit infrequently, the visit would be hyped and it would be an artificial environment where everything would be rehearsed and the business prepped up.” Suneja believes such meetings should not be an opportunity for fault-finding. “I prefer to brainstorm and talk about new trends and ideas and focus on what
we can do better,” he says.
But when the occasion demands it, a stern order can work wonders. Vsevolod Rozanov, President and CEO, MTS India has been in the country for four years now. He conducts impromptu checks on retailers to gauge business performance in the market first-hand. About six months ago, during one such random check, he walked into three or four Mumbai-based mono-brand shops. He found that the retailers had poor point of sale promotion material as well as a marked absence of people within shops to promote MTS products. “I immediately called up the retail head of Mumbai and told him to fix it.”
Rozanov hops across regions countrywide to confer with his retailers at least twice a month. Perhaps it is this interaction that resulted in the launch of smartphones in the CDMA category in India, since MTS only provides CDMA services. “Historically, CDMA is known as a ‘poor man’s friend’ in India and it was important to change that perception as CDMA handsets were available at lower price points only,” Rozanov claims adding that he met up with retailers of MTS personally to get such insight. That’s when he decided to introduce upgraded categories of CDMA handsets to wean away customers of GSM handsets or even upgrade MTS’ own subscribers. The company already has a few smartphone tieups with manufacturers and is gradually scaling the price curve in the CDMA space.
Even if these field visits don’t always result in concrete changes, they serve as an important tool for the bosses. During his first few weeks at the helm of HCL Technologies in 2005, Vice Chairman and CEO Vineet Nayar travelled across the globe to meet HCL employees and customers. One of these meetings he attended with the HCL team was with a customer who was happy with the way the company had delivered a project, and interestingly, another one was for exactly the opposite reason. In the first meeting, the customer completely ignored Nayar and eulogised the HCL team while in the other one, the customer put the blame squarely on the shoulders of the HCL management who he felt had not enabled the team appropriately. Neither customer had said a word about HCL’s services or products. They had talked only about the team members, the employees they had worked with. “These experiences provided a bold underline to a thought that our employees were the value we offered to our customers. Eventually, these thoughts and inputs led to the creation of HCL’s ‘Employee First, Customers Second’ philosophy, which is today the cornerstone of our success,” says Nayar.
Nikhil Menon and Moinak Mitra ETCD120817
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