The Emami Gurukul

Book Review: Business the Emami Way

Article first published +BusinessToday Click here 

As a child one heard of an allegorical tale of a village barber. He used to carry out minor surgeries for the villagers. Then came along a crafty quack who said to the barber: "You are so naturally gifted; now if only you had a formal training you could become a top surgeon." The simple barber swallowed the bait and asked the quack to teach him. And that was the end of his practice. Each time he picked up the implements he got scared at the thought of what could go wrong. He could no longer trust his intuition and native skills; the burden of medical theory paralysed his craft. Reading Business The Emami Way reminds me of that fictional barber - for reasons I shall come to in a bit.


R.S. Agarwal and R.S. Goenka are the stuff legends are made of. They are phenomenal entrepreneurs who started small by moonlighting while still working for one of the largest industrial groups. From there, they went on to build an empire taking on formidable FMCG multinational giants. They did with FMCG personal care products what Karsanbhai Patel of Nirma achieved with detergents; then gradually expanded into other FMCG categories like edible oils and retail pharmacy chains. To deploy the surplus of the low capital intensity consumer products business, Emami made lateral forays through joint ventures into healthcare and real estate. Nirma had, on the other hand, ploughed back its cash for upstream industries like Soda Ash and Linear Alkyl Benzene. It may not be sheer coincidence that both Nirma and Emami will soon be battling it out in the cement markets of Eastern India.

What could have been an enthralling saga of their fascinating journey from bean counters to business tycoons - gleaning management and life lessons along the way - has been marred by adopting a guru-shishya dialogue format. The "gyan" that is dispensed may sound to an evolved reader rather elementary, often laced with cliches and time-worn quotes like "Time and tide waits for no one". On how to conduct effective meetings, it is advised that "secretaries of the top bosses should collect all related facts and information for the department or departments and present it before the bosses". To check interruptions, it is suggested the boss hang a 'Do Not Disturb' sign outside his office. But if friends drop in announced, one needs to make time for them (so as not to appear "downright impolite"), but "do not go overboard".


Discourse about market segmentation, socio-economic classification and attitudinal difference between rural and urban consumers are in the same simplistic vein. But, all of it is grounded in strong earthy wisdom, cutting the chase - which is something professional managers and fledgling entrepreneurs can imbibe from the Agarwal-Goenka Gurukul.

The most interesting part of the book lies in "a leaf from my life's book" at the end of each chapter, which by itself could have been a rich read if chronicled in some more detail and depth. There was, perhaps, no need to laboriously plod through management theories like teaching human anatomy to the barber.

How ITC reinvented itself to “a company that also makes cigarettes”

Aricle first published in +Mint Click here to read


Over a decade ago, one of the doyens of Indian business journalism had written an article, “Tale of two companies”, comparing two packaged consumer goods makers — Hindustan Lever Ltd (still not Hindustan Unilever Ltd (HUL) then) and ITC Ltd. Since then much soap and detergent have been washed down the Hooghly and Arabian Sea — as indeed millions of puffs have been blown through human chimneys. While HUL has regained its old act by re-engineering itself, ITC has got its new act together by reinventing itself.

Till the early 1990s, the punch line of all Hindustan Lever chairmen used to be “we are an Indian company whose largest shareholder happens to be a multinational”. ITC, on the other hand, used to be less apologetic about its BAT Plc. parentage. Following the eminently forgettable K.L. Chugh era, when Y.C. Deveshwar mounted the saddle, in a corporate coup of sorts with the backing of institutional shareholders, he decisively cut off the umbilical chord and embarked on a mission to establish ITC’s Indian credentials with a vengeance.

At the same time, with liberalization of the Indian economy, the new generation chairmen of Lever over time shed their trademark khadi silk bush-shirts in favour of bespoke suits when traversing the power corridors of Delhi. However, this piece is not about comparing the two companies but trace the evolution of ITC as an Indian consumer products giant.

It is easy to surmise why Ajit Haksar — the last of the corporate Mohicans — ventured into hotels. It was partly to hedge against the possibility of curbs on the tobacco business and also as a safe haven for the surplus funds of the mother business that could be easily encashed anytime by selling the brand or the real estate. It is to Haksar and ITC’s credit that they nurtured Welcomgroup for a long time before it became truly profitable. Printing and packaging (where Deveshwar first cut his teeth) and paper boards were but logical vertical integration.

Similarly, one would believe the lifestyle and apparel business was started to secure the Wills franchise. But the real serious diversification was kicked off with ITC’s plunge into the foods business — which arose both out of necessity and opportunity. Subsequently, it naturally extended to pure consumer products play.

The story of ITC’s transformation is one of turning a proverbial threat into an opportunity. As the time-worn cliché goes — cigarettes is a “dying” industry in more senses than one. With the intervention of World Health Organization and a judiciary increasingly sensitive to the hazards of tobacco consumption, the tobacco industry has had to brace itself for a premature sunset like its consumers (smokers).

Simultaneously, there was a need to divert public attention from corporate governance and health (tobacco) to being a socially-responsible organization. This, one would suspect, was the genesis of a “we also make cigarettes” strategy.

The ban on cigarette advertising came as a blessing in disguise as it left ITC flush with cash. Not having a majority foreign shareholding allowed it to enter the food sector — then reserved for domestic players (except those such as Nestle SA, GlaxoSmithKline PLC and a few others — who enjoyed the benefits of a “grandfather” clause). Food was largely an open field with no organized pan-India player barring Britannia Industries Ltd. From biscuits, atta, ready-to-cook or heat meals, it has seamlessly moved to instant noodles, juices and now, one hears, coffee is in the pipeline.

For a cigarette manufacturer with low technology and little product innovation except in packaging perhaps, ITC’s most remarkable achievement was in learning the ropes of an entirely different supply chain and gaining mastery of a new product category, not just in terms of marketing but product development and innovation. Equally challenging was building a network which — contrary to popular belief — had little in common with the cigarette retail channel.

The evolution into personal care was even more interesting because here it had to contend with a giant like Unilever with an 80-year legacy in India, international brands and world-class research and development. Making soaps, body-wash and shampoo brands is as different as paneer is from talcum powder. Globally, too, it is rare for companies to be equally successful in both food and packaged consumer products. Neither Unilever nor Procter & Gamble Co. can really be considered to have handled both businesses with the same level of success while traditional food makers like Nestle and General Foods Corp. have by and large stuck to their knitting.

However, ITC’s real success lies in achieving this transformation with existing, home-grown talent with very little (or practically no) lateral hires at senior levels. ITC remains one of the few large companies that still believes in providing long-term careers to its employees. It is a key differentiator in a fast-changing corporate world where “turnover” and “velocity” are the current flavours of human resources management. Changing the corporate DNA and culture is no mean task. If an organization has to reinvent itself so have to its leaders. This is where Deveshwar scores above many of our present day corporate icons. Arguably, he had an extended stay at the top. But Deveshwar leaves behind a new ITC for the next generation.

In contrast, the much-hyped “Project Millennium” of Lever — riding on which many careers were made — lost steam. Among close to a dozen business ideas incubated — just about one (water, that too in a modified form) has survived the genetic implant.

It was generous of Deveshwar to praise Amul and Patanjali in his speech.The jury on the latter is still out. But, what it does underscore is the rapidly shrinking ramp-up time. What took Unilever 60 years to achieve, Amul did in 40 and ITC in 20. Now, Patanjali has managed to scale up in less than five.
A fascinating battle lies ahead between the global giants and the emerging “swadeshi” challengers.

Ronju (Pradeep) Dutt - an uncelebrated legend

Pradeep (PK) Dutt - Guru of Marketing Gurus passed away in Calcutta

Article first published in The Economic Times (click here for link)

An IIT Kharagpur Civil Engineer - he landed at the Backbay Reclamation Office of Hindustan Lever for an opening of Marketing Manager - after changing some 7 jobs (as per his own count) including trying his hand in Transport Business (when he couldn't see his own face on the mirror at night - because of the malpractices in the trade). The great raconteur that he was - Pradeep Dutt (PKD to his colleagues and Ronju to friends) would regale young Management Trainees with the story (perhaps made up) of how the topic of group discussion at the HLL interview was "The Rising Trend of Mini-skirts" - when he stunned the panel by asking whether it meant "Mini-skirts were getting shorter, or more and more women were taking to wearing mini-skirts". This piece of witticism he claimed clinched the job for him among many MBAs in the group.  It is this touch of humour and large-heartedness that set him apart from many of his peers and protégées - some of whom went on to do much better than him professionally.

His rise at Hindustan Lever was almost meteoric. As they say success has many fathers - so while a lot of people claim credit for the launch of Liril Soap and Fair & Lovely - PKD had a major role in both. Though the latter ('FAL' as it was called in Unilever parlance) - is a "politically incorrect" product to talk of now  - PKD (in early 80s) proudly displayed in his room a letter of thanks from someone living in a remote Tamil Nadu village, who thought had it not been for Fair & Lovely his daughter would not have found a good match. From there, Pradeep Dutt went on to become the youngest ever Managing Director of Lipton India - sitting in their old Weston Street Office in Central Calcutta and was the lead player of the company's turn-around story.

It is at Lipton, PKD touched the lives and shaped careers of many. Always a bon-vivant - he was arguably the most magnanimous of the Lever's Marketing doyens - perhaps, with the sole exception of the legendary Shunu Sen. But, ironically, it was also at Lipton's PKD met his professional "waterloo" in the launch of Tree-top - a tetra-pack range of drinks - and '21' an Ice Tea clone - which were perhaps much ahead of their time. But, PKD had the old world leadership values of backing his lieutenants to the hilt - and then taking the blame upon himself if things went wrong - a quality that has gone missing in today's corporate world.

Around the same time - PKD lost his wife Padma to cancer - who was really the anchor of his life. It his from here that his personal and professional world began to fall apart. If one call it hamartia - it was the blind faith he had on colleagues and subordinates. This, many friends and admirers believe, was also the cause of his next professional setback in a multinational company - which he had to leave in a somewhat forgettable circumstances.

His later years were spent between Calcutta and Santiniketan (where he took pride in saying his regular rickshawallah also double up as a boot-legger) - until he sold of his house there. At Calcutta - he was a regular at the Clubs. Always surrounded by friends - he was never spared himself on food, drinks and cigarettes. But, that neither dimmed his wit or took the edge off his sharp marketing mind. Many former colleagues would turn to him for advice on Brands - which he would dispense freely. Anyone else in his place - would have made a fortune out of it. But, PKD was too proud to do that. The outpourings on Facebook - at the breaking of the news this morning is a testimony to the popularity of the man as was the large gathering of friends and associates at the crematorium.  One elderly gentleman who came for the last rites - was carrying a bottle of mineral water. A friend quipped - you haven't come to Ronju's funeral with just plain water but mixed some gin into it - else he wouldn't forgive you. That in a way sums up the man that was PKD.