BUSINESS MANDATE
fountainhead of excellence
1 MAR 2022
BUSINESS MANDATE
fountainhead of excellence
47 MAR 2022
V Narayanan, former Chairman of Pond’s India Ltd was an inspiring visionary. He built a culture of character and competence and inspired ordinary people to do extraordinary things in the businesses he helmed. The Second V Narayanan Memorial Endowment Lecture instituted by well‐wishers and Pond’s veterans was held recently in memory of Late Shri V Narayanan.
Mr Jerry Rao
for different situations. This is where Mr V Narayanan
Founder and Former CEO Mphasis
set a great example. According to the Bible, Moses is the leader chosen by the God of the Hebrews, to bring that
the Hebrews out of Egypt. Then Moses dies. There is a
people are born leaders is
new leader—Joshua, whose job is to take them into the
simply not true. It was a very
Promised Land. I think the underlying message in the
clever theory that was useful
myth of The Exodus is that in different situations, we
for
need different leaders.
The
old
theory
aristocrats,
monarchs
and industrialists in the olden days to perpetuate their
In the area of politics, the British public actually
position. This is not a genetic trait like height or weight
understood it. Winston Churchill may have led them
or diabetes. It's a learned trait. The second thing we
through the war. But the moment the war was over,
know about leadership is that it is situational. No
they defeated Churchill and gave the power to someone
person is a leader in every situation. When you are on a plane, the captain of the plane is the leader. If there is an emergency, you have to follow the pilot’s instructions. Leadership is not something like ‘a man
for all seasons’ kind of story.
style in different situations.
The third thing about leadership is it is derived from situations. We need different kinds of leadership 48
situational. It means that one has to change one's leadership
A Moses and a Joshua
MAR 2022
Leadership a learned skill. It is
BUSINESS MANDATE
fountainhead of excellence
else. If Churchill had been re-elected, I don't think he
situation. How does one change for situations and
would have given India Independence in 1947. There
transform oneself from a Moses into a Joshua?
might have been a violent insurrection and all kinds of problems. The British public were clever. They changed the leader, knowing that the situation required a different leader. So, leaders are not born. Leadership a learned skill. It is situational. It means that one has to change one's leadership style in different situations. In the German army, they used to have different generals for offence and defence. Heinrici, for instance, was one of the greatest of German generals. His specialty was
According to ancient Tamil poet Thiruvalluvar, a leader must learn flawlessly, unlearn and get rid of the dust in the brain and apply what he/she has learnt. Learning and unlearning are part of a leader’s evolution. The skills that will be useful in defeating a country militarily and the skills that will be useful in negotiating with the leadership of the country about freedom are two different skills. These are two different situations.
all defence. Nobody has heard of him like they have
No knowledge will be useful, which is purely
heard of Rommel or Guderian. It doesn't matter. He was
theoretical. We all, as managers, must understand that
the best in defence. There are some who can do both.
there is no point in knowing theoretically and doing
Narayanan was one of them. He was able to straddle
nice PowerPoint presentations, if we cannot use them
multiple situations and multiple challenges.
in practice.
Learn and Unlearn
License, MRTP and FERA Chains
Why are some leaders able to do that? Let me now
Someone like Narayanan epitomized the art of
move from science to the art. Till now, we looked at the
excelling in theory and practice. He was a CEO and MD
research on leadership. We know that it's not DNA
at a time when the Indian manager was in chains, tied
driven and it's situational. It has to change as per the
between industrial licensing, MRTP and FERA. You had
BUSINESS MANDATE
fountainhead of excellence
49 MAR 2022
to operate with your hands and legs all tied up and at
Charisma is not something
the same time, keep up the organisation’s morale. You
inherited. It is acquired. It is as
had to keep your customers happy and brand values
much about leaders as it is
intact. You had to make sure that your market share
about followers; research is still
didn't go down and there was customer delight,
going on about the
managing products with an extraordinary brand
contribution of followership to
history. You had to be faithful to the brand legacy.
leadership. Narayanan was a
It was a very difficult task. Narayanan and at least
charismatic leader because of
a dozen other people of that generation of managers
his qualities and achievements.
managed that. Think of just one challenge they faced. You had to go and tell your foreign investor, "The Indian Parliament has passed some law. I know you people have been operating in this country for many
mention of the expression 'charisma.' Charisma comes
decades. But we are going to dilute you, using a share
from an old Sanskrit, Persian word. It talks about
price which is totally unfair to you. We are going to
miracles and magic. In the paintings of early Christian
bring you down to 40%. But don't worry. Be patient.
saints in Greek orthodox and Catholic churches, there
Hang in there for ten or twenty years. We will continue
will be a sun around the head of the saint. That is the
to do business and over time you will recoup."
Charisma itself. That is a holy touch given to the saint. Charisma is supposed to be very central.
Can you just think of the challenge? I am certain I would not be able to do it. But at least half a dozen
Charisma is not something inherited. It is acquired.
managers of Narayanan's generation did it. Navigating
It is as much about leaders as it is about followers;
FERA, MRTP and Industrial Licensing was as difficult
research is still going on about the contribution of
as Moses trying to bring Hebrew slaves out of Egypt.
followership
to
leadership.
Narayanan
was
a
charismatic leader because of his qualities and It was unthinkable before 1991 that two foreign companies will be allowed to merge or one foreign company will be allowed to buy the equity of another foreign company. All that under FERA were impossible. Then suddenly things changed. The controller of capital
achievements. It was also because of people like Balaraman and Atul Vohra as his followers, giving their leader that charisma. There is a symbiotic relationship. That is why enduring organizations have both great leaders and great followers.
issues went away. This required a different approach. Very few managers have been able to straddle different
There is no such thing as a great leader without
time periods. Narayanan was one of them. To go back
great followers. The best example in the last 150 years
to the myth of The Exodus in the Bible, he was able to
is Mahatma Gandhi. A good leader like Narayanan
be a reasonably good Moses and a very good Joshua.
encourages and programs their subordinates to succeed and better their leaders in what they do. People who
Charisma—Leaders and Followers
are insecure and scared that their subordinates will
In all leadership studies, you will find a lot of 50
MAR 2022
outperform and replace them can't do that.
BUSINESS MANDATE
fountainhead of excellence
Mr Thyagi Thyagarajan
I think Narayanan started in sales. He never compromised on customer satisfaction and customer
Former Regional Director & SVP
delight. He was obsessed with the fact that Pond's
GlaxoSmithKline, Asia Pacific
vanishing cream or Dreamflower talc or some of those
I
other brands had extraordinary association of customer satisfaction.
first met Mr Nari (Mr Narayanan's
nick
name)
when I came back to India
after a stint in the UK. I joined
Selling the Backwater In those days, for a variety of historical reasons, Cheeseborough Pond's was headquartered in Madras (now Chennai), which was a bit backward those days. All the big companies were in Bombay and a few dying British companies were still in Calcutta. It was very difficult to attract talent to Madras.
as a special assistant to the Managing Director. It took some time for me to settle back into India. I decided to expose the company, to talk to people from different backgrounds and different industries and see what we can do with that knowledge, the pharmaceutical industry being pretty insular. They get very special in many ways and I felt important for the company to be
Narayanan had the unique ability to convert that into a positive. He sent a subtle message that Madras might be a backwater but one could learn more and do better than going into the big ocean and getting lost. Since he had credibility and high integrity, the message got through. Instead of complaining, he changed the challenge into an opportunity and an armament in his armoury.
exposed. My boss at the time was one Mr Humayun Dhanrajgir. He was a classmate of Nari in Lovedale. He suggested to me to consider inviting Nari for our first talk and I got in touch with Nari. He came to Mumbai and spoke
about the
Pond's story.
It was a
mesmerizing, captivating talk delivered in typical Nari style—precise and factual and yet, underplaying his
I was also a big supporter of making Madras a big centre for banking operations. We were able to attract a lot of people. I had our credit card marketing head office in Madras. Then I convinced HTA, our advertising
role. It was a phenomenal story though, which resonated with everybody.
Power Packed Independent Director
agency to transfer one of their brightest people to head
After the talk, he spent a few minutes with me and
HTA Madras. He later went on to head their India
asked about my background. He realised that I was
operations and take up prestigious roles.
Pond's Balaraman's classmate and I could straightaway
According to me, the managers of today must take interest and play an active role in the community. It can be sharing of knowledge, associating with management organisations like MMA or contributing to the community in other ways. They must grow beyond the company.
connect with him. He joined our board. I joined the board of Glaxo India in an executive capacity and he came in as an independent director in a non-executive capacity. He did that role for close to 20 years. This is before the company introduced ceiling on tenures. I had 20-odd years with Glaxo as a board member.
BUSINESS MANDATE
fountainhead of excellence
51 MAR 2022
Nari was instrumental in requesting Mr N Sankar,
For many people, being on a
who was Nari's very close friend and Chairman of the
Board is a prestige issue but not
Sanmar Group, to induct me onto Sanmar Group's
for people like Nari. When we
Board. As a board member, I met him over 100 times
asked him to join our board, the
and had the opportunity to interact with him many
question he asked was, "Why
times.
do you want me on the board?"
On the very day, I joined the company, there was
He wanted to act as a sounding
an ominous signal for me. The government amended
board and help us navigate the
the Act for drug patents and also withdrew the Drug
tough times.
Price Control Order (DPCO). These were two important events in the history of Indian pharmaceutical industry. I had to manage with my hands, feet and
worthwhile. It's always a longer term with India but it
everything else tied.
is a rich country of a billion people and for a healthcare At Glaxo, we wanted a high-quality board, not to supervise us, but to give us advice and from whom we could learn how to navigate in a highly regulated industry like Pharmaceuticals. Since we had a heavyweight board with people like Deepak Parekh and Nari, we were able to persuade our parent company to look at India as a special case and to view everything from the product portfolio angle and that we had to be different including on pricing.
company which has the vision of being a global company, how could you not for prioritize India? We are able to have that understanding with the parent company. That was thanks to the role the independent, non-executive directors played. I saw Nari do that. For every board meeting, he would come fully prepared. He would read the minutes from top to bottom, underline the key points and would ask probing questions, always in a constructive way.
As an
independent director, Nari was influential beyond
Retaining Indian Colour Jerry mentioned about foreign companies being asked to reduce their share holding to 40%. We did that and when we had the opportunity, we were able to persuade our parent company to go from 40 to 51 and more recently, in the last few years to 75%. One of the advice I gave to our parent company in the UK was not to go for 100% because the fact that we were 50 or 75% gave us an Indian colour. We will be seen as an Indian
measure.
For many people, being on a Board is a
prestige issue but not for people like Nari. When we asked him to join our board, the question he asked was, "Why do you want me on the board?" He wanted to act as a sounding board and help us navigate the tough times. I have always seen the independent nature of the board as a positive and not as a body that is trying to put a spoke in the wheel and obstruct the CEO's plans.
Following Nari’s Footsteps
company amongst the MNCs. We were able to do that because we had people of
Later on, when I became an independent director
the calibre and integrity like Nari, who were able to
in a couple of companies, the model I had in mind was
persuade the foreign investors that India was
that of Nari’s. He was a person who could serve any
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MAR 2022
BUSINESS MANDATE
fountainhead of excellence
board, even if he didn't have the domain knowledge of
Great leaders do not think that
the industry. He would make it a point to be very well
they alone are responsible to
informed and educated on issues pertaining to the
drive the company. They believe
industry. From the questions he asked, you could never
in collective intellect. They
guess that he was not from the pharmaceutical
should also ensure that in their
industry.
team, they have one or two people who have the courage
So having a board with capable non-executive directors of the calibre of Nari was a great advantage.
to question their decisions and
When Mr Sankar invited me to join his board in Sanmar
to push them back.
Group, I participated in their Board meetings and Nari was also on that Board. I knew that Nari and Sankar were friends and had known each other for 50 years.
decided to compensate their release reasonably well. But in the board meetings, Nari who chaired the
That had the full support of people like Nari.
audit committee would ask tough questions. He would challenge and sometimes question the position that Sankar took. Sankar was one of the best CEOs I have ever seen. He knew his business and how to run his
Post the merger, Glaxo being the larger partner, we decided to break away from the past. We wanted to completely move away from our Worli office to a new location. Those of you who know Bombay will
company like nobody else could.
appreciate that the location of Glaxo factory is iconic. When I was asked to join their Board, I asked Sankar why he wanted a powerful board, being a private
It's called the Glaxo bus stop. It is a landmark in Bombay.
company. His reply was a lesson to me. He said that his position needed to be challenged and smart people on the board would be able to see if he missed a right turn or not. The second reason that he pointed out was that as he wanted to induct his son into the Board, he wanted to have wise people around.
Stakeholder
management is talked about widely today. Nari
When we sought Nari's advice, he said, "Why should you move your entire set up from Worli? You can keep your HQ there and relocate your manufacturing operations." His point was deeply philosophical and his advice was not to forget the roots from where one came from. It was not a mathematical or economic argument. We should not forget the origins of our organisations.
practised it from day one.
This is something that has since stayed with me.
Don’t Forget Your Roots
Great leaders do not think that they alone are
In 2009, when Glaxo and Smithkline decided to
responsible to drive the company. They believe in
merge, we had to take a lot of difficult decisions. We
collective intellect. They should also ensure that in their
had inherited nine factories. We needed just two. We
team, they have one or two people who have the
had to downsize our operations significantly and take
courage to question their decisions and to push them
out a large number of people. As many of them had
back. A leader must not be surrounded by yes-men.
spent their lifetime with us, the Board unanimously BUSINESS MANDATE
fountainhead of excellence
53 MAR 2022
Mr V Balaraman, former President of MMA and
chemicals to justify their continued existence in India
former MD of Pond’s India Ltd who succeeded Mr
while Narayanan chose the route of exports. While
Narayanan spoke about how Narayanan handled the
continuing with talcum powder, Narayanan allowed us
challenge posed by the then Union Minister Mr George
to start manufacturing of shoes, leather garments,
Fernandes and converted an adversity into an
mushroom and thermometers and we exported them.
opportunity. The minister wanted each company to
The exports brought in substantial revenues to the
bring in high technology and provide great value
company. For a period of ten years, the exports were
addition to India. He wondered what contribution could
far more profitable than the talcum powder marketing.
come from a talcum manufacturing company. The
Narayanan trusted people, gave them challenging
government levied steep excise duty on talcum powder.
assignments and gave them the freedom to fail and
Hindustan Levers chose to invest in fertilisers &
learn.
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MAR 2022
BUSINESS MANDATE
fountainhead of excellence