Harsh is a plain B.Com – and he makes it a sort of USP when he markets himself. The story actually goes that he wanted to go in for higher education, but his dad wanted nothing of it – he was asked to join the family business – Bombay Oil Industries Ltd as soon as his graduation was over. In the eighties, BOIL was a company whose majority revenue came from trading in edible oils – with fledgling consumer brands like Parachute and Saffola. Harsh was made in charge of the consumer brand business – and he grew it to Rs. 80 crore turnover by 1990. At that time he realized that with dozens of Mariwala cousins around if he had to grow beyond this it would be difficult as professionals hesitate to join family owned businesses. He convinced his family members that the consumer brands need to be spun off into a separate company – and Marico was born.

From day 1, Harsh has been doing a great job of PR and image management. One of the first things he did when Marico was formed was that he hired an ad agency to create a fancy ad to signify that Marico is not a family owned business. This ad featured in the employment pages – and was run only once. It was headlined – 200 employees jump ship from BOIL. The ad served its purpose – here is a company which is a meritocracy – and people will not get promoted just because of the surname that they have – and Harsh managed to recruit 30 people to his management team from renowned companies like Tata and HUL.

The diverse team had its advantages. There were always multiple perspectives to problems that the company faced. However there were also disagreements. Harsh has always considered implementation more important than strategy. One of the areas of conflict was how to deal with implementation laggards or under-performers? Some wanted this person fired, others felt that doing so would send bad signals to the rest of the team, still others felt that the person should be counseled and re-trained. The variances came in because of the different organizational cultures that the team members came from. Harsh realized that it was time for Marico now to start creating its own culture. He also realized that most companies have mission and value statements which seem only to exist on paper. So started a series of meetings, starting with top management, but eventually involving the whole company, which identified what would be Marico’s values. The purpose of getting involvement was to ensure that value definitions would be more than just lip-service. Some of the values and the illustration about company behaviors demonstrating the values follow.

In the mid 1990’s Hindustan Lever was the most formidable competitor in the FMCG space. Fresh from its successes in hammering out good market share from Colgate via Pepsodent, the chairman of HLL announced that the coconut oil space was next on its hit list. Marico, by then a BSE listed company, saw an immediate hammering of its share price. Indirect approaches were made by the HLL management to Harsh asking him to sell out. Harsh decided to fight it out. Advertising outlays were doubled. The sales team were pumped up with motivational films declaring war on Nihar the brand that HLL had purchased from TOMCO – a Tata company. Cut to 15 years later, HLL went throught its own traumas and eventually ended up selling Nihar to Marico. It is now a 300 crore brand, very strong in east India.

One of the challenges facing Marico has always been piracy – especially for its mother brand – Parachute. One of the reasons is the generous mark-up to what is essentially plain coconut oil. There have been a spate of competitors, who have imitated the color and shape of the bottle in order to confuse customers. Marico attacked on two fronts: one was to advertise about purity. Note that Parachute is technically an edible oil – attracting lower excise duty. So you cannot sell it on a good-for-hair proposition. Another innovation was to work with packaging. Marico went to European mold-makers and got them to work out a very complex closure for the bottle. It took 4 years for Indian mold makers to jugaad a similar mold, giving enough time for Parachute to strengthen and capture market share.

Harsh also believes that innovation can come only with change. Marico has a very flat organizational structure – with just 4 levels. So one way to change people is to make them move across functions. At most levels, managers in Marico move to a new function every 3 years. This gives a freshness in approach and opportunities for learning. There are also fewer rules to help give managers more independence. Just as an example – there are no sick leaves at Marico. If you are sick, take leave, if not come to work. No complications about lapses, conversion to paid leave etc…

In all this experimentation there are chances of failure. One recent example of a failure was shared by Harsh. Saffola Snacks were launched in Mumbai and had to be withdrawn within a matter of months. The reason was low shelf life and bad inventory management. These learnings were then applied to a launch of Saffola Oats – which was launched in South India and are doing so well that Marico is having problems keeping up with demand.

Another of Harsh’s success stories has been Kaya Skin Clinic. Harsh also wanted to be in the wellness space – but he realized that for a venture as drastically different from Parachute as Kaya – the approach to the launch had to be drastically different. A two person team was formed – who reported only and directly to Harsh. They were given a free rein – without being shackled by the organizational systems and rules of Marico. Even today Kaya operates independently of Marico.

Today Marico employs about 150 MBA’s. As a B.Com who supervises these premier B school MBA’s – Harsh says that his primary role is to keep their Analysis paralysis in check. Remember Implementation is key.

Harsh has been working with a group of entrepreneur’s over the last 15 years and has found that a formal structure of meeting them in groups has helped the entire group progress. His latest baby is Ascent Foundation – which wants to replicate this experiment to touch 10,000 entrepreneurs. It plans to launch a pilot with 100 entrepreneurs in Mumbai and Pune. Entrepreneurs who want to join in on this program need to have a minimum revenue of 2.5 cr in manufacturing or 0.5 cr in services.

At the end of the talk, yours truly managed to sneak in a question. Azim Premji, like Harsh Mariwala, comes from an edible-oil industry background, who diversified into non-related areas, whereas Harsh has stuck to his family’s core competence. Did he do a right thing by doing that? Harsh’s reply: I agree that Azim is doing much better than I am. But we also need to know that his getting into the IT space was an accident. The Premji family was owed money by a gentleman who had a small hardware business. The business was handed over to Azim in lieu of the dues – and the rest as they say is history…