Harsh Mariwala is an Indian entrepreneur, who is the founder and chairman of Marico, a Fortune India 500 company. Mariwala has penned a memoir of his business journey, Harsh Realities: The Making of Marico, covering everything from his successes and failures as an entrepreneur to how he built a consumer brand, value of culture building in a company via openness and transparency, and key learnings. It is also a story of grit and redemption. He opened up about the complexities of running a business with family members and much more.
Excerpts:
Q. Tell us about this book and what made you write it?
A. I could write this book because I had a lot of time due to the Covid-19 pandemic. But it couldn’t have been possible without the support of two individuals. One, my wife, who was able to add substantial value to the script in terms of making it far more anecdotal and emotional; she also added more gravitas to it. Two, my co-author Ram Charan, who is a renowned management guru and has written around 30 books.
It’s a memoir of my business journey that talks about my successes, failures and has nuggets of wisdom by the co-author. At the end of each chapter, he gives his insight into the learnings. It talks about building a consumer brand, culture building, family issues, innovation and a story of grit and redemption that were the pillars of founding and forging Marico. It leverages values like openness and transparency.
Q. One of the highlights of this book is that in your life failures have been as important as successes. Tell us about your journey and how you learnt more from your failures?
A. I started off by joining the business as a commerce graduate. I had not studied business so in a way nobody has taught me and when I joined the family-managed organisation so in that journey I failed in a lot of stuff, including basic issues. That was my initial set of failures. Out of every failure, I have had learning. After issues with quality assurance and product development, we set up a whole department around these. We took these failures very seriously. That has helped us become a far more robust organisation in terms of our own capabilities. As we progressed further and started growing the business, some things didn’t work out well and in some cases, we launched a product where the market size was too small.
So there has been a fair share of failures. We had a product failure in recent times; 10 years back when we launched a snack but gave preference to health over taste, the consumer wanted it to be tasty. The learning from that was incorporated in the product development of Saffola Masala Oats which has done extremely well and we are market leaders in that.
Q. Family plays an integral part in Indian businesses. You too had to deal with the same while running the business. Share your experiences of managing the business as well as the family?
A. It adds to the complexity because at one level, you are staying in the same house, and at another level you are related to each other, competing in the workspace and are co-owners, so these multiple role relationships make it a little difficult. On top of that, there is first generation, second generation, respect for elders, lack of openness, at times you can’t tell them how you feel. It becomes far more complicated if you are in a large family setting with a lot of family members in the same company. The key thing is to manage it proactively. The family is an asset on one level, it brings in a lot of benefits, but if not managed properly, it can be a liability.
I took the initiative of sitting down with my cousins, suggesting a roadmap for how to run the company from a family perspective. It took two to three years and resulted in the formation of Marico, which required a lot of patience, perseverance and consensus-building. It worked well for me. The key learning for me is that other stakeholders, including family members, play an important role in your journey. You have to have a win-win arrangement where you can co-exist and at the same time work independently.
Q. You once said that if the business has to thrive, it has to be run by the best person, not necessarily from the family. Do you think that things are now changing in Indian business families?
A. Normally in Indian business families, still there is a lot of hierarchical thinking, and it is expected that your children will take up your roles and be your successor. Internationally, things have changed. But it’s a matter of time it will change in India too because it’s getting competitive. If you put a family member ahead of anyone else in terms of capabilities, the business can suffer. The key thing is that the business should come first and then the interest of the family.
Q. You took a substantial risk in taking your company from your family company to a new one, Marico. It must have been a tough decision. Tell us about those momentous days, and how do you see them today?
A. It was not difficult as that was what I was aspiring to do. It took me two to three years to convince the family. If I look back, it was the most important decision in my career. That gave me a lot of freedom in terms of selecting my team, set of portfolios/products, allocating resources and growing and having an identity of my own. It became much easier for me to operate in Marico than when I was in the Bombay Old Company. Being self-motivated helped me and I learnt from the setbacks and hindrances. If you have a burning desire to succeed, then you will overcome all the roadblocks.
Q. Tell us about the flagship coconut oil brand Parachute and the sleepless nights initially had to run it. How do you look back at the legendary battle you fought with the rivals and how it paid off in the long term?
A. The initial forays of the brand parachute were through distribution and innovation delivering for growth. And gradually we became the market leaders, the product became strong and it became a big franchise. In 1993, Hindustan Unilever Limited (HUL) acquired Tata Oil Mills Company (TOMCO), predominantly a soap manufacturing company, which also had in its portfolio a coconut oil brand, Tata Nihar Coconut Oil. Because of that acquisition, HUL wanted to acquire us too. The battle was not easy, when you are under attack from a much larger player there is a lot of fear in the organisation. The challenge was how to overcome that, motivate people, how to take them on rather than selling off. It was quite tense, but I was quite resolute in taking them on. It worked out well for us, we didn’t lose any market share. We acquired that brand (Tata Nihar). It was a big source of victory for us.
Q. Parachute also shows your faith in the product and once convinced you always stand with your decision. How did you come up with the unique name and what really made you go with the instinct to not part ways with Parachute when you had so many tempting, often intimidating, offers?
A. When I joined the organisation, I was the first person from the next generation to join the company; my father was managing the company. One of the businesses we had was the edible oil business that was mainly sold to industries. It was then sold loose to consumers by the retailers under the brand name Parachute. I converted it from unbranded to branded, over a period of time. In that journey, a lot of friends advised me to change the brand name from Parachute to something else, but I never thought of changing it as I found it unique, symbolic, and talked about.
Q. The business worldwide is facing one of the ‘hardest realities’ in the wake of the Covid-19 pandemic. A lot of businesses have collapsed or are on the verge of collapsing. How do you see the pandemic?
A. A lot depends on the kind of business you are in. There are certain sectors that were very stressed including airlines, hospitality, and retail. Such companies suffered the most as there was little to no income. Those who had liquidity were able to survive, but those who didn’t either had to pack up or will pack up. You can’t afford to remain closed for so long. The key learning was that companies need to have some cash balances in their system. You have to play a little safe as you can’t overborrow thinking everything will work out. The pandemic provided opportunities: newer initiatives, B2C brands, and e-commerce. We were able to magnify the opportunities in the area of healthcare in terms of Saffola Honey, Saffola Protein, Saffola Chyawanprash. A whole host of new products came into the system. In terms of leadership, it gave us news insights. The corporations have also learnt to deal with the scenario in a proactive manner when it came to health, safety, vaccination, hospitalisation, and whatever help was required. The organisations which were sensitive to such needs have done well. I hope that the third wave doesn’t impact businesses that much. The corporate sector will do well in the coming times.
Q. The pandemic came at a time when the Indian economy was already facing some bumpy rides, and Covid-19 has made it even worse. What’s your take on the issue, and what do you think the government should do to help the country come out of it?
A. I don’t think only the government is responsible for the state of the Indian economy. We expect everything to be done by it which is not fair. A lot is in the hands of the entrepreneurs in terms of grabbing the opportunities for the growth of their companies.
The pandemic has had its own impact on the government’s finances as the tax collections have gone down. You need to evaluate what the government could do looking at the ways and means of the situation. I am cautiously optimistic in terms of increasing our overall economic growth rate, a lot will depend on the third wave and mutations of the virus. To give a kickstart to the Indian economy, the government has taken various initiatives. It could do demand-side reforms, for example, reduce the GST rates for six months. This could provide a fillip to the Indian economy. It could also resume the work on the pending reforms that are stuck due to certain reasons be it farm reforms, judicial reforms and other such reforms.
Q. What is your take on the farm reforms?
A. There are different aspects to farm reforms. The biggest hesitation is the MSP. It is also giving freedom to farmers to sell beyond mandis which is a good thing. I did not expect this kind of hesitation for farm reforms. The government is on the right track in terms of the announcement. It has become a political issue. The government should have discussed it a bit more openly instead of just announcing reforms, the process of implementing could have been better. By and large, there may be some areas that could get improved.