SynopsisThe Wadia-owned biscuit giant posted an eight-year high sales growth during the pandemic quarter ended June.
BENGALURU: The Covid-19 crisis may have brought shutters down on many lives and livelihood time and again this year. However, some companies turned the debacle into an opportunity to maximize their businesses. Britannia Industries was one with managing director Varun Berry at the helm.
The Wadia-owned biscuit giant posted an eight-year high sales growth during the pandemic quarter ended June. At a recent conference hosted by Isha Leadership Academy, Berry engaged in a candid chat with former Jubilant Foods CEO Ajay Kaul on his untold journey as a business manager at various companies besides Britannia, learnings along the way and his mantras of success for startups.
Top 5 excerpts:
During your period with Hindustan Unilever and PepsiCo, you were thrown into 2-3 situations facing the struggle of early phase of startups. One was a situation in Gujarat when you were sent to turn around a bottling plant. What were some of the learnings from a startup standpoint?
I was 32-years-old when I had finished working with Hindustan Unilever (HUL). HUL was a structured organisation where it was easy to go above and beyond as the system would take care of everything. I moved to PepsiCo from HUL and here I was suddenly in a company that was a startup in India with a turnover of Rs 25 crore. Sumant Sinha was newly appointed as the CEO of PepsiCo. I was handling the franchise operations of the company. One day I was called to revive the Gujarat market where we had 1% market share. I was told that the company had managed pretty good share in other parts of the country and Gujarat had not managed to earn share. Unfortunately, Coca Cola had filed a case against us at that time. I reached Ahmedabad with no bottling plant or people to work with due to the case filed against us by the competitor. I was supposed to run operations which did not exist.
We had a plant in Ahmedabad which we had sold to a Surat-based company. I approached the company’s head honcho and convinced him to sell the plant back to us. I hired temporary people who rolled several jobs into one. I recall the time when none of us slept a wink for four days on the trot. In a year, however, we reached 49% market share in Gujarat. As a 32-year-old, I saw my first big success in life. It was my building block as an individual and as a manager.
In 2013, you stepped into the big job at Britannia. You walked into the shoes of Vinita Bali and it might not have been easy. You must have had your own mandate and dreams for the company. Many head honchos start with a great idea but don’t know how to disseminate and bring the dream down to grassroots level. How did you democratize your dream for Britannia?
When I joined Britannia, it was a diamond in the rough. I had grown up seeing Britannia as a strong FMCG company in India. I was impressed with what the brand had done over 80-90 years of its existence in India. However, of late, there had been some amount of pressure on the company as far as distribution and competition were concerned. ITC had entered the market with their portfolio of products. Small competitors were emerging. But I saw that Britannia could surge ahead even amongst these headwinds. It wasn’t rocket science. It was simple solution which had to be applied to the company.
The first thing I did was to evaluate people. The system had become a little bureaucratic. There were a lot of hires from outside who were not gelling with the people who had worked in Britannia for years. I had worked with some of the best people in the industry and it was very tempting for me to get people from outside and fill the vacant positions. But I took a decision and a valuable one. I decided not to bring anyone from outside unless necessary. We coined the phrase – Britannia for Britannians. We decided to give opportunity to people from within the company even if he or she was 75% ready. Out of my 13 direct reports, only 2 were from outside Britannia. It worked wonderfully because people felt motivated. I selected a few youngsters as I opted for brain power over years of experience. It gave them an opportunity to prove themselves.
We were supporting way too many brands. We sifted it down to six mega brands and with bigger monies. We created an R&D centre to accelerate innovation and brought in cost efficiency mindset.
It was important for me to create trust between the company’s board and the team. In the past, board meetings with the chairman involved only the CEO and the managing director. I started to take my team of direct reports for our board meetings. It was very painful in the beginning as they had to face excruciating questioning. It took a year for the board to start feeling comfortable with the team and to trust their business sense. It was an important step to lay the foundation of a common dream and a common vision.
From a Rs 20 crore idea, all entrepreneurs want it to become a Rs 1000 crore idea. You joined in 2013 and Britannia’s sales increased multi-fold in this period. What is your mantra of scaling up business?
First, we should not worry about the evaluation of the company at the start. Britannia went from USD 0.3 billion to USD 13 billion. Share holder value is a result. It cannot be a strategy. Startups need to learn this. The objective is to build a business.
Second, every business will face crisis. When the business faces the bump on the road, if people start pointing fingers at each other and start looking in different directions you break what you have built because the trust is gone. The job of the leader is to keep the troops calm and keep marching in the same direction.
Third, consumer is the most important person in the whole equation. If you are not doing the right things by the consumer, course correction is important. Fourth, building brands is not easy. The toughest and the most underrated task is building brands.
You have always stated that employees are your strongest asset. While Britannia may not have faced lay offs, some organisations laid off employees and imposed salary cuts amid the Covid-19 pandemic. How do you handle a situation like this and keep employees motivated in such times?
We have not gone down that path as we performed well during the pandemic. But I understand that there are industries and companies where this has happened. It was necessary in some cases. At the end of the day, you are running a business and there are demands. If there is no business and it demands that you cut overheads, you have to do it. Fixed costs should be in accordance with your business.
But ensure that you are absolutely impartial about it. Employees asked to leave will be upset. Do it in a way that the employee does not feel rundown and understands that this is a demand of the business. Help the person as much as possible to get him back on his feet. Within the organistion, there should be complete transparency on the reason for laying off the specific employee.
Popular saying goes – ‘Survival of the Fittest’. However, during Covid-19 we saw that it were the most adaptive companies that survived successfully. How can organisations adapt themselves at a cultural level?
Winds and waves always favour the aimless navigator. Just make sure that you navigate the boat well. Understand where the wind and the waves are coming from. God is in the details. There is no substitute to hard work.
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