Execution is the central difference: Paranjpe
Chaitanya Kalbag, Suman Layak and Anusha Subramanian May 24, 2011In 2008, at age 44, Nitin Paranjpe became the youngest CEO at HUL. He decided to turn his company inside out with one aim - to get into the consumer's mind. So, in 2010, about two years after he took over the top job in April 2008, he made HUL accountants, production and human resources people go out and meet consumers in villages across India. Just as he did himself - and there was learning. He shares that in a wide-ranging interview with Chaitanya Kalbag, Suman Layak and Anusha Subramanian.
Suman Layak: HUL's food business is growing at a very rapid pace now. Globally food is 50 per cent of the total business. Is it part of the plan to take the food business higher?
Nitin Paranjpe: All our businesses have grown within in the last six months. Indeed within the last few quarters, we've been seeing broad-based growth. The other good thing is that it has been led by volumes. In many ways, the health of a business can be judged by the ability to get more consumers to buy more of your product. That means more volumes. As far as the foods' business is concerned, indeed there is a huge opportunity for us. These parts of the world are relatively lower in terms of the contribution value. We are beginning to see an increase and better business in food in places like India because the right conditions for the rapid growth of packaged foods is coming in to play.
There are many categories within Unilever which are large, significant and substantial strength which could be leveraged here. Within the food and beverage business, beverages is larger in India and continues to be the main stay of what we do and we will continue to invest and grow this business. So also categories like ice cream which are small today but there is absolutely no doubt that these categories will grow and Unilever, which is the global leader in ice cream, has the technology and the understanding that can be leveraged. Also in the savory category, so brands like Knorr and the entries that we're doing through strong brands like the Kissan, we see a very significant opportunity for us as we start moving forward.
So foods business will grow but so will the personal care and soaps and detergents will also grow. Many people think that soaps and detergents have become well penetrated and lack the growth opportunity. But they don't see that it may be well penetrated but consumptions levels are a fraction. Forget the western world, even if you were to go to South-East Asian countries, our consumptions levels are lower than what we find out there and therefore there is an opportunity for these markets to grow substantially.
So soaps and detergents will grow and so will personal care which is likely to grow even faster because of growing affluence, changing aspirations of consumers and changing attitudes towards consumption. No longer is the new generation guilty about spending on themselves. In fact, there would have been a time when people would have felt a little guilty about anything you do for yourself, spending on beauty, grooming etc was unheard of but now no longer! People are doing it, the young are doing it even more and therefore this sector will grow very rapidly.
Anusha Subramanian: The soaps and detergents business is still facing some pressure in terms of volume growth. Any particular strategy you're looking to deploy rebuild this business?
Nitin Paranjpe: First, I think soaps and detergents business has also grown in double-digit volumes. Relative to business like personal care etc, because soaps and detergents are so well penetrated volume growth of these categories over a longer period of time, are likely to be slow but it will still grow and will grow because of more consumption and because of up-trading which will start taking place as this is a general premiumisation trend that we see across all sectors and all categories.
Chaitanya Kalbag: There seems to be some amount of contradiction here. You are saying that penetration is quite deep but also that there are new age pattern creating a lot of room for growth?
Nitin Paranjpe: That's correct. So let me give you an example of how penetration is calculated. Forget soaps and detergents, even if you take a category like hair, most people would say penetration of shampoos is very high - 70-80% penetrated. But what does that mean? That means I've used a shampoo sometime over the last six months or sometime over the last one year. It is a penetrated category; the category is not unknown to the consumer. However when you start looking at the frequency of how often a consumer uses it, if I take the same number itself how often and what proportion have these people used a shampoo in a month, the number comes down sharply. If we check what proportion they've used it last week, then the number comes down even more sharply.
Let alone saying how often the consumers use a shampoo they use it in every bathing occasion, then it's an insignificant number you start getting. If you start seeing the evolution of markets, that's when consumption starts building. If you go to Western markets, people use a shampoo with every wash. So, penetration may seem large, which means, people are aware of the category, they know of the category and they've used it before but consumption levels are still a fraction of what they could be. Take bathing soap. Almost everyone in India would have used a soap but, go down to small towns, go down to villages many bathing locations are still the just water, they do not use a soap on every bathing occasion. So, it's a very well-penetrated category but the consumption opportunity continues to grow.
Chaitanya Kalbag: How do you see change in demography and spending power? How is that looking or changing?
Nitin Paranjpe: There are two interesting changes that are taking place in the country. That India is becoming more affluent with the growth is an obvious change. The consequences of this change is that people have more money and therefore they could tend to spend more and that could lead to a rise in consumption. But the interesting thing is sometimes money alone does not necessarily guarantee that you would start spending.
There was a period I remember, in the late nineties, when a lot of companies came into this country and across markets saying oh the size of the middle class is so much and did some arithmetic and something like so many people buy it and so much should be the price of the market and many of them burnt their fingers. Because having money alone is not sufficient. Do you have the propensity to spend and your attitude towards consumption is important. At that point in time in the nineties those who had the money had different attitudes towards expenditure and spending and therefore the theoretical opportunities should have been there but was not being realized. What we see today is very interesting. We call it, the impact of the generation of which has been born and brought up after 1980.
I take 1980 as a key period because it signaled the advent and proliferation of mass media. When mass media suddenly took off, what did it do? It did two things: rich or poor, you were exposed to brands and advertising which talked about buy me more, consume me more which started making you aware of what is available. This generation grew up on a diet of such advertising and made consumption all right. The earlier generation might have had the money but many of them were born and brought up just after independence. Gandhian values of austerity were still relevant at that point in time. And, therefore people even if they had money were very careful in terms of how they spent it and there was no question of self-indulgence. It was also a period when availability was constrained, markets hadn't opened up. We hadn't seen big brands and foreign brands come in. There was a scarcity syndrome. The post 80's, 85's the generation hasn't seen that. India has opened up now, so you've seen proliferation of choice, you've seen increased affluence and increased change in attitudes.
Chaitanya Kalbag: But it also meant that, for HUL the competition has become humongous.
Nitin Paranjpe: Of course, I will come back to that a little while later. But, first big shift is this. A phrase that I use often would be that today we see consumers and we see that aspirations have become rapidly homogenous. Means have remained relatively heterogeneous, still heterogeneous and that poses a challenge. The challenge I describe is as follows. There was a colleague of mine who walked into a village with a population of 2000 -100 kms from Lucknow. He was talking to a lady about 23-24 years of age and asked what soap do you use? She said oh I use this soap and for my face, I use a face wash. And he couldn't believe it and thought how can she afford a face wash. Affording a soap is a big thing and she's using a face wash. She said, "No I can't use soap on my face". Unbelievable! If it hadn't been one of us who had gone and experienced this ourselves, I would have said it was rubbish.
I personally was in a village, again, a 2000-thousand population village in Tamil Nadu. I walked into a home to talk to a consumer with the help of a translator. In their house, I saw in one corner a sachet and it looked odd to be to see a sachet in that home. I was like "hey what was that?" It was Comfort Fabric Conditioner. I was worried, I thought the poor lady must have mistaken it to be a shampoo sachet and bought this brand called comfort and wanting to use on her hair thinking that it is a sachet. So, I asked her, "what is this?" this is a brand called comfort, what do you use it for? She looked at me as if I was a strange guy and said "for clothes". I said, "Why would you use a fabric conditioner for clothes?" She said, "Why not? It's so wonderful, I can't do without it!"
Now this is an example of how aspirations are changing and consumption and buying behaviors' are changing. In the past things were easy. When I was a brand manager, life was very easy! You could segment consumers very simply, the rich do this, the poor do this! The rich buy this and the poor buy things which are quite different.
Can you tell us the name of the village in Tamil Nadu?
Nitin Paranjpe: I do not remember right now
You do a lot of work by visiting and walking into homes
Nitin Paranjpe: Absolutely! It's part of my job. Consumer and customer centricity is at the heart of everything we do. The day we stop personally getting a feel and interacting with consumers, we will not be doing justice to our jobs. I've given you two examples which tell us the rate at which change is taking place in India.
Chaitanya Kalbag: You said that food and beverages are smaller percentages in the total revenue of the entire company.
Nitin Paranjpe: The business per se is large but relative to our HPC business. It's about 20 per cent. I think over a period of time that proportion could increase, but we don't look at it in terms of what the proportion should be. The question is will it grow and will it grow rapidly? Yes. Why? Because the conditions that are required for the packaged foods growth are right and coming to play. What are these conditions? Firstly it's the changing consumer attitudes towards convenience. People are ready to pay a premium for convenience. People have more money, but less time. Before you even get to villages even in large towns, even if you take homes like ours, to begin with, packaged foods, ready to eat meals, ready to eat mixes, it's a new phenomenon. Today, there are double income families, people don't feel guilty about packaged foods because convenience has a value. These are some factors that drive packaged food business.
The second set of factors is the evolution of the trade environment. When organised trade starts coming in, it creates a shopping environment which is actually very conducive to the development of several categories. Example: as organized trade comes in, the supply chains become stronger, the cold storage facilities start improving and there are things like ice cream and other food stuffs that require cold storage start getting a fillip. And then you have wonderful shopping ambience, there will be categories like other forms of packaged foods that you've got start getting a better opportunity to present it properly, to be educating consumers properly and therefore, moving on. So factors like these are all right for and of course the general growing affluence that we're seeing.
The game is not played out. Today, packaged food business is only 5 per cent of the foods market. The Indian foods market is over 200 billion euros and packaged food is just about 5 per cent of that. It's not all packaged, it may be a fresh or maybe something else but less than 5 per cent has been converted into packaged and branded foods. Thus, conversion will happen. We shouldn't think the game is played out, the game is just beginning and what we want to do is learn to be disciplined and systematic in a manner in which we make and build our brand. When we build a strong brand we want to create positions. I keep using an analogy, a chess analogy. We want to make our move such that we are well positioned before the end game is reached. This is not about rushing every pawn quickly to fourth positions without thinking too much. Being tactical is not going to make you win the game eventually. You've to think through how markets have evolved and where will competitive advantage come from, how should we be building our brands, what is the source of long term sustainable advantage that we've got and position ourselves well because this game is still beginning, it has not played out at all.
Chaitanya Kalbag: What is the end game?
Nitin Paranjpe: The end game will be a larger foods and beverages business with stronger brand names like Knorr and Kissan. A larger portfolio. We want to make sure the expertise, technology and the understanding that Unilever has got will help us bring those in and bring value-added offerings to our consumers and hold on to these positions over a period of time. Leadership positions in a segment that we've participated in because we've got that in other parts of the world.
There was this one thing that you've said that about 50 per cent or more of your business has been touched by innovation, what exactly does it mean in terms of innovation? Is it new products? Or is it improving and tweaking products or the way you sell them?
Nitin Paranjpe: I would say that 50 per cent of our business is touched by innovation and I am not saying that more than 50 per cent of our success is on account of innovation. Some of these innovations are new products that we have introduced and some of them are improved products. In a business like ours as our global CEO Paul Polman says, "The fast moving consumer goods industry is an industry of continuous improvement". Every day you need to find ways to get little better than what you were the previous day. Why is that important, because you can't stay still. Even if you are a leader today others catch up. Gaps narrow and the competitive advantage disappears. Our job is to keep creating gaps. So we have to keep improving every day. That's one reason.
The second reason is that consumers' needs and expectations are changing. What consumers want today is suddenly gone into the waste, what delights the consumers today might not delight him tomorrow. You cannot take anything for granted. We have to create newer ways to keep exciting and delighting the consumer. This means we've to keep refreshing, keeping our brands contemporary and adding value with every change that takes place so that we stay ahead of the game. In this process we've to bring in place technology. For example: Let's assume we have a great product, which has an edge over our competitors. The competitors are not going to sit idle, they will analyze our brand and product and say what improvements do we need to make to try and catch up. We constantly have to innovate in all aspects so as to give the consumers superior value.
Suman Layak: Five quarters of double-digit growth. And you have been in charge for the last three years?
Nitin Paranjpe: We had a very good first year where we grew the business by 20 percent. The second year was challenging because of global recession and the last five quarters we have seen double-digit growth. It's been about strengthening our business, our portfolio and expanding our leadership and strengthening our capabilities. I remind everyone in our business that we have to run this business with bifocal lenses. It is about managing today but we would be failing in our responsibilities if we do not take steps today which may seem not so important in the scheme of things today but will be mission critical in guaranteeing the success of this business tomorrow.
Build a portfolio and capability that is relevant for India tomorrow. Doesn't matter how small it is today but we need to have a point of view. Have a point of view on the future, a point of view on the consumers of tomorrow, a point of view on the segments that are likely to grow tomorrow, the categories that will grow tomorrow, the geographies that will grow and be relevant tomorrow. Does not matter how small they are today
Rural explosion is going to take place soon and we have to win there. If modern trade as a channel is going to become big tomorrow we have to win there (doesn't matter how small it is today). Our strength in modern trade has to be higher than the average that we have got. In every channel of consumer we have to better than average because, if we are stronger in those aspects that are likely to become big tomorrow then the equations change. If you are weaker in the things that are likely to be bigger tomorrow then you will lose out. So we have identified the businesses that are going to be big tomorrow. We are systematically building are portfolio and capabilities.
In that context we are doing things to create gaps. We got to where were in 75 years because we were pioneers and we were the leaders but we cannot rest on those laurels. Others see this and copy. The period where we lost out was because we were leaders but we were not leading. It's not enough just being a leader. We have to lead and create gaps. We created the widest distribution ever because we were leaders but now we are creating gaps and how we are doing that - we created 500,000 new stores in a year. That's big. It is a source of advantage for us. When you get on the path to go down these small villages - some of these outlets are so small that even for a company of our size and scale it's a challenge to come up with an economically viable model for distribution of our products. Now we are going directly to these outlets.
Chaitanya Kalbag: Distribution costs would have gone up?
Nitin Paranjpe: That's where our innovation comes in. Our job was to find models which will enable us to achieve this in an economically viable way. The beauty is we have managed to this. In this we have used technology like it has never been used before both in rural reach and in urban to drive perfection.
We mapped every village in the country 600,000 of them along with the census data to understand what the demand is like in these villages. Demand patterns differ depending on the village and the amenities available in these villages. It gives you an indication of what and where you want to be present with your business. We then plotted it from the distance from the nearest stockiest. We then built sophisticated models at state and district levels to find a blueprint of coverage. Having worked for many months developing this sophisticated model we then started rapidly rolling out in pilot in small states and that's how we added these 500,000 stores.
Chaitanya Kalbag: You could be a partner to UID?
Nitin Paranjpe: Yes, we could be a partner. We could be a partner to many things. Currently, we are partnering with SBI - and piloting a project for financial inclusion in Satara and Karnataka
Anusha Subramanian: How deep is this reach of 500,000 stores?
Nitin Paranjpe: We have three times more direct reach now. It is a huge rigorous exercise and there is focus on execution. Sales manager has the blueprint in his laptop mapped with his state that he operates in. Have a discussion with the distributor and talks about all of this that we have done. Therefore we managed to do all this in such a short while.
Then we had a programme called More Stores and Perfect Stores. This was our More Stores program. You have to go to more stores - the more stores you go to, the better influences, the better shares and growth that you get and we've done pilots to show. The moment we've started to go there directly, the assortment that we're able to put up there has gone up, a share in the overall stuff we put in goes up and therefore the growth that we get out of that store goes up. That's the value of being there directly.
We have more than ten-twelve thousand people who sell through our distributors on our behalf.
Chaitanya Kalbag: Has it gone up exponentially?
Nitin Paranjpe: Of course, it has to go up if we're covering more outlets, that is the viable model that we've got.
Chaitanya Kalbag: But 12,000 for one hundred million is not all that much.
Nitin Paranjpe: So, 10-odd thousand is what we had to cover all of this, and now we've added. We also have a "Shakti Amma" and "Shaktimaan" group, we have about 50,000-60,000 ladies, 'Shakti' ladies. We said is there an opportunity to leverage this further, we've coined a name called "Shakti Amma" and coined a name called "Shaktimaan". A "Shaktimaan" would be a male member, so to say in that family. He had time in his hand. He wasn't occupied 30 days in a month. He had about 10 days who could on a cycle travel to the neighboring villages 2-3 kms away and start covering outlets in those places. And currently we could start to set up new set of things, adding further to the economic prosperity to those household which we've got and again a model was doing well by doing good.
Chaitanya Kalbag: So was it an Indian version of Amway?
Nitin Paranjpe: Yes. So that's what we did. That was about more stores. Then we had a better stores programme.
Suman Layak: So this guy on the cycle becomes your distributor and employee?
Nitin Paranjpe: No! He's not an employee. Firstly, he is not an employee, even those 10,000-12,000 people I was talking about are not employees. They are the distributors who employee sales men for themselves and we actually assist them and help them do all this work.
Suman Layak: So the guy on the cycle earns something out of this?
Nitin Paranjpe: Yes, because he sells our products to the stores and earns a commission on selling our product.
Suman Layak: Does he sell directly to consumers?
Nitin Paranjpe: No, the "Shakti Amma" sells the products directly to the consumers in the village and the "Shaktimaan" goes to a few more villages and around there to sell it.
Chaitanya Kalbag: But on a bicycle, how much can he cover?
Nitin Paranjpe: 3-5 kms. He carries very little, but he goes there every week. And then for the revenue that he makes. And then there are different models, somebody has found ways to customise their cycles and carry products. Then there was this, what we call 'Better Stores'. In rural areas the competitive advantage might be by only going to more stores but, in urban areas going to more stores is not a competitive advantage, the quality of what they can execute in a store can be a source of competitive advantage. Now how will we differentiate ourselves in that, we used technology. The brief was simple. We want perfection and we've defined what perfection means. There were seven criteria for perfection: the right assortment, right visibility, the right pricing, the right promotions in that store, the right share of shelves. That's how we started defining what perfection could mean. And for each of these stores we have dimensions of some store where all seven need to be there, some store where three out of seven need to be there, some other store four out of seven need to be there. Therefore, there are laid down vigorous criteria of what a store need to achieve before it can be called a Perfect Store.
Now, how do we get there? If there was one store in the country, it would be relatively easy to get that store to become perfect if we put the might of the organization behind it. But we have one and a half million stores, covered by an army of people going there every day. So we have to find a way and we have a complex portfolio. We've to find a model that enables us to make the life of the salesman as simple as possible, reduce all the complexities for him and allow him be at the front end and do what he does best.
What is the salesmen really good at and should be doing? Salesmanship is a skill and he should be selling. What is the second thing he must be doing? Building relationships and understanding the customers and building a bond. That's what he got to do.
He shouldn't be worried about what is there in his portfolio and what is not. He is neither equipped nor would it be a good time, forget him, no human being would have the mental capacity to look at 500-600 reschedules and half a million outlets. We've used technology to find the buying behaviour and buying pattern of the shopkeeper in every single urban outlet to begin with. What frequency does he buy etc.. we've captured all this over the last few years. The salesman has all the information on the handheld. If it is Anna stores, it will tell him what is the list of goods Anna stores usually buys. Therefore a pattern is created which makes everything very organized.
The job of a salesman is very simple, convert the goods shown in red which means those goods that need to be sold to avoid shortage into green. The probability of selling them is high because the shopkeeper is running out of stock. See how powerful this can be? Tremendously powerful as no one can ever manually ever track all this and that's what we're doing. And in a month, his job is to see the proportion of the list you're able to convert by selling minimum quantity in a given four-week period.
Suman Layak: For how long have your salesmen got these?
Nitin Paranjpe: Handhelds they have got for few years, but it is this technology that software solution we called it "Project IQ" and we wanted this IQ to be done at the back.
Chaitanya Kalbag: When was this project launched?
Nitin Paranjpe: This project we've been experimenting for over two years and when we've done two pilots and I myself remember being excited about working on this project for over two years. The first place we piloted it, it was conceptually sound but its execution it failed. And we learnt it was still complex for the salesmen to learn and understand. We went through two pilots, I remember one of them was in Pune, then we did something in Coimbatore, before that if I'm not mistaken we had done something in Ahmednagar or one city in Maharashtra, we had piloted it before. After two pilots, the third time we build all the learnings, changed all the software, simplified the interceptor. All the theoretical benefits that we should have got, we started getting. Then we rolled it out to one, one city in each branch just to make sure it is not the excessive focus that is gaining results. But, when you go to different places, you start seeing results.
Chaitanya Kalbag: Is this unique to HUL?
Nitin Paranjpe: The proprietary technology that we've built is unique. It's logical and not complicated. The execution is.
Anusha Subramanian: So did you build it along with a software company?
Nitin Paranjpe: The logic is all ours, the intellectual concept is completely ours, the code anyone can write, that is not a big hassle.
Chaitanya Kalbag: When did you start rolling it out? About six months?
Nitin Paranjpe: More than six months ago, we started rolling it in the country and now all of urban India has it and now our task is to take it to rural India, which will be the next stage of what we do. The beauty that I described is going to be our portfolio. Even the incentives started getting linked to this. So salesman, depending on how much you convert, your incentives, your variables everything gets linked to this.
The next thing we started doing is, still it is at a stage where we are working that logic out , it's still not perfected.
The logic is as follows: we want predictive intelligence to be built - so what does this mean? If I observe from the last sixty SKUs that we've got and I find that in your buying a large pack of Rin - say, 2 kgs or 3 kgs. Is it not reasonable to assume that you have some customers that walk in to the store have the money to pay for a large pack. A reasonable assumption. And I observed , why is it that you don't keep large packs of shampoo? Doesn't make sense, so it's a bit like Amazon logic which is those who read books are also likely to like A B and C.
So we are trying to build this logic in our system. While this will drive great compliance we are perpetuating the past. If in the past for some reason he has not purchased a SKU he will only perpetuate it in the future. We want this ever built list expanding over time. We must be intelligent about what we sell at an outlet to stay assured. So this is the logic we're going to build. An "ever-billed" list - have I ever sold it to you before?
This is a sophisticated and analytic concept which are partnering with people and getting results and when you run these analytics it will show patterns. No human being can look at one and a half million outlets data and come up with the data. The designed logic is to build an algorithm and to come up with certain recommendations of the system. We have to ask the right questions, use the right logics and have a unique market understanding.
Suman Layak: Is the mandate created by a human?
Nitin Paranjpe: The logic of a mandate has to be developed by a person, the system interprets the data that is fed in and gives outputs.
Chaitanya Kalbag: Does psychology play a role in this?
Nitin Paranjpe: Each one of us in this business has to understand why people do what they do? Why does he buy what he buys? Different people buy different things, if I see one shopkeeper likes to buy frequently with smaller quantities and there are some who don't want to bother every week. That is psychology. The customer-buying behaviors, is in an important part of the business. So in anything we do, we cannot grow without building conditions in which shopkeeper's assortment improves. By defining the right assortment, you need to have an intuitive understanding and not a scientific understanding. If a consumer sees merit and value, he say "thank you"
Anusha Subramanian: When did you start the "more stores, better stores"?
Nitin Paranjpe: 'More stores better stores' is being run for a while, that's the terminology we've given it. In this industry nothing is perfected, we have keep getting better and better and improve at every level.
Anusha Subramanian: In 2010, you came up with Mission 'Bushfire' and the perfect store concept?
Nitin Paranjpe: Those are for two different purposes. 'Mission Bushfire' was to get the whole company to connect and engage with our customers, to make them sensitive to the needs and aspirations of the consumers. It is not enough for the sales people to understand the customers, it is not enough for our brand managers to understand the customers. Whether you're in HR, whether you're in finance, whether you're in supply chain, you have to connect with the consumers. And that's why we took the whole company out to get them to talk to our customers. We said let's use this opportunity to work towards perfection in a store and the value of that also was to get people to understand how challenging or how tough it is to get perfection in a store, what constraints people are working with and also to understand that if we need to say that the front-end person does not deliver how many things in the backend have to work right to give the front-end person some chance of delivering perfection.
In the end the only insurance we have that will predict long-term success is how close we are to our customers and consumers and nothing else. For this the whole company has to be involved. This was one intervention to get people to become sensitive to t consumer needs.
I spent a day actually doing merchandising and visibility in a store one after another. The small Indian outlets that you go to are short of space, there are so many SKUs, hygiene factors are an issue so it's not easy. It's a big challenge. We're going close to where we want to be but event and interventions like this move us in a certain direction.
Anusha Subramanian: Going forward, how do you look to the future? And what are the challenges?
Nitin Paranjpe: Look, going forward like I said, the only insurance we have is closeness and intimacy with our consumers and customers. It has to be the heart of everything you do, when we do that we will drive innovation because it will come from good understanding and will result in better brands and in the end our insurance will be stronger brands that consumers want, i.e great quality and right pricing which is one aspect of innovation. Second, it's a great execution, make no mistake. Most people don't talk about it because it's not fashionable to talk about it because it is not exciting. But, in the end strategy crumbles or succeeds based on the quality of execution.
We've to give execution a prime place in the organization and organizations that cannot manage to do this cannot succeed, no question it cannot however good your strategy is. And I refer to you, if you look at the strategies of any large company, I don't know of any company which would say don't put consumers first. I don't know of any company that does not want strong brands. I don't know of any company which says we don't want innovation. All of them want the same thing, yet some will succeed and some will not. Execution is the central difference. Belief is one thing, the conviction and consistency in which you do it is different.
Suman Layak: The future will be led my volume growth?
Nitin Paranjpe: We run this business for a long term and not from quarter to quarter and frankly people have got excited by our results and share prices and all, but that's not what drives us. We run this business to make sure we're getting, we've defined clearly what we want to do. We want growth that is competitive, which means ahead or greater in the market and we want to find a business model that can deliver a long-term growth and sustainable growth. The word sustainable has two dimensions to it, sustainable as in consistent over a period of time and sustainable as in responsible in the context of the environment, in the context of social responsibility that we follow.
This is not an insignificant thing for us, we truly believe in the plans that we need to lay are consistent with the larger trends we've seen. We have a sustainable plan that we've got, we spoke about two years ago. Unilever has made a huge commitment to say that we will halve our environmental footprint even as we double our business. We are no different, we're going to do that. Not just the environmental footprint even as we double our business. In a country like India, growth has to be socially responsible first, work has to be economically right and it has to come through our business model and we're not a charity, we're not a philanthropy and in no way can we make a difference to the issues of this country with a little bit of charity and philanthropy.
But we can have a business model in such a way that the life of people can be made better. We can improve livelihood. We have made a big commitment and even when we started off, we started with a model of 75,000 families where we materially make a difference - they have to be underprivileged, they have to be socially backward. Then we make a difference. We have got to about 65,000 already, almost our target, so good enough we have to raise it further because we can make a difference to them. In fact we we've touched the lives of over a hundred and fifty million consumers that we have a roadmap till 2015.
I think, throughout this, India will start making a difference when our brand starts to make a difference because that's how we relate to our consumers. I feel quite passionately about all of this. Even if I had to be very hardnosed about business, I do believe that finding a model which will be socially responsible is in itself enlightening and I think many people in industry forums may talk about it that the prime minister and the government keep talking about inclusive growth, etc many people think that it is a political slogan. I think we fail to realize that this growth rate of 8. 9 to 10 per cent that we want, we will not be able to sustain it if it does not touch people of the lower range of the economy.
Only if the rich were to get richer and it doesn't trickle down and the growth is not inclusive, the social cost and the risk of strike can be so significant. How can this growth come? Secondly, if we want to grow at this rate, we have no choice but to get growth from the billion-plus people in this country and therefore we've to drive prosperity and affluence and awareness and education and therefore it must be inclusive growth in that sense as well.
Anusha Subramanian: What would be the best advice you've ever got, from whom and why?
Nitin Paranjpe: I've got several pieces of advice over a period of time. Well, don't get too excited by success, don't get overly perturbed when things don't work out. You need to do what you need to do because it's the right thing to do, at times it works and at times it doesn't and too often we're too worried about each of these things and we lose objectivity. Be a little detached at times and be absolutely clear about what you are doing. The second is, many many years ago, I was given a piece of advice that said the intellective values can take you far but intellectual combined with humility can become an unbeatable and irresistible combination and never forget that.