21 Jul 2020 22:07 IST

Kripalu’s spirited lessons for business success

Anand Kripalu

Talking at an MMA Leaders Speak event, Diageo MD offers five insights to make growth happen

Set the right ambition, develop focus, and win the right way with strong values and ethics. Also make growth happen and be future-ready. These are the five major insights that Anand Kripalu, an industry veteran with a deep understanding of brands and management, has to offer.

Speaking at the Leaders Speak Series by Pond’s Veterans, hosted by Madras Management Association and the Konrad Adenauer Stiftung, Anand Kripalu elaborated on his illustrious corporate journey spanning three-and-a-half decades, across Pond’s, Unilever, Cadbury and Diageo, and the lessons he drew from each of his stints. Kripalu is currently MD and CEO, Diageo India, and Member, Diageo Global Executive Committee.

Set the right ambition

Ambition, according to Kripalu,is a marriage of data and dreams. It determines the marketer’s resource, plan and effort. “In a business, if you aim to grow at 10 per cent, there are certain things you will do. But if your aim is 20 per cent or 25 per cent, you take very different and bigger bets to make that happen. Also, if you set your ambition too high, you set yourself up for failure. If you set it too low, as I did with Cadbury, you leave money on the table,” says Kripalu.

When Kripalu joined Cadbury in 2005 as Managing Director for the Indian subcontinent, the brand was a mature one that had been around for 60 years. But it was just coming out of the worm infestation crisis. Kripalu thought the business could grow much faster, though not many in the company thought so. He put together a plan to grow the business at 20 per cent per annum CAGR for the next five years (from 10 per cent in the past decade). Over eight years, the business actually grew by a CAGR of 25 per cent in topline and 25 per cent in bottomline. In hindsight, Kripalu feels he should have set the ambition higher at 30 per cent.

The power of focus

To reach the peak in any area, one needs mastery. And mastery requires focus and intensity. This means choosing one’s battles carefully and doing a few big things that have the ability to transform the business, rather than doing many small things.

Going back to the Cadbury example, Kripalu says he and his team developed a clear strategy that involved “pruning the tail” (killing a third of the brands, halving the number of SKUs, and cutting promotional costs) and focussing on strategic brand investments and one or two innovations per year, which could make a big impact. The two innovations at that time were Dairy Milk Silk, a premium variant, and the launch of Oreo biscuits. The power of focus helps businesses to make consumer-relevant changes that delight consumers.

Make growth happen

This is what Kripalu managed to achieve with Unilever’s business in East Africa, before his stint with Cadbury. When Kripalu took over as MD of Unilever for East Africa, the business had not grown for a decade and had lost money every year. Kripalu hit the ground running literally — travelling across the length and breadth of the countries he was overseeing, visiting homes, and talking to people. Soon he had covered more ground than many of the locals and earned their respect. “We put together a simple strategy: focussing on a few key brands and driving low-unit price packs (taking a cue from the one-rupee shampoo packs of Pond’s). I took examples from India that were relevant in terms of cost and efficiency,” Kripalu says, explaining the approach.

The result? The business started turning around. And at the end of the year, it was delivering double-digit growth and had turned profitable.

“Forget about your circle of influence and concern, focus on your circle of control – what you can do to change your business. Never be a victim, take charge,” says Kripalu, reminding the audience that many of the great companies, such as GE, IBM and General Motors, were born during a recession and slowdown.

Be future-ready

In a fast changing environment like ours, consumers are changing very fast. Marketers too must be agile and change and adapt rapidly. The organisation must create a culture and mindset that not only manages today but is also ready for tomorrow and the day after. “If you don’t do this, you will fall behind, you will be the dinosaur of the industry. That’s the reality,” cautions Kripalu.

Win the right way

Kripalu prides himself on the strong middle-class values he was brought up with and the way he was nurtured in Pond’s, where he began his career. Frugality, values, hard work, and ethics have been Kripalu’s strongest assets in the way he functions.

When Kripalu joined the liquor industry, people told him that it was not possible to clean the industry and one couldn’t be compliant in the alcohol business. But non-compliance was not something Kripalu was ready to flirt with, even for a fleeting moment. Instead he took on the challenge of changing the way the liquor business was done in the country. “People have told me that the cost of compliance is very high. But just think of the cost of non-compliance … Don’t take decisions that forsake the long term. Reputation takes decades to build and a second to lose due to one wrong thing.”

There are enough examples of companies “being shattered” (due to non-compliance) – Enron, Volkswagen, Satyam, BP. So many companies have failed because of poor governance. To Kripalu, it is not about building a company, it is about building an institution, and institutions are built on values and conscience, not on numbers. “There is no choice today other than to be a good corporate citizen. Do the right thing and live in harmony with the environment and the community that you serve,” Kripalu signs off before taking questions from the webinar audience.

On Diageo’s work culture and the future of liquor business in India

Ethical marketing

Diageo believes in ethical marketing. We cannot be irresponsible marketers. Only education on responsible consumption works. Diageo spends three times the statutory requirement of CSR because we believe it is the right thing to do.

Vision for liquor retail in India

Better stores and retail places are emerging. During the Covid-19 crisis, State governments have selectively started home delivery and e-commerce. This could unlock the biggest barrier for the liquor category — accessibility. Technology will allow us to leapfrog and transform this industry.

Spurious liquor

Counterfeit brands are a big challenge. We have teams supporting the excise department, with police assisting in carrying out raids. The long-term solution is using technology via smartphones, QR codes, authenticity checks, and blockchain to crack counterfeits and trace every bottle uniquely.

Diversity

Diageo India recently announced that live-in partners and same-sex partners would be provided medical cover and family benefits (as part of its commitment to promote an inclusive and diverse working environment).

Earlier, when I joined Diageo (in 2014), there were hardly any senior women. Today, four out of eight among the leadership are women. One-third of our top 50 leaders are women. But we haven’t solved this fully yet. Men score higher than women in value service scores. Attrition in women is higher than in men. If there are more women at the helm, championing the cause of alcohol, that will change the perception of alcoholic beverages and the face of the industry.

(The writer is a freelance writer and editor based in Chennai. She was formerly a journalist with The Hindu BusinessLine.)

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