Book Insights – Harsh Realities
“Harsh Realities” beautifully captures the career and life of Harsh Mariwala, one of India’s most successful entrepreneurs and the founder of Marico.
Structured in 3 parts, the underlying narrative deals with i) the challenges of balancing individual aspirations with cultural roots and set practices carried over from previous generations, ii) building from scratch the DNA for a highly successful and ethical organization and iii) leaving it all at peak to let professionals drive the company.
The book is a must read for every entrepreneur and investor for it lucidly details the struggles and successes of the firm, and the man himself!
My notes below are not exactly a summary of the book, neither a book review. They are just an encapsulation of the insights and key takeaways from the book, and the bare minimum that you should go through again and again, whether you are able to ever read the book or not!
Key Takeaway – “The mind is like a Parachute! It works only when open”
Insights:
- Harsh’s Marico Journey: Joined Bombay Oil in 1971, turned the 50 lakh revenue of consumer products division into 4,687 Cr. revenue and 485 Cr. profit (when he stepped down as MD in 2014).
- Important perspectives: i) When not doing an MBA proved to be a blessing in disguise for Harsh; ii) What gets measured… gets done! iii) Innovation is possible even in a commodity product with low differentiation; iv) Learning through seeing and observing, rather than brick and mortar classrooms; v) The art of marketing and advertising with limited resources; vi) Building a culture of sustainability… the institution is more important than the individual; vii) Talent is Supreme: Can you hire people more intelligent or knowledgeable than yourself? viii) The role that packaging plays in creating and distinguishing a brand (and the importance of continuous innovation needed in packaging also); ix) The organizational and people challenges that growth and scale bring with them; x) For a company to remain vital, the entrepreneur must sense the points of time where stagnation or complacency sets in. Confront these, make changes, reorganize and redesign; xi) Sometimes you win. But you never lose. You learn. xii) Make your passion your work; you will enjoy your journey; xiii) The power of a business is in its purpose. It is not what we do, but why we do it that defines us!
- The Marico Way: i) The 3P framework – People (invest into relationships), Products (focus on quality), Profits (source of wealth maximization for all stakeholders); ii) The Marico Culture- built on openness, transparency, trust, calculated risk taking, and a high performance without compromising on the core value system. A culture that would not only aid performance but ensure that it did not come at the cost of work life balance and office harmony! iii) 4 areas of thrust identified and acted upon for scaling up Marico’s early success – branding (followed template of successful industry leaders), distribution (leveraged technology, integrating the channels with the co), innovation (Erehwon as consultant) and cost management (Accenture as consultant). iv) Building of Marico through the 90s – product innovation / distinct value proposition succeeded – to give successful brands like Revive, Mediker, Hair & Care, and extend Saffola to multiple categories. Me-too products like Sweekar and Whistle failed for lack of USP. v) The high stakes failed takeover battle for Marico by HUL. vi) Identifying the true purpose and importance of board in guiding the management and organizational stewardship. Taking the board as a source of competitive advantage for the firm, rather than just as a regulatory requirement; vii) Mindset shifts that have taken place under Harsh in Marico – from steady to fast track, reactive to acquisitive / proactive, from tentative to confident and from conservative to risk taker
- Key points of strategic shifts in Marico – i) Packaging innovation (from tin to plastics plus solving for me-too competition, to create the moat around Parachute brand, ii) Leveraging Saffola brand and introducing extensions, iii) Using the experience of Parachute to create a much wider base of offerings in Hair segment, iv) Adapting the India market learnings to create a relevant global penetration strategy, v) Warding off HUL takeover attempts, vi) IPO and dealing with the pressures and constraints of external shareholders, vii) Strategy of treating Marico’s scrip as a brand, with a formidable brand and the initiatives taken with this philosophy in mind, viii) Building an organization culture focused on growth but with the DNA of people first, and world class governance mechanisms, often first / best in class. ix) The launch of Kaya, a pioneering concept; subsequent demerger of Kaya. x) The transition of Marico from an owner driven and managed company to a strategic, investor driven company.
- CSR (Marico) and Personal (Harsh & his family) Social Responsibility Initiatives – i) Marico Innovation Foundation – setup to nurture innovation in India among businesses (and subsequently to help scale up – examples include Rivigo, Genrobotics and Atomberg), social entrepreneurs and NGOs to recognize and help them scale up the innovations for enhanced economic and social value; ii) Sharrp Ventures – run by Harsh’s son Rishabh Mariwala – for investment into other promising ventures; iii) Ascent Foundation – A powerful peer-to-peer platform for enhancing entrepreneurship; iv) Mariwala Health Initiative – dealing with the issue of mental health and well-being; v) Aquacentric – aqua therapy clinics for physiotherapy
- Key Milestones of Harsh (as mentioned himself): i) Distancing himself from license raj and leveraged his strengths without compromising on principles; ii) Being able to modernize a traditional product (coconut oil); iii) Convincing his family to give his generation separate firms for full accountability and responsibility – led to the birth of Marico; iv) Creating a culture of transparency and innovation, using culture as a source of competitive advantage; v) Going against the grain to bet on hair oil and making it big; vi) Identifying a set of products / categories that afforded Marico a right to win; vii) Setting up a factory in Kerala (against popular opinion) and successfully operating it; viii) Investing in Bangladesh – setting up a business from scratch in a politically volatile environment to emerge as the largest Indian company in that country; ix) Kaya – successfully entering the market through services route and then launching relevant products; x) Pioneering move in moving to a professional MD as part of successional planning, a rare precedent for promoter driven companies.
- Harsh’s 8 Maxims: i) Leveraging strengths – a strength usually converts into a passion. So, to that end, you will then enjoy what you do. ii) Be focused – focus leads to depth. And depth leads to excellence! iii) Take Risks – Sometimes you win. But you never lose. You always learn. iv) Evolve your vision – one’s vision should not be set in stone but evolve constantly and be revisited every few years. v) Aim for win-win negotiations – a win-lose outcome does not pay in the long run. A win-win, where both parties meet halfway without compromise makes for a sound way forward. vi) Reinvent yourself – Continuing on the same road endlessly often causes loss of momentum – and the passion you possessed when you started diminishes. At that time, you need to ask yourself whether you will continue what you are doing perpetually or think of a new journey, a new challenge, and reinvent yourself. vii) Purpose – At a later stage in life, once a certain level of achievement has been attained, it is important to delve into pegging your purpose in life. Once identified, this purpose becomes a major fulcrum of your journey. Nothing remains the same once you discover your true purpose, your calling in life! Harsh’s purpose – Make A Difference! viii) Grit = Passion + Perseverance + Determination = Success!
