Secret dairy of Harsh Mariwala- Part 1

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Of all things, I kept thinking about the dingy lanes of Masjid Bunder. When Pradeep
(Harlalka) showed up, he was empty handed, with just a passport in his pocket. His idea of
travelling was to bring back “imported” items from the US. Mine, to break free before
plunging into the family business. Crisscrossing the US, we made our way to Europe,
ticking off Paris and London in one month-and-a-half. What a time we had! Pradeep’s bag
was, of course, bulkier — full of perfumes, clothes and chocolates — something we laugh
about even now.
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As a locality, Masjid Bunder was
brimming with both handcarts and
humanity. But it wasn’t a place for a
youngster. I was keen to do an MBA.
When I didn’t make it past the interview
stage at IIMs and Jamnalal Bajaj, the
aspiration was to go overseas. In one
swoop, my father shot it down. Hearing
all that business talk at home was no
longer enough, I had to join the ranks.

The first three years were slow, spent

learning the ropes of the businesses we
owned: edible oils, chemicals and spice extracts. Away from the bustle of Mumbai,
Vidarbha was my karmabhoomi. My first lesson in consumer insight came from here, all the
way back in the early 1970s. At 21, how much would you know about business? I just knew
edible oil was our bread and butter; that it had been in the family for many years. Parachute
was then sold in 500 grams, one kg and 15 kg tins in Vidarbha and parts of Saurashtra. I
was sent to Vidarbha to meet distributors. It was the first time anyone from Bombay Oil
Industries was visiting them. It would become a habit in less than a year — taking an
overnight train to Nagpur and thereafter travelling by road to Jalgaon, Akola, Wardha and
Yavatmal.

I soon learnt that the 15 kg tin outsold

the other two. Imagine my surprise
though when I figured out that the
distributors were selling our coconut oil
in smaller tins, on their own. Parachute
was a brand in its own right and the
family had no idea of that! But if it was
selling so well, why did I bother altering
the script? Simply put, the opportunity
to convert an unbranded commodity to
a branded retail business was too big to
ignore. There were very few coconut oil
brands in India. Shalimar was successful in Kolkata. I took the train from Nagpur on one of
my visits (it was second class in those days) to see how it was doing.

Talks with the distributors in Vidarbha became my management lessons. Each day, there
was a new case study. In that dusty bowl, I had found my passion. That feeling of selling
our brand directly to retailers, even booking the orders in registers, gave me a high. A
brand protected us from the vagaries of the traditional business. It helped do away with
lower margins, and brought in product differentiation. The ride was cumbersome, to say the
least. We first expanded in the west, then, moved to the south and north. The East was our
final frontier. In eight to ten years, we grabbed 10% market share from just 1% earlier! This
was in the mid-‘80s. By that time, we had set up regional offices. There were reasons to be
happy but the quantum jump I wanted was still elusive. It was time to shake up the market.
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***
In the FMCG business, it is always small innovations, driven by common sense, that have
made the difference. The same thing happened with edible oils. Coconut oil was still being
sold in tins. Plastic containers looked better, were easier to handle and cheaper as well. I
thought we had a winner on our hands but the retailers were not enthused. It turned out, a
company had tried going this route before, launching oil in square-shaped plastic bottles –
only to see it fall prey to rat bites. The shape offered them an easy grip.

The answer was simple: a cylindrical, round-shaped bottle that the

rodent couldn’t hold, let alone bite. We set up the prototype in rat
cages to prove our point to the retailers. That small step paved the
way for plastic bottles. It would still take a decade for the market to
shift, but it showed how far a small innovation could go.

Like Parachute, Bombay Oil’s other brand, Saffola, had a

presence in a few pockets in Mumbai and Delhi. It was déjà vu,
converting the loose refined business to branded oil. Again, a good
brand and sound distribution did it. Not being technologically inclined was probably what
pushed me to FMCG. Along the way, building brands became a way of life.

***
If I roll back the years, Marico was the
core of my existence. I was 39 when I
became the managing director. I
wanted to build a strong organisation,
but who would want to work in Masjid
Bunder! The Willingdon Sports Club,
near my house, came to my rescue. It
became the place to meet potential
recruits over cups of chai and samosas.
I was sly; these recruits must have left
imagining a large office space and
plush interiors. Luckily for me, the club
approach worked on many occasions.

One look at Jeswant Nair and I knew Marico needed him. An XLRI graduate with a proven
track record, he had handled HR at Blue Dart, Garware and Asian Paints. I figured people
must have thought I had gone crazy, hiring an HR person before anyone else. I don’t blame
them; it wasn’t a big function those days. Jeswant was outspoken, brash and a go-getter;
just what I needed.

Marico was carved out following the bifurcation of Bombay Oil Industries and I knew the
potential FMCG offered. At the same time, it was clear that I had to let go of the old style of
working. The days of Bombay Oil Industries were over. When I think of what happened with
RV Bindumadhavan, I still cringe. He had joined us from Ranbaxy to work on the new
plastic packaging for Parachute. One of the general managers asked him, “So you have
come here to buy dabba baatli?” It really upset him. I knew then that Marico had to forge a
new culture.
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In Jeswant, I saw someone who could convince others to believe in my dream. Over the
next two years, we recruited a bright bunch of people. Pranab Datta (for finance) from
Rallis, Raj Aggarwal, a marketing veteran from Colgate Palmolive (who sadly passed away
at the prime of his career) and Shreekant Gupte for operations. We were still a lean
organisation; there was a sense of ownership in the team, which meant greater job
satisfaction. It was also an informal space. People called me by my name. I clearly
remember Raj, right after joining us, came to work in a tie. That lasted for just two days!

When I joined the business, I was rather rigid. The approach was to only win. One
experience changed all that. Bombay Oil Industries had two strikes in the 1980s. Production
was severely affected. The strike lasted for almost a year and it came at a time when we
were establishing a new manufacturing unit for Parachute. We were up against Datta
Samant, a prominent union leader. I was so overconfident that I took on the union. In the
end, it was me who had to yield. It was a brutal lesson, but helped me transition from the “I
have to win mindset” to “look for a win-win approach”.

I have always been a workaholic. Though I would leave office at

5:30 pm, I carried work home daily. But I was flexible. I believe it’s
best for people to decide how they want to manage their time. I
would even make calls and send messages from the gym, but
didn’t expect that from my team. There, it was a more democratic,
less dictatorial approach. It worked! Over the next few years, the
team grew so close, we went on retreats to Nepal and
Fisherman’s Cove near Madras.

***
People think I am cold. Maybe it’s because I have trouble expressing my emotions. It’s
also because I am more of a loner. I like managing my own affairs, including my schedule,
which goes in my black diary or rather my “lifeline”. That’s not to say I haven’t allowed
emotions to get the better of me. The ‘90s were particularly stressful. The decision to set
up Marico meant I was working 17-18 hours each day. Hiring the team and getting things
working took up most of my time. In the middle of all that, there were negotiations with
cousins over the separation. It took a toll.

Separation is never easy. Even the smallest issues have to be discussed threadbare.
Things had reached a fairly decisive stage when they went awry. I was caught on the wrong
foot. Simultaneously, there was the pressure of sustaining growth at Marico. After a series
of long meetings, we had gathered for dinner in Madras. I didn’t realise when my emotions
got the better of me and I broke down...

The decade started with me setting up Marico. Two years later, in 1992, the settlement
process with the family began. I knew I needed money to pay off my cousins. A PE deal
with Goldman Sachs was as good as done till differences cropped up, at the last minute.
We then decided to go public. Again, by the time we reached a decisive stage, the capital
market was in bad shape. In 1996, we bit the bullet and went public at 175 a share. I was
so nervous. When, the IPO was oversubscribed 2x, the burden was lifted.

This is the first of a two-part series. You can read part twohere.
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