Redesign Your Business Model
Entrepreneur Harsh Mariwala talks survival techniques for businesses
Many a times, we have good employees working closely with us who perform exceedingly well but as the business becomes complex, things become bigger, they start becoming less and less relevant. Feeling guilty, we think we should be loyal to them. But, especially at the middle and senior level, some people can actually affect the morale of the organisation and performance as well. It is better that in the interest of the organisation to ask the person to move out. You may do it in a manner where you can give the person some time and do it in the right way because that is in the interest of the organisation. I am not a very strong advocate of loyalty especially at the senior levels because it can have a negative impact on performance if the person is not living up to today’s challenges.
Governance is relevant to all stakeholders; it has its own benefits in terms of capital market, attracting good talent, good associates and finally good customers. The culture of an organisation plays a very important role in driving governance. Culture, which is very open, very transparent, where people are free to talk to each other and there is authenticity in terms of whatever is there in the organisation, and the board also plays an important role in ensuring that the governance is kept at highest standards in terms of sharing with the external world, with the capital markets. It is very important to have that image which is trusting, authentic and transparent to all stakeholders. If you can achieve that it will benefit all the stakeholders as well as the organisation.
Having said that, in Covid times, the role of leadership is tough, lots of anxiety and stress in the system. It cuts across all the people who are connected to you if you are running a business, whether it is your own shareholders, or promoter, or employees, or key associates or the society. Every promoter has to look at all the stakeholder and not just themselves in terms of how do I mitigate and how do I meet this challenge, anxiety and stress. So, what can one do when the future is uncertain and unpredictable? Ultimately everyone is in the same storm but in different boats. In my personal example, I run Marico which is in fast-growing consumer goods and many of them are essential category. The business is doing exceedingly well, there is more demand, that business is actually doing almost as per our normal sales and profits so we are very lucky that we are in the right category of business. But at the same time we have a chain of Kaya Skin clinics which were shut for the last three months and we are just starting to open up in Bangalore and in parts where we were allowed to open. But completely different impact on us so the key is to determine what and how you will fight this storm.
In terms of meeting expectations of all stakeholders, I think it is important to make your employees aware of what your organisation is going through. In the case of Marico, we are doing well, no need to worry but in case of Kaya Clinic, we are saying we are facing trouble times and we would have to renegotiate rents… Depending on the kind of business one will have to be true and fair to employees in terms of what is happening and one will have to update them because the environment is changing and all of a sudden things have opened up now.
How will the organisation meet this challenge? Within an organisation undergoing some serious cash flow challenges should ask employees what they would do about these issues if they were the promoters and make them visualise the options. If you do that and if there is a hard decision to be taken, and if it is coming from employees themselves they will be able to understand that, it will be easier for the management to convince them that this is something which is inevitable for the organisation to continue over a period of time.
I strongly believe that you should not just stop at the employees but also look at their families and how you keep them occupied because everybody is stuck at home. So in Marico we have done a lot of webinars for employees as well as their families such as cooking webinars, yoga classes, general knowledge contests, overall immunity building, and that has helped us connect with our employees. We go a little overboard in terms of safety and so, towards that, we have taken insurance for our members, we have online doctors. So, if you are going overboard in terms of safety and sanitation you are sending a strong message to the members that the organisation cares for you. And this is not just available for employees but for family members.
During tough times, people rise to the occasion. When we had to open our factories it acted as a huge motivator to many of our members, no matter which department they were working in. We have seen members stretching themselves to an extent unseen in the past. We have to reward them, we have to recognise them. Everyday, I see two-three emails that specify which department or team has done stellar work… To date, we have more than a hundred mails reinforcing these extraordinary actions which show a lot of collaboration initiative and boundarylessness.
We also used this closure to meet certain organisational challenges. We threw a challenge supported by a big reward that if you came up with specific ideas of cost reduction or innovation which would help the organisation do something differently in the future or for the work from home teams. We got some 200 entries, some teams, some individuals, and they would get a reward between 20,000 to a lakh rupees. I We used this time to ignite people’s imagination, passion and to get specific suggestions which are relevant for the organisation. In terms of customers, we had to walk an extra mile and we saw that when we had shutdown our Kaya Skin clinic, we did not have any business so we started offering free e-consultations to all our clients and I think that did well.
Recently, I established a new business of Aqua Therapy, so we have Aqua Therapy centres where we offer treatments for physical ailments through water and a swimming pool which, again, is shut. There we gave a lot of suggestions free of cost to our members and that has created a huge goodwill and strong word-of-mouth. We had webinars talking about the need to lose weight on Aqua Therapy. So, a lot of work has happened. In terms of safety also we have done that.
We need to look at trends thrown up due to Covid. This pandemic is speeding up trends that were already on the way. The shift to digital and the fact that we are all on Zoom, children are e-learning, we have got so much used to this e-route that it means that we will be open to doing this far more in the future.
Housewives are buying much more on ecommerce, doctors are doing e-consultations, e-prescriptions, and virtual meetings so that is a big shift to the e-market. Three months ago, if someone had asked me whether I would do a meeting on Zoom, I would have said no but in the future I am clear that I will feel guilty asking someone to travel from an outstation destination just for a one-hour interview. I would prefer doing it on Zoom. It will need lesser effort and better time use even in cities like Bombay. So, e-meetings take root and there will be opportunities in e-consultation, e-commerce and so on. There are good opportunities to hire talent because talents have become abundant. People are using this time to hire certain talents which are available in the market to improve overall competence.
In terms of consumer habits, there is a shift towards health. Whether it is physical, mental or spiritual health, individuals in the future are going to be far more conscious about it. A lot of this is being done today through the e-route, online yoga classes are happening.
So, there are opportunities to leverage this fitness and wellness through the e-route. In foods, people are shifting to healthy food and immunity builders like Chyavanprash, Vitamins, other Indian remedies which will improve your immunity.
We recently launched Veggie Clean, a solution to clean fruits and vegetables, and found that we could not cope with the demand because people suddenly realised that they could wash vegetables and fruits with Veggie Clean. It not only sanitizes the vegetable but also cleans wax and other dirt. I wanted to launch the same concept 10 years back and it was a complete disaster because people were not willing to use something like that. A sense of hygiene has emerged and will continue. Finally, people are going to be more conscious about pollution and products that cause pollution.
Technology is going to play a very important role so you will have to use technology to enable your product or services.
I am confident that this crisis will throw out new entrepreneurs who are willing to experiment. Your will have to look to see what is relevant in your existing business, you will have to look at what you want to drop, what will you emphasize upon. We changed our product strategy towards hygiene, we are going to launch a range of healthy products. Each one of us will have to look to see what will be relevant for their current business and redesign accordingly. In the case of Kaya, after giving free consultations, we realised that there was a demand for e-consultation. So, we tied up with e-consultation organisations like Practo and Infine to offer services and we saw a good response. One has to leverage digital trends.
Similarly, one of my friends has an art gallery in Bombay and he said that he had to pay huge rent and asked me what he should do. I told him that he needed to re-evaluate whether he needed a gallery or if he could show a virtual tour of the paintings he had on a digital front. Then, if someone wanted to see it physically, he could send it by van and avoid paying Rs 8-10 lakh rent for the gallery. You need re-evaluate how you will mould your business depending on what you have. It’s the same thing with car showrooms. So, redesign the business model.
The role of top management in monitoring is very important. You can have an advisory board, you will have to think of many options and have to prototype some of them as all of them will not work. If you have some outsiders who can help you think through. Prototype, experiment will help you get opportunities and avenues for the future. So when the tough get going, they say never waste a crisis. This too will end, it’s a matter of time. Different businesses have been hit differently but I always look at how fortunate we are than many others who are suffering much more. It will be a different world so be ready to succeed in that world.