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Tag: Shantanu Khosla

  • Khosla is leaving the company at a time when it has lost share in over two-thirds of its business, a struggle reminiscent of its parent company that has now put over 100 brands on the block to focus on core business

    After 13 years as P&G MD, Shantanu Khosla, 55, quits

    By Sagar Malviya

     

    Procter & Gamble India’s managing director Shantanu Khosla is stepping down effective June 30, 2015, leaving behind a company that is struggling to grow its shares amid intense competition. The company announced his move on the BSE without elaborating on his replacement.

     

    The 55-year-old Khosla became part of P&G when it acquired Richardson Hindustan in 1985. In his tenure spanning nearly thirty years at P&G, Khosla led several business units around the globe. Later, in 2002, he took over the leadership of India operations of the company in June 2002. In 11 years under Khosla, P&G’s revenues have multiplied about six times at roughly 9,000 crore across three companies.

     

    Khosla, an IIT Bombay and IIM Kolkata alumnus, is leaving the company at a time when it has lost share in over two-thirds of its business, a struggle reminiscent of its parent company that has now put over 100 brands on the block to focus on core business.

     

    The Indian unit of world’s largest consumer products company ceded ground in products ranging from detergents, skin creams and shampoos to disposable razors and sanitary napkins. Experts said this resulted from P&G’s lack of innovation and focus on higher margins amid aggressive strategies adopted by its rivals to increase their market share.

     

    In the past two years, P&G has invested over Rs 2,000 crore in India, especially to set up manufacturing units to reduce dependence on pricier imports. However, big investments have taken a toll on its profitability, with the unlisted P&G Home Products, which houses laundry and shampoo brands, posting a loss of Rs 100 crore for 2013-14, on sales of Rs 5,381 crore.

     

    P&G in India including two subsidiaries, Procter & Gamble Health & Hygiene, which markets feminine hygiene brand Whisper and Vicks anti-cold balm; and Gillette India, maker of razors and other shaving products had annual revenues of Rs 9,274 crore during 2013-14.

     

    Source:The Economic Times

    Copyright © 2015, Bennett, Coleman & Co. Ltd.

    All Rights Reserved, Licensed to republish

     

  • … was the consensus at an ASCI seminar with John Hegarty, Marc Mathieu,Shantanu Khosla,Santosh Desai, Paritosh Joshi,Sanjeeb Chaudhari & Bobby Pawar in attendance

    Soon Consumers will be Regulators…

     

    By Labonita Ghosh

     

    A few years ago, global consumer goods giant Unilever found itself in a sticky situation. A new advertisement for its margarine Flora, had sparked a huge row. The ad showed a bullet going straight for a human heart made of china. The bullet, fashioned by the words “Uhh dad, I’m gay”, was followed by Flora’s tagline, “You need a strong heart today”. Amid largescale protests against the clearly homophobic nature of the ad, Unilever first distanced itself from the campaign, saying it had been produced by an agency in South Africa and had not been approved by the company. Then, as the protests refused to die down, the company pulled the campaign altogether. “The ad seemed to indicate that finding out your son was homosexual, was like taking a bullet to the heart. It was a very uncomfortable situation for us,” said Marc Mathieu, global SVP marketing for Unilever, who was in Mumbai last week, speaking at an event organised by the Advertising Standards Council of India (ASCI), on responsible advertising.

     

    ASCI has been pushing for self-regulation in the advertising world to ensure ethical and responsible handling of campaigns, and also for punitive measures against companies and agencies that put out misleading ads. Earlier in the week, the Department of Consumer Affairs announced it had set up a website called GAMA (Grievances Against Misleading Advertisements) and was partnering with ASCI to take action on the complaints filed online and penalise offenders. The prevalent idea, however, is that there may be no need for action if the industry decides for itself to toe the line.

     

    One oft-repeated grouse by the industry is that too many guidelines curb creativity. “The assumption often is that rules are a barrier to creativity,” said Shantanu Khosla. Managing director, P&G India at the event. “But we should not think of regulation as a constraint. It comes from the same source as my fundamental consumer insight, ie society. The people we serve, write the rules, and no one else.” Indeed, it is from these rules, added Khosla, that companies can also build leverage and trust for their brands with consumers.

     

    In fact, sometimes thinking out of the box can lead to some great advertising, felt John Hegarty, founder of BBH. He cited the example of how, since the socio-cultural conditions of various markets differ, there are some regulations that – literally — come with the territory. And trying to find (legitimate) ways around this, can often lead to innovative solutions. Like a hair care commercial that was prepared for the Malaysian market. “How do you advertise for women’s hair care product in a country where women wear headscarves and are not allowed to leave their head exposed?” Hegarty said. “The agency found a way around it.” The ad focuses on a comb instead, first with strands of hair on it, and later without, to show how the product could stop hair fall.

     

    Unilever’s Mathieu felt that understanding people is what unites the marketing and advertising agencies. “Insights into certain human truths are the most important thing,” he said. “So companies need to ask themselves what is the human truth that I can use for my campaign that will resonate with people?” Making campaigns more people-centric and creating more purposeful brands, will automatically yield ads that are less offensive and more acceptable to consumers.

     

    Experts, however, feel consumers themselves are the best regulators. “Self-regulation is our job, yours and mine, and not ASCI’s,” said Paritosh Joshi, head of media and communications consultancy unit Provocateur Advisory. “The more everyone believes they are a part of this, the more they will believe that enforcing truthfulness and honesty is a collective responsibility. Self-regulation is not about curtailing creativity, but about establishing a framework of rules that one might have for, say, golf or cricket or boxing. If you’re not allowed to punch below the belt, you’re not allowed to punch below the belt. There are good reasons for this, and we should all be aware of them.” When that awareness comes, there may not be a need for a watchdog at all.

     

    Sanjeeb Chaudhuri, CMO and global head of brand at Standard Chartered agreed. “Increasingly, the response of the consumer, will be driven by the consumer,” he says. “This consumer’s choice will, in turn, drive the choices that advertisers and agencies will have to make. They will find that they can’t go against the grain [of the consumer].”

     

    Santosh Desai, MD and CEO of Future Brands, saw things a tad differently. “I think the issue of self-regulation will only become more contentious till such time that business can see itself as an intrinsic part of society,” he said. “Considerations [about regulation] should not stem from things like the consumer becoming more empowered and taking to Twitter to complain. These will always be half-solutions. It will happen only when corporations begin to believe that they don’t have immunity from society.” Indeed, it should be impossible to separate the consumer from the business. “The business of business is people,” said Bobby Pawar, director and chief creative officer at Publicis Worldwide. “Just as products have consumer benefits, companies should too. They must also benefit society in some way. The thing to keep in mind is that if you are a person with a conscience, you should also try to develop one for your brand, and stay true to it at all times.” A tough ask, perhaps, but certainly doable.

     

  • He has been described as the Tendulkar in the Procter & Gamble system: 24 years. At the helm for 11 of them.

    What makes P&G’s India head Shantanu Khosla outlive peers

     

    By Kala VijayaRaghavan & Sagar Malviya

     

    The company he heads is coming off its worst financial year. Yet, an unfazed Shantanu Khosla wants to look back longer at how Procter & Gamble’s Indian operations have come along in its 24 years in the country, creating spaces for itself while going head on against the might of fellow multinational offsprings like Hindustan Unilever and Colgate-Palmolive.

     

    Just as well for him, for Mr Khosla has been at the helm of P&G India for the last 11 of those 24 years. Seen through the prism of P&G’s global template, Mr Khosla’s tenure, since 2002, is standard stuff. Seen through the prism of what’s happening in his neighbourhood, Mr Khosla is an outliver.

     

    Hindustan Unilever-P&G’s rival number one in india and against whom it is measured the most-has seen a change of guard four times since 2002.

     

    As has Colgate-Palmolive. As has Nestle. “The comparison (with HUL) pleases me because I know we are winning,” says Mr Khosla, managing director of the operation that posted combined revenues of Rs 7,561 crore in 2012-13. “In every category we have competed with HUL, we have grown. Ten to eleven years back, they were 20 times our size; today, they are three to four times.” And then, he fires a salvo. “Reliance has grown faster than HUL in the same period. So, is there a comparison?” But growth is one thing, profitable growth another. P&G’s speedy expansion has come at the cost of margins, especially in the last three years, when the quantum of losses posted by it- Rs 1,167 crore-wiped off all the profits it had made till then.

     

    A lament among industry observers is it’s not clear what P&G wants to do in emerging markets like India. They say its growth could have been faster given its parent’s size and product portfolio, its board of directors in India is aging, and is low on ideas and risk appetite, its strategy to opt for fewer stockists is puzzling. “P&G’s strength is top-end, high margin,” says Amin Babwani, a former senior sales and marketing official at HUL and now an independent consultant. “Hence, even if they become big, say, in the mid-priced detergent segment with the success of Tide, it will not meet their margin aspiration. It should leverage its global portfolio and quickly launch some of its big global brands in India.”

     

    P&G is upping the stakes in India. Its US parent has invested about Rs 2,000 crore in the last two years in its Indian arm to ramp up production and distribution, especially in relation to, who else, HUL. What makes that narrative more interesting is that, on October 1, HUL completed one of its regular successions, with Sanjiv Mehta stepping into the rather big shoes left behind by Nitin Paranjpe.

     

    Barely half a km away in Mumbai, at P&G, the footprints, as far as one can see, are those of only the indefatigable Mr Khosla. “Shantanu is like Sachin Tendulkar in the P&G system,” quips a senior company official, not wanting to be named.

     

    The Man

    The 53-year-old Mr Khosla says this is where he wants to be. “I love the job, I am learning everyday,” says the 53-year-old. “The consumer base in India is still underserved. And we have this young talent and leadership pipeline the P&G system consistently works on.”

     

    Mr Khosla heads all three P&G companies in India. There’s P&G Hygiene and Health Care (which makes Whisper and Vicks), Procter & Gamble Home Products (Ariel and Tide) and Gillette India (shaving products of the same name). Mr Khosla became a part of P&G when the Cincinnati-based company acquired Richardson Hindustan in 1985, in 1985. After leading several business units for it around the globe, he took charge of India in 2002.

     

    In 11 years under Mr Khosla, P&G’s revenues have multiplied about six times at Rs 7,561 crore. That’s faster than Colgate-Palmolive, Nestle and HUL, though the last name on the list has a significantly larger base. Personally, for Mr Khosla, it’s an unusually long stay in a Gen Y environment, where boards and CEOs are getting younger.

     

    “There is nothing unusual about it in the P&G system,” he says. “Over its 175 years of existence, P&G has had only 10-11 CEOs.” In India, before him came Gurcharan Das, David Thomas and Helmut Meixner.

     

    According to a senior company official, who did not want to be named, Mr Khosla has been refusing global positions that come with promotions. At present, in P&G’s global hierarchy, Mr Khosla is a vice-president. He reportedly has clout and commands respect for his leadership skills. “He could have been president-level talent any day, but he has chosen to be in India by choice,” says this official. In P&G, the president is a notch below chairman & CEO position.

     

    Declining to answer questions about global roles and older boards, Mr Khosla insists leadership development and succession planning is core to P&G’s culture. “I know who my successor will be as, with all positions within the P&G system,” he says. “Nothing happens by chance here. These are all pre-planned career decisions done with what is good for business and what is good for the employee. I am no exception.”

     

    The Company

    Departures from that template happen, even at the highest level. This March, the US parent brought AG Lafley-credited with the $57 billion acquisition of Gillette in 2005 and all of 66 years-out of retirement to be its chairman and CEO and revive growth. On a visit to India three months later, Mr Lafley admitted that P&G in India had fared better in categories where established FMCG was not strong, like women care, baby care, hair care and skin care.

     

    Part of the reason, he said, was because HUL had a headstart and FMCG talent. “It wasn’t until we were there for a decade or two that we began to hire some really good people out of universities, and we did acquire some good people with Richardson-Vicks and Gillette and other acquisitions,” he said in July. “But it is very hard when you haven’t been there for 100 years and you don’t have the reputation of HUL to hire the best.”

     

    Gautam Duggad, FMCG analyst at Motilal Oswal Securities, a brokerage, says comparing P&G with HUL is unfair. “Both have different histories,” he says. “HUL is a 100-year plus organization in India compared with P&G’s 20-odd years, of which, it has been aggressive only for the last 10 years.”

     

    Mr Duggad feels P&G is putting many pieces in place. “The losses are not worrying. It is the result of its investments in critical areas,” he says. “It is focused on long-term growth. Now, it is investing in critical areas: brands, distribution and infrastructure. For FMCG companies, management roles have marginal impact.

     

    Once the critical parameters are addressed, it is on auto pilot.” Ashok Chhabra, former P&G general counsel for Asia-Pacific & Australia says the company is guided by the consumer, not the competitor. “And Shantanu is driven by data and facts,” he adds. “He understands issues on the ground and is an excellent leader to guide P&G.” Mr Khosla says he maintains a 9 to 6, clear every mail in less than a minute, schedule. Mr Khosla, who is fond of gadgets and cars, meets as many colleagues he can, often seeking them out.

     

    “We have an open office, flexible work hours and are more virtual,” he says. Independent marketing consultant Kamini Banga gives a thumbs up to Mr Khosla. “A new entrant combating a large entrenched player is no mean feat, and what is essential is continuity and stability,” she says. “And if things are working well, it would hardly be prudent to bring change at the top and experiment with new strategies. As a challenger, Shantanu has brought stability and continuity while putting it squarely on the path to growth.”

     

    Source:The Economic Times

    Copyright © 2013, Bennett, Coleman & Co. Ltd. All Rights Reserved

    Licensed to republish