Cover Story: Lever Has Chairman Vindi Banga brought it back on track [Pg.2]

For Dalip Sehgal, Executive Director (New Ventures & Marketing Services), if a new project has to take off, it has to able to find a resting place in one of the existing businesses. Confectioneries have been launched under the Max brand, but Max is ultimately a children's brand (thereby giving it the opportunity to further extend itself). But it will ultimately find its 'resting place' in the ice creams business. Similarly, Project Shakti-for which the company has tied up with 500 of the two lakh-odd self-help groups in Andhra Pradesh-will help Lever make further inroads into smaller villages. Currently, Operation Streamline-the distribution thrust-reaches out to 80,000 villages of 2,000 households and above. Project Shakti will enable HLL to penetrate deeper into another 40,000 villages of under 2,000 households. But that of course is only once-or if-it assumes national proportions.

Another new venture being actively explored is water. Lever is sure it doesn't want to be another me-too bottled water player in the market. According to market sources, the company is actively looking at the prospect of selling water in rural areas, and at one point was even considering a water purification system for those markets. ''We will link the water venture to our capabilities and not play to the strength of others,'' is all that Banga is willing to reveal.

It is this urge to be different that's also reflected in the turnaround efforts at the foods business. To wean away consumers who prefer chakki-atta, Gunender Kapur, Executive Director (Foods), says by fortifying atta with iron and vitamins, he's offering a product that's hugely relevant and not available. That's because at least 60 per cent of women and children in India suffer from iron deficiency. Similarly, Dalda Active has the same taste of vanaspati but not the health hazards associated with it. In ice-creams too, executive director J.H. Mehta is attempting to move out of the price war with Amul, by launching differentiative products, like the sundae tubs in the take-home segment.

Even as Lever guns for focused growth, a concern being voiced in industry circles is whether it will continue to have the people to aid the company in that endeavour. ''Thanks to the consolidation that's happened over the years, the pyramid at the top has narrowed,'' points out Rajan Chibba, Deputy Managing Director, KSA Technopak. Adds Atul Vohra, Partner at headhunting firm Heidrick & Struggles: ''Before Leverites were less receptive to headhunter calls; now they're willing to listen.'' So is Banga concerned? Not really. ''Pyramids by nature are narrow at the top. Opportunities exist in Lever for good people. And don't forget that some 60 of our people are with Unilever.'' Adds Prem J. Kamath, Head (Management Resources). ''In the process of creating mini-businesses, we are also able to provide more of our people exposure at heading a business at a much earlier stage.''

Indeed, Lever needs all the help it can get from its 1,500-strong pool of managerial talent to take on the longer-term challenges: of warding off its competitors, both big and small, in key categories; of increasing consumption in markets that are ostensibly saturated; and of returning to those heady days of double-digit growth.

BANGA'S
Growth Mantras

FOCUS
Brands with maximum potential, size, competitive strength and potential for growth will get the full support of financial and human resources. Innovation and plit into separate functions. Activities broken up into mini-businesses.

EXTEND
If the growth of the core brand is ensured, it becomes viable for extension. Example: Fair & Lovely skin cream into soaps, and Close Up to Close Up Whitening.

MIGRATE
If non-power brand is of significant size, and has the core proposition of a power brand, migrate it into the power brand. Example: Coco Care into Nihar.

EXIT
Brands with no future will be milched and gradually phased out. Non-FMCG businesses will also be hived off, if not exited. Example: flavour and fragrances.

SUSTAIN
Grow only businesses that can be sustained in the years to come. Example: Although fragrance brands can be a Rs 20 crore business in year one, long-term growth potential is low. Hence they aren't in sharp focus.

PROFIT
Growth and leadership are important, but are of little help if they're unprofitable. Consumers have to be delighted, but shareholders have to be rewarded too.

INCREASE CONSUMPTION
Give the consumer an opportunity to use the product more often. Example: 100-ml standipack shampoos to ensure users increase consumption.

BROADBASE
Depending on the size of the opportunity, profit profile, synergy and long-term competitive advantage, new ideas are taking shape. Example: confectionery, water.

DIFFERENTIATE
Be it a new venture or innovation in an existing category, it has to be characterised by differentiation. Example: Annapurna salt (fortified with iron and vitamins) and Dalda Active (lower health risks).

EFFICIENCY
Along with the launch of superior products, the endeavour is to make the supply chain more efficient. Example: In the wheat supply chain, Lever now procures wheat directly from the farmer.