Thursday, May 26, 2022
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Future Sense

‘To Be An Authentic Leader, You Have To Embrace Who You Are’

Pune-born Laxman Narasimhan’s journey to become the CEO of multinational Reckitt is filled with life lessons. With Outlook Business, for the first time, he opens up about his childhood, the hustle and the struggles after he lost his father at 22

‘To Be An Authentic Leader, You Have To Embrace Who You Are’
Laxman Narasimhan Laxman Narasimhan

Laxman Narasimhan is the Chief Executive Officer of Reckitt, a £44.09 billion ($56.61 billion) UK-based consumer goods company. This is his story—of his childhood, his losses, of people who shaped his life, and about the Reckitt he inherited as a CEO just before the pandemic.

“I am obsessed about doing the right thing. I am obsessed about the consumer and the customer” is how Narasimhan ends this nearly an hour long interview with Outlook Business. But, this obsession is different—not like the ones of most other CEOs who learn it on the job, or read it in theories in management textbooks. It is how Narasimhan grew up.

Before ending this conversation he narrates a story—of an end-of-a-quarter town hall. It was a virtual meet, which Narasimhan was addressing from his home, to about 15,000 Reckitt employees across the world. His mother walked in, unknowingly. “We want to see your mom,” some of the employees said. Narasimhan reluctantly called his mother to join the call. She asked, “I hope he is doing a good job and doing what you [all] think is appropriate.”

He is doing well. Narasimhan took over as the CEO on September 1, 2019. In 2021, the group’s net revenue was £13.23 billion, a growth of 3.5%. And, in the two years of Laxman, the Group’s like-for-like (LFL) revenue growth is 17.4%.

When Narasimhan joined Reckitt, he says, “I think the company was going through a bit of an existential question around why we exist and whether we should split or keep together, etc.” He knew he had to answer a few questions: Why do we exist? What is our DNA? What is the future?

One of the first things, according to Narasimhan, was that Reckitt needed clarity—in a world full of choices. That clarity would come from some soul searching: “What’s the ambition? What’s the vision? What are we going to do? How do we do it? What are the future spaces? How do we build a team that actually is going to make that happen? And finally, how do we ensure we deliver what is needed for our consumers, our customers, our shareholders, and importantly for our community?”

But, let us take a step back. Let us understand this leader, how he thinks and what makes him think the way he does. A lot of it is buried in Narasimhan’s growing up years, when he was still living with his family in Pune, India.

Laxman Narasimhan
 

Turning Point and Train Travels

His father was the CEO of a company that made laminates—a position he gave up to start a business with a hope that his son would join him someday. Narasimhan’s mother was a primary school teacher. But, before his father’s plan could take shape—when Narasimhan was 19-year-old—his father fell ill. For the next three years, Narasimhan dedicated his life to taking care of him.

“I stayed at home, took care of him. I got to know him really well through that [time]. He was my mentor,” says Narasimhan. He died when Narasimhan was 22.

That was not the first death that Narasimhan saw in his family—he had lost a brother when he was just six. “[My] sister died before I was born,” he says. “As the only surviving child, you end up learning a lot of things. You compensate for others.”

His friends had a different life—they were preparing for exams, planning to go abroad. “But, I knew that I had family obligations with a sick father,” he says. His mother made Rs 4,500 a month and Narasimhan was working in a company where he made Rs 4,500. “So, I never wrote any exams until my father passed away,” he adds.

This is the year 1991. Sometime after his father’s death, when Narasimhan turned 23, he decided to sort out his life. The first thing he did was tell his only surviving family member—his mother—about his decision: “I am going to apply to business schools outside India.” She asked, “Why?”

“It is because I just had this dream to go somewhere else to set the foundation of my future. All my friends have gone abroad, and so I am going to take the exam and see what happens,” Narasimhan says, who then applied to top five business schools, including The Wharton School, which he joined.

But Narasimhan could not afford to quit his job to prepare for his exams. His job required him to travel to smaller cities. He remembers studying for GMAT on the trains, while going from Calcutta (now Kolkata) to Jamshedpur (home of Tata Steel and Tata Motors) on the Ispat Express and while going to Rourkela (which has a steel plant built by Steel Authority of India, or SAIL). “I was trying to sell something to steel plants, travelling to various parts of the country, staying in small hotels,” he says.

“I never imagined that I could afford to go abroad and study, actually,” he says. Narasimhan, during those days, came in touch with Ravi Kumar, then the head of the Wharton Club of India, with whom he is still in touch. Kumar called Narasimhan’s mother and said, “Laxman is saying he is not going to go [abroad]. He is crazy. He should go because I think he will make it.”

“I told him (Ravi) that I did not have the money,” Narasimhan says.

Laxman Narasimhan
 

Paintings, the Fiat and Unknown Friends

Narasimhan had saved some money for two years: $7,700 to be precise. But that was not enough. He took one of the toughest decisions in his life. “I had a Fiat [car] and my father left me three paintings,” Narasimhan says. He took one of the paintings in the Deccan Express to Bombay (now Mumbai) to meet his father’s friend Kali Pundole of the Pundole Art Gallery to sell it. “I also sold my Fiat,” he says.

Kumar, meanwhile, did something wonderful, recalls Narasimhan. “He is gifted. I could instantly see his passion and talent. He seemed like a really good candidate,” says Kumar. “I just wanted him to get there”. Kumar bought Narasimhan a return ticket to Philadelphia. He told Narasimhan: “If you make it, you pay me back. If you don’t make it, then it’s on me. But I’m convinced that you will make it”.

Once in America, Narasimhan was faced with a daunting task. The fee at Wharton was $80,000 while he just had $7,700.

“In moments of deep distress, people come to your aid if they believe in you,” reflects Narasimhan. In fact, he adds: “If you had told me back then that I would make it, I would not have believed you.”

Back in 1991 in Philadelphia, Narasimhan had to really bet on himself, as scholarships were hard to get for business schools. He also got a lot of help as he reached out to patrons for sponsorships. The Lauder Institute, which owes its fame to the cosmetics baroness Estée Lauder, wrote a letter to board members of The Wharton School. The Wallenberg Family, a powerful Swedish business dynasty, gave him a cheque of $20,000. “The letter came in Swedish and I wondered who mailed it to me. I opened it. There was a cheque in it, and I was like, ‘Oh My God! It is a real cheque’,” Narasimhan says.

He also got in touch with Azad Shivdasani of the Inlaks Family, which also runs the Inlaks Foundation. “He invited me for an interview in a New York hotel,” says Narasimhan. “I remember taking two local trains, first from Philadelphia to New Jersey, then to New York to get to Manhattan (the cheaper options). [Azad] ... tells me now that his intention was to gently turn me down. But he wanted to meet me to reject me. Instead, he ended up giving me a loan scholarship of $20,000. He gave it from his family foundation.” With this and two jobs, Narasimhan knew he had made it to the first year of The Wharton School to study MBA in finance. Simultaneously, he joined the University of Pennsylvania to pursue master of arts in German and international studies, albeit with some twists and turns when he almost gave up while being stuck in Germany without money for his passage back. Eventually, his aunt lent him money to get to fly back to Philadelphia.

After completing MBA, he joined McKinsey in 1993. Twenty-nine years later, Narasimhan, the CEO of Reckitt, says reflectively, “When you collect people in your life, they actually come through…”

Laxman Narasimhan
 

Fast Forward 2019: Narasimhan, the CEO

Unlike many others, Narasimhan has ensured he stays in touch and expresses his gratitude to all the people who have touched his life as he made his way from Pune to Slough in England. And unlike most CEOs, Laxman decided to be in China on his first day as a CEO in Reckitt—six weeks after he joined the company. “I chose to do the first day in China. It was a very important market for us, and it was important that our team knew that,” says Narasimhan.

“A CEO is a mixture of responsibility. I needed to ensure that as a person coming from the outside, you recognise the success and the heritage of the past, but at the same time, evolve the company to the future,” says Narasimhan.

As Narasimhan was trying to answer some of the existential questions haunting the company at that time, he was in a mode of intense learning and making quick decisions. “I had to make choices literally every single day. Some are visible to the world outside while most of them are not. So, I think the first six months were very high speed,” says Narasimhan.

The answers to all questions in Reckitt deeply resonate with Laxman’s life. They gravitate around three core ideas: a strong sense of the past to define the future, the resolution to strive ahead and people connect.

“Fifty-five per cent of my people own shares in the company. It is a big core strength of the past that we have maintained for the future,” he explains.

Second is the tradition of innovation both in product and categories as well is in the way things are done.

And finally, in the ethos of care for the consumer and the community. “It is something we did not expressly address—our care for the community, environment and each other,” says Narasimhan. It is the combination of the sense of ownership, the urge to create and innovate combined with care that is the winning mantra for Reckitt, he explains, giving credit to his “wonderful team”.

The 1993 Lauder Fellows doing the joint degree between the Wharton School and The Lauder Institute a
The 1993 Lauder Fellows doing the joint degree between the Wharton School and The Lauder Institute at the University of Pennsylvania (From Laxman’s personal album)

Online: The New Normal

Within the first six months of Narasimhan taking charge, the world was hit by the pandemic in early 2020. “[The pandemic] just reinforced how much of your life is outside your control. It also really reinforced the importance of the front line,” Narasimhan says. He adds: “Seventy per cent of my people, right through the pandemic, were selling and manufacturing in the R&D centres every single day.”

During the pandemic, brands like Dettol, Harpic and Lysol often were not available on shelves because of the high demand. Reckitt was one of the few companies in the world that continued to grow during the pandemic, but the pandemic has also forced an online buying behaviour worldwide.

“The reality is that we are seeing massive shifts in consumer behaviour. Our businesses is almost double of what it was before the pandemic in terms of what we do ecommerce wise,” says Narasimhan.

Laxman Narasimhan
 

According to Reckitt’s annual reports, ecommerce has more than doubled its contribution to the group’s net revenue since 2018, achieving £2.5 billion in consumer sales in 2021, which is around 12% of its total revenue. And it aims to generate 25% of the company revenue digitally within five years through a combination of organic and inorganic growth.

“The kind of transition we are seeing is irreversible. The pandemic had a big change. A grandmother in China knows how to order online, and it is not dependent on her children. That is a big deal,” Narasimhan says. “When that happens, you see ecommerce growth in every single market across every single category. So, we will continue to invest in it. It is a big part of our growth,” he adds.

He agrees that when such big shifts happen, some brands need to be repositioned and some re-imagined. “We are going to reimagine some of them… but a large number of our core brands are so powerful, have such heritage and history [that] we are getting new consumers to rediscover them,” he says, while elucidating with the example of one of Reckitt’s oldest heritage brands Dettol. A campaign two years back on TikTok saw 50 billion engagment with the disinfectant brand. “When you see so many young people engage, you know what matters—trust, heritage, performance and recall. It is about making your communication contemporary to stay relevant,” he says.

Laxman Narasimhan
 

Narasimhan believes in embracing the past, not disowning it, or detaching himself from it. He is doing the same with Reckitt. That is his leadership.

“I think, to be an authentic leader you have to embrace what you are about, because it makes you. You have to be comfortable with the elements of your past, as well as what you have learned in the course of the future,” says Narasimhan. “It makes you a real person and people connect with real leaders.”

And, as they say, certain things do not change. And, one of that for Narasimhan is his bond with his mother. She still lives with him.

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