3 EDs quit in 1.5 years… all well at Hindustan Unilever?

24 Jan,2012

By Kala Vijayraghavan & Chaitali Chakravarty


Three of Hindustan Unilever’s top team of eight executive directors – Gopal Vittal, Shrijeet Mishra and Ashok Gupta – have quit in the past 18 months. There have also been more than a few exits in lower levels of the company.


And sources within and outside the marquee employer say managers are feeling stifled by paucity of growth options. The FMCG giant, once considered an impregnable vault of top-notch talent, is now beginning to look vulnerable.


What ails HUL? The cause for the simmering discontent among local managers can be traced back to a bunch of strategic changes CEO Paul Polman is rolling out to make Unilever more responsive globally, past and present HUL managers say.


First, Mr Polman has consolidated the global business into four divisions – personal care, home care, food and refreshments (like Ice Cream). Secondly, he is centralising much of the decision-making globally, stifling the role of local managers.


Thirdly, he is forcing the company to consider outside talent, upsetting growth aspirations of internal candidates. Mr Polman, who took over in January 2009, is the first outsider in 77 years to head Unilever.


And lastly, global postings in the Unilever universe, once a big draw for Indian mangers, are no longer as attractive. “While the company has become bigger, roles have become fewer,” a top HUL official told ET. “Jobs at HUL are becoming more functional and narrow,” other top officials with an inside line to the company added.


An insider points to Mr Pankaj Gupta, who quit Unilever recently to join Reckitt Benckiser as supply chain head for South East Asia. He is now managing many factories across countries. He has the freedom to strategise, change and make the system more efficient. But as category VP, supply excellence for Unilever in Singapore, he had limited operational freedom.


Insiders say HUL will not miss exits like Mr Gupta as they have an excellent knowledge management system which means managers are told how things are to be done. There is little room for initiative.


Mr Polman is also mandating longer tenures at each position for its top management including the CEO. He is doing this to ensure business accountability and continuity in the face of growing competition and volatility. But at HUL, which is used to quicker job rotations and promotions, this too, is being viewed as a disadvantage by internal staffers.


Moreover, Mr Polman’s view that outside candidates should also be considered for every senior management role to ensure diversity, is another reason for angst among internal candidates used to netting such roles, sources say.


“It is highly speculative and incorrect to draw such conclusions,” a HUL spokesperson said in an email response to an ET questionnaire. “The average age of our Management Committee is around 45 years. This is a reflection of our focus on identifying high potential talent and investing in them through exposure to big and challenging jobs early in their career.”


A young management committee could be another reason making the second rung of managers restless, an FMCG expert, who has worked in HUL for several years in the past, said. “The so-called number two gets impatient,” he said.


Sources point to examples like Mr Samir Jain, vice-president, laundry at HUL, who quit to join Bungee, an agro-trading company, as it’s second in charge. He has a better and quicker shot at becoming CEO, they point out.


“HUL has over 1,500 managers and attrition is significantly below industry level at 5% per annum for the past four years. Our approach for identifying and grooming top talent has established the company as a source of leadership talent,” the HUL spokesperson said in the email response.


Moreover, global posting, once an attractive carrot, is no longer effective. Highly placed sources say that both Mr Gopal Vittal and Mr Shrijeet Mishra (currently the chief operating officer of Bennett, Coleman and Co Ltd, the publisher of The Economic Times) were offered global postings, but found them unattractive.


There are more such instances even at lower levels, they added. “India is where the action is. Why would I want to move to Moscow or Poland,” a former HUL executive, who was offered one such posting, quipped.



Source:The Economic Times

Copyright © 2012, Bennett, Coleman & Co. Ltd. All Rights Reserved


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