How promoters of Dabur, Marico and Jyothy Laboratories forged long lasting bonds with key professionals

How promoters of Dabur, Marico and Jyothy Laboratories forged long lasting bonds with key professionals

Kala Vijayraghavan, ET Bureau Jul 19, 2013, 03.46AM IST

A popular story on the empowerment of professionals at Dabur is to do with Hajmola candy. A manager offered the yet-to-be launched, mint-flavoured Hajmola to Anand Burman, who promptly spat it out and said consumers will never eat it. Unfazed by the promoter’s view, CEO Sunil Duggal launched it because the market research was favourable. He was right — Hajmola has been one of Dabur’s most successful new brands. There are promoters who like to hold on but there are also promoters like the Burmans who let go, letting professionals run the show, stepping in only when they need to or when they want to. “After a period of time, the relationship between promoters and professionals tend to become like spouses.” says K Sudarshan, managing partner with EMA Partners International, a consultancy. “They fight, argue and yet stay together.”A scan of the landscape of India Inc shows that very few promoter-professional relationships survive the test of longevity. Professor Mita Dixit, family business advisor and researcher, Faculty Equations Management Consulting, says this delicate relationship depends, to a large extent, on the promoter’s mindset and thinking. “If the promoter is evolved and knowledgeable, not only about operations, but also about the world and has a wider mental canvas, he empowers rather than controls,” she says. “These are confident promoters who are clear about their strategy and want to preserve the business for generations to come. There are other greedy-minded promoters who are only ambitious and want professionals to drive business without clarity or any long-term vision. How will the business then flourish?”

Given below are three relationships that have stood the test of time. Built on principles of mutual trust and professional empowerment, they have delivered phenomenal growth and shareholder value. Harsh Mariwala, promoter and chairman of Marico, who has been gradually ceding space and responsibility since 1997, says it’s an imperative for family businesses to professionalise. “If a family business does not professionalise in time, it could end up restricting its growth orbit,” he says. “The best situation is one where professionals imbibe a sense of entrepreneurship.” These three relationships typify that state of being.


It was in a residential building in New Delhi in 1983 that PD Narang met AC Burman and PC Burman, the owners of Dabur. The 28-year old, who agreed to join Dabur after that meeting, never imagined this would be the beginning of a lifetime partnership.

Narang’s expertise in tax consulting, finance and accounting helped him win the confidence of the company chairman, and his rise in the company was quick, especially after Dabur went public in 1994. He became company secretary in 1990; director of corporate affairs in 1998; head of the corporate and commercial affairs of the group in 2002; and group director, corporate affairs, in 2003. Narang calls himself a lifer at Dabur. He has turned down offers from larger organisations at twice his salary. “I shun cultures which are loud and disrespectful. This is a company I love to work for,” he says.

According to chairman Anand Burman, remuneration, empowerment and personal bonding are very important for successful promoter-professional relationships. For Narang, trust is the key. He says that people have sent anonymous letters to promoters maligning him and adds that “promoters kaano ke kacche nahin hone chahiye (promoters shouldn’t believe all that they hear).”

Burman sees trust as a “two-way street”. “There has to be implicit trust. The day the trust breaks, things go downhill,” he says. “We have a harmonious relationship between the family members and the executive cadre of the company.”

The Burmans were among the first Indian promoters to give charge of the company to professionals. In 1998, they handed over management of the company to a professional CEO and limited their own role to strategic inputs at the board level. They do not sign a single cheque and no one in the family has any executive role in the organisation.

The Burman’s empowerment experiment has shown results. Dabur’s topline has grown from Rs 900 crore in 1998 to Rs 5,300 crore in 2011-12, net profit from Rs 50 crore to Rs 645 crore and market capitlaisation from Rs 1,000 crore to Rs 20,000 crore.
Dabur Sales in year of starting and latest: Got together: 2002-03: (When the professional management team with Sunil Duggal and PD Narang took charge) Sales in 2002-03: Rs 1285 Crore Sales in 2012-13: Rs 6,146 Crore Net profit in year of starting and latest 2002-03: Rs 85 Crore 2012-13: Rs 763 Crore Market capitalisation in year of starting and latest 2002-03: Around Rs 1,000 Crore 2012-13: Around Rs 24,000 Crore

Partners in Profit


Milind Sarwate met chairman Harsh Mariwala for the first time in October 1997 as a CFO candidate. Mariwala’s mandate to Sarwate was clear: enhance shareholder value, transform IT into a competitive advantage, and strengthen corporate expert functions such as taxation, legal and accounting.

Over 15 years have passed since that interview and Sarwate is now group CFO . But it was testing waters in the initial days. Mariwala points to the conflict between the roles of a promoter and a chairman. “What is good for the promoter may not necessarily be good for the company,” says Mariwala. “But what is good for the company is always good for the promoter.”

According to Mariwala, the relationship with professionals reaches a higher degree of openness and empowerment over time once promoters find that the performance of professionals is up to the standard. For instance, in 2006, Sarwate says Marico issued equity through the QIP (qualified institutional placement) route. Mariwala and Sarwate differed on the choice of investment bankers. “To his credit, he let my view prevail and the QIP was a success,” says Sarwate.

Professionals in Marico say Mariwala provides a lot of professional and personal space, which gives people a high sense of responsibility. He encourages diversity in the workforce. “I experience Harsh as a fair guy, seeking a winwin. He does not seek exploitative gains and hence his team can trust him,” says Sarwate.

Further, Mariwala rarely prescribes any particular way of doing business, or functional management or behaviour. His approach is more of a professional and less as the promoter. “He values expertise. That delights functional experts like me,” says Sarwate.

Their equation, Sarwate says, is rational and not emotional. “When I joined, there was personal trust; now there is professional trust.” Adds Mariwala: “Milind and I may not necessarily socialise outside the office. We don’t need to have a chemistry to have a successful relationship.”

Sarwate says, for a meaningful relationship, it is important to discuss differences and sort them out soon. “Have a ‘disagree, but commit’ approach with each teammember,” he adds. Even if one of us disagrees with the other, we stay committed to the overarching organisational objective.”

Mariwala and Sarwate talk often, at times every day when Mariwala is in Mumbai. Since Sarwate’s role includes interaction with the board of directors and the promoter family, he does go back to Harsh for the final call on those engagements. “In most other professional matters, I would go back to Harsh only if I need any specific value addition from him or if it is a decision involving significant risk for Marico,” says Sarwate.

Mariwala has no complaints with professionalising Marico. With brands such as Parachute and Saffola, Marico’s business has grown 50 times — from Rs 80 crore in 1990 to Rs 4,000 crore in 2012. “It is always important to wear a professional hat over a promoter’s hat,” he says.

Marico Got together in: 1997 1997-98: Rs 490 crore 2012-2013: Rs 4596 crore Net Proft 1997-98: Rs 30 crore 2012-13 : Rs 396 crore Market Capitalisation: 1997-98: Rs 640 crore 2012-13: Rs 12,800 crore

Jyothy laboratories

Ullas Kamath first met MP Ramachandran, promoter and MD of Jyothy Laboratories in Bangalore, to help one of his friends get Ujala distributorship in the late-80s. “I was humbled by him,” says Kamath, who is a chartered accountant by profession. “He received me with so much respect at his small office. He gave me a bottle of Ujala, which still I have with me. That’s the best memento I ever got.”

They met again in Guravayur, Kerala, in December 1990, through a friend who was working as a sales officer with the company. This time, Ramachandran invited Kamath to join his company. He agreed and is now the number two in the company, responsible for executing the business plan with speed and precision, and plan for organic and inorganic growth.

In the 1980s, Jyothy was a marketer of Ujala, a liquid fabric whitener, and Maxo mosquito coils, fighting multinationals in the fast-moving consumer goods (FMCG) market. When Kamath came on board, no “specific mandate” went out to him from Ramachandran. “I knew what he wanted,” says Kamath. “There was just this pure ambition for growth.”

In one such spark of ambition, in May 2011, Jyothy acquired 50.97% stake in the Indian subsidiary of the German major Henkel AG for around Rs 119 crore. It also took over Henkel India’s debt of Rs 454 crore and preference shares worth Rs 44 crore, making the entire transaction worth Rs 617 crore.

Henkel gave Jyothy a wider portfolio: soap, detergent and oral care brands like Henko, Pril, Fa, Margo, Mr White, Neem and Chek. The deal also marked Ramachandran and Kamath’s partnership spanning over several years.

Their personal traits compliment their promoter-professional relationship. While Kamath is good with finance and numbers, Ramachandran is seen as a good HR and operations expert. “In the past 21 years, I have never heard him tell anyone ‘working under me’, it is always ‘working with me’,” says Kamath. “Ramchandran is he is very hands on and clocks 20% more work hours than any of us. And no matter what, he is never too busy to share his time,” he adds.

Ramachandran says an organisation needs different skills to succeed. “Equations don’t last long unless it is a combined effort to seek mutual benefit and growth. There has to be freedom in the relationship. For me, Ullas is like family,” he says.

Jyothy Laboratories Got together: 1991 Sales in the year of starting the association in 1991: approx Rs 6 crores Sales in 2013 : Rs 1100 crores Net proft in 1991: Rs 65 lakhs Cash Profit: Rs 100 crores Started as proprietary concern hence no market cap. Got listed in 2007. Market cap now Rs 3000 crore

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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