Srini Phatak

Show Notes

In this conversation, Srini Phatak, the Deputy CFO and Controller at Unilever, shares his journey and insights as a finance professional. He discusses the importance of experiencing different parts of the world and embracing middle-class values. Srini also highlights the compelling combination of hunger, humility, and the art of the possible that drives Indian executives to succeed. He emphasizes the significance of trust, confidence, and meritocracy in career progression.

Srini provides valuable advice on managing multinational companies, including the importance of understanding the business, people, and culture, as well as making choices and simplifying operations. He also discusses the role of the CFO and the finance function in delivering value creation and sustainable cash flows. The conversation with Srini highlights the importance of focusing on key drivers of business success, such as growth, profit, and cash. He emphasizes the need to go beyond just focusing on outcomes and instead focus on the enablers of those outcomes, such as volume growth, penetration, consumption, and premiumization.

Further, Srini discusses the importance of managing risk and making winning choices in business strategy. He explains that risk management is not restrictive, but rather a growth enabler. Additionally, Srini shares insights on organizational design, talent management, and the role of finance in driving value creation. Srini also talks about the importance of understanding consumer habits and preferences in the CPG industry and how they influence brand strategy and innovation. He shares insights on building a strong organizational culture and the balance between global and local cultures. Srini defines success as creating an impact in the business and with people, making a difference in external communities, and making suitable work-life choices.

Takeaways

...
• The combination of hunger, humility, and the art of the possible drives Indian executives to succeed.
• Trust, confidence, and meritocracy play a crucial role in career progression.
• Understanding the business, people, and culture is essential for managing multinational companies.
• Making choices, simplifying operations, and delivering value creation and sustainable cash flows are key responsibilities of the CFO and the finance function. Focus on the key drivers of business success: growth, profit, and cash.
• Identify and focus on the enablers of the outcomes, such as volume growth, penetration, consumption, and premiumization.
• Risk management is not restrictive, but a growth enabler.
• Make winning choices in business strategy by considering the opportunities and risks involved.
• Finance plays a crucial role in driving value creation by providing a holistic view of the business and being a co-pilot to business partners.
• Attract and retain talent by offering challenging opportunities, personalized development plans, and a stimulating work environment.
• Use data and trends to inform decision-making and prioritize where to invest time and resources.
• Identify and prioritize key risks in your business and develop robust plans to address them.
• Understand consumer habits and preferences to inform brand strategy and innovation.
• Build a strong organizational culture that aligns with the company's values and purpose.
• Define success by the impact you create in the business and with people, making a difference in external communities, and making suitable work-life choices.

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Quotes

"Strategy - Where to play, how to win?"

"I (am) a product of many Indias."

"I'm a product of education."

"The story of India is the story of Indian executives."

"India has truly arrived, our best is yet to come."

"Running a business, is a team sport."

"What failure and setback teach you. Success doesn't."

"Careers are marathons, careers is not a sprint."

"Not the results. How you go about and what you do is equally and sometimes more important than just the results."

"When you had a new opportunity and it was only two criteria. Is there somewhere which I am going to learn and make any difference? And is that an opportunity to create an impact?"

"If there are the CEO and the CFO for making tons of decisions, then there is an organization which is off-catered."

"There is an element of price and mix because end of the day you also need to make sure that you are able to command the right price premium because you also significantly invest behind your brands."

"Risk management is misunderstood and ...seen as something restrictive and defensive."

"You can't map all the risks and try and address all of them."

"The relevance of brands, customer choices, consumer choices, preferences, trends, that's really the lifeline of a business."

"In day-to-day business, there isn't a right answer or a wrong answer. There is always what I would call classically an evaluation of the upside and the cost of trying to realize that upside."

"Have the hunger, but also have the humility."

"You can't stretch a brand completely into different functional space, into value space and benefit space indefinitely."

"It's really about the impact that you can create with the business, impact you can create with the people. And if you can go and make a bigger difference to some communities. If you can, I think it's great."

"Be open to experiences, be open to doing different things. Go and seek out and do the difficult jobs early on in your life. Don't take the easy way out."

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Episode Summary

Coming soon...

Lightening Round

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Episode Transcript

Rohit Agarwal:
Hello, hello. Welcome to the Strategy of Finance podcast where we celebrate the profession and the professionals in the world of finance. We endeavor to unpack their journeys to understand what moves them, get inspired by their triumphs, learn from their experiences, and most of all, connect with them at a personal level. Today, we are honored to host the CFO from a Fortune 500 company. Established over 100 years ago, Unilever is one of the largest consumer goods companies in the world, and we are graced with the presence of Srini Phatak

the Deputy CFO and Controller at Unilever. Srini, welcome to the show.

Srini:
Thank you Rohit, pleasure being here and let me see if I can live up to all the good things that you said in the course of the next few minutes that we're going to chat.

Rohit Agarwal:
So Srini, why don't we start with answering the question, who is Srini Phatak?

Srini:
That's an interesting question. And I think the way I break it down is right at the beginning. There are two things which I think differentiate me. One, I say a product of many Indias. And second is quintessential middle class values. And they go hand in hand. Over the years, I realized there is nothing called one India. And that's the pleasure of experiencing different parts. My dad's a Maharashtrian born and brought up in Karnataka.

My mother is from Andhra. My wife is from Himachal. I have lived in Hyderabad, studied there. I've lived and studied in Lucknow. I think this amalgam of really trying to experience different parts of the country, food, culture, friends, I think opened up me, my horizons opened up my thinking and my perspectives. And that's why I say product of many Indias. The second element is,

quintessential middle class values, work hard, focus on doing the right things. Meritocracy plays a very important role.

Not the results, how you go about and what you do is equally and sometimes more important than just the results. A combination of hunger along with humility. So when I add up all of these things, somewhere between the experiences of all of India and the middle class values is how I see what I am today, which I hope at the end of all of this is a good human being actually. Professional, CFO all comes later.

But at the core, I think that's what I'm about. doing.

Rohit Agarwal:
It seems like Indian executives have taken the world by storm in all kinds of industries. What is it about the combination of hunger, humility, the quintessential middle class values that makes it so compelling, so differentiated that they are able to rise up the ranks and really deliver impact?

Srini:
I think to me it's actually the story of India is also the story of Indian executives. In some ways while we have been around forever and if you go back to India or Hindustan as we call it, perhaps has been the cradle of a lot of civilization.

But actually our story is the last 50 years. And if you ask us, it's actually our story is the last 25, 30 years. I think what you see of India is exactly what you see of Indian executives, whether they are in India or they are outside. It's really the art of possible. It is really the hope of what you can really be. How good can you be? I think that is what drives us.

And in some ways, and I say it in a good manner, the West has come through the curve. I think people are privileged. There is a certain standard of living. There is a standard. Many things are given. But when you come from where we come from, I think it's all of the possibilities, the world of possibilities. And that all comes through basically because then you want to work hard. You want to achieve things. You want to go up the straight up.

Education becomes important, hard work becomes important, invention and reinvention becomes important. And that is what I think to me. I think at the crux of it, it's what's true of India is true of Indian executives anywhere. And look, and I say this sometimes in jest. When you're growing up years, there used to be a song which used to say, hum honge kaamyaab ek din.

In some ways, it was a song of hope. But in some ways, it also felt that we don't belong. It felt used to feel like a lot of gap when you were, when was the day then? But today, if you ask me, I think India has truly arrived. And our best is yet to come. Indian executives have truly arrived. And you will see a lot more. So yeah, lots of hope, lots of aspirations, lots of ambition.

Lots of growth, lots of progress. I think we have the whole world to play for, we are just not India.

Rohit Agarwal:
Awesome. Fingers crossed. For a typical middle -class household, pushing or nudging, however you want to put it, the kids towards doing engineering or becoming a doctor is quite common or had been quite common. Did you have any such pressures from parents or guidance to say, should you pick one or the two? And how did the kind of introduction to finance really happened?

Srini:
So look, I'm slightly old and a bit of a dinosaur. So at that stage more so. Today I think there are plenty of opportunities. I don't think it's true at all. I don't have children, but when I see the kids of a lot of my friends and my family, the number of opportunities that they have on the plate are massive. I don't even know what some of those fields are today. When you're growing up, I think, yeah, you're right. It was either engineering or medicine. And there was a CA.

And then there was, I think, probably a bit behind in terms of that hierarchy. Yeah, did your parents want you to be either an engineer or a doctor? Maybe. But there was never that pressure in my life when I was early on to say, you need to be here, you need to be there. Why do I say that? My parents started from a village, worked their way through, came to a city. We started living in Hyderabad.

and they made that long journey from where they were to where they got us. To them it was more important that we live it with the right values, work hard and do well. I don't think the answer ever was in engineering or medicine. So yeah, so in a manner there was pressure to do well, but there was no pressure to be either an engineer or a doctor. The pressure was do well because if you do, if you study, if you work hard,

you will progress. I don't think my parents ever defined what was the picture of success and neither did I.

Rohit Agarwal:
got it. So then how did you stumble upon finance? Why did you choose that as your calling?

Srini:
So look, some of it is hereditary. And some of it is, I can't really say that I was very thoughtful about it. As I progressed, as in my school, I realized, look, I wasn't enjoying so much of the sciences, physics, chemistries of the world. I had a flair for mathematics. And in some ways, I also did not do very well in my class 10, for I was a reasonably bright student.

But I don't think I really aced my class 10 exams. And thought was, what do you do? And some of financial matters, money, commercial, came more naturally towards me. And that really got me to think about commerce. And that's why in my class 11 and 12, actually, it was as early as that that I shifted into taking commerce. I have to admit, I don't think I had a plan of.

a grand plan of what that would lead to. But it felt more natural and I was taking to it in a very easy manner. So it just felt like the right thing to do.

Rohit Agarwal:
Got it. And then you of course rose up the ranks at Hindustan Unilever and then made your move to the mothership. Tell us a little about kind of the journey to becoming the CFO at Hindustan Unilever first and then what led you to make that move.

Srini:
I didn't start with Hindustan Lever. I think there's also an important lesson for me and for everyone. The second instance was I did my chartered accountancy from PWC. And I'm not an All India Ranker. So in my CA, I did not do that well. And a Hindustan Lever or any of the Blue Chip would only call you if you are within the top 50 in the country. So I joined ITC.

I worked with them for about three years. A fantastic grounding and a grooming experience in terms of lessons of business, lessons in leadership. What helped me get into ITC was because I was with a firm who were their auditors, I understood their businesses, systems, processes.

And having done that for three years, Hindustan Lever came calling. Well, could have easily said, why make a change? ITC was good and I was really enjoying myself. But the thrill of a consumer business and brands and how it was touching everybody's lives and the reputation that the company has in the country felt that it was too good an offer not to take.

But as things with HUL and Unilever, there is nothing easy. There's never a free lunch or a free anything. I had to work my way through incredibly. And the toughest job, in fact, I did was right at the beginning. And for all the stuff that I talked about, brands and marketing, I started in chemicals. And within chemicals, I started in the manufacture and marketing of yeast.

So the irony is that those days I didn't know Hindustan Lever had chemicals and even in chemicals nobody knew where yeast was and I started in a factory called Chiploon and those days I didn't know where Chiploon was on the map of India. So this is what I say is classic baptism by fire and there are three or four defining things which I think distinguish an HUL and therefore your journey in leadership. You are tested.

You're put into challenging environments, you're given opportunities, and then it really comes down to what you make of it.

The second element is when people see the spark in you, they believe in you and they bet on you. So for many of my growing up years, I thought there were people betting more on my capabilities and believing more in me than I believed in myself. And then it starts to open up the avenues. The third thing which I personally think I always did is that look, and you have plenty of roles and I've done about 12 or 13 roles.

The element always was when you had a new opportunity and it was only two criteria. Is there somewhere which I am going to learn and make any difference? And is that an opportunity to create an impact? And more often than not, the answer is yes. I took the jobs. I don't think I ever planned my career to say what comes after A, B, and C, and D. Every time this criteria felt right, I grabbed it with both hands. my hands. hands.

I did that till about 2012 I worked in India and if you have to become the CFO of HUL, given that it's one of the biggest businesses within the Unilever set up. People need to have the trust and confidence in you. People at the head office, people at the senior leaders because they are entrusting, what is the jewel in the crown do. So from 2012 onwards, I've worked multiple roles. I've worked in global categories in London.

worked in supply chain finance in America. I ran the financial shared services for Unilever before coming back to India as a CFO. Short answer, experiences, working in different environments, track record of demonstrating that you can add value. And as you were doing it, somewhere in the journey that you then start to believe how good can you be.

Yeah, because if someone had asked me in the first 10 years of my working with Unilever, did I expect or hope to be the CFO of HUL? My answer was no. So somewhere I think around 2014, 2013 to 2014 is when I started believing I can be that person. Then I think 2017 is when I became the CFO of HUL.

Rohit Agarwal:
Wow, quite an inspiring journey. Super interesting. Does loyalty play a role in kind of taking to the next, getting to the next level of the ladder? Or...

I guess I wouldn't say, I wouldn't keep aside meritocracy. I think that comes first. But if there are two candidates equally accomplished, would you give preference to loyalty, someone who has been around for a while, someone who is known entity compared to an unknown devil?

Srini:
Look, I don't think there is a black and white answer to this question, right? Because we now see in many instances, homegrown talent, as we call it, who have been long enough in the system continue to grow. Equally, we also see many instances when you start to bring in talent laterally, even at mid -levels, senior levels. I think it really comes down to what is the requirement for the organization.

and the availability of talent and therefore the choice will still come down to meritocracy. Having said that in senior levels it's also about trust and confidence because end of the day at a senior level I think there will always be more than one person who can do the job. There will be some if I can use Hindi for a bit there is always a little bit of an unnis bees ka farak but I think it also makes a difference to then say does the top management trust you.

Therefore, what values do you bring to the table and therefore what are you as a human being? So the answer is somewhere between the two. I don't think just the long tenure is really going to make it. it.

Rohit Agarwal:
Got it. So you have spent all.

Srini:
I got the HUL CFO job, there were five of us. And we got externally and internally assessed. So we actually had to go through as good as a process as if you're getting recruited from outside. So we got assessed externally, psychometrics, external evaluation, internal interviews.

and before one of us made the job. Technically, I think all five would have done the job.

Rohit Agarwal:
Awesome. So you have spent almost 25 years at Unilever now. I'm sure you would have gotten multiple opportunities during your career to move to another company for, again, different reasons and so on. What made you stick with Unilever and not get distracted by the mirage of moving jobs for umpteen number of different reasons?

Srini:
So have I looked externally? Yes. Have offers come to me? Yes. So both have happened. It's not that in this, it wasn't as if it was a super cool and a good ride that you always have clarity about your next job and your growth and your progression. There have been times when I wanted to step out, but things working or not working.

If you roll back three or four things, first is the experiences and the opportunities. As I said, I've done 13 roles. I have moved the shortest role being nine months to roles which have been about four years. So we had an opportunity to every two to three years, you're actually getting to do something which is very different and which you hadn't.

That's really a very interesting recipe which Unilever offers.

The second element is the value systems. Yeah. HUL and Unilever believes always in doing what is right by the law, for the society, for the people, and right way of doing business.

You are never asked to or forced to do something which is wrong and even in an unlikely event that someone does, you have the absolute protection to stand up and say you will not and that's absolutely fine. And that's important.

Third element is the people that you work with. Yes, absolutely intellectual, but also again wonderful bunch of human beings. So many of my friends today, very close friends today, are a part of Unilever or have been a part of Unilever. It's that much fun when you like the company of the people that you work with.

And the thought is...

Money is important and the company also makes sure that the pay is competitive. Again, don't compare yourselves to one of our investment banks and the likes because if you end up trying to compare yourselves with the wrong set of benchmarks then you have an issue, even that takes off. So when you suddenly have all these elements, experiences, opportunities, people, money, right, value systems.

and a growth mindset because end of the day I would say my upbringing is Hindustan Unilever. Hindustan Unilever was all about growth, Hindustan Unilever was all about leading for the future. There is a combination, it is a very compelling combination. So, I think a combination, all of this has basically meant that 25 years I have gone in a jiffy, it still feels like, it does not feel 25, let me put it this way.

It also doesn't mean they feel like month three, that also I have to say.

Rohit Agarwal:
Makes sense. You've done multiple different jobs, as you said. I'm just curious, are you a fixer? Are you an innovator? Are you a builder? Like, why would Unilever or HUL chose, like, why did they choose you versus someone else for a particular job?

Srini:
So look.
At various stages in your life, you are all of that. Because you don't start when you are in your 20s. You don't start by saying, I'm a strategist, I'm an operator, I'm an execution. You learn along the way.

So classically what I call is there are and let me squarely talk about from a finance perspective there are four phases to finance. You have to be a strategist. You have to be a catalyst. You have to be an operator. And you have to be a steward. And underpinned all of this you have to be a quality leader because end of the day you will get all of these things done and you'll get it done through people.

Now the beauty of this model is it's not an "either or," it's an "and and" model.

Depending on the requirement, you will have to play different roles. Therefore, roles are always intact.

I think over the years, I think where I have learned is the ability to dial up and dial down the different phases and therefore adaptability. Yeah. And that is why it's what I will call your reinvention. If you are having the ability to play at multiple levels with different time horizons and you're able to adapt your style, that's when you actually then drive the biggest impact.

Having said all of that, as you move higher into the organization, there are, I think, some other elements which start becoming important. Your ability to think strategy, your ability to think future, your ability to deal with ambiguity.

However, at the same time making it simple and easy for the organization.

your ability to see an end -to -end value, work extremely closely with the CEO and the leadership team, and almost assuming the role of a co -pilot. I think these are some elements which then start to differentiate you versus any other CFO, any other leader. So,

Yeah, a long answer is this constant stage of reinvention and thinking like a business person then starts to make a difference in terms of you versus anybody.

Rohit Agarwal:
When you do move around, of course, different offices in the same company, but every office would have, again, certainly different personalities, slightly different cultural nuances based on maybe the location, so on and so forth. It's certainly a fresh start, right? You've got to build trust, you've got to build your credibility, so on and so forth.

And you said your shortest stint was just nine months. So you would have delivered the impact and then moved on to something next. What should someone do? I would imagine they probably need to do in the first 30 days, right? Some quick sort of credibility setting or trust setting and stuff like that. What are the first 30 days look like? Like, did you have a certain set of things that you said, okay, at least in your mind, these are the...

the five things that I need to solve for in the first 30 days to then pave the path for the next however many months you are there in that job.

Srini:
So look, first and foremost, I don't think in nine months you will really deliver any sizable impact. Let's start there. If you're going to do something for the first time, nine months is not that, look, you can deliver a project with a certain timeline, but it's not an ongoing role that you do. Let me also lay it out.

And this is where I think is an interesting conversation of how long is long in a particular role.

While I enjoy the fact that I have done 12 or 13 roles, it's helped me build. But I don't think the organization was always getting an ROI from me in my earlier days when they were moving me. But this is a long investment which a company like an Hindustan Unilever or a Unilever does.

Because when they train you for many of these roles, in the later part, that's when your ability to adapt, drive the impact, make a difference starts to become exponential. But in the first seven to 10 years, it's a pure investment which is going into you. I think it's important to context set it right because in today's context, I say everybody, a lot of the young people are really wanting to move and move roles at a very rapid pace. They believe...

they have done all and everything which they can.

Coming back to your question.

Look at the first 30 days, all that you can do is you need to put your head down and listen and understand. If you think that you can try and do anything more in the first 30 days, you're being naive. And to be honest, you run the risk of getting ahead of yourself. Because when you move into a new role and that happens in the same company or a different company, you need to understand the business. You need to understand your consumer.

You need to understand your customers. You need to understand the value chain. More importantly, you need to understand the people that you will work with and culture and what gets them going and what doesn't get them going. So first 30 days, typically I've got a very simple plan. In fact, that's my plan for first 60 days. Sit, learn, do the hard yards, feel miserable because when you do all of that, you'll realize there is so much that you do not know.

but spend that time to get under the skin of what you really need. So therefore the first act and in the first 60 days people look at how willing are you to really do some of these things. I don't think anyone expects from you to come up with the brightest idea having spent a few weeks and hours in a road. So it's at the end of 60 days then I actually then try and build what I call is a classic, the top five opportunities.

top three challenges. I'd like opportunities some more than some of the challenges, but you can say or the risks if I can call it.

And therefore what is my point of view? And I test this hypothesis again with various set of stakeholders to then say this is my thinking, this is what we believe we need to get to. Do you agree?

I think playing back what you think is a point of view is extremely important because what you get again is then you get an actual debate and a discussion on what you think is a point of view and there are nuances that you can pick up. There are elements you can change. If you're able to do that and adapt,

Yeah, that's when classically you will have at the end of 90 days a clear point of view of what you want to drive and where you want to go. So give yourselves that 90 days. Don't be in a hurry.

Rohit Agarwal:
Got it. How did your wife take all the move?

Srini:
tough. Let's put it, it's not just for my wife, for both of us it was tough. Especially in the last 10 years that we have been moving around extensively. I'm grateful to her. She's a doctor, which also meant that many of the moves she couldn't actually work. She actually had to get an international degree. She had to sacrifice some of her seniority in her roles. So I'm absolutely grateful.

to her for having given me the opportunity to run some of these things. And to be honest, she could have at any point in time said, look, we can't make the move. And I would have been OK with that. But you need that support system, and you need the ecosystem to really make it count. And then it's also important at various points in time to sit down and have the conversation to say, does it make sense for both of us?

Yeah, and not just say that does it make sense for you individually, it never works. So yeah, tough, tough on that count. And often it's also been tough for a different reason. Every time you move in two to three years, you have to rebuild your life in a different city. Or even if it is back in the same city, you lose touch with your people, your friends.

So I have to say more recently it's not feeling as easy and as simple as it used to earlier.

Rohit Agarwal:
I hear you. Kudos to your wife, certainly. Why don't we, on that note, move to get a master class on managing multinational companies from you? Let's start by immersing us into what does a typical workday look like of yours? What is Srini doing on an average day?

Srini:
So life is very different when I was a CFO of HUL versus when you are the deputy CFO of Unilever. And I think it's important. So let me try and give flavors of both. Because when you are an operational CFO in a market,

There is a lot more in terms of operational intensity about opportunities, challenges, interventions. When you are at a corporate center, you have a bit of a slightly longer horizon of life because you're not managing a day -to -day operations and activity. So the horizon changes, the opportunities change, and where you go changes. But if you wind back,

There is always this important element of strategy. Where to play, how to win.

Opportunities are unlimited, resources are limited. So more often than not, a critical component of your life always is around what to do and equally what not to do. And here resources is just not capital. Resources is capital, resources is people. And therefore you are continuously making choices of.

where and how are you going to spend your time and what output I need.

A second dimension is a critical one is having an external perspective because things aren't static around you. Everything is moving, whether it's the geopolitical, macroeconomic, your peers, your consumer habits. And therefore, what I say is classically having a worldview of some of those important trends and data points. And therefore, the implication on the business starts to become important.

So you don't start suddenly with an epiphany. You have to have some of these conversations with various people, stakeholders, and then start to connect the dots. So for many times when you're doing this, the bigger picture isn't there. But if you don't invest the time and appreciate and understand some of these elements, you will never connect the dots. A third element of job is always going to be all things great. You can't only think about six months, nine months.

You also have a month sales to hit. You also have a month PNL to drive. And therefore what I call is classically the enablers for it. How are you thinking about efficiencies? How are you thinking about cost savings? How are you thinking about fuel for growth? Which then links back well to the first point as to where are you therefore investing?

Fourth element is obviously how do you try and continue to simplify life, how do you simplify operations because in today's world it's actually it's a lovely dichotomy. Complexity is significantly higher but there are tools and technologies which can help you dissect it. But synthesizing and summarizing it into a story incredibly important and not well done. So therefore,

And making that shift and trying to craft that story so that you can make it simple for people to execute becomes super important. And let's also put it right. Of course, when you do all this by working with a lot of people, which means that you have to invest a lot of time and energy. Last of it, let's also be honest. Each of us has got at least a third and hopefully it's a third of a job which is completely non -value adding, which is the grunt work.

You just can't walk around from meeting to meeting giving dictates and somebody else will do it. You need to still roll up your arms. You still need to do many things yourself. And I do that. I'm saying, look, when you're looking at either a forecast or you're running your own spreadsheet or you are trying to figure out something else which is going on. So it's, look, why did I zoom back into a slightly macro answer? Because depending on the need and what's happening, some of the time that you spent on this can be extremely different.

Yeah, so yeah, it gives you a bit of a flavor in all of this. And I'll also tell you one last thing. If you're performing well, the time that you need to explain significantly less, when you don't deliver results, the amount of questions that you answer from multiple stakeholders means that it takes you away from actually focusing on what you need to be doing. So for many years, we have said this. Look.

it's better to perform and do well rather than sit and expect.

Rohit Agarwal:
Makes a ton of sense. I really love your definition of strategy. I don't think I've heard such a simple but so impactful definition. What to do, how to win. Makes a total sense. Okay, why don't we now learn a little bit about OKRs of the CFO or the finance function at such large organizations? Is it ultimately share price, revenue growth, profitability, all of it? How should...

how does the finance organization of Fortune 500 really operates?

Srini:
So look, share price is an outcome. You don't start by chasing an outcome. Look, yes and no. You can't obsess about how share price is going to move on a daily basis or a weekly basis. It will move not only on fundamentals, it will also move on marketplaces. But having that perspective that end of the day we are working for the investors and therefore delivering that return is important.

What gets you to deliver its value creation? End of the day, it is cash flows, sustainable cash flows, has to be driven by growth, has to be driven by margin expansion and how will you manage the cash productivity? And so these start to become outcomes. So obviously when you grow ahead of the market and you continue to generate cash returns and what we call as effectively total shareholder return, which is nothing but what you give as...

profits and dividend with the combination of how well you perform or consistently you perform will lead to a re -rating and therefore, they the share price at the end of it.

So what become important and these are all again outcomes. This is what you need to get done. And if you only start focusing on what you need to get done, then anybody can tell you, the machine can tell you, listen, you need to grow at five or 6%. You need to get a margin expansion of 50 basis points to 100 basis points. You have a cash productivity of 100%. So if you do all of this, yes, your share price will move. So the machine has told you that. So now what are you going to do about it?

So this is where I think you'll have to roll back to what I would classically call as the drivers of business. And I will use an example of CPG. Volume growth is critically important for us. Because end of the day, that's what is consumers buying. They're buying your units, they're buying your ML, they're buying your bottles, they're buying your sachets. So what is the enabler for volume? If you roll back, it's going to be penetration. That means how many...

how many people are buying you. Consumption. The people that you're buying, how much are they buying you, which is also a question of frequency versus what they do.

It comes down to where are they buying? So how are you able to attract consumers? How are you able to target consumers?

They then start to become key metrics which enable you to think about a volume growth. So in a manner, yes, you track volume growth, but with the right granularity, and I'm not covering all those elements. I'm just giving you penetration, consumption. You can call them three things, penetration, consumption, premiumization. You're getting people to pay more for some of your products. So I need to then roll back and say, okay, volume growths, penetration, consumption, premiumization.

And you need to be careful to say at what level are you looking at those metrics. You're not doing an operator's job. You have many geographies, you have many markets, many countries. But you then start to focus on some of these right enablers when it comes to volume.

There is an element of price and mix because end of the day you also need to make sure that you are able to command the right price premium because you also significantly invest behind your brands. And how are you actually changing the quality mix? Because end of the day chasing volumes for the sake of volumes doesn't mean a profitable business. That becomes a second element. Third element is when I look at the value chain, how are you able to take costs out? How do I do optimize?

and cost is not just supply chain cost, it's an end to end value chain. So I've always said in this, there's source of funds, there is deployment of funds. So you need to continue to hunt for those sources of generating savings, which then gives you the capacity to invest those savings. So you need to focus on that. Let me give you another example to it. When we look at capital expenditure or CAPEX,

The question that I ask and we ask is really, where are we spending the capital? How much is towards growth? How much is towards productivity? Because then what you're doing is actually trying to build that virtuous circle of growth. capital.

This starts to give you a flavor and then you add the complexities of what comes as geography, what comes as a category. But these are, let's say, some of the important drivers for us. And in the end of it, don't underestimate cash. For large organizations, cash is a given. But if you are a startup, all that I've said is true. But one thing which can kill everything that I've said is that absence or presence of cash. cash.

But therefore, even in the large organizations, ensuring that the cash productivity will start to mean all of this. So the difference that I draw from here is that look, as a CFO, you can have numbers in all of these. But the question really then becomes what then starts to make you from a CFO to the COO or a CEO journey is the questions that you ask behind them, the focus that you can get the organization to.

to drive some of these elements. The importance that you give to ensure that people don't drive too many activities which distract and therefore focus the organization starts to become important. So I will always go back to the outcomes. Yes, stock growing growth, profit, cash, leading to share price, but I will break it down the way I've tried to do across the value chain. And what I try to tell you in all of this is that in a manner, I have said customer,

I have said consumer, I have said supply chain, I have said marketing, and what I am telling you is end -to -end value chain.

Yeah, so there are multiple ways to skin the cat, but that's how I think one needs to start thinking about OKRs. Last element, don't make it too long and too elaborate. Otherwise, you run an OKR and a KPI machinery. Not everything is important all the time. time. the

Rohit Agarwal:
Thank you.

Makes a ton of sense. At the level where you're operating, I'm sure you're making a ton of choices every single day. And I would say those may be clubbed under the broad umbrella of business strategy. You're always taking some kind of a strategy call. How do you make the winning choices? Is there a framework that you use? Is there a North Star that you always keep in mind that, hey, these are non -negotiable. We cannot go in that territory. How do you think about?

making intuitively all of those choices.

Srini:
See look, it's a hard one. See the non -negotiables are in some way very easy. Yeah, because they are non non They can't be hundreds of them. Yeah, very clear in terms of how do you want it. You'll always comply with law. You will have a focus in terms of doing the right in terms of carbon footprint and what you do with the state. stakeholders

you will never do stuff which you are not supposed to do. So those are not the important ones. Everything else is, to be honest, is day -to -day business. In day-to-day business, there isn't a right answer or a wrong answer. There is always what I would call classically an evaluation of the upside and the cost of trying to realize that upside. Yeah.

I think with data and technology and tools, some of the quantum, the call is becoming sharper. I think they're putting into models into place, which means that not everything is subjective. Not everything is emotion. But at the end of the day, it's still a leadership decision. So on this one, I can't give you a hypothetical answer. I can't really. But yes. And to be honest, let's also be clear. We don't make so many decisions.

Yeah, what I was saying is look, it's not that every day we are making tons of decisions. So then there's a problem if every day you have to make tons of decisions.

Yeah, so just to bring it back, if I try and synthesize this question, the non -negotiables are few, driven by the organization thinking policy, how you want to do business. So that's seldom on the table. Yeah. Second element is we don't make as many decisions.

as you described it because if you are making so many decisions then a large organization is not liberated enough and does not have the freedom to do what they need to do. To be honest the answer is you need to make less number of decisions but the important is you need to make sure you make the big decisions and you make them right and for many of the big decisions the answer is not in the algorithm.

The answer is finally a leadership call in terms of looking at the pros and the cons, the upside and the downside, and there is an element of gut. Because end of the day, you still have to trust your instincts. So where I sit, because I sit, I work with the CEO of Unilever and the CFO of Unilever, so a lot of my time actually goes in unpacking some of these things.

enabling some of these conversations, bringing today what I call objectivity into some of it and therefore making sure that we are making the decisions with the right framing, making sure that the big decisions we are making with the right frame. That is how I would explain it. If there are the CEO and the CFO for making tons of decisions, then there is an organization which is off -catered. That is not an organization which is going to be sustainable winning into.

Rohit Agarwal:
sense. For a large organization given the size and stature, it seems or it feels like it's mostly about risk management, right? And I'm not saying that as a criticism, it's just the kind of, you know, the value that is at stake is quite high. How do you think about, again, when you're taking those big decisions, managing risk versus at the same time,

grabbing the opportunities that are available to you.

Srini:
at it over the years if you ask me.

Risk management is misunderstood and seen as something restrictive and defensive. Whereas let me give you a corollary to it. You need to take risks. When you take risks, you deliver that extra return. So in everything that you do, you are taking risk. Even when you are doing something or choosing not to do something, you take risks. Don't rot.

start treating risk management as an exercise at the end of everything that you've done in a proposal and then talking about things which don't work. If you think about it as an integrated way of how you will think, then you'll say, yeah, if you price up, what's the opportunity? And to get that opportunity, what risks do you need to manage? The answer is not, if I price up, there is risk. You want to price up. Let's reframe the question.

I want to get more consumers, we want to increase prices, we want to get more savings. So what does it take to get there? And therefore, what risks do you need to manage? It's a slightly different way of thinking about it. Then you're fine. Why do some large organizations, if it's so simple, then why is that look, why do we get upstage? And I'm sure you'll ask me, why is that look lots of innovation, creativity?

everything comes from smaller organizations and why do some of the larger organizations?

as I always said, opportunities unlimited, resources limited. Your core of your business, which is what you are already good at, is sizeable, is growing, is profitable. So there is always strategically as well as operationally, you would like to protect that and you would like to build the other areas.

get it. So simple say happy no problem. What happens when the core starts to be under pressure?

Everyone then starts sucking into fixing the core and you think you have got more time to do the innovation for future, well which you don't have. In today's day and age you don't have that. You don't have that luxury of saying look for the next 12 months, yes we have issues we have got ourselves into for whatever reason or a competition, a large competition is going hammer and tongs at us.

We don't have the luxury of saying, OK, we'll only focus on that and not do here because there are lots of insurgent teams which come through.

The second element is leadership and culture. In a large organization, and I've seen this in many parts of Unilever, there is a brand or there is a category. It could be 500 crores. It could be a thousand crore brand that you're working on. Here is this new beautiful opportunity in maybe in skincare. Today it's 30 crores. Yeah.

Yeah, you know it can build into it. It can build into that next future gem, but it's a three -year journey.

Now here they are two or three people who are pedigree similar. Where would you naturally in a large organization gravitate towards? Everybody would want to gravitate towards what is already established 500 crores and 1000 crores. Because everyone wants to manage scale and size. But how do you therefore capture that spirit in an organization where you are able to even manage the innovation?

So why have I used these examples? Basically, it is a classic dilemma of focus versus scale.

When there are larger organizations, there is always the struggle of making this duality work. And therefore, when under pressure, large organizations gravitate towards saying, let's focus on the core, we can always get more out of the core. And therefore, we start making those resources. So this is where I think we need to pivot. And if I quote,

Harish Manwani and Nitin Paranjmai who I worked with over many years, they'll say, how are you winning for today and how are you winning for tomorrow? And you need to be doing both of them at the same time. Many times large organizations will nearly end up winning for today and therefore cede the ground to somebody else for tomorrow. And we don't recognize this as a risk adequately at the top table. And that's why coming back and closing the loop, risk management.

is super important, it's actually a growth enabler and not at all a defensive.

Rohit Agarwal:
I love that analogy. Quite a contrarian take, but makes a lot of sense, especially in a large company context. Can you help us understand your organizational design as you have talked about different objectives that your function has? How have you organized given different markets, different countries? It's a vast, I mean, you guys are literally present throughout the world. How does information flow? It just, I mean,

to just think about the complexity, it's quite complex, I would imagine. So what's the art of designing it in a way that it works ultimately?

Srini:
Look, one thing I'm certain about organization and organization design is that it's always wrong. Because the answer is not finally in the design. Every large organization has, at least in a period of three to five years, made some change to the way they are structured.

Classically, if I look at the CPG industry, people have made two choices. They've either gone geography or they have gone category. At some stage, we tried to attempt to do both. We weren't successful because you're the only one who are trying to do a combination of category and geography. So right now, we have finally gone down to a category.

To me, more and more, you need to make a choice. This can work, that can work, but once you make the choice, you need to be absolutely clear that that's what you need.

The second issue I think which over the years.

where we have fallen guilty and many organizations have same, is what I call as the vertical and the horizontal integration. What do I mean by that?

We have segmented activities for focus and efficiency while we have lost the big picture. So what's happened? Supply chain. I'll take two examples. And it's true of the world. This is not a unilever answer. It's true of the world. Many years ago, supply chain used to be end to end. Today, what is it? Today, we have got procurement carved out slightly different. We have got factories, which are carved out slightly different.

We've got distribution which is carved out slightly different.

with slightly different teams. And then we struggle with interfaces because end of the day, what you're really trying to serve is a common business and you're really trying to serve a common consumer. Does procurement skills slightly different from running a factory? Of course they are. But in this spirit of trying to go for specialization, same is in finance. You have said, okay, we'll have something called as marketing finance. We can call this something as sales finance. We can call something as...

FPNA, we can call something as controlling and I can go on to a few more. So what's happened to a bit of an end to end perspective? It's almost like in sometimes it's like all of us know blind men and women feeling an elephant and really trying to solve a problem which is a problem, whereas you're losing the bigger picture.

So I think this is where we are all making an effort to bring back that end -to -end perspective. Where with technology information models, how do you get the right levels of information and insights where you're still managing the vertical, the horizontal, but without having to split yourselves.

Today, I think world is dramatically also changed. Today, you have data lakes, now you have base ERP systems, you have aggregations, you have data lakes, and your ability to actually go from a macro number to go and drill, very different order of magnitude. Your ability today to take very different data sets, whether it's consumer, customer, media, financials, and build models around it, exponential.

So the amount of data that you are able to manage today has gone into a very different order. So if I flip back, today what? We're able to close our books within two or three days at the end of the month. You can, pretty much. We all look at results three months or three days or four days post a month. Can we do it even faster? You can, but you don't get any value out of it. At the end of a quarter, can you go to the market within less than two weeks to go with your results? You can.

It's only that you need to make sure that you get your external communication right and you get some of your governance formalities right. So data and information systems and processes have evolved to an extremely different level. The question for us is that how do you manage that while ensuring an end -to -end view and therefore making the right decisions? And this is where I think it's going to get complex and you need to keep making it simple.

Rohit Agarwal:
Do you think given the specialization that you talked about, there are more layers of aggregation of knowledge required? So in some ways, you know, CFO, I would say from a finance function perspective, kind of becomes that person who is kind of an aggregator of all the knowledge. But given the complexity and scale of, you know, organizations like Unilever, perhaps multiple different layers are needed where that aggregation could happen.

Srini:
So I got a different take on this, Rohit. I think information is democratized. Tools and techniques are available to everybody. I don't believe finance needs to play an aggregator job at all. On the contrary, to be honest, why? I'm saying whatever is available in the data lake is available to anyone with the right security access level. I can give it to everybody. I don't need a finance person today to be sitting and trying to tell them what those lines are and what those...

what they mean.

I think where finance starts to become super important is because you are connected to every part of the organization. Your ability to see beyond the numbers and therefore really look at the problem to be solved, the opportunity to be unlocked and bringing what I would call a 360 or a 180 degree of life, it depends on how you call it, 360 view of the problem and life and what needs to be solved.

Today, that is where I think finance then starts to play that role of a co -pilot or the four phases, as I said. That's where you bring value because you are uniquely positioned to be able to touch every part of the organization. And therefore bring that holistic business view and therefore really drive what is really true for value creation. Therefore be in that position to be a co -pilot. To be honest, dashboards information means that...

You don't need layers. I tell you what, the problem is the more layers you have, the more you are spoon feeding the organization. My take is remove the people. When you don't have, it's almost like this, when you don't have a sidekick trying to tell you something, you'll grow up faster. And I say this slightly provocative, I know what I just did, but business partnering means...

having that ability to see your business partner in the eye and be an equal sparring partner. Not basically interpreting what your business partner wants and only getting it done.

That's the distinction. You need to be able to do both. You need to be able to work with your business partners and yes, need to get the job done, but equally have the courage or conviction to have a look in the eye in the business partner and tell them why it's not right. Yeah, just try and do it in a nice manner. Don't do it in a public forum in front of 10 people. And then you would train smash, but do that.

Rohit Agarwal:
Makes sense. Let's talk a little about talent. Larger organizations, smaller organizations, I think they are basically, they're defined by the group of talent that they are able to attract and really grow.

So do you have a certain recipe for attracting, developing, retaining the best talent in this highly competitive market?

Srini:
So look, gone are the days where you can really turn around and say because you are a certain brand, people will come and work for you for life. Gone are the days. Let's be clear. Maybe 25 years ago, it went so obvious that if an HUL called me, it was very obvious. Today, you're still a credible brand that doesn't necessarily mean that people will only line up to work for you. There are many opportunities, and that is the reality of life.

So therefore, what is the recipe? And to be honest, people will come, people will move, and people's horizons of how they think about careers and impact is also very different. So to me, what is the recipe? The recipe is at least, I think, the way we say is that, look, what does finance offer you in Unilever, which is very, very clear and distinguishes you from anyone else? It gives you the thrill of running a business.

It gives you the thrill of running a business which is a growth business.

You are partners to value creation. You play the job well, you can be a co -pilot to any business because end of the day, that's what it is. It gives you scale. It gives you the geography expansion. It gives you the category expansion. It gives you the opportunity. So even at a very young age,

You will have scale and size and the magnitude of opportunities and the decisions that you make are not comparable with many others. That's what it gives you. Then the organization invests time and energy on you for your development. You will personalize your development plan. You get that help. You get that stimulus. You get that on -the -job training. You get external programs. You get all of that.

And you get what I would call is the right value systems in terms of where you can really focus on doing the right things without having to worry about many others. Can we offer you the best possible pay in life? No, we cannot. End of the day, we are a business of selling soap and soup. We only make so much of money. We're not an investment bank and we never will be.

But if you are able to give me this package of what this means.

I mean, tell me how many others can then offer this package and we'll offer it consistently. It comes back to this, why am I here? At many times in my life, I had opportunities which have given me more money. But the thrill of really running a business and working in three different countries, doing 13 different roles with the people that I like and people really investing in my growth and development in multiple ways, that's the package we can offer. Yes, and I recognize.

Some will like it for 15 years, some will like it for 3 years, some will like it for 1 year. We made our peace with that. What we will continue to do is that and we are also saying we are absolutely open to lateral talent. We are not saying that you need to now come into a Unilever and you know come in early and you will grow and there is a prize at the end of whatever, there is no such prize. What we are saying is that look we will try and make it as exciting as possible. Yes, we will continue to recruit people.

at a CA or an MBA who are rankers. We are not diluting that. Yes, I wasn't one of them, but the criteria doesn't change. You can come in like I did three years into your work life, seven years into your work life, 15 years into your work life with your differentiated skills. Really give it your best shot in terms of what potential can you realize. Enjoy this ride and experience. And to be honest, look, this is indeed a very special experience.

And I think, yeah, if that gets going, we'll still continue to get quality. We'll lose some, we'll gain some. But one thing...

But one thing it definitely does is that you make connections for life. And I'll give you one interesting data point. And I did this about two or three years ago. I just counted the number of people when I was in HUL who were my pedigree, people in finance. When we last counted, there were at least 25 or 26 industry segments where the CFO was somebody from Unilever, and they all worked around my time.

So you make relationships and connections for life. I'm not talking about number of CFOs, I'm talking about the industries that you make. would count. you

That's something which offers when you are a part of HUL or Unilever you are always a part.

And look, if someone else can give us a better proposition, tell me, I'm up for it. And the last thing which we need to do, we need to keep telling people that we offer this. People don't know it. So periodically, like a marketing company, we need to go out there and then do a bit of a pitch. And that's what we do. In fact, the current leadership team in HUL does a fantastic job.

of putting their finance proposition out, whether it is to CAs, MBAs, and we do all of that. And then we also hope and pray that some of the good people see the sense and stick.

Rohit Agarwal:
Well
That was quite a convincing pitch itself, I have to admit. Let's talk about high achievers. There are always going to be a few people who will outnumber the rest of the group. Let's say 10 people join together. There are always going to be one or two that will outshine the others. How do you do justice to those high achievers?

Srini:
So.
This is a team sport.
Running a business, one has to recognize is a team sport. Running a business, it's like someone uses a nice football analogy. You can be a damn good forward only when you get the ball in that circle, which is give or take around the 30 yards towards the goal. You can be a brilliant Messi or Leonardo. You're not going to start from the back end and go to all together.

So I think two or three things. Therefore, for the high achievers, yeah, you need to give them challenging opportunities and assignments failing which they will feel that they're not being really tested to their limits. We get it.

and therefore give them those big opportunities. And since the interesting part that we say in HUL or Unilever is that look, we have big jobs and we put everybody into that space and therefore we give you that landscape to play. If you're bloody good, you'll outpace others and you'll go faster than others and that's the beauty of meritocracy, right?

Yeah. So we give everybody an opportunity. We are very happy to stretch some of these high achievers, high performers to see how far they can go. And they will get the liberty, they will get the freedom, they will get that visibility. However, what we will not do, we do not want individual contributors jumping over everyone and trying to push everyone down so that they can really be in the forefront. It never works. It never works.

Yeah, you can do it in some elements if you are a crack M&A dealer or if you're doing some treasury operations, you're an absolute tax whiz by all means. You will have more role to play you versus the others. But if you're going to run really run a broader business, I keep going back to the football analogy, you will get your opportunity, share the limelight and credit with everyone. Within that, you will get plenty of opportunity to sign.

Rohit Agarwal:
Makes sense. Srini, as we think about, let's say as everything rolls up, right, to the mothership, a few million pounds here and there are gonna be a rounding error, right? And in some ways...

Let's call it maybe the early signs to a problem area or a red kind of flag may get missed at the aggregate level, right? How do you ensure?

One, that you do get apprised of those red flags that are being posted anywhere across the world. And two, when do you interject? As you said, you aren't really taking those many decisions. So perhaps the category leaders or the country leaders should be taking responsibility of those and fixing it. Maybe tell us about those red flag zones.

Srini:
So let me give you an example to twin lens. I'll give you a business example and I'll also give you a controls and risk example. Both elements can be very different.

End of the day you have, you focus on your top 25, top 30 markets. That's where you'll have majority of your business, for everybody. Now, that answers could range between 60, 70 % of the business to 70, 80 % of the business.

making sure that you have good leaders on those businesses is obviously important because otherwise everything you can't roll up because look at the end of of day, five people sitting in center or ten people sitting in center are not going to really run a business.

But that's when when you focus yourselves in the top 25 or 30 markets and therefore you really focus on some of the key metrics. Think about it as a control dashboard, which is really telling you, we talked about penetration, consumption, premiumization, market shares, media intensity, and therefore your financials, maybe brand power and therefore your financials. That's in a manner classic way of really saying, okay, what is really going on?

All that it does is it makes sure that when you have your business performance conversations with those business leaders, you are not blindsided by them. The business leaders by themselves are supposed to anyway put a spotlight, but here you are not sitting to try and do an investigation on them. You are basically trying to make sure you have covered it sensibly.

then the second step is to really say look and I'll tell you invariably what happens is what I call as pattern.

Yeah, what I call is really patterns and trends. An individual data point in itself is not the reason for you to then intervene. But when you start seeing a few of these numbers over a period of trend not trending right, then you know you have an issue. And that's where you need to focus the organization to say, guys, we have a problem. What's, let's say, a 30, 60, 90 -day plan to address it? Because that's when you're really getting to sharply focus on them. You'll have long tail of markets.

And this is look at a market level you need to be all over it. I'm also giving you a perspective of when you see it from a group and a group CFO or a group CEO perspective. When you start looking at tail markets is not the right word. When you'll have the other market which are not your top 30 markets or top 35 markets or top 25 markets. There I think again is a good element. Don't micromanage it. Because end of the day there is only so much time that you have. So periodically go deep in.

to really understand what is really happening to their performance trajectory and always see it with a lens of an external lens and then try and see how well can you manage because again it comes down to the same thing there is only so much time where are you likely to invest your time life is good because in some ways data and trends they tell you a story and today it's not even that it doesn't even come down to you saying I am the most brainy person I need to dissect the data look the machines and the algos can tell you a lot.

So life isn't that complex. Actually, the choice for you is that, OK, you've got too many red lights. Which of those red lights are really red? Which are the other ones? Maybe the 40 watt bulb is not going at 40, but it's maybe going at 35. Make the choice. When it comes to controls, it's a very different ballgame. Because when you get a system or a process wrong, especially in an organization with shared services, order to cash, which has been outsourced, lots of customer relations.

lots of procurement resources. There the point is not a market. If you get a system or a process wrong, it can have a big multiplicative effort. And that is where we are now thinking more and more integrated. For example, as we think future of controls. We are saying IT controls, cyber controls, financial controls, all come together. You can't treat them as three different animals.

and have three different teams looking at it. So when you bring that together and when you enable it through some kind of a common control services organization, you then start to really look at patterns. I'll also give you another example. Use some of these process mining tools and there are a few vendors out there. You actually run through some of your process mining tools over any of your processes and we did that for our source to pay.

Officially, we say we've got about 30 or 40 ways we do it, but in reality, maybe we do it 200 ways by the time you go through the different parts of the organization. Then it's a very different way of saying how do you want to address it. It completely changes the perspective.

Rohit Agarwal:
how do you think about the macro events, which you may not have control on? They're not going to show trends. I mean, they're not going to have an impact from a trending perspective. They're just going to have an impact on a certain month or a certain week or a certain quarter. Right?

Are there are there mechanisms that are there that are that you're able to see that hey, XYZ kind of external event has happened and that's going to have an impact on our business positively, negatively, any which way and thereby we need to do something about it.

Srini:
Look, you can't map all the risks and try and address all of them. It's never going to happen. So the cost of trying to do it and the time and the effort it's going to do it is going to be absolutely impossible. Again, therefore, I keep bringing this back and saying that how many of these external variables do you think are important? And that itself is, again, a very good decision to make. And therefore, what plan A, plan B can you have?

Three years ago or five years ago, seven years ago, could anyone have predicted a COVID? No. Could we have predicted a war and a war still continuing in the Europe heartland for the last three years? No. Right?

So therefore, what can you start thinking about? You can start thinking about, let's say, some of the key structural risks, what's happening to agriculture and agricultural practices, and therefore, where do you source? Because that is nature and what is impacting to you. It can always play a big risk, too. If you have massive over -dependence, because we have to go, supply chains have to think both in terms of just in time and just in case. So therefore, you will have to start.

saying, OK, where do we think we have vulnerabilities? Where are we over -dependent either on a country or where are we over -dependent on a supplier? Or even for that matter, where are we over -dependent on a customer? You'll try and have to map out some of those.

You'll also have to start seeing that regulation is changing at a massive pace with new laws coming in terms of sustainability, as many countries, so many laws trying to address carbon, trying to address plastics. What are some of those elements? This is what I start to zero in and then say every company has to put it back into some sort of principle risks, which are seriously have the biggest implication on a business. And you need to try and work towards what's a plan A and a plan B.

You can't address all of them and tomorrow look if something which is going to happen dramatically like a curve ball it can happen but then look you won't be the only person and then the world will find a way of resetting itself because otherwise if you only think about all the things which can go wrong in life.

we have a problem there. So yeah, focus it on principle risks or the key risks or the focus risks. Make sure you have robust plans to address them. I've always found that companies are very good at identifying the risks, but really formulating the plan A and the plan B and executing them becomes key. I think if we do that, we can come across significantly better than anyone else. Yeah.

Yeah, and in the short term sometimes disruption happens as an on -cost. You also have to have the balance sheet capacity to absorb some of it before life normalizes. And I think that's where you can have an integrated risk approach to some of these externalities. You'll never be able to predict all of them or obviate all of them. If you're so good at predicting all of them, that itself will be an industry making millions and zillions of money in terms of what's going on. on.

Rohit Agarwal:
Are consumer habits or consumer loyalty, are those kind of part of that foundational risks that you look into?

Srini:
100%. So look, if you are in the CPG business, the relevance of brands, customer choices, consumer choices, preferences, trends, that's really the lifeline of a business of CPG because end of the day, all things consumer are all things customer. That becomes very integral to how you think about brands, how you think about innovation, how you think about products that you're going to offer, the formats you're going to offer.

So if that's place one, I think where we all have to be paranoid is really that. If look supply chain, we can handle. Operations, we can handle. Many other elements are within your own control. Where you really need to go and fight for is the consumer mind space, the consumer share of wallet, really the path to the consumer because the path to the consumer has changed between a traditional customer, to a digital, to an omni, to a social.

So that's where if you ask me that that's the real risk and the real battle. Everything else is enablers towards that. So that sits at the heart and center of what you're doing.

Rohit Agarwal:
whether you think about consumer habits, whether you think about, you know, loyalties and trends.

One could play a catch up in some ways or kind of be ahead of those trends, right? Can I really define them? I would imagine given the large portfolio of products you have, in some of them, you are perhaps kind of really leading those trends and in some, you are kind of catching up to those trends. How do you think about...

Srini:
Yep.

Rohit Agarwal:
kind of transformation or reinvention from an organization perspective, maybe that little pod, which is trying to really catch up, right? Is it possible or is it always an evolution only, right? Can small teams, even if not larger teams in large organizations, can they have a transformational event?

Srini:
So look, one needs to be careful. Okay, first point, yes, there will always be some trends which will be ahead of you. Sometimes you may even identify the trend doesn't mean that you have adequately invested and grown an opportunity. It's always going to happen and there will always be disruption. So that's a fact of.

And this is where organizations have to continue to be paranoid about what is changing and therefore what's your approach to it.

I give you an example and here I will use a Unilever example.

premium beauty, health and wellness, have been secular trends for a period of time.

Trying to build some of those businesses with some of your existing brands. You can't stretch a brand completely into different functional space, into value space and benefit space indefinitely. It stands for a certain thing and therefore it appeals for a certain set of consumers. For example, Unilever went through a series of acquisitions, both in our prestige business and into our health and well -being business.

And if you see over the past few years.

has acquired some of these smaller businesses to actually build a portfolio which is now running into a few billions.

and these businesses today are growing continuously at a double digit for many, many quarters. What we are also sensibly recognizing is that look, at this stage there is no reason to harmonize them into the main businesses. Now they've hit a certain critical scale in size. We are trying to figure out what is the fit for purpose organization systems and processes which allow them to grow and thrive.

That actually then starts to become an interesting model. What we have also seen that in our industry and in our own case, that your ability to do some of these bolt -on acquisitions and build them, you see significant value, rather than trying to go and do something truly transformative out there because very few cases of very large M&A have been successful. But your ability to take a business which is into a few hundred millions and therefore then grow it into a multi -fold.

is an interesting space. And that's where, let's say, inorganic growth opportunities come in. Sure, you can always launch brands, and we do that in some spaces, and you build them, and then you take them. But in your own experience, sometimes acquiring means that you can go much faster and capture the size of the price rather than trying to build from scratch. It gives you a different flavor. There are multiple other ways to do it. But yeah, the answer is you won't be able to do everything all the time.

and with the same level of detail and granularity. Let's give another example today. Is ice cream an attractive category? Absolutely an attractive category. But Unilever has also said, and you can hear it in the public domain with the CEO and the CFO talking about it, why at this point in time it makes sense for us to think about a separate ice cream business for various strategic reasons and why we should focus on

home care, personal care, beauty and nutrition. That's also in a manner reinvention to then say, so it's not always about you know acquiring to grow but it's also at a certain point in time of saying that.

It's also about sometimes making the strategic choices about in terms of look, maybe in this case, segregating an ice cream and running these two businesses separately, there is value to be done. That's also a big call.

Rohit Agarwal:
Awesome, makes sense. Unilever is present in 190 plus countries, right? How do you breed a certain culture at this vast, massive scale?

And I guess a related question also is, is the culture local or global?

Srini:
We talk about it a few times and I don't know, I think the common thread, there are a few common threads. It's not that everywhere Unilever feels exactly the same. No, it doesn't feel exactly the same. When I came out of India and worked in UK, UK did not feel like India and India does not feel like an Egypt and Egypt does not feel like a US. But the common threads are the common threads, the right value systems.

the purpose that we have in our business, the focus on consumers, the focus on building people and building leadership, the code of business principles. So at the heart of it, I think the two or three things which bind us, it's the value system and the focus on people development that we are actually in the business of serving consumer needs. These don't change. The other element perhaps where I think the reason which...

there is a bit more commonality of culture is because you really were moves people around a lot,

whether it's many of us working in different geographies or leadership teams visiting many geographies. When we do all of that, maybe we hold few of these constant. Other elements, there is always a nuance. Yeah, you will find the differences in every local market. And that's the beauty of it. That's how you want it to be. You don't want it to make, you don't want to just make it feel exactly the same.

because a Hindustan Unilever in India is apt for India. its quirkiness, with its differences, with it sometimes Bollywood, sometimes whatever else, because you need to be as closely representative to the market that you're serving. But you do it in a manner which is a Unilever way. So, yeah, that's how I'll articulate it. Will it be a different, you will have a different feel to it in many respects, you do.

and in many respects you don't.

Rohit Agarwal:
So Srini, how do you define success?

Srini:
It's very personal.
When I started my career, I didn't think I was going to forget the CFO of HUL. I did not think I could make one level below the CFO of HUL. From there, I have made CFO of HUL and I made a deputy CFO of Unilever.

So what next? So are you saying that you're successful only if you're CFO of your Unilever and if you're not successful if you're not the CFO of Unilever and you lost the plot.

Therefore...
It's an interesting one. So, okay, now you've worked in a 7 billion business. Now you're the deputy CFO for a 60 billion business. So what happens? Is the next opportunity has to be more than 60 billion? Is it only then you're successful? You've lost the plot. Yeah. So the way I say is, look, what has been important for me? Important for me has been your ability to create an impact in the business. Success for me has been your ability to really create an impact with the people that you work. And they go hand in hand. You're never going to

get the success unless they go hand in hand. The last element is that, look, have you made a difference to some people, as many as you can, that even when you're gone from the job, right, don't take your roles and seat and designation too seriously. If they still reach out to you and connect with you and then, you know, share with you, talk to you, you've done well, you've been successful. Yeah.

So to me, it's really about the impact that you can create with the business, impact you can create with the people.

And the impact is if you can go and make a bigger difference to some communities. If you can, I think it's great. For example, I would love to teach at a certain point in time. And the reason is, look, it's very simple. I'm a product of education. I'm a product of someone teaching me when I was young or teaching me through my career in terms of what to do, what not to do. So in some manner and shape, if I'm able to do that.

And it's fun. Look, you'll make money at a certain stage. You all want to make money because, look, money makes a lot of things easy. But there will also come a certain point in time where it starts to have a dimension of marginal utility. At least for me, it does. Do I want to be paid well? Yes, because to me, it is the value that I bring to the table. Is it going to make a big difference to my lifestyle? No, it's not going to make a big difference to my lifestyle. So long and short.

Create the business impact, create the people impact. Make a difference beyond work in terms of external communities. And I started saying, be a good friend. Be a good person that a lot of people can reach out. Have some fun. Have a bit of balance to life in terms of work, play.

It sorts itself out. Sometimes, you know, and I've been guilty of that. Sometimes you only chase title, position, salary. Then it's a very unidimensional way of looking at success in life. Right? When you start waking up and you don't find the joy in that, and it'll happen to you and it has happened to me. For years I used to just get driven by work. There have also been times when I've woken up and said, yeah, this is okay, but this is not giving you the same joy.

That's when you need to draw a balance. And I think at least if you ask me, I have reset myself back to really to find the broader definition. And I'm much more happy in a relaxed space. Don't become too unidimensional. There is a danger. It's just a title. It'll go. It's a matter of time.

Rohit Agarwal:
Awesome. calm persona curious to understand, did you work on it or you kind of were born with this calmness and the way you communicate this kind of an ability?

Srini:
Hey look, naturally Inborn is slightly overrated. Maybe some are talented in some elements. I'm sure they are. This is practice. I've always said you need to manage your energy, you need to manage your emotions. And you can dial up, you can dial down. Give me a stage and give me a large audience. There is a very different level of energy that I can bring to the table.

There are times you need to show anger, there are sometimes you need to show your irritation. This is what I say that look, you need to play all moods and all emotions sometimes to be impactful. So I do all of that. But more and more I am saying listen, I like to work in an easy manner, I like to work in a calm manner, I like to crack a joke or two. I get excited when suddenly you will talk about topics which I am really passionate about.

Otherwise there is something which is nice and calm and easy about this style that I have. Just keeps my blood pressure under check, gives me ability to switch on switch off, laugh a bit. I like it. Is it a bit practiced? It is a bit practiced. Right? Is it all natural? No, it's not natural.

Do I get it right? Sometimes. Do I get it wrong? Sometimes. Will I try again? I do.

Rohit Agarwal:
Love, love the candor, Srini. Thank you. What advice would you have for emerging professionals who aspire to be leaders?

Srini:
Just have fun man. Look, long careers, careers are marathons, careers is not a sprint. What will really make a difference is experiences and opportunities. Be open to it.

if you are a young professional, the world is your oyster, plenty of opportunities. Be open to experiences, be open to doing different things. Go and seek out and do the difficult jobs early on in your life. Don't take the easy way out. I think what it teaches you, build your character, build your resilience. It really helps you unlock how good you can.

Have that external connect. Meet as many people as you can in different industries, different forums, different communities, and not just business. Even your own personal space, it opens up your personality. Don't be uni -focused on money. If you get some of these elements right, the amount of money that you will make slightly later in your career will more than compensate for many of these other things.

Have fun and be a bit more balanced. So I'm not going to swing from one extreme to the other as to work -life balance. I think it's always work -life choices. But having a bit more flavor in your life of your interests at work and your interests beyond work will help you actually build your overall personality. And the last one is, listen, there's nothing called a wrong decision. There's nothing. This is in career.

seldom is it a one door decision. Life gives you multiple opportunities and you can grab those multiple opportunities even if you miss it.

And the last one, have the hunger, but also have the humility. End of the day, it is important to be a good human being. Output and outcomes do not define how you have gone through this journey.

At least that's my perspective. You don't have to agree with me.

Rohit Agarwal:
Awesome. That brings us to our lightning round, the final segment of our pod. Should be fun. As you have mentioned, we should have fun, not just work. All it takes is I'm going to ask you some very simple questions and I need immediate responses. All right? Let's start with something simpler. Sweet or savory, what do you prefer?

Srini:
Both

Rohit Agarwal:
All right. Books are podcasts.

Srini:
Books.

Rohit Agarwal:
Thinker or Doer.

Srini:
Thinker.

Rohit Agarwal:
Introvert or extrovert.

Srini:
Now, Extravert, earlier Introvert.

Rohit Agarwal:
All right, Scotch or whiskey, what's your guilty pleasure?

Srini:
Scotch.

Rohit Agarwal:
How does someone impress you?

Srini:
Energy.

Rohit Agarwal:
If not a CFO, what would you be?

Srini:
Teacher.

Rohit Agarwal:
Hmm. Ideal place for you to retire?

Srini:
India just haven't figured out where in India. I just have, hey look, long answer. I like Mumbai, I can't explain why. Yeah, if you ask me now, if I'm post to I'll say Mumbai.

Rohit Agarwal:
All right, number one item on your bucket list.

Srini:
Bloody hell, this is a tough one. Alright, I'll make up something. Maybe the answer will be different. I still want to go to Melbourne and Sydney and at least watch an India -Australia cricket match. It comes back from my childhood days and getting up at some 4 .30am to catch Benson and Hedges and God knows whatever series. But I've never travelled to Australia. So maybe Melbourne or Sydney and watch one of the...

Don't care about the outcome, just for the experience.

Rohit Agarwal:
makes sense. I remember the Gavaskar Border trophy, right?

Srini:
was young, I don't do that anymore, but I still remember getting up at 4 .30, 3 .30, 5 and watching a series of in the mid 80s. Yeah. When I was five, somewhere in my 10, 15 years kind of an age watching all of this used to be.

Rohit Agarwal:
Are you planning to watch the T20 World Cup?

Srini:
No.

Rohit Agarwal:
All right. Did you have any role models growing up? Personal or professional?

Srini:
It's a look you always have and at various points in time. And I've always liked this and there's an expression which I've learned somewhere is look, your personal board and you keep looking up to very different set of people.

If I pick up a random collection, I used to like Ivan Lendl. Was he talented? No. Any day a Stefan Edberg and a Boris Becker had more talent in maybe in their wrists than Ivan Lendl had in his own body. But I just liked the way the man would really work towards all elements of his game.

I loved a Mackenro and I'm just using some tennis examples of Stéphane Edberg for the class and the ease which they would play. I admired that. But there was something about, nothing elegant about an Ivan Lendl. But he was bloody good because he just kept trying to do multiple things and never giving up. Yeah. So that's where some of you start to draw inspiration in terms of, listen, it's not, how good can you be? What can you try?

So that was an early example of someone in sports. Actually, sports gets you many, many, many more examples, which are more, and to be honest, which also connect with people. You obviously liked, I liked the Saurav ganguly for the attitude and first really getting people to believe that, look, we can compete at a world stage. Yeah, you absolutely admire somebody like a Mahendra Singh Dhoni and who doesn't, for the calmness and the cool quotient and everything that he does. So there are multiple, but if you pick up.

and let's just try and keep it to sport because everything else in life today is controversial. So if you just try and keep it to tennis and cricket, I picked a few.

Rohit Agarwal:
Alright, the last one. Describe yourself in three words.

Srini:
Quirky.

Dreamer.

a combination of grumpy and fun.

Rohit Agarwal:
All right, Srini, this has been an amazing, amazing, enlightening show for sure. I certainly have a certain preconceived notion of really, really large organizations. And kind of, of course, my questioning is biased from that perspective. But thank you for clarifying a lot of those preconceived notion, a lot of those biases, truly admiring the candor.

with which you talked about. And it's heartening, truly heartening to see the caliber of talent, the caliber of people that are sitting at these large organizations and really thinking through in not that very old school orthodox manner, but in a really new age, open, much more practical kind of pragmatic manner and sort of understanding the vulnerabilities of the market as well. So.

Again, appreciate all your thoughts. This was a fantastic show from my perspective.

Srini:
Fun, I should say that some of your questions were tough and I didn't overthink it. It's one of those ones where I walked in and said, listen, I will handle as things come along. What'll happen? Either I'll get some right, I will get some wrong. That always happens. But it was fun talking to you. But it's definitely got me thinking on some things.

Rohit Agarwal:
You

Srini:
And yeah, maybe topics to explore. Look, every engagement is fun and you will always pick up something or the other. And yeah, let's see. If some people love it, great. If they don't love it, that's fine. We'll take it on the chin and we'll go on with life. Perfect. Thank you, Rohit. Yeah, pleasure. Cheers, man.

Rohit Agarwal:
Awesome. Thanks, Srini.

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