A Nursery for Leadership- Asian Paints

NHRD Bangalore organized a very interesting evening discussion on 23^rd February 2017 in which the former and current senior executives of Asian Paints participated. The discussion sought to unravel the secrets of success of the 75-year-old, home grown Indian Multinational having 25 manufacturing units and operating out of 19 countries.  The initiative for the same was taken by the President of the Chapter Mr. Bala Balachandar who is himself a former executive of the company.

In his brief introduction, Bala said that he got spontaneous response from his former colleagues when the idea was mooted for sharing their experiences and insights gained from working for Asian Paints. He acknowledged the presence of veterans as well as younger employees in the audience who had come in large numbers to participate in the discussion. The baton was then passed on to Mr Sudesh Shetty who has earlier served as president of the chapter, to initiate and conduct the proceedings of the evening.

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Sudesh described Asian paints as  a nursery for leadership, recruiting talent from the campuses and then nurturing and developing them at each stage. He also referred to it as a company with innovative marketing practices. Sudesh invited to the dais the members of the discussion panel namely Mr Amitabh Sinha, Mr Jalaj, Mr Ashish and Mr Sundareshan.

Some information gathered from the opening remarks of the panelists are the following. The company has encouraged executives to make cross functional moves and gain experience in diverse areas. As for example, sudesh moved from a sales to HR role while sundareshan moved from the plant in India to a foreign assignment in Egypt as the unit in charge. When the panelists moved to other companies, whether it is in a very different industry of Fashion retail with Aditya Birla or to the JSW group, their experience with Asian paints stood them in good stead, in dealing with the challenges of the new assignments.

 Asian Paints is a company that has not made a loss even for one year in its 75-year history. Described as the Don Bradman of Indian industries by a panelist, It is the top Ranked Indian company in the “Forbes Most Innovative company List” in 2016(Ranked 18th in the world). The company has been able to groom many leaders from within the organization. The CEOS of many companies have come from the stables of Asian Paints.

The questions put by the moderator Sudesh and their replies are given below:

Question to Jalaj: What is the secret of success of the company, which has celebrated 75 years on 1 February? What are the respective roles that people play to achieve this?

Answer: The story of Asian Paints have been that of a story of people. Having smart people has always been a priority. Focusing on all aspects of the company while empowering people and excelling in certain business strategies has been the key.

Started in 1942, in a small garage in Mumbai by four friends, Asian Paints came a long way and became a market leader by 1967-68. The company was however open to learning from others. The founding fathers recognized the importance of getting the best talent and looked towards IIMs and other institutions to meet this need. Every idea that comes from the employees for improvement or development is consistently looked into. Asian Paints had a flat organization structure even in the sixties and seventies with employees having easy access to senior management. They have a lot of freedom to try out ideas in the best interests of the organization. Later, these practices evolved as principles over a period of time.

Question to Amitabh:  What does Asian Paints do to develop leaders?

Answer: The Company has always given priority to the leaders being operationally fit managers, meaning they should have their basics right and be aligned well to be able to work harmoniously with other departments rather than be in a conflict mode all the time. Sound managers with a long-term perspective and being able to stand the test of time has been the focus of the organization.

Question to Ashish: You had moved to Aditya Birla from Asian Paints and have been credited with organizational transformation initiatives there. Could you compare and contrast your experiences and learning in the two companies?

Answer: I worked for only six years in Asian Paints followed by twenty years in Aditya Birla. Therefore, a direct comparison may not be appropriate. However, one can say that the core of both companies, in terms of values are similar.

My initial stint in Asian paints at Guwahati was during the insurgency days. The tough situations that I encountered at that time dealing with contract labour and other issues steeled me for future challenges. I believe that all this helped me in becoming president at a young age of 39.

Both the companies valued and developed grounded leaders giving importance to the nitty gritty and shaping the character of managers. Contributing quietly and practical decision making was important in both companies.

Question to Sundar: You have come to be known in the company circles as ‘remarkable Sundar’. From an assignment at the plant, level in India, the company sent you to Egypt on an international posting instead of looking for local talent. How did you cope, considering it was your first posting abroad?

Answer: Asian paints had always had a reputation of exposing and preparing its managers for various roles. It was a strategic decision of the management to go for an acquisition in Egypt instead of a green field project. I had experience in the company although not all of it relevant to the new assignment. Yet the company reposed trust and confidence in me. Asian paints is known to provide challenges and let the employees figure out what needs to be done. Everyone is given this space; four of us had gone to Egypt. It was clear that it was my territory and there would be no interference. Resources were provided but decisions were my responsibility. 
  

Question to Amitabh: Tell us about the recruitment process in Asian Paints and what has changed over the years?

Answer: Asian paints, traditionally have been going to the college campuses of premier educational institutions for recruitment. The objective was to select those who have done well academically, are hardworking and have a need for achievement. Typically, the candidates preferred were meritorious, middle class, not too flashy or abrasive. We looked for those with a point of view and would defend it.

Here Jalaj added: The candidates preferred were those exhibiting humility, empathy, with listening and connecting skills. We looked for the same basic qualities in those selected to work on the shop floor as well. Other abilities sought were process orientation with willingness to execute in any area.

Today the company is in need of out of the box technology; having diversified from manufacturing to services, technology space, and decoration bathroom business. Now, we will also need people who will go and set up business and have better soft skills. They would need to take risks and be able to push the manager (Middle managers could become complacent and prefer the status quo).

Question to Ashish: What did Asian paints not teach you?

Answer: As mentioned earlier, I had a comparatively short stint of six years in AP. The supply chain distribution was very good in the company. Later I applied these principles in the fashion business as well However, I found the new business was very complex, changing every moment. There were more than 10000 products with shelf life of 3 months and consumer’s life of 10 seconds. While analytical thinking worked for me in previous assignments and helped me become general Manager, President, CEO I found that in the new industry of fashion more of right brain thinking was essential and that you are as good as your last product.

Question to Sundar: You moved to a seemingly very different field of private equity and was quite successful. What is that you picked up at Asian paints that you were able to profitably use there?

Answer: The risk taking exposure that I got in Asian paints handling domestic and international business came in handy in private equity for value creation and long-term perspective. In the private equity role, it enabled me to look at different business sectors be it restaurant, pharma or other sectors.

Question to Jalaj: Companies like GE and Unilever have made a mark internationally by their contribution to best practices in HR. When will we see the practices of Asian paints included in HR text books?

Answer: Generally, at Asian paints we have been reluctant and uncomfortable speaking about or projecting ourselves. In respect of HR, our focus has always been on hiring good people with a long-term perspective and giving them diversity of experience. Our challenge and focus as we become more and more global would be to see how we harness further this diversity of experience.

The floor was then thrown open to the audience to shoot questions. One particular question that I found very relevant and interesting was on the company culture in respect of which the following matters were discussed.

Ownership: One of the panelists gave insights into this aspect of the work culture in the company by sharing an anecdote. Once a visitor to the shop floor stated “I want to meet the company.” A person in the level of a supervisor had no hesitation in declaring, “I am the company. What can I do for you?” This kind of a response is possible only when the management empowers employees and they in turn exhibit the ability and willingness to accept the responsibility.

­­­­­­­­­­Integrity: In this connection a story was shared of the time, company had announced the launch of a new product of automotive paint- APCA which required separate go downs for storing and obtaining license from explosives department of the Government. Although the date of the launch was notified, the company decided to postpone the launch rather than pay money to the ­­­­department to obtain license, which was being delayed by the department.

Emotional bond with company: A panelist revealed that the employees of Asian paints had a high level of emotional bond (95%) with the company. This is borne out by the fact that a large number of former and present employees turned up to attend the evening program in which the company was being discussed. As many as 250 former employees of the company registered with the What’s app group in two days on learning about the program.

Engagement with employees: The persons in leadership roles in Asian paints gives attention to coaching, mentoring and imitating conversations with their people. He or she is accountable for the team, appraising their performance, engaging with them, standing up for them and adding value in all conversations.

Delegation of authority at various levels in the organization: On this subject, Sundar already shared about how he received full freedom during his assignment and posting to Egypt.

A former employee who was present among the audience related another relevant story. He was responsible for a role that included taking decisions on paint replacement given to contractors. On one occasion, the contractor demanded 6 litres of paint while he felt that 3 litres were sufficient to carry out the specific work. Although the contractor took up the matter with higher levels, the company stood by his considered decision. It is instances such as these that boosts the morale of employees. It enhances their willingness to stick their necks out and take risks for the benefit of the organization.  

As a blogger, it gives me a lot of happiness to report on best practices of good companies. However, this time my cup of joy was full and overflowing as I was reporting on the success factors of an Indian multinational, which has made a mark for a sustained period of 75 years. It is wonderful to know that the company has its heart in the right place and cherishes important values; values that distinguish the good from the great….