I am what I am today because of the paint industry. As they say Small is beautiful. From a garage in 1942 is where a small company named Asian Paints started, from a market capitlisation of 1000 crores when I joined to 1lakh ten thousand crores when I stepped off. I am sharing some of the values that stood us in good stead.
We are a reflection of the choices we make. As a wise man once said we took the road less travelled and that made all the difference. As you grow there are many choices all of you will continually make. Should we grow in size, what does scale offer us; is scale only about efficiency; what are the challenges as you scale up; is growth the only way to meet the aspirations of everyone concerned. So what I am going to tell is what I have learnt over the years from heading the various functional areas at Asian Paints.
First of all marketing is to solve a problem of the customer. It is to address an unmet need of the customer. As Steve Jobs once said it is to meet the needs which perhaps cannot be even explained by the customer. Because many times a customer does even know what they want. Asking a customer, as Steve Jobs said, would have never created an iPhone. It is something that a set of people who had humility, who had perception, who had connect with the customers came together and created it. When we look at categories like exteriors and wall putties, I can see some of you in the room running successful enterprises catering to these niche segments. These are markets that had not existed 10 or 20 years ago, but are now large blockbusters for many of us today. So if you have ears to the ground, listening to what customers want, what are their recurring headaches you can have a succesful marketing strategy.
A thing we always talk about is who is a leader. Leader is the one who has followers. So embark on new paths, create new markets, grow the existing markets, don't eat out of someone's plate. That is why market share is not about moving from one company to another, it is about bringing new propositions in the market place. If you only have to gain market share from somebody else, you have to one of the two things –lower prices or offer better credit terms. If you want to move beyond that and not fight on prices, then the only way to do that is to innovate.
Another cliché we all talk about is about people. We all forget that organizations are made of people and they are your assets and what is most important is to get people who are committed, that is a strong word. There will be challenges in business and when there is a fire on the ship many people would want to get of the ship. There is a need to get people who are committed to the vision and as long you have the core team together you will ride many of these storms. Also you will need a set of people who are aligned. What happens many times is entrepreneurs have great ideas, but they need to be executed. And for execution the only thing you will need is alignment ensuring that you are committed to the cause whether it is the person in the lab, shopfloor, or the sales person in the market serving the customer, purchase, IT, finance, everyone of them needs to be aligned to the vision that the organisation has. As long as you have this set of committed people aligned to this vision you will achieve your goals. The other thing we should do over a period of time have is to get the smartest people from the institutions like IIT, ICT HBTI etc., as it is not possible as entrepreneurs to be at all places all the time. The people in the team are the embodiment of who we are and they need to feel secure, to feel empowered and that is why we need to put in the right processes in place. As long as that happens scale up will happen automatically.
Another thing that is a buzzword today is innovation. What is innovation, it is to do things differently; it is about new business models. Uberisation is a word that is used in common vocalbulary and which has emerged in the recent quarters. Data has become a powerful tool. World's largest mobility provider does not own a single vehicle or the world's largest room provider does not own a single room. With the help of technology, and data analytics, business models have changed. 15, 20 years ago when some of us started giving services at the homes or at the shopfloor of industrial customers, it was unheard of. But today it has become a part of our industry and it helps keep our customers with us and prevent them walking over to competitors and also allows us to innovate and offer more products and services. So when we invent and reinvent business models that too is innovation.
As you grow your business you will make decisions some of them will be wrong, but as they always say unless you make mistakes you will know what is right and what is wrong. So one thing to keep in mind is -- make mistakes but make them early and make them small and don't make the same mistake twice. Paint industry has the maximum number of bollywood stars endorsing different brands. The way brand gets built is by repeated experience which is very dependable experience. If one buys a product today and likes the way the product performs one will go back after 3 to 5 years when one want to repaint and ask for the same brand. That is what brand is and it as simple as that. Endorsements and advertising helps to have visibility but in the end if you don't have the right product, the right customer value proposition any money you put outside of that in so called brand building, is not going to very far.
What is competitive advantage. Many of us get a little mixed up on what it is all about. All of us have a certain competitive advantage—like a certain geographical reach, a certain technology, a certain solution that we offer. I think as long as you continually build on that as long as we create a moat around it and protect it from the competitors you can grow a very successful business for many years to come with out getting distracted by saying now I need to do one more product, or I need to one more geography, one more customer segment etc. Quickly you figure out what your competitive advantage is and you will always find customers in a certain chemistry, in a certain application, in certain part of the value chain also. As long as you continue to do that and innovate, you create a better technology, offer a better customer proposition, you can continually grow without having to have presence across all segments and geographies.
One last point--You have started, you have led and built successful companies, but always remember the brand or the company will outlast us and always keep that in the front as the motto. What I am doing today, or every decision that I am asked to make as a founder as the next generation or as a professional manager, or a functional head will have to justify that the decision in the best interests of my company and all its stakeholders. I can assure you as long as you do that everyone will win- the owners, the employees, the customers and suppliers. Even the community will be very proud of you. You have many such examples over the decades
It is important to have humility. What I mean is a sense of gratitude and a self contained ego you have got somewhere, luck and many other people have played a role in it. Acknowledge it celebrate it and move towards the next level towards your vision and I am sure as long as you do that you will conquer many frontiers.