Hindustan Unilever became a CEO factory and a company with good middle-class values.
Under price control soaps and vanaspati were in 1975, making a loss-making firm. HUL [Hindustan Unilever Limited] launched a new brand of premium soap.
Rustomjee, an older sales manager handling MP East, had sent his vendors a note asking them to maintain the launch till he visited the industry so that they could do it using conventional fanfare. A disgruntled distributor in Raigarh (now in Chhattisgarh) sent this to the police, saying that HUL was encouraging hoarding. Remember this was the time of Emergency.
They met a lawyer who said that for a small fee he would definitely get bail as they entered court. On being asked how he was sure, the attorney said that when MK entered the court the judge would wink at him, demonstrating the influence the attorney had on the judge. Sure enough, when MK walked into the courtroom, he was winked at by the judge. The judge maintained Rustomjee and MK waiting for hours. Sensing that the judge would not hear the case that day, thereby keeping Rustomjee in the cooler for the long Holi weekend, MK requested Rustomjee to leave the court and go to Raipur.
MK told the judge that being old, and being a heart patient, equally accurate, Rustomjee had abandoned for Raipur where he could get medical aid. The judge immediately issued a non-bailable warrant and sent the police to bring Rustomjee back. A despondent MK walked from the courtroom on to the street, only to find Rustomjee. There was no way Rustomjee would leave a young manager of the business at the mercy of a judge. Had the judge locked up for obstructing the legislation MK, Rustomjee was intending to present himself. MK sent Rustomjee and himself went to the Jabalpur High Court. Using HUL’s credibility and the stature of their counsel, rather than clarify the situation in an open court, there was a chamber hearing requested. The high court judge not only granted bail to Rustomjee but after a few hearings even quashed the criminal complaint.
While in Jabalpur MK got to be aware that the business sales officer in Jabalpur had either intentionally or inadvertently tipped the distributor which the first letter of Rustomjee could be misconstrued as hoarding. Peeved at him, as was the custom in those days, MK didn’t go to meet with him. Back after a successful outcome and a few days, MK was amazed to find an official reprimand letter. ‘It was unacceptable,’ the letter said,’to get a covenanted manager when in his city, to not visit with a salesman.’ The letter was on the confidential file of MK till he retired.
This story reveals many facets of HUL covered in the book. The drive for profitability in launch Lux Supreme when confronted with price controls. The profound belief in marketing even one of field sales managers. The sales system’s dedication to providing the very best in the marketplace by the manager being present for the launching in a little town to it. Integrity as evinced by the refusal to cover what could easily have been called a lawyer’s fee. The courage and presence of mind by asking the sales manager to 25, in taking a risk with the law of a company attorney. The caring showed by a veteran towards a younger manager. The ability of HUL, built by its reputation, to move mountains to have a special hearing of a case. Of having a meal at a salesperson’s house if you visit with his town, the simple middle-class value. The HR systems that picked up a policy violation and sent a reprimand notice.
I can not think. A few would have done some. But there is one in this story that HUL could have done. Reprimanding a successful result, because it involved what in hindsight was an incredibly small transgression – not having dinner in the Jabalpur salesperson’s house. But that is how HUL works. Much, far more a good one, although this is exactly what makes a CEO Factory and it a great company.