Published on: 12/17/2017IST

In a significant development, Nisaba Godrej, executive director of Godrej Consumer Products (GCPL) and younger daughter of Godrej Group Chairman Adi Godrej, has been appointed executive chairperson of the company, effectively passing the baton to her. Nisaba Godrej appears to have had her way again. Yet another top level appointment at the Godrej group has gone the way of a loyal confidant.

Vivek Gambhir, chief strategy officer at Godrej Industries will succeed A Mahendran as managing director of Godrej Consumer Products (GCPL), the company announced. The change will take place in June 2013 and Gambhir will work with Mahendran to ensure a smooth transition.

The news comes two days after GCPL announced a weak earnings report. An analyst who declined to be named citing company policy said, “It would be premature to link the two. Mahendran’s departure had been widely spoken about. What’s interesting is that Gambhir who lacks day-to-day operations experience has been chosen to succeed him.” 

To long-time Godrej watchers the news is hardly a surprise. As we explained in our story in the 100 Richest Indians special edition, Godrej has in the last couple of years emerged as a likely candidate to succeed father Adi Godrej, 70, when he decides to step down. This despite the fact that at 34 she is ten years younger to sister Tanya Dubash. Brother Pirojsha, who took over as chief executive of Godrej Properties in January is seen as untested.

As president of human capital and innovation Nisa controls the all important human resources function. As a result, a number of senior level appointments in the company have her imprint on them. And importantly she has her father’s ear.

Company watchers say news of Gambhir’s appointment shouldn’t come as a surprise. He’d had a stellar career with Bain and Co. before Nisa wooed him to Godrej three years ago. The two complement each other - Gambhir being numbers driven while Nisa leads more from the gut. And of course they get along famously well.

Gambhir has been a leading force behind GCPL’s internationalization drive in the last three years. The company has made eight acquisitions in places as diverse as South Africa, Nigeria, Indonesia and Chile. All the acquisitions have been a part of the company’s 3x3 strategy of focusing on three products (haircare, home care and personal wash) and regions (Asia, Africa and Latin America).

The acquisitions ensured that GCPL was able to grow both sales and profit at a brisk pace. In the last two years both sales and profits rose two and a half times to Rs 3,100 crore and Rs 604 crore respectively. The stock, which has doubled in the last one year to Rs 721 stuttered today on account of a weak earnings report announced on Saturday. It was down 5 percent to Rs 680.

The move, effective May 10, will see her father take up a non-executive role as chairman emeritus of the company, with GCPL Managing Director and Chief Executive Officer Vivek Gambhir reporting to Nisaba, better known as Nisa, who is 38 years old.
 
Adi Godrej will remain chairman of Godrej Industries, the holding company of the group.
 
“It has been a privilege to serve as chairman during a period when we have delivered strong results and transformed the company,” Adi Godrej said in a statement on Tuesday. “I am grateful to our board for their thoughtful and planned approach to executing our succession plan,” he added.
 
The development incidentally comes within three months of the appointment of Nisa’s brother Pirojsha as executive chairman of Godrej Properties, the real estate arm of the Rs 14,000-crore Godrej Industries and Associate Companies, or GILAC, which is the Adi Godrej Group. This, say experts, indicates the succession planning the senior Godrej is putting in place at the 120-year-old business house, best-known for a cross-spectrum of products from soaps to mosquito repellents and hair colourants.
 
Godrej’s elder daughter, Tanya Dubash, meanwhile, will continue to be a non-executive director on the board of GCPL, while Godrej’s younger brother Nadir, though on the board of GCPL, will continue to oversee Godrej Agrovet, GILAC’s third company, which is the unlisted agri-products major. A fourth unit is the retail business under Godrej Nature’s Basket.

 
Nisa’s elevation will put her directly in charge of GCPL, a firm she has been attached to for about a decade now in various capacities. While her current role was overseeing strategy, human capital, and innovation functions for GILAC, she paid special attention to the talent and innovation requirements of GCPL, the flagship Rs 9,242-crore company of the group. This firm is driving the group’s ten by ten agenda, which is to grow revenue ten times in ten years, first unveiled in 2011.

GCPL’s rise in the last decade, say experts, has coincided with Nisa’s entry and involvement in the business, leading many to believe that she was the natural successor to her father at the firm. An MBA from Harvard Business School and passionate about girl education, Nisa is known for her sharp insights, and has been instrumental in helping GCPL achieve its three-by-three agenda, which is growth in three continents — Asia, Africa, and Latin America — across three categories, which are hair care, soaps, and household insecticides.
 
This entailed setting up GCPL’s M&A cell in 2008, which went on to make a string of acquisitions in Indonesia, and African and Latin American countries, catapulting it into the big league of consumer goods companies in the country.
 
Nisa, who is married and has a son, has also helped transform GCPL into a younger organisation, in which the average age of its employees is 35-36 now against 40 years earlier. The average age of senior leaders at GCPL had fallen to around 45 from 48-49 a few years ago, she had said in a conversation with Business Standard earlier.
Her focus on innovation has seen GCPL come out with a Rs 1 mosquito repellent for Good Knight Fast Card and a Hit Anti-Roach Gel, among others, in recent years. GCPL also stepped into the salon segment, investing in salon chain b:blunt and launching an exclusive range of products under the b:blunt brand name, all of which was overseen by Nisa.
12/17/2017 | | Permalink