Mathew Job has been spearheading a remarkable transformation in Crompton Greaves Consumer Electricals Ltd for the last five years. “We have become the most profitable company in the consumer electrical space, outpacing our peers,” says Mathew Job, CEO of Crompton Greaves Consumer Electricals Ltd, in an interview with The Business Voice. Here are the excerpts
What was the first thing that came to your mind when you were about to take charge as the CEO of Crompton Greaves Consumer Electricals?
Crompton Greaves Consumer Electricals (CGCEL) was a new company in 2015 but the brand had an 85-year old lineage. The business had a strong position in the industry but had been under-invested in for many years prior to the demerger. The market meanwhile had evolved, and the company was facing a more demanding consumer and a new set of nimble and aggressive competitors. It was clear that what had got the company thus far would not be enough to take it forward on the next phase of its growth. This was top-most on my mind when I took charge as the CEO of the company in September 2015.
It was imperative that we re-invent ourselves to get ahead. At the same time, we had to ensure we retained the enormous strength and good will that the organisation had built up over so many years. Building new capabilities on top of the ones we already had – that was the top priority on our agenda.
How do you look at the transition of Crompton in the last five years?
The last five years have been a period of remarkable transformation and achievement for the company. We have, in this period, strengthened our market leadership position in fans and residential pumps by gaining market share. In lighting and water heaters, we moved from being no.5/no.6 to being no.2/no.3. We have become the most profitable company in the consumer electrical space, outpacing our peers.
We are now consistently rated as one of the top performers in the industry
If we look at some key efficiency or productivity measures like sales per employee or Rupee value profit per employee, we are now by far the best in the industry by a big margin. Our strong working capital management means that we have among the best profit to cash conversion ratios. We are now consistently rated as one of the top performers in the industry. These are massive achievements for a company which is only 5 years old.
All this has been made possible through multiple initiatives like brand building, distribution expansion, innovation and premiumization of the portfolio, pricing management and operational excellence. The biggest ingredient of our success is the commitment, grit and zeal of our people.
As the CEO of the company, how have you been addressing the Covid crisis? Was there any cut in headcount or salary?
The covid pandemic created a crisis, the likes of which we have never encountered in our lifetime. For us as an organisation, the health and safety of our employees and partners have always been top priority. Even before the situation started to worsen in India and the government mandated a complete lockdown, we proactively took multiple steps as early as 16th March of stopping travel, permitting employees to work from home and relaxing travel rules to ensure that employees do not need to take public transport.
We asked our teams to minimize in-person interaction, actively encouraged use of personal vehicles where possible and allowed usage of taxis for employees, who in normal course of business, were not eligible for the same. Safety and sanitation measures like mandatory temperature checks and increased frequency of cleaning of touch points were implemented at all locations.
The leadership team has been meeting daily (using technology) to take stock of the situation and to dynamically adapt our guidelines and action plans to cope with the evolving situation. We have tried to keep our people engaged and the business running as seamlessly as possible under the circumstances.
To keep our business running, we initially focused on cash and cost conservation
In this six-month period, we have conducted more than 150 training programmes for our employees accumulating nearly 25000 manhours on a variety of topics such as product technology and application, Sales Fundamentals, Finance, SAP, Quality, etc. Of these, more than 70% was put together and executed exclusively by our internal teams. We rolled out the Degreed Learning platform which hosts 25 courses curated specifically for Crompton Employees on relevant topics.
We not only paid full salaries to our employees during the lockdown period but paid them ahead of time. There were no cuts in jobs that were made.
To keep our business running, we initially focused on cash and cost conservation. As the lockdown started getting lifted, our objective was to have a vertical start up to capture all possible opportunities.
How do you position brand Crompton in the next five years?
We have had great success in the first 5 years of our operations. Going forward, we will continue to drive the current initiatives with renewed vigour – be it brand building, driving numeric and weighted distribution in consumer businesses, improving leads, bids and win rates in B2B, improved placement efficiency and OTIF, cost reduction programs, strengthening our factories and supply chains and driving functional excellence across the company.
There are new emerging segments and channels which offer new avenues of growth. We have already started implementing programs to capture our due share in these areas.
You have good Q2 sales revenues, how do you look at the future from the sales point of view?
It is very difficult to predict how the immediate future will pan out. Although the daily new cases of covid have declined from the peak of a few weeks ago, we cannot say that the worst is behind us. There is always a real possibility of a second and a third wave, as we are seeing in Europe and elsewhere. Many of the product market segments we operate in are far from normalcy.
However, the current situation has allowed the stronger organisations to grow their share and business at the expense of the weaker, less organised ones. Our strong balance sheet and lean cost structure allows us to manage such situations better than most.
What was your most unexpected lesson in leading for growth?
I don’t know if it was entirely unexpected but the thing that struck me the most was the willingness and the commitment of the team at Crompton to accept change. Often in successful organisation, one faces resistance to try new things. The question always gets asked – if something is not broken, why fix it?
More than 70% by value of the components we use in our LED products will be sourced locally within the next 12 to 18 months
When we embarked on our journey as a new company in 2015 and started doing new things and implementing new structures and processes, I expected to be confronted with this question daily. While this question was raised initially, once we articulated the ‘why’, I found that there was not only an acceptance of the change but great ownership and commitment. This is an essential part of what I call the ‘Crompton spirit’. If you were to ask me the one factor that has contributed the most to our success in the last 5 years, I would unhesitatingly say ‘The Crompton Spirit’. It is this spirit of unconditional delivery that has made us the most consistent performer in the industry.
What do you think are the greatest qualities of a CEO?
There are many qualities that make a great CEO and it is difficult to name of all of them. The ability to articulate an energising vision or purpose and rally people behind that vision is very important. The best CEOs I have known are also very decisive. It is not that their decisions are always right or perfect, but they are always decisive. One can’t always wait for perfect information. Once you have 70% certainty, it is always better to press ahead.
What is your take on PM Modi’s Atma Nirbhar Bharat or Self-reliant India agenda?
Our imports from China comprise less than 10% of our total purchases. We have already been working at many levels on in-housing and localisation. For many years, we were almost completely dependent on China for import of our TPW (table, pedestal, wall) fans. We have recently started making TPW in-house. By next year, most of the TPW we sell will be manufactured there.
More than 70% by value of the components we use in our LED products will be sourced locally within the next 12 to 18 months. The recent announcements by the government do not require us to make any major course correction. Rather, we need to progress on our path with even greater rigor and excellence.