Newsmaker: D Shivakumar's transition from global to local

His transition from a US multinational to a homegrown giant reflects his belief in hyper-local marketing

As a trainee in his first job, D Shivakumar, who resigned from the post of chairman and chief executive officer of PepsiCo India Holdings recently, began writing letters to management guru Peter Drucker and was pleasantly surprised one day to find that Drucker had actually found the time to respond. Since then, “Shiv” — as friends and colleagues call him — has written to many management thinkers from around the globe and collected articles of most big authors. He likes to flaunt his collection of “guru correspondence” when he gets the opportunity but admits he learnt the ropes of “real” business during his stint at Unilever from mentors such as R Gopalakrishnan, K K Dadiseth, Harish Manwani, to name a few.

 
The other thing that Shivakumar, who is expected to join Aditya Birla Group as president (corporate strategy and business development) by early next year, is particularly fond of is sports—any sport. He has tried his hand at cricket, tennis and golf, but has time only to run now.
 
He continues to be a fan of Manchester United football club and the Ferrari Formula 1 team. And although you can’t call him a movie buff, he shares a warm relationship with Hindi movie star Shah Rukh Khan, who was a brand ambassador for Nokia where Shivakumar worked in an earlier stint, and whose Indian Premier League team, the Kolkata Knight Riders, the telecom equipment maker supported till about two years back.

 

The two interests — management literature and sports — might seem disparate but Shivakumar says what one can learn from them are the virtues of teamwork. They also teach you humility — you might win against a team one day but lose against the same team the very next day. The moral of the story: you have to keep honing your skills all the time — he had told this newspaper over lunch in 2014.
 
Shivakumar himself has won some and lost some during his long career. After PepsiCo announced his resignation, Sanjeev Chadha, chief executive at PepsiCo AMENA (Asia, Middle East and North Africa), credited him with transforming the company’s portfolio. He said, Shivakumar “had been a key driver for portfolio transformation, helped develop our nutrition business, launching innovations with our Quaker and Tropicana brands, and deepened consumer engagement with our flagship brands.”

 
But when he had joined the international cola giant four years ago many were surprised. Shivakumar’s immediate predecessors Manu Anand (India head from 2010 to 2013) and Chadha (2006 to 2010) were chosen from PepsiCo’s internal talent pool. Rajeev Bakshi (2001-06) was the last outsider CEO at PepsiCo India, having moved from Cadbury.
 
He had also taken over the reins of the company at a difficult time. “Take NREGA, [the rural employment guarantee programme], unseasonal rains, minimum support prices, credit availability in the rural marketplace and the sale of tractors. If we look at these five parameters, the rural market is slower this year than the last. So, there is bound to be an impact. We are focusing on the right advertising, the right value points and right prices to drive rural demand,” he had told this paper during an interview.

 
Shivakumar had spent eight years at Nokia before joining PepsiCo; he has also worked with consumer electronics maker Philips and consumer goods firm Hindustan Unilever.
 
In hindsight, PepsiCo would be a cakewalk when compared with his stint at Nokia. An engineer from IIT Chennai and an MBA from IIM Calcutta, Shivakumar had a mixed bag at Nokia, where he fought a bitter and sometimes losing battle against the more aggressive Samsung and Apple on the one hand, and home-grown upstarts like Micromax and Karbonn on the other. During his tenure at the Finnish consumer electronics company, its sales in the country jumped from 1-1.5 million handsets a month to about 6-8 million handsets a month but its market share crashed from 70 per cent plus to about 25 per cent. To his credit, Nokia India overtook China during Shivakumar's time and went from $1 billion-plus to a $4 billion company in that period. Nokia's biggest failure under Shivakumar, experts point out, was missing out the dual-SIM revolution in the country, which accounted for as much as 50 per cent of handset sales in India in 2009 and 2010.

 
Shivakumar would be leaving PepsiCo at a time when the growth of soft drinks as a category has slowed  amid weakening consumer sentiment and the prolonged monsoons reducing summer sales. PepsiCo’s snacks business is also facing increasing competition from national and local rivals, such as ITC, Parle and Patanjali.
 
His own key takeaway from his long association with consumer companies is that the only way to win in a hyper-competitive market is to become hyper-local, he once told Business Standard. To explain the idea he offered some interesting examples from the media world. Take Who Wants to be a Millionaire, an international television game show franchise of British origin, that was reinvented and Indianised as Kaun Banega Crorepati in many regional languages. It ended up changing the fortunes of the channels that chose to host it. Or, take the regional newspaper industry. While offering some national news, they concentrate on localised content based on a keen understanding of what readers actually look for. If you are still not convinced, here’s the clincher: 90 per cent of Google searches around the world in every market are for local information, he had said.