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Future has a growing appetite for CEOs

Shyamal Majumdar & Raghavendra Kamath  |  Mumbai 

Getting critical people on board his fast-growing empire, says Kishore Biyani, is like a marriage, where he plays the bridegroom. “The most important thing is a meeting of minds. Rather than skills, I want to understand a person's family lineage, behaviour, aspirations and dreams,” says the Founder and CEO of the Rs 10,000-crore Future Group.

The ‘marriages’ are becoming more frequent these days, going by the number of senior managers who have joined the group in recent months. At least 30 high-profile people from multinationals like Hindustan Unilever, Pepsi and Coke have joined in the last four years — a period when revenues of Pantaloon Retail alone has gone up over six-and-a-half times from Rs 1,000 crore to Rs 6,660 crore.

Six of the top-drawer talent joined this year alone, including V Vaidyanathan from ICICI Prudential and Vibha Rishi, formerly of Pepsi and one of the co-creators of the legendary ‘Nothing official about it’ campaign. And 20 of these 30-odd key executives were handpicked by Biyani personally.

The recruitment momentum will increase further, says Biyani, for rapidly-growing businesses such as fast-moving consumer goods, foods and digital commerce. “Our appetite for more CEOs is increasing by the day,” he adds. He is bang on: the group plans to treble its revenues to Rs 30,000 crore in three years. In foods, for example, the canvas will become much larger. The group is setting up food parks in Maharashtra and Karnataka and a separate unit that undertakes processing, grading and sourcing.

Biyani also uses his uniquely informal style to great effect when he’s meeting with prospective hires. One senior executive remembers how Biyani jotted down his employment terms on a café napkin. And his sense of timing also helps a great deal. For example, Santosh Desai, known to be one of the best thinkers in the advertising business, was snapped up the moment Prasoon Joshi was made Chairman of McCann Erickson. Desai now plays a pivotal role in the group’s FMCG ambitions.

Many, however, say everything that Biyani does has a spur-of-the-moment feel to it — get what you want and fix the details later. And this is true for everything — whether it’s store launches, lease rental signings or talent acquisition. That means he often takes on people without clearly defined roles, leading to disillusionment and early separations.

But Biyani says the divorce rate is quite low. “Marriage as an institution is so strong in India that divorces don’t take place so frequently,” he adds, with a laugh. In any case, he says, he is not in the business of hoarding talent and hires someone only when there is a clear job profile.

Take, for example, Vibha Rishi, who had quit Pepsi and was identified by search firm Egon Zehnder. “I waited three years to hire someone like Vibha — who understands the consumer and can draw plans around them,” Biyani says. She takes care of everything connected with the customer, and her role includes customer retention, communication, loyalty programmes and so on. “For a business like ours, the consumer is everything,” Biyani adds.

Rishi joined the group early this year and has already made her presence felt. For example, the T24 promotion that rewards shoppers with talk time whenever they shop at the group's numerous stores. They also get shopping points when they use the connection. Though the group gains either way, its executives say the 'Shop More, Talk More’ and ‘Talk More, Shop More’ concept of T24 has been a great success.

Or, take the recent five-day shopping extravaganza — ‘Mahabachat’ (super savings) — at the Big Bazaar and Food Bazaar stores. In June, the group's electronics and durables chain eZone raked in Rs 40 crore from ‘Zero margin, 48 hours non-stop’ offer, where shoppers received discounts and offers on various items.

Similarly clear job profiles are in place for other high-profile entries such as R Radhakrishnan (former CEO, Reliance Hypermarkets), Mark Ladham (former director, Kingfisher group) and Devendra Chawla (former Coca-Cola hand and who steers the private label business), among others.

The latest catch — and a big one at that — is Vaidyanathan, who will steer Future Capital Holdings (FCH) to a Rs 8,500-crore NBFC giant. For starters, FCH will be expanding its pan-India footprint by adding 40 boutique retail finance stores over the next few months.

Future Group Chief People Officer Sanjay Jog sums up the group’s recruitment strategy: “We want to have people with different thought processes. Otherwise, everybody would just be clones of the big boss.”

Be that as it may, the hard fact is that amidst the high-profile entries, a few big names have also quit the group, especially after Future started winding down its focus on non-core retail ventures since late last year.

For instance, Prakash Iyer, chief executive of the loyalty card business, joined Kimberly-Clark Lever Ltd as managing director in February. Shashi Kalathil, who was the CEO of group's Galaxy Entertainment, joined a marketing firm. Arvind Chaudhary, CEO-Foods for Pantaloon Retail and later CEO, Aadhar, has joined Wal Mart India. There are many more.

One senior executive, who quit the group, says between 2006 and 2008, the group diversified into a lot of areas. Once the slowdown set in, the ventures did not get the required support and funding from the group or investors. That led to disillusionment. Another former top executive says he was recruited to head a business that never took off. So, he was given another job profile.

Jog says some exits are inevitable in a large group, but the number is marginal. “Mr Biyani gives his CEOs a free hand; there is no hand-holding. Some people did not, perhaps, realise they have to take their own decisions here,” he adds.

The most talked about has, of course, been the parting of ways between Biyani and Sameer Sain, a former managing director from Goldman Sachs. The promoters of FCH decided a few months ago to split the company’s two business lines: investment advisory services and consumer banking. While the investment advisory business has gone to Sain, the retail financial services will remain with Biyani. Quite a few high-profile executives, including Roopa Purushothaman, Shishir Bajaj and Dhanpal Jhavery joined Sain. When asked, Biyani becomes philosophical. “Certain things in life are beyond anyone’s control. But we are still friends and value our relationship.”

To be fair, Future Group isn’t the only one to see such departures. Competitors in the retail space have seen many more high-profile exits. For example, Reliance Retail has lost quite a few key executives, including Raghu Pillai. The same is the case with Aditya Birla Retail, which lost CEO Suman Sinha to Suzlon Energy.

Finally, does he sometimes find it difficult to get top-notch CEOs given that Future is essentially a family-owned group? Biyani says while he doesn’t believe in the “hypocrisy” of asking family members to join at the junior level, none of the Biyanis, including daughter Ashni, would get into operational roles. “The CEOs would run the business and be accountable; family members would set broad guidelines and manage relationships,” he adds.

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First Published: Wed, August 25 2010. 00:06 IST