Hindustan Unilever at last count has given over 500 CEOs to corporates across the world. In any survey of companies that consistently build world class leaders, HUL is sure to feature prominently. What is the secret behind this remarkable consistent leadership factory? Is there something in CCL's research that can help us understand this a little better?
Hindustan Unilever Limited (HUL) is one of India's largest fast moving consumer goods companies and is owned by the European company Unilever, which owns a 75% majority stake. HUL began its operations as Lever Brothers in India in the summer of 1888, when crates full of Sunlight soap bars, embossed with the words "Made in England by Lever Brothers" were shipped to the Kolkata harbour and it began an era of marketing branded Fast Moving Consumer Goods (FMCG) in India. HUL was formed in 1933 as Lever Brothers India Limited and came into being in 1956 as Hindustan Lever Limited through a merger of Lever Brothers, Hindustan Vanaspati Mfg. Co. Ltd. and United Traders Ltd. It is headquartered in Mumbai, India with an employee strength of over 15,000 employees and contributes to indirect employment of over 52,000 people. The company was renamed in June 2007 as “Hindustan Unilever Limited”.
In 2007, Hindustan Unilever was rated as the most respected company in India for the past 25 years by Businessworld, one of India’s leading business magazines. The rating was based on a compilation of the magazine's annual survey of India’s most reputed companies over the past 25 years. HUL was one of the eight Indian companies to be featured on the Forbes list of World’s Most Reputed companies in 2007.
HUL is the most innovative company in India by Forbes 2011 list and 6th in the top 10 list of most innovative companies in the world. HUL's leadership-building potential was recognized when it was ranked 4th in the Hewitt Global Leadership Survey 2007 with only GE, P&G and Nokia ranking ahead of HUL in the ability to produce leaders with such regularity.
HUL has for a long time been considered a school for CEOs. Almost every year a periodical publishes an article on this theme, when a HUL alumnus takes over the reins in the corner office. In 2010, HUL (not Unilever) was ranked number one in India and the Asia Pacific region and rated among the top four companies globally in the list of Global Top Companies for Leaders in a study sponsored by Hewitt Associates in partnership with Fortune magazine and the RBL Group. More than 530 companies participated in this study, around the world. While many attribute the leadership success at HUL to its innate belief that the foremost job of leaders is to produce more leaders, there is a lot more at work, than at first meets the eye. Although the results suggest that the organization has a proven track record when it comes to building leaders, very little is known about the processes and methods that go into the consistent development of world class leaders.
The rigorous recruitment process, the 15 month training programs that send recruits for short stints in the villages of Etah in North India or then the Unilever factories in Brazil, the stretching initial assignments, the organizational support in the form of buddies, coaches and mentors, the 70-20-10 philosophy, carefully facilitated ‘crucible’ experiences and a number of other interventions go a long way in ensuring that leadership development is not left to chance, but a part of everyday life for every manager in the organization.
For 43 years, the Center for Creative Leadership has dedicated itself to the research and teaching of leadership across the world. True to it's mission from its inceptions - 'to advance the understanding, practice and development of leadership for the benefit of society worldwide', The Center has graduated over half a million leaders through its programs.
The “Lessons of Experience” research made CCL professionals among the first to emphasize the critical link between on-the-job learning and leadership development. This research established that challenging work assignments and a variety of rich on-the-job experiences contribute most to executives’ development (as contrasted with formal leadership training programs). Those findings have significantly influenced the way Hindustan Unilever has approached executive development.
This story, based on the experiences of people on the inside, explores the many processes at work through the length and breadth of the organization that build this leadership muscle in every young managers and transform them into powerful leaders, year after year.
The trigger can be traced back to the 1950's, post India's independence, when it became imperative that management responsibility for what was then essentially a British company, be transitioned to local talent. For many years, managers had sailed from the Empire to oversee the Indian operations. With India having gained her independence, expatriate managers were reluctant to spend long periods of time in an increasingly nationalistic climate. A large number of expatriated managers were keen to return to England now that the Empire was history.
The new political climate necessitated a change. Indian managers had to be groomed to take over the operations. At the time Unilever began undertaking a process called 'Isation' or 'Indianization' of the managerial cadre; there was a shortage of Indian managerial talent that could readily take over from the European managers that were running the Indian business at the time. The solution arrived at, was to hire raw Indian talent and invest in training them ‘on-the-job’ over a two-year period, at the end of which, they would be ready to assume line management responsibility.
It was against this back drop that the first set of local managers were hired and put through a rigorous training program that covered all functions and required travel across the length and breadth of the country.
The Management Training Program (subsequently rechristened the Business Leadership Training Program and now the Unilever Future Leadership Program) began with its first batch of 20 Indian recruits way back about the time the II World War was drawing to a close. Some left because the post-war scenario offered better opportunities and others because they did not fit in, and the Company let them go. While the former couldn't be tackled in the short term, it was felt that a 24-month boot camp might help new recruits find their feet in the Company, making 'fit' less of an issue.
There was also the issue of a majority of the recruit's education having been completed overseas resulting in a very poor understanding of the Indian diaspora. For a Company which at that time sold hydrogenated vegetable oil under the brand name of Dalda in the iconic green and yellow packaging, a deep understanding of the Indian culture and its consumers was essential in order to conduct business effectively.
This issue it was felt could be resolved by putting young managers through a ‘hardship experience’ early in their careers. When it was first conceived, managers spent as many as 6 months going from village to village demonstrating the efficacy of Dalda and getting villagers to consume Indian delicacies cooked in the Ghee substitute. (Ghee is a traditional Indian clarified butter, used for cooking) At the end of this immersion, the manager would have an intimacy with the Indian ethos, customs and leadership perspective that would run deep and stay with him through his career in the Company.
The management trainee program has run largely unchanged in structure for over 25 years in HUL. The only notable change was the rechristening that happened in 2001. From being the MT (management trainee) program it became the BLT (business leadership trainee) program. More recently it has morphed into the Unilever Future Leadership Program. The organization’s conviction in the quality of this program is reflected in their willingness to hire undergraduates and put them in roles at par with post graduates after an extended period of training. Following their 24-month training program, young graduates who joined the organization straight out of undergraduate schools like St. Stephen’s and Lady Shri Ram were stepping into jobs that people 2-3 years their senior were doing, and performing at par with them. That’s probably why the BLT program is often referred to as a ‘Practical MBA’.
Structured Experiences: A closer look at the structure of the program reveals a calendar that is broken down into a number of stints that are modular and are broadly divided into core / cross-functional and international assignments. The normal duration of the program for a MBA recruit is 15 months. The program consists of certain core stints, cross functional stints, a 4 week long CSR stint and even a 6 week long international stint.
While the core stint is aligned to your functional area of specialization in order to give you a comprehensive exposure of your function, the cross-functional stints help you understand how each functional area links up with the company's overall plans and thus help you understand Business Leadership in the truest sense. The international stint shapes you for Global Leadership, whereas the rural stint enables you to connect with a part of India that most marketers have read about but never experienced.
Learning paths are different from function to function, but the experiences remain the same. Someone looking to build a career in the sales and marketing function will have a functional journey that is distinct from someone building a career in the talent management function.
A trainee in the Sales and Marketing function will start this adventure with a 19 week sales stint. That will be followed by a 6 weeks in Customer Marketing, 13 weeks in brand Management, one week in a factory, four weeks in a village in Rural India and a six week assignment in a Unielver Company overseas. The training culminates is a 13 week period of sub-charge post which a trainee appears for a confirmation interview. Each of these are geared to deliver specific learning experiences. Consider this plot of experiences against the stints. These 15 experiences emerge from CCL's Lesson's of Experience work and are carefully planted to ensure broad based learning from the very beginning.
A trainee in the Talent function will start her journey with ten weeks in a Factory. After that will come four weeks in sales, three weeks in a branch, three weeks in a regional HR role, six weeks in a Business HR role, two week working with the Service Delivery Team, four weeks on Central Employee Relations, four weeks in a village in rural India, six weeks as part of the Leadership Development Team and a six week assignment in a Unilever company overseas. Again, the training will end with a 13 week period of sub-charge post which the trainee will attend a confirmation interview.
Leadership Development for Everyone: Most conventional organizations wait for managers to prove themselves before investing substantially in them. This means a high dollar spend per senior executive with entry level managers being virtually starved. By making leadership development experiences available to every entry level manager, HUL truly trained every manager in the art and science of leadership.
The BLT Program takes in between 40-60 trainees every year, split across two batches. While the first batch comes in during May, the second batch embarks on this journey in July. The journey begins for batch after batch in Gulilta, HUL’s equivalent of GE’s Crotonville. This multi-storey building on the Worli seaface has marked the first day of service for many generations of employees. The program’s kick-off is done by no less than the CEO of the company.
For many, this is the first experience in the corporate world and with everyone looking to err on the side of caution, 50% of the batch is impeccably attired in suits and ties for their first interaction with the chairman. The chairman arrives briskly and proceeds to take off his coat and loosen his tie. The CEO is quick to create at relaxed atmosphere in the room and asks, “Why are you all wearing suits and ties? In this company only the CEO and the car drivers wear ties!”
In the first few seconds, an important message has been imparted to the eager listeners. This organization is about rolling your sleeves up, getting out in the plants and markets and getting the job done. The CEO dwells on his experiences with trainees, and charge them with the responsibility of asking as many questions as they possibly canover the next 15 months. He insists that the job isn’t done till one asked the question ‘Why?’ at least 5 times!
In the course of the two days a number of speakers from different functions come in and address the new kids on the block. Notably, a bunch of graduates who has just completed the program and assumed full time managerial responsibility also comes along and shares their experiences. These two days mark a particularly busy time for the program manager, who over the course of the next 15 months becomes a foster mother for these young trainees spread out across the length of the country.
After the onboarding, the trainees bid each other farewell and head out to their first stint. More often that not, it is a core stint, and the challenge from day one is substantial. Noel M Tichy, who for many years ran General Electric’s management development center at the behest of Jack Welch, has an interesting way of explaining performance. He uses three concentric circles. The inner circle is labled “Comfort Zone”, the middle one is “Learning Zone” and the outer one “Panic Zone”. He characterises the middle one as the zone where performance requires skills and abilities that are just outside of one’s reach. He argues that we never make progress when we are in the comfort zone, because we merely reapeat activities that we can easily do already. In the panic zone, the size of the task is so substantial that we can’t even begin to imagine how to get off the starting blocks. Over the next 15 months a trainee will find himself in the middle zone for a majority of the time, having to constantly acquire new skills and abilities to make it from one crisis to the next.
The design of each stint is well thought through. It reflects an understanding of the criticality of apprenticeship in the transfer of key skills in a short time. In each core stint, the initial part of the stint is spent in ‘shadowing’ an expert in the field. This is no different from an apprenticeship that in the past has produced masters like Leonardo & Michelangelo. While both are celebrated as master craftsmen, little is known about the arduous journey that both of them undertook before they gained acclaim. da Vinci studied under Verrocchio, Verrocchio had previously studied under Donatello, and Donatello had previously studied under Ghiberti. Michelangelo studied under Ghirlandaio, Ghirlandaio had previously studied under Baldovinetti. To these artists, apprenticeship meant learning the craft from the grass root level, and working your way up slowly. Learning wasn’t imparted through any formal education or lecturing, but through the act of doing. In some cases it began with sweeping the floor of the workshop and progressed to mixing paint and then to preparing a canvas.
In a sales stint, a trainee begins as a front line sales man. He shadows a salesman as he makes 30 to 40 calls, walking from outlet to outlet in a dusty bye lane in a small town. For the first 2 weeks, he observes the sales call; he begins to understand selling strategies, the nature of a trader and the competitive context in which the company operates. By the third week he steps up and delivers a beat’s target for the day. Once he successfully completes this challenge he is then ready to rise to the next level of supervision. As a shadow Territory Sales Officer (TSO), he works with the TSO, observing his actions, listing his responsibilities. He uses this time to begin to appreciate the language of sales, the manner of planning, the unique nature of each retail channel, and starts to get an understanding of how the TSO manages his team. Two weeks later, he takes independent charge of a territory and manages it for the next 4 to 6 weeks. A similar cycle continues as a trainee works himself up the sales hierarchy shadowing a Sales Officer (SO) and then an Area Sales Manager (ASM). In the last 2 weeks of his sales stint, he gets a glimpse of the area sales manager job, the job that he will step into when his entire training is complete.
Atul Gawande in his book, The Checklist Manifesto makes a compelling case for the use of checklists across a number of disciplines. From the cockpit of a Being 747 to the Emergency Wards in hospitals, checklists have been proven to raise the performance of pilots and medical practitioners. He defines two kinds of checklists that are most prevalent: DO-CONFIRM & READ-DO. With a DO-CONFIRM checklist the trainee goes through each day in the training program depending predominantly on their experiences and memory. They then have a review or a contact with a tutor or coach where the jointly run through the checklist and confirm that everything that was supposed to be done was done. With a READ-DO checklist, a trainee knows in no uncertain terms all the tasks they have to get through. A diligent trainee often carries a copy of the checklist to check items off as and when they complete them. For each of these checklists, great care has been taken to pick the type that makes the most sense for the situation and learning outcome that is desired. Checklists of both kinds are put to ample use in the training program. A review with a tutor more often than not begins with a checklist. The tutor quickly runs through the list pausing to ask a question every now and then to make sure that the task has been completed.
This mix of apprenticeship coupled with a rapidly advancing level of complexity in the learning zone creates a context ripe for learning from experiences.
Make Leadership Development Everyone's Responsibility: The rigorous coach, tutor and mentor support that the organization provides every young manager means everyone is responsible and involved in leader development. Through this process all HUL leaders are charged with increasing the stock of "leadership capital" within the organization.
The nature of the training program requires that a trainee operate at the end of the “Learning Zone”. Every now and then, a trainee will cross the boundary and find herself in the “Panic Zone”. This is a part of life in the BLT program and well defined scaffolding is built around the trainee to ensure that these experiences help her grow in places where she might have been weak to begin with. There are a number of people on the periphery of the trainee at all times to offer assistance as is relevant for that situation.
The tutor is usually the person responsible for the skill based learning and typically has about 5 years of experience in the company. More often than not, a tutor would himself have been through the training program and is able to empathize with the trainee. Since the tutor is responsible for skill training for a particular stint, a trainee will end up having a number of tutors as she goes through the program. The tutor assigns the trainee challenging projects that encompass learning objectives, in addition to on-the-job training. Significantly, each tutor must do a comprehensive evaluation and provide evidence based feedback to the trainee at the end of each stint. Projects must be evaluated for quality of analysis and content; in some cases the recommendations will be implemented immediately. In the course of the next 15 months, five to six different managers will do similar in-depth evaluations and feedback sessions with the trainee, thus helping the trainee build a robust and grounded assessment of her abilities.
Outside of the stint specific support in the form of a tutor, there are a number of other formal learning relationships that are established at the start of the training program. These relationships are rigidly defined for the duration of the training period but often blossom into lifelong relationships.
Each trainee is assigned a buddy - usually a senior from the same institute but a couple of year’s senior in the company. This is a non-evaluative role; it ensures that the trainee eases into his new environment and provides the support that he can count on.
The role of the buddy is based on the insight that new recruits are hesitant to demonstrate vulnerability in the early part of their career and that they are likely to be most comfortable confiding in someone closer to them in age and with a similar education background. By sharing his or her experiences, a buddy helps a trainee understand the challenges of the program and the rationale behind some of the perceived ‘impossible’ elements of the training.
A trainee is also assigned a coach and a mentor. While a coach is typically a manager who has had a number of years of experience with the organization, a mentor is among the most senior managers in the company. The coach is a trainee’s single window contact and will periodically review progress in each stint and ensure development on a continuum. He is the owner of the trainee’s leadership journey in that sense. The mentor uses his ample experience of the function the trainee is specializing in to help the trainee understand and imbibe the culture of the organization.
While the learning objectives and training calendar require frequent and time bound contacts with the tutor, meetings with the buddy, coach and mentor are left to the trainee to schedule as per mutual convenience. The initial meeting is facilitated centrally, but once that is done, the responsibility lies with both the people in the relationship to make it work for the benefit of the trainee.
A significant responsibility lies with the tutor, and the organization takes no chances with this role. Every year, when young managers become eligible to tutor fresh recruits they will be invited to Gulita for a two day Tutor’s Workshop.
The workshop is designed to showcase feedback from trainees who have had great experiences as well as those with the not-so-great experiences. First time tutors are taken through modules that include: giving powerful evidence based feedback, the GROW model of coaching and a presentation on the myths of coaching.
The presentation titled ‘The myths of tutoring’ makes a powerful shift in the way young managers see their role as tutors. The presenter first shows a series of statements and asks the audience whether they agree with each statement or not. Statements that he will flash include:
“We coach primarily to help others”
“Coaching focuses attention on the trainee”
“Good coaching means providing timely feedback”
“Coaching is a substantial investment in time”
“Coaching is a work thing”
Many first time tutors promptly stick their hands up in agreement when these statements flicker on the screen. Over the next few hours the presenter systematically demolishes these ‘myths’, frequently calling on his experiences as a coach and tutor. He illustrates the tangible benefits of being a great tutor in terms of having more time, building a stronger organization, and creating a following within the company. He concludes that coaching, far from being a philanthropic act, is purely selfish. He narrates a tale of a demanding trainee he once had that pushed him to discover an element of his personality that no one else had brought to his notice, and how that element was coming in the way of him being fully effective. He emphasizes how coaching helps you get to know yourself better, become more aware of your blocks. He gives the rapt audience an example of the most effective coaching he got when he was a trainee in the form of a 2 minute chat over the phone with his tutor.
He narrates the story of being stuck in a small town in central MP called Ambikapur, unable to find a new distributor after having interviewed more than a dozen prospective applicants. In the course of a frantic call to his coach, a question will open up a host of new approaches and a solution to the problem: “Is there is way you can meet your target despite not having a distributor in Ambikarpur?” that will immediately lead him to consider adjacent towns that had well settled distributors with ample financial muscle.
He concludes with a passionate claim that coaching is a life skill, one that if built can be adapted to your friends, wife and even your children. He ends with a slide with pictures of himself with the generations of trainees he has tutored. Some pictures are on the beach, one sitting atop an elephant, yet another in the wee hours of the morning at some South Bombay club. He ends by saying that there is no more satisfying experience, than to see someone you tutor do really well in the company.
Most first time tutors carry this passion into their first tutoring assignment. They have project briefs ready well before the trainee arrives. The distributors to which trainees will be sent are briefed, as are the salesmen and field officers who will work closely with the trainee during the shadow stints. Tutoring is serious stuff and this is reflected throughout the organization.
At the end of each stint, an appraisal is complete only when the trainee has given feedback on the quality of tutoring she has received. A score of 4 on 5 is the bare acceptable minimum. Any tutor getting a score lower than this is singled out for a counseling session with the line manager. The best tutors with scores in excess of 4.8 on 5 will get a personal congratulatory message from the director of the function. Training the next generation of leaders is every manager’s responsibility and the focus begins right at the very top.
This task of training young managers is a responsibility that a manager in Unilever shoulders very early in their career. This results in considerable skill development in the leadership competency cluster. The repeated opportunity to tutor and coach a young manager results in a higher awareness of self and a deep sense of contribution to the future of the organization.
Assessment for Development: Every trainee will be assessed after every stint, not for performance, but for development. The focus will be on helping the trainee to get the most out of this period of training and risk taking. This is distinct and different from assessment for evaluation or promotion etc. No discrimination is made between trainees on the basis of these assessments and this creates a context where trainees are willing to experiment, make mistakes and try new things without any fear of sanction.
Other Key Innovations in a Nutshell
Time: Senior managers devote significant amount of time and energy into building the next generation of leaders. From visiting colleges to conduct interviews to coaching and mentoring young managers, it is a tiring and rigorous investment.
Costs: A significant amount of money is spent on a manager in training given that it is 18-24 months before they become contributing employees. In this time the organization invests in their travel, continued education and send them overseas to get more culturally savvy.
These two challenges have always remained the most significant ones. I imagine the creators of the program did a great job of making a case and after a few years the culture and results took over. Over the decades, investing in the next generation of leaders has become a way of life at Hindustan Unilever.
Over a long period of time the results are plain for all to see. HUL's leadership-building potential was recognized when it was ranked 4th in the Hewitt Global Leadership Survey 2007 with only GE, P&G and Nokia ranking ahead of HUL in the ability to produce leaders with such regularity. Most recently Fortune named Hindustan Unilever as the #6 company globally for Leaders saying the $4.1 billion company sends young managers to live in villages so that they can understand the needs of rural consumers.
In 2007, Hindustan Unilever was rated as the most respected company in India for the past 25 years by Businessworld, one of India’s leading business magazines. The rating was based on a compilation of the magazine's annual survey of India’s most reputed companies over the past 25 years. HUL was one of the eight Indian companies to be featured on the Forbes list of World’s Most Reputed companies in 2007. HUL is the most innovative company in India by Forbes 2011 list and 6th in the top 10 list of most innovative companies in the world.
The lessons from HUL's sustained success can be best understood when viewed through the lens of some pioneering research done by the Center for Creative Leadership.
Assessment - Support - Challenge: Research from the Center suggests that Leadership Development produces results when all of these three are present. The structure of the training program as well as mid-career challenges at HUL are carefully designed to include all of these.
A candidate is rigorously assessed before development areas are identified. Once that is done, he or she is placed in a tough situation / challenging project. Perhaps most importantly, there is a significant support network available in the form of a mentor, guide, tutor and a peer buddy.
70-20-10: The concept that was first propunded by the Center from its landmark "Lessons of Experience" finds careful application in HUL. From my personal experience, the reliance on classroom programs was kept to a minimum while significantly bolstering the 'developmental relationships' arm. Regular 'contacts' with mentors, guides and tutors ensured that the learning was being processed and put it context.
In more recent CCL research, it emerged that the 70-20-10 when looked at through research done in Asia yielded a different mix: 60-35-5. HUL has been focussing on this vital 35% for many many years.
Working The 5+2: Since 2005, CCL researchers have complemented their U.S. data gathering with new global initiatives. They have collaborated with organizations in India, China and Singapore to review and extend what we know about how leadership is learned. The cross-country comparison uncovered more than 40 types of developmental experiences. Among them are five basic experiences universally important across all countries in our study, plus two additional experiences uniquely important in each specific country. While most organizations focus on the five basic experiences (bosses, turnarounds, increase in scope, horizontal moves, new initiatives) HUL has for a long time spent disproportionate time on the +2 (personal experiences and crossing cultures)
HUL helps young managers explore their values, set direction and develop their approach to work and life through a process of dialogue with senior managers in the organization. The organization invests significantly in young recruits to enable them to work across cultures very early in their careers even before they are confirmed!
The Center for Creative Leadership