Winning Requires Superior Business Crisis Planning
Need to build on ‘flexibility’ and ‘agility’ as strategic advantages, while being bolder and less risk-averse
Almost four decades in the consumer products industry, with the most recent seven years running India’s leading beverage alcohol company through the turbulence of the ‘Highway Ban’, demonetisation and GST, I have had my fair share of excitement and a few battle scars — but none has presented the unparalleled test of leading through a crisis, as in the year just gone by.
Business As Usual
When the news of Covid-19 in China started percolating in early 2020, we were already faced with the headwinds of a slowing economy and soft category growth. But, in an industry where dealing with issues is an everyday way of life, adopting a ‘business as usual’ mindset came naturally to us, and so we continued to run our business without being overly concerned. It was when the lockdown came into effect in March, that the reality of the impending crisis hit us — and how!
Starting March 24, unlike any other FMCG, our industry faced a complete shutdown that eventually lasted for six weeks. During this period, all liquor stores were closed, restaurants and bars brought down their shutters and all manufacturing operations were halted. For the first time in the company’s history — and in my long career — topline vanished overnight and stayed at zero, day after day. The initial sense was one of disbelief, shock and mounting concern. For a company of our size and fixed costs, not having any sales meant a deep red profit & loss (P&L)
and having to draw on cash reserves and bank credit. Public health concerns and societal views on alcohol created huge uncertainty about when our industry would be allowed to re-open.
But within days, our initial anxieties gave way to steely resolve. This was our leadership moment, and we would lead with clarity, determination — and on the front foot.
A Rallying Cry
Through all the debate on V, U and L-shaped recoveries, and a review of our own modelling tools, trackers and forecasts, we realised that at best these would throw up alternate scenarios, including a steep decline of our industry. However, the unpredictable economic impact of the pandemic with on-going restrictions meant that no forecast could be even broadly accurate.
We concluded that there was little point in dwelling on how our category would be impacted. We decided to focus only on two areas that fell within our ‘circle of control’ — outperforming competition (irrespective of category performance) and doing what was right for our people, customers, suppliers, and communities. Together, the two would make us stronger whenever we came out on the other side of the crisis. And so, ‘emerge stronger’ became our rallying cry and the organisational purpose that would visibly direct and drive all our efforts.
Win Every Day
In a year that was not going to be predictable or easy to plan, we set our goal to win in the marketplace, such that our people could feel it was within reach, in near-time. We articulated our goal as ‘winning in the market, every day and every week’. We also defined how we would win — through consumer-led superior insights, sharp focus within our large brand portfolio, disciplined trade investment and strong cash conversion.
Invest To Grow
We recognised that consumer behaviour during the pandemic would turn towards established and trusted brands, and that it was highly likely that premium brands would stay resilient. Despite the challenges on category growth, we remained unwavering in our strategic action to strengthen our two flagship brands in the mass premium category — McDowell No. 1 Whisky and Royal Challenge Whisky — by relaunching these nationally with new packaging and marketing campaigns. At the top-end, we continued to invest in our Scotch portfolio and make it more accessible and contemporary through our new cool ‘hipster’ format.
Flexibility & Agility
We realised early that in an environment characterised by continuously changing local restrictions, varying waves of the virus across states and cities, and with labour supply and logistics uncertainties, winning in the market would require not just sales and marketing to outperform competition, but also supply would need to outperform through superior Business Crisis Planning. Hence, we built ‘ flexibility’ and ‘ agility’ as strategic advantages — extending these to include fungibility of investments between brands and states, speed of decision- making and execution, while being bolder and less risk averse.
True Business Partner
Staying closely connected with our partners and supporting them as their businesses went through turmoil, has been an integral part of how we have run our
business during the pandemic. During the worst phase of our industry, when many parts of the trade were under lockdown, our senior leaders and salesforce made conscious efforts to connect virtually or on phone, one-on-one with key customers and suppliers, to understand their business impact and how we could support them. As CEO, I personally made scores of calls to our partners during the lockdown.
Shaped by these conversations, our support to customers included continuing certain elements of financial trade support, extending strategic customer agreements, and engaging with large- format retailers and luxury hotel chains who were well positioned to deliver business
Winning in the market requires supply to outperform competition through superior Business Crisis Planning under social distancing. Additionally, we bolstered bartender community training through digital content in multiple local languages, while sales teams worked closely with customers on the ground to jointly innovate solutions in preparation for recovery.
As early as April, we took a call to cushion the lockdown impact on our supplier community by being prompt with payments despite the squeeze on our revenues. We identified vendors who were impacted significantly by the lockdown and even made additional supplementary payments. This helped them stay afloat and hopeful. They, too, reciprocated with prioritised materials and service when the unlocks were set in motion.