Veterans Unpacked | Business is actually simple. What it ultimately boils down to is trust, says Uday Khanna

Representative image

Representative image

An accountant by profession, Uday Khanna, worked internationally with FMCG giant Unilever and then in India with Hindustan Unilever before moving up the management ladder at Lafarge where he was senior vice-president (group strategy), and then took over as executive officer (CEO) of Lafarge India in 2005.

Khanna takes pride in pointing out that the cement sector had a shady reputation that he strived to overhaul by educating those around him that it was a material that helped build homes, roads and hospitals.

When he left Lafarge, it was a Rs 3,000-crore company and had the highest EBITDA margins for any cement player in India. Khanna studied business and got his Bachelor of Commerce degree at the GS College of Commerce and Economics, in Jabalpur, and later became a chartered accountant, under the ICA.

He is presently on the boards of Kotak Mahindra Bank, Castrol India, Pidilite India and Pfizer India, and in the past has been chairman of the board of Bata, member of the Group advisory board of the Murugappa Group and BNP Paribas.

In an interview with Moneycontrol, Khanna reminisces about his days as an active business leader, reveals what keeps him busy now and offers advice for the current crop of leaders. Edited excerpts:

What have you been up to since hanging up your boots?

I retired in 2012 but stayed on as chairman for a year and a half. I had brought a flat in Bangalore and was en route to go there and settle down. But having nothing to do was likely to impact my health coming from hyperactivity, so apart from joining a few boards to help in institution building, I got involved in Education (Governing Council of the Anglo Scottish Education Society) and helping an NGO as treasurer and joint Managing Trustee of the Indian Cancer Society – which is the oldest and largest NGO for Cancer.

I also got involved in mentoring women candidates for Corporate Boards and giving talks on the virtues of ethical conduct and good governance to MBA students and continue to participate in the Bombay Chamber of Commerce & Industry activities as a Past President.

What keeps you busy now?

Apart from the above, I continue to read a lot on the latest developments of the digital age and current affairs to the philosophical/spiritual knowledge of what I call the “wisdom of our ancients” emanating from the vedas and upanishads and as summarised in the Bhagavad Gita.

I started yoga during the lockdown and did it over Zoom… that was new and that worked well for me. I used to dine out more with the family and wife and am a member of both the US Club and Bombay Gymkhana and there are a lot of networks in the HUL fraternity. That is something I also spend time on.

In addition, post retirement I like to travel by cruise ship and in the last three years I travelled to Alaska, Rhine and the Mediterranean and we had no idea that these ships were so huge that you could even play billiards without a problem, so that was fun and I would recommend it highly.

Looking back, can you tell us about three interesting events or anything that has stayed with you since?

One of my gurus in finance in HUL was a guy called Matthew Panicker and he later joined RIL and helped them with overseas finance. Back then Grindlays Bank had dishonored a check from HUL because that account had been overdrawn, and so the chairman went ballistic and it was a turning point for the realisation of watching cash flow which was not apparent to all of us.

Team members hired by Panicker brought in a banker from PNB to set up new systems and created new positions and banking relationships and that then later allowed for exponential growth. All this was before liberalisation. It sometimes takes a misstep for good things to happen.

The second example is of ethical management and its impact. It is from my experience when I was working as vice chairman for Unilever in Nigeria.

Our factory was alongside a Port and we used to get shiploads of raw material imports which were unloaded and went straight into production. In one instance, the ship unloading got delayed and we had to request the customs workers to allow overnight unloading so as to continue our production and we were willing to pay the required overtime charges but the workers asked for extra money. I had a meeting with the workers and indicated to them that in case work stopped it would lead to hardship for many other casual workers in the factory and no wages would be paid to them for no fault of theirs!

After some discussions, the unloading workers agreed without taking any payments whatsoever and in fact even refused to charge the Government customs official rate on the grounds that the government coffers made no difference to them. This was an insight into the inherent goodness of men when explained the implications of their actions and their desire to avoid any unintended consequences to their fellow beings.

The last example is from large cement plants in the rural areas of Chhattisgarh where there was significant naxalite and terrorist activity at that time. It was imperative that we enjoyed the goodwill of the local people in the surrounding areas and were seen as genuinely helping locals during distress. Therefore, many times when there was a shortage of water due to a delayed monsoon we would actually shut down our plant and divert the water for their requirements apart from turning our quarries into water bodies to change the ecosystem in favour of the locals.

The result was that our plants were never threatened and we continued our manufacturing unabated due to the protection offered by the local communities themselves.

If you had to relive your corporate career again, what would you do differently?

I do not have any regrets and actually consider myself lucky at the opportunities that I got. I am also an eternal optimist and believe in making the most out of the circumstances one is placed in and have been fortunate to have good mentors, colleagues and teams working with me and I have enjoyed every moment of it. Mentors have included BR Shah, who led the team that revived Lipton, and Matthew Panicker. Nothing gives me more pleasure than to see my team members and successors do well.

My favourite quotation is “God grant me the Serenity to accept the things I cannot change, Courage to change the things I can and the Wisdom to know the difference.”

What are the changes in the corporate world that you see now that are vastly different from your time?

The environment is far more competitive today requiring customer focus and improvements in cost and quality simultaneously. The pace of change is faster with digitalisation causing inflection points sooner making long term strategy difficult and every organisation needs to be far more agile than in the past.

The mobility of employees has increased exponentially and the importance of culture and human resource management is far more important than ever before. In my time, finance was the most important constraint which is now more easily accessible. My disappointment is when people don’t speak their mind. I’m an evangelist of ethics and the right code of conduct in the business and I feel that sometimes we need to not reduce everything to the lowest common denominator.

The amount of argument and debate that when on in ancient India before they come to a conclusion ought to be indicative of how decisions ought to be made of the benefit of all.

Which business leader in the current crop impresses you?

I would name three in order of preference – Uday Kotak because he exemplifies qualities that an industrialist should have. There is no family interference and that’s the reality.

Sanjiv Mehta with his achievements …it would go to anyone’s head but he’s kept his ego in check. That’s the difference between Duryodhana and Arjuna in our classics.

Suresh Narayanan of Nestle is someone I have known as a youngster and he has come into a scene with huge dissonance and has brought the ship back on course, and he walks the talk. That by the way is a common thread amongst all three and also all three have outstanding intellect, high integrity, and with their feet firmly on the ground.

How did you plan for life after retirement?

It kind of evolved. After work, I wouldn’t shave every day and I would get up late and do nothing all and I didn’t feel that great at the end of the day and was also bugging my wife in the process and very soon I realised that doing nothing was not practical and indeed we decided to delay our proposed shift to Bangalore post retirement and stayed on in Mumbai as it offered me opportunities to use my experience to add value and linked up with my desire to contribute to the social and education sector.

Is there anything you would tell your younger self?

I should have had a better work-life balance, I do feel that I could have widened my activities in sport, hobbies, reading and more. Yes, I should become more tech savvy. I would have advised myself to spend more time with my children. There is a beneficial streak in contributing to people’s development. I fractured my foot recently and managed OK because I’m blessed with resources but I wonder how I would have survived if I was a labourer or a blue collar worker. There has to be a sense of service, which is what I would tell my younger self.

What is your advice for the next cadre of corporate leaders?

It’s always the softer things that are more important, Watch the ego and never compromise your ethical values and integrity. Beyond that be customer obsessed always, embrace digital technology, develop empathy for the less privileged and encourage informed argumentation and discussions with your teams to arrive at optimal decisions.