As I leave the Taj Mahal Hotel in New Delhi after a frantic breakfast meeting with Dinesh Paliwal, I pop downstairs to the banquet hall level to have a quick look at the event Paliwal’s Harman International is planning for later that evening. The US-based premium audio and entertainment system makers, and owners of brands such as JBL, AKG and Mark Levinson, are going to unveil a new automotive gear and Paliwal is quite excited about it: “I’ve brought down my entire board and senior management team to India for the event. It is an exciting new product that extends our auto portfolio to mid-level cars as well,” explains Paliwal, chairman and chief executive officer (CEO), Harman International Industries.
Which is why the staff at the Taj are milling around while someone, very carefully indeed, drives a silver Mercedes-Benz into one of the banquet halls. Because, you know, when Harman International says “mid-level”, they still mean Merc. Harman is that kind of premium.
Big boss: Paliwal is known to be a tough taskmaster, setting hard targets and pushing his team to do better. Jayachandran / Mint
Paliwal has been widely referred to, in interviews and profiles, as a true global Indian executive. A moniker he earned during his stellar 22-year stint with ABB, the well-known Swiss-Swedish power and automation firm. And while speaking to him, it is hard to miss that “global Indian” accent: He pronounces Shirdi as any Marathi would, but then says “billion dah-lurrs” in the next sentence. But, of course, Paliwal isn’t putting on the fake accent, it is clearly the outcome of having been a roving manager for two decades.
During our all-coffee-no-croissant breakfast, Paliwal’s experiences at ABB come up with almost every other question. He constantly tries to swing the focus back to Harman, but there is no denying the obvious: All of Paliwal’s management stripes were earned at the massive multinational where he worked till 2007.
“ABB was huge. We were present in over 100 countries. Had more than 100,000 employees by the time I left. It was very different from Harman,” recalls Paliwal. So then why the move to Harman? At the time Paliwal made the transition, Harman was a smaller company, still largely managed by family members of the founder, audio engineer Sidney Harman. And in the 13 months prior to Paliwal’s joining, the loosely held together family of audio product brands had worked through two chief executives, both of whom fell foul of the Harmans.
Paliwal gives some of the credit for that decision to his friend and neighbour Indra Nooyi—“Our children often have sleepovers in each others’ homes”. Nooyi, now the chairman and CEO of Pepsico International, once worked with Paliwal at ABB and is now a close friend. “Indra told me that all this consumer sales and marketing was fun. And that I should try it at least once. So I decided to give it a shot.”
That’s how, in 2007, Paliwal went from being president, global markets and technology, at ABB to chief executive at Harman International. I momentarily think of asking him if things proved to be “fun” subsequently. But then Paliwal himself reminds me that there is nothing fun and frothy about his approach to business: “You know I was known for being quite...ruthless at ABB. I drove hard targets, pushed my people. But I was always fair. Once I was convinced of someone, I let them handle things themselves. But if you kept doing badly, there was no place for you.”
As Paliwal talks of his transition to Harman, it is clear that the company was in dire need of the Dinesh Paliwal treatment—the treatment that saw ABB cut costs drastically and reduce manpower from around 225,000 to almost half.
Paliwal slowly, resolutely, went about rebuilding the company. Several group brands that had gone astray were brought back into the fold. Loss-making plants were closed and cheaper capacity is now being built in China and Eastern Europe. In fact, India and China are firmly on Paliwal and Harman’s radar. Besides unveiling the new audio system—“It has two million lines of code. Most of it written in our offices in Bangalore!” he says—Paliwal also announced a new dedicated India office that evening.
The push into the Indian market comes at a time when Harman International is looking to do something here that it does very well: give sound to massive sports facilities. Paliwal enthusiastically rattles off a list of Harman’s stadium projects, including the New York Yankees stadium, and, top of the list, the Bird’s Nest and the opening and closing ceremonies for last year’s Olympics in Beijing. “Everyone wants to talk about the Bird’s Nest and what we did there,” he says, alluding to meetings with the Delhi Commonwealth Games authorities, including organizing committee chairman Suresh Kalmadi.
I ask Paliwal if any part of Harman’s new focus on India comes out of a personal need. “I am still close to India personally. But we are here because it makes business sense. We think India can be a quarter-billion dollar market for us in five years.” And then he adds laughing: “My board would never let me make a business decision because I have a soft corner for India. At the end of the day, I am a Marwari. So I will always think of business like a Marwari!”
Paliwal’s global credentials are particularly striking when you consider that his parents were freedom fighters and associates of Mahatma Gandhi. When I ask him about this, Paliwal says that he is now a US citizen by choice, considers China a second home and still visits India several times year. “But home is really wherever my wife and children are. Which means really it could be anywhere in the world.”
But perhaps not all of Paliwal’s bonds are so fluid. When he proposed the big pow-wow in India to his senior management, Paliwal says, some were concerned: “Some were very afraid of swine flu! But I went to Shirdi yesterday and prayed. I told them that now everything will be okay. I’ve taken care of it.”