Crises rarely come with warning. But every workplace has that certain someone everyone thinks of when fighting a crisis. In the case of Swiss food and nutrition multinational Nestlé S.A., that someone is Suresh Narayanan who served the company for 26 years across roles and geographies. Narayanan, who retired last year as chairman and managing director of Nestlé India, saw the company through its fair share of crises, including the infamous 2015 ban on Maggi, the instant noodles that contribute a significant chunk of the company’s sales in India. Narayanan was brought back to the top job in India from the Philippines when that crisis hit, and he is credited with turning the business around and bringing Maggi back to the country’s stores in five months.
How did he do it? It’s all part of his new book Courage Under Fire: Leadership Lessons from the Arab Spring, Maggi Crisis, Covid & More. In this interview with Mint Lounge, he talks about the mark of a good leader, what it takes to navigate a crisis, and why a business must always take care of people, especially in bad times. Edited excerpts:
You’ve had a long, eventful career leading many units of Nestlé. What prompted you to write this book now and how did you pick which crises to document?
My objective was to encapsulate my perspective in difficult situations. Managing easy situations is fairly intuitive but managing difficult situations is where the challenge comes. I chose these particular crises [for the book] for various reasons. Two of the incidents are from my early years at Nestlé—[handling] the closure of a factory and the Lehman crisis [of 2008]. At least one—Arab spring—had a cross-cultural context: I was new to the country [Egypt], I didn’t know the language, and was tasked with running the business. [I picked] covid for the enormity of the fact that everyone was affected. And Maggi [ban] was for how Nestlé dealt with it. The idea was to offer perspectives... where people are respected, empowered and how over time that transforms the organisation.
You ask an interesting question early on—are leaders born or can they be made?—and examine it in the many case studies in your book. What is your conclusion?
One of the things I have lived and believed in strongly is the need to de-mystify leadership. It is not charisma, brilliant articulation of issues, it is not narcissistic, or centred around outcomes for the self alone. It is not necessarily elitist in terms of background. The most charismatic people in good times can be utter failures in bad times. In bad times you need clarity and simplicity of communication. Only 1% or less people you would qualify as being charismatic.
So leadership needs to be nurtured, it needs to be cultivated. It is like nurturing children in a family. Each needs a certain amount of nurturing, coaching, and guidance. Leaders are identified when they step up in difficult times. As they say in Hindi, Hariyali mein tote bohot bolte hain but qayamat mein sannatta hota hai (there are plenty of chirping parrots in the spring, but in the apocalypse, there is silence).
You write that your grandmother inspired you with the principle of ‘janangala pattuko’ (take care of people, and things will take care of themselves). How easy is it to stick to that in a crisis, especially when businesses have to make hard decisions?
We are moving from an age of nurturing leadership to transactional leadership. There is a preponderance of the head over the heart. I can look at someone as a young talent that can be nurtured or I can look at them as someone who can deliver results. KPIs (key performance indicators) are important but not the be all and end all of life. There is also an overemphasis by investors and leadership alike on short-term vs long-term. If I had to be fired for my failures, I would have been fired decades ago. But someone held my hand and guided me. It is the same give-back feeling that leaders must have in their reach to give their back to their young wards and to their juniors in the organisation.
How does this principle change the culture in an organisation? And how does it help manage a crisis?
Professor Sumantra Ghoshal, a legendary professor at INSEAD and a proponent of corporate culture has a great quote: “Enter an organisation and you can smell if it is friendly or not, productive or not, futuristic, or driven by the past.” The smell of a place is how leadership should be measured. Culture of an organisation is behaviours which are happening when no one is watching; it is not defined by words in the boardroom. At Nestlé, for example, respect is a core value we cherish, for ourselves, each other, for diversity, and for the environment. During the [Maggi] crisis, everyone respected each other. Not one shareholder, employee, partner, distributor went to the media to criticise the company or seek financial recourse. That speaks of the culture of the company, which is developed in good times but comes in use in bad times.
The nature of corporate crises is also changing. Your earlier examples focus on operational complexity in times like the Arab Spring. But the Maggi crisis was one of public perception and communication. This kind of crisis is getting more complex and common today. How do you advise leaders to adapt to this?
CEOs and leaders need to be formally trained in crisis communication. One of the things we have seen is that in a crisis people go into a shell or read pre-prepared transcripts. Communication in a crisis needs some form of articulation and body language.
It has to be in keeping with the purpose and values of the company in a crisis. There has to be a single point of communication. In the Maggi crisis, for example, I took it upon myself to take on communication. People wanted to know, ‘who is the guy in charge? Whose scalp is on the line?’ Leaders must stand up and be counted upon, not delegate. Also, communication has to be simple, clear, authentic and transparent. If you don’t have an answer, say you will come back, don’t ad-lib or fib. Unfortunately, perception is reality.
In the past few years, we’ve seen large companies undertaking mass layoffs and pulling support during tough times like the pandemic. How do you see leaders managing such tough decisions today, and what can they learn about doing it better?
I have had my fair share of these tough decisions. I have done retrenchments, so I also have some blood on my hands. The first thing you always ask: ‘is it essential to chop jobs before you do something else in the organisation?’ You have to have that clarity of thinking. It is easy to cut jobs but are there other budgets you can cut? It is important to keep the individual at the centre of the discussion and his circumstances. When I have conversations where I let people go, they have always been humane. There are cases when people have asked for more time—a family member has surgery or the children are in the final years of finishing school. I have always given that time.
Treating people with dignity and respect is the most important. I shudder to see firings happening on Slack, on WhatsApp, over email, and people being asked to deposit their laptops at the security gates without looking back, or being made to sign agreements to keep the news of their layoff off social media. At the centre of the piece is the dignity of the individual. You will never be remembered for all the profits you generated, but how you made the other man feel. This is where a company’s culture is reflected. If a person is still your friend after he has been let go of, then that is a sign of a humane organisation. I still meet people I have had the misfortune of letting go, and they still meet me warmly.