Geopolitics, AI & social media: Crisis is coming in bundles for CEOs, says ex-Nestlé India CMD

After four decades in the trenches of the FMCG industry, Suresh Narayanan has seen some of the biggest corporate crises and disruptions of recent times, from the Lehman Brothers crisis and the Arab Spring to COVID-19 and the Maggi controversy. Having led Nestlé India through one of its most challenging periods, Narayanan has now put his leadership lessons and experiences into his new book, Courage Under Fire.

In an exclusive conversation with Firstpost, the former Nestlé India CMD reflects on what it takes to lead through crises, why today’s challenges are increasingly arriving “in bundles”, and why CEOs need courage, humility and the ability to communicate rather than charisma alone. He also discusses the Maggi crisis, the need for India Inc. to move beyond elitism, the weakness of short-term corporate thinking, private CapEx and why AI must remain a tool to help human beings rather than replace them.

Edited Excerpts:

What prompted you to write Courage Under Fire?

I have had four decades and a little bit more in the trenches, literally, in the FMCG world across three of the finest companies that I believe are there in FMCG: Hindustan Unilever, Colgate, and Nestlé. As I stepped down from a regular executive role, I felt the need to put down some leadership perspectives that I have gleaned over the last 40 years.

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Since my career has been, I don’t know, privileged or cursed, whichever word you can use, with numerous crises—whether it is the Lehman Brothers crisis, the early crisis of shutting down a factory, the Arab Spring, COVID, or the Maggi crisis—there have been numerous tectonic shifts that I have seen in my career in terms of the environment.

I thought of compiling some stories that illustrate what I used to come out of those difficult situations with, more as perspectives for young people rather than as prescriptions. Everyone’s problem will be different. A crisis never comes with a calling card and is always different, but there are some principles that could be of use.

In an increasingly transactional world, I felt the need to go back to the old-fashioned principles of leadership and to see their relevance in the current context.

You have tackled several geopolitical crises during your career. What stands out about today’s fragmented supply chains and geopolitical environment?

When I was handling the crisis, each of them was an individual incident in itself. They had to be taken from a logical start to a logical conclusion, and there were few interventions made by other elements of the global crisis impacting them.

Today, crises come in bundles. You’ve got geopolitics, the local level, social media, consumers, customers, the environment—everything coming together.

So, the task of a CEO becomes that much more complex because multiple features are being thrown at him and he has to respond on behalf of the company. It is becoming a lot more complex, and therefore the whole area of crisis leadership, crisis management and crisis communication is going to become a very important field for management studies and leadership studies.

On top of that, you’ve got AI and technology. That is the other one which is adding fuel to the fire. But those who are on the ground, who understand the reality of the situation and are able to interact with you on a one-to-one basis—I think those are the kinds of leaders who are hard-working and communicative but who are not charismatic.

Is globalisation retreating, or are supply chains simply being rewritten?

I don’t wish to make the statement that globalisation is in retreat. But certainly, it is true that supply chains are being fragmented and have become much more vulnerable and much less predictable.

I think that is going to create a lot more havoc for industries as compared to global geopolitics, which, for whatever it is worth, will continue from one high to a low to a high again, and it will go in waves.

That is less of an issue to tackle as compared to supply chains, talent and other related kinds of difficulties and issues that CEOs will have to face.

You challenge the idea that great CEOs have to be charismatic. Has corporate India been looking for the wrong kind of leaders?

One of the things I would not say is that it has been looking for the wrong kind of leaders, but one of the criteria, either said or unsaid, has been the executive presence and the charisma of the leader. A leader in a corporation is not a politician. He is a person who’s expected to be trusted over being loved.

A politician looks at being trusted and loved and therefore needs that charisma to get that love factor into the picture. Whereas a corporate leader has to have trust above love. And therefore, it means the ability to clearly communicate, the ability to absorb, the ability to relate to the situation, and the ability to be pragmatic.

People look up to leaders who are pragmatic and who are human like them, not people who are sitting up in the sky and doing what they feel.

What does courage mean when you are sitting in the CEO’s chair during a crisis?

Firstly, the title of the book is Courage Under Fire. Of all the characteristics that are important in navigating a fire, I believe that courage is the most important element that comes to bear when a crisis has to be navigated.

Competence, intelligence, IQ, environmental sensing—all of that is important, but if you don’t top it up with courage, it’s very difficult to come out of a difficult situation.

The courage to live up to your purpose and values; the courage to live up to your conscience; the courage to live up to your employees and to the expectations of the employees; the courage to live up to your stakeholders; the courage to live up to the environment; and the courage to find, even on the foggiest day, a glimmer of hope, of sunlight, to be able to move forward. All of this needs courage. And that’s why the title of the book is Courage Under Fire.

What was the toughest decision that required the most courage during your career?

There have been numerous turning points that have defined my own capacity to be able to take decisions and to have the courage to live with the consequences of that.

But in popular memory, I think the Maggi crisis is the one that is the most talked about in the context of India. And there, the decision to withdraw 39,000 tonnes of noodles from the market and from five million outlets—a decision that was taken at the highest level in the company—was a daunting task to execute in terms of on-the-ground implementation and to then get ready a product to be able to relaunch it within a period of five months and get it back to leadership within three months.

That, I believe, is something that was a moment of great courage, great fortitude, and great effort and commitment by everyone at Nestlé, starting from me.

When did you realise the Maggi crisis was bigger than a regulatory controversy?

Initially our reaction was more transactional. We said there is a data disconnect between the testing that we have done and the testing that has been done by the government, and it was more a regulatory misunderstanding. That is how we took it initially.

There was more of an approach of going to the regulator and explaining to them the tests that we were doing and the importance of the veracity of the results that we were getting.

But then it blew into the media space, and that’s when it came very clearly to light that this is a question of consumer and customer confidence in the brand and in the company, which is a much bigger issue than a regulatory infraction that you can talk about.

That is when the whole approach of going upfront to communicate the stand of the company came up—because one thing was that our spine was strong. We had done nothing wrong, and we had not violated any rules or laws of the land. We had worked well within the laws of the land.

There was a problem with the testing procedure, which was later acknowledged as well in terms of the changes that were made to the testing laboratories.

But the reaction had to be decisive; the reaction had to be clear, but still the reaction had to be humble in order to never, ever assume that the company is above the regulators. The regulator is the Karta-Dharta of the country in terms of food regulation, and we never thought of ourselves as being above the law under any circumstances.

In hindsight, what did Nestlé get wrong in the early days of the Maggi crisis?

In the early days of the crisis, I think if there was at all a criticism that could be levelled at the company, it is that we were a little bit slow to interact with the media.

As I said, we took it more as a transactional clarification that had to be given to the government in terms of the testing procedure that we were following. We took it as that approach, and when it blew up into the media, that is when we realised that we needed to talk much more to the consumer and to the customer rather than just to the regulator.

How does a CEO rebuild consumer trust when it collapses overnight?

I don’t want to sound philosophical, but you go back to the roots and the principles of the purpose of the organisation. I think the purpose and values of the organisation are extremely important in a crisis. For us, the word ‘respect’ is at the centre of who we are as a company. Respect for ourselves, respect for each other, respect for the environment, and respect also for diversity. These are important features of who we are as a company.

Food quality and safety are at the centre of what Nestlé offers. You can debate whether you like the advertising or the packaging or the various brands of the company. But one thing that you cannot debate about is the food quality and safety of what we offer.

We decided, and since we had not found any violation on that, our spine was straight and our facts were clear. So, we went about talking to the consumer in a transparent, humble, credibility-forming, trust-forming manner so that we were able to come back into the game.

And indeed, the strategy of the company did work because within three months we were back to market leadership after launch. That showed that intrinsically the consumer was still in love with the brand but wanted a clarification on what had gone wrong.

And when we clarified through the Mumbai High Court judgement and the subsequent tests that were done that not one sample of the company failed, we went upfront. We didn’t just keep quiet there. We went upfront and told the consumer through an advertisement where the mother says that, till now, I thought that I had not passed the test and had failed because there were some questions on Maggi being asked. Today, I understand that Maggi has passed the test. That means that I have also passed the test, which means it vindicates the fact that I was giving, in a trustworthy manner, the brand to my children for all these years.

That trust was not broken. I think in a crisis time you have to be clear, you have to be simple, you have to be conscientious, and you have to be diligent in the truth. And that is exactly what the company did. And that’s why we were able to come back into the market.

What is the one lesson from the Maggi crisis that every CEO should take away?

I think there is a very famous title of a book by Andy Grove, who was the chairman of Intel. He called it Only the Paranoid Survive. I think CEOs should be a little bit paranoid. I’ll not say ‘very paranoid’ or ‘very much paranoid’, but a little bit paranoid about the environment and about managing the environment.

This is not the time for complacency. This is not the time for hubris. This is not the time for sleeping at the wheel. You are going to be facing multiple crises, both local and geopolitical. Which arrow comes your way? You have to be able to anticipate and navigate it. Who is firing the arrow at you? You may never know. That is the reality of the situation today.

Why does India Inc. need to shed its elite tag?

We have to remember that in most of corporate India, there is still a sense of elitism. We go to the top institutions, we go to the top technical schools, and we go to the top places to recruit talent in the belief and hope that corporations will turn out to be stronger, better-performing and more sustainable in the future.

I think the future is going to belong to leaders who are more humane, leaders who are more agile, and leaders who are more hungry to absorb and to move ahead with their people.

Typically, if you go to the second rung of institutions, as it is called—if there is something called a ‘second rung of institutions’ at all—you’ll find students who are as intelligent, probably as capable, but much humbler and much hungrier to do the hard work of running a company or running a department or running a brand, as compared to some of the elite institutions where students tend to feel a little bit entitled.

If I have passed through one of the corridors of a large management school or a large technical school, I think the country owes it to me to become something. I think that needs to change.

I myself count as having gone to an elite institution, but I never held an MBA. That didn’t stop me from becoming the head of a large corporation.

And I think it was to the credit of the people who were my bosses and who were my mentors to recognise whatever little capability I had and push me to the front.

I think this is more important. The ability to be humble, to be hard-working, to work with purpose and values, and to be related in action and thought to the ground is far more important than a CGPA from a top institution, which really is more a boarding pass to the company.

After you join a company, nobody asks you, “Are you from the XYZ institution? What was your CGPA? Nobody cares. In a crisis, nobody takes out your degree and says, “This person is from a prestigious institution.” “Is this man of good character? Can I trust this man? Will he be able to solve the problem? That’s all you will ask. Therefore, I’m saying the more we shed elitism, the better off it is going to be.

Are companies overlooking talent because candidates do not come from elite institutions?

The difference between somebody getting into the top business school and somebody getting into the 20th-ranking business school is a matter of a few marks. Maybe on a day that person was a little bit sick or the guy could not think fast enough—one or two questions—and it has made a difference in the entrance score that they have got. The intrinsic capability is still there. You can hide a diamond anywhere, but a diamond will always remain a diamond, won’t it?

But if we discriminate and we say, No, we will not look at you as a favourable candidate for leadership,’ I think the company loses out, society loses out, and the country loses out.

I mean, we don’t ask this question of our politicians. We don’t ask, ‘Did you go to Harvard, Yale, or somewhere else?’ We don’t, and rightly so. We shouldn’t be asking them these questions.

How difficult is it for corporate India to move beyond this entrenched elitism?

It’s a movement that has to take place. I will not say that I was very successful in it because there is a supply-and-demand gap.

People want to join large companies and prestigious companies, even from the best institutions. So, when I take 10 people, if I go to the top five institutions, my quota is complete.

I have to make an effort to say, I will not go to these five places, and I’ll go to the next chunk of five schools in order to pick up talent. That’s a very difficult choice for a company to make.

Because they’ll say, Look, are we diluting? And then there is a commitment to these institutions that we will come every year; we will recruit; and we will, you know, do day zero and day minus one and all those kinds of things which are happening at campuses. You will be excluded if you decide not to go for that.

But what I’m saying is, we should, in any case, look at Tier 2 talent as much as we look at Tier 1 talent in order to develop the management cadre of this country and of the companies.

Is elitism the biggest weakness of corporate India?

In corporate India, this is not the biggest weakness. The biggest weakness of corporate India is, willy-nilly, because of our quarterly orientation, we have become a group of leaders who have become extremely short-term.

We have become extremely short-term because the investor rewards only the short term. The long-term-thinking companies and the long-term-thinking leaders are therefore left by the wayside because their thinking is more long-term—three years, five years, or 10 years.

Great companies, whether you take companies like Tata, Mahindra, Reliance or even Nestlé and Unilever of the world, have been built because leaders have thought long-term and short-term.

Today, it is thinking only short-term. Thinking only short-term means a few quarters. That, in the history of the company, in the longevity of the company, is a very short period. So, unless we start looking a little bit more at the longer term, I’m afraid we will be in the same conundrum.