An informal organisational culture has been a source of competitive advantage for Marico, the Indian consumer goods giant, which has built its success on adding value for every stakeholder.

Founder and chairman Harsh Mariwala believes that an organisation is accountable to more than its shareholders; he includes employees, customers, associates and society at large.

“The role of a business leader is to create value for the society by providing solutions; we have a responsibility to be a principal agent for social change,” he told a recent CEO conference in Mumbai. (For more, read WARC’s report: Marico’s success is built on adding value for every stakeholder.)

“And it’s all inter-related,” he added. “For example, if I do something good for my employees, they feel much better, get far more motivated and this will have a huge impact on the organisation in terms of its profitability and growth, and this in turn benefits the other stakeholders.”

He founded Marico back in 1990 and defined its purpose as “making a difference to all the lives we touch by nurturing them, by empowering them and by maximising their true potential”.

But he was unlikely to achieve that aim via traditional structures and from the very beginning Marico has operated in a different way to multinationals like P&G or Unilever.

“I didn’t want the culture to be just a statement displayed at the office reception area, and so we spent a lot of energy in crafting our values that were relevant for success in business,” he explained.

“And more importantly, it was about converting them into a strong organisational culture: we were a very open organisation, very informal, participative and empowering.”

And as a family-run business, the notion of empowering employees proved vital in recruiting good quality talent.

“That had a huge impact; we created a flat structure with minimum layers of hierarchy,” Mariwala said. The result was an organisation where people enjoyed working, without the usual politics and gossip.

Nor is there any obsession with things like tracking timekeeping and sickness; trust is uppermost.

But every couple of years, the business does a survey on each of its values and “where there are gaps, we try and rectify them,” said Mariwala.

“In my opinion this culture is our source of competitive advantage; talent has been the most important factor in the success of Marico.”

Sourced from WARC