Few Indians have heard of Hindustan Unilever Limited (HUL). But they are intimate with the brands it sells. To name a few: Lifebuoy, Dove, Clinic Plus, Ponds, Lakmé, Closeup, Surf Excel, Vim, Brooke Bond, Bru, Kwality Wall’s, Kissan and, as of 2020, Horlicks. Nine out of ten Indian households use an HUL product every month. Forget Google and Facebook, more Indians use HUL products than those who own a television, those who vote or even those who have running water or electricity. Even if you don’t know much about Hindustan Unilever, you have grown up with it and you are touching it every single day of your life. Just like your parents, grandparents and their grandparents.

While researching for this book, I came across a faded copy of the first annual report of the newly incorporated Hindustan Lever in 1958. The company was already among the largest in the country and made a profit after tax (PAT) of Rs 1 crore. In 2019 the company made a profit of Rs 6080 crore – a compound annual growth of 15 per cent. In the same period that HUL grew its profits 6000 times, the Indian economy grew 1400 times. It is hard to find another large company that has delivered 15 per cent earnings growth over sixty years anywhere in the world. It is nearly impossible to find one that has stayed in the top five of a large country for over sixty years.

Apart from being omnipresent in our lives and being at the top of the business game for a very long time, HUL is an enormously influential company. For the last decade, HUL has been ranked by AC Nielsen as the Dream Employer of Choice in the top twenty business schools in India. HUL is taken extremely seriously in government circles with many of its past chairmen being Padma Bhushan and Padma Vibhushan awardees. Most famously, nobody gives more CEOs to corporate India than HUL. From Nestlé to Diageo to Airtel to Hindalco to DMart to Raymond to the Star Network, there are currently around 400 HUL alumni who are CEOs/CXOs across corporate India. In corporate circles, HUL is well known by the nickname ‘The CEO Factory’.

Lord Cole, chairman of Unilever, visited India in 1965 and as was customary was interacting with a young manager. ‘Sir, what are the criteria for appointments to the board?’ the young manager asked the chairman. ‘I’m glad you are thinking so far ahead,’ Lord Cole replied. ‘The criteria for board appointments are contribution, competence and character. The last takes precedence over the first two.’

The final step in the HUL way of recruiting is an interview with a very senior manager from HUL, often a director. The purpose of this interview is to assess the candidate’s character. It is hard to judge character, but a good way is to see how authentic a candidate is while responding to tough questions like ‘tell us the biggest failure in your life’ or ‘what about yourself are you most insecure about?’ Candidates who are reflective, open to sharing their vulnerabilities and honest about themselves tend to be honest in their dealings with others.

M.K. Sharma, the former vice-chairman of HUL and then chairman of ICICI Bank, recalls his final interview in 1974. He was asked just two questions. He had mentioned in his form that he was fluent in Sanskrit. His interviewer, Dr Ranjan Banerjee, then HR director, who also happened to be a Sanskrit scholar, recited some couplets and asked MK to translate. The next question by David Webb, then vice-chairman, moved the conversation from the sublime to the profane. Had he ever watched a blue film? It was a trick question, but like the Sanskrit question, one meant to test the moral compass of the candidate. I never dared ask the patrician MK what his answer had been.

- Excerpts from “The CEO Factory – Management Lessons from Hindustan Unilever” written by Sudhir Sitapati, Executive Director, Foods & Refreshment.