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Unlocking the Blueprint for Building Great Companies: Insights from "The Unusual Billionaires"

Discover the secrets of building remarkable Indian companies from "The Unusual Billionaires" by Saurabh Mukherjea. Learn strategies for growth, innovation, and long-term success.

  • Introduction: Unveiling the Traits of Exceptional Companies
  • Defining Greatness: Measuring Success in a Multitude of Ways
  • The Power of Persistence: Turning the Impossible into the Definite
  • The Art of Laser Focus: Marico's Path to Excellence
  • Cultural Advantage: Cultivating a Winning Organizational Culture
  • Transforming Challenges into Triumphs: Marico vs. HUL
  • Jockeying to Success: Page Industries' Winning Formula
  • Axis Bank's Resilience: Overcoming Scepticism
  • HDFC Bank's Textbook Execution of Excellence
  • Long-Term Vision: The Magic of Compounding in Stock Portfolios
  • Unveiling the Path to Success: A Comprehensive Checklist
  • Conclusion: Paving the Way to Unusual Greatness

Unveiling Excellence: Insights from 'The Unusual Billionaires' for Building Remarkable Companies

Introduction: Unveiling the Traits of Exceptional Companies

In the realm of business, the concept of greatness can be elusive yet magnetic. Saurabh Mukherjea's book, "The Unusual Billionaires," offers a compelling exploration of some of India's most extraordinary billion-dollar companies and their remarkable journeys. By delving into their stories, this book unveils the patterns and strategies that have propelled these companies to the pinnacle of success. In this article, we will dive into the key highlights and insights from the book, shedding light on the criteria for measuring greatness, the strategies that fueled success, and the lessons that can be applied to any aspiring business venture.

1. Defining Greatness: Measuring Success in a Multitude of Ways

The book challenges the notion of a standardized definition of greatness. While stock market value is often considered a measure of a company's worth, the criteria for measuring greatness vary. Mukherjea introduces two key benchmarks: 

a) Non-financial services companies aiming for revenue growth of 10% and ROCE of 15% annually, 

b) Financial services companies targeting loan book growth of 15% and ROE of 15% each year.

Implementation: Understand that greatness is multifaceted. Define your success metrics based on your industry and objectives. Regularly assess your performance against these benchmarks.

2. The Power of Persistence: Turning the Impossible into the Definite

The concept of persistence is emphasized through the words of Robert Half, reflecting how determination can convert challenges into opportunities. The IBAS framework, focusing on innovation, brands and reputation, architecture, and strategic assets, provides a comprehensive strategy for building a great company.

Implementation: Develop a resilient mindset. Embrace challenges as opportunities for growth. Leverage the IBAS framework to drive innovation, enhance brand reputation, and create a robust strategic foundation.

3. The Art of Laser Focus: Marico's Path to Excellence

Marico's success story underscores the significance of focus. Harsh Mariwala's belief that focus breeds depth and excellence becomes evident as Marico's sustained growth hinges on brand leadership, brand extension, and divestment of low-margin brands.

Implementation: Identify your core strengths and offerings. Channel resources into areas of focus. Continuously refine your strategies to align with your strengths and market demand.

4. Cultural Advantage: Cultivating a Winning Organizational Culture

Marico's culture-driven success is exemplified through practices like openness, empowerment, integrity, and meritocracy. A culture that empowers and nurtures employees' talents fuels strategy execution and competitive advantage.

Implementation: Foster a positive and inclusive workplace culture. Prioritize openness, empowerment, integrity, and meritocracy. Create an environment where employees feel valued and motivated to contribute their best.

5. Transforming Challenges into Triumphs: Marico vs. HUL

Marico's resilience against Hindustan Unilever Limited (HUL) showcases how strategic responses can lead to victory. Marico's innovative initiatives, like "Operation Parachute ki Kasam," demonstrate how a united team can turn the tables in the face of adversity.

Implementation: Embrace challenges as opportunities to innovate. Mobilize your team with a shared vision and strategy. Swiftly adapt and execute initiatives to regain lost ground.

6. Jockeying to Success: Page Industries' Winning Formula

Page Industries' focus on high-quality products, customer loyalty, and in-house manufacturing emphasizes the value of a well-trained workforce and continuous innovation for sustained growth.

Implementation: Invest in product quality, customer loyalty, and innovation. Nurture a skilled workforce and prioritize in-house capabilities for long-term success.

7. Axis Bank's Resilience: Overcoming Scepticism

Axis Bank's success is attributed to its trusted brand, extensive ATM and branch networks, and innovative customer-centric strategies, highlighting the importance of adaptability and customer trust.

Implementation: Build a strong brand reputation through customer trust and innovation. Create extensive customer touchpoints to cater to diverse needs. Prioritize customer-centricity in all strategies.

8. HDFC Bank's Textbook Execution of Excellence

HDFC Bank's adherence to simplicity, risk-awareness, and internal architectural innovation has driven its remarkable success, emphasizing the value of streamlined processes and brand strength.

Implementation: Develop a risk-aware culture. Innovate internal processes to enhance customer experience. Cultivate a strong and recognizable brand to inspire trust.

9. Long-Term Vision: The Magic of Compounding in Stock Portfolios

Mukherjea introduces the power of long-term investing, emphasizing the impact of compounding and the benefits of holding stocks for extended periods to maximize returns and reduce transaction costs.

Implementation: Adopt a long-term investment approach. Focus on holding quality stocks and resist the urge to make frequent trades. Allow compounding to work its magic over time.

10. Unveiling the Path to Success: A Comprehensive Checklist

Mukherjea's checklist encapsulates factors for evaluating industry attractiveness, competitive intensity, and growth potential. This framework assists in identifying opportunities for growth and value creation.

Implementation: Evaluate your industry's regulatory dependence, competitive landscape, and growth prospects. Leverage growth opportunities by moving up the value chain and innovating within your industry.

Conclusion: Paving the Way to Unusual Greatness

"The Unusual Billionaires" by Saurabh Mukherjea offers a wealth of insights into the strategies and principles that drive the success of exceptional Indian companies. By aligning with the principles discussed in the book, businesses can embark on a journey to create a lasting impact, cultivate innovation, and build a legacy of greatness in their respective industries.

This comprehensive blog post provides a deep dive into the key takeaways from "The Unusual Billionaires" by Saurabh Mukherjea. It emphasizes the importance of focus, innovation, cultural advantage, strategic resilience, and long-term vision in the pursuit of building remarkable companies. By implementing these insights, businesses can position themselves for sustained growth and prosperity. 

Favourite Quotes:

Paradoxically, the question, ‘What is a great company?’ is harder to answer. A great company attracts the best talent, commands respect in the business community and, more often than not, trades at a premium in the stock market.

However, there is no standard definition of greatness. After all, if the stock market is rational, the share price is the best possible measure of the value of the company. And higher the value, greater the company.

Return on Capital Employed (ROCE) is defined as ‘earnings before interest and tax/capital employed’ where capital employed is defined as the fixed assets used by the business, e.g. plant and machinery plus the working capital being used to finance the business.

Criteria for measuring great companies:

(a) Revenue growth of 10 per cent and ROCE of 15 per cent every year for non-financial services companies; or (b) loan book growth of 15 per cent and ROE of 15 per cent every year for financial services companies.

‘Persistence is what makes the impossible possible, the possible likely, and the likely definite.’ –Robert Half

Four criteria of John Kay’s IBAS framework are namely innovation, brands and reputation, architecture, and strategic assets.

‘I strongly feel that focus will lead to depth and depth will lead to excellence.’ —Harsh Mariwala

‘The reason for success of companies like HDFC Bank, ITC and Marico is due to the focus and consistency that they bring to their business,’ said B.S. Nagesh, independent director on the board of Marico in my meeting with him in December 2015.

Since the firm’s incorporation, Marico has consistently focused on three key factors which drive a consumer staples company’s growth rates: (i) maintaining brand leadership; (ii) extending winning brands; and (iii) divesting low-margin brands.

Dadiseth, the then chairman of HUL, had warned Mariwala to sell Marico to HUL or face dire consequences. Mariwala decided to take on the challenge.

Even the capital markets believed that Marico stood no chance against the might of HUL which resulted in Marico’s price-to-earnings ratio dipping to as low as 7x, as against 13x during its listing in 1996.

As Milind Sarwate, former CFO of Marico, recalls, ‘Marico’s response was typically entrepreneurial and desi. We quickly realized that we have our key resource engine under threat. So, we re-prioritized and focused entirely on Parachute. We gave the project a war flavour.

For example, the business conference on this issue saw Mariconians dressed as soldiers. The project was called operation Parachute ki Kasam. The leadership galvanized the whole team. It was exhilarating as the team realized the gravity of the situation and sprang into action.

We were able to recover lost ground and turn the tables, so much so that eventually Marico acquired the aggressor brand, Nihar.’

Marico retaliated by relaunching Parachute: (a) with a new packaging; (b) with a new tag line highlighting its purity (Shuddhata ki Seal—or the seal of purity); (c) by widening its distribution; and (d) by launching an internal sales force initiative.

Within twelve months, Parachute regained its lost share, thus limiting HUL’s growth. Despite several relaunches, Nihar failed against Parachute. Eventually, HUL dropped the brand Nihar off its power brand list before selling it off to Marico in 2006.

As Mariwala said ‘I strongly believe that culture can be a source of competitive advantage in an organization and it is impossible to copy. The organization’s culture is a major driving force in the execution of strategy.

Correct culture helps in proper execution of strategy by helping everyone align on the same page.’

Specific measures that Marico emphasized on in this culture include: Openness: When Marico moved into its new office after its incorporation in 1990, in a first for an Indian company, an open office was created where the top management didn’t sit in cabins.

First names were used to reinforce informality.

Empowerment of responsibility: There are no attendance registers (or musters as they are commonly known in factories) to be signed for daily attendance, and employee leave is not monitored;

Integrity: In order to reinforce integrity, employees authorize their own expense claims up to a preset limit, instead of authorization from seniors;

Meritocracy: A significant portion of an employee’s variable remuneration is based on the individual’s performance rather than on the company’s overall performance. This helps stress the concept of meritocracy.

Milind Sarwate, former CFO of Marico, told us, ‘When I came to Marico, I quickly sensed that it had an environment different from my earlier organization, Godrej Consumer.

In Marico, hierarchy was based, not on age or seniority, but on the criticality of the role and the potential and effectiveness of the individual.’

B.S. Nagesh, the former MD of Shoppers Stop and an independent director on Marico’s board, said ‘How do you transfer ownership to a management team without making them owners? This is one of the keys to success.

Otherwise, one owner cannot be the Brahma, Vishnu and Mahesh (the holy trinity of Hindu gods). Because of Marico’s culture of empowerment, I see more owner-managers than just managers. This has enabled them to counter threats from Wilmar and HUL.’

Page Industries: Jockeying from Manila to Bengaluru

‘Nothing contributes so much to tranquillize the mind as a steady purpose—a point on which the soul may fix its intellectual eye.’

—Mary Wollstonecraft Shelley, nineteenth-century English novelist

‘Our managers understand that it’s not about having power but about how you empower your subordinates and bring about the best results from your team members. Hence, we have a team where each member behaves like a leader. This gives us a winning culture,’ said Sunder Genomal.

Page’s products are driven by high product quality, customer loyalty and frequent product innovation. To sustain all of this, Page has no choice but to rely on a well-trained workforce with high retention rates and, hence, an in-house manufacturing process.

Axis Bank: Confounding the Sceptics Repeatedly

‘Adventure is the life of commerce, but caution is the life of banking.’ —Walter Bagehot, founder of The Economist and author of Lombard Street: A Description of the Money Market

At the heart of this outstanding performance there have been (a) a strong brand—initially the UTI brand and then over the past decade, the Axis brand—that Indian customers, especially savers, trust;

(b) the largest ATM network and one of the largest branch networks in the private sector; and (c) consistent innovation over time in segmenting and tackling groups of customers in novel ways.

HDFC Bank: The Power of Textbook Execution

‘Any intelligent fool can make things bigger and more complex. It takes a touch of genius—and a lot of courage—to move in the opposite direction.’ —Albert Einstein

‘Simplicity is the ultimate sophistication.’ —Leonardo da Vinci

At the heart of this outstanding performance there have been (a) a risk-aware culture that has focused on generating healthy returns without taking high risks;

(b) an internal architecture that has consistently allowed the bank to innovatively rethink the core process flows that characterize the central offerings of the banking sector in areas like cash management and low-cost deposits; and (c) the strength of the iconic HDFC brand.

‘We love to be boringly consistent.’—Saugata Gupta, MD and CEO, Marico. Despite being in the business of selling a simple product such as coconut oil, Marico has been able to retain its market leadership with more than 50 per cent market share over the last two decades

‘It is the task of leadership to create and nurture an environment in which a multitude of talented minds work in harmony so that mutual competence is reinforcing rather than debilitating.’—Champaklal Choksey (2 August 1997).

The checklist

-Industry attractiveness

1. Is the company’s business heavily dependent on government regulation?

2. How many competitors are present in the industry and how strong is the competitive intensity?

3. What is the overall size of the industry and its growth potential?

Companies in high-growth industries tend to have better prospects than those in mature industries.

Even in mature industries, growth potential exists in the form of moving up the value chain—for example, from voice to data in telecoms, from standard definition to high definition in Direct-to-Home broadcasting, from hatchbacks to sedans in cars, etc.

The world’s most famous prize for manufacturing excellence—the Deming Prize—is named after the American statistician, professor and author, W. Edwards Deming who said, ‘Learning is not compulsory . . . neither is survival.’

In his 1993 book, Foundations of Corporate Success , Kay states that ‘sustainable competitive advantage is what helps a firm ensure that the value that it adds cannot be competed away by its rivals’.

He goes on to state that sustainable competitive advantages can come from two sources: distinctive capabilities or strategic assets.

Whilst strategic assets can be in the form of intellectual property (patents and proprietary know-how), legal rights (licences and concessions) or a natural monopoly, the distinctive capabilities are more intangible in nature.

Distinctive capabilities, says Kay, are those relationships that a firm has with its customers, suppliers or employees, which cannot be replicated by other competing firms and which allow the firm to generate more value additions than its competitors.

He further divides distinctive capabilities into three categories:

-Brands and reputation



To sum up, to get ahead—and remain consistently ahead—of competition, companies should continuously invest in innovation, brands and building strong architecture around its stakeholders.

Holding a portfolio of stock for periods as long as ten years or more allows the power of compounding to play out its magic in a rather unusual way.

Over the longer term, the portfolio comes to be dominated by the winning stocks whilst losing stocks keep declining to eventually become inconsequential.

Thus, the positive contribution of the winners disproportionately outweighs the negative contribution of losers to eventually help the portfolio compound handsomely.

Investing and holding for the long term is the most effective way of killing the ‘noise’ that interferes with the investment process.

By holding a portfolio of stocks for over ten years, a fund manager resists the temptation to buy/sell in the short term. With no churn, this approach reduces transaction costs, adding to the overall portfolio performance over the long term.

The P/E ratio is a very popular valuation method to measure and compare stocks versus their earnings. The ratio is a number arrived at by dividing a company’s current stock price (P) and its earnings per share (E—which could be trailing or forecasted earnings).

A high P/E indicates, among other things, higher earnings growth potential. Industry P/E ratios are calculated by dividing the total market capitalization of all the companies in an industry with the total of their earnings.


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