Bathroom fittings major Roca Bathroom Products has become a case study in crisis management. ‘Leadership – Roca Parryware Navigates the Pandemic’ shows how the company’s leadership navigated the crisis with grit and eventually rebounded.
Surviving the Pandemic
When the Indian government announced a nationwide lockdown on March 23, 2020, the Roca India management was ready. It announced work from home across its India operations the very next day. Production came to a grinding halt overnight. At the fore was concern for the 3,500 workforce and over 12,000 trade partners.
According to managing director KE Ranganathan, “Roca has operations in 170 countries. By the end of February, through our global system and with inputs from our China offices, we knew what was to be done initially to manage the pandemic in terms of manufacturing processes, sanitisation and social distancing. While we could never have imagined the magnitude of the pandemic, we did have some plans. So we got cracking the very next day.” Ranganathan recalls that as reality dawned, it became apparent that the situation was beyond anyone’s imagination and no one knew where things would lead. “This was the time to try and survive.”
Working from home, Roca’s marketing team started building up a digital campaign to coach its stakeholders about the virtues of social distancing and sanitisation. “We believed,” says Ranganathan, “that was the most important thing to do.” A series of educational videos and animations were launched that offered comfort and courage from a company that cared for its own. “Indians have a culture of showing their affection and concern by hugging others. Therefore building a discipline of zero contact and social distance was the most challenging task. Roca Parryware took this up with a great sense of responsibility through social media campaigns, to educate partners as well as customers.”
Roca Parryware Moves towards Revival
India returned to work and a curtailed social life in the first week of May 2020. “In May we resumed business operations and managed to achieve 40% production levels,” says Ranganathan. From then till September however, production levels at the company’s eight plants gradually rose to 102% as demand for bathroom products rebounded. But, he adds, this recovery was the outcome of some innovative thinking and smart execution.
“In May itself we had decided to be digitally upfront.” He explains that while earlier each sales executive would visit about 10 channel partners for business development, starting June the company launched digital meets and began meeting 150 partners daily virtually. “The meetings consisted of training, reviews, product launches and promotions. At each meeting we engaged with channel partners extensively, assessed their situation, guided them about new business practices, and discussed our new incentive schemes.”
Going all out for Channel Partners
The May-June period also saw the company rolling out a retailer support program that was unprecedented. “As an organisation our primary concern was the well-being of our 1,000 distributors and 12,000 channel partners, who are our backbone. We wanted to make sure that they would be safe physically and economically. While our education campaign was designed to ensure the first, our retailer support program allayed their concerns regarding the second.”
Roca Parryware distributors were extended additional credit during the critical months, in addition to a benign returns policy. Besides, through its 12 warehouses the company made sure that all orders were supplied on time, in exactly the quantities that were ordered. Higher incentives and attractive promotional gifts were offered, while sales teams worked hard to generate orders from customers. “Our aim was to help them reduce investment in inventory and their cost of holding stocks. After all, inventory cost mounts overnight. Through higher cash discounts we helped them clear their outstanding. We even let them return the inventory which they had. Thankfully our products are not perishable and are in demand in some market or the other.”
Ranganathan likens Roca’s survival and revival operation to an engine gradually chugging back to life. “During January-March 2020 we had grown 6% in terms of revenues. But in October and November we grew 13%. This makes us confident that during our calendar year 2021 we would be able to achieve growth of 25%, of course on a smaller base in view of lost production of a couple of months.” In our video interview ‘Leadership – Roca Parryware Navigates the Pandemic’ he shares more details of Roca India’s performance and future growth path.
Leadership Aims to Create Upheaval
The October-December 2020 period saw Roca India get into upheaval mode. “After the revival we were determined to jump high. And for this our strategy was to go digitally overboard.”
For starters, a redesigned company website featuring a Parryware Safe Buy section was launched, that listed all of the company’s channel partners by PIN code. Visitors to the website could now identify dealers nearest to them; view digital product catalogues, and close deals on phone so that the goods could be delivered to their sites. Subsequently they could view and connect with any of the over-30,000 plumbers trained and certified by the company, so that the goods could be installed safely and accurately.
Ranganathan says that in the 100 days of going live, the company has received over 8,000 bathroom inquiries from customers. “In my opinion this is a first of its kind initiative in India for our industry and it makes us very proud as a team. Very recently we have received an inquiry for 500 bathrooms from an educational institution.”
After Pandemic, Preparing for the Future
There is an across-industry realisation that the bathroom fittings category is not given to online retail, unlike several other categories including FMCG and apparel. That’s because customers want to have a touch and feel of the products before buying. On the other hand norms of social distancing are here to stay. This begs the question – what’s the future of retail in this industry?
“We believe that our future lies in experiential retail. Earlier customers would visit three showrooms on an average, but now they are closing the purchase by visiting one showroom only. We are taking cues from this behaviour. Therefore our approach for the future would be to invest in building high quality showrooms. We already have about 3,000 Roca and Parryware branded outlets. We will educate all our channel partners to enhance the experience in their outlets by adding live displays and incorporating technology, and will help them with the design and execution. In fact this is part of our market development activity, for which we earmark 5% of our annual turnover.”
Utsav Mahotsav, the trade loyalty program now in its fifth year, is being strengthened. Under this program trade partners can accumulate points every time they purchase the company’s products and upload their invoice. “We have in the past given out 20 cars and 500 motorbikes under this program, and will be making it more attractive for our partners,” Ranganathan says.
Leadership During Crisis
In March 2020 Gemma D’Auria and Aaron de Smet, both senior partners at McKinsey, described five leadership practices that would help managers respond effectively, in their article Leadership in a crisis: Responding to the coronavirus pandemic and future challenges. While explaining how Roca faced the challenges, Ranganathan reveals two traits that the authors consider critical for sailing through a crisis of this scale – empathy and decisiveness.
‘Leadership – Roca Parryware Navigates the Pandemic’ allows us to explore how these traits were manifest. We found Ranganathan to be extremely empathetic towards his 12,000 plus channel partners. He considers them “the most vulnerable lot”, given their circumstances of shuttered shops, rising cost of inventory, and the burden of maintaining themselves and their staff. We see that a substantial part of Roca’s covid response has been directed towards keeping this flock safe and sound. With alacrity the management devised trade policies that would alleviate the financial distress of dealers (higher discounts, good returns), send out a message of company’s financial robustness (healthy logistics, credit), and retain their loyalty when things normlise (digital meets, loyalty program, lead generation).
Leaders Need Not Know Everything
It is not expected that a leader would know all the things to be done during a novel crisis. However, an important trait is that he should decisively enable new approaches that would not only help the organisation sail through, but also serve it in the long run. Ranganathan’s decision to be digitally upfront served two purposes. Immediately it helped build bridges amongst team members and partners across the country, who would have been feeling stranded due to the lockdown and social distancing norms.
During crisis, isolation can lead to insecurity and recklessness, both of which can prove damaging. By building a discipline of daily digital meets, the company was able to maintain connect, identify distress early, and offer an optimistic outlook in a manner that was reassuring without being over-optimistic. Success on this front spurred the management to go further by linking pan-India customers with channel partners and certified plumbers through a website. This is a huge leap in retail practice, and could provide a significant competitive edge to Roca in the coming days.
Return of the Prodigal
Ranganathan and Roca Parryware go back a long way. He had joined the Murugappa Group, his first employer and erstwhile owner of Parryware brand, in 1994. Over the next 14 years he held leadership positions in finance, sales and marketing. And as CEO he oversaw the formation of a JV with Spain’s Roca and eventual profitable exit of the Murugappa Group in 2008. Thereafter he moved on to another organisation. Interestingly, he returned to Roca in 2017 as its managing director. Little could he have imagined that, within a couple of years of getting back into the driver’s seat, he would be faced with the toughest challenge of his career.
ABOUT THE AUTHOR
Deepak Gupta is managing editor at Sourcing Hardware