Hindustan Unilever reduces organizational layers for quick decision making

Hindustan UnileverBSE -0.76 % has pruned its reporting layers to make divisional heads report directly to their respective global function heads at parent Unilever’s London headquarters.

This is a part of Unilever’s strategy termed ‘Connected 4 Growth’ to drive agility and quick decision making with an aim to cut the rollout time of its innovations by a third across the globe.

Until now, HUL’s executives heading core categories — home care, personal care, foods and refreshments — were reporting to managing director Sanjiv Mehta. They will now instead report to global category heads while Mehta will continue to be responsible for the country’s overall sales and profit performance.

The four officials — Priya Nair, Sudhir Sitapati, Geetu Verma and Sandeep Kohli — will remain part of the HUL management committee.

\While the latest move effectively means Mehta’s responsibility could shrink, officials said he will still oversee the key performance indicators of category heads. Mehta will continue to be responsible for the South Asia cluster which includes India, Pakistan, Sri Lanka, Bangladesh and Nepal.

“The CEO & MD will continue to have full responsibility for the business and the P&L delivery in India. The category leaders will continue to sit on the India Management Committee and be accountable for the business delivery in the country,” said a spokesperson for HUL.

“The role of category heads will be aligned with the strategy of divisional business globally but the local CEO still controls execution in terms of reach, sales and marketing,” said a senior HUL official on condition of anonymity.

“There will be sharper focus and better development of premium brands where Unilever has an expertise compared to HUL which has strong on growing mass brands historically.”

In addition, brand development execs in India who were earlier reporting to respective regional brand leaders either in Mumbai, Singapore or London will now be part of the overall brand building team, all reporting to category heads within the country.

Analysts expect the move to help HUL in bringing global best practices faster, but warned of few drawbacks. “The pace of innovation will surely improve but India is a very diverse market and its not easy to follow a global template,” said Abneesh Roy, senior VP at Edelweiss Securities.

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