A line from Alfred Tennyson’s poetry perhaps best sums up the metamorphosis of ITC from the days of Kishan Lal Chugh to Yogesh Chander Deveshwar, who died Saturday morning at the age of 72: “The old order changeth, yielding place to new…”
YCD as he is popularly known leaves a huge legacy at ITC, in industry and in society. Tributes have been pouring in from political and business leaders. The business world will remember him for five things amongst his many significant achievements:
Dreaming big: He set an audacious goal of being a ₹100,000 crore FMCG company by 2030. For a cigarette company to aim that high was not ordinary. There is only one previous example of a company pivoting to a new business with such ambition and that was IBM under Lou Gerstner — moving from a hardware to a services company.
Many leaders set audacious targets but very few have the patience to steer their firms through. The ITC transformation journey is one of audacious goals with deep patience, patience shown by YCD.
“Deveshwar was credited for successfully keeping British American Tobacco Company (BAT) from taking larger control of the company with the help of Life Insurance Corporation of India”
The One ITC strategy: This involved leveraging the company’s assets as tobacco consumption declined. A declining industry saps managerial energy, distributor interest and retailer commitment. ITC is the only company that leveraged its pan shop coverage to sell a newer range, and leveraged its existing managerial capability as it entered hotels, food, fashion, e-chaupal, stationery, agarbathis, etc.
He created the concept of ‘One ITC’ distributor, an idea that every other big company has tried but not succeeded because of internal managerial egos and battles. The One distributor concept has given ITC a huge advantage in FMCG. For instance, every ITC hotel carries the full range of ITC products — potato chips, cookies, chocolates in the mini bar, shampoo, soaps and creams in the bathroom.
Building Indian brands: ITC has been able to achieve this by stretching existing tobacco brands, building new ones and acquiring new ones. ITC is owner of the largest set of consumer brands in India and very few people recognise that. ITC was always a brand company but few people gave it credit because they would always say that tobacco is a protected industry.
Over the last two decades with YCD at the helm, ITC has built 50 big brands. It is a brand powerhouse today. Many of the brands have been built integrating the Indian farmer and his produce — be it tobacco, potato, or fruits.
Staying a premium business In every sphere ITC has been committed to providing high quality products and services while being sustainable in every aspect of the business.
ITC is one of the few big companies which is water positive, carbon positive, and nearly half its energy needs are met from renewable sources. Truly a great commitment to sustainability.
Many premium businesses have offered lower price brands but ITC has not gone down that route. It tried such an approach in cigarettes but quickly scrapped it. The strategy of staying true to being a high quality, premium branded business is something that ITC shares with another top company — Procter and Gamble.
Adaptability: YCD was away from ITC and did a stint as the Managing Director of Air India from 1991 to 1994. Very few leaders move from running a private enterprise to running a public enterprise — some celebrated examples are Robert McNamara in the US, the first Indian chairman of Hindustan Lever Prakash Tandon, and Nandan Nilekani. By all accounts Air India did well during his tenure and such a move teaches leader adaptability.
ITC has been in India since 1910, a total of 109 years, and YCD worked for the company for 51 years. He was a board member for 35 years and a CEO for 23 years, 21 of them as executive chairman. YCD has been at the helm for nearly 30 per cent of ITC’s life in India, that’s a legacy almost no other professional leader of a private enterprise can dream of.
In his stint at ITC, the company grew from being an outpost to a lighthouse.
Suffering from ill health, Deveshwar ensured a smooth leadership transition. He stepped down from the executive role of CEO in February 2017 and was appointed by the board as non-executive chairman till 2022. ITC appointed Sanjiv Puri as the CEO and managing director.
President Ram Nath Kovind tweeted: “Sad to hear of the passing of Shri YC Deveshwar, a stalwart of Indian business and a builder of Indian brands. His emphasis on sustainability and the triple bottomline will remain ever influential. My condolences to his family and colleagues in ITC and beyond.”
Prime Minister Narendra Modi wrote on Twitter: “Shri YC Deveshwar made a strong contribution to Indian industry. His efforts helped ITC become a professionally-run Indian company with a global footprint. Saddened by his demise. My thoughts are with his family, friends and the ITC group in this hour of grief.”