The ‘DEFG’ of Business Transformation! ITC Executive Director Hemant Malik shares key drivers of business transformation; Outlines expectations from MBAs at IMC 2024

The business landscape is undergoing a rapid transformation. Stupendous success of digital-natives is forcing traditional corporations to adopt new ways to conceive, capture, communicate and deliver value. Accordingly, the expectations from MBA graduates are also changing. India’s leading CEOs and CXOs spoke on this theme at 14th Indian Management Conclave. Mr Hemant Malik, Executive Director, ITC Ltd shared the key drivers of business transformation -- which he conceptualized as ‘DEFG’. He also outlined the changing corporate expectations from MBAs at IMC 2024.

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The stupendous success of digital-natives like Amazon, UBER, Google, Flipkart, Zerodha, Zomato and many others, has forced traditional corporations in virtually every sector to adopt new ways to conceive, capture, communicate and deliver value to their stakeholders. So, as the rules of business value creation shift, have the expectations from MBA graduates also changed? What are the in-demand roles for MBAs, and the competencies required? India’s leading CEOs and CXOs from ITC, UBER, AXIS Bank, KPMG, Tata Group, Tech Mahindra and others spoke on this theme at 14th Indian Management Conclave (IMC), held on Sep 20-21 at XLRI Jamshedpur.

The inaugural address of Mr Hemant Malik, Executive Director, ITC Ltd on this theme was a key highlight of IMC 2024. In his insightful address, Mr Malik shared the key drivers of business transformation which he conceptualized as ‘DEFG’. He also outlined the changing corporate expectations from MBAs at IMC 2024.

Addressing IMC 2024, Mr Malik said: “Virtually every industry has been transformed in the last decade or so. The FMCG industry, which deals with low-tech everyday consumables, is undergoing a massive transformation. Virtually all aspects of business value creation are changing…” Mr Hemant Malik is the Whole time Director on the Board of ITC. He is also the Divisional Chief Executive of the rapidly growing Foods Business of the Company.

‘DEFG’ of Businesses Transformation

In his understanding address, Mr Malik identified four key drivers of this transformation, which he called as DEFG by business transformation. “It is not ABC but the DEFG of the business that are driving this mega change. D stands for Digital, E for Environment, F for fairness and G for Geopolitics. Put together, Digitalization of business, concern for Environment and Fairness, and Geopolitical developments are transforming business value creation process today.”

Mr Malik went on to elaborate on each of these areas. He said, “Digitalization is affecting all aspects of organisations - be it advertising or distribution and logistics, HR function, Finance function or manufacturing.” Offering examples from his company ITC, he said, “About 37 % of our advertising spends are in digital media today. Soon, about 50% of spend will go into digital media. This is a massive shift in last decade!” He elaborated that with the use of Artificial Intelligence (AI), messaging on digital platforms can be targeted every effectively to a niche audience.

Mr Malik also explained that rise of digital infrastructure has given birth to D2C brands which are competing with traditional FMCG players for market share in niche segments. “Levering digital infrastructure, many D2C brands have been born. They are catering to niche consumer segments. This is transforming the FMCG sector.” In 2023, ITC announced acquisition of a Direct-to-Consumer (D2C) start-up engaged in the manufacture and sale of innovative products catering to health-conscious consumers under new-age digital-first brand 'Yoga Bar'.

Mr Malik also added that traditional Distribution and Logistics chain have been disrupted by quick-commerce players like Blinkit and others.

Mr Malik highlighted that concerns for Environment and Fairness have become mainstream forcing companies to pay close attention to sustainability and fairness of their business processes. He also mentioned Geo-politics is affecting businesses significantly leading to uncertainty and flux.

HR & Finance Functions Too Under Transformation
It’s not that only customer facing marketing function has been seriously impacted by rise of digitization. Digital infrastructure is transforming traditional HR & Finance Functions too.
Given the rise of social media, HR is being transformed as the new generation of employees who are connected on Facebook and other social media platforms almost 24x7. HR managers need to reach out to younger employees on social media.

Mr Malik added that traditional financial analysis has been transformed by the rise of digital businesses. “How do you value a new age business today? Excel Sheets and valuation formulas are not enough! You have to understand the new narrative that the business is offering to the world and try to value it. It’s not easy, but it is a required competency today,” said Mr Malik.

So, what does industry expect from MBAs?
Closing his address, Mr. Malik offered comments on how B-schools can prepare their MBA students for the new world of work.

“In such a dynamic environment, MBA students should have a lot of curiosity and a strong desire to learn,” said Mr Malik. Analysis, synthesis and collaborative work is key for MBAs to excel in their roles and functions. He also added that MBA schools should emphasise on building strong communication skills in MBA graduates.

Mr Malik further added that there is no shortcut to success and hard work is key. Mr Malik is indeed a role model for MBAs who aspire to rise in corporate world. He completed his MBA from IIM Calcutta and joined ITC in 1989 from the campus. Prior to becoming the Divisional Chief Executive of the Foods Business Division in October 2016, Mr Malik was the Chief Executive of the Trade Marketing & Distribution ('TM&D') Vertical from April 2016. Earlier, in 2002, he assumed charge as the Head of Marketing of the then nascent Foods Business, where he was instrumental in the launch and development of mega food brands of ITC including 'Aashirvaad', 'Sunfeast', 'Bingo!', 'YiPPee!' and 'Kitchens of India'.

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