Lapac and Rumea sound a bit like those ancient continents Gondwana and Laurea, which straddled the Earth before tectonic plates carved them into the world map we’re all familiar with.
Actually, the parallel is not so very far off the mark. Except, the carving of these new continental landmasses is being done, even as we speak, by Rakesh Kapoor, recently appointed chief executive of healthcare-to-household conglomerate Reckitt Benckiser.
This is part and parcel of his new vision of the commercial world, articulated as a kind of antidote to some not-overly-impressive full year figures which have been announced at the same time.
As Kapoor sees it the motor-force markets of North America and Europe will, at best, stagnate in the years to come, so he’s taken the radical step of downsizing them into a single operation, centered on Amsterdam, in order to cut costs.
At the same time emerging markets, where almost all RB’s future growth is expected to come from, have been recast with new and emphatic importance. Hence “Lapac”, or Latin America and Pacific countries; and “Rumea”, Russia, the Middle East and Africa.
These are no mere geographical expressions either; Kapoor intends to put RB’s money where his mouth is. At the moment, only half the company’s capital expenditure goes into these regions. By 2016 this will rise to 80%. And we can expect little less revolution in the way the marketing budget be allocated: the bias towards emerging markets will shift from 44% to 55% over the same period.
It can hardly have escaped notice that a strategic realignment of this kind was implicit in Kapoor’s appointment as CEO in the first place. He is the first Indian to lead RB’s stalwartly Caucasian board. As such, he is part of a growing trend in multinational companies: the displacement of WASP leadership.
Look around you and you will see Coca-Cola and Pepsi rearming for an all-too-traditional cola war, with greatly increased marketing budgets. But one corporation is now led by a Turkish-American Muslim, Muhtar Kent, and the other by Indian-born Indra Nooyi. They’re not there by historical coincidence. A lot of that money will be spent over the next 4 years encouraging people in emerging markets to drink cola; rather than simply refreshing the palates of jaded North Americans.
We might note the same trend at Citigroup, whose chief executive is Vikram Pandit, and Deutsche Bank, which has picked Anshu Jain as its new co-chief executive. Or even at that redoubtable WASP establishment Harvard Business School, whose dean of two years is Nitin Nohria.
The big surprise is that Unilever did not take this route when appointing a successor to Patrick Cescau, instead plumping for a Dutch outsider with a P&G and Nestlé pedigree, Paul Polman. Maybe appointing a non-European would have been too far ahead of the curve in early 2009.
That said, the two most promising internal candidates for the CEO job, Harish Manwani and Vindi Banga, were – as their names clearly indicate – both Indian. If Polman decides to move on, I’ll wager that the next Unilever CEO will be Indian.
Posted by stuartsmithsblog 
