In 2021, Tilaknagar Industries’(TI) Mansion House brandy became the country’s biggest brandy brand by volume. This is a remarkable turn in fortunes for a company that went through acute financial stress from 2015 to 2020. Two years later, the company reported its highest-ever quarterly profit in December 2022 and aims to be net debt-free by FY24.
How did Chairman and Managing Director Amit Dahanukar manage to kindle the animal spirits of the company? Can cultural transformation in a company lead to a turnaround?
In a free-flowing conversation, Dahanukar explains how the company retuned its human resources policies to attract young talent, paving the way for eventual profitability.
For starters, there are several moving pieces for the company. However, it has made a conscious effort to shake off its conservative image and seek to attract younger talent by transforming its HR policies and corporate culture.
In the last two years, the company has attracted several leaders for senior roles, brought a tinge of diversity, and is taking big steps to do away with the typical 9-to-5 work style—all of which were millstones of the old guard.
“The new initiatives have impacted our employer branding in a positive way. We are receiving more direct applications via email, where candidates show interest and enquire about any suitable opportunities at TI. We have also seen a spike in referrals for respective positions as well,” says Dahanukar.
From defence to offence
The company has been looking at lateral hiring to get fresh talent from outside the industry for the last two years. This is to sidestep the risk-averse attitude of its current employees.
Bringing in an analogy from cricket, Dahanukar says due to past issues, the company got ‘defensive’ players. The defensive organisational DNA meant it was difficult for people to play on the front foot or coming out of the crease.
“We have to get new players, new talent, and those hard-hitting batsmen so that the organisation can also take risks,” he says.
As several of the company’s old guards retired to the pavilion, it roped in a new CFO, a new person in charge of all-India trade marketing, a company secretary, and a person to look after the production team. Most recently, it has hired a CMO and president for governance and compliance.
“We have also got a new HR (head). The HR is partially driven by the role and largely driven by leadership, so I am also playing an active role over there,” he added.
Getting in some more marketing talent would be next on his list.
I don’t like the system where people are punching in their attendance or keeping a track of their attendance. We need to recruit people who are smart, responsible, driven and require minimum supervision. I would rather focus on getting the right people into the organisation than spend resources on tracking how much time they are putting in and how much vacation they are taking
Dahanukar understands that a big cultural shift can only happen if the leadership is sold to the idea and he is trying to drive it right from the corner room, literally. He has decided to shrink his own office space as he is going to spend two-thirds of a month outside the workplace. The CEO’s office will become a flexi room to be used for meetings. The firm is also working towards unveiling an open-door policy.
Constrained by cost controls, the company is not making any major capital allocation to hire people but playing it smartly with office ergonomics, getting new faces, more flexible HR policies and making the organisation more technically enabled – both in product and in processes.
Talent retention and attraction policies at Tilaknagar Industries
Currently, the company has over 300 employees. The company faced an employee turnover of 7-10% each year in the last two years, while the number of retirees ranged from 1.5% to 3% each year in the same period.
However, cultural transformation is a work in progress. It takes time to make any significant changes to corporate culture.
Dahanukar says he focused on deliverability and not on how one gets it done. “So, in terms of goals, targets, accomplishments, I wanted to empower them in terms of being more task-oriented rather than being rigid about what time they come to the office, what time they leave and how they dress,” he says.
The company, thus, is gradually also moving towards flexi-timing and the firm hopes it would make it slightly easier for women to return to work. This is not only for the existing employees but also to attract top-end talent.
“Our head of legal and company secretary are women. But there are a few gaps. In sales function, particularly in liquor sales, we haven’t really seen women leadership. This is because historically it has not been encouraged to have a woman in a liquor shop or retail shop and liquor sale. In production, early on we didn’t have too many women in factories but we are making a conscious effort in terms of getting women vendors,” says Dahanukar.
Diversity has been a conscious HR strategy at the firm. Over the past few years, its Shrirampur bottling plant has consistently driven gender diversity. Now, women account for almost half the workers. These women employees at the unit are locals who stay in villages and towns near the bottling plant and are keen to earn a livelihood.
So, did the company change the talent acquisition process?
The hiring strategy is well ingrained starting with the application/sourcing of CVs, screening as per job requirements, and three to four rounds of interviews and assessments leading up to selection.
Being an alcoholic-beverage manufacturing company, most of Tilaknagar’s sourcing is for sales, marketing, production and operations disciplines. The skillsets it typically seeks include technical proficiency, communication, problem-solving and analytical skills, collaboration skills, initiative and enterprise.
“Our hiring channel consists of leading recruiting portals like LinkedIn, Naukri.com, to name a few. Some positions are also closed via recruitment consultants,” says Dahanukar.
On top of that, TI does offer some good benefits to its employees apart from their regular annual packages. One of the benefits that stand out is its employee stock option plan (ESOPs) under which all the employees, including factory workers, are granted company shares at a discounted price. Such a programme directly rewards employees as the market price of TI’s share increases, which is linked to the company’s performance.
The company’s culture today is different from what it was two years ago but it has a long way to go.
“I don’t like the system where people are punching in their attendance or keeping a track of their attendance. We need to recruit people who are smart, responsible, driven and require minimum supervision. I would rather focus on getting the right people into the organisation rather than spending resources on tracking how much time they are putting in and how much vacation they are taking,” says the chairman.
While the approach to work, vacation, leave, and dress code are changing, the larger issues revolve around compensation. For four-five years, the firm did not have a variable pay structure. It now faces questions of how it can assess people’s productivity and their output along with their individual goals, departmental goals and organisation goals.
“I don’t want to get into the mode where we are monitoring how many leaves a person is taking during a year. My costs will certainly go up 25% if I relax the vacation policy or travel reimbursement, do not check people’s bills and let them do it on a declaration basis, something we haven’t done yet. But this is something which I am trying”
Due to the COVID-19 pandemic, the work culture and environment have also evolved over the past two years. Tilaknagar does have HR automation projects in the pipeline and plans to invest on human resource management systems and automation of most HR processes over the next three to four quarters.
“At present, our prime focus is to make the work culture at TI more flexible, employee-friendly and modern regardless of the cost implications,” says Dahanukar.
As part of its flexible work culture, it allows employees at its head office in Mumbai to work from home on working Saturdays. They can opt for work-from-home on other days, too.
Previously, the firm had a dress code like most organisations with Fridays meant for casual attire. Since last April, everything has changed to all-day casuals.
The company is now working on the vacation policy as it wants to move to a system of ‘unlimited vacation’.
“I don’t want to get into the mode where we are monitoring how many leaves a person is taking during a year. My costs will certainly go up 25% if I relax the vacation policy or travel reimbursement, do not check people’s bills and let them do it on a declaration basis, something we haven’t done yet. But this is something which I am trying,” says Dahanukar. He adds the anticipated rise in travel budget is a small cost to pay to give that flexibility to employees.
In terms of policies like leave and attendance, three years ago the firm had revised and updated its guidelines in sync with industry norms. Back then, it had introduced flexi-work timings at the head office with an aim to provide some flexibility to the employees and offer a better work-life balance. It had also discontinued the sandwich leave policy, allowing employees to take small vacations without losing out on a lot of leave entitlement.
One policy that the company rolled out in this fiscal year is a modified version of the attendance policy for the head office. This includes options like work from home/remote working, work from anywhere/workcations, and flexi timings without minimum clock-in hours
The company has also launched an initiative known as “CMD Hour” to provide a platform for employees to share their ideas with the management.
So, how much of Tilaknagar’s success can be attributed to people’s policies? Operationally, the company had the same units and continues to have the same brands. The macro-environment also helped both TI and its competitors. However, TI has outgrown the industry.
“We have grown at say 25%. The industry has grown by 6-7%. We have a larger share of the pie. We could attribute it to many things. I think we can certainly not leave out the cultural shift, which was instrumental in driving this [performance],” says Dahanukar. “Without it we would have not probably achieved what we did,” he signs off.
Year of Incorporation: 29th July 1933
Number of Employees: As of December 2022, the company has 309 employees and another 14 in its subsidiaries.
Founders: Mahadev L Dahanukar. Currently, the business is being managed by his great-grandson, Amit Dahanukar, present ‘Chairman & Managing Director’ of the Company.
Amit Dahanukar – Chairman & Managing Director
C R Ramesh – Whole Time Director
Ahmed Rahimtoola – Chief Marketing Officer
Abhinav Gupta – President – Finance
Manju Anand – President – Governance & Compliance
Tarun Behl – Vice President – Works
Daulat Kadam – Asst. Vice President – Works
S. Raghavan – Asst. Vice President – Production & Operations
Ameya Deshpande – President – Corporate Development & Strategy
Dipti Todkar – Company Secretary
Col. Bineet Walia (Retd.) – Sr. Vice President, Sales & Marketing
Ashutosh Sharma – Sr. Vice President
Business Line: Tilaknagar Industries Ltd. is one of the oldest and leading Indian-made Foreign Liquor (IMFL) companies of India involved in the manufacturing, distribution & sales of alcohol and alcohol-based products/beverages.
Workforce Growth: 323 as of December 2022 compared to 339 as of 1st April 2019.
Key HR Factor: Around 45% of workers employed in bottling operations in our mother unit in Shrirampur are Women. The company provides ESOP benefits to all employees starting from the lowest level of workmen to senior management staff.
Our children’s education reimbursement policy covers the education expenses (fees) of all our employees’ children. Education reimbursement for tuition fees is provided starting from Nursery to Post graduation (in India) for up to 2 children per employee subject to policy limits and caps.
We are in process of implementing HRMS for employees across all locations. The system will help us automate Employee Onboarding & Exit, Attendance, Leave, Employee Reimbursements, and Performance Management etc.
Key Investors: Madhusudan Kela through Lotus Family Trust; San Francisco-based Think Investments, who invested in TI in the month of December 2022.