Gopalan Natarajan, Global Head: GBS, PMI
In this three-part series, Atul Vashistha, Chairman, Neo Group speaks to Gopalan Natarajan (GN), who is the Global Head of GBS at Philip Morris International. GN shares what his plan for GBS at PMI, their priorities, challenges and the way ahead. GN has some sound advice for young professionals aspiring to make it big as he also shares what he likes to do with his work week.
Sourcing Guru: Expert Wisdom- Gopalan Natarajan (GN) on GBS in 2025 | Ep 6.B
Sourcing Guru: Career Advice- Gopalan Natarajan (GN) on learning from conversations | Ep 6.C
Hi, everyone. Welcome to an episode of Sourcing that Guru. I’m delighted to have with us today, the Global Head of GBS at PMI, Gopalan Natarajan that we also call GN. GN welcome.
Thank you so much Atul, it’s a pleasure to be here.
Thank you. So GN, one of the things I always like to start with is, how did your career in GBS start? But before we get there, let’s tell the audience a little bit about your current role as the Global Head of GBS at PMI.
Thank you Atul. Let me start by first of all, saying when I joined PMI two years ago, before that I was with Unilever for over 25 years, the mandate that I got was to really create a state of the art GBS for PMI that is truly multifunctional and can be a partner to the enterprise. That is what I am right now on, a very exciting journey over the last couple of years and I’m really looking forward to the next few as well. As we speak, I have just now designed a 2025 vision for what GBS can and should look like for Philip Morris. Very excited about that as well as I take it to multiple stakeholders and to my teams across the world.
Well GN that’s really good to hear where the founding of GBS is talked about as partnering with the business and not just this driver of cost, though. Really good to hear and love to know more about your 2025 as we go through this session.
So GN often when I’m talking to GBS leaders, they come from very different backgrounds in terms of the journey that led them to become the head of GBS. It sounds like you did have some of that at Unilever, but take us a little bit further back at the start of your career and how you got to this point?
That’s a great question. Interestingly, I am not one of those guys who have spent years and years in GBS and who have come in with a deep knowledge of the GBS industry, on the contrary. Actually my career, most of the time has been spread across finance, supply chain and for a brief period, I headed up a business way back in India. I started my journey in India. I was there for around 10 to 12 years before I moved to Singapore where I was there for 10 years in various transformational roles, spanning supply chain and finance. Then when I moved to the UK with Unilever, I joined the GBS team towards the fag end of my career with Unilever. That’s where I really got into the GBS thing.
But before that, earlier on in my career, as I said, I was in supply chain and I used to do procurement and hence I had always a passion for working with external partners and bringing in a very different perspective into the way we do things. That has helped me a lot when I moved into the GBS space a few years ago. At Unilever, I was involved in a very interesting transformation of the GBS there, which had evolved in a certain way, over a period of time and we had to make certain changes in its life cycle. So yes, it’s a very varied journey for me, a lot outside GBS but in my view, the experience in business is very critical, I believe for one to succeed in GBS.
I think it’s a great point GN, which is the experience in business and having this wide deep experience from supply chain to other areas that you had.
GN let’s talk about some of the biggest challenges, some of the biggest issues that you see in today’s environment that you are either addressing as GBS or you’re looking to solve as part of your journey to 2025.
So let me say that for GBS in 2025 to be successful, the first calling card has to be, how do you enable growth of the enterprise? Because historically GBS has been seen as an efficiency driver. You move people from an expensive location into a less expensive location, and get some labor arbitrage. And maybe if you have the appetite, do a few robotics and get some efficiencies. But that is the old GBS. It moved into a more cross-functional and product-based organization.
For me, the future is about how can GBS drive, enable growth? That’s why I love to believe that GBS can be a co-pilot to the enterprise in this initiative, in this endeavor. Now, do I, for a moment, think that GBS will not drive cost efficiencies? No. On that the hand, I firmly believe that cost efficiency is the bread and butter for GBS.
To excel in the future is in how can we enable revenue and work more with our marketing and consumer and customer colleagues in that endeavor? As I look forward to that kind of a journey, what becomes important is the talent and the culture that you build in the organization. A culture where everyone in the GBS space is trying to understand our end consumer, our end customer, that is how you can become a true co-pilot. You can’t become a co-pilot to the enterprise unless you fully and deeply understand the business that you’re engaged in, the customers that you are working with, the consumers that you’re trying to satisfy.
So GN, on that aspect as a co-pilot, the one thing we’re seeing very clearly, it’s of course COVID was a big surprise, big change, but the reality is even since then, what you’re seeing is this significant supply chain issue, shortages, talent issues. And I think it’s becoming the new normal of this rapid change. How does GBS in your opinion, could and does respond to both rapid change and also creating this organization that can respond to all these fluctuations that we are constantly seeing in the market?
Absolutely. That’s a great question. And to me, one of the challenges that we need to acknowledge, and we haven’t yet come out of the pandemic at all, we are still handling the tail-end, and hopefully it’ll ease out into the next year. But as we come out of the pandemic, as we come into the new normal, the supply chain shortages, the hybrid workplace, what is the right norm of working? Everything is being questioned.
And I’ve even seen situations where people are saying and turning around and say, “Look, I don’t want to relocate. I don’t want to be in an office, allow me to work from home.” So the whole expectation of people is changing, and therefore it’s incumbent upon organizations and hence GBS to do two things. One, we have to introduce extreme agility in the way we form teams and how we work.
Interestingly, I had a discussion this morning with my team around this aspect of how do we promote agile squads? Squads here people can play total football. A concept that was popularized by the Dutch football team in the ’70s, that anyone can play any role, literally, almost. That is the kind of agility we need in the organization today and in the near future.
The second aspect is the business priorities itself are changing. The consumer is becoming more digitally savvy. I think what the pandemic has achieved in terms of forcing a digital way of working and digital way of consuming is incredible. What might have taken a few years in certain industries is happening literally overnight in these times.
And therefore we have to recognize the new digital phase of the consumer, the customer, and hence the priorities of GBS in the new environment become very different to what it was earlier. We have to increasingly, and even more accelerate our focus around how we become digitally savvy while at the same time, making sure that we have a very agile culture in our organization.
So GN, it’s a great way to put it, right? Responding to the changing environment by having agility on your side. Talk to us a little bit about what does that mean for your talent strategy?
Three things in my view, and this is a topic that I’m very passionate about. One is I firmly believe in 2025, 30% to 40% of the roles do not exist today. What that means is don’t go out there and hire for experience. Been there done that is a very nice thing to have in the past, but now you have to constantly look for new skillsets that are coming in and think, retrofit in your mind, where can I use this skillset?
I recently hired a couple of people in our new vertical within GBS, it’s the customer and consumer solutions. And the profiles are very different to traditional GBS. Here, we are trying to hire somebody with expertise in social media management, digital media management. Now at times I’m going and encouraging people to look for skills, look for talent that you may not know where to fit into your traditional organization structure. But my advice is, go and have the conversation with them, hire them because then you get those skillsets in and you have to in an agile fashion, think of how you organize yourself to fully unleash those skills.
So one is this looking out for talent and skillsets rather than looking for experience is one aspect of the talent strategy. The second aspect of the talent strategy is how do you create a highly learning organization starting with the leadership being included? How do you constantly learn and pick up new things, new aspects of leadership and of digital, of various aspects and bring that into the organization? And it has to be top down as well as bottom up, and learning organization is a must because as you bring talent from outside, people internally will start feeling, “Okay, what, where do I skill up? How do I become fit for the future?”
So one of the things that happened when I unveiled the vision for 2025, a couple of months back in my organization, and I had town halls with the team and face-to-face town halls, by the way, for the first time after almost 18 months, the questions that came to me were actually around, this is great, but this is making me nervous. And I asked why? “Because I don’t know whether I am skilled for this future that you are describing. What do I do to become skilled?” I said, “Great, thanks for that question because to me that nervousness is a sign that you want to learn. You want to become fit for the future.”
And that is the big thing that we need for the learning organization and equipping our internal talent to become more skilled for the future. So one is getting external talent in of a very different kind. And the second is to prep our internal talent and skill them up and up-skill them and make them uncomfortable where they are. And the third is how do you organize the structure itself?
Go for flatter organization structures. Gone are the days when you need a span of control of five, six, seven. Why not 15? Why not more than that? Because you need to have empowered organizations, empowered leaders who you deal with on a very high level vision, and then let them get on with it. So in my structure, when I came in, I had six people reporting to me two years back. At one point in time in 2020, it went up to 24 and then I realized that was a bit much. I then optimized it back to the high double digits, but I am willing look at and experiment with different structures, and I firmly believe the organization structure has to become fluid, flatter and very agile.
GN, it’s so refreshing to hear from you, you said 30%, 35%, 40% of the jobs in the future are not yet defined, right? There’s going to be new skillset required. Too often people start with, “Hey, 30, 40% of jobs that we have today will be eliminated,” but they don’t really have tried to imagine the future. So thank you for that.
One of the big impact in GBS we’re seeing is the impact of automation. Can you share your experiences with the audience in terms of what has led to success and what continues to be potentially challenges in wider and scale of this automation?
A very topical question, and my view on automation is don’t automate for automation’s sake. It is about end-to-end process outcome. What are we trying to deliver? And how do we deliver that? And before automation comes simplification. So in my transformation office, I now have brought together three… redesigned them, and actually in certain cases, don’t redesign, think for on a plane sheet of paper. If you had nothing, how would you design it?
So the zero based designing concept has to be brought in together with automation. To me, that’s the second leg of the trinity. And the third leg of the trinity is in fact data. Because you need very clean data and harmonized data, and a great mashed data on which you run the right process and then bring the automation, and then you can amplify the results of automation.
The second aspect of automation is the normal insecurity that comes in into people’s minds, “Okay, if I’m automating these jobs, what happens to me?” And that’s where… the point that you also made reflecting on my earlier answer around, think of the future, reimagine the future. And one of the things that I’m very passionate about is what I was told by one of my bosses many, many years ago. One of the jobs that you need to do is to make your job redundant. Because then, you can go on to the next level, the next aisle.
That is the way you need to think, rather than trying to say, “Okay, how do I protect my job?” And therefore, what do I do? Then your vision is inhibited, is limited. And therefore what I’m encouraging everyone to do is think of the next job, the next job, the next job, what you do next, then you’re less concerned when automation comes, because automation is going to come and you cannot get away from it. So those are some of the learnings. I have automation, not for automation’s sake, but really think together with process automation and data. And second is how do you equip the organization culturally for the next wave of automation that’s going to come inevitably?
GN, one of the things that clearly stands out for me talking to you is how on every one of these topics, you clearly recognize the role that culture and people play. So when I ask a question of automation to many people, they tell me all about the automation and what’s inhibiting it, but often the people aspect is removed other than the fact that people jobs are going to change. So thank you for clearly highlighting that.
So GN, another key change really, maybe a social cause at the same time, there’s a whole area of ESG and corporate social responsibility, social impact, but truly, let’s focus on GBS first. How do you see ESG either already or will impact GBS in its activities?
I think we are all very clear with the ongoing events in the world and the climate change that sustainability is not just a mandatory part, it’s almost everyone’s duty to contribute to sustainability. And one of the things that I am actually grappling with right now as part of the vision in GBS is how to establish a clearer link between what we do in GBS. And we have to bring all the elements of sustainability reporting, for example, and the work that we are doing around monitoring of metrics in the organization has to be run from GBS.
We have to bring the elements of a social responsibility within the context of GBS organization and what we can do for our societies in the places that operate in very squarely into our thinking. And especially so after COVID, we have to make it our mission to weave sustainability into our vision and what we do. And admittedly as I said, it is not a very metrizable of the vision. Some aspects are metrizable, but we have a job, we have a responsibility and we have to bring that in.
And interesting that you ask question, because yesterday when I was having a dinner with one of my friends from one of the big four firms, and is a retired partner, he said when he looked at my vision statement, “Can you establish an even closer link with sustainability?” And I immediately jumped on the thought, and that’s what I’m working on. So while it is yet a gray area, what I do recognize is that’s an area that I want us to work on as a leadership team.
So GN very clearly, as you think about ESG, you’re thinking about, what does that mean for GBS? What does that mean for the society that you are in? The one thing I would encourage you to also take a look at it, and it sounds like it’s on your program is, large organizations have an incredible ability to actually broaden that reach by also making sure their supply chain is actually adhering to that. So often when the enterprises look at themselves, they just look at themselves, and one of the things I’m trying to encourage is to make sure you’re also enabling your supply chain to follow similar set of principles.
Absolutely. And on that front, I have to say, you must have a look at our integrated report that we released earlier this year. I think we are making lot of strides on sustainability and the goals that we have set out for the next decade as an organization. I feel quite proud of working for Philip Morris, and it’s kind of continuing on the legacy that Unilever has left in the sustainability mission. So you’re absolutely spot on, I think we have a big job to do in our supply chains, and by supply chain, I’m really meaning right from crop to the consumer, so the entire value chain, I think we can impact in a very positive way.
So GN, staying on that topic and supply chain and suppliers. What role do suppliers play in GBS for you? And if they do, I’d love to hear about, what are the best ones doing right that makes them great partners?
In my vision for 2025, I would see ecosystem in GBS. And for me, that ecosystem is you have a few partners that are taking on certain types of activities and doing them very well, and where they can bring their skill that they do across many organizations to what they do for us, and I see that as a big ecosystem.
The second part of the ecosystem is our own captive GBS organization that then supplements this partner ecosystem with a very clear understanding of the end-to-end process, and what it can deliver to our internal customers and consumers, and thinking in a very agile and innovative way in terms of how we can continuously redesign and zero base the design of these end-to-end processes, and then making sure that we are involving our partners in that innovation process. So it’s a co-innovation process.
And then we have the third layer in the ecosystem, which is what I would call a bunch of co-pilots within the GBS organization who are out there working with our marketing and commercial and finance, and supply chain colleagues to look at the future and co-innovate and co think of how the business is going to happen in the future.
So you have these three layers, and each of these three layers has an equally important role to play in the GBS organization. Co-pilots are continuously defining the future, the scope of what we will do, [inaudible 00:17:16] the possible, what role can GBS play right ’til the customer? The second layer is more then doing the engineering work, if I can call it that way, to structure the process and do the plumbing and everything, and then part of the ecosystem then takes on the delivery of repeatable activities and be part of the co-innovation process.
So that’s the way I can visualize that organization and how we will organize in the future, and I see suppliers or as I call them, partners, a very integral part of that ecosystem, and I would see them as co innovators.
So GN you very clearly have been talking about a number of areas that are important to ensuring GBS success and the future of GBS. In this journey when you think about all the way to 2025, are there areas that you are going to invest more in? And I think you’ve talked about some of them already like talent and others. And are there areas that you look to reduce your investment?
If you first talk about where I’m going to invest the maximum time, and I would, even at the cost of repeating, I would say, it will be on growth, it’ll be on people and on culture. I want the organization to be growth obsessed, revenue obsessed, because that is how you uplift the energy of the organization rather than going and telling them, “Look, let’s save a few headcounts there and save a few million dollars here and so on.”
To me that is bread and butter, I want the organization to really invest time behind understanding business customers, consumers, and growth. So growth and people and culture. And in fact, amongst these three, if I have to put something right at the top, it is culture. Because culture is something then that sustains the talent that is coming in from outside or from inside, because that is then how you do things here, that’s a definition of culture.
So we have to get culture right, and that is probably will take the biggest investment in time in the coming months. So part of the reason why I’m rebranding the organization, and I don’t know whether I mentioned earlier in the conversation today, but we are actually in the process of rebranding our GBS organization into a different name.
And part of the reason why we are bringing a different name and a different feel is to also launch a cultural initiative around it, a mindset initiative around it through a plethora of programs and interactions. And for me, that is really the key. It takes a year or two, or even more to really get the culture.
Talking about where I would invest less time is I would invest less time in doing repeatable activities and transactional activities and stuff like that, which is where I want to bring more automation and more partnerships so that our people are really focusing on where there is value. Value creation is at the heart of what we will do.
Culture, growth, people, and absolutely focused on value creation. Thank you for that GN.
So GN, one of the things the audience always loves to know about successful leaders is, what is it that they do that makes them successful? So maybe let’s start with what resources do you depend on or rely on to make yourself a better leader?
So, yes, the cliched answer is of course that I take various learning courses and I look at different materials. But I’ll tell you what I value the most. I value the most talking to people externally, and even internally that are from a different part of the business, because those conversations in a matter of minutes, give you a distillation of 20-plus or 30-plus or 10-plus years of experience of that individual if you have the right conversation, and I find that very illuminating.
And I go out of my way… and so one of the objectives that I have is I want to have 30% of my diary every week on external meetings. Meetings where I can talk to people from outside, and from different areas. And sometimes the conversations need not be around a particular topic where there is a negotiation to be done, or a partnership to be done, even a conversation without any particular agenda and talking and brainstorming some thoughts gives you huge learning that you get, and wisdom that you can get from talking to people.
And again, here, it doesn’t mean that it is always about talking to people who are experienced, it’s also talked to people who have just started their journey in the industry, because they bring a different perspective. They have a totally different approach to life. So you need to learn from all kinds of people and conversations help you do that.
So apart from the learning programs and of course doing new things in your work, it’s about meeting people and trying to gather wisdom from all around you. A 360 approach I would say, to having conversations with people is for me a big driver of new learnings.
That’s really helpful, GN. GN, for my final question, for a young professional starting out in GBS, what would your advice be for them so that they have a long successful career in GBS?
I would say three things, and I like the part of three, it’s easy to remember. Be always a learner, be bold. And by bold, you have to make mistakes for you to learn. [inaudible 00:02:44] you will not learn. If you are bold, you will learn and you will make a few mistakes, but you will have a great few successes, hopefully, which then make you a great person. So be bold. And the last thing is have fun. Life is not worth stressing yourself too much. Sometimes it’s just okay to chill out and to relax, and have fun while working, enjoy what you do.
GN, what great advice. There’s a great lesson of three here. Learn, be bold and have fun. Thank you so much for that, GN. Thank you for joining us today.
It was a pleasure, Atul, and thank you for having me on this.
In This Episode
Global Head of Integrated Business Services and Head of Finance Transformation
Philip Morris International
Gopalan Natarajan (GN) is a seasoned, high performing C-suite executive with a successful track record over 2 decades in country, regional and global roles. He has established path-breaking global capabilities, step-changed performance in complex businesses, created new revenue models and set up joint venture operations and mergers. His experiences pans Finance, Treasury, Tax, Accounting, Operations and Supply Chain. GN is an astute negotiator and a leader who builds relationships across functions and influences across cultures.
Atul Vashistha is recognized globally as a leading expert on globalization, governance, and risk. He has authored three best-selling books: The Offshore Nation, Globalization Wisdom and Outsourcing Wisdom. Atul pioneered the global sourcing advisory space in 1999 when he founded Neo Group which collaborates with Global 2000 enterprises, empowering them to build new capabilities and generate rapid savings by leveraging global talent, analytics and automation. Neo Group offers Global Sourcing Advisory, Data Governance, and Risk Management services. Atul serves on the boards of the US Department of Defense Business Board (Vice Chair), IAOP, Shared Assessments, and Zemoga.