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When Rishabh Mariwala (33) chose to start his own venture of handcrafted designer soaps about two and a half years ago, it could have gone unnoticed as another start-up from an aspiring entrepreneur. But his firm, Soap Opera N More, created ripples, as the son of Harsh Mariwala (63) opted out of a role in the family's flagship business, Marico Industries, valued at Rs 13,500 crore.
He had spent three years developing the company's beauty salon service arm, Kaya Skin Clinic, and left at a time when Marico's founder, Harsh, was chalking out a succession plan. Rishabh's move mirrored that of his elder sister, Rajvi (34), who opted out of the company's brand-building team to focus on sociological research.
Harsh Mariwala famously declared that Marico was not a "lala" company, suggesting family members were not automatically entitled to succession. On Tuesday, the founder of Marico stepped down as managing director. Saugata Gupta, the professional chief executive officer, was made managing director.
"This announcement reflects the next phase of Marico's growth journey," said Harsh Mariwala, non-committal about an active role for his children in the company in the near future.
The Mariwala family has about 60 per cent holding in the company that reported Rs 405 crore net profit on sales of Rs 4,598 crore in 2012-13.
Saugata had joined 10 years ago as head of marketing and moved up the ranks of Marico, popular for edible oil brand Saffola and hair oil brand Parachute.
Rishabh and Rajvi's cases are rare in India's family-run businesses where the second generation is often groomed for leadership positions in executive roles.
Bajaj family patriarch Rahul Bajaj's son, Rajiv, is such a success story. He took a leadership position at Bajaj Auto after gaining experience at junior levels. Billionaire Adi Godrej's children, Nisaba and Tanya, also took executive roles in The Godrej Group. There are also examples of the second generation choosing to gain experience outside the company and returning to take charge. Rishad, son of Azim Premji, worked with GE Capital and Bain & Company before joining Wipro, the information technology firm founded by his father.
"Such examples of succession are rare. But a company of the size of Marico cannot be handed over to a young turk," says R Suresh, managing director at international executive search firm Stanton Chase, which specialises in leadership roles for large firms. "It may ultimately prove to be killing two birds with one stone, as pursuing an entrepreneurial role can bring invaluable learning, along with a new line of business." The option of returning to the family business is still open to the Mariwala children, he adds.
The Mariwala family members were not available for comments.
THE MARIWALA WAY
RISHABH (33)
* 2008 Joined Kaya as operations manager
* 2011 Quit Kaya to set up Soap Opera N More
RAJVI (34)
* 2007 Joined Marico's brand-building team
* 2009 Quit Marico to pursue her interest in sociological research
