6 The Sunday Times May 1, 2022
BUSINESS
US, baby formula sales have surged amid
a product recall by rival Abbott Nutrition.
It has not all been plain sailing, though.
After the invasion of Ukraine, Reckitt was
criticised for being too slow to ditch its
operations in Russia. He can say little
about the situation for security reasons,
although he is seeking to transfer the Rus-
sian operations to a third party or its
1,300 staff. The decision contrasts to that
of Unilever, which continues to sell Mag-
num ice creams and other brands there.
In the past three years, Narasimhan
says, he has not had “one day that’s nor-
mal”. Just six months after he moved
from New York to take on the top role at
Reckitt, the pandemic broke out. Naras-
imhan was stuck in London, where he
has non-domiciled status; his wife and
two children had to remain in the US.
He spent lockdown in his rented home
in St John’s Wood, northwest London,
caring for his 82-year-old mother, Bhana,
who has lived with him for the past 20
years. He remembers pausing Zoom calls
with his chairman to answer the door to
delivery men. There was also personal
sadness: Narasimhan did not see his
25-year-old daughter, who lives in New
York, for 20 months. He was also forced
to manage remotely a global company
with 43,000 employees and £13.2 billion
of annual sales. “It is very humbling, as a
leader, to go through that.”N
arasimhan has a ready smile and
speaks in an accent that is a mix-
ture of Indian and American with
the confidence and ease that you
would expect of a globetrotting
chief executive. But his upbringing in
Pune, India, is far from typical. Ask him
what his childhood was like and he has
one word: “Tough.”
His older sister died before he was
born and his brother was in and out of
hospital with kidney infections before
he, too, died at the age of eight. Narasim-
han was six. His parents never spoke of
his sister, but were “broken” after the
death of two children.
Narasimhans’s father established a
machine services business, supplying
parts to the US. But it went through pre-
carious times. His father ploughed all the
family’s money into the start-up, hoping
his son would take it over. “I didn’t have
the heart to break it to him that I found
the business quite boring,” recalls Naras-
imhan. When his father fell ill, the family
doctor encouraged Narasimhan to drop
out of university to help, but his mother
insisted he finish his education. He spent
his college days regularly travelling home
to care for his father, while his mother
worked as a teacher to make ends meet.
Narasimhan says growing up in India,
“you learn resilience, you learn toler-
ance, you learn to find a way through”.
He still managed to graduate and
began applying to American universities,
securing a place at Pennsylvania. “I
arrived in America with $7,700 and two
suitcases,” he says. “The fees were
$80,000 — I didn’t know how to go from
one to the other.” A collection of scholar-Laxman Narasimhan is drawing
on his extraordinary upbringing to
turn around Dettol maker Reckitt
Growing
up in India
you learn
resilience
ships and two jobs allowed him to gradu-
ate in the top 5 per cent of his class.
After college, Narasimhan joined the
management consultancy McKinsey,
where he spent 19 years travelling the
world. He and his wife, Vidhya, have lived
in 25 different homes in 29 years, includ-
ing in Latin America and India. In 2012,
he was hired by PepsiCo’s then-chief
executive, Indra Nooyi, and worked his
way up to chief commercial officer
Sir George Buckley, chairman of engi-
neer Smiths Group, was on the board of
PepsiCo at the time. He recalls how Nar-
asimhan was disappointed to miss out on
the top job there to Ramon Laguarta,
who replaced Nooyi in 2018 — and began
looking around for a role elsewhere. “He
behaved in a very professional way, but of
course, it was his dream,” says Buckley.
Narasimhan, he adds, threw himself into
each role — insisting on learning Spanish
when he led PepsiCo’s Latin American
business. “He’s like the energiser bunny
that needs two batteries in, but Laxman
manages to fit three,” Buckley says.
When he arrived at Reckitt, Narasim-
han says he found a company that had
“taken its eye off the ball”. It had missed
targets for 13 out of the 14 quarters, and
the shares had languished. Investors
were choking on the Mead Johnson deal,
and Reckitt had apologised in 2016 for
dozens of deaths caused by faulty humid-
ifier disinfectant sold in South Korea. It
had also reached a $1.4 billion settlement
over Indivior’s past marketing of Subox-
one, an opioid addiction treatment (Indi-
vior had been spun out of Reckitt in 2014).
Kapoor had been focused on cost-cut-
ting, and once said: “You need to really
starve people to get the best ideas.”
Narasimhan has ploughed investment
back into supply chains and R&D, while
spending time with big customers such as
Walmart, many of which had felt the face-
less RB was not as attentive to them as it
had been in recent years. He also per-
formed a screeching U-turn on plans to
separate the business into hygiene and
health divisions, a project named RB 2.0.
“It was staring us in the face that hygiene
really was the foundation,” he says. “And
we were trying to split it in two, Lysol inone business and Dettol in the other,
when they are basically the same thing.”
He gives his neck a nervous scratch
when probed on the Mead Johnson deal.
“I’m going to look ahead, if that’s alright
with you,” he says.
After improving relations with retail-
ers and investing more in new products —
including a tightly-fitting Durex condom
specifically for the Chinese market — Nar-
asimhan now has a fresh set of challen-
ges. The soaring price of raw materials
and supply chain problems have seen
costs rocket. Nestlé increased prices by
5.2 per cent in the first three months of
this year, and on Thursday, Unilever said
its had risen 8 per cent. So far at Reckitt,
customers are still buying products at
higher prices, up 5.3 per cent. “We don’t
really have an option because costs are
going up,” Narasimhan says.
Other pressures are coming from
rivals. Glaxo Smith Kline is spinning off its
consumer healthcare arm as Haleon,
which will be gunning for market share,
and has ambitious growth plans. Johnson
& Johnson is doing something similar.
Narasimhan believes he has the antidote
to the activists targeting his rivals (Glaxo
is under pressure from Elliott Manage-
ment, while Unilever is being stalked by
Trian). “I’m the activist myself,” he says.
So far, Narasimhan’s bullish outlook is
yet to be fully reflected in the share price,
which remains 2.5 per cent below where
they were when he took over at £62.40,
valuing the company at £44.4 billion.
However, he says now the “heavy lifting is
done” Reckitt will see the “rewards for the
work”. Thankfully for Narasimhan, that
heavy lifting did not involve a broken arm.I arrived in
America with
$7,700 and two
suitcases — but
my college fees
were $80,000
The boss of the hygiene giant arrived in post six months before the pandemic. No one day has been “normal” in that timeTHE LIFE OF
LAXMAN
NARASIMHAN
VITAL STATISTICS
Born: April 15, 1967
Status: married to Vidhya.
The couple have two
children — a daughter, 25,
and a son, 18
School: Loyola, Pune;
St Xavier’s, Mumbai;
St Vincent’s, Pune
University: Pune (BA);
Pennsylvania (master’s,
German and international
studies); the Wharton
School (finance, marketing)
First job: Father’s
manufacturing
start-up in India
Salary: £6 million,
including bonus
and share options
Home: St John’s
Wood, northwest
London
Car: noneFavourite book:
Wherever You Go, There
You Are by Jon Kabat-Zinn
Drink: double espresso,
macchiato and Pepsi Max
Film: Amadeus by
Milos Forman
Music: Stormzy
Gadget: Miele
coffee machine
Watch: none
Charity: various children’s
charities in India
Last holiday: IcelandWORKING DAY
The chief executive of
Reckitt wakes at 5am to
meditate and exercise,
ready to begin work at
7am. He started
meditating after his four-
year-old son was injured
by a drunk driver. He is
usually finished with work
by about 7pm, when he
spends an hour with his
family before logging on to
emails again at 8pm.DOWNTIME
Laxman Narasimhan, 55,
enjoys long walks, reading
and writing poetry, stand-up
comedy and sports. After
injuring his arm last year, he
was able to take up tennis
again at Christmas.Soundtracked by
Stormzy, the Reckitt
boss enjoys holidays
in Iceland, Jon
Kabat-Zinn’s books
and Miele coffeeI
t is hard to imagine a worse way for
a chief executive to prepare for a
gruelling day of investor presenta-
tions. The night before he was due
to announce a potential multibil-
lion-dollar sale of Reckitt’s Chinese
baby formula business, Laxman
Narasimhan fell down the stairs at
his London home. It left him with
two broken bones in his elbow and
a dislocated shoulder, requiring a dash to
hospital. “The doctor said it looked like
I’d been in a car crash,” he recalls.
Arriving home at 6am after an emer-
gency operation in the small hours, Nar-
isimhan had just enough time to lie down
on the sofa before starting nearly four
hours of back-to-back presentations and
Q&As with staff, investors and the media.
Most bosses would perhaps have left
the bulk of it to a lieutenant or two. But
Narasimhan, still quite new in the job,
refused — even eschewing painkillers for
fear of brain-fog. “Investors and staff
needed to hear from me.”
One year on, and thanks to a partial
replacement of his elbow joint, Narisim-
han, 55, has “80 per cent” of the move-
ment back in his right arm. After years of
struggle, Reckitt is also on the mend.
We meet in a boardroom close to Char-
ing Cross in central London as the FTSE
100 seller of Dettol antiseptic and Durex
condoms prepares to announce a set of
forecast-busting results that saw sales
grow 5.6 per cent in the first three
months of this year on 0.3 per cent vol-
ume growth.
Narasimhan is making progress in
unwinding the fall-out from Reckitt’s big-
gest-ever takeover. In one of corporate
Britain’s most disastrous deals, his prede-
cessor, Rakesh Kapoor, blew $16.6 billion
(£13.2 billion) in 2017 buying Mead John-
son, a collection of infant nutrition prod-
ucts. Even at the time, it looked foolish,
with Chinese demand at risk from a fall-
ing birth rate and Reckitt — or “RB” as it
was blandly known then — having no
experience in baby milk markets.
Narasimhan wrote down £8 billion
from the value of the deal, and last week
it emerged that the business was attract-
ing takeover interest from a string of pri-
vate equity firms including CVC, Black-
stone and KKR. He says he “can’t really
comment on speculation” but is “heart-
ened” by the turnaround of the division.
After three years spent dismantling
Kapoor’s strategy, Narasimhan is feeling
bullish. A pandemic-induced cleaning
boom has helped Reckitt’s hygiene busi-
ness, once tipped for a spin-off, emerge
as a star performer; a global surge in
colds and flu over the post-lockdown win-
ter has boosted demand for its Nurofen,
Strepsils and Mucinex brands; and in theSABAH
MEDDINGS
AND JIM
ARMITAGE