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RB’s new boss Rakesh Kapoor changes his world – the world of global CEOs is changing already

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 know.

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 (pictured), 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, Pacific and Asian 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 per cent And we can expect little less revolution in the way the marketing budget be allocated: the bias towards emerging markets will shift from 44 per cent to 55 per cent 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 Coke is now led by a Turkish-American Muslim, Muhtar Kent, and Pepsi by Indian-born Indra Nooyi. They’re not there by historical coincidence. A lot of that money will be spent over the next four years encouraging people in emerging markets to drink cola; rather than coaxing the palettes 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 (left) 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.

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Anshu Jain citigroup coca-cola deutsche bank emerging markets Harvard Business School India Indra Nooyi lapac Muhtar Kent Nitin Nohria Paul Polman Pepsi Rakesh Kapoor Reckitt-Benckiser rumea Stuart Smith unilever Vikram Pandit wasp establishment

About Stuart Smith

Stuart Smith is one of the most incisive and knowledgeable commentators on global marketing. He was a long-time editor of Marketing Week during the period when it was the UK's leading marketing, media and advertising specialist publication. Visit Stuart Smith Blog.
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