Guest: Rahul Agarwal - Former CEO & MD, Lenovo India
Episode Summary:
What happens when you reach the pinnacle of corporate success—leading a global tech giant to the number one spot in a hyper-competitive market—and then decide to walk away with no Plan B?
In this episode of Chai & Chips, I sit down with Rahul Agarwal, the former CEO and MD of Lenovo India. Rahul is a leader who defies the conventional playbook. From running a global marketing hub out of Bangalore when no one thought it possible, to candidly admitting his preference for “detailing” over high-level management, Rahul’s journey is a masterclass in authenticity. He opens up about the “drug” of the semiconductor and tech industry, the brutal realities of Indian manufacturing, and the profound psychological shift of stripping away one’s title to rediscover life as “nobody.”
YouTube episode link:
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Key Insights & Takeaways
1. The Indian Consumer Paradox: “She Wants It All”
Rahul breaks down the unique psyche of the Indian consumer. Unlike other markets where you can compete on niche value propositions, winning in India requires delivering on five contradicting fronts simultaneously: a reliable brand, top-tier specifications, a great price, aggressive offers, and unbeatable after-sales service. Companies that fail to balance all five—focusing only on one or two—often struggle to scale in the region.
2. Reframing Micromanagement as “Detailing”
In a world that glorifies “big picture” leadership, Rahul offers a contrarian view. He argues that 80% of success is execution, which requires getting your hands dirty. He frankly addresses the criticism of being a “micromanager,” reframing it as “detailing.” A leader cannot rely solely on high-level strategy; success comes from double-clicking into the problems until the solution is found. If the results aren’t there, a leader has a moral obligation to intervene in the details.
3. The Courage to Choose the “Unsafe” Path
Throughout his 25-year career, Rahul consistently chose the path of most resistance. Whether it was moving from a comfortable marketing role to a high-pressure P&L sales role or eventually quitting corporate life entirely without a backup plan, his philosophy is rooted in the idea that comfort leads to stagnation. He believes one needs a radical change in perspective to truly evolve, even if it means facing the terrifying prospect of “doing nothing” after decades of high-intensity work.
4. Make in India: The Hard Truth About Manufacturing vs. Assembly
Rahul provides a sober assessment of India’s hardware ecosystem. He distinguishes between “assembly” (putting parts together) and true “manufacturing” (creating the components like HDDs, CPUs, and screens). He outlines four hurdles India must cross to become a global manufacturing hub: bridging the cost disadvantage against China, improving labor productivity, solving logistics/infrastructure bottlenecks, and genuinely improving the ease of doing business to reduce bureaucratic friction.
5. The Identity Crisis of the Corporate Leader
Perhaps the most poignant insight is Rahul’s reflection on life after the CEO role. He discusses the initial joy of “being nobody” followed by the existential restlessness of losing the corporate identity. He advises leaders to recognize that titles, power, and stature are temporary. True confidence comes from stripping those away and finding value in one’s own existence outside of a business card.
Connect with our Guest:
Rahul Agarwal on LinkedIn: https://www.linkedin.com/in/rahul-agarwal-1973476/
Rahul Agarwal on X: https://x.com/rahul610
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· Episode transcripts on Substack: https://www.prakashmallya.com/s/chai-and-chips-podcast
Episode transcripts on Medium: https://medium.com/@pmallya2411
Episode Transcript
Speakers:
Prakash Mallya (Host)
Rahul Agarwal (Guest)
Intro: [00:00:00 - 00:01:19]
Rahul Agarwal 00:04
Firstly, the Indian consumer, she wants it all, a good, reliable brand, a good product when it comes to technology, the top specs, great price, with offers an unbeatable after sales service. Think there’s a degree of philosophy that goes behind something like this, and one needs a radical change in one’s perspective about one’s life. Look, when I quit, I was overjoyed. So the first six months are actually fantastic. I just loved being nobody and doing nothing. Okay, still, quite a bit of my time is being nobody and hiding somewhere and doing nothing much. So I think for the whole family. Use the word ecosystem to really fire you need a few things. First and foremost is you cannot ask people to manufacture here if it costs more.
Prakash Mallya 01:19
Hi everyone. Welcome to Chai & Chips. We have with us somebody who, after 25 eventful years in the industry, gave everything up to build his second innings in life. And the last job that he did at that time was CEO and MD of Lenovo India, during which time, India region was the only region worldwide to be number one in both PCs and tablets. And he also, in 2017 won the coveted IIM Ahmedabad Young Achievers award, from an alumni point of view, so which was very, very special. And since then, he has been involved in a couple of startups. He has also had a few projects running in the background. And for the folks who don’t know him, right? And I know him professionally and personally for quite some time, I can tell you that he’s a big foodie. He has a fantastic sense of humor. He travels a lot, and most importantly, he’s a terrific human being. So welcome to the show. Rahul,
Rahul Agarwal 02:27
Thank you. Prakash, pleasure to be here with you.
Prakash Mallya 02:29
Yeah. So this has been a long time coming,
Rahul Agarwal 02:33
Yes, and I’m glad we are doing it today.
Prakash Mallya 02:35
Yeah, and we are also color coordinated, yeah.
Prakash Mallya 02:39
Yeah. We got the dress memo.
Prakash Mallya 02:44
So let me start with
Prakash Mallya 02:47
you rose up the ranks in Lenovo, right? You spent a long time there. And India is a very unique market, so especially from the consumer and commercial business point of view, you would have seen a lot or different customers, partners and business environments. So are there one or two moments or milestones which you think really kind of shaped your leadership style, or gave a gave you a view of the market?
Rahul Agarwal 03:20
So I can think of two such decisions that I made which were difficult, and therefore they shaped the rest of my career. So first was when I was running marketing for Lenovo India. Lenovo then was a Chinese brand, and competition was saying it’s a cheap Chinese brand. And, you know, people had a lot of questions, but we did a pretty good job of building the awareness, building some degree of image of the brand. And the worldwide loved it, and they wanted to replicate it. And the CMO, the global CMO, then he came to India, he liked what he saw, and he says, can you do it for the rest of the world?
Prakash Mallya 04:03
Oh, cool.
Rahul Agarwal 04:04
And I was stumped with that question, because nobody had thought of that. Nobody had imagined that, hey, you can run something globally in the area of marketing, from India and they came the idea of a global marketing hub out of Bangalore, and he asked me to run it. So that was, you know, kind of a difficult decision. While it sounded very charming and very glamorous, because it was a global role, but nobody had done it before, so it had all the pitfalls of anything pioneering, anything new. And I love to really do hardcore marketing demand generation, really meet consumers. And this was kind of going to be doing marketing for the rest of the world. So I think that was....I took the plunge. Honestly, I didn’t have a choice. He didn’t give me a choice. Took the plunge. And I think that experience really was something I would not trade for anything else Prakash, it taught me skills that I didn’t have, how to handle resistance to change, how to do change management.
Rahul Agarwal 05:23
It made me more sensitive to the different cultures
Rahul Agarwal 05:27
all over the world. For the first time, I had team members who were placed all over the world. So I think it made me much more rounded and gave me a very different view of marketing. We were doing marketing for 100 countries in 25 plus languages. So while it’s a global MNC, and it had the it had a global positioning, global messaging intended, but then how do you really satisfy the local needs while still staying on the global messaging. So I think it was, it was definitely very different experience from what I had done earlier, and it honestly gave me a global perspective for the first time.
Rahul Agarwal 06:14
Second was immediately after that.
Rahul Agarwal 06:19
I mean, I had done very well in marketing, both for India and globally. And marketing sometimes can be a little luxury role to do, wherein the performance metrics can have shades of gray, and once you are branded a star that positioning stays for a long time. It’s a very flattering positioning, and which is what I had. But then I got an opportunity to actually jump from hardcore marketing to hardcore business, running a P&L of a large half a billion-dollar organization, and I didn’t really have experience of running such a large organization. And then you know that there’ll be a scorecard every quarter. You know, not a hero anymore. You’re a hero this quarter, you could be zero next quarter. So, it required a lot of courage to jump into that role. Lot of my advisors told me, don’t do it. You’re in a good place. But then something within me said that that’s the real thing. Well, marketing is good and marketing is very important. But unless you do sales, unless you run a business, you run a P&L, you’ve not really done the real thing, so I jumped into it. And I think that really, again, shaped me to do different things, bigger things later in life.
Prakash Mallya 07:54
Okay, so you talked about that was the real thing, and hence you plunged into it, despite your mentors, some of your mentors, saying, don’t do it. What made you come to that conclusion?
Rahul Agarwal 08:11
No, so it was, there were two choices. One was a safe choice. Continue the path. You know, there was a path being made for me to probably be the global VP in marketing based out of the US. And the other part was uncut, was rough, unpredictable, and it required courage to do that. So I just said that I’m going to do the difficult thing, and I just bit the bullet.
Prakash Mallya 08:46
So are you built like that? You end up doing more difficult or take more difficult choices.
Rahul Agarwal 08:52
I do end up doing unconventional things. So, you know, I tend to get bored a little fast with things. So there are two choices. One is more adventurous, even though it may be a little more dangerous compared to the safe route I would always take the other one.
Prakash Mallya 09:07
Okay, interesting. So if you look at you did a lot for marketing first, and then you ran the business for Lenovo in India. And India is such a beast of a market, when you look at from a consumer point of view, very diverse needs, demanding consumers, and at the same time, it’s hungry for innovation all the time. And are there any things that stood out for you about the market, key learnings or insights that you feel the audience can take a lot from people who are building businesses like consumer businesses here.
Rahul Agarwal 09:43
I mean lots, but let me just maybe bring out a couple of them. Firstly, the Indian consumer. She wants it all. A good, reliable brand, a good product. When it comes to technology, the top specs, great price with offers, an unbeatable after sales service. So you know, while somebody can say, but why would any customer want anything else? That’s true, but Indian consumers are they want everything. They want the best brand, but other than maybe one or two iconic brands, they also want the best pricing. They also want the best specs. And not all organizations can get it all right, true. And if you see the organizations who’ve done very well in India are the ones who’ve got it all right. So for me at Lenovo, it was all about getting it as perfect as possible. Now the reality is that we were not the most aspirational brand then, at that time, and it takes a very, very long time, and it can maybe never become so we worked with that handicap. Our distribution traditionally was much weaker than our competition, our retail footprint, the retail experience that we were giving was not that great. So we worked a lot on everything, brought ourselves as close to the perfect mix as possible, and we did fairly well. And while doing all this, you also have to make money, because you have to hit certain price points, but you have to also make profits. So I think all in all, it was, it was a good learning experience wherein we were always looking at some mix, looking at new route to markets, looking at doing something innovative for the brand, expanding our distribution network. And there is no rocket science Prakash in doing business in India, it is basically just looking at the fundamentals. And these are the five things that I mentioned. Are the five things that you need. The difficult thing is that, as the top management, cannot have focus on more than two. Okay, so if you are able to get your focus to maybe four or three, then you have a better probability of doing a better job.
Prakash Mallya 12:25
So you talked about price point
Rahul Agarwal 12:29
after sale, service, brand, decent, brand, then route to market, route to market, distribution and the specs and the specs, and, of course, the quality goes with the brand.
Prakash Mallya 12:40
Okay. And from where you sit now, and you’ve experienced startups as well now, any brand that stand out for you, that do at least many of them, if not all very well.
Prakash Mallya 12:57
Tech or any other industry.
Rahul Agarwal 13:01
From a tech point of view, Xiaomi did it very well, till the time they did it. And of course, then they got into some rough weather, but which is why Xiaomi became so massive, so massive. I think Samsung does a good job. Samsung does a very good job. Sony has got many things going, right, but some things, they’re not as aggressive in their brand and marketing narratives. These are some very, very good brands, great. I think Boat. Boat was marketing brand, and it did very well. There’s nothing unique about their products.. You know, they all got it from China like anyone else, right? But they build their brand very well, yeah? And they build their distribution very well. So it’s basically the fundamentals, and very few people are able to get this right.
Prakash Mallya 13:54
And leadership is a big part of creating the fundamentals and consistently building on top of the boring stuff, which most people would try to argue, you need to different things at different points in time. So are there any things that shaped your leadership philosophy and gave you either your global exposure or the jobs that you did, a position that helped you really build high performance teams, because most of the large companies global MNCs, have different priorities globally. You have to marry that with the local priorities. You have to have different cultures represented and really feeling included or part of your journey. How do you do that? What philosophy did you follow?
Rahul Agarwal 14:42
So while I was at Lenovo, we didn’t really have a strong global culture like Intel. You know, you spent a lot of years in Intel, Intel had a very distinct culture.
Prakash Mallya 14:53
Yeah, that’s true.
Rahul Agarwal 14:55
And you would go to any country, and people would behave in a way that would at. Head to that culture. Lenovo was a young company, still a young company, and therefore the culture globally was still settling in. So part of the leadership journey was to set up a culture for India, which would be distinct, of course, not in conflict with the global culture, and that is something we co created with 50 of our managers. I think that set the tone for a lot of things.
Rahul Agarwal 15:34
To me, leadership is
Rahul Agarwal 15:39
it’s a fine balance between being able to connect with your leadership team so deeply so that they feel inspired by you, and at the same time holding them responsible accountable for results, because hardware in India or hardware anywhere is a very competitive market. There is no tolerance for any mess, right? So how do you balance the two? And it was challenging because people, including me, do not want to be challenged, or at least challenged in a certain way, so my style was more direct, and some people struggled with it. Some others love the authenticity, because I would do straight talk and not leave anybody guessing. So I would say leadership was a constant effort. At no point of time I felt that I’ve excelled it, that I’m a great leader, because you’re always getting feedback, some good feedback, some not so good feedback, and therefore you’re always listening to the feedback, trying to improve, trying to connect better, trying to build a high performance culture, but I think it is not something that I can really articulate it clearly.
Prakash Mallya 17:10
There is an art to it. There is a science to it. I completely agree to that. But are there any behaviors? Are there any habits that you have stayed true to in order to accomplish those things, something comes to mind.
Rahul Agarwal 17:25
I mean, when it comes to running a place, you know, strategy and planning as a place you can do 5% of the time, but 80% of success is execution, getting into the details, dirtying your hand, rolling up your sleeves. And there were times I would get accused of micromanagement, and when you get that feedback, then you don’t know what to do. How do you handle that feedback? Because you don’t want to be called a micromanager. You don’t want to be a micromanager, but the same time, if results are not coming, and you see that some people are not really getting into details, then you have to do it yourself. So I was heavily into execution. Whatever success we had, I would say, not because of very innovative strategy, or any breakthrough planning, or any brilliant genius people. We have always had the luck to be working with good people, but I think the success is because of the detailing that we would I would get into so that was pretty close to my heart. Whenever, even earlier, if I ran marketing, I would really get to the bottom of everything. Not believe whatever is presented. Keep doing, double click, double click, double click, double click, till everyone goes crazy. But that is what worked for me.
Prakash Mallya 19:02
Paying attention to detail, I have observed is a hallmark of a great manager. So you got to get to the details, and you can’t do it at a high level, frankly.
Rahul Agarwal 19:14
But a lot of people Prakash, don’t want to do it. It’s because it’s just plain hard work. And when you become a leader, sometimes you tend to feel entitled that I have an army of people to get into details, I will just forget the big picture and quite often, and there are enough examples, the slips happen just because nobody looked into the details.
Prakash Mallya 19:41
And the other part you mentioned also resonated with me, and would love your opinion on it. My observation is, if you’re looking for no micromanagement as a employee, right, if you’re a part of the team, you have to earn the right to be completely independent. You can’t be joining a team and without any past track record that your manager is comfortable, he or she is not going to give you the latitude unless they’re comfortable with your competence level. So if you’re frustrated as an employee that I get micromanaged, you have to actually look at it from a manager point of view also that maybe you have not done all that needs to be done to build that trust. I’m assuming manager is all well intentioned, is competent manager? Do you agree with that?
Rahul Agarwal 20:31
Yeah, see trust. I mean, trust is the fundamental factor behind this. Now there are, the fact is, there are some micro managers. There are some people who, I would say, have a disease of micromanaging, who cannot trust anyone perfect, right? So I, you know, I cannot judge myself, but I would say that for me, it was more case by case, that wherever people were doing the job, doing the detailing and performing, then you stay hands off, because those people will get demotivated if you touch them too much, right? But you know, it takes all kind of people to make the world and make a company. So there would be different people. I agree that trust has to be earned and therefore to be left alone and not managed not leave aside micromanaged also needs to be earned, and I saw that some of the best people perform best if they’re not managed, not even micromanaged, though they’re so self driven, and when they are managed, something unsettles them. So you got to find who, which individual, which leader needs, what kind of management. So you were asking about leadership style. I think the best style is to be customized, to have the to have the sense and the maturity to read the situation, read the person, and use the leadership strategy that is best for that person.
Prakash Mallya 22:16
And that takes time.
Rahul Agarwal 22:17
It takes time. And there is, you know, and there are maybe a million books on leadership. I didn’t read any, but, yeah, you learn that, hey, this thing, this thing is working for a, yeah, it’s, it just doesn’t work for B.
Prakash Mallya 22:32
And all comes with time and self awareness and observation.
Rahul Agarwal 22:36
And you have to be also aware.
Rahul Agarwal 22:41
And you have to keep watching yourself.
Prakash Mallya 22:44
Correct. So you had a fantastic career, and you were at peak of your powers, so to say, when you decided that this is it, and I’m going to give up my corporate life, this was July 2021, what made you come to that decision? Was it an Aha moment or a certain set of things that came together? Because many people think about it, but very few people actually end up doing it. So what made that decision happen for you?
Rahul Agarwal 23:11
Think there’s a degree of philosophy that goes behind something like this, and one needs a radical change in one’s perspective about one’s life. It doesn’t happen overnight. There is no Aha moment, and different people have different views to it. I did what worked for me. I enjoyed my career. I think I really enjoyed till the time I enjoyed and then I started feeling bored and repetitive. And even before that, I had planned to have a second innings of my life, because it’s very easy to go on you know, you’re walking on a on a certain path and just on a treadmill. So one has to be comfortable with uncertainty, comfortable with obscurity, comfortable with no titles, no power, no stature or less of it, and also no flow of money. So it requires a lot of planning. If I look at my Excel sheets, which I have shown it to my dear ones, always, when I was 36 or 37 I started building a plan that if I reach this point, then I will decide whether I want to continue or not. So it really, it’s, I think it’s a mix of long term factors your mindset at that point of time, short time, if I were enjoying if I were loving everything that I was doing, probably I would have continued. So I think it’s a mix of a lot of these things.
Rahul Agarwal 25:09
And for me, I’m somebody who tends to think, why am I doing what I’m doing? What is the meaning? Why am I in this meeting? Why are we having this conference call? Why are we having this review meeting? And the meaning in those activities started decimating over the last two years, and then I was also getting a little charmed by the startup world. So I said, if I have to take a plunge, then I have to do it now.
Prakash Mallya 25:46
A lot of it is similar.
Rahul Agarwal 25:53
Yeah I mean you, you should also talk about it, because you followed kind of my path couple of years later. So what went through your mind, and how was it different from what I went through?
Prakash Mallya 26:06
Yeah, in my case, a large part was family not being happy. Seattle, combination of weather that the timing of our move. We moved because we had done like five international moves, and all of them had gone great until that point when Seattle didn’t work. So that was a big reason why I decided and what you said repetitive and not learning enough. Though, the job was fantastic. I learned a ton in the last job that I did. It ended up being more of the same. So that was the reason why I chose to just quit with no plan B. And I also had startup ambitions, so I did couple of startups, participated in them for the last year. It was tremendous learning. But it also, like you said, there is no schedule. And in the first six months of my quitting, I had a hard time. It was very difficult to have no schedule, which I did not think it will be a problem when I was quitting, and it was not the case. I don’t know whether you went through the same just when you quit.
Rahul Agarwal 27:23
Look, when I quit, I was overjoyed. So the first six months were actually fantastic. I just loved being nobody and doing nothing. Still, quite a bit of my time is being nobody and hiding somewhere and doing nothing much. I enjoyed it, but yeah, at summertime, you know, we are all victims of our background, of our beliefs, so it does start knocking you sometimes. What are you doing? Was it too early? And there are people who will keep adding value to your life. So there are these moments, like my mind has 1000s of thoughts every day. So there are times one feels elated, feels very fulfilled, feels very peaceful, feels very blessed. And there are times when a degree of restlessness seeps in, and you got to quell it, because this is how the human mind is. If the human mind knows that you are happy, it will start creating problems. So you got to work at it. And if you go back to the time when you were working and I was working, it was actually similar. Was it all hunky dory? All the time? Was it all great? No, there are ugly times too. So, life is same. It’s all about choices, correct? And you got to see 80% of your life what you want it to be. 20% will be difficult. And there will be times and days when 80% will look ugly and repulsive, but that’s life. And over a period of time, you know, you get more and more comfortable with it.
Prakash Mallya 29:19
Agree. I think we are all conditioned by our environment, and that environment, most time, tells us to just keep going at 100 miles an hour, which sometimes works, sometimes doesn’t work, and it is very personal journey is what I would say, even for the audience who are listening, two of us did similar things in terms of quitting with no plan B, but at the same time, we had different, similar, but different journeys as well, mentally passing through that. Yeah. Do you regret it at any time?
Rahul Agarwal 29:57
No, I mean, see, regret is more about policy. You can regret anything and everything in life, right. But regret is such a useless path, in my opinion, because you can never turn the clock back and you now, if you know that you made a wrong decision because the inputs that you were using were wrong, then yeah, maybe you should have the humility to say, hey, it was a mistake. But you, when you make a decision like this, it is based on a lot of emotions, lot of pre planning, and things may not work out, because success is not guaranteed. Even in our professional career, there was great years and they were not so great years. So then you can’t say that. Hey, was it a good decision to get into, let’s say, a P&L role? Life just keeps rolling. And I mean, my principle is that you have to have the courage to take the pick, the tougher choice. I would feel very low about myself if I were to play it safe all the time. Of course I would be, I would have more money enjoy the stature. But this has its own charm to me. This is more real,
Prakash Mallya 31:34
And both of us, I would say, need to be grateful to be able to be in this position as well, right? So that’s what I keep thinking, that just giving up and to be able to have that opportunity is not given to everyone.
Rahul Agarwal 31:51
Now they say the absolute, the utmost freedom in our kind of world is the freedom of time, if you can be the owner of your time and not be a slave of the routine that the corporate life demands. I think it has its own charm.
Prakash Mallya 32:12
True, very true. Yeah, and the part for me was not the title or the power. It was less about that, but more, I was driven by learning, and that learning comes when you’re part of something which forces you to learn at a quick pace. Have you seen that kind of getting impacted since you left?
Rahul Agarwal 32:38
No, I can tell you that I learned far more in the last four years than I learned in the corporate world, really? It’s a pretty big statement to make. The corporate life is pretty you’re sheltered. For example, while I was running a big P&L, I never had to worry about cash. Somebody would worry about cash. And because you’re a part of a large global company, if you’re running short of cash, because cash will just come in. Last four years, all I’ve dealt with in the startups that I’m involved in different forms, is cash. When you have a brand, people take you seriously. When you have a position, people take you seriously. They won’t meet you. The doors get opened. But when you don’t have a brand, when you don’t have a title, you only have a past resume, I think it humbles you, and to me, that is the real life.
Rahul Agarwal 33:50
So, to me, this, this whole experience, is when I’m using this word a lot real, but to me, this is the reality of life, and anybody and everybody should live without the titles, without the brand, to really understand how life is.
Prakash Mallya 34:15
100% agree, yeah, yeah. It gives you a different perspective, like even doing this podcast, something that I had thought about for years, and I talked about to you as well several times, but then I decided to take the plunge, saying life is not infinite. I’ll have to do it someday, but it’s just different from having a title and doing a job, very, very different.
Rahul Agarwal 34:49
Yeah, I mean, you know, when you look back, you can say, Okay, I walked or ran on one path, which I often used to say that in my last role, it felt like I was driving a bullet train. Tracks were laid out. The train was very well powered, and I had to just do something. But from that, you move on. You move to a forest where there is nothing laid out. There is heart shape, there is uncertainty, and that has its own charm. Now don’t you want both the experiences?
Prakash Mallya 35:28
Agree and the last two years, as like you also mentioned, it hit home for me, it’s been such immense learning, more than anything about you yourself, less about technology or any other thing which you can read, and if you’re part of the company, you will gather much more. But about yourself. Can you deal with uncertainty? Can you deal with having no schedule, no routine? So yeah, super. So look forward to continuing our conversations in our food journeys together.
Rahul Agarwal 36:05
Yeah, absolutely. I love, I love our lunches together, and I hope we continue on that.
Prakash Mallya 36:12
Yeah, so that’s a good break time to do a bunch of speed round questions. Okay, so let me start with, if you could give me one piece of advice to your younger CEO self, what would that be in five words or less?
Rahul Agarwal 36:36
Well, I could have been more patient with people and results.
Prakash Mallya 36:41
Fair point, and what’s a tech prediction you made that was completely wrong?
Rahul Agarwal 36:51
Oh, I don’t do lot of prediction, but there was a time when the online e commerce sales were rapidly growing, and I openly said in front of Flipkart CEO that laptop sales will never grow beyond 30% and my entire team squirmed. It was a little out of line comment to make, but I said, No, people will go back to offline. People do want to, you know, have a feel of the product before they buy. But I got wrong, because notebook then became 50% offline, online sales became 50% of notebook sales. So not a big tech prediction, but something I totally got it wrong, publicly.
Prakash Mallya 37:53
Interesting. So beyond work, what’s the one non tech hobby or passion that helps you recharge? I think I already know the answer to the question.
Rahul Agarwal 38:02
You know that? I mean, I am, I’m just too addicted to workouts, so I do long workouts, and then I do a lot of walks. So that is really something that I think charges me back. Not that I need to be charged back for what?
Prakash Mallya 38:26
For yourself.
Rahul Agarwal 38:26
Yeah, true to it just, just makes me feel very good about my whole self. That’s true.
Prakash Mallya 38:33
Yeah, agree, Chai or Chips when you’re strategizing for world domination?
Rahul Agarwal 38:39
Oh, I’m a chai guy, right from my childhood.
Prakash Mallya 38:41
What kind of chai do you like?
Rahul Agarwal 38:44
I like the traditional ginger tea, which is brewed for at least 12 minutes.
Prakash Mallya 38:52
You have very specific requirements.
Rahul Agarwal 38:55
Every day, I am very fussy about tea. You can ask about that to people who make fun of me and then say it’s impossible to give him the tea that he wants, but yeah, it’s 12 minutes of brew with lot of ginger.
Prakash Mallya 39:13
And who or which Chai brand appeals the most to you?
Rahul Agarwal 39:18
So we’ve been Taj Mahal users it for long, I haven’t tried a lot of other because my wife doesn’t let me try.
Rahul Agarwal 39:29
But yeah, that may work so far.
Prakash Mallya 39:34
Yeah, one innovation you saw emerge from India that genuinely surprised you.
Rahul Agarwal 39:39
I think innovation can be of any kind. So I, you know, I’m a guy who gets into operations. I think the way this whole quick commerce and even the food delivery, I think the way this has been perfected, that in about eight to nine minutes of placing the order, you get the things at home, which means somebody has accepted the order, somebody has taken the stuff out from the shelf, somebody has done the billing, somebody has done the packing. There is a guy who’s available there. He knows where to come, and he’s at your doorstep. I mean, it is something that I don’t think I could have ever been able to achieve.
Prakash Mallya 40:41
Remarkable. Yeah, any part of the city, any part of the country, yeah, yeah, most parts of the country, I would say,
Rahul Agarwal 40:48
So there are times when the driver is there and earlier we would say, okay, you know, you go and get it, but the guy will get it faster.
Prakash Mallya 40:56
Faster, yeah. I was having this conversation with a friend of mine, who was talking about, he had come from Singapore, and he was staying with his brother, and they asked him, ’Do you want Chai?’ And they ordered one Chai. He was thinking that Chai will be made at home. They actually ordered it from Chai point or wherever, and it came in no time, which really blew his mind. And living in India we know that is possible. Yeah, true. Okay, so let’s get back to our conversation. And one of the things that I really wanted to talk to you about was about Make in India, because, as Lenovo, Make in India was something that you pursued as a path within the country, one of the earliest brands, I would imagine, who did that in PCs and accessories. What were your observations at that point in time? What were the initial assumptions you made, or Lenovo made, which were proven right or wrong in the initial part of your journey of making in India.
Rahul Agarwal 42:07
So Lenovo, like the other brands, had a factory. So we’ve always had a factory in Pondicherry, but Make in India was never on my agenda. Okay?
Prakash Mallya 42:20
And why was it on nobody’s agenda? Why so?
Rahul Agarwal 42:25
Because there was, we never saw any benefit of manufacturing in India. The whole supply chain from China was so efficient. And once in a while, we did the cost benefit analysis, and it came out that if you manufacture, which is basically assembled, if you assemble in India, it would actually be a little more expensive, 2 to 3% Secondly, then you will have to also worry about the spare parts management.
Prakash Mallya 42:56
Service, inventory.
Rahul Agarwal 42:57
Inventory management, because In a large company, country like China, it gets used. But in India, if you have, if you’re left with some spare parts, then you got to take a hit on your P&L, and then the whole logistics, it never appealed.
Prakash Mallya 43:13
Which year are you talking about?
Rahul Agarwal 43:15
15, 16,17, the first few years, and the government also didn’t really push hard on it. It was never on any brand’s agenda. Prakash. Number one, number two, finally, when the government started pushing, and I think it’s a step in the right direction, because you got to think long term, correct, right? China cannot remain the superpower, manufacturing superpower forever. We, you know, we got to think of next 20-30, years, and India, the biggest benefit is leverage, the wages there are four to five times that of India, right while they’re doing robotics. But still, I think India has a good opportunity here to get into manufacturing. So government then came up with this production linked incentives into the 18 or something, yeah, that didn’t work because they were not very well conceived. Then they came up with PLIII 2021 or 22 just when I was leaving that I think they had taken feedback from the industry, that was good, and they also, you know, did a bit of pull and push approach. So they said, This is the incentive, this is the carrot, but then there’s also a bit of stick. So we’ll we really do want you to manufacture in India, but it was never a strategic play until now. I still feel it is not very strategic because we are still not doing manufacturing. We’re still doing assembly.
Prakash Mallya 45:06
And how would you qualify one versus the other?
Rahul Agarwal 45:08
So if the components are getting manufactured in India, let’s say the hard disk, let’s say the CPU, let’s say even the LCD monitor of a laptop. If these things, or RAM, these things are getting manufactured in India, then, I think then it makes sense to call it manufacturing. And some baby steps have been made. Some people may say more than baby steps, right, especially on the desktop front.
Rahul Agarwal 45:39
So it’s a slow cooking, will take time, but will it be, see how does a company look at any initiative or any project? Will it improve its competitiveness? Will it improve its market share, or will it improve its profits? Or will it motivate people? So manufacturing India somehow has not appealed to any of these four. At best, the government is saying, Okay, we will give you incentives so that your cost is same as that from China. So how does anyone benefit from that? So therefore it needs maybe long term, the manufacturing in cost in China goes up and India builds economy of scale, then there’ll be a relative benefit. But not yet.
Prakash Mallya 46:42
Okay, so you mentioned, and I agree with you that longer term, doing manufacturing in the country for hardware and components is the right thing, from strategic autonomy or building innovation locally, all of those points are, absolutely agree with you. But if you were to be given the pen based on your learning and experience of Lenovo Make in India, what kind of policies would you write to make sure it happens faster than what you believe is happening today?
Rahul Agarwal 47:17
So I think for the whole, use a word, ecosystem, to really fire you need a few things. First and foremost is you cannot ask people to manufacture here if it costs more. So you got to give them incentive to maybe make it a little advantageous. And this is the investment the government will have to do, because after three, four years, the government will not need to make this. These are investment for the future. Number one, number two, I think the whole labor productivity and labor laws, nobody looks at India and says, hey, yeah, this is a country we want to do manufacturing in because our productivity is low. We all know that, our labor laws are complicated, and who do they compare all this with - China, which is not a democracy, but that’s the competition, correct? But even countries like Vietnam have done so well, right? Third is the whole infrastructure, the whole ports infrastructure, the logistics, because importing so many things, so many components, is very complicated compared to just importing the product. So the supply chain for them, it’s a nightmare to manage 50 part versus one finished product. So can the government make that part better? Can the infrastructure really improve? And lastly, the overall sense of ease of doing business in India.
Prakash Mallya 49:04
And when you say ease of doing business, how would you describe it?
Rahul Agarwal 49:07
Red tapeism, bureaucracy, other things that come with all this? Right, so I think that is where we have not made progress, because people just don’t want to give up their powers. So, if these, I think, if these four things, they run in confluence, and I must say, while I’m somehow, I’m somebody who’s not, who does not hesitate to criticize the government that this government has the right intent, and they have made the right moves. Now, if I were in government, what would I do? Because to be in the government, to do anything is very difficult, because it’s so complicated. When you are in a private sector, it’s you just you can do it right? Yeah, so it’s easy for us to criticize. You. But I think the government has been consistent. They do listen, but it’s a anything in this area will take years to formulate. Mobile phone is a good success story, but there also we are largely assembly.
Prakash Mallya 50:18
Yeah, which is true, and agree with you that it’s a long game. Most of the ecosystems around the world has taken a couple of decades. Like you mentioned, China, even Malaysia, Vietnam, they have been at it for a while as well. Malaysia has been for a long time, in fact. And if you look back at your experience, the Make in India for Lenovo, did you see any divergence or improvement in terms of the buildup of skills or the buildup of design capabilities, or anything beyond pure manufacturing, which makes the assembling over time grow towards more value add?
Rahul Agarwal 50:59
No, unfortunately the design is still not being done in India, and I think that would be also one of the key milestones in this whole manufacturing journey.
Prakash Mallya 51:15
Yeah, a large part of the value is captured in design, in most cases, yeah, yeah.
Rahul Agarwal 51:22
So there are design capabilities, but none of them have really done anything at scale. See, we have good engineers, correct. We are good designers. And a lot of people in the US who design are Indians, but we’ve not really done things at scale here.
Prakash Mallya 51:40
Yeah. And the path that you see, given its long term, no question, you see movement in the right direction from where you sit or what your experience has been?
Rahul Agarwal 51:54
I mean, as I said, if you if I look at last eight years or seven years since the government started this, there are minor changes, minor improvements that happen every year. And then there is this whole tipping point concept that you know, if all the brands, let’s say computer brand start doing 60, 70% of manufacturing in India, which I think would come to about $6-$7 billion plus, if they show the intent to export, then the component manufacturers will come here if they find the whole environment healthy so it can happen, but it’s not, it’s not that people are in a rush to come here. It has to be cultivated, and the government has to get involved at the highest level.
Prakash Mallya 52:58
A large part is consistency of execution over a very long period of time. Yeah, very cool. Great insights. Rahul, so switching gears a bit, if you were to look at the India ecosystem, right, what are one or two trends or segments you see as huge opportunities which are in keeping with skills and capabilities of India to build product companies or companies in general, in tech?
Rahul Agarwal 53:32
No, I think you said it, and I think a lot of people have said a lot about it, that doing software development for a project is one thing, because somebody just tells you what to do, but building a product that solves the problem of organizations or consumers globally, and the ability to build a global product brand, I think it’s a great opportunity. Now, one would really wish that company like Zoho really become a global brand. I mean, what is so great in creating a ERP? If you look at the logic or the code of creating the ERP, anybody can create it, and it’s true, right? But then, how do you a create a brand, and how do you sell globally? These are the two skills that are needed. And I think this is a good opportunity here, because this is what, if you look at the Infosys of the world, or the TCS of the world, they’ve been wanting to do, but have had very limited success, because they’ve not, in my opinion, because they’ve not put the might behind it. It has been one of the initiatives. The top management says that in the next five years, we will put all that we have to create a product that will appeal to the Fortune 500 companies, I think that is one thing.
Prakash Mallya 55:05
Yeah, yeah. We have an opportunity, because countries smaller than us have product companies, which are world leaders. Why can’t we do it? Look at Europe, yeah, many smaller countries in Europe can boast about it, agree? So you’ve seen exposure across large companies, led large company here, and done startups for the last couple of years or so in variety of different capacities. So from a human side, right? Can you share some behavior or skill that can make a person stand out and do very well in their careers. This is a piece of advice for people listening.
Rahul Agarwal 55:52
You mean in the context of technology or?
Rahul Agarwal 55:53
In the context of technology or careers in general.
Rahul Agarwal 55:59
I mean, yeah. I mean, I look, I don’t want to sound like giving a lot of generic advice. I mean, my son doesn’t listen to me at all. And I think I assume that nobody would want free advice, but the basics, you know, do more than what is expected from you. Be proactive than reactive. People love employees who are proactive. People love employees who take initiatives. Don’t just keep working hard. My motto has been not just work hard, but keep combining the hard work with smart work. My theory is most people, including leaders, spend 60, 70% of the time doing useless things.
Prakash Mallya 56:50
And why do you think that is the case?
Rahul Agarwal 56:53
Because that is how the world is. Meetings have to happen, because without meeting we feel useless and managers have a need to manage. I think managers, they become more productive the if they’ll manage less. People who know me will say, look, how is he talking? Because I managed all my life, but now I’m an old man. I can say that you need to manage less. You need to have less meetings.
Prakash Mallya 57:20
You’re not old, Rahul.
Rahul Agarwal 57:22
Well by age, I am.
Rahul Agarwal 57:25
So it’s the basic things you know. Don’t plan too much. Don’t do too much of career planning. Just focus on today. I never focus on tomorrow. From a career point of view, just do a good job today. Do a fantastic job.
Rahul Agarwal 57:40
Keep taking feedback from your managers,
Rahul Agarwal 57:44
keep building good relationships with people around it’s very mundane advice that I can give all.
Prakash Mallya 57:54
Great pointers, and it’s very hard to do the basics. Don’t you think?
Rahul Agarwal 58:01
Well, yeah, I mean, I think I failed in half of them.
Prakash Mallya 58:04
I agree same, yeah, yeah. It’s very hard to do anything which most people do, is important, and you should do it to be able to consistently do it for a very long period of time. Very hard, right? you can preach to the others, but you’re doing a job. It’s hard, yeah. So last question for you, right? And this I ask all my guests, the India’s journey on hardware, semiconductors, deep tech is more than just about domestic growth. It’s about our place in the global technology map. So fast forward 10-15, years, where do you see India’s position on that map and what needs to happen today to make that a reality?
Rahul Agarwal 58:47
Yeah, I mean this, see, it’s a very good question, and I think everyone gets a little excited while thinking about it, and while replying, there’s a degree of hope, and hope is what we must all have. I don’t know one decade or two decades, but definitely India will be, will be right up there, without a doubt. Just forget the population dynamics. But I think somewhere you cannot talk about technology without mentioning India globally. Now what is, where have you missed out? Is pure play innovation, pure play design. Even if you look at AI, there are no AI companies in India. All right, and that is one reason why they’re saying the stock markets are not doing as well. So, I hope that we are able to build true AI while we are good at creating these models of quick commerce. But can we really do genuine Deep Tech?
Rahul Agarwal 1:00:01
So I’m hoping that all this will happen, because the Indian entrepreneur is a is an amazing animal, and to me, it’s a matter of time before some of them will jump onto it, because it can be done. It is not that you need to invent light bulb. And the innovation is not just inventing a light bulb or electricity or internet. It is all about doing incremental things and build some substantial, right? So, it’s a,
Rahul Agarwal 1:00:39
we don’t know why it’s not there, and there are a lot of reasons our blood, DNA doesn’t have R&D and blah, blah, blah, and they want quick results, and R&D and design take a long years, and, you know, the investors don’t have the patience, and therefore the founders don’t have the money to do it. But we’re hoping that will change. And that is my hope that in, let’s say, one to two decades, we’ll have 10 companies which will have global reputation of tech innovation.
Prakash Mallya 1:01:18
I absolutely believe so as well. Yeah, we can look forward to India really shining in true blue innovation in the future. So, is there anything else that we should talk about that we didn’t cover?
Rahul Agarwal 1:01:35
We can talk about anything, but I think this is good enough. It’s good duration.
Prakash Mallya 1:01:48
Yeah, okay. So, thank you very much. Rahul, I’ve always admired you as a person. I got the opportunity to work with you professionally and now know you personally. So, look forward to staying in touch, and thank you very, very much for coming over and doing this for us.
Rahul Agarwal 1:02:07
No, no, likewise. You know, I share the sentiment, and it’s great that we are now connected with our families also. So, hope the friendship will only grow. Thank you and thank you really it was, it’s an honour, I think to be invited to something like this.
Prakash Mallya 1:02:24
Yeah, thank you. Thank you for making the time. For our audience, please follow, subscribe to our show. It would help us reach other people. Please forward to folks you know, so that you can spread the word for us and do give us feedback on the kind of topics, the kind of guests, or the kind of conversations you would like to have with us. So, with that note, thank you once again. Thank you for being on Chai & Chips.