kunalbhamre

[kunalbhamre]

From 1 to 200 million $ supply chain

This is a story of seven ordinary women who had no background in business, no significant educational qualification and with just 80 rupees(1$) in the capital, they were able to build a business empire worth 1600 crores(200 million $) which are spread across 69 branches and more than 42000 employees. This homegrown brand is other than Shri Mahila Griha Udyog Lijjat Papad. Now, what is more, fascinating about this company is not the growth but the fact that the business philosophies of this home-grown company somehow seem to have a very close resemblance to extraordinary companies like Starbucks and Apple.

The question is what is so special about this papad(Indian dried bread) company and how has it lasted for more than 62 years and how did these seven women manage to build a business Empire out of just 80 rupees in the capital? The answer to this question lies in the incredible history of the Lijjat Papad. This is a story that dates back to the late 1950’s India when India was a fairly underdeveloped country, and back then let alone education, even literacy was considered to be a luxury. Even in terms of literacy during those times, women's literacy was not even considered important because of which only 8% of women in India could actually read and write, while 92 percent of women in India were illiterate. On top of that, women were not even allowed to go out and work and the earning capacity of the families was not enough to afford a decent standard of living. That is when in 1959 Mumbai, A group of seven amazing women from very ordinary backgrounds, came together to discuss a business idea that wouldn't need them to step out of the house also wouldn't need education, and yet could produce a competitive product in the market. That is how the idea of Lijjat papad was born with just 80 rupees of capital that was given to them by a social worker. They first started selling their papad at a local store and soon enough due to the superb quality and taste of the papad, even other shops started buying their papad, and that's when they started scaling up.

Now, when they started scaling, they have the opportunity to hire women at a dearth cheap cost because they were one of the rarest avenues of income for women which allowed them to work from home. But when these women have the first board meeting they established the fact that the primary goal of their business wouldn't be to make money but to empower women from the smallest house of the country and to provide them with the livelihood to nurture their family. More importantly, they also established the fact that money would only be used as a fuel to scale their impact on the women of India and not be the sole purpose of their existence. So instead of hiring women, they started to give out ownership to every single woman who joined their business and call them Lijjat sisters rather than employees. This is what you call collective ownership wherein every employee owns a small part of the company, such that, the profits and losses both are shared by every single person in the organization. So regardless of your age caste or religion, even if you are at the lowest hierarchy of the Lijjat Papad organization, you would still own a part of the business. Now, most of us might think that this is just a little business move, but this attribute of collective ownership is one of the foundational principles that make Starbucks an extraordinary company. Just like the sisters of Lijjat Papad, who own a small part of the company regardless of their position in the organization, every employee at Starbucks is considered as a partner in the business, rather than an employee. Starting from the Baristas who serve coffee to the customers, all the way up to the Senior Management officers, each one of them is offered stock options of the company. So this way just like the Lijjat sisters, every employee in Starbucks could be a small owner of the company. And this move develops, a deep sense of ownership which cultivates a culture of greatness, wherein every employee is motivated to go out of the way and to contribute diligently towards the growth of the organization. But the only difference between both these companies is that while Starbucks. Ideated this with MBA masterminds and with a million dollar Capital bracket, the seven sisters of Lijjat did it way before starboard's in 1959 without even knowing what is an MBA degree such was the business acumen of these incredible women.

The second phase of Lijjat was all about building a robust supply chain that would be cost-effective, ensure quality production, and would fit the lifestyle of the women who work for the company. So instead of having huge office spaces, they use the houses of the sisters as their small centers of papad making and the flour would first arrive from the mills to the respective central location wherein the dough is made. The sisters will be brought to the mills by a bus facility provided by the company. They would collect the dough and then go home, make papads, dry them on the home compound and then deliver the papad the next day. And lastly, after your delivery of the papad, they would collect the money and repeat the next cycle. This would be followed by surprise visits by the supervisors to check the quality of oil they use, the hygiene check of the house, and most importantly, the process of making papads. Now, the sisters are also given aluminum papad makers to ensure that the papad is produced in a standardized manner. This happens at all the branches and if one of these branches does very well, the profits are distributed among the sisters. And if not the losses of born by the branch members together.

After all of this comes the most challenging part of all, and that is sticking to the mission statement of the company. In the corporate, everybody knows that Mission, Vision, and values are just fancy words written on the Similarly, in case of college is also even your principal, wouldn't remember the mission and vision statement of your college and if he did it would only be because maybe some committee was visiting to give you a college some certification or rating. This is the reason why most of us do not understand the importance of mission and vision statements. But the mission and vision statements form the very foundations of every single organization, and when designed and followed the right way, they can help the organization sustained for a century. At the same time. If not done right, they can even bring down a million-dollar business. A classy example is Apple. When Steve Jobs got fired from Apple in 1984, Apple was a million-dollar company. Until he was there at the company, the company stuck to its values and it was a formidable player in the industry and as he left, they started to derail from their values. And within just 10 years. They were almost about to go bankrupt. That's when Steve Jobs got called back to Apple to fix things and get the company back on track. After he took over the company, the first question, he asked every single engineer, every single designer, and every single manager was, what does Apple stand for and what are the values that we believe in as a company? Because the biggest mistake that Apple made was that, while he was not around, they started to lose their identity and started to deviate from their values because of which, they started making products with no sense of purpose and eventually the brand lost its unique identity and Customer Loyalty just faded away. So, when he came back  Ask this question and the entire team is absolutely clear as to what exactly they were supposed to do. And this is what got them the ‘Think different’ campaign that told the world what Apple stood for and that thinks differently. Within just two years, the same company with the same engineers and the exact same resources then went on to create history to become a legendary company that made products that changed the world forever. This is the importance of mission and vision statements.

Similarly, In its 62 years of existence, Lijjat Papad has never deviated from its core values. And even today, after expanding 267 branches, scaling up to 42000 employees, and after importing their products to 15 different countries, they still abide by the core philosophy of their business that is ‘Sarvodhya’ which means progress for all.

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