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lijjat Papad

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Lijjat papad

Lijjat papad

Hi everybody, my name is gauhar ali

Today’s case study is one of the most incredible case

Studies

Today we will discuss about how a startup grows from a small village to multi million dollar company

This is a story of 7 ordinary women who had no background in

business,

no significant educational qualification

And with just 80 rupees in capital

they were able to build a business empire worth 1600 crores

which is spread across 69 branches and more than 42,000

employees.

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This home-grown brand that I’m talking about is none other

than

Shri Mahila Griha Udyog Lijjat Papad.

Now, what’s more fascinating about this company

is not the growth of the company but the fact that

the business philosophies of this home-grown company

somehow seems to have very close resemblance

to extraordinary companies like Starbucks and Apple also.

The question is- What is so special about this papad company

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and how has it lasted for more than 62 years ?

And how did these 7 women manage to build a business empire

out of just ₹80 in 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 1950s India

when India was a fairly underdeveloped country.

And back then let alone education, even literacy was

considered to be a luxury.

And even in terms of literacy during those times

woman’s literacy was not even considered important

because of which

only 8% of women in India could read and write

while 92% of women in India were illiterates.

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 7 amazing women from very ordinary background

came together to discuss a business idea

which wouldn’t need them to step out of the house,

wouldn’t need education and yet

could produce a competitive product in the market.

Ladies and gentlemen, that is how the idea of Lijjat Papad

was born

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with just ₹80 of capital that was given to them by a social

worker.

They first started selling their papads at a local store and

soon enough

due to the superb quality and taste of the papad even other

shops started buying their papads.

And that’s when they started scaling up.

Now, when they started scaling

they had 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 you know what ?

When these women had their 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 households of the

country and

to provide them with the livelihood to nurture their family.

And more importantly they also established the fact that

moeny 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 woman who joined their business

and called them Lijjat Sisters rather than employees.

This is what you call as 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 organisation.

So regardless of your age, caste, religion

even if you were at the lowest hierarchy of the Lijjat Papad

organisation

you’d still own a part of the business.

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Now, most of us might think that this is just another

business move

but I gotta tell you guys

that this attribute of collective ownership

is one of the foundational principles that make Starbucks an

extraordinary company.

Because you know what ?

Just like the sisters of Lijjat papad

own a small part of the company regardless of their position

in the organisation,

every employee at starbucks is considered as a partner in

the business

rather than an employee.

Everyone starting from the baristas

who serve coffee to the customers

all the way upto the senior management officers, each one of

them

are 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

organisation.

But the only difference between both these companies is that

while Starbucks ideated this with MBA masterminds and with a

million dollar capital backing

the 7 sisters of Lijjat

did it way before Starbucks, in 1959 without even knowing

what an MBA degree is.

Such was the business acumen of these incredible women.

The second phase of Lijjat was building a robust supply

chain

that would be cost effective,

would ensure quality production and

would fit the lifestyle of the women who work for the

company.

So instead of having huge office spaces they used the houses

of the sisters

as their small centres of papad making.

And this is what their supply chain looked like

The flour would first arrive from the mills to the

respective central location

wherein the dough is made.

And after the dough is made

the sisters will be brought by a bus facility provided by

the company.

Over here they would collect the doughs

and then go home, make papads

dry them on the veranda

and then deliver the papads the next day.

And lastly, after the delivery of the papads they would

collect their money

and the dough for 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 aluminium papad makers to

ensure that

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the papad is produced in a standardised manner.

This happens at all the branches.

If one of these branches does very well

the profits are distributed among the sisters.

And if not,

the losses are borne by the branch members together.

And after all of this comes the most challenging part of all

and that is

sticking to the vision and mission statement of the company.

Now people, for most of us

mission and vision statements are just stupid formalities

and they have no real significance for us.

Why ?

Because in the corporate everybody knows that mission,

vision and values are

just fancy words written on the wall.

And at the end of the day if your boss wants to kick your

@$$

he is going to do it anyways.

At the same time

in case of colleges also

even your principle wouldn’t remember the vision and mission

statement of your college

and if he did

it would only be because

he mugged it up because some committee was visiting

to give your college some stupid certification or some

accreditation.

And this is the reason why

most of us do not understand the importance of mission and

vision statements.

But here’s a thing guys

Mission and vision statements form the very foundations of

every single organisation.

And when designed and followed the right way

it can help the organisation sustain for a century.

At the same time, if not done right

they can even bring down a million dollar business.

A classy example of the same is Apple.

Now people, 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 it’s

value.

And it was a formidable player in the industry.

But after 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.

And you know what ?

After he took over the company, the first question he asked

to every single engineer

to every single deisgner 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

while he was not around

they started to loose their identity and started to deviate

from their values

because of which

they started making products with no sense of purpose.

Eventually, the brand lost it’s unique identity

and customer loyalty just faded away.

So Steve baba comes back

asks this question and within some time

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 truly stood for.

And that is “Think Different”.

And within just 2 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.

And again as soon as Steve baba left

we all know what’s happening with Apple.

This is the importance of mission and vision statements.

And here’s the most mind-blowing fact of all.

In it’s 62 years of existence, not a single time

Lijjat Papad has ever deviated from it’s core values.

And even today

After expanding to 67 branches and scaling up to 42,000

employees

and after exporting their products to 15 different

countries.

They still abide by the core philosophy of their business,

that is,

Sarvodaya, which means Progress for all.

While we live in a world where billion dollar corporates,

even with the slightest change in the policies

wouldn’t think twice before firing thousands of employees

and putting each one of their family’s life at stake.

On the other side we have got Lijjat Papad wherein

with every single machinery they bring in for automation,

they make sure

that not a single woman is asked to leave the organisation.

Because they are 100% clear that their ultimate purpose of

business is not to make money

but the empowerment of women so that

they can give their family and children a better quality of

life.

On one side where we have got these evil companies

who would put the health of their frontline workers at stake

just to maximise their profits.

On the other hand we have got Lijjat Papad wherein

even if they have a great year, they make use of the extra

profits

to sponsor the education of the children of their frontline

workers

regardless of their age, caste, religion or even the

position in the organisation.

And they do all of this just so that

the next generation of these frontline workers

can be given the opportunities that they truly deserve.

And last and most importantly

while inspite of being at the pinnacle of the technological

revolution

there are people who often keep doubting on their

capabiities.

And here we see a standing example of 7 incredible women

who had no educational qualification.

no background in business and no fancy investor.

And yet, they were able to build a business empire

that is now empowering generations of women all across the

country.

And that too

during a time when women had no scope of opportunities.

If this isn’t an epitome of greatness

I don’t know what is.

You should watch this documentry on lijjat papad

Lijjat documentry

Lijjat website

 

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