This is an extraordinary story of 7 ordinary women, who had no background in business and no significant educational qualification. Yet, with just 80 rupees in capital, they were able to build a business empire of 1600 crores. Their company which is spread across 69 branches, employs more than 42,000 people. This homegrown brand that I’m talking about is none other than Shri Mahila Griha Udyog Lijjat Papad.
Now, what’s fascinating about this company is not its growth, but the fact that the business philosophies of this homegrown 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 company? And how has it lasted for more than 62 years? Also, how did these 7 women manage to build a business empire out of just 80 rupees in capital?
The answer to these questions lies in the incredible history of the Lijjat Papad. It dates back to the late 1950s when India was a fairly underdeveloped country. Back then, literacy was considered to be a luxury; and moreover, women’s literacy was not even considered important. Due to this, only 8% of women in India could actually read and write, while 92% were illiterate. On top of that, women were not even allowed to go out and work, and the earning capacity of their families was not enough to afford a decent standard of living.
This is when, in 1959, a group of 7 amazing women from very ordinary backgrounds in Mumbai, came together to discuss a business idea. This wouldn’t need them to step out of the house or require an education, and yet, it could produce a competitive product in the market.
Ladies and gentlemen, 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 papads at a local store and soon enough due to the superb quality and taste of the papads, even other shops started buying their papads. That’s when they started scaling up. Now, when they started scaling, they had the opportunity to hire women at a cheap cost, because they were one of the rarest avenues of income for women, which allowed them to work from home.
But do 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 in the country, and to provide them with the livelihood to nurture their families.
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 the business and called them “Lijjat Sisters” rather than employees.
This is what you call “Collective Ownership”, where every employee owns a small part of the company, such that the profits and losses are shared by every single person in the organization. So regardless of your age, caste, religion or hierarchy, you would still own a part of the business.
Now, most of us might think that this is just another business move, but let me tell you, this attribute of “Collective Ownership” is one of the foundational principles that make Starbucks an extraordinary company.
Because, just like the sisters of Lijjat Papad own a small part of the company regardless of their position in the organization, every employee at Starbucks is considered a partner in the business, rather than an employee. From the Baristas who serve coffee to the customers, all the way up to the Senior Management; each one of them is offered stock options in the company.
So just like the Lijjat sisters, every employee in Starbucks could be a small owner of the company. 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 contribute diligently to 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 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 all about building a robust supply chain, that would be cost-effective, ensure quality production and fit the lifestyle of the women who worked for the company. So, instead of having huge office spaces, they used the houses of the sisters as they are small centres of Papad-making.
This is what the supply chain looked like –
The flour would first arrive from the mills at the central location where the dough is made. After the dough is made, the sisters would be brought by a bus facility provided by the company. They would collect the dough, 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 the 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 used, 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 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 born 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. For most of us, Mission and Vision statements are just formalities and they have no real significance for us.
But here’s the thing, they form the very foundation of every single organization. When designed and followed the right way, it can help an organization sustain for a century. At the same time, if not done right, it can even bring down a million-dollar business.
A classic example of this is Apple. Apple was a million-dollar company until Steve Jobs left in 1984. The company that once stuck to its values and was a formidable player in the industry, started to derail from its values.
Within just 10 years, they were 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? What are the values that we believe in as a company?”
This is because the biggest mistake that Apple made was that they started to lose their identity and deviate from their values. They started making products with no sense of purpose. Eventually the brand lost its unique identity, and customer loyalty soon faded away.
So Steve asks this question, and within some time, the entire team is absolutely clear about what exactly they were supposed to do. This inspired their “Think Different” campaign that told the world what Apple truly stood for.
Within just two years, the same company with the same engineers and the exact same resources, went on to create history and 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 today.
This is the importance of Mission and Vision statements.
Here’s the most mind-blowing fact of all. In its 62 years of existence, not a single time has Lijjat Papad ever deviated from its core values.
Even today, after expanding to 57 branches, scaling upto 42,000 employees, and exporting their products to 15 different countries, they still abide by the core philosophy of their business. That is Sarvodhya, which means “Progress for all”.
While we live in a world where billion-dollar corporates 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’ve got Lijjat Papad, where with every single piece of Machinery that they purchase, they make sure that not a single woman is asked to leave the organization.
This is because they are 100% clear that their ultimate purpose of business is not to make money, but to empower women so that they can give their families and children a better quality of life.
Where on one side where we’ve got these evil companies, who would put the health of their frontline workers at stake just to maximize their profits; on the other side we’ve got Lijjat Papad where 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. They do all of this just so that the next generation of these frontline workers can be given the opportunities that they truly deserve.
Last and most importantly, in spite of being at the pinnacle of technological revolution, there are people like you and me who often keep doubting our capabilities.
Here we see a standing example of 7 incredible women, who had no educational qualification, no background in business, and no fancy investor; Yet they were able to build a business empire that is now empowering generations of women all across the country!
If that isn’t an epitome of greatness, I don’t know what is.