Key Takeaways
- Lijjat Papad started with a scope of making the women invest their 4-5 hours daily and make money for the sole purpose of making them empowered.
- Its focus was on making the Lijjat sister’s equal owners of the company irrespective of their position, caste and culture.
- Till now, the same business strategy is being followed and this company is achieving its purpose and has also expanded into international markets.
Establishment of Lijjat Papad
In the year 1957 one day, seven ordinary women gathered on the roof of a house. They started to make papad and at that day they earned a profit of 50 paise on selling those papads. After that with just 80 rupees of capital, they were able to build a business empire worth 1600 crores with more than 45,000 employees for the motive of women empowerment.
The brand we are talking about is a very renowned papad brand which is known by every household in our country. It is none other than Shri Mahila Griha Udyog Lijjat Papad. This brand has lasted for more than 62 years in the market. Now, the more fascinating fact about this company is not the growth of the company but the fact they use business strategies and philosophies that have a very close congruity to one of the biggest business giants like Apple and Starbucks. Does the question arise that how did these seven women manage to build a business empire out of just ₹80 in the capital? We can find the answer to this question in the awe-inspiring history of the Lijjat papad.
The idea behind the formation of Lijjat Papad
This is a story of the late 1950s when India was a fairly underdeveloped country. At that time even literacy was considered to be a luxury, so even in terms of literacy during those times woman’s literacy was not even considered important because of which only eight percent of women in India could read and write while 92% of women in India were illiterates. They were not allowed to go out and work to earn some extra money which will help them to support their family and provide an average standard for living. In Mumbai 1959, a group of 7 amazing women from very ordinary backgrounds gathered to discuss a business idea that wouldn’t need them to step out of the house, wouldn’t need any educational qualification, and yet they could produce a competitive product in the market. On that day the thought of Lijjat Papad was born with just a capital of ₹80 which was given to them by a caseworker.
Obstacles detected and solutions were found and implemented
Firstly, they started selling their papads at the local stores only, but because of the quality and taste of the papad, they got more exposure in the market. They were more focused on the taste and quality of the product from the beginning. And that’s when they started scaling up. Now, due to the demand for the product, they need to hire some more women for the production growth. They had the opportunity to hire women at a very low cost because it was one of the biggest opportunities for women to earn while working from home. But the decision was the opposite, when they 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 a better and secure life for them and their family. And 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 any employee to their company, they started providing ownership to every woman who joined their company. They started a culture in their organization that they were called as Lijjat Sisters rather than employees or workers.
Company ownership
Hence, the concept of collective ownership comes in place where each employee of the organisation owns a small part of the company, either profit or loss every single employee of the organisation has to bear both. These things make them feel that they are not just any employee of the company they are the company it gives extra responsibility to every employee because regardless of any caste, culture, or colour even if anyone is at the lowest hierarchy of the organisation but still, she owns a part of the company. Now many of us will think that this was one of the business strategies of the company but no, this attribute of collective ownership was not done by this company only. Starbucks one of the very renowned company also follows this principle in their organisation. Just like the Lijjat sisters who own a small part of the company, employees of Starbucks are also considered as a partner in the company rather than an employee regardless of caste, colour or culture. Everyone starting from the baristas who serve coffee to the customers to the senior level management officers, they are offered stock options by Starbucks. This move helps to develop a deep sense of ownership and responsibility which cultivates a culture of greatness wherein every single employee of the organisation gets motivated and they give their best or they can go out of the way to contribute actively towards the inclusive growth of the organisation. The only difference between these two business giants is that companies like Starbucks were able to implement these kinds of business strategies with the MBA masterminds while the Lijjat sisters did this way before Starbucks and even without knowing that there is any degree called MBA. This is because these Lijjat sisters are known as business masterminds in the market.
The second phase was more challenging for the organisation, but they are very well known for doing works differently. They have a challenge of building a strong supply chain system and that would be cost-effective as well. But not only this they have to maintain the production quality of papad as well as the job need to be fit in the lifestyle of the women who works for the company. They came up with the idea that instead of having a huge office for work they use the house of Lijjat sisters as their centre for making papad. Firstly, the flour for the dough arrives at the respective centre location from the mills wherein the dough is made. After the preparation of dough, the Lijjat sisters will be brought to the centre from the bus provided by the company. Here they collect the doughs for papad and then go home, make papads, dry them on the veranda and follow the proper instruction so that the quality and taste don’t vary and they deliver it to the centre of Lijjat on the next day. After the delivery, they can collect their money on daily basis and again takes the dough for the next cycle. Surprise visits are followed by the supervisors to check that the instructions are being followed by them or not, the quality of oil they were using and proper hygiene check of the house is being done. Aluminium papers are provided to the sisters to produce papad in a standardised manner. This process is followed by all the centres of the organisation and if any centre is doing pretty well then, the profits are to be shared with everyone and if not then all the member of the branch have to bear the loss together as well.
The vision behind making Lijjat sisters
For Shri Mahila Griha Udyog Lijjat Papad their mission and vision for their employees and organisation were clear. This is something which we usually don’t see in the organisations to follow this by their open hearts. But this organisation stood on everything they said and they promised. In this competitive era where everyone is working on improving their technology and reducing their manpower but Lijjat has something different. They usually don’t purchase any machine which will affect the Lijjat sisters or which will decrease the manpower from their organisation. They always wanted to share their profits in all the team or with every woman of the organisation. They have a different profit-sharing model where the organisational belief was also different, they believed in the mutual growth of the Lijjat sisters. “This company belongs to me and I belong to this company” they have this kind of mindset in them which provides motivation and empowerment to them. This is not something which we see in every organisation. This kind of belief and responsibility only comes to the employees when they believe in the organisation, their mission and their value. They have 100% transparency in the organisation because they believe that this company doesn’t belong to any individual, this belongs to every sister who worked there, so all of them have the right to know the answers to the questions like “who, where, why and what”. Because there is 100% transparency in the organisation, they have a common purpose and vision which helped them to grow and keep motivated to work for the well-being of the organisation. Many Lijjat sisters now owned their homes, they can get their children educated in good schools or colleges.
Business strategy which helps them to succeed
- Foundational policies: Policies like 100% transparency is to be maintained in the organization. No gossip is allowed between the sisters. This policy helped them to serve the common goal because everyone has that right to share their thoughts.
- Standardised process: Lijjat papad established one standardized process that maintained and simplified the production of the papads. It also ensured that there shouldn’t be any compromise in quality assurance and also maintained and controlled the quality of papads.
- Uniformity in taste: The standardized process made sure that the taste of approx. 4.8 billion papads all over the world tasted the same. The company made sure that there is no compromise in the taste and hence to maintain it, they still buy Asafoetida (the main tasting ingredient) from Afghanistan.
- Company beliefs: – It was made sure that more women get employed when there is a need for more products instead of purchasing any machines. The company believed that the profits should be distributed directly to the women and make most of the women empowered.
- Quality control team: – Lijjat papad provides aluminium rolling boards and pins to the Lijjat sisters to maintain the size, weight, thickness, and shape of papad. Proper training is provided through the supervisors (Sanchalika).
- Equal ownership: – Equal ownership created a mindset that women who were working is not just regular employee but are owners. They became part and parcel of the company being the equal owners of profit and loss. In this way, the effectiveness and emotional aspect of the company increased.
For more information on the Lijjat business movement, click here.
Conclusion
The vision of Jaswantiben Jamnadas Popat was to create a community that works “for women by the women”. Lijjat papad was never created for making capital growth, it was for the sole purpose of women empowerment.
From start, the cash flow was very clear and transparent with “No credit system”. Neither credit was taken from the suppliers nor given to the retailers. Daily wages were given to the Lijjat sisters so that they don’t have to wait for the money till the month-end.
The company also made sure that the bonus was not given only in terms of money instead it was converted into long-term assets like gold coins of 5 grams or 10 grams. In the whole working life, a woman can collect up to 250 to 300 grams of gold which can be utilized for their children’s marriage or education purposes or they can also save it up for their old age.
This was a great way to make the women empowered and support their families. Even today this company follows the same vision of progress instead of profit.
In this era of technological evolution where companies follow advanced techniques and business strategy for maximum profit and to survive in this competitive world, Lijjat papad is still following the same business model since 1959 and expanded to 82 branches in India and exports in 25 other countries with more than 45000 employees with the same taste.
Visit this for details: https://news.badabusiness.com/business-case-studies/lijjat-papad-company-a-story-of-women-empowerment-1059.html
Shubham Kumar
Content Writer
Ashutosh Agarwal
Graphic designer
Neeraj Chiplunkar
Editor
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