INTRODUCTION: THE GODREJ GROUP

History
Godrej Group is an Indian conglomerate headquartered in Mumbai, Maharashtra,
India. It was founded by Ardeshir Godrej and Pirojsha Godrej in 1897,
Lalbaug, Mumbai.
The Godrej Group is one of the respected business houses of India. The group has
diverse business interests ranging from engineering to personal care products.
Companies operating under the Godrej Group are involved in a host of businesses from locks and safes to typewriters and word processors, from refrigerators and
furniture to machine tools and process equipment, from engineering workstations
to cosmetics and detergents, from edible oils and chemicals to agro products.
Godrej Group is also well-known for its philosophy and initiation of labour
reforms.
Its founder, Ardeshir Godrej, was a staunch nationalist and believed that India
cannot win freedom unless it is economically self-reliant. Beginning with security
equipment and soaps, the group diversified into a wide variety of consumer goods
and services.

 Godrej Group Companies:

Godrej & Boyce Mfg. Co. Ltd.: Godrej & Boyce manufactures a spectrum
of consumer products and industrial products. The Consumer products
include Appliances (Refrigerators, Washing Machines, Air Conditioners,
Microwaves, and DVD Players), Locks, Furniture, Security Equipment,
Office Automation, Conferencing Solutions, and vending Machines.
Industrial Products include Storage Solutions, Automated Warehousing,
Material Handling Equipment, Process Equipment, Precision Components &
Systems, Machine Tool Service, Electrical & Electronic, Tooling, and
Construction Material & Services.
Godrej Consumer Products Ltd (GCPL): Godrej Consumer Products is a
leading player in the Indian FMCG market with interests in personal, hair,
household and fabric care segments. Godrej Consumer Products is the
largest marketer of toilet soaps in the country with leading brands such as
Cinthol, Fairglow, and Godrej No 1. The company is also leader in the hair
colour category in India and offers a vast product such as Godrej Renew
Coloursoft Liquid Hair Colours, Godrej Liquid & Powder Hair Dyes to
Godrej Kesh Kala Oil, Nupur based Hair Dyes. Its liquid detergent brand
Ezee is the market leader in its category.

Godrej Industries Ltd.: The company is India's leading manufacturer of

oleochemicals. It also has major presence in food products such as refined oil and
tetrapack fruit beverages.
Geometric Software Solutions: It is a CMMI Level 5 Company and the leading
PLM services provider.
Godrej Infotech: The company is engaged in the business of developing
customized software solutions and implementing ERP, CRM, SCM software
Godrej Agrovet: Godrej Agrovet is one of the largest producers and marketers of
animal feeds and innovative agri-inputs India
Godrej Sara Lee: It is a joint venture between the Godrej Group and Sara Lee
Corporation, USA. The company is the world's largest manufacturer of home
insecticides. Its brand HIT is very popular in India
Godrej Efacec: The company provides warehousing, automated storage and
retrieval system solutions
Godrej Properties and Investments Limited (G.P.I.L): Godrej Properties
provides meticulously planned townships at affordable prices.

Major events in the growth of Godrej:

1897 - Godrej is established in 1897

1902 - Godrej makes its first Indian Safe

1918 - Godrej Soaps Limited incorporated

1961- Godrej Started Manufacturing Forklift Trucks in India

1971- Godrej Agrovet Limited began as an Animal Feeds division of Godrej

Soaps

1974 - Veg oils division in Wadala, Mumbai acquired

1990 - Godrej Properties Limited, another subsidiary, established

1991 - Foods business started

19ted incorporated

1994 - Transelektra Domestic Products acquired

1995 - Transelektra forged a strategic alliance with Sara Lee USA

1999

Transelektra

renamed

Godrej

Sara

Lee

Limited

and

incorporated Godrej Infotech Ltd.

2001 - Godrej Consumer Products was formed as a result of the demerger of

Godrej Soaps Limited. Godrej Soaps renamed Godrej Industries Limited

2002 - Godrej Tea Limited set up

2003 - Entered the BPO solutions and services space with Godrej Global
Solutions Limited

2004 - Godrej HiCare Limited set up to provide a Safe Healthy Environment

to customers by providing professional pest management services

2006 - Foods business was merged with Godrej Tea and Godrej Tea renamed
Godrej Beverages & Foods Limited

2007 - Godrej Beverages & Foods Limited formed a JV with The Hershey
Company of North America and the company was renamed Godrej Hershey
Foods & Beverages Limited

2008 - Godrej relaunched itself with new colourful logo and a fresh identity
music

2010 - Godrej launched GoJiyo a free, browser based 3D virtual world

2011 - Godrej & Boyce shuts down its typewriter manufacturing plant, the
last in the world

About the group: Key strengths of the group:

We believe that the core strength of the Godrej Group is its value system put in
place by the founders and has been nurtured all along. The strong relationships
with stakeholders suppliers, dealers, employees, customers, have established
Godrej brand in the market and increased loyalty. Some other factors nurtured on
the values are as follows:

 Brand name very loyal customer base, brand associated with durability and
quality (especially due to the products like steel cupboards, locks, steel
furniture, safes)
National presence The group has been able to establish itself in virtually
every district of India through a network of dealers, distributors and
branches reducing marketing costs tremendously. The trade is nurtured
meticulously using a multi-tier approach (local/regional/national contact).
The trade partnership sometimes runs into the second generation also.
People most valuable asset
Relationships nurtured with dealers and suppliers drives down traditional
marketing costs
Milestones of the Godrej group:

 Organisational Structure:

Godrej group of companies is one of the largest privately-held diversified

industrial corporations in India. Godrej Group comprises of more than 20
companies. Post-liberalization Godrej moved from a product division structure to
Strategic Business Unit structure (independent units) and entered into a number of
alliances. This has led to
Increased interaction between cross-functional employees
Fluidity in the organizational structure

 CONTEXT FOR CHANGE

The Godrej story started in 1897, when ArdeshirBurjorji Godrej (Ardeshir) gave up
his legal practice and started manufacturing locks in a small shed at Lalbaug near
Mumbai. Thus was GBML born. His brother, Phirozshah Godrej (Phirozshah),
carried on the pioneering work and in 1905 GBML built its first safe, thus entering
the security equipment business.GBML expanded its range of products by
manufacturing office equipment, typewriters, tool-room equipment, etc. In the
early 1920s, GBML started making soaps from vegetable oils and incorporated
GSL in 1928. In 1958, GBML started manufacturing refrigerators, its first home
appliance product. GSL ventured into animal feed in 1971 to help dairy and poultry
farmers rear healthier livestock. Godrej Pacific commenced operations in 1982 as
the Electronic Business Equipment (EBE) Division of GBML.In 1985, GBML
ventured into Computer Aided Designing services as part of its EBE division. In
1990, Godrej Properties & Investments Limited (GPIL) was incorporated to
provide meticulously planned townships. In 1991, the Godrej group entered the
processed food and edible oil segment by incorporating Godrej Foods Ltd
(GFL).The animal feed division was spun off into a distinctly focused animal- feed
and agricultural input company in 1991-92 and was named Godrej Agrovet
Limited (GAVL). In 1993, GBML entered into a joint venture with General
Electric (GE), US and Godrej-GE Appliances was formed.
It went on to manufacture washing machines and air conditioners. GE exited from
the joint venture in 2001 and the appliances business became a division of GBML.
In 1993, Godrej entered into a manufacturing and marketing alliance with Proctor
& Gamble (P&G). A new company P&G-Godrej Ltd, with each company holding
50%, was incorporated.

The entire distribution network of Godrej was transferred to this company and the
joint venture was entrusted with the task of marketing both Godrej and P&Gs
toilet soap and detergents brands.The EBE division was spun off into Geometric
Software Solutions Ltd in 1994 to offer complete solutions to customers. In 1994,
Godrej ventured into the insecticide market through GSL, which bought 75% stake
in Transelektra Domestic Products Pvt Ltd (TDPL), the manufacturer of the Good
Knight brand.In 1995, Godrej entered into a joint venture with the US
multinational, Sara Lee and the new concern was called Godrej-Sara Lee. The
venture was the worlds largest manufacturer of mosquito repellents. In August
1996, P&G-Godrej Ltd, terminated the arrangement and Godrej re-took charge of
marketing its soap & detergent brands but without a distribution network of its
own. In 1999, GSL sold 22.5 per cent of its shareholding in Godrej-Sara Lee to the
group holding company GBML for Rs 994.7 million. Godrej Infotech Ltd was
incorporated in 1999 to offer software solutions. In March 2001, GSL got demerged and its consumer products division came to be known as Godrej Consumer
Products Ltd (GCPL).In January 2002, Godrej Industries Ltd. (GIL) bought a 26%
stake in Personalitree Academy Ltd. Personalitree provided interactive soft skills
training programmes online to corporates. Personalitrees training modules have
since been a part of Godrejs training and development initiatives. It all started in
1996 with the break-up of the joint venture between Godrej Soaps Ltd (GSL) and
Proctor and Gamble (P&G). Post break-up, GSL was bereft of a distribution
system and had to start from scratch.
CHANGE INITIATIVES TAKEN UP IN GODREJ
ACTION/ORGANISATION ORIENTED CHANGES
CORPORATE RESTRUCTURING

A corporate restructuring process commenced. Godrej Soaps Ltd demerged into

two entities Godrej Consumer Products Limited and Godrej Industries Limited;
the foods business of Godrej Foods Ltd was hived off and taken over by Godrej
Industries. The company has embraced globalisation in its truest sense, he says, as
it has manufacturing facilities in Malaysia, Indonesia and Vietnam.The Group also
pruned Agrovet's retail play. "Retail was haemorrhaging the company. We would
joke about how the profit from our animal feeds business was paying for our retail
losses. We did not have the deep pockets to sustain the oversold opportunity in
rural retail," says Kahn. Aadhar was sold to the Future Group while Nature's
Basket was brought under Godrej Industries and billed as a vanguard brand.
10X10 STRATEGY
Adigodrej encourages all the employees to work on this strategy which means
growing ten times in ten years.
EMPOWERMENT OF THE ACQUIRED COMPANIES
They do it by empowering the companies they acquire. They generally have a
strong entrepreneurial culture, which we like to preserve. They may need help from
us to better their business processes, say better IT, better technology, etc., but they
try to preserve their empowerment and decision-making processes as much as
possible. They could have a problem here because they get some supervisory
managers here who wants to be consulted on every decision taken and they have a
tough time trying to avoid that. They know that controlling

doesnt work too

well, so they try to ensure that some of the disadvantages the larger multinationals
have dont creep into our operations.
TOTAL QUALITY MANAGEMENT (TQM) WORKSHOPS

Godrej started total quality management (TQM) workshops in 1995, to inculcate a

`positive work culture in the company. In 1997, all the 5,000 employees of GSL
were put through a three-day workshop as part of the visioning session of TQM.
Instances of innovation have been few and far that Godrej has never been
identified with innovative practices. Kaizen has attempted to change that mindset
but it has primarily been aiming at improving existing processes rather than
innovation. In fact, Kaizen was implemented in a very traditional manner and
could not attract employees interest. The strict adherence to rules and meetings
created psychological pressure losing interest of some of the employees. Godrej
had been very slow in adapting to the uncertainty in the market owing to the
mechanistic nature of the organization and it clearly shows in the market share of
its various traditional businesses when compared with the leadership position
earlier it used to command.
PHILANTHORY
Under Mr. Adi Godrej's leadership, the group is also involved in philanthropic
activities. Godrej Industries is a major supporter of the World Wildlife Fund in
India. It has developed a green business campus in the Vikhroli township of
Mumbai, which includes a 150-acre (0.61 km2) mangrove forest and a school for
the children of employees of the company. In addition to this and several other
green initiatives, the group has also established many Trusts and Foundations
through which it invests in education, health-care and the upliftment of the underprivileged of the country.The group also built a self-contained township called the
Phirozshah Nagar for its employees, thus paving way for basic but comfortable,
safe and hygienic accommodation for hundreds of employees, who get access to
the homes in lieu of the home rent allowance. This was its way of realizing the
dream Phirozshah Godrej, as also to take forward the trusteeship legacy of its

founding fathers by striving to achieve, in its own little way, what Gandhiji had
said, in reference to trusteeship, a just equitable society.
PEOPLE ORIENTED
OPENING COMMUNICATION CHANNELS
Adi himself acknowledge sthe fact that he was not a good listener but has tried to
improve himself over the time. Till a few years ago, I didnt really listen to what
others had to say. I have tried to change that. Now, I make an effort to listen
carefully when a suggestion is made, or when someone is making a point.Adi
Godrej in an interview with Inc.Listening to different businesses has also helped
the group's environmental efforts. Tina Trikha, associate vice-president of strategy
and planning, GI, recounts that suggestions on water harvesting, saving power and
improving engineering efficiency have flowed freely between the Chemicals,
Agrovet, GCPL and Godrej & Boyce units. Most of all, listening helped in
correcting Godrej's corporate image. While earlier its range of indestructible safes
and dependable fridges gave it a halo of trust, the association got fuzzy with time
as the group started focusing on other categories.
A programme called 'Bedharak Bolo' topped off by an annual award initiated eggs
employees to speak their minds at the meetings, including upcountry young
managers who might hesitate in a corporate environment.

FOCUS ON ETHICS ON VALUES

Adi believes on not compromising values. Values can be dynamic. Some come
from tradition rather than fundamental ethics and some of those need to change.

But the values that come from fundamental ethics should not change in the words
of Adi himselfWhen I started in the business, most people retired from the
business. That was not uncommon. A lot of Indians now dont think of staying with
the same company for more than five years. However, you do get a situation where
people have contributed quite well in the early parts of their career but are not able
to adjust to the times. Our tradition used to be to tolerate some of that.
On corruption, Godrej said a multi-pronged strategy was needed to curb the social
menace.
"I don't believe corruption will come down only because of punishment and
exposure. Corruption will come down when the reasons for corruption come down.
So transparency must be brought in. Any sale or purchase by the government
should be done by proper and open tenders," Godrej said.

PARIVARTAN
In 2000, Parivartan was launched in GSL with the objective of motivating
employees as well as imparting knowledge about the sales functions of GSL. A

team of 18 senior executives from all divisions spanning sales, logistics and HR
were called on to provide necessary inputs
ECONOMIC VALUE ADDED (EVA) TRAINING
In 2001, Godrej introduced Economic Value Added (EVA) in all its group
companies. An extensive training program was undertaken for various managerial
and officer levels. Over 500 employees were trained to manage EVA by making
appropriate decisions involving investments and/or trade-offs between the income
statement and the balance sheet. This training programme was conducted by Stern
Stewart, New York based management consultancy who had pioneered the concept
of EVA
GALLOP
GALLOP was instituted in early 2002 as a structured and organised inductiontraining programme at Godrej. GALLOP aimed at nurturing the new recruits into
leaders and dynamic performers through this one-year programme. The programme
started with an induction speech by the chairman, followed by the speeches by the
CEOs of all the group companies.The trainees were rotated in four departments
other than their primary department including a compulsory sales stint. This
mandatory rotation in sales enabled the trainees to get a hands-on experience in
understanding the market

SPARK

The objective of the Spark programme, initiated by GIL in September 2002, was to
train the trainers. The training programme was aimed at equipping the managers
to become successful coaches. GIL, in association with a Delhi-based HR
consultant, conducted a host of workshops to enable the managers assume the role
of a coach
E-GYAN
E-Gyan was the e-learning initiative of GIL launched in the second half of 2002. It
was an attempt to move away from traditional training methods of workshops and
help sharpen the intellect of the employees by self- learning initiatives. Initially,
Satyam Education Services Ltd was the content provider and rendered the entire
gamut of learning resources through its e-learning portal -learnatsatyam.com.
Internal communication measures like enrolment on a first-come-first-serve basis
and be the first e-gyanee were circulated.
YOUNG EXECUTIVE ON BOARD
He also initiated two practices that continue even today. The first was the Young
Executives Board (YEB). Started in 2001, this comprised 10 or 11 young
managers who acted as a parallel board and ideated on strategy, human resource
policies, corporate governance issues and so on. The YEB is periodically
dismantled and recreated, much like a real company board. Over the past eight or
nine years, several suggestions of the YEB have been accepted and implemented,
including those relating to the corporate HR function and gender diversity
initiatives such as flexi-time options, the creation of a daycare centre and a revision
of the maternity leave policy

 TECHNOLOGY CHANGES
IT is used extensively in the group. They were among the first in India to introduce
enterprise resource planning (ERP) systems about 12 years ago. Ever since, they
have concentrated on extending our reach from our vendors to their distributors
and retailers. Connecting everyone using their IT infrastructure helps them keep
tight control over their working capital and manage their business better. It helps
them tremendously in ensuring that our logistical systems and supply-chain work
efficiently. This keeps our costs down, a benefit our customers eventually see.They
have established strong connectivity with our distributors (project Sampark) and
suppliers (project Sahyog) by deploying a supply-chain management (SCM)
system. Now we intend to reach out to our retailers. This is going to be quite a
challenge since we deal with about three-and-a-half million retailers. No country in
the world, other than China, has as many retailers and there are no ready solutions
we can turn to. We are working on various IT solutions employing different
technologies, such as mobile messaging, to make it happen.
STRATEGY CHANGES
'3 BY 3' MATRIX STRATEGY
The company will operate in three continents (Asia, Africa and South America) in
three categories: Hair care, home care (including insecticides) and personal
wash.The three continents have now begun to grow fast, which has opened a huge
market for consumer products. These are also markets where multinationals like
Unilever, Procter & Gamble and L'Oreal don't have an overbearing presence; this
leaves ample scope for smaller companies and regional brands to grow. And the
three product categories are those in which the Godrej group has done well in its

domestic market. Godrej Consumer Products is the leader in hair colours and dyes
with brands like Godrej Expert, Renew and Colour Soft.
The strategy was redefined in such a way so as to establish connect with the
customer.They decreased the amount of text declaring benefits on the packs. It
was more to-the-point. They did not claim 100 per cent herbal for our variant of
herbal-based Expert powder unlike henna powder packs in the market. So the
design was more authentic and easier to connect with.
GLOBALIZATION
Godrej acquired new organisations and grew, the leadership team is now focused
on integrating and building an inclusive culture. As Adi Godrej, Chairman of
Godrej Group observes: The natural instinct of large Western multinational
companies is to centralise and control. Our expansion strategy, on the other hand,
is based on minimal interference from HQ. We have acquired entrepreneurial
family businesses and believe in letting them operate as they deem fit.
INNOVATION
In 1991, as the economy was opening up, Adi Godrej felt the need of innovation in
Godrej. This was critical both from the aspects of survival in the market place and
grabbing the opportunities liberalisation offered.

 KAIZEN

Kaizen - The System empowered employees, through a top management driven

formal announcement of freedom to all employees, to conceive and implement
improvements (Kaizen) continuously in the organization. This view differed from
the traditional view, where employees are required to check with their superiors
before introducing any changes.
There is one more condition. The improvements should be made with zero
investments. Though a flexible approach, it recommends that the employee should
explore zero investment route first before money is sanctioned as investment.
Apart from easing the obtaining of sanctions for implementation of proposed
change, it forced the employee to become more creative. Stimulation of
creativity leads to visible human resource development. The increased involvement
of employees also created trust in the management.
Non-Monetary awards, like token gifts, and recognition were given to employees
who contributed to the improvement.

 KOTTERS

MODEL

OF

CHANGE

FOR

TQM

IMPLEMENTATION
Creating a sense of Urgency
Many developing countries, including India, switched focus to ISO 9000,
expecting quality to become world class if they meticulously met the ISO
requirements. This belief turned out to be misplaced. ISO 9000 delivered
consistency, which is necessary but not sufficient for quality. Therefore it was
decided to look for alternative ways of achieving a TQM culture in Godrej Soaps
Ltd.
It all started in 1996 with the break-up of the joint venture between Godrej Soaps
Ltd (GSL) and Proctor and Gamble (P&G). Post break-up, GSL was bereft of a
distribution system and had to start from scratch. As part of the rebuilding exercise,
GSL recruited about 250 new employees who had to be aligned with its corporate
culture. In 1997, GSL conducted a Total Quality Management (TQM) workshop
for all its 5000 employees to help them connect to their job.
TQM Awareness programmes conducted for all employees across all cadres
from the Chairman and Managing Director to the lowest grade worker.The first 7
awareness programmes were conducted by Eicher Consultancy Services (ECS).
Forming a guiding coalition
Train-the-Trainer concept was utilized for creating a pool of 60 internal
trainers.

 Task forces were initiated

Creating a Vision
Visioning sessions were held to select Corporate Shared Values which are
Ensuring consumer satisfaction for the simple reason that consumers are
why one is in business;
Managing process,
Changing from relying on detecting errors to preventing errors;
Continuously improving in the belief that there is always room for
improvement not only with big improvements but also with small
incremental improvements;
Working together as a Team, the whole being greater than the sum of its
parts; and
Encouraging personal initiative, with employees fired by the knowledge,
skill and desire to personally succeed in a way that leads to collective
organizational success.
Communicating the Vision
A formal announcement was made by the managing director and chief executive
officer, according freedom to all employees for making improvements at their
workplace. It made top management support completely visible.
Empowering others to act on the new vision

Freedom was given to all employees to make improvements at their workplace.

The implementation was top down, with the topmost managers involved first.
Many of the improvements are published through an in-house news-circular, which
provides a mechanism for awarding recognition to those desiring it. No monetary
payments are made to the employees for making improvements; it is treated as part
of normal work.
Monthly meetings of all employees are held in groups, where they are given
six minutes each to report all the improvements they have implemented
during the preceding month. Discussion or comment is prohibited, because it
often leads to demotivation of the speaker. Remarks like Why did you not
think of doing this improvement before? made by the boss, can demoralize
the employee. Protection from demotivation is provided in the kaizen
meetings by the rule of no discussion or comments.
Feedback is provided by a system whereby the superior evaluates the
improvements heard in the kaizen meeting by awarding marks on a 0-100
scale. Criteria for the awarding of marks are management driven and
announced in advance. Typical criteria are: improvements done in a group
are better than those done alone, copying an improvement is better than
originating one, etc. The criteria can be changed with time, to dovetail with
the organizations needs.
Apart from easing the obtaining of sanctions for implementation of the
proposed change, it forces the employee to become more creative. Seeing
employees applying their brains repeatedly to improve the organization
promotes trust.
Planning and Creating Short term wins

 A reduction of over 70 per cent in changeover time on the shop floor was
achieved in all Plants.
The quick response to marketings needs reduced finished products
inventory by over 40 per cent maintaining the same service level.
Consolidating Improvements and Producing More change
Introduction of the CII-EXIM Business Excellence Modelin 1998-99; 20
employees undergo special training as Assessors for the CII-EXIM BE
Award.
Self-Assessment of all businesses conducted as per the CII-EXIM Business
Excellence Model; Strengths and Areas for Improvement listed for each of
the 9 criteria in the Model.
TQM Awareness programmes conducted for business partners: Suppliers,
C&F Agents, Distributors, etc.
TPM initiated at Pondy Factory (GSLL) and Valia Factory (GSL);
Six-Sigma initiated at Pondy Factory.
Institutionalizing new approaches
Special focus on integration of business strategy/plans and TQM through audits

 RESISTANCE TO CHANGE

1. Fear of loss of status: The TQM implementation was leading to

empowering the employees by removing the bureaucracy in the organization
structure which was met with resistance from the manager cadre since they
were not too sure about the need of the TQM implementation as they already
had certifications to lower the operational costs but those certifications were
not effective and hence, they doubted the effectiveness of TQM
implementation.

2. Buy-in from employees: The employees had to be trained for TQM

implementation to get them better acquainted with their jobs but the training
was met with resistance as the employees didnt had any say in the initial
phase of the change process. They were just being informed about the start

of TQM implementation. The employees were concerned about the time

commitment which was needed in the training.

3. Threat to Job Security: Since the TQM implementation required educated

employees and they were being trained accordingly for that purpose but it
also led to a fear among employees about their job security in the company,
specially the employees in the lower cadres. The lower cadre employees
resisted this implementation as they didnt understand the need of TQM
implementation.
4. Inability to learn quickly and too much pressure on employees: The
lower cadre employees found it hard to cope with the amount of time
commitment needed for the training programs designed for them and there
was pressure on the employees to find new ways to improve the process
every time. Although they were empowered but too much pressure on them
also led to demotivation among employees.

5. Change in the way the job was performed without any information: The
employees found it difficult to cope up with the way their jobs were
changed; the process was too fast for them to cope with it.

 IMPACT OF KAIZEN ON FINANCE

Table given below compares the performance of Godrej vis--vis American and
Japanese. The data pertaining to the Japanese and American Systems is an average
of a large number of companies surveyed.1
PARAMETERS

AMERICA

JAPANESE GODREJ

N
Number of suggestions received per 0.13

24.7

28.8

employee per year

Suggestions implemented (%)
24
Participation ratio
8
Cash
Award
per
suggestion 605

80
67
3.25

Over 80
Over 70
0

implemented ($)
Cost savings per person per year

2,750

270

250

(Approx.)

 IMPACT OF CHANGE ON ORGANIZATION

The key elements of TQM for any organization are:

Empowering and Trusting employees

Optimization of the resources across the functions in the organization
Innovative and Creative thinking based management style
Focus on continuous improvements and long term preventions

These elements required some fundamental changes in the manner of functioning

of the management and employees. The following were the implications of the
change:
Implications on Management Processes
Delegation of authority downwards and giving more decision making power
to employees

 Creating open communication channels and reduction of bureaucracy within

the organization so as to speed up the decision making process
Implication on People Processes
Developing Training programs based on TQM principles and processes so
that employees can easily adapt to the new systems
Designing appraisal and reward systems that focus on team performance
rather than individual performance
Changes in recruitment and other processes based on the TQM principles
Establishing a feedback mechanism

LEADERSHIP OF ADI GODREJ

Adi Godrej, the chairmen of Godrej Group of Industries, is an entrepreneur who
has changed the structure of the Godrej Post 1991. He analyzed the need for the
change post liberalization, understood the need to move away from the highly
bureaucratic structure to a highly decentralized structure. He actually identified the
need to have a different CEO for the all the Group companies, and actually he was
the one who realized the need for a non-family CEO for the companies. Under his
visionary leadership Godrej completed a 10 year restructuring process in 2001.
While our economic reforms have delivered rapid growth, Godrej is now more
focused on inclusive growth to ensure equality of opportunity for all. This means
that the focus of Adi Godrej is towards developing the lower end of the society.
He has also demonstrated to the world that there are profits to be made from
developing products and services for the bottom of the pyramid. Indigenous
innovations in products or packaging, such as shampoos in sachets.

His efforts towards process improvements led to the progress and growth of the
Godrej Group.
He is responsible for shaping the long term strategy for these firms and driving a
focus on value creation.

Leadership:
Adi Godrej says leadership is not a contest. He believes good leaders, when they
take decisions not liked by all, owe it to their subordinates to explain the rationale
for such decisions. Here he is actually involvement the participation of the sub
ordinates.
According to him leadership is about doing the tough things. One must have a
clear vision of the future and work to see how it can be achieved and how your
people can contribute to achieve that vision. One has to be clear that one cant
pander on every opinion. One has to keep in mind the long-term interest of the
organisation. Tough decisions are needed to be taken sometimes and that is the
major distinguishing points of good leaders. Though being delegative he seems to
be leader who is tough.

According to an interview of Adi Godrej, he says A leader need not be loner, but
neither has he to be popular. You must be respected by your staff. Tough decisions
can also be respected. Communication is very important. If a leader just makes a
one-line announcement that is not a good thing. They must explain what it is. He
says that a leader should be responsible enough to answer to the management.
Even his family members are given preferences over other but they actually join
the organization as Management Trainees to gain hands on experience which is
absolutely necessary, then they rose in the organisation.
According to him, the common factor in good leaders is wisdom. A Leader do not
have to be the most intelligent person in the world but I think wisdom is very
important to choose to do the right thing. The leadership lesson I remember best is
that Leadership is about thinking the future backwards not the present forward.
Worst thing a leader can do is not listen.

Inspirations
He has great admiration for leadership that was passed down in ancient Greece. So
Socrates was Platos teacher and mentor. Plato was Aristotles and Aristotle was
Alexanders. That is a leadership transfer that I have always admired. Other leaders
that he admires are Nelson Mandela who enabled South Africa to be the most
successful African country. He also admires Margaret Thatcher as she took some

difficult decisions in a socialist Britain which was not doing well economically.
The Downing Street Years of Margaret Thatcher, because it describes how
Margaret Thatcher's leadership and decisions transformed Britain.
Taking Tough Decisions
His biggest test as a leader was to change the Group's direction and mindset when
India embarked on the path of liberalization in 1991. There are many scenarios
where he had to take tough decisions for the organization. For example, some
joint-ventures (JVs), work very well for years when the interest of both the parties
are being met, but after a while, there is not much to learn from each other. In these
situations he had to be frank and clear that a restructuring is the best way forward
and one must be open about it and get it done.
Less of Autocratic
Adi Godrej feels that his leadership style has changed over time from Authoritative
to Delegative over time. He has become a better listener than what he used to be
when he was younger. Things are very different today than when he first joined the
group. He believes Leadership styles and dimensions must change with times. This
implies that he is leader who is ready to adapt himself with time.

A Man of simple Stature

Despite being a regular name in the Forbes list of some of the richest people in the
world, Adis core values have remained middle class. This has allowed both his
personal brand and his business to have a connection with people.

He only use the email and occasionally access the internet and he still does not use
a laptop instead uses a desktop to work. On the contrary Adi is also a businessman
whose is tech-savvy and personal interest in technology adoption has benefited his
business immensely and added that bit of dynamism to the Indian FMCG industry.
Adi instilled new business processes at a time when companies perceived change
to be disruptive and threatening. He created an emotional connect of both his
personal and the group's brand image with people by maintaining traditional
middle class core values have remained middle class.
Social Responsibilities
The Godrej Group has been actively involved in many philanthropic and social
activities. It has built schools, dispensaries and a residential complex for their
employees and their families. It has also established many Trusts and Foundations
which invest in education, health care and upliftment of the underprivileged. It has
built many green environs, nurseries and gardens which show its love for nature.
It is an active donor to the World Wildlife Fund in India and has also developed a
green business campus in Vikhroli, Mumbai. The campus includes a 150 acre
mangrove forest with flourishing wildlife and a school for its employees' children.
Godrej works on having our products green in their application to the consumer.
Group also has a property development company which has decided that every one
of the buildings, whether commercial or residential, will be LEED -certified.
Group strongly believes that these are good objectives and that they are good for
business. Adi Godrej thinks that a company that operates in a green manner will be
more successful than a company that doesnt.

Groups believe that some of these environmental and green factors are very
important. Most people would subscribe to that view, even though they might not
do something about it. He doesnt believe that India should have an environmental
objective at the cost of development, he believes green emphasis will help
development.
Talent Acquisition
He focuses on selecting leaders who are entrepreneurial, Out-of-the-box thinker
and creative. Too much routine thinking is not something that he finds creates
success. They must also be ambitious in both target setting and in achieving those
targets because some people tend to be satisfied with average progress. He thinks
commitment to values is important and a willingness to work hard, dont
necessarily mean long hours. He needs devotion and that means being able to
cancel their vacation when required and/or turn up on a Saturday or Sunday when
required. The ease with which theyre willing to do it for the business lets us pick
up who is devoted, who is not.
Most of the issues are associated with ensuring effective execution and this impacts
how Godrej select the right people who are likely to execute better. Adi Godrej
says I also need to ensure that I detach myself from some of the decision-making.
From that point of view, I find it very good to be the leader of a family business
because I have younger-generation people who are much closer to the consumer.
Their thinking is much more avant-gardeand so I have to be open to trusting their
decision-making even if I feel it might not be the right way to go. This makes him
a Delegative leader.

The best combination is to listen to the young managers, empower them

sufficiently and provide guidance when their directional propensity can be helped
by past experience.
Values
He believes integrity, both financial and intellectual, cannot be compromised.
These values must lead us in a country like India, where there is a fair amount of
corruption and where maneuvering is considered normal. Sticking to ones
principles is difficult, but companies like Godrej which do this are generally
rewarded in the long run. These companies have a public image whereby people
stop asking for bribes. So this is not as difficult as one would think in an
environment like Indias.
He likes to think about business in my spare time. He is very fond of long walks,
for example, where he think about issues. He keeps a sheet of paper where any idea
that comes up, he notes it down and follows it up. He thinks its a great lesson,
enjoying ones work, he is not one of those who works 16 hours a day for a month.
When people see the leader doing certain things, I think it almost becomes an
organizational culture.

Leadership Style

Adi Godrej believes that Leadership style and dimensions should change with
time
Transformational Leadership
- Delegating significant authority: Adi Godrej actually found a need to identify
different CEOs for all the Group Companies
- Eliminating Unnecessary Control: The main objective of Adi Godrej was to
eliminate an inflexible style of management which it. . Hence when Adi Godrej
joined the group, he faced the challenge of modernizing the management
structures and making them more flexible and systematic.
- Effective Listener: The time-tested businessman has slowly given up his
arrogance and started to listen more to the companys young managers, which
includes Godrejs fourth generation upstarts
- Statesman: Adi Godrej formed his opinion about the consumption patterns of
Indians from all walks of life on a local train journey in Mumbai. In a country
where millions of people lived in poverty, it made sense to Adi to target the
bottom-of-the-pyramid, the market mostly made up of the poorest people in
Indian society
Adi Godrej actually leveraged profits from small innovative things such as
low-cost refrigerators and economical water purifiers aimed at Indias vast
rural inhabitants.
- From the above analysis the following are the characteristics of Adi Godrej
o Taking tough decisions in difficult time
o Responsible: A leader should be always answerable to the management
o Wisdom: A man with wisdom is better than an intelligent person.
o Thinking future backwards: The motto which he follows
o Better Lister: Listens to people who are younger
o A Man with Simple Stature
o Has emotional connect with employee
o Develop Leaders
o Socially responsible Person: Green Emphasis

o Committed to Values: He wants all his employees to follow the same

o Delegation: Detaches from decision making give power to lower level to
decide
o Man of Integrity
Sometimes growing large isnt the top priority. Thats a lesson that perhaps a lot of
other businessmen in their quest for valuable resources can learn from Adi Godrej

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