The tale of seven ordinary women with no business experience, no significant educational backgrounds, and only 80 rupees in their bank accounts. They were able to establish a business enterprise worth 1600 crores, with 69 branches and over 42,000 people.
‘Shri Mahila Griha Udyog Lijjat Papad’ is the name of the homegrown brand we’re talking about.
What’s more remarkable about this firm is not its development, but the fact that its business ideas seem to have a striking resemblance to those of great organisations like Starbucks and Apple.
What makes this papad firm so unique, and how has it managed to survive for over 62 years? And how did these seven ladies manage to construct a corporate empire with only ₹80 in their bank accounts?
Table of Contents
History of Lijjat Papad
The fascinating history of the Lijjat papad has the solution to this question. This is a story from India in the late 1950s, when the nation was still very underdeveloped. And there was a time when not just education, but also literacy, was considered a luxury.
Even in terms of literacy, there was a time when women’s literacy was not valued. As a result, just 8% of women in India could read and write, and 92 percent of women in India were uneducated. Furthermore, women were not allowed to work outside the home, and households’ earnings were insufficient to maintain a good level of living.
In 1959, Mumbai was the place to be. A group of seven incredible women from several ethnic backgrounds got together to explore a business concept that didn’t need them to leave the house, didn’t require any schooling, and could nonetheless generate a market-competitive product.
With only ₹80 in funds provided by a social worker, Lijjat Papad was born. They began selling their papads at a local store, and shortly after, other stores began purchasing their papads owing to their excellent quality and flavour. They began scaling up at that point.
When they began to grow, they had the ability to hire women at a low cost because they were one of the few sources of earnings for women that enabled them to work from home.
When these ladies held their first board meeting, they decided that the major purpose of their firm would not be to make money, but to empower women from the country ‘s underprivileged residences and give them with a means to support their families.
More crucially, they determined that money would only be used as a fuel to expand their influence on the women of India, rather than being the main reason for their establishment.
The Collective Ownership of Lijjat Sisters
Instead of hiring women, they began to offer every woman who joined their company ownership and referred to them as Lijjat Sisters rather than workers. This is referred to as collective ownership, in which each employee owns a little portion of the firm, so that gains and losses are shared by everyone in the organisation.
So, regardless of your age, caste, or religion, even if you were at the bottom of the Lijjat Papad organisation, you’d own a piece of the company. Most of us may believe that this is simply another commercial move, but it is more than that; this quality of community ownership is one of the fundamental ideas that identifies Starbucks.
Because, much as the Lijjat papad sisters own a little portion of the firm regardless of their position in the organisation, every employee at Starbucks is seen as a business partner rather than an employee. Everyone, from the baristas who serve customers’ coffee to the senior management officials, is given stock options in the firm.
As a result, exactly like the Lijjat sisters, every Starbucks employee may be a little owner of the firm. And this action fosters a profound feeling of ownership, which fosters a culture of excellence in which every employee is inspired to go above and beyond and contribute tirelessly to the organization’s progress.
The main difference between these two organisations is that, while Starbucks came up with this idea with MBA masterminds and a million dollar investment, the 7 sisters of Lijjat accomplished it long before Starbucks, in 1959. Such was this outstanding women’s entrepreneurial prowess, the time when no MBA thing really exists.
The Cost Effective Supply Chain Management
The second phase of Lijjat was the establishment of a solid supply chain that would be cost effective, assure excellent manufacturing, and match the lifestyle of the company’s female employees. Instead of having large office premises, they repurposed the sisters’ homes as mini papad-making centres.
And this is how their supply chain looked: flour would first arrive from the mills to the central facility where the dough is produced. After the dough is produced, the sisters will be transported by a bus service supplied by the corporation.
Over here, they would collect the doughs, return home, create papads, dry them on the veranda, and then deliver the papads the next day. Finally, when the papads were delivered, they would collect their money and the dough for the following process.
This would be followed by surprise inspections by supervisors to inspect the quality of oil used, the house’s sanitation, and, most crucially, the procedure of preparing papads.
The sisters are now provided with aluminium papad makers to guarantee that the papad is prepared in a standardized way. This occurs at all branches. If one of these branches does exceptionally well, the proceeds are divided among the sisters.
If not, the losses are shared by all branch members. Following all of this is the most difficult element of all: adhering to the company’s mission and vision statements.
Mission and Vision
People, for the most part, mission and vision statements are merely dumb formalism that have no actual meaning for us. Because everyone in the business world understands that purpose, vision, and values are merely fancy phrases placed on a wall.
But the truth is that ‘Mission and Vision’ statements are at the heart of every single organisation.
And, when developed and implemented correctly, it may help an organisation often last centuries. At the same time, if not done correctly, they may drag a million dollar firm collapse.
Apple is a great illustration of this. Apple was a million-dollar firm when Steve Jobs was sacked in 1984. Until he was Managing the company, the corporation maintained its value.
And it was a formidable industrial participant. However, once he left, they began to drift away from their core values. And after just ten years, they were on the verge of bankruptcy. That’s when Steve Jobs was summoned back to Apple to straighten things out and get the firm back in the game.
And do you know what else? When Steve took over the company, the first thing he asked every single engineer, designer, and manager was, “What does Apple stand for?”
And what are the values in which we as a corporation believe? Because Apple’s real blunder was that when he was not there, they began to lose their authenticity and began to depart from their ideals, resulting in goods with no sense of purpose.
The brand eventually lost its distinct feelings, and brand loyalty fell away. So Steve returns and asks this question, and within a short period of time, the entire crew is completely clear on what they were intended to do.
And it was because of this that they were able to launch the ‘Think Different’ campaign, which revealed to the world what Apple genuinely stood for.
And “Think Differently” Vision works, and in only two years, the same firm, with the same engineers and exact same resources, went on to make history, becoming a legendary corporation that developed goods that altered the world forever. And, after again, we all know what happened to Apple after Steve Jobs left. This is why mission and vision statements are so important.
And now for the most mind-boggling fact of all. In its 62 years of existence, Lijjat Papad has never wavered from its essential values. Even now, after expanding to 67 locations, employing 42,000 people, and selling their products to 15 different nations.
The Progress for All
They still adhere to their company’s key ideology, ‘Sarvodaya,’ which means ‘Progress for All’. While we live in a world where billion-dollar corporations would not hesitate to fire thousands of employees and jeopardise the lives of their families with the least change in policies.
On the other hand, we have Lijjat Papad, who ensures that no woman is asked to quit the organisation with every piece of machinery they bring in for automation. Because they are completely conscious that the ultimate goal of their business is not to create money, but to empower women so that they can provide a better quality of life for their families and children.
On one side, we have these corporations that would jeopardise the health of its frontline staff in order to maximise their profits. On the other hand, we have Lijjat Papad, where even if they have a fantastic year, they use the additional income to finance the education of their frontline employees’ children, regardless of their age, caste, religion, or position in the organisation.
And they do it all so that the next generation of these frontline workers can be given the opportunity they deserve. Finally, despite being at the peak of the technology advancement, there are people like us who frequently doubt our capabilities.
And here we have a shining example of seven outstanding ladies who had no formal education. There is no business background and no flashy investor. Despite this, they were able to create a business empire that is now empowering generations of women across the nation.
And all of this happened at a period when women had little options. I don’t know what more to conclude if this isn’t the pinnacle of triumph.