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Podcast | The business of family — The house of Godrej

Every great Indian family has a fable for succeeding generations of consumers and stake holders. Here’s the story of the House of Godrej.

April 30, 2018 / 05:24 PM IST

Adi Godrej

The legacy

Every great Indian family has a fable for succeeding generations of consumers and stake holders. And few compare to the legends associated with the House of Tatas and the life of Jamshedji Nusserwanji. But we have already told that story to you. Today, we dive deep into the history of another proudly swadeshi family but before we do that, let us go right into the heart of a storm.

Caught in the middle of this specific storm was none other than Adi Godrej, Chairman of the Godrej Group. He was sailing as he usually did in a hard won moment of leisure when the storm came, suddenly and unexpectedly. Instead of negotiating with the weather, he waited it out till all was calm. When he was rescued, he showed no sign of panic.

This in a nutshell sums up the adaptable, unflappable and resilient character of one of the largest Indian conglomerates that encompasses a staggering array of sectors including real estate, FMCG, industrial engineering, furniture and appliances.

Adi's fortitude stems from a legacy of measured decisions in uncertain times that founding father Ardeshir Godrej left behind.

Ardeshir, was a pioneering spirit who deviated from the trajectory of affluent young men of his time. He did not fulfil his family aspirations by pursuing a career in law.

"Make in India" may just be a revisionist idea today because it was Ardeshir and other ground-breaking homespun entrepreneurs like him for whom the phrase "Made in India" had a huge emotive significance in pre-independent India.

Adi Godrej has with miraculous intuitiveness grasped the expanse of the idealism and sagacity that birthed the Godrej empire. He once stated clearly that the company would always put business before family.

He has ensured that the bedrock of values on which the company was built is never shaken. The goal has consistently been to wed social and corporate responsibility with profit making. He also represents a fast shrinking collective of business icons who exemplify ethical conduct and refinement in their interaction with stake-holders and in all aspects of their personal and professional life. Perhaps those values have trickled down from Ardeshir who despite a flourishing business, insisted on using public transport and was often spotted at bus stops, reading a newspaper or a book.

The story goes that Adi too once famously refused to throw his weight around when a guard on one of his properties did not recognise him.

To the Indian consumer, however, more significant than any of these stories is the feeling of warm familiarity and trust that the name Godrej evokes.

These are feelings that no company can earn overnight. The relationship between the Indian consumer and Godrej goes right back to the time when in 1918, the company produced the world’s first vegetable oil soap. Till then European soaps were by and large made of animal fat and the Godrej soap was a gesture of gentle defiance and an endorsement of the ideals of Swadeshi and non-violence.

There is even an archival proof of none other than Gurudev Rabindranath Tagore endorsing the soap! Decades later Adi's wife Parmeshwar Godrej would tap into popular imagination by roping in stars like Vinod Khanna, Imran Khan and Dimple Kapadia to endorse Godrej's bouquet of soaps like Cinthol and Crowning Glory.

Add to that the presence of the ubiquitous Godrej almirah, locks, hair colours and a lot more in almost every Indian home and it becomes self-evident just how deeply the brand has ingratiated itself with the consumers.

The beginning:

But much before the modern, expansive brand that we know Godrej to be, there was, as we have said before, a man named Ardeshir Burjorji Sorabji Godrej.

Ardeshir was born in 1868 in an affluent Parsi-Zoroastrian family as the first of six children. Ardeshir's father Burjorji and grandfather Sorabji dealt in real estate.

In 1894, Ardeshir, a young law graduate refused to base a case he had been entrusted to argue, on just an assumption. The experience taught him that he was incapable of deviating from his inner compass and hence gave up law. He famously said," Instead of seeing my side of the case, I saw both sides." This was a quality that would hold him in good stead on his new path as an entrepreneur.

But before the success, came the preparation. His apprenticeship at a pharmacy paved the way for the first step towards making surgical equipments. Then in May 7, 1897 was born a success story. He created a template for locks that were cheaper and far sturdier than the imported versions.

The product was not just about utility. It was a statement made by a proud Indian that the idea of Swadeshi could be realised successfully. Then came other runaway hits. He began to manufacture safes, and patented his design for door frames and double-plate doors.

The ultimate triumph was when the made in India Godrej safe was used by the Queen of England during her tour of India in 1912. Post an ammunition explosion at Bombay's Victoria docks when fires raged for days, the contents in many of the Godrej safes remained intact.

Post the success of the swadeshi soap whose celebrity endorsers even included Annie Besant, Ardeshir decided to encourage the nationalist pride in Indian products, by distributing a soap recipe in pamphlets. By doing this, he proved, that for him the term shareholders had a different meaning than the one in circulation today.

This small gesture in a way paved the way for the CSR initiatives that Godrej brand is associated with now. The philosophy of 'Made in India" remained a lifelong obsession with him and he followed the ideals of political and social leader Dadabhai Naoroji. He believed that rejecting foreign-made goods was not enough and India had to compete with world markets with products of superlative quality. He also donated Rs 3 lakh, a huge amount then, to the Tilak Swaraj fund.

When Ardeshir’s younger brother Pirojsha also joined the business, it truly became a family enterprise.

Ardeshir passed away in January 1936. This was a momentous year as Godrej & Boyce had posted Rs 12 lakh as revenue and Godrej soaps had chalked up ₹6 lakh worth of revenue. All this was created by a principled man who without much ado, dug deep into his beloved country's soul and created products that represented its highest ideals and the simplicity of its people.

The expansion:

The Godrej Group was already an iconic presence on the Indian business landscape when Adi Burjorji Godrej joined the company in the sixties. However compared to where it is today, the Godrej brand was a contained success, relying on the tried and trusted products like locks, safes, wardrobes and soaps. And even Adi Godrej could not have imagined that in 2017 he would be anointed the 814th richest person in the world with a net worth of US$ 2.8 billion.

He was however being prepared for the role he would eventually play to steer Godrej to unprecedented success. He received his MBA from the MIT Sloan School of Management, where he was a member of the Pi Lambda Phi fraternity and a member of Tau Beta Pi. Interestingly, he was the first management graduate to join the family business.

His first steps after joining the company were towards the modernisation of management procedures. The group had two companies then—Godrej Soaps and Godrej & Boyce that manufactured furniture, safes and locks etc. Adi decided to back the company that was not making profits and joined Godrej Soaps.

He also had to grapple with a closed economy and the travails of the License Raj where red tape obstructed businesses at every step.

His focus was upon cutting costs and on human resources management. He also brought in fresh blood in the management ranks and emphasised upon marketing and creating a result oriented work culture.

Along with his brother Nadir Godrej, and his cousin, Jamshyd Godrej, he steered the company towards international expansion in Asia, Africa, Latin America and beyond.

What expedited the success was the liberalisation of the Indian economy in 1991 and the Godrej’s used to beating global products at their own game right from the time of Ardeshir, utilised this new business climate to hone their competitive edge.

They also began to partner with global players like Procter & Gamble and with GE Appliances in the nineties. The House of Godrej's joint venture with US-based consumer products company Sara Lee brought into the company's kitty, brands like Good knight and Hit, and the Kiwi brand of shoe polish. That partnership lasted for 15 years, till 2010.

Around 2000, Adi split Godrej Soaps into two halves—its consumer products company, Godrej Consumer Products Ltd (GCPL), and Godrej Industries.

Subsequently, GCPL bought over 11 companies across various countries and true to its pioneering spirit, the company’s unassuming hair colour, impertinently challenges global players like L’Oreal till date.  The company has also diversified in areas such as vegetable oils, chemicals, animal feed, palm oil plantations and more.

Carrying forward the CSR activities that Ardeshir was so devoted to, the Godrej family supports the World Wildlife Fund in India.

At a time when many corporate houses are being blamed for being ecologically insensitive, the Godrej group has cultivated a green business campus in the Vikhroli township of Mumbai, with a 150-acre mangrove forest and a school for the children of company employees. The Group supports causes that include healthcare, education, the Smile Train initiative and the Godrej Memorial Hospital among others.

Reports state that 25 percent of the shares of the Godrej holding company are held in trusts such as the Pirojsha Godrej Foundation, the Soonabai Pirojsha Godrej Foundation and the Godrej Memorial Trust.

Adi's wife, the late Parmeshwar Godrej did a lot to add to the popular appeal of Godrej products at a time when advertising budgets were slim and nobody could have thought of investing a fortune in an unglamorous bath soap. She also played hostess to some of the biggest stars in the world and lent a hospitable, accessible aura to a rather reclusive business family.

An inheritance of ethics:

In keeping with its founder's ideals and the remarkably level-headed leadership of Adi Godrej, the house of Godrej has never washed its dirty linen in public and has maintained a remarkably dignified public persona. One of the ways in which Adi has preserved the corruption free image of the company is by steering clear of areas where the interaction with the government is intensive.

The amount of integrity the house of Godrej demonstrates while dealing with real estate projects and defence equipment is exceptional.

Even in family matters, roles are well-defined so that there is no confusion about boundaries, privileges and duties. Young members of the family are heard out, included and not stifled.

Qualified family members are given positions commensurate with their abilities and interests and today Adi's younger daughter Nisa, elder daughter Tanya Dubash, son Pirojsha play important roles in the development and expansion of the company.

Competent managers like Vivek Gambhir, Balram Yadav and Mohit Malhotra though not from the family tree have done their bit to add to the company's growth. The key to the success of the Godrej family is that there is no nepotism and everyone who joins the company must deliver.

At the heart of the Godrej credo is the ‘good and green’ path. The three pronged method trains young Indians in life skills, protects the environment; and is committed to generate a third of its revenue from good and green practices like eco-sensitive buildings et al.

After a lifetime of work, Adi is still keen to keep on learning about the world. He has travelled to over 93 countries and yet there are cities that call his name and projects he wants to invest thought and passion in.

His humility doesn't give away that his company touches over millions of Indian lives every day with home appliances, security solutions, storage solutions, precision engineering , food processing, refrigerators, washing machines, microwave ovens, aerospace equipments, air fresheners, car perfumes, forklift trucks, sweeping machines, bobcats and more.

At the last count, the group’s average turnover has crossed USD 3.5 billion with products spread across 60 countries.

Adi Godrej, say his peers, is not just a business leader, he is a statesman. Ardeshir would approve.
Moneycontrol News
first published: Apr 30, 2018 05:24 pm