The Godrej Group

Management of Change
Kaizan and TQM Implementation in Godrej

Group: Abhishek Soni: 01 Akanksha Bansal: 02 Ankit Dalal: 04 Astha Bishnoi: 13 Deeksha Uniyal: 19 Nikhil Sharma: 35 Nirankar Singh Royal: 36 Swimmi Alaska: 55

TABLE OF CONTENTS INTRODUCTION: THE GODREJ GROUP ................................................................... 3 CONTEXT FOR CHANGE .......................................................................................... 7 CHANGE INITIATIVES TAKEN UP IN GODREJ ........................................................... 8 KOTTERS MODEL OF CHANGE FOR TQM IMPLEMENTATION............................... 14 RESISTANCE TO CHANGE ...................................................................................... 16 IMPACT OF KAIZEN ON FINANCE .......................................................................... 18 IMPACT OF CHANGE ON ORGANIZATION ............................................................. 18 LEADERSHIP OF ADI GODREJ ................................................................................ 19 References ........................................................................................................... 23

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 de-merged 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. 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.

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 under-privileged 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 vicepresident 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 induction-training 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 elearning portal -learnatsatyam.com. Internal communication measures like enrolment on a firstcome-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 Number of suggestions received per employee per year Suggestions implemented (%) Participation ratio Cash Award per suggestion implemented ($) Cost savings per person per year AMERICAN 0.13 24 8 605 250 JAPANESE 24.7 80 67 3.25 2,750 GODREJ 28.8 Over 80 Over 70 0 270 (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-garde and 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

References
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