Posted: 23 Mar 2010 12:18 AM PDT
Riding on India’s growth story, the century-old Rs 13,000-crore Godrej group has been undergoing a metamorphosis of sorts as it gets ready to herald a new era where real estate could become its biggest business. This comes even as it claims to be the only Indian company with the largest consumer touch-point in the country with 470 million consumers.
Besides, the group has also managed to retain its relevance in the marketplace and this has a lot to do with the induction of the fourth generation of the Godrej’s into the group. However, while on one hand, the group is poised to attain a youthful exuberance, on the other, like all family businesses, it is going through a phase of succession planning.
The third-generation Godrej’s in the supervisory position have been engaged in internal discussions for some years now on this matter. The Godrej family council, which was set up a decade back, has now inducted two external directors, Keki Dadiseth and Naushad Forbes. What shape the discussions take only time will tell, but the seriousness with which the family has undertaken this exercise epitomises the transparency in its culture that has been handed down from one generation to the other.
The Godrej’s are among the few families which have followed a structure of equal ownership for decades. In an interview with Namrata Singh, group chairman Adi Godrej, who turns 68 this year, spoke at length on how the group is charting its growth path. Excerpts:
Over the last few years there’s been a visible change in the Godrej group. Is it a conscious decision to change so that the group remains relevant even as it turns 113 years old this year?
Over the last few years we had a relook at our strategy and when we saw four years of 9% plus growth, it led to an internal realisation that we needed to revisit our strategies in many areas. The important changes we’ve made include the new strategy cell that we have created. Secondly, we decided to form a FMCG leadership team for the three FMCG businesses (Godrej Consumer Products, Godrej Sara Lee, Godrej Hershey Foods & Beverages), which would look at synergies in each business and opportunities for inorganic growth. The third thing we did was to have a relook at our brand Godrej and its positioning across companies. We formed a team led by my daughter Tanya [Dubash] and partnered with Interbrand, a brand consultancy firm, about two years ago. We decided to go in for property development, which has been added as a major focus area for the group. We also worked over the last 2-3 years to take Godrej Properties public, which we were able to list in January.
Over the last few years we had a relook at our strategy and when we saw four years of 9% plus growth, it led to an internal realisation that we needed to revisit our strategies in many areas. The important changes we’ve made include the new strategy cell that we have created. Secondly, we decided to form a FMCG leadership team for the three FMCG businesses (Godrej Consumer Products, Godrej Sara Lee, Godrej Hershey Foods & Beverages), which would look at synergies in each business and opportunities for inorganic growth. The third thing we did was to have a relook at our brand Godrej and its positioning across companies. We formed a team led by my daughter Tanya [Dubash] and partnered with Interbrand, a brand consultancy firm, about two years ago. We decided to go in for property development, which has been added as a major focus area for the group. We also worked over the last 2-3 years to take Godrej Properties public, which we were able to list in January.
You would ask why now? There are two or three reasons. One is that India’s growth rate has accelerated well. We think that the next decade is going to be the best ever for India. We expect growth rate over the next decade to be 10% plus. Over the last 2-3 years, we’ve also inducted a lot of younger family members into the business. Or, they’ve been working in the group and have now taken strong leadership positions. They’ve driven a lot of this change too. All in all, this encompasses our desire to bring about the changes.
Your eldest daughter Tanya Dubash has been with the group for long, Nisa has taken an interest in HR, while your son Pirojsha is keen on the real estate business. What kind of future roles do you have in mind for them?
Tanya has been there for almost two decades. Nisa is active on HR and strategy. Pirojsha is currently involved in Godrej Properties. He’s the executive director on the board of the company. These are the current roles. Their roles will evolve over time.
Tanya has been there for almost two decades. Nisa is active on HR and strategy. Pirojsha is currently involved in Godrej Properties. He’s the executive director on the board of the company. These are the current roles. Their roles will evolve over time.
Do you see Tanya emerging as a future leader of the group?
We have not enunciated anything of this sort.
We have not enunciated anything of this sort.
That brings us to the question on succession planning. Anil Sainani (a former civil servant who runs his consulting business on family governance) has been working on this matter for sometime now. What has been the progress?
He’s not only working on succession, he is also the advisor to our family council. There we keep meeting regularly. We don’t want to comment on family business matters.
He’s not only working on succession, he is also the advisor to our family council. There we keep meeting regularly. We don’t want to comment on family business matters.
Source: MagiucBricks
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