Forbes India 15th Anniversary Special

It is a luxury to be able to incubate and build a business: Jamshyd Godrej

The Chairman of the Board of Godrej & Boyce Manufacturing Company Limited speaks about the advantages of being in a family business, the company's investments into the aerospace sector and his father Naval Godrej's lasting values

Jasodhara Banerjee
Published: Feb 10, 2023 12:28:39 PM IST
Updated: Feb 10, 2023 12:45:27 PM IST

It is a luxury to be able to incubate and build a business: Jamshyd GodrejJamshyd Godrej, Chairman of the Board of Godrej & Boyce Manufacturing Company Limited

Amar Chitra Katha recently launched its latest book in the ‘Pioneers of Progress’ series on the founders of Godrej & Boyce, in which it commemorates Naval Godrej’s contribution to the Godrej & Boyce conglomerate. Jamshyd Godrej, son of Naval Godrej, and Chairman of the Board of Godrej & Boyce Manufacturing Company Limited, spoke to Forbes India about the lasting values that have guided the Godrej family in its business ventures, the challenges and advantages of being in a family business, and the attributes he would look for in the next generation of leaders.   

Q. What have been the broad principles and values that the Godrej family has followed while building one of the oldest, biggest and most successful conglomerates in India?
In the early days there was a very strong theme of self-reliance and being innovative in whatever we did. That is a theme that continues. The other values were about people. My grandfather, one of the things he was very keen on when we moved from the old campus to the new one, was that we should be more inclusive for employees, whether it was schooling or housing or health, which continues today. Also, ethical businesses and business practices was another big theme for the family, and that certainly continues. That’s the ethos of our founders that continues.  

Q. Do you think it is easier or more difficult to establish family businesses today than what it was during your grandfather’s time?
Almost every business starts out very small, as a startup. If it’s a startup with the connotations of today, then there are a large number of external shareholders. But traditional family businesses were about the family being in the business and running it. Both concepts are valid and continue today.  

The regulations around businesses today are certainly more complex than in the past, and one should always expect them to get more and more complex as they go on, because there are so many issues to deal with, with stakeholders, governments and compliances. At one time businesses did what they wanted, because that was the way it was, but today any startup has to worry about so many different things, regarding regulations etc. So, certainly from that angle, it is more complex.  

Q. For you, personally, what have been the most rewarding and challenging aspects of being part of a family business?
In my case, it gave us a lot of freedom to think long-term. For instance, many of our businesses needed to be nurtured over a long period of time before they could mature and perform well. You don’t always have that luxury. It is a luxury to be able to incubate and build a business. I would say that essentially, the ability to be able to do that and build on our current strengths is a big deal for me.  

Q. In the past couple of years there have been several startups that held a lot of promise and very high valuations. They went on to IPO, after which their stocks and performance plummeted. Do you think in the current scenario where startups have so many external stakeholders, it is becoming more difficult for young companies to have this long-term vision and nurturing approach?
It all depends on how you position what you want to do to the investors; if you position yourself saying you need say, 10 years, for this business to be successful, to be able to nurture it before going into an IPO or anything like that. It is all a question of how you present yourself. If you position yourself as a ‘get rich quick project’, then you get a different kind of reaction. 

Also read: A career in the family business: Duty or choice?

Q. Given that Godrej is investing in a new aerospace facility at Khalapur, near Mumbai, how do you see the private defence manufacturing sector shaping up in India? What are the plans for Godrej Aerospace in particular?
A big change has taken place in the government’s approach to the private sector. There was a period, not so long ago, when there was an active effort by the government to keep the private sector out. And today the government is not only interested in bringing the private sector in, but is actively encouraging them, and giving them orders that would not have happened in the past. Obviously, those who had a good amount of experience in this area are the ones who will be able to grow quite rapidly. But we have also seen that many startups can contribute an enormous amount of talent and opportunities for young people.  

What I have seen in aerospace is that it needs a heritage. Aerospace is not something that you can easily pick up. Even around the world, people who have the skills and heritage of being in this industry are the ones who have been able to get into startups and do things. Startups can think out of the box and do things differently. 

It is a luxury to be able to incubate and build a business: Jamshyd GodrejAmar Chitra Katha recently launched its latest book in the ‘Pioneers of Progress’ series on the founders of Godrej & Boyce, in which it commemorates Naval Godrej’s contribution to the Godrej & Boyce conglomerate

Q. Are collaborations, then, between younger startups and more experienced companies the way forward?
Yes, I think so. Wherever you can get talent from the outside, it’s a good opportunity for both.  

Q. Why did the government keep the private sector out of aerospace in the past, and why has there been this dramatic shift? What are the factors, such as cost, localisation or security, that have influenced the shift?
I would say the foremost factor is trust. In the past, the level of trust between the government and the private sector was just not there to allow large scale intervention from the private sector. And that has changed dramatically. There is an element of acceptance that you can trust the private sector as much as you can trust the public sector. The government felt at that time that the public sector was a better way to deliver these goods, because of the security issue, the fact that it needed huge investments to be made, which was being made only by the government sector, and also because armaments and anything to do with defence was considered strategic from a government perspective.
 
All of these have changed. There is a much greater level of trust and appreciation of what the private sector can bring to this. The experience of the government was that in many of the programmes, they were not able to get goods in time. We have had lots of times where programmes got delayed and costs were overshot. There is an appreciation that the private sector can be more nimble, can be faster, and will stick to timelines and costs. And this has been borne out.

Also read:  Why India's defence sector is booming

Q. What are the challenges for a large conglomerate to implement green initiatives across its verticals?  
There are a number of reasons to go green. One strong impetus for companies to be much more green is that the cost of energy in India was very high for industries. And the only way to reduce that was to become more green. At Godrej & Boyce, over the last 10 years, we have been able to halve our specific energy consumption through all sorts of interventions over time. It could be improvement in products or processes, or more efficient use of resources. We plan to again, over the next 10 years, reduce our specific energy consumption by half. These are the sort of initiatives we have had. We also have a programme called Good and Green, where we have focussed on products that are good for society, and which are green. This has resulted in all our businesses looking at our programme carefully and are able to reduce consumption of energy and water, and reduce generation of waste. When there is an overarching theme like this, you do get good results.  

Q. What are the new sectors that Godrej & Boyce would be looking at in the near and mid-term?
Our basic approach is that in each of our business units they have the opportunity to deepen and widen their portfolio, their goods and services. To a very large extent, that’s what we have been doing. For most of our products, the industrial penetration levels have been quite low, so there is a lot of opportunity to be innovative and green. My theme in the company has been that we need to keep innovating, and do that in conjunction with being sustainable and green. So it’s a combination of innovation and green that is really going to allow us to make the goods and services that are highly competitive.
 
Q. We know your father Naval Godrej as one of the pioneers of Indian industry, and the recently launched book by Amar Chitra Katha focuses on this aspect of him. What is the one thing you remember most fondly about him as a father?
He had a theme in his mind, about what new thing have you done today. He was always looking at the next challenge. As a father, my talks and discussions with him were always about that. How do we become more ambitious; how do we do things differently and do them better; how do we grow. Aside from the business, he was talking about people; he got this strong theme, that he got from his father, that industry needs to be much more socially oriented to supplement housing and schooling and health care. There was a very strong theme of how do we make people’s lives better. And that came through to us as children. He had wonderful hobbies—sailing was one big hobby, that I am also keen on. He was able to, through example and through his life, motivate us to do these things.

Also read: Succession planning: Now more essential than ever before

Q. There have been reports about Godrej & Boyce planning the next generation of leaders from within the family. What are the lessons in succession planning that you have for any younger company that might be in a stage of growth where the founders are looking to hand over the reins?

The first thing is that there must be a great interest and hunger to be part of an organisation and the belief that you have a lot to contribute. We all know that leadership is not about one person, it is about the whole organisation. So how do you pull an organisation together to move in a particular direction. Whether it is a family member or a professional CEO is not the issue so much as what is the passion you have to do that. Passion is really important. How do you come across in your organisation? Do you promote openness? Do you promote diversity? These are very important in an organisation.  

Q. What are the three top qualities that you would look for while identifying the next generation of leaders?
Firstly, it is empathy. You must be able to put yourself in the shoes of other people, and understand where they come from, what their interests are, where they are going. The next big value should be about openness—open to new ideas, new thoughts and ways of doing things. And then there is being open to new technology. Today things are becoming much more digital, and you should be open to appreciate that there are new and different ways of doing things, and that you need to explore all of that.