Building on the brand
Indian property developer Godrej Properties is gearing up for its next phase of expansion. Managing director Milind Korde explains to Gay Sutton how good communications and long-term partnerships lie at the heart of its operations.
Much has been written about the miracle of the Indian economy and its rise to become one of the major global powers of the 21st century. Boosted by economic reform, Indian industries and businesses are emerging as power houses on the world stage, while segments of the community are experiencing dramatic cultural and lifestyle changes. These changes are easily visibleÔÇöif you were to look at the skyline of Mumbai today, you could be forgiven for wondering if you were looking at Manhattan or Hong Kong.
One company playing a major part in changing the shape of the nation is Godrej Properties. The company was launched some 20 years ago by the Godrej Group, a highly respected company with a 113-year history of quality and integrity, and a powerful brand name recognised throughout the country. Today, the group has a wide spectrum of interests from fast moving consumer goods and industrial engineering through to appliances, furniture, security and agri-care, and has a presence in some 60 countries worldwide.
GodrejÔÇÖs diversification into property development was based upon sound business judgement, and its timing was immaculate, coinciding with the first early wave of IndiaÔÇÖs renaissance. ÔÇ£The group had several parcels of land around the country, and our vision was to monetise them by launching into property development,ÔÇØ explains managing director Milind Korde. ÔÇ£There were not many property developers at that time, and we consequently began with a big advantage.ÔÇØ
From the very beginning, Godrej Properties was structured around a unique joint venture (JV) business model which it has successfully taken country-wide. Each project is managed as a JV development partnership: ÔÇ£Our partner provides the land and we provide the funds, expertise and manpower to manage the project. We also bring the strength of the Godrej brand to marketing the property.ÔÇØ
Today, the company has completed many prestigious developments, including Planet GodrejÔÇöa 48 storey tower block that is currently MumbaiÔÇÖs tallest residential building. The business has regional offices and multiple ongoing projects in Mumbai, Pune, Bangalore, Ahmedabad, Mangalore, Chennai, Kochi, Hyderabad, Kolkata and Chandigarh. One example is the Godrej Woodsman Estate in BangaloreÔÇöa development of seven apartment blocks at a height of 16 storeys, surrounded by lush gardens and including facilities such as a club house, swimming pool and childrenÔÇÖs play area. ÔÇ£We have a very large canvas at the moment,ÔÇØ Korde continues. ÔÇ£Primarily we develop residential propertyÔÇöand this is based on consumer trust in our brand. But we are also developing upmarket commercial and retail space.ÔÇØ
Good communications and transparency lie at the heart of the companyÔÇÖs operational success, and this ethos spreads throughout all its business dealings. From the very outset of a new project, the JV partner is constantly updated on progress via weekly and monthly meetings. ÔÇ£In terms of property development, our JV partners may not understand all the technicalitiesÔÇöbut we keep them informed of what is happening in terms of project schedules, what kind of revenues we are expecting and when we can expect to realise that profit,ÔÇØ Korde explains. ÔÇ£If they have points of view, we take them on board. But we are the people who drive the project. The buck stops with us.ÔÇØ
Similarly, the company is concentrating on building upon the strength of its customer relationships. ÔÇ£Six months ago we appointed a chief customer officer, who not only deals with customer related grievances, but is tasked with communicating with our customers, managing group discussions and analysing their needs. These ideas are then incorporated into our plans at the design stage.ÔÇØ
With properties aimed at the prestige end of the market, the company works with some of the worldÔÇÖs best architects, and has developed a strong long-term relationship with US engineering and construction company Larsen & Toubro, which handles the majority of the construction work. Again, the relationship is communications based, and a whole series of protocols and technologies have been put in place to enable Godrej to micromanage and oversee the projects.
Using web-based software called Concerto, the company is able to track each project, day by day. ÔÇ£We manage construction projects according to Eli GoldrattÔÇÖs theory of constraints,ÔÇØ Korde says. ÔÇ£Through Concerto we are able to see if there are likely to be any constraints on the projectÔÇöof course some are manageable and some are beyond our control. But where we are able to, we intervene strongly and manage those constraints, removing any impediments which could affect the project.ÔÇØ
The relationship with Larsen & Toubro has been very productive, and Korde believes it is central to the companyÔÇÖs ability to deliver superior quality properties consistently and quickly. Maintaining this partnership is a key element of ongoing business strategy. However, he also acknowledges that as the company expands, it will be widening its partnership horizons. ÔÇ£Looking at the scale at which we may operate into the future, there is room for developing two or three more construction partnerships,ÔÇØ he says, ÔÇ£particularly as we expand and operate in different regions.ÔÇØ┬á
Expansion is definitely part of the ongoing business strategy. The company has continued to thrive, in spite of the global recession. ÔÇ£We feel there is a huge opportunity for real estate development in the next decade because of the sheer growth of the economy and the populationÔÇöwe have a very large and young population for whom consumer finances are available. And we intend to strongly leverage on this in the future,ÔÇØ Korde comments. ÔÇ£While our focus will continue to be residential, we would like to maintain a balance of two-thirds residential and one-third commercial.ÔÇØ
None of this could be achieved or maintained without a highly skilled workforce, and the Godrej Group has a well established HR process. ÔÇ£We are a very learning oriented organisation,ÔÇØ Korde says. ÔÇ£Through regular reviews we assess our people on their strengths and weaknesses. We then leverage their strengths, identify their weaknesses and provide training programmes to hone their skills.ÔÇØ
The HR process also includes preparing suitable management staff for leadership positions in the future, thus securing succession within the company. This mixture of well honed business partnerships, a powerful brand name, highly trained staff and excellent communication skills is likely to enable the company to expand with confidence and security.
