For someone who loves books and dislikes naming favourites, it’s tough to quickly make a list of only 10 must-read books. There are so many valuable books an entrepreneur can learn from that this list is only a starting point, rather than “the Top-10”. But, then, one of the most important things an entrepreneur can do is to overcome his or her own resistance at some of the most inconvenient times. So here goes!
Good to Great (Jim Collins) – this book delves into some fundamental strengths that entrepreneurs need to seed into their business fairly early. Interestingly some of the companies listed in the book may no longer be called great (a weakness with most management books quoting specific examples), but I believe the principles stand the test of time.
The Tipping Point (Malcolm Gladwell) – some small things do become big. Every entrepreneur and start-up would love to know how and why; Gladwell’s book offers a different perspective – from epidemics to better governance. Much learning for the start-up and the small business owner.
Losing My Virginity & Screw It, Let’s Do It (Richard Branson) – one autobiography is usually enough for most people – trust Richard Branson to not fit into that mould. I’ll count them as one. As an entrepreneur who went from selling records to creating one of the most diverse brands covering airlines to telephone services, Branson will certainly have something for everyone. The books offer a view into his struggles as much as his successes.
The High Performance Entrepreneur: Golden Rules for Success in Today’s World (Subroto Bagchi) – if for nothing else, read it for the first chapter: “How Do I Know if I Am Ready”. Of course, once you’ve gone through that chapter, it is remarkably easy to go through the rest of the book, which offers guidance from Bagchi’s own deep experience as an entrepreneurial manager and as an entrepreneur.
Fortune at the Bottom of the Pyramid (C. K. Prahlad) – who says you have to have millions in the bank and service only rich customers to be a successful entrepreneur? I must admit I came very late to this book, and am yet to complete it, but it is an excellent reference source for case studies of innovative and very large businesses being grown in markets that are typically treated as poor or low value, environments that many Indian entrepreneurs can relate to.
Made to Stick: Why Some Ideas Survive and Others Die (Chip Heath, Dan Heath) – Inspired by the Tipping Point, the Heath brothers describe what it takes to get your ideas across, and make a lasting impact. A must for entrepreneurs looking for funding, to hire great people and keep them motivated, and to capture lasting customer relationships.
It Happened in India: The Story of Pantaloons, Big Bazaar, Central and the Great Indian Consumer (Kishore Biyani) – there are too few books about or by Indian entrepreneurs, so this is one growth story in desi style that many start-ups would be able to relate to. It is not as polished as most other entrepreneurial autobiographies, but valuable nevertheless.
The New Business Road Test: What Entrepreneurs And Executives Should Do Before Writing A Business Plan (John Mullins) – an someone who turned from corporate life to academics and further to being involved with entrepreneurs, Mullins provides a great framework to help the entrepreneur filter and refine his concept of the “next big thing” into a real business.
Venture Capital Funding: A Practical Guide to Raising Finance (Stephen Bloomfield) – while written from a UK and European perspective, it is a valuable reference for anyone looking for external funding. A practical guide to the whys and the wherefores, the jargon and the structures of venture funding written for an entrepreneur.
And last but not the least – pick your favourite philosopher or guide. No matter whether we are overtly spiritual or completely agnostic, there are times, many times in an entrepreneur’s life, when we need to step beyond the intellectual construct of business, look beyond plans and strategies, and next year’s targets. Depending on how you are feeling and what you need at that particular time, this book (or these books) can be versatile in offering you guidance for your next steps, direction to correct your course, or simply a platform to stabilise yourself.
The thing about lists is that even if you find one item on the list that makes a substantial difference to you, the list has been useful. Among the above, I believe you will find more than one that will create such an impact. Happy reading!
[Column written for The Economic Times, 13 November 2009]
It has been around 200 years since the birth of Charles Darwin, and about 150 years since the publication of his and Alfred Wallace’s thoughts on evolution by natural selection. In their honour, let us remind ourselves of the basic theory that all of us learn at school. (So I’m a few months late acknowledging it – please bear with me!)
On Evolution: Change Happens
(1) Species differ from each other, but individuals within a species also differ from each other quite a bit.
(2) These differences are due to changes to the basic genetic framework of the organism (mutations) which can get passed on to following generations.
(3) The environment keeps changing physically, climatically and biologically.
(4) In the new (changed) environment some of the mutations survive better than others (“natural selection”).
(5) The effect of these changes over several generation results in the evolution of species, and the rise of new species.
The primary reason I am highlighting this theory is because, to my mind, businesses are like living beings. Businesses are conceived, given birth to, they grow, and most of them die after a few years or a few decades. During their life some businesses get married (merged or acquired), and sometimes they give birth to other businesses.
About 2-3 years ago, the business climate seemed predictable and only looking upwards – the biggest challenges in the food and grocery sector seemed to be whether your ambition was bigger than your competitor’s. Many predictions were made about how the large – more “organised” – businesses would quickly kill the small.
However, with much turmoil in the business environment in the last year or so, it is evident now that it is not just the small companies that are vulnerable. The change in the environment is also giving new growth opportunities to the smaller or younger, previously vulnerable, businesses. While some of the larger businesses have died or are in the process of dying, some of the smaller businesses are mutating even more to survive better in the changed surroundings.
Although small businesses are always looking for growth, the new environment can bring such a surplus of opportunities that, in the helter-skelter growth the learnings are quickly lost and the business may actually go off the tracks.
On Process: Passing On the Genes
The challenge for the smaller businesses now is to pass on their genes down the generations; for the management to ensure that the newer stores and the newer recruits gain from the learning and the adaptations already in the organisation.
At an entrepreneurial stage, the core team handles critical activities and is on call to guide others. The team is knit quite tightly, and located geographically close together. The stores are few and in locations with a similar environment. “Knowledge” is inherent in the way you do things, guided rather than taught.
You may recall my stressing culture and organisational personality, the “people” end, in a previous article. At the early stage of the business, very often, that is all there is. But growth needs replication and predictability.
Biology again gives us a great lesson in how to replicate learnings and functionality: genes (DNA) provide the template for cell functions, and are reproduced almost faithfully from previous generations.
In a business, such replication comes from well-designed processes incorporating the intent, the activities and the desired outcomes. For growth, processes are a must; they are the genetic code of the business. Processes provide the design for how a customer would interact with the store, how the store would interact within itself and with other points in the organisation, and how the organisation would interact with external agencies.
You may ask, “How much process should we depend on, and how prescriptive or restrictive should we make them?” You may also point out that processes start off with very good intention, but with time – and often distance from head office – the processes decay.
And you would be right.
On Decay: Bad or Good
Even in bureaucratic organisations, adjustments are made to fit people or situations, and that causes the process to mutate. Sometimes the change is temporary, at other times the process may change completely and permanently. If changes happen passively and are not channelled the existing process will decay.
I use the word “decay” carefully. While the process change itself may be good at a point (e.g. responding to a customer need), the organisation as a whole may not learn much from it, or the change may affect one part of the organisation and not others. If that happens, the organisation and its systems will become dysfunctional at some point.
For instance, it could be the little leeway that the merchandising head provided to some managers that erupts into an uncontrolled working capital epidemic across the chain. Or a margin adjustment with a vendor at a certain point in time becomes a deadly norm.
So, back to evolution: mutations are a fact of life. Adaptations are happening because of the changes in the environment. Managers need to critically question: does this change meet a current ongoing need or provide an ongoing advantage, and can it apply to the rest of the business? If the answer is no, ask people to read the rule-book (the process manual).
If the answer is yes to both, change the rules, and make sure the new process is implemented quickly and smoothly across the organisation. Then it will be “adaptation” rather than “decay”.
After all, the conclusion that Darwin, Wallace and many others have given us is this: it is not the strongest, the biggest, the fastest, but the most adaptive who survive.
In a recent workshop on fashion styling, we were discussing how the retail seasons have evolved. In the developed economies, from the traditional two seasons – spring-summer and autumn-winter – the number of seasons grew as fashion brands discovered or invented (take your pick!) sub-seasons to create and satisfy distinct demand in specific time periods. For many companies, the number of “seasons” has grown to 10-12 now including transitions and “promo season” series.
India, you would think, essentially has two seasons, the summer and the festive season. However, in the last decade or so, as exposure to the global culture has increased, other “seasons” such as the “Valentine’s Day” have emerged and proved important for retailers.
In fact, events such as the “Sabse Sasta Din” (“the cheapest day”) on the 26th January (India’s Republic Day) created by Kishore Biyani’s Big Bazaar in 2006 should also qualify as seasons, given the huge sales upsurge during the event. In fact, the impact has been such that many other retailers and brands have also taken this concept rather seriously this year. In fact, after a rather dull consumer response in the festive season in 2008, many of our clients reported rocking sales in the last week of January 2009 on the back of heavy promotional campaigns.
More recently while voter awareness campaigns such as “Pappu can’t vote” have been effective marketing initiatives to get many of us out of our comfort zones and exercise our voting rights, many retailers and brands have also seized this opportunity of citizens’ awakening by offering up to 20% discounts to those who have voted. The economic slowdown is certainly getting people to think differently and more creatively. So, “Jago re” (awaken) brands, retailers and countrymen – go ahead and fashion your own season!
We’re all for new business ideas and guerilla marketing tactics. However, it is a fact that some work, and many don’t.
Here’s one idea that raises some question marks.
It’s a business called freepapercups.com that provides free paper cups to offices carrying the ads of other companies who pay for the cups. The company’s proposition is that everyone wins – the recepient office saves on paper cup expenditure, coffee service providers get a new tool to save their customers money (and for themselves to possibly gain some share or the revenues?), and the advertiser gets to penetrate a previously untouched white-space. Who knows – this may work, just like the ads and logos painted on the roofs of white delivery vans.
However, the thing is this: paper cups – with ads or without – will get thrown away like yesterday’s newspaper and last month’s magazine. So, this would be another form of broadcast advertising whose effectiveness needs to be measured and proven, and it’s guilty (of waste) unless proven innocent.
Also, it is invasive to a great degree in a space that should be uncluttered with any messages other than what are relevant to the organization’s own business.
So, will it really contribute anything significant to the offices who won’t be spending on the paper cups, or to the brands that do spend to advertise on them? Or will it just detract from both?
What might be next – co-branded letterheads perhaps?
Lest I sound too much of a cynic, let me offer up a thought: maybe governments should put a new line item in their budgets – “Grant on expenditure on ceramic coffee cups for offices to carry environmental and fiscal-consciousness messages”.
A caffeine-laced economic stimulus – now that should get the economy going again!
(Based on the special address By Devangshu Dutta, Chief Executive, Third Eyesight opening the second day of Prime Source Forum 2009, Hong Kong)
I’d like to thank the organizing team at Prime Source Forum for this opportunity to address this distinguished group of top management from the global apparel and textile industry.
I’ll take you through a brief presentation that’s slightly different in flavour. it’s a little bit of a step back from what we discussed yesterday and will continue to discuss during the day today. It’s looking at the world as we’re seeing it evolve and unfold – discuss things are possibly being seen, heard but not really understood.
I’ve titled my presentation “Itches, Cuts and Fractures” and I’ll explain that seemingly strange title shortly.
First of all, as all of us were discussing yesterday and you must have felt it – there’s a sense of uncertainty; nobody seems to have the answers. Certainly not the experts; the experts got us here. The experts had all the answers till about six months ago and all the answers turned out to be wrong.
Instead, I’d like to take a step back and look beyond numbers, beyond rationales. All explanations and analysis seem to ignore one of the strongest drivers of humankind – emotion. Underneath all the thinking, reasoning, logical layers, it is emotions that actually drive many of our decisions.
When it comes to uncertainty – when it gets to an extreme – we tend to get into a fearful situation. When we don’t know what’s happening, or what’s going to happen, fear is actually the emotion that drives a lot of the decisions. We’re beginning to see a lot of that in the world, around the world in different countries. You might think that this might happen in the more developed economies, others might think that this is likely to happen in the less developed economies, but it is actually happening around the world.
And when it comes to another step further, fear actually causes friction.
As students of Zoology, we learn about how animals respond when they are threatened. In a shifting environment with many potential threats, fear and survival instincts trigger the “fight or flight response”. The animal can either try to fight the threat or to escape.
It is no wonder, then, that ‘friction’ is the first reaction in a world where there is a lot of uncertainty and lots of fear.
And we’re beginning to see the signs of that…if you caught the news yesterday about what’s happened in London while the G-20 leaders get together for the Summit. There’s clearly a lot of anger, a lot of resentment which is bubbling over. You might remember a small news item from a few weeks ago, about somebody’s expensive car being torched by a group of youngsters in western Europe, some of whom had recently lost their jobs.
In uncertain times, not only do we stand up to fight potential threats, we even see many more things as threats than we did earlier.
Let me ask you this question – how many of you remember how the 1930s Great Depression ended? It didn’t end in a “Great Revival”, it actually ended in a World War. I don’t mean to sound alarmist, but people do stupid things when they are under pressure. We all do. That is something that nobody wants, but sometimes your hand is forced and you end up taking actions that you regret later.
This is one of the issues that I think should concern all of us, and I’d like to talk a little later about how to deal with that.
If you look at some of the actions that have happened in the political domain, it’ll be clear how this is affecting what we have discussed in this area – the global trade in apparel and textile products.
Well, we’ve already seen in the last 2-3 months the push-backs coming from different political parties in various countries, raising barriers, taking actions that are essentially “warlike”.
In fact, not very far from here [Hong Kong] American and Chinese ships actually got into aggressive posturing on the high seas. This may have been a political statement from either side. We don’t know what was going on or who was right, but clearly there is conflict arising out of friction.
This could go on to its logical conclusion, or we have the choice of a step back.
When you look at the textile and apparel business, and I mentioned this yesterday, is one of the most international around the world, this becomes critical whether you are looking at sourcing or exploring new markets. How do I know which countries are safe to go to?
A few weeks ago The Economist very helpfully published a table rating 165 countries. I could say it is surprising but it is not. Of the 165 countries rated in 2007 and 2008, only 2 countries showed an improvement from the previous year’s score, 12 showed no change (of which 7 were anyway in the very high risk or high risk category), and the rest all showed an increased vulnerability to economic, social and political unrest.
There is no surprise in the list of the countries at the top of the table or at the bottom of the table. What is surprising is the change in the rating, or the risk outlook. Countries like New Zealand, Austria, Australia, Mauritius, Norway…look at the change…as a percentage the change is very high. These are countries which you would think are fairly stable. So it is not just the already unstable becoming more so, but the potential of friction and conflict rising in relatively stable countries as well. The map looks redder – indicating higher risk – than it did last year.
So there is clearly a lot of uncertainty – we don’t know when it’s going to end, we don’t know when this recession will bottom out and we’ll see the light at the end of the tunnel. The situation looks fairly grim and the question is, what do we do?
We talked about the fight response, let’s talk about the flight response. One of the responses we have available is to not fight but to retreat, to protect ourselves.
That leads me to the other form of dealing with a threat – flight or escape. In individual terms this may literally mean running away from a location, in other cases this can mean deploying protection measures to cocoon oneself: a tortoise retracts within its shell, a squid squirts ink, while a hedgehog deploys its prickly quills.
What you’re trying to do is to protect yourself, your mind and emotions included, from all the uncertainty outside the boundaries you define.
Since countries can’t physically run away, governments build walls and engage in protectionism in the form of tariff barriers as well as non-tariff barriers such as procedural hassles in the way of imports, and get into trade fights which are essentially delaying tactics. You don’t really project too much aggression so as to get into a conflict but enough so as to present a barrier.
But – the good news is that there is hope! I believe that, fortunately for us, as Homo sapiens – “thinking humans” – we are not locked into our biological response systems alone. We have a third choice: to discuss and debate, to open a dialogue.
Partners who have turned opponents seem to be talking – there seems to be willingness to sit down at the table and talk things through. How quickly and what result will emerge remains to be seen. It is encouraging to see in this morning’s South China Morning Post a quote from the White House that the USA and China in their meeting yesterday “also agreed to work together and address the economic crisis, resist protectionism and to resume discussion about human rights as soon as possible.”
So, should we wait to see what emerges from these talks in London, and from the policy measures being announced by governments around the world? What do we do, as businesses, as individuals?
Well, I don’t think that freezing into indecision is an option. I don’t think inaction is an option. We have no way of knowing how the market will shape up, how the supply base will emerge, but we need to take steps to address our business concerns. Proactively or reactively we need to take action.
All the companies represented here in this room clearly need to respond to an economic situation that most of its management has never faced and most may never face again.
I have found as I have talked to people in the US in January, in the UK, in Europe, in India that many, many companies are postponing decisions, and the postponement is not rational. It is not to say that something will happen, and I know the window of time in which that event will happen, therefore I am postponing my decision to that future. They’re just postponing – it’s just “I’ll look into this later”, it’s procrastination – it’s not even postponement of a decision. And that is not an option. I don’t think we can sit tight and wait for this to blow over.
So what should we do? How should we respond – on the sourcing side and on the market side?
I’ll talk about the sourcing side first.
The first thing we need to do, is to break from what one author called “the Tyranny of Or”. For instance, in discussions with colleagues from the industry I’m struck by how much we think along bipolar lines of growth. We prefer things to settle either one way or the other way, for them to be conveniently predictable for us.
I would suggest that rather than debate between extremes, we need to accept that different markets and supply bases will evolve differently. It is not a choice between consolidation or fragmentation, globalization or localization (“could manufacturing move back to Europe, or to the US?”). Should we be strategic or be reactive? There has been discussion about partnership, long-term relationships, but that partnership was shaped in a world very different, many months or years ago when the world was very different. Shouldn’t we react to that change?
Should we look at getting the lowest cost or should we look at speed? Clearly when you look at speed, you would be looking at supply bases that are more capable and potentially more expensive. Should there be a trade-off?
That leads me to a second issue: eggs. That is, risk. There are two philosophies.
One philosophy says: put all your eggs in one basket and watch it very very carefully. The other more common saying advises that we should spread your risk around a little bit and spread the eggs in different baskets.
That’s the thing about risk – you can try and minimize risk, but you also need to try and mitigate risk , diversify risk.
Well, if there is just one thing we need to learn about risk, it is to “diversify, diversify, diversify”. Minimizing risk is only possible to a certain extent. So I would tend to go along with common wisdom here. And even if you believe in the first philosophy, it only works even partially if you have multiple eggs.
Yesterday we talked about a few other things – consolidating the business, conserving cash flows and being careful with our resources, and so on. But it also leads to conservatism. If you look around the room and see the number of black suits around, including the one on the stage, you’ll get a flavor of what I mean. These things are not divorced from each other. We deal with our business and rational decisions through the lens of our emotions. And when things are looking uncertain, we tend to contract, whether to regroup our energies or to protect ourselves – fight or flight which is a very instinctive, natural response.
The thing that we need to remember is that when you look at the fashion and the retail businesses, both of these businesses are fundamentally entrepreneurial in nature. Of course there are corporate businesses as well, but the successful ones promote entrepreneurship within the corporate.
And the thing about entrepreneurs is that there is a certain quality…you could call them mavericks. The night before last there was a conversation about how the average size of manufacturers and brands in this industry is much smaller than in other sectors. The reason for that is that the entrepreneurial drive actually takes precedence over any corporate diktat. The industry actually allows and encourages entrepreneurs to break off, and go and do their own thing. And that causes fragmentation.
Standing here today, after all that discussion on the sourcing panel yesterday about supply base consolidation, I have to say this: fragmentation, to my mind, in the current scenario is a good thing. You might call me crazy, but let me give you my reasoning for saying that.
Think about a beanbag – there is a lot of air in between the small pieces of foam, and the bean bag is a lot softer than one single solid piece of foam. The cushioning effect comes from the fact that there is a lot of air in between.
We need the cushion of diversity in the industry at the moment because there is no way – no way – we can predict who will succeed.
Some of the best known names in the industry have disappeared in the last six months. Twelve months ago nobody could have said, with any certainty, that they will disappear. So how do we decide what’s good, who should consolidate with whom, who will survive? We can’t! Nobody has a crystal ball, nobody can identify certain survivors. I would urge you to allow fragmentation to exist rather than just travelling on the consolidation route.
I think supply base consolidation and market consolidation has gone beyond strategic considerations, and almost become a fad. Consolidation does have some logic, but when it comes to risk, diversification is certainly preferable.
The recent crisis in global financial systems dramatically demonstrated not just how risky it is to depend solely on a few large institutions but also how the risk gets multiplied manifold due to these institutions might be interconnected.
In the textile and apparel business, instances such as SARS and the temporary re-introduction of quotas have demonstrated, again and again, the fallacy of over-depending on consolidated supply chains.
Also, too many people believe that the industry worldwide has no choice but to consolidate, that mergers and acquisitions are inevitable, and that large companies will dominate the business from retail to fibre. We forget that we are talking about the fashion industry, not the automotive or aerospace industry. Entrepreneurship here doesn’t cost billions or even millions of dollars.
We also need to look at balancing our approach – everyone has been looking at efficiency, which is a great driver: you strip out extra cost, extra time etc. but what I said about the risk is also true of innovation. You want different sources of innovation. There is not a single company in this room, or around the world in this sector, has the prerogative of being the only innovative company in the world.
As I said, this sector is entrepreneurial, and there is innovation coming from all kinds of people, from all kinds and sizes of companies. There is the need to allow that to happen and we would miss out tremendous innovation opportunities if we consolidate all our eggs into one or a few baskets.
So when you next look at dropping suppliers, think about what capabilities you might be losing or what risks you might be multiplying.
When you look at what that means for the sourcing approach, obviously you do want to reduce costs, when you are dealing with a predictable product, but the share of unpredictable is growing with every passing month.
In uncertain times such as now, and with unpredictable products, the prime driver is to “Catch the Trend” and the focus must be on “Response”. So you need to look at making the buying decision closer to the season and closer to the market. Development lead times must be shrunk and the lead time heavy decisions (such as fabric commitments, lab-dip approvals etc.) must be taken out of the critical path. This may even drive more sourcing from supply bases that are close to the market.
The panel on sourcing talked about lead-time yesterday. A lot of lead time is spent just going back and forth in the supply chain. The only way to handle this is for suppliers to not only become more capable, but to stand up and say “we are more capable”. They need to be able to say, “We don’t just convert fabric into garments, we can also do a lot of other stuff – we can new product, we can actually look at your sales trends and tell you what products we should be developing together.” This is an art, or a science, that seems to have disappeared (or is disappearing) over the last 15-20 years, as we’ve gone into this, dare I say, management consulting-led ‘strategic sourcing’ drive. The art of being a merchant is not only a retailer’s prerogative, but also something for a supplier to do. You need to be able to read the market, not just respond to a tech-pack, and I think that’s a skill set that needs to be emphasized and encouraged in the current market.
What should buyers do? Certainly, speed to market strategy is at the top of the agenda. Another response to this is to look at sourcing closer to home.
In this environment suppliers in global hubs should certainly be more concerned about reducing their “sketch-to-shop” lead times.
In fact, today buyers may look to proximity for more than just speed-to-market and the concern for clothing miles (“proximity sourcing is environmentally friendly”). Underlying that is the sense of security – that it is closer to home, more in the known territory than unknown, more “predictable”, it’s familiar – “I can manage it better”.
We’re going to see more of that – I don’t think we have a choice. Buyers are human beings, despite what several suppliers sitting in this room might think. Emotions do drive buyers’ decisions as well, and that is one of the emotions that will be driving some of the decisions.
Just a quick word on the market side: both factories and their buyers need to define the value that they bring to the market,
There is a lot of talk about partnership in this sector but, let’s be honest, there isn’t much partnership in this sector around the world. Companies do need to question what is the value they are bringing to their customers, and whether that value is greater than last year.
You can’t take it for granted that the consumer will trade down, or even trade up to a better product that will last longer. Why should they buy your product?
One of the kneejerk reactions in this kind of a market is to cut down on marketing. There is a need to sustain investment in branding (as targeted to the consumer or within the trade). In fact, if you are a supplier and have not invested in this area so far, I would suggest that the time to sow the seeds is now. Whether it is developing markets, new segments in a developed market, a country that is new to you, it takes a few years to develop a credible market presence. It’s cheaper right now – marketing costs are lower now, people are available, advertising is cheaper; the time to plant the seed is now.
On a different note, I would like to reiterate a particularly significant concern.
The fashion industry has one driving principle – that everything becomes unfashionable. We have what is called planned obsolescence. Without planned obsolescence how do you make next year’s sales? Any consumer business is built on the same principle, but the fashion industry is particularly important because it is very visible and raises the aspirational level very high.
Imagine the population as a cylinder, and imagine aspirations being pulled upwards like a piston. This upward aspirational pull affects not just those who can afford to indulge their aspirations, but also those who can’t. The stress is felt most at the bottom end.
I have to confess, this slide is about 3-years old, when I used it at a conference organized by the Confederation of Indian Industry. I used it again today because the signs that were just becoming visible at the end of 2006 are now on the news every day. The crime and the conflict arising out of this stress is apparent around the world. [Edit.: Articles referencing the original presentation are in the Business Standard of 30 November 2006, and on Third Eyesight's website.]
What if the fashion industry’s consumers decided to opt-out? What if they said, we don’t want to buy more, we want to buy less? What would the business look like in that environment?
I think we need to start thinking about that now, because many companies will face that in their market. I think there are certain companies and segments in the US market that are already facing that pressure, and we will find that happening across the world.
Our business models are geared towards outdating merchandise in a matter of weeks or days or hours, and selling more to replace stuff that is still fairly serviceable. What if consumers got into the mode of conservation that many people in this room are already getting into: that “I need to conserve my resources”. Let’s not forget, we’re all consumers. Let’s looking at our spending behaviour; is it the same as last year? I would guarantee you, 80-90% of the people here would say that they have made some cutback since last year.
So how do we get out of this situation? Well, the situation is out there in the market and we can’t just get out of it, so we need to deal with it.
The manufacturing of apparel products has been and remains a great vehicle to spread income and wealth to the financially less well-off people. Also, the textile and apparel industry has such low barriers to entry that I believe it is also one of the greatest vehicles to promote entrepreneurship and self-reliance.
Finally, a word on the pain that many of us are feeling. I would like to share a very short video from Ted.com that might help to put things in perspective. [Transcript of talk continues below the video frame.]
The reason I shared that video is to explain the strange title of my talk.
I believe that many of us are experiencing the equivalent of an itch or maybe a scratch. Some have a cuts and bruises, and a few have fractures. But the fact is that we’re not dead yet. Most of us have lost much less than David Hoffman, whose presentation you just saw on the Ted.com video.
Let’s not forget: this industry has faced downturns before and has come out of them; it will again. Meanwhile we need to get our heads down and go through with doing whatever we are supposed to be doing.
Someone said: this crisis is too good to waste. There is too much opportunity in this crisis to not use. We can make changes that would be difficult in the best of the times. In the best of the times you’re going strong, everything is going well, there is no motivation to change.
The kind of transitions that look tough at other times, those investments that you can’t make at other times – this is the time to make them.
Mark Twain said, “If you feel like you’re going through hell, just keep going.” And I think that’s what we need to do.
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