NKC’s Speech

Speech offered by Mr Nand Kishore ‘NKC’ Chaudhry
28 February 2017
The Blades

I would like to quickly take you through the journey of my life which I call the University of Hard Rocks of Life because it was only after my college, that my real education began.
I started my career selling shoes from a little shop that my father had started. I realized that there was very little room to grow and I was offered a full time job in a nationalized bank. I declined the offer as I wanted to do something of my own where I could enjoy what I do.
So about 38 years ago I started with 2 looms in my own house in a small town, Churu in Rajasthan, as a contract manufacturer – producing rugs for larger exporters. I borrowed $200 from my father to buy looms and an old cycle to travel to weaver houses and day-to-day work. The beginnings were humble yet filled with challenges.
One of the first challenges I faced was from my own family. In those days rug weavers belonged to the “untouchable” class and were not given the same social standing as others. Given the strong class system in India interaction was not only discouraged but was looked down upon. I faced a lot of resistance from my own family members and neighbors but I could not understand how could they be different human beings. I fell so much in love with weaving and weavers that I used to take my lunch and eat with weavers and their families besides the looms on which they made their carpets.
I used to spend entire day working with them and learned the basics of weaving. I discovered and realized that some of the most beautiful rugs in the world were made by those who did not have the most basic rights in the society. Within 2 years, I established 10 looms in and around my village in Rajasthan and thereafter I further expanded as a contractor for 8 years. After that I moved to Jaipur to start my own exports with my brother.
In 1990 I moved to Gujarat where I stayed for 8 years. In this period I had the opportunity to train and develop a network of about 15,000 tribal men and women in the art of rug weaving. Initially, I faced challenges working with the tribals who were not welcoming of outsiders but I knew that love, empathy and respect could make the relationship much easier. Just in a matter of 3-4 years they started to respect me as their guide. My interest of living in villages and being close to nature made it easy for me to connect with the tribal people and grow the business.
During that time, I was blessed with 3 daughters, then with 2 sons. In my society at the time and even now, girls get much less priority than boys. My British friend Ilay Cooper, suggested that girls are often more efficient and receptive. So my wife and I treated all our children equally and sent the girls to study in America even though our family tradition strongly disapproved of sending a girl abroad alone.
I encouraged all my children to take a deep interest in the American lifestyle; especially that of the house-wife, who is the end consumer of our product so that when they finish their studies they would have a better understanding of customer needs. I told them that I considered myself as a weaver and thus they were daughters of a weaver, that weaving had become the biggest enjoyment in my life and they should not forget this.
One thing I learned was to appreciate the wisdom that people at the grassroots generally have. Women manage home, food, children, and budget and still take time to weave carpets. They are probably some of the best managers of the world.
In 1999 I separated from my brother and started Jaipur Rugs. I also established a company in USA to move close to the customer. Initially I had little knowledge of business and finance as I spent my time with weavers in villages. As a result I had to face a lot of problems and it was one of the most challenging moments of my life where I had to learn things which I did not learn in the past 20 years of my life.
I had already been very successful in creating a good name for myself for quality and quantity in carpet weaving. But once I stared again, I had huge problems and failures for the first three years. Then I started to introspect what went wrong and I realized that my past success had created a “false feeling of goodness” within me. I realized that “Good is the enemy of best” and I had developed a mental disease called “Euphoria”. I was highly success at working with the people at grassroots but now I had to learn new skills and change my leadership style to run a global business.
I observed that it was me who was restricting the growth of the organization, as I was everywhere in each decision. So I have to remove myself, my perception, from every decision and use natural talent, wisdom and capability of the individuals to see things as they are and not as I want them to be. It was an ice-cube so loosing myself was like melting the ice to become water as it can be flexible and take any shape to become simple enough to let natural growth happen.
Up to now I had relied on the entrepreneurial skills and leadership qualities of the uneducated people and they had gained deep understanding of the business. But to support the rapid growth of the business I had to hire fresh and experienced educated professionals. But they put me upside down.
I learnt that knowledge is power but too much knowledge and knowledge gained without practice develops ego. Practitioners sometimes get the skills without having the knowledge. To break the ego of the professionals, I started a learning initiative which we named ‘Higher School of Unlearning’; we made the professional work with our older uneducated managers in different departments to develop deep understanding of the business process. I also took the challenge to teach them the basic fundamentals to manage the business and people like ours, which they never learnt in their school and college. We worked on the philosophy of ‘Finding Yourself through Loosing Yourself’ and the more I lose myself, the more I find myself.
In Early 2008, Prof. CK Prahalad called me and asked me if I knew who he was. I replied, who does not know you! But I was extremely surprised why he had called me. He said that he wanted to do a case study on our business model and then I said that what we do is very simple, what if you write it and no one reads it? Even my neighbor does not know me! But he explained me that our global supply chain was very unique by connecting the world’s poorest with the richest.
After talking to him I realized that we had done a few things right to reach where we are.
I attribute the success of Jaipur Rugs to some the following factors:
First is our Vertical Integration and nurturing capabilities of people at the grassroots:
There are about 60 processes in carpet making from buying of raw wool to the final delivery. All these processes are heavily guided by us and that gives us a competitive advantage by having quality control at each level by developing the skills of uneducated people working at various levels. 100’s of our weavers have risen to become either manager in our business such as branch managers or become entrepreneurs.
Secondly, passing on more benefits to the weavers is critical.
While hand knotted carpets fetch good value in the market, weavers who are the real creators, receive only a fraction of this because of middlemen involved in making and selling the carpets. I realized this early on and started going directly to the weavers eliminating the middlemen. We could therefore pass on more benefits to the weavers and sometimes 100% more than what they earn through the middlemen.
In 2004 we set-up Jaipur Rugs Foundation which works for making lives of weaver families better by providing them training and helping them get health and education benefits.
It was a very challenging process as I was taking away someone business and I was constantly threatened by many contractors. One day a politically powerful contractor came to my office with a gun and asked me to leave Gujarat but I knew that it was a frustration of his failure.
I believe that innovation will be a key for Jaipur Rugs to grow further. One of new initiatives is to include our weavers in the product development and design process to unleash the creativity of the talented artisans we work with.
Now I want to share with you another unique initiative, which we are implementing called Founder’s Mentality. I think that this new research by Bain and Company will be a new management science in the future. The research explains that out of 1 million founder driven companies, only 2 companies cross 100 million dollars in revenue. Rest of the companies remain small or die because they are unable to define and communicate founder’s vision and his style of working. Over a period of time, they stop listening to the frontline working with customers and grassroots people of the organization which the founder understood when he started the business. Some of the highly successful companies that have been able to retain founders mentality are Nike, Starbucks and Legos.
When the second generation joins the business, new capabilities are added which give a huge scale to the business. However, the second generation is disconnected from the frontline, which leads to complexities in business. Thus, the growth is not profitable and sustainable.
Third layer is of the professionals, who are distant from both – the grassroots and the customers. This leads to a huge gap. Founder’s Mentality is a pure science that helps explain and bridge these gaps.
The research says that frontline at the grassroots are the doers – they are the kings – the heroes of the business. While people at the corporate office, sitting at the top; are thinkers. Thinkers’ job is to make doers’ life simpler to help them in enhancing their capabilities and skills. Doers pay salaries to thinkers.
Founder’s core values, his leadership style, his way of working should be documented and his values should be made into non-negotiable, so that the next generation of leaders and professionals do not dilute these values. Founder began his journey with early heroes who helped him scale the business- this should also be documented. This will help the next generation of leaders and professionals to scale up the business, by maintaining simplicity and focus.
Authority and decision-making power are concentrated at the top of the organizational pyramid. When we turn the traditional hierarchical pyramid upside down, the frontline at the grassroots and weavers are empowered with greater decision-making authority and freedom of action. While the thinkers’ job is to make the strategy pull up, not push down which is a democratic way of doing business.
So for us, at Jaipur Rugs, it is time to invert the pyramid. I invite all of you to be a part of this unique experiment.
My future vision for Jaipur Rugs is to allow the artisans to a greater share of the wealth they produce. Also, I want Jaipur Rugs to be a platform of connecting the end consumer with the artisan so that they can both emotionally connect with each other. I consider myself privileged to have worked with some of the most talented artisans in this country.
I would like to end by sharing a small experience I had when I was in college. I had a very strict college professor of business administration and he came to my classroom and called out my roll no. and asked me to stand. I got scared as to why he was asking for me as I was a disciplined student and I started to think what wrong I might have done. Then he took out a test copy and showed to everyone in class saying look at the answer this boy has written. The question was what is the definition of business and what I had replied was “business is next to love. It is the creator and preserver of civilization.” The professor then said that this boy will become a different businessman one day! Thank you!