50 years of exceptionally successful management
Vardhman’s journey of 50 years is replete with experiences both bitter and sweet. This has helped build its organizational character.
In the life of a business, turbulence and crisis are inevitable between periods of calm and stability. Steering through them with a steady handbuilds strength, resilience and fortitude, deepening organisational character and enabling one to move from one challenge to another. We believe that an organisation’s ability to cope is fundamentally dependent on its capacity to perpetually learn from experiences.
We have built processes to collectively analyse and reflect on our experiences with equanimity. We try to cultivate this attitude in every employee. We are not daunted by failures and setbacks as we convert them into learning opportunities, embed them in our organizational memory and resolutely move forward.
In order to explain what Vardhman is today, it may be helpful to recount some of our defining moments and organisational values.
Learning organization
A learning organization has been a part of our vision. This never allows complacency in our approach and rigidity in our thoughts. A response to any situation remains dynamic and is not born out of ideological or philosophical bias. At Vardhman, we have developed a capacity to deal with every situation through proper analysis and understanding with a fresh look through a process of introspection and rebuilding exercise.
Let me provide an example of one such defining moment and its outcome.
In 1982, there was labour unrest in the factory, which turned violent, resulting in the factory remaining closed for more than six months, threatening our survival.
We extracted learnings from this incident to develop an institutionalised training and skill development programme. Beyond skill development, we underscored the dignity of work and inculcated a sense of employee belonging.
The outcome is that the Group has a Manav Vikas Kendra in each manufacturing plant, which acts as the centre of such training. In turn, this has moulded the organisation’s behaviour towards people and become a focal point for the management, as people are the key assets to create value. The soft processes for employee engagement such as Quality Circle, TPM, Kaizen, Group Communication Meetings, etc., have been firmly embedded in our organisation’s culture, which has been meaningfully embraced by our people.
Similarly, a formidable challenge emerged in the mid-1980s as lawlessness prevailed in the State of Punjab due to political turbulence and the consequent reluctance of professionals to reside within the State. We responded with two strategic initiatives – recruiting and developing local talent and geographical dispersion.
We scouted for young, smart, dedicated and ambitious young men and women with basic qualifications, and through our Executive Training Programme we turned them into star performers. They have built the Vardhman of today through hard work and a sense of ownership.
Simultaneously, we decided to diversify geographically, which has now given us an all-India presence marked by national visibility and a wider access to talent, raw materials and markets, generating attractive returns.
Though we remained focused for almost 30 years on spinning, when the opportunity came following changes in Government policies that provided a level playing field for the textile composite sector, we integrated vertically in the fabrics business by establishing weaving and processing facilities. We had mastered spinning technologies and products; we were now required to master unrelated business segments through pursuit of excellence in our DNA, which we accomplished. We entered the sewing thread business and soon challenged the global leader in this field with a near monopoly in the Indian market. This attracted the attention of another global player with whom we forged a partnership to exploit mutual synergies.
In a short time, the group established a strong position in the apparel fabric segment. We enjoy the patronage of global retailers who have approved sourcing of fabric from us for their domestic garment production and also for markets like Bangladesh, Sri Lanka and Vietnam. The hand knitting yarn of the Vardhman Group is the first preference of consumers in India. In all these businesses, we have emerged as number one or two in terms of size, market reputation and profitability.
After we commissioned an acrylic fibre venture, many new plants came up, resulting in a glut. The industry became sick and many units were either closed or were in a precarious condition.
Not only did we survive but also achieved operational benchmarks at par with global companies, remaining profitable throughout.
A pursuit of learning, drive to excel, timing of opportunities and a conservative but sound financial sense have helped us emerge as leaders. The manufacture of textile is an easy entry business.
Competition is severe and relentless. Consequently, margins are low and cyclical.
Continuous growth and attractive financial returns are difficult. Only through strategic insights, prudent timing and operational excellence can sustainability be achieved. Underlying this has been our commitment to nurture talent, transparency in decision-making, continuous process refinement, dedicated hard work and a focus on shareholder value.
We have come a long and weary way. Armed with confidence, we are determined to march ahead.
Companies have long lives. What is a period of 50 years? A century beckons!