The Accidental Businessman
“I started attending lectures and seminars. I would listen to talks delivered by successful people,” he says. He read management books. He did a lot of introspection and tried to identify his behavioural traits that were impediments in the growth of the organisation. He discovered, for instance, that wherever he was ineffective at work, his ego was to blame. “I started looking at others in ways that I could search for their inner talents,” he says. And he realised that even illiterate people had a lot of talent. He started mentoring them — for instance, he would spend an hour a day with his store supervisor, a semi-literate man, and coach him on various aspects such as how he to handle subordinates.
The carpet business in India does not have too many professional managers. Chaudhary started hiring professionals. The experiment failed — their approach did not mesh with the literate and semi-literate people. “I realised that you can create as many processes as you wish to, but unless there is love and respect between co-workers, you can’t make anything happen,” says Chaudhary. He put the professionals together and said, “If you don’t get along well with others in the organisation, we’ll never be able to achieve our goals.” He coaches them regularly and so far, it’s working well.
Jaipur Rugs’ distributed model has worked well so far. But the kind of growth that it is seeing now — its turnover has grown from Rs. 35.72 crore in 2006-07 to Rs. 67.75 crore in 2008-09 — demands greater control.
He is putting in place proper processes and monitoring his Area Commanders a lot more. He stays in touch with them regularly, either by meeting them once in 15 days or by being in touch through the phone. He is putting his learnings about the carpet-weaving process down in a manual which anyone — literate or not — will be able to understand. This is part of his Zero Defect mission that is being piloted in Narhet village in Rajasthan. The idea is to change the face of the industry: Give the customer variety and time delivery without defects, reduce wastage and cut down on the inefficiencies in the supply chain.
“The weaver has often been left by the wayside in this industry. He has never been seen as a partner by businesses,” says Chaudhary. “As they get empowered, they will become stakeholders in the business and the customers will also be happy.”
A Case Study in the Making
N.K. Chaudhary does not have an MBA degree, but there is a thing or two that he can teach MBAs. Chaudhary met management guru C.K. Prahalad in a TiE seminar in Jaipur and told him about his company’s business model. Four months later Prahalad called him saying that he wanted to write a case study on Jaipur Rugs.
In more ways than one, Jaipur Rugs symbolises Prahalad’s idea that the poor aren’t victims. Instead, the poor can create value as entrepreneurs. This idea, elaborated in Prahalad’s bestselling book, The Fortune at the Bottom of the Pyramid, fits in perfectly with Jaipur Rugs — that companies can alleviate poverty and create value by involving the poor as entrepreneurs. Jaipur Rugs has a rather unique business model in that sense — it has created a global supply chain that sources raw material from several countries, provides this to poor people in India’s villages and supplies carpets and rugs to stores in the West.
Prahalad is documenting the story of Jaipur Rugs as a case study in the fifth edition of The Fortune at the Bottom of the Pyramid. Chaudhary has been invited as a speaker to the University of Michigan’s Ross School of Business (where Prahalad teaches) and Wharton School of Business. A team of MBA students and a professor from INSEAD spent a whole day with Chaudhary, at his office and in Narhet village, to understand how the business model works. In January this year, 10 students and a professor from Simmons College School of Management, Boston, visited Jaipur Rugs. Early next year, a team of MBA students will spend about five days with the company to understand its business challenges and identify opportunities it can tap in the future.
Closer home, two professors from the Institute of Rural Management, Anand — Prof B.N. Hiremath and Prof H.K. Mishra — are studying how the value chain of Jaipur Rugs contributes to the livelihood security of the weavers. Specifically, they are examining the use of ICT (information communication technology) for livelihood, and part of this includes studying how Jaipur Rugs’ ERP implementation has helped the rural poor.
Says Prof Hiremath, “We have found that the livelihood security of the present generation of weavers has substantially improved. This may continue for the next 20-25 years as long as the current crop of weavers continue.”
He has started creating waves in the world of management researchers, but for Chaudhary, it is business as usual.
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Thanks and regards,
Geetha
