Farooq Kathwari, Chairman, President and CEO of Ethan Allen Interiors Inc.
Farooq Kathwari's Commencement Speech - May 18, 2008
I am delighted and honored to be here today. Let me first congratulate the grandparents, parents and graduates. It is quite a feat to go through a college education today. When I was a full-time night student at NYU in the late 1960s, I worked full-time, had a monthly salary of $400, and with that supported myself, paid my tuition – about $600 a semester – and even bought a new car – a Mustang. Those days are definitely over. So congratulations to parents and graduates for their hard work. This is truly a day to celebrate!
A question on the minds of many of the graduates is the challenge of entering a new phase of their lives in an environment that is increasingly referred to as a globalized world.
I reflect on my own journey when at the age of 20, with a B.A. in English Literature and Political Science, I traveled from the mountains of Kashmir to the hustle and bustle of New York, especially the unique experience of going underground in the subway system. I wondered how people could go under the ground while still alive and then how once there they could actually survive the deafening noise.
The amazing thing about humans is that we adjust to new challenges, even with all the apprehensions. A few months back, I was visiting the University of Kashmir and shared some of my experiences in coming to the new world. One that got quite a response was when I recounted my first experience in New York going to a self-service restaurant called an automat and asking for tea. They gave me a cup of hot water and two bags – a tea bag and a sugar packet. I looked at them and started to open the tea bag to get the leaves out. Someone was kind enough to tell me that all I had to do was put the bag in the water. So I did that and then also put the unopened sugar packet in the water. The students in Kashmir had a good laugh.
When I left Kashmir, I had never seen television. Today they have tea bags and sugar packets, TV channels from all directions, and the Internet. This is one global world. We are all much more connected.
The new world has brought us many opportunities and also the potential for many conflicts. Globalization has raised the expectations of people all around the world — and if the expectations are not reasonably met, we will have more conflicts. And today conflicts even in faraway places impact our lives here at home.
I am sure the question on your minds is how to compete and succeed in this big ‘small world.’
As one who has had to bridge the old and the new world, I am happy to reflect briefly on some of my experiences and share some thoughts that you might find helpful.
During my college days in Kashmir, I was deeply involved in sports. I was the captain of the cricket and aquatic teams. Well, you don’t have to play sports to know how important teamwork is in almost every aspect of work and life. I have learned the value of pitching in and doing what was necessary for the team. And in leading teams, I’ve learned the value of listening, of prioritizing, or recognizing and developing talent and of motivating by sharing my enthusiasm.
I was fortunate enough to take the helm at Ethan Allen at a fairly young age. I mean I was quite young; Ethan Allen wasn’t. It was a bit stuck in its ways. But today it is a 75-year-young company. When I took charge, the company had 90% brand recognition, and was respected for quality and service. However, the company needed reinvention, as its products, factories, stores and many of the leaders were not compatible with the needs of the future.
We started the reinvention of Ethan Allen with two convictions. First, that there are fundamental principles of good leadership and dealing with human beings that have intrinsic value and that have remained the same from time immemorial. Second, that techniques and technology continue to change and those changes needed to be embraced.
We first started by focusing on core values that would guide us. We call them our Leadership Principles.
My inspiration for the Leadership Principles was twofold. First, I have long been impressed by the universal principles of ethics that are part of all religions of the world and that are also enshrined in the principles that founded this great country. Second, in college in Kashmir, I was a Political Science student and focused on studying the American Constitution and History. I was particularly moved by the inspiring message, “We the people …
During the last 20 years at Ethan Allen, we have made a point of discussing our ten Leadership Principles throughout the year. Periodically, our Senior Managers evaluate themselves on their implementation of the principles. Compensation for Senior Management is based on their adherence to those principles.
Today I would like to focus on these principles.
- Leadership by example
- Accessibility: Be accessible and supportive, and recognize the contributions of others
- Customer Focus: Our first responsibility is to our customers
- Excellence and Innovation: Have a passion for excellence and innovation
- Self confidence: Have the self confidence to empower others to do their best
- Change: Understand that change means opportunity and it is to be managed, not feared. I lived in the mountains of Kashmir in my youth, and hiking is still a hobby of mine. The mountains teach us that reaching the summit requires an appropriate pace. Climbing too fast often results in altitude sickness, which can be fatal. The solution is: If you climb too high and can’t breathe, come down a little, stabilize yourself, and then climb again – or not. Unfortunately, most people don’t like to accept that they have gone too far, and do not want to climb down. They end with a disaster. If only they had managed the change.
- Speed: Maintain a competitive advantage by reacting quickly to new opportunities
- Hard Work: Establish a standard of hard work and practice it consistently
- Prioritize: Establish priorities by clearly differentiating between the big issues and the small ones.
- Justice. Always make decisions fairly. Justice is not a word often used in business. Yet we know that injustice results in conflicts and lack of motivation. Justice, on the other hand, builds confidence and trust, which, in turn, encourages motivation and teamwork.
Bottom line, in my experience good governance is good for profitability. At Ethan Allen, during the last fifteen years, we have consistently performed at the highest levels of profitability for our industry and, in fact, for most industries.
Once our core values were in place we made other changes to survive and thrive in the global economy, namely:
- We energized our U.S. manufacturing by focusing on 9 major plants in the U. S. and one in Mexico, and by consolidating smaller plants. Even with global manufacturing, we are very pleased to say that we still manufacture over 60% of our products in the U.S.
- We developed a strong diverse Leadership team. Today out of about 400 managers at Ethan Allen, more than 75% are women.
- We molded our enterprise to cater to the busy American consumer by focusing on providing interior decorating solutions. Our design centers are staffed with about 3,000 interior design professionals.
- We redesigned our product lines to reflect the diversity of design that has been brought to America from all corners of the world.
- We have embraced the major tools of technology that are needed to operate a business enterprise in today’s competitive environment.
In my view, by following the time-tested principles of treating people with dignity, and by working hard and with passion, we create a competitive advantage — be it for an individual, an enterprise, or a nation. In addition, when we embrace knowledge, technology, and new skills we are able to differentiate ourselves in a positive manner.
Finally today, I would like to dispel some of the myths about today’s graduates:
We often hear that “young people lack motivation;” or that “today’s generation does not have passion and lacks understanding of the interdependent world;” or that “young people lack critical thinking skills.” I believe these are all myths.
Today’s young people are more knowledgeable and understanding of diversity than previous generations. And they want to work with passion. They need to be motivated. In my view people all over the world want to be treated with dignity and work in an environment that will help them show their passion. I am gratified by the passion, drive to excellence, and hard work that young people are capable of when given an opportunity. It is the responsibility of leadership to help create an environment that brings out the best in our people young and old – fresh graduates and those who graduated in earlier generations.
So my advice to the graduates is to work hard, work with passion — irrespective of the task and job — treat your teammates with dignity, and do not be afraid to attempt an adventure even if you are only 70% ready.
I am deeply honored and humbled by this interaction and recognition. I am proud of our long-standing association with Western Connecticut State University. In fact, we are neighbors. It is doubly gratifying to be recognized by members of our own family – Westconn is part of our extended family. Again, many thanks and congratulations to all.