of Management Sciences (LUMS) Convocation
December 24, 2003
Mr. Babar Ali, Esteemed Guests and Graduating Students:
It is a great privilege and honor for me to be
with you at this important event. I would like to congratulate
all the graduates and their families on this momentous occasion. Also,
my congratulations to Mr. Babar Ali for his leadership in developing
this institution and to all the faculty and staff in making this
a world-class educational institution.
Yesterday Mr. Babar Ali gave me a tour of your
institution and later in the evening I participated in the Awards
Ceremony. It is
very impressive what has been accomplished.
I am privileged to share my thoughts with present
and future leaders who must play a great role in shaping the debate
for the future. I
strongly believe that the responsibility of leadership is to shape
the debate - to project the right attributes - whether in a business
enterprise, in civil society and even in our religions. If the leadership
does not take this initiative of setting the priorities and the debate
the vacuum is filled often with dire consequences.
Lahore has a great
history being on the crossroads of interacting with many civilizations
and ideas from several thousands of years. There are few places
in the world that can match the history and culture of Lahore.
me personally coming back to Lahore is part of a cycle of a journey
that began in 1950 when at the age of five with my mother and other
siblings we crossed the Wagah border to Lahore coming from Srinagar,
Kashmir where our family lived. We had left behind my seven year
old brother and an eight year older sister as they were in school.
We had come to join our father who a year earlier had come to Lahore
for a two week permit and was not allowed to return to his home
as the authorities in Srinagar canceled his permit. He decided to
take a leadership role in Azad Kashmir.
We thought we were here for a short visit and that Kashmir would
be reunited. Those were challenging times. We lived for ten years
in Murree, Muzzafarabad and Rawalpindi, often visiting Lahore in
At age of fifteen we again from Lahore crossed the border and journeyed
to Kashmir to be reunited after ten years with our siblings and our
I lived in Srinagar, Kashmir for the next five
years going to college and participating as a student activist
in many protests demanding dignity for the Kashmiri people. I also spent a great deal
of time playing cricket and being the captain of our team. I
learned a lot about teamwork, the issue of human rights and focus
during those years.
At the age of twenty I once again crossed into
Lahore one week before the 1965 India-Pakistan war and on the fateful
day of the start of the war I was here in Lahore and saw the perils
this great city faced. Lahore welcomed me with its usual hospitality
and after the end of the war I was given traveling documents to
leave for the U.S. for the next part of my life journey.
As you can see Lahore has been very much part of my life journey
and it is with much affection that I return to this historic city
and your well-respected institution.
I mentioned that I believe the main responsibility of leadership
is to shape the debate for their enterprises and societies. Debates
and priorities are always shaped by leadership and in case leadership
fails to take this opportunity and responsibility the vacuum gets
filled with by people with louder voices and the most extreme agendas,
often with projection of hate, oppression, intolerance, injustice
and maintaining the status quo.
I have the privilege of being the Chief Executive officer of one
of America's well known and well respected business enterprises.
Ethan Allen is a 72-year old vertically integrated company from design
of product, to manufacturing in U.S. and other countries, of marketing
and retailing of home furnishings throughout North America and in
several other countries including China.
When I took charge in mid 1980's Ethan Allen
needed a major reinvention. The products were no longer relevant,
the marketing and manufacturing needed a major overhaul. The challenge
was to change the image of this well established enterprise with
over a 90% brand recognition. And
as often happens the management at the company were comfortable with
their status and felt there was no need to change.
Reinvention means taking a fresh look at the
problems and challenging assumptions of the past. In going
through any major reinvention or new ideas one has to understand
and plan that ideas will generally be first rejected, than tolerated
and finally there is a chance of acceptance.
Reinvention is key to continued vitality of any
institution and reinvention takes place either unconsciously, which
is most of the time, or consciously which is obviously the preferred
method. I have also believed that relying only on hope is not a
good method. Another
important factor to keep in mind that with the rapid changes in the
world in every field the cycle of reinvention is becoming shorter.
A first major step in reinvention is that a core leadership
group needs to be formed which accepts and embraces the need for
change and helps in shaping the agenda and the debate for the rest
of the organization. In the case of Ethan Allen I established a 40
member Advisory group of our leaders known for their leadership quality,
entrepreneurship and well respected by their peers. This group was
key to helping transform Ethan Allen during the last fifteen years
and has played a vital role in marketing the ideas and taking the
leadership initiative for change.
I also believe it is the responsibility of leadership to establish
the overall environment and guidelines under which the enterprise
will operate. In other words every institution is defined by the
culture that the leadership creates.
As you all know, much has been written about
management and leadership principles. Early on I was very much
impressed by a letter of instruction that Hazrat Ali, in the seventh
century, had written to governor designate of Egypt. This letter
of instruction inspired me to establish our own set of “instructions” which
we call Leadership Principles at Ethan Allen and form today our
most important guidelines in conducting our enterprise.
Among the important instructions and advice given
to the governor designate by Hazrat Ali were that he must remain
on constant guard against his most important enemy that was himself,
he cautioned him not to get carried away on his importance
and to control his ego. Another piece of advice was that a Leader
is known by the advisors he, and today also she, surrounds themselves
with. For instance, if advisors are tyrants they will likely lead
to tyranny, if they are just they will likely lead to justice and
if cowards they will likely inhibit leaders from courage.
The Ethan Allen Leadership principles have helped
us to create a unique culture which has developed a highly motivated
10,000 associates. Let me briefly describe these ten Leadership
principles which you will recognize are all associated with common
sense and good governance. These
principles are available on our website at: www.ethanallen.com
1. Leadership: Provide Leadership by example.
2. Accessibility: Be accessible, supportive, and recognize the contributions
3. Customer Focus: Understand that a leader's first responsibility
is to the customer. Communicate this philosophy to all associates
and encourage them to make customer service their first priority.
4. Excellence and Innovation: Have a passion for excellence and
5. Self-confidence: Have the self- confidence to empower others
to do their best.
6. Change: Understand that change means opportunity and do not be
afraid of it.
7. Speed: Maintain a competitive advantage by reacting to new opportunities
8. Hard Work: Establish a standard of hard work and practice it
9. Prioritize: Establish priorities by clearly differentiating between
the big issues and the small ones.
10. Justice: Always make decisions fairly. Justice
builds confidence and trust, which in turn, encourages motivation
Developing principles or instructions is only
the first step. Our
challenge was to make it part of our culture. During the last
fifteen years we have made it a point that these principles are discussed
in small and large meetings and many of our senior management are
asked to write about the implementation of these principles as part
of self-evaluation. A major portion of our incentive compensation
depends on following these principles.
Most enterprises spend a great deal of effort
on external marketing. We
developed an intensive, internal marketing program to continuously
sell our principles to our associates. Our credibility depends on
practicing what we preach. Many enterprises become victims
of their own propaganda rather than the practitioner of it. The
last principle which is justice is rarely used in business terminology
yet we know that most inefficiencies and conflict takes place in
organizations when there is a feeling of unequal treatment. Throughout
history a small band of motivated people have accomplished wonders.
Our philosophy is also that it is better to be
good and strong rather than big for the sake of bigness. We operate and focus on only
one enterprise. We have stayed away from the temptation to
buy others as leading one enterprise and making it excel is a major
commitment. I also believe that good governance is also good
for profits. At Ethan Allen we have consistently outperformed
our peers in profitability. In addition, in 1989, I had the
opportunity to form a group to purchase Ethan Allen, keeping it as
a private company for five years and, in 1993, taking it back public. In
1993 the Company had very high debt, almost no equity and today the
Company produces annually close to $200 million in cash flow with
a market capitalization of $1.5 billion and no debt.
Our success to a great degree is attributable to developing
a great motivated team, the basic fundamentals of which I learned
in Kashmir as a captain of our College cricket team.
I mentioned that Ethan Allen had a 90% brand recognition
in the mid 1980's. It was a known brand but was losing the most important
attribute of a brand, that is being a preferred brand. Being known
is no guarantee of being preferred. The challenge for leadership
in every aspect whether a business enterprise, a social institution,
a nation or a religion is to create a preferred brand.
A preferred brand must have positive attributes and than on a proactive
basis those attributes need to be projected repeatedly. This is where
leadership comes in and establishes their main job to practice and
project the positive attributes.
Let me turn on another subject that is important to me - the situation
of Kashmir. I am pleased about the recently announced steps to normalize
relations by India and Pakistan and offer a window of opportunity
to move forward.
There is a greater realization in India and Pakistan
that they need to settle the Kashmir dispute for their well being
and that of the region. This sentiment has long been felt by Kashmiris
on both sides of the Line of Control, never more so than now.
The conflict over Kashmir has been the chief source
of tension between the two great nations and has resulted in tremendous
costs for the region - mounting death toll, impact on economic growth,
military buildup, rise in extremism and psychological stress, especially
in the Kashmir region itself.
Seven years back I helped found a group in the
U.S. called the Kashmir Study Group. I was deeply concerned over the tragic situation
in Kashmir, and the three parties were engaged in a no-win situation. The
group consists of twenty five members with political, diplomatic
and academic backgrounds with great deal of expertise in South Asia.
The objective was to help shape debate by moving people away from
the old rigid stated positions of the parties and to consider new
As it has done so, the Kashmir Study Group has
won the attention and respect of Pakistanis, Indians, and Kashmiris
alike as a serious, innovative and objective organization dedicated
to finding ways to move forward to a Kashmir settlement. I
have had the opportunity during the last several years to interact
with the leadership of Pakistan, India and leadership on both sides
I am gratified that today there is a greater opportunity
to move forward and the realization that compromises will be required
by all parties. The current initiatives are being taken by the leaders
of the region and as I have stated it is the responsibility of the
leadership to shape ideas that will help in the resolution of this
problem in a manner that is peaceful, honorable and feasible.
I have conveyed to all the parties a principle that we try to apply
to the conduct of our own discussions. To provide a basis for fruitful
negotiations, dialogue must be characterized by three features. One
is the absence of coercion, with all parties agreeing to treat the
others as equals. A second requirement is for participants to respond
with empathy, to think someone else's thoughts and feel someone else's
feelings. The third requirement is that dialogue must be concerned
with bringing forth people's most deep-rooted assumptions in order
to overcome misunderstandings. There must be genuine desire for peace.
I would like to also briefly touch upon another
subject that is of utmost importance to all of us. Today, there is a great
deal of focus on Islam and we know the major perception, especially
in the west, is that Islam is a religion of violence and intolerance.
There is great need and an opportunity to project the positive attributes
of this great religion. I do not think that Islam needs
reform or that Islam is inconsistent with democracy and freedom or
women's rights. In my view, the leadership in the Muslim world needs
to focus on the attributes that are hallmarks of Islam - of mercy,
graciousness, tolerance, innovation, education, moderation, justice,
and most importantly that Islam is a religion of reason.
It is critically important that the leadership realizes
that the above attributes are attributes of success for an individual,
a business enterprise, a nation and the world at large. The projection
and the implementation of these attributes is the responsibility
It has been a great privilege and pleasure to
have been here today and to share with you many of the principles
that have guided me in business and in life. I firmly believe
that they are as valid for the rising generation of Pakistani leaders
as they are for leadership in the United States and elsewhere.
Thank you all once again. I am delighted
and touched to have had this opportunity to revisit a country and
a city that played an important part in my young life and have
so generously welcomed me back many years later.
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