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Princess of Silk Steps Out of Family Cocoon

Princess of Silk Steps Out of Family Cocoon

Author: Sruthi Radhakrishnan & Sangeetha Kandavel
Publication: The Economic Times
Date: July 26, 2011

Introduction: After ushering in change at Nalli, Lavanya Nalli plans to add a global perspective

In only four years after she joined the family business in 2005 as a 21-year-old, Lavanya R Nalli drove more new initiatives than had ever been seen in the 83-year-old retail chain, known worldwide for its six yards of silk. She coaxed Nalli Silks to diversify into newer products, opened new formats, set up stores outside India, and even got the business, now in its fifth generation, to corporatise. And then she did the unthinkable - she left the . 550-crore firm, deciding the time had come to step out of the family cocoon, gain outside perspective and then come back in.

Nalli Silks roped in Kamal Tandon as COO and freed Lavanya to go to Harvard Business School in 2009. Next, she interned at McKinsey and is joining the firm this October as a consultant in its strategy practice. She intends to work there for at least two years. "People who have been with Nalli for 20 years know what it is to run a business the way they know it," she says explaining her decision to study and work outside. "That is a fantastic skill. But the drawback is you don't get a new perspective," she adds.

Lavanya has broken tradition in more ways than one. She is the first woman in business after four generations in her family and the first to work outside the group business. Designs for Nalli's Future And, unlike many scions in South India who first do their Harvard and McKinsey stints before signing up for the family business, Lavanya, mentored by her grandfather Kuppuswami Chettiar and father Ramnath K Nalli in her early years, did things the other way around-."Harvard gave me a new approach to thinking that I have brought back with me," she says. "The way that I'd look at a problem before might have been a little more internal, because you are a product of the environment you are raised in. Harvard allowed me to look at the same issues from a different angle." Lavanya has Harvard's punishing schedule of over 600 case studies to thank.

Lavanya worked with a retail client during her McKinsey internship. The buzz is that she was involved in an acquisition deal. Lavanya, however, wouldn't disclose any details. "I thought there is some merit in working there for two years and then coming back," she says. "Right from the beginning, I was particular I wanted to handle a retail client, because there are lessons that you learn from a mature retail industry that are quite applicable in a developing market."

It's going to be a while before Lavanya comes back to Nalli, but her mind is already weaving Nalli's new design for the future. "I have recognised that there is a certain way business has been done for the past 80 years, which works for the company right now." But then, "what works for a company when it's small and growing is different from what works for a medium-sized firm". "The reason we haven't expanded as rapidly as I'd like is because the systems and the processes that were in place were more pertinent to a small firm," she says. Lavanya, an engineering graduate, sees a lot of scope for further expansion. For that, Nalli needs to become "more process-driven than people-driven".

Her family is ready to give her a free hand. "She provides consulting services to multinational companies across the globe. So I'm very comfortable introducing her ideas into the family business," says Ramnath Nalli, 52, her father and the vice-chairman of Nalli Silks.

The work for the next growth phase of Nalli has already started. New cities are being identified - Puducherry, Kanchipuram and Ahmedabad, to name a few. Lavanya also speaks of a different kind of expansion.

"Expansion could mean that we take it to new geographies, to new customers, get into new lines but still target the same audience, or get into new lines and target new audiences. The last is the hardest. That's something we are not looking at now," she says.

Amid her talk on expansion and new markets, she goes back to a discussion at her class at Harvard. This was about an MNC retailer, which had opened shop in China. They had to effect operational changes in China. "For example, the Chinese expect stores to sell them live fish, which they later take home to cook. This was different from what the store was doing in the US." Even within India, the way each city does its saree shopping is different, she says. Lavanya is confident her ideas for Nalli could be implemented when she comes back. "The good thing is that I have work experience with Nalli. So, it's not like I have just come back and decided to change things." Also, it isn't that there will be drastic changes. "Anything that's a deviation from your normal course of business, you need to ask yourself why the change is necessary, what the outcome will be, and if it is the worth the risk," she says. Her grandfather Kuppuswami Chettiar, 70, chairman of Nalli Silks, sums it up well: "When the shop was under my control, I was conservative about expansion. After Lavanya joined, I had the courage to get into other retail formats."

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