As featured in CFO India (Nov-Dec 2013 issue). Complete article appears after the image:

I am reminded of a very interesting incident that I experienced in my father's factory 13 years ago.

I was making 'Argyle' socks (like the one photographed here) for exports. This was my first order for these socks. After having made them in various color combinations, we began packing them in typical 'bundles' wrapped together using adhesive stickers that displayed the size and the price, etc.

After all the packing was done, in the final inspection, I just picked out one bundle and opened it like a consumer. As I ripped the adhesive sticker from the socks, I got a heart attack! The THREAD of the small 'criss cross' lines that make the Argyle pattern so famous began ripping out of the socks (since they had got attached to the sticker and were not strong enough to stay in the socks). Hence, every TOP SOCK in every bundle would be damaged via the sticker on top of it when opened by the buyer.

I had no clue what to do. The shipment was leaving my factory for the docks in 3 hours. It was 1 pm in the afternoon. Interestingly, the socks had PASSED inspection from Europe and India (I guess they had not opened the bundles OR that the sticker had become problematic over time) - so technically I was good to Ship. 

I decided to be honest and called up my buyer. He had a sample bundle on his desk and he immediately could understand the problem when he opened the bundle like any consumer would. 

The conversation that followed is the lesson of this story:

The buyer first THANKED me for being honest and truthful. Then he revealed that ARGYLE socks supplied by other manufacturers were also being returned to their stores for reasons that could not understand TILL NOW - since I had revealed the problem of the ROGUE adhesive. This was a global problem for them. 

The buyers extended my timeline and PAID FOR THE EXTRA TOP SOCKS we had to produce!! They also gave us many more orders in the years to come and almost began skipping inspections for our consignments. 

In all businesses and professions, very unexpected and difficult moments arise. I believe it's best to: 

- Immediately tell the people impacted what's gone or going wrong (VCs are always keen to know what's NOT working in their startups) 

- Try and solve the problem if possible with FULL DISCLOSURE rather than through a veil.


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Alok - one hypothetical, related scenario. How and when (immediate?) would you deliver bad news such as mass layoffs? 

The beginning of the month I can pay my people. Then next month they leave and thats it

Thanks Alok

Good share. It's true that we need to think of the long-term perspective which involves earning the trust & respect of people. That holds true even when it comes to social media. :)

Just one word, Amazing stuff!!

Goes to prove that we can bear the financial loss(parvadtha hai) instead of damaging our reputation and then our business in the long run.

a lesson learnt in the early stages of 15 years

We do the same if some thing went wrong for our US Orders.. Clients trust us because we are transparent. Its there money, but its our business to protect them. 


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