10 July 2020
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The story of Zara

Peter Switzer
23 September 2016

There once was an Academy Award winning movie called No Country for Old Men.

Well, I want to show a ‘country’ definitely for old men, and young men and women could do a lot worse following in their steps.

Amancio Ortega is septuagenarian while Edward DeBono is an octogenarian and they have both taught me enduring lessons about winning and standing out from the crowd.

Edward is well-known as the man who made popular the terms we often use of “thinking outside the square” and “lateral thinking”.

Amancio is very unknown, but this son of a poor railway worker, who left school when he was 14 to earn money so his mother would not have to beg for credit, has gone on to be the second richest man in the world. 

In 2012, he overtook who is arguably the best investor of all-time, Warren Buffett (another octogenarian) on the global rich list and he did it creating a disruptive business you might have heard of, and I say this facetiously, called Zara!

In 2013, Fortune magazine said the company was opening a store a day and expert watchers of Amancio say he created this outstanding business based on two rules.

First, give customers what they want and second, get it to them faster than anyone else can.

I don’t know if Amancio ever listened to or read anything from Edward de Bono, but if he hasn’t, he has ended up following the great thinker’s advice.

I interviewed Edward in the early 2000s for my Talking Business program for the Qantas airline company. It was a confronting experience because he thinks and talks so quickly. And there is nothing more unsettling for someone who is supposed to be a good interviewer to be asking great questions when you’re not quite understanding the answers!

As de Bono was making point after point, I must admit I felt a bit like Manuel from Fawlty Towers, leaning forward and thinking “Que?”

His basic proposition was that successful people are lateral thinkers — they think outside the square and it gives them a competitive edge.

To make his point easier for me to comprehend, he shared a story of two boys walking in the forest without shoes and they encountered a grizzly bear. 

One boy in his terror started putting on his running shoes while the other looked at him and said: “Even with running shoes, you will never outrun a grizzly bear.” And to that the other boy said: “I don’t have to outrun the grizzly bear, I only have to outrun you!”

This made me think as well as ask, and I still do today: “What am I doing to give me some running shoes advantage?” And it’s something I commend to you.

The mark of Zara

Amancio Ortega has done a lot of thinking outside the square and when I recently went into his 34th Street store in New York, it was astounding what this company is doing with fashionable clothing at unbelievably low prices.

I have always dreamt of travelling overseas with no bags and no clothes and simply buying a bag and filling it as I go along. The likes of Zara could make this dream come true.

Ortega was born in poverty in Spain and when Fortune magazine shone the spotlight on him a few years back, he was one of the richest men in the world. How did he do this? Well, it was simple, Ortega worked out what the customer wanted. He got his inspiration from the best, most loved and most expensive brands in the world. However, he sold it cheaper and made it quickly and by controlling his supply chain he got it into his shops ASAP.

His product is not as good as some brands but it looks good and as it is cheap compared to brand products, he is on a winner with lots of consumers. 

Zara belongs to his Inditex Group and his new-age fashion model has rewritten the rules of the clothing industry to become the biggest fashion retailer in the world!

That’s success.

In 2012, when Spain was crippled by 50% unemployment, the company’s CEO, Pablo Isla, revealed that revenue was up 17% year on year for the first three quarters of 2012. The nine-month sales revenue was $US14.6 billion and net profit came in at $US2.71 billion.

That’s success.

Biographers say he was driven by the way he saw his mother treated because of her status as someone needing charity. It gave him focus. He wanted success and this is a typical characteristic of a high achiever.

And he rolled his enthusiasm into his workers by being close to them. His family was involved and the people of his hometown — Galicia. 

And sure, he tapped into the cheap labour — women at home while their sailor husbands were at sea — but that was his village’s competitive advantage. However, he has taken the design and production line to a new level of efficiency and it explains why so much is created and supplied in a short space of time. 

Fortune says “there is a firm 24-hour turnaround deadline for Europe, the Middle East, and much of the US, and 48 hours for Asia and Latin America.”

That’s Zara and it was no accident. Success was planned and that’s a huge lesson for all of us.

And the experts who know Ortega say he has never had an office! The second richest man in the world doesn’t need one because he works in the factory, with the fabrics, with his workforce! He not only thinks outside the square, he lives outside the square. And doesn’t it pay off?

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