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Bangladesh RMG Industry
Can the new leaders build on the legacy of their predecessors?
In family businesses, the concept of “succession planning” is well known. It is the process of identifying and developing new leaders who can replace old leaders when they leave, retire or die.
Succession planning is vital for family businesses. Indeed, it is important for any business to be able to draw on the skills of experienced and capable employees that are prepared to assume leadership roles as they become available. Yet businesses often get it wrong in succession planning. They don’t plan ahead and don’t have the right people in place when the current leader decides to step down. Some businesses flounder when the founder retires.
Now let us apply these issues to the Bangladesh RMG industry. Let’s say this industry is one large family business. Are we ready for the challenges of tomorrow? Are the sons and daughters of tomorrow ready to navigate the ship through unchartered waters?
These are the questions the industry is now asking itself. And I believe—and hope—we have the right answers.
First, a look back on the journey that we have made so far. The apparel industry of Bangladesh has taken huge strides since it was established in the early 1970s by our first generation of private entrepreneurs. At that time, there was no real plan as nobody knew what the future might hold. In many ways, these entrepreneurs were navigating a path without a compass, and few of them could have realised that their final destination would be the world’s second largest apparel exporter.
In those 40 years, Bangladesh’s RMG industry has faced many challenges and overcome numerous hurdles. It has been a remarkable journey—one without precedent, to my knowledge. The RMG industry now contributes hugely to the national economy of Bangladesh, accounting for about 84 percent of the country’s total foreign earning from exports. The industry has also created employment for about four million people and is a massive contributor to the national GDP. Many have been lifted out of poverty by this industry and we owe a huge debt of gratitude to this first generation of entrepreneurs. They have put Bangladesh on the global map.
It would not be an exaggeration to say that the development of Bangladesh as a country partly hinges upon the development of this sector. This can be a blessing as it means that we are true specialists in this area, with unrivalled global knowledge. But it also places a massive burden on this industry to get things right. We have many of our eggs put in one basket.
The RMG industry itself is at a crossroads at present, and this is where the issue of the succession planning comes in. Who are the industry visionaries of tomorrow? Who will take the reins and guide us as we transition from a lesser developed country?
Many of the first-generation apparel entrepreneurs of Bangladesh are now handing over the helm to the next generation, often their sons and daughters. This second generation has a different mindset in many cases, and are often open to new, different ideas. They could potentially oversee a break with the past and that is not necessarily a bad thing, as the industry is changing before our very eyes.
There has been a mindset in the first generation of businessmen to stick to traditional products, processes and operations. For example, even after four decades, the apparel industry of Bangladesh is still concentrated on producing basic items. But the next generation of entrepreneurs are thinking out of the box. They are opting for value-added products by setting up in-house design, development and R&D facilities.
Most of the second-generation businessmen and women have studied abroad in well-known universities of the world. This meant that they got exposed to new ideas and new ways of thinking. What worked in the past will not work in the future; our whole industry needs to recognise that and the young minds are taking this message on board.
Consequently, the next generation are using modern operations, HR and new methods. They are using the latest technologies and technicalities. They possess the mentality that sustainability and transparency are inseparable parts of the business. And they believe in the idea that “knowledge is power” and are keen to share knowledge among their peers.
The next generation are the future. However, I also believe they can learn from the past. The entrepreneurs of yesterday did things differently but the leaders of tomorrow can learn from them. The RMG industry was built on their dream, determination, and willingness to break down barriers. Our entrepreneurs of yesteryears went out into the world and brought that world back to Bangladesh. Every major apparel brand in the world now views Bangladesh as a serious sourcing destination. It is difficult to overstate what an achievement that is.
For this, we must thank these industry pioneers while also looking to the future with the leaders of tomorrow. For success we need succession planning, and I believe Bangladesh is well-placed in this regard. The next generation will usher in the expected changes in the industry, I firmly believe, and take it to an even more elevated position.
Mostafiz Uddin is the Managing Director of Denim Expert Limited. He is also the Founder and CEO of Bangladesh Denim Expo and Bangladesh Apparel Exchange (BAE). Email: mostafiz@denimexpert.com
PHOTO:
REUTERS