In his Techtextil North America 2008 keynote address, speaker Allen Gant, president of Glen Raven, Inc., focused on the transformation of his company from a textile manufacturer into a global provider of innovative solutions. At the show, Mr. Gant spoke with Messe Frankfurt USA about the critical role his employees have played in that transformation.

He explained that the key to Glen Raven’s success has been the ability of its people to adapt to – and even embrace – change. One example is the company’s culture of safety. “Fifteen years ago, we decided we were going to produce things in a safe environment or not at all – period,” Gant said. “Today, we have facilities that have gone ten years without a single accident or injury.”

Another way the company encourages change is by not punishing failure. “People at Glen Raven are allowed to fail, to make a mistake,” Gant noted. “We have tremendous communication between our associates. At Glen Raven, employees will come to their boss and say ‘Here’s what happened – I made a mistake. And by the way, here’s what I think we can do to correct it.’”

Asked about the secret of his company’s success, Gant says “It’s the environment inside Glen Raven that makes it unique. The company always changes, but has a value system that doesn’t change. It’s a very personal business – and that’s the way it should be.”

In the following transcript of his presentation, Gant recounts some of the milestones in his company’s global transformation.

 

Presentation by Allen E. Gant, Jr.
President
Glen Raven, Inc.

Techtextil North America
Atlanta, Georgia

April 1, 2008

            I was fortunate to be exposed to global aspects of the textile industry at an early age. In 1951, my father joined a group of American textile executives who were assisting England with the rebuilding of their textile industry following World War II. At the tender age of two, I began joining my father on trips overseas, and we both learned first hand that the textile industry extended far beyond the shores of the United States and America did not have a lock on technology or innovation.

            Over the years, our company continued to maintain a global perspective as my father and I and other associates at Glen Raven traveled overseas frequently. Being exposed to foreign languages and diverse cultures throughout my formative years inoculated me against a fear of the unknown. It’s this perspective that I have tried to instill with our Board of Directors, senior management and associates.

            As the global textile economy has evolved over the years, Glen Raven has also evolved. We have been proud to join ranks with others in our industry to champion progressive trade policies that foster a level playing field for everyone. At the same time, our management team and directors have continued to make strategic business decisions based on a global perspective and the need to adjust to economic realities.

            The past two decades have been among the most challenging in our long history because there is no playbook for transitioning a 127-year-old textile company to a 24/7 global economy. We have certainly made more than our share of mistakes.  For my presentation today please forgive me if I focus on the positive, but rest assured that it has not been an easy transition.

            To begin with, even though our company invented panty hose, we exited that business when it became clear that this category had been commoditized and the margins were no longer acceptable to us. We discontinued our apparel fabrics and yarn businesses for the same reasons. They had become commodities and we could no longer add value.

            An historic challenge for the textile industry – which is still apparent today – is that many segments are easy to commoditize, which means that production pursues low wage environments. The textile industry left New England for the South in search of lower costs. From the South, the industry went to Mexico, the Caribbean, China and India. Today, some of the fiercest competitive battles are no longer between the U.S. and China or India. Some of the toughest battles are between China and India and other emerging nations, each attempting to undercut the other in terms of low cost production.

            So, how has this global environment affected a 127-year-old textile company such as Glen Raven? You may be surprised to hear me say it has left us with a world of profitable new opportunities. The expansion of the textile industry all around the world has made our company stronger, leading to our successful transformation from a North Carolina textiles company to what we like to think of as a “global source for innovative solutions.” We have had our ups and downs along the way, and we are humbled by our overall good fortune.

            In this regard, Glen Raven is fortunate that innovation has been part of our cultural DNA, going back to 1880 and my grandfather, the founder of our company, John Q. Gant. He set the stage for a company that could capitalize on new ideas. As a result, we were one of the first textile mills in the South to dye fabrics and one of the first to begin work with synthetic fibers.         

It is this innovative spirit that prompted Glen Raven to take one of the boldest steps in our history more than 40 years ago. During the late 1950s and early 1960s, we were the leader in the production of cotton duck, a form of treated cotton used for awnings. Our company discovered, however, that acrylic fibers could be used to weave a superior product that would not fade, rot or mildew. So what did we do? In 1961, we made one of our major business lines obsolete almost overnight by introducing the Sunbrella® brand of awning fabrics. Fast forward to the 21st Century and Sunbrella is one of the industry’s strongest fabric brands, with leadership positions not only in awnings, but also in marine and furniture markets. 

            When you work in a culture that appreciates the global nature of the economy and champions innovation, making decisions related to international trade are much easier. You are always troubled when these decisions cause disruption in the lives of people, but you must also recognize that your first obligation is to sustain your company during changing times.

            With the textile industry moving the production of commodity products off-shore, it was clear to us at Glen Raven that our fundamental strategy must be to focus on performance products based on intellectual capital and technology and not on low wages and low costs. Sunbrella fabrics are an excellent example of this strategic thinking, as are all of our products and markets today.

            We adapted Sunbrella fabrics for convertible car tops and today we have a leading market share with all of the major automotive nameplates. We helped the automotive industry recognize that it was time for an improved headliner fabric, and today we have a lead share in this business.

            The military needed a fabric that was both waterproof and flame resistant, and we offer that technology today. Industrial workers need to be protected from electrical arc hazards and they want to look good and be comfortable at work. We created a fabric with the best weight-to-protection ratio in the industry that is fade resistant and long lasting.

            As these examples illustrate, we are continually looking for new opportunities on a global basis and we follow a disciplined approach for evaluating each opportunity. Can we meet a need better than anyone else? Will we add value through our knowledge and through the application of technology? Can we earn a leading market share? Is there long-term potential? What underlying social, political and economic factors will make this product or market viable for the long term? Does this application align with our core values? If the answers are yes, then we move forward. I can assure you we have not batted 1.000 with new products or new ventures. Our disciplined approach, however, has guided our domestic base and our strategic expansion overseas and, fortunately, given us more winners than losers.

            Based on our disciplined approach, it was clear to us beginning in the early 1990s that our global footprint must expand beyond the United States. World events were reshaping the globe, including the collapse of the Soviet Union and the symbolic victory of the free market system; the growing importance of China in world markets; deployment of the Internet and global high-speed, broadband communications; the introduction of the Euro and the European Union; and improvement in global logistic systems.

Within the space of less than a decade, the world economy was changing dramatically, fundamentally and forever. Fortunately for Glen Raven we were in a position to capitalize on these changes because we already had a portfolio of technical products, capabilities and expertise. In addition, as an innovative, privately held, financially sound company we were in an excellent position to invest for the future.

Given this backdrop of world events and Glen Raven’s heritage as an innovative company, we identified an opportunity to expand our global presence quickly. We purchased a company that was at that time our largest competitor – Dickson, SA of France.  Dickson and Glen Raven had been friendly competitors for a number of years and we knew each other well enough to know that our markets and products were complementary and that our values would align.

            When we purchased Dickson in 1998, Glen Raven’s global presence grew tremendously overnight. We suddenly had 1,000 associates in France and our sales network grew to more than 120 countries. We were the proud owners of Europe’s leading awning fabric brand, Dickson. It was a bold move, but we knew it was the right move.

            Not only has Dickson contributed to our growth and profitability, it has also given us valuable lessons in what it means to be a global company. Imagine that the United States is a patchwork of independent countries, all with different languages, cultures and tastes. If you can imagine that scenario, then you can imagine the perspective that Dickson brought to our business. This is a company that sells awning fabrics all across Europe, charged with providing distinctively different styling for each country. Awning fabrics that are popular in Denmark would never sell in Spain. In addition to meeting a great diversity in color and styling preferences, Dickson has long been adept in working with a wide range of trade regulations, cultural differences and, before the Euro, varying currencies.

            Ten years after our acquisition of Dickson, we continue to develop synergies between our North American and European operations. Our Sunbrella brand has been a tremendous success in Europe owing to its reputation as the world’s leading marine fabric. Dickson’s European styling has inspired our U.S.-based design teams and we have gained insights into innovative approaches to marketing based on French models. Because of our colleagues in France and around the world, we attend numerous international trade exhibitions that keep us up-to-date on the leading edge of technology and emerging color and design trends, not to mention opening our minds to new ways of thinking in terms of operations, product development and marketing.

            Our success with the Dickson acquisition gave us confidence for our next bold global move – the construction of a business center in China. Again, looking back to the mid and late 1990s it became increasingly evident that Glen Raven must have a greater presence in Asia. Our acquisition of Dickson increased our sales and marketing presence around the world, and Glen Raven people had been serving the Asian market for a number of years, but this level of commitment was not enough.

            Additionally, a number of our best customers – manufacturers of casual furniture – had established factories in China and they wanted fast, efficient access to our Sunbrella fabrics. We concluded that building a business center in China would be an excellent strategic move, both defensively and offensively.

            Defensively, we had to be close to our customers. If we didn’t provide them with efficient access to fabrics, it was clear that someone else would. The most fundamental tenet of good business is you must remain close to your customers, so our move to China was a given.
 
            Offensively, we viewed our expansion into China as much more than building a manufacturing center. We approached this new facility as our Asian business center, charged not only with weaving and finishing Sunbrella fabrics, but also with developing Asian sourcing strategies and expanding our share of the Asian market.

            Asian consumers are becoming increasingly affluent as their economies expand, and they value American brands, such as Sunbrella. We see our Asian business center as providing tremendous long-term growth potential.

            As we have continued to pursue a global business strategy, we have continually redefined our company. We no longer think of ourselves as a textiles company. We no longer think of ourselves as a manufacturing company. We think of ourselves as a provider of solutions. Our core competency is fabrics, but we do not allow our heritage to hold us back from great new opportunities.

            With this perspective in mind, in May of last year, we acquired our two largest distribution partners – The Astrup Company and John Boyle & Company. Glen Raven, Astrup and Boyle have been trade partners for more than 100 years and when we learned that these family-owned companies were interested in a transition in ownership, we moved quickly.

            We have merged Astrup and Boyle resources into a new subsidiary that we have named Tri Vantage. This new organization is increasing efficiencies in the supply chain through consolidation of branch locations, economies of scale and other strategic initiatives. Most importantly, Tri Vantage is bringing us closer to our customers and opening up opportunities for innovation and further redefinition of Glen Raven’s vision for our future.

            Our acquisition of Astrup and Boyle has also brought us opportunities for further global expansion. For example, one of the subsidiaries of Boyle was Strata Systems, which has developed a niche of geogrid products used to stabilize steep slopes during commercial development and highway construction.

            Strata has established distribution partners all around the world and as a result of this global perspective identified an outstanding opportunity in India. As India’s economy continues to expand, it has launched a 6,000-mile superhighway project. Strata’s products are crucial to the engineering of this new system, and we recently opened a joint venture operation in India so that we can be a major supplier for this enormous, multi-year venture by the Indian government.

When viewed from a broad perspective, our global strategies, ranging from Europe to China and from Tri Vantage to Strata, are addressing the entire continuum of the supply chain. On the one hand, we have manufacturing facilities and sourcing infrastructures on three continents, including North America, Europe and Asia. On the other hand, with the addition of Astrup and Boyle, we are responsible for assuring that our customers have the right products, in the right places, at the right times, all backed by competitive prices and responsive service. Our entry into the distribution and services realm serves to further distance us from our heritage as a manufacturer of textiles. We are more and more in a position as a solutions provider. 

            Where is Glen Raven today in terms of global transformation? When I say we have made the transition from textile manufacturer to global provider of innovative solutions, I do not want to imply that we are done. Far from it. Transformation is not a process with a beginning and an end. It is a continual process influenced by technology and evolving trends in consumer, social, political and economic behaviors. We have changed and we will continue to change, yet we will always remain grounded in our core values of integrity, innovation, quality, marketing and respect for people.

To help assure that we do not fall in love with the status quo at Glen Raven, we created a New Frontiers Department. As a champion for innovation, New Frontiers is serving as a resource for our operating subsidiaries, encouraging communications and collaboration across all of our subsidiaries. It offers an outside perspective and serves an invaluable role as counselor and gadfly. One of the most important roles of the New Frontiers Department is to challenge the status quo.

Most recently, New Frontiers launched an online information resource that is giving our managers ready access to the latest in market intelligence to guide their innovative thinking. This information resource is just one example of how New Frontiers is helping our front-line managers maintain a vision for the future while they manage daily operations.  

            In closing, I was asked today to define the key to success in the global economy. Unfortunately, there is not one key, but several. I would like to highlight some of the things that we have learned about the global economy and how to succeed within it. As someone once said, you learn far more from your mistakes than you do from your successes, and these insights are certainly based on both good times and not so good times at Glen Raven.

• Global strategy vs. business strategy – When someone asks me what is our global strategy I correct them by saying we don’t have a global strategy, we have a business strategy. They are one in the same. All business strategies today must be global.

• Global infrastructure – Within the past 10 years, the global trade infrastructure has come of age through advances in communications and logistics. If you do not use this infrastructure to expand your operations worldwide, your competition will. The world is truly flat.

• Be open to cultural differences – One of the greatest barriers to global expansion for many companies is the fear of working with people who speak a different language and have distinctly different cultures. It is essential to put your prejudices aside if you are to succeed in global trade. If the Chinese can find ways to penetrate our markets, then there is no reason why American business cannot find ways to penetrate theirs.

• Flexibility is paramount – Where will interest rates be next quarter? What will happen to the price of gold? Which of the Asian, Middle Eastern or Latin American governments will become destabilized? I have no idea how to answer any of these questions and neither does anyone else, which underscores the need for flexibility, particularly in a global economy. You must be prepared for any eventualities or at least have a culture that approaches paradigm shifting events with a perspective of “where do we go from here?”

• Get the expertise you need – Every country is different and there can be severe penalties for getting it wrong – legally, politically and culturally. Every deal that you do internationally will add names to your Rolodex which could be invaluable in identifying and assisting with the next deal. We have been fortunate to identify experts who have helped guide our business strategies and we are open to working with new resources.

• Maintain a financial discipline – One of the most important aspects of a business strategy in a global economy is a financial discipline. When margins decline because a product has been commoditized, you must take a hard look at whether you should exit that business. Pride and vanity come at very high costs in a global economy. It takes a strong financial discipline, which we have at Glen Raven thanks to our chief financial officer, executive management team and Board. 

• Innovation – Finally, recognize that innovation is not the most important thing, it is the only thing. New ideas are no longer limited by geography or time. Capital will seek out the most innovative products and services. Your goal must be to generate innovative ideas ahead of anyone else, capitalize on those ideas quickly and be prepared to exit and pursue other new ideas based on changing market and competitive conditions.

            If there is one overriding message that I would like to leave you with it is this – there is this very big world of opportunity waiting for you out there today. While Glen Raven has always had an international perspective, it has required a good deal of soul searching and painful adjustments to become the global organization that we are today. I encourage you to learn from our experience, embrace thinking outside the walls of your company and lead your people to do the same.

            As I remind my colleagues almost every day, the competition never sleeps, which is an incredibly humbling thought. It is always 6 a.m. somewhere in the world and someone is hard at work on the next great innovation that will redefine markets.

We should all set our alarm clocks for 6 a.m. and commit ourselves to creating the next great innovation that we can market not only in Des Moines, but also in London, Paris and Hong Kong.  

            Thank you for listening and best of luck with your own global transformations.

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