Strategy Session: Rebranding for survival, planning for success
Alberta Venture, August 2015
by Marzena Czarnecka
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I meet Emad Keshmiri while hunting for a succession planning story, my head full of depressing statistics and truisms along the lines of “The first generation builds—the second generation enjoys—the third generation destroys” that are, unfortunately, supported too well by hard data. I’m not, to be perfectly frank, sure I want to write another piece on succession planning. Not that succession planning isn’t a critical—perhaps the most important—challenge facing most family-owned (or human-owned, to be a little hyperbolic) businesses today, given that inevitable and unavoidable aging thing we all undergo. But… we’ve said so much about succession planning already, haven’t we? And the base template of the story hasn’t altered: it’s necessary, it’s hard, it requires planning, we all know this, yet most businesses do it too late, most founders struggle with letting go, most successors aren’t properly trained to take over, most successions fail…
But what’s happening at the Keshmiri family business—the House of Persian Rugs, established in Calgary in 1968 by Emad Keshmiri’s grandfather, Ali—is not so much succession planning as… rebranding is the word Emad and I decide on, although, really, re-visioning and re-inventing might be more appropriate. And succession planning? Keshmiri isn’t quite sure he’s going to succeed to anything—he hasn’t decided what he’s going to be when he grows up yet, and it may not be the owner of HPR. But as things are unfolding, that reluctance to succeed his father may be the key to the success of the entire enterprise.
See, Keshmiri is trying to create an enterprise to the success of which he’s entirely irrelevant. And virtually nobody in a family-run business is daring—or humble—enough to do that.
Rewind. I don’t know this about Keshmiri and the Keshmiri family business when I meet them. And everything I thought I knew about them goes out the window when I walk into the House of Persian Rugs, expecting to walk into—well, you know, a house of Persian rugs, a carpet store, we all know what they look like, right? —and instead walk into a modern art gallery. Which is hosting an art gallery opening-type event, and entertaining local interior designers and art connoisseurs, as well as its long-standing, “traditional” Persian-rug loving customers.
The space is light and open, and the walls are hung with art. Carpets, yes, but—these are definitely not Keshmiri’s grandfather’s Persian carpets. The day I experience HPR, it’s displaying “Estetica Italiana”: a collection of modern carpets by Milan designer cc-tapis. Designed in Italy, woven out of hand-spun Himalayn wool in Kathmandu, and “highly customizable… making them an interior designer’s or architect’s delight,” the carpets are… well. Not Persian.
In pride of place among them, an ultra-modern piece, in which a skull takes shape among the knots. Keshmiri laughs. “When we were putting that one up, my father just looked at me and shook his head, ‘What would your grandfather say?’”
(I don’t know Keshmiri’s grandfather, of course, but I now know a little about his story, his legacy, and the kind of successors he left behind, and I think he would have said, “How much are we selling this for? Seriously? And people will pay this? Go for it.”)
HPR is the only distributor of the cc-tapis rugs in Canada. But it’s not turning its back on its origins: it’s also the only Canadian distributor of the exquisite designs by German-based, Persian-tradition-reared artist Hossein Rezvani, who’s reinterpreting traditional Persian designs in a way that would make dogmatists scream… and poets like Rumi and Hafez sing.
Welcome to Keshmiri’s rebranding exercise… and un-succession planning story. It’s ingredients are pretty simple: a solid foundation. A massive crisis. The need and the courage to rethink everything—to take the same risk in the third generation that the first generation founders took. And to keep on rethinking everything, every step of the way.
House of Persian Rugs started the way every Persian carpet store in North America got started—how most immigrant-run businesses in the New World get launched. What market niche can we fill? What do we have that’s desired—and not in plentiful supply? When Keshmiri’s grandfather landed in Calgary in 1966, he brought with him some of his family’s “precious rugs.” Beautiful, and much admired by his new Calgary friends, they were promptly sold to finance the new life in Canada. More rugs imported from friends and family in Iran—sold—imported… and, by 1968, a formal store.
In 1996, Abbas, Keshimiri’s father, officially takes over. Keshmiri is 10 and uninterested in rugs. He’s too busy going to school, playing track and field, and wondering if he’s going to be a dentist or a cardiologist—the professions of choice of his elder two brothers (the youngest is an architect). He ends up getting a Bachelor of Kinesiology, and then a Master of Management of Innovation at the University of Toronto
—with a view to probably working in one of the industries. You know. Oil and gas. Finance.
Abbas is definitely not grooming a successor. And he’s running the business more or less as his father had, “on a model virtually unchanged for hundreds, maybe a thousand years,” Keshmiri says.
But in a very, very different world.
Keshmiri puts it very bluntly, “There was no competition, really, in my grandfather’s time,” he says. “I don’t want to take away from what he built, because he was very successful and he worked hard.” But. He created a market, he had limited competition, he had easy and predictable access to the product.
“This also meant he had no need to change or innovate,” Keshmiri says. “My father took over the business at the time when the old model was initially working—and then, very quickly, the industry became very challenging.” Family-owned carpet shops all over Canada, North America and the world started closing down. The market was saturated, its practices outmoded and inefficient. The customer was changing, the seller was not adapting—and the carpet shop was dying.
For places like HPR, built on importing Persian rugs from, you know, Persia (i.e. Iran), the economic sanctions against Iran introduced by the US in 2010 and followed by Canada in 2012, added an additional massive stressor: importing the “best” product became prohibitive.
Fortunately, crisis is an incredible impetus for change and creativity. Abbas recognized that he and his industry were in crisis, and that the most valuable arrow in his quiver was a freshly educated son with a lot of energy, “massive student loans,” and a lot of ideas.
“My dad essentially said, we need to change. Any ideas?” Keshmiri said. “He wanted me to come in for six months, immerse myself in the business and to try things. He was—all the credit goes to him. He gave me an open canvas to paint on. I was free to experiment. To spend. He was open to change. He knew we needed to change.”
Fast-forward four years—because Keshmiri’s six months turned into a year, then two, now four—and House of Persian Rugs is changed and still changing. And the man responsible is still not sure if he wants to give the rest of his career and life to HPR. But he’s turning this uncertainty into the rebranding exercise’s and un-succession planning’s greatest strength. He’s focusing on creating processes and relationships that don’t need him to function and thrive, and hinge mostly on a customer-oriented approach for the new target customer.
“Our target customer is now the interior designer,” Keshmiri explains. “For this grade of product, more and more of the buying decisions are made by third-parties: designers, planners, architects. They’re busy. They need us to make things as easy and efficient for them as possible. They need customizations: this carpet, but in that colour, and can it be square? A completely different approach from the traditional customer who’d come into the shop and spend hours rooting through piles of carpets and talking with Grandfather about them.”
It is for the benefit of this new customer that the thousands of pieces of carpet HPR has in inventory are now digitized. Designers can browse everything at will on their devices, in-between meetings. Come into HPR ready to buy—or to demand customizations.
The traditional customer, of course, still exists. “One of our challenges is to not alienate our loyal, traditional base while working to build this new one,” Keshmiri says. “Sometimes, I think it would have been easier to keep House of Persian Rugs as is, and to start a spin-off business that approached carpet selling in this new way.”
But. When you’ve got a powerful brand—a brand your family is emotionally and financially invested in—it’s hard to let go. Even when you’re a hard-nosed MBA.
OUR EXPERTS RECOMMEND
Emad Keshmiri doesn’t love management/business books. He suggests you read Robert M. Pirsig’s Zen and the Art of Motorcycle Maintenance instead. And if what you take away from his story is a passion for modern Persian art, pick up Iran Modern by Fereshteh Daftari.
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