When you have nothing, the incentive to have something can be huge. With nothing to lose but your abject poverty, there’s nothing standing in your way to achieve greatness. Amancio Ortega is the perfect example of that, a dirt-poor foreigner upon arrival in America, he is today recognized as the founder of Zara, a globally popular clothing and accessories line. Nothing in his background gave him any advantages. All he had was the ability to fight harder and last longer than most American people.

Born on the 28th of March 1936, Ortega is a Spanish billionaire with a net worth of $68.2 billion as at September 2018, making him the second-wealthiest person in Europe after Bernard Arnault, and the fifth-wealthiest person in the world, according to Forbes Magazine. This wealth is largely from the fashion group he founded, known as Inditex. It may not be popular to everyone, but it’s the company behind brands such as Zara, Massimo Dutti, Oysho, Zara Home, Kiddy’s Class, Tempe, Stradivarius, Pull and Bear and Bershka, according to the Inditex Group Annual Report of 2009. But all of this only got started when he heard his mother, a housemaid, begging for credit at local stores. This was the straw that broke the camel’s back. He dropped out of school and started working at the age of 14.

In building his business, he put the customer at the centered of his unique business model. Growing up, he realized that to earn good money, he had to give customers what they want. Ortega is known for maintaining a close relationship with his workers. This started in the 1950’s when Ortega began by organising single women who could sew well into sewing cooperatives. The product line included lingerie, babywear and nightgowns.
By 1963, Ortega had over 10 years of experience from managing sewing cooperatives. He founded his first company, Confecciones GOA, centredaround his family. He was in charge of developing new fashion trends. His brother, Antonio, managed commercial issues, Josefa, his sister was responsible for bookkeeping, while his wife, RosaliaMera, acted as his business partner. Till date, all of his businesses have witnessed heavy involvement of his family members.

• This business model leveraged on a low-cost local workforce to deliver fast production clothing turnarounds.
• By 1975, Ortega opened his first storefront known as Zorba, but changed it later to Zara, which expanded rapidly in the 1980’s to other Spanish cities.By 1985, Confecciones GOA transformed into Inditex, a holding group for a number of popular brands. It was floated on the stock exchange in 2001.
• Ortega was not a man who allowed sentiment to get in the way of business. When he found out that the workforce in Portugal were cheaper than their Spanish counterparts, he opened stores there in 1988.
• He broke into the US and UK market in 1989 and 1998 respectively.

It is by no coincidence that Amancio Ortega’s business empire grew so rapidly. At the core of his business model is the heart of a fast fashion retailer. The key to this business model is to give customers what they want as quickly as possible. For example, Zara is known to develop and distribute 12,000 new designs annually.
Designers usually create 3 models every day out of which only one will survive the scrutiny of analysts and patternmakers. Its better to kill a bad design in the confines of the factory, rather than lose revenue and brand reputation because of a bad clothing line. These analysts and patternmakers apply locally curated knowledge into their decisions. They are experts in the local or regional tastes of their respective regions, having been drawn from diverse backgrounds. They also consider reports from local store managers about changing customer habits. Every Inditex employee is trained to keep an eye on clients styles, requests and the latest selling trends.

It doesn’t stop there; Zara also refreshes its garment stock at least twice a week; for clothes, this is on Sundays and Thursdays, while shoes come in on Tuesdays and Fridays. At Stradivarius and Massimo Dutti, new clothes arrive every Tuesday and Thursday. For Bershka and Pull & Bear, new deliveries arrive Tuesday and Friday. This is premised on the golden rule that Ortega imposed in the 70’s to the effect that new orders had to be received and acted on within a 48-hour period.

But that is not to say that this brutally efficient system is not without its failing. What makes it so popular is not just how positively it operates, but also, how it bounces back from its downtime. There have been dress failures from time to time, one such incident happened at a Manhattan store in New York when white jackets were not pleasing to the customers. As soon as the staff detected this and noted that the local clientele preferred a cream colour, the white ones were withdrawn, and the clothing line was reissued in cream tones, which was a success.The combination of these rules is what have put the Inditex group ahead of all its peers in the fashion retail industry. Today, it employs over 137,000 professionals in close to 7,000 stores and facilities, across 88 countries, with annual sales revenue over $19.67 billion as of January 2015, according to Astrum People.
Another factor that has put the Zara brand at the forefront is the fact that it does not bask in the euphoria of its success for too long. It doesn’t relax into the easy trap of reproducing its hits. All because a product is doing well doesn’t mean they can’t do better. You can see this principle at work in most of the successful businesses. All because the iPhone 1 was a hit didn’t stop Apple from releasing the iPhone 2 right down to the iPhone X. You can either self-innovate yourself into greater relevance profitability or wait for an outsider to do that for you, at your detriment.

The Zara brand consistently modifies and offers varied versions of its products. In fact, a famous fashion blogger, Garance Dore has coined a term, Zaragasm, which means being seduced by the variety of choice and fashionable offers that Zara has in stock. Rather than track fashion shows, the company prefers to track bloggers and listen to its customers instead.Very few companies in the world can keep up with the pace of the Inditex group. The company competes against itself, striving to beat its previous speed records. Somewhere in the world, a new Zara store opens on a daily basis, although one-third of them are in Spain, according to Astrum People.
While most people know Amancio Ortega as a fashion entrepreneur, people hardly know him as a real estate tycoon. He used profits from his fashion retail to purchase prime properties. He then rents them to Zara stores and other businesses, thus performing the role of his fashion business’ landlord. This in effect ensures that his money keeps circulating and does not escape to third parties. His real estate empire is estimated to be worth over $10 billion.

Even when unemployment was at a critical levels and major businesses where moving out of the country in 2007, Ortega took the opportunity to purchase their properties at great discounts.When Harvard Business Review looked at Zara in 2004, they termed its management practices questionable and downright crazy. This was because:

‘Zara defied most of the current conventional wisdom about how supply chains should be run… The company can design, produce, and deliver a new garment and put it on display in its stores worldwide in a mere 15 days. Such a pace is unheard of in the fashion business, where designers typically spend months planning for the next season’

This fast approach to service delivery ensures that Zara has significantly lower markdowns, compared to its competitors. Its markdowns are usually in the range of 15%, while those rival US apparel retailers and department stores are typically in the 50-70% range, according to Forbes. Even before the internet generation arrived with its focus on ‘I want it now’ service deliver, Zara was already providing this service and thus became the natural choice for this generation. In the 2010 annual report of Inditex group, the last before Ortega resigned as Chairman of the group, he wrote,

‘The customer must continue to be our main centre of attention, both in the creation of our fashion collection and in the design of our shops, of our logistical system and of any other activity’

Zara and its associated brands under the Inditex group exemplify Agile Management at work. Rather than copy them in other to beat them at their games, most established fashion brands prefer to stick with traditional management practices. They prefer to believe that the vertical management practices of Zara are beyond their capabilities, or out-rightly postpone implementing speed to market procedures. These businesses are yet to enter the Creative Economy, where the customer is at the center of the equation.

Unlike most of his competition who have shifted shop to China due to cheap labor costs. Inditex has largely sourced most of its products from Spain, Portugal and Morocco, thus building a strong and likable brand amongst its most active customers. By controlling his supply chain, he can ensure that his company reacts quickly to new trends, giving the customers exactly what they want. It also significantly reduces the final cost of his goods as he doesn’t have to pay a rival to put his clothing line in their stores. He is in complete control from the design brainstorming stage, right down to the cashier at the storefront.

Amancio Ortega did not have it smooth, he zigged and zagged until opportunity hit him. At age 14, he dropped out of school and attached himself to a shirt maker where he learnt the art of apparel making.

It was during this period that he met Mera in a clothing store where she worked as a shop assistant. She was later his wife and business partner. The two of them partnered with Amancio’s brother, Antonio to create dressing gowns and lingerie designed by Mera, which they sold from their garage. It was also during this period that Ortega adopted the vertical approach that has remained at the core of his businesses till date. Whereas most retailers focused on one aspect of the business such as making clothes, distribution or selling clothes, Ortega did all three, helping him to tap into Spain’s skilled workforce of female embroiderers and seamstresses.
By the time he was 36, he had transited to marketing bathrobes made by sewing cooperatives he helped set up through his company, Confecciones GOA.There’s so much to learn from the grass to grace story of Amancio Ortega for any ambitious entrepreneur. First of all, the fiercely private life of this man belies the theory that you have to be ‘visible’ or more or less, all over the place in other to snatch opportunities. Rather than chase the limelight, Ortega focused on constantly innovating, now the press is chasing him to share in his limelight.

Another lesson we can take from him is the freedom to experiment. Its much easier to experiment when the business is still wobbly, unknown and hardly has any revenue. What is your competition either not doing at all, or not doing well? Step in and offer that niche service. Even if it fails, you’ve learnt something that doesn’t work and very few people will ever know. Its better to fail in private than when you’re in charge of a Fortune 500 and the board has no other choice but to fire you as CEO.

Another lesson is the need to involve family in the running of business. Because Ortega always carried his kith and kin along from day 1, there is largely no reason to doubt that after his death, the Inditex group will not remain relevant.