The Solve Effect Podcast - Episode 1: A Textile Titan

This is a transcript of Episode One of The Solve Effect, edited and condensed for clarity. Listen on Spotify, Apple Podcasts, Amazon Music, or iHeart Radio.

Hala Hanna

Welcome to The Solve Effect. I’m your host, Hala Hanna. What if I told you that a 72-year-old textile titan might just help save our planet’s water supply?

Today, we welcome long-time Solve advisor Marjorie Yang—known to many as Margie. She’s the Chairman of Esquel Group, one of the world’s largest textile and apparel manufacturers, and a leader in technology and innovation.

Margie has spent her career advocating for sustainable manufacturing and better working conditions. She’s a powerful example of how business leadership can drive real social and environmental impact.

Welcome to The Solve Effect, Margie.

Margie Yang

Thank you. So happy to be here.

HH

We're so happy to have you. You've led the company through such transformation from, you know, how you use technology to the size, to the culture. I was wondering what personal philosophy is behind it. Why is it that you approach business in such a different way?

MY

As I was sitting here listening to your introduction, I was starting to think that, in fact, many of my ideas probably started at MIT. But we can backtrack a little bit more. My grandfather started at Qinghua, then went to Phillips Academy.

HH

Uh-huh.

MY

Andover. And then went to Lehigh. And he was very much influenced by the philosophy of Qinghua about how enterprises are to be the foundation of building an economy, a national economy, and then because he went to Lehigh and in those days, Frederick Taylor was a big influence. So he came back to China and he was running a silk textile mill. And he had adopted a lot of the philosophy from Frederick Taylor. He managed to convince my father to go into the high-tech industry of the time, which was textiles.

As I was growing up, I was privileged to hear from my grandfather who talked about who would, in conversations with my father, be talking about the management philosophy that he had. If you're the leader, then you should take care of the people who follow you. So these ideas were sort. Like it from the basis. And I think what it was like, I remember distinctly when I started taking an interest in the environment was when I was at MIT.

Because when I was at MIT, that was the time when Limits to Growth or Silent Spring—those books were, you know, my generation. So those are, that's the basis of my management philosophy.

Although having said that, my father early on said to me get a good education so you don't have to be in the textile and apparel industry. Ultimately, he would invite me to join him in the textile and apparel industry. So isn't it interesting? And now as I get more and more involved after all these years, I realized, wow, you know, the time I spent at both MIT and Harvard is really useful for what I'm doing now, which is contrary to what most people think. Most people think that the apparel and textile industry, these are sunset industries, no technology. Totally untrue. Totally untrue. There's so much opportunity to apply what I learned at both MIT and HBS to create a lot of good

And going back to what my grandfather was trying to get us to understand is the importance of this industry on people and on society. So we're a small company. We're a private company, but we aim to be a catalyst for change. So we try to document what we are doing right and what we are doing wrong, but because we're a private company, we also have the freedom to have a longer-term vision and try to do the right things, but it takes somebody to, I think, write it and communicate it so that others can use us as an example and choose to see what part of our management style can be useful.

HH

I mean, what's wonderful about it is that it's a story also of the Industrial Revolution, the second, the third, the fourth right. And you're going from the textile manufacturing to a real knowledge and technology company and so that would be a wonderful book to read from industry perspective, from a business perspective because this new managerial margins also from just the family multi-generational perspective. I would read that.

MY

Well, it's also probably very relevant for today's overall economic consideration. We started at a time when China was just beginning its opening up and reform. In those days, China was very poor. So, a lot of factories went there because labor cost was cheap. And then today, China is definitely no longer the poorest. And many people say, well, then it's time to go and find a place where you have cheaper labor.

We decided that we would not. Our interest is to create quality employment. China should not lose all the manufacturing, and this is such a hot topic in the US today. We feel that we can manage better so that the workers. . .while they are still in this industry are making a better—improving their standard of living and through various means that we learn.

From MIT, from Harvard, every management tool, every how to use technology, how to use knowledge overall, how to use knowledge to enhance the productivity of a workforce that needs to have a higher income. And this gets very, very interesting.

HH

Right. And you think of a good job beyond the good income, right? You really think of the whole person, the whole environment that they're in?

MY

Mhm, mhm. Including sort of this interesting topic of work life balance, where work life balance is very much part of wellness.

Years ago, one of my factory managers told me that not only do the workers need a break. Even a factory, I mean equipment needs a break. I have learned from many, many good operating managers. They know how and then they share their management philosophy with me. Some of them talk about how a factory is like a orchestra. If you listen to the noise and if the noise that is generating sounds like music. Sounds like you know, Yo-Yo Ma’s cello—well, that's a great, great factory. And if it sounds like my niece used to play the cello sound like that, but it's not a, you know, we've got a problem there.

I guess one of the great factory operating managers was a gentleman called SK Wong and he early on told me, he said, “Do you like people? If you don't like people, you don't belong in this business. If you like people and you, it makes you happy to see people getting their paycheck and going home and buying things. Imagine that they're buying milk for their baby, and if you get a—You know, if you're happy from that, you belong in this business.”

It's not just about better processes, but also especially at a time when you're trying to, when we're trying to introduce technology. You need to convince the worker that it is not to replace them, but to work together with them to use the technology to make their work easier, the product more stable, better quality, so that we can become even more competitive.

HH

I mean, that's the interesting thing you were saying you're a small business. Of course. I'm gonna probably say outdated number by now, but it's definitely in the 1.78 billion. You know, company in terms of the value of what you what you do. And you really, as I hear you speak, it sounds like the values that you've brought to the table are actually your competitive edge and that that has transformed not just, you know, the lives of those who work there, but also what you're able to do with what you produce.

MY

Well, we used to be, at one point over billion-dollar company, but because in 2020, our mill in Xinjiang was put on the entity list. Falsely accused of using forced labor, which is quite interesting because it's not even a garment factory. It's a highly-automated spinning mill. Air condition and all that. But that's not the point. We lost half our business overnight. All our US customers. And some of our European customers. Due to pressure from their legal department, the buyers could not continue to work with us, even though we've been working together 30-40 years, so we had to let go of 30,000 people. Which was very tough, especially during that was time of COVID. Around the world, we had to let people go. In Sri Lanka, in Malaysia, in Mauritius. And I'm very proud of my colleagues who managed to let people go, but did it in such a fair way so we didn't have any strikes, or we all parted very friendly. And it's very sad because we had to close some very good factories.

Our theory proves right because we still have the spirit was still very, very good, and even though we were going through this crisis and in fact the crisis became the impetus for change we talked for. We have many PowerPoints over a period of ten years where we have said that we are going to adopt Stan Shih’s smiling curve to move away from basic manufacturing to be a brand company to have better marketing, branding and more technology. All the good stuff. And then Professor Jim Womack from MIT, of famous for lean, he once said to me he said, and we were learning lean, he said. You guys are not going to change and I said why, he said, “You're too successful.”

So, we were very, very getting complacent. We were very good at making shirts and we were very we were happily going along. And by the way, our previous CEO was also at MIT. Right and we were all very happy doing the things that we know how to do. So we never did that. We never made those changes that we promised we said we would because we didn't have something to leverage on. Now, with this crisis, we could leverage on that and we are now moving out.

We started our brand business. We almost started from close to zero now to about 30 million US, the technology business. So, we started in technology. Because, say in the spinning mill, we were trying to find ways to prevent workers from losing their hearing. Most spinning male workers will have lost hearing because of the noise in the workshop. We're now selling a lot of garment factory automation equipment, and I think that business is gonna be very, very, very good. Because we couldn't find any young person who would want to spend three months to learn how to do a particular skill. And out of necessity, we said, “Well, we we better learn to de-skill.” To a point where. . .I can only use a stapler. I cannot sew. I tried one of those automation machines and I could make a cuff. It's so much automation that you just even I can make that so. That's the. These changes so that you then move the people who used to be in sewing to keeping technicians. And one worker can operate five or six machines.

The latest automation area is using AI to do quality inspection fabric quality inspection. It's very tough on your eyes because manually you have to . . .the fabric is coming down with the light behind it and you have to spot defects. And as you can imagine, the next generation, nobody wants to do it. I mentioned this because everybody says AI is going to cause loss of jobs, but then in our case these are jobs that nobody wants to do. You are not going to be able to find people who want to come and stand in front of a fabric machine just looking at the fabric for defects. And so these are automations that will enhance the productivity of the existing workers because it will also help the existing workers if the defects can be also fed back into the system. And then improve on because you see it's not you say, well, how does this relate to what which spindle did it come out of? How can we fix that? All this is all related.

And then finally, what's very interesting is sbout a technology that we are so we have an interest in selling water treatment technology because we have, we're very good in water treatment. Then, our latest. A big thing is water is dyeing.

HH

Waterless, dyeing.

MY

Waterless dyeing.

This is a big deal for cotton because waterless dyeing, technology has been in use for synthetics, but not for cotton fiber. And this one—

HH

Right. We all know that like one shirt costs it, like uses how many liters.

MY

Yeah, yeah. This one is particularly interesting because I just went around the company and said what else can we do to make some money? You know, after you lose half your business, you know you start to panic and say, well, what else? We can't sell shirts to the US. So what? What? What other tricks do we have? You know. Can you sing? Can we generate some revenue from forming a band? You know, get in the local bar. What else can you do?

So, I called one guy who said, well, our R&D head. So what? What else? What other business can we be in? He said, “Well, we have been working on a waterless, dyeing technology for ten years and we think that we can make it work.” So that's wonderful. Wow. That's really very, very so. How come you never told me about this before? He said, “Well, you know, we're busy making shirts.”

So, with this, you know, I can just say that I feel that if this works, when I die on my grave, I would put this, that this is I'm responsible for introducing a technology that will save, I don't know how many tons of water. This to me could be the highlight of my whole career because this is like to me it's a big deal, you know, this is from days when we were talking about Silent Spring and Limits to Growth. This is really a disruptive technology, but really good for the environment, something that we can all be proud of. But if we had been still very successful in selling shirts, this probably would still be sitting in the, you know, in the R&D department.

HH

It's the the textbook innovator dilemma. I mean, who would have known that you were saved from a potential Kodak moment by the entity list.

MY

Yes, yes. Yeah, so I suppose. If there is something that I should share with all my friends is that. When you get hit by a crisis, don't just. Sort of mourn about why me. You know why? Why did it happen to me? Start to think of what are good things that can come out of this. And I think that is something that we all need to. In these turbulent times, the only thing that is certain is uncertainty. Then let us embrace uncertainty. I know that during uncertain times, we should look at opportunities that comes from being from these unfortunate crisis.

HH

There is such an important lesson right now for any business leader that is just we are all facing. You know what, what does the trade wars mean to us? What would tariffs mean to us? Is it a change to the international trade order? What does that mean to my supply chain? And the fact that you're, in some way, you're already ahead of that and have lessons that are both leadership lessons and management and technical lessons is really quite something.

MY

When there's disruption in trade, this is a time we need to push because whatever little trade there is, we have to make it more efficient. So this is a time where we've decided that those of us working on digital trade is to really get people to focus on, “Let's get this done because it will take out. A lot of wastage.”

HH

I have to actually share a little bit about our Solvers because one of them I should introduce you to, Shelly Xu. She created this AI that basically creates perfect zero waste designs using AI and you can just see it all and then you can follow to cut it.

MY

Oh, you should introduce us. Well, I'd love to meet more Solvers. I think they're a group of really enthusiastic–I mean, there's such energy with the Solvers, and I just hope that during this period that the Solvers we all share experience and encourage each other to keep going.

Just because times are tough doesn't mean that we cannot continue to pursue our dream. And just because. . . oh, this is something I definitely want to share. I remember now. If you're a Solver, you have to say that it's OK. OK, I do this because I really believe in it, not because of external positive reinforcement. I cannot just rely on external positive reinforcement. I must enjoy it to a point where without the positive reinforcement, I still feel that I'm really happy at that I embarked on this journey and continue to go. I hope the Solvers will not give up their dream and that the dream itself will propel them.

HH

That is just so wonderful. I mean, there's so much to take here and it's really interesting how you put people at the center of everything you do and, you know, go down to really what is needed. Dignity with a good job, good pay. But also, the trust that comes from caring for people and from wanting them to be in a beautiful, clean, safe environment. You also talked about the intersection of technology and people and how this is not about automating, but autono-mating, and making sure that people are empowered to do their best and not the things that they don't want to do. But my favorite is that last bit about having fun because—can I share your age? Is that OK? Otherwise you just cut.

MY

Of course. It no, no, no. You can share my age. I think I just disclosed it.

HH

But Margie is 72 and I’m lucky to be in the room with you to feel your energy, your passion, your clarity of values and thought, and to know that this is just another decade of fun for you? That makes me very excited.

MY

Thank you.

By the way, on the technology, but it means a lot to me because sometimes I complain, I said, you know, those of us who graduate from MIT believe that technology is good for mankind. So far, technology has not delivered that promise.

So, we have the responsibility to use technology better, how to wield it to really create value for society. So, this is such a privilege for me to have had that experience an opportunity. And now the challenge is here, but because I feel that I'm well prepared, I feel, oh, let me just enjoy this.

HH

I think you know the technical word for you, Margie is probably you’re a bad ass.

Thank you again to Margie for a truly wonderful conversation. Here are three key takeaways for me:

First, Use Crisis as catalyst for innovation: When Esquel Group lost half their business overnight, they didn’t let the crisis go to waste. They transformed. Sometimes your greatest idea is hiding in plain sight—you just need someone to cut your revenue in half to find it.

Second, Always center People: Margie believes technology should enhance human dignity rather than replace workers. Instead of eliminating jobs, she focused on creating higher-value ones.

Finally, Find your intrinsic motivation: At 72, you get the feeling that Margie is just getting started, and having fun. This outlook has sustained her through a 50-year career and carries her with remarkable energy and passion. I hope that's contagious.

These lessons showcase Marjie's approach to business leadership that balances profit with purpose, technology with humanity, and crisis with opportunity. I'm Hala Hanna, and this is The Solve Effect—where business wisdom meets human impact.

This episode was produced by Bridget Weiler and Elisabeth Graham, with audio engineering and editing by Chris McDonnell. Theme music by Max Natanagara. If you would like to support the show, subscribe or leave a review wherever you get your podcasts. You can also find us on social media or visit us at solve.mit.edu.