The Whimsical Entrepreneur
Have you ever worked with a Chief Executive that prides on a large retinue of managers under his command with little much to show for their individual achievements? I am sure, you have. If not, let me introduce you to one such high-flying CEO of a pharmaceutical company that I had the onerous responsibility to shake up and bring him down to reality in its cruelest form. The result: the company grew to become investors’ darling in under 2 years.
From here to there: the journey: a glimpse:
Year 1987-88; City: New Delhi, India; Industry: Pharmaceutical (Homeopathic) and Herbal Cosmetics, Yearly Revenue: Under 5 Million U.S. Dollars p.a.
Challenge: Multiple challenges, namely:
Help eliminate private contractors and consolidate production from 12 far-flung, smaller contractor-owned units to one single location where all herbal personal care products could be manufactured under one roof, owned and operated by the company
Streamline Management Policies, Procedures and Effectiveness
Help enter new market segments
Implement advance procedures for cutting-edge solutions to daily challenges
Show a quantum growth in Y2Y revenue as well as Profits
My first and foremost task was to sit down with the C.E.O. for an hour-long brain-storming session whereupon a meeting was set-up with the GM, the Sales Manager as well as the Channel Distribution Manger that also acted as the Marketing Manager. Too bad, they did not have either Product Manager or Production Manager in place, leaving it up to the hard-pressed General Manager who happened to be a Pharmacist by training. The C.E.O. was a well-known Homeopathic Doctor with roaring practice that kept the company going.
The meetings confirmed to me what I had been suspecting all along: a lack of communication with respect to key trigger points in production, sales, staffing requirements and latest market stats. They had all been living under any imaginary lead role not expecting to be blown off from their perch by fast-growing competition.
I could see a huge opportunity in cutting raw material wastage at so many locations through consolidations, match production per demand in a timely fashion to control overstocks and bring in Lean Management.
Second important drill I introduced was a Daily Morning Management Meeting for 10 minutes to discuss updates, challenges, targets (yes, I literally pushed them to set daily targets for each department head to achieve)
Next in line came Purchase Department where I analyzed their entire purchase process of raw materials, packaging materials, printed materials from a to z as well as identification of alternate sources where larger volumes could be contracted for more favorable cost
I eliminated the transport contractors that acted as bridge between production units and the company warehouse
The Sales Manager had been running the entire sales Operation with only 5 Sales persons to cover the entire country. They only came back to the Head Office once a month and that too for only a day or two at the most. This kept the company from imparting them any training at all. I re-organized the entire Sales Department and helped the company grow by hiring between 3 to 4 Sales persons in each state and making it obligatory for the Sales Manager to travel across the country minimum once a month to do reorientation training for the staff under his charge. This singular move quadrupled the revenue within 3 months of launch.
I helped them negotiate better supply contracts on virtually every single item they had been buying and that brought huge savings on a recurring basis.
One month of my on-the-job involvement followed by 3 weekly visits, one visit after 3 months and another after further 3 months brought the company to a stage where they successfully participated in an International Trade Fair and bagged orders from foreign buyers to the tune of 6.5 Million U.S. Dollars.
The above is an example of self-imposed limitations where entrepreneurs fail to see beyond the immediate because of their whimsical approach further worsened by their tunnel-vision support team.