Investing for investment grade

“Patience” can be my middle name and so is “nosy”.

When my brother-in-law from the Netherlands started coming to the Philippines twice in one year compared to the once in 20 years, the “nosy” in me started to wonder what business could there be for him to fly in with a team of four to six global consultants. I also wondered who would make such an investment considering the operational costs.

Unfortunately, my brother-in-law is Dutch and therefore not inclined to making tsismis or small talk about what he and his team have been up to in the Philippines. Being a professional, John is a strict adherent to client confidentiality.

Initially, I treated John’s visits as “swing bys” assuming that their clients were probably regional multinational clients that may have business or tiny offices in Metro Manila. But the more time he spent here, the more I got curious. If you’ve ever put together a Master class jigsaw puzzle, you know that everything is about patience, focus and forming a mental focus of the puzzle.

What I discovered proves to be very interesting and valuable to people in business particularly those who aspire for growth in our now “investment grade” status.

I’ve learned that there are several multi-million dollar Philippine companies jointly run by the first and second-generation owners and managers that have begun to untie their hands from the old school notion of doing things on their own. They no longer see themselves as the only one who know what’s best for their companies or corporations. In order to be on top as well as globally competitive, they now realize that they have to bring in their own version of “professional imports” to step up their game and make the most of the opportunities currently available.

They’ve also learned that all the best intentions, as far as mission-visions go, amount to zero if the followers and doers don’t see the same picture that the owners or leaders have painted. In short, failure often comes in the implementation of the correct business process because the people who are suppose to do it don’t get the picture, don’t want the responsibility and are busy making sure they’re doing “their job” in order to keep the job, instead of going to the next level or working on a goal 5 to 10 years down the road.

Most of these leaders generally have an idea of their problems or have tried to institute solutions but find themselves caught up or limited by a pyramid ascendancy of decision-making. Because the problems rise to the top, the bosses don’t get to see or follow-up on implementation or business process analysis.

To make the point, ask yourself: Do you own or are part of an organization where nothing gets bought, no one gets paid, or supplies don’t come in because there are only one or two signatories for checks and releases of payments?

Do you employ an army of third party sales people who stand all day long in exclusive malls, electronic stores, Duty Free, groceries and supermarkets selling products they have no “working idea of” nor display any voluntary marketing skills to offer your products?

Are you part of an ever-growing organization where decisions are made largely at the top among the CEOs, directors, or senior VPs only? Are you in an organization where most decisions are still made by the boss because there are no checks and balances designed to insure that the right or correct decisions will be arrived at through a process of consultation, clearing and step-by-step approval?

Are you part of an organization that ought to be making hundreds of millions if not billions by the sheer volume of customers, product demand and innovation but are not?

These are some of the things that the owner-managers I mentioned earlier already knew. They knew their companies have what it takes but they don’t quite have the experience necessary. That’s where many corporations in the Philippines find themselves. Many are family-owned, some are publicly owned, but all home grown, built from the ground up. Many of their CEOs, owners, directors and managers are trained and educated for local conditions and in local conditions. Most might have degrees earned abroad but not current work experience immersed in actual market situations that require fast and critical analysis.

In the slow, “we are in an island, with little competition” scenario those MBAs and years of local experience may work for you. But suddenly the situation changes. Population spikes, OFWs sending back billions of dollars, trade restrictions coming down, the peso becoming stronger suddenly places your company or corporation in a situation where opportunities are there for the taking, a sudden increase in the number of competitors can eat up your advantage. We now wake up to find ourselves going from “local” to “global”. So what happened next?

What happened for the companies above was that a lady named “Veronica” walked through the door and introduced them to a company named “Renoir Consulting”. Unlike other consultancy firms, Renoir is a London-based consultancy firm with a network of global consultants that allows them to bring in a team of 6 to 8 experts in a short time. Because of this, Renoir only deals with companies in the multi-million dollar bracket so that clients get substantial ROI.

What surprised me is that in a short span of time, Renoir has been engaged by 8 local companies, all of whom paid $60,000 for a thorough “analysis” of their markets and business process. $60K isn’t much when you consider the cost of bringing in 3 to 4 consultants who all fly-in from Europe, India, US, Indonesia, Singapore etc. and stay in hotels for 3 to 4 weeks. The “analysis” is then handed over to the client who has the option to implement an “in-house” process or to bring in the Renoir team to undertake the business process rehabilitation.

Unlike other consultancy groups, I learned that the Renoir team doesn’t simply walk in and tell people how to do it! They actually recruit or build a team from within the company, who will then go through the process of discovering, understanding, and seeing what the owner-leaders or directors have envisioned. They will also be empowered to identify or recognize operational or organizational problems and be part of the solution making. By doing this, the company people have both ownership and responsibility to carry on the process and to cascade the solutions internally. This part of the process takes months but why do Philippine companies buy into the project?

Someone put it this way: “When the pain they’re feeling is bigger than the fear of spending money” they come around. Another executive put it best when he said: “I have the best incompetents...the longer they wait the more money it costs.” But the best reason I heard was: “the job comes with a guarantee, you don’t get billed if they don’t deliver.” More to follow....

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