The life of Po is not pie

(Conclusion)

So, without any knowledge of the business, no formal training on sales marketing, he sought out a company in Taiwan, had to take a minimum delivery of 400,000 diapers at P3 million and went to SM through a friend and from there steadily penetrated the diaper market.

 Lesson# 12: Ignorance is bliss, it is also the reason why many business people ventured into things overly intelligent people can’t their head around.

While things did grow and grow, I did say the life of Po was not pie. By 1996, he faced fierce competition that grabbed his brands from makers and pirated his people incessantly until he was left with just one brand “Pro-Kids.” His sales plummeted from P80 million down to P15 million. Then 1997 brought the Asian financial crisis that buried him a little more.

Lesson#13: Sometimes misfortunes are actually a blessing. Because he had much less, he lost less.

Sam Po learned his lesson well and quickly solidified his team and in 1998 launched the EQ brand. Just when things were going well, Kimberly Clark sued him for patent infringement for the Pro-Kids brand and demanded $500 million damages, destruction of all stocks etc. Considering Kimberly-Clark had won all their previous lawsuits, the legal action was a serious concern. Po hired the best legal and patent lawyers and in an unexpected turn, a competitor namely Proctor & Gamble who had assumed legal responsibility for a similar law suit, opened the door for legal cooperation and won the case in the Supreme Court.

Lesson# 14: Cooperating with the competition can eliminate your real enemies.

Not only was Sam Po relieved of his legal burden by winning the case, it made him realize that he was no longer a backyard, small time operator. If Kimberly-Clark went out of their way to crush him, it meant he was big enough to be a threat to a multinational company.

He immediately moved to professionalize his operations even more to the extent of letting go of a childhood friend who was resistant to change and eventually losing some investment partners.

Lesson# 15: emotions and personal/family relationships can often be the dead weight that keeps resistance in place. Cut the anchor or the barnacles (talaba) will grow.

During the process of professionalization, Sam gave his new team one year to finish the transition and expected to see direct results in their sales figures. In the mean time he went out and played golf. The year passed and he found his company in worse shape than before the transition.

Lesson# 16: Change and progress does not work well with fixed schedules especially when the one who should be in charge is out playing golf.

Realizing the situation, Sam Po took full control and made every decision and he soon realized that when you hire or pirate people from other companies especially a multinational company, they bring their talents but also the techniques and baggage they acquired outside. Often enough, you end up with the same formulas and approach that the competition or companies utilize. He analyzed why advertisements were not translating into sales and discovered that the ads appealed to the up market and not middle and lower class buyers of his products. Sam Po eventually reached back into the past and dug up a classic hit that was both satirical and humorous.

Lesson# 17: Divorce may allow you to change partners often but everybody has his or her own baggage that they bring along with them, It’s the same in business. Choose wisely.

Sam Po survived the learning curve, the Asian Crisis, the $500 million lawsuit, and the transition program. He soon realized that he wanted to be more than just a local player, he wanted to go regional, to sell in Malaysia, Singapore, Australia and elsewhere. But he was also well aware of malingering operational and organizational problems. His problem, like that of so many CEO’s is that he had his hands full running the company and no one experienced enough to work out the kinks in his business process.

Lesson# 18: When you feel something is wrong, it usually is.

That’s when he took up the offer of the Renoir Consultancy firm to do an analysis in order to confirm what he had long suspected was wrong. After a month and a half of detailed observations the analysis came and as Sam Po put it: “The findings were true. They found exactly what was the problem. It was confirmation, I know, but don’t have the time, the people, to do those things.” The analysis presented him the numbers, data as well as root causes and directions to choose from. “I have to be honest and say that they are a bit expensive, but they (Renoir) also quantified the savings we will achieve by addressing the problems.”

Lesson# 19: A leak or a small hole in a pipe is often unseen but it draws our attention when the cost of water continually goes up. What often costs us so much money is not the leak but our failure to act on our suspicion.

Not only is it expensive, it often requires a lot of digging and ripping and in the organizational context, this causes discomfort and anxiety. According to the Renoir representative, their regional data reveals that when it comes to changes in the workplace, the Filipinos are the top most resistant to change in the environment. This is based on their behavioral/situational audits conducted through the life of a consultancy project. Sam’s eldest son, Karl Po who was part of the team that processed the analysis confirmed this observation and even added that a strong hand or direct order makes things worse because people won’t take ownership of the change going from local to global.

But the good news is every excavation or renovation may expose the leaks, the rust and the rotten, but when everything is done right, things always work and look better. And that is Lesson# 20: Investing to be Investment Grade is not a “cost.” It’s an investment.

Thanks to Sam and Karl Po for a quick MBA from the school of hard knocks and Renoir for arranging my request for the interview.