4 Turnaround Lessons

I’ve spent most of the day looking at financial statements. One of the things I’m doing now is working on the turnaround of Issho Genki Interntional, the producers and distributors of the most trusted brand of Squalene (which is currently a small yet growing category). We’re not completely out of the woods yet, but this last quarter is looking very positive for Issho Genki. We have improved enough to make me a little more comfortable with writing about the lessons we have learned from our mistakes. There are actually a lot of lessons I would like to share but I’ll start with these four.

What Do You Love?
Squalene is a natural antioxidant which protects and enhances the body’s cells. I’ve been taking the thing for about 15 years now and love the stuff. So aside from the challenge and necessity, loving the product was an attraction to me. I’m not really a salesman. I can’t sell anyone anything. What I am is a highly contagious sick man. When I fall sick in love with something I’m going to infect you with it if you hang around me long enough.

Turn Around Lesson #1: Work on something you’re passionate about. Turnarounds have a lot of baggage that can distract and discourage you. Working on something you’re passionate about helps keep you motivated. While need is a great motivator, never underestimate someone who is madly in love.

Go Treasure Hunting
Issho Genki used to be a very popular supplement brand but dropped out of people’s consciousness when management was not able to transition well into retail outlets. It’s a classic case of a business that did well, overspent, didn’t change relevantly, and descended. The good part though is there was a lot to work with such as the brand recall due to its, at the time I took over, 13 year existence, historically large distributor base, high-quality manufacturing base in Japan, and existing distribution relationships with Mercury Drug, Watsons, Dyna, and other retailers and customers. The most important thing the company had though was some really trustworthy and hardworking people that made the chance of a turnaround possible.

Turn Around Lesson #2: Look for the pieces of value. These are things you’ll be able to work with and build on. What are the assets? (Of course depreciate accurately!) How much cash? (This is your blood. Even if people owe you, you run out of cash, you’re dead.) Can you use your assets to generate cash? (Either through sales or as collateral) In our case, we didn’t have any hard assets aside from a very nebulous concept of brand goodwill. We had no way of accurately measuring this so working with that was a step of faith. We also didn’t have a lot of cash. We had a third of what we needed to survive month 1. (That month was very stressful for me!) But what we did have other than the brand were good people who made the sales happen and extended payables and stretched and stretched. Good people are always a great asset.

Cut the Fat
When I walked into my corner office on the 25th floor of a nice commercial building in one of Metro Manila’s business districts I had the following thoughts in sequence:

1. Wow. This is cool.
2. This is really big. Too big.
3. This must be expensive.
4. This has to go.

One problem businesses have as they go along is that they take on too much fat. That’s actually like us humans. Hehe. We take on so much unwanted baggage that weigh and slow us down, or worse, choke our organs which kills us. We had to do a lot of cost cutting in Issho Genki, more than a third of our operating expenses. This also meant there were contracts we could not renew, people we could not hire, perks we could not enjoy, and rewards that had to be differed. Of course not everyone was happy – including me. But you have to do what you have to do.

Turn Around Lesson #3: Cut the fat. Look in the mirror and see where everything is starting to sag and cut those parts out. (I’m in no way suggesting liposuction. I’m talking figuratively.) While Lesson #1 is to work on something you’re passionate about, don’t mistake the fat for the purpose. Fat are the unnecessary things or parts or even functions we’ve accumulated that no longer effectively contribute to your purpose or bottom-line. So to cut the fat you should have a well-defined purpose for your organization. I see this so many times in business and even non-profits where everyone wants to do everything, so there are so many people accumulating fat, and no one can recognize what’s fat anymore because there is no clearly defined purpose. So define the purpose based on what’s important to you (values) and what doesn’t fit is fat. Cut that. Some people can afford to go on a diet. We couldn’t. We had to have surgery. So we did just that.

Who’s Your Daddy?
I was 23 years old when I took over a company that was closing down. When I look back I really had no idea what I was doing. They say that sometimes not knowing is actually better so that you don’t know what to be afraid of. I don’t know if that’s true. I didn’t know what I was doing, but I was really scared. More people would have seen it if my repertoire of facial expressions was more than just a smirk, but in my gut I was really really scared. I was scared because I knew that I didn’t have what it takes to make this work, and this is what led me to what I consider my life’s greatest lesson: Run to God.
Turn Around Lesson #4: This isn’t from the business books, but it’s really from my life manual: run to God and wait on Him. There were days when I would go to the office at 6am just to pray for a miracle. That somehow something would happen that day and we would live to fight another day. I would walk around our empty office and say “Father, please help Beth with the finances. Please help Guada with administration. Help Lolit with logisitcs.” I would pray for everyone and everything, and guess what? Most of what I prayed for didn’t happen. Hehe. But better things came along. Life lessons instead of quick profits. Humility instead of promotions. Contentment instead of abundance. Peace beyond understanding. These, along with the knowledge that my Father is watching over me, fixing my mistakes, redeeming my wrongs, forgiving my sins, and surely preparing a place for me, these are my profits.  

Money is useful, but these experiences, they’re priceless.
And life is not being able to afford the numbers on the price tags. Life is about enjoying the priceless things.

…By the way, sales are up and expenses are down. That’s always a good sign.

Published by

David Bonifacio

David Bonifacio Husband, Father, CEO of Bridge. #DB

8 thoughts on “4 Turnaround Lessons”

  1. David, this is really great! It was more than like reading a business book. It is LIFE. The moment I came to know that you took over Issho Genki, I knew in my spirit that you can make it turn around. You have passion, you listen with your heart, and most importantly, you know who to turn to. Congratulations!

  2. mentors are usually older guys with ripe wisdom. but through your blogs i’m making you one of my mentors hehe. it would be cool to sit down with you and have a fulfilling conversation with you.
    btw, i’m not gay.

  3. Great blog David! I’m so encouraged! You’re father is our mentor(me and my husband)through podcast.=) we just love listening to him and off course applying what I’ve learned–slowly and step by step–:) and reading your blog right now, motivates me even more! Thank you for sharing! You’re indeed a blessing!

  4. Great post, David. I was surfing along when I stumbled upon your blog. It is a truly great turn around story. I will share your story and valuable insights with my seminar participants.

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