My first restoration project was a red 1973 Porsche 911T. It was a total wreck in need of a complete ground-up restoration. Admittedly, I never saw the car for what it was—only for what it would be.
I grabbed my catalog and started ordering parts. I had no plan, no timeline, and no budget—only a vague vision of a solid outcome. For months, I threw all my free time and spare cash into the project, jumping from one activity to the next. Everything was going to be perfect.
As weeks dragged into months, the project grew larger instead of smaller. I uncovered rust in unexpected areas; discovered major issues while undertaking minor tweaks. A project that might have taken a year filled 17 long months and went frustratingly over budget.
I’ve learned a lot about car restoration in the years since. I should have spent more time diagnosing the car’s state, then defining what outcome I wanted for the money and time I was willing to invest. It’s easy to outspend your budget buying $20 original Porsche screws, and wind up with no money to re-upholster. I should have prioritized tasks so I could work in a logical order, rather than pulling parts out and putting them back in, only to pull them out again to get another problem.
A business strategy is no different. After more than thirty years of managing pharmaceutical companies, I’ve participated in preparing and executing a lot of strategies. Many of the most important lessons I’ve learned, I learned first on that 1973 Porsche.
Pursue strategies, not opportunities
Too many management teams (MTs) sit around a conference table and choose among the range of opportunities available to them on a current day. They call this strategizing. It’s not strategizing. It’s me looking at a catalog full of shiny parts and penciling an order.
Successful companies don’t grab at every opportunity that comes along, even if it is profitable. There will always be opportunities. Every opportunity that doesn’t fit your strategic plan distracts from it and slows your overall growth trajectory.
All opportunities require upfront expenditures, be it in time, money, or both. They can be justified by future paybacks. But if they don’t fit your plan, these ideas will dilute the funds available to fully implement your strategy.
Xcelience recently had an opportunity to move into an area outside of our defined growth strategy. We would have had to front the cost of equipment purchases, but the opportunity would have paid us back very well in the end, and the equipment would have been available for any potential similar projects that might arise. We passed on the opportunity not because it wasn’t sound but because it would have diverted funds away from our overall growth strategy.
Instead, we chose to invest in 6000 ft2 of warehousing for our nascent commercial manufacturing operations—a key strategic area that we will launch this fall. Commercial manufacturing is strategic for us because it follows directly on other services we offer—preformulation through clinical trial packaging and logistics. It’s a natural addition. Not only does it have the potential to attract new clients, but it is a service our existing client base has been asking us to offer. Marketing is already hard at work preparing the website and other materials to create awareness for this capability. Our sales force is booking multiple clients who have expressed interest in this service. Our MT is fully on board and aware of the strategy, and it has been embraced by our staff. This investment— once realized—will catapult our growth in a way that the same amount of money and energy put into an area not related to our strategic plan could not possibly achieve.
Commercial manufacturing is one of a few key strategies in a five-year plan Xcelience laid out last October. All of our investment opportunities since that time have been carefully evaluated on their contribution to this plan. That plan was an inflection point; our growth since has stepped sharply up by every measure. Revenue is up approximately 48% year over year and staff has grown by 23%. We opened a new UK facility in February to become the first global CDMO with revenue under $2 billion.
What got you where you are won’t get you where you’re going
There are those who love the challenge of putting a box of parts together and building a car, and there are those who love driving cars. Not everyone likes both.
Similarly, your company at its current stage of growth is completely different from what it will look like in the next stage. Some people will like the stage you’re in more than the stage you’re moving into.
This is painful for many companies. If you have a staff of ten and foresee a staff of one hundred in five years, you will probably find that some of the people who are thriving in your current organization may become obstacles to growth later on. The new systems and culture, unfortunately, won’t suit everyone equally. Resist the urge to cling to what you are and the way you have always done things and focus on the strategy.
Build a management team with a unified voice
An ambitious new growth trajectory may find some major dissenters high up in your organization. You absolutely must have complete buy-in from the MT. I have seen MT’s flounder along trying to make everyone happy. I cannot stress it enough: if you cannot bring your dissenter around, your strategy is unlikely to succeed. Full agreement at the top is imperative. Once your MT has full approval behind a strategy, you will be astonished by the acceleration you can achieve.
This next point should follow naturally, but many companies fail to pick up on it intuitively. Your MT must speak with a single voice. The entire team needs to be on the same plan, all day, and every day. There can be no mixed signals to staff. Once this is clearly happening, let the MT have loudspeakers. They should be visible, accessible, and actively spreading a consistent message.
There may be dissenters among the staff as well. It would be unrealistic to expect everyone to like the new, larger company as much as the smaller one. Most will embrace the changes with energy, but some will miss the days when everyone knew everyone, and decisions were made around the coffee pot. I find that most dissenters move on of their own accord, which is sad, but best for all concerned. Your new, growth-minded staff will have the right mindset, the right skills to meet the coming changes, and the ability to acquire new skills as necessary. You’ll almost certainly need to bring more staff to adapt to an expanding workload, and you’ll be looking for these attributes.
Consistent, reliable maintenance
Communicate regularly to staff. They should know not just what the strategy is, but what it means to them and how it translates to their specific function. In a car, every part serves a function. In a company, those functions need to be made clear.
At Xcelience, we start with quarterly all-staff meetings. Regular email communications help keep the strategy in everyone’s mind. The company strategy is incorporated into the performance targets of all strategic staff so that they know the specific objectives that fall under their purview. This helps everyone understand how they are contributing to the defined goals.
The next stage of communication is to clients. Xcelience did this with a new marketing campaign called Suite of Services, which clearly communicates our expanding business offerings.
You will also need the right systems in place to grow. This year we recognized that our paper-based inventory system was slowing us down and moved to a much faster and less fallible electronic system. We also recognized the need for and hired a full-time, experienced human resources manager.
Keep your finger on the pulse of your business
Make sure the details of your everyday business do not go overlooked by a head-in-the-clouds strategy. Every good strategy should work its way down to the nitty gritty: the metrics. Metrics, properly defined, confirm that the departments continue to contribute to the strategic goals of the business.
Make sure the MT meets regularly to review and revise the strategy. A good target is to meet mid-year. So far, Xcelience has had just one such meeting, which resulted in only a few tweaks, but also served to re-focus and revitalize MT commitment to the path.
Recognize, reward, and celebrate
Whole-hearted embracement of your strategy is your new corporate culture. Recognize it, reward it, and celebrate it. Employees who go above and beyond in their efforts to realize the strategic plan should be honored and compensated. At Xcelience, this group changes consistently, which is a good thing. It’s a sign that not just a few people but everyone is getting on board. It means the culture of the organization has evolved to embrace its growth objectives.
I’ve restored many cars since that first Porsche. Last week I began work on a 1976 BMW 2002. It’s another ground-up job. It will take two years, but I have the goal defined, the plan and the timeline established and know my budget. I will re-assess my plan periodically as I progress. The result, I am certain, will be fantastic. Whether in business or in cars, achieving the goal always is.
Lindon Fellows is the COO of Xcelience, a CDMO in formulation development and clinical packaging and logistics located in Tampa, FL. Mr. Fellows took over the reins of day-to-day management in October 2013, with organizational responsibilities including staffing, systems and implementing organization changes to prepare for projected growth in 2014 and beyond.