We were fortunate that our business startup was rather smooth and predictable. I believe that became possible for several reasons. First, Acre, Inc was organized at a time when the consulting market was expanding and needed more consultants or specialists. Second, the decision to provide services to specific industries that fewer consultants ventured into was an advantage. Third, we positioned the company as technology-driven, a decision which turned out to be a competitive advantage.
To put that in a marketing perspective, the environment for consulting services in the first five years of Acre, Inc.’s corporate existence was friendly. At the same time, Acre, Inc had the right mix of corporate and business ingredients to be viable and to grow given that type of an environment.
However, as in any venture, there were growing pains which were clearly evident during the first five years of Acre, Inc’s corporate journey. There were three major pains although, in retrospect, we considered them as challenges and opportunities. These were people, administrative, and client development pains.
People Pains
People pains pertain to the challenge of establishing a corporate culture, in particular, the culture of discipline and the commitment to live and relive a set of core values that served as the moral and foundational platform of the company.
Of all forms of people pain we experienced, the discipline of time management had been the most difficult. Until now, and in the environment where we operate, we still find this value the most challenging. We used the Stan Davies model which gave us a better understanding of time – that it is a resource, not a constraint. By changing the context or our understanding of time, we looked at time as an ally.
Another form of people pain that we had to manage was productivity. Work was understood as 8 a.m. to 5 p.m. It was hardly considered as the output associated with the eight-hour day. As a service company, productivity was a critical performance indicator. However, it was an abstraction to employees and needed to be translated into a language that everyone could appreciate.
We re-engineered our concept of productivity and endeavored to understand it from the perspective of client relationship. Employees performing core functions were asked to directly deal with clients and to make commitments, on deadline and quality. I was surprised at the impact of this “re-engineering” on the attitude of employees. It was a 360-degree turnaround. I could not tell if it was due to client orientation or fear of accountability. But it worked.
The daily task of office care was another form of people pain, in fact, an annoying form of pain. We needed daily reminders plus a program of demerits for people to get used to turning off computers when taking a long break or stepping out of the office, and to cover all office equipment before leaving the office. It took us months to get some form of regularity and positive response. People had to feel the financial impact of the demerits.
Administrative Pains
Administrative pains pertain to two elements – compliance to government procedures (or peculiarities) and project financing. In enterprise development, we expect government and banks as partners. In our experience, that is so far from the truth.
In a previous article, I wrote about our experiences with the Bureau of Customs. There were occasions when we had to abandon a shipment of “intelliwares” because the assessments were unreasonable. There were also occasions when shipping-in a single book, which was technical (like Design of Experiment by Montgomery) meant paying the agency twice the cost of the book. In any transaction, we experience some form of annoying pain. It is a good thing that there are now Country Ratings that rank countries according to their competitiveness. Government agencies are starting to benchmark their effectiveness and are more conscious of the need to be service oriented. It was so different during our start-up years.
Managing cash flow in the first five years when we were growing fast was stressful but very educational. It is in these stressful moments when we discovered that first, banks were never and will never be catalytic partners to their clients, and that second, there were more effective methods of managing cash flow other than relying on your main bank and equity. Although the range of our banking transactions had been limited, we had enough options to get by with flying colors.
Client Development Pains
Client development pains pertain to the struggle between internal capacity and demand. They need each other but they do not usually and automatically adjust according to each other’s requirements. There was a need for us to break the cycle by first investing in capacity (people, hardware, software, space), hoping that the demand came at the appropriate time.
Our clarity of vision enabled us to make policy decisions in favor of investments in capacity well ahead of demand. Early in our corporate life, we planned for a 1:1 computer to people ratio, a paperless office, computer-aided processing and interviewing, and data capture using many types of methods including optical character recognition, computer-based DE and many others. While that policy decision put a strain on our cash flow, it was strategic and it paid off over the long term.
(This is Part 2 of a series of articles on the history of acreinc@20. Part 2 talks about the start-up years from1989 to 1994. What is the main purpose of the business? What are the secondary purposes of the business? What markets and customers will the enterprise aim to serve? In what processes should it excel in a business where systems, methods and technology are victims of obsolescence? In what way should the enterprise position itself in an industry dominated by multinational companies or companies that have been operating for many years? This part discusses the important decision-making days and documents the impact of these decisions on the future of the enterprise. Some are book-line strategies and decisions. Some are blue ocean scenarios. For comments, write to abfontanilla@yahoo.com or nick.fontanilla@gmail.com)
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