Monday, February 26, 2007
Insecurity wins the race
posted by Ron Leff 
Here’s a subject I’ve believed in -- and lived -- my entire 28-year career: the power of insecurity.
I went into the family business full time in 1978. Our company, J.W.S. Delavau, Inc., manufactured high-volume, low-margin nutritional supplements. At the time, we got little respect and even less attention within the industry.
Our facility reflected our spirits. We worked in a 100-year-old, five-story building in a rough Philadelphia neighborhood, with zero capital to invest in expansion or upgrades.
Our bad situation soon worsened. The bank told us we had 60 days to get our act together, or it would pull our loan. Then we lost our top two customers. Insecurity was running high, and the wolves were at the door.
To survive, we had to be innovative and lean. But the turning point didn't come overnight. First, we focused on improving our primary product line, calcium. It generated good press over time, and we slowly gained more business.
This revenue let us buy better equipment. We refined our unique processes, and increased throughput by 50x. We also recruited better management personnel, and hired people with deep experience in larger pharmaceutical companies. And we moved our facility to a new building, finally gaining full control of our process, product, and costs.
The industry noticed our 180-degree transformation. Soon, we attracted branded pharmaceutical companies to buy from us, as we were one of the only companies that could meet their standards. This established us as the low-cost producer with high-end quality.
Ultimately, we became the most profitable company by percentage in our industry, employing over 400 people. Our reputation as innovators preceded us; other firms clamored to see how we did it. In 2002, an LBO firm in New York acquired us, with the promise to expand on the company's upward movements.
Step by step. Inch by inch. Lot of crossed fingers and holding breath. As the company's key decision maker, I was responsible for keeping the house of cards erect. But even at our most successful period, I never shook the mindset that it could crash at any moment. I did not want to go back to the “good old days” -- truly some of the worst in my life.
These fears and insecurities focused me on keeping a competitive edge. Without the early challenges, I could not have forged the company -- or myself -- into our ultimate successes. We were always out to prove that we were as good as or better than every other company in the industry. And it turned out we were, thanks to hard work and sheer grit.
As my life experience shows, insecurity is a great motivator, especially when you understand it, and know how to leverage it. Remember, though, to temper your fears with belief and confidence in your abilities. Otherwise, you'll be crippled before you even enter the race.
I went into the family business full time in 1978. Our company, J.W.S. Delavau, Inc., manufactured high-volume, low-margin nutritional supplements. At the time, we got little respect and even less attention within the industry.
Our facility reflected our spirits. We worked in a 100-year-old, five-story building in a rough Philadelphia neighborhood, with zero capital to invest in expansion or upgrades.
Our bad situation soon worsened. The bank told us we had 60 days to get our act together, or it would pull our loan. Then we lost our top two customers. Insecurity was running high, and the wolves were at the door.
To survive, we had to be innovative and lean. But the turning point didn't come overnight. First, we focused on improving our primary product line, calcium. It generated good press over time, and we slowly gained more business.
This revenue let us buy better equipment. We refined our unique processes, and increased throughput by 50x. We also recruited better management personnel, and hired people with deep experience in larger pharmaceutical companies. And we moved our facility to a new building, finally gaining full control of our process, product, and costs.
The industry noticed our 180-degree transformation. Soon, we attracted branded pharmaceutical companies to buy from us, as we were one of the only companies that could meet their standards. This established us as the low-cost producer with high-end quality.
Ultimately, we became the most profitable company by percentage in our industry, employing over 400 people. Our reputation as innovators preceded us; other firms clamored to see how we did it. In 2002, an LBO firm in New York acquired us, with the promise to expand on the company's upward movements.
Step by step. Inch by inch. Lot of crossed fingers and holding breath. As the company's key decision maker, I was responsible for keeping the house of cards erect. But even at our most successful period, I never shook the mindset that it could crash at any moment. I did not want to go back to the “good old days” -- truly some of the worst in my life.
These fears and insecurities focused me on keeping a competitive edge. Without the early challenges, I could not have forged the company -- or myself -- into our ultimate successes. We were always out to prove that we were as good as or better than every other company in the industry. And it turned out we were, thanks to hard work and sheer grit.
As my life experience shows, insecurity is a great motivator, especially when you understand it, and know how to leverage it. Remember, though, to temper your fears with belief and confidence in your abilities. Otherwise, you'll be crippled before you even enter the race.
Labels: Business Development, Delavau, Philadelphia, Small business
