Sarwar Ahmed,
Founding Managing Director, Syngenta Bangladesh Limited 2000-2012
Adjunct Faculty, School of Professional Studies, New York University, New York
Business Consultant
What makes a business survive in the long run, much after you’ve passed away? A Chinese proverb says you can only keep wealth in the family for three generations – the first generation starts a business, the second generation runs it, and the third generation fritters it away to its ruin.
How do we avoid this pitfall? It requires business owners to think strategically. Unfortunately, most business owners are bogged down on day to day operations, not on creating and implementing a holistic longer-term strategy for a sustainable business.
What do we mean by strategy? It is simply a plan of actionable activities a business leadership makes for a five-year time horizon. Who makes this plan? A strategy is built by the business leadership team.
It starts with the Purpose – the business’ reason for being. Why does the business exist? What needs does it serve through its products and services? The Purpose is easily confused and substituted with its more prevalent cousins – Vision and Mission statements. Purpose goes a lot deeper – it creates an emotional and umbilical tie of employees with the business. Purpose lays the foundation for creating a strategy, guiding the leadership and business like a North Star.
Strategy needs a definition of the markets to address. For example, Bangladesh has become a global hub of garment production. Hence garment producers need to analyse the markets they cater to – current and future.
We need to look at the market and environmental trends that will affect the business in the future. Industrialized countries, the main bread basket for garment industries, are heading to a reduced, and ageing population. What does that mean for the future of garment industries? What would we like to achieve in the coming years?
Based on the analysis, we need to look within the organization – what resources we have – culture, structure, assets and competencies.
Each of these resources will need alignment to achieve the strategic goals of fulfilling the Purpose and satisfying our customers with our products and services.
I joined the Agricultural Division of the then Ciba-Geigy, a swiss multinational company in Bangladesh, in 1981, freshly minted MBA from IBA, Dhaka. I was fortunate to have been mentored by a visionary leader Georg Wyss, its Managing Director. He had a strategic vision of the future of agriculture in Bangladesh, assuring us of success when the company survived on financial injections from the parent company.
In a span of a decade, I became Head of the Agricultural Division, a first in Bangladesh, much to the chagrin of senior managers who had served ages.
Ciba-Geigy merged with Sandoz in 1996 to form Novartis.
At the turn of the century, I became Managing Director of Syngenta Bangladesh Limited, a company formed by the merger of two global agribusinesses of Novartis and AstraZeneca.
My first setback as head of the company was a government decision to ban a category of agricultural chemicals which led to a loss of 30% of our business, a feat engineered by our competitors. Our competitors must have been rubbing their hands gleefully, believing that they had put the last nail in our coffin, sure about the demise of our business in Bangladesh.
This dire situation led us to think strategically about our options for survival in the near term, and sustainability in the long run.
Our decisions paved the way for creating enduring brands, alignment of our distribution channels and a unique promotion strategy. Not only did we come out of the dismal situation, but Syngenta also bounced back to being the market leader in the AgChem business in Bangladesh. We set the famous flying wheel running (from the book, Good to Great, by Jim Collins), which even today keeps Syngenta on the top of the lot in Bangladesh.
A major global issue that organizations face is their employees’ commitment to work and organization. 85% of employees do not feel motivated or fulfilled at their work – it is an 8-hour daily grind with a balm of a month-end paycheck. Business leaders must create a culture where employees are motivated to contribute to the success of the organization. Genuine compassion along with delegating authority – “empowering” needs to be done across the organization.
An organization’s culture and its subsequent impact on performance take years to build. Succession planning – creating leaders within, must be part of the strategy so that the culture continues as leaders inevitably change.
The fear of being defrauded is well-founded and strong – unfortunately, in my corporate experience, I had colleagues who defrauded the company by claiming false expenses. Of course, they were shown the door as soon as their follies surfaced. It took me a while to realize the adage – trust but verify. Trust your employees that they are doing the right thing. However, have a verification process of checks and balances so that there’s no scope for cheating at any level of the organization.
Another major impediment to creating a successful strategy is the financial system of an organization. The usual profit and loss statement is geared toward satisfying accountants, not management. The chart of accounts must be created for management’s understanding of their company’s financials. And of course, financials must be available early each month to review business performance.
Business leaders need to focus on three financials – their profit and loss, cash flow and balance sheet. Without getting into the nitty-gritty of understanding debits and credits, they must understand these three fundamental financial statements and their impact on results.
In summary, what is the pathway for creating a long-term successful strategy?
- Understand your current business – your financial system must deliver the 3 fundamental statements.
- With your senior leadership team, create a Purpose, a statement that speaks to the heart of your organization.
- Create a 5-year strategic plan, including the top 3 actions which will have long-term consequences for your organization.
- The most difficult part – implement! In your monthly review meetings, check on your progress in achieving strategic goals.
- Review your strategy at least once a year. Usually, this should be done as part of the budgeting process.