When the Product Pipeline Dries Up, Make New Pipes

Question: What major challenges has your company faced?

Lawrence Koh:  Well we don’t supply consumer products, primarily.  We supply products for corporations that support their point-of-sale strategies, their back-end business distribution fulfillment, technologies and things of that nature.  So when 9/11 occurred, they didn’t really know how the public was going to respond.  It was an event that occurred that was so beyond anybody’s comprehension or ability to predict how the public would react that I would say, nine out of ten or our companies put their budgets on hold and purchased nothing from our company. 

So by the time six months transpired from that, we had delivered all of the products that were already in our pipeline with no new orders to replenish our business.  And I came into the office one morning and the employees with not much to do were sitting around talking and I came in and I joined the conversation and after that conversation was over and we all enjoyed our time together, I said to them, "I'm sure you can read the handwriting on the wall and that there's got to be some level of concern about you being laid off and losing your jobs."  And that they shouldn't leave it up to me, just to me, that they have a very profound vote in it, a say in their own future and that I was encouraging them to exercise that power. 

And of course, they weren’t really sure what I was talking about.  And I said: "Well, what could we do during this time that would be constructive, even though we don’t have the cash flow, what could we do that would benefit our company, that we generate revenue and profits going forward? " So we decided to use that period to develop new projects.  And as a result of that, my wife and I agreed that we would fund the company and pay for their salaries during that period and we would shift from what we were doing to developing new projects, creating new projects, drumming up new ideas and then making a decision on which of those we wanted to commit to. 

And two years ago that ended up becoming one of our biggest... one of those projects ended up becoming one of our biggest new programs.  So it worked out well.  And I think it was a valuable lesson for them and it was a valuable lesson for me because it was a test of faith for me.

Recorded on October 28, 2010
Interviewed by John Cookson

When slow business followed a national tragedy, it became necessary for Koh and his wife to pay employees out of their own pockets. This led to greater loyalty and a new line of more successful products.

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