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If adversity is the best teacher, the Great Recession should have been a prime learning opportunity for companies worldwide. It certainly was for this company, the New Jersey based creator of innovative global brands and products, the most notable of which is the Clean Plus® brand. They’ve been at it for going on two decades. Considering that it garners 90% of its royalty and license income from abroad, the company’s challenges were great and compounded by a strong Euro that cut into profits coming and going. Coming because sales into dollar based economies were impossible due to high prices, and going because now that the dollar has firmed up substantially, its currency losses for GAAP reporting are substantial – so substantial in fact that they wiped out singularly the entire second quarter profit. A mere paper loss of course since most of the company’s purchases for raw material and research is European based – but still not designed to favor motivation among wall street traders that have ignored the company since its inception. “We learned valuable lessons and gained a healthy sense of crisis” said Manuel Garcia, Communications Officer. But for the currency loss the company has been profitable in each of the last three quarters. As one would expect, the tactical practice orchestrated by Helle Madso, FLKI’ president required a mindset totally different than that practiced in the industry. Management and the entire global distribution network had to realize that business as usual was not an option. Changing an ingrained distribution culture was not easy, yet Madso was able to accelerate a program of structural reform. “We consolidated overlapping functions and shortened supervisory processes” she explained. “Now we’re leaner, more reactive and able to provide stronger support for members of our distribution networks.” The revamp also extended to the manufacturing units. Traditionally the company had routed different research and productions in separate, dedicated plants and facilities. To improve efficiencies it created multipurpose production units to manufacture chemicals and impregnated accessories such as wipes. Workers switch between different roles in the assembly process. The new composite system delivers such significant productivity gains and cost savings that Madso is now keen to roll out the process globally. “The financial crisis taught us that we can’t control our environment. What we can do is have a culture that adapts to circumstances” she says. “Ultimately it’s the adaptable who survive.” To ensure that the company grows and prospers over the next decade, Madso has devised a plan for the next stage of globalization. The multipronged strategy involves building up the product lines, expanding the reach, and moving even more aggressively into the emerging markets of China and other Asian countries, and not to be forgotten, diversifying into new lines of business, notably disinfection and medical care. If the rapid success of the company’s pipelined products is anything to go by, FLKI looks to be well on its way to meeting its targets. The company’s product conceptions are shaking up the market. Products renowned for their convenience, portability and usability (the company’s line product motto is “It Simply Works”.) have attracted large new audiences. Women where the purchase rate has tripled, and the middle aged, two groups generally ignored by the company’s competitors. “We’re aiming at 20% global market share by 2015, and it’s a target we’re confident of hitting” says Garcia. In medical and disinfection products Madso’s goals are equally clear. She wants to grow the rigid business by around 70% in the next five years. Social and economic trends are aligning to support Madso’s bold vision. Eager to expand, but aware that developing the business almost from scratch would require a huge investment, Madso took the bold step of going on the acquisition trail targeting small to medium sized companies in Chemicals, wipes, and related productions. Of course the relative economic robustness of developing countries vis-à-vis the developed world is another major post–recession paradigm shift that no company can afford to ignore. With no debt and a booming distribution network, market demands for FLKI product conceptions are on the rise. “Making a big push into these markets is the N°1 priority in the midterm” said Garcia. Expanding into new business areas is as important as expanding into new countries. FLKI devotes a significant proportion of the roughly 10% of revenues it commits to research and development every year to move into promising new business areas. But just as important to the company’s success is its policy on corporate social responsibility. Whether aligning itself with the UN’s Global Compact for sustainability and responsible business practices, or creating green products in environmentally responsible ways, all of FLKI’s initiatives are inspired by its “Social IN” philosophy. This helps people worldwide lead healthier and more fulfilling lives, and maintains that the value of a company that does right by its shareholders and society at large will inevitably rise.
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