Ep. 27: How Laurent Notin Helped a Cambodian Company Become Debt Free and Scale Revenue to $1.3 Million

Transcript

This episode is brought to you by Equilibria, Inc. Equilibria provides training to assist fast-growing companies in documenting and improving their key processes for maximum operational performance. Visit EQBsystems.com to learn more. That’s EQBsystems.com.

Welcome to Scale Tales – the business storytelling podcast where entrepreneurs, executives and experts share firsthand accounts of those magical moments when they achieved something bigger than even they could have imagined.

I’m Alicia Butler Pierre and I live in the U.S. Here, there’s no shortage of resources for entrepreneurs, project managers, and developing leaders. It’s only through my travels to other developing nations that I realized how privileged I am to have this access. It’s an underlying reason why this show exists – to give access to others who otherwise may not get it. Our next scale tale finds us in southeast Asia where a Frenchman begins working for a cash-strapped company and eventually helps change their financial future.

This is Ep. 27: How Laurent Notin Helped a Cambodian Company Become Debt Free and Scale Revenue to $1.3 Million 

Hello, my name’s Laurent Notin. I’m the bottleneck coach. I empower funders to thrive. I’m currently based in Helsinki, Finland and this is my scale tale.

My journey started on the 3rd of October 1999. I am French originally, but I’ve lived outside France longer than I lived in France. And the first day I landed in a foreign country was that date, 3rd of October 1999. I was in Laos in East Asia. Laos is a small country in the state Asia, a landlocked country between Thailand, Cambodia and China. I’ve never been to Asia.

I went there because I followed my partner at that time. She had found a job for nine months. Initially I had just finished my studies, didn’t have a job. So I thought Hey, let’s go. This is something that I had always wanted to do, explore the world. So we left initially for nine months, but I ended up living in southeast Asia for 20 years in total. Laos was an emerging country. It’s still an emerging country.

But at that time in 1999 the capital Vientiane did not have asphalted roads. After a week I started looking for a job before I left to Laos I had sent my CVs to a few French companies that were registered there. And the first company I contacted was a small market research agency. By market research I mean the type of company that go out and talk to people and ask them questions about products or services.

Back in 1999 they were doing this by sending interviewers knocking on doors of people using pen and paper questionnaires. I was offered a job. What was funny is that I started working and I was paid $250 a month, which is not a lot, but I didn’t really care because my partner was earning a good amount of money to enjoy life in Laos. So this is how I ended up in market research. While I was working for them, one of our clients was another market research agency called IRL, which had offices in Cambodia and Vietnam, but they had clients in Laos. Because they didn’t have any operations in Laos, they were using us to run the operations to send interviewers and ask the questions.

So we would do the field work. We didn’t do the data processing. I remember we would send back all the questionnaires by DHL back to Cambodia. So that was a lot of packaging but it was fun. One day back in December 2005, the owner manager of the company sent me an email and that email was a job offer.

Basically the email was saying,

“Hey, I’ve just lost my research director in Cambodia and I was thinking about who could replace him. And I thought about you. So, do you want the job?” 

He attached the, the contract to that email. This is a type of opportunities that don’t come a lot. Especially was a time in Laos where I was started to turn into circles because it’s a small country. There was not a lot of things to do. I was getting a bit fed up. It was time for a move.

So I just said, “Yes! Yes! Let’s do it.”

And this is how I ended up in Cambodia working for this research company which had a revenue of $700,000 US dollar at that time, in 2006 and maybe 30, 40 staff. You need to imagine Cambodia. It’s weird when I’m talking about revenue here. The frame of reference that I use is a frame of reference in Asia. You can’t compare 700k to 7 in Cambodia. Compare it to 700k in, in the US for instance. Okay?

Because the costs are not at all the same. I was saying the company maybe had like 30, 40 staff at that time. But today, even back then in Europe or in the US, a company that was doing 700k a year of revenue, would suddenly not have 30 staff because it was too expensive. So 700k, 30 staff was quite significant for Cambodia at that time. And they had some big names. I came as the research director. Basically the number two, I was in charge of all the project management, business development. And I knew there were some issues, but I didn’t realize all the issues that the company was facing. There were more issues than what I thought there would be.

For instance, where the company had a lot of debts. If I remember correctly, I started working on the 1st of February 2006. I think the company owed something like between 50 to 70k to different creditors. But a lot of that money was for interviewers. We are not paid interviewers. The people will go on the field and ask the questions for a long time. So of course that also impacted our reputation as an employer and it was very difficult for us to find interviewers.

So that was one of the issues that I was not aware of. The other issue is they had also a lot of other financial issues and no cash flow, for instance. It was a very day-to-day cash flow management with no forecast and you would just use the money when you had it. And so there was no real plan, there was no money on the side. So at the end of the month, you wouldn’t be really sure if you had the money to pay the salaries of the staff. And so of course that created more debt because I had to add on top of that. This is Cambodia in 2006.

The banking system is very limited. It’s very difficult to get an overdraft from a bank even more difficult to get a bank loan. So basically the company had to be self-sustainable with no financial support from outside. Of course all of these also created frustrations internally because people were  not paid on time on top of that the owner manager was really, really good at business development, was really, really good at taking care of the clients.

We had great clients, the company had great clients, great projects, but human resources didn’t have necessarily have the best staff. But all of that I discovered, I didn’t know that I didn’t know all of it when I started working. This is all some of the stuff that I discovered later on. So I started working. I loved it from day one but there were a lot of issues that we had to address starting with the money aspect. You can’t run a company with so many debts and if you don’t know where the next dollars are going to come from and how they’re going to be allocated. So it took a little bit of convincing with my boss.

But he decided to hire a new financial director who came in and set up some processes to start to have like a small solid foundations when it comes to money management. For example forced us to start using a cash flow forecast file, which is a forecast over eight weeks. So we knew where the money would come and what expenses we would have. And we were able to manage the money accordingly.

The other thing was that we had to pay the debts, especially to the interviewers. He set up a schedule of payments to those people so that first hire, a new financial director who knew what he was doing, was really the first step towards being able to have solid foundations so that we could scale the company. Because otherwise there was no point of starting scaling, even though we would get another big contract with a big client, the money will disappear. We didn’t know where because there was no money management at all. So that was one of the first things that we did.

The other thing that was really, really important was the quality of the operations. Basically, if you collect bad data, the report quality that you will give to your clients will be bad. You could have the best report writers in the world because the data are bad, they are not accurate, then the recommendations you’re going to make based on those data will be irrelevant anyway. So it was really, really important to focus on the quality of the data collection so that our clients and our staff will trust us. That was a big, big renovation to implement.

But Laurent was up for the challenge. 

I hired an excellent consultant, someone who had a lot of experience in running fieldwork. And I asked him to write the data quality procedures, like a full set of data quality procedures, because guess what? I discovered that we didn’t have any as a market research company. That was a bit of a surprise. So the guy came in, he spent like two months with us.

He went to the field, he observed the fieldwork, fieldwork, interviewers, supervisors, and then he came back with a set of procedures that were really, really, really solid. Once we had that, the next step was to implement them, making sure that the staff started using them. We created a new position in the company called the Operations Director basically became the number three in the company.

And we was who job was to supervise the fieldwork department, all the fieldwork people and implement the data quality procedures. It turned out to be a really difficult task because people get used in doing things and resistance to change can be really, really high. They didn’t understand why they had to change what they were doing because they thought it was working pretty well. You know, now that I’m looking back at it, I think my communication, with the research director, with the operations director may not have been on par. Maybe we could have been better at communicated.

Hindsight is 20/20. But if nothing else, we have to give Laurent credit for self awareness. 

But after one year of trying, I was fed up. This is, this is one of my top leadership moments that I remember. I remember I took everybody in a meeting room, all the staff, because everybody had to be addressed because the quality of the data was something that was a concern for everyone from the field work to the data processing to the people in the commercial department. I think I said something like, “Well guys, it’s been one year, I’ve tried and despite all our efforts, it has not worked. So now I’m going to give you the choice. Either you start implementing the data quality control, data quality procedure, tomorrow or you leave the company and you leave the company right now.”

Nobody left. Everybody started implementing the quality control procedures and the next day everybody was like,” Wow, this is so great! “This is really good. The data quality control, the data quality is so much higher. And I was like,” Yeah, I told you.” This moment really stick into my mind. I think this as it’s one of the moments that has defined me as the type of leader I wanted to be.

There was also another moment that defined Laurent as a leader. 

Remember I told you the company had some financial debts and to be able to pay those debts, to get rid of those debts, especially to the interviewers, we had to ask the staff to lower their salaries for a period of time. So we made a plan with this new financial director. We made a plan of lowering the staff salary for six months. We were talking quite a significant decrease maybe a third of their salary.

This salary reduction took place at the beginning of the year. Laurent told them that they would be reimbursed for this reduction by September or October of that same year. But the employees had a surprise for Laurent and it’s not what you’re probably thinking.

And so I took everybody again in a meeting room and everybody agreed. But they asked me one thing.

They said,

“Yes, if we do one third, you have to do 50% of your salary and I accept it.”

So for six months I was paid 50% of my salary. But it worked. We paid all the financial debt and we reimbursed everyone when we said we would like September, October, all at once. There was another aspect also of starting the transformation of the company. I talk about building the financial foundations talk about addressing the data quality which is this, this was a product that had to be excellent.

The other aspect was okay, who are we? What are we doing? What do we want to be known for? How are we different from the competition? Where can we add value? Where can we go where others can cannot go? We were really strong in what we called commercial research working with private businesses. But there was one aspect where we were not that strong and there was quite a lot of revenue to be made there. It’s what we call social research. And social research is working with international organizations, donor agencies like the big NGOs, the World Bank, the Asian Foundation Bank, all of these big names because they do need market research too.

But they don’t call it market research, they call it social research. And we were not there at all. So we had a lot of experiments there and it was really much of an approach of we’re going to try something, iterate and try and try again. We started with developing like a social research department. We hired full-time people. But that did not really work for several reason, reasons. After several trials and iterating along the way, we finally hit the spot. We finally understood where we could be really strong. And the idea was a lot of these organizations, they needed a nationwide research covering not all the country because when you run a survey you will not go absolutely everywhere but maybe a third or two third of the country sometimes.

And we’re talking like sample size of 2,000, 3,000 people going into rural places where sometimes it needs one day of travel just to go into one village to do five interviews with five different people. This is exactly where we could be strong. We saw an advantage. So, together with the operations director, we decided that we would build a database of nationwide interviewers, something that the other companies did not have. And so we set up provincial offices in the key provinces of Cambodia so it would be easier for us to send people from the provincial office to rural areas around those provincial offices.

But on top of that, and I think that is the most important aspect, is that we came to a realization that our interviewers, who most of them were university students, it was a part-time job. For them it was an opportunity to get some money on the side while they were continuing their studies.

And the company culture was such that these part-time university students were not viewed as part of the company. 

That is a mentality that we really had to change. Because they were the most important assets in our company, because if we didn’t have those interviewers, we were not able to collect data that we could use to write the reports for our clients. So, no interviewers, no data, no clients. So it was really important to make sure that those people felt they belong to the company. We develop an HR environment, a company culture where all those interviewers would feel that they are part of the company. And that required a lot of communication. We develop also a lot of HR processes for them

And there was something else that proved to be the tipping point for changing the company culture. 

Every quarter I was going on the field to see, to observe what was going on, but also to show my presence to those staff, to show them that the top management cared about them. And I know that had really a big impact on them because again, you have to put that into perspective of the country. We are in Cambodia. This is a very pyramidal structure where the respect to seniority and to leadership is really high.

Most of the time people at the bottom will never challenge the top manager, because the top manager is always right. And the top manager will never talk to the people at the bottom. Because the people at the bottom, you know, buff, it’s people at the bottom. Right? So by me going on the field and showing a presence, I was reinforcing the culture that I wanted to set up for the company. I was showing the example for the other staff to make sure that those interviewers would be considered like they were full-part staff that was. So this database was one of the best decisions we made.

And I remember like four or five years after we had a database of 350 interviewers that we could send absolutely anywhere in the country. And not only that, but we were known for it. We were known for data quality control and procedures, the high quality of the data. And we were known for the fact that we had those staff that we could send anywhere and that we could actually run a nationwide country studies and you know, we, we got big, big, big, big projects. Thanks to that.

What an amazing story, right? With the right people, processes, and technology in place, Laurent was able to lead IRL from a position of financial strength and accurate, quality data. But he soon left the company. Why? He’ll explain after the break.

Some small businesses fail not from the lack of customers, but from too many. When your business receives positive publicity, it’s exciting! The spotlight attracts more customers and the cash flows in. But too much growth too soon can be catastrophic especially if your organization lacks the business infrastructure to support this growth. Behind the Façade: How to Structure Company Operations for Sustainable Success is a book that introduces a proven framework for building business infrastructure. The book is structured into six relatable stories of entrepreneurs who apply this framework, giving you an inside look at how they solve their fast growth issues and how you can too! Pick up your copy today at ScaleTalesPodcast.com. ScaleTalesPodcast.com. 

Laurent Notin is known as the Bottleneck Coach, a clever name he’s given himself based on his years of experience in helping other companies grow and scale. Before the break, he shared the story of how he helped scale IRL, a foreign-owned market research company with operations in Cambodia. 

Specifically, he helped build and implement a solid business infrastructure and welcoming company culture for a team that consisted of native Cambodians and
foreigners as well as full and part-time staff. After achieving this, he left the company. Pay attention and take notes as he explains why he left and how those experiences led him to becoming the Bottleneck Coach. Here’s Laurent.

After I left I started working for an advertising company where I was also the managing director in which I had had some shares.

Everything that I coach in my practice today is based on either things that I’ve learned myself that I put my hands, into it, the mistakes that I made, or it is based on all the discussions and the conversation that I had with funders. When I decided to become a coach, it just made so much sense to me because I realized that the part that I actually enjoy the most, be it at IRL or after or even before, was helping others grow, helping my staff strive, teaching them, mentoring them, coaching them.

That was what was making me the happiest and I’ve always loved helping others, but being a part of their growth journey is the biggest reward for me. When you have these people that you promote, for instance, the operation director became this amazing leader. This is so awesome for yourself too. It’s a bit selfish but it is because you have influenced him in a proper way.

Plus, I had the experience of asking questions. Asking question is an art and this is an art that I developed and, and I don’t want to say mastered, but I got better at it through those experience working with these research companies. I became a coach for entrepreneur because running a business is something that I speak the language. I’ve sat in the seat. I know how they feel. I know how it is. Even though it was not my companies, but it was pretty close because we didn’t have any support from the shareholders anyway. So I experience the loneliness at the top. I experience the fact that sometimes you’re not sure how you’re going to have to pay your staff. I experienced the cut in salaries, for instance. So everything that all these experiences that I got through IRL and before and after, made me the coach I am today.

Listening to Laurent you may be wondering, did he have a business coach?

I had a business coach the last year and a half working in Cambodia, but before that I had great mentors. The first company in Laos that I worked with the owners were a couple and they by default acted as my mentors. They were tough. They were really tough. The relationship didn’t end very well, but I learned so much with them. When I moved to Cambodia, my boss slash the company’s manager acted as my mentor. I learned a lot also from him. I remember I had conversation with him where I was telling myself, because the guy is really smart. “Damn, I’m so stupid. I feel so stupid! How I didn’t think about it!

Now I see those conversations helped me really grow and I, I learned a big lesson from him. I remember one day, a little bit after maybe six months after I started working in Cambodia, he took me out an evening, we went to play pool and I had some beers and you know, we started chit chatting and after a while he sat me down for a serious conversation.

And I remember him saying,

And it’s true. I’m French first, I’m from the Mediterranean side second. But at that time I had a temper. I had a temper. And you know, working in Cambodia is not like working in France. I was lacking patience sometimes. And the staff who had been working for IRL for a while before my time, they complained to their boss.

And I remember he said,

“Look, I know you can do it. You’re gonna have to work on your temper because if you don’t, I will have to make a decision that I don’t want to make.” 

That was like a big wake up call. Big, big wake up call. I really had to work on my temper and start my self-awareness journey.

And that self-awareness journey, combined with his years of developing and leading others makes Laurent a highly sought after business coach. So, what exactly does he do as a coach to help his entrepreneur clients?

And that self-awareness journey, combined with his years of developing and leading others makes Laurent a highly sought after business coach. So, what exactly does he do as a coach to help his entrepreneur clients?

I was able to understand why I was being like this. What were the triggers and what could I do to change? And this is what I see again and again in companies. You start scaling up, but then they reach a stage because the funder’s role need to evolve. You cannot take a company from 0 to 1 and apply the same recipes from 1 to 10 and then from 10 to 20 and beyond. Every time you have to evolve your role and evolve efficiently, sustainably over the long term, you need to look into you first. You need to change you before you can change others and then by default, change the company.

One of the things that I see over and over and over again, I call them the bottlenecks. There’s one bottleneck that I see all the time. This may be the most difficult bottleneck of all, is the inability to let go. As the business evolved, the business grows, you got bigger and bigger clients. What do you do? Well, you hire staff but those staff you have, supposedly, you have to trust them. You have to delegate work to them.

You have to empower them with decision making so that they can run things on your behalf, on the behalf of the company. And you don’t have to be involved in every little decision. To be able to do that you need to let go. But when you are a funder, letting go is so damn difficult because if you started from scratch, you were involved in everything. You were doing everything. Maybe you had some co-founders and you had the impression of being in charge of everything, to have the control on everything. And as the business evolved, you cannot continue like that because if you continue like that you’re going to create not only a lot of frustrations among your staff because they will be like, Hey, why did you hire me if you don’t trust me?

But also you’re going to create a lot of fatigue and stress for yourself because you’re going to be involved in everything but the workload keeps on increasing over and over and over. So it’s really important to let go. But what does it mean? Let go of control? To be able to let go of control, you need to understand the challenges, the ideas, the self-limited beliefs, the bottlenecks that block your way.

Why is it that you cannot let go of control? Once you understand that then you can do something about it. You can act upon and then this is where you will reach real scale up. This is where you put yourself in a position where you can actually scale because when you do that, you start building something that goes beyond yourself. Your company is you at the beginning, but the goal is to build something that goes beyond yourself. And that’s why you need to let go. And that’s why this is one of the most difficult bottlenecks.

And this is why Laurent calls himself the bottleneck coach. He helps his entrepreneur clients identify and remove the bottlenecks that impede flow and scale in their businesses. If you’re interested in learning how to get unstuck, there’s a way you can tap into his expertise free, at least initially. 

If you want to try it out, I’m really happy to offer the chance to any listeners for a free coaching session. One hour with me just to experience a little bit what coaching is about but also what are the bottlenecks that you may have that you are not aware of, or blind spots if we don’t like the word, “bottlenecks.”

The coach is not only there to give you accountability, but my role as a coach is also to give you a different perspective on things starting with you. So if you want a free coaching session, the best thing you can do is go on my website and you book a call with me and in a message you mentioned Scale Tale podcast.

Laurent, this is very kind of you to make this offer to listeners of Scale Tales. Merci beaucoup my friend.

You’re absolutely welcome. Thank you for inviting me.

I’ve had the pleasure of getting to know Laurent since the pandemic when I was a guest on his podcast. It’s called Cracking the Entrepreneurship Code. My family and I have also enjoyed great food and great conversation with Laurent in Helsinki. Here’s a recap of some lessons learned from him as he shared his scale tale: 

1. Be prepared for landmines when starting a new job or project, especially if you move to another country. There’s so much you don’t know but remain open and flexible.
2. Exercise prudent financial management. Your ability to properly manage money not only shows discipline but also proves fiscal responsibility to future investors.
3. Pay attention to the quality of your operations. Operations directly impacts your internal and external customer experiences.
4. Be a stickler for data quality and accuracy. After all, data drives decisions and if the data is bad, decisions you make based on that bad data will also be bad. 
5. Have a strong No. 2. This is usually someone who functions in an operational role like a COO or an Operations Manager in Laurent’s case. This person also typically focuses on the back-office operations while the No. 1 focuses on the front-facing activities like business development.
6. Processes are non-negotiable. Document them. Train people based on them, and watch the results as your company becomes less dependent on you as the leader and you can grow and scale. 
7. Speaking of scale, one way to start is by building a team of independent contractors or part-time staff. Leverage university students, if possible. It allows you to pay a lower rate while giving them valuable work experience.
8. Get a business mentor who can help hold you accountable.
9. Work on your mindset as you go through the stages of Startup, Build, Growth, and Scale. Practice and maintain self-reflection and awareness. Those around you will notice the difference and will have even greater respect for you. 

A special thank you to Laurent Notin for sharing his scale tale with us. Take him up on his offer for a free one-hour coaching call. You can sign up for that, as well as access other resources mentioned in this episode’s show notes. Visit ScaleTalesPodcast.com. Again, that’s ScaleTalesPodcast.com. 

Thank you for listening! If you learned something valuable from this episode, please leave us a five-star rating and review wherever you’re listening.

I’m Alicia Butler Pierre and I produced and narrated this episode. Additional voiceovers by Clarence Levy III and Hashim Tale. Audio editing by Olanrewaju
Adeyemo. Music production and original score by Sabor! Music Enterprises. Video editing by Gladiola Films. Show notes by Hashim Tale.

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