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Tuesday, 03 June 2014 23:38

CASE STUDY: Karl Hendrickson :

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Karl Hendrickson: Entrepreneur
Sex: Male
Age: 65 (At the date of interview)
Age at start of business: 26
Firm: National Continental Corp Limited
Venture: The business was set up to manufacture bread.

Areas for consideration included:ethnicity, family background, social capital, financial capability, education, niche marketing, experience, creativity and culture.

 

Ethnic Background: Chinese

1. Family Background and Ethnicity
Karl Hendrickson's paternal grandfather hailed from China the province of Fulken, his maternal grandfather, also from China, hailed from Canton. His paternal grandfather owned a grocery store. His father first worked at Appleton Estate, but later owned and operated a rural bakery. He had been exposed to business from an early age; after school and on weekends he worked in the bakery. This experience and other on-the-job experience gained in Canada formed the basis for the establishment of the business. His father provided start-up capital in 1957. He noted that by introducing new technology, he changed market demand for an old product. Mr Hendrickson reported that the bakery employed new technology i.e., specialized machinery to make sliced bread.

This study contemplates the influence of -
a) ethnicity
b) social capital
c) financial capability
d) education
e) experience
f) creativity and culture
g) family background

as determinants of success/failure of any business venture, i.e., how variables impact failure or success of small and medium sized business ventures. .

Mr. Hendrickson shared factors that he considered important to his success; these are ranked according to priority:

1. He said that initiative and vision were inseparable from the market and knowledge of the market. It was because he had knowledge of the market that he used his initiative to introduce sliced bread to Jamaica.

2. Family resources and other social relationships enabled the entrepreneur to secure financing.

3. The principle of thrift and money management was very important to him and formed a basis for growth.

4. Willingness to work very hard and long hours (14-16 hours a day); sometimes he slept on the shop floor and repaired the machine.

5. Tertiary Education, academic preparedness and technical competence were less important.

6. Creativity was important to grow the group through diversification.

7. Culture and family.

Traditionally the Chinese are known to excel as traders and shopkeepers. The driving principles underscoring their success have been said to include willingness to work long hours, the ability to access funding, cheap sourcing of products by pooling resources to facilitate bulk buying.

Karl Hendrickson was the beneficiary of skills passed on from his parents as well as the sense of 'duty and headship which emanated from their culture.'

The family had financial capital and with this capital they were able to provide the required start-up cash needed to acquire equipment, factory space and working capital. The factory was established at 45 Half Way Tree Road.

Karl Hendrickson, having worked in Canada,had been exposed to new technology. He had the vision to challenge first his parents and later the market to accept this new product, sliced (soft) bread alongside hard-dough bread. This easy-to-market-and-handle product proved to be a significant differentiator and gave him an edge from his first year in business.

Whereas he believes education to be important, the vision of how he could impact the market, combined with opportunities available to him,culminated in his decision to leave university before completing his degree. Mr. Hendrickson is very skeptical of the University of The West Indies'relevance to day-to-day business applications. After coming home, he started National Baking Company Limited, which later changed its name to National Continental Corporation, the flagship Company for the group of Companies now known as National Continental Corporation.

The name 'National' was first used by his father in St. Elizabeth. His father assisted the entrepreneur in his two first years of business. He later benefited from alliances with international business entities including "Continental Baking". This entity bought minority shares in his Jamaican company.

He benefited from this relationship by the transfer of technology, including costing and pricing of products and the maintenance of equipment. Hendrickson cited Eric Digman, a business partner, as a person who played an important part in the early years of his business.

Marketing
Marketing continued to play an important part in the success story. The entrepreneur not only had a product in great demand, but he was able to increase the demand by making the product more easily available .He took his product to the people in horse-drawn wagons --'bread shops'. These horse-drawn wagons were effective advertising and soon National was a household Jamaican name. People were happy to buy fresh bread instead of bread off the shelves. This he did for many years until his product had so high a demand that he was forced to concentrate on mass distributive channels. Hendrickson was actually doing intuitively what textbooks have documented as appropriate strategy for building market share . This marketing strategy not only increased sales revenue but also significantly increased profitability. Having honed his skills in bread making and distribution,the entrepreneur diversified his business portfolio.

Diversification

After many years of success in the manufacturing and distribution of bread, the Company extended the product line to include crackers and buns.

Later diversification included providing housing solutions (Key Homes Ltd), manufacturing and distributing carpets (Jamaica Carpet Mills Ltd.), (Courtleigh Furniture Ltd.) furniture manufacturing, chicken distribution (Caribbean Broilers), chicken feeds (Newport Mills Ltd), and lately the hospitality area (Courtleigh Hotel and Knutsford Court Hotel). Over the years, a few of his business ventures failed. These include Courtleigh Furniture, Jamaica Carpet Mills, National Food Products and Century Film Jamaica Ltd. The entrepreneur identified that his technical ability and market skills were not transferable to some industries.

Hendrickson said succession is a very vital part of the Chinese culture - the transfer of wealth and continuity has taken place over the last six years. Karl Hendrickson has retired,but he is still active as the Chairman of the Group and to some measure is still involved in day-to-day activities. As his father had done, he is now assisting his children in breaking new ground, and providing vision capable of enhancing their leadership skills. He is still a mental and physical dynamo.

His management style was described by staff members and senior staff as autocratic.This involved centralized decision making and lines of authority. Management needed to be cognizant of all details.Mr Hendrickson said "the primary factors for his success were his willingness to take risks, discipline and foresight". He was always a hands-on, no-nonsense manager.

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