Management Magazine, April 1995
Working to a flat, joke-studded, no holds barred management style, partners Ian Handricks and John Shennan have turned a failing contact lens company into a world leader. Penelope Bieder
Humour is our secret weapon," says Ian Handricks beaming happily. "It’s a major marketing tool and appears in everything we do, from the clothes we wear, to the mad ideas we dream up for major conferences.
Joint managing directors Handricks and john Shennan are sitting at an informal conference table at Hirstlens, the company they jointly own. Beginning and finishing each other’s sentences, these partners are musing on the satisfying performance of a manufacturing company they rescued from the receivers five years ago – a solid company that had its beginnings in 1942, and was world-renowned for its advanced technology in the field of contact lenses.
Dental technician and company founder Eugene Hirst fled from his homeland of Czechoslovakia in 1958, seeing the writing on the wall for Jews in Europe. Soon after arrival, he found a job at Auckland Hospital and, refusing to be discouraged by the wariness and prejudice many New Zealanders then showed towards foreigners, immediately began to see tremendous business opportunities here.
While working at the hospital, an ophthalmologist asked him if he could form a contact lens, which in those years were large haptic lenses. They had first proved useful after World War One for soldiers who had suffered damage from mustard gas poisoning. These early large lenses provided relief in separating the cornea from the eyelid.
Hirst’s groundbreaking work with plastics led him to establish his own company, Hirstlens, in the early 1940s. Although he knew nothing about contact lenses, he surrounded himself with books, supplied lenses and taught optometrists how to take a mould of the eye. Early patients needed to be of a fairly tolerant disposition during the fitting process!
Eventually Hirst joined forces with prominent optometrist Doug Mortimer and they ran the contact lens business above the optometry practice In 1953-54, they began to develop the contact lens as we know it today, although the first models were still 10mm larger in diameter than modern lenses and made of a very pure perspex imported from ICI in England.
Hirst constantly sought out new ideas and material, forging ‘contacts’ overseas, working at the cutting edge of research and development. In the mid-1960s, Otto Wirtchle, another Czechoslovakian, developed the hydrogel material - a major breakthrough which led directly to the birth of the soft contact lens.
Through his friendship with Wirtchle, Hirst obtained one of the first batches of hydrogel and was soon sub-licensing technology offshore. Before long, New Zealand was leading the world (outside Czechoslovakia) in the manufacture of soft contact lenses.
When current joint managing directors Shennan and Handricks joined the company (Shennan in 1968, Handricks in 1974) Hirst’s business philosophy included a relaxed management style that promoted pride in the craft, a positive attitude to research and development, alongside a fierce loyalty to the company itself not surprisingly, almost all staff have been with Hirstlens 15 years or more. Though the company has evolved considerably since Hirst died in 1989, Shennan and Handricks would not have missed those pioneering days for the world, operating out of workshops with artisan-type technicians who were both locally and internationally trained.
In 1976 Hirst's involvement lessened and he sold the company to New Zealand Optical which formed a company under the ownership of SonnFilter AG, of Switzerland. They sold out to Crown Corporation, which in turn sold out to Standard Optical Corporation of Australasia - which shortly after went into receivership.
In 1989 Handricks and Shennan decided to attempt to purchase the company from the receivers. It was seriously ailing, nearly bereft of products and suffering a faltering commitment from its suppliers. Mortgaging themselves to the hilt they succeeded in gaining control over a 10-month period and found themselves with a business made up of a spectacle laboratory, a sunglass laboratory, instrumentation and a contact lens laboratory. And it was then, that Hirstlens was born.
The latter, though doing very well, was a forgotten cousin in a large operation, working away quietly in a corner of the building. Says Handricks; "We felt we had enough expertise to make some pretty fundamental changes in the direction of the company. After 48 years it was time for a major shake-up. We decided to try some innovative management and marketing techniques that were unknown not only in the optical industry but in most other fields, too."
When it surfaced from receivership the company was producing four or five products - hardly enough to make it stronger. An initial decision was made to increase the range and over six months, the four products grew into a product catalogue that was over 100 pages long.
The second step was to overhaul the marketing division. "How could we honestly go into the marketplace with a company that had just come out of receivership in a country that was in the throes of deregulation?” Handricks and Shennan pondered. “Multinational optical companies were lining up to compete with us. "They decided that rather than fighting the competition, they would act co-operatively.
So Handricks and Shennan asked the larger companies if they would like Hirstlens to sell their products for them. Gradually, the multinationals agreed. Now companies like Bausch and Lomb, Allergan, Alcon and Pilkington Barnes (PBH) allow Hirstlens to sell their products on their behalf even though they have their own distribution warehousing and sales teams in this country.
“Hirstlens has made a very great success of it," says Handricks, proudly. "To the stage where a couple of years ago a major multinational asked us to take over their New Zealand operation?
The third step was to define their business. Handricks explains; "Instead of being unidirectional, Hirstlens was split into three parts. We are a contact lens manufacturing unit, a distribution company selling other people’s products and, with the company’s historical emphasis on technology, the third direction taken has been the setting up of a technology division. This was in itself divided into two areas: the research and development of contact lenses, and computers." The computer business had begun back in the mid-1980s when Handricks and Shennan were heavily involved with the development of computer - controlled contact lens machinery.
While in England, Handricks, working for Hirstlens, had developed a series of computer - controlled lathes that were at the leading edge of technology. Handricks (an engineer by training and something of a computer pro) lived in England for seven years and Shennan visited often. Their lathes now sell all over the world with Handricks assisting in the development of laboratories.
Their love of computers led them to taking a computer filled with games to an optometry conference, where more people could be found out the back of the stand playing games than at the front looking at contact lenses. (That was the last time Hirstlens took a contact lens product to a conference.) The small computer side of the business has grown into a monster - from helping optometrists computerise their businesses to marketing and developing the latest in digital image processing. Recently, a new branch called Beyond Imagination came online and they continue to run a support group called OUCH - Optometrist Using Computers Hotline - where members develop skills and help each other. This was successful to the extent that Hirstlens has supplied virtually every computer used in optometry in New Zealand. Moreover, while this may appear to be a small market, some clients have purchased up to nine computers.
But digital image processing is where Beyond Imagination is concentrating and Handricks and Shennan’s gaze is now refocusing offshore. “We have found a way to produce this photographic system for one tenth of the price of a similar system in the United States, and Hirstlens has become the major supplier of digital image processing in New Zealand, as well as photo imaging," says Shennan
"In case you’re wondering," interrupts Handricks, "it is the process of taking old photos and repairing them, taking two photos and joining them together, taking images out of photos, putting images into photos, graphics, layout, video capture and manipulation, sound, creating music, and a whole range of media tools. A system that costs $250,000 plus in the United States has been developed by us at Hirstlens for $20,000, and we have begun exporting to Australia and England. We provide the software, the hardware, the training and the marketing training."
The attraction of the package is that someone can come in, see the system and know what the total capital outlay for the business is going to be - usually about $29,000. Digital imaging is a self-contained small business for someone who has a small amount of capital and wishes to be self-employed in a new and growing area.
Handricks and Shennan are pleasantly surprised at the enormous growth and potential of this branch of their company, and happily confess to never predicting such success. In 1995, they bought a 20,000 square foot building in St Lukes, Auckland, which gives them the necessary space for their ‘wonderland’ - an environment they have created where adults especially can take their time to learn the technology before they buy it. Thus an unpressured interactive environment is provided which blatantly aims to excite the senses - and Handricks and Shennan are convinced this has been one of the secrets of their success.
The runaway growth of the company is reflected in Handricks’ and Shennan’s management style. “we have developed a management style we felt comfortable with - it cannot be labelled paternalistic or laissez-faire and there is no pecking order," says Handricks. He and Shennan jointly manage a company where there are no defined roles, they are both at ease in the contact lens or the computer side of the company and can be found unloading trucks and answering phones. In the laboratory, everyone works for the mutual benefit of the company and themselves. No-one clocks on or off and there is mutual trust. Handricks and Shennan know their staff have families where day-to-day management problems can be bigger than any they encounter at work - and that flexibility is important.
Problem-solving techniques in the laboratory are used by staff who are encouraged to think independently by bringing a solution as well as a problem to management. “If an environment is provided in which people can develop their talents the whole business benefits."
If there is a problem, staff feel free to approach either Handricks or Shennan - as well as finishing each other’s sentences, they readily swap roles as trouble-shooters. Part of their internal communication system is one A4 sheet of paper that circulates on a Monday when the week’s work is first confronted and analysed. The mission statement is dead simple. They are in business to stay in business. A tattered diary is shared between the directors, they take holidays when they feel the need and they do not work overtime. They feel their joint managerial role works because they recognise each other’s weaknesses but try to build on each other’s strengths as well. "It has parallels with a good marriage - the secret of which is communication. We need the challenge which the other one provides."
Hirstlens’ turnover nearly doubled in the first three years of Handricks and Shennan’s take-over, and they are confident of more than repeating that growth in the next three-year period. A bifocal lens project - funded 50/50 between the company and the Government (the Technology for Business Growth Programme run by the Foundation for Research, Science and Technology) - is being trialled by companies overseas.
On top of that, the potential development and diversification of the computer side of the business, with its offbeat marketing approach, is well beyond imagination.