By Verne Harnish
Dennis and Emily Balajadia founded Dragon Edge Group, based in the Manila area of the Philippines, to make sunscreen after Dennis had drinks at the beach, dozed off–and ended up with a bad burn.
This year, the 130-employee company, which the couple founded in 2005, is on track to exceed its 2019 revenue, which will put it in the $7-10 million range. Even better, they expect profitability to double since 2019. The Scaling Up platform helped the couple position the business for growth, despite a rough couple of years during the pandemic.
“Dennis & Emily Balajadia battled cashflow issues and the pandemic to openly embrace the Scaling Up methods,” says Scaling Up Certified Coach Herb Cogliano. “They focused on improving Execution, communication, and People systems, resulting in 90% sales growth over last year.”
Here is how the couple put Dragon Edge Group on the fast track to growth by using the Scaling Up platform, with Cogliano’s guidance.
Getting people into the right seats on the bus
During the pandemic, Dragon Edge Group reduced its team to 90 people, who were all working remotely. “We held onto people as long as we could, but we had to scale down,” says Dennis.
To make the most of the talent they had, the leadership team worked with Cogliano to complete the Function Accountability Chart (FACe). “It brought clarity for the different roles,” says Dennis.
Embracing a new strategy
Prior to the pandemic, Dragon Edge Group brought in about 50% of its revenue by selling sunscreen, such as spray sunblock. “We didn’t have that in the Philippines,” says Emily. “People would end up walking on the beach with that white sunscreen on their faces.”
Their Beach Hut Sunblock brand addressed the gap in the marketplace and found many fans. However, once beaches closed during the hard lockdown in 2020, the company’s sunblock sales dipped 97%. “We hadn’t seen anything like that before,” says Dennis.
With their sunscreen business falling off a cliff, the leadership team completed the One-Page Strategic Plan. This helped them decide on a new strategy: to build upon a line of baby products that had previously accounted for the other half of the company’s revenue. That line includes Cycles, a clothing detergent for babies with sensitive skin.
The Balajadias, who have five children, had to make their own, because it was not available in the Philippines. “We had to import it from the U.S.,” notes Dennis. “It was costing us a lot.”
The baby products line has now become an important revenue driver, thanks to their new strategic focus. With the sunblock business roaring back, too, they now have two thriving product lines fueling rapid growth.
During the pandemic, the company also built an online presence—and has continue to invest in developing it, even with traditional retail sales coming back. Today, about 30% of sales come through online channels, up from 3-5% in their pre-pandemic days. “There was a big boom online,” says Dennis. “We had to put more focus on it.”
With a leaner team, the company needed to make sure its execution was flawless. “We realized we had a lot of waste and inefficiency, even though we were growing,” says Dennis.
They worked to root out these inefficiencies and completed a job scorecard, so team members knew what was required to succeed in each position. Prior to that, Dennis says, “We weren’t being clear enough about the work we expected from them.”
The company has also created awards for employees who live out its Core Values as they do their work. Dragon Edge Group features the award winners on its website. For instance, one finance supervisor has been recognized for demonstrating accountability and ownership that embody the Core Value, “We will find a way & get it done.”
Getting laser-focused on Cash
When sales dipped, Dragon Edge Group negotiated with its suppliers so it could cancel some of its contracts and conserve cash. “We tried to maintain three months of cash,” says Dennis. The company also worked to extend payment terms.
Now that the pandemic is over, it has deepened these relationships by making good on these arrangements. “I’m happy to know we are able to pay them back,” says Dennis.
Meanwhile, the company is positioning itself for rapid growth by continuing to build out both product lines. “We think we will surpass 2019,” says Dennis. “We think it’s because of the discipline we learned to not run after the next shiny object. Herb would always center us.”