Finding the right team to lead a company is very important, and perhaps an area where many entrepreneurs struggle as they cannot attract the right people, or delineate responsibilities clearly or effectively. HP has had the foresight to make difficult management changes as necessary to ensure the success of ERI.
SM: Can you take us through the history of the different management teams? You were running the investment bank when you started funding this company. There was a technical founder of the company. What was the next step? You were still on the east coast at this point? HP: Yes, I retired from my investment bank position back in 1996. We went on with the founder all the way until January of 2000. Then we realized we had the ceramic rotor. At that stage we were trying to ISO-organize the business. We were actually trying to standardize and take the art out of the production process. I spent an increasing amount of time on the business.
You can only do this by presence. You have to be around. You cannot sit on the phone and do business around the world. You’ve got to feel it and smell it. We realized we were hurting ourselves by not really allowing the organization to expand. The founder was not willing or able to hire people who were smarter than himself. That made the whole organization stagnant.
SM: Did you take him out?
HP: At that time we offered to make him a technical manager and let other professional people build the organization. What is quite common with founder or inventors of things is that it is a black and white universe. We ended up in a one-year litigation. He tried to take away the patents and quite a number of things we couldn’t live with. We ended up suing him in the U.S Federal Courts, Courts in the state of Virginia and even through the patent offices in Norway. So we took out the heavy guns. That was the first management change.
At that stage we had also started to look at developing a sustainable global marketing strategy to launch the PX. I was living part time in California with another venture and part time in Norway. The person who was doing our marketing study at that time was interested and capable and we hired him as the CEO. That was how we solved the marketing challenge.
I remember that shift. We thought we had planned it well. We even put an armed guard in front of the entrance door in Virginia. We knew that we dropped a bomb here. We were ready to do anything. We even changed the locks on the doors. We thought we had something explosive on our hands and we did.
A few months later we wrapped up the entire company with the machinery and all and put it in seven containers and put it on the railway car and shipped it to California.