Twists and Turns in Decision Quality Consulting
Updated: Mar 7, 2019
By Jack Kloebler
Finding Kromite, or, Kromite finding me?
Little did I know when I received the call from my friend, Homie Razavi, how it would affect my future and what kind of ride it would be. Homie started Kromite LLC back in 2003 when he learned about the 4th takeover of the Pharmaceutical company where he was an employee (Pfizer acquired Pharmacia). As an expert in Decision Analysis (DA) and Portfolio Management, he had been running Kromite for 4 years when I agreed to join him as a partner. For me, moving from the Army (23 years- 500,000 members), to Bristol-Myers Squibb (2 years-40,000 employees), and then to Johnson & Johnson (5 years – 110,000 employees) into Kromite, (5 employees) was quite a change.
“Kromite’s journey is not a simple linear one, but one that winds back and forth and changes with leadership, technology, and industry cycles. “
For the next five years we had fun hiring contractors and employees while trying to find the right mix. We always grew organically, never taking out a loan or growing too fast. Our focus was Pharma R&D DA, which also required expertise in valuation, forecasting, risk assessment, facilitation, and R&D strategy development.
At times we had engagements which involved only one or two of those areas of expertise, not an entire and comprehensive DA. This is when we realized that we can help with decision making simply by improving one of the elements of Decision Quality (DQ).
Our second focus was Portfolio Management of Pharma R&D projects. Not long after I joined Kromite, we landed three large Portfolio Management engagements and we were off and running. Most of our business was project-based, each project lasting 1-4 months, so keeping employees fully employed without over-committing was (and is) a challenge. At one point, in 2011-2012, we had to slightly reduce our size due to a downturn in classic Pharma DA projects. We learned that many consulting companies felt the same pressure.
March of 2012 was a large turning point for Kromite. Homie and over half of the Kromite employees became the Center for Disease Analysis. It was a well-thought out decision with a very good outcome. C4DA continues to help companies, countries around the world, and WHO model patient flow and disease prevalence for Hepatitis C and Hepatitis B.
In the same quarter of 2012, we were contacted by Idea Connection, looking for someone who could attack a tough Agriculture (Ag) problem. Open Innovation companies, such as Idea Connection, help large companies solve tough problems through anonymous, distributed competitions. We had initially deleted the invitation to join but when they called back, we listened and eventually attacked the analytics problem. We found an Analytics Champion in this company and we began our 7-year relationship with one of the largest Ag companies in the world. Experiences like this remind us all that opportunities come from all sides and all sources. You can’t do everything but vigilance among your employees can help uncover opportunities that might otherwise go unnoticed – some of them may be game changers. Kromite continues its relationship with Idea Connection and we continue to find business through their projects and competitions. By late 2012 we were supporting two industries, and we were not working to solve purely their DA or Portfolio Management problems. Instead, we dove into simulation, optimization, systems engineering, and mathematical modeling – whatever was needed to help companies make better decisions, bringing clarity to complex situations. Rarely were we being specifically asked to help a company with DA.
Thanks to hiring 5 more outstanding analysts we were able to handle the growing analytics demand and widen our reach within the Ag company. With our analytical support, they applied for and won the Edelman Prize from INFORMS in 2015.
Through it all, I have come to understand that your people truly are your company. Hiring great people pays off – sometimes in surprising ways. Nine years ago, we started heavily into discrete event simulation to model R&D processes. We needed technical help and we were constantly contacting the software company, Imagine That! Eventually, we realized we needed to hire a world class DES modeler and we were lucky enough to bring in the very person who had been helping us for 5 years. Dave Krahl brought in a whole new level of modeling which has worked out extremely well. Since 2016 we have slowly grown our manufacturing efforts so that by 2018 we were partnering with 4 manufacturing companies for analytics and modeling.
Analytics has taken most industries by storm, and, within analytics, machine learning is yielding huge benefits for many who use it properly. We began facing more and more analytical challenges that would be best met using machine learning methods, especially in Finance and Agriculture. We realized Kromite needed more talent – more analysts who have been taught the latest and greatest machine learning methods.
We started in earnest hiring only Masters level or above. While hired for a specific industry and methodology expertise, our additional team members have added so much to the diversity of the company, including gender, language, nationality, geography, and educational background.
Our conversations around problems are richer and more productive. As an example, when discussing an Agriculture modeling issue that involved a great deal of uncertainty and a collection of varieties, one of our newer members of Kromite who recently graduated with a cross-school MS (Engr, Business, Math) automatically thought of a financial portfolio and suggested looking at one of her favorite financial optimization methods. Within a day the solution we offered our client had dramatically improved. As our talent grows in diversity, we find ourselves helping companies in Pharmaceuticals, Agriculture, Manufacturing, Oil and Gas, Finance and even Pro-Bono work. This diversity stems from our skills but also from our passion to work on interesting, important issues where we can help improve decision making.
Kromite is now well-poised with a new energetic CEO - Dave Krahl took over in late 2018 – and growing strength in key areas of analytics. We are ready to catch the next wave, (next industry, next hot technology) but always with a basis in better decision making.
Lessons learned along this journey
A. You have to keep your talent fresh, either through education in-house or hiring. While the math of Decision Analysis has not changed, different industries may need different methods or analytics to support decision making. In 2003, analytics was not such a driver as it is now. In 2008, Big Data was around but left to the Googles and Deloittes of the world. Now, natural language processing, deep learning through neural networks, 3-5 types of machine learning algorithms, R, Python, and data mining are all expected for an analytics company. Tying these techniques to DQ and DA is very powerful but not obvious and it takes special skills.
B. Diversity is critical. The modeling and problem solving we do need fresh ideas and new approaches, combined with project management, rigor, and discipline. We need different perspectives, coming from education, culture, gender, or experience.
C. Patience and persistence. Many engagements have come after agonizingly long waits for responses. We often thought “Oh, we lost them”. Two weeks later (and sometimes much later) we get the call to start. Clients have their own organizational issues such as restructuring, budgets and scheduling.
D. Growth is not linear, and it is not even our goal. Growth is simply one of the outcomes of:
1) finding and hiring good talent,
2) keeping an open mind with respect to the type of engagements we accept, and
3) always focusing on helping a client make better decisions.