At Endeavor, we work with entrepreneurs from many different industries. A few months ago, we met Nikolay Sabev, who is the founder of Econt and is now going through Endeavor’s selection process. Our team is impressed with the deliberate perfection and philosophy with which Nikolay runs his business so successfully since 1993. This should be no wonder as Nikolay practices and even teaches Buddhism and has incorporated principles from it into Econt. In this interview, we video-chatted with Nikolay to learn how he is navigating the current situation and also the impact that the crisis has on the logistics industry globally.
In your 25+ years of leading Econt, you have weathered a few crises already. How is this one different from previous ones and how can companies best respond to it?
Let’s first define what is a crisis from the perspective of business – a crisis is any situation that you have not foreseen, which you have no control over and which affects abruptly the parameters of your business. In this way, this crisis is no different than any other one.
The key to successfully go through the stormy period is to be prepared in advance – if you start preparing for dealing with the situation once it is already at hand, then you are too late. The first thing any entrepreneur should do, once he establishes his company, is to setup the business in a way that can successfully react to any changes in the market. This strategic planning makes all the difference. I will give an example with my favorite sport– the enduro type of off-road motorcycle racing. The parameters of this riding are very arrogant and brutal as you go through mud, water, rocks and ridges. Yet, these extremes are not a surprise since you consciously go up the mountain and you are expecting the harsh conditions. The motorcycle for this riding is smartly built to successfully deal with these conditions and hence, you have no problems dealing with the ride successfully. In a similar way, a business is also a machine that needs to dynamically manage the capacities of its resources and processes as a response to changes in the market. I believe in Econt we have found the formula on how to do this well and we have managed fine through all crises in the past 27 years. We have a contingency plan for absolutely any situation so that the business does not find itself at risk.
Is the global Logistics industry already affected by the crisis?
If we look historically on a global level at various crises, it is evident that the transport and logistics industry has a lag of about 5 years. So we do not expect any radical changes in the next 5 years as ours is quite an inert industry. What is crucial during such situations, including at extreme conditions such as wars, is deliveries to and communication with the population as well infrastructure in regards to medical and sanitary support. Before, during, and after a crisis there is always a need for couriers. This need will get even bigger with time as more and more the geographically spread communities become interconnected. Now, when many countries’ borders are blocked, many realize the need for logistics solutions. Overlooked transport options, such as through the railroad, are now appreciated again – we just have to remember history and know logistics. The solutions are out there.
What will change in the industry, is that demands for timely deliveries will become more definitive. Companies in our sphere that still have an excuse why they delay shipments from time to time will be completely out of the game soon. The global economy will not tolerate compromises with quality or time in logistics as everyone values every cent and every minute.
How does Econt deal with the current situation?
The switch in the overall environment in the past weeks has led to changes in the behavior of our clients and we adjust accordingly. As part of Econt, we have a team that continuously scans and analyzes any changes so that we can then take strategic decisions on managing the new situation in a way that is effective for all stakeholders. We have in-house experts as well as outside partners who are specialists on statistics and behavior analysis. This is not something new, but rather part of our everyday business. Hence, on a local level we do not have changes to the rhythm of our business, with the exception of course of building sanitary norms into a cult. We managed to implement the highest hygienic norms within 24 hours of the announcement of state of emergency and we make absolutely no compromises on this.
In terms of HR and organization, there haven’t been any changes in the past month. This is because about 10 years ago we implemented Toyota’s principle of continuous improvement. We have raised this culture into a cult – everyone works for the optimization of the business, without waiting for a crisis to get to it. That’s why we do not need to make any major readjustments now.
The ratio of delivery to door vs office has changed as more clients prefer to have delivery to their home. This is due to the fact that many people work from home now and prefer to have as minimum contact points with outside people as possible. Another change we noticed is that there are more speculators that we immediately took action against and excluded from our community as we consider protecting the end-client as part of our social responsibility. Also, society has expectations of large companies and look to them to partake in the alleviation of hardships. We take this responsibility seriously and have always been a socially committed business and as such, currently we participate in various campaign where we donate our services for free when deliveries are related to products for medical personnel. Additionally, we researched what the hospital in Ruse needs in terms of equipment, and we donated 250 k leva for its purchase.
We’ve also identified a market need in the past years for digital instruments that allow for contactless deliveries and we’ve been working on this. One such service is the Econtomat, which allows parcels to be dispatched/received at any given time – it works on the principle of a mailbox – you just leave what you want to be sent in the machine and the courier later that day picks it up; same with receiving – you can pick up your parcel without having to be in contact with any person. The current situation validates our hypothesis of the need for quick and contactless delivery. Another such service we started offering 3 months ago is “quick reception,” with which you can prepare everything electronically and just drop off the package to be sent at a box in an Econt office. You do not need to communicate with anyone nor spend any time in lines. This trend has become obvious in the current crisis – we need to digitalize even further. We keep expanding the communication with potential software partners that help us on this journey. Overall, we have to be realists on both the impediments and the opportunities that this crisis presents, both for personal growth and business sustainability.