Case Study: “Overcoming Challenges and Succeeding in the SME Sector” - Calanna Pharmacies -

1. Case Study:“Overcoming Challenges and Succeeding in the SME Sector”- Calanna Pharmacies - AICD Workshop Cairns 12th October 2012. Mario Calanna

3. The Calanna Journey • Opened my Pharmacy at Woree in 1976 in Calanna Medical Centre • About 18 years ago we extended hours to 7 days 8am to 8pm. • About 15 years ago we introduced complementary medicine and a Naturopath to our portfolio. • In 2000 I purchased the North Cairns Pharmacy from Peter Cominos, moved it to the present location and T/0 has increased about 7 times. • In 2004 we were introduced to HIP – this (as well as Matthew graduating as a Pharmacist) was the turning point in management, leadership and growth of CPG. • Introduced me to Coaching, learning, reading and Turn-Key management (E-Myth and One Minute Manager and Brad Sugars.

4. The Calanna Journey • By 2006 we saw no more value in continuing HIP and launched our “fell alive, feel healthy, feel good……Calanna giving you the Zest for Life” theme. Again this reflected the Calanna Theme since 1976. • In 2006 I won the AIM State owner/manager Award – spurred on the excitement of this direction. • Since then we have purchased a Pharmacy in Innisfail, 1 more in Cairns, 3 in Townsville, 1 on the Gold Coast and Matthew opened his own at Sugar World Edmonton in 2010.

5. Calanna Mission Calanna has always been built on connecting and building relationships with people, providing Total Health Solutions and never being satisfied with the current achievements Adding value to our services and rewarding customers We are on a Journey to Excellence NOT Perfection

6. The Pharmacy Industry • Govt is our biggest customer –– most Pharmacies have a 80:20 split – Calanna aims for a 60:40 ratio • Location rules and legislation protect Pharmacist Ownership by Pharmacists. • 5CPA’s - provided stability and less panic!!! • 25% cuts came in April 2012 – despite our 5th CPA • Lower cost price of PBS Medications – less $GP (10% Mark up + Disp Fee) • Increased products are open sellers • Pfizer entered the wholesale market– 1% loss in discount from all wholesaler purchases

7. Pharmacy & Calanna • Compounded by more CHOICES in Models - discount, online, services, consumer demands • I have never be so certain of our Model, Our Culture, Our Customer connection, Our Leadership and our Significance • Decision – on the vicious cycle or the victor's circle. • Vicious Cycle – find excuses, blame someone, lose focus, look for handouts and subsidies (BED) • Victor’s Cycle – focus on your market, find opportunities, look for ways to improve (OAR)

8. Intersection - Crossroads • Your Model – Your Niche – Your Decision

9. Purpose • Only one real reason to own a business – make money. The aim should be not to buy a job but grow jobs so you can grow and become who you are meant to be. • Need a Dream – something that no one can deter you from – something that drives you. • Must clearly define this Passion to yourself & your team. You must involve them and what they need to achieve - so you can achieve your Dream. • Although profit is the primary motivation and provides times of Happiness and many Successes. You will lack Fulfilment and Significance in your life – if many others are not part of your Dream • Financial success will be empty.

10. Calanna Vision • “To empower people through advice, information & support toward Total Health Solutions giving them the Zest For Life. • ”We want people jumping out of their skins”. • “When I walk into a Calanna Pharmacy I want to feel comfortable and able to trust the person who serves me. I want to hear some laughter, feel some smiles. I want to be greeted with the expectation to be helped. I want to find the solution or the advice or information for my present challenge. I want to be acknowledged. I want to leave the Pharmacy empowered and feeling good about my experience. I want to know I can come back to Calanna and have this same experience time after time”. • Does your business – your workplace - reflect your Purpose and Vision?

11. People and Networks • The Purpose and the Vision are achieved through Leadership and Team morale & Character Values. • Team Members – need a career, need skills • They dictate to a large extent your own Altitude and Reputation • I know Calanna is only as good as its weakest links. • These are most often people. And they must be supported, guided, be accountable, be responsible, be rewarded and be up skilled • HR is really about finding people with the passions that will allow you to achieve your Dream & your culture and have the desire to learn and be better. • You can always learn skills – Attitude is a decision

12. People and Networks • Do they have goals? Do you have goals? Are they shared? • When do you delegate? How do you delegate? Do you delegate and abdicate? • More Customers/Team member – up Loyalty Ladder • Strategic Allies – businesses and disciplines that help all parts of our life – social, family, finance, health, spiritual, emotional. Who can you trust to look after your customers/clients? • Servant Leadership is flat model (a trust between members) with people working together – like overlapping circles

13. SWOT - Strengths • Face to Face dispensing & Pharmacist availability • Servant Leadership Culture – overlapping circles • Total Health Solutions – Zest – Complementary & Holistic • Succession Planning – Empowering people to Lead • Career Path • Desire to learn, to improve and to innovate • Need the Right People - committed to your Brand - are your biggest asset • Fortunately we are able to attract these people

14. SWOT - Weaknesses • Level of Trained Team members/movement of people • Government key customer – CPA and changes • More options for and demands of customers • Technology is a double edged sword – need to maintain the right balance between technology and people. • Loss of focus on our Model with the entry of other bigger players

15. SWOT - Opportunities • Services – CPAP, Chronic Disease Management, Compounding, Prevention • New products • Innovation • Branding – Marketing, Advertising, USP, 5 reasons why, Consistency

16. Branding • Gives your business focus and direction, and enables you to target your ideal audience. • Define your Purpose and your promise to your customers/clients? • Determine your USP - What are the 5 main reasons WHY people should do business with you? • Define your niche.Create a customer experience and expectation. And repeat it every time. • It must be consistently delivered. • Your logo, your whole concept. The Marketing, the Systems, the Protocols – should all be congruent and consistent. • Follow it without compromise.

17. SWOT - Threats • Other Pharmacy models • Supermarkets and open selling products • Online and IT support and Innovation. • Change in Ownership Legislation • Not be valuable enough to the community • What are the Threats to your business? • I believe the biggest ones are inside your four walls!!!!! • Leadership, values, team morale, confidence, reputation

18. Structure - Change Agent • Board – Chairman and family members • Management – CEO, General, Operations, Marketing, Administration, Store Managers, • Have a clear Strategic Plan that is visited monthly and flexible to allow growth & new opportunities. • Turn Key Management & Succession. The more you share and teach. The more empowered everyone becomes. It allows you to work on - and not just in your business • Building leadership – I must continue to stress.

19. Resources • E Myth – Michael Gerber • One Minute Manager Series – Ken Blanchard • Brad Sugars Books • Winston Marsh – www.winstonmarsh.com.au • Andrew Griffiths - 101 ways to do almost anything • Terrific Trading – Jurek Leon – www.terrifictrading.com • Success Magazine – www.success.com • Darren Hardy – www.thecompoundeffect.com • Colin Pearce – www.characterworks.com.au • John Maxwell – www.johnmaxwell.com

20. Roles & Positions • Clearly determine & define the roles needed to achieve your Purpose • Must have defined areas of responsibility, accountability and skills for each position you require • Reward for achievements – encourage them • Provide Career options - • Build a Team Culture - Character • Roles must have succession – there should be backup for all positions for stability and growth • Aim - Fire yourself when you are able to delegate responsibilities – TRUST, SKILLS, ATTITUDE.

21. Systems – Ideas - Decisions The Accountant’s and Auditor’s Mindset • Finance, Marketing, IT, P/L, KPIs, Payroll, Cash Flow • Each Pharmacy is part of CPG and enjoys the benefits of buying power, central Hub that provides Payroll, support, Marketing and Promotional materials • But – Financially/Profitability – each site must stand alone. • Protocols, Systems, Quality Assurance, training • Decisions based on logic, Strategic Plan & calculated risk • IT Communication between all sites is vital – information can be accessed from all sites at anytime.

22. Systems – Ideas - Decisions • What gets measured gets repeated, what gets repeated gets rewarded – our people are rewarded on performance (the agreed wage + % bonus) • 1% changes in many areas compound into big $ changes in the bottom line. • During the past 7 years our GP has increased from 34% to over 40% - huge difference in $GP • Turnover for Vanity – Net Profit for Sanity

23. Action – Success or Failure – Energy!!!! • Achieving Is Doing – skills, role plays, results, checklists – follow the plan • Follow up, team meetings, personal meetings, goal setting, competitions, Public Speaking skills – building confidence and competence. • If want to be the leader of a pack – you should always believe there is someone ahead of you and he/she must be caught. • Apathy, Arrogance and Procrastination are killers. • Five frogs sitting on a log – DO or you do NOT

24. Your Mindset • Value who are and what you do • Do it better and learn how to empower others to be better • Believe in your dream and revisit your Purpose and your Character on a regular basis. • You must have fulfilment as well as a good bank account. • What is success? “Knowing what you want, knowing how to get it, knowing how you keep it, Knowing how to enjoy it” • The most important words are: “The words you say to yourself, about yourself, when you are by yourself”

25. Summary • Coaching and Turn Key Management • Having a USP and a clear Mission/Purpose/Dream • Vicious and Victory’s Cycle • Purpose – Vision – to picture and feel this Vision • People – Servant leadership/ succession/ goals/skills • SWOT • Branding – 5 reasons people should do business with you • Roles and Positions – clearly defined • Systems – to drive and finance all of these • Action – to DO something – Procrastination is a Killer • Mindset and Resources

29. Mario’s Mantra “I wish for you to find your purpose in life: The dream you were born to own and achieve. The dream you will never compromise. The dream that provides your whole being with vitality, and passion. Passion to inspire others to achieve their dream. Passion that will influence you to act with patience, compassion, generosity and humility. I wish for you a legacy of hope and not regret, a legacy of abundance and not scarcity, a legacy of health, inner peace and fulfillment…..”