August 17, 1998 Design News
MANAGING DESIGN
Tips on guiding product development
Design for survival
Brad Wendt, President
Design Concepts Inc.
Madison, WI
An article of faith in engineering and design is that
we never lose sight of the basics. We learn early that
a mechanical device will hold up over time and under
stress only if its author has embraced such fundamentals
as proportion and balance of simplicity, quality, and
serviceability. At Design Concepts Inc., we were thrust
into a situation that eventually gave us new confidence
in our own abilities. If your company faces a life-threatening
business crisis like ours, get down to basics quickly
and leave nothing to chance.
My father, David Wendt, founded Design Concepts Inc.
as a design and product development company in 1970.
We've grown steadily, and now our employees work with
major players in world markets. In 1995, we were looking
toward the close of a successful year. Two challenges
plunged us overnight into a survival crisis.
Crises. The first challenge hit December
15, 1995, when two key managers walked into my office
and resigned to enter business for themselves--with
a Design Concepts client and proposal information in
hand. Three other staff members and a sales agent soon
followed, in a coordinated defection. Two weeks later
Design Concepts Inc. founder and chairman David Wendt
suffered a stroke while skiing and fell into a coma.
He did not recover from the coma and died one week later.
Very rapidly, the company had lost 33% of its billing
capacity, faced spirited competition, and felt the loss
of project assignments from clients. Internally, ongoing
projects were at risk, with eight professional staff
members suddenly forced to work without direct supervision.
Morale was a pressing concern; employees were apprehensive.
The company that David Wendt had built now faced a very
real threat to its life without his guidance or a management
transition period.
Resolution. Management adopted a three-point
strategy. It would focus on the core business, delegate
downward, and recruit aggressively.
Early on, the team closed a Florida branch operation
and an ancillary company in Wisconsin. Managers met
extensively with clients to shore up goodwill and to
reassure them that design programs in progress were
being managed without relaxation of time and quality
standards.
Staff members carried unusually heavy loads, often
working long hours without direct supervision, and at
times taking on management-level tasks and responsibilities.
Meanwhile, we attracted two key managers. In total,
Design Concepts lost six people and hired seven.
The three-part strategy emphasizing the basics was
clearly successful. Beyond merely surviving, we came
through the crisis better off in several ways. Sales
and profits for 1996 and 1997 were up substantially.
We now have up to 30 employees. Our work has expanded
geographically to include our first major project in
China, and we're working in a much greater variety of
SIC codes. While part of this is due to having moved
so aggressively to make up the lost core business, we
also know we're doing a better job of managing projects
and serving customers, as measured by repeat business.
One additional benefit doesn't show up on the books.
The people who stayed say that Design Concepts is now
a fun place to work.
In 1997, Design Concepts Inc., was awarded
a Blue Chip Initiative Award by the U.S. Chamber of
Commerce.
Q: It's difficult to argue against the logic
of planning before a crisis, but for a small company,
how realistic is it to plan for the unthinkable? And
where do we start?
A: Begin by saying you're not going
to commit massive amounts of time and resources to creating
a plan. Then imagine the worst two or three things that
couldhappen, and try to figure what you
would do if one of them did happen. Decide what is actually
essential to your company, have a backup strategy for
each essential operation, and a succession path for
every function.
As to it being realistic, crisis planning can make
a terrific subject for an in-house seminar, because
it requires managers to prioritize tasks and functions
according to their contribution to the company. A crisis
plan might suggest more effective day-to-day allocation
of your resources.
Q: How can a small company protect itself against
the sort of crisis that is caused by the sudden resignation
of key personnel?
A: Two ways. First, have a succession
track for every position and make grooming what I call
a "strong second" part of every manager's
job. If you do this openly and candidly, from the beginning,
it shouldn't be a problem, especially if you make it
a part of the ongoing crisis plan.
Second, and this is more difficult and more important,
try to make your company a place where people want to
stay, or when they want to move on, to leave with grace.
As long as we have a free society, people will be changing
jobs for one reason or another. When a staff member
or manager wants to move for career advancement or geographical
change, or whatever reason, that person should be able
do so with management's blessing.
Fax your management questions to Design
News at (617) 558-4402 or e-mail your question to dn@cahners.com
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