Retired industry veteran Elden Smith, whose name is synonymous with the Fleetwood brand name, feels that “focusing on product quality” is essential to a company’s success, particularly when faced with challenging economic times.
The former senior vice-president of Fleetwood’s RV Group shared his insight during a panel discussion hosted by the Recreation Vehicle Industry Association (RVIA) at its annual meeting in Aspen, Colo.
Smith was joined for the discussion, Managing in Uncertain Times, by Bill Doyle, former president and current chairman emeritus of Western Recreational Vehicles Inc. (WRV), Yakima, Wash., and Mike Larime, former president and COO of Thetford Corp., Ann Arbor, Mich.
“As in real estate,” Smith said, “location, location, location is a key to success. In business, and the recreational vehicle industry in particular, it’s product, product, product. That is the cornerstone. It is the foundation on which our manufacturing businesses, our dealerships, everything that we do is built. Our success is based on the success and the responsiveness of the product we have to offer.”
Smith said it’s critical for manufacturers to always be prepared for any eventuality because the economy and the market environment are always changing.
“When times are good, it’s going to get bad, and when times are bad, it’s going to get good,” he said.
Companies that realize this can have a greater survival rate, riding the crests and valleys.
“This will help you in two ways,” he said. “First of all, while it may be an oversimplification, it keeps you focused in the good times on how you need to be operating for the bad times. And when you are in the bad times, and your sales have gone down 70% in a year, it sustains you in looking forward to the times when things will be better. It keeps hope alive.”
Doyle recalled how he guided WRV through successive economic crises by being prepared on the front end and being adaptive after the tough times set in.
“At the start of the Arab Oil Embargo in 1973,” he said, “there were approximately 20 people who called themselves RV manufacturers in the state of Washington. When the embargo ended, there were only five manufacturers left. They had not prepared themselves. A couple of years later, it was down to three people.”
The situation was compounded by the oil crisis of 1979 and 1980. Doyle said his company developed new, innovative product to survive, introducing the Alpenlite, an aerodynamic fifth-wheel designed for two people.
From Larime’s viewpoint, developing a corporate culture that fosters continuous invention and reinvention is critical to helping a company safeguard its market share in the face of changing economic conditions.
“It takes vision and courage to believe your product is never good enough,” Larime explained. “It takes a totalitarian form of commitment to keep reinventing products that are already successful in the market. It takes a relentless quest for new technologies, almost a blind faith in your ability to extend the state of the art. It takes a passion to expand and enhance current technologies even though the market is not driving you to do so. And it takes a cultivated institutional ability to dream of new products and prophecies that can be spawned by the science of the day – and the energy, courage and, perhaps above all, spirit to bring them to the market.”