BGC Helps Wade Dynamics Master the "Business" in Business Case Studies
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As any Broadway chorus member knows, talent doesn't always equal fame. And exceptional products or services don't guarantee business growth. This was the situation facing Pete Wade, Vice-President of Wade Dynamics, Inc., a Cleveland-based machine balancing shop. Despite 40 years of expertly servicing machines for manufacturers, schools, universities, hospitals, and other major customers, the company wasn't prospering. "We had a lot of work," said Pete Wade, "but we weren't really making money." He and his dad, company president Dennis Wade, knew their business had far more potential than its balance sheet suggested. By offering both in-shop and on-site balancing in addition to a high-tech metal spraying process, Wade Dynamics had the capability to balance 100 percent of the jobs it found. The trouble lay in finding the jobs.
Wade Dynamics epitomizes the American family business. Founded in 1963 by Conward "Grandpa" Wade as a broken tool removal shop, the company doubled in size during its first year following Con's purchase of a dynamic balancing machine. Business was steady until the early '70s when Con's son, Dennis, heard about the new technology of metallizing. This involved the spraying of metal powder onto the surface of a damaged or worn part for repair, thus saving the customer from buying a new part, or in some cases, a whole new machine. Metallizing offered excellent durability and simplified the balancing of fans and rolls. Realizing they could provide an essential service for customers and augment their company's capabilities, the Wades split their business between dynamic balancing and metallizing, and the company thrived for two decades. In 1994, Pete Wade began working full-time for his family's company and soon made his own mark on the business. Determined to find a metallizing technology that produced a harder, chemical-resistant coating, Pete discovered HVOF, an advanced process (inspired by an F-16 jet engine) that shoots metal powder at Mach-13 speed. The acceleration causes the particles to smash together and bond at microscopic levels, producing denser, harder, and more durable coatings — a machine owner's dream. The technology allowed Wade Dynamics "to provide a service to our customers that is unmatched," said Pete Wade. By 2003, nearly a decade after acquiring HVOF, Wade Dynamics outshone its competitors, based on capabilities … yet the business wasn't growing. Pete and Dennis Wade were tired of waiting in the wings. It was time to take center stage, and the Wades called Andy Birol for help.
THE BGC SOLUTION:
Pete Wade recalls his family's first meeting with Andy with a kind of rueful fondness. "He tore us up," said Wade with a laugh. "We all shed a few tears that night." Andy quickly ascertained that the Wade family, in building its technological supremacy, had relied on the company's expertise to gain new business, rather than doing the hard work of finding, keeping, and growing customers themselves. At their first meeting, Andy asked them why they weren't already multi-billionaires. "He really put things in perspective for us," said Pete Wade. To run a successful business, the Wades had to become better at the business side of the company, not just the technical capabilities. Andy worked with the Wades, including Dennis, Pete, and their wives, Denise and Beth, the company's secretary and treasurer, in the following areas:
Marketing: Andy advised the Wades to get serious about marketing their company. Although the company had tried salespeople, advertising, and mailings in the past, nothing really seemed to bring in customers. "Andy helped us see that we need to be more proactive in meeting people and networking," said Pete Wade, "something we'd never done." Having earned their reputation, Pete and his family worked with Andy on self-marketing techniques and even attended a COSE conference to make contacts.
Targeting Best Customers: One of the first tasks Andy gave the Wades was to create a three-year spreadsheet, noting each customer and contact name, the amount the customer spent, the nature of the job, and the actual profit they received. It was an eye-opener; some of Wade Dynamics' "best" customers contributed very little to the company's bottom line. "Just because we had a lot of work didn't mean we were successful," said Pete Wade. "Instead of taking all the business we could get, we've learned to look for customers that will get us what we want in our business." With Andy's help, they developed a standardized pricing system based on getting proper specifications from each customer to cut down on the risk of over-delivering their services.
Building Customer Relationships: Andy emphasized the importance of customer contact and service. First, he showed the Wades how to use the company newsletter to provide useful information, gaining customer loyalty and respect. "Before, it sounded like a sales pitch," admitted Pete Wade. "Now we try to help our customers with their jobs." Furthermore, Andy helped them focus on solving the problems of their customers, not just the machinery. "He told us we cared more about the machines than the people, and that wasn't good for the business," noted Wade. "People want the sit-down, 'how ya doin?' type of stuff," said Wade. "And now that's what we try to give them."
Developing a Succession Plan: Having spent more than thirty years with the company, Dennis and Denise were looking forward to days of peace and quiet, but they weren't ready to step into the wings immediately. With Andy's guidance, the Wades agreed to grow their business to the next level before Dennis and Denise retire, and they have developed an action plan to meet those goals by 2007. "Hopefully, it will be sooner," said Pete, future president of Wade Dynamics. "We're all working really hard to get the business where we want so they can leave when they want."
At their initial meeting, Andy helped the Wades reach the dramatic decision to achieve profitability or close the shop within three months. "I think he knew we wouldn't be closing," said Pete Wade. Andy proved his worth almost immediately when he helped the Wades locate billing errors that netted them $2500. With a succession plan in place, everyone feels comfortable with the company's legacy and the way they are shaping its future. Pete Wade credits Andy with inspiring this new vision. "He helped us look at our business in a way we never did before," said Wade, "whether we didn't know how to look at it or didn't take the time … He taught us how to take off the blinders we had on for so many years." With no more talk of closing up shop, the Wades are committed to working with Andy to achieve sustained growth. "We all highly recommend Andy's services," said Pete Wade. "He definitely knows what companies have to do to change with the times." Working with BGC, said Wade, was "eye opening — even somewhat shocking, because Andy's so confident … He's somebody who knows exactly what needs to be done."
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