DeFehr on why bigness does and doesn't matter
By Michael Knell, Canadian correspondent -- Furniture Today, December 16, 2001
Art DeFehr is one of the smartest people I know. During a panel discussion at our Leadership Conference, he made some of the most insightful comments I've heard about this industry.
For those of you who don't know, Art is president and CEO of Palliser, Canada's second-largest furniture maker. The question before the panel: Do the really big furniture manufacturers, of which there currently are less than a handful, have a better chance of survival than their smaller competitors? Art says no, and his arguments are compelling.
In recent years, almost every sector of the economy has been consolidating, creating behemoths that crush competitors through sheer weight. This drive toward bigness, Art said, rests on four factors, only one of which is relevant to the furniture industry. They are:
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The need to achieve technical or design dominance. While important to companies such as Microsoft, it's not a big factor in our industry, where knock-offs are a way of life.
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The need to establish market access control. There are few barriers to entry into the furniture industry, so this doesn't affect us.
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The need to create brand name dominance. There are few true brand names in this industry, and getting bigger doesn't guarantee this will be achieved.
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The need to create financial strength. This has some relevance. Getting bigger often means achieving certain efficiencies, but they also can be found without getting big.
So what is the most important factor behind the furniture industry's drive to bigness? "More than in just about any other industry I know," Art said, "our industry is personality driven."
What often is a company's greatest strength is its greatest weakness as well. "The ego factor does the most damage," he said. Most furniture companies' success is driven by the vision and passion of one person. When he or she leaves, the company's fortunes decline.
Since Art amd Palliser are so closely linked, I asked him after the session how he was faring at keeping his ego out of the company. After a bit of bantering, his answer was twofold. First, his interests outside the company — he's involved in many humanitarian causes — give him a sense of balance. Second, he is mentoring the next personality to drive Palliser, his son-in-law Peter Teilmann, now vice president of sales and marketing.
Slowly but surely, Peter's vision is permeating the company, and Art is confident that when the day comes for him to move on, the company will not falter.
Size may help, but size may not matter. What does matter is vision and drive. So long as a company has these, and manages to renew them, it will both survive and thrive. Since the overall theme of the conference was "Survival of the Fittest," those are apt observations indeed.
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