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October 10, 2004
EIGHT QUESTIONS ABOUT OUTSOURCING AND INNOVATION
Ben Bradley recently sat down with Mark Dronen, CEO of Go! Products
Inc., a manufacturer and marketer of high-end specialty barbeque
grills and toolboxes to talk about testosterone-driven innovation,
cheese shaped hats, and simple outsourcing mistakes.
BRADLEY: Give us some background about Go! Products
DRONEN: I love tailgating, sports, camping and eating. A few years
ago in a parking lot in Indianapolis, I saw a grill that was unlike
anything I had ever seen.
It is hard to explain, but to give you an idea, imagine a high-end
stainless steel grill (four burner grill, removable cooler, marine
grade AM/FM/CB player, USB port, GPS, etc) on a patented scissor
lift chassis. This chassis connects to the tow-hitch of your vehicle
so you can easily transport the grill anywhere. The chassis is wheeled
so the entire grill/cooler combination can be wheeled anywhere with
ease.
It was innovation fueled by testosterone. As a guy who loves to
cook out year round, I immediately fell in love, not only in the
concept, but in the technology and its potential for future products.
So much so, I just had to be a part of it.
When we bought the company, we inherited a manufacturing partner
from the former owners. The grill was manufactured in small lots
and their pricing was out of line with the market. We knew they
couldn’t support us when we grew, in fact, we were starting
to see hints that they wouldn’t be able to support us much
longer. We decided to move manufacturing to China and that’s
when things got interesting.
BRADLEY: What is tailgating and what is the Chinese translation
for it?
DRONEN: Tailgating is a uniquely American phenomenon. To my knowledge,
there is no Chinese word that accurately describes it. How do you
explain it to someone that has never done it? How do you explain
it to someone from China? If you explain it literally (“We
wear identical sweaters and drive to a parking lot with our friends.
Then we decorate our bodies with paint and taunt our enemies who
wear foam slices of cheese on their heads. Then we cook meat with
fire.”) you risk sounding a bit demented in any language.
BRADLEY: So what was the problem?
DRONEN: We knew we our pricing was out of line. We knew the big
box retailers would pound us if we didn’t build a margin for
the channel. Moving manufacturing offshore was a logical alternative.
BRADLEY: Was outsourcing to China the right choice?
DRONEN: Yes it was. But without a doubt, our biggest problem with
outsourcing manufacturing to China was our urgency. Our dealers
were screaming for new products. Our partner in China represented
to us that they could handle the entire product lifecycle. We thought
that included innovative early stage product improvement. It didn’t.
Outsourcing to China was the right alternative. Our problem is that
we went to China too early in our product development cycle.
BRADLEY: Let’s talk more about the product development
cycle. Were there cultural issues?
DRONEN: I think so. Our style is to brainstorm and spend many weeks
looking at all the alternatives on paper. Doing it on paper is cheaper
than doing it with metal. Once we know all the alternatives, it
is easier to begin defining functionality. It is important to remember
that we’re talking about a leisure product for something that
is uniquely American. It is hard to innovate if you don’t
have the context for how a product will be used. If you grew up
with football and tailgating and barbeque, then you have an entire
collection of experience to draw from. If you’ve never taunted
someone who wears a cheese shaped hat, how can you really understand
the tailgating experience? How can you understand the hassles of
transporting a grill? How can you innovate unless you understand
the experience of the product?
BRADLEY: Where did things go wrong?
DRONEN: Looking back, what we really should have done is focused
on product development here in the US. If we would have taken the
time to work on the product design, it would have saved us many
hundreds of thousands of dollars. Then, once we were ready, send
the mass production to China. Things would have been much easier
and cheaper.
BRADLEY: How do you resolve these cultural conflicts?
DRONEN: We’re still working on that.
BRADLEY: What advice do you have for other business owners?
DRONEN: We learned a few things that we’re happy to pass
on.
First, just because someone speaks English doesn’t mean they
understand English. Take the time to help people understand.
Second, email is not a substitute for getting in someone’s
face.
Third, cultural differences can create an extra layer of complexity.
Fourth, complexity is bad.
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CONTACT
Ben Bradley
Managing Director
GrowingCo, Inc.
ben @ growingco.com
Direct: 630-221-9844
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