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By Design (Crown, the BMW of forklifts)

By Design: The Story of Crown Equipment


("The BMW of Forklifts" ~ Forbes.com)

by Pat McNees

The compelling story of how a small-town firm, Crown Equipment, known for making heat regulators and television antenna rotators, became a major player in the lift truck industry.

From the 1950s through the 1970s, as much as 20 percent of the firm's business was contract manufacturing and repair services for the U.S. military and for private corporations as varied as Baldwin Pianos and IBM. In addition to supporting Crown's overhead and keeping its factories busy, the contract work provided Crown with precision machinery, superb training, greatly increased know-how in important areas, and a reputation for quality work. Even a brief period of producing precision-manufactured but low-profit novelty products in the mid-fifties helped Crown develop first-class manufacturing skills and valuable experience and, ultimately, the reputation that went with them.

The contract work together with sales of antenna rotators subsidized the development of what would become Crown's most important product line. By 1959, three years after shipping its first unit, Crown had become a niche producer of small manual fork lifts. For most of its history, Crown was not considered a significant competitor in the lift truck industry. But the firm grew and developed, slowly but steadily, over forty years in the material handling industry, adding products a year at a time until it had a complete line of heavy-duty electric lift trucks. In 1995, fifty years after it opened, Crown owned factories in five countries and branches in eight, and employed thousands of people worldwide. It had become the largest manufacturer of electric material handling equipment in the world and the leader in the narrow-aisle lift truck market.

On one level, this is the story of small-town people working together to develop a world-class product for an international market. But it is also an interesting look at the military-industrial complex. In diversifying weapons production in the years after World War II, the U.S. government helped small rural firms across America's heartland develop the capacity to compete with the big boys in nonmilitary manufacturing.

Finally, it is a story about Jim Dicke, an entrepreneur who could also manage — a man skeptical about the value of college degrees and scornful of desks and three-ring binders (“pure overhead”), who had the knack of converting the can-do spirit of a small farm town into teamwork and company spirit. Crown today dominates its niche in the international lift truck market.

From the text:
"Harold Stammen attributes much of Crown's success to 'luck, perseverance, good management, and dealing with what you have at hand. You work to be successful in the scope of where you are at the time. When Crown recognized that it was in the lift truck business, I'd be surprised if anyone envisioned that Crown would be a major lift truck company some day; I don't think any of us expected that. It was fortunate that Crown stayed a privately held company....we can make big decisions very quickly by just talking to a few people. There are not a lot of stockholders. Large groups of stockholders tend to be reactionary and critical, and want an immediate greater return on investment. There's always pressure to pay out good dividends, which leads to decisions that might be good in the short range but aren't good in the long range — for example, cutting back on capital investments because they need to show a profit this year.' "

"Crown has a constant management style with a long-term philosophy — there is a high level of consistency: steady growth combined with a long-term development strategy. Steady growth is important. Blowing a balloon beyond its acceptable capacity can create an instant problem: The air enters a balloom slowly, but it can exit quickly."

"Jim Sr believed that a company director or owner's most important quality was to be willing to listen to other people, to be willing to accept suggestions, and to be willing to give credit. 'In a business discussion,' he told them, 'if you make a statement and somebody else brings a new thought to the table, you should, one, be ready to accept it and, two, be ready to give them credit for having brought it up. Don't say, 'I don't think we should do that' and two days later have them find out you're doing exactly what they suggested under your handle and your name. That's a good way to kill support and enthusiasm. Most people would say that at Crown we're willing to change our minds, as top management, and give credit to who came up with the suggestion. Many times it's a combination: part of an idea comes from here and part of it comes from there. Then you always have to say 'we': 'We thought this out,' 'We're going to do this,' or 'We came up with this idea.' So many people kill incentives by using the world 'I.'"

"Jim had a knack for talking with people about how things worked. Together they might come up with a better idea of how to do it. As he went through the plant, everybody knew him -- 'Hi Jim'-- and he knew them, by first name. They weren't numbers; they were people. Somehow that meant something more to people than that extra ten cents an hour."

Publisher: Orange Frazer Press

"In a narrative featuring an unlikely cast of characters, we watch this community-based company educate itself to make the upwardly mobile journey to market domination. Demonstrated in scenes and anecdotes, the Crown story teaches fundamental entrepreneurial lessons. The economic parables of Crown's formative decisions provide a unique but universal parallel to any young business anywhere."
~ My Millionaire Bookshelf