April
6 -- I get a million pitches to write about professional services companies,
health firms, staffing services and consultants. But a lawn mower manufacturer?
In Washington’s back yard?
It
conjured up romantic images of Henry Ford-like industrialists strutting through
their factories, building fortunes, commanding legions of blue-collar workers.
Then
I interviewed William Wright, a 58-year-old tinkerer and inventor who had to
raise millions, mortgage his home, fire dozens of workers, iron out a million
mechanical problems and fight off a financial crisis to give birth to his
vision of the perfect — and profitable — lawn mower.
The
Frederick, Md., manufacturer’s sales dropped by more than a third in three
months and stayed there for a year during the Great Recession. The company went
into the red. Cash was drying up. Banks were not lending.
Chief
executive Wright went into cost-cutting mode, slashing head count from 125
employees to 75. The layoffs left him with a lean, highly motivated workforce,
“the best of the best,” said the former Volvo mechanic.
Thanks
to those moves and to a resurgent economy, Wright Manufacturing came out the
other end of the Great Recession a leaner, stronger company. It expects to ring
up more than $40 million in sales this year and produce enough profit to send
its 22 investors a monthly dividend.
Nearly
85 percent of its 170 employees are factory workers, turning out between 600 and
800 lawn mowers a month. The machines sell for $7,000 to $11,000 apiece,
depending on size and horsepower. Most Wright lawn mowers are known by a
distinctive perch that allows the operator to ride standing at the back.
The
company’s lawn mowers are sold to dealers across the United States and Europe.
Wright’s best markets are Massachusetts, Florida, Chicago and Kansas City.
Wright also makes mowers sold under the John Deere brand.
Wright
would not provide the scope of his profit except to say, “We make a serious
margin.”
He
said the company’s edge is its ability to keep warranty claims to about 1
percent of revenue. The industry average is 2 percent.
“We
went through skin, muscle and bone and were left with an amazing team. We had a
lot of brain power. We got rid of costly traditions. We gave people permission
to improve their work.”
The
company encouraged workers to share training tips, including more efficient
ways to perform the same tasks. Basic things such as new ways to store tools
became part of the company’s “goof proofing” campaign to reduce mistakes.
“If
you wait for management, it may take years to get done,” said Wright. “But the
workers come up with more, smaller ideas, more frequently and get [them]
implemented faster.”
During
the recession, Wright’s managers became fanatics about hiring, looking for
highly motivated employees.
“We
don’t take weak employees,” the founder said.
The
company increased its hiring standards. Prospective hires are interviewed by
three Wright employees, who must unanimously agree to make the hire.
Prospective employees must also tour the plant and meet people so they get a
taste of the culture.
“We
are careful,” Wright said. “We are extremely selective. We got paranoid about
hiring good people. We hire for attitude and aptitude, not prior experience or
credentials. We like to train for the jobs in-house.”
Take
the all-important welders. Each lawn mower has hundreds of parts that must be
skillfully welded so the machine holds together. Because of the skill and
training involved, welders tend to be higher paid than other factory employees,
earning between $14 and $18 per hour, depending on their skill and
productivity.
But
Wright didn’t necessarily want longtime, skilled welders. He wanted young,
inexperienced — less expensive — laborers whom he could mold into Wright
Manufacturing employees.
“We
would rather have somebody who worked at McDonald’s and has good character and
work ethic and teach them how to weld,” he said. So Wright instituted a welding
school to train workers from scratch.
Wright
grew up north of New York City, and after a year of studying engineering at
Clarkson College, he quit to go to a small Florida college.
He
started off his professional life three decades ago repairing Volvos in the Baltimore-Washington
area. In his spare time, he and his wife began a lawn mowing business to make
extra cash.
Wright
loves tinkering with gadgets, and around 1983 he decided to build an all-metal
grass catcher to attach to his lawn mower. He then approached a local lawn
mower dealer about selling his contraption. The dealer sold 200 Wright-made
grass catchers the first summer.
Making
such a small number of the accessories was not yielding enough profit, so
Wright rented a 1,200-square-foot space in Gaithersburg, bought a welding
machine and scaled up his grass catcher manufacturing.
“We
could make them cheaper if we could make more of them,” he said.
He
recruited 400 dealers across the United States, charging $300 each for
customized grass catchers that fit more than a dozen different mowers.
He
also designed and built a “sulky,” which allowed the person operating the lawn
mower to ride standing at the back.
As
the business was getting off the ground, he could fall back on other revenue
streams. Wright’s lawn mowing enterprise had grown into a $1 million-a-year
operation, with 12 trucks, 500 customers — mostly Potomac homeowners — and
netting him a $200,000 a year living. He had learned computer programming
during his one-year stint at Clarkson, so he put that to work in 1983 by
writing software that helped keep track of his mowing service.
As
his manufacturing business grew, he decided he wanted to build not just grass
catchers but the entire mower. He sold the software business for $125,000 in
1993. The same year, he sold the lawn mowing business for a six-figure profit.
He
still needed more money. He mortgaged his multimillion-dollar home, twice. He
contacted friends and others through word of mouth, raising between $1.5
million and $2 million. He took out bank loans and maxed out his credit cards.
“When
you are an entrepreneur, you get creative and desperate at the same time,”
Wright said.
The
first year he made mowers, he lost $18,000, and the business grew in fits and
starts after that, turning a profit one year, then losing money. Wright
struggled to control its warranty costs and figure out a price that allowed
both the company and its dealers to turn a profit.
Over
the past three years, though, Wright Manufacturing has hit its stride, turning
its 20 investors into happy campers.
“You
work on every angle until one day, you sort of come out of the woods,” said
Wright, who owns 57 percent of the company. “Running a business means
eliminating as many problems as you can. You always have problems. But when
enough parts start to work well . . .
the profits start rolling in.”
