Risky Business: How Sauder Woodworking Company’s Innovative Practices Keep Paying Off
Take it from Kevin Sauder, president and CEO of Sauder Woodworking Company – if you want to keep business operations interesting, useful and profitable, you have to embrace change.
That philosophy has clearly worked for the Archbold, Ohio-based company, which grew from a one-man operation to America’s fifth largest residential furniture manufacturer that employs 3,000 and generates more than $500 million in revenue.
Sauder’s Sept. 28 Fridays at Findlay talk at the University of Findlay, titled “Innovating from Your Core Product,” delivered several key ideas for success that anyone can implement:
- Take risks. In 1934, Erie Sauder began making chicken crates and cabinets in his barn. When a nearby church burned down, he offered to build pews, too. Then, when he got his big break, he accepted an order to build 25,000 tables, even though he didn’t have adequate capital, equipment, or a workforce.
- Establish connections. Erie’s expansion gamble paid off because he knew a few financially successful people who were willing to invest in his venture, and he had an established relationship with a local bank.
- Use everything. Sauder Woodworking’s success has also always been based upon eco-friendly practices. The tables Erie first built were constructed from scrap church pew wood. Today, the company generates about one third of its own electricity by burning residual sawdust, and its products and packaging are made with up to 97 percent recycled material.
- Never stop improving. Even if success is evident, Kevin Sauder said there are always ways to do better. “You’ve got to keep saying, ‘I’m not good enough.’ You’ve got to keep improving,” he maintained. The company encourages its employees to invent, improve upon, strategize and test new products and methods, even if they aren’t initial moneymakers. Years ago, when it was suggested the company deconstruct its tables for better shipping efficiency, it responded, and the ready-to-assemble furniture concept was launched.
- Stay up-to-date with technology. The Sauder family has had its fair share of inventors who have used existing furniture features and revolutionized equipment to transform the furniture-making business, resulting in substantial customer cost savings. By the end of this year, the company expects to begin operating a $16 million automated storage and retrieval system within a 1.4 million square foot warehouse on its Archbold campus, similar to how Amazon.com handles its inventory.
- Diversify. Find ways to create and acquire new products, and hire a variety of workers with all sorts of backgrounds. Sauder’s acquisitions have ensured it no longer has all its product eggs in one basket, and that customer needs are met in areas that others haven’t considered. For instance, the company contracts with office superstores and IKEA. Its partnership with Batesville Casket Company has generated millions. As for the workforce, “When you have a broad range of people, you have better ideas,” said Sauder.
- Step aside if needed. “Don’t be afraid to hire somebody smarter than yourself,” Sauder advised. He also said leaders should be willing to recognize and respond to irrelevance. His grandfather, who invented a very profitable laminate printing line, was the first to suggest the company get rid of it, he said. “That’s innovating. That’s embracing technology,” he noted.
- Be smart about hiring family. Sauder said there are three family rules for working with the company: get the best education possible, work outside of the company for a meaningful period of time and be successful at it, then start at Sauder by applying for an open position and work your way up. “You need to separate the business from the family, and ownership from the management in terms of rights and responsibilities,” he said.
To learn more about Sauder Woodworking Company, visit www.sauder.com.