What's the solution? Look for a new niche, something countercyclical, and hope your reputation can be transferred. So Vermont Castings' management began considering new products: hot tubs and spas, perhaps, a gift line of trivets and thermometers, a gardening-by-mail business.
It didn't make sense to Syme, "but I kept telling myself, 'I can't be right; they have all the management horsepower.' "
While few of the new product lines worked out, they led, logically, to a change in distribution systems that would cut the company off from direct market connections. It made sense to build a strong dealer network: Vermont Castings would need dealers to push those countercyclical products, whatever they might be. And it made sense to move out of mail order, too: cannibalizing your dealers' sales was no way to win their loyalty.
After that, it was a simple question of costs. If you weren't selling directly to customers, why did you need a toll-free number or a newsletter? "Rare and unusual" doesn't show up on a balance sheet.
The Owners' Outing went, too, victim of the same logic. Read the numbers. The party cost Vermont Castings $75,000 a year. Since the company sold some $120,000 worth of product with a 60% gross margin each time, netting $72,000, it would be saving $3,000 a year.
No one planned to end the outing, exactly. But no one approved the list of committee assignments either, or signed off on a budget, and the deadline passed.
There was a new leadership style in place. No more calling your boss by first name; you communicated by memo. No more batting around ideas in the halls; planning moved through a formal process. The spontaneous parties were gone; you couldn't even bring in a six-pack for your department on a Friday afternoon without formal permission. Rare and unusual? Bob Ferguson, head of R&D, started thinking about wearing a tie.
Internally, the company was paralyzed. Endless discussions of administration and procedures produced no agreement; endless memos and planning meetings produced no business plan. The corporate types had run out of ideas; after three years of fighting the culture, they'd run out of will. How do you manage a company where everyone expects to put their two cents in? There was no telling people what to do; you had to convince them. Give them an order with an inadequate explanation, and they would dig in their heels, passive and obstinate at the same time, convinced that they alone knew the Vermont Castings way.
"It was scary to be a middle manager and to feel that you were running the company," remembers direct-sales manager Sandy Levesque. "We had a lot of heads walking around with their chickens cut off."
The flow of new products had stopped, except for cosmetic updates. Bob Ferguson's R&D department spent more than $1.2 million, "but it was all non-stove specific, because we were always so unclear about what the market wanted."
For Syme, watching unhappily from his home in nearby Norwich, it was clear by 1986 that Vermont Castings was "heading for disaster," perhaps in as little as three or four months. In his day they'd turned out a new stove every year and a half or so, but in the five years since Howell's cancer diagnosis, the company had been drifting. Worse, the Environmental Protection Agency was set to announce tough new national emission standards that would force the Defiant, the corporate standard bearer, off the market completely.
So Syme told the board he was going to take active control again. What was there to lose? Sales, profits, margins, and equity were all flat, the market falling, their foundry running at 50% capacity. The cash cow was obsolete, with no new product to replace it -- while an upstart competitor was coming right at them.
Howell had been right: vision wasn't enough. But without vision you don't have anything, Syme argued. The corporate types "weren't malicious; they had been miscast." They'd never understood what made the company special. Vermont Castings wasn't about stoves, it was about values. "A professional manager can't watchdog those. Only the guys who saw them from the start can."
How could the board deny him a chance? He owned 45% of the equity, after all, "so it's my bat and ball."
There was no fanfare when Syme came back to work, no announcement on the assembly plant floor, no speech to rally the troops. He just started showing up in the design shop in the spring of 1986, doodling out ideas, then he followed the stove that emerged through design to production.
Just like in the old days, his presence paid off in product: the Defiant Encore, introduced in July 1986, the new state-of-the-art model, with emissions lower than any federal or state regulations, and far lower than any competitors'. Syme's return paid off in morale and quality control, too. "Seeing Duncan call the shots made people realize that things had changed," Bill Floyd remembers. "The guys on the line enjoyed seeing him walk through again, discussing the problems building stoves, knowing that 'good enough' no longer was."
But Syme had no illusions that his mere presence could be enough, or that he could ever re-create the ball-bearing factory. That dream had died with his partner and best friend. Syme had been aged by the pain and by the exile that followed. But he'd grown up, accepting that the responsibility for Vermont Castings was his. It would not be enough to be a blithe tinkerer; he'd have to learn to lead a team. No more management by instinct; he'd have to consciously reestablish the best of what the old company had had.
The company would have to grow up, too. If it wanted to retain its franchise as the nation's premier stove crafter it would have to find ways to institutionalize product and production excellence, and find a way to reconnect with the market.
Syme wrote the new mission down, a business plan of sorts, the Vermont Castings "Vision Statement," a 21-page meditation on corporate philosophy, assets, and opportunities circulated throughout the company. He started by redefining the basic creed of rare and unusual as "significantly above the average and expected," promising that the goal of the company and all employees would be to provide "an extraordinary life experience in all ways" to customers, community, and self.
