"Budgets are made to be busted," is something you hope most CEOs of growing companies believe. Yet that's not the way the story usually goes. Often, the larger a business gets, the more fiscally conservative its leadership becomes. There is, as they say, more to lose.
But for Carey Smith, founder and CEO of Big Ass Solutions, a $122-million manufacturer of colossal fans and light fixtures based in Lexington, Kentucky (to whom you can attribute the above quote on budgets), the flexibility that comes with budget-busting is a necessity for long-term growth.
How long-term is Smith's vision? It is, in all seriousness, a 200-year vision. And that explains why, a few weeks ago, he changed the company name from Big Ass Fans to Big Ass Solutions. On the surface, it was just the change of a noun. It had a practical purpose. For the first time in its history, the company was manufacturing something other than fans. Specifically, the Big Ass High Bay LED fixture was the first product from the new Big Ass Light division.
Beneath the surface, though, the name change reflects the vision of an organization hoping its brand, culture, and values will endure for generations to come.
The Path to Big Ass Fans
This is not Smith's first trip to the name-changing rodeo. In its first few years, the company, which launched in 1999, was called the HVLS Fan Company because its products moved high volumes (HV) of air using low-speed (LS) motors. Smith changed the moniker when his industrial and commerical customers kept referring to the products as "big-ass" fans.
Then, as now, the company sold directly to customers. That is, there was no layer of distributors between Smith and the actual users of the fans. This put the company in an ideal position to learn firsthand what it could do better.
In the early years--what Smith calls a very "hands-on" period with "a lot of running"--most of the customer intelligence went toward improving the fans in every way. What happened gradually was that the company became an engineering powerhouse. It specialized in massive (five to 24 feet in diameter), elegant (award-winning designs) fans that efficiently cool industrial and commercial spaces.
By 2009, Big Ass Fans was a $34-million company that still had plenty of growth potential. The success was wonderful.
But a lingering, long-term question remained: How do you create a company that can endure for 200 years? The answer, of course, is two words that are easier said than done: Talent and culture.
Building a Culture That Fosters Reinvention
Smith has become an expert at screening potential employees for curiosity and positivity. His methods include valuing liberal arts majors (even though his organization reveres engineering and hands-on skills) and being confrontational in job interviews. The impression Smith wants to make is that the company, despite its playful name, is a serious place to work. Immaturity at the right time and place is encouraged. It's called fun. But laziness is not tolerated.
There's a 97-second YouTube video called "Because Not Everybody is a Big Ass Fan" which, in many ways, captures everything you need to know about the company's culture. It opens with voicemail recordings of customers expressing their ire over having received mailings from (what was then known as) BAF, and then segues into a hip-hop melody as two BAF employees dance and gesticulate gangsta-rap style while lip-syncing to the voicemails. The video is more than just a way to let off steam via social media. It reinforces Smith's beliefs about pushing boundaries. (It is certainly not the most sensitive way to treat complaints.)
Of course, it would be one thing if Big Ass Solutions were just a place where curious, positive employees came and stayed for a little while. But Smith has gotten them to stay by creating what amounts to a PARC (formerly known as Xerox PARC) for fan-related technologies. In fact, Big Ass Solutions boasts what it calls the world's only R&D lab for testing large-diameter fans.
Its in-house Skunk Works team, formerly called (no joke) Team "Badonka Donk" but now known as "The Kitchen," is a sub-group of five engineers who are tasked with high-concept thinking and spaghetti-on-the-wall ideation. The company holds 95 patents (with 129 pending) and it routinely allows its engineers to pursue whatever projects they want.
You read that last sentence correctly: Whatever projects they want. Smith says it's routine for the company to hire five new engineers, just to pursue a Kitchen-hatched idea with high potential. "We have a very long horizon," he says. "Everything is flexible." Including hiring budgets. Including diversifying from fans.
Freedom Leads to Innovation
So how does a fan manufacturer become a manufacturer of both fans and lights? It happened late last year, when one of the Kitchen's engineers, 24-year-old Thomas Lesser, was following his own curiosity, and using Smith's generous grants of task-flexibility to pursue exactly what he wanted to pursue.
In this case, Lesser was reaching out to the Mass Design Group in Boston. Years ago, when Mass Design was in the early stages of planning and designing Butaro Hospital in the Burera District of Rwanda, it faced a serious design challenge: To reduce the transmission of airborne diseases like TB. Ventillation is no small part of that equation. Mass Design reached out to Big Ass, who donated a fan to the hospital.
Fast forward to last year. Having read through a company database of recent sales reports, Lesser saw some "curious" notes from Mass Design regarding TB and infection and disease transmission. He dug deeper and read through some of the designers' papers. He noticed that there were several assumptions on air mixing. Given that the organizations had a previous relationship, Lesser figured it couldn't hurt to reach out. Given Big Ass's in-house knowledge about all things ventilation, it was worth examining if they could turn some of those air-mixture assumptions into givens.
Stemming from that collaboration, the Big Ass team began taking a closer look at UV lights, which were used in Butaro Hospital to destroy or inactivate microbes. Big Ass and Mass Design built a test unit including a fan, so they could test if the UV lights were doing that vital job.
All of that testing led to a lot of learning. And a lot of thinking about the possibility of Big Ass manufacturing lights of its own--lights that could stand up to other difficult conditions.
It wasn't long before the company's engineering staff had developed an LED light fixture designed to withstand the rigors of industrial facilities. In a YouTube video illustrating four tests of those rigors, the company shows how its debut light fixture does not crack when a Ford pickup runs it over.
Avoiding the Way of the Railroad
It may seem like a small thing, that a company with in-house engineering capabilities diversified from fans to another product its customers would appreciate.
In reality, it's not that simple. The history of business is littered with examples of companies that fail to recognize or jump on opportunities to capitalize on their capabilities.
Sometimes, it's because an organization is too rigid in defining those capabilities. Theodore Levitt, in a legendary 1960 Harvard Business Review article, criticized the dying railroad industry for this very sin. "They let others take customers away from them because they assumed themselves to be in the railroad business rather than in the transportation business," he writes. "The reason they defined their industry incorrectly was that they were railroad oriented instead of transportation oriented; they were product oriented instead of customer oriented."
Smith did not make this mistake. He did not assume Big Ass to be only in the fans business. He properly took the broader perspective. The company was a provider of engineering solutions.
The new name reflected this. It also enabled Smith to encapsulate more of his long-term vision. "Simply fans is not a vision," he says. "I do not want to suggest that the fans are not going to be a part of what we do. But 50 years from now, it’s probably not going to be mostly a fan company.
"You can't put blinders on like that."