If your company has been around for a while, at some point it may need a significant change in its legal or organizational structure, or both. There can be great payoffs to change, but there are also significant risks.
This week we welcome Noah McNeely of Product QuickStart, and one of his clients, Kristi Gorinas of Defendables and The Go With Me Chair. I’ve known Noah for years. I met him when he was at the helm of Slingshot Product Development Group. He led that company through the market downturn that happened in 2008, and has built it in the years since. Recently, Noah realized that it was time for major structural changes at Slingshot. With the help of his partners and team, he divided Slingshot into three more targeted companies, with Noah now at the helm of Product Quick Start.
Product QuickStart is a product design, development, engineering and manufacturing company. They focus exclusively on early-stage companies, small companies, startups and inventor entrepreneurs.
I thought today would be a great opportunity to focus on when, why and how to restructure a mid-sized company, and learn from Noah’s success.
Do it For the Right Reasons
Undertaking a restructure is no small task, whether it’s organizational, structural, or both. There are great reasons to do it, but the first step is to take a good solid look around you and see if the signs you are seeing are signs for change.
Issue: You are no longer doing what you love. Noah and his partner started Slingshot Product Development Group 16 years ago. It was a two-person operation that grew to 35 people. They worked in manufacturing and with entrepreneurs, as well as with larger clients like Procter & Gamble, Black & Decker and Schick. As the company grew, Noah’s role in the company changed. He explained, “Managing 30-40 people leaves very little room to do innovation or product design, or work with clients, which was always my passion, and was the reason I got into the business to start with.” For Noah, getting back to the work he loved doing was a big motivation to make changes.
Take a look around you. When you’re trying to do too many things with the same team, or using one-size-fits-all processes, people generally aren’t satisfied with their work life. We’ve had plenty of articles on the importance of keeping your team happy, and seeing them struggling is a strong sign that things need to change.
Solution: Keep yourself, your team and their interests in focus as you restructure. Noah and a small team broke off into Product QuickStart with a focus on doing the kind of work Noah loves. When Slingshot began to restructure, team members were asked which part of the company they wanted to focus on. Most were happy to choose the company aspect that was most important to them. A few were not interested in moving in any of the three directions, and Noah and his team focused on finding them positions with other companies. It was an amicable restructuring, because they took the entire team, and their interests, into account.
Issue: Your target market is too broad. Before she started working with Noah, Kristi was working with a larger product development firm. She was one of the firms smaller clients, and felt that she was at the bottom of their list. It would take her days to get a phone call returned, and her product fell behind schedule. Kristi says, “There’s nothing I could do but follow-up, and follow-up, and be pest, and then they start not liking you because you’re pestering them. So I needed to move it to somebody that had more focus on the inventor and the entrepreneur.” One of the motivations for Noah to split Slingshot into several smaller companies was to be able to effectively serve customers like Kristi.
Solution: Get to know the customers you are serving, and the difference you want to make for them. In choosing to work with a specific kind of customer, Noah also decided what he wanted to bring to the industry. He decided he wanted to be a positive force, and that he was in it to help customers create success stories. With that in mind, he says he turns away more clients than he takes on. If he believes that the product isn’t viable, or that the potential client has unrealistic expectations, he will do his best to steer them in a direction he feels is more beneficial to them, rather than taking them on as a client.
Issue: Your systems no longer fit your needs. As Slingshot grew in different directions, the processes that had worked for a smaller company no longer fit. Noah says, “We learned that our company was really a collection of several small companies.” They were spread between manufacturing, R&D scientific projects, serving large businesses, and serving smaller start-ups and early stage companies. “What we were doing, in retrospect, was we had these oddly shaped pegs, and we were trying to squeeze them all through the same little round hole.” They found themselves in a situation where their processes and branding were not optimized for every area they were trying to cover.
Solution: As you restructure, identify each target demographic, and create systems to fit their specific needs. Noah says that in order to serve the Product QuickStart target customer, they boiled the processes that they use for larger companies down to the basics, giving their entrepreneurial and start-up clients what they needed to enter the market and create the first phase of growth.
Issue: The industry has changed. This isn’t always a bad thing. Often changes bring more opportunities to the table, and the experience of missing opportunities can also be a reason to change. The industry has gone through many fluctuations since Slingshot began 16 years ago. One of the major changes is that it is easier in today’s market for startups and inventor entrepreneurs to survive. That makes it more realistic for Noah to pursue his own passion of helping them succeed.
Solution: Stay aware and be strategic. This is where a great long-term strategic plan can come in. If you know where you want to end up, ultimately you’ll be more aware of the market changes that make that possible. You’ll also be more likely to see those changes coming.
When Noah realized that a change was in the cards, he met with his Board of Directors and Regional Partner. Together, they restructured themselves as a parent organization overseeing several smaller organizations. The change was gradual. After making changes to the overall structure, they continued to co-habitate for a while, until it made sense to move out on their own. They found, after a while, that it was difficult to fully rebrand as distinct companies while operating under the same roof.
Noah explains, “We took baby steps at first. Each of these entities started out as a DBA of the parent company. And over the course of the last couple of years, each of these organizations has become its own independent LLC… the real key is to work on those gray areas between the companies, and make sure everyone understands what their business is so they can focus on it very, very well. We’ve done a really good job of that.”
The change has worked out well for the company, as well as for Noah, who is back to doing what he loves. For customers like Krisi, the change works, too. She says, “It’s important to me because they’re focusing more on the smaller company, and one person inventors, and they fit my needs perfectly as Product QuickStart.”
As a CEO and as a leader, your choices make a difference to others. The choices Noah and his team made to restructure have made a difference that reaches far beyond themselves, and affects the industry at large. By following his own passion, Noah makes it possible for entrepreneurs like Kristi to succeed as well.