Design World

  • Home
  • Technologies
    • 3D CAD
    • Electronics • electrical
    • Fastening & Joining
    • Factory automation
    • Linear Motion
    • Motion Control
    • Test & Measurement
    • Sensors
    • Fluid power
  • Learn
    • Ebooks / Tech Tips
    • Engineering Week
    • Future of Design Engineering
    • MC² Motion Control Classrooms
    • Podcasts
    • Videos
    • Webinars
  • LEAP AWARDS
  • Leadership
    • 2022 Voting
    • 2021 Winners
  • Design Guide Library
  • Resources
    • 3D Cad Models
      • PARTsolutions
      • TraceParts
    • Digital Issues
      • Design World
      • EE World
    • Women in Engineering
  • Supplier Listings

How to maximize results and ruin a business

By Lee Teschler | November 5, 2020

Share

Teschler on Topic

Leland Teschler • Executive Editor

[email protected]

I once worked for a company whose business was a mix of publications and trade shows. The trade shows made a lot of money. The publications were profitable, but not nearly as much as the shows. That made those of us writing for the company’s magazines and websites a little like second-class citizens. We had no clout or resources, and the trade show folks often treated us like we had IQs ten points lower than theirs.

I eventually left this sorry situation, but I kept tabs on my old employer. The company was eventually sold to a LTeschlerTHfirm whose overwhelming majority of revenues came from running industrial trade shows. This outfit couldn’t wait to dump the publications and websites that came with the acquisition. That left them even more heavily invested in the trade show business, which was their goal all along.

All this transpired just before Covid hit. If you are familiar with the current state of exhibitions and public events, you can probably guess what happened next. With few other business lines to cushion the fall, the company went from a first-half operating profit last year of $321 million to a first-half operating loss this year of $957 million. Massive layoffs have ensued. The word bloodbath comes to mind.

These results probably wouldn’t surprise University of Toronto Professor Roger L. Martin. Martin is an outspoken proponent of the idea that the single-minded quest for growth–as practiced by the money-losing trade show company—is a pretty dumb idea. “Judging company performance solely on the basis of short-term shareholder value increase has caused executives to give short shrift to long-term stewardship of their employees, communities, and the environment,” he says.

Martin also blames this lack of balance partly for the big divide between the working class and the well off. “Unconstrained pursuit of labor-cost efficiency has left tens of millions of American workers earning less than a living wage while the top 1% achieve unprecedented wealth,” he says. He doesn’t see the situation getting better so long as “business, economics, and public-policy schools still teach the importance of a singular objective function…And it isn’t going to happen as long as reward systems are geared around achieving singular goals–like achieving this year’s budget, which is still the dominant goal in much of American public and private-sector life.”

Interestingly, basic engineering practice illustrates the downside of running a business according to the theories Prof. Martin rails against. Suppose you set out to design a circuit or a suspension bridge. If you subscribed to the maximum optimization theory prevalent in business today, you’d build in no cushion whatsoever to handle loads even slightly larger than the design maximum. After all, adding capacity above what’s necessary could be viewed as spending money on unused resources. Business schools teach that the presence of unused resources is a situation that good managers must avoid or risk termination.

Of course, an engineer who allowed no safety margin in the interest of efficiency wouldn’t be designing products for long. But a manager running a business this way might wind up keynoting the consumer CES show—if the trade show business wasn’t in shambles. DW

You may also like:

  • Empty facial tissue shelves (49665872561).jpg via Wikipedia
    Lean manufacturing: Another name for just-in-time shortages
  • engineers on wall street
    Does the world need engineers on Wall Street?
  • thermoelectric
    Harnessing waste heat for electrical power
  • fake wiki
    What you think you know that isn’t so — Adventures…
  • 9-11 report
    What 9/11 truthers do during a pandemic

Filed Under: ALL INDUSTRIES, Design World articles

 

Related Articles Read More >

Hirschtick on the cloud, CAD, and the future
china-manufacturing-future-image
Is China’s manufacturing future in trouble?
Drone-mounted inspection breaks barriers for F-35
TriStar, a misunderstood failure of design

DESIGN GUIDE LIBRARY

“motion

Enews Sign Up

Motion Control Classroom

Design World Digital Edition

cover

Browse the most current issue of Design World and back issues in an easy to use high quality format. Clip, share and download with the leading design engineering magazine today.

EDABoard the Forum for Electronics

Top global problem solving EE forum covering Microcontrollers, DSP, Networking, Analog and Digital Design, RF, Power Electronics, PCB Routing and much more

EDABoard: Forum for electronics

Sponsored Content

  • Renishaw next-generation FORTiS™ enclosed linear encoders offer enhanced metrology and reliability for machine tools
  • WAGO’s smartDESIGNER Online Provides Seamless Progression for Projects
  • Epoxy Certified for UL 1203 Standard
  • The Importance of Industrial Cable Resistance to Chemicals and Oils
  • Optimize, streamline and increase production capacity with pallet-handling conveyor systems
  • Global supply needs drive increased manufacturing footprint development

Design World Podcasts

June 12, 2022
How to avoid over engineering a part
See More >
Engineering Exchange

The Engineering Exchange is a global educational networking community for engineers.

Connect, share, and learn today »

Design World
  • Advertising
  • About us
  • Contact
  • Manage your Design World Subscription
  • Subscribe
  • Design World Digital Network
  • Engineering White Papers
  • LEAP AWARDS

Copyright © 2022 WTWH Media LLC. All Rights Reserved. The material on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with the prior written permission of WTWH Media
Privacy Policy | Advertising | About Us

Search Design World

  • Home
  • Technologies
    • 3D CAD
    • Electronics • electrical
    • Fastening & Joining
    • Factory automation
    • Linear Motion
    • Motion Control
    • Test & Measurement
    • Sensors
    • Fluid power
  • Learn
    • Ebooks / Tech Tips
    • Engineering Week
    • Future of Design Engineering
    • MC² Motion Control Classrooms
    • Podcasts
    • Videos
    • Webinars
  • LEAP AWARDS
  • Leadership
    • 2022 Voting
    • 2021 Winners
  • Design Guide Library
  • Resources
    • 3D Cad Models
      • PARTsolutions
      • TraceParts
    • Digital Issues
      • Design World
      • EE World
    • Women in Engineering
  • Supplier Listings