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The Aha Moment: Scaling Your Business Without Sacrificing Quality

Peter Janis explores the challenge of scaling your pro audio business without sacrificing quality.

A few years ago, while I was traveling to the United States from Canada, the border officer asked what I did for a living. I told him that I manufactured electronic products in Canada. He said, “No, you don’t. No one builds electronics in Canada.”

Although that’s somewhat true, not only were we able to pull off such an impossible feat, we managed to do it competitively. Radial Engineering twice made it to Profit magazine’s Top 100 fastest growing companies in Canada, and in 2016 we won the British Columbia Export Award. We built our first DI box in 1996, and over the years, we grew production to the point where we shipped about 100,000 electronics products a year. In my view, we achieved this by delivering exceptional quality day in, day out.

Growing steadily without sacrificing quality is not easy and there are certainly plenty of challenges along the way. The old adage “People are your biggest asset” is almost right. More to the point, you need good people to grow your firm. Good people love challenges, prefer to be in control of their departments, and love to prove that they are able to deliver. Good people will “pull the chain to stop the conveyer belt” when something is not quite right instead of simply allowing it to go through the process. Good people will also root out employees who have a bad attitude or are not carrying their weight. You can train a person with a great attitude, but you cannot turn a miserable soul into a good employee. Good employees have pride in what they do and are able to deliver the quality that makes your products or services stand out. In a labor market where unemployment is low, finding good people is all the more difficult. Even though it is frustrating, you are much better off to wait until you find the right person instead of simply hiring a warm body. This, in fact, is the Aha Moment.

During Radial management meetings, I would sometimes announce, “Radial is a sales and marketing company.” Other times I would say, “We are a manufacturer,” and still other times I’d proclaim that we were a logistics company. The truth is, we were all of those. Without sales and marketing, you have no income and cannot produce, pay bills or hire staff. To put it in sports terms, we labeled sales and marketing as our offense, while administration, manufacturing and shipping were our defense.

But more often than not, I would proclaim that we were a logistics company. Toyota changed the way most companies produce by instituting just-in-time (JIT) manufacturing. Toyota and Ford do not manufacture windshields, car seats or brake pads; they buy them from specialty manufacturers. Big companies use sophisticated MRP (Materials Requirements Planning) software to schedule and order parts so that they arrive only when needed and do not waste space on factory floors.

Similarly, we planned production using a spreadsheet and relied on our purchasing department and inventory management software to ensure supplies arrived on time. We used various sub-assembly houses and manufacturers that were much more efficient at stuffing circuit boards, worked with metal shops that had robotics, purchased transformers from qualified manufacturers, brought in all of the parts and did final assembly in-house. Our purchasing department was Radial’s central nervous system, and Susan Smith, who ran the department, was an absolute star.

The beauty of JIT manufacturing is that it enabled us to scale production as needed. Specialty subcontractors allowed us to increase or decrease production levels without having to deal with hiring, training or laying off staff based on demand. By employing multiple suppliers (second sourcing), we could increase production at one facility if the other was unable to deliver. This ensured stable pricing, as everyone knew there was another player in the game. With careful due diligence, we scrutinized subcontractors by having them produce samples and clearly defined our expectations. They knew that if a product was not 100 percent, it would be returned.

Although most of our production was done in Canada, we also purchased product offshore. Primacoustic panels, for instance, came from China, as the cost to individually wrap each panel was simply too high in Canada to fit our mass production model. It took working through three different factories and multiple trips to visit the factories in China before we found one that could deliver a consistently high quality product on time. Over the years, we figured out how to work with offshore companies so that they would deliver quality without our having to station one of our staff at the factory. Doing business offshore requires building relationships and, once again, finding good people with whom to do business.

Finding the right people who can power scaling and quality ultimately creates expectations and momentum that will last even in the wake of turnover. Mike Hill, our general manager, would often say, “When my job is done, I am no longer needed.” And he proved it. When I sold the company, he decided to retire, and today the Radial team continues to motor full-steam ahead.