Remember Mogens Smed? The colourful Calgary entrepreneur made his mark manufacturing high-end office furniture and interiors, before selling out to U.S. giant Haworth Inc. in 2000. Now, he's back with a three-year-old private company, DIRTT Environmental Solutions, which uses advanced software to design, build and organize modular "green" interiors for North American companies. And he's still shooting from the hip about design, labour and manufacturing in Canada.
DIRTT is an acronym for "doing it right this time?" Did you do it wrong before?
Lots of things were wrong. This is my third business career. My first company went bankrupt in 1982. Now I'm 61, and I've got three left in me. I've already got the name registered for my next one. It's called DIPTT, which means "doing it perfect this time," because we haven't done it all right this time either.
We are a manufacturing company in the most inappropriate city in the entire world, Calgary. But there is a genuine need and movement for sustainable products. We didn't get these many millions in sales because we got all misty-eyed about hugging a tree. We did it because we responded to the business issues and the design issues.
Wouldn't you be better off in China?
They can't make this stuff. China is great at making widgets. If you go through our factory, the sheet metal in that corner is made in China, that pole is made in China, this die cast piece is made in China. But everything here is made to what the client wants, to the architect's and designer's vision, and it has to fit into that environment.
So there is a future in manufacturing in Canada?
There absolutely is - if you are using technology as a platform, and if you are not making widgets. One thing about these [emerging] societies, they have no concept on how to go to market. They have no desire to do one-off, three-off or five-off orders. But here it's all individual pieces.
We also have to be realistic. If this were 10 years ago, you know what I would have done? I would have found a way to add another 500 people. The fact we have only 400 people was born of necessity. In the old days we solved our problems by throwing more bodies at them. Now we are forced to get smarter.
Why have you opened a second plant in Savannah, Ga., as well as here in Calgary?
When you combine freight, operating costs and materials, we see ourselves being 25- to 30-per-cent more competitive coming out of that factory than we are here in Calgary.
Another of the reasons we're going to Savannah is because I'm very afraid there is going to be a strong Buy America bias. Already we are experiencing that with certain defence contractors.
So there is no way you should be in Calgary?
I totally agree. The only place that has higher labour costs is Ontario and that is mitigated by being closer to the [major eastern North American] markets.
But Calgary is a great place to do business and we have a huge customer base here. There is this line called the border but it really doesn't run that way. Our biggest markets are Houston, Dallas, Denver, Calgary - and another big market is Anchorage, Alaska. We just did seven floors for Chevron there.
What have you learned about managing?
If a client wants to get a hold of me, they call me directly. They don't have to go through a big bureaucracy. Nobody has an office in this company, including me. I just use a sit/stand stool. Yeah, there is some chaos here, and a little bit of anarchy ...
And there are no MBAs and lawyers in this company. It's on purpose. Read this book, A Whole New Mind, by Daniel Pink. I've struggled over the years with the fact I'm not a strategic thinker, I'm an instinctive thinker. I am far more right-brained than left-brained.
