Vacuum Cleaners Discussions

James Dyson has voiced his feelings in regard to what it will take to save Britain's manufacturing industry in a report commissioned by the country's Conservative Party.  An interesting read and plenty of UK reader comments follow.

http://www.telegraph.co.uk/finance/financetopics/recession/7400742/Sir-James-Dyson-plan-to-fill-UKs-engineering-vacuum.html

M00seUK and vacmanuk, I'll be glad to learn what you think.

Venson

Hi Venson, I've been a touch busy of late, but I'll look to pass some thoughts on this topic soon.

On a related note, here's an interview with James Dyson in this press, this week, with a few good insights:-

• Company did better than expected during 2009 "We increased our market share in every country we sell in”
• New product to be unveiled later in 2010 (clue: it will use a mains plug)
• James Dyson due to step down this year as chairman of Dyson Ltd

http://business.timesonline.co.uk/tol/business/industry_sectors/engineering/article7061037.ece

Excerpted from the interview:

...."He [Dyson] was a billionaire three years ago but won’t mind dropping a notch in the recession.

He has also learnt to understand how others feel. When we met in 1999, he told me he would never pay bonuses to staff. “I think the whole principle is demeaning,” he said.

Now he has changed his tune. “Yes, we have a bonus scheme. I think it was your suggestion,” he says drolly. And the bonuses could be rather good this year, as the company did better than expected in 2009. “We increased our market share in every country we sell in.”

Does it make sense that Sir James Dyson who was counted among the world's top billionaires with $2 B just 3 years ago can fall to multimillionaire and all the while he reports that business is better and better?  If this is how the new UK math works, Cameron got the wrong man for the job when he tapped James.

Carmine D. 

I'm sure if Dysons were actually made in Britain it would also be of help to British Industry.

Well Lucky, that's the thing, it WAS of great help then.

vacmanuk wrote:

No wonder Brown is catching Cameron in all the UK polls.  Brits realize that Cameron tapped the wrong man for the job because James/dyson outsourced his manufacturing production.

Carmine D.

CarmineD wrote:
Carmine,

I think it's admirable that James Dyson is willing to admit when he is wrong and to adapt to changing times.  Just because he thought bonuses were demeaning, doesn't mean that the employees did.    Perhaps the MAP policy has been adjusted as well due to the rough economy.  A 20% discount isn't really that extreme, particularly in comparison to some of the other big box brands. 

Severus wrote:

Hello Severus:

I agree with you.  It is admirable that James Dyson recognizes errors in judgment and corrects them.  Tho, 10 years is a bit long for the realization to sink in on his turnabout for bonuses. 

On dyson MAP, the higher than 10 percent "advertised" discounts are a factor of both the bad economy and also more importantly the need for dyson to be competitive pricewise with other bagless brands and models.  Even as a niche seller.

Since James and dyson have seen the "light" on these two issues, dyson/staff will become more realistic with their views on bagged vacuums.  Dyson and bagged vacuums are not mutually exclusive in the vacuum industry.  Both can increase and flourish simultaneously rather trhan at the expense of each other.  Even in bad economic times.  If I were a betting man, I'd bet dyson will have to lower prices even more than 20 percent to be competitive in the short. mid, and longterm.

Carmine D.

CarmineD wrote:
It's actually been a lot less than 10 years - I recall it being reported around 4 years ago that all Dyson employees were receiving a performance-related bonus for meeting growth targets.

I think it's positive for any business to offer a profit share / bonus scheme to all employees - I'm doing the same with my business.  When I was in previously in employement, only the sales team got bonuses, based on their sales  commisions. Unlike the people who actually had to do their badly spec'd projects... now that *was* demeaning :-)

M00seUK wrote:

Hi M00seUK:

I'm relying on the article you posted here dated March 14, 2010 with James Dyson interview.  I excerpted the verbage about bonuses from it.  "Now" is the operative word to me.  It doesn't mean 4 years ago.  With the realization that the article/interview misrepresented this issue on this point [intentionally or not], I beg kindly to revise my statement to read instead:  6 years is a long time to come to a realization of a turnaround on employee bonuses. 

For any business man in James' position to hold such an opinion at all, at any time regardless of length, is well to put it bluntly simply outrageous.  Worse still, it's even more shocking for James to say/print that the dyson bonus about face came as a direct result of the interviewer's suggestion 10 years ago.   Such outrageous statements by James Dyson, from a business perspective, cast doubts on him as a business leader.  It's as incredible as a decline from $2 Billion to multi-million in net worth in 3 years and saying during the same time periods that his company's profits and market shares are increasing year over year.  

Carmine D.

CarmineD wrote:
Hello Carmine,
As if often the case, we're discussing a series of unknowns. What we do know is that 10 years ago, Dyson didn't believe in offering bonuses. Here's a quote from an interview dated in 1999:-

"...likewise, he thinks an interest in money is rather vulgar. He is not a fan of paying people bonuses to hit targets. 'I think the whole principle of bonuses is demeaning. If someone needs a bonus to motivate them, they are not the sort of person who should be in business, in my view. Somebody is here because they believe in what we're doing and want to go with that and make a difference, and get great satisfaction themselves, and achieve things."

What we don't know is when exactly this policy was reversed - it might well have been two years later. Equally, while the interviewer at the time was likely one of a number of people to raise the question of performance-related bonuses, I very much doubt he was the only one.

It's worth bearing in mind is that the Dyson in 1999 is quite different to the company it is now. Back then, they would have been investing in R&D, trying to expand production (against local frustrations) to meet international distribution demands. With cashflow likely a big issue, it was about more about making people believe in a cause, than paying out speculative bonuses and drag down the bottom line.

In recent times, with cashflow demands more relaxed, it's now about getting new, reliable, exciting, well-marketed products out there. Everyone shares in that responsibility and they recognise that a bonuses structure gives a good return on investment. By all accounts, there's been a fair number of performance goals met over the years. Nothing 'outrageous' in that at all, in my view. You're blowing this far out of proportion.