Bill Spencer recalls that day in March 1995 as clearly as if it were yesterday.
The meeting Spencer scheduled to advise his boss of his retirement plans had taken a sudden and unexpected turn. His retirement, Spencer learned, would mean the end for the string of small businesses he had spent years nurturing and developing.
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Bill Spencer (L) and Xymid business development manager Dick Fader evaluate whether a roll from the company’s extensive fiber inventory is a viable candidate to meet a customer’s specific need. |
They would never be big enough to impact the company’s bottom line and were drawing attention away from DuPont’s larger businesses. Beyond shutting them down, the only option was to sell them.
The first question that raced through Spencer’s mind when he heard the news? How would he tell the people he had personally recruited from within DuPont to help him grow the businesses that they would soon either be working for another company or possibly be without any job at all. He knew there would be no good answers to most of their questions.
A DuPont team — most of whom knew next to nothing about his businesses — was put in place to find potential buyers and expedite the sale. Yet because the businesses were small, there was no imperative. The result was two years of upheaval and uncertainty for Spencer and his team.
Fast forward to October 2004. The businesses jettisoned by DuPont are now the backbone of Xymid, LLC, a successful producer of technical fabrics and composites headquartered in Richmond, VA. Sitting at the helm of the company he now owns is President Bill Spencer, the ex-DuPonter who found a way to buy the businesses, keep his team together, pay his bills and build a solid company.
Spencer, who adds an entire new dimension to the concept of positive thinking, says he’s “having a blast” running Xymid. Yet the obvious question begs an answer. Why take such a financial risk to buy the company when he could have retired in comfort after his highly successful career with DuPont?
“I really anticipated my calling after DuPont would be teaching,” he said, laughing. “I never expected to be where I am today. Yet when DuPont told me that the only options were to sell the businesses or close them down, I really didn’t think I had a choice but to be a part of the purchase. As it turned out, I had to be the major purchaser.
“The people were always my No. 1 concern. What would happen to them if we were sold? Also, I knew there was great value in our products, even if they didn’t generate the large revenues DuPont needed. And I honestly believed that I could make a company like this work because I knew the businesses and how to make them more efficient and effective outside the DuPont structure.”
He was right. Six years after the sale, he oversees a broad portfolio of profitable niche businesses. They are bedding, protective apparel, print sleeves, artificial leather, absorbent fibers and structures. The link among them is that they are each unique technologies tailored to specific applications.
The bedding business is a case in point. Thanks to a patented manufacturing technique, Xymid® fabrics combine the performance characteristics of knit fabrics with those of nonwovens.
“The unique way our fabrics are made gives them a competitive advantage, because they’re so versatile and can be engineered to meet the specific needs of our customers,” said Lee Miller, who runs a major portion of Xymid’s fabrics business. “The technology enables us to make products that meet very stringent processing requirements.”
That means, for example, that an elastic edge can be integrated into Xymid fabric for the side panels of mattress pads, giving them better holding power on mattresses. The manufacturing process is also more efficient because the need to attach elastic to the pad is eliminated.
Xymid’s customer-friendly, streamlined manufacturing system is also attractive to bedding customers. Since orders are filled within days of when they’re received, customers can reduce inventories and better manage their cash.
Xymid’s Lanx Fabric Systems are gaining rapid acceptance in chemical protective overgarments, undergarments, over boots, duty uniforms, gloves and boot liners. Developed in the early 1990s for the U.S. Special Forces, they are the only fabrics approved for chemical protective undergarments by the U.S. military.
The durable composite fabrics contain unique carbon structures that absorb chemical agents, prevent poisoning by perspiration, and provide extremely uniform chemical protection. An added feature is their “tailorable stretch,” resulting in garments that fit well and are comfortable.
Overgarments made of Lanx Fabrics can be found at the Department of Homeland Security’s first-responder training facility in Alabama, where live agents are used in the training. Army, Navy and Marine flight suits are also made with the fabric.
Because the stakes are so high for those who wear garments made with Lanx Fabrics, protective apparel is “more than just a business” for Bob Weaver, who manages protective apparel for Xymid. “There’s something special about helping protect people and save lives and, given our customer list, our impact is far reaching.”
Mining for opportunities
Spend a day with the Xymid team and it’s obvious that they thrive on finding and developing new business opportunities that will fuel the company and its growth. Xymid wants to be known as a company that can bring new ideas to market more efficiently and effectively than anyone else. Given limited resources, that can be challenging.
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Gloves are one of many markets currently being explored by Xymid. These tight-fitting gloves, featuring tacky palms and fingers, are gaining rapid popularity among cost-conscious athletes in a variety of sports. |
“We have to mine for new business development ideas wherever we can find them, since we don’t have an experimental station with 150 researchers at our disposal,” he said.
He’ll sit down with anyone who has a potential new business opportunity. People in large corporations, which Jack Welch of GE fame once said were “too thick fingered” to develop a business from scratch, are particularly fertile ground. Because they can’t tolerate development cycles that are longer than business cycles, they often “orphan” technologies which the Xymid team can “adopt” and bring to market.
Ideally, Xymid will have 20 business development concepts under evaluation at any one time. They go through a rigorous process to determine whether they are reproducible, unique and can be commercialized.
Building a new culture
Xymid’s people and products have their heritage in DuPont, but the comparisons stop there. Much of how Xymid operates today is rooted in Spencer’s strong beliefs about what makes a business tick.
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This lightweight jacket, made in part with a proprietary Xymid fabric, offers exercise enthusiasts a unique balance of breathability and water resistance. |
First off, there’s speed. “It’s not the big who eat the small,” he said, “but the fast who eat the slow. A customer can come to us with a problem on Monday and we can have a solution by Wednesday. That’s almost impossible in a large corporation.”
Another part of the Xymid culture is the belief that small is better than big — a major departure from the philosophy of major corporations, which have to hit home runs to please shareholders. For example, smaller businesses require smaller investments.
The company’s philosophy is “make a little, sell a little, make a little more,” Spencer said. “The goal is to manage our exposure. We can’t afford $300 million investments in bricks and mortar, but we’ll back a $50,000 opportunity that makes sense.”
Then there’s a lack of bureaucracy. Face-to-face meetings give way to phone calls. Memos and broad-ranging purpose statements are anathema because generating them undermines the speed and focus on developing and growing businesses that provide Xymid’s competitive advantage.
“When we see people writing internal memos,” said Spencer, grinning, “we know we have a problem.”
The energy among the Xymid team is palpable. The opportunity to develop and build businesses and have a sense of ownership in them is a major motivator.
Each of the company’s six businesses is autonomous, with distinct teams working from well-defined business plans. The teams are solely responsible for the performance of their businesses and are compensated accordingly.
Untapped resource
Part of the secret to Xymid’s success is that Spencer has tapped in to what he sees as an enormous asset ... the incredible talent of people in the prime of their productive careers who have been “dumped on the street by corporate America for whatever reason or no longer feel that working for large corporations is what they want to do.”
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Xymid’s unique technology can create fabrics with exceptional wear resistance. They’re finding increasing acceptance in work boots, ice skates, and athletic shoes. |
They represent a growing cohort of skilled professionals in their mid-50s and beyond who believe they have much to contribute and are looking for an opportunity. At Xymid, they get their chance.
They might not always be willing to work 120 hours a week. Yet, Spencer has discovered that if they find themselves in businesses where they are having fun and building value for their customers, you can’t limit their hours.
Conversely, his troops will tell you that the personnel philosophy of the company is an important reason why life at Xymid is utopia.
Lee Miller, who joined Xymid after 36 years with DuPont, described the way things work at the company.
“Simply put, people are inspired,” he said. “There is an environment that is conducive to all of us working together to grow these businesses. The beauty of this for me is that it’s more fun than work. There’s no bureaucracy. We make instantaneous decisions that help us satisfy customers and gain market share.
“The recipe for success is combining good leadership with good people and good products that perform well for our customers.”
Looking to the future
So what does the future hold for Xymid LLC? Spencer said he has no long-term goals, because that leads to bad decisions.
“I see no reason,” he said, “that we can’t grow to $100 million in revenues, but my life isn’t dependent on that. I’m driven by taking advantage of opportunities for growth by doing business better and by giving good people a chance to build their businesses.
“What we really enjoy and really want to do is take potential business opportunities, bring them to market, and make some money for everyone in the process. So if there’s anyone out there with a new technology to develop, give us a shout. We can have some fun together,” he added with a smile.
• Make a little, sell a little, make a little more
• It’s not the big that eat the small, it’s the fast that eat the slow
• Prepare for complex products by first selling simple ones
• We want to be tested by the free economy every chance we get
• Don’t say no. Say yes to something else
• No productive person ever has fun with too little to do
• Resist the temptation to increase spending just to become more significant
• Managing expectations is as important in product development as managing technology
• Get to market quickly as this is the only way to truly validate the product
• Our ultimate boss is the customer. Forget that and we will ultimately fail
