Documenting the American South Logo
Excerpt from Oral History Interview with S. Davis (Dave) Phillips, January 27, 1999. Interview I-0084. Southern Oral History Program Collection (#4007) See Entire Interview >>

Importance of innovation for business success

In this excerpt, the interviewer asks Phillips to explain the reasoning behind a dramatic reorganization of his company, but Phillips does not offer a great deal of detail on how he approached the mental and financial strain of such a change. Instead, he describes his effort to limit costs and bring in new equipment. He did so in part because he modeled other businesses who were innovating. Those that did not do so failed.

Citing this Excerpt

Oral History Interview with S. Davis (Dave) Phillips, January 27, 1999. Interview I-0084. Southern Oral History Program Collection (#4007) in the Southern Oral History Program Collection, Southern Historical Collection, Wilson Library, University of North Carolina at Chapel Hill.

Full Text of the Excerpt

JM: Let me ask you this. Approximately when did you take the decision to sink all this money into refitting your plants, your plant? How did you measure the prospects? That's a lot of recapitalization. You've got to go in and buy new machinery. How did you measure the prospects for that sort of investment from your end of the furniture textiles business? This issue of technology and textiles across the last twenty or thirty years is obviously a very important and interesting one. DP: Good question. We bought the original plant in '74. I bought into a plant that had old equipment. I soon learned that you are not going to make a lot of money if you have old equipment. The quality is not as good. Your efficiency, your labor cost is too high. So I took the first step of upgrading it once I owned control and actually moved the plant to another building and put in at that time better equipment, not all new equipment but better equipment. Then through the '80s some other equipment started hitting the market. We built a second plant about ten years ago and bought all brand-new equipment. That's when we really started making a lot of money because it was absolutely the best quality. We got computerized to where our creativity could be translated on a piece of machinery in a very short period of time. Instead of months, we could do it within days. Therefore we had better placements with better customers because we were providing them a greater service of creativity. Our styling staff, we used a couple of people and when I sold it, we ended up having twelve full-time designers creating product. The same thing's happened to a lot of other industries, the car industries and what have you. You have to be very creative, very fast. That's what happened here but our business, when I took over Phillips-Davis in the '70s, we were probably doing five million. When I sold a year and a half ago, we were doing fifty-five million. I sold it for around fifty million dollars. So it really paid off. I must tell you it was having the best machinery and the best people. JM: What put you ahead of the competitive curve? Why wasn't there someone, why wasn't Mr. Smith down the road also seeing this opportunity? How did you get ahead of that game, win that market? DP: Some of the competition had done a better job. I had watched them, and I had seen them pull away. It was because of better machinery, and it was because they had a lot of designers. So I used this as a way in which I saw how they became successful that I had to do the same thing. I had a lot of competition that didn't do the same thing, and they fell behind or went out of business. So it was either do or don't. It became very obvious to me that I had to do it. JM: And you mostly competed down the road then on quality. DP: Quality and design. But not on price. We had to be competitive, but price was not the main factor.