Business Case Study: The Five Drivers Of The Business System

By 1997 Denis Gagnon was the sole owner of Excel Dryer, a commercial hand dryer company. He realized customers didn’t like using hand dryers because they take too long. In late 1997 a group of engineers from MIT proposed to develop a high-speed hand dryer.

The process dragged on and on.

When interviewed he said: “At the end of the three and a half years the business owed me two years of back salary. I remortgaged the house; I was maxed out on the line of credit, and running out of options.”

As we cover the material in this section, listen closely to each of the 5 Drivers of the Business System and try to identify which Denis violated and why.

The 5 Drivers of the Business System

Even in business circles, there seems to be a lot of confusion

We’ve all read about companies who’ve suffered hiccups in product quality or service. Some have survived; some have not.

Satisfy Owners and Investors

Product delivery and customer service contribute significant overhead to your operation; so once you subtract your costs of production, the expense of returns, selling, general, and administrative expenses, interest expense on outstanding loans, and all other expenses including taxes, you 've got to generate enough in profits to satisfy yourself, if you are a sole proprietor, or your investors; otherwise you 're out of business.

Believe it or not every discipline in business education must work to support these simple principles. Skip one of the principles and you have a problem; skip two or more and you 're really in the weeds. Measure every business decision in the light of these five principles and you 'll seldom experience significant difficulties. The purpose of business education is to provide you with the tools to frame your response to a violation of one of the principles. No more, no less. The challenge lies in quickly developing expertise and judgment in the use of these

Over the next five years he increased his equity position, and by 1997 was the sole owner.

“Having been now in this business for five years I realized customers didn’t like using hand dryers because they take too long to dry your hands.”

“They were always a major cost savings and they keep your restroom neater and cleaner, but the end user did not like the experience.

• In late 1997 a group of engineers proposed to develop a high-speed hand dryer. The research and development process would take them more than three years.

“At the end of the three and a half years the business owed me two years of back salary. I remortgaged the house; I was maxed out on the line of credit, and running out of options.”

• Denis had spent more than $500,000 developing a prototype of the Xlerator Hand Dryer. On July 26th 2000 he unveiled the prototype at a trade show in Atlanta