Download this case in PDF, click on the case below to view the case in a bigger version or read a shortened version further down.

In 2003, after a turbulent period with significant economic problems, the newly appointed managing director of Cimbria Herning, Lars Nørgaard, realised that drastic changes were needed to secure the company’s continued existence. The company had lost its previously unassailable market position, and more and more orders were going to the competitors.

Times were difficult, and the outlook was challenging for the small manufacturer in Herning. In 2003, Cimbria Herning’s pretax result was a DKK 9.3 million loss, which meant that the equity was gone, and the bank was pulling out. The situation was also taking its toll internally – staff turnover was high, and the owners were demanding to see a positive result for 2004.

The chosen solution was an organisational restructuring, which included selling off certain business areas in order to focus exclusively on the company’s core area – loading chutes – as well as a substantial design investment to redesign the loading chute.

Lars Nørgaard had the idea of using design to relaunch the loading chute when he happened to read a design story in the newspaper; soon after, he heard about a design seminar for companies. Lars Nørgaard signed up for the design seminar, and that opened his eyes to the value-building capacity and business potential of design.

“In the past, we would just add new functions to the side of the loading chute, so eventually it looked like a mechanical Christmas tree. We didn’t see it as ugly, because it had always looked that way. The design seminar, however, made me aware that design has to be incorporated into every business strategy if a small company like ours is to have any hope of being a relevant player in the international league,” says Lars Nørgaard.

The outcome so far…
Even though Cimbria Herning was under pressure on every front in 2003, the company responded proactively and decided to invest in design. The use of product design was new to this sector of the engine industry, but Cimbria Herning was convinced that design is good for the bottom line. When Cimbria Herning told others of their idea, their contacts all advised them to stay far away from design.

But the company was convinced that design is good business and that the implementation of design in the relaunch of the loading chute was a move that could help save the company and set a new, positive course. Shortly after the relaunch of the redesigned loading chute, Cimbria Herning saw a 40% increase in turnover. The customers had once again begun to prefer Cimbria Herning’s products over the competitors’.

Within the first year, the company’s DKK 9.3 million deficit was turned around to a positive result of DKK 3.7 million. Since the design investment, Cimbria Herning has been the main player in the market and has consolidated its position as the world’s leading manufacturer of loading chutes.

The design investment came at a crucial point in Cimbria Herning’s history, when the company was struggling, both economically and mentally. The figures had never looked worse, and staff turnover had never been higher.