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Conversations in Management

Richard Knerr

We completely lost control.

For over two decades, Richard Knerr, along with his childhood buddy and partner, Arthur “Spud” Melin, were leading purveyors of fun. The two launched their decidedly low-tech business in a way usually associated with high-tech start-ups—in a parents’ garage. Starting with a Craftsman band saw and an ad in Popular Mechanics, the pair began marketing slingshots under the brand name Wham-O (the sound made by the slingshot). They enjoyed modest success with the slingshot and other sports-related products but business really began picking up in 1957 after they encountered the inventor of the Pluto Platter. Immediately sensing a winner, they bought the rights, made a few design changes and renamed it the Frisbee. Despite the success of the Frisbee, nothing prepared them for the public’s response to their next new product—the Hula Hoop. Hula Hoops (under other names) had been popular fitness accessories for thousands of years—with pictures of them actually appearing on ancient Greek pottery. Knerr was introduced to the classic hoop through a chance meeting with an Australian sales representative while attending a sporting goods trade show. At the time, Australia was experiencing a fitness craze and the hula hoops were used for exercise. Without waiting to see the bamboo original, Knerr and Melin had their creative staff craft a sample from brightly colored plastic. Company staffers then took the hoops to local playgrounds and offered them free to any kid who could master the technique. The approach paid off and the product had already generated some buzz by the time Hula Hoops hit the market in 1958. The buzz became a boom and within four months over 25 million Hula Hoops had been sold and Wham-O was producing 20,000 more a day. By the end of the year, 40 million were in use and within two years, 100 million hips were happily gyrating. Then as abruptly as folks started Hula Hooping—they stopped. Wham-O was left with huge inventories and ultimately only turned a $10,000 profit on what had been the biggest fad in American history. Knerr and Melin regrouped and enjoyed many more—and better managed—successes in the ensuing years. Products like the Slip N’ Slide, the Limbo Game, the Super Ball and Silly String easily captured folks’ attention and generated abundant amusement (until you tried to get dried Silly String out your kid’s hair). There were a few clinkers along the way—mail-order mink stoles, do-it-yourself bomb shelters, instant fish—but the company never lost control again. They developed a simple business plan, stuck to it and enjoyed financial success almost as much as they enjoyed their last great product, Hacky Sack.

It’s surprising how easily a good idea can run amok but it happens all the time. Someone comes up with a new way of doing business, everyone else gets behind it and in the general enthusiasm, no one notices that things aren’t working out as they should. Part of the problem is that folks are often reluctant to speak out against what they believe everyone else supports. All things considered, most of us prefer to be part of the team rather than isolated from it. Then again, most organizations don’t necessarily like to hear that their new initiative has less in common with Wham-O’s Frisbee than it has with Instant Fish. To beat the problem, leaders should recognize that not every critic is a troublemaker. In fact, it’s in every organization’s best interest to create opportunities for dissenting voices to be heard and honestly evaluated. Listening to those differing opinions can help you avoid management-by- fad, keep a sharper focus on your mission and still encourage innovation. Try it—and watch morale and productivity bounce higher than a super ball!

—Ebert