From the February 2008 issue of Entrepreneur

Distractions in the workplace are not always considered good for company morale--or productivity, for that matter. But for Columbus, Ohio-based Priority Designs, a 50-person industrial design consultancy with Fortune 500 clients like Adidas, American Standard and Lowe's, one particular non-income-producing activity may do more to bring the company together than any collaboration on a client-based project does. It's called "Derby Fever."

Every year, Priority Designs enters a car in the Industrial Designers Society of America's Derby Competition (sponsored by IBM), where more than 3,000 designers congregate to see which model car moves the fastest down a 40-foot-long aluminum track. At Priority, employees who don't normally work together pair up, and engineers stay up until three in the morning working on cars. Over $10,000 is spent on the design and development of Priority's derby car. "Lots of design awards are subjective," says company principal Paul Kolada, 49. "But this one is purely objective: The fastest car wins."

Every year, the rules are a little different, and the cars themselves range widely in style. This year, Priority Designs beat out companies like Dell, Procter & Gamble and SC Johnson with a two-car contraption called The Slingshot, which catapults a quarter-ounce mini-car from a larger-wheeled housing. It went 40 feet in 1.74 seconds--a new Derby course record.

"At the event, there are lots of recruiters slinking around, but I don't worry. We keep our employees happy," says Kolada. "During reviews, people tell me that the Derby is one of the most exciting and refreshing things we do. It's something even their spouses and kids get excited about."