A manufacturer of cabs for compact utility and construction equipment.
The client's company began as an independent, family-owned business. While they had been a solid business since the late 60s, they hit a period after the turn of the millennium in which cabs for small utility equipment were in high demand. In a few short years, they had nearly doubled their annual sales figures. With the company in such a strong financial position, the family began looking for potential buyers and eventually sold the business to a private equity firm.
Following the acquisition, a new CEO was assigned to run the company. He was financially oriented, looking to strengthen the asset’s financial position and resell it within a five to seven year window. Costs were cut back in all possible areas while, at the same time, quality improvement standards were increased. Innovation was scrapped in favor of the more efficient production of existing products. The esprit de corps that had developed under the charismatic former owner evaporated. The company’s reputation as a market innovator was soon diminished and they had begun losing opportunities to bid on the design of new cab platforms. Revenues fell from roughly 55MIL to 30MIL and suddenly the business had become something of a stranded asset for its new owners.
Despite the poor performance, the private equity firm still believed in the business and brought in a new CEO to help turn the company around. The short term goal of the new CEO were as follows:
Bessemer was hired to facilitate the effort in all three areas. The effort began with targeted innovation sessions to brainstorm new product ideas and generate new product development roadmaps. The results were synthesized and Bessemer held intensive product development sessions with the client’s staff to further develop the ideas. The outcomes of those sessions were brought to dealers and OEM customers to further refine and validate product concepts. This approach not only enhanced the products themselves, it generated buy-in and goodwill with the very customers the new products would benefit.
While all of this was going on, Bessemer was also working with the client on the re-vitalization of the physical spaces that would support its ongoing innovation efforts. Brainstorming and information gathering sessions were conducted with internal stakeholders. Insights and business behaviors were mapped and employee needs were recorded. The ideas were synthesized, refined and developed into a set of architectural layouts that would support innovation principles and practices as well as the development and prototyping of new products. All of this was completed in approximately three months.
Bessemer’s involvement was a major catalyst in reinvigorating the organization. In the 5 years prior to this project, the company had made no new products. Bessemer engaged them in a rapid concept generation effort to spark the effort. We helped them refine the concepts in the field with their actual stakeholders and customers. And Bessemer helped the company revitalize and reshape not only the new product development process but the design of the built environment in which it takes place. The result: 40% of the company’s 2013 profits will come from new products launched in that year.