Columbus-based BMW Financial has selected five startups to join an Innovation Lab, dubbed the automotive sector’s first financial technology business incubator. “The five finalists,” according to AM Online, present a range of innovations that could revolutionize how consumers own and insure cars in the future, from opening up entirely new types of leases to consumers, through to tackling the barriers young drivers face.”
FedEx Corp. this week unveiled a number of changes in its C-suite, led by news that FedEx Express chief Dave Bronczek will become president and COO of the parent company. This makes him primed to succeed CEO Fred Smith. FedEx also announced the retirement of Mike Glenn, whose roles included co-CEO of FedEx Services. The other Co-CEO, Rob Carter, will become FedEx Services CEO in 2017.
Cleveland-based KeyCorp this week received clearance from the Office for the Comptroller of the Currency to buy Buffalo-based First Niagara Financial Group. It’s the last step in a nearly yearlong process to merge the banks’ assets.
Columbus-based Nationwide is buying Jefferson National of Louisville, taking on the company’s portfolio of investment and fee-based advisers. Nationwide said the deal marks a major expansion of its sales reach in the financial services market. The transaction, which will make Jefferson National a Nationwide subsidiary, is set to close early next year.
The “But For Ohio State” fundraising campaign launched under former Ohio State University President Gordon Gee is coming to a close with a haul past the $3 billion mark. OSU President Michael Drake on Thursday told major donors that the university brought in $3,004,563,961. For scale, that’s about half of the university’s annual top line.
Cleveland-based Progressive Insurance said it plans to hire about 1,300 people by the end of the year, mostly information technology positions. Jobs will be added at its headquarters and other offices around the country. That’s an increase of about 5 percent over Progressive’s headcount as of June 2016.
Dr. Sheldon Retchin, CEO of OSU’s Wexner Medical Center, said in a recent interview that he’s seeking to “make Ohio State a place where innovation and research are really top of the chart.” Growth areas, he said, include research in addictive medicine and health policy.
Cardinal Health Inc. is making a concerted effort to promote women because that will bring it closer to its customers in health care, said Paul Gotti, vice president of nuclear pharmacy at the Dublin health care giant.
Crown Equipment was honored Wednesday by the Ohio Department of Veterans Services for its dedication to hiring and retaining military veterans. Chip Tansill, director of the the Ohio Department of Veterans Services, traveled to Crown’s headquarters in New Bremen to thank the veterans for their service, and to acknowledge the company’s consistent recruitment of Ohio’s military servicemen and women.
Columbus-based Huntington announced its $3.4 billion purchase of FirstMerit in January. The deal closed two weeks ago and FirstMerit will be converted to the Huntington brand in full early next year. Until then, Huntington is asking FirstMerit customers to continue using existing FirstMerit branches.
Ohio State University Wexner Medical Center had $3.21 billion revenue in its first full year with the James Cancer Hospital tower and doubled emergency department, a 9 percent increase over the prior year and passing the $3 billion milestone for the first time.
An unidentified beauty products company will receive a six-year, 1.485 percent tax credit in a pass-through by third-party logistics partner DHL Supply Chain. The company, formerly known as Exel, will add $13.31 million in annual payroll as a result of the project.
A Marysville hospital system is scrapping plans for an expansion in the city, opting instead to turn 90 acres of undeveloped land back over to Scotts Miracle-Gro Co. for product testing. Memorial Health will sell the land bordering Route 33 to Scotts (NYSE:SMG) for $4 million, both organizations said.
The tiremaker this week disclosed that Gregory L. Smith, senior vice president of global operations, will leave the company Dec. 15. Joe Zekoski, the company’s chief technical officer, took over his duties earlier in August.
The Delaware, Ohio-based industrial packaging maker said it had profit of 78 cents per share. Earnings, adjusted for one-time gains and costs, came to 91 cents per share. The results exceeded Wall Street expectations of 72 cents a share.
A pair of Center for Operational Excellence members have landed on ComputerWorld’s annual ranking of the best companies to work in information technology.
The magazine’s 23rd annual ranking placed Toledo-based COE member Owens Corning fourth on its large-company list, up from No. 7 in 2015. Columbus-based Nationwide landed at No. 36 on the list, up from 49th in 2015.
ComputerWorld’s rankings surveyed nearly 25,000 I.T. staffers at the nominated companies to rank the list, culling details on office culture, benefits, and training/career development opportunities.
The magazine singled out Owens Corning’s “dynamic environment that offers employees opportunities to grow professionally.” Nationwide received plaudits for its learning and innovation events, “hackathons” and peer-led educational sessions. The company also is active in COE’s IT Leadership Network, a group of IT leaders committed to implementing process improvement principles in that space.
Coming in at No. 1 on the large-company list this year was Detroit-based Quicken Loans, whose president spoke for COE members in 2012.
Explore the list here or download a PDF of the detailed ranking here.
Nearly half of COE’s member companies or their parent organizations made the ranks of the 1,000 largest companies in the U.S., with 10 cracking the Fortune 500.
The magazine’s much-hyped annual list was released earlier this month, with Dublin, Ohio-based Cardinal Health cracking the Fortune 25 at No. 21, with $102 billion in annual revenue. Cardinal Health is the highest-ranked COE member company on the list and the second-highest Ohio-based company, behind No. 17-ranked Kroger ($109 billion).
Other COE members and member company owners in the Fortune 500:
58. FedEx Services parent FedEx ($47.5 billion)
69. Nationwide ($40.2 billion)
128. Emerson Climate Technologies parent Emerson Electric ($22.3 billion)
137. Progressive Insurance ($20.9 billion)
138. Abbott Laboratories ($20.7 billion)
165. American Electric Power Company ($16.9 billion)
169. Goodyear Tire & Rubber Co. ($16.4 billion)
224. Parker-Hannifin ($12.7 billion)
480. Owens Corning ($5.4 billion)
Member companies that fell outside the 500 but made the ranks of the Fortune 1,000 are
The Ohio Manufacturing Institute just released the latest edition of its semi-monthly Manufacturing Tomorrow podcast, which they recorded at the Center for Operational Excellence’s Leading Through Excellence summit just last month.
Podcast Executive Producer Kathryn Kelley in this edition interviews a trio of COE members – Agrana Fruit’s John Labrador, Crown Equipment’s Craig Wreede and WillowWood’s John Matera – on what operational excellence means for them. Listen here, and check out the podcast’s website here.
COE regularly partners with OMI to bring speakers to Manufacturing Tomorrow. Past COE collaborations have resulted in podcasts interviewing Goodyear’s Norbert Majerus, COE Executive Director Peg Pennington, Snap-On Inc. CEO Nick Pinchuk and more. They’re all on the podcast archive.
Special thanks to Kathryn Kelley and the OMI team for visiting the summit and featuring our members.
The Center for Operational Excellence’s flagship annual event has more than a few things in common with the fast-paced racing world featured in the kickoff to the fourth-annual Leading Through Excellence summit.
In the span of three years, COE’s April Leading Through Excellence summit has grown to a gathering of nearly 400 process excellence leaders from around the world: 50 companies, a dozen workshops and tours, 20 breakout sessions, four dynamic keynote addresses, and countless insights across three days aimed at helping organizations harness the power of process improvement.
Here’s a look back at the event:
Leading Through Excellence began with a bang as nearly 100 attendees plunged into the high-paced world of pit crew racing, guided by Mooresville, N.C.-based training ground Performance Instruction & Training (PIT). The session’s focus on handoffs, coordination and standard work drove home the importance of having a high-functioning team for Cheryl Cole of KeyBank, which sent 17 employees to the conference. “We can all benefit from what we experienced from PIT,” she said. “Teams tend not to be aware of the significance of being in sync.”
Team-building emerged as the heart of Leading Through Excellence, where a number of companies brought upwards of 15 employees. “Getting a team together, you start bouncing ideas off each other,” said attendee Linda Schaefer of COE member Clopay. “You get more people involved, the excitement builds, and great things always come of that.”
Operational excellence isn’t bound by the Japanese words that make the foundations of lean. Author Dan Markovitz (A Factory of One, Building the Fit Organization) in his workshop offered a jargon-free look at continuous improvement that’s at the heart of his own passion to break down barriers to understanding. “If we could speak to them using analogies and metaphors that make sense to them, all the sudden we don’t have to go uphill,” Markovitz told COE in a pre-summit interview.
Longtime COE member Cardinal Health Inc. hosted a “train the trainer” workshop hosted by Luis Loya (pictured, middle) that modeled the health-care company’s own best practices in teaching lean practices.
Off-site tours during Leading Through Excellence ranged from a trip to Anheuser-Busch InBev’s massive Columbus brewing facility to a trip through the production line at COE member Abbott Nutrition. Here, Ohio State’s own Spine Research Institute demonstrates its trailblazing work in studying back problems, a hugely costly yet widely misunderstood workplace ailment.
After hosting two high-paced rounds of pit crew training simulations on the first day of Leading Through Excellence, Performance Instruction & Training’s Ben Cook took to the stage to kick off a full day of breakout sessions. Before a crowd of nearly 400 people from 50 companies, Cook illustrated PIT’s “think inside the box” philosophy, that’s hinged on driving precision from a highly functioning team and reducing human error as much as possible. “The problem is the human element – that’s what happened with us as pit crew members. If we break down, then we lose the race; the car’s not gonna lose the race for us anymore.”
True leaders don’t bark answers – they ask questions that help dig to the root of the problem. Attendees practiced asking effective questions in a packed session hosted by lean expert Margie Hagene.
More than half of all breakout sessions at Leading Through Excellence are hosted by industry leaders, sharing stories of what worked, what didn’t – and how we can all learn from it. Pictured is Guru Vasudeva, SVP and Enterprise CTO at COE member and summit sponsor Nationwide, who shared his own “day in the life of a lean leader.”
The balance of the breakout sessions at Leading Through Excellence are hosted by Fisher College of Business faculty members sharing their own research. Pictured is Prof. Aravind Chandrasekaran, who offered insights he gleaned from working with high-tech manufacturers facing sudden – and potentially cataclysmic – shifts in project scope.
Matt Dumas (pictured, above) of COE member Honda R&D said the summit is “a great event for a team. To have more of the organization thinking about lean and understanding these principles makes it that much easier to take it back and work together to apply it.”
Lead summit sponsor MoreSteam.com gave attendees a hands-on taste of process design principles with a catapult workshop that had participants taking a “MacGuyver” approach and facing off in friendly competition.
Longtime lean leader Joe Murli in his keynote address offered his decades-in-the-making perspective on the lean management system. Of the summit, he said “this isn’t just leading-edge thought, but edge of the envelope thinking here. It’s little things that we can pluck off the tree and bring back to put into what we’re already doing. That makes it much more powerful.”
Connecting an organization’s purpose and mission down to day-to-day work can be a formidable challenge for any company. David Kalman of Root Inc. in his popular breakout session showed attendees how visuals can help close that gap.
Harvard Business School researcher and professor Francesca Gino, author of the book Sidetracked, guided attendees through the wild world of decision making, where our hard-wired instincts often stand in the way of the right calls. “We are human beings,” Gino said. “Often we start with a plan, a clear goal, and we take the time to come up with a clear action plan. When we look at the outcome, we’re often a little bit off target.” Knowing how to counteract the unconscious biases and instincts we possess, Gino said, can lead us to better decision making, she said.
The behind-the-scenes action at Leading Through Excellence was fueled by more than three-dozen Fisher College of Business undergraduate students, graduate students and staff members, who served as volunteers and introduced speakers throughout the event.
Accidental Creative founder and acclaimed author Todd Henry closed out Leading Through Excellence, urging the audience to ask: “How are you bringing yourself to the table every day as a leader? A brilliant idea is not enough – in order to succeed, you have to develop your voice as a leader and you have to help your team develop its voice.”
The Center for Operational Excellence is closing out 2015 by hitting the 40-member milestone, 23 years after its founding.
COE welcomed six new member companies over the course of the year, most recently:
Core Molding Technologies Inc. Columbus-based Core Molding is a plastic manufacturing company whose products include sheet molding compounds and fiberglass reinforced plastics. Its chief customers are in the truck manufacturing and automotive supply businesses. Core Molding has production facilities in Columbus and Batavia, Ohio; Gaffney, S.C.; and Matamoros, Mexico, with a total payroll of about 1,500. The company recorded a profit of $9.6 million on $175 million in revenue last year.
COE this year also welcomed:
Crown Equipment Corp. The New Bremen, Ohio-based company makes a broad range of forklifts and automation and fleet management technologies. Vertically integrated, Crown has 12,000 employees and 17 manufacturing facilities in 11 locations worldwide, along with four regional headquarters spread around the globe and more than 500 retail locations in about 80 countries. The company employs more than 12,000. Earlier this year, Crown cemented its presence in its home state by completing an expansion project that doubled the size of its electronics assembly plant.
FedEx Services. Memphis-based FedEx Services is one of four operating arms of FedEx Corp., the $47 billion-a-year transportation, e-commerce and business services giant. It began operations in 2000, providing information technology, sales, and marketing support for FedEx’s Express and Group subsidiaries. FedEx Freight and Office were later aligned with Services, which has about 12,000 team members and recorded $1.5 billion in annual revenue.
KeyCorp. The Cleveland-based bank has about $94 billion in assets and a network of nearly 1,300 ATMs and 1,000 full-service branches across 12 states, employing more than 13,000 employees. Key in its home state of Ohio is the six-largest bank by deposits, holding about 8% of the market across 229 branches.
Progressive Corp. Based near Cleveland, Ohio, Progressive was founded in 1937 and ranks as the fourth-largest auto insurer in the U.S. The company employs more than 26,000 and recorded a profit of $1.3 billion on $19 billion in revenue for 2014.
Safelite Group Inc. The Columbus-based glass repair provider fixes and replaces windshields through a network of about 90 facilities and 6,500 MobileGlassShops across the country. Safelite said nearly 5 million customers used its services in 2014. The company, which employs more than 12,000 nationwide, this year ranked as one of the 10 best places to work in Central Ohio among companies employing 250 or more in Columbus Business First’s annual list.
Click here for a full listing of COE member companies.
All three authors are familiar faces to COE audiences. Majerus spoke at COE’s spring seminar in 2012 and has brought insights from Goodyear’s ongoing lean journey each year to the center’s Leading Through Excellence summit. Another op-ex champion at Goodyear, Chief Technical Officer Joe Zekoski, brought leadership insights to the center’s fall seminar just this month.
Paider, meanwhile, helped launch the ITLN in 2012 and has served in a leadership role ever since, helping bring a wide range of speakers to the popular event series. Orzen, who kicked off the first-ever ITLN event as the featured keynote, has since joined the COE as a senior adviser.
Both Lean-Driven Innovation and The Lean I.T. Field Guide are available on Amazon and other book retail sites.
Culture matters – and the companies that do it right know it pays dividends inside and outside their four walls.
This month, four Center for Operational Excellence members made the cut in an annual ranking by Columbus Business First of the Best Places to Work in the Columbus area. These companies scale the heights of the list by creating an environment where employees are engaged, inspired and driven to deliver.
The rankings – which came from a record 235 nominations – were made after employees at each nominated company completed a workplace satisfaction survey run by a third-party firm. Found among the 50 winning slots in five company-size categories are members:
Mills James – The Columbus-based, employee-owned creative media company ranked No. 8 in the “Large” category, for businesses with 100 to 249 employees – Mills James has 103 Columbus-area staffers and 160 company-wide. Summing up its secret to success, the Mills James team wrote: “We don’t hire employees; we hire principled, passionate, creative owners.”
Fuse by Cardinal Health – It didn’t take long for this scion of member Cardinal Health to make a mark as a top place of employment in the Columbus area. Cardinal Health opened this 122-employee innovation lab that develops commercial technologies for health-care customers little more than a year before it landed the No. 3 “Best Places” spot among large companies. Fuse, which is hosting a tour for next year’s Leading Through Excellence summit, said the company is “making it happen in health care” by having “killer talent” and being “big and visible.”
Safelite AutoGlass – The Columbus-based vehicle glass and claims management organization notched the No. 8 spot among extra-large companies in the “Best Places” ranking, for those employing 250 or more. Safelite, which has more than 1,200 employees in the Columbus area, said it works to create a “people-powered, customer-driven culture.”
BMW Financial Services NA LLC – The automotive financing arm of the iconic manufacturer landed at No. 6 in the extra-large company ranking. BMW Financial, which employees 570 in Columbus and more than 700 company-wide, wrote that “our associates are the key to our success.”
Looking back at a storied history that stretches back more than a century, Ryan Arbogast remembers Nov. 1, 2013, as a low point for the company his great-grandfather founded in 1907.
Arbogast, fourth-generation president at prosthetic product manufacturer WillowWood, sat anxiously in a Florida courtroom and listened to a judge deliver the most devastating blow yet in a legal battle that spanned nearly a decade – and, up until recent years, seemed to be moving in their favor. WillowWood, the judge said, was blocked from selling its Alpha® Classic and Hybrid Liners and sleeves because a key ingredient was found to infringe on a competitor’s patent.
Arbogast remembers picking up the phone and calling company headquarters, tucked away in a village southwest of Columbus, Ohio, to deliver the news.
“I was totally blindsided,” he said. “I hadn’t foreseen any possibility we’d have this product taken away from us.”
Calling the now-halted Alpha Liner merely a product is an understatement. In the 17 years since its introduction to the market, the sock-like sleeve that slides over a residual limb to make amputees’ prosthetics fit comfortably had become WillowWood’s lifeblood, composing nearly three-quarters of the annual revenue for a company at the lower end of middle-market range.
The product that helped triple WillowWood’s revenue and work force in just a generation was packed up and bound for a storage facility. What remained were nearly 200 employees wondering what might happen to their jobs come Monday and a cavernous company warehouse that had been bursting at the seams just hours before.
“You could hear your voice echo in that room,” Development Engineer Chris Kelley said.
Almost instantly, WillowWood was left with a gaping, multimillion-dollar hole in its top line that wouldn’t be plugged by legal appeals or going on record to “respectfully disagree” with the decision.
Arbogast and his team needed to act, and the next steps they took charted a path that helped WillowWood survive, thrive and innovate without a pink slip in the process.
A century of growth
WillowWood itself sprang from an act of innovation in the face of adversity. Ryan Arbogast’s great-grandfather, William, survived a railroad accident but emerged a double amputee, albeit one unwilling to settle for the poor prosthetic options before him. He took it upon himself to carve prosthetic legs that best met his needs using wood from willow trees on his farm, giving the company its name and first burst of inspiration.
A direct precursor to the Alpha Liner WillowWood would introduce at the end of the century came in 1921 with the rollout of the Sterling Stump Sock, a wool prosthetic sock the company says quickly became the industry standard.
The next 70 years of growth for WillowWood, then named Ohio Willow Wood, weren’t without pivots and setbacks. The company turned to making polo mallets and balls at the height of the Great Depression in order to survive, and a decade later made parts for airplanes and boats during World War II. Major innovations came from the 1950s through the 1980s as William Arbogast’s children and grandchildren introduced new prosthetic feet and knee-shin units to the industry.
The last drastic change for WillowWood came in 1996 with the introduction of the Alpha Liner, which prompted the company to shed its profit-leading wool sock department and focus the bulk of its research and development resources on the product. The comfort and performance of the Alpha products hit the market 10 times more expensive than its wool-sock predecessor – not that the industry minded.
“That changed the company entirely,” Arbogast said. “Demand was so huge we threw everything into production capacity and maintaining quality.”
Payroll more than doubled in several headcount increases, and sales followed right along. This secured for WillowWood a market niche ahead of very small, mom-and-pop operations but still a fraction the size of some overseas manufacturers.
“We had the innovation and the engineering technique to command a price that keeps a small company like us profitable,” Arbogast said.
On the heels of its product successes and growing intellectual property portfolio, WillowWood made a formal commitment to process improvement in 2006, when it joined the Fisher College of Business Center for Operational Excellence at The Ohio State University.
Amid this growth, small licensing skirmishes weren’t uncommon for WillowWood, but it was a pair of patent-related lawsuits the company filed in 2004 and 2005, respectively, against St. Petersburg, Fla.-based competitor ALPS South that set its future troubles in motion. Leaders say the lawsuits created few ripples at the company in the ensuing years, but that was before the tables turned.
WillowWood eventually found itself on the defensive, losing a 2012 jury trial sparked by a lawsuit ALPS filed and, in March 2013, facing a court order to halt selling Alpha® products containing a specific formula whose ownership was in dispute. That ruling marked the first true disruption to WillowWood’s day-to-day operations, but paled in comparison to the broader November order that pulled the plug on all Alpha Liner products containing the formula in question.
“I called a group of people into a big conference room and told them to shut everything down,” Operations Manager Mark Alter said. “We’re done.”
For front-line employees, the ongoing legal battle to which they paid little notice over the years was very much on their minds.
“The biggest question on the floor at the time was, ‘Are we gonna survive this?’” Chief Financial Officer David Pierson said.
Of the options before WillowWood, leaders immediately took the quickest, easiest route off the table: Layoffs.
“We said right off, ‘We’ll do everything possible not to lay people off,’” said COO John Matera. “It’s not part of our culture. We don’t do it.”
WillowWood instead turned to triage on its revenue side, its next steps a blend of survivalist-minded innovation and a determined effort to continue holding fast to the customer-centric values its founders established a century ago.
That determination was at once noble and pragmatic: The Alpha Liners contained what’s called a thermoplastic elastomer gel that gained traction among customers for the soft, comfortable barrier it created for a residual limb against the prosthetic. That wasn’t the case with silicone-coated liners, another WillowWood offering that contributed but a fraction of Alpha’s haul to the top line and appealed to the minority of customers seeking a sturdier, harder material.
Silicone liners weren’t seemingly the answer to WillowWood’s very big revenue problem, but its R&D team saw in them a lingering possibility: Was it possible to align one to customer demand and save sales in the process?
An under-development silicone liner that featured a softer-grade silicone proved to be the answer. One problem still, however, stood in the way: That liner didn’t make it far enough through the R&D pipeline to have shop floor-level tooling designed, and WillowWood lacked the production capacity to install new equipment. Luckily, the company had plenty of very concerned employees ready to save their jobs and their company. Within a few weeks of the court ruling, company leaders sought volunteers for a second shift and had it up and running, employees more than willing to overhaul their own schedules to help WillowWood through the tough stretch ahead.
That launched the fastest, most fraught R&D project in WillowWood history.
All hands on deck
Call it semi-organized chaos.
WillowWood employees plunged themselves headlong into development of a soft, silicone-based liner and designing – virtually from scratch – the proper tooling for a notoriously complex process. Employees turned out one newly designed production tool a week, scavenging equipment originally purchased for other products and retrofitting shop-floor tools.
“It was a full-court press with everyone involved in designing the tools and making them,” Kelley said.
What was once guided by written documentation and established processes was being determined on the fly, problems in the morning shift becoming solutions in the early hours of the afternoon.
“There was a lot of waking (R&D) people up in the middle of the night,” said Randy Elzey, supervisor of the Alpha line.
Elsewhere in WillowWood’s headquarters, silos were falling out of necessity. The company’s custom fabrication and Design group moved into production on newly formulated liners. Front-office staffers pitched in on the production floor.. Arbogast himself spent time on the factory floor running electrical wires.
“Everybody pulled down their own piece of the action,” Chief Marketing Officer Doug Kreitzer said. “We moved a lot of people around and there was a real sense of camaraderie.”
It paid off. Within a few weeks, WillowWood successfully developed the soft-silicone Express Liner with a limited supply set to leave the building on Dec. 1, exactly a month after the court decision. The company strategically designed liner profiles that matched the largest swath of customer demand and, in the following weeks, moved on to other configurations to align supply with as much of the market as possible.
Wasting no time, WillowWood in December began developing a different kind of thermoplastic elastomer gel that stayed outside the restrictions of the patent ruling but would be attractive to Alpha customers as well. This brought two potential new products into the R&D pipeline, but one very big challenge to the shop floor: Liners with different fabrication methods that literally clashed like oil and water.
Among many other differences, silicone liners cured by a drastically different process than the in-development thermoplastic elastomer liners, dubbed K12 and K27. In the frenzy to turn out the Express Liner, engineers cleverly retrofitted production equipment production equipment to have both in process on the floor.
The company’s decision to run development of two similar thermoplastic elastomer liners at roughly the same time eventually became fortuitous. The K12 Liner made it to the customer testing phase by early in 2014, but initial feedback pointed to durability problems, prompting the company to scrap it and pivot to K27, losing little time in the process.
“Had we not identified the K12 problems through testing, we would have been in trouble,” said Jeff Doddroe, the company’s new products director. “We were very fortunate to be able to do that switch in a very small time window.”
WillowWood may not have batted 1,000, but the upheaval to its long-established R&D processes was unprecedented and transformational. The company typically begins with a New Product Development department feasibility study and moves to finding materials, shaping processes and developing prototypes for internal validation, before creating several iterations and eventually involving all WillowWood departments as market arrival nears. From the first stirrings of a new product through training, manufacturing and shipping, the process can take anywhere from nine months to two years.
It’s a tried-and-true approach, Doddroe, “but it’s also mundane.” The more software development-like approach to WillowWood’s rapid-fire Express Liner rollout, in fact, wasn’t entirely unwelcome.
“If we say we’re going to make a silicone liner,” Doddroe said, “we’re talking a high 90th-percentile that it goes to market. If we were to work the way we did on this project, we’d have a higher percent fail, but this really worked out for us.”
WillowWood leaders acknowledge this drastically sped-up process didn’t merely involve working faster. While entirely confident in the safety and quality of the finished product, they say risk-taking – heretofore an under-exercised muscle inside WillowWood’s walls – played a key part.
“As far as I’m concerned, though, we had no choice,” CMO Kreitzer said.
Voice of the customer
Customers responded as well as – or better than – WillowWood could have expected in light of its troubles.
Sales initially were decimated but climbed to hover about 50 percent below prior-year revenue through the quarter following the court decision. A prosthetic foot product whose sales soared beyond expectations, also helped cushion the blow.
Linda Wise, WillowWood’s sales and marketing manager, credits much of the company’s survival in those days to the relationships it has built over the years with its 19 distributors in 18 countries across the globe.
“There’s a lot of history, a lot of trust, between us and these companies,” she said.
Still, it required some difficult conversations with distributors and end customers, Wise said.
“They stuck with us, but we didn’t sugar-coat it,” she said. “We continued to try and partner with them and find solutions for patients, whether they involved us or not.”
WillowWood’s sales in the spring of 2014 indicate patients’ solutions very much involved them. The April 2014 release of the company’s innovative, heat-absorbing Alpha SmartTemp Liner and the K27 formula liners buoyed sales right back to year-ago levels – even beyond.
“Our reputation, and that relationship base we built, saved our business,” Arbogast said.
The company’s remarkable customer retention speaks to a bond, the effect of which extends well beyond the walls of WillowWood’s sales and marketing department. In fact, leaders say, it contributed to the all-hands-on-deck attitude seen throughout in the roughest days. Many prosthetic businesses began just like WillowWood, driven by a tragedy or disability that lends immense personal significance to the work at hand and the customers whose lives it impacts. WillowWood’s slogan calls its work nothing short of “freeing the bodies and spirits of amputees.”
“There’s a personal investment in what we make here that our folks believe in,” Chief Administrative Officer Dave Curtis said. “We’ll have amputees come here, we have test patients running all over the place. It’s very easy to know you make a difference in what you do.”
A year out from that game-changing court decision, sales have leveled off to a predictable pace unheard of in the dead of last winter, though they’ve retreated from the highs seen in the wake of the Alpha SmartTemp Liner’s rollout.
“We introduced new products, made a lot of changes and a lot of additions,” Product Release Director Pat Thomas said. “We’re kind of on clean-up duty now to get our product line back in shape.”
Meanwhile, at least one major unknown in the wake of the case has come to a conclusion. The WillowWood competitor’s liner gel formula patent expired in August, clearing the way for the company to once again legally make the liner once so popular with customers. The company went back into production on the liners in late September, while sales began in early October.
Now, the company is left with a full production schedule and many lessons learned.
One of the most transformative effects of the court decision was the collaborative environment that developed among employees, many of whom found themselves at least temporarily in new departments and roles. That exposed an opportunity and a flaw, Thomas said.
“We need to emphasize cross-training more,” he said. “This really exposed a lot of holes in our processes, especially ones that overlapped.”
The events of the last year also have Arbogast completely reevaluating the company’s approach to developing and protecting products.
“We can’t rely on intellectual property like we did,” he said. “There are a lot of loopholes in the U.S. legal system, and it’s not one that’s going to protect us. We just need to stay ahead of the competition by a generation or two.”
To do so, leaders agree a new approach to R&D is in store. In the years WillowWood turned out the liners at a breakneck pace, the company added more and more testing to the R&D process. This was by no means required by federal safety standards – as an externally worn medical device, prosthetics are comparably low-regulated – but rather an effort to keep aligning with the product quality the market appeared to demand.
“We discovered we can move a lot quicker than we ever thought we could,” Operations Manager Alter said.
Not that the pace seen amid the frenzied days of silicone Express development is where WillowWood wants to be.
“We don’t want to stay where we are or go back to where we were – but we do need to pick a point in between,” Arbogast said.
The future for WillowWood, leaders say, will bring changes inside and outside the company’s four walls. Not the least of them is a much-needed culture change Arbogast said he was rolling up his sleeves to lead just as the company’s legal troubles peaked.
“I took over in 2010 and spent two years positioning the culture and the employee base to be more strategic in our planning, to think further out, and November (2013) hit just as that machine was starting to run,” Arbogast said. “We had a hundred-year-old company with an ‘If it’s not broke, don’t fix it’ mentality, and now that’s completely gone.”
One crucial area of future change for WillowWood is its product spread, which leaders admit relied entirely too heavily on liners. Arbogast says he hopes to diversify product mix through a number of new opportunities, which range from a high-potential software package for patient care to its LimbLogic vacuum system that helps amputees ensure their prostheses don’t come off.
“We want to pick those niche problems and attack them,” Arbogast said.
A natural progression from a broader product mix is a broader sales footprint, which the company is pursuing as well. Plans are in the works for an expansion to the South American market this year.
“The more sales we have internationally, the better off we are,” CMO Kreitzer said.
Wherever these paths take the company, leaders say they hope WillowWood can maintain the urgency and energy that carried them through those unprecedented rough waters – with growth and innovation, not survival, as the driver.
“It made for some exciting days, to be sure,” Thomas said. “I just don’t know I’d want to do that again.”