Global agility

Balancing demands in a variety of product and industry segments and managing double-digit growth are challenges confronting Tremco Global Sealants, as president Randy Korach explains to Ruari McCallion. When observing the classic image of a swan gliding serenely across a smooth lake, everyone knows that its casual beauty above the water is maintained by strenuous activity below. The progress of Tremco Global Sealants has been rather similar.┬áÔÇ£Tremco Group engaged on its strategic plan in 2003, which was to double in size by 2010,ÔÇØ said Randy Korach, president of Tremco Global Sealants. ÔÇ£WeÔÇÖve seen dramatic growth and, over the past five years, weÔÇÖve tripled in size.ÔÇØ That growth has come both from acquisitions (one of the most significant being the 2005 purchase of German company, illbruck) and internal efforts. ÔÇ£WeÔÇÖve achieved $700 million of growth over the period and more than half of that, $385 million, was organic. On a day-to-day basis, we run our company strategically focusing our efforts on building our brands, identifying and filling gaps in the service or product offerings in the industry and providing a value model that will enable us to grow through our customersÔÇÖ ability to grow their businesses.ÔÇØToday, Tremco Global Sealants is the worldÔÇÖs foremost supplier of sealant, weatherproofing, waterproofing and passive fire control solutions for commercial and residential construction and industrial applications. The company manufactures the most complete range of high-performance products in the industry, including silicone and urethane sealants and impregnated foam tapes, glazing rubber extrusions, deck coatings, commercial and residential waterproofing and firestopping systems. What makes the company unique, however, is its ability to provide building envelope solutions from the foundation to the roof. Wall assemblies, window assemblies, deck coatings and the below-grade applications all need to connect to ensure sustainability, or the long-term performance of the building enclosure, and Tremco is uniquely positioned to provide the knowledge of how to bring them together and the compatible products or systems for integrated building envelope solutions. Tremco Global Sealants is part of the Tremco Group, which represents about one-third of the portfolio of RPM Inc., a multinational company that holds ÔÇÿa mosaic of superior products, services, technologies, companies and peopleÔÇÖ, primarily in construction-related areas. It prefers to maintain the entrepreneurial spirit within its business units, while providing financial and management stability. Its strategic move in 2005 was to expand its reach across the world by replicating in Western and Central Europe the successful strategy that had seen it grow into a major corporation in the US. ÔÇ£Our focus is on product innovation and customer intimacyÔÇöunderstanding needs and responding to them. Our acquisition business model is based on respect for the entrepreneur,ÔÇØ said Korach. ÔÇ£We identify opportunities in three areas. First is synergisticÔÇöcompanies with complementary business positions to ours, with a strong management team. The second is the entrepreneurial acquisition, which is typically a smaller company, in a space weÔÇÖre maybe not familiar with but, again, with a strong management team, often family. WeÔÇÖre able to provide capital resources for development. The third area is strategic, typically larger companies.ÔÇØ illbruck fit well in all threeÔÇöa strong company, operating in a geographic area that the company had identified as a target (in this case, Western Europe) and under family ownership, which is not unusual for established businesses in Germany. ÔÇ£illbruck was identified early as a fantastic fit,ÔÇØ said Korach. ÔÇ£We developed a relationship identifying mutually beneficial opportunities for both companies and were able to demonstrate that RPM has done a great job in becoming the preferred home for family-owned companies in construction.ÔÇØTremcoÔÇÖs main market in the US is commercial and industrial but the downturn in the residential sector, in which it also has a presence, is a warning of what may be coming along. ÔÇ£In our experience, trends in the commercial and industrial areas lag the residential sector by no more than a couple of years,ÔÇØ Korach observed. ÔÇ£In preparation, weÔÇÖre undertaking some belt-tightening and are assessing the necessary actions to preserve our strategy. WeÔÇÖre looking at what we need to continue to invest in short-term and what we may need to sacrifice. WeÔÇÖll continue to invest in new product development, specific product innovation and examine our headcount going forward. Brand building and process support are very important but circumstances differ across our markets; different times need different approaches.ÔÇØ Tight management is very much at the heart of TremcoÔÇÖs strategy. ÔÇ£WeÔÇÖre not immune from the malaise of bureaucracy that can infect any large organization,ÔÇØ he said. ÔÇ£We fight the good fight every day, with active dialog, active internal management discussion and challenging of management decisions openly and honestly. We use tools from academia and ÔÇÿTremcoizeÔÇÖ them. We use the balanced scorecard, as well as lean and six sigma tools to attack inefficiencies in all areas of our business. I wouldnÔÇÖt say weÔÇÖre leaders in lean or six sigma, but it makes good business sense particularly in an increasingly competitive environment. We canÔÇÖt afford to be complacent. While we are not immune to low-cost competition, we work on providing a value-added position to our customers so that we give them a reason to choose us as their supplier of choice.Improvement tools are not just deployed in the manufacturing area; theyÔÇÖre applied in transactional processes, too. ÔÇ£ItÔÇÖs a big cultural shift to get heads of departments to raise their hands and say they could use these tools to drive out inefficiencies in virtually everything we do,ÔÇØ said Korach. ÔÇ£While not everyone within the organization is there as yet, weÔÇÖre making progress.ÔÇØ TremcoÔÇÖs strategy is based on long-term business growth, and as it spreads across the globe, there are different challenges every day. ÔÇ£We have a global leadership team that investigates the balance between North America and the rest of the world, Europe in particular. It undertakes strategic discussions and decisions,ÔÇØ said Korach. ÔÇ£We have the luxury of a geographically-spread portfolio and strong business mix. We relish our position. ItÔÇÖs difficult to be agile in a global market but thatÔÇÖs what we strive to be.ÔÇØ