A Client Success Story: Maxcess International
Accelerating Organic Growth via Lean New Product Development
One company with five major brands and no strong history of cooperation across divisions was falling behind in developing innovative new products.
Total Engagement Time:
- 8.5x improvement in new product sales
- Implemented a global, cross-functional, lean NPD process focused on topline growth
- Restored innovative culture focused on creating products that match customer needs
- Realigned Product Portfolio to business strategy – enter emerging markets
- Standardized global product offering to reduce SKU and manufacturing complexity
Business today is a complex world of global deals, corporate mergers, and relentless competition. To succeed, we must collaborate across continents and cultures, often working in newly assembled business units. We need a common language if we are going to act in unison. This is especially true when it comes to making strategic decisions about new products and then getting those products launched. Barriers to innovation are everywhere.
For Greg Jehlik, newly minted CEO of the Maxcess group of industrial brands, those barriers to innovation were well entrenched when he arrived for the first time at headquarters in Oklahoma in 2010. Three of his best-known brands, Fife, Tidland, and MAGPOWR — makers of guiding systems, slitting & tension control products for printing, plastic packaging, converting, textiles, and other manufacturing — had been together since the 1990s. Later deals brought in complementary precision roll companies Webex and Valley Roller. Together, the brands were a powerhouse of industrial application experts which, in many respects, acted like complete strangers.
“We were one of the biggest players in the market and we were acting like a bunch of little, local businesses,” Greg recalls. “Systems designed in Europe did not consider the needs of customers in China or North America. Nothing had been done to integrate the various brands into one company.”
Greg’s first order of business was to travel to all the Maxcess sites. The private equity owners were concerned about the lack of innovative products for the global market and emerging economies like China. So, Greg traveled across three continents, visiting every office and factory, looking for the future of Maxcess. What he brought back to Oklahoma City with him were 13 entirely different business cards — different logos, different literature, different messages — from Maxcess business units and leaders around the world. It was a potent symbol of the company’s fractured identity. With a 15-year history of the brands acting independently, Greg knew it would not be easy to get leaders all pointing in the same direction and responding to customer needs.
Fortunately, TriVista’s Lean New-Product Development experts Brenda Reichelderfer and Shigenori (Nori) Morimoto were also on the case. Brought in at the recommendation of the private-equity owners, Brenda found the new product pipeline clogged with evolutionary projects. There were a lot of slight improvements and medium-sized modifications, but no revolutionary ideas. Strong portfolios have a mix of both evolutionary and revolutionary. To get to the breakthrough ideas, Brenda and Nori knew the company needed its global talent focused in one direction, with a common language and product development process.
Nori began by training two teams on the concepts and models of Voice of the Customer (VoC)—a focused method for finding the customer’s true, unspoken needs and translating those into new products. He led the teams in preparing and conducting one-on-one interviews with end customers, analyzing the customer word choices to reveal their true needs, and then developing key messages from that analysis. The teams brainstormed to identify concepts from every interview and then looked at the whole to begin thinking about solutions.
“We work hard to make sure that the teams are not being walked into a pre-ordained solution,” Nori said. “The really valuable part of this process is getting engineers to back away from their tried-and-true solution sets and think about the customers’ real needs.”
Meanwhile, Brenda was training cross-functional teams in Stage-Gate tools and preparing leaders to guide the efforts with Portfolio Management.
“With three distinct design centers all doing their own thing, Maxcess really needed Portfolio Management first. But to get there, they needed Stage Gate, because all projects need to be trackable, sortable, and have a business case,” Brenda says. “Without Stage Gate, you’re at risk of doing the pet projects, the squeaky-wheel fixes; not the best project for the company.”
With Brenda’s direction, Maxcess collected all of their design engineers into one room with company leadership. They looked at the 25 projects that were in development and agreed to transition all of them to Stage-Gate management (Figure 2). That meant building a business case for every project, which took about two months. For most companies, 30-50% of new-product ideas will not survive the disciplined, rigorous analysis that Stage Gate requires. The same was true for Maxcess. By the time the company’s global, cross-functional leadership team was ready for the first Portfolio Management meeting, just 18 projects remained. After that meeting, the number was 13. Once we whittled away the weak ideas from the strong, the potential value of Maxcess’ new-product portfolio increased 30% while investment in it was reduced by 27% (Figure 3).
“When we came out of that meeting, it was crystal clear what projects should move forward,” Brenda says. “And with more focused attention, those new products could get more resources and move faster through the pipeline.”
One of those projects, the Fife 500, turned out to be a game-changer. It began when the Stage-Gate team recognized a duplication of efforts, with the U.S. and German teams both working on updates of a Fife guiding system. Brenda put the two teams together and pushed the conversation far and wide, resulting in their first in-depth, international discussion of customer needs. Instead of competing with each other, the teams began truly evaluating the elements of each design against customer demand.
The Fife 500 began as an evolution, but it became a revolution. A guiding system that keeps material flying through a processing line at 2,000 feet-per-minute and running true, it has intuitive touch-screen controls capable of working in more than a dozen languages. It quickly became Fife’s most popular guiding system.
“With our best engineers working together instead of in opposition, considering the needs of customers around the globe, and following a clear development process, the Fife 500 was our first truly global project,” Greg says. “It was designed with off-the-shelf components to keep costs down. The project was on time and on budget. It demonstrated to us that we could work together as one team and make something exceptional.”
That was 2010. In the years since then, Maxcess has continued to use the Lean New-Product Development process to manage innovation. Every month, cross-functional teams meet to manage the portfolio of projects. Every quarter, the work product of those meetings rolls up to senior leadership meetings. Every project begins with Voice of the Customer to ensure customer input, and is managed by Stage Gate to keep it on track.
The entire Lean New-Product Development engagement between TriVista and Maxcess lasted just six months, but the value of it increased over time (Figure 5). In 2010, projections for new-product sales (defined as year of launch plus 3 years) were flat at about $1 million per year. By 2012, new product sales were just under $3 million. In 2015 those sales were more than $8 million, representing 8.5x improvement in new product sales. And Maxcess had finally become a unified sum far greater than its parts.