Rebranding an OEM Company
You probably didn’t know it, but back when this project took place, Siebe Appliance Controls could well have made the components that govern your kitchen range and oven; your washing machine and dryer. They might have been what kept your food cold at home, or at the grocery, and what caused McDonald’s French Fries to sizzle in cookers the world over.
Through a series of mergers and acquisitions, Siebe (pronounced See-Bee) no longer exists. It is now part of Schneider Electric, a global technology company headquartered in France. No doubt the success of Siebe Appliance Controls made its owners and shareholders a lot of money when it was acquired. But when my brother and I were asked to help Siebe solve a branding issue, it was a totally new name in appliance controls. How so? Siebe’s parent company headquartered in London had acquired and merged five separate appliance controls companies and put them all under the Siebe name. Suddenly, that new entity had a 10% worldwide share of market. It also had almost zero name recognition with the appliance manufacturers that Siebe now served. Nevertheless, at the time of our first meeting with Siebe Appliance Controls’ president and CEO, the company was virtually tied with Diehl of Germany, and it had about twice the volume of its closest North American competitor, Honeywell.
The primary question the CEO wanted answered was this: how could all the company names that had become familiar to OEM appliance customers (Robertshaw, Ranco, Eliwell, ACT, and Paragon) best be brought under one corporate umbrella? Should the individual names be retained? It was a question that had to be answered quickly. Whatever the answer to that question turned out to be, it would have to capitalize on whatever brand equity and goodwill already existed in the acquired companies.
The CEO listed what he wanted to know:
• Should each unit operate with separate identification, or should they be combined
under the Siebe name?
• What should be done to capitalize on the inherent strengths of each?
• What were the company’s perceived weaknesses?
• What was or what could be the best and competitively most powerful and sustainable
point-of-difference for this new company?
• What would it take to establish the brand as the clear leader worldwide in the
appliance control category?
While a true identity can almost always be found at a company’s core, in this case there were five different companies, each with its own heritage, cultures and beliefs; each with its own unique strengths, followers and failings.
As is Stephen Hawley Martin’s operating procedure, the search for facts and information started by scheduling interviews with the company’s employees leading up to the managers in order to ferret out cultural common denominators.
Input was gathered in group discussions by teleconference, starting with sales and continuing throughout the entire organization. Then, value statements were prepared in order to get feedback from customers.
It soon became clear that a sound case could be made for making price the king in this industry. Unlike the automobile category where retail prices had kept pace with or led inflation, retail prices of kitchen appliances at that time were about what they had been ten or 15 years previously. That was great for homeowners, of course, but not for appliance-makers and their suppliers. When the research was done, would the company that made the cheapest controls be the winner? Many Siebe employees that were interviewed thought so. If that turned out to be the case, there was no need to proceed further with the study. A powerful identity based on value is not needed when price is all there is to talk about.
The Quest for Quality
As probing continued, the horizon began to clear. In addition to price, there appeared to be increasing pressure among the OEMs for quality.
Did they want it both ways?
The desire for quality stemmed from the high cost of service repair calls. A three-dollar control device that failed after the customer had taken the appliance home could cost the manufacturer a $100 repair call. This, and a growing realization that consumers are likely to remain loyal to a brand with few problems, put pressure for quality on suppliers. One major appliance maker had moved to extract a guarantee that suppliers would pay for a call after a ceiling was passed. Moreover, during the years prior to their acquisition by Siebe plc, some operating units had slipped in product quality. As one of the company’s employees said during the internal interviews:
When you talk to (our customers about what they want) you will hear Service, Quality, Price and Delivery. And you will hear complaints. To be candid, we’ve had some problems. Our PPM (failed parts per million rate) hasn’t been what it should be.
Prior to the acquisition, customer complaints had intensified. Afterward, there had been some management turnover that further exacerbated the situation, as service continuity was lost.
A Sense of Enthusiasm
All company personnel interviewed adhered to the strong belief that the new management was committed to quality. One of the first things the new CEO had done was institute stringent new standards and plant investment. A transformation was underway to the Toyota Production System, now known as “Lean Manufacturing,” and it was expected to lower production costs while a the same time increasing output quality. This had generated enthusiasm internally about the future of Siebe Appliance Controls. One executive told me, “Our strength right now is the enthusiasm we have. We wanted to generate some excitement, and it’s working.”
A sense of spirit had also been brought on by the consolidation. Employees spoke of the company’s heritage; the tale of the young Austrian inventor who had come to England in the early 1800s to pursue his engineering interests and had invented the first diving suit. Augustus Siebe was his name. It seemed that he was driven to invent devices that would reduce manual labor and increase human productivity. His pursuit of excellence had been based on sound engineering principles and his guiding spirit projected values that would be rekindled 160 years later in the company that bore his name.
Many staff members who had been part of the Robertshaw unit of the newly constituted firm, the one that had been plagued with PPM problems, viewed the creation of the new Siebe Appliance Controls group as an opportunity to cast the entire company in a new light. Here was a typical response:
Being part of a big global corporation is a definite advantage. This lets customers know we are not going bust tomorrow. Besides, we are investing year after year. We have balance now and can combine shared experience across these companies and across the world. That’s a big advantage.
Rather than finding a resistance to change and the consolidation, which is often the case when mergers and acquisitions take place, there appeared to be widespread acceptance. This opened the door to using the Siebe name to establish a single identity, and there were practical reasons for doing so. In Brazil, for example, Robertshaw Controls enjoyed a favorable reputation, but it had been known primarily as a maker of mechanical devices and, at that time, electronic controls were rapidly taking over. A new name would give the company a fresh start and associate the operation with the latest technology available.
In England, one manager said, “We want to get the job done. Get lean. We’re trying to do things that haven’t been done before in the new product area.”
Stephen asked him, “What about a name change for your group?”
“Change it. Siebe makes us number one in the world.”
While the idea of changing the name did not resonate well with every single employee, especially those within companies in countries where pride in separate heritages ran deep, the Siebe Appliance Controls name was neutral at worst, and therefore a realistic option. It carried no baggage. Adopting it would wipe the slate clean across the board, and in the aggregate it would broaden global appeal.
As one manager said, “Most customers don’t know the Siebe name or company well, if at all. It is neither positive nor negative. This may not be true, however, with large international customers. Top management is probably aware and has a positive impression of the company.”
The input from discussions with people throughout the company and throughout the world was distilled into ten value statements. Each was heartfelt and true; each represented an important strength.
Systems Innovation: Our platform systems approach (several different controls in one snap-in panel designed to govern all functions) speeds customer installation and lowers overall cost.
Global Source: As the only international company in appliance controls, Siebe is a single-source supplier that can maintain a strategic balance between manufacturing capacities in different countries.
Single Contact: A single service representative is a conduit for all the worldwide engineering abilities of this international engineering company.
Standardization: We know the standards, regulations and configurations for appliance controls everywhere in the world and can help customers standardize and cut costs.
Breadth: Customers will get both up-to-the moment answers and the lowest costs because Siebe Appliance Controls can produce and sell a greater breadth and depth of components and systems.
Stability: Siebe’s financial strength helps customers enter markets everywhere by assuring them a dependable source of supply.
Reliability: Our time-tested manufacturing and technological capabilities mean we produce reliable components and systems that will be delivered on time.
Responsiveness: Because appliance controls are our only business, customers can count on Siebe Appliance Controls to solve problems and get the job done.
Technological Excellence: Siebe Appliance Controls is part of a powerful international engineering group whose sole business it is to deliver technological excellence for customers everywhere in the world.
Engineering Focus: Siebe Appliance Controls is part of Siebe plc, one of the largest diversified engineering groups in the world. This helps shorten product development time while reducing cost.
The statements above provided customers with information we believed they would find intriguing. However, reliability (product excellence combined with on-time delivery) emerged clearly as the most desired attribute.
Customers wanted suppliers they could rely on for quality and just-in-time (JIT) delivery, particularly because lean manufacturing was gaining steam across the globe and JIT delivery is essential to success when it comes to lean production.
They also wanted honest information; a willingness to solve problems; kept promises; and components that performed with the lowest possible failed parts per million. It all added up to the top ranking of “reliability.”
This study rested upon personal interviews rather than statistical data, but the point was soon reached that researchers call “Theoretical Saturation.” That’s when the answers all begin to sound the same. The respondents had been sent the value statements ahead of time. They had read them and formed opinions before our conversations began.
We require a quality goal of 50 PPM in our production testing and 100 PPM in field defects. A supplier has to be willing to support that. Some aren’t willing to invest in improving manufacturing techniques. They need to go to the latest manufacturing technology.
All things being equal, we will go with the supplier with the better track record on reliability.
Reliability is particularly important when you are in a just-in-time position, as we are.
We need to be reliable ourselves and that must extend to our part suppliers. Quality is the major issue.
The most important thing Siebe can do is provide reliable products, it gets us favorable brand awareness. Siebe must have a built-in process to prevent defects.
Reliability is the most important [criteria] of all. All these other things (we’ve talked about) lead up to this. It’s absolutely number one in our book.
When all the questions have been considered, reliability would be the most important consideration for us at this time. Being proactive along with ideas and global technology is also very important.
We are in the commercial cooking game, and reliability is absolutely number one with us. I’ve studied this list, and there is no question.
When I see the word reliability, to me it also means quality. The quality has got to be there. It’s essential.
In this case, the word “reliability” defined the attitude and the result that had to be achieved: Reliability rooted in excellence.
While performance in several of the operating units was uneven, the desire for excellence was embedded in Siebe's corporate culture. Excellence in all endeavors was present in the form of leadership and resources. To become the appliance control supplier of choice worldwide, excellence would have to be delivered in all things from inventive technology to operations, from proactive sales and service to quality products and sure-fire delivery.
To accomplish this, Siebe Appliance Controls’ CEO began systematically to convert all the manufacturing and business operations worldwide to a system of lean manufacturing. This system defines value from the customer’s point-of-view and creates a value flow starting with raw materials and suppliers. These sources move downstream through manufacturing and shipment in a way that brings everything together to reach the customer precisely at the speed of consumption. The methodology causes flaws, if any, to be identified at an early stage, rather than after something has been manufactured and placed into inventory. The lean manufacturing concept was extended to the entire organization, including how the company was run, and to the value chain, thus creating what the Siebe Appliance Controls’ CEO called, a “Lean Enterprise.”
Stephen got caught up in the enthusiasm created by what was going on with this client, and told the CEO I thought he ought to write a book about it. Not only might the book become a bestseller, it could help get the word out about the lean transformation at Siebe Appliance Controls. The CEO said he thought it was a good idea, but he simply did not have time. So Stephen volunteered to ghostwrite it for him, and they worked out a deal.
Things transpired just as it was hoped they would, and the book became an international bestseller. Called Lean Transformation: How to Change Your Business into a Lean Enterprise, it was translated into German, Italian, Spanish, Russian, Korean, and Chinese, and today it is required reading for Lean Certification by the Society of Manufacturing Engineers (SME).
Through lean production, the objectives of reliable products and delivery were achieved for a company that became the clear leader in appliance control manufacturing throughout the world. Lean Production gave solid meaning to the core identity of the Siebe Appliance Control brand.
Siebe Appliance Controls Summary
Here is the Brand Power Statement Stephen created for Siebe Appliance Controls:
In the white goods and appliance industry, Siebe Appliance Controls is the quality supplier of OEM components that appliance manufacturers can rest assured will arrive on time and perform as intended.
Core Identity: Excellence (Pursuit of perfection/always reliable)
Corporate Mission: To become the dominant appliance controls supplier of choice worldwide.
Marketing Strategy: Achieve global customer satisfaction and confidence by partnering with them to design, produce, and deliver innovative new products and systems.
Corporate Position: Siebe pursues excellence in all aspects of its operation resulting in leading-edge products and just-in-time delivery.
Benefits and Attributes: Innovative new products, global sourcing, financially strong, broad-based engineering, a technological leader, proactive service.
Emotional Pay-Off: Confidence
If you’d like to have a conversation with Stephen Hawley Martin to discuss the possibility of having him create a roadmap that will lead to increased sales for what you sell, send him an email. There will be no obligation on your part, it won’t cost you a thing, and who knows where it might lead.
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