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DPI Client Interview
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For several decades, T. D. Williamson, Inc., has been the worldwide leader in pigs. No, not that kind of pig. These are specialized pigs, equipment that cleans and measures the geometry of a pipeline. Beginning with pigs, this 80-year-old privately-held company has developed equipment to perform maintenance, without shutdown, on under pressure piping systems. The company is the recognized leader in hot tapping and plugging products and services worldwide. Business had been good; the company was stable. But management realized that significantly greater growth was essential if they wanted to remain so. Yet efforts to charge up the engine had fallen short of where they wanted to be.
"We had few competitors and we certainly had the lion's share of the business that we were in," says Pete Samoff, President and COO of the privately-held Tulsa, Oklahoma company. TDW currently has about 700 employees living in 20 different countries. "We're the company that developed the technologies and marketed them, bringing something to the pipeline marketplace that's truly needed, and we're highly respected for the quality of our work. But the market for those products was getting mature. The company could only grow at the rate of the market segment. We had done all the right things to find new growth, searching out new markets, pushing the organization for growth. We ran harder, invested capital, developed new markets. We did all those things but really couldn't outpace the market itself. We just weren't getting the level of growth that we felt we needed as a company.
"We also wanted to see a company that would look more for opportunities, a company that would be more aggressive, that would assume a little more risk in the way we approach things. Not risk in the marketplace, not risk in what we do as a company because you can't have risk when you're working on live gas pipelines. I'm talking about that risk that would allow people to say, 'Okay, I think this is a good idea and we should pursue it and I'm willing to go forward with it.' And that just wasn't something that we had."
Samoff and his top managers had tried to tackle the issue of growth, or lack of it, in their annual strategic planning meetings, but they didn't seem to be able to break out of their current business' confines.
Says Samoff, "I had been President for three years, and when I looked at what we'd accomplished in these planning meetings over that time frame, I realized we'd gone over the same issues every year, and they were much more operational than strategic in nature. We really needed to get beyond that. That's when we set out to find somebody who could bring some discipline to the process, to get us on the strategic side of things and off the operational issues."
After a thorough search of strategy consulting options, the DPI Strategic Thinking Process rose to the top, as it represented a means to mine the knowledge and experience of TDW’s own managers, collectively amounting to hundreds of man-years. The process, which systematically extracts a complete picture of the company, its products, markets, and view of the future business arena, would allow them, they felt, to draw on their deep understanding, to envision a new future for T.D. Williamson, Inc.
"The fact that the DPI process uses our people to develop our strategy, that it's not people coming in and doing it for us made a whole lot of difference," Samoff states. In assembling the group that would go through the process, Samoff and his senior managers were interested in extracting the best thinking of a diverse cross-section of the company. "We brought in thirty-five people from ten different countries, people with different backgrounds, and different markets--some from developing markets and others from markets that were very mature."
DPI Partner George Spiva facilitated the process, keeping the discussion on track and assuring that all points of view would be heard. Says Samoff, "I think having a facilitator like George Spiva, who's experienced at this process, was important. An outside facilitator makes sure that you stick to the program and that the most vocal or most senior people don't take over the discussion."
As they went through the sequence of the process, they quickly found that this crossbreeding of ideas led to lively debate, with new perspectives emerging. "It was interesting to see how, in fact, we didn't always agree on everything, but in the end we came out with thirty-five people who were on board as to where we're heading."
The turning point came, as it often does, during the debate over their Driving Force, which, in the parlance of the DPI process, is the specific set of skills and capabilities at the core of the company that propels it toward a given set of products, customers and markets.
The discussion at T. D. Williamson, Inc., brought about a surprising conclusion. Most of the team thought they were Technology or Know How-driven--pipeline maintenance technology--but soon realized they had gradually become Product-driven--niche suppliers of equipment and services--and determined they should be Customer Class-driven--offering solutions for the maintenance needs of owners/operators of pressurized piping systems.
Samoff describes the discussion this way, "When we got into the Driving Force we all knew we were a Technology/Know How-driven company--the Know-How being the specialized ability to service pressurized pipes. We'd been doing it for eighty years. But when we got into talking about it, and we did have some heated discussions, all of a sudden we began to question if that's who we truly were. It was interesting to watch the discussion evolve as we realized that we had probably become, over many, many years, more of a Product-driven company and not what we thought we were. We were market leader in hot tapping and plugging equipment for a long time, but after a time the equipment was in broad use. And we came to the conclusion that our customers weren't really looking for us to be just an equipment supplier any longer.
"So we found that who we thought we were, we really weren't, and realized our customers were looking for us to be more. So we decided to shift our Driving Force to Customer Class-driven and expand the services we offer to our customer base. We already had most of the capabilities we needed to do that. But what we would really need to do to make this change was to develop a new Area of Excellence, and spend a lot of time with our customers to find out more about what they're doing and what else we can do to help them in their businesses."
As a result, the group hammered out a concise new Business Concept that would reshape the company and provide a blueprint for the future: "We will anticipate and respond to the maintenance needs of owners and operators of pressurized piping systems with innovative solutions that leverage our unique operating and technical capabilities that have application in all of our geographic markets. By partnering with our customers we will enable them to minimize their risk and maximize utilization of their assets."
As Samoff explains, "There are about a half-dozen key words in there and our managers understand it. We use it as a filter for what we will and will not do."
To illustrate the difference between the new concept and old, Samoff recalls an incident that occurred a few years ago. "I was listening to one of our guys telling a customer how to go about doing a particular type of job. He was telling this engineer exactly what he needed to do to clean his pipeline, and how he needed to do it. That's just how we supported our customers who'd bought pigs. I think that pig sale was three or four thousand dollars. Today, we're doing the whole cleaning job that could be $300,000 and the pig sale's still three thousand. So we really do it from beginning to end now, rather than just selling the products."
This has grown the field of opportunity dramatically, enabling T. D. Williamson, Inc., to drastically alter their view of the future possibilities.
"We've got a much larger sandbox, a much larger opportunity. Now we're in the process of learning more and more about our customers. We need to understand them well enough, that when they're out there trying to decide what to do next, and they get to a decision about where they want to be, we're already standing there ready to serve. That's where we want to be."
Critical Issues: A Pipeline To Implementation
As any CEO knows, creating a strategy is only the first step. A crucial step, but only the beginning. Making sure it happens requires a disciplined approach, the backbone of which is a list of Critical Issues--an essential output of DPI's Strategic Thinking Process.
"The greatest thing about it for me," Samoff says, "was that we came out of the DPI process with a clear list of Critical Issues. Issues like customer research, maintaining our brand equity, breaking new markets. We had the people who took part in the strategy sessions design and pursue these. We have a lot of ownership in the process because a lot of people have been involved."
Samoff believes this involvement in these issues has been essential to getting commitment to the strategy and effective implementation.
"We selected the Critical Issue teams very carefully, and as time went on brought in more and more people. By the time we'd been through the first meeting or two, we had somewhere between 80 and 100 people directly involved. That led to a lot of buy-in throughout the company around the world--and a focus on getting it done."
One of the most pressing Critical Issues was to prepare TDW's 700 people for the changes that would be taking place. After all, these highly skilled workers had been doing the same types of things for many years and the company seemed to be doing well, enjoying a sterling reputation in its field. Why change? Why now? How?
"One of the things we had to do was to change the culture in the company that really resisted change," Samoff explains. "Any kind of change caused a great deal of anxiety. In addition to directly involving people in the changes, one of the tools we used is a set of videos to explain change. In the first one, we used the lemonade stand to try to put the new strategy in terms everybody would understand. It was about a lemonade stand that only sold lemons and water and sugar, and you made your own lemonade, versus one that made the lemonade (complete solutions). Another video was about the Critical Issues and another on progress and successes.
"Our personnel were told that there would be organizational changes and there were. We told people we were going to change who our customers were, that we were going to change how we do business, bring in new skills. And we did all those things. People are beginning to recognize that change is here, that it's going to happen, and can see the positive results.
"Now when we're talking about making a change or coming up with a new breakthrough capability, people want to be a part of those teams, teams like the lean manufacturing team. They see that this new strategy is really what's driving where we're headed and want to be a part of it. They now understand that change isn't necessarily bad. That change can make things better. This could never have happened two or three years ago. The process would have just faded away. Now when I walk through the shop and offices around the world, people all want to talk about the strategy and how we're doing, not just where the next order's coming from."
Another Critical Issue team's charge was user research--learning everything it can about relevant customer needs to flesh out future products and services. Another was assigned to researching and creating a plan to handle a burgeoning customer need, called pipeline integrity. "It's a new market that's emerged in the U.S. and we're there already, ready to support our customers,” Samoff says.
As these and other Critical Issues have progressed, the much-needed growth has followed along exceptionally well.
"One of the things we said was that we wanted to double the size and value of the company in five years. That would have been a big stretch for our company historically," Samoff states.
"Right now, in the first full year of our new strategy, we're way ahead of where we thought we'd be. We've had a very good year--the best in our history. Our sales volume increased by 20% versus the typical 6% over the past several years. This put us ahead of our 5-year target and expected revenue growth and total company value is continuing to exceed our projections.
"We can actually measure and see how much of that growth has come from the new strategy and how much from our traditional market niche. So being able to pass that along to all of our people has been a real shot in the arm for everybody."
