The “new normal” is promising to dramatically alter the building industry, requiring Ply Gem Industries to reevaluate its position as a manufacturing company, says Lee Clark-Sellers, Ply Gem’s Innovation Officer since 2011.
With the demand for supply chain value, the need for agility in a changing marketplace (residential, multi-family, new construction, repair and remodel, commercial), and changing demographic trends (everything connected, educated consumer, urbanization), increasing revenue is a must, as is maintaining cost-effective manufacturing, she observes
This article continues Clark-Sellers’ account of Ply Gem’s innovation journey, begun in Innovation Management Report’s Fall 2012 issue, by focusing on evolving the company’s innovation capabilities and culture to complement growth by acquisition, both aligning to its corporate strategic vision.
The “new normal” is reflected across multiple industries, from Staples selling shaving cream and deodorant to Home Depot selling 3D printers. Tesla opening its patents to create market competition is a counter move in the use of patents. Even Fujitsu is adapting to the shrinking manufacturing footprint by turning its electronics plants into giant greenhouses to meet the growing food demand by growing lettuce.
These changes are all around us. Adapting will bring success, and Innovation is about adaptation.
Developing Sustainable Innovation Culture
Within Ply Gem Industries, the new innovation journey started in 2012 with understanding what Innovation means. While innovation has always been a part of Ply Gem’s history from the start with recycling plywood crates to developing McDonald’s Sippy straws, the new innovation focus was on how to develop a sustainable innovation culture.
Developing a common language is critical for a sustainable innovation culture, and it ensures everyone feels ownership. This was a basic step in influencing the culture. We have used a 4-tier definition: Tier 1, Hold the Base—mainly cost improvement, low risk, use core capabilities; Tier2, Incremental—new and improved product/service to customer; Tier 3, Significant—new customer value proposition; Tier 4, Transformational—industry- changing product, service or business model.
Tiers 1and 2 fall under the current business units, where there is a culture of safety, quality, clear rules, and methodical processes. This culture is required for a manufacturing plant where employee safety and product quality are the top priority. Tiers 3 and 4 require a culture of learning, experimentation, risk taking, and a high degree of urgency. For this reason, Ply Gem created foundation Labs as a separate entity in 2013.
Foundation Labs Looks Beyond Today
Foundation Labs (FL) is designed to complement the business-unit R&D activity and look beyond our current product portfolio. It is staffed by a dedicated team of in-house scientists, external consultants and key testing partners around the globe. The key goal of Foundation Labs is to establish alternative revenue streams for Ply Gem that do not fit into the current business-unit portfolio or business model. FL has three key focus areas: identify and qualify opportunities, incubate opportunities, and launch new opportunities.
Each opportunity moves through a series of phases in which the opportunity progresses or is stopped. Each phase also requires a different set of skills and culture. The Identification phase requires a high degree of outreach both within and outside of our industry. New ideas come from constantly scanning the environment in both the building industry and outside world. This requires people who possess strategic, insightful mindsets and who aren’t afraid of acknowledging they don’t know best. An open attitude is a must for this team.
Incubate and Launch
Within the Incubation phase, the focus shifts to experimentation and prototyping. This often requires us to bring in new skillsets that complement in-house knowledge, as well as formulate new tactics to develop and test ideas.
The Launch phase is treated as a start-up company, with a dedicated team given latitude to test new business and customer models as it establishes the market. If proven scalable after 1-2 years, the new revenue opportunity will be transferred from FL into a new or existing business unit. Projects can either be developed in-house or through collaboration with key partners. Oversight of FL is through a Board of Managers, consisting of Ply Gem’s CEO, other executive leaders and an outside member.
Engineered Slate Roofing
One of Foundation Labs’ outputs was the launch of our new Engineered Slate Roofing product. The original material science was directed at a completely different product and market. However, after two years of intensive R&D and testing, we tried something completely different. Within 12 months, we were able to create a product, distribution and strategy for Ply Gem. This has given us insight into several other product lines that are outside of Ply Gem’s current portfolio and market.
Innovation Starts at the Top
Other fundamental programs to foster a sustainable culture of innovation started at the top of the company. Ply Gem’s CEO, Gary Robinette, included innovation as part of corporate executive bonus structure three years ago and formalized the role of Innovation Officer. Innovation is on the agenda at each of the monthly Executive Reviews. Ply Gem is a good example of why innovation must start at the top.
We have other internal and external innovation programs. Key internal programs include creating an ideation portal for employees and running annual Grand Challenges. Also, innovation is part of both the company’s leadership training program and the sales training program.
External innovation programs have included hosting an open ideation platform within the building industry, participating in university innovation programs, and working with both start-ups and established companies to develop new products, services and go-to-market strategies.
Each year this list grows, as well as the innovation culture within Ply Gem. Fostering innovation is an ongoing journey, which requires adapting to the changing marketplace and business cycle.
The Ongoing Journey
At the time of this writing I would say Ply Gem has created a new standard in the Industry in both internal and external innovation programs. The innovation discussion is now happening not just at the executive levels but on the manufacturing floor, and external companies are frequently querying Ply Gem about new opportunities. I would call this a good measure of the success of Innovation.
Lee Clark-Sellers; Innovation Officer; Ply Gem Industries, Inc., Cary, NC; firstname.lastname@example.org