From Local to Global: Smart Management Lessons to Grow Your Business

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© 2012 by Evan J. Segal. All rights reserved.

No part of this book may be reproduced, stored in a retrieval system, or transmitted by any means without the written permission of the author.

Published by AuthorHouse 02/16/2013

ISBN: 978-1-4685-6353-5 (sc)

ISBN: 978-1-4685-6352-8 (hc)

ISBN: 978-1-4685-6351-1 (e)

Library of Congress Control Number: 2012904874

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Because of the dynamic nature of the Internet, any web addresses or links contained in this book may have changed since publication and may no longer be valid. The views expressed in this work are solely those of the author and do not necessarily reflect the views of the publisher, and the publisher hereby disclaims any responsibility for them.

Contents

Reviews

Acknowledgments

Overview

Chapter 1:   New Product Development

Chapter 2:   Strategic Growth

Chapter 3:   People: Building a Great Organization

Chapter 4:   Climbing the Ladder

Chapter 5:   International Partnerships

Chapter 6:   Marketing: Romancing the Hose!

Chapter 7:   Customers

Chapter 8:   Supply-Chain Management

Chapter 9:   International Market Access

Chapter 10:   Selling the Business

Appendix/Resources

About The Author

Reviews

An Entrepreneur’s Guidebook 38957.jpg 38957.jpg 38957.jpg 38957.jpg 38957.jpg

Evan Segal’s book, From Local to Global is a must read, hands on guide for any entrepreneur who is running their own business, thinking about running their own business, or thinking about selling their private company. Evan takes the unique practical perspective of discussing the do’s and don’ts of managing and growing a business that frankly can be applied to any industry, addressing topics such as growth through acquisitions, hiring, marketing and importantly, how to think about your customer. The book is extremely well organized, with a powerful Lessons Learned section at the end of each chapter. From Local to Global should quickly become the entrepreneur’s guide to running and growing a private company.

Robert Sarazen—Vice President, Goldman Sachs & Co.

Full of well organized insights 38957.jpg 38957.jpg 38957.jpg 38957.jpg 38957.jpg

This is a well-constructed, well-organized, thoughtful and insightful work by a person who has been to war and clearly knows what he is talking about. Each chapter has lessons that are well worth learning at each and every management level; it is a paean to the entrepreneurial spirit and a testament to the power of world-class leadership. _

Christopher B. Carson—Director: Business and Tax Group—Cohen & Grigsby

Practical-Practical-Practical 38957.jpg 38957.jpg 38957.jpg 38957.jpg 38957.jpg _

Mr. Segal has produced a very interesting and informative book. He writes from a practioners point of view. He provides refreshing insights into how a business truly runs and becomes profitable. His frame of reference is not a large business, where most things have been figured out… but a scale that we all can relate to—one on the way to success.

The questions and challenges posed are just as important as the answers his firm arrived at… and the journey is a trip in itself—one that we all can relate to. He takes the issue of growth from slogan to reality . . . providing a blueprint for success. Thanks for this solid book- . . . a must read!

Dr. Charles Bishop, Principal, Coral Bridge Partners

Fascinating Read for entrepreneurs, business owners and students 38957.jpg 38957.jpg 38957.jpg 38957.jpg 38957.jpg

It’s very well written, concise and an easy read—and makes its point well. The author presents a fascinating story about how he took over at his company’s helm and grew a small local business into a global market leader. He takes a mundane product (a stainless steel gas connector for the food service industry) that most of us have seen (but never given a second thought to) and weaves a great story around it. Lessons learned from the book include a first-hand view of a roadmap on taking a manufacturing company to the next level in the face of global challenges. It also shows how an innovative small businessman can flip a global challenge into a multitude of global opportunities! I highly recommend this book to aspiring entrepreneurs, businessmen and business school students!

Dr. Bopaya Bidanda

Department Chair, Ernest E. Roth Professor of Industrial Engineering

Department of Industrial Engineering, University of Pittsburgh

Great Read, Better Lessons 38957.jpg 38957.jpg 38957.jpg 38957.jpg 38957.jpg

As a freshly minted MBA, it is great to read a book that takes many of the academic concepts I learned throughout my curriculum and applies them to a real world setting. From Local to Global: Smart Management Lessons to Grow your Business is not only a very entertaining read, but is also filled with valuable lessons for anyone involved in today’s complex business environment. It is evident that the author shares his lessons learned with the sincerest intention of helping others succeed. I would highly recommend this book to anyone interested in the complexities of effectively running, and growing, a successful business—The pieces of this book are timeless and will provide insight and ideas that will be useful for many generations to come.

Brett Paulsrud, Senior Real Estate Analyst, HFF

Interesting small business story full of valuable lessons 38957.jpg 38957.jpg 38957.jpg 38957.jpg 38957.jpg

Interesting, valuable book on growing a successful small business. I picked this up as an entrepreneur looking for insight to build and grow my startup—before finishing the second page, I was jotting down ideas to implement in my own operations. The book teaches valuable business concepts through the story of a small niche product growing into an essential part of commercial kitchens and homes around the world. The author does a good job combining the creative and academic approaches he used running the business, with valuable small business war stories. These include getting through the doors of heavyweights like Home Depot, fighting discriminatory EU trade practices, and even getting plumbers excited about stainless steel gas line connectors. Definitely recommended for entrepreneurs, business students, small/ mid-size business leaders.

Brain Magrann, Principal, Traversis Global Training LLC

Contact Information:

Email: [email protected]

Website: www.evanjsegal.com

Facebook: www.facebook.com/EvanJSegal

Twitter: @evanjsegal

LinkedIn: www.linkedin.com/in/evanjsegal

Acknowledgments

I would like to first thank all of the employees, customers, suppliers, manufacturers’ representatives, and other stakeholders who played an important role in the success of Dormont Manufacturing. It was their hard work, dedication, and teamwork that laid the foundation for our success. I would also like to thank Stacy Brovitz. Working together, we provided the leadership to support the dramatic growth of the business

I would like to thank my father, Jerry, for his wisdom and guidance and for teaching me the importance of a strong moral and ethical footing as the foundational elements in growing a business. He always told me to act like a mensch, a true gentleman in all my actions. Building on his solid support made it easy to do the right thing in tough situations. His guidance, influence, and steadiness led Dormont through its formative years and his invention of the stainless steel gas connector enabled the company to realize its tremendous growth and success. I would like to thank my brothers, the Segal and Phipps families, and all of our friends for their love, support, and encouragement throughout my journey.

Most of all, I want to thank my wife Tracy and our beautiful daughters, Tess and Ariel. Sharing the challenges and providing a constant foundation of love and support, Tracy has always been a true partner in my career. Our daughters grew up discussing how many hoses did Daddy sell today? at the dinner table. From attending sales conferences to posing for photos used in marketing materials, my family has always been an integral part of my success. I love you all more than you’ll ever know.

Overview

Over a twenty-year period, I led the transformation of Dormont Manufacturing Company from a small family manufacturing business into a world-class global manufacturing organization. Building a strong, highly motivated team, we achieved a tenfold increase in sales and profits and created several hundred new jobs. We worked with our suppliers to introduce innovative products, create new technologies, and expand into international markets. I was able to energize the selling of a business-to-business product—making sales meetings, distributor calls, and company events something that everyone looked forward to. Using best-in-class skills, investing in automated equipment, and giving our employees the room to succeed, we built a highly successful manufacturing business in a very challenging environment.

We worked with a wide range of customers, from multinational food-service chains, large retailers, and equipment manufacturers to numerous food-service equipment, plumbing/HVAC, and catalog distributors throughout the world. Each channel of distribution and every customer provided an opportunity to learn about their business and to develop a mutually beneficial relationship. We were able to identify best practices and cross-pollinate them across channels, delivering valuable new ideas to our customers.

After successfully leading the evolution of Dormont from a small local business into a successful international company, I realized that I had learned many invaluable lessons along the way. Through a series of speeches to executives at national trade shows, I found that the knowledge that I had gained was relevant and applicable to business owners and managers. My goal in these presentations was to provide business leaders with some of the knowledge and wisdom that helped grow Dormont in today’s challenging environment.

The chapters in this book address a range of topics, including growing and selling a business, creating exciting marketing programs and dynamic sales meetings, operating in a global economy, working with a broad range of customers and suppliers, and building the trusting and talented team that became the foundation for the success of our business. The stories/mini-case-studies contained throughout the book provide an effective way to both demonstrate and emphasize smart management lessons. Each story was selected because it provided an effective was to illustrate an important management concept.

I hope that the insights and lessons contained in From Local to Global: Smart Management Lessons to Grow Your Business provide you with the opportunity to build and grow your business in a challenging global economy. I want to thank you for purchasing this book, and I look forward to hearing from you about your own experiences and ideas. You can find additional information at my website (www.evanjsegal.com), Facebook (www.facebook.com/EvanJSegal), Twitter (@evanjsegal) or LinkedIn (www.linkedin.com/in/evanjsegal).

Chapter 1

New Product Development

New products are engines to growth and profitability.

Exceptional performance in Product Development is the result

of a disciplined, systematic approach based on best practices.

—Robert G. Cooper

New products are often a critical part of a company’s success. For Dormont, it was the invention of the stainless steel gas-appliance connector that fundamentally changed the direction of our business. This innovation dramatically changed how gas appliances are installed in two industries—residential plumbing and commercial food service. In many ways, these inventions impact all of us—whether it is through the use of gas appliances in our homes or whenever we eat in a restaurant.

As I embarked on my leadership role at Dormont, my challenge was twofold. First, we needed to capitalize on our potential for significant growth in the gas-connector market. Second, we needed to build a new-product-development team that could create innovative new products that would help support the future growth of the company.

I began by studying new-product-development processes that were being successfully used by industry leaders. After a thorough review, we decided to focus on a concept called a stage-gate process. In its basic form, a stage-gate system is a conceptual and operational plan for moving a new-product project from idea to launch. Stage-gate divides the process into distinct stages separated by management-decision gates. The company sets up cross-functional teams that need to successfully complete a set of related activities in each stage prior to receiving management approval to proceed to the next stage of product development. Focus is a critical component of a successful NPD process. It allows you to allocate precious resources on the most important projects. (If you are interested in learning more, in the appendix there is a list of references about stage-gate and other business processes mentioned throughout the book. You might also read about the NPD process at Apple that Steven Jobs used to create products that changed multiple industries.)

Another important tool that we used to support our new-product development was voice of the customer (VOC), a term used to describe the process of capturing a customer’s requirements. It typically consists of both qualitative and quantitative research steps. Our team would work with our customers to produce a detailed set of customer wants and needs and then prioritize them in terms of relative importance and satisfaction with current alternatives. These were used as the key input for new-product definition and the setting of detailed design specifications.

We began building our NPD team by successfully hiring a group of talented engineering and marketing professionals who brought a great deal of knowledge, ideas, and enthusiasm. We were most successful when it involved an extension of our current products and other product extensions developed collaboratively with our supply chain.

The Invention of the Stainless Steel Gas Connector

Dormont sold a line of flexible metal connectors that were used to attach residential gas appliances. These were flexible brass tubes that were made in small sizes (three-eighths inch and one-half inch diameter) and in lengths ranging from twelve inches to seventy-two inches. It was easier to install a gas appliance with a flexible line (vs. hard pipe) as the connection could be attached to the gas supply at the wall and then the appliance could be pushed back into the space. The best examples would be a gas range in a kitchen or a gas dryer in a laundry room. Dormont began to purchase gas connectors and valves and sold them with our line of small Crescent water heaters. This arrangement generated additional sales and commissions, which made the Dormont line more attractive to manufacturers’ reps.

After a few years, the number of brass gas connector returns began to increase. These products were used in residential kitchens and laundry rooms, areas where household cleaners containing ammonia were stored. The brass tubing was susceptible to corrosion from the ammonia, and this created pinholes in the thin-walled tubing. Eventually, the brass gas-connector manufacturers began to coat the flexible lines with a gray epoxy coating to protect against the corrosion.

As a result of the issues with the brass gas connectors, my father (Jerry) began to think about a better solution. Was there a superior product that could perform the same functionality and not be at risk because of corrosion? From the many custom pipe fabrication jobs that Dormont produced, Jerry had learned a great deal about metals that were effective in corrosive conditions. He wanted to design a product that would integrate a metal that was malleable enough to be fabricated into a corrugated, thin-wall tube and could also withstand the attack of corrosive chemicals found in the home. He knew that stainless steel would be an ideal option. Building on the current product designs, he worked with one of our strategic suppliers to design and develop the first stainless steel gas-appliance connector.

In addition to the product design, Jerry had to address issues related to American National Standard (ANSI Z21.24) for residential gas connectors. This was a national standard that was adopted under the auspices of the American National Standards Institute. ANSI had delegated the creation and administration of standards related to gas appliances and accessories to the Z21 Committee. This committee in turn created the Gas Appliance Connector Subcommittee, whose members included brass gas-appliance connector manufacturers, code officials, and individuals from various gas utilities. In addition to performance tests, the standard included a design restriction in the materials section that allowed for only brass or aluminum as metals that could be