If there’s one thing that Kevin Gray can’t stress enough to his employees, it’s the importance of being adaptable to change.
As CEO of Lauren International, a $105 million holding company that consists of five polymer product businesses, Gray says the only way to stay competitive is to continually change.
“Change happens constantly, and one of the things that we spend a lot of time talking about is we believe as much as anything that our leadership needs … to be creating a culture of change within the organization,” says Gray. “We need to make sure that once you start to create a culture that change is acceptable, we don’t ever want to go back and have to push through that barrier to make it start happening again.”
Gray was fortunate in that Dale Lauren Foland, founder and chairman of Lauren International, spent a lot of time during his tenure as CEO creating a culture of change, and it was ingrained in Gray during his 23 years with the company. When Foland retired as CEO in 2005, the responsibility rested on Gray to continue to reinforce that culture, which would, in turn, help Lauren International achieve its main goal — to continue to grow profitably.
Gaining momentum
For Lauren International to successful, all five of its business units — Lauren Manufacturing, Edgetech I.G., LMI Custom Mixing, Lauren AgriSystems and Lauren Elastomeric Coatings — must grow profitably.
Corporate management allows each business to run on its own, so it is up to the leaders of those businesses to ensure that they are constantly evolving to adapt to customers’ needs. Allowing business unit leaders and their employees to develop the strategies behind change leads to more buy-in on their part and a better chance of success.
“You get a tremendous amount of momentum out of each individual business, because there is ownership of that business,” says Gray. “They’re basically creating the strategy, so the buy-in is there. … It’s not something being pushed down their throat as a corporate initiative. It’s all coming from within.
“It’s just like anything else — if you personally set your own goal, you get a much better chance of achieving that than if somebody else comes in with a goal that really doesn’t make sense and you can’t buy in to that. That’s a critical piece of it.”
And although Lauren International gives its businesses guidelines for profitability and growth, the businesses usually exceed those guidelines on their own.
“The business leaders have been chosen because we have a lot of faith in their abilities, and they bring something additional to the table,” says Gray. “We’ve given them the authority to not only grow their business but develop the strategies to move it forward.
“For day-to-day activities, there is almost no interaction with the Lauren International side. We do the reviews. We talk to people and go over their strategy, but by and far, that’s pretty much the business unit leader and their management team that’s setting the direction.”
In addition to setting the direction of their businesses, business unit leaders need to enforce the importance of change in their company culture. For example, an important part of adapting to customers’ needs is being innovative and coming out with new products before the competition does.
But if employees are scared of making mistakes, their creativity will be stifled. Employees need to know that failing is an important part of succeeding in innovation, and that’s an important part of the company’s culture that business unit leaders need to communicate to their teams.
“Every time we fail at doing something new, it’s a learning opportunity,” says Gray. “We’ve made our share of mistakes over the years — seven digit mistakes as far as dollars to the cost of business — and Mr. Foland has always been supportive of that and said, ‘Good try. We learned a lot from that. Don’t be afraid to go pick up and do the next one. Stay very active in your pursuit of innovation.’
“It’s just a culture that it’s OK to try something new and fall flat on our face. We’ll risk a lot of dollar bills to be creative and do new things. And nobody that is involved in that is looked at in a negative way. In fact, they are commended for that.”
The key to change is being consistent and constant. If you constantly tell your employees the importance of change and why it keeps the company competitive, they will get excited about change and what it means for the company.
“Once people start to recognize that the change is good, the change is making us more competitive, the change is giving us more opportunity, and in many cases, the change is improving the overall operation, then you start to build that momentum,” says Gray. “Our point is we can never allow that to go back to what it was when you had to bring a bulldozer in to get it started. Right now, we live in a world where every day we are changing, so people are used to it. That, to me, is one of the most important things that our leadership team can continue to impress on all of our employees.”
Endless opportunities
Change occurs at Lauren International in a variety of ways. Sometimes it’s exploring a new niche and possibly opening a new business.
Other times, it’s developing new products. And sometimes, change just means becoming more efficient and eliminating wastes.
For the past several years, Gray has made it a point to examine all facets of Lauren and look for processes or steps in a process that don’t add value to the customer. He looks at where the business is now and where he would like it to be, and then creates a plan that will get the process there.
“We basically do a quick overview of any of the business practices,” says Gray. “It could be something as simple as, on the office side, accounts receivable. We pull together a group and look at the process and start identifying many of the wastes in the process and how much time it takes to perform that process. Then we start finding and picking out where the wastes are and putting a plan together to eliminate those wastes.”
Change also occurs because management is open to new opportunities, which could mean new products or a whole new business.
“We want to make sure that we are finding niche opportunities where we can add value to our customer base,” says Gray. “We want to do that in a manner that we not only grow top-line revenue, but we continue to remain a profitable organization. To do that we believe we need to be able to build closer and deeper relationships with our customer base and continue to provide things that are different than every other company out there.”
Building customer relationships involves spending time at customers’ facilities and encouraging visitors to come to Lauren facilities. Management tries to reach out to customers using the Internet as a tool to help them manage their inventories and access their needs.
But Gray realizes that it is still old-fashioned face-to-face discussions that bring new opportunities to Lauren. And when customers visit a Lauren facility, they don’t just meet with management, they meet with the employees involved in running the business, so the next the time they call with a question or concern, they know who they’re talking to and how that person operates.
Building those relationships helps customers feel more confident doing business with Lauren and helps Lauren learn about customers’ needs, which could lead to new products.
“When we find out there is a need for a product there, then we go back and start thinking through how we might be able to meet that need,” says Gray. “From that point, we would do the analysis and say, ‘If we could make those things happen, are we going to be able to do that and be a profitable organization? And how big is the opportunity? And where else could we take it? Is it something that we could be spinning off and starting an entire organization around?’”
Sometimes that opportunity turns into a new product, and sometimes it is enough to base a new business around. But regardless of how big the opportunity is, Gray doesn’t strive to reach a certain number of new products a year. If an opportunity arises and appears worth pursuing, then Lauren will pursue it.
“To us, it’s not about quantity, it’s about quality of the opportunity,” says Gray. “It could be one for the year, or it could be 15. It just depends on how things present themselves.”
And sometimes opportunities present themselves as a challenge. All companies face challenges, and rather than be discouraged by them, Gray is motivated by them.
“We really look at challenges as opportunities,” he says. “We try to spend a lot of time recognizing those early and putting action plans in place to deal with them. We don’t sit around crying in our milk over a challenge we face. We take that challenge and realize that if we can persevere and work through this, then we’re going to be a better organization because of it.”
One challenge that the company faced in the last few years was that it wasn’t selling any weather stripping in the United States. But rather than give up on that product, management decided to do something to become more competitive in that market. It required completely changing the way the product was produced, which meant that Lauren had to stop mass producing products and change to single-piece flow.
“Today we are selling a large percentage of those products, because we saw an opportunity,” says Gray. “The way we were doing business, we were never ever going to be competitive and provide the quality product that the market required. We took that challenge and completely changed the way we were making the product and turned a challenge into an opportunity. That’s a small example, but it happens every day.”
And that is why Lauren employees must be willing to embrace change. Although many look at change as a bad thing, change has only brought good to the organization. And that is something that Gray and the rest of the leaders of Lauren International and its subsidiaries will continue to communicate to their employees.
“Be prepared for it, because it is going to happen,” says Gray. “We really stressed that point with our leadership — that it is our responsibility to make sure that our culture never ever slips away from that concept that we are always going to be changing. And none of us need to get comfortable in what we are doing today, because if we are doing the same thing 90 days to 180 days from now, then there’s something wrong, because we are not addressing the needs of our customer base.”
HOW TO REACH: Lauren Internationalwww.laureninternational.com
