American Saw Sinks its Teeth into Aggressive Growth Strategies
Indeed, Lenox American Saw, which already sells products in more than two dozen countries, is looking to increase its presence in Europe and Asia, especially China.
“We’re not looking to make products in China,” said Heisner, noting quickly that the company does, in fact, manufacture some lines there already. “We want to sell products in China.
“They’re cutting a lot of steel there,” he continued, referring to both China’s dizzying growth curve and one of American Saw’s main niches — blades that can cut steel quickly and cost-effectively. “China holds a lot of opportunities for us.”
BusinessWest looks this issue at how the East Longmeadow-based company’s new president will approach the task of capitalizing on those opportunities and thus remain a cut above the competition.
Heisner was promoted to his new post from the position of vice president of marketing for American Saw, what he called “the easiest job in the world.”
He was exaggerating, of course, but also making a point about the quality of the company’s products and their reputation within the industry.
“We’ve always said that if we could put our products in people’s hands, then they were sold on them,” he explained, noting that this was true across the company’s three main product lines: band saw blades, power tool accessories, and hand tools. “It was my job to get those products into people’s hands, plain and simple.”
That assignment remains part of his overall job description, but he also has a bigger, broader responsibility — picking up where his predecessor Bill Burke, now head of Rubbermaid’s tool division, left off in the drive toward the company’s stated goal of growing sales (currently around to $250 million) to the $500 million mark by 2008.
Only now, that target has actually moved to a loftier number. “Our CEO is upping the ante,” said Heisner. “He wants us to get to $1 billion.”
To get there, the company will take a multi-faceted approach that includes new-product development, continued improvement to existing products, and cultivation of new markets in which to sell those items.
Leading those efforts will be Heisner, who, like Burke, spent many years developing a competitive admiration for the Lenox brand while working for one of American Saw’s main hand tool rivals — Baltimore-based Black & Decker.
There, he worked in marketing and new-product development for several years. In 2001, he joined Danaher Tool Corp. as vice president of marketing for its Hennessy Tools division, and two years later accepted Burke’s invitation to join the team at American Saw.
Like Burke before him, Heisner told BusinessWest that what attracted Rubbermaid to American Saw (and pay $450 million for the then-family owned company) was the Lenox brand, which has a strong reputation among end users for quality and dependability.
So much so, that, while the name American Saw & Mfg. is still used in Western Mass., where it has considerable equity, outside the area, the company is known as Lenox.
“Here, if you say ‘American Saw’ or simply ‘The Saw,’ everyone knows what you’re talking about,” he said. “Get outside this market, though, and that name means nothing to them. They know the name Lenox.”
And Heisner’s current priority is to put that name on a wider range of products, but without compromising what he says that name means to professionals.
As he talked about new-product development, Heisner reached over to a table next to his desk and picked up a multi-purpose screwdriver, or an ‘all-in-one, as its known. This is an indispensable tool for many of tradesmen, including plumbers, electricians, and HVAC technicians, but a product that never carried the Lenox name and signature wolf logo — until recently.
“We made a promise when we (Rubbermaid) came here that we swore we’d live by,” he explained. “And that was we’d only offer a product that has a demonstrable benefit. If we couldn’t come up with one, then we wouldn’t offer it as a Lenox product.”
By that, he referred to the difference between the Lenox brand and other tool and accessory brands the parent company sells, such as Irwin — a difference he compared to the disparity between a Mercedes and a Chevrolet.
“We could get to $500 million in one year, forget five, if we wanted to make Lenox more of a mass-market product as opposed to a premium product,” he explained. “We didn’t want to do that.
“What we want to do is take this brand and go like this,” he continued, spreading his hands apart, “because there’s a lot of things that plumbers, electricians, and others use that we don’t make but could — if we could create that demonstrable benefit.”
|“We’re not looking to make products in China, we want to sell products in China.”|
Looking for an Edge
In the case of the all-in-one, that benefit is a thicker wall for the nut-driver, which also doubles as a tube that holds the various screwdriver heads, said Heisner, noting that while conducting the five-gallon-bucket research he spoke of, the company’s R&D team noticed that the nut driver became quickly stripped on competitors’ models because that wall wasn’t thick enough.
“No one had ever done that before, and we’re not sure why,” he said of the seemingly simple innovation. “But that’s our demonstrable difference. And it’s a great example of how we were able to take something that had been out there forever and make it better — to make it good enough to carry the Lenox name.
“We’re maniacs when it comes to user research, and that’s what we did with the all-in-one,” he said. “We didn’t know if there was an opportunity to do something with this particular product; all we knew was that all our users, every single one of them, used one of these.”
The same type of detailed user research has led to other new products, said Heisner, including a torpedo level (another tool that nearly every tradesman carries) with several innovations and a circular saw blade manufactured in conjunction with a Japanese company. It has also spawned improvements to a number of traditional product lines, including band saw and reciprocating saw blades made with a recently developed coating that provides more durability and faster cutting.
Many of the company’s significant innovations move from the band saw blade line — the company’s single largest product segment — into other areas, said Heisner, noting that this was the case with the new coating.
“It’s all about heat — if you can eliminate heat, you can make a much better blade. This coating product dissipates the heat and protects the tooth, so you create a blade that lasts much longer,” he said, noting that the company’s new Armor line of products has been extended from band saw blades to reciprocating saw blades and other lines.
The new-product development initiatives are having a demonstrable difference on American Saw’s bottom line, said Heisner, noting that the company has set several sales records this year and has matched three straight years of double-digit growth — and also in the nature of those sales.
Indeed, while sales of new products (a category reserved for those within three years of initial introduction) have historically accounted for about 5% of total volume, this year, that number is nearly 20%.
“And we want to continue to move that figure higher,” Heisner told BusinessWest. “World class is 30%, and we want to be there within 18 months.”
While working to introduce new products and improve traditional lines, American Saw is also working toward expanding its geographical reach, said Heisner, noting that by this he meant developing new and stronger markets in many of the countries where the company already has a presence.
“Normally, when people talk about China, they’re referring to taking their manufacturing over to China to support the U.S.,” he explained. “We’re doing the opposite; we want to support China with manufacturing here.
“The market in China is exploding, and we have lots of innovative products, starting with band saw blades.” he continued. “That’s half our business — making products that turn big pieces of steel into smaller pieces of steel, and no one is cutting more steel right now than the Chinese.”
The keys to penetrating new markets, and also improving sales in existing markets, are continued R&D, or ‘user research,’ as Heisner called it, and efforts to put the company’s products in front of people and actually in their hands.
Which is why the schedule has become much more crowded for the employee known simply as “Hack Man.”
Lee Breton, a 35-year American Saw employee, started cutting cars in half with reciprocating saws armed with Lenox blades in 1981. He eventually moved on to tanker trucks, airplanes, and anything else that could demonstrate the product’s quality and efficiency. (He recently set a personal best by ripping through a car in less than a minute).
Today, there is something called “Team Hack Man,” said Heisner, noting that Breton now has some help, and will use it to take the schedule of car-cutting events from 20 (the average for the past several years) to more than 200 for 2005.
“That’s quite a show they put on,” Heisner said of the Hack Man team, which appears across the country and overseas. “When you cut in half that fast, you get users to take a look at your products. And once they start using them, they’re sold.”
Summing up the broad strategy for American Saw in the years to come, Heisner said it comes down to one word: relevance.
By that, he meant that the company and its Lenox brand plan to enter into more product lines — items as simple as an all-in-one screwdriver — and thus greatly expand its reach in terms of visibility and, more importantly, sales.
“We want to move into a bigger room,” he said, noting that the company and its
R&D teams will continually look for ways to bring demonstrable benefits to the people who use blades, hand tools, and power tool accessories.
And for that, they will need more of that five-gallon-bucket research.?
George O’Brien can be reached at[email protected]