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16
Sep

Strategy Consulting for Richard A. Michelson, McNeil Corporation and Inspection Technologies, Akron, OH

A reader of my blog posts has requested that I select and share stories from my days when I was earning my experiences as a strategy consultant. That’s good, because they bring out a lot of valuable pointers, and they are in days that are no longer under total confidentialities.  I’ve already published the first on my experiences with George W. Tippins. This is the experience story about my experiences with Richard A. Michelson, then chairman/CEO of McNeil Corporation (now McNeil & NRM Inc.) and co-founder Sharon Golf Club), Akron, OH.

agoodyGrowing up in the suburbs of Akron, Ohio and having both parents having worked for Goodyear, I was always enamored to learn more about the world’s largest tire maker. I also lived in a city where it seemed all the world’s tires were manufacured. Akron was home to: Goodyear, Firestone, General, and BF Goodrich. As a high-school student at Archbishop Hoban, you could literally see most of the tire manufacturing facilities of Goodyear just over the hill that Hoban sits on. Speaking of my high-school days, I had found Babcock & Wilcox logosummer jobs at Babcock & Wilcox; and as a caddy, gardener, and working in the lkitchens and pro shop of the Sharon Golf Club in Sharon Center. (As Sharon’s top caddy, by the way, I was sent to both the PGA events at Firestone CC, and the LPGA events at Weymouth Valley CC where I was selected to caddy on the PGA tour for Texas’ Miller Barber, and for Australia’s Jan Stephenson in her rookie year on the LPGA tour, among other well-known pros. For Stephenson, it was her first tournament in the United States, and no one (including me) knew of her full golfing potential — or else I might have made a different life’s work decision.)

Sharon Golf Club also was a great place to meet famous people. While there, I caddied for General Westmoreland, Robert McNamara, Jack Nicklaus, John Glenn, Graig Nettles,

RA Michelson

Richard (Dick) A. Michelson

Thurman Munson, Joe Namath, Mike Phipps, Bob Babich, Lee Majors, many other celebrities, and business leaders of Akron and Cleveland that frequented Sharon, a private male-only golf club buit by local millionaires, for millionaires. Like I said, I had many opportunities to meet and converse with them all. One of the founders of the Sharon Golf Iwo_Jima_amtracs_crop_LVTA4Club was Richard (Dick) A. Michelson, CEO of McNeil Corporation in Akron, he often played his rounds with Glenn Meadows (also from McNeil). I caddied for both of them mutiple times. Dick Michelson was an old-school, pragmatic and very-friendly ex-Navy machinist who during World War II was stationed in Riverside, CA overseeing the production of the light Landing Vehicle Tracked version four (LVT-4) armored personnel and cargo armored landing vehicle that was used to strike the beaches of Saipan and Iwo Jima. After the war, he returned to Akron to find work within McNeil Akron Inc.

Work for McNeil Akron Inc. as a creative director

In the last few weeks I was creative-director at Akron’s Quadrathought Creative Group, a marketing services company, we were hired by Quadrathought-logoMcNeil’s CEO Glenn Meadows to design marketing campaigns for their OEM equipment for the global rubber and tire manufacturers. (I say last few weeks, because three weeks after we were signed on, the IRS and State tax agencies closed Quadrathought down for failure to properly pay McNeil Corp logoemployment taxes, which led me to Pittsburgh and the beginnings of The Xavier Group, Ltd.) I pitched the winning marketing campaign’s creative ideas and services to the upper management team (which included both Meadows and Dick Michelson among others). After the meeting, Dick pulled me aside and asked me if I used to caddy for him and Glenn at Sharon. I said that I was their caddy, and that started off a new friendly relationship between the three of us.

Research and Analytics into new directions for McNeil and their potential impact on strategy and profits

A week later, Dick Michelson called me back to explore and provide some advice and analyses work on whether McNeil Corporation should purchase BF Goodrich’s Aerospace Company (now UTC Aerospace) Inspection Technology Division. Inspection Technologies had been rolled out of Goodrich with French venture capital to create a start-up that became Inspection Technologies Inc.ITIlogo (ITI). Michelson and Meadows felt that “possibly ITI would give them a broader range of process equipment,” and that would better bolster McNeil to survive for the future, as the rubber tire industry was undergoing a massive shakeout (with class-action lawsuits against Firestone’s failed fiberglass wheels (additive manufacturing today would have been Firestone’s savior in the 70’s) and their attempts at radial tire manufacturing, and BF Goodrich’s hostile takeovers by European investors. I agreed to personally begin this process at Quadrathought for him and to use the results as some of the analyses in our more comprehensive marketing campaign.

Once I relocated to Pittsburgh and started The Xavier Group, Ltd. I announced Xavier’s start-up in many newspapers. Because, I had ties and family in Akron-Medina, I also had the start-up release sent to the Akron Beacon Journal, the Medina County Gazette, the Wadsworth Sun Newspapers, Rittman-Norton-Doylestown Trogdon Papers, and History7community papers in Fairlawn, Barberton and throughout West Akron. Michelson read the release and called Xavier at its new Pittsburgh location (in Ross Twp.). In our conversation, he explained that even though Quadrathought no longer exists, he would like to hire The Xavier Group to continue the analyses and work on projects for his company. I explained that legally we would have to side-step any work on any kinds of marketing, advertising, or sales campaigns for McNeil. He then asked if we were able to provide our engineering services and strategy services for McNeil specifically regarding ITI, but also McNeil’s line upgrades at Goodyear’s tire manufacturing facilities in Akron s a subcontractor to their prime contract. Xavier took the job, and McNeil became another one of our first clients.

Status of the Rubber and Tire Industry

images-2It needs to be understood here that THIS is what strategy is all about. It is difficult to think of an industry that was affected more by the wave of mergers and acquisitions (M&A) in the 1980s than the U.S. tire industry. Seventy-five percent of the companies in the industry (accounting for 90 percent of the value) experienced a takeover bid or were forced to restructure during the period 1981-89. As a result of this activity, control changed hands in over half the companies in this industry and forever altered the rubber and tire industry in Akron. Even more remarkable, in the majority of cases, control was transferred to foreign owners. By the end of the decade, the longstanding traditional American firms like Firestone, Uniroyal, BF Goodrich, Armstrong, and General Tire belonged to foreign companies. As a consequence, large U.S.-owned tire manufacturers, who in 1971 represented 59 percent of the world production and included four out of the top five producers, dropped to just 17 percent by 1989.

The rubber industry was in a shakeout mode being broadsided by European and Japanese competitors who introduced radial tire designs; just as the steel industry based in the same region was broadsided by the new technologies of electric arc furnaces and mini-mills. The foreign competitors, looking for a vulberability of the traditional giants in their industry, had latched on to disruptively innovative technological advances.

The switch to the radial technology required major capital investments because it was not economically feasible to convert the existing bias-ply capacity to producing radials; 5612b38c6f3fc82da79172c34c533b20--charles-goodyear-rubber-companyFirestone’s attempt to do so ended in fiasco, and record financial losses. As a result, tire producers faced the prospect of making major capital investment in a low margin sector at the same time as the growth prospects for the entire sector looked grim. The major diversified tire companies (Goodrich in particular) made the conscious decision to reduce their capital and development expenditure in the tire business, sell their foreign operations, seek government “national security” contracts within the military-industrial complex to salvage some operations, and look for a foreign (European) buyer for mostt of its domestic operations.

It was also this rapid technological change that began in the 60’s and culminated in the 80’s that generated overcapacity in certain industries (and significantly in manufacturing), that required longstanding firms to quickly and RADICALLY improvisehydraulic-tire-curing-press-250x250 and adapt with new strategies for survival from optimizing the use of R&D explorations; operationally downsize; or exit. Managers who were tied to old paradigms to this day, still fail to recognize quickly enough that a decision has to be made; so they continue to invest in the old paradigm as they always have, and turn to legal channels to defend against the broadside intrusions to their markets. When managers behave this way, exit is significantly delayed at substantial cost of real resources to the company, to the industry, and to the society as a whole, and in my opinion, we see a lot of this in the current politicized ideologies of the “Make America Great Again” approach to business strategies.

The tire industry of the 70’s and 80’s serves as a great example of how favoring the power and profits of the old paradigm over attempting new disruptively-innovative maxresdefault-1products and services can become a road to perdition. Wide-spread consumer acceptance of radial tires by 1982, meant that worldwide tire capacity had to shrink by two-thirds (because radials last three to five times longer than bias ply tires). This, therefore, required that the tire giants had to move forward with new strategies if they wanted to survive. Instead, historical analyses suggest that they turned to the military and defense “national security” industry to keep them safe (which ultimately didn’t help at all — but led to multiple recessionary downturns that negatively affected US society.

“This business is going through some rough times. We have to make major investments so that we will have a chair when the music stops,”was the chant coming from many business leaders in that time. They failed to recognize the true issues facing them at their front doors.

Lessons from the Steel / Primary Metals Industries

In 1964, all of the US Steel behemoths (US Steel, Bethlehem, Republic, LTV, National) made the decision to stick with basic oxygen furnaces (BOF) and improve outputs in their facilities. The STRATEGY was to milk the cash out of BOF when electric arc furnacesdofasco 033 and overseas mini-mills challenged the leaders in steel. That meant NOT investing in new steel equipment and plants, but reengineering operations with union labor pay increases  that increased experienced steelworker loyalties; and to increase purchases of automation and advanced manufacturing equipment that (in combination labor, automation, advanced tooling) would improve outputs and profits of existing (old) facilities. They would “milk them” until they were no longer profitable, then sell them to others. (Unions thought they were negotiating better deals and higher middle class wages — but the strategies used in steel suggest otherwise!)

At McNeil, because they saw their rubber and tire “cash cow” drying up, as a tire manufacturing supplier of OEM equipment, they saw they needed to increase their offerings, and they wanted to see if in-line 2D and 3D automated visual inspection machines, flouroscopic / ultrasonic / X-ray / infrared analysis inspection machines would Davy-logoimprove their standings with Akron’s tire manufacturers and keep them at the top of their game. If it did, their new STRATEGY would be to offer end-to-end in-line equipment to meet the needs of rubber and tire manufacturers. That end-to-end (or turnkey) approach, I was very familiar with from my work at Davy McKee on processing plants.

What is real “strategy?”

The purpose of hiring outside engineering and strategy consulting firms is to allow them to deeply analyze potential future actions to see if it will increase profitability and/or extend the life of the organization until new economic conditions can yield growth.strategy Growth strategies in good times are to expand and improve positioning of resources to yield better demographics, territories, technologies so as to optimally serve more customers in a more valuable way. Engineers analyze with a deep dive of how technologies are designed and applied in real-world situations. Their feedback and recommendations will either improve the technologies, or make recommendations specifying some other course of action would be more appropriate. Those are the essence of shaping a good strategy. Once the strategy is in place, the tactics (plan or execution) will dictate the degree of success an organization will have.

How did this relate to my and The Xavier Group’s experiences?

My newly acquired exposure to visual inspection automation and robotics would drive iumyself, and The Xavier Group, from then (1981) to the present day. Think about it. McNeil’s machines (before inspection machines) were using chemistry to shape, mold, cure, vulcanize, and create tires on a mass produced scale. They wanted to add inspection equipment to the in-line process to provide “automated” quality controls (QC) and quality assurance (QA) … and to create a turnkey offering to manufacturers.

From a sheer technology experience the OEM machines to be analyzed were:

  1. McNeil Akron’s existing OEM line of rubber processing equipment
  2. McNeil Akron’s potential OEM line of inspection processing equipment
    1. 2D high-resolution, high-speed visual inspection machinery
    2. 3D high-resolution, high-speed spatial visual inspection machinery
    3. Flouroscopic X-ray analyses inspection machinery
    4. Ultrasonic sound wave analyses inspection machinery
    5. Thermographic Infrared light analyses inspection machinery
    6. Thermographic Infrared LIDAR analyses inspection machinery
  3. How that processing equipment would work together in a Goodyear tire manufacturing facility
  4. How the automation equipment was to be “networked” together
  5. How the network would collect and use data in a “turnkey design”

In understanding the machines, one had to also understand (in 1981 technology):

  1. High-resolution cameras and optical lenses
  2. Camera placement to yield 3D virtual imagery
  3. Flouroscopic X-ray imaging processes (silver print emulsions)
  4. Picture-taking focusing and manual and automatic exposure dynamics
  5. Ultrasound camera imaging processes (digital screen and paper readouts)
  6. Ultrasound osilliscope/oscillograph soundwave readouts (amplitude and frequencies — and what they mean)
  7. Thermographic Infrared camera imaging processes (including FLIR)
  8. Thermographic LIDAR camera imaging processes
  9. In-process Conveyor Systems
  10. Process Controls, Statistical Process Control (SPC), Quality Management
  11. Sensing technologies
  12. Process line software and Relational Database Management Systems (RDBMS)
  13. Inspection Equipment Software
  14. OEM Equipment Software
  15. CAD, CAM, CIM, CNC Machinery and Software
  16. Electrical and Electronic Components
  17. Mechanical and Engineered Design Components
  18. Chemical and Mixing Components and Formulae
  19. Networked in-line Controllers and Switches
  20. Enterprise and Information Technology Architectures
  21. Machine-to-Machine Communication Technology Architectures
  22. Human-to-Machine Communication Technology Architectures
  23. Human-to-Human Communications Theory and Practice
  24. Problem-Solving Theory and Practice
  25. Operational Governance and Business Operations Modeling

In understanding the McNeil Corporation business model to develop a strategy and make a decision regarding the Inspection Technology one had to:

  1. Perform a company Situation Analysis
  2. Perform a company Financial Analysis
  3. Perform a company Marketing/Industry Analysis
  4. Perform a by Market Economic Outlook Analysis
  5. Perform an Industry Outlook Analysis
  6. Perform a Stakeholder Analysis
  7. Perform a Resource Allocation and Positioning Analysis
  8. Perform an ITI Merger and Acquisition (M&A) Analysis
  9. Perform a Customer and Customer Outlook Analysis
  10. Perform a Technology Outlook Analysis

From these, The Xavier Group would then be able to provide cohesive and detailed recommendations to McNeil, Michelson, and Meadows on how they should best proceed; and for The Xavier Group (the results could dictate whether or not McNeil should enter the next phase) with Tactical Plans and Executibles.

The 1982 Goodyear installation and testing subcontract experience

23274-9978419.jpg

One intriguing upside to this process was that McNeil senior management had already closed a deal with Goodyear_Social_02Goodyear’s CEO Charles Pilliod Jr. to install the inspection equipment on a Goodyear Tire line to see how well it would work. (It appears that Goodyear, at that time, was formulating a strategy regarding their future and facilities as well!) This meant that in addition to providing strategy consulting services, Xavier would be subcontracting on engineering services regarding the installation and implementation of the inspection technology equipment, which would thus be providing the advantages of real-time field data and information collection to support solutions, recommendations, and improve conclusions regarding the project.

We began the project in the summer of 1982. Over the winter, I, and The Xavier Group team and its contractors prepared ourselves for the task by preparing and pining over reams of analyses, and engineering on-site work at both McNeil and at Goodyear to see how the equipment would work, and how it would be installed at the facility. We also deep-dived into research regarding the science that was behind the new technologies; while our financial team prepared its M&A and P&L papers regarding the backgrounds and culture of Goodrich’s Inspection Technologies Inc. to see whether or not the purchase would be a “good fit” for McNeil. We wanted to be ready and prepared to fasttrack our capabilities as McNeil’s subcontractor, when we were asked to execute. In that stage, preparation and persistence are much more valuable to the outcomes than other aspects. We, as spring blossomed, began to mimic “dry-runs” on all the procedures we would be involved in — and time-sequenced them to optimize our productivity when we were in the field. Those dry-run practice operations were also key in helping us come up with metric procedures to help collect the right kinds of field data when the pilot program was turned on and we were receiving realtime data from the in-line process and machines. These runs also helped us define better questions to be asked, and allowed us to draw up the kinds of meaningful information feedback loops that would optimize the characteristics of the working final product. (I’m not sure if today’s organizations truly understand the value of such preparation — though I do know that it is still done by most competent outside contractors.) I must note here, that these should be done as standard operating practice in all industries and organizations or businesses from start-ups through Fortune 100 multinationals.

It took only a few months to compete the project within budget and under deadline in 1982. It turned out to be a successful installation. As for McNeil’s purchase of Inspection Technologies Inc. we provided them with our recommendations regarding the purchase, as well as plans for the implementation of the new strategy should they adopt the recommendations. I don’t know how things transpired after that, because I understand that Goodrich and the French venture capitalists involved complicated the financial side of the project. It was my understanding from ongoing discussions with Michelson and Meadows for the few years after that project that McNeil Corporation (as it had then been renamed) did, in fact, use many of the strategy recommendations moving forward, and did eventually increase its OEM offerings in the area of non-destructive testing inspection machines and equipment.

 

 

 

 

 

 

 

6
Sep

Strategy Consulting for George Tippins, Pittsburgh steel magnate

SteelSlabforming-Tippins,jpg

White hot steel slab rolling out of a Tippins Rolling Mill.

A reader of my blog posts has requested that I select and share a story or three from my days when I was earning my experiences as a strategy consultant. In the early ’80s, I arrived in Pittsburgh and started The Xavier Group Ltd. (1981). I started the company with experiences that centered around the personalities of three significant individuals — three of the first seven companies for which I was a young strategy consultant: George W. Tippins (founder/owner of Tippins Machinery Company, owner Allegheny Ludlum Steel – now Allegheny Technologies, and Tuscaloosa Steel, Alabama); Donald H. Jones (founder/owner of Control Systems Research, Technology Recognition Corp., Who’s Who in Technology, International Cybernetics Corp., Automation News Network, Industry.Net, and Draper Triangle Investments; Jones was also was adjunct faculty at CMU’s Tepper School of Business (where he founded the Donald H. Jones Center for Entrepreneurship)); and finally Edward George Sr. (founder of The Tangier Restaurant (5-stars) and Vegas-style Cabaret/Nightclub), West Akron, OH. It’s hard for me to single out a single story, so instead I will publish a few stories in the next few blogs.

I arrived in Pittsburgh, PA in the early spring of 1981 from Akron, OH where I had been a creative-director at Quadrathought, a business-marketing services company (until it was forced to close just months after I had joined it). Before Quadrathought, I worked for a Davy McKee Headquarters_Independence,_OHFortune 500, Davy McKee, Cleveland (Independence), OH, as a director in senior management. Davy McKee Engineers and Constructors had been the sixth largest such firm in the world. Davy McKee was a merger between Davy Ltd., constructors and engineers of processing lines in multiple industries, as well as shipbuilding. It was based in Birmingham, England, UK, and Arthur G. McKee, Cleveland, engineers and builders of steel plants worldwide (including most of them in Cleveland, Chicago/Gary, Detroit, and Pittsburgh). I had been hired on at the onset of the merger process (during legal/financial analyses — before they merged or began reorganization).

When I left Davy McKee, during its post-merger reorganization, I had contacted executive search firms throughout the region, as suggested by Davy McKee’s human resources team. One week later, the Quadrathought creative-director position opened, and I thought that might be fun, so I took the job mainly, because it was close to home and felt it would add some unique experiences to my background.

During the months I worked at Quadrathought, I was approached by numerous executive search recruiters who felt I may still desire a job more closely-related to my backgrounds in chemistry and engineering. When the tax man came, and closed Quadrathought, I called the elderly and experienced recruiter in Pittsburgh who had said he had five interviews I was highly qualified for. Most, he said, were in the steel industry — an area in which I had become quite knowledgeable (including advanced technologies), while employed at Davy McKee.

I set up a few days to go on five interviews, booked a cheap motel room (Knights Inn), and within two weeks, all five had made distinctive offers for my employed services. Not knowing much about the firms, I asked the recruiter which firm he thought would be the best match for my job skills. He said, “They’re all world class.”

Then he asked me the question that changed my life. He asked,”They all want you so bad based on my exit follow-ups, have you ever thought of going into business for yourself?” I was young in my 20’s and energetic — but being a self-employed entrepreneur wasn’t something I had ever considered. He added, “You should think about it. Opportunities like this are rare.” It got me thinking of the possibilities — and the dangers ….

The recruiter, himself, was the retired CEO of a large Pittsburgh firm (Ketchum Communications). He had great connections. He instructed me step-by-step on how to approach all five and see if they had even “ever considered” using a ‘contractor’ as an alternative to outright hiring. After mastering the “pitch” delivery approach, he sent me back out, explaining that if any are interested, then I could decide whether it would be better for me to become self-employed, or better to take one of the other offers and become a senior manager again. I went out to all five, and all five liked the ‘contractor’ approach to the hiring alternative. In fact, one of them, Tippins Machinery Company, Etna, PA — who had me interview with the founder/owner George W. Tippins — suggested that “contractor or employee,” he (George) wanted me “on the job at 8 a.m. the next morning.” As a contractor, Mr. Tippins said, I would “receive double the pay of an employee if I chose that approach.” (It was his demeanor and nature that made me decide to form my own company and go the contractor route from there on!)

I went back to the recruiter, told him my decision, and he went out of his way that day to get me the professionals I needed to file the right paperwork and become a legitimate sole proprietorship (and all of this before I even had a permanent physical residence in Pittsburgh, or had become a Pennsylvania Commonwealth citizen). The recruiter explained that Mr. Tippins was a “dear friend and former associate who’d saved my [his] ass a few times over the years,” and he wanted to make certain everything would work out between us, because Tippins was one of his best search customers, and (he felt) his reputation was on the line. “You’re nothing,” he said, “if you lose your reputation.” That was good advice that I followed as I entered self-employment.

When I arrived at Tippins at 7:45 am the next morning from my “luxury one-room economy suite” at Knights Inn (on the day after I switched from day room rental to month-by-month rental), I announced my arrival to a sleepy receptionist who said that “George” (it seemed part of the culture to call Mr. Tippins by his first name if you knew him) wanted to brief me on what he had in mind, and would come down to take me up to his office soon. I sat there and read about the history of the company.

Founded by Leon H. Tippins (George’s father), in 1923 as Tippins & Springdale Inc., Springdale, PA (about six miles north on the Allegheny River), Tippins originally was a small machinery-refurbish-resell company that bought and sold coal power plant and coal mining machinery.

Tippins Machinery

George W. TippinsIn 1946, George Tippins who returned from the military with his electrical engineering degree from Yale, took over the company his father started in 1923, and began to transform it from a company that refurbished coal mining equipment to one that refurbished, designed and built rolling mills and other equipment for the steel and metals industries. In 1961 he renamed it Tippins Machinery Co., and moved it into the old Spang & Company facilities in Etna.

Tippins, president and owner of the Tippins Machinery Company, who I was about to meet with, was by then a gregarious multi-millionaire, and well-known throughout the tiny borough of Etna (I had found from having lunch in a nearby restaurant when I first interviewed there). The restaurant owner said that it was not uncommon that each morning, often before 7 am, to find Mr. Tippins stepping out of his engineering and design offices — a renovated bank building and adjoining retrofitted cinema building down Butler Street from the Spang facility where his machinery workshop was — to walk six blocks down the Butler Street hill to get a cup of coffee and two morning papers — the Pittsburgh paper and the Wall Street Journal, and then to return the six blocks up the hill. Often,  I was also told, he would return at lunch time for a “quick bite,” and was very friendly with the local “regulars” who he would often discuss steelmaking subjects with him. I found these stories added to my understanding of the man and to his aura as a relatable individual.

A few months before I visited Tippins, though, George had stunned the steel industry world, when he helped save the multinational Allegheny Ludlum Steel Corp., now part of Allegheny Technologies Inc. (ATI) from being sold to Texas financiers who had intended to close it and sell it piecemeal to the Chinese. It was in late December 1980, that he provided a $60 million certified check, the cash needed to support the 80% management-led buyout of the specialty steel business of the former Allegheny International Inc. led by Ludlum’s CEO Richard P. Simmons. Tippins served as board chairman and majority owner of Allegheny Ludlum from 1980 through 1986. By 1986, the company had a successful financial turnaround and was growing to become a world leader in the stainless and titanium steel markets.

As I’ve stated, George Tippins held an electrical engineering degree from Yale University and later, in 1963, earned a graduate degree in industrial administration from the Carnegie Institute of Technology (now Carnegie Mellon University) while operating Tippins. He had also been a commissioned lieutenant in the Navy Reserves, serving stateside during both World War II and the Korean War.

From his Navy experiences, he had come to believe that there was going to be a growing market in the 70’s and 80’s for thicker and wider steel slab (which would then be turned into flat sheet and rolled steel). He was right! He spent the next 25 years from 1963 coming up with both the company and the means to service that new sector of the industry.

By the time I had met him, George Tippins already held more than a dozen patents forUS4455848-1 machines and metals processes. His designs were leading the concepts in the steckle and rolling mill markets a quarter of a century before his nearest rivals. “His innovations really helped his U.S.-based company compete with all the “biggies” in the industry throughout the world, particularly companies in Germany and Japan, who became George’s primary competitors,” George Knapp, a lawyer and president of Tippins Industries Inc., a holding company for other Tippins family interests would later explain.

Mr. Tippins, I found, was also an avid reader and liked to envision where the world of steelmaking was heading. By the mid-60’s, there were many voicing concerns about how Electric Arc furnaces and a new concept called “mini-mills” would eventually replace big steel and the basic oxygen furnaces that created steel from scratch using iron ore, coke, and other alloys. As he had explained it to me, most of the other companies were “in lockstep” with what US Steel, Republic Steel, Bethlehem Steel, and LTV Steel were preaching regarding the future of steel. But, he had thought, as early as the mid-60’s, that these two new steel developments would make the steel giants vulnerable, and allow new companies to produce steel from used scrap in mini-mills. He seriously believed these new technology companies would eventually jeopardize “big steel’s” hold on the industry and overtake it. From what I had analyzed at Davy McKee, I had to agree with his forecast! George wanted to be the leader in providing steel machinery and rolling mills to all the markets — both the traditional “big steel” (by selling machinery that could produce bigger and thicker slabs), and by catering with special “packages” to the new mini-mill markets. I had learned about this shift when I worked at Davy McKee, and would later experience it in 1983 when the bottom fell out of the Pittsburgh steel market.

George Tippins envisioned being the “one-shop stop” globally for steel production projmgmtwrldequipment. He had the focus and foresight to transform his family’s machinery business into an “end-to-end” mill producer — what the industry called a “turnkey approach.” Turnkey meaning “from conceptualization, through engineering and construction, to where it could be turned over fully operational to the customer — who could then turn the key and it would start.”

When he took me up to his office that day, it was precisely that “end-to-end mill producer concept” that he was ‘contracting my services’ as a strategy consultant for. He had seen my work when I was employed at Davy McKee, as George was a customer and provider to Davy McKee, and he said he wanted “to create a strategy and marketing approach that took his company from being well-regarded as a traditional major supplier of new and rebuilt steel and metals equipment” to be seen globally as a well-established inventor and innovator of proprietary rolling mill equipment, and an engineering firm of turnkey facilities.”

Though it sounded like more of a marketing job than one of strategy, in time, while I contracted there, I came to realize it WAS a strategy consulting project. Mr. Tippins had me become immersed with his patented designs and the engineering, fabricating, and sales operations of Tippins Machinery (in 1982, we changed the name to Tippins Inc. to better reflect the new turnkey strategy that was being deployed and executed throughout the operations. The advantage, I found, of being a contractor was that I had many other companies that were catering to the primary metals and advanced automation manufacturing markets among my original customer-base, and the synergy and interrelatedness of many of the concepts helped me both as a strategist and in early sales.

droppedImageThe Xavier Group eventually created this flowchart (see image) of our “Total Solutions Approach” to project management as a result of our five-year stint working alongside George Tippins to help the world see that helped improve this company into becoming a premier turnkey developer and provider of important advanced and cutting-edge technologies for the steel and metals industries.

In 1984, George Tippins founded Tuscaloosa Steel Corp. in Alabama, based on his patented design that more efficiently produced steel plate in continuous-casted coils.He had developed the company to showcase his innovative approaches to the mini-mill markets, and Alabama had provided a tax abatement to get Tippins to build the facility there. Later, Tippins sold the company in the early 1990s to British Steel.

By 1986, when I left Tippins, it had grown to become a business of 300 employees and over $115 million in machinery and turnkey “package” facility sales.

Upon George Tippins’ death at 79 from cancer, Charles Queenan Jr., senior counsel of Pittsburgh’s leading Kirkpatrick & Lockhart law firm, a longtime friend who served on the board of Allegheny Ludlum Steel Corp. with Mr. Tippins said, “George Tippins was a significant force in the steel industry both in Western Pennsylvania and around the world, who had innovations that were really ahead of their times.”

 

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