Katherine Hudson likes to have good, clean fun. But this was no situation comedy. After almost five years on the job, she knew Brady Corporation needed to focus on a complete overhaul of the way it made its “high performance” labels and signs. And she would need the best and brightest minds the Milwaukee manufacturer could spareor notto make it happen.
The chill blew in from Lake Michigan onto the American Club in mid-February, 1999. Skies were as gray as a business suit. At the posh five-diamond resort an hour north of Milwaukee in Kohler, Wis., the world-class golf links were hard-frozen and desolate, covered in snow.
But inside its cozy auditorium and comfortable conference rooms, the heat was on. Nearly 100 top managers from Brady Corp.one of Milwaukee’s oldest and most successful homegrown businesseshad gathered from around the globe to look coldly at their future.
The group had been meeting every 18 months under the direction of chief executive officer Katherine Hudson for almost five years. And they had been actively executing sweeping changes at Brady.
Since the former Kodak instant photography chieftain was named CEO in 1994, the old-line manufacturer of high-performance labels and industrial safety products had doubled its workforce, topping 3,000 employees. Net sales climbed from $260 million in 1994, to $479 million by mid-1999. Net income rose from $18.5 million to $39.6 million in the same period.
The company was investing in Asia and making acquisitions in Latin America. Engineers were producing new waves of ultra-thin identification labels for handheld electronic devices; and, its engineers had come up with innovations such as an adhesive that leaves a pattern when removed, to help police identify stolen laptops.
But the change was only starting, the senior managers would realize, as they huddled to hear Hudson’s latest pitch. In the next decade, growth would not come easily for Brady. The company, she maintained, might not even be able to grow at allunless it totally changed the way it operated.
The company was “stymied,” Hudson says, “by an infrastructure that had reached well beyond its practical limits.”
The conclusion: Brady would have to completely redesign its business processes, to fit into a new, digital world order where competitors could come from any part of the globe and use the Internet to shave costs out of already low margins.
Quick fixes would only allow Brady to maintain sales at around $500 million a year. The company’s information technology, controlling everything from the printing of labels on its manufacturing lines to the disbursement of paychecks, was riding on aging systems that could not communicate with each other. That meant delays and unnecessary expenses in filling orders; and, slow responses that hampered the company’s ability to introduce new, profitable products, such as its Mondo Bondo line of “ultra-aggressive” labels that could stick to greasy machinery.
This overhaul would have to lower costs and increase competitiveness, in a world that had sped up life even for a maker of labels and signs. If the company was to crack a billion in sales around the world in the next five years, it had little choice but to reexamine all parts of its business.
“We really wanted to be sure that whatever we did, it was business-led,” says David Schroeder, Brady’s chief financial officer. “We wanted not just a software project, but a business-led project for the whole company.”