ITW: Accelerating Innovation at an Industrial Powerhouse
ITW is a Fortune 200 $16 billion global diversified industrial manufacturer. Its major business segments include test & measurement equipment, automotive OEM components, polymers & fluids, commercial food equipment & services, construction products, welding products, and a diversified specialty products group that includes beverage packaging equipment and consumables. The company has operations in more than 58 countries and employs more than 60,000 people worldwide.
ITW had grown to become an industrial conglomerate of 800+ business units, in large part through acquisition. Its method of acquiring smaller businesses and applying the company’s 80/20 principle of customer and product focus, among other management approaches, has led to consistent growth and profitability over the past 25 years.
However, globalization has led to new competitive pressures, creating a renewed focus on the need to improve growth rates though sustainable differentiation driven by innovation and new strategies for its core business.
The company turned to its Technology Center—historically a source of advanced research and development consulting on issues such as cutting-edge materials, mechanical designs and manufacturing processes— to create an ITW business innovation process and to assist business teams in the process of developing growth strategies.
The Tech Center sought an external partner that could assist them in creating a corporate innovation program and developing a business innovation process by providing access to leading-edge approaches, tools, and counsel on how to adapt those tools to ITW’s culture.
Innovation Program: ITW engaged growth strategy consulting firm, Clareo, to assist in developing its corporate innovation program. Clareo worked with the Tech Center and ITW’s senior executive leadership team to define a vision and objectives for the program and to define how the program would be managed and funded. This program included a high-level management process and governance model that guided the identification, selection, investment, and scaling of new growth opportunities.
Innovation Process: Clareo also assisted the Tech Center in developing an innovation process that is used by business teams to identify innovation opportunities and develop growth strategies. These strategies are ultimately fed into the business units’ longrange strategic plans that are approved at the corporate level.
In working with the Tech Center, Clareo provided a variety of collaborative methods and growth strategy tools that address challenges found at various stages of the innovation process. These innovation methods and tools included: a Ecosystem Mapping framework to develop insights and implications for growth opportunities; an Insight Session approach that uses an experiential process for leveraging external experts’ knowledge and insights with the participation of the project team and senior leaders; and a portfolio management toolset to assess the attractiveness and strategic fit of various growth options. In support of ITW’s innovation capability development, Clareo worked closely with the Tech Center to tailor these tools to the company’s innovation process and culture so that the tools could be adopted and used throughout the company on an ongoing basis.
Growth Strategies: Clareo assisted several business project teams as they developed growth strategies through the ITW Innovation Process. These ranged from an automotive division exploring new technologies for manufacturing, to a beverage packaging business seeking growth in the changing beverage market, to a food equipment group looking for new growth opportunities in a specific market segment of the industry. For several of these projects, Clareo leveraged its global network of experts to gain exceptional knowledge and insights on industry trends and growth opportunities.
ITW has established corporate organic growth targets and has launched more than a dozen program teams from various business groups to identify and invest in new growth opportunities in support of these growth targets, leveraging the ITW Innovation Process. The company has also formed an Innovation Leadership Council staffed by senior executive leadership, including the Vice President of R&D for the Tech Center, to provide program oversight and governance. These innovation and growth strategy projects have fed into the business groups’ long-range strategic plans where investments have been approved for building and scaling new businesses.