Littelfuse: Protect. Control. Sense.
Designing a Five-year Growth Strategy for a Leader in Circuit Protection
Littelfuse is the world’s leading supplier of circuit protection products for the electronics, automotive and electrical industries, as well as an emerging player in the power control and sensing markets. Littelfuse products protect against common threats to electrical circuits and components, such as overcurrent and overvoltage protection, ground-fault and equipment protection and power distribution and control. The Chicago-based company had revenues of $667 million in 2012.
Littelfuse has expanded through technology innovation, organic growth and acquisitions over its 85- year history to be a leader in circuit protection. The company weathered the Great Recession and reaped significant benefits from a major company-wide consolidation and rationalization of manufacturing operations. But with slow growth and increasing commoditization across its core circuit protection products, the company needed a new roadmap to accelerate growth. The company turned to an internal team spearheaded by a core group of senior leaders and a global project team with representation from across business segments, functions and geographies. The objective of the project was to create a new corporate strategy that laid out more aggressive plans for growth while leveraging the core circuit protection business. The five-year plan needed to address several key elements: determine which parts of the core business were key to growth and therefore worthy of additional investment, identify strategic “hunting grounds” beyond the core business and outline the organizational changes and capabilities required to execute the new strategy.
Littelfuse sought an external partner to collaborate with them in the development of their corporate strategy, one who could bring leading edge growth-strategy insights, methods and tools as well as industry and technical knowledge to complement the internal global project team.
Littelfuse engaged growth strategy consulting firm, Clareo, to assist in developing its corporate strategy. Clareo worked closely with the project team using a rigorous, data-driven approach to assess Littelfuse’s current situation and provide a new perspective on the company’s strategic positioning and scope of opportunities. This included thorough research of megatrends in core, adjacent and new markets and identification of technology trends that could present opportunities or threats to the company.
Clareo used collaborative working sessions throughout the strategy planning process to engage the entire global project team. This approach leveraged the project team’s collective knowledge and expertise across markets and geographies. Clareo’s Ecosystem Mapping analytical tool was used to synthesize the research for insights and implications into growth opportunities for the company.
Clareo’s approach was designed to build Littelfuse’s internal capabilities for strategic planning, providing the methods, tools and frameworks to guide the planning process. Included in this capability development was a focus on a new portfolio management tool for ongoing assessment of investments in the core business and new growth opportunities.
Clareo worked with the project team to facilitate discussion of a new vision, mission and objectives for the company. Clareo then led an assessment of the company’s organizational structure and capabilities and working with the global project team, identified key areas of company strength that could be leveraged as well as weaknesses that would need to be addressed to execute the strategy.
The global strategy team developed a five-year corporate growth strategy around the theme of “Protect. Control. Sense.” The company’s aspirations were communicated in new vision and mission statements, which described how the company would evolve and grow in the future. The strategy included plans to double the company’s revenues in the five-year time horizon to more than $1.3 billion through a combination of organic growth and acquisition. While leveraging the core circuit protection business for organic growth, the strategy identified promising areas for investment. These strategic growth areas included protection relays, custom electrical centers, industrial electronic modules/controls, sensors and commercial vehicle products. The team also identified capabilities that were critical to achieving strategic goals and developed initial plans to attain them.
After the plans were reviewed and approved by the company’s senior executives and board of directors, the new strategy was publicly unveiled at a Littelfuse investor conference on Wall Street, where financial and strategic objectives were presented to analysts. In addition to setting business growth targets, senior leaders of the company have now been assigned to lead capability development in areas that will be key to the success of the strategy.