The execution success rate increased dramatically when segments chose their own projects and did not have to compete for resources.
Karen Geiger
General Manager, Professional Business Unit, Therma-Stor
Segment Resources For Stronger Strategy Execution
Therma-Stor manufactures residential, agriculture, and industrial dehumidifiers, as well as restoration equipment for dehumidification, air scrubbing, and evaporative drying.
Focused
Resources are now focused by segment, which has allowed segment teams to choose their own projects, utilize dedicated resources, and better serve internal and external customers.
For more information on this story, contact
Karen Geiger, General Manager, Professional Business Unit, Therma-Stor: [email protected]
Goal
Therma-Stor had three market segments with different customer needs, expectations, and growth targets. Each one had its own sales and marketing team, but they all shared engineering, supply chain, and assembly resources. Growth strategies, primarily new product development, were formulated annually across all market segments and prioritized based on the effort required and revenue growth potential. For example, if one market had a couple of $5M strategic bets and the other two only had $3M bets, all engineering, supply chain, and operation resources would focus on the larger bets. As a result of this approach, Therma-Stor could start a year with about ten strategies and end it with only two or three successfully executed. The organization clearly needed an overhaul to better support each market segment.
Process
They started by segmenting engineering, sourcing, and assembly to align with each of the already segmented sales and marketing teams. This created focused business segments with full financial ownership and control. Therma-Stor used several tools to improve its strategy development process. It used a product-market matrix to understand where each market had the most growth potential for new or existing products and where there were gaps. In addition, each business segment answered the following key questions: Why do we have what we have? (Value chain) Who has the competitive share? (Market share data) Why do they have the competitive share? (Value canvas) How do we get what competitors have? (SWOT/PESTEL) Therma-Stor also used targeted selling and 4Ps. In the end, they developed potential strategies within each business called the Big Three.
Results
The execution success rate increased dramatically when the segments chose their own projects and did not have to compete for resources. There was also greater ownership with both internal and external customers. Finally, growth strategies went beyond new products. They emphasized channel, marketing, and operational strategies as well.
Key Learnings
- With a narrowed focus and resources aligned accordingly, it’s easier to keep everyone engaged, increasing momentum for strategies to be recognized.
- It’s easier to communicate to our current and future customers who we are and where we are going.
- Communication is critical. Keep repeating the Big Three strategies and how each team member contributes.