World smart Featured

12:15pm EDT May 23, 2005
In a global market, barriers to entry are often more basic than building a supply chain or cultivating a customer base. A language mix-up can make or break a deal in the worldwide game of business; even plain English can stump high-level executives who deal in international board rooms, says Gary Heiman, president and CEO of Standard Textile.

"In Israel, 'he' means she, and 'who' means he," Heiman says.

And crossing your legs or showing the soles of your shoes is an insult in some cultures, he adds.

Sometimes, "yes" means maybe, or yes for now, until later negotiations. Other times, "maybe" means no --because "no" can come across as rude, says Heiman, who speaks four languages.

"We deal with people who often have different histories and experiences than ours," Heiman says, pointing to Standard Textile's 22 manufacturing plants in 12 countries, with thousands of associates in 49 countries who produce and sell health care, hospital and work-wear products for the half-billion-dollar business. "Countries in which we do business often have different religions, belief systems and codes of honor that we have to respect.

"We like to think that we are 'world smart,'" he says, emphasizing Standard Textile's tagline. "That means being in the right place at the right time with the right resources. Our business model encompasses developing innovative products, and marketing and selling them everywhere in the world."

It would be easy to get lost in translation without a "world smart" attitude, but the culture Heiman has built at Standard Textile is rooted in a commitment to reaching for international resources, tapping into talent around the world and relying on sure-fire systems and a detailed reporting method to ensure the global business revolves smoothly.

We are the world

Heiman's introduction to global markets began miles away from business school. Contrary to the experience of most managers, he broadened his knowledge overseas first.

"It's the flip of most people's background, where they start in the United States and transfer somewhere outside of the country for a number of years," he says.

Heiman was a college graduate fulfilling his wanderlust when he moved to Israel in 1973. Now a dual citizen, he spent 17 years there and served a tour of duty in the Israeli military before joining Standard Textile in 1975, when he launched the company's first vertically integrated manufacturing facility.

In the military, Heiman discovered the importance of systems, infrastructure and reporting strategies.

"I decided that the real key for any country, or company, to grow or prosper and be vibrant and secure is to have a strong, individual infrastructure," he says.

At that time, Standard Textile's operations were based solely in the United States, and functions were limited to distribution, unlike today's comprehensive supply chain model.

"We did not design, develop, research and manufacture our own products," he says.

Today, Standard Textile's scope touches every process, from product development to engineering to yarn and fabric production to sales and marketing. The work force has diversified over the past 30 years, as well. Payroll is comprised of associates from around the world. Training them to communicate and conduct business in foreign environments is critical to the company's success, Heiman says.

"One thing I have learned and built over the years is a well-trained, well-disciplined team that is efficient and has boldness and bearings," he says. "They have a need to take on big challenges in faraway places, almost all the time under adverse conditions. They must accomplish their tasks on time and train a local team and have systems in place before they leave."

In turn, Standard Textile offers employees the opportunity to make an imprint on the global economy.

"Our associates thrive on the possibility of doing things that others have not done," Heiman says.

For Heiman, that means whipping up a manufacturing operation from scratch and following a growth model, gathering information, testing products and building slowly and conscientiously before preparing to produce on a larger scale.

As an example, take China, the most recent addition to the Standard Textile global network.

"We are not going to hire a 25-person marketing and sales staff tomorrow," Heiman says. "We will hire a handful of people who researched and understand the market and its needs, hurdles and opportunities, and then we will approach it in a very well-defined, controlled and disciplined way."

This methodology makes sense to Heiman, who quoted Sun Soo's "Art of War" during a speech in March to honor the opening of Standard Textile's China operation. "Unhappy is a fate of one who tries to win his battles and succeed in his attacks without cultivating the spirit of enterprise, for the result is waste of time and general stagnation."

The Chinese host was surprised at Heiman's selection, although he later discovered Heiman, a practicing engineer, was a Chinese history major in college.

"At the end of the day, you don't achieve anything through war and battles," Heiman says, explaining in a broader sense the importance of cultivating a work environment where associates cooperate despite political and societal differences. "Cross-cultural training is a significant part of our overall corporate training program. Not only are people spending time in other countries, but we also have people from those countries visit Cincinnati.

"We might ask our employees to be a part of a meeting, and they need to understand the dos and don'ts of dealing with a particular country."

Workshops provide cultural overviews for employees, but most valuable are shared experiences from colleagues who present realistic scenarios and coach associates on how to better handle challenging cultural encounters.

For example, discussing the war in Iraq with a Frenchman is bad idea, Heiman says.

"We bring in associates from France to talk to employees about what they should do to fit into the local environment," Heiman says.

He refers back to Sun Soo, applying his words to 21st century business.

"If you don't follow up by building enterprise, infrastructure and economy, and by giving people a better future, it's all for naught."

Managing across borders

Book smarts and lectures provide valuable lessons, but nothing replaces the real thing. In managing a global business, the sticky situations -- the uncomfortable, uncommon and sometimes downright frustrating times -- mold a hands-on management boot camp for international associates.

Heiman describes a difficult management changeover in a European country that ultimately led to a structural reorganization. Norms in the United States aren't necessarily the same in other countries, and business unusual is business as usual in some cultures, he learned.

"In some countries, a company's success is measured by how big you are, what type of machinery you have and your revenues and sales," Heiman says. "It was shocking to us how little emphasis [the workers] put on the bottom line. We had to teach the associates there that anyone can have volume and compete on generic products and low prices, but at the end of the day, there is no end to the lowest price.

"Someone will come in lower, and you can only compete by developing innovative, exciting new products that better meet customers' needs. And you need to earn a reasonable margin."

After meetings, discussions and attempts to shift mindsets, this bottom-line-focused mentality still didn't register with employees until Heiman appointed a manager who had worked at other international operations and understood the concept.

"We told workers that the former owners didn't sell us the company because they were happy with its results and business was great," Heiman says. "As a matter of fact, they sold it under duress because they weren't producing a bottom line. We had to communicate that the only way there was a future for them was to create a respectable top line, and, as importantly, a respectable bottom line that will fuel development and growth."

That sounds simple, but the lesson taught Heiman that strong infrastructure and an impeccable reporting system are essential for conducting business without running into communication blocks.

In effect, country managers report to the corporate executive committee, which is comprised of senior vice presidents in every functional area. Additionally, companywide goals fueled by incentives gel together departments so that each part works toward the success of the whole.

"We have corporately aligned incentives on a global basis," Heiman says. "For example, we focus on product development by setting the goal that 15 percent of the products we sell in any given year will be new products that were developed and introduced during that year. This means that every six or seven years, we have totally new or re-engineered products across the board. Everyone across every functional area in every country is tied to this goal."

Marketing and sales departments gather field intelligence so they can offer insight to the product development team. The product development team designs new introductions for various markets. Manufacturing personnel focus on ways to weave and produce different products rather than on how to push items off the line as quickly as possible.

The same defined structures apply to the supply chain, which must function 24/7/365, Heiman says.

"When you are involved in a global market, the supply chain is a dynamic process," he says. "You have to react quickly. You can't just say, 'We'll get to it when it's on our clock or when we don't have a holiday or vacation over here.'"

The supply chain operates as like a well-oiled machine, fueled by Standard Textile's research and development teams.

"We tie together every area of the business to innovation," Heiman says. "And we look at waste in every part of the supply chain so the operation is efficient and effective."

Finally, quality control dictates the success of the products, so a global quality control team travels around the clock, visiting company facilities and suppliers.

"Quality, consistency and overall efficiency of operations are addressed here day in and day out," Heiman says. "Quality control is wired into the DNA of all of our associates -- it's second nature to them."

Made to order

Customers demand innovation and functionality at the lowest cost per serving, Heiman says. Towels are simple; incontinence pads for hospital beds are basic. So to meet these orders, Standard Textile designs fibers that withstand industrial use, provide comfort for patients and guests, and are easy to use.

"Customers want greater longevity so their cost per use will go down dramatically," Heiman says.

Because cost cuts must come from somewhere, Standard Textile relies on its supply chain to usher products to the marketplace with as little waste -- travel time -- as possible.

Then, the company turns to field intelligence to identify ways to reduce costs and provide the best products possible to customers -- items the market really wants.

"Being a person with a past in the military, I have a great respect for field intelligence," Heiman says. "That means not just hiring a consulting firm or getting market information, taking that as gospel and turning that into products. We gather field intelligence from our marketing and sales people. We find real opportunities and what our potential customers need."

From there, Heiman and his team highlight promising growth sectors. Hospitality is offering substantial growth, and Heiman hopes that sales from products in this department increases 50 percent this year. The company recently re-entered the U.S. hospitality market after a nearly 30-year hiatus.

And institutions are willing to spend on textiles that provide guests with a luxurious experience.

"That falls right into our lap," Heiman says. "When [hospitality] customers look for new, exciting products that their guests will be happier with, that is exactly our strength."

Growth is calculated and conservative, but still a little risky, Heiman says. Following consumer trends carefully allows Standard Textile to prepare and produce products before competitors introduce options, he adds, comparing the tactic to a hockey game.

"If you are a good hockey player, you get to the puck just in time," he relates. "If you are an excellent hockey player, you anticipate where the puck will be, you get there ahead of time and you wait for it."

On the world clock, the game is always on for Standard Textile. This urgency translates in all cultures in which the company operates, and Heiman takes his commitment as ambassador to its success quite seriously.

"We have to bring the world to Cincinnati, and we have to bring Cincinnati to the world," Heiman says. "It works in both directions."

How to reach: Standard Textile, (800) 999-0400 or www.standardtextile.com