In the more than a decade since she left Sohio (now BP Oil) in 1989 to found Thermagon Inc., Carol Latham has proven that innovation can, indeed, drive success.
Working with just an idea -- a way to dissipate the debilitating heat generated by semiconductor devices in computers -- Latham has built a loyal customer base and developed a company that's in constant growth mode.
Her company's client list includes such heavy hitters as Unisys, IBM, Motorola, Silicon Graphics, Dell, Intel, AMD and Cisco, and continues to grow. Latham recently moved her company from its West 25th Street digs to a larger building on Detroit Avenue in Cleveland to accommodate new equipment and an larger work force.
Last year, Thermagon expanded from 48 to 81 employees, in the process reaching $11 million in revenue. She employs numerous innovative approaches to her work force, including teaching new hires multiple business functions as part of their training.
This year, Thermagon is approaching 100 employees, and Latham says the company should top the $17 million mark by year's end. So what drives this innovative Visionary on her quest to provide the best product -- and company -- in the marketplace?
SBN sat down with Latham to discuss her business philosophy and what's been happening with this multiple award recipient.
Growing companies often find themselves faced with temptations to expand beyond their core products. Is that true with Thermagon?
We manufacture thermal management materials that go between the parts of an electronic system. Everything we make has that focus. Historically, everything was polymer-based, but now we're doing work with nonpolymer-based materials. That's the type of diversity Thermagon explores.
The biggest chunk of our business is the interface materials -- the materials we put between the CPUs and the components -- and the heat spreaders. There is a smaller, but growing rapidly, part of our business as well -- the circuit board materials that we sell. We've doubled our bookings on those since January.
What's spurring your growth in a sector that's begun to slow a bit?
There's a slowdown in the technology sector. Companies like Agilant have recently announced problems, which are really experiencing supply problems. If anywhere in the supply chain someone can't produce, then you have a problem. That kind of thing tends to slow the economy down a little bit.
For Thermagon, our concern is that we use so much of certain raw materials, that in order to support our growth, we have to guarantee no problems in our supply line. Luckily, the semiconductor industry is booming, and telecommunications isn't far behind.
Are you funding this growth internally or externally?
Until 1999, when we got into this building project, we didn't have any debt. Now we have a line of credit and strong cash flow. We work from the cash flow first and borrow the rest. Financially, we're on very solid ground.
You've been known in the past to travel around the globe a lot, visiting many of your customers on a regular basis. What's happening on a global level?
I haven't traveled quite as much this year as last year. A lot of our international business last year was generated by U.S. companies manufacturing overseas. It looks like there's more being manufactured here than there used to be.
There's a lot of activity in places like Mainland China, Japan, Taiwan and Korea, but we're finding the U.S. sector is actually growing the quickest. That may be because a lot more manufacturers are using contract manufacturing. That's made things a bit more complicated because it causes us to deal with more than just the OEM (original equipment manufacturer).
Because of that, to track the business and determine where it's being manufactured becomes a chore. What may be manufactured in China today may be manufactured in Taiwan tomorrow and then again in the U.S. after that.
Could you touch on the importance of continuous innovation within your industry?
The ability to adapt is imperative. You have to know where to be and when. There's a tendency to get complacent in what you're doing, but you have to consistently try new things and shake the company up a bit.
For example, when I go overseas a couple times a year, I always have an audience. People are interested to hear what's going on with Thermagon because we constantly introduce new products, talk about testing capabilities and I often help solve problems on the spot.
As a company, we're really on the move. But it's a real challenge. People say it's great to be expanding the way we are, which it is, but most people don't know how difficult it is to absorb this type of growth in business. New products are continually being developed and introduced -- about quarterly.
That's keeping with the fast-moving changes that occur in the electronics industry. How to reach: Thermagon, (216) 939-2300