Blowing up the business plan Featured

8:00pm EDT July 26, 2007

Jim Ziminski felt disaster looming. He saw it in the company’s revenue growth, which was nearly flat. He saw it in the declining sales in his business’s most important distribution channel. He knew Crane Performance Siding LLC was losing market share. And he knew homeowners were becoming disenchanted with vinyl siding, which was practically the only product offered by his company since its founding in 1977.

“Vinyl siding had somewhat of a bad reputation,” says Ziminski, who was promoted to president of Crane Performance Siding in late 2002 to help turn around the struggling, family-owned company. “They didn’t think it looked real.”

It was a hard truth to face, but Ziminski, who previously served as vice president of sales and marketing for this division of Crane Plastics Co., knew fighting it wouldn’t help. His company had to find a new niche — and fast.

“We started looking at our brand and our products and our offerings, and what we realized was for us to position ourselves as the best vinyl siding company with the best service, lowest cost, best value was not a realistic proposition,” Ziminski says. “We were kind of late in the game. Even though we’d been in vinyl a long time, we hadn’t kept up with the Joneses. What we did realize was we needed to focus.”

That focus came in the form of a new, higher-end siding product that appeared promising, but would require sweeping and immediate changes at the company, which employs more than 300 people.

It would require an almost complete turnover of Crane’s sales team. It would require a drastic reconfiguration of its factory. It would require new customer service systems and different distribution methods. But, if it worked, the payoff would be sweet. Ziminski figured he had little to lose.

“We were in a tough position at that time,” he says. “But when everybody panics and runs around, somebody stays calm, somebody stays focused and somebody takes [market] share because they had a plan, and they stuck with it.”

Ziminski’s plan was solid-core siding, a sturdier, more attractive alternative to vinyl siding, which his company began making and marketing as CraneBoard.

“We ultimately focused on that, and it absolutely rebuilt our company,” he says. “It helped us get customers. It helped us retain customers that were, perhaps, going to leave. It helped our customers get new customers because now they had a unique product.”

In Crane’s first year selling CraneBoard, revenue grew more than 20 percent, Ziminski says. Since then, sales have jumped at least 50 percent more.

“We’re between $150 and $200 million with plans to grow beyond that, even though the market is contracting,” Ziminski says.

Here’s how Ziminski’s bold decision turned around Crane Performance Siding and how Crane’s renewed success has positioned the company to remake itself into a completely new entity: Exterior Portfolio by Crane.

Hearing the critics

When Ziminski began assessing Crane’s market position in 2000, he didn’t like what he saw. So he went to the primary source of his company’s lackluster sales: homeowners.

“We did a lot of focus groups with consumers,” Ziminski says. “Those can be pretty eye-opening. Sometimes you’re hearing things you’re not so comfortable with, but you’re hearing things you need to hear.

“What we heard about vinyl siding was that people didn’t like the fact that it was shiny or glossy. They didn’t like the seams. They liked how competitive products like cedar and fiber cement were straighter and wider. ... They absolutely wanted maintenance free, but they wouldn’t give up good looks to get maintenance free in many cases. What they really aspired for was a better, high-end product.”

That gave Ziminski hope. Not only was there still room for Crane to carve out a slice of the marketplace, but there was a whole new pie to be had.

“People in tough times, they see problems, they see challenges. We saw opportunities,” he says. “When we went out and talked to our dealers and distributors and contractors and builders and, most importantly, homeowners, we had no doubt they wanted this product. There was a need for something different.

“The thought was if we don’t do this, a competitor will. So who better to cannibalize your own product than yourself?”

Get on board or get out

Ziminski wasted no time getting CraneBoard ready to launch. The first task was convincing employees this was the best — perhaps only — way to a stable future.

“The first people we sold this product to (were) our people,” Ziminski says. “We were open and honest and said, ‘We can’t be the best at vinyl siding. It’s too little, too late. But the market is telling us that we’re really onto something here [with CraneBoard], and we can be the best in this category, which is a higher-end category.’ We essentially sold them on why we were doing this and why it made sense.”

Getting buy-in from every member of the sales force was particularly vital if this turnaround plan was going to work. So before Ziminski even called the first sales meeting, he sent everyone the book, “Who Moved My Cheese?” by Spencer Johnson, a best-seller about dealing with unexpected change.

“I told them, ‘Your cheese is going to get moved,’” Ziminski says. “‘And it’s going to get moved rapidly, and you really have one of two choices. One path is you’re going to embrace this change and be motivated by this change, and you’re going to enjoy it ... or you can fight it. And if you fight it, I would suggest that you probably want to leave now because we’re going to change with or without you.’”

In the end, a whopping 70 percent of the sales force either headed out or was shown the exit. The remaining 30 percent got down to business.

“Our model was to sell the higher end, to sell the uniqueness, sell the different things,” Ziminski says. “We ended up with a very high-functioning sales group very quickly, and we have not had turnover of those people. That was the first major makeover.”

The next was manufacturing. “When it came time to rework our factory and get new equipment, the question was always, ‘Is this what’s best for solid-core siding, which is our future, or is this best for vinyl siding?’” Ziminski says. “Each department, be it manufacturing or customer service or distribution, they all understood what the vision was for the company: This is what we are; this is what we’re not. And it all fell into place and became pretty clear.

“Quickly thereafter, the results began to turn. Once we had the results, people really began to believe.”

Rapid results

By the end of 2006, Crane had introduced six new solid-core siding panels that were wider, straighter and less glossy than vinyl and 12 decorative trims and corners — just about everything homeowners had said they wanted in a maintenance-free siding product.

Sales of these new offerings were leaving Crane’s traditional vinyl siding in the dust.

“If you look at our sales mix, where it was heavily weighted to our lowest-cost products in 2000 and 2001, it is equally heavily weighted to our solid-core products now,” Ziminski says.

In addition, sales-per-employee figures are up roughly 40 to 50 percent, and the company’s throughputs, scrap rates and on-time delivery have improved significantly since focusing on solid-core.

“Our profitability results increased dramatically,” he says. It’s a turnaround that essentially saved the company. “I would question whether we would have been able to sustain [ourselves] over the last seven years if we just kept doing vinyl siding,” Ziminski says. “That’s not because vinyl’s bad. It’s because we weren’t going to be able to compete and change with the dynamics of the marketplace the way (other manufacturers) were. If we were here — and that’s a huge if — we would be very, very different-looking.”

Ziminski says his turnaround strategy starts by being honest with employees.

“You need to tell them what’s going on and be fair,” Ziminski says. “Sometimes it’s scary. When the market is shrinking, no one wants to hear that, but they need to.”

Hearing criticism is also difficult for CEOs. But it’s essential if you want to grow.

“I think the difference between us and our competitors is we heard what our customers said, and a lot of people hear what they want to hear,” Ziminski says. “We wanted to hear they loved vinyl siding and everything was great. We didn’t hear that. We heard what their issues were with the product, and we knew solid-core could solve some of their concerns. We didn’t try to fight it. We didn’t argue with them. We went to what they wanted.”

More change ahead

The next big change for Crane Performance Siding will be just as monumental as the last — and it’s already well under way.

“There are dynamics in the market that we can’t ignore, so we’re repositioning ourselves once again,” Ziminski says. “We’re focusing our company on exterior design. People are using a mix of materials, colors and textures on the exterior of their homes now to get a more unique look.”

Ziminski is capitalizing on that trend by transitioning his company into a completely new one.

“We’re going to essentially become a new company called Exterior Portfolio by Crane,” Ziminski says, noting that Crane Performance Siding will remain in business, but will sell only vinyl siding products. All exterior design elements, including BellaStone — a new, realistic-looking stone product introduced this spring by Crane — as well as the company’s wider, more decorative trims, will be shifted to the new company.

Delineating the product lines in this way is important for the future success of both businesses, Ziminski says.

“If you’re going to buy BellaStone, a very expensive, high-end product, for example, do you want to buy that from a vinyl siding company? I’m not so sure. It’s a different image,” he says. “We’ve, again, talked to our customers and talked to the consumers and gotten great confirmation on the path we’re going.”

Ziminski will spend much of the remainder of 2007 positioning Crane internally and externally for the changeover to Exterior Portfolio by Crane. He’ll get some help from Duo Dickinson, a nationally known architect and contributing editor in home design for Money Magazine, who has been hired to help with Crane’s repositioning and marketing of its new exterior design products.

“You have one chance to make a first impression; just one,” Ziminski says. “When we come out with this stone product, we have just one chance for someone to try it the first time, so we better make sure we have it right.”

Naturally, Ziminski will also continue to seek input from consumers on how to improve upon his company’s new offerings.

“We’re a big believer in launch and learn,” Ziminski says. “We want to hear they love it, but we also want to hear what they don’t like, what’s not right and what could be better. We believe in 100 percent brutal honesty.”

By the start of 2008, Ziminski expects to make the full transition to Exterior Portfolio by Crane.

“I think [employees] know and accept that we’ve got to keep changing,” Ziminski says. “The only thing we can count on is we’ve got to continually evolve because the market is not static.

“We can see what we’ve done in the past, and we are proud of it. But what we’re going to do in the future is even bigger. We owe it to our employees and to the Crane family and to the corporation to reach our full potential. Our full potential is far greater than what we’re doing today.”

HOW TO REACH: Crane Performance Siding LLC and Exterior Portfolio by Crane, (614) 443-4841, (800) 366-8472 or www.cranesiding.com or www.exteriorportfolio.com