Not a Vendor, A Partner: How Milwaukee Tool Reinvented Itself: Part One

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Part One: The Partnership Strategy Catalyst

by Michael Kirby, Director of Mechanical Trades, Milwaukee Tool and advisory board member for MechanicalXchange

“Our partnership strategy has changed the entire company, not just our bottom line. It has brought us all together to develop new solutions, and our new development process relies on—and benefits from—these industry relationships we’ve developed. They fuel the ideation for our innovation and that has helped develop us into the new product machine we have become.”

In the mid-2000s, Milwaukee Tool was at a crossroads. At that time, we were a little lost in our ways and had been for many years. We were trying to be everything for everyone and had no focus on who we wanted to be. We had just received several awards for the Best Router on the market; we were still investing in corded tools; we were launching gas-powered equipment; and we were dabbling in cordless. No strategy, no focus.

Even though it was clear the market was headed down the cordless path, we were only at about 1% cordless market share (at this time it was all NiCad and NiMH battery technology). All of these were reasons we weren’t growing as a company, but we had one ace up our sleeves: a battery technology that we had been working on for several years and held some significant patents around…Lithium-Ion Battery Technology for use on Power Tools. That’s what attracted TTi (TechTronic Industries) when we were put up for sale by Atlas-Copco, and when we launched the first Lithium battery powered tools for the professional trades, it changed the market indefinitely.

We had been extensively researching the technology for years and had been performing accelerated tests to prove its effectivity in extreme heat and cold conditions. All of our competitors had looked at this as well and deemed that Lithium-Ion technology was not compatible for the power tool industry…we obviously thought otherwise.

When we launched a handful of Lithium-Ion tools, it took the market by storm. (Although the Milwaukee Tool brand was well-established, we were not known for delivering innovation to the market…at least not since we launched the very first reciprocating saw, the SAWZALL®, after World War II.) The introduction of Lithium-Ion to power tools is truly when a major shift took place within our company.

Refocusing on Who We Serve

Steve Richman came in as our President and made some quick observations. He helped us take a deeper look at who we were, what got us to where we are, what we are known for and, most importantly, what we were not. We could not continue to be everything to everyone, at least not until we got our house in order. And that meant going back to our roots, what made us who we are … and that is MEP— Mechanical, Electrical and Plumbing.

But to do this we had to relearn our ‘user’. We had to provide solutions for everything they did from the time they woke up, to the time they got home from the job. We had to understand what they did for hobbies. We had to find out what they needed. To do this would take significant resources. So to fund these initiatives we had to make some hard choices and that meant literally killing products, products lines, active projects—anything that didn’t have the end goal of developing productivity-enhancing solutions for the MEP contractor.

We developed a cross-functional team that would spend a considerable amount of time on jobsites, observing professional MEP trades men and women performing their daily tasks and routines. This team would essentially work hand-in-hand with these users, asking a lot of questions, and listening to what they said and why they said what they said. It was all about providing solutions to help make them more efficient, safer, and productive and to provide savings to the bottom line. This led to what has become our Jobsite Solutions team (JSS).

Come back for Part Two: How Milwaukee Tool Became More than a Tool Company

Juli Patty