When Jay Gould joined American Standard in 2012 as CEO, he faced a liquidity crisis. Draining cash, the once-venerable plumbing company was on the brink of collapse.
Gould, 54, knew the firm had lost $20 million in its last quarter and was tumbling down an unsustainable path. Employees feared for their jobs.
“My predecessor had a tendency to reorganize three times a year and downsize twice a year,” Gould says.
To boost morale, Gould gave the company’s 5,500 employees a larger purpose. He defined the company’s mission as “raising the standard for daily living in people’s lives.”
With about 1.6 million people worldwide dying each year due to lack of clean water and safe sanitation, Gould sought to develop a low-cost latrine. His team of engineers designed such a device for the poor in Bangladesh.
Last year, the company launched Flush for Good, an awareness-raising campaign that engaged customers in improving sanitation in the developing world. For every purchase of American Standard’s high-end Champion toilet, the firm would donate one of its newly designed devices to Bangladesh.
To improve the bottom line, Gould cut expenses while emphasizing innovation. He increased market research so that his team’s innovative thinking focused on what mattered most to customers. As a result, Gould estimates that income from new products will soar from $15 million in 2013 to more than $70 million in 2014.
From its near-death experience, American Standard has rebounded nicely. Revenue grew 9.5% last year, and it projects a 15% increase this year.
— Adapted from “Jay Gould Aims for the ‘Magic’ at American Standard,” Steve Minter, www.industryweek.com.