Last November's official closing of the merger of two of North American building products market-leading players was a classic sword that cut two ways.
Strategically, the pluses of combining two giants in the building exteriors products, materials, services, and solutions supply chain--respectively on the residential and commercial side of the construction and engineering landscape--were several and significant.
Now, the blended company is the dominant player in building product exteriors, period, serving residential and commercial customers across new construction and repair & remodel market. As the #1 manufacturer of windows, vinyl siding, insulated metal panels, metal roofing and wall systems and metal accessories, its product portfolio, footprint, and engineering solutions mix have no equal in North America.
What's more, with dominant stakes in both residential and commercial construction activity, the new enterprise's ability withstand the throes of a downturn on either one area or the other gives the organization recession resilience neither had before. Too, the new firm can leverage scale-ability, infrastructural breadth, deep relationships, freight, and other distribution nodes for greater efficiency in both materials inputs, process improvement, and product outputs.
Actually, negatives of the deal, were few beyond an obvious detail: the fact that the two companies had operated, competed, grew, and prospered up to and through most of 2018 in largely parallel universes, producing discretely different products from mostly different materials and sub-component supply chains, and delivering them to virtually separate--if related--customers.
The real challenge being how to mesh two sharply distinct--although aligned in important ways--business cultures, operational models, product lines, and identities together under a single moniker that could stand up to both strong characters at once.
The merger on paper, in spreadsheets, in boardrooms, and among investors made total sense. It suggested that synergies, blended proficiencies, scale, and a new cycle-resistant DNA were grounds for great expectations and financial out-performance, a platform for growth.
Still, the job of the strategists--led by James S. Metcalf, chairman and ceo, and his designated "new-name task force" leader, chief marketing officer Susan Selle and her team, including director of corporate marketing Vicki Frye--was to convert what made sense on paper to an entirely new belief system three critically important stakeholders--customers, team members, and an ecosystem of channel partners--would need to embrace wholeheartedly if the merger were to really get traction and succeed.
A several-month corporate re-branding process concluded recently, with the April 11 announcement of the enterprise's new name--Cornerstone Building Brands. After its annual shareholders meeting next month, the company expects to list on the New York Stock Exchange under the ticker symbol CNR, effective May 24, 2019. The new identity journey--a corporate enterprise equivalent of a thorough soul-searching vision quest, involved many hundreds of hours of interaction with associates at all levels, from the assembly lines at the manufacturing plants, to the distribution nodes, to the back offices, to the sales centers, to the headquarters staff, an inventory of the who, what, how, and why of the new combined enterprise.
"The first stage [of the corporate re-branding process] we spent listening to our associates in our company manufacturing facilities around the country," Metcalf tells us. "Our white board started to reflect answers to the most basic questions, 'who are we?'; 'what are our core values?'; 'what is our purpose as a company?'; and those white board sessions focused on terms like, leadership, customer focus, platform for growth,'and the values, first and foremost, around our associates' safety, our priorities around 'nnovation, our insistence on integrity, and our skill-sets in lean six sigma collaboration and teamwork that allow us to constantly improve as the world of our customers concentrates and consolidates into fewer, bigger players."
The identity search process that began the moment the two companies merged in late 2018, took on a life of its own as it moved beyond the white board into conversations and vetting with divisional and regional leadership across the new enterprise's mass portfolio of brands, operating arenas, and customer points of contact.
"The way Susan and Vicki and their team went about the naming initiative, and engaged and aligned both our line associates and our senior management team in the undertaking won buy-in internally right out of the gate," says Metcalf. "Our discovery process revealed at almost every level, a deep-felt pride our associates bring to work with them every day in the purpose of their efforts, which is to help bring people homes and communities they live in and can prosper in."
This multiple-bottom line common denominator--the fact that at both the house level and the community level, where residential construction almost invariably intersects with commerical and public institutional development, building, and investment--emerged as the singular locus of opportunity for the enterprise's future.
"In plain language, we recognized that our array of products and solutions are integral to communities, where people live, work, and play," says Metcalf, who foresees increasing convergence in physical built-space strategy, investment, and development between commercial, public, and residential neighborhoods and communities. "What this really means, and how it matters brought us around to this rock-solid foundational notion of the way we contribute to communities."
Ergo, Cornerstone Building Brands. The new enterprise brand carries a multi-dimensional answer to questions of who it's for, what it means, and why it matters. The new logo blends design DNA from both identities--green and blue, and serves to tell, in no uncertain terms, of a whole bigger than its parts.
"We found as we saw Jim [Metcalf]'s interaction with our team members, whether it was in our window facilities or our insulated metal panel plants for stadium construction, that our associates take such pride and feel that at such an emotional level," says Susan Selle, whose task force led the charge on the new-naming. "Cornerstone really delivers on that emotional purpose people put into their work and see in its impact on communities."
In its bright-line moment bid to seize a foundational role in construction's future value chain and serve as a bedrock community element, the new blended enterprise had to start somewhere new. So far, feedback has been positive, and in the organization's ecosystem of stakeholders, viral.
"Since the reveal, we have not had person we've talked to--ranging from the factory floors to the board--say to us, 'explain to me what this means?'," says Metcalf. "They get it. And since we made the announcement, we've learned that the word getting out has generated 180 million impressions in the first week or so. That's pretty impressive."
Now that the NewCo mystery is solved, Metcalf says operational and integration focus is on captial investment in manufacturing facility upgrades, on cross-pollinating enterprise skill-sets--i.e. iterative mergers and acquisition, integration, and lean execution chops on from the NCI genome and product, design, and installation innovation from the Ply Gem DNA--and on growing the business.
Metcalf notes plans for Cornerstone Building Brands to invest 2% to 2.5% of sales revenue in capital expenditures to tool facilities for greater automation in light of chronic and worsening labor capacitiy constraints, both to increase quality, velocity, and efficiency in getting products to customers.
"We've got three top priorities," Metcalf says. "First, strengthen our core operations, with talent recruitment, customer service focus, and new product development. Second, is to extend our reach, amplifying opportunity to cross-sell residential products and solutions on the commercial side and vice versa. And third is to grow strategically, via organic growth and our proven disciplines around repeatable acquisition modeling."
For a company whose men, women, products, services, solutions, and 80 manufacturing facilities connect directly with 12,000 buildings a year--a rate of 33 residential and non-residential structures every 24 hours--the present moment has become one the enterprise's architects and strategists can now confidently say focuses fixedly on tomorrow.
"This is a journey we feel very proud of," says Metcalf. "Now, we can deliver on the promise of bringing two leaders together in a way that will be transformational for the industry."