Target the leaders, the rest will follow

Terrifying prospective buyers away from costly new manufacturing technologies is no way for a supplier to succeed. Yet fear is a routine response to breakthrough tools that promise to shatter traditional work patterns. By carefully selecting its first customers and positioning its radical product innovations as far less disruptive, Extrude Hone has managed to build itself into a cutting-edge business in an age-old metalworking market.

It’s hard for a grown man to be taken seriously when he’s trying to convince a multi-billion dollar manufacturing firm that his company’s product, which looks and acts just like silly putty, actually represents the cutting edge of advanced technology. But for Irwin-based Extrude Hone, making the case for novel approaches to forming and machining precision-engineered metal surfaces simply comes with the territory. 
“Our business is to transform new science into new tools for the world’s manufacturing industries,” company CEO Larry Rhoades told an overflow crowd at the Pittsburgh Product Strategy Network’s September 21 forum in Pittsburgh’s downtown Rivers Club. “And we do that in a variety of ways.”

(Mike Rynerson, Ralph Manning and Larry Rhoades)

Casually rolling up a golf ball-size clump of the bright blue polymer and bouncing it high off the meeting room’s carpeted floor, Rhodes began by explaining why his seemingly childlike toy meant serious business. “This material is pliable, you can form it. It’s a liquid, an elastic, a brittle solid,” he said, admonishing audience members not to let souvenir samples of the fickle material liquefy onto their clothing. 

“We put abrasive particles into it and it’s like a 3-D sandpaper. We flow it through passages where the flow is restricted,” he explained. “The material cross-links and becomes an elastic solid, dragging the abrasive particles on the outer surface across the edges and surfaces of the passage. It does whatever sandpaper would do if it could get in there and do it. It’s used for many things, including the internal passages on combustion engines.” 

The old grind

Of course, silly putty – or serious putty, depending on what you do with it – represents only a small part of the company’s precision manufacturing activities which include, according to its official Web site, a menu of technologies for deburring, polishing, and producing controlled radii that improve the strength, performance, and reliability of metal components. What the company’s non-traditional metalworking technologies all have in common is that they are designed for application to manufacturing processes where extremely close tolerances of hard-to-reach surfaces are critical and where previously impossible metal shapes with very short turnaround times may be essential. 

Those unique capabilities put a lot of Extrude Hone’s products into distinctive niches within the tradition-bound metal forming and finishing industries. Yet those same unorthodox product qualities which help to overcome previously hopeless obstacles also scare away potential customers, some of whom view them as risky, or even threatening, to their companies, their products, and their careers. 

To help overcome that resistance and provide the company with a growing base of application experience, Extrude has crafted a distinctive product strategy. Its approach is designed to minimize customer perceptions of risk and, and the same time, ladder the company up from smaller to larger markets, learning, earning, and improving as it goes. It often begins with the aerospace market, where volumes are small but support for innovation is high. 

Ratcheting up

“In aerospace, materials are virtually un-machinable. You have pretty much non-negotiable design requirements. And you have the incentive to make the turbine section of the engine hotter and hotter. Today, the turbine section of an aircraft operates above the melting temperatures those components are made from,” he explained. “They’re not high volumes, but they allow you to spread out the cost of process engineering and tooling and capital equipment. And they have a remarkably nurturing attitude. So it’s a good place to introduce a new process; there’s a compelling need for whatever this new process can do.”

At the same time, however, you need to connect with the industry’s leaders. “You don’t enter that market with small players,” Rhoades cautioned. “You enter it with GE, with Rolls Royce. They own this market. The real gatekeepers are the large companies in that marketplace. They pretty much define the manufacturing processes that are going to be used because they designed the products.” 

Step Two follows. “After aerospace, we go to high-purity devices. That would include surgical implants, heart values, medical devices, things for the semiconductor industry and the pharmaceutical industry. There we have moderate volumes, and high values per part. 

“The next step would usually go to dies and molds. Here the volumes are lower, typically one. So the process has to be very flexible,” he said. 

Next is the diesel market. “Diesel injection products are the highest volume precision component made in the world,” Rhoades observed. “They are very, very close tolerance. The quality of the edges and surfaces make significant differences in emissions and fuel efficiency of the engines.” 

Finally, there’s the automotive industry. “It’s highly competitive, representing about a third of all manufacturing globally,” he said. “And they’re generally not very nice people. They’ve earned their stripes by squeezing their suppliers. They are facing tough competition from outside the country.” But the volumes are tremendous and so, potentially, are the revenues.

“Go from market to market, learn the lesson, gain credibility, solve complex issues, and then ultimately get to the high volume markets. That’s the strategy we follow,” he said. 

Backing off

Yet even in technologically advanced industries, there is still the human impulse for prospects to recoil from change if that change seems too drastic. It is a resistance Extrude has become quite familiar with. “How do you reduce the reluctance of those customers to buy engineering technology?” company vice president Mike Rynerson asked rhetorically. “We think they’re scary to people. Look at a cross section of American buyers. If you change something drastically, a lot of people jump back. But a few people will jump right in, and typically you want to find out who those jumpers are and work with them right upfront.” 

You also need to look a bit beyond the horizon. “Customers change their minds on a daily basis about where they’re going, about what they want. You need to know what they’re thinking and what their customers are thinking so that you’re standing in the path when they come along with their wallet open,” he said. “If you’re going one way and designing something because you think it’s kind of interesting, and they’re going the other way, you’ll never realize a return on your investment.” 

Among Extrude’s market-tested approaches:

• Package your technology so that it is seen by the prospect as another tool in their tool kit, not as a threat to their skill set.
  
  
• Seek out customers who can see your technology as a way to differentiate themselves from their own competition and help them stand out in their markets.
  
  
• Position yourself shoulder to shoulder with your customer, instead of across the table from them. Join them in looking at their customers to see how you can help those customers succeed.
  
  
• Don’t ask your customer to take all the risk for an innovation; help to mitigate their understandable fear of placing large bets on something new.
  
  
• Build consensus in the customer’s organization; there are lots of people involved in major technology purchases.
  
  
• Don’t ask your customer to change everything they do all at once; if you ask them to change just one thing, they’re more likely to try.
  
  
• Put your show on the road. Extrude put one of its finishing machines on a truck and carried it from one customer site to another. Then they upgraded to a custom motor coach.