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If you’ve been in business for any length of time, you have seen alot of changes in the business environment. Everything from how you communicate to how you keep your books has changed radically over the last decade. The business owners who keep up with these changes and bring their companies along with them will succeed. Those who d0on’t will disappear in the dust of obsolecense.

The Timken Company is a good example of a business which has kept pace with the increasing complexity and globalization of the business world. It began over 100 years ago as a family owned and operated business. It has grown over the years into a Fortune 500 company. Their web site says,

“The Timken Company is a leading global manufacturer of highly engineered bearings, alloy steels, and related components and assemblies. Our technologies and products turn up virtually everywhere equipment moves or power is transmitted. By applying our knowledge of friction management and power transmission, we help our customers’ products run smoother, faster and more efficiently.”

The Timken Company has always manufactured bearings and alloy steels. But they haven’t always been a leading global manufacturer. That distinction came to them only as a reesult of intentional planning and gchaning with the times. Ward, “Tim” Timken is currently the Chairman of the Board of Directors. The company web site says this about him–

“Previously Timken served as president of the company’s Steel Group, leading it to record levels of profitability. In 2000, Timken served as corporate vice president in the Office of the Chairman. Responsible for strategy development, he played a pivotal role in the acquisition and integration of The Torrington Company, by far the largest acquisition in the company’s history. The addition of Torrington doubled the size of The Timken Company and significantly expanded its product breadth and capabilities for friction management and powertrain solutions.”

A report on sbnonline.com did a feature on Timken and his company. It focuses on how the company positioned itself to be prepared for changes as they came along in their business environment. Here is the advice Timken gives small business owners today in preparing their own businesses to adapt to the changes taking place all around them.

Set clear goals

Up until the early 1980s, The Timken Co. had a business model in place that drove the company to be the world leader in tapered roller bearings and alloyed steel. Throughout that decade, The Timken Co. began to look beyond its core business. The company purchased a few small operations and pushed the boundaries around its core products but hadn’t made any drastic moves. In the late ’90s, many of the company’s leaders were retiring. As the new chairman, Tim Timken and the rest of the new generation of leaders had a new direction for the company. The group re-evaluated what exactly the Timken brand stands for, and they decided it wasn’t just about the products it was the knowledge behind those products that made The Timken Co. the industry leader that it is….”

“It’s put us into parts of the market that we never would have thought about serving before,” Timken says. “It drives us to take products to market that don’t look a whole lot like a tapered roller bearing.” The key to executing your vision on a worldwide scale is creating a communication structure that allows you to have instant contact with both the global management team and the global work force. Quick, precise communication lets you be both proactive and reactive to changes in the environment around you.”

“It all starts with the strategy work you do to position your company, and then it cascades down from there,” he says. “Once you get your vision and mission for the company set, you define the strategy. You go from strategy into tactics, from tactics into business plans, business plans into individual performance plans. “Throughout the whole communication chain, you have to make sure you are staying true to a core set of directions you’ve put in place for the company. If you do that well, the communications become a lot easier.”

“Timken wants to make sure that every one of the company’s 25,000 employees knows exactly what role he or she plays in getting The Timken Co. to reach its goals. The strategies are translated directly to each individual so that everyone knows what he or she is supposed to do.”

Create a work force of change

“…There’s a difference between having global partnerships and customers and truly being a global company. Changing the mindset from a primarily national company to one that thinks about the entire planet has its own set of challenges, including resistance from long-time employees. “You start with communication,” Timken says. “Make sure people understand what you’re trying to accomplish and how you plan to get there. The fact of the matter is that when you’re going through periods of change like we’ve seen in the last four or five years, there will be people who will not be able to make the change. That’s just a reality we have to face.”

He says there are three things to do when you run into resistance. “Your first line is to make sure they understand what you are trying to accomplish,” Timken says. “The second line is to be more aggressive in coaching them to try to make the change. The final line is trying to find a different place for that individual, whether it’s inside the company in a different occupation or somewhere else. “It’s difficult when you run a business and you know people extremely well, but, at the end of the day, if you have an element of your population that is resisting the change, that will do more harm than good. You have to address it proactively.”

But even when everyone is on board with your plan, it can still stress your internal resources as you race to keep up with global competition. New products being launched quicker means you have to take steps to keep your employee base equipped to handle the pace. “You do it by a combination of internal training as well as hiring selected talents from the outside,” Timken says. “The fact is, there are products we’re making today that we wouldn’t have known anything about five years ago. So rather than going through the exercise of trying to acquire that knowledge ourselves and propagate it, we’ve found it’s often better served by somebody from the outside.” And doing that may mean re-examining your hiring practices. “If you look at the history of our company, 20 years ago, we didn’t hire all that many people after they turned 21,” Timken says. “We wanted them right out of college; we wanted them to work for our company for 60 years and then retire. It’s not a model that works anymore quite frankly for demographic reasons but also from strategic reasons. Our company is moving so quickly that you can’t afford the luxury of training everybody yourself.”

Use caution

In much the same way the company finds expertise outside the company to fill knowledge gaps, it uses strategic acquisitions to gather additional expertise, products and markets. There are a few things to watch out for in any acquisition, and one of the most critical skills a leader needs to broker a successful deal is the discipline to push away from the table and say, “No, thanks.”

“….Understanding the company you are planning to acquire is very important, but Timken also takes his managerial instincts into account before closing the deal. “It’s a combination of very good due diligence and gut feel,” he says. “You can sit there and spend a lot of time going through data rooms and talking to customer bases, but, at the end of the day, the only way I get comfortable with an acquisition is if my gut tells me it’s a good fit culturally.”

The first thing Timken does in that opening gut check is decide whether he has faith in the people sitting across the table from him. Values play a large part in this decision. If he gets any sense that the leaders of the other company are willing to bend a few rules to get things done, the deal is off.”

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