Worthington Industries Prioritizes Strategic Innovation
Nearly seventy years ago, John H. McConnell, a successful salesperson in the steel industry, identified a white space where the market was unable to adapt and meet the needs of some customers. John put a loan against his 1955 Oldsmobile to start a custom steel processing business. In the years that followed, Worthington grew to become an industry leader.
Over the last decade, Worthington formed the Corporate Innovation group to expand their culture of innovation across the enterprise, fundamentally aligned with that original mission of serving the needs of their customers.
Shellee Simmons-Taylor, Vice President – Strategy & Innovation, leads Worthington’s corporate strategy and innovation function, primarily partnering with the business units to uncover opportunities and accelerate execution. Michael Luh, Managing Director of Emerging Technology Investments at Worthington Industries, finds and executes strategic venture deals.
I recently had the chance to connect with them on this work.
MM: Michael, you came to Worthington to wear the innovation hat. How did you get your ideas off the ground?
ML: We’ve always believed that Innovation here is a team sport. We knew we could innovate anywhere, but it really begins with strategy development. A few business units had fundamental strategies already in place. From there, we selected our first Innovation initiative based on the potential business impact on the company and leadership readiness to support the effort.
Our philosophy was to initially have Innovation live under the corporate umbrella and be guided centrally, but our goal was always to move Innovation into the business units once established.
Accelerating innovation is all about culture change. We are achieving that. At first, there were three or four of us in innovation; the team has grown to thirty-plus across multiple business units.
MM: How does Worthington prioritize innovation opportunities?
SS-T: We look at where Worthington’s strengths match the needs of customers and market opportunities.
Market – Leader – Readiness, or MLR, is our key approach for prioritization. First, we ask, is the Market attractive to us? We are a small, nimble team that supports the Leaders who are ready to execute. We do not push projects unto the business leaders; “push” does not work. We partner with our Leaders and work with cross-functional teams to develop recommendations. Readiness is a measure of engagement. Is the business leader able to commit resources to collaborate? Do we have the right cross-functional team and needed capabilities? Do they have an approved budget? All of these indicate Readiness to engage on a project and activate the recommendations.
These cross-functional teams then become lighthouses and facilitators themselves in strategy and innovation processes. Their success creates a pull for additional processes and capabilities.
ML: The real test is when managers commit and prioritize this work. For that reason, innovation champions must include senior and influential leaders who dedicate their resources and time. The information must lie in the business unit. Unless the business unit leaders understand this and buy into the strategy and the opportunity, the project cannot live on its own.
We are very thoughtful about which projects to pursue. We do not want to waste time and money. However, if we assess the strategy, the leader’s pull is fabulous, and all they are missing is capability; we may identify the failure point and help them acquire the missing capacity.
MM: How does your team collaborate with the business units?
SS-T: While the business units own the projects, we design processes for innovation and strategy development as well as needed capabilities for engagement. We partner with leaders to structure strategic choices, identify capabilities to win and support them to get started. As the business unit leaders execute the recommendations, they invest in faculty, processes, and systems. We also collaborate to accelerate initiatives and evaluate markets for potential acquisitions.
MM: How does a corporation like Worthington build a corporate innovation team like yours?
ML: One of our underlying philosophies is the diversity of thinking. We have people with all sorts of backgrounds and experiences. Each of them approaches problems differently. We recruit for intelligence and curiosity.
We practice constant improvement here in a safe environment. Our employees must be willing to fail. Leaders are trying to do what they think is correct, but sometimes we must put a project on pause before we can tackle what we want to tackle. Or sometimes, we may have to pivot away from a project entirely. That is a hard message the business unit might not want to hear, but if we cannot win, we stop and pivot to where we can.
SS-T: I would add, how does Worthington maintain the effectiveness of a team like this? We operate by a set of team principles to protect the culture and influence of the team. I’ll share a few:
- We seek first to understand each other, our markets, our customers, our consumers, our suppliers, etc. We are curious strategists, learners, researchers, and makers.
- We are wingpersons. We make our partners look good. We are never Batman; we are always Robin.
- We have a flat status on projects; we will consider and respect all contributions regardless of title or role.
MM: With venture funding to invest in strategic deal flow and intentional innovation well-grounded in many business units, what does the future hold for innovation at Worthington?
ML: Even though managing and investing venture funding is new for us, we are grounded in the same disciplined approach to finding opportunities where Worthington’s business and our customers can “pull” us into the future. With Worthington Industries Ventures, we can tap into this external R&D to find new and disruptive ways to support our customers’ unmet needs and businesses while we explore new markets that are strategic to Worthington’s future.
SS-T: We support M&A and venture activities with rapid market opportunity assessments. We help to answer questions like, where else do we have a right to play and win?