Sponsored story: Building a winning strategy

There's an old adage that tough times require tough measures; and, arguably, the last two years have been among the toughest ever for economies and businesses around the world, where we have seen cost cutting, bail outs, restructuring, redeployment and a host of alternative strategies to ensure survival and underpin future growth. Yet for companies such as Parker Hannifin, the downturn in the global economy has been a period of quiet but solid consolidation and growth in key markets, creating robust foundations on which to build as the western economies recover and as emerging markets return to pre-recession levels of demand. For Parker, growth and success are driven by a clear long term strategy, based on rigorous management processes, solid investment policies and an ongoing, company-wide commitment to innovation. This core philosophy of innovation has sustained and directed Parker since its foundation in 1918, and has been instrumental in helping us achieve our position as the world's leading diversified manufacturer of motion and control technologies. Perhaps as importantly, this philosophy enables us to deliver outstanding products and customer services and, increasingly, underpins our goal of partnering with customers to resolve many of the fundamental issues facing society; for example, the need to conserve critical energy and water supplies, to reduce pollution, and maximise crop yields in developing nations. Our market-leading position is also based on a process of organic growth and strategic acquisition, enabling us to create an extensive portfolio of products that meet the needs of our customers throughout industry. In the last 30 years, for example, we have acquired some of the most respected brand names in industry, including Alenco, Racor, Schrader Bellows, Digiplan, Telepneumatique, Chomerics, Polyflex, VOAC, Maxam, Fairey Arlon, Dennison, Vansco, domnick hunter, Legris and Origa. Each has been integrated seamlessly within the existing Parker organisation, bringing new strengths and capabilities and helping us deliver even greater customer value. As a result, we now offer a comprehensive choice of motion and control technologies, including hydraulics, pneumatics, filtration, fluid controls, drives, electromechanical, seals and instrumentation. On its own, however, the ability to offer an extensive choice of products does not necessarily build a successful company. Winovation Instead, success derives from many different factors, of which one of our principal differentiators is the unique Winovation strategy. With multiple divisions, some 300 manufacturing locations, a network of sales and customer support centres and 55,000 employees in 46 countries, Winovation allows us to create a common, business-wide framework within which a process of constant innovation – both in products and processes – can be delivered. In addition, the Winovation strategy provides a set of tools that focus and guide individuals as well as teams, creating the ability to develop new ideas and, as importantly, to disseminate these in a controlled and beneficial manner. In essence, Winovation is a strategic business methodology that allows us to focus on important projects that deliver the greatest potential value. By taking research and development out of the engineering workshop, and transforming it into a rigorous, structured and flexible business process we're able to capitalise on the inspiration, imagination and expertise of our employees worldwide and channel this energy in new and exciting directions. This has resulted in major changes in the way we carry out our business processes. For example, managers are increasingly engaged in the actual process of discovery and invention, giving us greater leadership with a management style that is flexible and less constrained by traditional attitudes or disciplines; in effect, Winovation has made us far more entrepreneurial, which is almost unheard of for a $10 billion sized organisation. In addition, our design engineers now have to apply a commercial value to each innovation or product evolution by describing its importance to the end-user or customer; making something smaller or faster is no longer sufficient, instead the key is to show how product features translate to tangible customer benefit. This has had a significant impact on many aspects of product development, ranging from a transition in the way we value products, which now involves closer collaboration with our customers, to the fact that our engineers are spending far more time with customers. In practice, this had led to a steady change in business emphasis. No longer are we a company selling products; instead, we're partnering with customers to deliver technologies that help them improve the performance, functionality, productivity and profitability of their processes or manufacturing operations. Delivering value Our Winovation strategy is one of the key factors that differentiates Parker from its competitors and, in conjunction with our conventional management disciplines, is playing a vital role in helping us maintain our market position, even during challenging economic periods. In recent years it has enabled us to bring to market a steady flow of new and improved products, to enhance the efficiency of many of our business and production processes, and to refine and focus our customer services, such as ParkerStore and Hose Doctor. For example, the Winovation strategy has led to a number of major breakthroughs in technology, including the development of a fuel tank inerting system for aircraft, for reducing the risk of explosion from fuel vapours; in turn, this system was based on a unique Parker gas separation technology, which produces a flow of high purity nitrogen from a conventional compressed air supply. Other projects include Close-Coupled Instrument Mounting Systems that reduce installation time, improve safety and cut costs in the petrochemical industry, simple clamp mechanisms for underwater use that prevent galvanic corrosion, and Compact Spiral hydraulic hose that is lighter, tougher and more flexible. The Winovation strategy is not, however, reserved only for high profile projects. Indeed, by creating a culture of innovation it is regularly used to aid the evolution of existing and often standard Parker products and systems to extend their functionality and performance in many different applications. This can range from the development of smaller and lighter pneumatic valves, that are capable of being used in extreme conditions, to compact hydraulic pumps and motors, and low cost in-line particle and moisture detection systems for hydraulic oils and fluids. Supporting Innovation Parker has been supporting innovation for over 90 years. From the fitting of high-pressure hydraulic connectors to the Spirit of St. Louis aircraft, for the first solo Atlantic crossing by Charles Lindbergh in 1927, to our ongoing involvement in the pioneering Bloodhound 1,000mph landspeed record attempt in 2012, we've always been, and will remain, at the forefront of motion and control technology. Looking to the future, our ongoing Winovation strategy will play a crucial role as we work with customers to address many of the challenges facing our rapidly evolving society, at both a local and global level. In particular, we'll be focussing on issues such as carbon reduction and energy conservation, building on our existing product platforms and developing technologies to create solutions that meet the technical and commercial demands of the markets in which we operate. Central to this process will be our continued ability to deliver solutions that address environmental, social and business needs, without discernable impact on the operating performance or efficiency of machines or equipment. We are, for example, already beginning to achieve this with commercial vehicle systems that reduce emissions and noise, while simultaneously improving fuel consumption, engine efficiency and long term operating life. Balancing the needs of our business, staff and customers, with our environmental and social responsibilities will be key to the long term success of Parker as a global organisation. With our long history of innovation, partnership and value, we believe that we have the strategies and philosophy required for success, today, tomorrow and far into the future.