PPG officially sold off its flat-glass business to Vitro S.A.B. de CV, including production sites around the U.S. and a research and development center in Harmar.
It concludes a $750 million deal between PPG (NYSE: PPG) and the Mexican glass manufacturer that was announced in late July. It’s also an end of an era for PPG, which has sold off most of the rest of its traditional glass business in favor of coatings and paints.
For most of us in Western Pennsylvania this seems unthinkable. I mean after all look at their Corporate HQ downtown Pittsburgh. It’s all glass. PPG has been selling off their glass interests for some time now. How can a company that founded itself in the glass business divest itself of all its glass interests?
THEY CAN AND THEY SHOULD BECAUSE ALL BUSINESSES NEED TO RE-INVENT AND RE-DEFINE THEMSELVES EVERY SO OFTEN.
There is this proven business concept out there called The Sigmoid Curve. The Sigmoid curve is a mathematical concept which has been widely used to model the natural life cycle of many things, from biological organisms, to schools and companies, marriages and careers. Imagine the Sigmoid Curve as the curve of life of an individual, an organization or an entire economic region. The curve initially declines in a time of experimenting and learning, then rises in a period of growth and prosperity, and finally declines leading to the end. The key to sustaining a healthy life, a healthy business or a healthy region is to make a transformation to a new curve before the current one is too far in decline.
Applied to business it is this 3rd stage (declines leading to the end) where we need to pay attention. Generally speaking once the business is in that decline stage there are not adequate recourses to support change. For this reason, as companies approach the top of the Sigmoid Curve they need to start to think about re-inventing themselves. This is what PPG has done. They are moving away from their core which has always been glass and re-inventing themselves into a coatings company.
Many of us can remember In Search Of Excellence. This was the “THE BOOK” back in its day. If we remember Tom Peters spotlighted 43 companies that everyone else was supposed to model themselves after. I believe there are only 3 or 4 of those companies left today. Most of them were gone 10 years later. WHY? The Sigmoid Curve. They did not reinvent themselves.
Wang Labs, Borders Books, Circuit City, Enron, the list goes on.
PPG is a great example of how a company needs to reinvent themselves in order to survive. More companies should take this example and apply it their business.
About the Author
With more than three decades of experience in all facets of sales management, customer service, business growth, and staff coordination, Certified Business Coach Greg Emslie is a focused professional with the tools to help you grow and manage your business effectively.
Driven by his ability to implement proven business concepts and help improve teams, Greg affects all areas of the companies he works with, including sales, leadership, profitability, and decision-making. He focuses on improving efficiency and processes for his clients while helping them grow their revenue base.
Ready to begin finding other ways to make your company more productive? Let’s get the conversation started. Contact Greg Emslie for a business strategy discussion today.