Flush with good deeds

American Standard finds its inner humanitarian and a new look

What does a humanitarian mission in Bangladesh have to do with the growth of an iconic American brand, or a new color scheme for American Standard?

Actually, a lot. And the connection between the three — and several other initiatives at Piscataway, N.J.-based American Standard Brands — revolves around relatively new CEO Jay Gould.

What’s happening in Bangladesh is basic human improvement. “When I joined the company, I was shocked to learn that 2,000 kids die every day for lack of access to proper sanitation,” said Gould, who took over as CEO in January 2012, replacing Don Devine.

Under Gould, the company flexed its humanitarian muscle when the Bill & Melinda Gates Foundation solicited ideas to develop innovative sanitation solutions in the Third World. During all of 2013, for every Champion toilet sold, the company donated a sanitary toilet pan for distribution in Southeast Asia. (Gould himself toured Bangladesh on a follow-up mission in 2013.)

For Gould, a self-confessed believer in “purpose-driven companies,” the effort that became “Flush for Good” was more than cause marketing. It was an event to boost morale at American Standard, following successive cuts and restructurings. The company had seen about three years of twice-a-year restructuring or downsizing.

“Frankly, [employees] were tired and beaten,” Gould said. “Survival is not a stirring reason to get out of bed.”

American Standard employees who talked to HCN confirmed the new-and-improved culture. And there’s also a new-and-improved strategy at work. To wit: The company is working to flush its low-cost-provider reputation.

In talking to major customers, the same three desires appeared on the top of the list: brand building, demand creation and product innovation. “They were all asking for the same thing, and it wasn’t ‘What’s your lowest price?’ ”

The company’s new look is playing a role also: updated, refreshed and described as slightly more feminine than previously — a marigold, teal and charcoal color scheme that was selected for its “bold and optimistic” message. (It’s also more distinctive within the industry than the classic red, white and blue, Gould said.)

A two-month-old deal with Ferguson, the nation’s largest kitchen and bath showroom company, is an important step for American Standard, which can help it begin to compete on a “level playing field” in a high-quality showroom environment, he said.

With a five-year plan firmly in place, the company is on pace for core revenue to increase 9% to 10% in 2013, with double-digit increases in 2014.

Behind the scenes, the company’s supply chain was revamped, leading to improvement in gross margins from 15%, when Gould became CEO, to its 22% level currently.

For Gould, the idea of doing good around the world goes hand in hand with business success. “I’ve actually been amazed by the response to Flush for Good,” he said. “It’s bringing humanity back to the category.” 

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