Research Underpins Identity Change at Owens Corning (1995)
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Research Underpins Identity Change at Owens Corning (1995)

Owens-Corning, a company previously best known for its Pink Panther advertising and other people’s products, had been performing sluggishly for several years prior to Glen Hiner’s arrival as chairman and ceo in 1992.

Paul Holmes

Owens-Corning, a company previously best known for its Pink Panther advertising and other people’s products, had been performing sluggishly for several years prior to Glen Hiner’s arrival as chairman and ceo in 1992. Since then the company has changed its name, its logo, its priorities and its culture.
 
Late in 1993, Owens-Corning Corporation conducted a little consumer research, an attempt to determine how well consumers knew the company and its products. The research disclosed that the public associated the company with two products - the pink insulation it has advertised distinctively for several years, and Corning Ware.
 
Unfortunately, Owens-Corning does not make or market Corning Ware. It has no connection save an historic one to Corning Glass, the company that does. Nor does Owens Corning make the Libby-Owens-Ford water goblets for which some consumers gave it credit. And there is no relationship between the construction products company and Dow Corning, or Owens-Illinois, or Korn/Ferry.
 
Almost as alarming, the survey by Marketing Corporation of America found that there was little recognition for the scope of the company’s activities. Hardly anyone recognized Owens-Corning as a company whose glass and composite materials are used in windows, refrigerators, body armor, baseball bats and even the Stealth bomber.
 
Consumers perceived Owens-Corning as American, its name almost unknown outside the U.S. and Canada; as disjointed, its warm pink insulation in juxtaposition to the high-tech materials that go into sophisticated composites; as conservative, a stodgy follower rather than a dynamic leader; and as manufacturing oriented, focused more on the output of its plants than on the changing needs of the marketplace.
 
It was clear that, in the words of Karen Strauss, recently appointed director, corporate brand, the company was dealing with “a major identity crisis.” The only good news was that the company had a reputation for quality products upon which it could build a new identity.
 
Adds Strauss: “We recognized that we had to develop a comprehensive global brand strategy that would help us reposition the company, rally the organization and drive the future. We had to bury the out-of-date notion that Owens-Corning is a U.S.-focused insulation company, and to herald our true identity as a world leader in advanced glass and composite materials. And return good old Corning Ware to its rightful owner.”
 
Formed as a joint venture of Corning Glass Works and Owens-Illinois in 1938, Owens-Corning earned its independence in 1949 as a result of a U.S. antitrust decree and went public in 1952. For the next 34 years, it was a typical middle-American manufacturing company, conservative in culture (presided over by two generations of the Boeschenstein family), growing steadily and producing a healthy flow of new products without ever coming close to setting the world on fire.
 
Then, in 1986, Wickes Companies launched a hostile takeover bid, and while Owens-Corning was successful in fending it off, the effort necessitated taking on a $2.6 billion debt burden and compelled the company to redirect its strategy. It sold ten noncore businesses, divesting itself of or firing almost half of its workforce, halved its investment in research and mothballed 14% of production capacity.
 
“Historically, Owens-Corning had been a customer-driven company,” says Brad Oelman, vice president of corporate relations and an 18 year veteran of the company. “In the wake of the takeover bid, however, we were single minded in our devotion to paying down the debt, and I think we became very internally-focused.” With its focus on reducing costs and increasing productivity, the company also ceased to grow.
 
That was the situation when Glen Hiner, formerly president of General Electric’s GE Plastics division, replaced the ailing chairman and ceo Max Weber in 1992. The first outsider to head the company, he immediately set aside $800 million to cover the costs of asbestos litigation (Owens-Corning has been named as a defendant in more than 180,000 asbestos-related lawsuits), declared that with debt down from $2.6 billion to around $1 billion it was time for Owens-Corning to look ahead, and refocused the company on growth, and in particular on research and development.
 
To emphasize his seriousness, he took the unusual step of stating his goal - the Owens-Corning would be a $5 billion company by the year 2000 - not only internally but also externally, to suppliers, customers, shareholders and the media. He has also said that he expects earnings per share to rise at twice the rate of sales, thanks to increased productivity.
 
“When I arrived here, the thing that was different from GE was that there were literally no goals,” says Hiner. “People were thirsting for an idea of where they were going. One driving force for putting in the $5 billion sales goal was to make people understand that they had a future. And saying that you’re going to do it and putting it on the line is a big part of making it happen.”
 
A $3.4 billion company with more than 16,000 employees, Owens-Corning has two major lines of business: construction products, which includes insulation, roofing products, windows and patio doors; and industrial materials, which includes numerous glass fiber applications and resins. Close to 75% of its income comes from the U.S., but the company has manufacturing plants in nine overseas countries. To achieve his goal, Hiner plans to raise the contribution of overseas operations from 25% of group sales to 40%.
 
He was also quick to recognize that the company’s identity - or lack of it - was a potential obstacle to progress. To achieve the kinds of goals Hiner was setting, the company required complete investor, employee and consumer support.
 
“Despite our growing presence in more than 30 countries, and our standing as a leader in advanced glass and composite materials, people continue to think of us only in terms of our insulation, roofing materials and Pink Panther icon,” said Hiner, at an August 1994 press conference to expand awareness of its corporate brand. “It’s a key reason why our stock does not attract the attention it deserves from individual investors.”
 
Hiner’s feeling was that while Owens-Corning had been transformed since 1992, the public perception of it had not.
 
Adds Strauss: “We couldn’t afford to have our various products fighting alone in the marketplace. We couldn’t afford to maintain a corporate name that carried no unifying value. We needed a name that consumers could seek when shopping in the product categories where we compete; that manufacturers would come looking for when considering new applications for advanced glass and composite materials; and that investors would come to appreciate not as a cyclical company with sales linked to home construction, but as a balanced, global enterprise.”
 
The corporate marque had been changed in 1992, when the word “fiberglas” was dropped from the company’s name, redefining the company was a world leader in advanced glass and composite materials.
 
With the research findings in hand, management felt it needed a positioning statement that would act as a rallying cry for the brand. A new corporate tagline was born: Owens-Corning - We make the difference. The tagline was designed to distinguish the company from all the other “Owens” and “Corning” variations with which it was confused, and to stand as “words to live by” inside the organization, building employee morale and motivation.
 
The message, says Strauss, was that: “Owens-Corning products and services can be expected to deliver greater value. Our materials can be expected to make products stronger, lighter and more energy efficient. In other words, Owens-Corning can be trusted as a company that is genuinely dedicated to making a positive difference in the marketplace every day.”
 
Hiner also articulated three principles by which the company would be guided: individual dignity, customer satisfaction and shareholder value. Thus he ensured that the company, inward-looking for so long, would be guided by the interests of its three major stakeholder groups: employees, customers and shareholders.
 
Beyond the tagline and the statement, an extensive, multi-dimensional identity change and image-building campaign was initiated. The company: expanded use of the red Owens-Corning mark introduced in 1992, to include every product and every company logo worldwide; expanded use of the Pink Panther, on all home improvement products; increased ingredient branding, promoting the use of Owens-Corning materials such as the Advantex fiber in products marketed by other companies;corporate advertising, in the form of a $10 million campaign promoting materials beyond insulation for the first time in the company’s history; a new corporate tagline, “Owens-Corning: We Make The Difference,” communicating that the company “is dedicated to making a positive difference in the market place every day - that our products and services can be expected to deliver greater value”; and international sponsorship of freestyle skiing, leveraging the use of Advantex fiber in many top-flight skis, and communicating the fact that Owens-Corning is no longer the “conservative, risk-averse” company it had historically been.
 
The most important element, however, was management and employee support. Obviously, Hiner’s enthusiasm for the identity change - and the culture change that accompanied it - was important, but Strauss took other steps to ensure buy-in at all levels of the company.
 
“I attended every sales meeting and visited every factory to talk about the need for a global identity. I made presentations and talked about it at lunch. No one escaped. I attended our management leadership conference, talked to every senior level manager, and proved with research results that strengthening the umbrella brand was the single best way of expanding sales of their individual products.”
 
Strauss also shared storyboards for the first set of commercials - featuring a variety of Owens-Corning products - with senior management as soon as they were available, and made sure the agency, Fahlgren, received management’s feedback. When the campaign broke, featuring Owens-Corning products at work in the Humvee armored personnel carrier and snow skis, the company staged a premiere party for employees. Strauss even brought in champion freestyle skiers to give demonstrations.
 
All of this was creating a new corporate culture, one a world away from the traditional, conservative, midwestern culture that had characterized Owens-Corning since its inception. (Indeed, another priority for Hiner was diversity: “When I became chairman and ceo I noticed something immediately that I knew needed changing,” he says. “Owens-Corning had been very successful, but very white and very male for a long time. Diversity was needed to open new worlds that only a variety of inputs and ideas can unlock.”)
 
Internationally, meanwhile, the company is investigating the appeal of the Pink Panther character, who has moved from a starring role in promoting insulation products to consumers to a cameo role in the company’s corporate campaign. Strauss hopes that the Panther may eliminate the generic, big American corporation image Owens-Corning has in some overseas markets and make the company appear more vital and more consumer friendly.
 
Again, however, research is an important part of the process.
 
“Our game plan is the result of a painstaking, sometimes humbling research process that involved every Owens-Corning department,” says Strauss. “We are a vastly different company than we were even two years ago, and the new campaign is an important step towards the goal of expanding the public’s perception of our brand to better match today’s broader, far more exciting reality.”
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