Hilti Business Case

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Hilti 2003.
Maintaining a Proactive Sense of Urgency

As of 2003, the Hilti Group was a world leader in developing, manufacturing, and marketing added-value, top-quality products and services for professional customers in the construction industry and building maintenance. Hilti’s product range covered drilling and demolition, direct fastening, diamond and anchoring systems, firestop and foam systems, installation, positioning and screw fastening systems as well as cutting and sanding systems. At that time, Hilti had operations in over 120 countries worldwide and more than 14,000 employees, of whom two-thirds interacted directly with customers in sales, engineering, and customer services. Hilti operated its own production plants as well as its own research and development centers in Europe, America, and Asia. Approximately 1,500 individuals were employed at the company’s headquarters in Schaan, Principality of Liechtenstein. Furthermore, Hilti posted €2.05 billion in sales for fiscal 2002. Since its founding in 1941, Hilti had been profoundly influenced by the values, tradition, and spirit of its founder, Martin Hilti. Although his pioneering spirit was no longer omnipresent, Hilti’s executive management drew from his principles and core beliefs and so kept the company in a state of constant evolution: People were always the focus; the utmost quality was a must; and Hilti products were sold via direct sales. “Sustain that which has sustained” was the motto according to which the executive management was constantly realigning the company. By 2003, Hilti had been the undisputed market leader for years. In a process lasting almost two decades and costing €16.3 million, the company systematically developed a culture which revolved around constantly questioning the status quo, personal will to succeed, and actiontaking grounded in personal responsibility. Toward this end, the major challenge facing Hilti’s management was the process of generating a proactive sense of urgency on an ongoing basis. __________________________________________________________________________________ This case study was written by Prof. Heike Bruch and Sabine Bieri at the University of St. Gallen (Switzerland). It is intended as a basis for discussion rather than as an illustration for effective or ineffective management solutions.

Hilti

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Hilti 2003 – Maintaining a Proactive Sense of Urgency
1 Hilti evolves as a company
“Hilti’s developmental path has been one of constant evolution augmenting company strengths and building on them continually.” (Michael Hilti, Chairman of the Hilti Board of Directors)

1.1 Fastening systems, direct sales, and high growth
Together with his brother, Eugen, Martin Hilti founded the Maschinenbau Hilti oHG in Liechtenstein in 1941. During the Second World War, Hilti’s employee count grew from five to about one hundred. At the end of the 1940s, Hilti first came into contact with nails and bolts specifically for direct fixtures. Martin Hilti saw enormous potential for power-actuated tools, so he bought the rights and patents to them. From then on, Hilti specialized in fastening technology options and began its journey on the way to becoming a world-class supplier to the construction market. Hilti’s distinctive direct sales policy grew out of technological necessity in 1957, and it remained a company mainstay until 2003: The “DX piston principle” developed by Hilti represented such innovative technology that it had to be explained to customers. For this reason, Martin Hilti arranged for the products to be demonstrated in an active, hands-on situation – direct on the construction site. This measure ensured close contact with the customer and thus immediate feedback with regard to customers’ needs and desires. From the very beginning, Martin Hilti made employees the focus of the company. He had great faith in people and believed that they needed the freedom to take action and freedom of choice in order to...
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