Who is your customer and what does your brand mean to him? Every board should be able to answer this question, but most organizations hardly ever stop and think about it. Wavin has been adopting this train of thought over the past three years. They apply the principles and methods of design thinking to strategic decision making.
Wavin is a global leader in plastic tubing and piping used for the distribution of drinking water, rainwater, wastewater and gas. The company was first exposed to the ideas of design thinking in 2013, when it lost market shares in Turkey. Local management assumed this happened because the factory was built in a remote location, causing high transportation costs. By building a new factory, closer to customers, these costs could be lowered. Or so they thought. Executive Director Supply & Operations Richard van Delden wasn’t too sure about this solution. “High costs are an obvious factor to investigate when market shares are dropping. Lower prices could potentially lead to more buyers, but how do you return the investment you made when building the new factory when your products become cheaper? In my opinion, local management was too focused on this solution and I suggested we take a new, broader look at the issue, to analyze why market shares where dropping. Perhaps we could find some other way of dealing with it, besides lowering our prices.”
Before traveling to Turkey, Van Delden witnessed a scene on a construction yard in the Netherlands which opened his eyes. “I parked my car and, by chance, walked along this construction site. They were busy excavating the area and I got into a conversation with one of the contractors. He told me many plumbers know Wavin and the quality it delivers. However, the mechanical contractor usually decides on which materials to use and he is often unaware of the many suppliers. That’s why he will never propose to use Wavin, even though he also looks for the highest quality.” There was a gap in the market. How could Wavin get those decision makers to choose their products, instead of inferior products?
This conversation made Van Delden realize that he had to change his perspective. To help him do that, he got in touch with Business Models Inc., Patrick van der Pijl’s company. Van Delden: “Patrick applies a broad set of tools, mostly canvasses, to visualize the value proposition of your company. Then he teaches you how to market that value proposition, thereby answering to customer demands. It all revolves around design thinking. Patrick applies the principles and methods of designers and uses them to develop business models.”
This completely changed the trip to Turkey. Instead of talking about a new factory, Van Delden took the local management team outside to observe their customers while they worked on construction sites. This experience taught the team a lot. They discovered that plumbers often use tools and materials in the wrong way, which leads to highly varying levels of quality in their work. While Wavin consistently delivers top quality, in the end, the plumber is responsible for the end product. This is why we decided to provide training for the plumbers, to teach them how to use our products properly”, Van Delden says. The first Wavin Academy was born: a place where not only plumbers could learn all about Wavin’s products, but where everyone, from wholesalers and contractors to decision-makers, could go to be informed.
The Wavin Academy in Turkey which is, by the way, free of charge – became an immediate success. So much so, that Wavin has decided to start new ones in every country in which they do business. Yet these Academies aren’t created by using the same blueprint over and over, says Van Delden. “Every market is different. In each country, we sell different products, the market structure is different, the brand experience is different and so on. So before we start any Academy anywhere, we go out and do another customer safari to find out what is really needed within that particular market. We build our Academy accordingly.”
This is exactly how it went on in the Netherlands. The Dutch Wavin Academy opened in Hardenberg last year. It includes an experience center where customers can discover the entire range of products in real life.
Focus on your good qualities.
Nowadays, Van Delden uses the principles of design thinking with every strategic decision he has to make. “I have turned it into a habit to fill in the canvasses before we go deeper. This is a wonderful and quick method to discover the consistencies between the various subjects within your business strategy. Besides, it also forces you to look at it from your customer’s perspective. Where lies our added value? Why would he want to join us?”
Van Delden has adapted this way of thinking to many of the decisions he has made so far. He recalls: “During the crisis, there was an excess of overcapacity within our markets. Something had to happen, especially in Great Britain. The Brits initially decided to make major cuts. That is, until I joined the commercial team and began to fill in a business model canvas. We concluded that we where technically and qualitatively ahead of the competition within two sub-markets. We then decided to focus on those two product groups and shut down all our other production sites. Now, we’re harboring all our resources within two focus factories. Our sales team can hone in on these two markets and we have been able to simplify our supply chain, which has resulted in significantly lower logistical costs. We are building our customer relations and are bringing in long-term customers, mostly because of the high quality we provide. Because of this, our sales team is no longer obliged to nervously run after every order. Instead, they now have time to find out how to respond to our customer's needs and desires even better. The game has changed completely.”
Traditional thinking patterns: let it go.
While adapting the design thinking method is yet to become a commonality for all of Wavin’s business models, it is steadily gaining higher ground. Van Delden: “I can tell that it takes time for people to let go of traditional thinking patterns. But when they have discovered for themselves just how massive the impact can be, they usually change their mind. So I’ll continue to be a missionary until every person within our company fills in at least one canvass once. This often triggers them to use different canvasses, because every one of them leads to new insights which you might want to explore further.”
Written by Mirjam Hulsebos