The Retooling of Stanley Black & Decker
Jim loree wants to turn a 175-year-old manufacturer into a company as innovative as any in silicon Valley.
In 2014 Stanley Black & Decker set up engineers in a Towson, Maryland, strip-mall office with instructions to come up with something new in cordless power tools. Three months later, James Loree, the company’s chief operating officer and chief-exec-in-waiting, had a look.
The Towson engineers demonstrated a clever way to arrange cells in a battery to make the voltage adjustable. Loree asked what they would need to get the battery out the door in a year. They said $30 million. “I looked at the CFO and said, ‘Are we good for that?’ and he said, ‘You bet,’ and off they went with their $30 million,” Loree says.
Stanley is an ancient firm, still making tape measures in the rustbelt city of New Britain, Connecticut, where Frederick Stanley opened a hinge-and-bolt shop in 1843. How does a company survive for 175 years? By throwing money at long shots like that battery. “History is littered with stories about legacy companies that were complacent, inwardly focused, arrogant,” Loree says.
Stanley’s variable-voltage battery didn’t reach stores until June 2016, but it looks like a winner. Lithium-ion batteries are getting big enough these days to run not just handheld drills but also standing equipment like table saws. The big tools, though, need a much higher voltage to operate efficiently. The designers in Maryland figured out how to make batteries interchangeable by having the tool tell the battery what kind of juice it wants.
With this trick Stanley gets carpenters addicted not just to its tools but also to its batteries, which retail for up to $199 apiece. They’ll pay extra to be able to build a house without worrying about lugging a noisy generator to the job site and tripping over power cords. Stanley is hauling in $300 million a year on its Flexvolt batteries and wants to see a lot more breakthroughs, meaning innovations that will each add $100 million or more to revenue.
Loree, 59, who has been running the company for two years, is a finance guy, not an engineer. He joined General Electric in 1980 as an auditor and spent 19 years there, mostly at GE Capital. In 1999 John Trani, the GE alum then running Stanley Works, brought Loree in as chief financial officer.
Trani was trying to turn around a troubled company whose $2.75 billion of revenue came mostly from hand tools like tape measures and builders’ hardware like hinges. “It couldn’t ship effectively. It had a weak supply chain,” Loree recalls. “Almost all the things you could think of that could go wrong for the company were going wrong.”
Slowly, Stanley did turn itself around, and in