REPOSITIONING FOR GROWTH: 1998
“Repositioning for Growth was a massive undertaking, but time has validated its necessity. The standardized systems that came out of it make it easier for customers to do business with Airgas.”
Sandra Fowler-Hurt, VP, Gas Operations Division
By the mid-1990s, Airgas had $1.5 billion in sales and over 250 acquired companies organized into 40 hubs. Rapid growth created fresh challenges. The earlier holding-company model was no longer efficient or effective. In January 1998 the company embarked on an ambitious program: “Repositioning Airgas for Growth.” The challenge was to move from a holding-company mentality to that of a true operating company, while preserving an entrepreneurial culture of autonomy, responsibility and accountability.
Airgas had proved it could grow through acquisitions. To ensure lasting value it needed to strengthen its internal abilities as well. Forty hubs were replaced by 12 regional companies, systems were streamlined and standardized, and improvements were implemented in such disciplines as product management, pricing, billing, payroll and cylinder tracking.
As part of the repositioning efforts, all companies operating under the Airgas umbrella now identified with “One Airgas,” and a company-wide logo was deployed for the first time.
One important element within repositioning was the development of a strategic or national accounts program. Since the early days, the acquisition strategy had emphasized rural markets as opposed to urban regions dominated by the majors, and Airgas now had a national footprint that was second to none.
“Limited integrated supply was going to be the way of the future. To do that we needed broader product and service offerings so if someone selected us they could eliminate a lot of vendors.”
Peter McCausland, on the idea of strategic accounts
The strategic accounts program was launched in 1998 to leverage that platform by providing supply-chain management to large, national customers with multiple locations. The aim was to make Airgas the sole provider of gases and gas supplies to these customers. Through its integrated supply network, Airgas aimed to provide a full range of products for every need in every customer location.
Five strategic product areas were identified and chosen for their growth potential and for diversification against industrial cyclicality: bulk gases, medical gases, specialty gases, CO2/dry ice and safety. Most salespeople were generalists who knew enough about the broad Airgas product and service lines to identify potential opportunities to customers. These generalists then called upon specialists in each of the five strategic product areas to match the customer’s specific needs. This strategy allowed Airgas to provide technical support far beyond that of a typical roll-up company.