Multinational firms with more than a century of experience often slow down in their old age, but mining machinery company Bucyrus International is still growing like a teenager under the leadership of 1976 Thunderbird graduate Timothy Sullivan.
The Milwaukee, Wisconsin-based company moved up 18 spots to No. 9 on Fortune magazine’s 2010 list of the 100 fastest-growing U.S. companies. “That’s a pretty unusual situation for a company that is 130 years old,” said Sullivan, President and CEO of the worldwide industry leader in mining machinery manufacturing and servicing.
Sullivan spoke Nov. 2, 2010, at Thunderbird School of Global Management in Glendale, Arizona, about two weeks before the announcement of a $7.6 billion takeover by Caterpillar Inc. His presentation was part of the Global Issues Forum, a speaker series that brings several global leaders to Thunderbird each trimester.
Reinventing the model
Sullivan credits the recent growth at Bucyrus International to a decision made 10 years ago to overhaul the company’s business model — a difficult process that led to turnover in senior leadership.
“We decided to become more of a service-oriented company rather than just be a pure manufacturer of large mining machinery,” he said.
Since then, Bucyrus International has grown organically and through acquisitions. Sullivan said the service focus creates a predictable and sustainable revenue source for Bucyrus International because mining machinery requires scheduled maintenance.
Sullivan said the new business model helped the company pull through the global recession unscathed. “It’s the largest insurance policy that any company could have,” he said.
Even before the adoption of the service-oriented business model, Bucyrus International started a different type of transformation from a domestic company to a global powerhouse.
Sullivan said Bucyrus International hired him when he graduated from Thunderbird to help guide the global expansion. “When the recruitment was being done here, they were hiring students who could help with the international introduction of the products around the world,” Sullivan said.
When he arrived at Bucyrus International, 80 percent of the company’s revenue came from the United States. Today about 75 percent of the revenue comes from outside the United States.
“In 35 years there has been a complete change in how we do business,” Sullivan said. “A company that was primarily domestic is now primarily international.”
A third factor that has helped Bucyrus International sustain its growth in recent years has come from the rapid industrialization in emerging markets such as China and India.
“The United States had its industrial revolution in the first part of the last century, and Europe was the century before that,” Sullivan said. “We have three or four countries now at that same level of industrialization and urbanization, which has created effectively a commodity boom that we have never seen in the world before.”
|Growth pattern at Bucyrus: Bucyrus International CEO Tim Sullivan, a 1976 graduate of Thunderbird School of Global Management, talks Nov. 2, 2010. View the video on YouTube or on China’s www.tudou.com (2:44).|
|Thunderbird Question: Tim Sullivan ‘76: Bucyrus International CEO Tim Sullivan, a 1976 graduate of Thunderbird School of Global Management, answers the Thunderbird Question. View the video on YouTube or on China’s www.tudou.com (0:59).|