Steven Richman, President of Milwaukee Tool Corp on the Louis Carter Show

Lew, great to be here today.

Well, you know, to that point, when we started this journey 14 years ago, we were a $450 million company competing against Goliath—Stanley Black & Decker, Bosch, Makita, Fluke, large global companies. We had a focus and went back to our roots post-World War II, focusing on mechanical, electrical, and plumbing users. We had a dream that if we could become partners with them and understand what they did from morning to night and help them drive productivity and safety on the job, we could earn the right to be viewed as their partner. That was the impetus from having great people in the right culture—the two bookends that have driven us year after year with an outside-in perspective.

Well, you know, it's been quite fascinating. We had what we called MPS for 13+ years. Carly Tyler and Tim Brasher were reflecting on an internal podcast this morning—when we first started, it was a small group of YouTubers and bloggers and individuals in the trades. It became a family. They would harass us about products for different contractors, and when are we going to bring it forward. We had dinners, meetings, drinks. It was a family with give and take. We had a Milwaukee tool band playing every year. We brought users and distribution partners in. We had to pivot, and the cross-functional team came together to create a live event called Pipeline. We're on the fourth series now, launching tonight. It goes out to the entire community—bloggers, trade publications, YouTubers, Milwaukee Tool Nation. It's going extremely well, and we're looking at what to do differently next year. The team is pulling it together and looking to change the game again.

You know, if you think about us as a business, we were small and knew we had to change the game. Most of the key Milwaukee team are big fans of Clayton Christensen, who wrote The Innovator's Dilemma. His mantra was that the world is moving too fast for incremental change. So we had to work smarter, take significant risks, leverage our agility and speed, and our parent company TTI allows us that. We launched what people said was impossible: a comprehensive range of M12 and M18 lithium-ion power tools. Back then, the industry thought lithium-ion had poor cycle life and temperature performance. Our development teams created IP and global patents for using lithium-ion in power tools. Competitors were making money off NiCad and weren't willing to take the risk. We then created Fuel—a sub-brand with brushless motor tech, electronics, and red lithium technology to solve user problems. We identified pain points for mechanical contractors, electricians, plumbers, and remodelers, and used the M12 and M18 platforms to eliminate those pain points. We did the same for accessories, hand tools, safety, and storage with our Packout system. I'm fortunate to work with these people who partner with passionate users to understand pain points and deliver disruptive innovation that changes the game.

Well, I think the first thing is that it all revolves around culture. Number one, recruit, retain, and invest in the most diverse, knowledgeable, best people, and believe they will help drive the business. That's one bookend. The other is creating a culture where people are obsessed with disruptive innovation, care about the user and the brand, have candid dialogue, agility, a sense of urgency, and one team working together. That leads to success. It's about team performance, not individual. Our philosophy is like Blockbuster vs. Netflix—Netflix saw themselves as an entertainment company, while Blockbuster stuck to brick-and-mortar. We never think we're done. Our teams, whether on a saw blade or the Packout system, are on job sites seeing the user's struggles. That led to Packout, the most advanced storage system. In hydraulics, for data centers, we use One Key technology to ensure bolts are driven to spec and track devices. It's the relentless people and culture that allow us to grow year after year. Growth is the outcome; it's really about solving user needs and being a partner.

To your point, it's not only the product side and the user, but also our technology teams partnering with the best electronic providers to understand the next generation of technology. Same with battery, motor, sensors, materials. The changes over the next five years are consistently there. That's a big piece of it. The people and culture, with a team that's been together for 13+ years, can have candid dialogue. People like Shad Hansen, Jamie Christian, Daryl Hendricks, Bill Hughes, business unit leaders like Shane Maul, Rick Ray, Tim Albrecht, Scott Griswold, our CFO Ty Staisity—who is an enabler—supply chain leaders, manufacturing leader James Wamsley. Our TTI parent Joe Gait and Horst and Stefan Pudwell have enabled this team to stay together. Without the people and culture, and relationships with users and distribution partners like Home Depot, it won't work.

All I can say is we have new categories we are changing. We just launched a program called MX Fuel. Anything that's gas or electric on a job today, we believe will be powered by cordless outdoor power equipment. Our core trades want that product, as well as people off the job site, maintenance people, and eventually landscapers. In terms of who we partner with, that's our secret sauce. We view relationships and partnerships on the technology front—universities, startup companies, technology companies—as key to our success.

You know, it's like our people philosophy. If you're the smartest, brightest, most advanced individual but don't fit our culture, you won't fit. We have a European electronic component supplier that is special because from the CEO level down, they bring an entire team to brainstorm how to drive technology to solve user needs for the next five years. We're not looking for transactions. Same with distribution partners—we sit down and talk about what we'll do in 24, 36, 48 months. People ask why we partnered with Home Depot and not Lowe's or Menards or Amazon. It's because that partnership from the top down allowed us to do that. Same with Granger, Fastenal, MSC, Do it Best, Ace Hardware, Orgro Brothers, and in electrical with Sonepar and regional players like Ram Tool, Colony Hardware, Fasteners, Acme Tool. They allow us to get where we need to be today and in the future.

We clearly believe it all starts with culture. I'm doing a session later today called '52020' for new people—20 people joining the company. I'll talk about where we came from, what made us successful, what companies we don't want to be like (Blockbuster, Nokia), what companies we want to be like (Apple, Lululemon, Coca-Cola), and what companies we can learn from that fell apart (Under Armour). Then how our culture fits. That communication is done by all our leaders to the entire company. Our challenge today is to keep making things smaller as we grow. 13 years ago we had 207 people in Brookfield, Wisconsin. Now we have over 2,000 in R&D headquarters and are opening facilities in Mississippi, Wisconsin, and globally. Teams need to be empowered, accountable, and responsible, all tied back to culture and driving what our user needs. Doing great stuff for us doesn't matter if it doesn't hit our users and distribution partners—then it's not success.

Thank you, Lew. One last comment: this all ties back to leaders. I'm just fortunate every day to be surrounded by a team of leaders that are the best of the best. This is not me—it's the leaders cross-functionally throughout our business with relentless drive, understanding the culture, and driving it from the beginning. New people join every day with the opportunity to have that kind of leadership and drive technology and focus on the user. I've never seen anything like it in my 13 years here. This is a special time and a special group of people to fight with every day to attack the pain points of our users and distribution partners. Thanks for having me.