JSJ The Next Generation

August 18, 2006
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GRAND HAVEN — When third-generation managers Nelson Jacobson and Lynne Sherwood recently took over the reins of JSJ Corp., they inherited a global conglomerate that quietly had carved itself an enviable position in the new global marketplace.

The privately held firm boasts the type of business model that economists predict will be the key to success in the new economy. The JSJ headquarters in Grand Haven makes no product and represents only a tiny fraction of its 1,800 employees. With the exception of its community work, the face of JSJ is seen through nine diverse brands, each tailored to meet customer demands. It is just as comfortable selling its wares in China as Detroit, has adapted its practices to meet the advanced demands of the high-growth medical sector, and has been adept at using multiple brands to further penetration within a customer's business.

"Business designs have changed over the years," said Sherwood, company chairman since last year. "You need to change with that."

According to Jacobson, who assumed the role of president and CEO in May, JSJ is a drastically different company now than it was five years ago. The recession spurred some of that change, hand in hand with what then-CEO Phil Taylor referred to as "a fundamental sea (of) change."

"We knew that the old days weren't coming back," Jacobson said. "Globalization. The new technology that came with the Internet. We had to fundamentally prioritize and rethink our business."

Early on, JSJ's leaders realized that its top priority should be to "get closer to the customer." All resources and efforts should be geared toward solving customer needs.

A strong example of this is the five-year-old office furniture brand izzydesign. A hybrid OEM and contract manufacturer, izzy is aligned with the needs of both consumers and would-be competitors. Rather than spend years and millions of dollars inventing a chair line, it became European furniture giant HAG's exclusive North American manufacturing and distribution partner.

In the automotive sector, electrical and mechanical systems brand GHSP adjusted its philosophy so that customers are now driving innovation.

"They are truly world-class engineers, but they were guilty of just inventing things and then showing them to the customers," Jacobson said. "Today, you'll see how they are working at different levels of the automotive suppliers, especially in marketing and product development. They are actively seeking feedback on needs and engaging those specific problems."

And the various JSJ divisions have applied that collaborative spirit within the company. Outside of this environment, Grand Haven-based machine maker Dake USA would have little use for collaboration with izzydesign. Yet, they have found an unlikely success cross-marketing to each other's clients. When one of Dake's most famous clients, Orange County Choppers, needed office furniture for its new corporate headquarters, it tapped izzy.

"The fundamental advantage we have is that we've always been a partnership," Jacobson said. "I have not known anything else in my life than that business is done through partnering and cooperation."

JSJ Corp. was originally founded as Grand Haven Brass Foundry in 1919, a partnership between 25-year-olds Alvin Jacobson and Paul Johnson. When a fire burned the foundry to the ground a year later, B.P. Sherwood of Grand Haven State Bank became a partner and financed the rebuilding. Their initials created the company's current name.

With that, Nelson Jacobson pointed out that the company has historically found its greatest success when its back was to the wall.

"It seems adversity has always accelerated investment," Jacobson said.

For instance, rather than take the problems facing the tooling industry on the chin, Florida-based brand Hudson Tool & Die choose to painstakingly reinvent itself as a supplier to the medical industry. Its ability to stamp titanium provided an opportunity to make medical implantable devices, but doing so involved learning a whole new industry with intensive quality controls and materials management.

"They embraced it with a passion," Jacobson said. "You talk to the worker, and instead of 'We go to work and stamp parts,' it's 'I'm making the battery case that drives the pacemaker.'"

Then, of course, there is China. While most of the nation only began to recognize Asia as an emerging consumer and labor market in this decade, JSJ Corp. has been there for nearly 20 years. The company first entered the country following the Black Monday stock market crash in 1987. Two years later, Jacobson's father was in Tianjin for the first days of production at a Dake joint venture as the Tiananmen Square massacre erupted in Beijing

"That's an interesting insight into the company's character, culture and values," said Jacobson, who has made over 40 trips to China since 1992. "It never occurred to us to stop. Many Americans pulled out or withdrew to Hong Kong. I can't even begin to describe the goodwill that (decision to stay) created with the Chinese government."

Now that China is the automotive sector's only legitimate growth market, GHSP is poised to become that nation's No. 1 supplier of driver control systems. As domestic customers GM, Honda and Ford invest further into the region, they have increasingly leaned on JSJ, and helped enable an expansion there in 2004. Before that time, most of the content was imported from Michigan at significant cost — including the shifter for China's prestige vehicle, the Buick Regal, made famous as the car the last emperor drove.

Today, JSJ continues to export product to that market.

"This market is a very, very significant opportunity for West Michigan," Jacobson said of China

Much of the conglomerate's success — including 17 percent growth last year to $317 million — is due to a combination of unit autonomy and corporate support, Jacobson said. The headquarters unit prides itself on an ability to jointly manage human resources, accounting and technology in a collaborative and helpful manner.

Of late, the parent company has opted to raise its public profile.

"Our predecessors had the idea to be behind the scenes in business as well as in the community and charity," Sherwood said. "We're still low key, but we want to make sure all of our employees identify themselves with the broader organization. It's important they know what we're all about."    

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