Seeing Opportunity, a Former Banker Takes Charge of a Flagging Manufacturer
Editor's Note: IndustryWeek covers women in manufacturing all year long, but for Women's HIstory Month we are giving additional attention to standout female manufacturing leaders.
Sarah Nash calls herself a lifelong learner, and it’s possible she has done enough learning for several lifetimes. Nash made a name for herself both as an investment banker with high-level leadership roles at J.P. Morgan and as a go-to candidate for boards of directors. But in 2018, she took on an entirely different role: running a legacy manufacturing company that had its share of challenges. Capital investment and innovation were nil. Operations were housed in a 19th century brick warehouse on a pot-holed city street with 21st-century loading challenges. Employees were disaffected and discouraged from working as a team.
The company, a manufacturer of engineered sealants, coatings, lubricants and foams called Novagard Solutions, was founded in 1977 in Cleveland. For most of its history its primary product was PVC foam for automotive and industrial applications, including noise reduction. Novagard later branched out into silicone with the help of some small acquisitions, manufacturing window sealants among other things.
Since Nash took the helm, she has had clear priorities: expanding Novagard’s product offerings and applications, investing in higher-tech equipment, tapping into government resources and building and staffing a lab to create and test new materials. Yet another priority is finding new applications for silicone (an especially versatile material that can be liquid, viscous or solid) in areas like electric vehicle batteries—which can run longer on a charge with coatings that prevent temperature extremes—semiconductors and medical devices.
In addition, some wild cards have been tossed her way. During the Texas ice storm last year, Novagard’s resin suppliers, all in the Lone Star State, went on pause. Nash called around and through a strategic supplier found a backup supply in Portugal, shipped it at a loss and reformulated foams with the new resins. When trucking shortages stalled a shipment of silicone fluid, she again tapped her network to commandeer a tanker truck, and the driver to go with it, that would fit into the company’s relatively tight loading area. (Next on her agenda: commandeering some off-site container storage.)
“It’s like taking an airplane that’s lost three of its four engines,” Nash says of her supply-chain challenges. “And you’ve got to figure out how not just to land it, but put three new engines on it.”
Since Nash took the helm, Novagard has increased its revenues (sales were up in 2020 compared to 2019 and up 35% in 2021); got a state-of-the-art lab for customized materials staffed and running; and grown its workforce by at least a third, to 145 employees. Dividing her time between Cleveland and New York, Nash is also chairman of the board of Bath and Body Works, and on the board of directors of social-good software company Blackbaud; engineered products manufacturer HBD Industries; Irving Oil; New York Presbyterian Hospital and the Smithsonian Institution.
Nash talked to IndustryWeek about the excitement and hard work involved in transforming a small manufacturing company to grow and flourish in a new era.
How did you go from investment banking to manufacturing CEO?
When I retired from JP Morgan in 2005, I didn't want to get back in a similar arena. So, because I was very close to a number of clients, I began to get involved in boards. My last job at J.P. Morgan was focused on building the client business and investment banking business across different industries, and I became fluent in those industries. The backbone of an issue can be common, irrespective of the industry.
I gravitated toward midsized companies because I knew that the boards would probably be more engaged. The job of a board is to always focus on the CEO’s development, and then CEO succession. And right underneath that is the development of talent under the chief executive. The second big and dominant role is obviously the governance of the company. And the third is strategy.
But over time, I got more involved in this company. Because my now ex-husband, he was needing some help. And it just made sense that somebody like me with varied interests would help him out. He was running the company until 2018 and I got very engaged around 2009, and then extremely engaged around 2014, and then we needed a succession plan. So I was deeded the company. And he’s now my ex-husband and the minority shareholder, and I’m the majority shareholder.
How does that work?
Fine. He’s a silent shareholder. He’s enough older that it wasn’t something that he was interested in doing anymore.
Where did you see potential in Novagard?
I knew as everybody does now that the electrification of everything was beginning, and that as a company if we were going to be a player, we had to be a participant in that market and potentially a leader. [So in 2018] I asked our head of R&D, “can we reformulate our silicone to be used for these kinds of applications?” And he said, “I don’t know why we couldn’t.” And then we set up on a path to do that.
I hired a thermal chemist. We hired a head of the business to see about how we would build the business. We changed the leadership in R&D. The leader today is somebody who’s a real innovator, a product developer. He came from [a competitor] and has a Ph.D. in advanced materials. And he’s an incredibly creative mind. You give him a problem to solve around silicone, and he figures out what to do.We have a lab of about 10 smart, bright people with bachelor’s and master’s degrees and he has been cross-training everybody. We have two people in the lab who used to be on the [manufacturing] floor. They ran two businesses, one around the silicone, one around the foam. Our big issue is, “It’s great if you can make it in the lab, but you got to be able to make it on the line.” You really need to understand the scale of process. And these two individuals really understand all that process. They’re also really good at running the trials down on the lines.
I knew if I just stuck with the course, we could do it. What has been fun for me is making an older manufacturing facility work for electronics applications, which are extremely precise—the materials one might put into silicone to give it different viscosities or strengths. We had to change our plant and also continue to evolve the lab.
We got a nice R&D-related grant which can be used to manufacture the kinds of materials that we're developing. It’s all being completely automated. We’re also expanding the capacity, taking our mixers from 150 gallons to 500 gallons.
Who are your customers?
Most of our product [91%] is exported. For our new customers on the electrification side—EV, battery, electronics, medical satellites, aerospace—we have non-disclosure agreements. Companies all over the world, who have might historically used epoxy or urethane in their product design, are now saying, “Help us figure out the right kind of silicone coating to solve these problems.”
Historically, our customers have been smaller. A huge customer would be $4 million a year, and an average customer might be $250,000. Now those numbers are getting much higher. It’s a very exciting time for us because we’re iterating product in the lab, innovating new product and substantially changing our manufacturing so that we can make these products on a big scale.
Who’s your competition?
What makes us different is probably the best way to describe us. Why would a company call us? Their application size may be smaller. Or they may have historically used other materials and want hands-on development. A lot of big companies won’t do hands-on development, unless you’re Tier 1. We say we’re “customized around the solution.” They come to us with a problem “Do you have a material that does this?” Or, “we want to do more of this and less of that.” Then we start developing material. It takes at least two years to go through testing and then the finished product.
You’ve said you had a serious morale problem when you took over the business. How have you addressed that?
I knew I wanted do this, but I wanted a different kind of company. There’s a big distance between the vision and the making-it-happen part. And so I looked around and felt that we needed to make a significant change. At the time, people just weren’t working together. They were very siloed, very turf-oriented. The quality and the cleanliness and how things were made on the plant floor needed to change. We had no processes or very few processes. I’m a financial person at the core. I like data. I measure things with data.
We never had a real head of operations. So I hired someone from Eaton (Corp.) who was a very process-oriented person. We put metrics in, and once you do that, you start seeing who’s making it and who’s not making it. Who’s prepared to change and who’s not. By early 2019, I knew where the really big holes were. We needed a new head of HR, we needed a vice president of operations… I needed people everywhere, I needed an analyst and a finance head and a head of quality. So you start chipping away, and begin to build a culture.
How did you find the people you needed?
Ultimately, we formed a great partnership with Ratliff and Taylor, a local recruiting firm. They’re doing most of our senior searches for us. I wanted people who were mentally agile, courageous, curious, humble, who had the ability to ask for help, who worked in a team. People who trusted and respected each other.
I got a little help from one of my boards. Blackbaud, their head of HR was retiring and setting up a leadership business. He retired just when COVID started. He called me and said, “I’ll give you 23 free hours.” He did a tremendous job pulling the team together [during COVID]. If there was a grief or a grudge, he addressed it. He gave some people individual coaching because they just needed help. They needed the confidence to stretch even though technically, they’re very capable.
We have a meeting every morning now at 8:30 with anyone connected to operations. We’re all leaders of the plant. We go around the room, and we hear from procurement, scheduling, the customer perspective, supply chain issues. Closing out the night before and opening up the day. We do it five days a week, no matter what. Right after I have a meeting with my [leadership] team … we talk about what’s going on not just with the day, but looking forward and what’s happened that we need to be aware of and how we can help each other. These are great placeholders for people to know that if they’re running around, if they’re at these two meetings, they’ll be good.
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