Company Focuses on Stability, Records Expansion: Armstrong World Industries
In the dynamic world of manufacturing, Armstrong World Industries, based in Lancaster, Pennsylvania, has stood out as a consistent performer, earning a coveted spot on the U.S. 50 Best Manufacturers list. The company's secret to success can be traced back to the principles outlined by Rita McGrath, a renowned consultant and author, whose research on financial outliers has resonated widely.
McGrath, the author of "The End of Competitive Advantage" (2013) and "Seeing Around Corners" (2019), emphasises the importance of adaptability and innovation for maintaining competitive advantage. Financial outliers, as per McGrath, are companies that consistently grow over time by adapting to changing market conditions and identifying opportunities for sustainable growth.
Armstrong World Industries' approach mirrors these principles. The company aims for steady, long-term profit growth, targeting a 5% annual increase over five or more years, a strategy that focuses on sustainable expansion rather than short-term gains. This approach is a hallmark of McGrath's financial outliers.
Moreover, Armstrong invests in its operations to drive growth, rather than solely focusing on quarterly profits. This approach helps maintain stability and ensures continuous improvement in efficiency and productivity.
The company also places a strong emphasis on employee engagement. Programs like the "good catch" initiative encourage employees to identify hazards and work collaboratively to prevent accidents. This not only enhances safety but also fosters a culture of proactive problem-solving and collaboration.
Armstrong is committed to sustainability, with initiatives like the Ceilings Recycling Program, which has diverted over 200 million square feet of old ceiling materials from landfills. This commitment to environmental responsibility aligns with McGrath's emphasis on adapting to changing market conditions and leveraging innovation for sustained growth.
CEO Vic Grizzle attributes Armstrong's philosophy to a focus on fulfilling commitments and having leaders with vision. Grizzle found inspiration for this philosophy from Columbia University Professor Rita McGrath's research.
By focusing on long-term growth, sustainability, and operational excellence, Armstrong World Industries demonstrates the characteristics of a financial outlier, as described by McGrath, and has been recognised for its achievements in the manufacturing sector. The company ranked No. 2 on the 2025 U.S. 50 Best Manufacturers list, marking its first appearance on the list. In previous years, Armstrong was too small to qualify for the U.S. 50 Best Manufacturers list.
McGrath commends Armstrong World Industries for considering leading indicators, which are harder-to-track measures of future performance. These indicators, such as formal risk assessments, quality safety conversations, and housekeeping audits at each of its manufacturing plants, help the company identify and mitigate potential issues before they become significant problems.
In conclusion, Armstrong World Industries' success story is a testament to the power of adapting to changing market conditions, fostering a culture of innovation, and focusing on long-term growth. The company's journey aligns closely with the principles outlined by Rita McGrath, providing a compelling example of her research in action.
Armstrong World Industries, by adopting a business strategy that prioritizes long-term, sustainable growth and invests in technology for operational excellence, mirrors the principles of financial outliers as defined by Rita McGrath. The company's commitments to sustainability, employee engagement, and leading indicators further highlight its focus on adaptability and innovation.
