Our-Business-Model-and-Values
Founded in 1912, ITW (NYSE: ITW) is a global industrial company centered on a differentiated and proprietary business model. The company’s seven industry-leading segments leverage the ITW Business Model to generate solid growth with best-in-class margins and returns in markets where highly innovative, customer-focused solutions are required. ITW’s approximately 45,000 dedicated colleagues around the world thrive in our decentralized, entrepreneurial culture and work to position ITW as one of the world’s best-performing, highest-quality and most-respected industrial companies. In 2019, the company had revenues of $14.1 billion, with roughly half coming from outside North America.

ITW by the Numbers

A Differentiated Business Model

The ITW Business Model is a powerful and proprietary set of strategic, operational and cultural practices that have been in a state of continual development and evolution inside the company for over 30 years. It is ITW’s defining competitive advantage, and it is the value we add to all our divisions.

When properly applied, the ITW Business Model delivers superior performance and value for our customers and high-quality growth with best-in-class margins and returns for the company. ITW’s Enterprise Strategy is centered on our commitment to leveraging the power of the ITW Business to full potential across the company. By doing so, we strive to deliver differentiated long-term performance for our shareholders.

The ITW Business Model is comprised of three elements:BusinessModelGraphic2

80/20 Front-to-Back defines how we operate. It is a unique set of proprietary tools and methodologies that our divisions use to structure and operate their businesses to maximize the performance, execution and value-add they provide to their largest and most profitable customers, and minimize the costs, complexity and distractions associated with serving small customers. Through the application of ITW’s 80/20 Front-to-Back process, our divisions deliver best-in-class customer-facing execution, high-quality organic growth, and superior profitability and return on capital performance.

Customer-Back Innovation describes how we innovate. At ITW, we innovate from the customer back, not from the research and development center out. Our divisions partner with their key customers to create unique solutions that solve difficult technical challenges and improve business performance. Often, these innovations help our customers achieve their own eco-efficient product, climate change-related or performance goals. The deep capabilities and creativity of our people in this regard are evidenced by our portfolio of approximately 18,000 granted and pending patents, including more than 1,900 new patent applications filed in 2019.

Our Decentralized, Entrepreneurial Culture is the key to how we execute. Our people are clear about what is expected of them with regard to our business model, our strategy and our values. Within this framework, we empower our business teams to make decisions and customize their approach in order to maximize the relevance and impact of the ITW Business Model for their specific customers and end-markets. Our people thrive in ITW’s “flexibility within the framework” culture; they think and act like entrepreneurs, they are accountable, and they deliver.

Our Values

Integrity. We operate with complete integrity and the highest ethical standards in all of our interactions and dealings with our ITW colleagues, customers, suppliers and stakeholders. No compromises, no short cuts and no exceptions.

Respect. We treat everyone as we expect to be treated and value the diversity of perspectives, backgrounds and experiences of all of our ITW colleagues.

Trust. We trust that all ITW colleagues will operate with their best efforts and in the best interests of the company at all times.

Shared Risk. We recognize that continuously evolving and innovating is essential to ITW’s ability to remain a strong, successful and growing company. As such, we embrace thoughtful experimentation and manage risk by involving all stakeholders in key decisions.

Simplicity. We keep things simple by focusing on the essential core of any business opportunity, challenge, issue or problem. 80/20 is not just something we do, it’s how we think – it is our core philosophy and drives simplification at ITW.