About 150 years ago, a couple of Swiss wagon builders somehow won a contract to build muskets, and like in any business or personal relationship, one thing simply led to another.
Fast-forward to today and what is now known as “Sig Sauer” made a splash like few others at the 2015 SHOT Show. That impact is in no small part due to the aggressive leadership of CEO Ron Cohen. Cohen joined Sig Sauer as President and CEO in 2004 after years at the Israel Institute of Technology and service as a combat commander in the Israeli Defense Forces.
Under Cohen’s leadership, Sig Sauer has arguably become the fastest-growing firearms company in the U.S. It has tripled its work force and invested millions in state-of-the-art manufacturing facilities at its New Hampshire plant. Just as important, Cohen has invested in a high-quality leadership team, men like Andy York.
York came to the outdoor industry naturally. He was a young hunter, interested in innovative ideas who discovered that he also possessed an aptitude for business. Initially, he specialized in point-of-sale promotions and computer accounting systems in the automotive trades, photography, golf and recreational sports.
His dual interests in business and the outdoors eventually landed York at Leupold & Stevens, which grew by “driving innovation and partnering with the trade,” he says. From there, he transitioned to Blount International, a global manufacturer and marketer in the forestry, lawn and garden business, which gave him an international perspective.
Today, with decades of very broad business experience, Andy York looks at Sig Sauer and says there’s “not another company in our industry that has the growth rate and the potential that Sig Sauer has right now.” And so Tactical Retailer asked York to share his business and personal insights with the industry.
TR: Thank you for visiting with us, Andy. You mentioned that Sig has enormous potential. What exactly do you mean? Explain that potential.
York: Product diversity and sophistication; expanding marketing opportunities.
My philosophy is that at the end of the day, successful businesses start with product innovation. Look at the Sig Sauer product line. Sig puts its focus on building high-performance quality gear. That’s what built the brand.
My education and background are a good match because I believe in product innovation. That’s the center of everything. You can have great marketing and even great sales for a while, but at the end of the day, when the customer goes to the retail store, it’s the product that matters. A good marketing program gets a guy to the store, but eventually it’s product with strong features and buyer benefits; it’s value and stories that drive the consumer to pick your product.
TR: So gun manufacturing today is like the automotive business. We have to introduce new product with innovative features and benefits every year.
Go to any trade show in any industry and people walk into your booth and want to know what’s new.
The challenge is that startup companies are usually founded by very innovative, passionate, engaged leaders. They know the field so well that they come up with a product that more cautious, established leaders don’t see. That’s the genesis of a startup. Then as they grow and increase in complexity and number of employees and become larger organizations, it gets to be a challenge to maintain focus on innovation, because as a company grows, you rightfully have to spend time with other administrative and process-oriented things: payroll and insurance and so on. But you have to keep your primary focus on product.
Look at Steve Jobs at Apple; that’s what he did and that’s why they’ve been so successful.
TR: So in a growing company, the founding genius eventually has to give way to a professional administrator?
York: Not necessarily, but some companies lose sight of innovation and lose their way. Look at Apple, though. Jobs was a strong leader who was also a very strong innovator. He understood how to bridge that gap and bring on people who could help grow the company.
TR: Is that true at Sig as well?
York: Look, a dozen years ago Ron Cohen came into a company that was a 10th of the size it is today. What was his approach?
Ron is an engaged CEO who can take apart every single product we build and put it back together. He knows why we decided to put a chamfer on that part and why we beveled that edge and why we chose that particular spring. He’s been part of those engineering discussions for a decade and consequently has built a product portfolio that has driven growth around the world.
Ron not only figured how to grow Sig, but he has brought on competent, experienced guys to manage the various business units. He put an infrastructure in place that can support a company that has grown ten-fold in 10 years, yet maintains a focus on product and innovation.
In Ron’s office, his whole wall is full of guns and you can see him get passionate as he walks you through them. That’s something you can’t say for every company CEO, not just in the shooting sports, but in general in any industry. I’d say that every company has a particular personality. Part of Sig’s success comes from Ron’s personality.
TR: So Ron has managed Sig in the U.S. as a product- and innovation-driven manufacturer?
York: Right. Lots of times when companies want to grow they look to acquire another company. Not that acquisition is a bad option, but it’s a different approach at Sig.
At Sig, it comes down to strong leadership. Ron said we want to get into airguns, so we hired Lou Riley, former CEO of GAMO. Then ammo, and we hired Dan Powers from RUAG and Bud Fini from Remington. Then silencers, and we hired Kevin Brittingham, former owner of Advanced Armament Corporation. Then optics, and he knocked on my door.
So it’s organic growth with strong leaders who are given the resources they need; we know how to build the businesses because we’ve done it in the past. Our job is to expand the Sig brand and what Sig means to the marketplace.
TR: But doesn’t Sig’s U.S. operation report to German owners?
York: The reality is that in Ron’s 12 leadership years, more and more of Sig’s production has been moved from Germany to the U.S. — Swiss design, German engineering and U.S. manufacturing. But now most of the engineering is done in the U.S., and more than 95 percent of the business is based here.
It isn’t just the managers, though. We have a thousand employees in New Hampshire, a state-of-the art facility and a hundred CNC machines — it’s the nicest firearms plant in the industry.
TR: Is Sig following in the footsteps of other European companies that have come into the U.S. market?
York: In my two-year forced exile into the forestry industry … two companies stand out: Blount and Stihl.
Stihl is similar to Sig. Stihl went from forestry into lawn and garden consumer gear and then consumables. They too brought most of their manufacturing to the U.S. and go direct to independent dealers, focusing on training. Stihl makes sure their guys are product experts and they focus on service and merchandising. When you walk into a Stihl-branded retailer, you know it because they give you a “store within a store” image.
There’s a two-way commitment between manufacturers and retailers. They buy our product, promote the Sig brand to their customers, and we’re going to make a significant investment in helping their business succeed.
Sig is branching out into affiliated product categories to become a more all-encompassing brand. We’re partnering with retailers in the same way Stihl does in their industry — training, merchandising, promotions, special product options … and totally engaging with them.
TR: Where is your division, Electro-Optics, going? Will we soon have cell phones in spotting scopes?
York: It’s a delicate balance, isn’t it? There’s always a need for better technology. So why “Electro-Optics?” There’s a lot of product that’s already “electro,” but you might not think of it that way. Anything with an illuminated reticle I would define as an electronic instrument because there are electronics inside; any rangefinder is electronic.
When you look at the transformation of industries … the photographic industry is a great one to look at. I was at Polaroid when we debated how fast silver-halide film was going to get trounced by digital. In the ’90s managers there thought it was still a generation away.
Three years later film was dead and the whole world had gone digital.
Then everyone chased megapixels, from 1 to 40, and over the course of say 2000 to about 2007, people switched to digital cameras. But then they switched to their smart phones and that industry changed yet again.
I don’t think the shooting sports are going to change that fast, though. By its nature, shooting and hunting are very traditional. But I think there are opportunities with digital technology.
Some companies want to create $10,000 riflescopes that can do everything for you, but that’s not our vision. Think of the illuminated reticle. Is there an application for electronics in the product that can improve the performance at an equal or slight upcharge over a basic optic? I mean, you can buy a good scope for $600 and one with an IR for $650. That’s within reach of most guys, and illumination provides a real benefit.
TR: So back to the original topic, Andy, Sig made quite a splash at SHOT.
York: As planned! We’re bringing out a new miniature hand-held compact spotting scope, the Victor 3, with variable power optics, 6-12, 10-20, 15-30. The scopes have little gyros on the prism that senses the shake in your hand and automatically with that motion sensor moves those gyros to stabilize the prism and takes out all the vibration. Independent focus, independent zoom wheel — and then you can switch on the stabilization switch and it’s as if you were looking through a scope on a tripod. It’s not a $10,000 scope, it’s a $500 scope — and it’s a game changer.
And we’re very proud that our Kilo 1600 Rangefinder can range accurately to 2,000 yards. Actually, it’s going to be accurate to 2,400 yards — over a mile and a half — and it ranges so fast in scan mode that we had to put a governor on it to slow it down. Everyone else was challenged to get a refresh rate of once or twice a second. The Kilo’s clock speed updates four times per second. We included an ambient light sensor inside, a “Lumatic Display,” that automatically senses conditions and calibrates the intensity of the display.
TR: What about the long term?
York: Electro-Optics is just part of the bigger vision. It’s Sig evolving to the next step. Sig spent the last 10 years ramping up its business for operators, law enforcement, military and special operations around the world. Because of that focus and drive to build high-performance gear … well, that’s why the tactical and concealed carry markets love our stuff.
Sig isn’t price-point gear; it’s performance gear for people who use it as a tool. That focus has driven the company the last 10 years. It’s time to take it to the next level on several fronts now, including the commercial market.
It’s really a matter of taking the company beyond what we’re known for in firearms and saying we want to take a systems approach, focus on anything that goes into or on a firearm. So you have silencers, ammunition, electro-optics and the airgun division as well.
There’s a lot going on at Sig right now.