ITW AT A GLANCE
In 1912, Chicago financier Byron Smith placed an ad in the Economist looking to provide capital to a "high class business (manufacturing preferred) in or near Chicago." He turned down several initial offers, waiting for the right proposal. When a group of inventors with an idea to improve gear grinding came along, Illinois Tool Works was born. From these humble beginnings, the company endured the uncertainties of war and recessions, expanded into businesses across the globe, and transformed entire industries through simple yet ingenious solutions.
Since our founding more than 100 years ago, ITW has become one of the world’s leading diversified manufacturers of specialized industrial equipment, consumables, and related service businesses. ITW businesses serve local customers and markets around the globe, with a significant presence in developed as well as emerging markets. The company has operations in 57 countries that employ more than 48,000 women and men who adhere to the highest ethical standards. These talented individuals, many of whom have specialized engineering or scientific expertise, contribute to our global leadership in innovation. We are proud of our broad portfolio of more than 16,000 granted and pending patents.
How ITW Work
ITW 's business model is comprised of a set of unique core capabilities: our proprietary 80/20 business process, customer back innovation, and our well-known decentralized entrepreneurial culture. While we own many global businesses, these capabilities are unmistakably ITW — and key to our longevity and strong performance.
80/20 Business Process
ITW ’s 80/20 business process has been integral to our success for nearly 30 years. Simply put, 80/20 focuses our businesses on the 20 percent of customers that generate 80 percent of revenues. We structure our businesses around serving these key customers, giving them the special attention, products and services that address their specific needs and pain points. 80/20 is about getting closer to our highest-value customers. It’s also about keeping ITW’s operations efficient, despite our size and global scale.
Cutomer Back Innovation
ITW ’s very first products - invented over 100 years ago - were new types of machines for making gears and washers that solved customer problems no other company had been able to master. We have a long history of working pragmatically to solve stubborn or complex manufacturing problems with highly specialized products—not mass-produced commodities. Many of ITW’s innovations—often simple, but always ingenious—have transformed industries, created entirely new product categories, garnered prestigious awards and earned us a place in the history of industrial design. In fact, we’re consistently ranked among the top U.S. patent holders.
Decentralized, Entrepreneurial Culture
ITW is well known for its diversified business portfolio and highly decentralized operating strategy. ITW businesses operate independently within the ITW framework, often under their own brand names.
In fact, we have few corporate, top-down functions; we trust our businesses to manage their own operations and respond quickly to local market opportunities. We give our businesses a high degree of latitude within the framework of our business model, and they have a healthy dislike of organizational complexity and bureaucracy This decentralized, entrepreneurial culture is how we make sure that we continue to think and act like a much smaller company–fast, flexible and focused.
And with product offerings across a mix of high-growth industries, our diversification across our businesses helps us weather economic fluctuations, letting strengths in one area offset weaknesses in another.