Here's a company I can be pretty sure you've never heard of: Grace Manufacturing. I'd never heard of it either until this New York Times profile, though I've seen and used its products — "microplanes" for shaving cloud-like piles of parmesan, truffles, and other high-end ingredients. Microplanes for kitchens now make up 65% of the company's revenue, yet it was a product category completely different from what Grace started out doing, and only got into reluctantly. It's a fascinating example of questioning assumptions about your business domain when under pressure, staying alert to customer needs, and being open to opportunities as they appear.
Grace started out in the 1970s as a contract manufacturer of etched steel parts, such as for printers. Grace had a proprietary process for making precise steel shapes, which resulted in the edges of the steel being razor-sharp. In this context, sharpness was a liability and workers had to be careful handling the parts. With the emergence of dot-matrix printers in the 1980's, Grace realized its cash-cow business was under threat, and so it looked for other areas.
Faced with a similar situation, other companies may have looked at adjacent areas — wooing the makers of dot-matrix printers, or looking at other high-volume, complex machine pieces. Grace took a step further back and thought more broadly about its capabilities and the attributes of what it does. As CEO (and founder's son) Chris Grace put it, "We realized we were good at making sharp things. And so we thought, what can we make that's sharp?"
Woodworking tools became the first answer: specifically small planes for doing fine sculpting of wood surfaces. Grace had some success with these tools, but then the unexpected happened: chefs started using them in novel ways. Grace inadvertently created a need and a new product category: the culinary microplane, which extracts more flavors from foods than traditional grating and shaving. Chefs loved this new expansion to their toolbox.
At first Grace was incredulous that its serious woodworking tools would be used in this application, but that didn't stop it from taking orders. Today microplanes dominate Grace's business, and the company has continued to explore other applications, such as medical and cosmetics, driven in part by the pressure of patent expiration.
Following how customers are continuing to find new ways of using their products is important for Grace, for example by watching The Food Network. I love how Chris Grace puts it: "If you child was an actor, you'd watch for him," he explained. "Same deal with us."
(This article originally appeared on the Harvard Business Review blog)
AVP of Marketing Strategy Adam Richardson is the author of Innovation X: Why a Company’s Toughest Problems are its Greatest Advantage. His book is the manual for leaders looking for clarity about the emerging challenges facing their businesses. You can follow Adam on Twitter @richardsona.