By Nathan Peck | MiBiz
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ROCKFORD — Byrne Electrical Specialists Inc. sees value in remaining a student.

If the Rockford-based company has a motto, it’s “learn by doing.” Talk to any employee long enough and it’ll come up. Frequently. The addition of new product lines such as the Stratum in-floor cable routing system — learned through doing. Six sigma events — learned through doing.

The acquisition of XUS Corp. of Holland is another exercise in learning through doing, says Daniel Byrne, managing director of Byrne Electric. The merger brings expertise in the solid-state electronics and LED manufacturing fields into the Byrne fold, while bringing diversification to its product portfolio. The acquisition of XUS, a small firm owned by Bob Gray, provides Byrne access to the exterior and architectural lighting markets, areas of growth in the lighting industry, Byrne told MiBiz. The company began clearing space in its production facility to accommodate the equipment and train employees in the manufacture of solid-state electronics.

“Our employees know their job will change day to day, our products and production lines will change and move around. This is part of our diversification strategy,” Byrne said. “The design and assembly (of electrical power systems) are our core competencies. The new piece for us is the technology and the solid-state electronics piece.”

Rusty McBride, director of sales development, recently joined Byrne from Philips Lightolier, where he worked as regional VP for the architectural lighting firm. He said Byrne is capitalizing on a changing lighting market as technology brings greater efficiency to outdoor lighting, lasting 50- to 100-percent longer than existing bulbs. McBride said the lighting systems dim at twilight, come to full power in darkness, and use 30- to 60-percent less power than traditional lighting.

“In 10 years, you will see a radical market transformation toward solid-state lighting,” McBride said.
The 40-year-old company has expanded into global markets, opening facilities centers in China and Mexico. Byrne currently employs 200 people in Rockford and has no plans to outsource its workforce. The China facility produces power distribution for domestic markets. The firm is working to strengthen its relationships with its existing customer base, while developing relationships in emerging markets.
“We are looking to develop new sales channels. Each market is different, especially globally — global markets are exponentially more complex versus the North American market,” Byrne said.

Byrne is closely tied into the office furniture industry, providing power and data distribution for a variety of OEMs, and its sales dropped alongside the industry when the economic downturn hit. The office furniture market accounts for 95 percent of Byrne’s business, and the industry saw sales declines of nearly 30 percent in 2009, according to the Business and Institutional Furniture Manufacturers Association. The acquisition is a targeted approach to entering a new market by bringing in outside expertise, which is part of a market diversification strategy that is well under way for the family-owned business.

“Being a family company is both a blessing and a curse. It’s a blessing that we are not beholden to private equity, but we are not going to be plopping down $10 million to do an acquisition,” Bryne said. “This is a small acquisition, a small step that we hope to grow in the future. This is due largely to our philosophy of being fiscally conservative and not being leveraged to the point where we are at a point of teetering.”

Byrne said the company looks for innovation across the company and empowers each employee to find novel solutions that benefit the company. Product patents are shared, with employee names on the filings.

“Culturally speaking, it is a significant shift. Innovation as a strategic focus requires you to be committed to it in good times and bad,” Byrne said. “Innovation doesn’t come only from your advanced products development department, it is also about energizing your entire employee base. They all share opportunities and share ideas across the company. It’s not just one of us, it’s all of us.”