Profile in Leadership
A Strong Sense of Stewardship
Theodore Lapres III, MBA ’79, President and CEO, Nypro
Lapres’ ascension wasn’t as dramatic as Truman’s or Graham’s, but, like them, he would have to prove himself quickly. Nypro badly needed a leader to renew its sense of mission.
In 1998, longtime owner Gordon Lankton (Cornell ’53, mechanical engineering) had sold Nypro to its employees, making it one of the largest employee-owned firms in the U.S. Then, in 2002, Lankton moved up to serve as chairman. His successor as president and CEO began pushing in directions that many felt conflicted with Nypro’s core principles.
“He’s got a clear, clear focus, but he’s not out pounding the drum and being strident... He does things in a quiet and determined manner.”
– Jim Peck, corporate VP and general counsel, Nypro
“I had to step away from the things that I was comfortable with on the financial side — to let other people handle that — and spend much more time with the customers, with our engineers, with people in the plants,”
– Theodore Lapres III, MBA ’79, President and CEO, Nypro
“He wanted to grow much more quickly than we could sustain as
an Employee Stock Ownership Plan company,” Lapres says.
“It was a rocky time. There was a lot of unrest and tension,” recalls Aaron Lazare, MD, dean and chancellor emeritus at the University of Massachusetts Medical School and a member of Nypro’s board.
When the position opened up in 2006, the board tapped Lapres, then chief financial officer, as interim president and CEO. Five months later, they made it a permanent appointment.
“It came out of left field for me,” says Lapres. “I stepped into this CEO role unexpectedly and knew right from the beginning I would have to do a lot of learning on the job.”
Clearly, Lapres has learned well. Since 2006, in his quiet and purposeful way, he has led Nypro through the biggest reorganization in its 50-plus year history. He also has steered the company safely through the global recession. Now, he’s helping Nypro to fashion a strategy for future growth.
Based in Clinton, Mass., Nypro designs and manufactures injection molded plastic parts for products that touch our lives in many ways: cell phones, home appliances, drug dispensers, cosmetics packaging, and beverage containers, to name just a few. When Lapres joined the firm as corporate controller in 1988, Nypro had $80 million in revenues. By 2008, annual sales had climbed to nearly $1.2 billion.
Lapres came to the CEO’s post with strong credentials, of course. “He’s totally honest, and he’s a very smart guy,” Lankton says. “Everybody respected him.”
His background in finance was impeccable, Lankton adds, and Lapres had learned about other aspects of corporate operations while chairing the board of Nypro’s business unit in Singapore.
But Lapres understood that to succeed as CEO he would need a crash course in all things Nypro. “I had to step away from the things that I was comfortable with on the financial side — to let other people handle that — and spend much more time with the customers, with our engineers, with people in the plants,” he says. “In the first two years, I made a vow to visit all of our 30 to 40-plus operations around the world, and as many of our customers as possible.”
He listened to everyone he met and also used those visits to outline the vision that his leadership team was creating for Nypro.
Under a new, more customer-focused strategy, Lapres and his team
have redesigned the firm. First, they got Nypro out of ventures that
didn’t match its strengths. For example, one subsidiary manufactured
robots. “Making robots wasn’t something we were good at,” Lapres
says. So Nypro sold that unit, plus others that made a poor fit.
They also transformed the heavily-matrixed, regional organization into a company composed mainly of three global business units. The first business serves the consumer electronics market, with an emphasis on wireless. “Nokia has been our largest customer for a number of years,” Lapres says. “RIM [Research in Motion] will be our largest customer this year, making plastic housings for Blackberry devices.”
The second unit serves customers in health care: Nypro makes precision parts for medical devices such as insulin pens for Eli Lilly and asthma inhalers for GlaxoSmithKline. The third global business focuses on packaging. “Procter and Gamble, for instance, is our largest customer in packaging,” Lapres says.
Within these markets, Nypro forms strategic relationships with select customers. “We serve them very broadly and deeply, with engineering services, global capabilities, design, tool building and support, along with molding the plastic parts,” Lapres says. Each unit largely runs itself, while Lapres and his corporate team focus on the bigger picture. “How do we bring a parenting advantage to these various businesses, driving synergies among them so that there’s more value to being under the Nypro fold than not?” he asks. “And then, what are the new markets that could drive our growth in the future?” The sustainable energy market, for instance, might offer significant opportunities, he says.
While making these changes, Nypro also had to move fast to stay afloat during the global economic crisis. As money grew tight, people started buying fewer wireless devices, home appliances, and other products that are central to Nypro’s business. After 22 years of straight increases, Nypro saw sales drop by about seven percent in fiscal year 2008, compared with 2007.
In response, the firm cut expenses wherever it could. “As an employee-owned company, we like to go carefully there,” Lapres says. But the crisis forced Nypro to work harder than ever to control costs and stimulate cash flow — with good results. “Even though we ended up with profits down, we still remained profitable.”
The recession also made the company reassess the role of wireless products in its portfolio. Wireless is a high-risk industry for a contract manufacturer, since wireless products go obsolete every six to 12 months. As manufacturers prepare to introduce their next-generation devices, Nypro must continually compete for their business.
“A health care program, if you win it, you might have for seven to ten years,” Lapres says. Packaging programs last five to six years. So Nypro has been working to balance its customer portfolio more evenly among the three markets, he says.