The Bondhus Story

The Bondhus Corporation:

Ballpoints, Fold-ups and Worldwide Success!

Someone once asked a young motorcycle mechanic if he knew of a company called Bondhus and without hesitation the fellow declared: "Yeah, Bondhus. I use 'em all the time. Best damned tool on the planet!"

While the prevailing trend among tool companies is to increase and broaden product lines to achieve distribution efficiency, Bondhus runs doggedly in the other direction, focusing its efforts on the one or two things it does better than anyone else. For more than 30 years that has meant focusing on the ballpoint tools that John Bondhus started manufacturing in a tiny Monticello machine shop in 1964. This commitment to the concept of a narrow, pinpoint focus represents the Bondhus Corporation's earliest corporate philosophy.

Like so many other successful businesses, Bondhus began as a single, simple, bright idea. When John Bondhus was a boy, his father Tom tinkered with the notion of a ballpoint hex tool and in fact made a few of them in his machine shop for his own use. But it was left to John, the eldest of the 13 Bondhus children, to grasp the full potential of his father's invention and to develop it into a thriving, international business.

In 1964. with little money and few prospects, John entered the manufacturing business with a single product.

Ongoing success

Bondhus's ongoing success is based on this range of Bondhus ballpoint tools which remains a revolutionary product with almost unlimited potential. although they have spawned a host of imitators. Even with some 70 competitors world-wide, no one seriously disputes the overwhelming success of the Bondhus Corporation in the world of ballpoint hex tools. The company claims that it has more than half the worldwide market share; its closest competitor claims no more than perhaps 15 per cent. But John Bondhus, president and founder of the $20 million company, isn't satisfied.

"The Driving Force of Bondhus Corporation:' according to the company's 1997 Strategy Statement, "is the attainment of a dominant world-wide market share of selected, highest quality, non-powered fastener tools."

From one point of view, the company is already there. The Bondhus ball- end hex tool turns up everywhere. It can be found in tool boxes around the globe, on every continent and in dozens of nations from Taiwan to Venezuela, from Sweden to Japan. Machinists and automotive repair shops find it indispensable; US. Army tank commanders used it during the Gulf War; printing press operators use it in Singapore, South Dakota, and Syria, so do dentists and the makers of artificial limbs. General Motors builds cars with it; bicycle repair kits almost everywhere contain some version of the tool; jazz, rock, and pop musicians who play Fender guitars use it, too.

From Balldriver® Wrench to GorillaGrip® Fold-up:

the Vision and the Focus

The Bondhus story is best understood in terms of broad vision and pinpoint focus. If that seems contradictory it's because the Bondhus Corporation is in some ways a contradictory company, just as its founder sometimes seems like a walking contradiction. Independent and occasionally contrary, John Bondhus paved his own route to success, often flouting conventional business wisdom and writing his own imaginative and creative new rules. People who know him describe John Bondhus as a "visionary", a "philosopher", a man of "brilliance and creativity". Yet today, he is essentially what he always has been: a solitary, small- town guy who likes to go fishing when he's not building a successful product that's about as basic and fundamental as anything can be.

John Bondhus says: "Our strategy is to focus on individual products and perfect them to the point where we have the very best quality and the best price in the world. That's how you build market share. That's how you build customer loyalty. The key for us is focus. It's the dilution of efforts that makes you less successful."

Growing Excitement

Within the company, there is growing excitement about the latest addition to the Bondhus line. The aptly named "GorillaGrip" fold-up tools, like the ballpoint tools, represent another one of those seemingly simple, but really revolutionary new ideas.

"These new fold-up tools are our biggest opportunity today for growth and future profits,'' John Bondhus says. "We have the best designed fold-up in the world today... We plan to do whatever it takes to become a dominant world leader in fold-up tools within the next five years." Accustomed to putting heavy metallic-looking things in their tool boxes, customers often look askance at the lightweight, almost fluorescent space-age composite material in the GorillaGrip fold-up handles. In startling shades of yellow, red, orange, and green, these tools look, some say, "like a toy". People often have a hard time believing that this unique grip material actually is, as advertised, "stronger than steel".

But it is. And if you don't believe it, the Bondhus Corporation will prove it - and then you will believe it! "That's the battle we have to fight," John Bondhus says, "and we're winning. If we can get you to pick it up, just once, and hold it and use it, you're sold."

Swiss Army knife

Everyone expects that the GorillaGrip fold-up tools - sometimes described as a kind of "Swiss Army knife among hex tools" - will accomplish in the future what the ballpoint L wrenches and screwdrivers did during the company's first three decades. "We did it once with the ball points:' says John Yngve, Chairman of the Bondhus board of directors, "and now we're going to do it again with the fold-ups."

There are good reasons for this confidence. For example, the steel used in all of the Bondhus tools is at least 25 per cent stronger than the steel used by competitors. Over the years, Bondhus has developed unique manufacturing processes that ensure the highest standards of quality control in the industry. That much has long been well-established. But the GorillaGrip fold-up tool is special, even by the high standards set by Bondhus Corporation. Its comfortable, attractive, one-piece, space composite handle is demonstrably stronger, more durable that any of the various metal, plastic, or die-cast handles used by other fold-up tools.

In recent head-to-head testing against competing tools at trade shows, participants have been invited to try to damage the GorillaGrip foldup tools. So far they've failed: they couldn't bend, break or shatter them into pieces the way they did with competing fold-up tools. And in scientific torque testing, the GorillaGrip fold-up handle survives 43 per cent more torque than the two-part plastic handle used by one competing tool and 35 per cent more torque than a one-piece stamped metal handle used by another.

Phenomenally Successful

Introduced in 1996, the GorillaGrip fold-up already has become " phenomenally successful", says manufacturing manager Mike Blackston. In its first nine months the GorillaGrip generated more than twice the sales that the previous new Bondhus product was able to generated in its first 12 months. John Bondhus believes the GorillaGrip fold-up has tremendous sales potential. He predicts extremely rapid sales growth for its first five to ten years, reaching perhaps as much as $30 million in annual sales, if his marketing, sales, and distribution network can get the tool into the hands of the men and women who will use it. "People who use the GorillaGrip like it", he says, "and they continue to like it. If we can get it into their hands, they'll buy it".

The evidence suggests that he's right. At demonstrations around the globe, customer response to the GorillaGrip fold-up verges on amazement. At several recent trade shows, potential customers have been queuing up in long lines to see, handle, and try out the tool, obstructing neighbouring booths and causing consternation among other exhibitors and amusement in the Bondhus booth. Initial scepticism swiftly gives way to astonishment. With its architectural, formfitting, colour-coded handle, the tool looks and feels like nothing else on the market.

Management Style

The Bondhus management style is a corporate theory based on total employee involvement and participation. "My management philosophy is to motivate people by letting them do the things that they want to do:' John Bondhus says. "We're very committed to our employees and to the idea of an open, participative style:'

John Bondhus believes that there is more to employee satisfaction and performance than job security, good pay, and a clean, well-lit place to work. Material rewards can help, but won't necessarily inspire people to reach their full potential or give any lasting sense of personal fulfilment. Avoiding that fourth 'Big D Word' - 'Dead-End' requires something just as important and far less tangible than money.

In its statement of corporate philosophy, the company declares: "We believe that people are born with a natural desire to be productive," and, to the greatest extent possible, Bondhus organises its affairs according to that principle. John Bondhus has created a corporate culture in which creativity and innovation can thrive and an employee's "natural desire to be productive" can be indulged.

Employee participation

The company welcomes and encourages employee participation at all levels: it sought, for example, employee's input for the GorillaGrip fold-up development project. The company also advocates constant educational activity and career development for its employees.

Bondhus conducts regular inhouse seminars on subjects related to career development and personal growth. The company pays the costs for outside job-related courses and offers paid time off for any employee who wishes to enrol. To encourage a broadening of job skills, employees may request and receive extensive inhouse training in a company-related project of their choice. For example, a receptionist might wish to take sales training, a salesperson might want to learn more about the manufacturing process, or a machinist might seek management skills training. Bondhus rewards that kind of employee initiative. Cross-training is encouraged. Promotions, whenever possible, come from within the company.

"John is always stretching and pushing people to be their best:' Internal Operations Director Diane Fales says. "People don't get stagnant around here. There's always something new. I just can't imagine being bored."

Relentless and bold

Bondhus is relentless, aggressive, and bold in its determined quest for global market success. Back in 1964, when the Bondhus Company opened for business in a small shop in Monticello (which doubled as a home for the Bondhus family), it produced 300 ballpoint blades a day. Those earliest days saw the origin of what would become a company policy: the decision to sell Bondhus products only through distributors and manufacturers who emphasise customer service and product features over price.

By the end of 1965, Bondhus had picked up its first two distributors. In early 1967, the company incorporated as Bondhus Corporation and hired two new manufacturer's representatives to provide coverage on the east and west coasts of the USA: Walter Coleman and Kenbil Engineering, still represent Bondhus and thus indicating another company characteristic: when Bondhus finds a distributor or a representative who performs well, the relationship grows and prospers and endures.

In the wake of a 1975 trip to England, France, and Sweden, John Bondhus began to establish his first European importers. Having determined to expand internationally, John Bondhus never looked back. He did, however, look in every other direction, believing that research and planning would be the keys to successful exporting. He began to develop an international marketing plan and created a strategic planning team which examined what was possible in each potential overseas market. The company set up a tactical plan for each market which included setting measurable objectives and performance evaluations. It began to sign up overseas distributors - and it began to sell a whole lot of tools!

Explosive growth

At the same time that Bondhus was starting its overseas expansion, domestic sales continued their explosive growth. By the end of the 1970's, Bondhus was manufacturing tools for some of the biggest names in the tool industry and other private label companies were beginning to take notice of the still small Minnesota company.

The manufacturing plant had to be expanded twice to accommodate increased production, research and development, sales, and administration. By 1980, Bondhus had, for the first time, topped 31 million units in annual sales. More than 30 employees had joined the firm. And the company purchased its first computer for accounting purposes.

When the subject of another plant came up: Dick Van Allen, VP of US and Barbados Operations, recalls, "we didn't rule out anything or any place." Instead, in typical Bondhus fashion, the company considered all the angles and all the possibilities in locations ranging from Ireland to Malaysia to Belize. "We looked at absolutely everything", he says as he ticks off a partial list of the economic and social factors the company considered: language, religious beliefs, cultural groups, literacy, political stability, type of government, currency, infrastructure, electricity and gas providers, transportation systems, labour costs, tax structure, and the existence of an industrial and economic development commission or authority. "We put down everything we could think of," he says.

Then, one by one, the company eliminated locations until finally settling on the east Caribbean island of Barbados, a former British colony that is now an independent nation. The island provided a well-educated, highly motivated work force, as well as some other very tangible economic benefits to an American manufacturing company.

The government offered a ten-year Ôtax holiday' to Bondhus, meaning the company paid no income tax on revenues generated at the Barbados plant for the first ten years of operation. Even now, ten years after the plant opened and the tax holiday has expired, the corporate income tax rate stands at just three per cent. In addition, products manufactured in Barbados for export around the globe were not subject to the same import and export duties and tariffs imposed by other nations on products made in the USA. From Barbados, Bondhus was able to ship duty-free into Europe.

"Barbados:" says Dick Van Allen, "has been successful on all counts." In 1987, its first year of operation, the new manufacturing plant produced nearly $1 million worth of Bondhus tools. The quality of the tools made in Barbados meets the same rigid standards as those manufactured in Monticello: "Their quality is every bit as good as it is in Montecello," Dick Van Allen says.

In his 1997 Executive Summary, John Bondhus summed it all up this way: "The opportunities have been identified - plans are in place to capitalise on these opportunities and we have the financial strength to carry them out."

Attenborough Tools

In the UK Bondhus products are distributed by Attenborough Tools which has distributed Bondhus products since 1975. The arrangements here are typical of those favoured by Bondhus. The company's preference is to work with distributors who specialise in six or seven product lines with a high degree of product knowledge, rather than a distributor who deals in a multitude of product lines and has no real in-depth product knowledge. In the UK market, Bondhus work in a close relationship with Attenborough Tools to produce a marketing plan and stress the term partnership which builds on the positive reputation of Bondhus products.

The UK is one of the leading markets for Bondhus. Mike Thornborrow of Attenborough Tools says: "It is always our ambition to work with quality products. We have no doubts about the Bondhus commitment to quality and its ambitions to remain the dominant force in ball end hex keys. The GorillaGrip fold-up tool range has proved to be a very important additional product which enhances the already strong reputation of Bondhus hex keys in the market for discerning tool users:"

"We are planning to build on our success with Bondhus:" Mike continued, "and we see a significant expansion in penetration of the fold-up market as we make known the undoubted advantages of the GorillaGrip fold-up tool." "We are also determined" Mike added "to expand sales of the ball ended hex keys, the T-handled range in particular has so many quality advantages over the competition that we expect to increase market share significantly."

Something special

Clearly, Bondhus tools are something special. That the company makes the best tools of their kind anywhere on the planet is an article of faith at the Bondhus Corporation a faith that is built on a foundation of product testing combined with user satisfaction and loyalty. Bondhus tools are handier, easier to use, more durable, more versatile than competing tools; Bondhus uses better steel, better manufacturing techniques, and better design than the competition. In torque tests, just one of several means of testing tools, Bondhus consistently beats its competitors by a large margin.

Still, as John Bondhus points out: "We know we've got the best product on the market. But just being the best doesn't make it something that people want right away. There's always some resistance to good new ideas. We believe that through intensive focus and teamwork we'll retain and increase our world market share."