"What is our role in the world?"

That was the question Dean Scarborough began asking himself when he became CEO of Avery Dennison Corp. five years ago. Known best to consumers for its office products, the company's two largest businesses are as a supplier of pressure-sensitive materials and a provider of retail information products, which includes fabric labels and radio frequency identification (RFID) tags. The company's individual businesses had clear strategies and knew their customers well, but employees had a difficult time connecting to what Avery Dennison's overall strategy was. So he struggled with finding a unifying vision around which the company's employees could marshal their efforts. That's not an insignificant issue in a company with 30,000 employees operating in 60 countries. Avery Dennison, No. 138 on the IW U.S. 500, had sales of $6 billion in 2009.

In developing this vision statement, Scarborough had the advantage of knowing the company intimately. He joined Avery Dennison in 1983 and rose steadily through the ranks, becoming vice president and general manager of Fasson Roll North America in 1990 and then moving to the Netherlands in 1995 to lead Roll Materials Europe. Two years later, he returned to the United States to assume group vice president duties and then became president and chief operating officer in 2000.

Scarborough was first attracted to Avery because of a culture that encouraged initiative and was supportive of new ideas. But 22 years later when he assumed the reins of the company, he was faced with an old nemesis of many CEOs -- a stock price in the doldrums. He began taking a series of steps to fuel growth and improve operational efficiency. He also set out to shift the company's focus so that it was "more external."

Out of that work and more than a year of thought, Scarborough finally landed on a compelling vision. Rather than focus on what the company was making, he centered the message on how the company was adding value for customers -- helping them sell their products through packaging solutions that enhance their brands and through technologies such as RFID tags that provide enhanced intelligence to manufacturers and retailers.

In a May 20 speech at the Pathway to Manufacturing Prosperity conference sponsored by the Italian Trade Commission and IndustryWeek, Scarborough said Avery Dennison is "transforming ourselves from a manufacturer of basic materials into something more -- a trusted partner who makes every brand more inspiring and the world more intelligent. That is our new vision."

External Focus

To achieve growth, Scarborough knew when he became CEO in 2005 that he would have to shake up Avery Dennison's product mix. "I felt we did not have enough earnings growth in the existing portfolio," he recalls. "Office products was a declining business, which had great cash flow but there was a way for us to create shareholder value by creating a new business model with retail information services."

That meant pursuing RFID technology and its promise for bringing a new dimension to product tracking and retail information. "The emergence of a chip that costs a dime and allows you to get intelligence on a product and track it in multiple locations is an incredibly powerful concept," said Scarborough about RFID. "It is going to enable a lot of industries to drive to a level of efficiency that they have never thought possible before. This is not just item-level tracking for retail or getting baggage to move on airlines." As an example, he cites research the company is doing on tracking food spoilage without employing destructive testing. "There is all kinds of work going on now at a kind of micro level on how to track things much differently than before. That is what we mean by making the world more intelligent."

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