Many publicly traded companies approach their task as straightforward – achieve their fiduciary responsibility to return the best results possible to shareholders. Lancaster, Pennsylvania-based Armstrong World Industries is no different, but how it chooses to create shareholder value is.
While many competitors look to increase profits, Armstrong set its sites on being an outlier – the kind of company that can grow profits by 5% per year for five or more years – the kind of company that consistently grows by investing in its operations instead of chasing quarterly results.
It’s a philosophy that landed Armstrong in the No. 2 spot for the 2025 IndustryWeek U.S. 50 Best Manufacturers list. It was Armstrong’s first appearance. In previous years, they’d been too small to qualify.
“I call it the secret sauce here,” CEO Vic Grizzle says. “We have an organization that really values doing what it says it's going to do, and we have leaders who have the courage to lead with vision and aspiration.”
A big inspiration for Grizzle was Columbia University Professor Rita McGrath’s research, highlighted in a 2012 Harvard Business Journal article. McGrath, a consultant and author of “The End of Competitive Advantage” in 2013 and “Seeing Around Corners” in 2019. Her 2012 article focused on financial outliers that maintain growth throughout many years.
Grizzle says what he took away from McGrath’s work was the need to be an extremely stable company for employees and customers – a solid operator that wouldn’t overreact to the ups and downs of markets. And, at the same time, being a company that was constantly changing and adapting. McGrath says there’s no contradiction to being stable and being ever-changing.
“When people have to cope with constant change, it’s exhausting. So, if you can limit the scope of the kinds of change they need to adapt to – such as change in customer behavior, change in technologies, change in the ecosystem – there is just more energy to make the moves needed to be successful than if one is part of a place that is re-organizing every six months,” McGrath says. “These companies are really focused externally on their markets and customers, not internally on political conflicts, power grabs and maneuvering.”
McGrath reviewed IndustryWeek’s metrics for determining the IW U.S. 50 Best Manufacturers list, financial metrics such as revenue growth, profit margin growth, inventory controls and return on equity. She says the metrics do a good job of looking at past performance (net income growth, for example) and current performance (return on assets), but great performers also look at leading indicators – harder-to-track measures of what might happen in the future.
“Armstrong is clearly aware of the importance of leading indicators,” McGrath says. “In their sustainability report, they observe ‘Each of our manufacturing plants tracks certain leading indicators based on their area of focus. These indicators include formal risk assessments, quality safety conversations and housekeeping audits,.’”
She adds that the company has a “good catch” program in which employees are rewarded for identifying potential hazards and working together to mitigate them before anyone gets hurt.
