Connect with Joe FritzEmail: jfritz@investmentcasting.org Website: www.investment casting.orgLisa Ryan: Hey, it's Lisa Ryan. Welcome to the Manufacturers' Network podcast. I'm excited to introduce you to our guest today, Joe Fritz. Joe has been the Executive Director of the Investment Casting Institute since 2013. With over 35 years of experience, Joe has contributed to some programs, including the navy's Trident programs, the air force's joint strike fighter program, and Boeing 787 Dreamliner program. Joe holds degrees in engineering from the University of Connecticut and an MBA from Union College.Joe and I had the opportunity to work together in Puerto Rico at his association's annual meeting. He was also kind enough to let me bring my mom with me. We had a great time together. Joe, welcome to the show.Joe Fritz: Well, thank you very much, Lisa. We did have a good time in Puerto Rico, and it was a distinct pleasure meeting your mother and having you speak at our event.You were extremely well received, and I had many people requesting that we share the event's recording with folks on their staff to learn from you about gratitude in the workplace.Lisa Ryan: It was almost like back in the olden days when we used to have live events.Joe Fritz: It does seem like quite a long time since we've been able to do so. The pandemic last year wiped out every live event that we had, except for one training program that was conducted in February.Lisa Ryan: Share with us just a little bit about your background, and then we'll get into the details as far as what this last year has meant to you, your association members, and really what you hear in the industry. Tell us about you, Joe.Joe Fritz: That's a loaded question. As you can tell from your introduction, I have a solid military design background. That was really a big part of my career when I first got out of college, working through things until the end of the Cold War. When the Berlin Wall came down, I worked as a design engineer for General Electric in the naval ordnance division. It was like this bright young man better find something else to do with them without a Cold War to be building apartments for.I applied for a blind ad in The Wall Street Journal. Nobody ever gets a job on a blind ad. What they were looking for was an engineer with aerospace experience, an advanced business degree. A couple of my friends pushed me to apply for it, and I ended up changing industries completely, finding myself in the world of metals and material science.Since 1990, I've been working in the investment casting industry and parallel industries I've stepped out in a couple of times. Still, I became fascinated with technology and the science involved in creating precision metal components. Using this process for the point that I could actually say that I love the industry. Around 1999-2000, a business colleague of mine solicited my help in looking at and preparing his presentation to apply for the job that I'm in right now. I was I got very excited about this. Mike, this is the perfect job for me. He laughed at me, and he said, you know, the only differences, I know the Board of Directors, and you don't.In 2013, Mike picked up the phone, calls, and says, hey Joe, I'm planning on retiring. Are you going to throw your hat in the ring? After some discussions and a series of interviews, I found myself the Executive Director of the investment casting Institute. We're a 501 C six nonprofit trade association. We have approximately 265 Member companies throughout the United States and some international. Our focus is on bringing first-off benefits to our Members, especially the smaller members. We've got a couple of substantial companies. Still, the smaller companies are the ones that really derive benefit from working with us, so we offer educational benefits we try to work up discount programs to support them. We offer networking opportunities. A huge part of my job is bringing people together, facilitating communication, and the ICI has afforded me that opportunity.In addition to focusing on our Members, we also focus on the customer base. Our Charter aims to educate the customer on the benefits of investment casting versus other metal forming technologies. That's not to say that our role is to push investment. Quite often, people will come to me looking for a referral to somebody who can make an investment casting for them. When I look at their growth or speak to them, I go, you don't want to use investment casting. This is better made as a sand casting or a die casting, or a fabrication, depending on the configuration. We try to bring people together and make sure that they will be in good long-lasting relationships.Lastly, I view is the third leg of the stool of what we do. We have three legs on every stool that is sustainable. That's very important to us. We work with young people. We have an associated trade association. It's a 501 C three it's a nonprofit, the foundry educational foundation, and they work very closely with the schools and young people. Through them, we've worked to support their initiatives and have direct contact with the schools on our own. I can often be found talking to a bunch of high school juniors, and seniors, and sometimes junior high school kids as well as going to the universities, and it's very fulfilling when you put a spark, and they come and talk to you afterward that one thing to talk about the process, and the training, and education that gets involved with it.When you start passing out parts and components that show examples of what you can do with this process, it sometimes ignites a fever in some of the students, and that's a great thing. I've been doing this now, going out to eight years. There are kids that I met in junior high schools, and high schools, and in college, and they keep in touch with me and let me know what they're doing, and they're smart because they're learning how to network, right from the start, so there's some goodness there, and it's very gratifying to do what I do right now.Lisa Ryan: Now there are so many different ways to go in this conversation number one, I didn't know about your stalking your current job for 13 years. So, the other guy retired. That was pretty good, and succession planning was already in place. Still, I really like what you talked about the last time with sustainability and bringing new people into the industry because with all of the manufacturing manufacturers and manufacturing associations that I work with, that seems to be the main thing that they struggle with is how do you bring these new generations into the workplace.You not only starting earlier going into high schools and stuff but giving them that that physical component, something that they can hold in their hand-building those relationships with those people. I continue to keep in touch with you, so obviously, that's working. So how are you not only as a person but as an industry with your Members communicating that same philosophy as far as connecting with the newer generations coming in?Joe Fritz: First off, I'd like to point out that the industry clearly has identified that there's a need for sustainability. Every year we conduct a house business report. In fact, we're currently collecting survey results for our 2020 house business report. A year in review, but I can go, year after year, and I can tell you that the number one concern is attracting, training, and retaining new employees. We've seen in recent times, and when I say recent, and showing my age recent talking the past 10 years. But over the past 10 years, we've seen much greater difficulty in retaining those employees. I've heard stories of the from foundries where they've hired someone they show up late for the first day of work, and then they never come back again.I had spoken to one foundry. This is a very high-tech foundry - excellent benefits. They have over a 90% turnover of new employees in the first year; we've never seen before. Historically, you go back to When I entered the industry, you would get in, and you'd see people in going into companies new hires minimum of a two-year commitment, if not longer. But what's a very curious thing is that when I walked into my first investment castings boundary in 1990, I noticed that the majority of the people I was dealing with were my contemporaries or older Okay, but mostly my contemporaries.I don't want to say it's a sad thing, but the concerning thing is that I walk into a foundry today. Most of the people I see are my contemporaries. You would think that you see a lot more young people in the industry, so I've taken I personally have tried to sit back and try to understand what that is, and some people say, oh, it's the millennial phenomenon or its people don't want to get their hands dirty.We're becoming a service economy, and I hear all those comments the United States was built on manufacturing, and manufacturing is our future, but it's a changing and evolving future. So you take a look at what I've done is, I take a look at what's exciting these young kids today, and one of the big things is additive manufacturing. I go to every high school, and a lot of the junior high schools have 3D printers, and these kids are clamoring to those classes, and I think part of it. Because it's not just an academic thing, you can put things into play and build something. You can do it in class and combine some of your teachings involved with that. I think they get excited about that so.What I try to do, at least when working with these young people, is trying to make the connection because additive manufacturing is a significant part of what we do. Now some people view printed metal products as a competing technology to investment casting. In certain aspects, it is, but you print more than metal. You've print plastics, the resins polymers. There are all sorts of stuff that you can print. It all plays a role in what we do since the 1990s. For example, additive manufacturing was largely used for doing prototype work, where we would print a pattern instead of injecting a wax. Maybe I should give you a high-level view of how our process works in an investment casting process, which is also called the lost wax process. You start with a wax pattern that looks like the finished product with the same configuration of what you want to make and metal.You take that, and typically you take several of them, assemble them onto a wax bar or something that we call a screw, and build a cluster of parts. Then they take that, and they dip it into a ceramic slurry, and back it up with a stucco, let it dry, and then they repeat till you build a laminated ceramic Shell around all the waxes.Then they removed the wax you basically melted out. You fire the mold, so it becomes hard, and you bring it to a temperature that the metal will the metal easily. You pour the metal into the ceramic mold. If you break the Shell off, cut the parts so often, clean them up, and haven't finished the metal product. In normal production, you will build a metal tool to inject the wax into to make those wax patterns, but in prototype development. It's very costly if you've got to build a 30,000 or 100,000 or $300,000 tool to work on a design that's changing so. You would generally get a CAD file, and you would print back then. It was a simple stereo with the graphic pattern, and we call to replace the wax pattern and build the Shell around. You can make parts. The customer can take put them in their engine or their automobile or so forth.Do evaluations on it modify the designs, and so you get to the point that you have a stable design that you are willing, then, to cut metal on, and build a tool for that's work first got introduced to our industry, you look at it today with the evolution of the additive manufacturing technology, people are printing patterns for low-rate production. To replace waxes again, you're not going to build a tool for a run of 20 parts right, so it's still used for prototyping is used for low rate production.But what you're also finding is now, you can print ceramics, so instead of printing a wax pattern or a plastic pattern to dip into a Shell, some people are actually printing the shells themselves with all the internal passages right out of the chute. Now is this a disruptive technology? It's more of enabling technology because the process is slow. It's not suitable for high rate production, and it's costly, but there are many benefits from it? One of the things I try to do when putting the spark in these young kids is to show them some printed patterns, show them to transition, and let them know that it can lead to many things. It also helps when you talk about the opportunities, and the availability of positions, and the long-term prospects.I'll tell you I've seen the people who have entered the industry with high school degrees, who are now general managers, and Vice Presidents of companies because they've done what it takes they put in the effort, and they've done very well with it.Lisa Ryan: Now, in that have you reached out to this is reaching out to the kids but what about things like guidance counselors or teachers or anything, getting into the schools for things like manufacturing day because it's one thing to get the kids inspired, but we also need to change the conversation with the parents. With the guidance counselor's so that they're not so focused on the four-year college degree because, as you just demonstrated with somebody with a high school diploma, they could be running a plant as part of their career path.Joe Fritz: Right, and we do that, in fact, it doesn't stop with them, and also a lot of what we do to support the Integration of students, and keeping the students has also helped educate our members, and the foundry so it's a full stem to Stern, but we do attend the career days manufacturing days I had mentioned the foundry educational foundation they run an event every November which we attended support. I have personally spoken with career counselors and teachers in the schools I've been invited to speak at.I've also spoken with the not PTA but the various school districts that are looking to get back into some of the more basics, realizing that the curriculum we have today is really straight away from the trades history is great, I mean, it's a very different world case in point, I went to a school with our business administrator Nora gamba you've met Nora.Lisa Ryan: Oh yeah.Joe Fritz: We went there to talk to these kids at a junior high school in Jamaica Queens, New York, and we get there, and it's gigantic school. The kids were amazing. That was probably the most attentive group we ever spoke with them afterward, I'm talking with the instructors and some of the counselors there, and they were saying, well, we used to be a vo-tech school. But now it's basically reading, writing, and arithmetic, but we'd like to get our foundry back up and running. I go, you have a foundry, and they took me for a tour, and they have a foundry, and those kids are hungry. Right now, it's used as a storage area for props for the theater group. I know they're taking steps to bring that online, and we have offered our technology and our services to help them out in any way we can, so there I think there's a recognized need among the academic community. The very fact that we were invited in, and then they made a point of showing me what they want to do, but there. I think that there's an issue connecting with the parents.My father goes, you want to be smart. You want to get a college degree. You want to work with your mind and not your hands. My father first-generation American, and he had a vision for my future. I was somebody who always enjoyed working with his hands. There are many kids out there that do, and I think that part of my going to higher education was because it was my father's dream. I don't regret it all because I still get my hands dirty - mostly in my garage rather than in the workplace. Having a desire to manufacture and see things made is not something that is inbred into you. It's something that you learn. You either like seeing things come together, building things, making things, and design things, or you don't. That's something that has to be nurtured. I have seen the kids who really want to do this up, but my father wants me to be a doctor, but no, my mom thinks I should be a lawyer.I always ask what is it that you want to do because that's The key thing you have to appeal to their interests. You can't force them impressed upon anybody, and one of the things I always tell these kids I go, what is it that you love to do. Right pick what you love to do, and make that your career goal your career objectives, and, as the old saying goes, you'll never work a day in your life.Lisa Ryan: We look at from when your father was going was getting started, and he wanted you to go to college, so you could have a quote-unquote better life than he did. But unfortunately, we've had two generations of everybody going to college. Now, these kids are coming out with 10s of thousands of dollars in student loan debt for either something that they don't want to be doing because mommy and daddy told them to go to college or something that they can't find a job in their chosen degree so turning it around and saying listen. You have a stable job with something you love to do, working with your hands, great benefits, and very little debt that you will amass by going directly from high school to a tech school. It's directly into the trades like that, so it's just really changing that conversation that the one we talked about was two generations ago or a couple of generations ago where college was where you could. They don't want to say that you could actually get something from college, but there's so much competition now, and we don't have enough people.Joe Fritz: That is being exposed at that young age to say, wow, this is cool. I can work with my hands. This is what I want to do, and having mom and dad be okay with that. That's very true, but that's not to downplay the importance of college graduates. You need the engineers; you need the accountant. It would help if you had the marketing people. Still, the real main force, the key people that make this industry strong and great, are actually doing the people who have a passion for it, the people who focus on quality.The people trying to improve things, and hopefully, that's stem too stern from the person who was hired to push the broom to the guy who's running the corporation. Everybody would be great if everybody had that passion. But it's the people on the shop floor that really make things happen because they're the ones who are going to put quality into a product. They're the ones who are going to recognize when a product is lacking in quality before anybody else does so.Lisa Ryan: What are those what are you, seeing as far as so what some of your Members are doing you've shared what you've done to change that conversation and to attract people but are there some best practices that you've heard from your Members are they doing something else that unique that might be helpful to somebody tuning in today.Joe Fritz: Well, first off, one of the things that we see a lot of our Members doing

Contact Mauricio Barboza:Email: mauricio@joncoind.comLinkedIn: https://www.linkedin.com/in/mauricio-barboza-a6bb9558/Lisa Ryan: Hey. It's Lisa Ryan. Welcome to the Manufacturers' Network podcast. I'm really excited to introduce you to Mauricio Barboza today. Mauricio was born in San Jose, Costa Rica. He studied architecture at the University in Costa Rica and graduated with honors majoring in emergent manufacturing technologies. Mauricio is currently the director of business development at Jonco industries. He is responsible for identifying new markets and emerging trends, developing new business opportunities and long-standing partnerships, and building and expanding their client base to drive forward their company's profitable growth ultimately. These are fancy words to say he helps their business grow. Mauricio, welcome to the show.Mauricio Barboza: Thank you, Lisa, glad to be here.Lisa Ryan: So share with us a little bit about your background, and really what led you to Jonco, and doing the things that you're doing now.Mauricio Barboza: My background is actually in architecture. I went to architecture school, and I got a major in emerging technologies. I've always been passionate about the manufacturing industry about business development, product development, and, more so, Creative Problem Solving. That is what led me to Jonco. Jonco is a problem solver. Jonco industries is a multi-industry manufacturing and packaging company in Milwaukee.We have a wide range of capabilities from fulfilling from powder filling and chemical filling. We have a large format digital printing. We do a lot of cutting - whether CNC, and computer-controlled, and water jet, and whatnot. One of the fascinating things about Jonco that I was attracted to is adapting to change and how they have grown as a business. As a matter of fact, one of the most recent things right now, and because of the pandemic, is we're taking on a shift. We're allocating one for facilities, one of our warehouse facilities, to develop a fulfillment center. There's a major need for fulfillment centers right now because everything's everything going on with the pandemic. Everybody wants everything right away, so the need for a fulfillment center is out there.We're taking that shift, and that is one of what attracted me to Jonco.Lisa Ryan: In our conversations leading up to the podcast, we talked a lot about the pandemic and some of the pivots that you made in making one product, and then just overnight changing to something else, based on what the customers were looking for. So what did that look like before and after, and really how were you able to change so quickly?Mauricio Barboza: One of the fascinating things about the manufacturing industry right now is that everything changed. It's not the same as before the pandemic. It's never going to be the same it's never going to go back.The pandemic pushed the manufacturing industry to adapt and embrace technology. I love the fact that it pushed manufacturers and forward thinkers to embrace technology at a faster pace. When we talk about technology, there are really three big players out there.One is automation. Automation has been a while for decades. The biggest difference right now with automation and how things are moving is that it has become accessible. It has become accessible to smaller industries - from small companies to mid-sized companies. Think of it as a car. When cars came out, they replaced the horse. It was a novelty. Now, everybody's got a car. Similar things are happening with automation. Automation is just becoming available. It's easier to use. The interface is user-friendly, so it's one of the fascinating things that is happening right now.Another thing is that the digital transformation. Everything is shifting from paper and pen and all that traceability to digital to the Internet of Things. We're doing everything that we're doing on the computer, computer control, and how we monitor data and upgrade analytics from everything we can collect on the floor.The third piece is collaboration. One of the things that endemic has taught us is that we all need a backup plan. What better way to do it than to collaborate with your colleagues. You understand their capabilities to see them not as competition but as a strategic partnership. That's been huge. Those are three things that we're trying to push within our company.Lisa Ryan: So, give me an example of a collaboration that you had with somebody you may have thought, as the competitor in the past, and you were able to use the pandemic and partner with that person. What did that look like?Mauricio Barboza: I'll give you two examples. When I talked about collaboration, there are two venues: one is with companies doing similar things that you are, and the other is with universities, and using them as research and development, coming up with new things, and innovation.One example is in the sewing industry. We were affected, by a pandemic, because it is labor intense. When a team is out, what do you do? We've reached out to all Contracts owners or their contract manufacturing companies and build that synergy. When we're short, we reach out to them.At the end of the day, we're trying to serve the end-user customer. We keep our customers happy, whether we do it ourselves or we do it with partners. They're going to stick with us, and we're going to help each other out.In similar ways, when our competitors or strategic partners are at full capacity or one of their teams was out with Covid, they reach out to us and say, "Hey, can you guys tackle this right now?" Absolutely - if it was within our abilities.Lisa Ryan: That's such an important lesson for other manufacturers to pay attention to. There is enough business for everybody. We might not be thinking that right now because of just what this last year has led to, but you think about the future in those relationships those other companies helped you. You helped those other companies who are more likely to refer business to in the future because they've developed that relationship with you. Kudos to you for being able to step out and create those relationships for happening.Mauricio Barboza: Absolutely, and you're right. There's enough business for everyone. The most important thing that has come out of this is that a strategic partnership is looking out for each other. To try to grow together - learning from each other's mistakes and learning from everything-we have to succeed. It's been a great learning curve. It's been a great challenging time, but it has really benefited the industry.Lisa Ryan: What about the employees that you have working for you? One day you're making packaging, the next day you're making masks or seals, or you're just completely changing the product overnight. How were how did that work with your team and get the buy-in for that to happen?Mauricio Barboza: I feel that that staying fresh. It is well-liked by our people because it's not the same thing, every day, every week, every month. It keeps changing, so is that continuous growth is that the continuous learning process doing things differently. It's not every hour. Everything changes so often that it keeps us fresh in a way. That's very attractive to us for a lot of the people that work here.Lisa Ryan: It sounds like it's built into your culture. You're naturally able to make that shift when everything changes overnight. That was your business model, to begin with, because of everything that you do there.Mauricio Barboza: Adapting to change is at the core of our business. That's what we grow with the challenges and opportunities. When companies don't want to do something, we see that as an opportunity to help them out and grow a business and that division. I feel that our culture sees that. We champion the good stuff that is coming out of all those changes. We try to keep a good attitude.Lisa Ryan: What are some examples of working with your team - of acknowledging them, of sharing that good news, and positivity? How are you doing that in the plant?Mauricio Barboza: Well, we set up attainable goals, and we give teams tasks, and if they accomplish the task, we reward them. We have a program where if you go beyond what we have asked, we have this room that will collect things that we have gathered from other companies that you went to that room, and you can pick something. It keeps them motivated. We want to express our appreciation for them because we felt people were everything. As much as we've tried to embrace technology and automation, we really need to take care of people.Lisa Ryan: That's a great idea when you have things given to you from other companies because it's a really inexpensive way to reward the people who are working with you. Are there any other programs or things you're doing to keep that motivation going and keep people inspired?Mauricio Barboza: Continuous growth is one of the reasons they join Junko industries. They're not going to stay at the same place for a long time. We're going to train them. We help them grow. They can grow within the company at a swift pace because of what we do, which is very encouraging. That keeps everybody motivated. We have a set of tests. If you exceed those tests, you will get rewarded, whether it's an object, or PTO, anything that will keep them excited.Lisa Ryan: That's a great way of expanding the skill base of your employees. The ones that are looking for tasks, you can pinpoint them as your future leaders. They can grow with the company because it sounds like you do many that promoting from within.Mauricio Barboza: Sure, absolutely, and it is exciting. I mean, if you think about it, they're always asking us what's next. One of the newest things right now is this fulfillment Center that we're in the process of building a 300,000 square foot facility. We're turning into a fulfillment center with state-of-the-art software, and technology, and whatnot. It is exciting that they know they're working for a company that is willing to grow at the industry's pace, if not faster. Trying to take care of the problems is current, and we do our best at it. We tell ourselves that we are experts at becoming experts, and that's how we have done business since 1988 since we've been in business.Lisa Ryan: One of the other things that we talked about was that you have about 60% of your employees are full-time, and then you also use a lot of temporary workers. What are some of the ways that you manage that, too, to keep basically everybody happy and keep that turnover rate down?Mauricio Barboza: That's been a challenge with corporate. That's what has been one of the biggest challenges for us. Before covid, we could ramp a team in a matter of a week or weeks because of the Labor-intensive projects we have done in the past. Now that's different, and that's why we're shifting towards more automated stuff.  We push all of our employees to think of the company as part of theirs, grow within the company, and support all the operations we do and bring in.Lisa Ryan: It sounds like that's probably what one of the things that are keeping you up at night is dealing with that the change, the automation, and bringing in new people. What else is keeping you up at night?Mauricio Barboza: Well, I think the pandemic has told the industry that we need a backup plan. We can no longer be in business without having a backup plan. We need to adapt to everything that is shifting forward. If you are one of those companies or individual thinking that are just waiting for the storm to pass, waiting for this to be over so we can go back to normal, that's not going to happen. You're going to be left behind.One of the things keeping us up at night is having that backup. Automation is part of it. New technologies are part of it, listening to the industry, fulfillment centers, and move forward with the industry.Lisa Ryan: From a networking standpoint, in getting together with other manufacturing colleagues, what are some of the things you would like to learn from them? And what are some of the things the ideas or strategies you would be willing to share with your manufacturing colleagues?Mauricio Barboza: Sure, well, I will be willing to share all the ways that we have learned that failed and succeeded and how to learn about ways that they have accomplished. What have you done? What have you done wrong? What did you learn in the process? Because failures are actually good, failures help you grow. Learning from those failures so important as a company. If you can learn that from a different company making their own mistakes, it's even better.I'm willing to share our stories, how we have grown as a company, and our challenges. I would love to hear from similar companies.Lisa Ryan: The pandemic has speeded up a lot of the technology. It's put us light years ahead of where we would have been had it not been for the pandemic.Mauricio Barboza: I see that pandemic as a technology accelerator of the century. I mean, really speed up the process. It was going in that direction. It happened faster now.Lisa Ryan: If you were thinking about all the things that you've done in this last year, what would be your biggest piece of advice or strategy that's worked best for you, that might help someone else listening to this podcast today?Mauricio Barboza: Sure, keep up with what's going on in the world again. Bring him back. Don't get used to waiting for the storm to pass. Learn how to dance in the rain. We need to learn how to dance under the worst circumstances because that's what helps us grow. If you're one of those waiting for everything to pass, are you going to be left behind?Lisa Ryan: Mauricio, it has been an absolute pleasure to have you on the show today. What would be the best way if somebody did want to connect with you what's the best way for them to do that?Mauricio Barboza: sure, they can do it via email, whether my personal email or Jonco industries and to leave you my email addresses.Lisa Ryan: I'll put that in the show notes so that people can click. Thank you so much for being on the show today it's been great talking to you.Mauricio Barboza: Thank you, Lisa. I appreciate it.Lisa Ryan: I'm Lisa Ryan, and this is the Manufacturers' Network podcast. See you next time.

Connect with John Millen:Website: www.MillenGroup.comLisa Ryan: Hey, it's Lisa Ryan, and welcome to the Manufacturers Network podcast, Live Edition, and we're excited to introduce you to our guest today, John Millen. Now, John is a benefit hacker over the last 20 years in the employee benefits industry. He became annoyed and upset that there were not better ideas to contain health care costs and improve benefits for employees, having been a victim of a high deductible medical plan himself. He decided to radically change the way health care plans are presented to employees, to employers.John is the Millen Group's co-founder, an independent benefit advisory firm located in Richmond, Virginia. And over the past two decades, manufacturing has been the number one industry that they've been able to improve. So, John, welcome to the show.John Millen: Great. Thanks, Lisa. Thanks for having me on. Appreciate it. Absolutely.Lisa Ryan: Share with us a little bit about your background and what led you into employee benefits and particularly your focus on manufacturing.John Millen: Yeah, so absolutely. So my training from college was as an engineer, mechanical engineer. And in that field, you're solving lots of problems. Yes, it's about math and physics and all that stuff. But you're solving problems. And several years ago, I remember going through the process of open enrollment for myself. I picked a medical plan, which happened to be a very high deductible medical plan, thinking that's all I needed. I didn't have any advice. I just picked it because it was the cheapest and ended up learning the hard way that I picked the wrong plan in that process.And then, over that period, after that, you have a sting like, oh, my gosh, why didn't anyone tell me that it worked this way? We have provided different types of benefits for almost 20 years to small companies and big companies. I started seeing what was being communicated to employees from the front of the room, and I got irritated, and I got mad. I'm like, why are they not saying this way?And then not saying this? And it started from that. I wanted to fix the problem. I was tired of seeing other people get burned by different things. And there were some mistruths, not intentional people aren't bad people, but they just didn't know what they didn't know. After several years of that, seeing companies do things a certain way, we wanted to hack it in a good way. Benefit Hacker. It was very catchy. It gets people's attention, but it's like, hey, there are things you can do that you've been told may not be the right thing, especially over time.Everyone says, right, right. Who wants to sell insurance? Like I didn't go to college to sell insurance. And I don't love selling insurance. I love solving problems. And insurance is a mechanism. It's a risk mechanism that is always changing. So that's kind of what led me to this industry.Lisa Ryan: Right. And it's something that with benefits, it's always on our mind. I know for me, with my husband being furloughed last year for ten months, that was the one question that kept popping up is, holy cow, what are we going to do if he gets laid off and we don't have benefits and going to the market or using COBRA or whatever? So from my own experience, thank goodness our Christmas present was that Scott got called back to work in December, and now we don't have to worry about that anymore.But when companies are thinking about employees and, you think that, OK, well, employees, they're an asset versus a liability. But from our conversation, before we were talking about that, they look at their employees as assets, but they don't generally treat the employee benefits spend that way. So what do you see as far as the investment versus expense? Fascinating.John Millen: So it's a little thing I do when I get on an early call with the president or the CFO of a manufacturing facility, I'll just ask a simple opening question: Do you view your employees as an asset or a liability? And they kind of chuckle. They go, well, I have a few liabilities, but they're mostly assets, like, OK, we agree with that. I said, so then the money you're spending the three-quarters of a million dollars on your benefits for the year you're spending, do you view that as an expense or an investment?And it trips them up, and it's because they want to say expense. After all, it's an expense that comes off the top line. But you invest in assets. Right? So it's an investment. And the reason I talk about that is because so many people get it. Focused on the wrong thing, if you're spending three-quarters of a million dollars every year, what is the value you're getting from that? And sometimes the value is not very good.For the client we worked with last year, the money they spent was not like we're not maximizing the dollars spent. And so that pivots the conversation a little bit from insurance, like who cares what the deductible is yet to. Let's maximize it spent because it's a big dollar amount.Lisa Ryan: Well, not only getting the benefits for the employers themselves but just as a recruiting tool to get people on board, because when you have employees that are looking at you, that's one of the main things that the newer generations coming into the workplace right now are concerned about because they see how health costs can just destroy their family's finances. So just looking at they're investing anyway, making sure it's a good plan. But from your standpoint, also making sure that they're maximizing what that spend is.John Millen: Absolutely. And you said something just there. People are more aware because of covid probably right now their health care. They're more aware of, like, how much do I have to pay out of pocket? And you talked about retention. Here's a great tip that everyone can use right away, no matter what industry. But this is something we integrated with our manufacturing clients is tell the applicant upfront about your benefits. Don't wait until a new hire orientation. And I think it's a strange reaction.I get some people who are like; I don't want to do that. Like, well, is that because you have crappy benefits? But if you have good benefits, you should tell them if you have pretty crappy benefits, yet you may not want to say to them. So we started doing that where you take your benefits book, right, that you create and maybe it's just the first two pages of summary, and you show them these are all the different benefits we provide.You want to show them the cost if you don't want to. But that is a recruiting tool because I guarantee you they're thinking about it in their head. They're thinking, what are the benefits like? What are the benefits? And ninety-nine percent of employees will not have the courage to ask usually. And so HR professionals, recruiters are surprised. They want to see the benefits. What do we give? What do we offer them? That should be a part of the applicant process.Lisa Ryan: If you have a good benefits package, when especially when it comes down to they're looking at a couple of different employers to join, they have one employer who has been transparent and has shown them the benefits, and they're pretty good benefits, like, wow, this is cool versus nobody else sharing that information. So it sounds like it's certainly giving them an edge. Just the fact that they're providing that information and kind of setting in that employee's mind that, hey, this might be a pretty cool place to work.John Millen: Here's another thing that that I would highly suggest. How many times do you go to a website for a company and find out careers and says benefits and it says health insurance, dental vision, whoopty do like just having health insurance today is not good enough.You have to have a good health insurance plan. This is where the conversation pivots a little bit towards your spending half a million dollars or a quarter of a million dollars or a million dollars or whatever it is.Are we maximizing that because your health plan needs some tweaking, needs some updating? Not only telling them, showing them the benefits, but don't just say we have health care because some people find out that means a six thousand dollar high deductible plan with no other coverage will be an issue?Lisa Ryan: What do you think are the benefits that have the highest impact on employee attraction and retention?John Millen: So great question. Health insurance, right? Medical insurance. It's number one. It's the thing that can devastate a family more than anything. So definitely your health insurance package. But I would say to look at that is not just health insurance. It's your health care benefits. I mean that health insurance is Blue Cross Blue Shield, a three thousand dollar high deductible plan. That's the health insurance. But the health care benefits might be things you layer in on top of that bundled in there to make the plan a lot more robust.So definitely health insurance. But think of it, not just health insurance, but health care benefits. So what are some examples? What's been popular recently is telemedicine. We saw it kind of spring up last year. Hey, I can talk to a doctor over the phone or video at home.Why? Because you couldn't go to the doctor and has been around for a decade. This is not new, but it took that moment for the industry to get shaken that we've been talking about it for six years. So we will add cost or investment a couple of bucks a month for people into the medical plan, even though they may have it because it enhances the benefit and makes it so much better. There are other benefits you can add in there, whether it's first dollar coverage or different types of supplemental plans that can take the perceived value or the actual value of the plan from here to here.So not just health insurance, it's health care benefits, that whole little package, I would say that's number one. Number two: And this is going to surprise a bunch of if I told you, what are the three top benefits that you would ask for at an employer? What would you say were the top three?Lisa Ryan: You would say health, wealth, the health benefits of vision and dental, I guess, would be the top three and the three most popular.John Millen: But I would say you probably need to insert in their disability insurance.Lisa Ryan: Oh, yeah, I have mine. I have a friend who had a tree fall on her when she was riding in the Metro Parks, and thank goodness she had disability insurance. Whenever I think about canceling my policy because I don't want to pay the benefits premium, I think about what she went through and what saved her because she had a disability.So, yeah, I am all over that, and I've had my interest for, yet no one ever went bankrupt from a dental bill. No one ever went bankrupt because they couldn't get glasses, and so it's one of those just little nuances. Yes, you're going to have dental. Yes, you're going to have vision coverage. But sometimes what I tell them is, look, if you don't have employer-paid short or long term disability or both, maybe be making your dental vision partially voluntary or one hundred percent voluntary and give them a five thousand monthly benefit, because it's something that is not discussed.John Millen: It's not sexy. It's important.Lisa Ryan: When I see that Ramina popped in and said that she's been using her telemedicine for years for her parents, I mean, I think that that was one of the things that covid just brought in is I would have never thought that I could visit my doctor by phone. But the fact that you can't it's like that's just one of the many technologies that this pandemic has forced us into doing and making it normal and normalizing it because I just get my doctor on the phone and show him what's going on and it works.John Millen: So it's been interesting. That's right. A lot of the medical plans have it. We don't always bundle it. And external, we do it when the. So here's an analogy on most medical plans, you have vision coverage. Is it very good vision coverage, you get an annual exam as part of your medical plan, does it pay for glasses? No. Does it pay for polycarbonate lenses? No. So, yeah, there's vision in it.What I see, though, is some of the telemedicine plans, not all the time, need to be enhanced a little bit. And so that's when we say let's make it no cost, there's no fee ever. You can add your whole family. So these are just little things. Little tweaks. It doesn't cost a lot of money, but minor tweaks.Lisa Ryan: Right. And this is kind of funny. Romina shared that she has a friend of hers who's a doctor and can do that while on vacation. So, again, we're looking up. Not that we want to be working. Twenty-four seven, for goodness sake, because we do need to take advantage of those vacations. But it gives us so much more flexibility than what we used to have when it comes to our benefit. So what are some of the things that you're seeing that maybe employees, employers are missing when it comes to their benefits, some of the biggest mistakes that they're making?John Millen: So another great question. One of the things I've seen as a little bit of a trend, and it's going to sound a bit controversial. It's not mainstream as it's been around for the past 15 years. There's been this movement towards consumer-driven health care, meaning, hey, you spend three weeks researching that big screen TV at Best Buy, but yet you only spend five minutes when you need your knee replaced. You just go where they say there's a lot of truth in that, that we're not aware of the cost of health care because health care is not the same as health insurance.So that is a big issue that's trying to be fixed. But I would say over the past 15 years. There are some cases when employees will not be a consumer of health care. They will go where their doctor says, period.And I've heard for so long now, this is not all the time, but I've heard so long. And they say from the front of the room, next time you need a hip replacement, just go online. You can look at the costs. You can look at this.And I think I have five thousand dollars out of pocket, max. That's all I'm going to pay. I don't care if it costs one hundred thousand or six hundred thousand. If my doctor says this is where we're getting it done, I'm going to go there. So there are some cases where consumerism is not working. In some places, it is prescription drugs, outpatient testing, things like that. It's working. So here's what I would say is look at your employee benefits options.So some companies have one option. Some have to. Some have three, some have five and six, which I think is crazy. Ridiculous. Look at those plans and ask yourself, does it have prescription coverage? Because we're finding that prescription drugs are a third of the claims, and you can't get away from it on TV, see all these fancy ads. But prescription drug costs are going up fast. So if all you have are high deductible plans, meaning no prescription coverage until you hit your deductible, it's painful.And that's what's happening with the rationing of insulin. People are cutting back their insulin because it's so expensive, and it's causing people to die from it. So this is a straightforward little thing you can add now. Is it does it add more cost? Yes, but it's an investment. And I'll give you a quick story. I was talking last year, I got a call from one of my manufacturing clients, and they had a new hire employee from a different state that was going to work for them.And he had a bunch of benefit questions. So the HR manager called me. She said, would you mind talking to him? He's not an employee yet. He's looking. And I said, sure, I called him. And he told me he said, my prescription cost is two thousand dollars a month. Do they have any kind of plans that will help pay for my prescription I'm taking? I looked up the prescription, I looked at the plan.We had redesigned, we had added back in prescription coverage. And I said I said, Greg, it's going to be 40 bucks a month for the copay. Forty dollars a month versus two thousand a month. That caused him to move from North Carolina in, among other things, not just benefits, but that's a retention tool, and that's a big thing that's missing, is having good prescription coverage.Lisa Ryan: Wow. Well, so when you're looking at the fact that they're doing spending three-quarters of a million dollars on health insurance for their employees every year, what is the best way to get to maximize that spend?John Millen: So the first thing I would say is knowing your five-year cost and your five-year projection. What is it going to cost you over the next five years? I asked this question a lot. How much are you going to spend on your health care or benefits package over the next five years? And I get blank stares. I don't know not only what you are going to spend, but it's compounding because most of the time, it's going up to eight to 12 percent a year.So it's not just one plus one equals two. You're adding more on top of that. We show we show a potential client. This is what you're going to spend. They see seven million dollars. I say, all right, now it's perspective. You can no longer assume that eight percent renewals are good. I hear this a lot in our industry. I talk to a client. We just talk to our broker. And they said we got a five percent renewal, and that's good, and we should just move on.I don't think that's good because it's been five percent and 12 percent and twenty-two percent. It's gone like this. So I think you've got to look at the thought out into the future and say, how do we bend this curve down? I don't see a lot of that happening. I see a lot of reactionary things. Last minute. Here's your window, Lisa. We just got your renewal back. It was a 12 percent increase. I got them down to eight.I think it's the best thing you should take, not what does that look like five years from now? And can we try some new things.Lisa Ryan: So as we're getting to the end of our time together, what's your number one tip that you would give to people listening today regarding what they're doing with their benefits to make them better and to use it as an attraction and retention tool?John Millen: Wow. So, one, there are lots of things that I would say. From personal experience, working with tens of thousands of employees over 20 years is making sure that investment that you've created, that package that you're all of your employees understand, are educated about it and know how to use it. The biggest thing I see, especially manufacturing, right, John? We're running presses. We're running machinery. We're running porcelain tile. We can't stop what you need to give the employees time.It's some way to carve out 30 minutes or 60 Minutes one time of year and explain to them what they are, how they work, and what's right for them. This is how I tell employers you're spending seven thousand dollars a year on average per employee on their benefits.If they get paid...

Lisa Ryan: Hey, it's Lisa Ryan, and welcome to the Manufacturers' Network podcast. I'm excited to introduce our guests today, Teresa Lindsey. Teresa is the CEO of Channel Products, a privately held Cleveland-based manufacturer of components systems and technologies for the gas appliance industry and beyond. Recently she's launched two new divisions of Channel, Spotted Yak, an engineering design firm, and Haute Door Life, an online retail entity, offering high-end curated outdoor living products. Channel has manufacturing facilities in both United States and China and a distribution Center in Europe. Under her leadership, the company's revenue has grown by over 100%; profitability has increased by over 1,000% the overall employee base has tripled. She has built a culture based on high levels of individual and corporate performance and charitable service. Teresa, welcome to the show.Teresa Lindsey: Thank you for having me, Lisa.Lisa Ryan: Well, that is quite a background. I'm so excited to hear about your journey regarding how you got to where you're at. We're going to talk about the culture you created. Please share with us a little bit about your background.Teresa Lindsey: Thank you so much. I had a different life, a unique life. Some might say somewhat disadvantaged by comparison to others. I grew up in a world that I didn't have an emphasis on career or education. I had to navigate my way through all of that into adulthood and took several different paths. There are many splits in the road in that journey, but I finally ended up manufacturing several years ago. I was going from General Motors into Haute corporation, a publicly held friction manufacturer. Then, after that, with the private equity firm who owned Haute and who owns Channel. Through that ended up at Channel, and the way it got here is unique. We purchased Channel; I was with the private equity firm. We purchased the company, and I came in for about six months to help them operationally. Let's see how we can improve things; let's improve morale. Let's dig into the meat of the company. We felt like it had good bones. Let's see what we can accomplish. During that time, we discovered that because it was a local company, we were busy on due diligence with several other companies. We missed some things, and so it ended up being not exactly what we thought we were getting when we purchased it. Let me say it that way. What ended up happening was an executive decision made by the private equity firm, the ownership, that they would replace the President. I was in that meeting sitting there with the owners, and I just felt it well up inside of me, and I just said, give it to me, I can do it. I can run this. I can fix it, and I can make that happen. That was nine-plus years ago. They took a chance on me, and they gave me a shot. They had no reason to do that or to believe that I could do anything I was saying that I could do. But they did. They believed in me, and here we are today. So that's my journey here to Channel Products. It's been a fun ride with many intricacies to it, a lot to overcome, and a lot to learn, as you can imagine. Many moments were growing moments for me, first times. Here we are. It's been fun, and I'm grateful I surrounded myself with people far better than me. That facilitated the climb.Lisa Ryan: When you were looking at the first days of Channel nine years ago, you don't have to go into the details as far as what you thought you were getting but didn't. Share with us the journey as far as the culture, the way it was, and some of the things that you saw as an outsider coming in that oh I can fix that. What happened with the employees? How did you finally get them to buy in - because we know this whole process takes time. It doesn't happen overnight. How did you take it from day one - brand spanking new off the street - to what you've created?Teresa Lindsey: I would say that that we're still on the journey. Culture is an ever-evolving thing. The word culture is thrown around so lightly. These days, everybody uses it. We use it all the time. To me, there's so much more than the buzzword culture that goes on in an organization.Unfortunately, when I first stepped in, it was a culture of fear and intimidation—lots of silos and a lot of breakdowns. I don't want to say infighting is strong, but dissension if you will. It was it was difficult. The culture mirrored the leadership, and the business mirrored all of that. It was walking into a great challenge as well as a tremendous opportunity. There was no place to go but up. To heal and to restore, we started to put into place concrete things.The first thing I did was I stepped in, and I had scheduled a meeting with every employee, all of them. I called it "school, the Pres," and I sat down with each individual. I had a list of five questions at the time. I asked them all the same questions. I took a few minutes to get to know them personally -tell me about your life, your family, where do you come from? Then I asked them very specific questions.One of them was, "We snap a finger, and you're me, you're now the President of Channel Products. What's the very first thing you change. What's the first thing that you think would have the greatest impact and make a difference here. What are you afraid of?" Having those conversations started to lay the groundwork for some much-needed change.From there went to work, facilitating several different things, one of the early things that I did was 360-degree peer reviews. I did them a bit differently. Rather than doing a survey, having people fill out opinions, and all of that, I listed every employee's name and put an ABC D or F next to their name and then yes or no. I handed that list out to every employee, and I said I want you to go through, and we had in a team meeting defined all of the attributes of an A player. I made sure that it was their definition, not mine. What is your definition?Here's what's interesting about culture back then. Everybody was listing A player attributes because it was almost like a finger-pointing exercise. "Communication is an A player," while they're looking over here at Sally, who is not good at communication. It was almost like that. Everybody was just frustrated. We defined 34-36 attributes. Then I rolled out the 360-degree review. It was for them to check to go down each name, are they in A player B, C D or F and then yes or no. If you started your own company today, would you hire them? It was very simple, very clean. There was a small comments section that you couldn't offer opinion or thoughts or complain, but what you could do is, if you mark them anything less than a player B or below, you could list up to three of those attributes that we had defined as an opportunity for them to work on. So no chance to shred somebody. I don't hear you're complaining but let's dig in.I took the results for each individual and put their name down A, B, C D E, F, yes or no, and then just put a number, and you got seven a's 20 B's, 3 C's - type of thing. As it stands, only two people would hire you, and the rest would not. I put those in an envelope, sealed them, and pass them out at the next meeting, which we at the time called one team meetings, now they're called Channel chats, and pass them out. Then the real facilitation began. As you can imagine, as people open those envelopes and pulled that out, they saw that they're sitting in a room full of peers and all those peers had opinions about how they were not necessarily an A player. There were only just a couple of people who were viewed as being very strong A players.That was a starting point. Then it was about facilitating. Okay, we are going to create a standard high in the company for performance. Today, we make it very difficult to get into our company - intentionally, it's by design. We're going to set the standard, really, really high, and then we're going to watch the fallout. Some people are going to make it. Some people aren't. For those of you who aren't going to make it, I'm going to help you transition into something that's an excellent fit for you. We're going to do this together because I care about you, and I want the best for you and your families. But this just might not be the right place for you going forward.That was the beginning of it all. Since then, we've implemented a number of powerful cultural things that we do and maintain That have evolved over the years into a very mature, very rich, and robust culture.Lisa Ryan: And for the people who had the three things that made them, not an A, was there some recourse? Did you offer them some training, some guidance support? I'm assuming that that meeting was probably filled with a lot of shock and hurt and all the other emotions that go along with that. When you're thinking you are "all that in a bag of chips," and you find out, well, maybe not.Teresa Lindsey: I will say that I had a revolving door after that. People in tears, people angry. Other people took a position of indifference, "whatever, I don't care." Because they couldn't handle the results, the only person who saw the results were the staff members who had a specific group of people reported to them. They didn't get to see everybody's results. If they had, say ten direct reports, they got the results of those ten direct reports to help coach and mentor them through that process and help them develop the skills where the gaps were.Lisa Ryan: It sounds like again, I'm going back to having that first conversation right off the bat before you even build that level of trust to have that in-depth conversation, so what was that process like? They were coming from command, control, and fearful environment. Here's this new person coming in - what's going to happen? What were some of the steps that you took to build that trust and to be able to have those difficult conversations?Teresa Lindsey: One of my very first meetings with them when the ownership introduced me to the workforce, I said to them, look, there's only one thing that matters here, and that's trust. I am going to trust you to show up every single day and give 120% of yourselves. That's my expectation. I'm going to trust you to show up here and give everything you have to be loyal, supportive of our future to our growth to their culture and what we have going on. In return, you have to trust me to make the very best decisions for you and this company. Some of it's going to feel personal but it's not. This is about us building a company, which we're all here to do. Everybody collects a paycheck here to do just that. It's about us building a company, but the way we're going to build the company is by building a culture. I was very clear with them that the only way to get to where we were going was that we had to blow up the culture and then reassemble it piece by piece. In those initial three months, I talked to them a lot about vulnerability. This is going to hurt. We're going to be vulnerable with one another. I was very vulnerable with them. I was also very transparent with them. It's one of my key beliefs as a leader. I believe in leading people in the managing process. We never manage people here. I don't ever let my team say all I manage them, or that's not true. We lead. Nobody wants to be managed. They want to be lead. We lead people and manage the process.The second element to that was stripped down vulnerability to rebuild that trust and so much so that. I put myself out there a lot of times and allowed for open comments and feedback on me. I would intentionally do that, so they could see me being very vulnerable. I believe in transparency.In my years of leadership here at Channel, I am hyper transparent with the people here. The only thing we don't share our people's salaries. We share everything else - we don't break HIPAA laws, but I mean, we share everything else. Whether it's the company's performance or making a tough decision like building a facility in China, I knew that I would have to change my workforce here as a result of that and downsize.I started telling them six months in advance. I started giving them a heads up – "Look, we're going to keep this many people, and I want all of you here. I need you to show me that you want to be here." Here are the requirements here the standards for that. This is how we're going to make decisions about who stays and who does not. This is not personal. It's business. I love all of you as if it is personal. We're going to walk through this together. I met with them more than once a month—every three weeks. I met with the entire workforce, reminding them, this is what we're doing. This is the decision we're making.The interesting thing about that is when it came time to sit down and have those one-on-one meetings with people to let them know who was coming with us to our new headquarters - because simultaneously, we were building a new headquarters - and who was coming to the new headquarters, who would no longer be joining us on our journey as a company. We brought in a firm to help us, transition folks. We gave them all the support in the world, the softest landing you can imagine. We gave them a heads up 60 to 90 days in advance. We had those meetings 60 to 90 days in advance of them having to have a replacement in a job. The firm we worked with actually sat me down afterward and said, "we've been doing this for over 30 years. Never in our history have we had people who have just been told they were exiting the company say through tears, I will miss Teresa and this company. This is the best thing that's ever happened to me. I'm so sad I'm not going forward with them, but I don't blame her. I could have done more. I should have done more."When you talk about transparency and culture, we have a very low churn rate on less than 2-3% of our people leave independently. If we're exiting someone, it's a different story. Most people come, and they plant themselves. It's for reasons, just like that, and that blowing up of the culture and rebuilding it is what has made us what we are.Lisa Ryan: So what's your favorite part of your culture, right now, out of all the good things that you've done.Teresa Lindsey: It's hard for me to narrow it down because there's so much that I love about Channel Products, our people, and who we are. I would say that everybody here is excited and focus and loyal about being a part of something bigger than themselves. That's important to me, and it extends throughout our organization. It permeates in many different ways, and it manifests itself in a lot of different ways in our culture. We go above and beyond for employees.We do unique things. We are a unique culture. We have all the normal stuff - a game room and a gym in our building. We're unique in the way we approach our people. They have the option to work four 10s and take Fridays off. We give them paydays off to volunteer every year. We have a program where they all year long get chips poker chips in exchange for swag and gift certificates and tickets and airlines stuff. We have a lot of different events throughout the year. We do charitable things throughout the year. Our people appreciate all of that, but they're fiercely loyal to just the company's vision and making it successful. We support people on the back end. We've had many people here who have been diagnosed with, unfortunately, life-threatening illnesses that happen when you have many people. I believe we reap what we sow as an organization. I had one associate who did not show up to work for over a year because he struggled with cancer and unfortunately passed away. I never took him off of our payroll. I kept him on our payroll to continue to get benefits to continue to take care of him, even though he was not contributing from an actual business standpoint. We've done that a number of times here for folks. I believe that when you're good to people, and it goes beyond, "we had a party for them and gave them pizza." When you're genuinely good to people and they show up, and they see those examples, and they show up every single day, knowing wow if I were in that situation, this is how they would treat me. This is what I can expect from Theresa in the organization. That goes a long way to creating loyalty and fostering teamwork and camaraderie and stuff so.Lisa Ryan: Well, and when you give your employees time off to do volunteer work, what does that look like.Teresa Lindsey: So we have our Channel cares portion of our organization, and we do some pretty cool philanthropic stuff. COVID obviously, last year was a bit challenging with those things, but we've done things. One example that I give because everybody loves it and other people have emulated it is that we took the entire company into four teams. We surprised them. They showed up that day, and we said, surprise, this is what we're doing today. We sent them out on limo buses. Each team had a limo bus, and $250, we bought them matching T-shirts for their teams and everything it was a competition for Channel chips. I mentioned our elevate program with the Channel chips.Employees had to go out into the surrounding community. They had three hours to do as many random acts of kindness that they could do. They just had to figure it out as a team and tell the driver where they wanted to go.Where do they go, and what are they going to do? And it was the spur-of-the moment. There are categories like who can do the most random acts of kindness? Who does the coolest, most unique thing? Who can bring back the most money? Who can just do genuine random acts of kindness without spending money? We had all these categories for winning, and that day they went out and did over in three hours. We did over 100 random acts of kindness - everything from coloring books and crayons to the hospital's children's unit. They took stuff to the fire department and the police department. They took Gatorade to construction workers. They stopped and paid for gas. They went to a drugstore, found a woman standing in line, and paid for her prescription. They had to take a picture of everything they did, verify, and text it back to us while they were out doing this. We were keeping trackback at the home base. One team took a picture around a woman in a dental chair - they paid her copay that day—so unique things.That extends over into the volunteer days. We allow our people to volunteer any place they want. There is a form they have to fill out and have signed. It's not a day on the boat. They have to go and give up themselves, but we pay them to do that. A lot of times, they'll get together as a department, or different people in the organization will pull together. We did shut down one entire day, and we paid all of our employees to go and work at the Cleveland food bank.We do a number of things like that as part of our philanthropic arm. We try to be unique rather than just cutting a check. I feel like anybody can do that. We try to approach it with maybe some more teeth and grit.Lisa Ryan: Right, so what are some of the things that keep you up at night.Teresa Lindsey: Thinking of how to leverage this wave that we're on as a company. I almost feel guilty saying this amid the challenges of a...

Connect with Scott Gauvin:Website: www.macresco.comLisa Ryan: Hey, it's Lisa Ryan. Welcome to the Manufacturers' Network podcast. I'm excited to introduce our guest, Scott Gauvin. Scott is a seasoned change agent with over 25 years of experience successfully helping organizations realize their potential.Throughout his career, Scott's focus has been on driving performance gains through organizational alignment and a progressive operation strategy approach. He has advised companies the world over and across a wide range of industries, including pharmaceuticals, biotech, consumer goods, medical devices, agriculture, packaging, legal services, banking, food processing, and industrial manufacturing. He holds a BA from the University of Massachusetts, an MBA from Boston University, and is a Six Sigma black belt. Scott, welcome to the show.Scott Gauvin: Thank you, Lisa. It's a pleasure to be here.Lisa Ryan: So share with us a little bit about your background and what has led you into the work you do, particularly with lean.Scott Gauvin: Early in my career, I worked for a manufacturer and got a chance to play in many different areas and learned a lot about some of the issues that plague manufacturing companies. I realized a disconnect between some of the changes we were creating and how we created that change. Throughout many experiments that went awry, we learned that one of the things we struggle with is implementing sustainable change.When we're implementing and practicing lean, one of the things that I've focused on - especially the last probably 10-15 years, is how to create change, but more sustainably. My focus is on the human element of lean practices.Lisa Ryan: That was one of the things that we were talking about a little bit before we started the interview because manufacturers are pretty much familiar with lean. Everybody, at some point, is doing lean. You mentioned that a lot of them are only doing about 50% of lean. So what are they doing rightScott Gauvin: Lean comes from the American executives' work who studied the Toyota operating model back in the 1980s. They've adapted it to their operating models, but there are two parts of that Toyota model: one is continuous improvement, and the other is respect for people. Many equate the respect for people as being nice to people. You should be nice because that's the right human thing to do, but the idea of respect for people isn't about being nice. The respect for people part is Toyota's operating mindset, which forms their culture.The respect for people pillar is about the mindset you establish. The focus is on the human element of change. How you're incorporating every stakeholder into the change equation and letting their skills, their talents, their knowledge, their experience transform the organizations. Manufacturers get this wrong because they focus only on the continuous improvement side of these two pillars, and they give lip service to the respect the people piece. They implement the tools and then focus on creating cost reductions or productivity improvements.Lisa Ryan: And why do you think they are they're thinking that? Do they perhaps feel that those soft skills are not contributing as much to the bottom line? Where is the disconnect?Scott Gauvin: I think it all comes out of what's driving the need. What's driving the executive is we've got to get our numbers up; we've got to improve our performance, and so, what are the tangible things that we can do that? We can see that we can affect those. There are many tools in the lean methodology that helped drive change that will ultimately reduce waste or increase productivity. The problem is that a lot of those changes aren't sustained. There's an industry week article floating out there that they did a study that suggested that as much as 97% of lean efforts fail to achieve what they set out to accomplish.Most start their lean efforts with the wrong purpose. They set out to reduce costs to eliminate ways to improve efficiencies; thus, they focus on the metrics instead of focusing on a holistic approach, which is a combination of the tools and the mindset in the culture around the respect for people aspect. The purpose is around the respect people piece. It's not about being nice. The purpose is to engage the stakeholders to create more value. That's why we're doing this continuous improvement thing.If we're focused on just reducing costs, that's got a shelf life that's not very long. This is why we often see a lot of clients who call us back to help them. It's because they've done lean, or they've had some lean initiatives they didn't stick to. The efforts aren't sustained, and so they're asking us to help them with another approach. What we're seeing, when we do an evaluation, is that there's a lack of understanding and implementation of the respect of people piece.Lisa Ryan: it's interesting because you think, with only two pillars, that would be 50% each. 50% of the time, we're focusing on continuous improvement, and then the other 50% is that respect for people. For the companies that are making that mistake, what would you say that their ratio is?Scott Gauvin: There are two kinds of organizations: there are organizations who have been doing this for a long time and have come around to understand what the respectful people piece is. They understand that it is a mindset shift. It is a cultural shift. It's the way we operate as opposed to. We do the continuous improvement side are the things that we do -the immediate needs. We focus on continuous improvement. For the average organization, it's like 98% continuous improvement tools and maybe a nod to the respectful people piece. There are very few organizations that I've been to that do a good job with the respect for people piece because it focuses on the mindset and the culture of the organization itself.Lisa Ryan: And what are some of the things that you advise your clients to start to do to get stronger in that respect for people aspect of lean.Scott Gauvin: It goes back to the mindset. One of the things that we do with our clients when we're heading down this path is when we look at why they are doing lean in the first place. What's the purpose of it? It's almost always to improve the operational efficiencies and reduce costs, in some ways. Then we migrate the conversation over to the people aspect because if they're people, they will be more capable of better buy-in. If the people were more engaged, the result would be the productivity improvement, the reduction of costs, the elimination of waste, and so, a lot of the conversation is around what are the right mindsets that the organization needs to adopt to have it be part of the way we do things as opposed to creating these events that almost forced the change to happen.One of the first things we do is an evaluation of what is the current mindset and what are the mindsets that we want to migrate to. Then we create a path to migrate from the current mindset to whatever that future mindset is that we want to have.Lisa Ryan: So does that start with an employee survey, or how do you figure out what the mindset is?Scott Gauvin: So the mindsets are usually dictated by leadership. Whatever the leaders think usually permeates through the rest of the organization. It's a conversation with the key leaders in the organization around what do. I'll give you an example: one of the questions that I ask when I sit down with the leadership team is, "On a scale of zero to 100, what percentage of the employees at this organization come to work to do their best every day.? The executives usually will come back somewhere between 25 to 80%. That gives me a sense of where their mindset is in terms of the employee. I start to describe to them that they should think that the answer to that question is 100%. Now, what they'll say to me is, "Oh well, but I can tell you the guy. I know the guy that doesn't come to do his best every day." I explain to them is it's not about that guy, it's about your mindset. How do you see the people in your organization? Because if you see that only 50% of them are coming to do their best, well, then guess the decisions you make, how you resource, the policy decisions you make, the change process, and the changes you make. Because now you're making changes, based on the 50% of the population is trying to get one over on you. That drives all kinds of waste in itself. The first mindset shift has to be with the leadership that everyone comes to work every day, thinking that 100% of the people are coming to work to do their best and if they're not doing their best. What is it that's getting in their way? What can I do to remove those barriers? That's one of the first ways that we do an evaluation; it's a conversation.Lisa Ryan: It sounds like it could be a difficult conversation if you run into a leader that comes up right off the BAT and says only 20% of my people, and that's how they're seeing it that's such an interesting perspective. How do you have that conversation and get that leader to start thinking it's not my people it's me.Scott Gauvin: It's not my job to necessarily change their mind it's my job to create the environment that hopefully inspires them to reconsider their approach. What they've been doing isn't working, so they want to do something different. I'm proposing a new approach. If you change your mindset, you change your thinking; you change your approach because if you want to change the outcomes, you first have to change your mindset; changing your mindset will then drive a new set of behaviors. Those new behaviors we can then form into new habits those new habits, then ultimately create the outputs are the results are the outcomes that we're looking for. It's a process if they have a better path to get to those outcomes, well then they'd probably be pursuing it, and so there are occasions when I've had an executive say now I'm sticking to my guns it's only 20%, and what I'd say is that I can't help you. If you're not willing to change your mindset, we're not going to change behaviors. If we don't change behaviors, we can change habits, and if we don't change the habits, you're going to get the same outcomes that you've always been getting.Lisa Ryan: Well, so when it comes to mindset changing, what is the very first thing that a leader listening to this podcast may do to get started.Scott Gauvin: Thinking about what is the intention behind the behaviors that they're engaged in. Why are they making that decision? Are they making that decision for something that is for themselves, or are they making that decision for something beneficial to those around them? That's the first challenge you can use to evaluate do you have the right mindset or not if the if it's so that I can get my numbers up that I can look good or so that I can achieve my goals if you're saying a lot of me and my or I the chances are you've got a tainted mindset. If you're saying to help my team to help my people to make it more effective to get more their voice into the conversation to utilize more of their skills and talents and knowledge and experience, well, then you're probably on the right path. There are degrees there that you can look at, but the first thing would be to look at yourself and evaluate the behaviors you're engaging in. Are you doing those things for your intrinsic reasons, or you're doing them to help others around you.Lisa Ryan: It reminds me of going through sales copy or speeches, or whatever and doing "I" surgery on it when you're removing all of those "I's" and looking at the needs of that customer that prospect to that audience member. It sounds like that is a good beginning step for people is to do some "I" surgery.Scott Gauvin: The other thing I always come back to in these change efforts, we always talk about getting buy-in. I think leaders can improve their odds of success by getting better buying, and buying is a combination of creating clarity and listening. If you want people to buy in, first they've got to understand what they're buying into and why leaders don't do a good job of creating that clarity. You're on a need to know basis, and right now, you don't need to know. That doesn't work for any change effort. The second is listening. People need to express their concerns, fears, and disillusionment of whatever the changes they need to be. They need to have a platform where they can disagree debate it out. Once they've had that moment that they can have that conversation, and their voice has been heard. When we've had that conversation and talked about why they don't like the idea, why do they don't want to change, there's a much greater chance that they will commit to that change, even if they disagree with it because they understand what the change is for and their voice has been heard. They've been at least able to express their concerns or their reservations about the change. That's another thing that leaders could do if you want to increase your change success and create better by creating clarity and listening.Lisa Ryan: Creating that safe environment for people to express what they like what they don't like. I tell people in my programs to become the master of the poker face. No matter what that employee tells you, no matter what that person in your organization tells you, your only responses, thank you for sharing - even though you want to say no, that's not right. But that safe environment is being okay with whatever employees say. That sounds like that has a big part of getting the buy-in that we need to move forward.Scott Gauvin: The other thing that we often see is that people shy away from it because they're afraid of the conflict that might arise out of that. Like you were saying, you have to have that poker face. I don't think it's a bad thing to say. I'm not sure I agree with you on that, and here's the reason why.Those conversations are the richest because if we shy away from the conflict that might create. It's okay for us to have differences of opinion. The differences of opinion create the platform for us to share. If there's one thing that I would tell people, don't shy away from the conflict. That's just a difference of opinion, and it sometimes involves some strong emotions. But what I would say is don't have a poker face manage your feelings around it so that you don't retort back or don't just be dismissive about it, but have the conversation. The conversations have the richness and opportunities you can debate because I know I'm not always right as a leader in my organization. I'm not going to admit that to my team always because we don't want to say that we're wrong but, but allowing yourself not always to be right as a leader is a powerful thing. People have different knowledge that they're bringing to the situation, so allowing that conflict to bubble up and have the conversation respectfully, of course, is valuable.Lisa Ryan: When, in the beginning, you said that respect wasn't about being nice and that clarification of the fact that when you're nice is when you're conflict avoidant. People aren't necessarily feeling safe because I don't want to hurt their feelings. But respect comes from the opportunity to share a difference of opinion and still like each other, or at least be polite to each other at the end of the day, right.Scott Gauvin: Right, and we have a workshop that we often run. It's a primer workshop for a lot of the change efforts that we do. We always run this workshop before we start any new lean effort. It's called conflict is the root of all waste, and the idea behind this this this workshop is that a lot of the waste that we see are the symptoms of unresolved conflicts. If we got good at engaging in productive conflict respectfully, not only are you creating that environment of respect for people, but you're almost encouraging it. We're saying we want to have the conflicts to flush out what is underneath all of these ways because the reason why a lot of these wastes keep coming back on people is because they're dealing with the surface waste and not the underlying current that's driving the waste in the first place.I often equate it to my lawn. The lawn comes up, and it looks beautiful, and then all sudden, I start seeing the weeds. What do I do? I mow the lawn, and the weeds are gone. My lawn looks beautiful, and then two weeks later, we get a little bit of rain, and two weeks later, the weeds are right back. What we often do with our lean activities is mow the lawn. We knocked down the problems, but they just keep coming back because we haven't addressed the fundamental root. That's the root of that waste, which is that unresolved conflict. If you're practicing respect for people, you're willing to go at the root, not just cut the surface waste.Lisa Ryan: Now that is a powerful explanation of getting to the root of that. We're getting to the end of our time together. Scott, what are some of the ways you serve your clients and the best way for people to get in touch with you.Scott Gauvin: Our practice revolves around three key pillars, one is helping organizations develop strategies to grow their businesses, and so that then leads into the operation components, where we help organizations with their lean efforts. And the third piece is around the culture organizational development piece. What we find is that they're all three are connected if you. If you've got a good strategy, then that strategy can inform where you're going to operate and support the way you operate. You need to have a good culture, and so we help organizations where those three meet.The best way to learn more about myself or my organization is to go to our website macresco.com. There's a ton of information about our models, our approach, and there's a way to contact us right there.Lisa Ryan: Well, wonderful, Scott. Thank you so much for sharing your wisdom and insight when it comes to lean and that respect for people it's been a blast catching up with you.Scott Gauvin: Thank you, so it's been a lot of fun.Lisa Ryan: i'm Lisa Ryan, and this is the Manufacturers' Network podcast. See you next time.

Connect with Ashleigh Walters:LinkedIn: https://www.linkedin.com/in/ashleigh-walters-makethingsbetter/Website: https://www.onexinc.com/Lisa Ryan: Hey, it's Lisa Ryan. Welcome to the manufacturers' network podcast. I'm excited to introduce you today to Ashley Walters. Ashleigh is President of Onex, an employee-owned business operating for over 54 years in Erie, Pennsylvania. Onex designs services and manufacturers high-temperature industrial furnaces. When Ashleigh assumed the general manager role in 2013, the company has lost sight of its mission and family-centric core values. Today Onex's mission is to make things better: empowered employees, happy clients, thriving communities.Ashleigh holds a BS in chemical engineering from Auburn University. She's the chairman of the board of directions for Northwest industrial resource Center, a manufacturing extensive partnership, and President and director of Aspire casualty, a reinsurance company. Ashleigh is the author of "Leading with Grit and Grace: a journey of organizational culture change. Ashleigh, welcome to the show.Ashleigh Walters: Thanks so much for having me, Lisa.Lisa Ryan: Please share with us a little bit about your background and what led you to Onex, to begin with, in 2013.Ashleigh Walters: Sure, I have; as you noted, my bs in chemical engineering from Auburn University. I met my husband there back in 1998. He started Onex in the southern division in 2002 when we graduated from college; I joined Onex in 2003 as a technical salesperson.Fast forward to 2013. I was a stay-at-home mom with two little boys, and my father-in-law called to let me know that the current leader had left the organization and that he needed me to lead and take a look at the financials.Lisa Ryan: Okay, and then, and so what happened, I know that there was that they had kind of lost sight of their vision by that time so tell us a little bit about the process of what you saw and how that transition started to take place.Ashleigh Walters: The previous leader was a command and control style leader, so he had siloed the company. People weren't working well together. People were living in fear. The first thing I started asking curious questions: how are we doing this; what's going well; what's not going well. As I asked those questions, employees at first were fearful of answering me because they thought I would find something wrong in what they were doing. They thought I was going to throw them under the bus. Then they realized, as I helped them solve the problems they were facing, that I wasn't there to hurt them; I was there for them and helped get rid of the obstacles in their way. I call that a much more democratic approach to leadership.It's really about putting people first. As a leader, I have to help them. The most important part of my job is helping them do their job to the best of their abilities.Lisa Ryan: How about how many employees do you have it Onex.Ashleigh Walters: We have 50 full-time employees.Lisa Ryan: Okay, so going around and talking to each of the employees and having those conversations. How much time would you say that that took out of your week?Ashleigh Walters: To change a culture takes time. It took us a good four years before I felt like we were in a spot where everybody was on the bus everybody was on the same page. We did many different events and used many lean principles to help us make that cultural shift, so we started with a value stream mapping event.We mapped our entire production process, and then we went on to map our office processes as well. Since we did those different lean-type initiatives, it started the conversation and started the collaboration. Those initiatives are what helped to lead to the culture change as well.Lisa Ryan: So take us back to the early days when you first came in, and you start asking these employees questions, and they were still in that fear state. What did that sound like? How are they reacting? What did it feel like that there was the trust wasn't there?Ashleigh Walters: Yes, I think it was a very divided organization people came to work with their heads down to their work and left for the day. Now you can feel a difference when you walk in the door. You get smiles and friendly faces, and how can we help. It's just a different dynamic. You can tell people are working together, all playing on the same team.Lisa Ryan: You mentioned that you were helping employees when you were asking questions and then pitching in and giving them what they wanted. What were some of the things that they were asking as far as what's going on, what's working well, and what's not.Ashleigh Walters: yeah, sometimes it was just as easy as like a report; it took a ton of their time that I didn't need. Maybe the previous manager had wanted to see this report every Monday, but it wasn't important to me. Just flushing out some of this helped. I always asked what takes up the most of your time and annoys you. Then, whatever that was, we worked to try to fix it. We found three different people filing different AP stuff in different ways; it was just redundant tasks.We tried to flush out kind of the inefficiencies and waste in the system and, as we helped remove those obstacles and get rid of that annoying work for people, they were more apt to give us even more ideas on how we can improve.Lisa Ryan: I love that question of what annoys you because that can be a little bit of a difficult question because you don't know exactly how employees will answer that or what they're going to come up with. Was there some hesitation in using that word? What was it about the word annoying that made it?Ashleigh Walters: We've gone on to use that Paul Acres from his book and he says what bugs you might be a better way to phrase it. You're never allowed to talk about another person. It's always a process or a piece of your work that is causing the issue that you'd like to see improved. I also call it servant leadership in that you're there to serve. Those on the team look like going to their workspace and seeing them do the process and helping them understand like there is a better way to process - whether it's an officer on the production floor.Lisa Ryan: And I know that in your intro, it said that you're that Onex is an employee-owned ESOP, so was it like that, when you first came on board or how did you transition to an ESOP.Ashleigh Walters: So when I first joined Onex, my father-in-law, Eric walters, was the majority owner of the company. Drew and I purchased him out in 2018 and became the majority owners. Drew and I had begun thinking about Okay, what does a succession plan look like for us. And while I understand retirement succession planning for 40-year-olds seems like a very odd topic, we also knew that third-generation family-owned businesses only had a 13% success rate. So, while our two sons, we would love for them to come and work for the company, one day if they so choose, we didn't want to make that something they had to do. We tried to understand what succession planning for the future might look like for us.I sat in on a panel for succession planning, and I found out about an ESOP. When I came home and told Drew, I think this could be an excellent plan for us. He told me I was crazy that I hadn't understood what I heard about the planning event. We watched all the YouTube we could find on it, and he said, "actually, I think you're right. This is going to be a good option for us." We already had that family-centric culture. We repaired that culture, and an ESOP was a kind of a natural transition for us. It was just reimagining what a family-owned business looks like.Lisa Ryan: What is an ESOP? What does that mean that the employees own the company? What there a percentage is that is. Please share a little bit about what that looks like because Drew thought it was too good to be true. People who listen to this don't understand the full implications of what an ESOP is. Can you share a little bit about what you discovered?Ashleigh Walters: ESOP's became part of the law in 1976. there are not many of them in the US, I think; maybe around 5000 Companies are ESOP's. So it's not something that's widely known about. An ESOP is an employee stock ownership Program. That means Drew, and I sold all of our shares to the ESOP trust, so all of our shares went to the ESOP trust. They are released every year to the employees who Onex employs within that year, and they release based on payroll out of the total payroll for the year. The company is also valued every year, and so you, the employees get a statement at the end of each year that says, these are the shares that you own, and this is the value of those shares. The employees never pay a dime to be a part of an ESOP, but it becomes their retirement plan. So when they retire, the statistic is that they retire with 2.5 times more as an ESOP company than a traditionally matched 401k.Lisa Ryan: So what does that mean as far as succession planning, though? The employees own the company, but once you and Drew decide to retire, what happens in that next step?Ashleigh Walters: It's just like every other company. The next step is to make sure that we have leaders within the company that are coming up and learning how to lead and manage the company so that one day when we retire, those leaders are still here. The thing that Drew and I felt the best about is that previously, before we sold the shares, if Drew and I had been killed in a plane crash or a car wreck or something, then there wasn't a succession for the company itself there was no we don't know who would have bought the company if we weren't here. If something happens to us, the employees go right along; the company goes right along with no change.Lisa Ryan: Okay, that makes sense, so what are some of the things that are keeping you up at night.Ashleigh Walters: So I think as a leader, what keeps me up at night is always trying to assess a situation and understand what my options are for addressing it and thinking through the different options, all the different scenarios. It weighs very heavy on me that I have 50 families banking on me to make the right decisions. While I don't always make the right decisions, I try to fail fast, learn from them and quickly recover.Lisa Ryan: And from a networking standpoint, if you were to reach out and learn from your manufacturing colleagues or people that are listening to this podcast, what are some of the things that you might like to learn from other manufacturers.Ashleigh Walters: Since COVID 19 hit, I haven't been able to be in person and network with these other manufacturers or other business leaders in person. I do miss that. I always want to hear what they're doing, and their organization is going well. What I'm interested in is to hear about is not just the standard business stuff, but what are they doing that's different and unique, that's helping move their business forward.Lisa Ryan: And, by the same token, what expertise or insight would you be willing to share with your colleagues.Ashleigh Walters: So I certainly have led through to crisis now, so anybody coming out of this COVID 19 pandemic and it's just feeling a little tired and a little lost and doesn't know which way to go. I'd be more than happy to share my story and see if there's a nugget in there that would help them.Lisa Ryan: If you were to wrap this up and then nice bow and give your best idea or suggestion for something that's worked over there and Onex to the people listening, what would that be?Ashleigh Walters: So I think that the freedom to fail has been an ample opportunity and a competitive advantage for us here at Onex. I mean, you're free to make decisions within the bounds of our vision or mission and our core values. I'm not letting you light up a furnace and make it destructive. I'm only saying like think outside the box. Don't take the status quo; try something new. If it doesn't work, that's okay try again. You truly learn more from your failures than your successes but never make the same mistake twice.Lisa Ryan: that's terrific advice, and it also helps you create a safe environment for people. They would rather know that if something didn't work than they told you. You learned from their mistake and moved on versus knowing that they would get in trouble, and then you don't know where it's going to.Lisa Ryan: Well, Ashley, it has been an absolute pleasure having you on the show Thank you so much for sharing your insight with us.Ashleigh Walters: Thank you so much, Lisa.Lisa Ryan: I'm Lisa Ryan, and this is the Manufacturers' etwork. See you next time.

Connect with Per Sjofors:Email: per@sjofors.com.Website: www.sjofors.comLisa Ryan: Hey, it's Lisa Ryan. Welcome to the Manufacturers Network podcast. I'm here today with Per Sjofors. Per is the founder of Sjofors Partners. Pricing has always been an interest area for Per. As a serial entrepreneur running companies in Europe and the U.S., he did pricing experiences. Now some of these experiences worked spectacularly well, and others not so much. As a result, Per founded his company out of his frustration that his business schools taught him that pricing is too abstract, too academic for a business executive to act on. Per, welcome to the show today.   Per Sjofors: Thank you very much, Lisa, and thank you for having me.Lisa Ryan: Absolutely. Share with us a little bit about your background. What brought you here, and with this whole focus on pricing and the craziness that goes along with that?Per Sjofors: Well, it's a little bit of what you just mentioned. I had been able to run a few companies here in the U.S. and in Europe before I moved here. And these experiments we did with pricing - some were spectacular. I mean, we could see revenues are up 25 percent the next quarter, and others were complete duds. And business school learnings were so academic and so theoretical that it was useless. So, 13 years ago, I decided I was too old and too opinionated to report to anybody.  So I decided to take that interest in pricing and develop a process that would make every pricing experiment a success. That is the process that we've been using ever since. And the core of the process is to understand how you can predict sales volume at different prices. Now, once you can predict sales volume at different prices, and when you can predict revenue at different prices, you can set the price that is the best for you if that prediction is correct. Lisa Ryan: Right. When it comes to manufacturing, you and I have talked about this a couple of times, but we think that there's just one way to do pricing in cost-plus. But this is one of the biggest mistakes that manufacturers are making. And there are two others. What do you see about these mistakes, and how can we start to turn that around and be more profitable?   Per Sjofors: Cost-plus is a big one. I've been there myself in some of these companies. We use a rule of thumb because different industries have different rules of thumb - some are 35 percent, some is 50 percent, some double the price. In some industries, you go up as high as ten times the cost. But, it's all irrelevant because your cost as a manufacturer has very little to do with the value you deliver to customers.   There's another very logical thing, but a lot of manufacturers don't think about it. And this is if you manage to reduce your cost, your price goes down in dollars. If you manage to reduce your cost and have your prices the way they are, there's no reason to make a little more money. The other another mistake, of course, is to look at a competitor.   If you have competitors that have prices online, it's quote-unquote, easy. And many times, in manufacturing, you don't have that ability. You try to get somebody at last year's price list or maybe an international price list or something like that. And they'll give you some hints somewhere where competition or pricing sets their prices. But it doesn't tell you the story. It doesn't tell you what deals they're making, doesn't tell you about bundles they're making. It doesn't work. That tells you what kickbacks they may offer to their clients and special incentives, and so forth. So trying to set a price based on a competitor leads to using the wrong price. And by the way, that competitor may well have guessed in getting to set their price in the first place. Lisa Ryan: When you think about it, you're trying to differentiate yourself from your competitor anyway, as far as in terms of product, in terms of service, and in favor of something else that you're doing. And if you're going to price yourself the same, then what differentiating factor do you have?   Per Sjofors: Well, you used a very keyword here, differentiators. When I did these experiments, the key was to figure out from the process I developed how you can differentiate yourself in meaningful ways to your customers so that you can command higher prices so that you gain a little bit of pricing power.Let me give you an example. We're currently working with a company that provides steel plates that you run over when there's a trench in the street. Can you think about something that is more commoditized than a piece of metal?Lisa Ryan: And it doesn't have to look pretty. You're driving over it for.Per Sjofors: Exactly. This company naming no names here, has managed to become the high price leader in their market. They charge between 20 to 25 percent higher fees than the competition. They also charge delivery fees - the competition doesn't do that. Now, how do they do that?  Well, by adding services to a commodity product. They have managed to position themselves to be the thought leader by providing educational services on safety. They have consultants that advise on what kind of steel plates you should use. They have managed to differentiate themselves in a way that is meaningful to their clients.Lisa Ryan: That's probably what happens when you're selling that to a purchasing agent. They're thinking that they're just calling and buying pieces of metal to put on a road. But when this manufacturer comes and says, and we can do this, and we can share this, these safety tips and everything, it's just really looking at your business differently.Per Sjofors: Exactly. Yeah. This is a trend that's been going on for a while. We know that more and more commodity manufacturers are becoming service organizations that also sell the commodity. By doing so, you almost always increase that pricing power.   Lisa Ryan: You mentioned in our conversation a couple of weeks ago that maybe you have a little less flexibility in the price if you have a commodity product. You talked about bundling, making it difficult for people to compare those apples and oranges of the bundles. But then you're looking if you're doing a strictly a cost-plus, then you have some of these higher-margin things that maybe you're letting leaving money on the table. So tell us about both ends of those of that spectrum.Per Sjofors: It's fascinating because companies that use cost-plus typically have the same uplift or margin for every product. But every company has specific products that are a complete commodity and certain products that have a level of uniqueness. One of the recommendations that we discuss is how to segment the product on a scale from unique to commodity. You want to categorize these anywhere you want to call them A, B, and C, meaning A are unique products. C is complete commodities, and B products are somewhere in between.That leads to a different pricing strategy for all of these with the unique products; all discounting should stop, prices should increase. For C products, it's all about strict cost control. True commodity products are being sold on price. And for those B products, those are sort of in-between; you should find out if you can add something to make a product a B product, so you gain that pricing power.Lisa Ryan: There are three mistakes that manufacturers make in their pricing. What else are they doing wrong?   Per Sjofors: Cost-plus is a mistake because the cost has little to do with the benefit that your competitor does. It's the benefit and the value that the customer sees. The sort of costs among various manufacturers are similar, so you end up having a near-identical product with near-identical prices. But that is also an opportunity because that means that the savvy manufacturer can differentiate themselves and, once they do, see a doubling of sales growth and three to five times higher valuation, which is enormous.  We touched upon this already; the third major mistake is to guess. I remember speaking to a CEO a couple of years ago. He had this product, and he said, we priced this one hundred sixty dollars. I don't know; he said maybe he should have been ninety-nine. Perhaps it should have been three-fifty. I don't know, but one hundred and sixty just felt right.   Lisa Ryan: It's so funny. We talk about this, and immediately my mind goes to Shark Tank. You have people coming out of Shark Tank, and they want a ten million dollar valuation. And the product hasn't even come to market yet. But then they say the sentence that the sharks hate, "but this is a three billion-dollar business." Oh, yeah. Well, I think, and if we just got .02 of the market, we can make tons of money. That drives the sharks wild. Per Sjofors: Another there's another term for that, which is the Chinese sneaker syndrome. You know, I'm going to sell sneakers to only half a percent of the Chinese population, and I'll have a million-dollar company. Yeah, exactly. Exactly. It's also interesting that you mention Shark Tank because they talk about pricing there sometimes, but the sharks make the same mistakes. They're saying your price is like your competitor or price a little lower. Or, your product is not as good as a competitor, so price a little lower. And how much is a little lower? Well, it's gotta be lower, or your product is a little bit better; it's gut-feels higher. That's not the way to do it. That's guessing. Right.   And it's so funny because companies generally go from, you know, everything should be driven by data, and then you guessed the price.    Lisa Ryan: Well, it's kind of like asking your friends or asking people, hey, I'm about to develop this product. Is it something of interest to you? Oh, yeah. That sounds like a great idea. That's the best idea I've ever heard. But a follow-up, would you buy it and what would you pay for it and try to get that real sense of. Yeah, that's a great idea, because again, we go back to Shark Tank. How many of those people are all my friends told me this was a great idea.   Per Sjofors: Whenever you do some as a startup, you never want to talk to your friends about this. They will never tell you the truth. You come up with a dud of a product or a product idea, and they will say, oh, yes, this is great. There are statistics that roughly 40 percent of all startup fails because they say there's no product to market fit. Why? Because they haven't done the research. They haven't understood what potential customers truly are willing to pay for that product. So they're guessing their price, which means that they're either too high and won't sell anything or are too low, and they're not making enough money.  And so they fail. It's about that ability to understand sales volume at different prices. And that will always lead to the right price. And sometimes, if you do this as a startup, you may end up saying, I will never make money on this product, so get it right now.Lisa Ryan: And when it comes to pricing, again, a lot of people are thinking, well, it's got to be the low price. If I can just come out with the lowest price, I can make it up in volume. So, what's the error of that thinking?Per Sjofors: This is a very well-known example, but look at Apple versus Samsung. Samsung has telephones or smartphones that are technically superior to Apple in virtually all aspects, yet a Samsung phone is three hundred bucks, and an Apple phone is twelve hundred. How do they get there? Well, they got there by superior marketing, by having differentiators that make sense to the client. And yes, Apple has a small market share, but they have superior valuation. And they generate 70, 80 percent of the whole cell phone industry's profits.   Lisa Ryan: If somebody's listening to this podcast today, decides that they need to start looking at their pricing, what's a good place for them to start?Per Sjofors: Well, obviously, I want to put myself forward. There are very few people that work with pricing in the way that we do. It's a unique way, and it's a practical way because it came from that very practical need I had in the companies I've been running. So obviously, my website is sjofors.com, and my email is at per@sjofors.com. Lisa Ryan: And so what does that process look like? Where do you start with your clients?   Per Sjofors: We work specifically with manufacturers. We start with an impact analysis, which is relatively short. We have our own A.I. software. It's a fairly short term and not a very expensive analysis of a company's transactional sales data. From that, we can assess how much more would they make if they price right. A typical 20 small 25, 50, 100 million dollar manufacturer, the results of that, is almost always several million dollars in in in in in revenue that is pure profit.   Lisa Ryan: Wow, so that's a big difference. So if you could wrap it up in a nice bow and share your best idea or biggest aha, somebody's watching this today can use it right away.   Per Sjofors: Pricing is much more important than most companies believe it is. And pricing is also something that you can work with proactively. Pricing is part of the four quadrants of marketing for a reason because those four pieces are connected. And when you start working with pricing proactively, the company will earn superior profits, crush the competition, and lead to unexpected shareholder values. Lisa Ryan: It has been an absolute pleasure having you on the show today. Thanks for hanging out with me here.   Per Sjofors: Thank you very much, Lisa. And thank you for having me.Lisa Ryan: You're welcome. I'm Lisa Ryan, and this is the Manufacturers Network podcast. See you next time.

Connect with Lisa AndersonWebsite: www.lma-consulting.com You can also call 90963039 Telephone: 909-630-3943Lisa Ryan: Hey, it's Lisa Ryan from the manufacturers' network podcast. I'm excited to introduce you today to our guest, Lisa Anderson. Lisa provides expertise and advice on maximizing the customer experience and enabling profitable, scalable, dramatic business growth. She's worked in industries as diverse as aerospace and defense, building and industrial products, food and beverage, consumer products, and health care products. Before founding LMA consulting group, she was the Vice President of operations at Paper Pack. Her tenure included transitions and promotions through its transformation from a $100 million family-owned business through a merger and acquisition of three businesses combined into one 350 million dollar global company. A leveraged management buyout followed this combined with an investment banking group, which sounds like quite the ride. Lisa Anderson: Thank you. I'm glad to be here, and it was a great experience.Lisa Ryan: So share with us a little bit about your background, including more details of what you did with Paper Pack.Lisa Anderson: So I've been consulting now for 15 years, but before that, I started my career at Coca Cola and did planning and distribution planning. I went to a press plastic injection molder and then onto Paper Pack. It was quite the experience. We grew the core business and then bought a division of P&G and bought another smaller entrepreneurial company similar to us. It was quite an exciting challenge to merge cultures, people, processes, and systems successfully to integrate the products, grow the business, and increase profits and increase the company's value. It was a great experience to utilize in my consulting today.Lisa Ryan: And even with all of those changes and everything you went through in your history before today. The last year has been, shall we say, rather interesting in manufacturing. How are you working with all of these changing conditions in the manufacturing marketplace?Lisa Anderson: Well, never been busier. Current clients are finding that their demand is volatile. It depends on who their customers are, and the importance of the customer is shining through with coronavirus. A food manufacturer could be their customers' customer could be a Costco as an example, has been increasing as people are still shopping for food. On the other hand, the customers' customer could be Starbucks, and that took a nosedive when a lot of Starbucks slows down and, in some areas of the country, only drive through their open. That's led to volatility in demand, which meant that we had to focus extra efforts on understanding changing customer decisions, getting a change in customer behaviors, and getting a better handle on our demand, so that we could know what to manufacture and how to set up our supply chain to be successful.Lisa Ryan: And that's one of the things that I've been hearing from a lot of the people that I've had as guests on the show is the thing that's keeping them up at night is the supply chain, because you don't know one day to the next, so what are you, seeing as far as what's going on in manufacturing what's going on in the supply chain.Lisa Anderson: Well, that's a great question. I'm seeing that manufacturers that were already innovating and understood the importance of having a diversified supply chain. That doesn't mean that "hey, I have to have ten suppliers for every material or anything, but it does mean we have to be used uncommon common sense and be thinking strategically ahead. For example, when I was a Vice President of operations, we had one of the critical materials we purchased from Brazil. There are plenty of things that can go wrong in getting the product from Brazil into the United States, so all along, we had a backup source of supply in the United States on the east coast. Now we didn't just establish a backup supply that we went to them if something went wrong. Instead, we had 20% of our volume going through the backup source supply all along, so that they were working with us, they knew they could count on us for some volume. They knew they were the backup supply, but they were a vital backup supply. This did not make our private equity investors happy because they preferred that we didn't have to spend as much money on this critical raw material. Luckily, we won that battle and kept utilizing them because we had issues with the ports somewhere along the line. I think it was the transportation challenges. There's plenty of obstacles, and our backup sources supply ramped up quickly. One of the clients that we're doing that sort of thing already is better off than saying no. No time like now to start and rethink what you're doing in your supply chain, and that's just one example. The other thing is folks had supply let's say you had two places within Asia well, that's not helpful, even if they had China and India let's say they both experienced issues around the same time, and it still created challenges. So, it's thinking about the same thing that could be true in the United States, when I was in that role again everything under the sun happened, of course, when I was in that role, so there was a hurricane the things happen. In North Carolina, our plant was lucky, as a P&G plant, so they planned it strategically on a hill, which was helpful because the rest of the town was underwater. That said, we weren't, but no, we couldn't do anything for several weeks in our suppliers were affected. Hence, we had to have backup sources of supply and sources of production. You know, the ability to be agile so that the issues could happen, no matter where you are. However, the closer you are to your customer, the more likely, you can respond quickly, so I'll turn it over to you because there's plenty more I could talk about. Still, I'm sure you have other questions.Lisa Ryan: You said companies that are already innovative are the ones that are faring better. What do some of those innovations look like? If somebody hasn't necessarily been that innovative to this point, what would be a good area for them to start?Lisa Anderson: Well, you know that's true, so it could be something simple like getting a better handle on customers' changing customer requirements and changing customer patterns. That could be as simple as talking to your customers and collaborating with customers to impact our customers' customers. How do we positively impact their product and service? It could just be collaborating with your customer on innovating in terms of the service you're providing. So it could be that you customize a product on the fly. At the end of the process, your customer can tweak the product or tweak it to the service. Some of it's just about having the service to figure out what your customers' customers need. Let's say your end customer is a customer at Walmart, which is the same situation as if your customer was Boeing, which is surprisingly enough at the end in Walmart. You have a customer buying product so that you can get that point of sale type data, and at Boeing, they're using the product to build a plane either way. If you can figure out what needs to go to all the Boeing branches, there are fewer than Walmart's, but several still exist. So if you can figure out what needs to go to each Boeing for each growing facility, Boeing doesn't have to do it and have what they need when they need it. They don't have too much; that's a service that you're providing to Boeing. The same thing is true for Walmart, which is more expected. Still, Walmart's the same thing. If we provide products to every Walmart in the country and the distribution centers, it depends on what you're doing and what you're supplying them, which saves them a lot of hassle. They can focus on more activities that help them promote the products in the store. Let's say that's some of the innovative products and services you could provide without even having to redesign products or do anything significant. When it relates to the product, there are many configured orders like options on products, where you can say you know I'd like it in this package size of that package size or this color. Suppose you can put those closer to the customers' point where you serve the customer. In that case, your customer can change their mind. They don't necessarily know what their customers will do to have a more agile, flexible service to better serve their customers. Hence, it's all about how do you find ways to serve your customers better in a more profitable way? When you look at how we do it more profitably, we go back into our manufacturing side and say, what can I produce these items to a certain point in the process and then mass customize or customize the fly. Lisa Ryan: Well, one of the things that it's such an interesting way of looking at things that people are only considering their customers and the fact of just taking it that one step further, to think about your customers' customer. It gives you that much better of an opportunity to understand how you can better serve that customer so that they can serve their customer. It just opens up not only a whole new conversation and way of looking at things, but it sets your business apart because nobody else is asking them that question. You can do something right off the bat, sit down and look at your top three customers, top five customers, etc. and think about what's my customers' customer. Then have that conversation.Lisa Anderson: It's shown through the coronavirus because the customers' customers reacted differently from the past. Historical patterns were blown up. Everything changed. If the customers' customer supported hospitality, they probably aren't doing well. If they supported the PPE type of business, they increased dramatically. That was true for many other less obvious industries, how you service those customers, and what kind of value you could provide. You can differentiate yourself far easier and quicker in a way than even redesigning products. Not that you shouldn't be looking at that also.Think about it consumers have changed the way they consume it during this pandemic. Not everything that we did pre-pandemic is what we want to do post endemic. We may not even know, but we will evolve, and so our businesses, our understanding of what new products they would need in new services. We were talking about services before this. So, what new products they'll need and or what tweaks to products they'll need in the future. Given what's happening in the pandemic, we don't want to wait till it's done to figure that out. Somebody had to be first. Apple came out with the iPod, but the iPod was just a better walkman. No one knew they needed an iPod. So I know it's fascinating about it, it wasn't entirely new. You have to think about how can I make my customers' lives better. What would they want?  Lisa Ryan: Well, and one of the things that came out of the whole pandemic was it's speeded up the technology. If it had not been for the pandemic, we're probably light years ahead now just because we have been forced to adopt technology that may have taken months or years to be able to implement. So what is some of the technology that companies should be looking for looking at today?Lisa Anderson: Well, that's true. I've been involved in this region of the country, which in southern California, was known in terms of advanced manufacturing and significant and distribution. Because of the Asian supply chain, and so they had been concerned for several years, we needed to re-skill and look at how we deal with the changing conditions. Because of technological advances, we're going to automate warehouses, as well as manufacturing facilities. How would we keep up with changing conditions since the pandemic that has been accelerated? What was five years ago was is happening now. So that's like to your point, first of all, that's true. So what are some of the necessary technologies? You want to have a modern system, which is the system, that you use to take orders, ship receive, produce, invoice, etc. These days, if you have a highly customized system, if you have a system that cannot scale with your growth, you are behind your competitors' rest. Because of the modern systems today, we have many capabilities built into them that you can utilize to scale your business successfully. They also integrate better with some of the technologies that I'm going to talk about, so I started with the system. You can't build a house with just windows; you have to have a foundation and some walls. So it would help to have a foundation in your technology to start with, so with that said, artificial intelligence is gaining momentum. How does that apply well for one in the demand forecasting, which we just talked about changing customer conditions? The ability to apply artificial intelligence to find patterns where there are none is helpful. So that's one of the areas where artificial intelligence is coming into play similarly in like cash flow planning, which is critical especially depending on your size company or status. Certainly, if you're looking at going into an area of growth, having cash to support that growth is essential. It certainly comes up on the manufacturing floor, so when you look at it instead of doing preventative maintenance, how do I predict which maintenance which equipment or machinery do I need need to be looking at now, instead of just going to what the preventive maintenance schedule let's pinpoint where it's going to break down and fix it - resolve that before it even breaks down. So that's one of the areas that a lot of the manufacturers, especially the bigger ones, have been doing all along, but that's, so that's like artificial intelligence. Still, there's plenty of folks looking at robots. Robots are good. Robots are bad. Well, robots are both. I'm working with a food manufacturer that has invested a lot in technology. Technology has its good points and bad ones. You can go faster and be more efficient; you don't have to worry about people standing next to each other with covid and all sorts of advantages, on the other hand. But you have high-speed lines going by with like food bars, in this case. One thing goes wrong, and the rest is kind of that Lucy show everything could start flying off the line. You get all sorts of issues and waste and all kinds of problems. So you have to bring the right skills in. You have to do it smartly, so it's not always going faster is not always better if you don't keep your quality, etc. However, many robots, a lot going on their Internet of Things, certainly connecting machinery to other systems and related parts, are gaining momentum. You know the augmented reality. One of the things with the virtual world we live in today is that the experts may not be readily available to fly out and help you with your machinery or equipment or just everyday tasks that you have to do.It would help if you had an expert. So, we can do a lot with webinars and zoom and those kinds of things when it comes to more analysis, the planning, the project side of things in the end, and even the earpiece side of things. When it comes to the machinery and equipment, it's helpful to show somebody what's going on, so you can start simply by showing a video of what's going on in the manufacturing facility and walking through.I've done that with some clients just to layout their processes. Still, you can go a step further. There are 3D glasses and ways you can collaborate with folks to help somebody who's solving a problem on the line. Some technologies support that type of activity; there are autonomous vehicles and all sorts of opportunities. I think technology is also making labor costs less relevant I mean, that's been happening anyway because if you're comparing it to China. Let's say the rates have been going up in China. There are so many extra costs added into the end to end supply chain when you think about inventory and IP and the risks and all these other things. In addition to that, technology has allowed us to produce faster, more efficiently, automate tasks. One of my clients uses a robot to produce throughout the night, so they need the skills to set the product up, but then, if they can keep it on a certain product that they required extra volume of they can produce that through the night, and then in the morning, they can look at it. That helps them keep up with customer demand, so there's a lot to be said for that requires very little labor. Hence, it's enabling folks to relook at their manufacturing and supply chain operations and reevaluate where should I source products, how should I set this up where should I be located those types of things.Lisa Ryan: When the other thing is that I've noticed in just in the last year, how much easier technology is. It's much more intuitive than it's ever been before. It's much less scary than it's been before, where in the past, that might have been this whole overwhelming project product or project to bring all of this technology into the plant. Now you get it, and it simplifies your life, probably to a greater extent than the pain of implementation, as you would have had just a few years ago.Lisa Anderson: I think that's very true. That reminds me of another aspect of the system that's gaining popularity is E-commerce and B2B. Collaborating with customers with a portal for those kinds of things has gotten far easier and far more implementable. The philosophy has changed largely, and so that's partly why some of the modern ERP systems and the appropriate partner are quite important. But if you can implement these technologies and more of a like strategic sprint or in an agile fashion, you don't have to worry about learning something completely new. Agile is a somewhat uncommon common sense, which means let's try the most critical piece and start to implement there. We start directionally, and then we iterate and change as we go, but it means that you don't have to have everything perfect and spend months and months before you see any results and then like something's gone wrong, and you have to start all over again, which is not.Lisa Ryan: So if you were to give your best piece of advice to people listening today, what would that be?Lisa Anderson: Well, so I would say, the one thing that they can do is look at changing customer conditions changing customer requirements and how you can add value to that to your customers and your customers' customers. It will take your business to a whole new level. More companies will succeed, and not only succeed but pull away from the competition during times of turbulence. If you want to pull away from the competition by innovating, pulling all the resources to innovate, collaborate, and look at your data. None of that will be possible if you don't start with your team. Ensure that you have the right people on your team and that you're empowering and engaging them. This sounds easy, and it is not easy to accomplish. You really need to be doing that and creating a culture of innovation, and...

Connect with John Hrdlick:Email: John.Hrdlick@inxintl.com LinkedIn: https://www.linkedin.com/in/john-hrdlick-ba953815/Lisa Ryan: Hey, it's Lisa Ryan, and welcome to the Manufacturers' Network podcast. I'm excited to introduce our guest today, John Hrdlick. John is President and CEO of INX International Ink company. He spent most of his career in the industry at INX during his 44 years with the company. He's worked in the production lab and text service, eventually landing. Operations Management around 1994 as a VP in 2011, he became a senior CIO, and then President. He added CEO in 2019. He enjoys managing the employees towards their goals and challenges in all of his roles. He's also an active member and participant on NAPIM boards and the IMDPA associations. John, Welcome to the show.John Hrdlick: Hi, Lisa. I'm delighted to be here. Always a pleasure talking to you.Lisa Ryan: Share with us what led you into INX, and share with us that journey of what got you to where you are.John Hrdlick: Well, it's a journey that most people don't see these days. I came out of high school; there were other opportunities. I did start college after high school, and at the time, due to the cost and my maturity level, I didn't last very long. And I left with the idea that I'd get my act together, I get some money in the bank, and then go back to school. So that led me to a shift position in a factory. I was laid off, and a friend of mine got me into the business where he worked. I was a production worker. That was a different company. I stayed there for three years and then went to INX to make more money because I got married. So I've been very fortunate to work for a company like INX, and opportunities kept coming my way. Every chance I had to move up or take on a different role, I took it, and it eventually took me to where I am today. Everyone has a mentor, and I was lucky to have Rick Leaneti. He's my mentor. He was our President for 19 years, so he brought me up to the organization, which helped me understand our company's culture. It took me all over the world. I've seen most of our employees. I think most of our facilities and that also includes seeing customers all over the world. So even though I had mainly operational positions. I was still involved with sales and people and to be successful. I focused on that taking care of our people and taking care of our customers.Lisa Ryan: So when you said that everyone in the company had a mentor expand a little bit more about that. What did that program look like, and how did that what levels do people get mentors. How did that process work?John Hrdlick: Well, at the time, we didn't have a program. Individuals at INX would take people under their wings and help them along. I worked for Rick for ten years. Then I left and came back about five years later and worked for him again. I moved up to our corporate office, and there was probably a period of five or six years where I didn't work directly for Rick, but he was always there.When I became CEO, he and I worked together every day. Even when I didn't realize he was mentoring me, he taught me and helped me and the ability to do what I do today; it wasn't an organized program. It was just someone who saw something in me and took me under his wing, and you see that all of our company.Lisa Ryan: Starting on the production floor and then ending up as President, you're right. It's not a story that you hear every day. So, is that one of the things that you attribute to success is the fact that they groom people within the company versusJohn Hrdlick: Least I would say there's a good mix. But what he has done over the years is they do nurture their employees. INX is a great company, and people tend to stay and make a full career out of our company. If you look at our average tenure, our employees were with us for 22 years on average. That has gone down in recent years for two reasons. Number one, our business is growing, so we're adding employees, but also because of the baby boomer effect, we're seeing a lot more retirements now. It's not uncommon to see people at INX with 50 years or more of experience, in their 40s, like me, 30s 25.Every month, I fill out anniversary cards for each employee. In North America, South America, and Europe and it's one of their milestone years, whether it's 5, 10, 15, and so on. I send them a handwritten card, and that resonates with employees. It fits our culture of having open-door policies. Anybody can call me up or send me an email. Sometimes that creates a lot of extra work. Still, anyone who works at INX knows they can connect to senior management at any given time. That is very important and the opportunities they see to move up in the company. So it's an excellent all-round company.Lisa Ryan: How many employees, approximately, do you have?John Hrdlick: Overall, in our part of the company, we have roughly 1300 employees.Lisa Ryan: So 1300 employees and regularly, you are sending out handwritten cards acknowledging those employees. Did I hear you correctly?John Hrdlick: Yes, but that's for milestone anniversaries only. Suppose I had to do that every year for every employee.Lisa Ryan: Right. You'd never be enough time.John Hrdlick: On average, it's probably 12 to 15 cards a month to fill out.Lisa Ryan: Okay, that's such an important point because that 12 to 15 cards, which most people don't even write one or two and a month, but it makes such a colossal difference takes minimal time. So what would you say you invest an hour, a couple of hours?John Hrdlick: I would say two hours. I try not to write the same thing. And every card - and many of the employees I know. So I can add something that I know about them. So roughly two hours; I break it up, so I don't do every card in one sitting before my writing gets terrible or unreadable. So I try to take my time and break it up throughout the month.Lisa Ryan: I've been on the receiving end of a note for a handwritten note from a CEO or CEO. When I was in the welding industry, Bud Kailash was at the top of the organization as Chairman CEO. When I had a good month, Bud would write on my Commission statement, "Congratulations. Lisa. Good month." It means the world when somebody takes the time out to do that. So I want to commend you for doing that. To the people who are listening, these little personalizations can make such a huge difference to your employees. Speaking of that culture, which obviously, you must have a pretty terrific culture because of the tenure you have there besides the handwritten notes. What are some of the other things that are going well?John Hrdlick: There's a lot of things we're doing well. But if I look at the top of the list, I have to say I can't talk about this without mentioning our response to covid. We're very proud of our employees. The last year, every directive we sent out, every update letter we've sent, everything we've asked our employees to do, they've responded. We're in an essential company, so we never stopped manufacturing. Our corporate office moved to their homes to work within three days of covert starting, which's roughly 80 people. To repeat the cooperation and attitude from our employees to keep everything running during this time is very commendable we 86% of our products find their way onto food packaging. That food packaging and beverage packaging ends up in the grocery stores, and that's what made us essential. We were part of the supply chain that get food and beverages in the stores for people who couldn't go out to restaurants and things like that anymore. We reminded our employees of their part in that process, and we made sure we were communicating every month with them. So they were up to date on everything we were doing.Lisa Ryan: Wow. What are some of the other things that you or your leadership team do to take care of your employees to connect with them?John Hrdlick: Well, we work in a very competitive industry, and to stay profitable, reasonably profitable, and viable, we have to manage our costs very well. So many years ago, we instituted a program that thinks it's TPM - total productive maintenance. We didn't come up with it. It's based on a Japanese model. But the best way I can describe TPM is it's lean on steroids. It's to get the involvement of the employees' management needs to go out on the shop floor, talk to the employees. Ask them what's working, what's not working. What did they need from us to help them and whatever we do to improve our production floors' efficiencies, the employees are directly involved. So that helps us involve them in the entire process, but they get to know management. The employees see me walk around. They see our CEO walk around in our various division vice presidents, and you get that one on one relationship with employees. We're one of them. We're coming to them for help to make us more efficient. That has helped us over the years to mitigate our manufacturing costs increase every year. When we budget, we target zero budgeting for our operations. With our business growth, we strive to, year to year, keep our costs reasonably flat as much as possible.Lisa Ryan: So it sounds like you've created a safe environment for employees to get to know you, to feel valued to be, to feel heard, to feel that their input is also appreciated. Do you have specific examples of an idea that maybe came from the floor that you were able to implement that made a significant difference in the company recently?John Hrdlick: Yes. There are so many. Some of them have minor impacts, but they all add up. Others can go well into six figures in savings, but they're all related to the process itself. We recently had a significant improvement in our freight costs in 2020. Simply by our logistics team taking a harder look at the areas in our freight costs that we weren't managing well, putting out monthly metrics, and then working with the plants on how they could improve those metrics. We worked with our freight vendors on how we could improve with them as well. That was a significant cost saving in 2020. At some point, that team has to present their project to management, giving them recognition. It involves management asking them questions and giving them the proper pat on the back for what they've done. Whether it's small savings or considerable savings, they're putting their effort into helping us be better, and we show them a lot of gratitude for that.Lisa Ryan: And for the people who are listening to this, who may be afraid to ask employees what they want because they think they're going to come up with some off the wall: I want $20 more an hour and six months vacation. So when you take the time to ask your employees sincerely, what have you found in the real world that happens?John Hrdlick: Well,  when we're walking around the plants. We call it the Gemba. We talk to the employees and ask them how they're doing and what would make their job easier - things of that nature. It's a casual conversation. And generally, when I'm part of that, you can get 1, 2, 3 ideas that will take back to the local management team, and they have to act on them within a certain amount of time and either accept them as valid projects or reveal that is could be rejected. Sure, as there's a little bit more to the story. But no matter if we accept or reject an idea, the employee is talked to about it. And if we reject an idea, their manager explains instead of not saying anything, so that helps. And of course, we have suggestion boxes, and we try to get a certain number of suggestions every month from every facility. There's always encouragement for our employees to put something in the box. So when you do something like that, you can get some off the wall ideas. But again, we address every one of them. None of them had been too terrible, but some that aren't realistic, and we explained that to the employees.Lisa Ryan: Right. So what are some of the things that are keeping you up at night?John Hrdlick: Well, go back to covid, we've been running. We're essential, and we've been successful, but we still have cases we've had cases. Luckily, we haven't had to shut down our facilities in any way. Still, I get worried about that; now and then, you get a phone call in the middle of the night. We run 24/7, 24/5, so those phone calls can come, and sometimes it involves me being called, So anytime I hear the phone ring in the middle of the night, it's a problem at a facility or Japan, but that worries me. But again, our employees have been very resilient and cooperative. Other things that wake me up at night or keep me up. I would say the last few years. There have been significant problems with freight carriers, the service level, and that service's cost. They're short drivers. The tanker trucks are in short supply with qualified drivers. So everybody in manufacturing is probably dealing with this problem in one way, shape, or form. But when we can't get our product to a customer or can't get our raw materials to our plan because of transportation problems, we can quickly create a massive problem with our supply chain. The other thing that can keep me up at night is we're very focused on safety had our company, and from time to time, there might be an accident in a plant and some of our plants. The nature of the product they produce can be more dangerous than others, but I never liked to get the phone call that there was an employee accident or a product spill somewhere. We're concerned about the welfare of our employees. And then, when you go beyond that, it can have a broader impact. So those things cause me to either be woken up in the night or sometimes stay on my mind.Lisa Ryan: So, from a networking standpoint, if you were to connect with other manufacturing colleagues. What are some of the things you would like to learn from them, and in turn, what is some of the expertise or strategies that you would be willing to share with other manufacturers?John Hrdlick: Well, we can always use help, and we always look for help dealing with the job openings we have in manufacturing, and I think everyone's been dealing with this trying to entice younger people to get into our industry and work in manufacturing. We've tried many different things, and we could probably share some of those with other people, but we're always looking for new ways to draw people to or would be very beneficial to me and the rest of us. That's very important to us, and also the area of freight again. We're doing something different with our freight management system. Still, I would like to hear what other companies are doing to deal with the challenges out there because it impacts manufacturing, like filling open positions. So those two areas are areas where we could get help from other manufacturers. We could also share what we've done; maybe that could go both ways. Areas were where I think we could help if anyone is still trying to get their arms around managing through covid, I think what we've done as a company wasn't rocket science, but it's been very successful. Our TPM program would help other manufacturers, even if they only use a portion of it. As I said before, it involves the employees, and anything you can do to include employees will eventually improve your operating efficiencies. So I think that those areas we could help, but other people could help us.Lisa Ryan: Terrific. Well, John, if you were to wrap it up in a nice little bow with your best tip for somebody listening today to improve their workplace culture like you've done so well over things. What would that be?John Hrdlick: Keep it simple. It's not all about the numbers. The numbers are significant. But if you take care of your people and take care of your customers, treat them as human beings, and the result is the numbers will take care of themselves.Lisa Ryan: John, I want to thank you so much for being on the show today. It's been an absolute pleasure having a conversation with you.John Hrdlick: Oh, thank you very much. Lisa Ryan: I am Lisa Ryan, and this is the manufacturer's network. See you next time.

Connect with Suzanne O'Connell:Email: soconnell@certifiedThomaspartner.com.  LinkedIn: https://www.linkedin.com/in/suzannemoconnell/Lisa Ryan: Hey, it's Lisa Ryan, andwelcome to the manufacturers' network podcast. I'm excited to introduce you toour guest today. Suzanne O'Connell. Suzanne is a mechanical engineer andcertified Thomas partner. She has 28 years experience in manufacturing and 20plus years in digital marketing, and nearly a decade serving Thomas industrialsB2B clients. Welcome to the show.Suzanne O'Connell: Lisa, Thank you so muchfor having me. Glad to be here.Lisa Ryan: So as we get started. Thatis a lot of engineering and manufacturing in your background; tell us a littlebit about your journey that made you decide to do that.Suzanne O'Connell: Well, I always loved mathand science, so pursuing mechanical engineering was a natural path for me.Ironically, I started in computer science. And then I fell in love with HVACand refrigeration -  thermodynamicsclasses, if you will. So I changed to mechanical engineering. I started inproduct development, and I was writing selection software for a manufacturer ofcooling towers, evaporative fluid coolers -product lines like that. I realizedthat I like people as well. And when you're coding software, you're not gettinga lot of interaction with people. So I naturally progressed into an insideTechnical Sales role and then into outside sales roles, and finally into theconsultation role that I have at Thomas.Lisa Ryan: And I know that you do alot with digital marketing and there's so much going on with this wholeinternet of things. Please share with us a little bit about what that is in howit's impacting that industrial space.Suzanne O'Connell: Well, there's a lack ofskilled employees, which is further driving the adoption of automation. Andthere's an accelerated trend to embrace and deploy the Industrial Internet ofThings. So businesses are now driving scale through technology, and they'reable to collect more data than they ever have been able to previously.Lisa Ryan: So when you're talkingabout automation. How exactly does industrial automation change the way thesetraditional job roles are viewed?Suzanne O'Connell: Well, the drive forautomation and technology on the shop floor is transforming the way that welook at the future infrastructure and work opportunities and manufacturing;historically, we've been divided between blue-collar and white-collar jobs, wesee the emergence of new collar jobs that combine complex technology and datawith traditional manufacturing capabilities.Lisa Ryan: Why know that one of thethings we've seen in the last several years is this large influx of millennialsinto the industrial space. So how have you seen this demographic creating thosenew opportunities and challenges?Suzanne O'Connell: Well, it's an excitingtime where we're about 50/50 between our millennial managers and our babyboomer generation. So that's changing dynamics in the office. And this newgeneration has very different requirements for doing business. They've grown upwith the internet their entire life. They're used to getting things in aninstant, and they don't tolerate slow any longer. So it's creating someinteresting dynamic tension between employees and business and their customerbase as they rise in positions of authority. We are also seeing our babyboomers adapt to millennial behaviors. So we see a lot more engagement electronicallyversus phone activity that we have seen historically.Lisa Ryan: One of the questions thatI get a lot from my clients is attracting Millennials and Gen Z into thisindustrial space. So we're looking at this IoT; we're looking at all of this digitalautomation coming in. But what are companies using to attract these newgenerations?Suzanne O'Connell: I think they're naturallyattracted to technology and the reporting capabilities and things that comewith that. Whether they're taking roles in purchasing and doing onlinesourcing, taking roles in marketing departments where they're able to dodigital initiatives, or working out on the shop floor, they're using the latestand greatest technology on that equipment.Lisa Ryan: We've talked for the pastyear about how it has impacted how manufacturers are marketing their products.So what do you see that's different this year regarding industrial marketingefforts.Suzanne O'Connell: Well, there's anacceleration. There's a need to have a digital presence more than ever. Some ofthe other methods of reaching customers, like trade shows, fell by the waysidebecause of the pandemic. Adjusting from word of mouth, “they'll call me if theyneed me” mentality to develop basic strategies to lead and nurture prospectivecustomers, providing a buyer's journey through content and their own digitalpresence.Lisa Ryan: And so what would be whenyou don't have access to historical things like trade shows? Share a little bitmore about what that agile strategy would be something that somebody listeningtoday might consider implementing.Suzanne O'Connell: So you have to have kindof a comprehensive and cohesive strategy. It's a long, complicated buyingprocess now, and multiple stages take place. And different types of contentsupport visibility throughout that buyer's journey. We're finding that not only is it long and complicated, but it'salso primarily self-guided so the need to reach somebody at an earlier entrypoint in the conversation has become a marketing necessity. We're seeing manyof our customers adopt the educational type of content in ebooks, white papers,and case studies.People are early on in new product development stages or a newproject; they have content to support visibility within the research stages. Somoving from there, you know, you have to have a good foundation in the website.That's what all of your digital marketing efforts are intended to drivevisibility and opportunity to. You need to build quality traffic because it'snot just about reaching more people; it's about reaching the right people.We're finding our clients are developing strategies for their niche focus: whoare their buyers? What are the capabilities that set them apart from thecompetition? and trying to market specifically to those business objectives,rather than just throwing things at the wall to see what sticks.Lisa Ryan: And I know that Thomas hasdone a lot of research in that area. So what would be one of the studies youwere talking about? What are the steps in the industrial sourcing process?Suzanne O'Connell: Yeah, so we did the mostcomprehensive study that's been done into the industrial buying process, and weuncovered that there can be up to 139 touches that take place from someoneestablishing a need to making a purchase decision. We found that holds trueregardless of Industry focus, job function within the organization, or productand service being sourced. They're looking for ways to speed that process up.They funnel down into six distinct stages. I think I mentionedresearch as being one of those - design & evaluation are other steps thatwe see. But the biggest frustration we hear from buyers and suppliers is thetime it takes to produce a quote. So our clients are looking for faster, moreresponsive ways for their sales team to follow up on leads. They're looking formore qualified leads to come through so that they have to do less to nurturethose. It's a combination of a lot of things.Lisa Ryan: So 139 steps. Holy cow. Atwhat are you seeing as far as being able to, you know, speed up the process.What are some of the sourcing trends that you're seeing within Thomas, and doyou expect that to continue into this year?Suzanne O'Connell: Yeah, so it just speeds upthe process; Thomas has done some things on our platform to make it easier toget the job done. We've introduced supplier validation filters. The ability tofilter on quality and diversity. All different things that matter to peoplewhen they're buying products.So we're trying to continue to make improvements to the platformto make it easier for them to find the right supplier. For our clients, we'remaking sure that they're accurately represented in the space. So making surethat there's a lot of really robust content about what they do and who they doit for so that when people are looking for their products or services they havegood accurate information, and it makes it easier for them to be found. So as far as sourcing trends and just in general, anything that'spackaging, bottling, private label - that's going through the roof. Obviously,things that are related to PPE are through the roof. But we see an uptick insourcing across all products and services, which is fantastic. It shows thestrength of manufacturing, which we love to see, but there's a lot of reasonsfor that. There's reshoring that's going on. There are hiccups in the supplychain that are still taking place from shut down, you know, last spring. Sothere's going to be a continuation of needs and then new products coming outdue to changes that are taking place in society.Lisa Ryan: So let's back it up for acouple of minutes here. If somebody is not familiar with Thomas and preciselywhat it is that you do. Can you just share a little bit about what you do?Suzanne O'Connell: Sure. So Thomas has fourcenters of excellence, Thomas net.com is our supplier sourcing platform. At therisk of dating myself, we had the Thomas register, which were big green books.I sourced out of those in my first job out of college. In 2006, we tookeverything online. We stopped printing the Thomas register. We now have over70,000 categories that represent products and services, system Integration;anything that's manufacturing related. We have 1.2 million active registeredusers using the platform to find Suppliers for those products and services. Sothat's one area of excellence for us. We have our product data solutions group, so very advanced websolutions – everything you need from interactive product catalogs, eCommercesolution, we're even doing 3D CAD and BIM on the fly for clients. And so a lotof strength with our technology there. And then we're a full-blown digitalmarketing agency. So anything that impacts our clients online: websitedevelopment, search engine optimization, even full comprehensive inboundmarketing strategies that we implement on their behalf. Our latest segment is our industry data. We used to talk about ourdata within Thomas net.com, but there's been so much interest in it that we'vepulled it out into its own pillar. So Thomas is sharing sourcing trends andindex reports. There's a lot of power in first-party data, and we trackeverything that's on the platform, so we're able to identify trends insourcing, and pockets in the US where there's more opportunity for thoseproducts and services. We even had a roundtable at the White House. Lisa Ryan: I am one of the people whoused the Thomas register. So I'm very familiar with the big green books.Suzanne O'Connell: See, you still see them onthe shelf in some clients' offices, which always makes me smile.Lisa Ryan: So what are some of thechallenges with family-owned manufacturing businesses that they're facingregarding such succession. And what does Thomas's data forecast as far as thosekinds of businesses?Suzanne O'Connell: Well, we're seeing manybusinesses consolidating through private equity acquisition, specificallycustom manufacturing businesses. A lot of those were started after World WarTwo and handed down to the second generation. They're attempting to make theirway to the third generation. But many of their family members aren't interestedin continuing that business. So there's not often a family member or a staffperson to step into that leadership role. Some of these businesses were run as more of a cult ofpersonality. At the end of the day, they don't have processes and systems tohelp them survive a transition without outside funding and leadership. And Ithink that's what we're seeing primarily with custom manufacturing.Lisa Ryan: Interestingly, you saythat because that's what has happened with my husband's company. They were onthe second generation, and there wasn't a third generation to hand it down toexcept for one son, the rest of the kids didn't really have an interest in thebusiness, and they were recently sold to private equity. Suzanne O'Connell: Yeah, and you know it'sinteresting to see with these acquisitions what takes place, as some of them areholding companies where they're beefing them up to be sold yet again. So Ithink it's pretty fascinating.Lisa Ryan: When it comes to a companylooking at upping their game with digital technology, what would be your besttip to help them get started.Suzanne O'Connell: I think starting withunderstanding what their digital footprint looks like currently is first andforemost, that foundation is solid. Some of the other initiatives that you cantake on are a lot like landscaping before the house is built right, so you haveto see where you are currently. Most companies have a pain point - what is thehole in their current marketing that they're trying to fill? You can customize strategy around any marketing budget, right? Andthere are differences. You can be more aggressive if they have the funding todo that or be more conservative and tackle what needs to be done first. So,often, I'm talking with clients and giving them different engagement levels,helping them understand what they need to do now, but where they're likely tobe two, three years from now, they're planning with that bigger picture inmind.Lisa Ryan: And how are some of theways you help the clients you work with. And what's the best way for people toget in touch with you if they want to learn more.Suzanne O'Connell: I begin by listening totheir business objectives and aligning digital marketing initiatives withthose. Whether they partner with Thomas or not, I want them to have a betterunderstanding of what today's buying process looks like at the end of the day.And what they need from a digital strategy to ensure their success long term. Acomplimentary customized strategy we can look at together to know where I wouldstart with anybody that had an interest.Lisa Ryan: And what's the best wayfor people to get in touch with you.Suzanne O'Connell: LinkedIn is great. MyEmail address is soconnell@certifiedThomaspartner.com.  Lisa Ryan: Thank you so much forbeing on the show today. It's been great to have a conversation with you.