A growing pie for the next generation
The FABRICATOR’s Leadership Summit focuses on attracting the best and brightest
How can fabricators attract the best and brightest? According to speakers at The FABRICATOR's Leadership Summit, held earlier this year in Austin, Texas, it's about growing the business through progressive management and open communication.
Brody Fanning pretty much summed everything up: “Larry the press brake operator is 65. He can’t do this anymore [moving his hands to lift a large sheet during a bend]. This is the biggest problem we can control.”
The vice president of sales for Elgin, Ill.-based Bystronic made this remark to several hundred business leaders who attended two co-located events in Austin, Texas: The FABRICATOR’s Leadership Summit and the Toll Processing Conference, both organized by the Fabricators & Manufacturers Association International®. The summit this year drew more than 170 attendees, the greatest number to date in the event’s nine-year history.
This year’s theme, dubbed “the next generation,” suited Fanning’s comment, which he made while introducing keynote speaker Diane Thielfoldt, learning strategist and co-founder of The Learning Café, Daniel Island, S.C. She spoke of what makes different generations so different. As people work longer and live longer, they’re changing the workplace culture, which she separated into several generations: baby boomer (1946-1964), Generation X (1965-1976), and the millennials (1977-1998).
It’s no secret that manufacturing employs an older crowd. As Thielfoldt explained, baby boomers comprise about 39 percent of the overall workforce. She paused briefly, then looked out to her audience. “For this industry, it’s possibly closer to 50 percent.”
It’s also no secret that friction exists between old and new workers, and Thielfoldt explained why. Generally speaking, boomers live to work. Gen Xers grew up during a tumultuous time in the workplace, particularly in manufacturing. They saw their parents’ jobs eliminated by technology or sent to Mexico or Asia. All this shaped their perspective: They work to live. They’re hard-working but independent, knowing full well that nothing is permanent.
Millennials have perhaps the most complex and difficult-to-understand perception of work, at least for their boomer bosses. As Thielfoldt put it, “Millennials live, then work. Their work style and lifestyle mesh.” Instead of compartmentalizing “work” and “life,” the two are forever intertwined.
This outlook explains their starkly different perspective on the workday. Their personal lives thrive on feedback of the real-world and virtual, click-here-to-like kind, and this in turn bleeds over to the workday. What may seem like micromanaging to a boomer can be (depending on how it’s presented) welcome feedback to a millennial. “Millennials are looking for a coach,” Thielfoldt said.
Fabricators have plenty of boomers. What it needs are more millennials for them to coach. So how can this business attract them? According to several speakers and roundtable discussions at this year’s conference, it boils down to creating better opportunities in better-run and -valued companies.
Another keynote speaker, Jack Stack, has some experience in this area. The president and CEO of Springfield, Mo.-based SRC Holdings Corp. purchased International Harvester’s engine remanufacturing division in 1983. He didn’t go in with venture capital or a large amount of cash. Instead, he and a dozen business partners put together $100,000 and borrowed nearly $9 million. Yes, million; that’s an 89-to-1 debt-to-equity ratio. That would be scary today, and it was even scarier in the high-interest-rate landscape of the early 1980s.
He turned the business around and set up an employee stock ownership program that has allowed many employees to retire and cash out as millionaires. Many have gone on to launch their own businesses. How did Stack spark such success? It comes down to communication and translation: specifically, translating the language of manufacturing into the language of business.
Stack, who wrote a bestselling book about his adventure called The Great Game of Business, introduced SRC to open-book management. Every employee speaks the language of business and, most important, connects actions in running a manufacturing floor to the firm’s financial statements. During every management meeting, each executive “owns” a line item on the income and cash flow statement, be it sales, materials expenses, or anything else.
The idea has some significant implications. Say a fabricator practices open-book management, which allows everyone to plainly see that about 75 percent of revenue comes from customers in just one industry sector. Everyone from the brake operator to the vice president of sales is on the same page. They’re not thinking about a specific work center efficiency metric in their area of the plant. They’re thinking of the business as a whole. They’re thinking about diversification.
What if the company has some prospects in the electronics enclosure business, a sector that may require some intricate forming? Managers and even operators in the brake and punch press areas may suggest specific form tools or brake tooling upgrades to better handle the work flow.
They’re not thinking about reducing cycle times in punching and forming. That’s manufacturing-speak. Instead, they’re connecting the dots between manufacturing efficiency and market competitiveness. They think about producing more parts per hour but in a different context: being competitive in a new market to diversify the revenue streams. That’s business-speak.
Stack’s success exemplifies the best of the U.S. economic engine, the inner workings of which get lost in modern political debate, much of which centers on who gets the biggest piece of the pie—the money pie, that is. Liberals say the rich have gotten too much of that pie, and perhaps some pieces should be redistributed to the rest of us. Conservatives argue that wealth redistribution runs counter to the ideals of capitalism.
So who should get what amount of the economic pie? Chris Kuehl, FMA’s economic analyst, just wants a bigger pie.
As Kuehl explained during his keynote address that opened the conference, as long as people are happy and getting what they need, with sufficient access to money and credit, who cares if the rich continue to get richer? Of course, if people are unhappy and not getting what they need—a reality the unemployed, underemployed, and working poor face—we need to grow the pie.
As Stack’s turnaround story shows, manufacturing may be one of the most effective sectors at doing just that. His company’s culture of communication and engagement has minted millionaires who have gone on to launch companies of their own, employing more and growing the pie. Some of the best millennials entering the labor market today surely would want a taste of that.
The next FABRICATOR’s Leadership Summit takes place Feb. 25-27, 2015, at the Gaylord Palms Resort & Convention Center, Kissimmee (Orlando), Fla. For more information, contact the Fabricators & Manufacturers Association International at www.fmanet.org/fls or 888-394-4362.
The FABRICATOR is North America's leading magazine for the metal forming and fabricating industry. The magazine delivers the news, technical articles, and case histories that enable fabricators to do their jobs more efficiently. The FABRICATOR has served the industry since 1971.