In this episode of the MFGMonkey Podcast, we sit down with Scott Hoselton of ACS to explore the dynamic world of team empowerment and the pressing challenges facing the manufacturing industry today. Scott shares his insights on fostering a culture of collaboration and innovation, highlighting strategies that have proven effective in empowering teams to excel.
We delve into the industry challenges that manufacturers encounter, from supply chain disruptions to technological advancements, and discuss how ACS navigates these hurdles. Scott’s expertise offers valuable perspectives on turning challenges into opportunities for growth and improvement.
Join us for an engaging conversation that uncovers the keys to building resilient teams and thriving in a competitive industry landscape. Whether you’re a seasoned professional or new to the field, this episode provides actionable insights to empower your team and tackle industry challenges head-on.
How to Get in Touch with Scott Hoselton
If you’re interested in learning more about ACS or connecting with Scott Hoselton, you can reach him via the ACS website:
- Website: www.acscm.com
- Contact Through Website: Fill out the contact form on the ACS site, and Scott or a member of his team will follow up.
- https://www.linkedin.com/in/scott-hoselton-a9a0266
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Empowering Teams & Industry Challenges with Scott Hoselton
In this conversation, Scott Hoselton, president of ACS, discusses the company’s focus on systems integration in the automotive and aerospace markets. He shares insights on project management, the challenges faced in the industry, and the importance of defining requirements to ensure project success. Scott also highlights ACS’s diversification strategies, internal capabilities, and unique projects that showcase their technical expertise. In this conversation, Dustin McMillan discusses the importance of team empowerment, company culture, and effective communication in fostering a successful work environment. He emphasizes the need for humility and vulnerability within teams, the significance of understanding different personality types for collaboration, and the value of building strong relationships with customers. The discussion also touches on the wisdom gained through experience and the necessity of balancing professional and personal life for overall success.
Scott, welcome buddy. How are you?
Great, thanks. Appreciate the opportunity to be here today Dustin.
Yeah, no thank you. More times than not, we have a little bit of technical difficulties trying to get two systems to link up. We finally got connected and figured out a workaround and now we’re rolling.
Yeah, thanks for your patience there. I’m glad we’re connected.
Yeah, you too. Well tell everyone where you’re at and the company that you’re with and all that fun stuff.
Sure, appreciate that. I’m Scott Hoselton, president of ACS. We’re a systems integration firm and we’re headquartered just outside of Madison, Wisconsin. And then one of the big 10 cities like over where you’re at. And also we have an office up in Troy, Michigan, just outside of Detroit. Focusing on the automotive market space. We are 30 years old this year, we’ve been around since 1994. 125 people, that’s our organization and we really focus on delivering innovative and integrated test facilities for our core markets, which are automotive and aerospace.
That’s great. I was just saying I jumped on your website, and it looks like you got a lot of fun stuff, fun machinery that you’re integrating things like that.
Yeah, it’s interesting. It’s a big challenge, right? So, we always have new demands, and new requirements very frequently do we get the same request twice. So, our engineers love that variety.
Right.
The opportunity that it provides, and our customers are looking for us to be flexible.
Good. If you can talk about it, do you have a favorite project that you guys are working on right now? Or if you have any NDAs and stuff, I completely understand that as well.
I can talk about it at a high level.
Perfect.
Yeah, we have a fantastic project right now. It’s the largest project we’ve ever won with one of our longest-standing customers who invited us back. We’ve worked with him. Really kind of in the entry-level stages of that project. It’s exciting. The product that will be delivered out of that facility is really transformative. And the application of that product is really going to help a lot of folks. And we were able to come in and sit down with him and go through our delivery model. And align it with their needs and move into an execution phase relatively quickly, which is really our core brand matter.
Sure.
Yeah, it’s a production facility that also includes tests. And those two realms include both of our areas of expertise.
Okay.
Which is exciting. Yeah, it’s one of our oldest customers as well. That’s a great win.
Well, that’s always fun when you can work with the same customer on multiple projects, you have that rapport built already and it’s like working with a friend most of the time.
We were really lucky when we were hatched if you will. The first four customers were some names you’ll recognize, Carly Davidson, John Deere, Cummins, Caterpillar. And we were 25 people that spun off an engineering firm to do this type of work. The interesting thing about those guys is people, they’re iconic American brands, and they treat their supply chain like they treat their customers. We really learned a lot. Not only that, but we’re also not at a gate having those four names on your resume open a lot of doors for us.
Absolutely.
And to this day, those four customers are still far larger a few years later.
That’s fantastic. That’s stuff I love. We’ve been fortunate enough to provide different fabricated parts and machine parts to those industries with conveyors. And there’s a company in Michigan, it’s escaping my brain, but we did some fabricated parts for some automated systems and things like that. And it is fun being involved with those projects. So, I’m sure you guys have a lot of fun with it. You’ve been with the company for 21 years?
Yes, that is correct.
And are you one of the founders? I never even asked that.
No, I’m not. I’m actually one of the earlier partners.
Okay. Awesome.
We invited people in to buy into the organization. Yeah. So, I’ve been here quite a long time. We’re a young company and it’s full of young people as well.
Good.
So, I’m one of the old-time people there.
Well, probably fishing keeps you young. It was kind of funny when we first started chatting. You told a story about your stepfather?
Correct.
Yeah. So, it’s always fun when I do these, and I can connect with somebody on a personal basis. You and I certainly did that right off the bat with one of your walleye stories. I think you should share that.
Yeah, it’s a great story. I grew up in a small town in Central Illinois, about three hours straight west of where you’re at. I grew up fishing with my family. As we get older, my brothers and I still get together and do things. A few years ago, my little brother invited me to go along with our stepfather and about 20 others of our closest friends up to a great Wall Lake in Canada, probably heard of it, Locksville. And the guys had some great equipment and took the Ranger and Champion fishing boats all geared up with GPS. Get up in the morning at 6:30 and take off and run 40 miles up the lake, find the spot, and catch fish until about 6:30 and come back. And my mom’s husband, 82 at the time I believe, took his boat and idled out around the point, just so he couldn’t see the lodge. So, he felt like he was out in the middle of nowhere. Two conditions. He fished until he had his limit, or he finished the magnum bottle of red wine, and it was a magnum. On the first day, he fished all day because he said he was buying himself and couldn’t drink all that wine. The second day he invited me to go with him and I was, yeah. First, I was like, I wanted to go upriver, up the lake with these guys, and run hard. But six days later I didn’t leave his boat. We got up, everybody was gone at 6:30. We got up around 9:30 and had a late breakfast. Walked down to the dock and idled around the shore. He found an absolutely fantastic spot. And I will say, I think out of the six days, I think three days we finished the wine before we caught the fish, and the other three days we caught the fish.
Right.
Anyway, we were back at the dock at about 1:30. He was taking a nap at about 2:30 and I was down by that lake in the Adirondack chair. He was finishing the unfinished bottle of wine.
Right.
Or cracking a new one, waiting for the guys to get back at 6:30. And I have to tell you. One of the finest weeks of my life. Do it that way. We really had a good time.
Well, there’s nothing better than leaving after and getting back to the dock with a couple of punch tickets before everyone else.
We can imagine we probably didn’t talk to you about that either.
We absolutely love fishing up here. You have to come down and do it sometime. It’s probably a much different experience than what you guys have up there. But it’s definitely fun. We’re kind of winding up the season here and hoping to get a few more days out ourselves.
Sure. Yep. I’d love to do that. Thank you.
Yeah. So, we are jumping into it, I was really interested in talking to you because we’re integrating a few new systems ourselves, and then we see it with customers and just really getting your insight on what you have seen both work really well when you’re setting up a new line for somebody or on the other end of the spectrum, what have you seen folks do that has been a total disaster.
That’s a really good question. I’ll go with the second one first because then I’ll lead into what we do. You know, a lot of times people, and it’s just by nature they get involved and get ready to do the project and they call who they know.
Right.
And they oftentimes know who the manufacturer of the equipment is. They know the local architect, and we have a local constructor that they know well. Each one of those firms and entities has its own deliverables. And they all do a very good job in each one of those capacities. And the customer will procure the parts and pieces of a project in that manner. What happens though, they have to manage it. And those are independent disparate entities that work really hard to do what they do. And our types of projects, which have a heavy requirement for integration requirements between building systems and process systems, there are gaps in the scope of supply. And so, customers have to figure that out either live or ahead of time. That typically costs time, which is building these facilities, getting it up and running is the order of the day, as quickly as possible.
Right.
And there’s a budget and there’s a skill. And so, we were created really for certain types of projects initially, which were engine test facilities. To come in, do the design, and then we actually do the all-in house. We would define the equipment requirements. The customer would either give us a list, and we can either procure commercially or we could build ourselves, we have our own manufacturing facility. We then hire the contractors, we do the data access system and the commission all under one purchase order. It wasn’t anything we thought of. It was the companies I mentioned earlier, Dustin, that said, would you guys do it this way? And so, we learned along the way it’s an Engineer Procure Construct model (EPC) with a turnkey responsibility. And what it really did is it married the gap, it shrunk the gaps. There are three things you have to market on. One is our technical expertise, two is our flexible delivery and the third is we don’t even feel it will work. And these still need to work. And the worst thing a customer can ever do is finish the project and have it operational-ready. And as it’s sitting there paid for and it’s not making product and that’s what we do. So, out of that gap, from the traditional design-built-delivery, our model was created to really sort that gap. And the customer can call us, and we’ll take care of the whole thing.
That’s fantastic. So, you guys literally are on the ground from conception. You’re engineering it. You’re helping design everything. I’m getting the input from Harley’s engineer or whatever they need, the components that it’s doing, the rate that they need to hit. And you guys helped them design the entire line and then install and then test it and make sure it works before you guys are gone.
That’s right. One of the unique things about our model is that everybody’s got a number, and they have to go get a number to give it to their management team to get the project funded. And so oftentimes they had to go too far downstream with design efforts where the project was funded. Because they’re making decisions on things that haven’t been talked about yet to get funding and it may not be required as their scope gets more defined. We utilize a process called front front-end planning process and it really takes that design to the first 15, 20 percent. We identify P and I.D.s, energy flow diagrams, systems architecture, space programming, and building infrastructure at a high enough level so we can get some numbers. We didn’t turn that over to the customer and say, hey, here’s your range. It’s two to five million, it’s 20 to 30, it’s 40 to 80. Whoever that confidence interval needs to be, they can go get their funding if they get the funding they need. We continue with the design. We can turn that into final design construct permission. If it’s out of the scope of the funding available in that fiscal year, we can table it, and they’ve spent 50 to 100 grand. And they’re not down a path that they can’t come back off of. Again, learn behavior. We stubbed our toes a few times. That’s kind of what we learned. But it’s a really good way for us to engage with the customer for them to define the requirements. We call it a project charter, Dustin, and then all of the project stakeholders get together and sign it. But we all own the scope from the very beginning.
What kind of commitment are you asking for from your customer upfront? And it seems like you guys are doing a tremendous amount of work before the projects are even approved.
Yeah, it depends on what they’re going to do with that number or that scope. If they’re going to go do a feasibility study and say, be, is it yes or no? We can do that very cost-competitively. It’s just hours times people. And if it’s going to be more defined and if they want to really go get a funded number, we’ll advance those designs a little further and maybe to the 30 to 40 % design level. And that’s a little bit more of a commitment. We do it open book. And so, if we don’t spend the money, we don’t charge the customer. And it’s a very collaborative process as well. The number one reason projects fail is the failure of the owner to adequately define the requirements. And we feel we’re not doing our job if we’re not asking you questions you haven’t considered. This is our professional responsibility. If we can do that, we can get that defined well enough. They can go forward and have a certain outcome that they wouldn’t have had otherwise. So, I’m going to tell you about 85 % of the time we do, we call it a front-end planning effort (FEP). We do FEPs for our customers’ capital projects.
And I can see if you have a group of newer engineers working on a project that has never been down this path before. They just don’t know what they don’t know. And I can see where you guys’ process comes in and that’s what you do every day. You can really point out 50 things or maybe two things that they just didn’t think about at all. I was telling you we’re putting in a line and there are two or three things we didn’t even think about when one was as simple as running airlines. We were so focused on the electric and multiple other things that we’re like, we haven’t even talked to anyone to run all the airlines that we need to operate the pneumatic part of the system. And I mean, it’s not a game changer. It really didn’t affect the project, but it was a tiny detail that we missed.
And you’re not alone there. I mean, you have your day job, right? You’re not a capital project, project manager, building projects all over the US. It’s pretty normal. And oftentimes they can be really big issues though, especially if you’re looking at where you’re to put infrastructure and you don’t have room, or in today’s economy and climate, the lead times on equipment. If people aren’t getting the electrical gear ordered early, a 50, 60-week lead time can really impact their project schedule and there’s nothing you can do about it. So, we try to talk about those things upfront with customers and say, hey, what are your critical path items? Here’s what we think they are. Let’s marry the list together and see if we’re aligned.
Wow. You guys are seeing 50-week lead times on some of the electrical components.
Yeah. The build-out of the electrical infrastructure for a variety of reasons, it’s really a good show on those OEMs to develop and get that market, get that product shipped. And we don’t see any foreseeable let-up. It’s just been the demand is so high. And the good thing is you get your order in. It is what it is, you can plan around it. The bad thing is, if you don’t and you have requirements that are in front of that, you’re kind of stuck. And there’s only a few people that do some of those things. And the nice thing about it, most of it is in the US. You can really know that once they get it done, it’s here quickly. But it’s one of the current challenges of doing these types of projects.
What other challenges are you guys seeing?
Some of the things that are kind of starting to reconcile are that the labor shortage was a big deal a couple of years ago. We don’t see that as much today. I think people are back to work and want to be at work. I think that’s going well. The pricing seems to have stabilized a little bit. A couple of years ago, we all know about the inflation numbers. And it wasn’t just the inflation numbers. It was also a capacity issue. We were working in a couple of markets that we were foreign to, Phoenix, Arizona was one of them. And all the chip manufacturing that was going in down there, the contracting and the customer equipment builders and the software folks were just full of work. We had a large project that ended up going on hold and it about doubled the cost over four months solely due to the capacity of the subcontracting market. And they didn’t have any availability. So, we had to travel further and further, and the price went up. That seems to be stabilizing a little bit though.
Yeah. And I would have to say, depending on what part of the country. In Columbus, we are very fortunate that we have some giant projects going on. Intel is one of them. That’s over a hundred billion or a hundred trillion dollars or something insane. Maybe it’s a hundred billion. It’s so big, but it demands so many subcontractors that it’s just unbelievable. And then you have an EV plant for Honda going on just down the road. On 71. It’s incredible how many subcontractors though those two jobs alone pull in and how it affects the housing market, outside of even the manufacturing market if somebody smaller wants to do a project. Definitely a very good point.
Yeah. The industrial manufacturing sector is very healthy. If you look at some of the build forecasts, they depend on what sector you’re in, they can be very fairly dramatic. But industrial manufacturing. However, you define that, it’s building a chip plant, it’s building a new EV plant. That’s happening all across the US. When you look at some of the data center projects, there are just some very highly technical projects that are currently underway, and they don’t seem to be lighting up anytime soon. It looks like it’s probably a four or five-year run on that.
Yeah. And I had to look up to make sure. It’s a $20 billion project for Intel until they end up spending $100 billion. Nowhere near trillion. I was wrong, very wrong. These projects are just so big. And then we were at another DLA event last week. And the director of development of Ohio was talking about another project that could possibly be larger than Intel. And I would think that the Intel projects got to be one of the largest projects in the United States, like in history. How big that the infrastructure of all that is with them putting in everything from their own power plant to just the machinery that’s going in. Are you guys involved with them at all? If you can talk about it.
Yeah, we’ve done some chip plants, but the chip plant is a potato chip plant. No, we haven’t been involved. They are obviously a market we’re interested in. There are some challenges with such a project. And you’re right, they are some of the largest projects ever let in the US outside of the large dam projects and heavy projects back a long time. But the reality, there are only a few firms Nationwide that can take on that kind of capability, that kind of project. When you talk about those sizes. You have JVs and partnerships. The good thing is our building sector in the US is extremely capable, very technical, and the highest in the world in my opinion. And so that segment’s also really good at recognizing the strengths and the weaknesses. That’s where opportunity comes in, Dustin. So, we would have an opportunity at projects like that, we’ll call some of the enabling spaces. Maybe some of the complicated mechanical stuff, maybe some of the testing systems, maybe some of the software, or some of the custom test equipment. That’s where we come in. We would partner with a big builder to build the core and shell and do all the big infrastructure. Because that’s what they do, and they do it very well. And they can take the risk of 100 billion if you will.
Right. What markets are you heavily concentrated on?
So automotive is our core market. And when we say automotive, we don’t just say Pascal, it’s on and off the highway, it’s marine, it’s anything that’s moved by an external force. Then our second market that we’ve really hit pretty hard over the last five years, is aerospace. And it was a natural transition for us, we could take the same skill set in the automotive space and transition to the aerospace marketplace. Again, integration between heavy process and infrastructure and making things work. The difference between the two markets is that the aerospace stuff spins and moves a little bit faster than the automotive. We’ve been successful there and there. With our SWAR diversification strategy, we grew up in the automotive space with the big diesel OEMs, as I mentioned. As we’ve looked to diversify our business, we looked for opportunities where we could apply the same resources and still have the same kind of deliverable with respect to the added value. So, the first strategy was, as we got to move forward, let’s build more for the same. Let’s build additional applications for the same customer base. So, we have these customers we have worked with for 30 years, how can we do more? So, we’re building custom test stands, we’re doing abatement projects, complicated work still, high-performance projects, but different than what we did in the past. Our second strategy was to have more customers in core markets. So, we’ve grown in the automotive space, we opened the Detroit office. Ford is a very good customer of ours. They have been great to work with over the last 10 years. We’re making progress in a variety of tier-one supply chains, and other OEMs. Had a lot of success with some Japanese firms as well over the years in building tech centers. And the next strategy for us, Dustin, was new markets. And that’s a lot more work and a lot more risk. We decide who we want to be and where we want to be growing up. We’re not changing our core strategy. But we’re going to change our near-term strategies as required. And the markets we’re looking at right now are really around industrial manufacturing, the reasons you just mentioned. It doesn’t matter if it’s a chip plant, or if it’s an EV plant, or if it’s a battery OEM. There’s a lot of the same requirements in terms of integration. The challenge we have there is just the size and scale. Our largest project to date at ACS is right around a quarter of a billion dollars, $250 million. We can scale pretty good up to there. These projects that you’re talking about, as you mentioned, are just absolutely monster projects. We would look for partners with some of the big CMs that came about.
Yeah. And you guys are very diversified with both what you do and the markets that you’re in. And it’s interesting just to hear about how you’ve scaled up over the years and certainly the growth that you’ve seen being there for as long as you’ve had. You want to talk about the different services that you guys offer and what you guys really excel in there. I know that we talked about everything from design to turning the machines on and making sure they work. Specifically, I think you mentioned earlier that you guys are doing some internal manufacturing for some of the components.
Yeah, absolutely. So, we have six internal teams, and they were all built around the requirements of these types of projects. So, as you mentioned, we have an internal facility design team. Mechanical, electrical, and piping engineers that work here. We either buy designs from engineering partners or execute them ourselves based on the needs of that specific project. If we have a unique skill set that an engineering firm that has a big, long resume there, we will partner with them. We still manage it. We still owe the risk that they would execute. We have an internal design team that does a lot of the work other than that. We have that internal project management group, more of a traditional construction manager type role where you have project managers, construction managers, site supers, and safety folks. That’s an internal theme. Then we get a little different. And so those would be two entities that a lot of firms would have that like to build buildings. From there, we go to integration engineers. Those are our guys who write specifications for equipment sourcing, or they put together a commissioning integration plan installing that equipment. They get involved in the Space programming, the layout, the throughput, and the utilization factors. We can do that very quickly and very cost-effectively. Then we go into a controls group where we design and build a lot of PLCs, programmable logic controllers to control processes or safety intermediaries, working with people like Rockwell and Siemens and others as partners there. And we do that as a component of our own projects or as a standalone control deliverable. That marketplace gets wider when we talk about those guys. Then we go into that machine design and build group. We have a group of machine builders and designers who are mostly mechanical guys who design and build custom equipment. That’s where everybody has fun here. That’s the everlasting job-stopper machine. You know, where, what is this? How do you determine what this is? And most of the stuff we do is pretty complex, pretty unique. Our biggest competitor there is oftentimes the customer doing it themselves because they always have. We can come in and be cost-competitive, do it quicker, and maybe provide some more functionality because we have a broader range of expertise, and we can develop opportunities there. And then our last group is our newest group, which is our software team. We started this group about three years ago at the request of customers to do some more flexible open-source software solutions for data acquisition systems. And so, we work on it with a national instruments-based program called LabVIEW or a language called LabVIEW. We create open-source solutions for customers where we sell them, teach them up, and give it to them. And they own it from there. And that’s probably our fastest growing group, especially in this day and age of automation where everybody’s turning on machines. And that group also can also include an automation arm. We’ve installed a couple of robots here in the last six months for high-production, and high-value manufacturing facilities because of our expertise and integration. So that’s really the six groups that we have.
Okay. That’s fantastic. I’m kind of cruising around on your website here while we’re talking and some of the projects that you have pictures of there are the aerospace and automotive industries are pretty cool, right? www.acscm.com When you guys are listening too get on and jump on here and see what they’re doing. What’s one of your favorite projects that you’ve done and what industry was it?
Yeah, so you know what? I’m like you, I came out of the BD world. And so, I don’t have, I like them all. The reality is there are a few that were really technically challenging, and they were hard to finish. And we finished them when they worked, and the customer was really happy with the closure. One of those was an altitude chamber for a diesel OEM a few years ago. And it was hard. They were asking us to do some things that really hadn’t been done before for a budget that certainly hadn’t been done before. And we signed up for it and we worked together. And one of the proudest moments of ACS that I’ve had was a year after that project was complete, there was a trade show, technical trade show in that city. And one of the tours was through our test facility that that customer hosted. And they talked a long way about the work that they had, that they were able to do in the facility that we built. So, we’re kind of like the BASF of the world. You don’t know us. You just know some of the stuff that you buy was developed on machines and systems and facilities that we built. And it was a really great moment because it was challenging. It delivered, again, as we talked about, the functional performance requirements that they wanted. Since then, we’ve had a couple of projects, I would say a lot of projects that have been very unique. And one of our favorite customers came to us a few years ago and said, we only call you guys if the budget’s unattainable and the schedule can’t be met internally. Because then we can work with you to figure it out. Part of that is we have an unemotional attachment to the project. We’re not going to work there forever. So, we can come in and ask hard questions and sometimes give hard answers. And that’s what our customers ask us for. Most of our favorite projects at ACS are built around technical complexities that we haven’t seen before. A few years ago, we got involved with a local firm. UW’s here in Madison like you got OSU and I’m sorry, VOSU down here in Columbus. And there’s a lot of research going on here. And there was a guy working on nuclear fission projects and we got involved with a nuclear fuel rod handling system. That wasn’t in our chase, we weren’t looking for that. We just met some local people, and we have a very technical group of folks, and we built I think two of those systems. That was great, that was crazy. Radar array systems for the military. I got to stay kind of high level with some of this stuff because in the days. I get involved in a lot of R&D work Dustin. And it’s fun. You guys get involved with projects where the product’s not on the market yet. And so, we’re building something for things that nobody’s seen before. That’s probably the most exciting, as you know, though, with your business development background, the greatest success here at ACS from my perspective is when we get invited back.
Absolutely. Yeah. And the fun thing that I hear about your guys’ culture, it’s not, can it be done or not? It’s how we figure it out and make it happen. And that’s always been something for me in the business development world, it is identifying a problem and figuring out a solution, and how to get it done. And there are so many companies out there that if it doesn’t fit inside their little box, they walk away from it. And I think that people are missing out on a huge opportunity where they have somebody come and they’re like, hey, we need you to do this. And there’s a ton of companies out there that say, that can’t be done. Or it’s going to be too involved or whatever. And the great thing about you guys is, yeah, let’s figure that out. Now, if we can figure it out in your budget or not, that’s a different answer. But we’ll push it to the limit and see if we can get there.
That’s a great time and we try to say yes. And so, our BD guys bring back qualified opportunities to our operations team. Our operations guy’s hand in hand with our BD team, and review those from a technical perspective, from a commercial perspective, and from an execution perspective. Okay, yeah, we can do this. I can tell you that it’s been very rare when we say no. The no’s come out of capacity issues, not about capabilities issues. And so, if we can’t do it because we’re busy, we’re not going to oversell. These are what our customers really need. But very rarely do we say no because of the technical risk. Most of our guys get kind of fired up when they see the real challenging projects come in. For the same reason you just mentioned. The flip side of that too, is that it doesn’t happen unless you have a great team. And I’ll tell you, we have a fantastic team here. Really bright engineers that are really conscientious, that try to do the right things, they are empowered, they can make decisions on behalf of our firm, tell the customer the second day they’re here. We put a lot of trust in them. We’re to live with the mistakes. At the end of the day, we got a better team because of it. And I think one of the greatest, I heard this a month ago, we had a customer up here and you know this in your industry, there’s a lot of smart people out there. Every firm is full of a lot of smart people. He told us, and this doesn’t sound humble saying that, he told us that they liked it because of the humility of our team. There are a lot of smart people in the company they work with, but nobody was ever that guy or that sharp shooting question was all about working together. And this project was in flux. We were kind of working through some things to define the requirements so they could go get them funded. It’s a lot of emotional discussions about do you really need it? Or is your number real? Or is that, you really go get that quote? And our guys worked through it with them and the project’s going to get funded. And it looks like it’s going to be a major win for them to get their project funded. And it was all about, we started off every meeting with our value statement. And our values are all about how we want our people to behave. And if you hire the right culture, you don’t have to worry about that. In fact, the new people make your firm better from the first day they’re here. We’re really big believers in that.
Yeah. That was the thing going through my head the entire time that you were talking. It is all about your culture and there are a lot of really smart people out there. There are a lot of companies with a lot of smart people. And if their culture isn’t what you guys have, it doesn’t matter how smart the people are. If they’re not working together and figuring it out together and working together and feel like a family. My buddy next door neighbor, his company DEM, does wire harnesses in Chagrin Falls and I’m fumbling and rambling here because I’m trying to find the book that he told me to read or listen to. I spent a lot of time behind the windshield. Let’s see if I can pull it up. The Culture Code. Great book. I don’t know if you’ve heard or read that one yet. They talk a lot about what you’re talking about in the book, just case studies on different cultures and what drives good culture. The whole book is based upon just people feeling like their family within an organization and that they belong there. And it certainly sounds like you guys have that.
We did a transformative thing three years ago. We have a group of shareholders that are all working partners. So, they have to be working in the business again, being out here on part of the company. It’s transition and we’re preparing for transitions all the time. And we went offsite for two days and two nights and worked on some really key things. And it was all about breaking relationships down. We get closer to one another and become more vulnerable so we can trust each other. A couple of things came out of that. I’m talking about reading the business book, Five Dysfunctions of a Team by Lencioni. I know you’ve read that.
I have not. I will.
Great book. If you have a team that goes through the different personalities of the team members and how they add value or actually subtract value. And you go through an exercise there called personal histories. And it gets pretty emotional. People stand up in front of the group and talk about where they came from, how they got here, what’s their biggest strength to the team, and what’s their biggest weakness. And it’s kind of hard when you’re sitting there and your business partners in your circle. And this is before you have the beers and starts telling you what you don’t do well. And especially when it’s a consensus. And what it did was drive a lot of really good behaviors coming out of it. We got through all of that, and people felt really broken down and vulnerable and these personal relationships just started to grow that weren’t there before. And it transitioned into the second year where we really got into the guts of our business. We worked on the opening discussion of what our second year was about, what makes a great year, and eight entities filled that out and the consistency between one box and the other was amazing. And I don’t think if we hadn’t done that the year before, we’d be more vulnerable, closer to one another. I think we would have still been eight different versions of the same answer. And then we took that exercise and took it into a keep, stop, chart and we looked at financial performance, business development, technology, relationships and we went through that and went in a matrix. And we developed a working business strategy for that year. There’s no, what do we need to be doing? What should we start doing? What do we stop today? It really worked out well, took some time. And in between that we shot some guns, rode some go-karts, went to see a comedian, and went to a ball game. So, we had some time to relax, pretty good meetings, and pretty good discussions.
Yeah. When you have a leadership team that understands humility and vulnerability, you can lead from that stance. It changes the dynamic of the company, and your team is willing to be that way as well. And especially, I think what you guys do is a real problem solver. Going in, they can carry that into a meeting with a customer and can be humble and vulnerable in front of a customer and work along with them. It just has to build a rapport on a different level.
It really does. Our customers are smart. We learn so much from them every time we work with them. But we need that ability to come in and provide solutions. And our team needs to have the self-confidence to put themselves out there. Because they’re going to walk in sometimes and the customer is going to say, I don’t like that idea. And it can’t be catastrophic. Okay, let’s go back to the drawing board and do something else. That’s what we found is that these discussions about empowerment have driven a lot of good autonomous behavior, self-confidence, and the ability to take risks. It’s kind of cliche, you’ve heard it, but we win together, and we lose together. Every football coach says that every Friday morning. But that’s what we do too. We hold each other accountable for success and failure, but we’re not going to berate each other. Our business is going to get better when we fail and it’s going to get better when we win. But along the way, it’s all flowery we start talking about. There are challenging discussions certainly because it’s accountability. And without that, we wouldn’t have anything.
Yeah. And you brought up something else that’s very important. Having those great relationships, going out and riding go-karts together, shooting guns, and drinking a few beers. It really brings people together and you become family, become friends when you’re doing those activities.
We went through some training externally here and we’re still doing it with customers and communications training. And talked about five components of that. And really the first component was to build a relationship. If you don’t have trust, and that takes time, you can never tell somebody, trust me. The first thing you do when somebody says trust me is put you in my back pocket. But we have to put the time upfront. And then from there though, we step into understanding what drives their need or their pain. And then we talk about understanding the decision-making process. Fulfilling the order and then the post to follow-up. And it sounds like it’s not a fixed sales process. It’s a good communication strategy about getting connected, staying connected, fulfilling your promises, and then filing out the phone. And with a lot of engineers, you have a lot of technical folks in your businesses. Communication skills aren’t what they went to college for. They’re problem solvers. We give them some tools to focus on and they’re really good. They’re not phony. They are really tools that people can utilize in personal-professional relationships to have better conversations. And it’s really been successful for our firm. Because I think people feel empowered now to ask questions. And they might not have been before. You know how it goes, you come into a meeting sometimes and everybody’s quiet and you have got to drive the whole conversation. And you walk out of there saying that really wasn’t worth any time. Later, somebody comes in and one of the people drives. They ask, all they do is ask tough questions. And it’s tough at the moment, but then you walk out and say everybody feels very energized. They got some answers. We really try to empower that behavior internally and externally.
That’s such a great point that you make. People go to school for whatever their craft is, an electrical engineer or a mechanic. I’m picking on engineers right now. Or you can say, do the same thing with accountants, CPAs, and all that there. They go to school to master that craft. They don’t come out with personal skills, which is maybe something that our educational system is missing. And it gets put onto us to help people with those skills. And I know as a young person, probably one of the things that I did the most to understand myself was doing the disc profile test. I remember that test being transformational for me because sometimes I like to know all the details, but I’m a very high D and there are sometimes I don’t think about the details. I just want to know that we’re going to get there. I care less how we get there.
I was hoping you asked me to guess. I was going to say you’re a D high.
Yeah. High D.
I’m a high I. I’m a real high I. In fact, at profiles and so successful for our firm, and learning how to talk to one another.
Absolutely.
We actually look at the profiles of new hires. And also, as we promote folks in their leadership roles, we are making sure we get all four of those quadrants represented in our management.
Yeah, it is. It’s transformational because if you can understand the other person and what’s important to them intellectually, you’re going to understand why they don’t want to know all the details and you can push back that and you’re not trying to force it on them. And then the people, the S’s and the C’s that they’re asking questions that they already know the answer to you. You learn not to be defensive about that. You’re like, why are you asking me that question? You know the answer. You’re like, that’s just our personality. They just want to confirm it in their own head or whatever. Very transformational for me.
We’re full of fees here with our engineers. And I call cold and calculating instead of country answers. Yeah. But what it is, if they’re detail-oriented, they want to see the spreadsheet. You know what, that’s the perfect attitude for the role they’re in. They get involved in these complex projects they’re doing design. We need people to get into the details and really measure twice before they cut one. And then so we really look higher into that group for the roles we have.
Well, and for you guys, I can only imagine the bombs that you’re building for these different projects. I mean, there are so many moving pieces and parts, and understanding every widget and every inch of wire and every wire nut that’s needed. It’s an incredible amount of detail.
It is. And we have to have those guys have to be willing to go out on a limb to defend their design. I can give you 100 examples of that. A recent example of that sea level but of that empowerment. We have a project that’s an aerospace project. The customer wants us to do it. It’s pretty tight timeframe. We’re fortunate to have a good backlog right now. We’re very cognizant of our lead times. So, when we have lead times, we try to farm out some of the stuff that’s more lower commodity stuff. We have a lot of machine shops in the area that we can work with, and we have over the years. But this young engineer for a few years went to our operations manager from our manufacturing facility and said he wanted to outsource a certain component of this test system. The young engineer said we can’t outsource it. It’s not a component that we can take out. It needs to be designed and built here in-house. Nobody challenged them. We double-checked to make sure we couldn’t. If it was the right answer, we moved on. That’s exactly what we’re looking for. Someone who has the wherewithal and the knowledge to make that call and the courage and empowerment to be able to do it. It was a combination of our culture of that personality style and their role here as well combined to make that happen.
Yeah. And that built a young individual’s confidence, tenfold. And the next time when he brings a bigger problem to the table, he’s going to do it, and people are going to trust them and he’s going to trust himself. That’s another thing that this book talks about is just giving almost unlimited authority to anyone to bring any challenge to the table or challenge anyone within the company, whether it’s you or an accountant or whatever. If they see a problem, bring it to the table. And if you’re right, then thanks for catching that. And if you’re wrong, then let’s learn all from it and move on. But nobody should feel like they’re limited in their authority to challenge a problem.
I couldn’t agree with you more. I think if you buy a good tool, you better use it. Don’t keep it in the tool shed. They’re having it there in the garage. They’re using it. That’s kind of how we look at our people. Our best investment over the year is back on our staff. Without a doubt. We have KPIs, everybody has KPIs here in the business too. But we have KPIs that measure our staff by. And our success for that year. The number one is safety, customer satisfaction, and community engagement. Then we also go into revenue and S-O-Net profit and turnover. And if we really think about those, there are components that kind of stretch all across the impact that each one of our employees can have in the success of the business that year. We tried to create those, so everybody in the team could say, impact that KPI in this way. I’ll have a way. So, there is ownership. And then again, it just kind of ties in with the other things we talked about with respect to the culture. We worked really hard to do that, whether it be on the sales side, the execution side, or the internal dynamic.
Right. I would have to go on a limb and guess that your sales folks in your production and engineering folks get along pretty well.
They do. And you look funny when they don’t. There’s a natural tension between sales and ops, right?
Yeah.
You were both half I think right now, but there’s a natural tension. One guy is trying to sell everything. The other guy got to build it. But you know what? They’ve earned each other’s trust along the way. We just had this conversation about lead times because we’re busy right now. But our sales guys still have sales roles that haven’t been met. So, we’re pushing, pushing, pushing. And we had this discussion, and we got our sales guys to say in the years that they’ve been here, operations have not responded when they said they were going to. Our ops guys will stay nights and weekends to write proposals. And then, as a smaller firm, we have a proposal team, but a lot of our operations folks have to write proposals themselves for them to execute. That’s just how we set up. And so, they have to stay sometimes, nights and weekends to get those things done. And they always do. That level of respect between the two groups is very high. I will say some of our sales guys and it’s the nature of the role are unrealistically optimistic at times. Guaranteed jobs are coming on October 20th, if we give it up today. Then we found out on October 20th that it’s actually October 20th of 2025. That might raise some concerns. You can’t fault the enthusiasm, right? And so, they get along pretty good.
And come from a more of a sales background than an ops background for myself. If you’re not asking the right questions and they just say October and you as a salesperson, it’s October of 2024. And they’re like, no, no, no, October of 2025. But even things do change. We have a customer right now that we were supposed to start doing things. Start moving some of the lines into our facility two months ago and things happened internally. And now it’s going to be hopefully the first quarter of 2025 project. And it’s just a lot of communication. And I think for me, for your customer to feel comfortable with communicating that to you, it makes all the difference in the world. And if you’re planning on it to be right now because that’s what you were told. And then things change for them internally and they don’t feel that they can tell you that things have changed because they feel bad or whatever. That can be a huge difference in an organization just gearing up. And when it doesn’t happen, it could get hurt. But if your customer feels that they have confidence they can come and say, hey, we had something happen. We can’t really tell you what it is, but we’ve got to push for three months. You’re like, whatever we’ll be here for you when you’re ready. I think that’s a huge rapport builder with customers as well.
Yeah. And really in today’s economic climate, we’ve seen a lot of delayed decision-making. Things haven’t gone away they’re just moving slower. And I think it’s become kind of systemic. I don’t think it’s necessarily tied to the current economic climate. I think it’s kind of how companies are going to make decisions moving forward. With the rapid advancement of technology, you really have to check what you’re doing. You make a decision today and say yes, the next six months might be an obsolete decision. If you’re constantly kind of going back and checking, is this the right thing to do? Is it still the right thing to do? Okay, go. And it’s hard as a firm not to get frustrated if you’re the service provider for that solution. And we’ve had I think the record we just had this kind of sarcastic joke over our last partner meeting was about what’s the longest opportunity that’s been in our CRM that didn’t convert. It’s still not closed out. We have one that’s 11 years old. And the customer’s still there. They still want to do it. When the timing’s right. We haven’t closed. We’re going to be there. You just said it’s hard not to get frustrated. We don’t put it in our CIS. I got a low go-get ratio on it, of course. But it’s still in our CRM, it’s a developing opportunity because it’s not always the individual’s fault. Sometimes the corporate strategy changes it, and they may come back. On the flip side, we’ve had projects come back that we thought were long gone. And said, thanks for staying connected. We asked if we could update our pricing because we’ve been waiting for a little bit of time. It typically works if you stay connected, right? And if you’re doing the right thing and you stay connected. Those opportunities come around. May not be the exact same one that was initially talked about. It’s another one. So, we really believe, we believe very strongly in that. Our biggest project in the history of our firm was uncovered by some of our team making phone calls to guys they hadn’t talked to in a year. And they said, hey, we’d like to talk about this project, and could you do this? And it was just staying connected. That’s all it was.
Yeah. And I totally agree. We did this the other day. We had a company that was going to move all their warehousing, kitting, and distribution to us. And we worked with them for, I don’t know, four or five months to get it all to the table. And they were a German-owned company, and they took everything to corporate and corporate shut it. They just pulled the rip cord, and the lady was, she was also embarrassed to tell us. And we were like, hey, we understand. Yeah, we just put in four months of work or five months of work or whatever, but we get it. And when you review it in two years, if you can build a case for us to do that for you in two years, then come to us. And if not, then that’s okay, too. But it gives us a reason to reach out and just touch base with their team every six months or however long. And I agree with you when those opportunities come back along or another opportunity with the same company, now that the customer may feel some sort of an obligation because of how you handled it. And I’ve seen it in a different way working for a company where upper management was pissed and they let the customer know. And now the customer’s offended and they’re like, we would never work with you guys ever again. Why would you make us feel that way? And it’s an old-school mentality. But it is what it is, we learn as we get older.
Yeah, we did. I read this book once on wisdom, and it was really interesting. The author interviewed a bunch of 70-year-olds across all walks of life in the US. Politicians, laborers, authors, schoolteachers, and across entertainers. Some people you have heard of some mostly people you haven’t. The number one result of that survey was knowledge is really based on wisdom and wisdom is based on experience. And then they went to the Eastern world and asked about those cultures. What definition of wisdom was, based on the comment they said, well if you’re still alive and you’ve had your eyes open and not been a complete knucklehead the last 70 years, you’re going to have some wisdom just by proximity. Real wise people know how to use it, it’s a weakness. It’s not the wisdom game, how you use the wisdom you’ve learned over the years. I think that’s what we’re talking about here. It really is.
That’s a good point.
How do you apply? It’s like good engineering. It’s how you apply the knowledge you have. Reading the textbook, we can all figure that out. It takes you a month, year, or decade to learn it, but the real good problem solvers can apply what they’ve learned really well. The problem is I don’t apply that at home as well as I do at work.
That’s a whole different conversation. We can have a whole another episode on things that we do at work that we should do at home.
Yeah, it is not the truth.
It is amazing how we can do things almost better at work than we do at home and from a personal standpoint. And my Vistage team, we talk about that quite often. And that you will talk about humility and being vulnerable, that group will humble you and make you more vulnerable than you ever thought you could be in a group of peers. But, yeah, you got to work just as hard on your personal life as you do on your business life. And if you don’t, I believe that your work life or your professional life will be stifled because of that if you’re too lopsided. And I say that from personal experience.
Yeah, likewise. It’s not sustainable, right?
Right.
You’ve got to be happy with what you’re doing, who you’re doing it for, and who you’re with long term. Otherwise, you’re going to be, I don’t think you reach your potential. I just read a book on what the five key focal points of running the business are. Real quick, in some of the things you know, vision is the first thing. Know what you want, and how to get there. The number two is cash. You don’t have any money you don’t have any business. Knowing where it’s going, how it’s coming in, how it’s going out is really important. The third was people. Build the best possible team and surround yourself with them. Fourth was learning, stay relevant, be disruptive. And the last one, which is what we talked about a lot this afternoon, is those relationships. Know them and be engaged. And that’s the part sometimes for me at home I’m not as engaged as I’d like to be. It’s because you work all day, and you get home. I have three kids, we’re still around the house. And if anybody wants to check out last night, my son wanted me to act out a movie scene with him at 9:30. Guardians were still playing the Yankees and watching the baseball game. That’s the last thing I wanted to do, but it meant a lot to him. So, I went upstairs and let him beat me up for about 20 minutes. I think those things are very important. And all of them are equally important to be successful, whether you’re running the business or part of the business.
Yeah. And to the listeners, we’ve cited quite a few books and sayings and things like that. We’ll have all of this in the transcript that we post on our website. We’ll also have do a blog of the podcast. We’ll have these books and some of these things in our blog posts as well. We’ll share them online on LinkedIn and things like that. So, you’re listening, don’t feel like you have to go back and write all these things down, feel free to visit the MFG monkey website. It’s just MFGmonkey.com and it’ll take you there and you can find a transcript of the podcast. We also have it in the description of the podcast. So, whatever you’re listening to, whether it’s Apple or Spotify or one of the 900 other platforms that you can listen to us on, it’ll be in the description. Same thing with Scott, with your contact information, why don’t you tell everyone how they can get ahold of you and your website, we’ll have this in the description and all the other places as well.
Sure, thanks, Dustin. Yeah, you can just actually go to our website which is www.acscm.com. And there’s a variety of ways you can reach out to us through the website. My last name’s kind of long, I’m not going to try to spell it. If you reach out to us through the website, I’ll get the email. I’m working with Emily and Amanda here in our offices. I love to have you reach out and let me just follow up with anybody who might have an interest. And honestly, Dustin, I really appreciated your time today. I really enjoyed the conversation.
Yeah, it was fun.
Let me think a little bit.
Yeah. It was definitely fun. And that’s why I started doing this, back in 2020 and it was right before COVID. And it was just because of my buddies and I would talk about this stuff all the time. And then it grew into like folks like your team reached out to us. And now that’s really how every guest is on our podcast, now it is just people reaching out. So, I can’t be more thankful that people find the value and what we’re doing that they come on and they want to be part of the conversation and, selfishly, I learned a ton from each guest that comes on. So, it’s kind of my education and way to keep things going up in my brain and not get stagnant. So, I love it.
Now you do a great job. It’s been very, very interesting and I really enjoyed this today.
Yeah. Thanks, buddy. I appreciate you coming on.
You’re welcome. I’m in, I’d reach out to you about that walleye trip.
Yeah, do it. I would like to get up in Wisconsin as well and do a whole different kind of fishing. So, I actually fished at Ashtabula last week and did some steelhead fishing early season.
Nice.
Yeah. I usually go when it’s cold. And it’s fun. The fish don’t fight nearly as hard. I land a whole lot more in March than I do in September or October. But those things are crazy. If you’ve never flyfish for a steelhead in a river, man, they’ve rocked it out.
I know we’re running up against it. I flyfish for steel with my brother-in-law on the west side of Michigan. A beautiful little, small river. Yeah. Ahead is about 20 degrees day and I had a leak in my sweaters. Another story. I hooked a nice steelhead, and our guide got caught underneath the tree, and for about 40 minutes I was trying to get him out and we didn’t want to damage the fish. So, kind of got close and we took a picture as much as we could then we just pulled the hook. But that was probably the funniest most rewarding fish that I never caught.
Yeah, I have a trip that I didn’t even hook a fish or stick a fish out in Oregon and it was one of the most memorable trips that I went on we were on a drift boat and we were going over class threes whitewater rafts and we would go over a class free and the guide would paddle us back in and he was trying to tell me where to go and it was all I could do to cast a 10 weight rod out and out and Oregon on a boat after, you know, four or five hours. I was absolutely beat, but fun stuff for sure. All right, man. Thanks for coming on and we’ll have to do this again and figure out a different subject. Maybe.
Thank you very much. I appreciate it. Talk soon.
For more insightful conversations like this, visit MFGMonkey.com. Listen to this episode and many others on Apple Podcasts, Spotify, or your favorite podcast platform.
Key Books Mentioned
For those interested in exploring some of the books discussed in this episode:
1. “The Culture Code” by Daniel Coyle
- A deep dive into what makes great company cultures, featuring case studies from successful teams.
2. “The Five Dysfunctions of a Team” by Patrick Lencioni
- A guide to understanding and improving team dynamics, focusing on trust, communication, and personal growth.
3. Additional Book on Wisdom
- Scott references a book on wisdom, emphasizing how experience and thoughtful application are essential to leadership.
These books offer valuable insights into building strong, effective teams and are highly recommended for anyone in leadership roles.