Enterprise Minnesota Magazine February 2015

SPECIAL REPORT: LEADERSHIP DEVELOPMENT

Helping Manufacturing Enterprises Grow Profitably

FEBRUARY 2015

C.H. Robinson’s Dan Ryan on the value of logistics ERMC’s new CEO plots aggressive growth

Internal

Northwest Alliance pioneers united involvement St. Cloud’s growth strategy for manufacturers

Development How Alexandria Industries accommodates growth and succession planning Tom Schabel, CEO, Alexandria Industries; Lynette Kluver, director of organizational development, Alexandria Industries

Enterprise Minnesota 310 4th Avenue S. Suite #7050 Minneapolis, MN 55415

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Where Business Comes Naturally

Business comes naturally to Elk River. So much so that it’s become one of the fastest growing business communities in Central Minnesota.

CAPABLE. A skilled workforce of over 12,000, with another 400,000+ within a 30-minute drive time.

ACCESSIBLE. On US Highways 10, 169, and 101 and near MSP International Airport ECONOMICAL. Financial incentives and energy costs 23% lower than the national average.

ABUNDANT. Approximately 40 acres available identified for manufacturing companies, zoned light industrial.

RELIABLE. An unmatched electrical reliability of 99.9999%.

City of Elk River, Minnesota Economic Development Department 763.635.1000 │ www.ElkRiverMN.gov

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FEBRUARY 2015

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INTERNAL DEVELOPMENT

Alexandria Industries uses its ambitious in-house Leadership Academy to accommodate growth and plan for succession.

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STREAMLINED SUCCESS

LEADERSHIP RESET

LOGISTICS MATTER

PIONEER PARTNERSHIP

St. Cloud uses focus and expansive coalition building to bring manufacturing jobs to the region.

After ‘surviving’ a couple years of go-go growth, L&M takes some time to reappraise its HR procedures.

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2 Poised for Growth The Minnesota Jobs Skills Partnership helps companies train employees for growth.

C.H. Robinson VP Dan Ryan tells Enterprise Minnesota CEO Bob Kill why manufacturers—of all sizes—should understand their transportation options.

This northwest coalition has been representing its manufacturers for almost 50 years.

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The next level

Growing from Within

ERMC’s new president starts to take his company to the national stage.

Superior Industries deploys in-house systems to meet the company’s spectacular growth.

Final Word: Digging Deeper The 2015 version of the State of Manufacturing® will regionalize its results.

Visit the Enterprise Minnesota website for more details on what’s covered in the magazine at www.enterpriseminnesota.org.

Subscribe to The Weekly Report and Enterprise Minnesota® magazine today! Get updates on the people, companies, and trends that drive Minnesota’s manufacturing community. To subscribe, please visit http://www.enterpriseminnesota.org/subscribe.

DECEMBER FEBRUARY 2015 2014 ENTERPRISE MINNESOTA /

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bob kill

Poised for Growth

Helping Manufacturing Enterprises Grow Profitably Publisher Lynn K. Shelton

The Minnesota Jobs Skills Partnership helps companies train employees for growth Custom Publishing By

T

he contents of this issue of Enterprise Minnesota magazine enable me to showcase a Minnesota manufacturing company that I greatly admire, along with a government program I greatly appreciate.

The story, Internal Development (page 16), demonstrates how Lynette Kluver, the director of organizational development at Alexandria Industries, has in part used grants from the Minnesota Jobs Skills Partnership (MJSP) and her company’s 50year relationship with Alexandria Technical and Community College to help prepare their workforce for various challenges.

Now in the midst of deploying her fourth

MJSP grant, Kluver has used them for technical training, process training, to their last grant that included pieces of leadership development and succession planning.

Kluver calls MJSP a “best kept secret. It is all about developing skillsets so that you can continue to grow the business.”

I have served on the board of MJSP for seven years. And I now serve as vice chair.

I’ve seen first-hand the kind of tangible value it provides for Minnesota’s businesses.

MJSP is a great example of a public-private collaboration that invests in the people that 2

/ ENTERPRISE MINNESOTA FEBRUARY 2015

help grow certain industries in our state.

At a time when many manufacturers display justifiable heartburn about where they are going to find well-trained workers, MJSP helps manufacturers take training into their own hands. Training often helps employees stay current with changes in their job and industry.

What makes it particularly energizing for me is that some 70 percent of MJSP’s funds go to manufacturing entities across the state. And it’s not ever lost on us that one of

MJSP is a great example of a public-private collaboration that invests in the people that help grow certain industries in our state. every seven jobs in Minnesota is related to manufacturing and they pay 20 percent more than competing industries.

MJSP can provide up to $400,000 for training new and existing employees of businesses who partner up with an accredited Minnesota educational institution.

The schools, in turn, develop and deliver training that is specific to what the business needs. And the program ensures that businesses have skin in the game by requiring at least a one-to-one match.

Manufacturers can use these grants to help defray training-related costs such as curriculum development, instruction, materials and supplies, equipment, and instructor travel. You can use wages paid to employees during training to count toward the required matching contribution.

More information can be found on the MJSP website (www.mn.gov).

Bob Kill is president and CEO of Enterprise Minnesota.

Contributing Writers Clayton Benjamin Lynn Shelton Photographers Tom Lindstrom Chris Morse Brad Veenstra

Contacts To subscribe subscribe@enterpriseminnesota.org To change an address or renew ldapra@enterpriseminnesota.org For back issues ldapra@enterpriseminnesota.org For permission to copy lynn.shelton@enterpriseminnesota.org 612-455-4215 To make event reservations events@enterpriseminnesota.org 612-455-4239 For additional magazines and reprints contact Lynet DaPra at lynet.dapra@enterpriseminnesota.org 612-455-4202 To advertise or sponsor an event jim.schottmuller@enterpriseminnesota.org, 612-455-4225 To pitch a story tmason@mason-publicaffairs.com

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All rights reserved. Reproduction encouraged after obtaining permission from Enterprise Minnesota magazine.

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BUSINESSEVENTS 2014-2015

Enterprise Minnesota’s Business Events offer outstanding professional expertise and practical business solutions to improve competitiveness and growth opportunities for Minnesota’s manufacturers and related industries.

DATE 12/10/14

TOPIC

CITY

Empowering Leaders – The Keys to Attracting, Retaining and Growing Talent

Arden Hills

1/14/15

Creating a Mindset for Strategic Growth

Alexandria

2/11/15

A Vision of Growth – Strategies for Manufacturers

Ramsey

4/22/15

Increasing Your Market Share

Owatonna

6/17/15

Leadership Teams – Guidance for Good Business Governance

Shakopee/ Chaska Area

STATEWIDE ENTERPRISE MINNESOTA EVENTS 5/13/15 10/26/15

2015 State of Manufacturing® Statewide Release

Minneapolis

Statewide CEO Council Meeting

Plymouth

Exclusive to Enterprise Minnesota CEO Peer Council Members

For more information and registration, go to www.enterpriseminnesota.org, or email/call us at events@enterpriseminnesota.org or 612-455-4239.

PEOPLE TO WATCH

The next level ERMC’s new president aims to double the company’s size within three years

G

eorge Murray is a soft-spoken chief executive with an audacious goal for ERMC, the company he took over in September. He wants to double the size of the company within the next three years.

ERMC (formerly Elk River Machine Company) runs a buildto-print metal fabrication shop and manufactures processing equipment for the concrete-producing industries.

From its 80,000-square-foot facility in Elk River, the company provides diverse manufacturing services to industries including aerospace, defense, transportation and energy. Founded in 1961 as a small blacksmith shop, today ERMC employs more than 75 people and has annual sales revenue of more than $15 million. ERMC is a subsidiary of Cretex Companies Inc., a massive diversified holding company also based in Elk River.

Murray says the capabilities of the company match up well with market trends in its customer core.

“A lot of manufacturing is coming back to the United States,” he says. “A lot of companies within probably a 50mile radius are looking to bring their outsourcing needs to their back door versus across the ocean. We’re able to manufacture at the same types of costs, with a lot of improvements.”

Murray previously served as vice president of Smartrac Technologies, a manufacturer of high-security RFID (radio-frequency identification) inlays, where his responsibilities included operations in North America, Europe and Brazil. He received his undergraduate and graduate degrees in business

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ERMC President George Murray

administration from the University of Phoenix. In addition, Murray is a decorated war veteran with the U.S. Army and a black belt in Lean Six Sigma, a managerial concept combining lean manufacturing and enterprise.

He relishes the opportunity to take ERMC “to the next level.” He says half of his career has been devoted to turning companies around in sales or financials perspectives. But ERMC is not exactly a turnaround. He notes that he inherited a company with good cash flow, good operating income and great stability.

“The company was very solid,” he says, noting that he is only the third president in its 54-year history. His predecessors were founder Lloyd Bartell and Bartell’s son, Jim, who took the helm in 1994.

“It really just needed the next fresh approach to take it to the next level of growth,” Murray says.

ERMC is not a typical job shop, he says. “It is a very well-organized company,

managed well and it shows extremely well,” he says, adding that a highlight of his first six months is the positive impression the company makes on visiting customers.

“Customers come with a preconceived notion,” he says, “but when they come through here, they are quite refreshed by the technology that we’re using, the tenure of the employees that we have and the cleanliness of the shop.”

Murray’s first move was to “reinvent ourselves.” He changed the name to ERMC to transform the company’s outlook from a regional company to a national brand in order to reach customers outside of Minnesota. “We’re looking for customers in Louisiana, Atlanta, the West coast,” he says.

He redesigned the logo and rebranded the company’s mission statement. “When we go to a customer, we show a lot bigger than we did a couple of years ago,” he says.

But the centerpiece of his new mission was the company’s website, which adopted a design and color scheme that coordinated better with Cretex Companies.

“We tore it down and rebuilt it from the ground level,” he says. Working with a local marketing company, ERMC updated its catalog products and better showcased its capabilities in a more readable, user-friendly environment.

The new website at www.ermc.com features an entirely new design, in-depth content and search engine optimization tactics.

The site gives ERMC a sharp, contemporary look while showcasing the new ERMC

ERMC (formerly Elk River Machine Company) runs a build-to-print metal fabrication shop and manufactures processing equipment for the concrete-producing industries.

Voyager Industries achieves ISO Brandon-based company uses GAP funds to help achieve the designation

B

ob Kill, president and CEO of Enterprise Minnesota, recently joined other dignitaries to help Brandon-based Voyager Industries commemorate achieving its ISO 9001:2008 registration. Voyager is an aluminum distribution and fabrication manufacturer.

Members of Minnesota’s Congressional delegation and officials from the Minnesota State Colleges and Universities (MnSCU) system were on hand to join in the Jon Boutain, CFO, Voyager Industries; Bob Kill, president and CEO, celebration including: Andrew Enterprise Minnesota; Gary Suckow, CEO, Voyager Industries Martin, northwest regional outreach director, U.S. Senator Enterprise Minnesota’s ISO expert Amy Klobuchar’s office; Toni Merdan, Kent Myhrman led Voyager through the senior economic development officer, process and ensured the company met all U.S. Congressman Collin Peterson’s the ISO standards necessary to pass the office; Joe Mulford, system director for registration audit required for ISO 9001: education industry partnerships, MnSCU; 2008 Certification. and Greg Sandeno and Randy Wentzel, ISO 9001:2008 is an internationally manufacturing specialists, Alexandria recognized standard that confirms a Technical and Community College. company is meeting the highest standards Following the ceremony, Mike Draper, available for managing its business. ISO sales and marketing manager of Voyager is a “roadmap” of business activity that Industries, led the group on a tour of the streamlines processes, confirms practices company’s recently expanded facilities. that correctly match up with supplier and Voyager financed a portion of its ISO customer needs, and states that company work through an investment from the management methodically measures Growth Acceleration Program (GAP). quality throughout its entire business.

GAP is a direct state investment that “Achieving this certification is a helps manufacturing companies of 250 or testament to the hard work and dedication fewer full-time employees access business of our team,” said Monty Normand, quality improvement services. manager for Voyager Industries. “ISO “Becoming an ISO 9001:2008 certification demonstrates to our customers, registered company demonstrates Voyager competitors, suppliers and staff that we are Industries’ commitment to quality products committed to being the best we can be.” and quality business management,” Kill Founded in 1977, Voyager currently said. “This is a significant achievement employs 80 people in 70,000 square feet for all of Voyager’s staff that will open up of space. Its products include Voyager new business opportunities for Voyager Aluminum, Voyager Dock, Titan Deck and Industries and position it for growth.”

Yetti Fish Houses.

FEBRUARY 2015 ENTERPRISE MINNESOTA /

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PHOTOGRAPH BY CHRIS MORSE

corporate brand identity, according to the company.

ERMC officials say the site’s improved navigation, expanded content, and easy access to extensive product information enables customers to upload specifications and other documents to request a quote or contact an expert directly.

The website was partly designed to attract younger decision-makers in ERMC’s marketplace without alienating long-time users.

As a result of the website improvements, the company has experienced an uptick in sales.

Murray says he is also working to strengthen and develop a culture in which people want to work. “I really believe that when people really like what they do and love where they’re working, it shows in the overall performance and shows on the bottom line,” he says.

For that, he credits his service in the military.

“One of the buzzwords today is servant leadership,” he says. “The military has had servant leadership for more than a hundred years. It is basically, as a leader you are there to show focus, identify strategic initiatives, support your team and be able to remove roadblocks. That’s what a servant leader does.

“It also enables you to take all types of people, all skillsets, backgrounds, cultures and be able to form them together into a strong, cohesive team.”

PROFILE

Enabling Growth NAM’s president uses a local appearance to advocate how Congress can help surging manufacturers contribute even more to the U.S. economy ongressional attention to U.S. trade policy topped a wide-ranging list of legislative priorities for manufacturers outlined recently by Jay Timmons, president of the National Association of Manufacturers (NAM).

“It doesn’t matter what our manufacturers make if we can’t sell it domestically—and internationally,” he said during his keynote speech at the Economic Club of Minnesota meeting in Minneapolis.

Timmons’ vision for an aggressive

“It doesn’t matter what our manufacturers make if we can’t sell it domestically — and internationally.” trade agenda includes supporting the Trade Promotion Authority, the TransPacific Partnership and the Transatlantic Trade & Investment Partnership, each of which will give manufacturers enhanced access to foreign markets. “These ongoing negotiations have the potential to expand U.S. exports and international sales and to promote jobs and economic growth,” he said, adding that these agreements would open markets to nearly one billion consumers covering nearly two-thirds of the world’s economy and trade.

Minnesotans benefit directly from increased world trade, Timmons said.

Manufactured goods represented $19 billion of the $21 billion in goods shipped from Minnesota companies to 209 countries in 2013. What’s more, one in every five U.S. jobs depends on trade.

And jobs linked to manufactured-goods exports pay, on average, 18 percent more than other jobs.

U.S. manufacturers currently enjoy a $60 billion surplus with free-trade 6

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partner countries but run a trade deficit exceeding $500 billion with countries with which they don’t have free-trade agreements. “We simply can’t afford to sit this one out or cede market share to our competitors,” said Timmons. “Other major economies are already negotiating dozens of agreements without the United States that could put U.S. manufacturers and workers at a significant competitive disadvantage. At a time when the dollar is strong and global growth is slipping, we need more trade, not less.

“A smart trade policy is the difference between growing those businesses and shutting their doors,” he said, adding that most Americans agree. “Poll after poll has found that majorities of Americans of

both parties and across all demographic groups support trade agreements with additional countries to spur U.S. exports and grow manufacturing.”

Timmons, a savvy and experienced veteran of Capitol Hill in Washington, D.C., said that manufacturers would benefit from a Congressional outlook that also included fair and transparent regulations, free and fair trade, more competitive taxes, 21st-century infrastructure, diverse energy options, immigration reform, health care and legal reform.

“The menu is long because the moment is significant,” he said.

Export-Import Bank. Congress should immediately reauthorize the

PHOTOGRAPH BY CHRIS MORSE

C

Jay Timmons, president of the National Association of Manufacturers (NAM), recently spoke to the Economic Club of Minnesota.

Export-Import Bank, Timmons said. At stake, he added, is “whether we want manufacturers in the United States to win overseas, or whether we want our foreign competitors and their workers to swoop in and seize these opportunities.”

Ex-Im’s financing opportunities offset more than 60 export credit agencies used by global competitors, he said. Without Ex-Im, U.S. manufacturers will soon compete “in an international marketplace with the odds stacked against them.” “A vote against the Ex-Im Bank is a vote to support sending manufacturing and jobs overseas instead of here at home,” he said. “It’s really that basic.”

Logistics. Washington should increase pressure to resolve the labor slowdown at West Coast ports, Timmons said, adding that manufacturers have to act, too.

“Poll after poll has found that majorities of Americans … support trade agreements with additional countries.”

“Everyone has to encourage the parties to reach an agreement to return the ports to normal business operations so that we can eliminate this uncertainty,” he said, “and keep global commerce moving.”

In addition, Timmons called on government to redouble its investment in America’s crumbling infrastructure. “Too many of our ports, roadways, railways and runways are getting worse by the year and are in desperate need of repair,” he said. “We can’t risk another tragic rush-hour collapse like the one on the I-35W bridge in 2007.”

Regulations. Government’s system of “unnecessarily complex and inefficient” regulations currently costs small manufacturers nearly $35,000 per employee per year, according to Timmons, who added that the money ultimately comes out of consumers’ pockets. Timmons called on Congress to streamline and simplify the system and to increase accountability. “Because every regulation, well-meaning or not, increases the cost of doing business,” he said.

Taxes. Timmons cited Enterprise Minnesota’s State of Manufacturing

poll to highlight how manufacturers are concerned by the uncertainty in Washington about the budget and taxes.

“Our outdated tax code is turning too many [manufacturers] away and driving investors out of our country,” he said, adding that corporate tax reform doesn’t go far enough on its own. Timmons called on Congress to fix the individual tax rate, which affects two-thirds of America’s manufacturers. In addition, Timmons said Congress should make the Research and Development Tax Credit permanent.

Energy. Because America’s unprecedented global advantage in the production of reliable and affordable energy is driving manufacturing’s resurgence, Timmons advocates an “all of the above” approach to energy policy that “taps every resource we’re blessed with here at home.” Shale gas is just one opportunity among many, he said. “If we develop this resource correctly, we can create a million new American jobs over the next 10 to 15 years.” He said building the Keystone XL pipeline is another great opportunity. “Altogether, the combination of oil, natural gas, coal, wind, solar and other sources will mean more jobs, lower utility bills, and more growth across the board,” Timmons said. “Americans need an energy policy around which manufacturers can plan—one that incentivizes, not inhibits, innovation.”

Health Care. America’s health care system “needs to reduce costs, increase options, and help employers and employees make informed decisions,” Timmons said. In addition, policymakers should eliminate the medical device tax, which Timmons said “stifles research and development of medical advances that keep people healthy and safe.”

Manufacturers contribute $1 of every $8 in the American economy, some $2 trillion, Timmons said, adding that Minnesota’s manufacturers contribute $37 billion to its economy, boasting the largest payroll of any sector, and are responsible for one out of seven jobs.

In addition, Timmons said, every manufacturing dollar in America adds $1.37 to the economy, giving it the biggest multiplier effect of any industry.

“Nothing else comes close,” he said.

“And a single manufacturing job can lead to the creation of three to five more jobs in other industries. What a great return on investment that is.”

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Growing from Within Superior Industries deploys in-house systems to meet the company’s spectacular growth

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he first decade of the 21st century will forever be known around Morrisbased Superior Industries as when the company tried to attract and retain the requisite number of qualified employees to accommodate the company’s spectacular surge in growth through acquisitions.

From the time Human Resources Director Scott Arndt joined Superior in 2004, the Morris-based company was named to Inc. magazine’s list of America’s fastest-growing private companies.

The manufacturer of steel conveyors and storage tanks used six strategic acquisitions to grow from $35 million in sales in 2004 to a whopping $285 million in 2014. During that same time, the company’s workforce exploded from 150 people to more than 1,300.

Arndt recently described how he’s coping with those challenges when he spoke before more than a hundred manufacturing executives at Creating a Mindset for Strategic Growth, an event sponsored by Enterprise Minnesota that was held in Alexandria.

“It’s been a fun ride,” he said.

Much of his challenge, he said, was to develop a means through which the company could “grow from within.”

A case in point was the pressure to find welders. The pool of welders being developed by the three local technical colleges was insufficient.

“The three schools in the area would have 70-80 graduates every year,” he said.

“I spent a lot of time on those campuses.”

But, Arndt noted, by the time the students graduated, “literally 72 had jobs.” “They knew where they were going,” said Arndt.

“The other companies in the area were trying to get to the six welders who didn’t know where they were going yet.”

To compensate, Superior created its own training center. Using an in-house team leader—“who was passionate about welding; he dreams about it,” Arndt says—the company founded a certification program that now offers 1,600-1,700

certifications, according to Arndt.

This, in turn, led to the creation of Superior Industries University (SIU), which today offers in-house training and education in 26 different disciplines.

The company creates the expectation that if you want to be a leader, you have to participate in SIU, according to Arndt, who says the training has had particular impact on line managers.

“Who has more impact on our staff than a first-line supervisor?” he says. “We can give great speeches and get them excited.

That works for the first few days. And then what? If we don’t have leaders who are leading the majority of our staff as a coach, as a grower, as a developer, you get stuck. We’ve got to replace and restart that training process all over again.”

Superior systematically identifies its high-potential employees for the program.

Arndt described another way in which the company shows its appreciation to current employees: the OTS, or On the Spot, bonus program. “We wanted to change the culture, reinforce the behaviors that were going to help us be successful as leaders, successful as co-workers and successful on the job,” he explained.

Arndt says the company’s previous, more traditional, bonus program failed to properly motivate employees or recognize achievement. “We’d take a percentage of profits, spread it out amongst everybody,” he said. “As long as you were here on December 31, you got your share of a profit-sharing bonus. Although that works, is it doing what we want? Is it really motivating, or is it creating a culture of entitlement?

“Currently, managers have full access to a pool of money that’s there to reward employees who go above and beyond.

Who came in early to get something done? Who stayed late because a customer was expecting something? We reward those people with $100 in cold cash—yes, we report it! —but it is an appreciation event for the manager.”

Trusight is now MRA Your Employers Association

State of Manufacturing® Focus Groups Scheduled What follows is a schedule of focus groups related to the 2015 State of Manufacturing® survey research project. Any manufacturing decision maker is invited to attend.

HARNESS THE POWER OF YOUR MEMBERSHIP

• InfoNow! 866-HR-Hotline (866-474-6854) available 24/7, Online Resource Center, and InfoNow@mranet.org • Expanded wage, salary, and benefits survey reports

Please email events@enterpriseminnesota.org or call 612-455-4239 to register to attend a focus group.

DATE

TIME

CITY

2015 LOCATION

Feb. 27 (Fri.)

12 PM lunch 12:30 PM focus group

Litchfield

Custom Products 1715 S. Sibley Av. Litchfield, MN 55355

March 9 (Mon.)

11 AM

Albert Lea

Riverland Community College 2200 Riverland Dr., Room 121 Albert Lea, MN 56007

March 11 (Wed.)

9 AM

St. Paul

St. Paul College 35 Marshall Ave, Room 3320 St Paul, MN 55102

March 11 (Wed.)

3 PM

Minneapolis

MPMA 5353 Wayzata Blvd., Ste. 350 Mpls., MN 55416

March 12 (Thurs.)

9:30 AM networking 10:00 AM focus group

New Brighton

Risdall 550 Main Street, Suite 100 New Brighton, MN 55112

March 13 (Fri.)

8 AM

Plymouth

MRA 9805 45th Ave N Plymouth, MN 55442

March 13 (Fri.)

10:30 AM

Elk River

Elk River City Hall 13065 Orono Parkway Elk River, MN 55330

March 17 (Tues.)

7:30 AM breakfast 8 AM focus group

Mankato

South Central College 1920 Lee Blvd.

President’s Conference Room North Mankato, MN 56003

March 17 (Tues.)

11:30 AM lunch 12:15 PM focus group

Redwood Falls

Duffy’s 110 Front Street Redwood Falls, MN 56283

March 18 (Wed.)

8:30 AM

Richfield

BMO Harris Bank 6625 Lyndale Avenue South Richfield, MN 55423

March 18 (Wed.)

3 PM

Minneapolis

Surly Brewing Co. 520 Malcolm Avenue SE Minneapolis, MN 55414

March 19 (Thurs.)

12 PM lunch 1 PM focus group

St. Cloud

Gray Plant Mooty 1010 West Saint Germain St., #500 St. Cloud, MN 56301

March 19 (Thurs.)

4 PM

Willmar

Ridgewater College 2101 15th Avenue Northwest H139 - Administration Building Willmar, MN 56201

March 20 (Fri.)

8 AM

Alexandria

Alexandria Tech. & Comm. College 1601 Jefferson Street CR 203 Alexandria, MN 56308

March 24 (Tues.)

10 AM

Greenbush

Central Boiler 20502 160th St Greenbush, MN 56726

• Preferred pricing on talent, tools, and training • Roundtables, forums, and networking events

www.mranet.org Minnesota 888.242.1359

Wisconsin 800.488.4845

Illinois 800.679.7001

Iowa/Western Illinois 888.516.6357

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Enterprise Minnesota’s 2015 Statewide Survey Release Event Wednesday, May 13, 2015 4:00 pm - 7:00 pm Minneapolis Convention Center 1st Floor - Room 101 1301 2nd Ave. South Minneapolis, MN 55403 ual State of Manufacturing survey of over 400 Minnesota manufacturing executives. Ž

Attend the statewide release event and receive a book containing survey results, pollster analysis, focus group transcriptions and selected cross tabulations.

Register now at www.enterpriseminnesota.org

Four Questions With Representative Pat Garofalo

Y

ou have two important committees for manufacturers.

What is their purview?

Number one, energy prices are a significant cost for manufacturers and other large power users. Over the last 10 years, we have seen a dramatic increase in the price of energy. The tradeoff has been that it has also been cleaner. We had decided as a state that we wanted our energy to be cleaner.

But now I think there is a greater focus on making sure that we have energy that is cleaner and more affordable.

Breakthroughs in technology have allowed us to do that.

The second area of importance is workforce development. There is a misalignment between the skillsets that are being taught in schools and what the marketplace of manufacturers need. We need to make sure those skills are available.

Third—and this is more of a challenge in Greater Minnesota—is the issue of workforce housing. In some places, they have good jobs, with good pay, but there isn’t anywhere for people to live near their employers. Those are three issues that manufacturers should be interested in.

As a practical matter, what can the legislature do about these things?

This is a fascinating time for energy because we are seeing a lot of technological breakthroughs that are solving problems. Just as email saved more trees than any public policy ever could, we’re seeing the marketplace get renewables cheaper; energy efficiency is allowing the same productivity with a lower energy footprint. And the shale gas revolution—this fracking that’s taking place—is really a game-changer for the world. Any one of those three things would be a big deal toward lowering costs and to allow for cleaner and more affordable energy. The fact that all three are happening at once is pretty revolutionary.

House File 1, our jobs bill, addresses workforce and energy issues head on.

We want to create a refundable income

tax credit for students who get their degree in STEM (Science, Technology, Engineering and Math) or long-term care fields who go on to work in parts of the state where there is a shortage of and great need for skilled workers.

As for the housing shortage, our bill makes permanent a pilot program that encourages the creation of workforce rental housing. Making sure we have a skilled workforce and communities that are able to sustain them is going to be a big key to creating prosperity all across the state.

It is an amazing time to be involved in energy issues. Because, again, the typical tradeoff has been, if you want cleaner energy you have to pay more.

Or, if you want cheaper energy, you have to pollute more. And that’s just not the case with these breakthroughs in technology. Smart public policy allows us to have energy that is both cleaner and affordable.

I’m hoping that we’re going to take steps to embrace fracking technology.

Silica sand used in fracking is produced right here in Minnesota and has the possibility to create dozens of goodpaying jobs. Sending that sand to the parts of the country where fracking can take place will continue to drive down the cost of capturing that natural gas through the fracking process. Natural gas is a cleaner and cheaper alternative to many of the fuel sources we use now, and should be embraced by those who wish to reduce greenhouse gases and help the environment.

Do you have a sense that manufacturers are appreciated by their communities and by lawmakers for their job-creating capabilities?

The public is misinformed about how difficult it is to create jobs in a profitable business. It is an exceedingly difficult task. Certainly Minnesota has to do a better job of showing our appreciation to the manufacturing industry by helping reduce red tape and getting government out of the way— and avoiding costly mandates that reduce productivity.

INNOVATIONS

Pat Garofalo represents District 58B in Minnesota’s House of Representatives, which includes portions of Dakota and Goodhue counties in the southeastern Twin Cities metropolitan area.

He serves on the following committees: Job Growth and Energy Affordability Policy and Finance (chair), Greater Minnesota Economic and Workforce Development Policy, Rules and Legislative Administration, Taxes, and Ways and Means.

Is there value for policymakers and community leaders to get to know the opportunities in manufacturing by touring plants and visiting with local manufacturing executives?

Absolutely. Touring manufacturing facilities gives us a chance to get an up-close look and hear how the policies we pass in St. Paul are impacting their businesses. They’re the ones who are our eyes and ears on the ground and can tell us what we need to do better, and what tools we need to give them in order to grow jobs and expand manufacturing capabilities.

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11

Great Places to Make Stuff

Streamlined

Success St. Cloud’s Mayor Dave Kleis and Cathy Mehelich, the city’s director of economic development. Kleis is largely credited with setting a more business-sensitive tone in his city’s attitude toward, and success with, job creators and economic development.

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/ ENTERPRISE MINNESOTA FEBRUARY 2015

PHOTOGRAPHS BY BRAD VEENSTRA

St. Cloud uses focus and expansive coalition building to bring manufacturing jobs to the region

W

hen German-based manufacturer Geringhoff opened the doors of its first U.S. facility last year, it illustrated the transformation of St. Cloud into one of Minnesota’s premier settings for manufacturers.

Geringhoff is a 130-year-old, familyowned maker of farm equipment, primarily corn harvesters. In an effort to extend its presence in the U.S. market, the company tested 27 different locations before settling on St. Cloud.

St. Cloud had a lot to offer.

There was the available building. In the fall of 2011, just as Geringhoff made its first inquiries to St. Cloud, an 80-yearold mill-working business shuttered its operation, unable to withstand the economic downturn in housing. The business was forced to abandon its nearly new, 100-thousand-square-foot, state-ofthe-art facility.

There was the supplier network. St. Cloud authorities identified 65 relevant regional suppliers, located as far north as Detroit Lakes and south into the Twin Cities, far more than any competing location.

There was the workforce. The combination of St. Cloud State University and five regional technical training institutions provided a potential workforce of more than 30,000 local workers.

And, not to be underestimated, there was St. Cloud’s German heritage. Mayor Dave Kleis, the public face of St. Cloud’s efforts, emphasized the area’s German heritage, even conversing in German with Geringhoff executives.

It all mattered, but mainly in the way Kleis’ St. Cloud contingent deployed a seamless coalition of local economic players to press its narrative. It included representatives from the city’s new economic development office, the privately funded Greater St. Cloud Development Corporation, St. Cloud State University, St. Cloud Technical and Community College, the workforce center, the small business development center, a locally based representative from the Minnesota Trade Office, and St. Cloud’s highly regarded chamber of commerce.

An internal Geringhoff publication probably best summarized its decision to choose St. Cloud. “They [Geringhoff]

Joan Schatz, COO at Park Industries

Nurturing its manufacturing base St. Cloud helps longtime resident Park Industries expand and create more jobs

Park Industries, based in St. Cloud since 1953, reached out to the city and economic development partners to aid in an $11 million expansion. The nation’s largest producer of stone-processing equipment, the company employs 225 people. Its expansion included the construction of a 33,760-square-foot addition to the manufacturing facility and additional machinery and equipment. To assist the expansion, the Minnesota Department of Employment & Economic Development provided funding through the Minnesota Job Creation Fund, and the city of St. Cloud provided tax increment financing.

Joan Schatz, COO at Park Industries, says that among the strengths of St.Cloud is its region-wide sense of mission.

“They understand our needs and what our challenges are as we grow and address our various markets,” she said. “Our situation is particularly dynamic in the way that community business leaders step up and partner with city and state officials as well as educational institutions.”

wanted a place where they could find hard-working, honest employees and a great community that would support this growing business,” it said. “They found all these qualities in St. Cloud, Minnesota.”

M

ayor Kleis is largely credited with setting a more business-sensitive tone in his city’s attitude toward, and success with, job creators and economic development.

He used his first State of the City address some 10 years ago to suggest

that St. Cloud better prioritize its links to current and prospective job creators and streamline the process through which businesses deal with the city. His vision ultimately evolved into the creation of the city’s first stand-alone Economic Development Authority (EDA), an entity that focuses exclusively on addressing business needs in the community.

Previously, economic development had been primarily administered through the city’s Housing and Redevelopment Authority (HRA), as well as a public/ FEBRUARY 2015 ENTERPRISE MINNESOTA /

13

private organization called the St. Cloud Area Economic Development Partnership.

Kleis immediately perceived that economic development activities would get lost among the HRA’s more pressing responsibilities to housing, neighborhood development and revitalization.

It was also not lost on him that the HRA’s priorities might change with the shifting concerns of its rotating and independent board of directors.

“It never had a clear focus on jobs,” Kleis says, adding that the HRA also lacked a “true connection” to the city.

Kleis’ new economic development commission was run by an appointed board and a staff that was housed within the city’s Department of Community Development.

The move “changed the philosophy,” he says, adding, “I wanted to put it there so there was an entrepreneurial aspect to it.”

He then hired a seasoned veteran to be the city’s economic development director.

Cathy Mehelich, a graduate of St. Cloud State University’s local and urban affairs program, is a 20-year veteran of helping local communities relate to their job creators. After a first job in Olivia, she spent 11 years at Elk River and moved to St. Cloud four years ago.

This new entity and new separation of powers put a strong emphasis on business development that quickly became clear in the community. “[Kleis] saw the opportunity for the city to do a better job in responding to business development needs and led an effort to do that better,” Mehelich says.

“One of the mayor’s goals was to serve as a first stop for businesses that are interested in coming to the city,” she says, “whether for startups, expansion opportunities, technical and financing resources or new development opportunities.”

Kleis also withdrew from the regional economic development partnership that was composed primarily of elected officials. “Way too heavy on the government, too little on the business piece,” he remembers. He appointed a task force to find a better solution, which led to the creation of the Greater St. Cloud Development Corporation (GSDC), a private collaboration of approximately 100 regional business and community leaders within Benton, Sherburne and Stearns counties in central Minnesota.

GSDC describes itself as spearheading 14

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Hermann Braun, director of manufacturing at Geringhoff’s St. Cloud facility. An internal Geringhoff publication probably best summarized its decision to choose St. Cloud. “They [Geringhoff] wanted a place where they could find hard-working, honest employees and a great community that would support this growing business,” it said. “They found all these qualities in St. Cloud, Minnesota.”

the economic development efforts of the greater St. Cloud region by identifying and unifying opportunities to engage community leaders, foster business growth, expand and nurture the area’s talent base, and support the communities that make up the greater St. Cloud region.

“We found a lot more business buyin and support,” Kleis says, adding that GSDC is made up almost entirely of

business investors and is financed almost entirely by the business community.

As a result, St. Cloud has experienced an enormous amount of positive change, according to Mehelich. “It really helped streamline our responsiveness to the business community,” she says. “Being a regional hub, there are a variety of business development resources, both public and private.”

Meaningful results Since Mayor Dave Kleis created a stand-alone economic development department in his city hall offices, St. Cloud has experienced: • 300,000 square feet of new construction projects, • $15.4 million market value, • 335 new jobs, • 1,081 retained jobs, and • $54 million private investment at a 10-to-1 ratio of private/public dollars.

Kleis’ economic development team scored another victory two years ago when mass transit bus manufacturer New Flyer decided to produce a new bus at its St. Cloud plant.

The Winnipeg-based company already employed more than 600 people who produce heavy-duty city transit buses for large metropolitan areas across the county, including New York City, Los Angeles and Miami.

Three years ago, the company entered into a joint venture with Scotland-based Alexander Dennis Ltd. to produce an intermediate-size bus—the MiDi—to serve smaller municipalities. Alexander Dennis would create the designs and New Flyer would provide the manufacturing, including the sourcing of components.

order to streamline communication and scheduling for the company. In addition, Mehelich coordinated a small private reception for Winnipeg-based company executives one year before the expansion project in order to highlight new local initiatives and acquaint company officials with community leaders.

New Flyer chose St. Cloud for the $5 million expansion that includes six new bays to its 350,000-square-foot facility, and machinery and equipment to retool existing production lines.

“This is a central location for us, for our management,” says Wayne Joseph, New Flyer’s St. Cloud-based executive vice president of operations. “We would have closer and better oversight. We did get some financial incentives from St.

Governing and Growing Companies in Greater Minnesota.

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Partnering with Minnesota Manufacturers SINCE 1980

New Flyer chose its plant in St. Cloud for the $5 million expansion that includes six new bays to its 350,000-square-foot facility, and machinery and equipment to retool existing production lines. Its new product line will add about 100 local jobs.

New Flyer needed to decide which of its three U.S. plants—St. Cloud; Aniston, Ala.; or Elkhart, Ind.—it would use to build the MiDi. The St. Cloud team helped broker a public-financing package that included interest-free loans of $100,000 from St. Cloud, $250,000 from Stearns County, and a $1 million forgivable loan from Minnesota’s Department of Employment and Economic Development.

Kleis’ EDA office coordinated the approval process with all three entities in

Cloud, although we certainly could have gotten as much or more from the other locations.

“I think it was our commitment to St. Cloud and the St. Cloud area. The mayor had a lot to do with it. Our relationship with the community made us want to invest in this area.

“Mayor Kleis is extremely probusiness, extremely pro-manufacturing.

Between the mayor and Cathy, we could not have a better relationship and partnership with the local community.”

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SPECIAL REPORT: Workforce Training

Internal

Development Alexandria Industries uses its ambitious in-house Leadership Academy to accommodate growth and plan for succession

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I

n 2008, Jason Bachman was a secondshift supervisor in the pressroom at what was then Alexandria Extrusion. A 15-year employee, Bachman was eager to move up in a company that was growing quickly and poised to grow even faster.

In just one year, the company established a strategic alliance with Wheaton Plastics to enhance its injection-molding capabilities. It created Alexandria Finishing and soon acquired Alexandria-based Doege Precision Machining, and then traveled south to acquire M&M Metals, a Dallasbased manufacturer of precision metal fabrications. And from banter around the company, Bachman knew there were more growth opportunities at hand.

To help accommodate its growing employment demands, the company had created something called the Leadership Academy, an innovative two-year program that was designed to train employees on a variety of issues, give them better selfawareness, and steep them in company culture.

Eighty of Alexandria Extrusion’s 300 employees applied for 20 spots. Bachman was one of them.

“There was a lot of excitement” about the program, Bachman remembers. “We knew we were going to be doing acquisitions in the future. [The Leadership Academy presented] an opportunity to help us grow within the company. I had the desire to lead and I had the desire to help others.”

The inaugural class, of which Bachman was a member, received instruction that combined self-assessments and one-on-one counseling with monthly classes that ranged from two to six hours in length.

Topics included business acumen, communication and management techniques—with a healthy dose of company culture.

Bachman took the Myers-Briggs personality assessment, which revealed his decision-making style. The Winslow Assessment measured, among other things, how he worked with others, how he handled tasks, and with what level of emotional maturity he did these things.

The tests demonstrated to Bachman his type of personality. “I’m the kind of

personality who says ‘Let’s go! Why aren’t we done yet?’” he said. “It allowed me to understand that I need to take a step back— it’s not always about how fast we can get stuff done. We have to bring people with us.”

The training stays with him today, he said. As general manager of Alexandria Extrusion MidAmerica, a subsidiary of what is now called Alexandria Industries after yet another acquisition, Bachman now manages 55 employees and, he said, still works on tempering his “let’s go” inclination.

“It is still my personality,” he said. “I’m always wondering why we’re not doing things faster. But I know it is not about the speed. It’s about doing it right. Bringing people on, making sure everybody is trained and educated. Developing people.

“I’m having a lot of fun with it,” said Bachman, who drives from his home in Alexandria to the Minneapolis-St. Paul airport every Sunday night and boards a plane to Indianapolis, returning home on Thursday nights. “If I look back at all the things I’ve done, this is probably the most rewarding. What you’re really doing is changing people’s lives. You are helping people become better.”

The concept of the Leadership Academy long gestated in the creative thinking of Lynette Kluver, director of organizational development at Alexandria Industries.

Kluver has deep experience with providing imaginative training at the company. Over 15 years, she has leveraged almost a million dollars in training grants from the Minnesota Jobs Skills Partnership and other state institutions.

She estimates that she began advocating the concept to colleagues on the company’s leadership team about two years before they began the program.

As the company’s top human resources executive, Kluver was also well aware of the succession challenges in its Alexandria Extrusion facility, in which more than a quarter of employees were 55 years old or older.

“We need to have a whole lot of people ready to fill the positions when somebody is ready to retire,” Kluver said. “As we

Core Values

The Leadership Academy included a strategic exposure to what drives Alexandria Industries As Alexandria Industries entered a period of explosive growth, CEO Tom Schabel and his leadership team spent eight months crafting a shared vision and infusing its workforce with common values.

“We’d always done strategic planning, but creating our five-year vision was an interesting process for us,” he said. “We wanted to talk about what kind of legacy we would like to leave behind. In the process of creating our shared vision, we believed there was also a need to bring stronger focus on our values, as well.”

looked around in meetings, we knew that there was going to be a great need for people to take new positions, whether they are in a leadership position to lead people, or just to be a leader.”

Then came 2007 and the advent of a probable string of acquisitions that would pressure the company’s ability to identify the right mix of employees to help cope with the potentially explosive growth. “We knew that we didn’t have the depth to support that growth,” she said.

She knew that developing leadership skills inside the company would enable it to make those additional acquisitions with greater confidence.

“The beauty of it was that we didn’t have to start thinking about it, because I’d been thinking about it for years,” she said. “We had the ability to move quickly.”

“Leadership development is a key piece in succession planning—to make sure you have the right people with the right skills in the right place at the right time,” she said.

“If you are not being proactive, then you’re not going to be successful.

“I have a passion for coaching and mentoring,” she said. It “fills my cup,” she said, to help employees achieve an understanding of who they are, and their values, strengths and gifts. And then to give FEBRUARY 2015 ENTERPRISE MINNESOTA /

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PHOTOGRAPH BY BRAD VEENSTRA

Engineer Adam Rupp, a graduate of the Leadership Academy, says his MBA taught leadership skills “but the Leadership Academy taught me how to be a more effective leader by using my own values and the company values to guide my decision making.”

them tools to leverage that knowledge in their workplace and in their communities is “pretty darn exciting.”

The growth of the Leadership Academy dovetails with the company’s more acute focus on aligning its company vision and culture among its newly acquired entities.

Company CEO Tom Schabel described that evolution in last month’s Enterprise Minnesota magazine.

“We’d always done strategic planning, but creating our five-year vision was an interesting process for us,” he said. “We wanted to talk about what kind of legacy we would like to leave behind. In the process of creating our shared vision, we believed there was also a need to bring stronger focus on our values, as well.”

More pragmatically, Kluver said, “Culture will eat strategy.”

A few years ago, Schabel’s senior leadership team took about eight months to develop full agreement over that shared vision. The power that came with that agreement was a defining moment, he said.

The company’s explosive growth imbued the process with a special urgency. “We realized that as we made acquisitions, and we were growing, we had new leadership coming into different roles,” Schabel said.

“It was important to get agreement around our values. We wanted to make sure that all of the employees, no matter what facility or location or role, defined 18

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integrity, for example, the same way we do in Alexandria, Minnesota.”

The company methodically introduced its values to employees over 10 months.

Company executives visited each of their facilities in Alexandria, Wheaton (Minn.), Dallas and Indianapolis multiple times.

Once there, they broke departments into smaller groups to facilitate in-depth discussions.

“We knew we couldn’t just have an employee meeting and leave it at that,” Schabel said. “We rolled it out in a formal manner to ensure that people understood that this is more than a sign on the wall.”

Values (personal and corporate) occupied a fundamental role in the threepronged objectives in the design Kluver gave to the Leadership Academy, along with servant leadership and competencies.

To fill the first class, Kluver and her colleagues identified high performers, “people from whom you are going to get an immediate return on investment,” she said, adding that they would have potential to move up to an identified position during a certain timeframe.

Recruits would also demonstrate learning agility, according to Kluver.

“Research shows that learning agility is a predictor of leadership success,” she noted.

This, she said, includes: People agility: Confident people who know themselves well, who have a passion to learn and who also learn from their

experiences. “They have connections,” Kluver said. “They look to nurture and develop relationships. And they are typically good communicators.”

Results agility: People who inspire others to perform beyond their capabilities, who understand that results take effort.

And who aren’t clock watchers.

Mental agility: People who analyze problems from a fresh point of view. They have an attitude that embraces opportunities to be challenged. They have a mindset that is open to different ways of doing things and learning new things.

Change agility: People who are curious about new ideas and unafraid to take initiative.

Kluver planned the Leadership Academy with the help of Vicki Jodsaas, president of The Competitive Edge, an Alexandria-based company with clients in 25 states. Their vision blended classroom instruction, personal coaching and real-life work applications.

Students receive 130 hours in monthly classroom instruction over 18 months that covers a mix of company culture, communications, relationship building and business acumen. Instructors include inhouse executives and outside consultants, as well as faculty from the technical college system.

An expensive core element of each Leadership Academy is each student’s personal and confidential hour-long session, once a month, with Yvonne Kinney-Hockert of Consulting Solutions.

Long associated with Alexandria Industries, Kinney-Hockert works with students on company objectives, personal objectives, roadblocks or opportunities.

Kinney-Hockert debriefs students on their Myers-Briggs and Winslow results and constantly integrates their sessions with company values and course objectives.

“We’ve had a relationship with her for a number of years,” Kluver said. “She knows our culture and she knows individuals well. While it is the most costly aspect of the program, without it, it wouldn’t be as effective.”

Students learn whether they are open to change, whether they are an introvert or an extrovert, whether they like details or the big picture.

She’ll also coach participants through challenges outside the workplace that may keep them from being as effective as they could be. “It ends up being pretty

powerful,” Kluver said.

The popularity of the coaching sessions, according to Kluver, is demonstrated by how people “sit outside her door, consciously tapping their foot, waiting to get in. When the door opens, they race in with their list of things they want to talk about.”

And, finally, students apply their instruction to real-world situations within the company. “We are not copying a canned leadership program off the shelf,” Kluver said. “We want you to learn in the trenches.”

Kluver and her colleagues are now planning three other educational offshoots within the next year.

• Leadership 101, a less intensive class, will enroll its first session of students in March. Forty participants will develop the same self-mastery skills, along with studying basic business issues, learning leadership skills, and improving their communication skills during an 18-month program in which classes meet every eight to 10 weeks.

• Manufacturing Academy. In a format similar to the Leadership Academy, students will work through five or six functional areas that will concentrate on technical skillsets, in addition to leadership skills.

• Masters’ Academy. Tied more closely to succession planning, this highly customized effort aims to help prepare Leadership Academy graduates for specific future responsibilities.

“The Masters’ Academy is our future,” Kluver said. “There are a lot of us who will be retiring over the next five to 10 years.

We better have a pool of candidates ready to go.”

Engineer Adam Rupp, an employee of Alexandria Industries since he enrolled in an internship in 2005, is a graduate of the second Leadership Academy session.

After graduating from Alexandria Technical and Community College, he went on to get a degree in mechanical engineering at St. Cloud State University and then, while working at Alexandria Industries, earned an MBA, also from St. Cloud State.

“The MBA teaches skillsets, such as marketing, accounting, and finance,” he said. “You’re learning information. It is not necessarily about how to lead others,” which he says is a shortcoming of his formal education.

“I also had never heard of a company promoting its values to the point where you

Accountant Karla Noetzelman

Life-Changing

Karla Noetzelman’s experience made her a zealous advocate for the Leadership Academy Accountant Karla Noetzelman keeps a four-inch loose-leaf notebook perched on a file cabinet above her desk at Alexandria Industries. It contains all the notes and handouts from every session of her experience as a student in Alexandria Industries’ Leadership Academy.

The notebook is the grand connector of the Academy. Every student receives one and is required to maintain it throughout the program.

Noetzelman says she pulls it down and thumbs through it at least once every couple of weeks to get background on a particular work challenge, whether how to accommodate diverse opinions in a meeting or how to most effectively communicate through email.

A six-year employee, Noetzelman says she was in part motivated to join the Leadership Academy to get to know other people at the company. As a member of the accounting staff, she is located in an off-campus facility that houses only 14 of the now almost 400 Alexandria-based employees.

“I really wanted the opportunity to have a leadership position and to learn more about the company,” she says. “I had never worked in manufacturing before, so it was a great opportunity to understand our business and to meet other people, and learn more about the company.”

She has since become a zealous advocate for the Academy. “It was lifechanging for me,” she says. “I never imagined a company would put a person through something like this.”

She says one of the biggest takeaways was the lesson of influence. “I learned I could adapt to other people and how to influence them,” she says. “Leadership is about influence. It is not about coming in and telling people what to do.”

could apply them,” he said. “I had always seen them written or posted on their websites. The Leadership Academy focused on those.

“My MBA taught me leadership skills, but Leadership Academy taught me how

to be a more effective leader by using my own values and the company values to guide my decision-making. When I see a decision being made that is representative of our company values, it is apparent that the decision was the correct one.”

FEBRUARY 2015 ENTERPRISE MINNESOTA /

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SPECIAL REPORT: Workforce Training

Leadership

RESET

After ‘surviving’ a couple years of go-go growth, L&M takes some time to reappraise its HR procedures

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/ ENTERPRISE MINNESOTA FEBRUARY 2015

F

or better or worse, the dramatic sales cycles of the energy economy with which L&M Radiator must contend have enabled (or forced) it to try a wide variety of employee leadership development strategies.

Almost fantastic surges in sales growth in the mid-2000s forced Hibbing-based L&M Radiator to make speedy and drastic personnel moves to keep up with the demand from oil and gas companies for its prestigious Mesabi® line of industrial radiators.

Over a three-year period, the company quadrupled in size, growing from $50 million in sales to about $200 million.

It opened two more plants, one in Independence, Iowa, (2005) and another in Yankton, S.D. (2007). L&M moved its existing plant in El Paso, Texas, to a larger facility in Las Cruces, N.M., and also eventually expanded its plants in Iowa and South Dakota. In 2011, L&M opened a plant in Chile.

It also increased its workforce by some 400 percent.

“We pretty much immediately

expanded to three shifts in all four of our U.S. plants,” company Vice President Laura Ekholm told a recent meeting of business executives. “We needed first-line supervisors like right now.”

Ekholm was one of three manufacturers who brought their real-world experience to an Enterprise Minnesota event entitled Empowering Leaders: The Keys to Attracting, Retaining, and Growing Talent held at Delkor Systems Inc. in Arden Hills.

“We were promoting first-line supervisors right off the shop floor,” she said. The company’s attitude at the time, she said, was that if “somebody’s been here four or five years, let’s get him in the foreman’s office.”

In its rush to fulfill the tidal wave of incoming orders, L&M could devote little time to considering how to develop its new supervisors.

“It didn’t work,” Ekholm said. “They were really good workers but not necessarily good leaders. They had no skills for leadership. They were a little intimidated. And it was intense. We were working all the time.”

PHOTOGRAPH BY TOM LINDSTROM

L&M vice president Laura Ekholm says her company has used time during a downturn in the energy markets to evaluate training and employee relations.

In most locations, the company tried to recruit local allies. Local community colleges and technical schools were enlisted to create a series of intense, weeklong boot camps for new supervisors which, Ekholm said, concentrated on teaching new supervisors what they needed to know to get product out the door.

“It was training by fire hose,” she said.

“They learned a lot, but when they got back to their plants, they were like deer in the headlights.”

She added Boot Camp 2 and Boot Camp 3 sessions to augment the original training—and to give new supervisors a network of colleagues to call for help.

“They had people they could talk to,” Ekholm said. “If you were a tubing supervisor in Yankton and you needed to talk to somebody, you remembered a guy in Hibbing that you went through this training with. They had somebody to call.”

Throughout those go-go years, L&M managed the growth and “more or less” maintained its quality standards, Ekholm said. “But it was not pretty. It was chaotic.”

B

ut now, almost as quickly as the fickle worldwide energy market had once pressed L&M’s facilities to the limits of their production capabilities, that same marketplace has contracted dramatically, lowering L&M’s sales to about $70 million.

The executives at L&M have used the downturn as a time to evaluate lessons learned about training, as they await the next uptick in energy.

They first tightened and revised their hiring policies, Ekholm said. L&M always looked for minimum qualifications of a high school education, passing a drug test and a mechanical aptitude—formal or informal, according to Ekholm. But now, L&M includes foremen in the process to ascertain how employees could solve problems and work together.

They also brought the orientation process back in-house. “I feel like the colleges really let us down,” Ekholm said. As the process went along, the colleges demanded that employees change their schedules to meet the colleges’ schedules. They weren’t able to accommodate the number

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of training sessions L&M required. And, what’s worse, there was high turnover among instructors.

L&M executives also investigated the reasons for high employee turnover, which Ekholm characterized as “atrocious,” particularly for entry-level employees.

“It was a revolving door,” she said. “We rivaled the local McDonald’s for turnover.”

She discovered that employees were not intimidated by the workload or the work processes. “They didn’t feel like part of the team,” she said. L&M now puts workers in teams and holds a meeting for new employees every week for six months.

Once a month, speakers talk about the company, its business or benefits.

In addition, L&M added a mentor program. Each new employee gets a mentor for six months. After the six months, mentors are rewarded with cash bonuses or gift certificates, and mentees get dinner out with their families.

L&M’s efforts have received positive feedback from new employees, as well as those who were laid off and then hired

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back. “We’ve seen new employees get back up to speed much, much quicker,” according to Ekholm.

The company’s human resources department also revised the process of employee reviews, setting goals and expectations that reflect the company’s corporate goals.

That solved a problem. “Front-line supervisors didn’t know what we expected of them,” said Ekholm. “We’re really looking at leadership from the bottom up, not from the top down.”

To provide a better management toolbox for leaders on the shop floor, L&M engaged Enterprise Minnesota to help with Training Within Industry (TWI), a program of continuous improvement exercises and 5S workplace organization.

“We felt like we had to give some tools about how to communicate, to break down our product, to understand training, and to be able to teach,” Ekholm said.

Over about an 18-month period, L&M trained some 100 people in two different plants, working on job safety

and job relations, with a special focus on instruction. Currently, about 10 employees in each plant have become TWI champions, and the company has performed about 400-plus job breakdowns companywide.

“We’ve always had special process instructions, but we focused on the what and the how, never on the why,” Ekholm said. “That’s what TWI job instruction focuses on: Why are you doing this?”

L&M has also completed nine Kaizen events between two plants. Each Kaizen consists of 10 people, representing a wide variety of departments, who meet for three days. After that, they meet weekly.

“Usually there are about 20 items on their hit list,” Ekholm said. “They can decide when they want to do the next big cleanup, or move equipment around, or make physical changes. For the most part, they are given free reign.

“Getting buy-in from everybody on the floor has been a good experience for us,” she added. “We see positive results on our bottom line.”

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The Interview

Logistics

Matter C.H. Robinson VP Dan Ryan tells Enterprise Minnesota CEO Bob Kill why manufacturers— of all sizes—should understand their transportation options

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/ ENTERPRISE MINNESOTA FEBRUARY 2015

C.

H. Robinson is a global provider of freight transportation services and logistics solutions to companies of all sizes, in a wide variety of industries. We operate through a network of more than 280 offices that allows us to build our business through direct, face-to-face relationships with our customers. In order to service these customers, we have contractual relationships with more than 65,000 transportation companies, including motor carriers and railroads, as well as air and ocean freight carriers.

In addition to transportation, we provide sourcing services through our Robinson Fresh® business brand. Robinson Fresh handles the buying, selling and marketing of fresh produce, and it was our original business when we were founded in 1905. The foundation for much of our logistics expertise can be traced to our significant experience in handling produce and temperaturecontrolled commodities.

What is your Minnesota footprint?

C.H. Robinson has approximately 1,700 employees working out of seven locations in Minnesota: Brooklyn Park, Rochester, Roseville, St. Cloud, St. Paul, Sartell and our global headquarters in Eden Prairie.

I recently read that C.H. Robinson purchased Freightquote out of Kansas City, MO. Why is this significant?

C.H. Robinson has serviced the small business community since our beginning and currently has a significant amount of business with this group. However, it remains an extremely large, underserved market and growth opportunity for C.H. Robinson. Freightquote is a leader in e-commerce logistics and has developed a large customer base within the small business community. Freightquote’s Internet storefront and online presence meets customers where they want to buy, and e-commerce is going to be a bigger part of future supply-chain services. Together with Freightquote’s e-commerce solutions and C.H. Robinson’s scale and access to carrier capacity, we can grow this market more effectively.

You service a wide range of customers.

Tell us what that means for Minnesota manufacturers.

I mentioned earlier the many different locations we have in Minnesota. Our employees are intentionally in close proximity to our customers, as it gives them broad knowledge of the local market.

This knowledge, combined with a deep understanding of the specific supply chain issues facing individual customers and certain vertical industries, such as manufacturing, enables our employees to respond quickly to customers’ changing needs. In addition, servicing many different industries allows us to draw on best practices in order to create customized solutions for our customers.

Manufacturers tend to believe that they are the ones dealing with workforce issues, regulations, etc., that they didn’t

anticipate. How would you sum up what I might call the “state of affairs” in your industry?

The state of affairs in the logistics industry is similar to the state of affairs in the manufacturing industry. There are concerns about labor, rising costs of operation and legislative pressures.

Specific to the logistics industry, the driver shortage remains a key and real issue. Driver turnover is still at record levels, and carriers have equipment parked

The driver shortage remains a key and real issue. against the back fence because they can’t find and retain drivers. On the operational side, carriers’ overall costs of doing business are rising. Despite the dip in diesel fuel costs, carriers’ savings are nearly entirely offset by increasing expenses for recruiting and training drivers, new equipment, insurance and health care costs.

With regard to government regulations, the transportation industry is facing several, such as hours-of-service, electronic onboard recorders, and compliance, safety and accountability. The logistics industry isn’t concerned about one government regulation over another, rather the culmination of the impact of all of them.

Half of the manufacturing base in Minnesota is located outside of the seven-county metropolitan area. Many manufacturers are buried in tiny rural communities where there are no freeways and they don’t have good transportation available to them. Any guidance for them?

A thriving manufacturing industry is good for everybody. The logistics industry is very fragmented, which causes peaks and valleys when it comes to having access to the right amount of capacity. Whether you are a small manufacturer that ships infrequently or a large manufacturer

that ships daily, we can use our carrier relationships to make sure our people, process and technology are standing behind you, to help you navigate and succeed.

Guidance to them would be to prioritize transportation and speed to market. I read somewhere that the most expensive words in business are, “We always do things this way.” See what’s out there and available to you.

Maybe you can dig just a little deeper.

Many people may not recognize your technology resources, your infrastructure or your network. Talk a little about how you can bring those resources to any manufacturer, no matter what their size or where they are located.

We want to meet our customers where they want to buy. That means in remote regions or in major metropolitan regions from transactional to integrated supply chains. The reason C.H. Robinson is so successful in the transportation industry boils down to relationships, both on the customer side and on the carrier side.

We continually work on establishing contractual relationships with qualified transportation providers that also meet our service requirements to assure dependable services and contract carrier availability during periods when demand for transportation equipment is greater than the supply.

Just like a small shipper doesn’t have the leverage to access a bunch of capacity in the marketplace, a small carrier doesn’t have the resources to access a bunch of freight in the marketplace. We’re trying to put those two pieces together.

Technology plays a role, too. A small manufacturer is going to have different technology capabilities than a large one; the same holds for the difference between a small carrier and a large carrier. We invest more than $100 million annually in our Navisphere® technology platform. It is a TMS—a transportation management system—that our customers have access to. It gives them the benefits of using FEBRUARY 2015 ENTERPRISE MINNESOTA /

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technology to gain management tools, visibility and business intelligence.

Since the recession, our industry has gone through a very rapid maturity cycle.

We went from being an over-capacity marketplace to a highly balanced, nearly perfect market of capacity supply and shipment demand. In that process, the carrier community has become very sophisticated. They’ve invested in technology and business processes because it breeds efficiency and profitability. So the shipper community needs to interact with the carrier community in a sophisticated way by presenting its freight in ways that create net value for the carriers. That’s a key role that we play, not only as an aggregator of capacity, but also in providing the right freight and capacity to our two customers: shippers and carriers.

Are regulations increasing? Are they driving up costs?

Sometimes the government creates regulations to protect the small player and it does the opposite. What’s going on with regulations?

Regulations in the industry are increasing, and typically, regulations do add costs. Some of the regulatory changes are creating pressures on the trucking community. For example, changes to the working hours of a driver and the tools to manage those are examples of reduced efficiency and increased cost burdens for the carrier community that eventually are reflected in less available capacity and higher prices for the shipping community.

The other thing is that with any new regulations, there always needs to be a development of understanding. There has been a lot for the industry to digest.

So, lack of clarity around some of the newer government regulations is a factor. If you are leaving interpretation of those rules up to the general public, it is probably a cause for concern and, if they are misinterpreted by the shipping 26

/ ENTERPRISE MINNESOTA FEBRUARY 2015

community, unnecessary risk can be incurred as well as inconsistent service from the trucking community. That’s why the industry is asking for better clarity around some of these newer regulations, because they seem to have come at a pretty good clip.

Often these regulatory attempts to improve the industry introduce some element of inefficiency. It is the cumulative effect that continues to put stress on the industry.

Isn’t it also compounded by the fact that the next generation of truckers— just like the next generation of manufacturers—is shrinking, in part because of regulations and also because the industry is seen as not having very good opportunities?

There is absolutely a driver shortage.

There is a large voice around the shipper and carrier communities about attracting truck drivers. Long-haul trucking has really struggled to attract workers and that brings higher wages, which brings additional pressure to the industry.

Interestingly, there is a relationship between manufacturing and truck driving.

When manufacturing and housing industries are expanding, drivers tend to be attracted to those industries, leaving trucks without drivers. Carriers respond by raising driver wages and that ends up raising transportation rates.

Does that have an especially negative effect on the small trucking companies?

Large and small trucking companies offer different advantages to drivers. The larger companies may be able to offer additional benefits and more revenuegenerating miles, but drivers seem to be more satisfied working for smaller carriers, as demonstrated by their lower employee turnover rates as compared to the larger trucking companies.

How can a manufacturer look at transportation, logistics and supply chain as a differentiator for its business? Say a small manufacturer

wants to deliver daily, but no trucking company will come to Willmar on a daily basis to pick up a partial load.

How can a manufacturer think more strategically about this?

Being competitive means winning

Basically, the operating expenses are accelerating faster than the market can offer in pricing. and growing business. Supply chains aren’t an exception: there are substantial cost and service ramifications, and leverage associated with them. As companies address operating capital and cash flow initiatives, the supply chain is increasingly called on to identify and deliver efficiency, visibility and actionable insights. In competitive markets, many manufacturers can differentiate themselves through the supply chain, such as higher order fill

rates, multiple service offerings, cost-toserve insights, etc.

You have to take a look at the evolution of the supply chain. A lot of it is driven by technology and the globalization of our economy. So if you do business internationally, you probably source internationally. A small manufacturer wants every competitive advantage it can get, including the supply chain. At C.H. Robinson, we feel we can connect with those smaller shippers, consolidate their shipments where it makes sense or leverage their capacity.

It becomes even more than price and access to capacity. We get involved with customers of all sizes and take a look at their business processes and how to satisfy their customers’ demands. We can also help a customer differentiate itself after the sale of the product. Maybe we increase the frequency and quality of delivery, using different modes of transportation. We can do all these things through a dynamic or planned environment so the customer can offer different services to its customers.

A lot of trucking companies seem to go under. What’s the status of the health of the industry today? Is it shrinking?

Is it stable?

New truck orders are at an all-time high right now. Post-recession, a lot of new truck orders were for replacement, not for growth. Now, we’re seeing these are actual growth purchases. With the expanding gross domestic product, the new purchases include fleet expansion, which is healthy for the industry. That being said, bankruptcies are still very prominent in trucking.

The bankruptcy threat seems counterintuitive. Right now, the market is so good for trucking. It appears most analysts agree that the new requirement for electronic log books is a primary driver for carrier bankruptcy rates of late as it is a high cost for small carriers.

So the industry is expanding. The investment in new equipment and technology is expensive. It appears that some of the smaller companies just can’t afford to stay current.

Basically, the operating expenses are accelerating faster than the market can offer in pricing. That’s the other reason C.H. Robinson has to appeal to the small carrier. Small carriers are critical to our

network because carriers that have fewer than 100 tractors transport more than 80 percent of our truckload shipments.

We regularly communicate with carriers and try to assist them by increasing their equipment utilization, reducing their empty miles and repositioning their equipment. We provide an advance on pay and we also offer payment within 48 hours of receipt of the proof of delivery.

These relationships are critical to our success.

The price of fuel has dropped dramatically. It’s pretty shocking to fill up a car for $30 when it used to be $50 or $60. How will that affect transportation?

Fuel for a carrier is 30 to 40 percent of its operating costs, so it is extremely material. However, the reality is that a lane has a rate per mile that the market has set because of the balance of supply and demand. Fuel is a variable that

Some of the regulatory changes are creating pressures on the trucking community. typically follows the Department of Energy fuel index. Your rate per mile doesn’t move with the price of fuel, but your total spend does.

Our recommendation is to separate the market rate per mile from fuel and use a mileage-based fuel surcharge rather than a total flat rate from point A to B. The pricing is then more attractive to the carrier community, which will give a shipper a better total price and greater capacity commitments from carriers.

Your cost to serve a lane will move a little as fuel fluctuates, but it is likely more competitive over time than the carrier needing to hedge on where fuel is going.

There has been a massive trend of original equipment manufacturers trying to find suppliers who are close by, for a number of reasons: You can reduce inventory. You can get daily shipments. You can buy in smaller quantities. Has non-surface transportation changed dramatically because of this?

International transportation is a key component to our success. We made an

acquisition three years ago to improve our value proposition, especially from Asia to the United States. Exports are up, primarily by ocean. Importers continue to take advantage of favorable labor in manufacturing. Right now, there is port congestion due to some of the labor conflicts in the port cities. That’s a real challenge. Shippers are having to extend their expectations of transit types.

With all your infrastructure capabilities, can you help manufacturers plan ahead in some situations?

Visibility of goods flowing through the supply chain is one easy thing that we do through our Navisphere® platform, giving visibility through a single platform across multiple continents. You’re getting that track-and-trace visibility as to where your product is every day of the year, which allows manufacturers to keep things on schedule. However, if something does happen while the product is in transit, our employees have the logistics knowledge and multi-modal solutions to bring options to the table. As well, we’re always staying on top of the latest events and news in the logistics industry that could cause shipment disruptions, such as labor issues, weather events or natural disasters, and talking with our customers about how those could affect their supply chain.

A small shipper is not going to be able to consolidate its shipments on its own, but small carriers enable that in a way that is competitive with reduced risk.

The smaller manufacturers and shippers may have less frequent volume and, as such, may also need fewer services.

That’s where consolidation is an attractive option; it allows less frequent shippers to lower costs and boost efficiency. Our network of consolidation facilities around the United States aggregates customers’ shipments, which provides improved overthe-road services, shorter transit times and less handling of the product.

And that’s our role, to create value in this very fragmented environment of both manufacturing and transportation.

How do we create value so that the small participants actually are competitive in a global market? That’s what we do. We bring the back office skills and tools to the smaller shippers and carriers so that they can compete with the largest shippers and carriers.

FEBRUARY 2015 ENTERPRISE MINNESOTA /

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PIONEER Partnership This northwest coalition has been representing its manufacturers for almost 50 years

T

he long, cold winters in northwestern Minnesota have long produced a thriving locale for certain industries, specifically the snowmobile and logging industries.

“People up here were resourceful,” says Robert Hager, CEO of Border State Bank, speaking about the residents of Warroad, Baudette and Roseau—Minnesota cities that are well known for the manufacturing companies of Polaris Industries and Marvin Windows and Doors.

“As far as Marvin Windows and Polaris Industries, a lot of [success in manufacturing] was tied to our winters,” Hager says. “In the winters, people needed to get around. A lot of our logging was done in the wintertime because you could get into the different forest areas that were probably too wet in the spring and summer. We needed winter transportation to move people around, so snowmobiles started showing up in this area. One thing complemented another and because

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of a lack of agriculture, manufacturing was a good fit for this area.”

However, manufacturing in this part of the state does have its challenges.

Because most of Minnesota’s commerce is focused around the large metropolitan area of Minneapolis and St. Paul, it is easy to forget about the importance of manufacturing at the outskirts of the state and the needs of those manufacturers. For this reason, it is essential to raise awareness about these manufacturers.

To address the concerns of the large rural manufacturers in Northwest Minnesota, Bill Marvin, Allan Hetteen and Ted Rowell Jr. started the Northwestern Minnesota Manufacturing Association 48 years ago.

“We started in 1966 when I invited Bill Marvin and Allan Hetteen to a meeting,” says Rowell, then president of Rowell Laboratories Inc.

By Clayton Benjamin

in Baudette. “We were having some concerns and problems in finding qualified applicants for professional and semi-professional positions, and I asked them to come and talk about some of the problems we might share.”

Roads are essential for importing raw products and exporting goods from the manufacturers.

Marvin, then president of the sprawling Marvin Windows firm in Warroad, and Hetteen, then president of Roseau’s Polaris, one of the leaders in the snowmobile industry, sat down with Rowell. In their discussions, they found they had the basis for an organization.

“We came to the conclusion that the solution to some of our problems might be to promote the area and to make it more attractive to potential employees,” Rowell says.

The organization was incorporated in February 1967. Several years later, the banks of Roseau, Warroad and Baudette were invited to join. “We first expanded to the banks because of the important roles they play,” says Rowell. “They were associate members at first and later became full members.”

Currently, businesses included in the association are Polaris Industries Inc.; Marvin Windows and Doors; Security State Bank; Wabanica Inc.; Wells Fargo; Border State Bank; Central Boiler; and QC Technologies.

Since its incorporation, the nonprofit organization has dealt with problems and situations affecting economic conditions in the area bordering Lake of the Woods, including transportation, education, promotion of employment opportunities, industrial development and the general well-being of the area.

Currently and in the past, the association has reached out to state and federal government contacts to address the construction of load-bearing roads and faster Internet connections.

Roads are essential for importing raw products and exporting goods from the manufacturers. Without load-bearing roads, businesses in the area would suffer and there would be an economic downturn in the region. Therefore, the association has worked with the Minnesota Department of Transportation to “connect our roads for efficiency and to make sure they feed into major arteries,” Hager says.

Attracting qualified labor remains a problem in Northwest Minnesota.

“Recently, we gathered to discuss hiring,” says Steve Muzzy of Central Boiler. “We found out that for all of these major employers up here, we had only gained 100 employees in six months, and with attrition, you need to gain more than that.”

By discussing their hiring issues, members of the association discovered that some of the main contributors to a shortage of workers included a lack of housing and schools. “We cannot maintain losing 100 employees when we need 500 more,” Muzzy says. “There are more jobs up here than we can get [people] to fill them. Our biggest problem with finding employees is housing. We’re fine with wages. Wage scale, we’re actually probably higher than the Cities.”

There simply isn’t enough housing for

Steve Muzzy, president of Central Boiler in Greenbush, says members recently discovered they had only gained 100 employees in six months.

“There are more jobs up here than we can get people to fill them.”

new employees, he says.

“Our area is blessed in that it is stable,” says Hager, “but it’s not growing in terms of population. There is only a 2 percent to 3 percent unemployment rate here.”

In the past, companies involved in the association have put together first-time homeowner funds. “The companies have put in $10,000 or $20,000 for first-time homeowners so they can have the down payment for a home,” explains Muzzy.

“If they stay in the home for three to six

years, then that [loan] is forgiven.”

Additionally, the hiring boom in North Dakota’s oil production industry has drawn workers away from the region.

Muzzy says hiring upper-level employees can be difficult because of the difference in Minnesota and North Dakota taxes.

The association’s members have also focused on schooling in the area. To encourage educational opportunities, the association oversees an essay competition for seniors in the area.

FEBRUARY 2015 ENTERPRISE MINNESOTA /

29

October is manufacturers’ week and seniors in the area schools are asked to submit an essay for a chance to win one of the four $1,000 scholarships the association offers.

“We hold an annual breakfast where the [winning] students read their essays,” Hager says.

Additionally, many of the member companies have donated equipment to local schools. According to the Roseau Civic and Commerce Association, Polaris donated boxes of Legos and robotics equipment in 2014. Marvin Windows has also donated equipment to Warroad High School. Also, many businesses in the association offer separate scholarships.

One educational issue the association is currently confronting is a cutback in government funding of two-year tech schools. “That type of education is very important to us up here in Northwest Minnesota,” says Hager. “We’d, in fact, like to see an increase in funding.”

Because of these shared issues in Northwest Minnesota, it’s necessary

Early members of the Northwest Minnesota Manufacturing Association. It was founded 48 years ago when Ted Rowell Jr., then president of Baudette-based Rowell Laboratories Inc., invited Bill Marvin, then president of Marvin Windows, and Allan Hetteen, then president of Polaris, to discuss their common interests.

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for members of the association to share goals and information to help one another overcome obstacles. “We can help each other with business knowledge, so we don’t have to learn everything the hard way,” Muzzy says.

For instance, the members of the association share information about their own management techniques and new products, best practices and safety, and information about legislation.

Furthermore, they share information about their labor needs and try to decide best practices for attracting workers to the area.

Because the association’s members are from diverse industries, they don’t compete with each other, Hager says.

“We have a great diversity of products here,” he notes. “Windows don’t compete with snowmobile vehicles. It’s a very diverse area, but the one thing [businesses] do have in common is labor and commerce. What affects labor and commerce? Roads, railroads, Internet services, and those types of things.”

Hager says these shared issues keep the association together.

“We’re not trying to undermine each other,” Muzzy says. “We’re trying to help each other. It’s not thinking that, ‘Well, if I know something and don’t tell the other guy, I’ll be better off.’ It’s more

“Our area is blessed in that it is stable.” like, ‘Let’s help each other and make this region a shining star in manufacturing.’ ” Through the years, the association has conducted monthly meetings where members have attended management training seminars, met with mayors and city councils of the three cities on a number of issues, encouraged the establishment of industrial development groups, exchanged industrial ideas and procedures, and heard a number of speakers discuss legislation and programs on the state and federal levels.

Past speakers at the association’s

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meetings have included industry leaders in agriculture, manufacturing, transportation, engineering, commerce, environmentalism, technology and medical industries. Some speakers included in the association’s talks include professors from surrounding colleges, representatives from the Department of Natural Resources, colonels from the national guard, county sheriffs, school teachers and children, health care workers and Bill Martinson from Enterprise Minnesota.

Although it is definitely not a social organization, Rowell says there are some fun events, too. There are annual fishing and golfing outings and a holiday party that family members are invited to attend.

At its February board meeting, the association will install the following officers for 2015: Bob Evans of Marvin Windows and Doors, president; Mark Reese of Central Boiler, vice president; Brian Kolnoski of Polaris Industries, secretary; and Brent Olson of Border State Bank, treasurer.

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Final Word

Digging Deeper The 2015 version of the State of Manufacturing® will regionalize its results

A

s you read this column, our pollster is in the process of phoning Minnesota’s manufacturing executives regarding the sixth annual rendition of the State of Manufacturing® survey. We are thrilled with the progress of our 2015 project.

The State of Manufacturing is our well-known annual survey research project that enables manufacturing executives statewide to weigh in on the issues and challenges that enhance or restrain their ability to do business.

We’re incorporating a new wrinkle in this year’s research that we think will add even better analytic relevance to the results. This year we are bumping the base sample up sufficiently so that we can read the results in how they affect different areas of the state. Our analysis will now compare how the results compare and contrast between and among different areas of the state. We’re going to run cross-tabulations in each of the McKnight regions, along with the Twin Cities.

We’re going to run cross-tabulations in each of the McKnight regions, along with the Twin Cities.

This will be relevant and it might turn out to be important.

Bob Kill, Enterprise Minnesota’s CEO and president likes to say that with every 100 or so miles that we travel away from the Twin Cities, the dynamics of being a manufacturer tend to change. The farther you go, the greater the differences in transportation and logistics, in local economic development infrastructure, and the greater the disparities in the number and caliber of available employees. We’re eager to see how this 32

/ ENTERPRISE MINNESOTA FEBRUARY 2015

way beyond merely helping us defray the costs related to the project.

This year’s sponsors gathered one Thursday in January for a working lunch in one of the conference rooms at Enterprise Minnesota to discuss how we can ensure that our poll reflects meaningful, relevant and leading edge concepts and positions the conditions of manufacturing in ways that help policymakers and local economic developers do what they can to maximize manufacturing as the job creating engine of our economy.

Here is just a smattering of some of the raw topics we eventually passed on to our pollster, who transformed many of them into statistically meaningful questions.

Lynn Shelton is director of marketing and communications at Enterprise Minnesota.

turns out.

We also want to welcome two new statewide sponsors, one representing government and one representing the marketing/advertising industry – The Department of Employment and Economic Development (DEED), Minnesota’s economic and workforce development agency, and Risdall Marketing Group, a full service marketing/advertising agency. I should take a minute to identify and thank our statewide sponsors, some of whom have been with us for the entire seven years that we’ve been conducting the State of Manufacturing. They are: Baker Tilly, BMO Harris Bank, Granite Equity Partners, Gray Plant Mooty, Marsh & McLennan Agency, and MRA. The value of these sponsors extends

• Transportation. How do logistics, high spending or increasingly clogged rail lines affect decisions related to shipping? Related to that, in part, how might the rapid decline in oil prices affect the way manufacturers approach business?

• Workforce. How are manufacturers adapting to changing demographics? What is the ongoing impact of millennial workers? Is there a difference between managing them and working for them? Have manufacturers adopted cultural differences to recruit and retain a new generation of workers?

• How are companies developing new markets? Enhancing their marketing? Exports? Acquisitions?

• How are manufacturers using social media as a resource in their overall marketing strategy?

• How are manufacturers developing leadership teams to grow their businesses?

The brainstorming session evolved as sort of a great focus group in and on its own.

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