Building a Better Business: Lessons for Machine Shops From an Unexpected Source

I recently had the opportunity to speak to a group of homebuilders. Home construction is not my field. But I was brought to this group (the setting was a professional conference) to talk about the challenges manufacturers face and how they are meeting them, out of the belief that one field might learn from the experiences of the other. That belief was vindicated, at least in my own personal experience of the encounter. I was there to offer something, but I ended up learning a great deal by interacting with leaders in a field that is at least a step or two removed from the one that I know.

Other business leaders appreciate something similar. I know a store owner who is interested in the realms my work touches: media and manufacturing. When I am with him, he gets me talking about these things, even though they do not relate to his world. Except they do. My store owner friend understands the same premise that brought me to the builders, namely: Business is business. To build a great business enterprise is to confront certain widely applicable truths about how to do work well, how to bring people together, how to steward an enterprise and how to serve customers by delivering the value they are looking for.

All this is fitting to consider in light of recent articles we have posted. In recent coverage, we profile machining facilities that have distinguished themselves in different aspects of the metrics and characteristics within our “Top Shops” benchmarking survey. Our Top Shops honorees this year are A to Z Machine Company, KLH Industries, Rosenberger North America Pennsauken and Stecker Machine Company. But more than just profiling facilities in our coverage of these companies, we profile businesses. The measures of a machining provider’s effectiveness go beyond the facility, beyond the shop, beyond just what happens in the machine tools and on the shop floor. A great machining business is something more than a great machine shop: It is a great business that happens to focus on machining. And that means great machining providers have something in common with other great businesses, as well as something to learn from businesses in other fields.

In that spirit, I want to pass along some of what I learned by listening to that group of experts in the home construction field. The source for much of what follows is Shinn Consulting, the homebuilding advisor that organized the event where I spoke, and the provider of much of the insight offered there. Some of the points that follow also came out in my conversations with business owners at the event. Again, the initial context of all that follows was homebuilding, but no one would know that from reading the following list. These are the points that struck me because of the way they apply to business in general, including the business of manufacturing.

Here, then, are points to think about as you build your own great business or team — that is, the great business or team that just happens to focus on machining:

1. Even though a lot will change over time, long-term planning is still possible. These are the things unlikely to change no matter how much time passes: (1) what makes a successful business, (2) what makes a quality product, and (3) human nature.

2. Economists are often wrong. Listen to the economic forecasts and plan in light of them. Then, make a separate plan, preparing for what you will do if the opposite of those forecasts happens instead.

3. Reputation is a powerful advantage. In any field, having a reputation as a leading provider delivers benefits that include (1) attracting and retaining talent, (2) customers that are loyal and refer others, and (3) suppliers who want to work with you and keep the relationship strong.

4. Leadership has to do with people, including their motivations and needs. Management has to do with things, including the systems around those things. Both are important, but so is the distinction. It does not follow that a good manager is automatically a good leader, or vice versa.

5. Offer a version of your service or product reduced to “heart attack” specifications. That is, come up with a version so stripped down, so low on extras, that it gives the customer only the minimum they ask for, and gives you something like a heart attack to imagine offering so little. This exercise is valuable because of the way we tend to bring our insecurities into our work. We arrive in the marketplace under the cloud of Imposter Syndrome, and thus we tend to offer and deliver more than is needed in the hope that we won’t be found out. But those extras add cost, and they divert our attention from getting really good at what the market really wants.

6. When business conditions are strong, companies can be stupidly arrogant and get away with it. When business conditions are weak, the companies that offer real value are more clearly seen as such.

7. When looking to improve or streamline the way some aspect of the work is done, start with the people procedures. That is, first address the rules, incentives, expectations and processes that drive what the people are doing. Second, address the computer and software systems. (We almost always go about this in the opposite order instead.)

8. A great marketing metric few companies track: the percentage of new business coming from referrals.

9. Simply being better than average for a very long time is a way to be excellent.

10. The people in the organization addressing errors or defects and the people addressing delivery delays should all be on the same team. Reason: They are all probably looking at variations on the same core problems.

11. Discipline is doing what is necessary whether you want to or not. Commitment is deciding what is necessary and sticking with it. Commitment and discipline produce habit. Because it determines what you do on every normal day, habit is the powerful thing.