The Blueprint for Getting 20% More: Throughput, Quality, & Rewards
We’re in a period of time where everyone is struggling to do more with less. That pressure impacts everyone at all levels — CEO, management, and the frontlines.
But what if you had a blueprint for achieving more without expanding resources?
If you tap into the talent, skills, and creativity of your greatest asset — your people — you could accomplish quite a lot.
There are issues that occur in manufacturing that go unreported because frontline workers don’t feel like they’re being heard by leadership. From quality and safety issues to facility improvements, there’s a sentiment that any feedback will just get lost in a black hole.
There is difficulty attracting and retaining talent. And that’s impacting the ability for manufacturers to meet customer demands.
In today’s episode, Thomas Shorma, Former Chief Executive Officer at WCCO Belting, joins us to share how his team was able to increase throughput by 20%, retain talent, and create an environment where anyone within an organization can contribute to the growth of the company.
Join us as we discuss:
- Getting 20% more for 20%
- Encouraging your workforce to share ideas and feedback
- Developing internal training programs for different skillsets
Experiencing disruption on the frontline? We can help. Request a demo today.
Check out the full episode below:
Tom Shorma: I think we’ve never really had a reduction in ideas being generated, because people realize we are listening, we’re taking action, it’s making a difference, and at the end of the day, that’s why our workforce retention is so good, because people are heard and they know they’re making a difference.
Josh Santo: Welcome to Conquering Chaos, the show for manufacturing leaders. In each episode, we’re connecting you to the manufacturing leaders of today who are driving the innovations needed to future proof the operations of tomorrow. If you feel like your time is spent fighting fires and trying to control the everyday chaos, this show is the show for you. My name is Josh Santo, I’ll be your host.
We’re back with another great episode of Conquering Chaos. Today we’re going to talk about finding new ways to work with current day constraints, specifically workforce challenges, and as a result, growing from these efforts. Now, we’ll be examining these topics to the story of our next guest’s experience, overcoming these challenges within their own operations. Speaking of our next guest, let’s talk about them. Manufacturing is more than just a business. For our next guest, it’s part of the family.
His father, a Korean war veteran, founded WCCO Belting, which is a manufacturer of agricultural and industrial rubber belting as well as conveyor products. After taking over from his father, he set his sights on international expansion, earning the company the 2003 North Dakota Exporter of the Year Award. He’s overseen a number of acquisitions, innovations and product offerings, and international growth. In fact, under his leadership, his company was the first business in North Dakota to receive the Presidential EStar Award, which is an award from the Department of Commerce recognizing the impact of an organization’s contributions to US exports.
Currently serving as the CEO and president of WCCO Belting, please welcome to the show the recent winner of the Global Ambassador Award by the North Dakota Trade Office, Tom Shorma. Tom, thanks so much for being here today.
Tom: Thanks, Josh. Appreciate the introduction.
Josh: I always try to hype everyone up. I think everyone deserves a little bit of hype in their life, and with your accomplishments, there’s certainly a lot to hype.
Tom: Well, thanks. It’s been a fun ride. We’ve had a lot of involvement with a lot of customers, vendors and employees that I’ve really enjoyed working with.
Josh: Well, that’s great. Well, look, we start each episode off with the same question of our guest. What’s your day to day look like in your role?
Tom: Well, on the business side, we started small and we’ve grown exponentially over the last 21 years. You go through the various stages of growth from the economy and the day to day responsibilities have had to evolve the same way to adapt and to change just like the business did. At one point when we were small, I wore a lot of different hats and was directly involved in just about every decision that the business had to make.
Today, with the growth we’ve been able to recruit some globally experienced professionals to the leadership team, and they’ve got experiences that allow them to basically make the decisions without my involvement. My role today is really involved in setting goals, holding people accountable to goals, and doing a lot more listening of the team to determine what they need and want and then try to go find the resources, whether it be people or funding in order to help them accomplish those goals.
Come to think of it, it’s like I have two teenagers in my house, kids still at home, and that’s what I’ve had to do here too. A lot more listening and helping them make informed decisions about what they want versus what they really need.
Josh: That’s leadership. That response reflects some of the core tenants of leadership. You’re setting goals, you’re holding people accountable and you are listening, but you’re not doing it for them. That’s really a powerful statement. The time you talked a little bit about going from being a small operation to experiencing some significant growth. Could you give us just an understanding of, when you say small, what do you mean, and when you talk about growth, where are you now?
Tom: Well, I first came back to work for my father out of college. I was the first four year degree employee, full time for my father, and we had 22 employees, and I was in charge of sales and marketing. We built the business from that small little company to eight divisions with over a thousand employees. In 1992, we split those different eight divisions up. The myself and my seven siblings or eight kids, we purchased four of those divisions from him, and he kept four.
When we did that one of my older siblings took over our trucking company and the next oldest our equipment company, and my father asked me what I was going to do, and I said, “Well little surprise, I quit.” I left the family business. I was tired of being very poor and overworked in a family business, which is typical. I left and started my own company. I did consulting for a period of 10 years with companies all over the US, and it was in 2001 that a couple of our non-family board members convinced me to come back into the family business, specifically WCCO Belting and to help grow it do for the family what I was doing for my clients.
In 2001, I came back, I sold my consulting company, came back into the family business, and I took over WCCO Belting. We had really just 30 employees. We had flatlined the growth. We were still profitable, but it just wasn’t where everybody wanted it to go. I came back in to grow it in 2001. Along the way we’ve had different levels of growth. In 2004, we had our first really big change. We had to reinvent ourselves, so we reorganized the plant, doubled our workforce, doubled our revenues, and it implemented a new ERP software platform. That was the test. All right.
Now having been through that I don’t think I would ever try to do that all in one year again, but I was young and naïve and I said, Oh, we can do it. Then it came into about 2010, and we had to do reinvent again, again, because it was growth. Again, we doubled our workforce, we expanded our facility. We really changed some things in terms of how we did business. We utilized some technology for automation. Then we jump forward in 2014 became another big hurdle.
We were concerned with the demands that were growing and our ability to deliver to our customers in a timely manner. As the orders continued to grow we had to figure out something new so that we wouldn’t fall behind again, and we had to set some new goals. It was doubling, doubling and doubling and we had expanded the plant three different times over the period of 12 years. It was time to try to reinvent once more in 2014.
Josh: Wow. What a great story of where things started, how they split your own path and coming back. I love that the board members were asking you to do what you were doing for your clients. I think that sentiment is going to be shared here in this episode, because it informs a lot of what we’re going to talk about, which is how do you make an impact? One of the things that stuck out to me about your story was how you embraced constraints.
When I first read the book, The Goal, which I know I bring up a lot on this show I was struck by that idea of constraints. I hadn’t thought about it in the way that it was presented before. Bottlenecks, those weren’t new to me. I think a lot of people are exposed to the idea of bottlenecks just growing up and experiencing life. The idea that there will always be a constraint either by design or unintentional, that stuck with me. With that came the lesson of embracing and working with your constraints and that’s what you did.
Specifically, we’re talking about a constraint that’s on many manufacturing leaders’ minds right now. It’s the workforce constraint. There is difficulty attracting and retaining talent, and that’s impacting the ability for manufacturers to meet customer demands and this is exactly what you were talking about. Tom, this is what you were experiencing. Could you talk to us a little bit more about what was happening at WCCO and why there was a struggle to meet the customer demand?
Tom: Well, I like to reference 2014, because that was a significant reinvention process that we had to go through. The leadership team that we had in place created a five year plan to increase our throughput and revenues by 20%, with a plan that said, we’re going to do it or we’re going to be forced to do it, because of the availability of workforce with 20% less people. More than 20% growth in revenues in product production with 20% less people, we knew that staffing was always going to be our greatest challenge. We live in a rural area in a rural state, the entire state has less than a million people spread out across, it’s agricultural based. We weren’t planning to downsize, we just figured natural workforce attrition, but ultimately push us down by about 20%. That was really the starting point where we said, okay, we’re going to really take another big step, and when we did that we announced it to everybody at our annual employee meeting 20% more for 20% less people. I laugh, because I look back and they looked at us and said, are you crazy? We’re already working on how can we do that. They were a little skeptical at first, but we said, okay, we’re not going to just put you on an island, we’re just not asking you to work harder.
We’ve got some steps we’re going to go through in order to effectively implement change to reinvent, we had done some good things, we had seen the growth, we had doubled, we had doubled, we had doubled again, but this time was going to be different, because in the past, we generally had enough people to draw from in order to grow. This was going to be different. The first thing we told to them was, we’re going to give you a 20% increase in wages, and of course, they’re all- they’re looking at each other, “Hurrah, his is amazing,”, but then we said, it’s not more for same, it’s more for more. The math doesn’t work to just give you a 20% increase. We have to find a way to produce more. They said, well, how are we going to do that? They said, well, number two, we’re going to give you better training, more thorough training, give you the information you need in order to do your jobs more effectively, and we kicked off an internal technical training program. I say internal, because in our business it’s very unique.
We tell people that no one in the world makes the products we make, how we make them. It doesn’t matter if you’ve got 10 years of prior experience in manufacturing, you’re entry-level or you’re a VP, it doesn’t matter, because no one does it our way. We have to provide extensive training, we started a 99-level entry-level training and then we set it up like a college curriculum 100 level, 200 Level, 300 level and 400 level. We now have more than 100 different syllabuses in training classes for people at different skill sets in different parts of the organization that we set up back in 2014. Thirdly, we told them that we’re going to look for an invest in a lot more process automation and we had to automate, we had to take some of the physical laborers out of the process and make it more technical and more redundant, in order to increase the throughput consistently. Then lastly, and probably the most important part of the whole piece, is that we told them that we’re going to become better listeners.
Now, as a family business, we’re close to a lot of people and we’re pretty good listeners, but we told them that they were going to have to help us come up with ideas that would increase throughput, safety, and quality. You’ve heard the term a Kaizen program in manufacturing, and that’s really a formal process by which you implement change. Ours was really more like an employee suggestion program on steroids, and we solicited them, we encouraged them, we rewarded them- yes, financially included- in order to come up with ideas. Since that time- 2014- to today, they have provided us more than 3,600 suggestions on how to do little things, big things, in order to improve quality, throughput, and safety. I always ask people, that many ideas over that period of time, how many do you think were actually implemented by the company?
Josh: It’s a great question.
Tom: More than 50% over the entire period of time, and then people say, well, doesn’t that fade out? Don’t people just stop losing ideas? Well, in the last 18 months, we’ve added 100 people to our workforce. These are brand new eyes and ears and ideas, and those people are now embracing the idea of making improvements. In fact, we’ve gone from a year and a half ago, about 50% of the ideas implemented, we’re now at 62%. We’re climbing, because the new group is coming up with even fresher ideas, new ways to make changes. I’d like to say a lot of our change, our reinvention, our improvements were really driven by the new workforce innovators that we brought onto our team and the people that are in the flow of the day-to-day operations coming up with ideas as to how to make things better.
Josh: Well, I love that story. I love that breakdown in how it reflects one of your earlier answers responses about leadership, because what you just described was an actual application of, here’s the goal, I’m going to hold the team accountable, and I’m going to listen. I love hearing that philosophy actually put into place. Now there’s a couple of really important highlights that I want to cover and then dig into a few of the topics that you brought up.
First of all, the power of setting growth for 20% more throughput, 20% more revenue growth, and doing with the expected 20% less people to help support those specific goals. That’s quite the constraints to find yourself in, but the way you phrase it was perfectly, it’s not about working harder, necessarily. It’s not about doing the thing that you’ve been doing the same way you’ve been doing it and expecting this different result. That’s insanity. It was about how do we use this to inspire reinvention. How do we control what we can control and do something about it? I love that the first thing that you brought up was, you get a 20% wage increase.
That’s big, right? We’re going to be asking for hard work, we’re going to be asking for more, and we’re going to give you more upfront, as a result. Now, over time we’re going to have to earn it, but just that that first fate of putting your people first, I think that’s such a powerful moment that stands out to me. Then you spoke about training and the importance of training, and really understanding that no one is manufacturing your product the way that you manufacture it, and in not having these assumptions that the people that you bring in are going to have the specific knowledge or skill set needed to man this particular machine for this process, for this product.
Instead, just taking the ownership of we know that what we’re doing is unique, we know that even if there’s similar ways of doing it, we have our own spin to it. Let’s take that ownership and teach the people that we bring in. As a side note, that is one of the ways in which you can help increase retention. One of our previous guests, Jim Parker, talked about how they found that by really focusing on training and enablement, making sure that especially new hires within those first 90 days understood what to do, how to do it, and what made them effective at it, it actually led to improvement in retention. Then you brought a process automation, and not just process automation, but just automation in general. That’s a very great topic for us to dig into as well. Then finally, that culture that you were setting of we’re going to be better listeners, because we’re looking to you to empower the entire organization to achieve these goals.
After that little recap, I’d like to talk about those specific bullet points that you brought up. Specifically, the 20% wage increase. that’s a huge jump. I’m curious, were you able to just say, this is the way it’s was going to be or did you have to go through a series of approvals and have some tough conversations in order to make it happen?
Tom: Well, there were a lot of conversations in planning and it’s by the numbers, the numbers don’t lie. Here’s what we have to have it for growth in order to afford the wages and the benefits that we provide. That’s something that we have always stressed over the years. Growth is a victory for the workforce, from top to bottom. It creates opportunities to improve your income. It creates career advancement opportunities. Those don’t happen without growth. For the organization to keep growing, we have many, many people in our organization today that started at an entry-level and they started in positions of just doing the day-to-day labor thing, but over the years, they were provided a perspective in terms of why growth was important. They’ve now advanced through the organization earning far greater than they ever would have if the organization hadn’t grown. Growth was important, but it wasn’t growth in itself. It wasn’t just we want more profits. It’s really a balance. The company needs the profits to provide the opportunities for career and income growth. When we set the numbers up and we showed all of the information to them, we said we think it’s going to take us five years in order to make all of this happen.
The reality was in three years we had grown the business by 20% and we had reduced our workforce by 20%, three years instead of five and so, they embraced it. It was doing all of those things and it really happened very quickly. As you mentioned, I have to follow up on that. One of the really big unexpected benefits of being good listeners we are doing that, because we wanted to improve throughputs in safety, and quality, but you’re absolutely right.
When businesses are better listeners, it also lowers attrition. They need especially today’s generation, they need to know that they’re being heard. When we have all those employee suggestions for improvements and processes, we literally post them along the walking aisle where they walk into the plant. Everybody gets to see those ideas, and every single person that submits one gets feedback as to whether it’s going to be done or not going to be done or when it’s going to be done.
I think we’ve never really had a reduction in ideas being generated, because people realize we are listening, we’re taking action, it’s making a difference, and at the end of the day, that’s why our workforce retention is so good, is because people are heard and they know they’re making a difference.
Josh: Absolutely. You bring up such a good point of the fact that the 20% more was not really a question of profit, rather growth. Growth for the company benefits everyone associated with that company. That becomes a rallying cry. That becomes, here’s what’s in it for me. I think that that’s powerful, because I think oftentimes there’s a gap. There’s a gap between that perspective of the company and the different levels that are involved in making a product from a raw material to something that can be delivered to a customer.
I think that often gets lost in translation. I love that you’re bringing up that message of the focus is growth. Growth for you professionally, growth for you financially, growth for the company, and that’s such a powerful message. Now to your point about listening, and that’s one of the topics I wanted to dig in with you. The idea of listening, it sounds so simple when you say it, but the actual implementation of it really varies and it really takes a dedicated culture that prioritizes is exactly what you’re describing.
I’ve been fortunate enough to walk and tour and help implement technology on a ton of different factory floors. Some within the same company, some across different types of manufacturing sub-verticals. I can’t tell you how often when I’m talking with an an operator on the frontline, I hear this sentiment of, nobody listens to me. I reported this issue, I brought it up as a problem, and nothing got done about it. Oftentimes it’s described as going into some black hole. You raised a really good point, Tom, which it’s not just important to accept what they’re saying, but to follow up and respond to it.
What I found firsthand is that lack of visibility leads to that conclusion of, well, I didn’t hear anything back. They must not be listening to me. When that may not actually be true, but it’s important to really close that loop and say, we heard you. Here’s what we’re going to do or here are the reasons we’re not going to do something or you inspired this next idea, but having that loop to close is important.
I’ve seen that first hand with some of the customers that we worked with. One customer had this approach of if you see something, say something. Just similar to what you described. Then in this case it was catching quality issues, safety issues, even facilities issues. I remember one time it was just, Hey, this light keeps flashing. I think it’s time to change the bulb.
It was the fact that they could see what the response was, what the action was, the follow-up, the notes that inspired them to continue submitting more ideas. Now you told me a story prior to this recording call about a specific individual who had some ideas that weren’t- or initially dismissed. Could you tell us about that individual in that story?
Tom: Yes, I love to talk about the Bill story, and this was right at the beginning when we set up this whole, give us feedback, give us ideas on how to improve throughput quality and safety. We set up from the very beginning, we’ve had a cross-department team that includes people from the production floor, from middle management, from senior management, assessing all these ideas, because there can be 30 to 60 in any single month.
There’s a lot of ideas that would come in. In the very first meeting, I remember listening to this one of our middle managers bring up this idea from Bill and it was a simple thing. Bill worked in a punch press, punching parts, and there were these little rubber pieces that would fall on the floor. Bill’s idea was very simple. Could you get me a dust pan and a broom so that I could sweep up these pieces in my work area and keep it clean.
I don’t want to go looking around for a dust pan and a broom. This middle manager said, ”This isn’t the stuff we want in here. We want real ideas to really make an impact.” To the credit of one of our vice presidents, the vice president stood up in the group and said, ”Listen, this is Bill’s idea. It means a lot to Bill. He thinks he can be more productive if we give him a dust pan and a broom. We’re going to give him a dust pan in a room.” We followed through on that, Bill got his tools, and the next thing within a couple weeks later, Bill comes up with another idea.
He says, ”The dust pan and the broom are great, but if I had a small little vacuum like a wet vac, I could vacuum these things up in a lot shorter period of time. Came through the committee, they gave him his wet vac. It wasn’t a couple months later Bill, came into the meeting with an idea and then a suggestion. He said, ”I’ve designed a little bit of a mechanism if it can be built, a tray to go around in the punch press, so we don’t have to vacuum them up anymore.
They’ll just go right into the vacuum automatically. We can sweep them right off into the tray and it’ll make it far more efficient. To this day- this was now 14 plus years later- Bill is the number one or the number two idea generator in our business. Bill is actually a little bit autistic. He doesn’t say a lot, but the man is smart and he knows his process.
If we hadn’t given him that first dust pan in that broom, it is highly unlikely that he would’ve followed through and had all these other ideas for process, safety, and quality improvements, at the end of the day. Things can start off small, they can start off slow, but if they genuinely believe that you’re listening and that you’ll take action, the ideas will keep coming and they have for us. [music]
Walter: Hey, y’all. It’s Walter. I’m the producer of our Conquering Chaos, working behind the scenes to make sure you get the quality content you expect fans and dserve. Concreted chaos is brought to you by Parsable. Industrial leaders like yourself use Parsable to tap into their frontline operations to track trend and optimize the inefficiencies that are impacting operational results, and they’ve accomplished some impressive results. 20% increase the productivity, 12% increase to throughput, and 6% increase to OEE, just to name a few. How? Well, first they digitize the frontline.
In Parsable, they create, update, and distribute digital work instructions worldwide with an easy to use authoring tool. Next, frontline workers generate new data on frontline activity by using Parsable’s mobile app to access and complete audits, inspections, forms, checklists, and more. With that new data, leaders are able to uncover actionable insights into inefficiencies impacting frontline workflows and processes at sites all across the world.
Companies like Heineken, Georgia Pacific, Grupo Bimbo, and others are leveraging these new data points to improve their operations and build a more sustainable future. Go to www.parsable.com to schedule a consultation with an industry expert, who could share how you could use that data that Parsable generates to improve their operations and build a more sustainable future.
Josh: That is such a powerful story, because I think that sentiment of we want big ideas that are going to make an impact, I think that’s how a lot of us think about things. We really think like, what’s that big change? What’s that big pivot, that big reinvention? Sometimes we overlook that the real power, the real change comes from those small incremental improvements that are made over time. That idea of 1% better.
Tom: That’s why they call it continuous process improvement, not big idea improvements. It’s all the little things add up to big things.
Josh: It’s not batch process improvement, where you’re just doing it three times a year, little iterations. That’s also important, because of what you described. It’s the evolution of the understanding of what would make an ideal solution, because oftentimes we’re thinking in terms of our constraints and what we know and what’s reachable. In this example, a simple solution to my problem is a dustpan and a broom. Cool. Got it. Well, the next iteration of that is, well, what if it was a little easier to get up all of this scrap as soon as it’s happening? Cool. A vacuum, the wet vac, that makes a great idea, but then to get to that point of, well, how can we prevent this from being something that reaches the floor, to begin with, so that no one has to really focus on the cleaning?
That evolution takes those incremental steps and learnings and ideation, which, to your point, would not happen if you shut the conversation down right at the start. Bill would still be dealing with the excess that wound up on the floor, hunting down his broom and dustpan in order to clean it up. I think that that’s such a powerful lesson of listen, respond, do the little things, because they add up.
Tom: There was one other piece of this suggestion program that we implemented or brought out at the same time that it was started. That was, we started what we referred to as a profit-sharing pool, and it was linked to the profitability of the company. When company profits go up, so does the dollars in the pool when it goes down. Guess what? Your dollars will go down as well.
We told them that with their voice, their ideas can have a direct impact on our success. When we asked them to help us earn more, they also would earn more. They would receive a direct benefit from their ideas for our improvements through profitability, through putting safety. There was also a direct financial correlation, not just ease of working in your particular cell, it was also a direct correlation to their income. That made a big difference as well.
Josh: That’s such an important focus. That’s why I started with highlighting your 20% more, as in giving 20% more. It’s easy to overlook sometimes that while we want everyone to be passionate and enjoy the work that they’re doing. We’re all working so that we can live a life that we want to live, and far too often that’s not the case. There’s a lot of people who are struggling to reach some of those minimum, what we would consider minimum living standards, let alone enjoyable living standards. Money is one of the best ways in which they can change those circumstances.
The fact that that is recognized as far as, we’re going to give 20% more and offer this additional opportunity for earning more all tied to growth, personal growth, financial growth, company growth, that’s powerful. That’s putting people first and it’s really great to see. Speaking of putting people first, another way that your organization did that was on the training, that internal technical program. Talk to us a little bit about what it took to actually start and implement this internal training program.
Tom: Oh, it really begins one class at a time. What do we need to teach people in order to be more effective in their jobs? Just like Bill’s ideas started small, so did our training program. We’re a company that sells product into 26 countries today. The vast majority of the world is on a metric system, unlike the United States. All of our prints in our specs are in metric.
The tape measures that they use in some of their processes are in metric, so in our one-on-one classes, we’re teaching people how to read metric tape measures and to use them in the process. It sounds like everybody knows how to read a tape measure. Well, you may, but you may not know how to read a metric tape measure. It really built from there, from ground up, one class at a time.
A lot of the classes were actually ideas or recommendations that people gave to us and saying, “I need to know more about this. I need to know how to do this. I need to know about ISO or I need to know about LIN in order to implement some of those things.” As you move through the understanding of the technical aspects, now you start to get training in LIN manufacturing processes and Kaizen programs and reducing material handling and what waste really is in a process. That’s just all part of the evolution of building an effective training program.
Josh: Starting exactly like you said, piece by piece, almost really focusing on this fact that you can’t make assumptions. It’s better to focus on over-educating than under, in some regards. I love that it was sourced from the people just saying, “Here’s what I need to know. Here’s where I’m struggling and I would love some guidance on there.”
As far as the implementation of this program, was it a dedicated team that was created to focus on this or were these responsibilities added to specific roles? I want to give our audience some ideas on if they’re in a situation in which this is not something that they’re doing, what are some practical application steps they can do to have their organization deliver something like what you described?
Tom: Sure. Well, when we implemented the program, we were at only 120 employees. Yes, you have to designate someone with the passion and the skills to be able to create curriculums, a syllabus for each different type of training activity or class. That’s how we started with one person designated, in addition to their other responsibilities. Small businesses know you’re never wearing one hat, you’re always wearing multiple hats, and we had a person that was in charge of our engineering department who also had a lot of training background in her past. She started the program in addition to our other duties.
Today, we have multiple full-time people doing nothing but documenting, creating SOPs, and then training people on a regular basis. Many of those people actually started in the production floor learning from the curriculums, and so now they’re teaching their curriculums and onboarding new people into different areas of the business. Start small like everything else, and you build upon it. Depending on the level of trading that is necessary in your business, you may be able to do it with one person, but when no one in the world makes what you make, how you make it, you tend to have to commit a little bit more resources to do it effectively.
Josh: Piece by piece, person by person. I think that that is such a great approach. Clearly, it’s a consistent theme that’s emerging in our conversation today. Training is super important. Like we talked about, it has impact on retention. It also, to the original goal, the growth goal that you set, it’s a key need in order to meet throughput goals, safety goals, quality goals.
I’ve worked with one customer in particular who saw variation in how a particular process was completed. That was leading to variation in the actual results of the product, everything from quality spec violations to just not meeting the expected forecast of the product being produced on that line. Where their focus was, was how can we gather the actual best practices, measure those best practices to get the data that says, okay, this is not just an opinion, this is objectively the best practice, and then upskill everyone else on, here’s the best way to do it, so that you then reduce that variation in what the people are doing, thus reducing the variation in the results that you were getting.
Training is extremely important. The last topic that you had brought up in your 20% more program was automation. Can you talk to us a little bit about your experience exploring what needs to be automated, how it should be automated.
Tom: Well, again, a lot of this is driven by our suggestion program. What processes do you think we need to improve in order to improve throughput quality and safety? Yes, we did bring on a full-fledged educated automation engineer, but again, no one makes what we make, how we make it. In our facility, 100% of 200,000 square feet of equipment, every piece of machinery has been customized to our processes. There isn’t any, let’s go buy some automation, let’s go buy some robotics and implement them in our process.
You really have to build it yourself. In many cases, we’ve done that. That also requires us to have the space by which they can build those automated processes. In 2017, our fourth expansion in 15 years, we literally built a maintenance automation fabrication area connected to our facility by which they can literally take those ideas from the employees and figure out how to automate some of those processes. That was a commitment of resources and people to automation. That was just in 2017, three years after we hit our metric. It is just even if the automation doesn’t exist, there are people that can develop processes that will take on labor, improve safety, and quality.
Josh: Speaking to the power of listening, how the ideas flow, what can be automated, what can be approved comes from the people. Such good examples of giving power to the people. If I haven’t made it clear already, I love the WCCO story that you shared. Together, your team identified and embraced a very specific constraint and by embracing it found new ways to deliver more without getting rid of that particular constraint. By adjusting how you approach the problem, the constraint became a little less impactful on your operation.
Tom: This is a really good segue into another part of the conversation where it was really an employee suggestion that helped us make a change in our business and that was workforce recruitment. We have a unique model, we put the vast majority of workforce recruitment on the shoulders of those that are already working in our business or existing workforce. We financially reward them for going up to find people that they will enjoy and appreciate working next to on a day-to-day basis. No one knows the type of person that should come into the organization and be successful than the people that are already there.
It’s part of our unique selling proposition, our employee value proposition. Love where you work in the people that you work with. We reward them for going out to find additional people that was at a suggestion that why don’t you pay us to go find people to come into the organization instead of advertising on the radio, newspaper, et cetera. We’ve embraced that and over the last 18 months, I know everybody, every state, every business. I know very few businesses that are fully staffed. Over the last 18 months, we’ve added in a very small community, in a state that has the lowest unemployment in the country, we’ve been able to find 100 full-time permanent people.
We’ve grown from 200 to 300 in a period of 18 months. 80% of all of those new people that have joined your organization were referrals, people recruited by existing workforce. Yes, they are financially recruited for coming on board, but we’ve done that, despite the fact that a common practice in our state and certainly nationally, are the new hiring incentive, signing bonuses, relocation incentives. We do not offer them. We’ve never offered them yet we’ve been able to increase our workforce exponentially, because of the culture, because of the people that are working. They’re bringing in new people. People don’t leave businesses. Rarely, they leave culture and they leave their bosses.
We’ve been able to find a lot of new people through our existing workforce referrals to be able to come on board and enjoy their careers with us. Again, that was just another one of those unique ways to approach situations that came out of the referral program or the recommendation program from our employees.
Josh: This wasn’t a specific goal that you said, this sounds like this was a byproduct of all the efforts related to your original goal.
Tom: It was just one of those ideas that came up at the team review meeting for ideas, because we were brainstorming trying to figure out how are we going to grow. There’s only so much speed that we can implement more capacity through equipment or automation, we’re going to need more people in order to keep up to demands. We made a lot of investments in facilities and equipment over the last four years, but we’re going to need people to run that equipment. One of the ideas that came in was well, why don’t you just pay us to go find more people? Okay, I’d much rather give you the money than the local newspaper radio, go find them. Do you think that’s going to work?
Oh, my gosh, that’s where it comes from. They find the right type of people too. You’re not going to try to bring someone in to work next to you that doesn’t show up every day and doesn’t do a very effective job, because now you’ve got to work harder to cover for them. They’re bringing in family, they’re bringing in relatives, they’re bringing in friends that are working in other places that are not happy. They’re happy so they are able to recruit them in.
Josh: What a testament too, because if you’ve got a friend or a relative who says look, I know this great place you’re going to love it, come check it out with me. You can’t have a much more impactful recruiting method than that, referral recruiting is critical.
Tom: Yes, and certainly we do supplement that we’re very visible. As an organization, it’s part of our crew model. We want to be an active member of the community and I don’t mean community, just our city where we live or town, but rather the state, our region, our associations. We’re visible there and frequently, we hear it from new employees. They say, “I heard it’s a great place to work.” Now, we always tease them when they say that, because we introduce everyone that’s new every month at the employee meetings. We have monthly employee meetings for all three shifts.
It takes about 30 minutes and we briefed them on what’s going on in the business, but we start every one of those meetings introducing every new employee. We always ask them, why are you here? Why is this a great place to work? We say are you here for a job? Well, yes. Some of them will say, no, I’m here for a career. Then we say good answer, because you can be trained in weeks or days, while a career, it’s a commitment and you’ll learn skills here that you can use anywhere throughout your career or your lifetime. That’s the difference between a job and a career, but they always say, I heard, it’s a great place to work. I look at them and say oh, and it’s a great career too.
Even existing employees, tell them about the difference between a career and a job.
Josh: That’s so great. The results speak for themselves. Your team achieved the 20% more throughput, 20% more revenue before the deadline, in three years as opposed to five years. You were ahead of your initial goal and one of the byproducts being you’re actually able to see an improvement to recruiting and retention as well which is huge. It speaks to the power of the process that you applied here.
Tom: With all the effort to be visible in the community, it’s a small town, 12,000 people, the whole county area along the border is only 20,000 people. It’s still difficult to find enough people, what would be considered traditional manufacturing workforce. Part of that whole workforce recruitment model was if there’s not enough people in the pond that you’re fishing in, change ponds. We added the dynamic and this goes back to 2014 as well, to fish in a different pond. We made a specific effort to attract women and new Americans to our manufacturing workforce and that has made such a major difference in our business in a smaller community.
Today, we’re a primary sector manufacturer, and 50% of our total workforce are female. That has opened up a lot of eyes to a lot of people saying you’re finding a lot of women working in manufacturing. We say, absolutely. Two-thirds of our supervisors are female. They lead our quality program, our safety program, our indirect purchasing program and they all started in production. One of the things that we’ve done pretty uniquely, I think, from a lot of businesses in terms of recruitment, we do not sit in an office to do interviews, especially for people that have never been in manufacturing before. We do what we refer to as a walking interview.
100% of the applications get a walk through our facility with the production manager so that they can see firsthand the work that the people are doing there. They get to see, I could do that. I didn’t know what you did, but I think I can do that. I might enjoy doing that. They can see women doing it, they can see younger people doing it, older people doing it, they can see new Americans doing it and they can picture themselves doing the same type of work. That’s part of our process in terms of recruitment as well as making sure that those that are applying for a position with us understand the work that we do and where they might fit into that overall process.
I mentioned women, we also have a very unique mix of new Americans that are part of our workforce. This is again in a small community in North Dakota with 12,000 people. In our small team of today 300 people, they can speak 10 different languages in a manufacturing organization. It’s a really unique blend of workforce. We have a sign above our front door that I put there 21 years ago is one of the first things I did when I came back into the family business. That little sign says we are always looking for great people. It doesn’t say male, female. It doesn’t say black, red or white.
It doesn’t say, gay or straight. It doesn’t refer to Catholic, Muslim, Protestant. It just says great people and our model in terms of workforce recruitment is always focused on finding talent and then developing that talent, because that’s what you have to do in a smaller business, in a smaller community.
Josh: This is such an important lesson of not just from your story of rethinking how you do things, but rethinking who is a part of your team. Because you’re right, some of the previous guests that we’ve had have talked to us about tapping into different talent pools that traditionally haven’t been tapped into women being a great example.
There are such amazing career opportunities and I’ve been able to have some very strong and successful women share their stories on the show. But it leads to that one of the last points that you made of when people walk around the floor and they see other people like themselves doing something that’s critical for having that moment of I can do this too.
That’s how we think as people. We think in terms of people like us do things like this. However, we identify that is how we are perceiving the environment. The fact that you want to show that the diversity within WCCO belting that’s huge. Plus diversity leads to different perspectives on these ideas that are being shared which to your point is where the power came from.
There can’t be enough said on the importance of diversity within manufacturing.
Tom: Agreed. There’s another part of the workforce that has evolved for our organization. Last year for the first time in our history, we actually invited the parents to bring in their high school kids into our organization during the summer to learn about manufacturing careers and to contribute to our processes.
Again, we needed more people so we’re drawing into a different pool. A pool of high school kids and nine of those 10 students that we brought in last summer were children of current employees. They were so amazing. They were respectful of the older people. They showed up every day on time. They did whatever we asked of them that we got our eyes opened a little bit.
I will say that it renewed my faith that this country can survive long term, because of the generation that is coming up. These were still high school kids, so much so that we did it again this summer and we had 15 of them, and it was the same thing. They’re learning about careers and manufacturing, not just the production positions, but they’re being exposed to the quality programs, the technical programs, the safety programs, the ISO programs, all of these different things.
The accounting, the customer service, These are all manufacturing careers not just the hands on making the product. Perhaps they graduate from high school, they go on to college, whether it’s a two-year technical degree or a four-year degree, they may be thinking in the back of their mind, I want to work in manufacturing.
I may be an accountant, I may be an engineer, I may be a quality supervisor, but I think I want to be in the manufacturing arena and that’s the way that we’re going to be able to survive in manufacturing long-term in the United States. Is I get more of those high school students exposed to careers in manufacturing before they graduate high school not after they do?
Josh: Absolutely. I would imagine that in addition to being well-raised kids, some of the reasons you’re seeing so much success comes back to that philosophy of setting clear goals, holding people accountable, and listening, because that direct guidance sets everyone up for success. This has been a great story. Tom, I just got one last question for you. What’s next for WCCO belting?
Tom: Well, WCCO is going to become part of a large multinational organization. Most recently the family has made the decision to join forces with a large 151-year-old organization and to bring some of its values, its culture, its model, to their organization.
Frankly, they were pursuing us not because of our equipment or because of our buildings. They have the resources to buy those. We appeal to them, because we have a really unique model with some amazingly talented people, and they wanted us in the organization. We will become something part of a larger picture rather than a standalone 68 family year family business.
Josh: Congratulations on that. That’s a big moment and it goes back to that idea of growth being good for the people, for the financial opportunities, professional opportunities, as well as growth of the company, and that’s just another phase of this growth so congratulations. That’s huge. How can our listeners continue the conversation with you, Tom?
Tom: Well, I’d be happy to come back on another time and talk about different things. I just love talking about those things. I go around different organizations. I will continue to be active in the business community speaking at different events and talking about the things that we’ve done successfully and they can always reach out.
Josh: I know you’re on LinkedIn. Are you sharing those events there? Or how would people find out so that they could–
Tom: I am, and I’m a regular, I do a lot of writing and blogs on LinkedIn and other places as well.
Josh: Tom, thanks so much for being with us today, and that’s the show.Listen to learn a few lessons on getting 20% more out of your operations from Tom Shorma.