Creating an Impactful Company Culture

Episode 184 | Challenges: Community Growth Workforce

Jim and Jason both know the importance of fostering a great company culture within their businesses. Knowing where to begin and how to accomplish a thriving culture, however, can be daunting. In this insightful episode of MakingChips, Jim shares his personal experience building a company culture that won Carr Machine & Tool the Spark Award for Culture and Workforce Development.

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When the culture is great - the work is great

When your team embraces the core values of your company, the result is hugely impactful. Jim and Jason have both discovered that when manufacturing leaders take the time to pour into their team and employees, more is accomplished and business goals are not only met, but exceeded. Your people matter, and how you communicate the mission of your company to them is key. Jim explains that learning to listen to your employees and making structured room for conversation is the foundation for company culture success. The core values of your company should be honed down to just a few. They should act as the internal compass of your business and be the why behind what you do. When your people are united behind a common set of core values and know that they are each valued and have a voice, making chips becomes that much easier.


Mantra and motivation craftsmanship

Every business should have a stated mission and vision. Jim took those building blocks and presented them to his team - with a twist. He sat down with his team and asked them what their mantra and motivation was. What was their why? He wanted to know what it was that inspired and motivated his employees to get out of bed every morning and come to work at Carr Machine & Tool. The process offered powerful insight that gave Jim the tools he needed to communicate effectively with his team and understand his employees on a deeper level.

Jim knew that not everyone would have the same why and not everyone would understand what the company does in the same way. Jim explains that people’s answers change over time as well. For instance, not everyone on his team had the same answer for how the business actually made money. Jim encouraged his team to voice their differing perspectives so that he could better understand what areas he needed to clarify and unify his team. Structured round table discussions and reviews of the company’s goals, structure, and mantra help Jim keep a pulse on the health and vision of his company culture.


Investing in the team is investing in the company

Fostering a company culture where success is celebrated and failures can be discussed are aspects of investing in his employees that Jim deeply cares about. Group and individual successes should be noticed and celebrated, he explains. He also wants his employees to understand that mistakes will happen - and that is okay as long as everyone can learn something from them. “No one is perfect,” he says, and the culture he has built is one where everyone knows that someone else has their back when something goes wrong.

Having fun together is also an important part of the company culture at Carr Machine & Tool. Jim organizes field trips for his team to conferences, IMTS, or group BBQs. Learning together and sharing a relaxed drink together helps build community.

For Jim, the emotional and physical health of his employees is vital. He explains that when your people are healthy, they will be able to put forward their best effort. As a leader, he fosters emotional health by talking with his employees and encouraging open discussion. Sharing is key. As for the physical, Jim likes to supply healthy food options to his team throughout the day.

For more tips on how to build up your people and create a thriving company culture, listen to the entire episode!


How to begin changing the company culture

Growing a company culture takes time. Jim utilizes professionals in the areas that he needs help. He organizes standups with financial advisors and makes sure that his team understands the systems, investments, and decisions that the company is making. Uniting his team behind common knowledge of the company’s net profits and sales keeps any guesswork at bay, and taking the time to discuss hiring decisions as a team helps build trust and unity.

But where do you start? Jim encourages manufacturing leaders to simply begin the conversation with team members and employees. Giving your people the opportunity to speak and share is the perfect starting point. Structured dialogue can help foster a thriving culture while also keeping the focus on core values and business growth. “Everyone has a voice,” Jim explains, “and every voice is valuable.” As a leader, stay true to the decisions you make, limit distractions, and make it clear to your people that you are invested in them. Listen to the full episode for more tips on how you can set the example to your company and keep the culture thriving.


Here’s The Good Stuff!

  • Why laughter is better than caffeine.
  • The criteria that won Jim’s company the Culture & Workforce Development Award.
  • Manufacturing News: tips for company culture success.
  • Empowering your team through strategic open communication.
  • Crafting the mission and vision of your company.
  • Encouraging emotional and physical health among your employees.
  • Clarifying the why and how of your company.
  • The importance of celebrating successes and discussing failures.
  • Utilizing field trips to foster company community and learning.
  • Hiring new team members as a team.
  • Contributing to charity as a company.
  • Utilizing professionals to help make sense of the details.
  • The return on investment of pouring into your company’s culture.
  • How to begin changing your company’s culture as a small manufacturing business.


Tools & Takeaways

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Jim Carr: Welcome to MakingChips. We believe that manufacturing is challenging, but if you are connected to a community of leaders, you can elevate your skills, solve your problems, and grow your business. I'm your host, Jim Carr, and I'm joined in the MXD, formerly DMDII Studios, with my good friend and my cohost, Jason Zenger, who thinks he's funny and he's really not.

Jason Zenger: I'm very funny. Thanks, Jim.

Jim Carr: Yeah. You're welcome.

Jason Zenger: The reason Jim's saying that is because we just did Take 5 because I kept making him laugh.

Jim Carr: At least we can still laugh after 185 episodes, right?

Jason Zenger: Exactly.

Jim Carr: Exactly, but that's what it's all about.

Jason Zenger: Yeah. You know what also is important, is to have some laughs in the workplace. Right?

Jim Carr: No, it's important. That's one of our core values at ... Funny I mention core values on this-

Jason Zenger: What is your core value that has to do with laughing?

Jim Carr: Energize.

Jason Zenger: Okay. Ours is, "Life is great."

Jim Carr: Yeah. We say, "Have an ah-ha moment." We need to have an ah-ha moment.

Nick Goellner: We're too German to laugh. We have no humor in our core values.

Jason Zenger: That's good, Nick. My family is German too, but we didn't migrate from Germany like yours did. Well, many generations ago we did, but yeah. "Life is great," means that you're going to have fun in the workplace, tomorrow is going to be better than today.

Jim Carr: I'd have to open up mine and read all the details, but definitely we want to have ah-ha moments and we want to keep each other energized by keeping it low key.

Jason Zenger: Sometimes laughter can be better than caffeine.

Jim Carr: Totally. Or wine. Before we get into the episode, I want to talk a little bit about ...

Jason Zenger: What do you want to talk about, Jim Carr?

Jim Carr: I want to talk about that episode that we did with Tom Carmazzi, the president of Tuthill Corporation. Remember that one?

Jason Zenger: I do. I remember it.

Jim Carr: What was the name of that episode, Jason?

Jason Zenger: It was When The Workforce Becomes The Life Force. It was Episode 102. If you go to MakingChips.com/102, and there is a great video on Tuthill's website where they equate a pump, which is one of their primary products, to a human heart.

Jim Carr: I know.

Jason Zenger: Talking about connecting a manufacturing company to life is just, it's a beautiful picture that they painted.

Jim Carr: We actually did two interviews that day, but that particular interview that we started on, 102, was so darn impactful to me. Do you know why it was so impactful when I met Tom and he took us through the Tuthill headquarters?

Jason Zenger: I thought it was so impactful. I mean, Tom's a passionate, authentic guy, and he's just an amazing leader. Tom's become a friend of mine, and I ask him questions on, "What do I do in this situation?" He's a great leader. Actually, he gave me a book that I still need to read and that I need to call him back so we can get together and discuss it pretty soon, but yeah. I know that that episode impacted you. You told me that. Probably more than any other episode, we've gotten feedback about that episode. The two episodes with him were our audience's favorites.

Jim Carr: Yeah. We'd been talking culture and core values on the show leading up to Episode 102 with Tom, and then we went into that facility, I'm a visual guy, he had graphs, he had visuals, he had metrics, he had data to show that by putting his people first and shifting the culture to the people and to the team, that the financials will come. I didn't believe it, but that was the tipping point for me to say, "I'm going back to Carr Machine tomorrow and making a change.

Jason Zenger: Yeah. You were a culture naysayer for a while with MakingChips.

Jim Carr: I didn't know what I didn't know.

Jason Zenger: Right, of course.

Jim Carr: I was a little intimidated to start practicing it, but lo and behold, you know as well as I know what happened last week. We were the recipients of two awards at the VIA for culture and workforce development. Obviously, what we implemented a few short years ago has really become obvious and has resonated out-

Jason Zenger: Yeah, you've embraced your core values and your culture.

Jim Carr: Exactly.

Jason Zenger: I think that's really good.

Jim Carr: Yeah. People are seeing it, and people are telling us. I didn't think that it would become that impactful that soon, but the criteria for the culture award was, we had a defined, communicated company goal, we had workforce development, which when we were filling out the application, we felt that culture and workforce development were aligned and dovetailed into one another. We practice a good cultural environment, we have a culture that attracts and retains employees and customers, we have team building, I can get into that later, and then growth pathing, and we have diversity. We have formal assessments for measuring that culture, so all those criteria were met, and we were the recipients of it. It was really empowering, and I'm still basking in the glow of that night.

Jason Zenger: Yeah. I was at the forefront of talking about culture early on, and to be quite honest with you, I've probably fallen ... I've let my culture just fall by the wayside a little bit, and not by intention, not because of forgetfulness, but just going back to that episode that we did before, I'd just been too busy stretched in too many directions. I've had this discussion with a lot of my team members, and I've gone to them about-face and said, "I need to get my act together and I need to be more present, and I need to be more responsible for the culture of our company," and so I'm looking forward to learning from you as it relates to this.

Jim Carr: Who knew?

Jason Zenger: Yeah, I know.

Jim Carr: You were the one that introduced me to it, and I was the one that took it and actually evolved it.

Jason Zenger: I've had a lot of things going on, and I told this to my team. I was like, "I need to get my act together, and I need to get back, improve the culture, because I'm ultimately the person's that responsible for that."

Jim Carr: Well, congratulations, Jim, on the award.

Jason Zenger: Thank you.

Jim Carr: I just see it as, maybe we should tip our hat to the community of leaders in Metal Working Nation, because you talked about Tom kind of-

Jason Zenger: Oh, he wasn't the only one.

Jim Carr: Lighting the fire. I think about Jess Giudici.

Jason Zenger: Craig Zoberis.

Jim Carr: Talking about workforce developing, growth pathing, all the different people that we've brought in have really helped us elevate our leadership and-

Jason Zenger: I think you remember early on, I think Pete Zelinski even talked about that as something that was really important in the companies that he visited, as the managing editor of Modern Machine Shop, that culture wins.

Jim Carr: There was quite a few, and I don't remember them all. All I know is, Tom was the one that was the tipping point.

Jason Zenger: Yes.

Jim Carr: Was the apex of it for me, and then, I went back and I said, "We're going to start doing it now."

Jason Zenger: Yeah. He's a sharp guy. We should have him back.

Jim Carr: We should have him back.

Jason Zenger: That would be great.

Jim Carr: That was my dad's favorite episode, too, that episode with Tom. Interesting you brought that up.

Jason Zenger: Jim, what exactly are you going to teach us about culture? What have you learned through this journey? Teach me.

Jim Carr: That's funny, to hear you say that, because you were the one that taught me.

Jason Zenger: You know what, I am also willing to learn. There's a lot of things that I don't know, and I always need to step it up.

Jim Carr: I have a lot of bullet points that I'm willing to share with what I've learned over the last couple of years that I believe brought me to this point.

Jason Zenger: We even did an episode where you and I were talking through your core values as you were devising them, right?

Jim Carr: You were instrumental in helping us craft our core values, but I don't necessarily know that we did a episode on Carr's core values. Before we get to that, let's go to Nick. Nick's got some great news about culture that I'm sure he'd want to share.

Nick Goellner: Thanks, Jim. We talk about the news every week. This week's article comes from the Society of Human Resources Management. It is 10 Tips For Changing Your Company's Culture And Making It Stick. The first tip ...

Jim Carr: Yeah, what is the first tip?

Nick Goellner: Define a set of desired values and behaviors. Sounds a little bit like core values.

Jim Carr: Sounds a little bit like core values. Exactly.

Nick Goellner: Then, the second tip, align culture with strategy and processes.

Jim Carr: That would allude to making sure that once your culture is there and defined, that you have a vision and a process to back it up.

Nick Goellner: Yeah. We're going to talk about using core values in your employee reviews, and that's what that point is talking about in this article here. That's something that we do at MakingChips. I wrote about it in a previous article, and I'm going to be writing about it for this week's original article too. Back to the article here, the third point is, connect culture and accountability, something Jason talks about a lot.

Jim Carr: What does mean to you, Jason? Connect culture and accountability, point three.

Jason Zenger: Well, I think, to me, when you say that, it goes to the notion of hiring, evaluating, and firing based on your core values. I think when you try to hire somebody and get somebody to stay when they don't fit your core values, in the long run, it's just not going to work. You need to make sure that people are accountable to those core values, and if they're not going to embrace them, they've got to go because it's just going to cause more conflict in your business than what it's worth.

Nick Goellner: Yeah. The fourth point here, have visible proponents. This is what you were talking about, Jim. When Tom showed you ...

Jim Carr: Those graphs.

Nick Goellner: Charts and graphs, it's like, "Okay"-

Jim Carr: Metrics.

Nick Goellner: They're able to quantify culture. I think that's part of the reason why people don't take culture seriously, is because, it's so ethereal.

Jim Carr: Well, they think it's smoke and mirrors. Quite frankly, I thought it was all smoke and mirrors at the beginning too, because it was elusive. It was something I didn't know. It wasn't tangible. It wasn't something I could put my fingers on. Next point?

Nick Goellner: Define the non-negotiables. These are things that you absolutely have to have, or you are not a good fit.

Jim Carr: Okay. Six?

Nick Goellner: Align your culture with your brand.

Jim Carr: Oh. Love that one. Culture and brand, absolutely positively have to be aligned.

Jason Zenger: Well, Jess Giudici talked a lot about this during our episodes with her.

Jim Carr: Right. What did she say, Jason?

Jason Zenger: She just said that, from an HR standpoint with her, recruitment is so important that, your core values in your marketing and your branding was just paramount to getting the right people in the company.

Nick Goellner: Yeah, and that's one of the things that we do at MakingChips. When we start working with a client, we ask them about their culture and about their values. We try to design their brand such that it communicates those values. The next point here is, measure it.

Jim Carr: Metrics. Have data to back it up.

Nick Goellner: What gets measured gets managed.

Jim Carr: I totally get it. Eight?

Nick Goellner: Don't rush it.

Jim Carr: Right. That was the thing that I was struggling with, was, how long am I going to have to practice this before the ROI comes? I mean, I just can't believe how fast it came to me.

Nick Goellner: Yeah. You can be like, "Okay, here's our mission, vision, and our values, and we should have a great culture," and that's just the start.

Jim Carr: Right. Don't rush it. Don't freak out and say, "I've got to have it done by tomorrow." It will happen eventually, and it'll be an organic evolution.

Nick Goellner: The ninth point is, invest now. Don't wait for staff and resources that may never come. Take the time to invest in culture now.

Jim Carr: The last one?

Nick Goellner: Be bold and lead.

Jim Carr: Yeah. Well, it's all about good leadership. Every company has to have a good leader to convey and push down from the top, top-down. You need to be bold about pushing that content down from the top.

Nick Goellner: Absolutely. We cover that in news, we are writing an original article this week about using core values in your employee review process, and I was just in Kentucky and I met with a company who had a small, a small company, but they had exceptional culture. I asked Stan Martin, the owner of Martin Manufacturing, to write an article, and he will be the Chip-In Contributor for the week.

Jim Carr: All right, Stan. Thank you for that, I appreciate it.

Nick Goellner: You can find all this content on MakingChips.com. If you subscribe, we will send it to you in our newsletter.

Jim Carr: Called?

Nick Goellner: The Boring [crosstalk 00:11:57].

Jim Carr: I love that, man.

Nick Goellner: It will be delivered to your inbox every week.

Jim Carr: Love it. Jason, we're going to talk about culture, which, you were the one that actually hand-held me to it, walked me through it, and I intercepted it and took it to the next level. Now ...

Jason Zenger: You caught the ball and ran it to the end zone?

Jim Carr: I know.

Jason Zenger: It was a Pick Six.

Jim Carr: Now I'm an award-winning company of culture and workforce development. Who knew?

Jason Zenger: I was actually looking back, and it was Episode 97 where we talked about narrowing down your core values, and one of the things that I remember when you first showed me your core values, I think you had, like, 10. I was like, "No, you need four or five." We went through that as an episode, and we narrowed down your core values. If you go to MakingChips.com/97, you can listen to it right there.

Jim Carr: Good. Thanks for bringing that up. I do remember that episode now, but I think it was more impactful when you-

Jason Zenger: When we did it privately? Yes.

Jim Carr: It wasn't private. You came into my company and sat down with my team. We had, like, 15, and you're like, "That's not going to work. You've got to bring it down to something like four." We did. We had a lot of things that went into one particular one, but at the end of the day, it has been a journey for Carr Machine and Tool to go down this. I know Jason and Nick make fun of me because I don't read a lot, but what I do ...

Jason Zenger: No, we make fun of you because you don't know how to read.

Jim Carr: Well, no, I do know and I'm getting better, but what I do know how to do very well is, I do know how to listen, and I do know how to focus, and I do know how to execute. Quite frankly-

Jason Zenger: There you go.

Jim Carr: That has been the success of Carr's culture, and the evolution of Carr's culture, over the last couple of years. Like I've said before, we've had many guests on this show that have fed me granularly about what that meant to them, and I listened. I listened intently, and I made the change. I'd just like to share with the Metal Working Nation and revisit it with Jason and Nick, about what those things were and how I just started to implement it.

Jim Carr: Basically, the first thing that I did, and it was quite a few years ago, was I started weekly production meetings. I had a structured, 90-minute, open-table with the entire team, 8:30 a.m., everybody comes, empower the employee to have a buy-in and a say-so in all the issues that are going on in the company right now, from production to tooling, to good things to bad things. I want to hear about it. It's a time that we can all get together and really share our own personal successes and failures as a team, and help each other and have everyone's back.

Jason Zenger: It happens everyday.

Jim Carr: These meetings are once a week.

Jason Zenger: Oh, once a week. I thought you said once a day.

Jim Carr: Weekly production meetings ...

Jason Zenger: Weekly, yes. Okay.

Jim Carr: 90 minutes, 8:30 a.m. on Wednesday mornings. It's very structured, I create the structure every week.

Jason Zenger: Is it similar to a Level 10 meeting?

Jim Carr: It is similar to a Level 10 meeting. However, my leadership team is within this structured weekly production meeting. Actually, we've evolved the production meeting to more of a strategy meeting, and I'll explain that in just a little bit, but it's a very structured meeting, we start out the meeting with saying something good about our personal life or business life, and we relate it back to one of the four core values that we defined shortly thereafter, which is, "Flex, fly, play and energize." Those are really the truncated versions of what they all mean. I won't get into them now because, really, core values are something that's internal and not something that you put on your website. It's not something that you broadcast. It's something that is communicated internally, and it's a feeling that everyone on the inside of the company should know and how to engage with.

Jim Carr: After that, we crafted our mission and vision statement. Personally, I didn't like the word mission, vision. It sounded too boring to me, so we defined it to the mantra and motivation, and what's your why. We all went through an exercise and asked everybody on the team, "Why do we come to work? What is important to us?" It was really eye-opening and impactful for me to actually write down the reasons why I came to work everyday, and what was important to me in being a successful leader of a small manufacturing company.

Nick Goellner: When we talk about vision, we're usually looking into the future, something that you haven't achieved yet and you're trying to achieve. You've changed that to motivation. Is that what you're motivated to get to, then?

Jim Carr: Yes.

Nick Goellner: Is that what you're getting at? Okay.

Jim Carr: Your mission is like a mantra. A mantra is a saying that you say over and over again. Like, when you define a mission statement, a mission statement says, "We do this, we do this."

Nick Goellner: It's what you're doing on a day-to-day basis, essentially to achieve your vision.

Jim Carr: I said, "I don't like that. I want it to be more of a mantra. I want it to be more like a poem. Then the motivation part was, yes, Nick, what you said. The vision is something that, out maybe 90 days, one year, three years, 10 years, and how are we motivated to get to that? It's like a road map. What's our road map like to get out to there. Then, we asked ourself why. Why do we come to work everyday, what motivates us? What's important to us as humans and individuals who have to come to work everyday for eight to 10 hours a day? It was really powerful. To hear my CNC machinists actually write this down, it was ...

Nick Goellner: Yeah, that would be an interesting exercise, to see like, "Okay, so, why are you here everyday?"

Jim Carr: Right.

Jason Zenger: What came out?

Jim Carr: Well, I can only tell you, I have it all written down internally. I don't know if I'm privileged to share what they said, but I can share with you what I said. One of the most impactful things for me was, I want emotional and physical health among my employees. That is really what's most important to me. If you have emotional and physical health, the financial health will follow, much like what Tom Carmazzi said. If you put your people first, the financial aspect will come. I felt that the most important thing to me was, among all of the people that are on my team, if they're emotionally healthy and physically healthy, that when they come to work everyday and they have that health ratio, they're going to put their entire effort into making their job the best they can do, and the financial aspect will come in return. That was my why.

Nick Goellner: What can a manufacturing leader do to promote emotional health or physical health?

Jim Carr: Well, emotional health I think is talking to people, having these open dialogues in meetings, getting to know your employees. Not really on a personal basis, but utilizing all of the tactics involved in culture to get them to talk and share and ...

Nick Goellner: Just being more social throughout the day?

Jim Carr: Not be closed. Yeah, and just sharing. I think sharing is really a key thing.

Nick Goellner: What about now the physical side? The first thing that pops into my mind is stand-up desks, so people aren't just sitting down all day.

Jim Carr: I bring in all healthy foods to my team all the time, I'm bringing in a fruit and protein bars, Quest bars. Occasionally we bring in coffee cakes and doughnuts too, but there's always access to healthy choices during the day.

Nick Goellner: Do you shame your employees when they make the unhealthy choices?

Jim Carr: I don't, because it's not me to ...

Jason Zenger: I'll bet he does.

Jim Carr: Who am I to say that you shouldn't be eating a double Big Mac, or an extra large order of fries, right? I mean, that's your choice, but here's an option. I think that it'd be a better option if you picked up a banana, rather than having a super-size fry. You know what I mean?

Nick Goellner: Bananas have a high glycemic level.

Jim Carr: Yeah, but it's not processed food.

Nick Goellner: I know, I'm just kidding.

Jim Carr: It's an organic food. Another thing that I've been doing, I've added this into our weekly strategy meetings, is I ask all the team members, "How does Carr Machine and Tool make money?" You would be surprised at how different everyone's answer was. I did this about six to nine months ago. I wrote it down, and I keep it on the production meeting structure. Just last week, I said, "You know what? It's time for us to review what that was. I said, "Ryan Carr, here's what you said. Linda, this is what you said. John, this is what you said. Let's go back and let's revisit that." You want to know? It changed. [crosstalk 00:20:34]

Jason Zenger: Enlighten me. What kind of things did they say?

Nick Goellner: That seems pretty cut and dry. You're a contract manufacturer, people use your machines to make parts, and you charge them for it.

Jim Carr: Yeah, but how do you know that that CNC machinist in the shop running that machine, he has no idea how the company is making money. He has no idea. I want to know what he's thinking, so I can enlighten him to tell him, "This is how I know we make money," because I share the P&Ls with them, how we're doing.

Nick Goellner: I was just going to ask that. Do you review financials together?

Jim Carr: I do. I don't go deep, but I tell them where we're at.

Nick Goellner: What kind of answers have you gotten to that question?

Jim Carr: Some of the people were really good. Actually, they were all really good, quite frankly. They did vary a little bit. Getting jobs in a quoted time was important, getting jobs out, having the high quality to make the customers come back. They were all really good answers, but I think as we move forward and we review them again, the answers are tightening up. People are really starting to understand how the company does make money.

Nick Goellner: Did you ever have anyone answer in a way where maybe they were suggesting a new revenue stream that you don't currently have, or ...

Jim Carr: No, not yet.

Nick Goellner: Because you've been talking to me about, "Hey, maybe we should start getting into our own product line."

Jim Carr: A product line? Yeah, I know. That would be awesome. No. We've talked about creating a product line, and I planted the seed with them a few weeks ago that maybe that's something that we need to think about as we craft our vision for the vision, but no one's brought that up. No one's brought that up, except me.

Jim Carr: Another thing too is, we celebrate successes and discuss failures. Well, what does that mean? When we win a big job, I'll run to the store and buy a few bottles of champagne. I'll bring everyone in the office and we'll sit down and we toast. We say, "Yes, great. This is what we've been waiting for. This is what we wanted. This is part of our vision to growth." When we have failures, we discuss failures too because failures are a part of everyone's daily thing. We're there to help each other as there's failures within the company. We need to know that we have each other's backs when we have failures.

Jason Zenger: You need to learn from your failures, too.

Jim Carr: Absolutely.

Jason Zenger: You told me before that one of the failures that you had in the past was that, you were actually machine parts, and you screwed up a bunch of parts and they took you off the machine, right? You were never allowed back in the shop, weren't you?

Jim Carr: No. No, I'm not that bad. I have run a few end mills into the table and the vice though before. You can still see those out on some of the-

Jason Zenger: Oh, really?

Jim Carr: Oh, yeah. Some of the dinosaur vices that are out in the shop have some end mill holes in them and some drill holes into them.

Jason Zenger: Nice.

Jim Carr: We all make mistakes, right?

Jason Zenger: Yeah, it's part of learning.

Jim Carr: No one's perfect.

Jason Zenger: That is also another important thing about your culture is that, you need to be able to allow people to fail, to make mistakes-

Jim Carr: Totally.

Jason Zenger: In order to learn from them and in order to get better. You don't want everybody walking on eggshells.

Jim Carr: No, but they have to have accountability too. They have to have accountability.

Nick Goellner: My brother Noah, who we had on the show once, he always tells this story about these Japanese guys from Toyota. They visit this American company, and Andon is an alert of a problem that happened. The guy goes to the Japanese leadership and he says, "We have very few Andons compared to what we used to have." They look at him and they're like, "That's a problem. You need to be creating so much pressure on your people to continue to grow that you're always discovering the next problem that you need to solve."

Jim Carr: Right.

Nick Goellner: It totally backfired on the guy. He thought he was going to get a pat on the back, but they were like, "Why not? Where's all the problems?"

Jason Zenger: Yeah. That kind of reminds me of that book, The Goal. They're always trying to weed out the bottlenecks.

Nick Goellner: Absolutely.

Jason Zenger: What else, Jim?

Jim Carr: We have field trips. I take my entire team-

Jason Zenger: I think that's a real important one. Yeah, give us some examples of different field trips that you've done.

Jim Carr: I've taken the entire team to IMTS for the full day, we go out to dinner at night. Actually on April 10th, we're going to McCormick Place, Chicago, to go to the Automate Conference. We go to the Greater O'Hare Association that we belong to, has an annual barbecue picnic outside in one of the forest preserves.

Jason Zenger: That's costly for you to take those, pay those machinists to be off the machine, right? Or, do you not pay them when you go on these field trips?

Jim Carr: I do not pay them to go on the field trips. I can't do that. I can't pay them to drink beer with me, you know what I mean?

Jason Zenger: Okay. That becomes like an optional thing.

Jim Carr: It's typically an after-hours, but-

Jason Zenger: Do you make them pay you to drink there with you?

Jim Carr: Yeah, sometimes. When we go to IMTS, of course, I have to pay them.

Jason Zenger: Because I know you've made that suggestion to me before, which I haven't taken you up on, paying you.

Jim Carr: Here's the answer to that question. If it's during business hours and there's an educational ROI on them attending that function or conference, then I pay. If not, then I can't pay them. I can't pay them to go have fun and drink beer and eat food, but if they're going to bring back some value to the company, then I pay them. We don't do it a lot, but I try to do it at least quarterly.

Jim Carr: Another thing we've implemented is, when we hire somebody, everybody in the entire company interviews that person. The minute that prospect leaves the building, we get together immediately. They walk out the building, we have a quick meeting. Everyone goes around and says, "This is the pulse that I got from this person." We discuss it, we review that person as a team right then and there, and pretty much make a decision whether that person is aligned with our core values, and does he or her embody our core values, and does that person look like they're going to be a good fit for the company.

Nick Goellner: I love that one. I honestly think we should start doing that with MakingChips, because we're expanding. We're looking into hiring more people, by the way, MakingChips.com/careers, if you're interested. I love the idea of having the whole team in on the interview, because a lot of times when you're the leader, you're not in the trenches all day interacting with this new hire.

Jim Carr: Do you know how powerful it is when your CNC machinist knows that you're empowering him to make a decision on a new hire?

Nick Goellner: Yeah, exactly.

Jim Carr: It is huge.

Nick Goellner: That's awesome.

Jason Zenger: Well, the only thing I struggle with, and I commend you for a lot of these things that you've done, I'm trying to figure out how to translate that to my company. I've got-

Jim Carr: Well, you have team leaders, right?

Jason Zenger: Right, yeah. We've got almost 50 people between two locations.

Jim Carr: No, no. [crosstalk 00:26:55] I don't know your business, and I would never elude the fact that I would, but, of the 25 at Black and the 25 at Zenger, I'm just articulating that that way, there's probably layers of leadership right there. When the leaders should each interview the new hire-

Jason Zenger: Right, and we do that.

Jim Carr: Separately, and then as soon as that new hire walks out, all those leaders should get together and discuss the pulse that they got from that prospective new hire. That's what I would recommend. Of course reviews, millennials like reviews often, especially when somebody is new. I typically go 30 days, 60 days, 90 days, and then maybe six months, one year, and then annually after that.

Jim Carr: We're charitable, so what we're doing lately is, we asked all the employees to let us know what charities they would want to, if they had money to give to particular charities, what's important to them. For me, it's Parkinson's. Of course, my dad has Parkinson's Disease, it's important for me to give back to that and be philanthropic to that.

Jason Zenger: Don't even try.

Jim Carr: I know. To that charity. Again, maybe someone has had a parent die of cancer, or something else. We want to know what the employees' feelings are for charities.

Nick Goellner: Yeah. For us, it's ALS. Our founder, my grandfather, his wife died of ALS. So many people from the company do this ALS walk in Rockford. It's a big fun time for the company.

Jim Carr: Exactly. It shows culture. It's part of your values.

Jim Carr: Flex schedules, I know in a manufacturing company, I can't say to my machinist, "Come in whenever you want, you're going to get your job done," but at the end of the day, I'm pretty flexible if somebody wants to take time off. I'll let them. I can't pay them for their time off, we don't have unlimited PTO, but if people need to get off, I'm understanding of that, that they need to take care of things outside in their personal life.

Jim Carr: I bring in experts, people like health plan professionals that really do deep dives on our plan, to really let them understand all the values in what their healthcare provider can offer. Investment plans, we recently converted our 401K plan to a new investment company. I brought in a professional from the investment company, sat down with the entire team, and he explained to them the options that they can ... Then, we're going to schedule one-on-one meetings with that investment expert and our employees.

Jim Carr: Again, Nick, I share company financials, and at the end of our production meeting every week, everyone is delegated to get a lottery ticket.

Jason Zenger: Hold on, pause before you go to the whole lottery thing. I want to ask you a question about the P&L.

Jim Carr: Sure.

Jason Zenger: Tell me exactly what level of detail that you do show to everybody for your P&L.

Jim Carr: Just plus or minus, where we're at.

Jason Zenger: Just the bottom line?

Jim Carr: Right. The bottom line.

Jason Zenger: You don't show sales or costs or anything like that?

Jim Carr: I do show sales.

Jason Zenger: You show sales and net profit?

Jim Carr: Yes, I do show net profit.

Jason Zenger: Those are the only two that you show.

Jim Carr: Right. I can't really show how we're doing, because that's more on a one-to-one level. If you were a CNC machinist, you'd have accountability for making your jobs profitable, right?

Jason Zenger: Right.

Jim Carr: I'm not going to call you out in front of the entire team and say, "The last six jobs you did, we lost" ...

Jason Zenger: I don't mean job by job. You're talking the overall company, you show the P&L.

Jim Carr: I'm talking the overall company, right. As soon as you log into QuickBooks, boom, that number shows up right on your dashboard. It's that quick.

Jason Zenger: You show the net profit to everybody on a weekly basis.

Jim Carr: 100%. My leadership team, I'm showing it weekly. To the entire team, I'm showing it quarterly.

Jason Zenger: Okay. Then, how does that translate to something in their pocket?

Jim Carr: Well, it's all about accountability. If they're doing well, then I will reward them on that. Then, most recently, we decided to do morning daily huddles with our operations manager, Ryan. He gets together with all the shop floor people, every morning, 7:00 a.m., from five to 15 minutes, and just gives direction for the day.

Jason Zenger: Like a stand-up?

Jim Carr: It is. They go right by the coffee machine and they stand up and they say, "This is this." There's so much more, but I don't want to take too much time. These have been the ones that have been most empowering to us.

Nick Goellner: You've made ...

Jim Carr: Many, many changes.

Nick Goellner: 20-something below points' worth of investments in culture. Has there been a return on that investment?

Jim Carr: Yes. I will tell you how impactful this was. Last Monday, my sales manager, John, scheduled a phone call with a sales prospect on a East Coast semiconductor company, a $5.5 billion a year company. We got a hold of him to schedule a call to do machining. During that call, John was going on about what we do. Then, we've defined through our L10 meetings what our three uniques are, and they're people, communication and technology. While John was talking, I thought, "You know, I've got nothing to lose and everything to gain." I thought, "I'm just going to go for it." I started talking about our culture. This guy totally bought into it, totally understood where I was coming from, and wanted to know more. I said, "As a matter of fact, we just were the recipient of two awards last week for workforce development and culture," and this was the big differentiator for that particular call.

Nick Goellner: I was just looking at some statistics. I had a long car ride, and I was looking at the Bureau of Labor Statistics, just how many machinists there are, how many contract manufacturers there are. There are literally thousands of job shops, and thousands of them around the same size with the same type of machinery that you have. You've got to do something to differentiate.

Jim Carr: Got you.

Nick Goellner: Culture is just a great differentiator.

Jim Carr: Yeah. I'm really feeling good about this new prospect becoming a Carr partner, because he understands the importance of partnership, and he understands our value, and he understands our three uniques. What we've determined as a leadership team is, if the customer does not understand our three uniques and value us for those, they're not going to be a good customer. John's already told me that he's crossed off many, many prospects on HubSpot already because he went through and said, "Do they respect us for our people, our communication, and our technology?" If the answer was no, boom. They hit delete. We're really focusing on that as a company, moving into the future.

Jason Zenger: What would a small manufacturing company like yourselves, what would be the most important thing for them to do tomorrow, besides listen to the plethora of MakingChips episodes on core values and culture?

Jim Carr: Start open dialogue with your team. I think that's the most important place to start for me. It was for me. That's where I started, because I think that, if people have an opportunity to speak up, that they will. The more structured you do that, people are going to really start evolving themselves and sharing more and more with what they think that the value of the company is going to be, and where they can take it. Because everyone has a voice, and everyone needs to share what they think about what's going on. It's just really empowering to the employee.

Jason Zenger: Well, you develop your values based on the best of the best in your company, and it's not about sending an edict down from the front office.

Jim Carr: Right. Then, I think staying focused. I think that, you need to really stay true to the decisions you're making. I think another thing too is, no distractions. I mentioned the other day that we don't have cell phones in our meetings because I want everyone to know that if they see me on my cell phone during a production or strategy meeting, they know that I'm not invested into hearing what they're going to say. They see me, and they are reacting to my behaviors during that production meeting. They know I'm taking this very seriously, and this is serious stuff. I'm setting an example for the rest of the company. We even turn off our phone lines, so if somebody calls Carr Machine and Tool during that time, we won't even answer the phone call.

Nick Goellner: You just cut the power to the entire facility.

Jim Carr: Right. It's all about us.

Jason Zenger: Stop making chips.

Nick Goellner: Yeah, he turns the lights off.

Jim Carr: It's all about us. Those are really the top tips, Jason, that I would say to a small manufacturing company to start this culture shift tomorrow. If anyone has any questions, they can feel free to link in with me and shoot me a DM, and we'll talk offline. I'll be happy to share with what I know about that.

Jason Zenger: Jim, like I mentioned before, we have talked about culture and core values a lot, so obviously we feel it's important.

Jim Carr: I was listening.

Jason Zenger: The Metal Working Nation tells us that they feel it's important to their company. I think that the only people that don't believe that it's important are the people that are not embracing it. I think that they should embrace it. I think they should go back and listen to some of those articles, and just jump in the pool.

Jim Carr: Well, it's not for everybody.

Jason Zenger: Well, no, every company has a culture. Every company does.

Jim Carr: Right, it's either a good culture or a bad culture.

Jason Zenger: Or, it's a defined culture or undefined. You could have a good culture and it's not defined. That's definitely possible. I think that, you should take some notes down and ... Every company I would assume has meetings. I would imagine you together with-

Jim Carr: I would not assume that.

Jason Zenger: You're right. Not all companies have meetings, but if you don't, call a meeting and just say, "Hey, team. Should we start having these conversations? These are some of the notes that I've taken from all these MakingChips episodes. Should we start having these conversations?" I would imagine that your team wants to define their culture, because you've probably hired people that were not a good fit for your team, and it's had bad consequences. Let's try not to repeat those mistakes.

Jim Carr: Yeah. When I go back years ago and think about some of the hires that we'd had, they were not good. Those people did not fit at least my core values. Now, whether or not they were my dad's core values, I don't know, but ...

Jason Zenger: Those things could change with successive generations.

Jim Carr: Totally.

Jason Zenger: I know that there's a notion that your core values never change. I don't know that I believe that. I think that they can evolve over time, and especially with ownership changes, they could definitely change.

Jim Carr: Well, the leader of the company is the one that's really defining the culture, but the core values are the thing that is defined by the entire company.

Jason Zenger: I would disagree with you to a certain extent. I think that the leader is accountable for the core values, and I think that the core values can change with the leader, how the leader hires, how the leader directs the company, but the culture and the core values are part of the people as a whole. With that, we've talked a lot about culture, but as it always goes, if you're not MakingChips ...

Jim Carr: You're not making money. Bam.

Jason Zenger: Bam.

Speaker 4: Thanks for listening to the MakingChips podcast. Jim and Jason knew that the Metal Working Nation, the community of world-class makers, needed to commit to a new way of leading to stay ahead of the competition. MakingChips was created to fill that void, to give you advice from other manufacturing leaders who can push you to take action. Your manufacturing challenges have a solution, and many of them are at MakingChips.com.

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