Shop Matters - Ep. 6 Company Culture



Shop Matters is a podcast designed to talk about the world of machining and manufacturing with your host, Wade Anderson. Sponsored by Okuma America.

In this week's episode, Wade speaks with Okuma's COO Jim King about the need for strong company culture, especially with the lack of skilled labor in the manufacturing industry.

TRANSCRIPTION

Wade Anderson:

Hello manufacturing world. I'm Wade Anderson with Shop Matters, sponsored by Okuma America. This podcast is created to discuss all things machining and manufacturing. Today I'm in the studio in Charlotte, North Carolina with Jim King, the president and COO of Okuma America. Welcome Jim.

Jim King:

I'm glad to be here with you, Wade. Thank you very much.

Wade Anderson:

All right. Well I know you can't really tell it by the way the studio looks, but it's actually kind of a cold, rainy day here in Charlotte. So appreciate you braving the weather and coming out.

Jim King:

Yeah, but it never rains in Charlotte, you know that.

Wade Anderson:

Especially in the winter time, right?

Jim King:

Absolutely.

Wade Anderson:

Today we're going to talk about a topic that I'm excited about because all day long, every day I talk about machining, manufacturing, processes, things of that nature. Today we're going to talk a little bit about culture, which I think is one of your top topics right now, isn't it?

Jim King:

It is. And that's one of the things that really, from my standpoint, drives a company. If a company doesn't have a strong culture for the employees to latch onto, it really doesn't have the ability to be a top performing company.

Wade Anderson:

Tell me, let's work through some of the characteristics. When we talk about a corporate culture, what does that mean from a customer perspective?

Jim King:

Well, a lot of customers want to understand and be part of a culture even if it's not their own, they like to be seen as part of your company culture. And I'd say probably five to seven years ago we started down a path of trying to define who and what we are from a mission, vision and values standpoint. And we went out to those customers and really asked them, what do you like about Okuma? And that's formed really the strong foundation that we have today for our culture.

Wade Anderson:

Okay. I think it's interesting that you started with the customer, instead of starting internally, and then pushing that outward. Talk me through that a little bit. I mean, how do you approach customers and say, "Hey, tell us about what our mission should be."

Jim King:

Yeah. A lot of times, like you said, most companies will sit in a board room and they'll come up with these great vision, and mission, and values, and get five or six people or a consultant to come in to tell you what your values are, your mission is. But we really went out and talked to the customers, and we interviewed them, and just said, "What do you like about Okuma? Why do you like purchasing machines from us or our distributors? And, and what do you look for in a company in the manufacturing industry?" So, we started by asking a series of questions to those end users and small shop owners, and they helped us define who and how we behave in the marketplace.

Wade Anderson:

You just hit something I was thinking about as you were talking through that. When you're talking about customers, are you just targeting the big OEM-type companies? Are you talking job shops? Did you canvas it?

Jim King:

Really all of them. Most of customers are job shops. A lot of our job shop customers say, well we're too small for Okuma, and that's the farthest from the truth. As we defined our mission statement, we passionately pursue a customer for life. It doesn't matter if it's a one-machine shop or some of the big Fortune 50 companies, we treat them all the same way.

Wade Anderson:

Okay. You just said the mission statement. Say it one more time for me.

Jim King:

We passionately pursue a customer for life.

Wade Anderson:

All right. I take part of the key is the simplicity, right?

Jim King:

Absolutely. We started out with a mission statement that you'd have to be a PhD to understand it. And what we wanted to accomplish is how do you get every employee in the company to understand what the mission is, and if it's really complex, no one can even recite it. So they have to come back and they're not going to involve it in their day-to-day life in business. So simplicity was a real strong key to why we went with such a nice, simple mission statement.

Wade Anderson:

Remember, in years past you walk in, and it's three or four pages that will be framed on the wall, and yeah, I agree. If you can't memorize it, you can't really live it every day.

Jim King:

Absolutely.

Wade Anderson:

It can't be part of your fiber.

Jim King:

Right.

Wade Anderson:

All right. Talk about values that go along with it. When you say mission, vision, values, I guess, walk through those three steps, and what does that mean, again, from a customer perspective, looking in, how does that affect them?

Jim King:

Well, the mission helps everybody understand what do you do every... what your future statement is, is that we want to passionately pursue a customer for life. The values is really it helps the employees really define what they do every day, how they behave every day. What is the expectation of the employee. And the values help that employee define that reality for them. Leading with a servant heart, if you passionately pursue a customer for life, having a servant heart helps you serve that customer.

Jim King:

As we define those key values, those values all fed back to our mission statement, that valuing partners in honoring our legacy all set back to really the mission statement.

Wade Anderson:

Obviously Okuma has a core team of longtime employees. I know in the lobby area there's a wall of plaques of everybody who's got 25 years or more with the company. And that's a huge wall, a lot of plaques there. But does that help you in bringing on new talent to bring on new people? Do you use the mission, vision, value statement on gauging prospective employees?

Jim King:

Absolutely. One of the things that, every time we get together with a new employee, we talk to them about our vision, mission, and values. In fact, every meeting we try to make sure every employee, when they start the meeting is they start with our mission statement and our values, and they pick someone in the meeting room and relate one of our values to that individual, or the meeting, or the topic.

Jim King:

And so even in an interview, the people that impressed me the most are the ones that went to look at our mission, vision, and values. And during that session of being interviewed for a position in the company, if they start looking into that, a lot of the people say, "Listen, I really relate to your values." And I think it's been a great recruiting tool for people that really want to follow core values of Okuma, and they want to be a part of that family.

Wade Anderson:

I'm going to put you on the spot here, and beings this is live, I'm going to hold your feet to the fire. Is it a gauge? I heard you mention earlier about a servant heart.

Jim King:

Right.

Wade Anderson:

If you've got two candidates that come in interviewing for a position, one's got a lot of skill, but maybe the heart side of it isn't quite there, but then you're interviewing another guy and he's got that servant heart-type mentality, but maybe the skillset isn't quite as high as the other candidate. Do you use that for a gauge on decision-making?

Jim King:

Oh, absolutely. Yeah. I would hire the servant heart because I believe skills, technical skills on how do you run a machine tool, if you've got good math skills, I can teach the skill side of it, the technical side. It's very hard to teach someone how to have a servant heart if it's not core to who they are.

Wade Anderson:

Right. How to have passion.

Jim King:

Yes. It's just you can't train that. I can train a lot of people on technology though.

Wade Anderson:

Yeah. Okay. Interesting. Does that help you from an empowerment standpoint? How does empowering employees, how does that affect the company culture as a whole?

Jim King:

Well, if a company's got a strong culture, it helps the employees understand where the rails are. If your values are set up correctly, it really tells them where are they and how they can behave within the organization. So yes, I think having a strong value system, and a strong culture allows the employee to take certain risks that they know they're going to be able to survive at the end of that risk. And so if you define it and you live to it every day, you don't vary. Part of what leadership has to be in a company is we've got to live our mission, and vision, and value every day. And if we do that, the employees start to say, okay, it's predictable. The management team, every one through the organization is behaving in a consistent manner. It empowers your organization to take risk knowing that the organization's not going to punish them for taking risk.

Wade Anderson:

Right. I read an interesting book recently called Call Sign Chaos by General Mattis.

Jim King:

Yep.

Wade Anderson:

He's got a statement that he talks about in the book over and over that business moves at the speed of trust.

Jim King:

Yes.

Wade Anderson:

And I love that. The speed of trust. What you just said to me about the guard rails or the guide rails, to me that's kind of saying, "Hey here. Here's the parameters that we expect you to work in, and we give you the trust to move business, move transactions forward." I would think that's got to increase the speed of help and service and support to the end customer.

Jim King:

It all feeds back to the mission statement. If you allow the people to be free and unencumbered, understanding what the rules are, passionately pursuing a customer for life, they're making decisions on how to help that customer. They're going to err on the side of how do I help that customer? How do I keep manufacturing strong in the United States? That's what drives that, and we have increased our speed of transaction within the organization.

Wade Anderson:

Okay. As we're talking about it from a customer perspective, if you're an internal employee, does that help from working inter-department teams? If I'm in service and working with engineering or things of that nature, how does that affect the internal culture, and how they work together inside that maybe isn't quite as visible to the external customers?

Jim King:

I'll tell you a little story, about every quarter, I have a Coffee with the President, and we bring in anybody that's been hired in that quarter or within the first six months. And part of that is so that they understand where my office is and I'm not some big ogre that sits in a corner.

Wade Anderson:

Or picture you as Shrek.

Jim King:

No, please don't. What I do is during that discussion with the employees, one of the questions I ask them is, tell me about the organization and your experience within the first six months. And, there isn't one of them in the past four years that I've been doing this, that have come back and said... They all state that you guys help me. It doesn't matter where, what questions I ask, it doesn't matter what department I go to, everyone in the organization is here to make me successful. And they've worked at many different companies, and if you cross over those boundaries, the employees said it's just you're a different place to work, and that people want to see you succeed, and I don't have to fight to get answers out of one another. I think that all pulls back to culture, and trying to help each other succeed.

Wade Anderson:

Okay. What kind of feedback, you say you've been working on this for, you said four or five years-

Jim King:

Yeah.

Wade Anderson:

Give or take. What kind of feedback are you getting from the field? What kind of feedback are customers giving you? Are they seeing the difference? Are they feeling it?

Jim King:

Every customer that comes into our organization, we start out with our mission, vision, values statement, and I ask him throughout the visit, I'm going to come back on the wrap up, and ask you if we achieved our mission statement. I have yet to have a customer stop and say you didn't do it, one, and then two, most of the time they say you guys are different. You're not a normal corporation where it's high pressure, you're more concerned about our success, and that's different. It's just a relaxed environment where you're trying to help make me successful, and it's consistent, trade shows, at IMTS, we get those types of comments on a regular basis is that they like to do business with us.

Wade Anderson:

Okay. Now Okuma has a very, very tight relationship with their distributor network.

Jim King:

Yes.

Wade Anderson:

Does that culture, does that influence the distributor network? Do they share the same ideas and principles that you share within Okuma proper?

Jim King:

Yeah, I would say yes. We've got 38 years plus with these key partners, and they've evolved with us. We have a philosophy of acting as one in the marketplace. That means that there's a very fine line between the distributor and Okuma. If we continue to grow together like we have, our cultures, when we came out with a mission, vision, values, and presented it to the distributor owners they were saying this defines our company. And it's fun to have a lot of our customer meetings where the distributor is even talking to our value system, even before any of our Okuma employees do. It is a close, tight relationship.

Wade Anderson:

Okay. What about the Japanese influence? Okuma is a Japanese company. Is there much of that influence from the Japanese culture in Japan to Okuma America, or is it as almost in reverse? Is there a kind of a reverse flow where Okuma America has helped influence Japan?

Jim King:

I'd say the Japanese culture, if anybody's that's been over there, you stay at a hotel and you ride the trains, it's a servant society. They are there to help you, If you've never experienced it, it is one of the best... I love going there because it is such a servant society. I think it pulls in from the Japanese culture aligns directly up with and influences our behavior in our marketplace. I think there's a tight connection there, and it's a good connection, because I think sometimes we are such a fast pace in the U.S. economy, that sometimes we forget about taking a moment and making sure that the person you're transacting with is someone... Are they in the right place, or how are they feeling at that moment. And without taking a moment and having that servant heart, you don't have that, you don't have that connection. And I think that Japanese cultural shift helps us, helps us a great deal.

Wade Anderson:

Yeah. I heard you say something about making sure people are in the right seats. I've heard that analogy a lot. Making sure you've got people in the right seats on the bus. How do you look at that from an executive level? If you are looking at your entire organization, how do you make sure you've got people in the right seats on the bus? Do you review kind of where people's jobs are versus where their passion really lies? What does that process look like?

Jim King:

Well for us, every year we go through analysis of all of our employees from top to bottom, and we analyze are they in place, are they in a place that they want to grow their career? And through discussions with our managers, we understand is this employee want to do more than they're doing today. We understand that, and we communicate it, and our organization has developmental requirements. Every employee has to have eight hours of developmental work. As employees start to learn and grow their skillsets, then we look for places for them to be.

Wade Anderson:

Okay.

Jim King:

I'll also tell you that the value system may or may not weed out employees that don't subscribe to it. A lot of times you'll put people in places in the organization, and if they don't fit in that, the organization takes care of it. The organization helps put people in the right place. And they help them succeed.

Wade Anderson:

Are there instances where you realize somebody is in the wrong spot, and you've got to make shifts and move? Is there any, have you seen many negatives to that?

Jim King:

No. I don't think we've seen any negatives. I think we've seen the organization evolve and grow in a better place for those people that don't subscribe to taking care of the customer every day. Those people slow us down, and they end up leaving. If they don't want to be in this environment, they can slow the organization down. They can limit the high performance of an organization. And it's almost a natural progression that happens.

Wade Anderson:

Yeah.

Jim King:

They're good people, but they just don't subscribe to the same things that we try to do as a company.

Wade Anderson:

Same philosophy.

Jim King:

Yeah. Absolutely.

Wade Anderson:

A common theme, doesn't matter if you're a machine shop in Maine or a machine shop in Southern California, I hear it every day of the week, we got all the work, we don't have the people to do it. So getting people, finding people is hugely important, but then how do you retain them? Once you find the good ones, how do you keep them? How do you retain them? And I think the culture has got to be probably the number one aspect of that.

Jim King:

It is. All the companies in the world will have training programs, they'll have employee development, but if you don't have an environment where the employees feel that they're contributing to the organization, they have a path and a career to grow in, and they feel connected. And if you can keep people connected to your organization, and that connection for me is a culture, and the culture makes up the vision, mission, and values. Look, if you don't have those three components, you don't have a culture. And if you have all that together, it is an amazing thing for seeing employees from the millennials to us baby boomers all find a way to come together and work in a... For one thing they work for the customer.

Wade Anderson:

Let's say a hypothetically, I'm Wade Anderson, I've started Wade Anderson's Pretty Good Machine Shop, I want to work on my culture, what advice do you give? Where do you start? How do you start making the shifts and the changes to create the culture that's going to be a winning recipe?

Jim King:

My recommendation is you start with your customers. Your customers would be your best asset to tell you how you're perceived in the marketplace, and that might be a good thing or a bad thing because from what they tell you, you might need to make some course corrections. Secondly, I'd go to my own employees and say, why do you work here? What makes you get up every morning and come into work and contribute to this organization? What are the key things that keep you here?

Wade Anderson:

What's your big why?

Jim King:

That's right. And you get to that answer. Then I would go to, if you have distribution or if you have salespeople that are representing you in the marketplace, ask the same why. Why are you here? Why do you look at selling Okuma's? If you take all those inputs, you start to be able to paint a picture of who are you and why do you exist in the marketplace. And from that, I think then you can start to develop a mission statement. Then once that mission statement’s developed, then everything else comes from it. I think if you follow some real basic understanding of who, and what, and why you exist, people don't take the time typically to analyze that. They think if they create a big mission statement that is empowerful, it's going to solve world hunger, that everybody's going to follow it because we're going to solve world hunger. But that's not the case. If they can't relate and connect, and the only way you do that as you ask them, how are they connecting today to your company?

Wade Anderson:

I think you did a great job taking a very complex thing and making it very fundamental, right. You just said you start with the fundamental basics. Start with the customer.

Jim King:

Right.

Wade Anderson:

Interesting. All right, Jim, any other thoughts, anything else you want to share?

Jim King:

No. I think I've told you everything I know.

Wade Anderson:

All right. Well, again, I appreciate you coming today, appreciate you joining us. For everybody out there, you have questions, any kind of ideas that you want to talk about on the podcast, reach out to us. Until then, we'll see you next time.

Jim King:

All right. Bye. Bye.

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