Manufacturing Beyond Machines: Culture, Ownership & Succession (ft. Jim Vinoski)

What does it really take to build, scale, and sustain a modern manufacturing business? How do leaders balance operational efficiency, workforce challenges, and long-term succession planning in an industry that’s constantly evolving?

In this episode, we sit down with Jim Vinoski to unpack 16 years at General Mills and explore what it takes to navigate today’s manufacturing landscape. From overcoming food production challenges to understanding the root causes of inefficiency, we break down practical strategies that manufacturers can apply right away. We also dive into the human side of operations—building strong talent pipelines, embracing second-chance hiring, and addressing age bias to create more resilient, high-performing teams.

We’ll also explore leadership, capital, and the future of manufacturing—covering everything from raising funds and navigating family business succession, to evaluating private equity vs. ESOPs to prepare your business for a successful exit.

If you're thinking about scaling your operations, strengthening your workforce, or planning for the future, this episode offers a grounded, experience-driven perspective on what actually works.

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https://www.secretlifeofinventory.com/

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YouTube: https://www.youtube.com/@manufacturingtalks5250
LinkedIn: https://www.linkedin.com/in/jimvinoski/
Substack: https://manufacturingtalks.substack.com/
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📖 Resources:
The E-Myth Revisited: https://www.goodreads.com/book/show/81948.The_E_myth_Revisited

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Podcast Produced by: inFlow Inventory
Hosted by: Jared Plumb & Melinda Tse

0:00 - Teaser
0:24 - Intro and welcome to Secret Life of Inventory
1:49 - Lessons from 16 years at General Mills
2:42 - Overcoming food manufacturing challenges
3:37 - Most valuable lessons
6:09 - Modern tech trends & industrial evolution
7:30 - Jim’s earliest memory that defined his perspective on manufacturing
8:52 - How Jim's experiences influenced his consulting approach
9:53 - The root cause of operational inefficiency
11:58 - The current state of onshoring & regulations
12:50 - Essential solutions for modern manufacturers
13:52 - Building a talent pipeline for small shops
17:08 - The power & success of second chance hiring
21:14 - Tackling age bias and intergenerational dynamics
25:11 - Creating a perfect work culture
30:04 - Practical leadership advice
31:07 - Hiring advantages: small business vs. big corporate
33:37 - How to raise capital for manufacturing
38:08 - Obstacles in family business succession
40:05 - Mentoring the next generation of workers
40:50 - Government programs and training grants
41:55 - Private equity vs. ESOPs
44:57 - Alternatives to exiting the space
45:42 - Key strategies for scaling and future exits
48:05 - Making your financials attractive to buyers
49:35 - Outro

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Transcript

0:00

You go beyond the business if you truly wanna build that workforce and that culture. You get to know people as people, and then you help them deal with the problems they have not just at work, but overall, and you're gonna have a dedicated and truly committed workforce. Hello, everybody. I'm Jared. Hi. I'm Melinda. And welcome back to Secret Life of Inventory. This is a show where we dive deep into the unseen world of inventory management, revealing the hidden mysteries that help businesses like yours optimize their workflow and succeed. Today, our guest brings a powerful combination of big picture strategy and hands on manufacturing experience. Let's welcome Jim Vinoski. Thank you guys, Melinda, Jared. Thanks. Of course. Jim is a principal advisor, best selling author, host of Manufacturing Talks, and one of the leading voices re for industrializing America. From working sixteen years in manufacturing at General Mills to seven years of writing for Forbes, Jim has studied over three hundred industrial companies and reached over one point five million readers. Today, Jim advises manufacturers on things like m and a, funding. He also does coaching so that you can build high performing teams. Not only does Jim focus on strategy, but he helps companies put it into action. This includes future proofing operations through technology and training, developing the workforce, and making smart capital investments in things like machinery and facilities to drive long term growth and efficiency. And today, we're gonna be getting Jim's unique perspective on things like workforce culture and ownership so that you can know exactly what it takes to build a long lasting manufacturing business. So, Jim, so thanks much for being here. It's a pleasure. Thank you. Cow. Yeah. Yeah. Such a buildup. I'm not sure if I'll be, living up to it. I'll do my best. So, Jim, before you started advising manufacturers and running your own podcast, you worked sixteen years in the food industry at General Mills. Can you take us through that journey? How did you start working there, and what was it like? Yeah. Well, I mean, sixteen years is actually a good chunk, but not my entire career. I have more than thirty in manufacturing total. Mhmm. General But Mills was just the golden opportunity kind of midstream career wise and I got a call out of the blue by a recruiter. I'd already been working in food ingredients for about three or four years at the time and he says, I've got this job with a great company but it's out in the middle of nowhere in Michigan. And I said, I grew up in the middle of nowhere in Michigan, so let's talk. Perfect. Yeah. Perfect. Yeah. Kinda like going home. So I started at the Yoplait yogurt plant up in Reed City, Michigan about an hour north of Grand Rapids where I live now. And then just started building my career and bouncing all over the place with the company. So I'm sure working in food manufacturing, you know, has a lot of unique challenges, of course, dealing with things that are expiring and all that all So that as far as that's concerned, what do you think are some of the biggest, you know, challenges that you face while working there, and how did you kinda overcome those? Well, unique to food, and I guess, you know, pharmaceuticals similarly is the level of, regulatory scrutiny. So, obviously Yeah. We've got a lot of people in government focused on making sure we keep our consumers safe, which obviously Mhmm. Our companies are too. And so, you know, that can get to be a little thorny in dealing with all the the various food safety regulations Yeah. Requirements. But the way I approached it is whether it's me and the company or a government regulator, we're all there for the same thing. And so Mhmm. I tried to build collaborative relationships and make sure that they understood. Yeah. I'm here to partner with you, not to fight against you. Okay. That's good. Yeah. That's awesome. Yeah. Can you share some of the most valuable lessons that you learned during your time there? Well, I mean, General Mills, obviously, is quite the brand. And Yeah. From a manufacturing perspective, they don't get the kudos that I think they deserve. I mean, the internal development stuff that they did over the decades on not only product but process. So, I mean, there's cereal making processes that are still top secret there. How you make Cheerios, you know. Lucky Charms. Yeah. My favorite. Yeah. Oh, good. Yeah. And so people don't think about that intellectual property and the amount of brainpower it goes into those kinds of things. While I was there, I was instrumental in switching over from the old mechanical drive packaging equipment to servo drives. So going from chains and gears to electric motors that can change direction, change speed, and know their position to where, you know, it used to be a machine would crash because you had a jam and you had to take things apart. It would be down all day to get back in time and get back up and running to where it's literally clear the jam, push a button, and you're off to the races again. My My gosh. Wow. And yeah. I mean, just the the level of know how and intellect and, you know, we worked with some phenomenal suppliers and people who just, you know, had knowledge that was mind boggling. And it was just so much fun working with those kinda people. So, yeah, you've seen this thing scale like crazy, I'm sure. Yeah. Like, I'm sure that makes tons more cereal all at once. Right? Come on. Well, right. Yeah. And, you know, it it it we we have this big thing about automation today, and obviously AI has come to the fore. And I just look at it as this continuum where we're doing away with the kind of dirty dangerous jobs that people would get hurt in or just not have a good time in in the past and Right. Elevating employees. So I like to get away from that. Yeah. We're eliminating jobs. No. We're we're leveling up. Yeah. We've actually been hearing that a lot from a lot of our other guests who are talking about, you know, there's a lot of this talk of lights out manufacturing, and now it's kind of turning more into a collaborative relationship where automation and AI are enhancing and empowering employees rather than, you know, getting rid of them. So that's really great to hear. For sure. And all the AI and automation making manufacturing cool, not like the dirty, dark bad. Like, what Yeah. Well, and make it appealing to people tech. Coming up. Exactly. Who have been on apps their whole lives. And, yeah, mean, different For for AI and robots to do anything, it's to do the jobs we don't want to do. Exactly. You can have those ones. Absolutely. Right? Delegated. Yeah. Exactly. So aside for, past your time in General Mills, you've been working for Forbes. You've been writing, you know, for seven years for them. And in that time, mentioned that you've, you know, you studied over three hundred industrial companies. So I I guess kind of like, has there been anything you know, obviously, you've been writing about all things manufacturing. So with that in mind, is there anything that kind of, like, stood out to you as far as, like, new technology or trends? Well, you know, to preface it, the the opportunity Forbes gave me is I've done some really cool, fun stuff in my career. Mhmm. And I've done food, I've also done paints and coatings, chemicals. So I've touched on a few different verticals. But I always say, one person in manufacturing for an entire career touches the tiniest sliver of everything that goes on in manufacturing. So getting to branch out with Forbes and look at everything under the sun manufacturing was just phenomenal. I mean, I'm naturally curious and love to dig in and research and learn. Yeah. And so, I mean, learning everything from one man operations up near where I grew up making handmade snowshoes all the way to we talked about it before we got on three d printing, whole new way of making things. Right. Yeah. Just covering that broad swath has been so rewarding. Yeah. It's very cool. One man operations. I love that. That still qualifies as manufacturing. Right? Does. Yeah. Yeah. It's fantastic. Crazy seeing how manufacturing has evolved to, like, three d printing and everything. Right. You definitely seen manufacturing from the inside out. So can you recall your earliest defining memory that really shaped how you think about manufacturing today? Well, I'm gonna go back to what kind of led me that direction, and that is bicycling. Mhmm. I've been a cyclist since I was a young teenager and discovered it on my own, kinda loved riding. And then kind of this eye opening experience was coming across an issue of Bicycling Magazine in the little tiny town I grew up in in Upper Michigan. I think it was the only copy they carried. I probably took it from someone expected to be there from them the other cycle of Yeah. And just reading this thing and discovering there's this whole world of racing and technology that Mhmm. You know, I didn't see. And and then diving into that and I became a self taught mechanic. My little brother and I primarily did a whole bunch of bicycle mechanic stuff and and that got me interested in the mechanical side and led me to a mechanical engineering degree in school which then led me to manufacturing. Oh, very cool. So it started young. They started young. It did. And and you know, it's it's kinda following a path that I didn't really know. Well, you know, you're just gonna lead me. Yeah. Policy. Yeah. I'm still finding out. Yeah. So looking back, how do you think your experiences influenced the way that you approach consulting other manufacturers today? Well, the big difference for me versus a lot of consultants is I've I spent my entire career almost every single year in a factory on the floor every day. Now I did spend four years with General Mills at headquarters, but even with that, I was traveling out to all the Yoplait General Mills plants and our contract manufacturers as well. So actually hitting a whole lot more plants through that. And so dealing every day with what the true experts, the machine operators and maintenance people who keep the plant running, what they deal with every day, what eats their lunch, what drives them crazy, that just made me focus on, you know, the real problem solving isn't about solving some KPI for an executive in at the headquarters. It's about permanently eliminating that problem that's been dogging this poor operator for a decade. Mhmm. Right. Like that kind of thing. So we're gonna move on a little bit to more of the the workplace and culture and the people that make up it. Yep. Something that's been talked a lot about is obviously the talent shortages going on in manufacturing. It's been kinda cited as like the key major problem that we're seeing. Mhmm. But from your perspective and your opinion, what would you say is like the big root cause of like operational inefficiencies right now in manufacturing? It always goes to people. And and, you know, I take it back to when I was in college. I had a college professor who taught a really good career development course who told me straight up, don't go into manufacturing. It's it's a dying industry. Oh, god. And this was a a long time ago. Yeah. Yeah. This was a long time ago. We're talking decades. And that's the thing. I mean, we've been denigrating manufacturing work, skilled trades for literally three generations. And now we're puzzling over, gee, why can't we hire people? Yeah. And so we've created our own problem. Right? And, you know, there's certainly whole host a of things that lead to manufacturing inefficiencies and failures. Mhmm. But if you're not solving it, again, at that floor level with the people who are doing the job, you're already behind. And we've we've put ourselves behind with just these really I mean, they were well intended. People in the eighties and nineties truly thought, oh, we can just send this stuff overseas and become experts at desk jobs, and and we're all gonna be elevated. Well Right. We see how that worked out. Yeah. Experts aren't always right. And now, unfortunately, we're playing catch up. And so Mhmm. That to me is job one is the whole people development end. Like you said, attracting people to because what of that ill advised advice Mhmm. Has our young people thinking these are dead end careers and and not fun and not challenging and not rewarding and Yeah. Nothing could be further from the truth. And then, you know, getting the people piece solved and then rebuilding just the the institutional capabilities that we sent overseas for. Do you find that that we're seeing a lot more onshoring as you're seeing some progress in that area? There is progress, and I'm kind of heartened by some of what I see. I think we've got some other challenges that are gonna kinda make or break that. And it goes to public policy things. You know, we're again, well intended things around regulations Right. Where we started off thinking, okay. We can protect the environment. We can protect our workers with these safety and environmental regs. And and those are all fine. But then when you layer things on for decades I mean Yeah. I know in the US, we've got three hundred thousand individual regulations that manufacturers have to follow. Literally millions of detail layered on one another too. So it makes it even more hard to navigate, I'm sure. Yeah. Sometimes contradictory. And so, definitely, you have to hire an army of lawyers and stuff like operators to run these So what kind of solutions do you think manufacturers need to focus on? Well, I mean, big thing is around dealing with the the challenge of getting the people you need to run your operation day to day to start. And so that's a mix of partnering with the service providers that are training people that are develop developing those careers, whether it's high school shop classes, community colleges are wonderful around trades, trade schools themselves. If you have a manufacturing operation of any size and you're not partnered up with those kind of groups, you're already falling behind. Mhmm. And then being marketers. I mean, we we've been horrible as manufacturers at marketing what we do, and I get it. You know, you're head down running your plant day in, day out, trying to make things run. But if we're not out there presenting ourselves as this great career opportunity and wonderful challenge for youth to come in and build careers. There's no one else gonna do it for us. Mhmm. Yeah. So, I mean, you you talked about vocational schools and community colleges and stuff like that as far as attracting new talent. How do you how would you say, like, smaller shops can actually go about, you know, getting that pipeline of of new talent? And I guess in a similar vein, how would you say, you know, new tech like digital tools and automation, how are those playing a role in, like, in attracting those new those younger tech savvy people as well as, like, upskilling and retaining those existing employees? Well, to start with the first part of your question, yeah, small shops certainly have the challenge and have a lot of extra bodies to go out and, you know, be advocates and ambassadors for partnering with schools. But that's an opportunity to group up, you know, get into trade organizations or local community organizations with like manufacturers. It's where even competitors can come together and say, hey. Here's something worth partnering up on despite being business competitors Right. Where we can create something and build something together, you know, kind of pool our resources and go after that kind of thing. As far as technology and the opportunities to help, I mean, we talk about the process automation. Right? And that's what everyone says is, oh, here's the the next big huge thing is Industry four point o and the industrial Internet of Things. Those are all phenomenal. And, yeah, there are tremendous opportunities around automation. I was at a local machine shop in my hometown just last month. And, you know, there's the the CNC machines that do the machining now, and they're highly automated. But even loading those machines now is automated. You got a robot sitting off to the side that does the loading of the different jobs. Right. And they literally are lights out operations so that people can walk away for days and have those run. Oh, wow. But beyond that is the business process automation. So there there's all these things that people talk about in, like, ERP and MES systems, and those have been good. But it's like people tried to get a one size fits all solution years ago and now manufacturers have been saddled with these legacy solutions that got part of the job done but now there's so many different things. Just had a guy from MaintainX for example on my show last week and they've been around for a few years kind of using AI and software to automate maintenance practices on the factory floor. So inventory tracking and work orders things that you know again going to the what eats a maintenance guy's lunch if he's spending an hour filling out a work order instead of fixing a machine Right. Well, that's Right. A waste. Yeah. Mean, software can take care of that now. Yeah. So Absolutely. I always recommend to people, look, you know, factory floor automation, great. But that may not be where your opportunity really is. Look at your business processes. Right. Yeah. So manufacturing software is a good investment, obviously. Oh, absolutely. And and I mean, getting better. Yeah. Mean, I We're biased to that, of course. I just wanted to get that clip of you saying it. Yeah. Absolutely. So, I've heard that second chance hiring is actually gaining a lot of traction in manufacturing, especially as we're trying to, you know, fill these really key critical roles. Yep. So, know, in your for those who don't know, second chance hiring is when you are employing people with criminal backgrounds to kinda give them a chance to reenter the workforce. So have you seen a lot of success when it comes to second chance hiring? And in your opinion, for companies that are successfully doing this, are they do they have any, like, systems or structures in place that really help them succeed with these programs? So it's interesting. I I came across that just by happenstance at a a show, jeez, five or six years ago down in Georgia Mhmm. Where, I was on a panel and one of the speakers was a woman from the Georgia Department of Corrections and she was talking about second chance hiring. Mhmm. And I was just enthralled by what she was talking about. Know, it's this mix of problems where we have people who've made mistakes in society and, you know, they pay their dues. They go to prison. They serve their sentence. Yeah. Then they come out and we continue to punish them. Yeah. You can't get a job. You can't get housing. You can't drive. Mhmm. I mean, how stupid is that? Yeah. It's it's a sign point of prison to, like, absolve them of their crush. And to rehabilitate. Right? And so, I mean, I just think the world of the people who are going after this because, it's such a problem for the individuals, obviously. But then when we talk about these workforce challenges, why would we wall off a whole segment of society? That's insanity. Yeah. And and, you know, they're primarily male who you know, those guys tend to go more toward the mechanical thing. So it's also a segment of society that could most likely help us with the problems. Mhmm. And and so, yeah, I've actually interviewed a number of people down at that show at that conference. I met a guy with a local company, talked to him and he's like, well, come out to my plant. I mean, I can show you what we're doing. And he toured me at his plastic plant making bottles for a variety of packaging operations and talked to me about how they built this whole infrastructure with their frontline managers to bring people in who had gotten out of prison to help support them personally, again, getting to housing and transportation, things like that. And then in the workplace, you know, they may not have the background of how to Oh, it's great. So it's it's completely all encompassing. It has to be. It has to be. That's big thing I learned is, you know, you don't just hire someone out of prison and throw them to the wolves and, oh, sink or swim. That's not gonna work. Right? Support system. Yeah. Especially people who've been in prison a long time. Are they're gonna need all kinds of support. So Yeah. It's fantastic. You know, talking to people who have done it, it's just inspiring to hear because then what you get in return is people who are immensely grateful Mhmm. To have the opportunity to have the support. And, I mean, I've I've had executives who've done that whole hog who've said, yeah. There we have no better workers in our plants than the folks we brought in as Second Chance. That's that's fantastic to hear. Mhmm. That's really great. So Mark Peters in Grand Rapids, where I'm from, has Butterball Farm. It's a small butter company, and he's just a huge advocate. And So shout out to Butterball Farms doing that. Yeah. Absolutely. There are several like that. To me, if you're not looking at that and you're struggling with people, definitely get with those kind of experts who've done it. They'll be glad to help you. Mark's written books about how to address that and other people problems. So, there's help out there. And and, again, you know, like I ran across in Georgia, the the, people in the correctional, organizations are also wanting to help because they don't want people coming back, you know, I suppose it'd be really great to avoid reoffenders and things like that. You know, you're keeping people as productive members of society, giving them purpose, and it's it's great. Yeah. It's really good to hear. Yep. Nowadays, many shops also have multiple generations working side by side, which I know can cause a lot of tension. So based on what you've seen, what are the biggest challenges with age bias and how does intergenerational dynamics play into that as well? So I'm gonna tell a personal story. It's really interesting. I mean, obviously, I'm well along. I have some recruiter friends I've known for years and years. And not too long after I left my last company and went out on my own with my consulting, I had a guy call me and he's like, I've got this job I really think you ought to look at. It's just it it is a perfect fit. And I mean, was with a company that I'm incredibly respectful of. I won't mention the name because I'm gonna be a little critical of what they do here. But, I mean, this is not a slouch company. They're they're a place that is broadly doing things not only right, but, I mean, groundbreaking in in their approach to people. And and, honestly, the business they've built Mhmm. It is just an amazing story. And so I wasn't really looking to get back into the workplace, but because it was a buddy and I trusted his judgment, I thought, okay. I'll I'll take a look at this. So I got on the horn with a young woman from HR, and we did a lengthy interview. And I was just honest about where I was. You know? I had just gone out consulting and I'm looking at this as, hey, you know, maybe this is right for me next, maybe it isn't. Just having that conversation. Mhmm. And finished up and I didn't hear anything for a week or two, so I circled back with my buddy and he's like, you know, I've been afraid to call you because I just got I just got blistering feedback from your interview. Like, really? Why? Oh, you know, the woman from h from HR is talking about how you've you're just you don't have it anymore. Oh. You know, you you're all over the map. You don't know what you wanna do. And and, I mean, just stuff where I was being honest about where I am in my career. You're right. Yeah. Immensely experienced and lots of opportunities that I have. Mhmm. And she took it as, you know, I've got young people who are just go, go, go, want this job particularly. So this old guy, forget about him. Oh, jeez. It was my introduction into age bias. Mhmm. I subsequently did a little research. You know, if you lose your job at age fifty five or sixty in the US anyway, I don't know what it is here in Canada, but the statistics are you're most likely never gonna work again. Oh my gosh. Wow. For whatever reason, whether you quit or get fired Right. At that age past fifty five, really, it's unlikely you're gonna find another job. And so this the statistics say that this young woman with her personal bias is by no means alone. Right. It's an institutional problem. Mhmm. And it's just again, you know, going back to the same discussion we had with with Second Chance Mhmm. It is idiotic. I mean, you've got your most experienced people. Yeah. Yeah. And you're saying, over the hill. Forget about them. Which I you But I can't hire people. Isn't experience a good thing? Yeah. You would think experience would be, like, a huge boon, but I guess I guess Well, there's a money thing. Right. There's a time thing, and this one's also kinda stupid, but I get it. Oh, if you're sixty, I mean, how much longer are you gonna work? Right. Well, okay. But when you hire someone who's twenty five, statistically, how long is he or she gonna work? Yeah. Yeah. It's no more than a few years anymore. Yeah. So it's kind of a self defeating Mhmm. Notion. Younger worker too. Yeah. Yeah. More experienced. Right. Much more likely to turn over. So Absolutely. Yeah. If you look at it, there's absolutely no reason, but I just think there's this cultural bias now that's certainly spread across the HR world. And and I don't know if the true hiring managers are aware of it, but they need to be and they need to be corralling some of those tendencies and saying, no. We're gonna throw the the gates open and consider all comers because we need people. So if you're to describe perfect the scenario where a manufacturer has built a really good strong work culture, what does that look like? Are there any like core values that every team should have or? Well, it looks like a company called the Monty Group up in Petoskey, Michigan. So I I came across these guys, I don't know, five or six years ago. On LinkedIn, I saw a post from a guy down in Tennessee, a licensed seller of stuff called it's retaining wall blocks. So if you're driving on the highway and you go past an underpass, these big giant blocks that form the retaining wall Right. Right. It's those. And I find out, well, jeez, they're they're made and licensed out of this town up on Lake Michigan in Michigan state of Michigan. And I mean, this is like resort central. I wouldn't have imagined there was any manufacturing up there at all. Okay. So I start digging in. The guy introduces me to the president of one of the business groups up there. And I start looking at these guys. It's it's not just an amazing story about how Dutch immigrants back around nineteen hundred become farmers and their sons decide to sell the flowers they're growing and they wanna make baskets. So they go buy a machine and it turns out not to be a basket machine. It's a veneer machine. So they start making veneer. And now here, you know, decades and decades later, you have a whole veneer plant plus a plywood plant right there in Petoskey on the lakeshore where you would never imagine there'd be a factory at all. And then they start branching out and they're doing concrete and retaining wall blocks and consumer hardscape for landscaping and properties out in the desert southwest. I mean, they're just all over the place. But as they're doing it, they build this culture where they're not just taking care of people from a a pay and benefit standpoint. They're truly taking care of people as people and partnering with the community. So you know similar to that second chance thing they realize, hey we've got problems with people who maybe got on drugs or whatever or they went to halfway house. They have trouble coming out and getting a job. So they established what they call a three quarter house. They had the a motel right there in town that was kinda one of their property things. The company did this. The company did Wow. That's some fantastic initiative. The yeah. The motel wasn't doing anything, so they're like, let's do something different. They made that their three quarter house where, okay, you're coming out of a halfway house where you've had a substance abuse problem. We're gonna put you here. We're gonna provide you housing. We're gonna provide you counseling. Wow. Again, this whole, approach of everything in transportation, housing Full support. Partnering up, getting proper work habits and proper supervision of not just work performance, but what you're doing personally to make sure you're not falling back into old habits Wow. And help rehabilitate people. On the other other end, they're in, again, this gorgeous beachfront resort stretch of upper Northern Michigan. And so housing is a huge problem. You hear that all the time about resort areas. Right? Mhmm. So they build on one of their played out sand and gravel things from their concrete operation, a whole housing development, not just for their people, but for anyone in the community who struggles to get good housing. I mean, are beautiful houses, but they're prefab kind of, you know, modern day manufactured housing. Mhmm. Not like the trailers that we think poorly of, but I mean these things are just beautiful modular construction. Mhmm. I mean a gorgeous house anyone would be happy to live in in this gorgeous spot and selling for much less than what you're gonna buy any similar house for in Right. In Petoskey or Charlevoix or Mhmm. That stretch of Michigan where, you know, things pumped up because everyone wants to be there. Right. Right. And so, I mean, they're just my prime example of how you go beyond the business if you truly wanna build that workforce and that culture. And you get to know people as people and then you help them deal with the problems they have not just at work but overall. And you're gonna have a a dedicated and and truly committed workforce. Yeah. I mean, it's incredible. What you're describing to me sounds a lot more akin to, like, a nonprofit rather than a manufacturing company, which is, like, insane to to hear that. That's amazing that they're doing this kind of stuff. I mean, it really is. And obviously, you know, they're doing well with their businesses and able to reinvest that way. Not every company is gonna be able to do that. Right. But, you know, as we talk about struggling with people, those are the kinds of things maybe you're not gonna do everything that the Monty group does. And, oh, by the way, it's Ready Rock is the name I was trying to not everything they do, but look at all the things they do and pick one or and two try to apply them if you're struggling. Yeah. If you were to give practical advice to leaders on how to build a positive work culture, what would you tell them? Again, I just said it. It's all about knowing people as individuals and truly valuing them. I wrote an article back probably a year ago about the leadership problem I think we have in manufacturing. You know, unfortunately, manufacturing comes from a place where it's, you know, mostly men, gruff, let's get the job done, forget about your feelings thing. And I get that. I mean, you know, kind of that way myself sometimes. But if we want to attract the people we need today, that's not really gonna work. And and another tendency is we we would promote people to management who were best from a technical perspective, but maybe not best from a people perspective. Mhmm. And so as we look at who should be leading, it shouldn't be the people who are really good at running machines. It should be the people who are really good with people. Yeah. And so it's that putting the right people in the places we need and then treating the people as individuals and truly valuing them as as as people, as humans. Mhmm. So, I mean, as far as going back to, like, kind of attracting talent and retaining talent, of course, wages is obviously something you can, you know, easily do, or anyone can easily do. Maybe not so much for the smaller shops. But what is what is something that you would say that, like, smaller manufacturers can offer that, like, big corporations necessarily can to help kind of, like, attract and retain talent? Well, mean, opportunity is one. If you're not selling what you can do by doing the job well to advance your own career, then you're kinda cutting off your nose to spite your face. Right. That same machine shop I was at in my hometown or where I live now, they're very vocal about you know, if you come in, you could come in with no degree, no nothing but a high school diploma. And, you know, you're gonna start by just doing grunt work in the machine shop. Mhmm. But if you will apply yourself and learn to run a CNC machine, you can be doing that in the first year. And then if you'll apply yourself beyond that, you know, we're a fast growing company. We've elevated half of the people we we started with to management jobs now. Oh, wow. And as we continue to grow, those are gonna be the opportunities and, you know, the sky's the limit. You're learning in a small company. So if you wanted to go out on your own, you're you're gonna have those business skills to build from. Yeah. And so, you know, we talk about the whole college degree thing and, you know, I've got a college degree myself. It's done me very well, but now we're finding it's out not for everybody. Yeah. And it's not even the best answer a lot of the time. Mhmm. So, you know, if I were advising someone who wanted to be an entrepreneur and they didn't know where to start, I'd say, go. Go work for these guys. You're gonna learn not just a good skill, but the business. Wow. Are you seeing a lot of opportunity for people who don't have secondary, like, education? Absolutely. Oh, fantastic. Yeah. It's it's changing as we speak. You know, I would say we're still tending more toward college degree for every elevated position, especially across the corporate world. But especially among smaller businesses now, people are finally thinking, why do I need a college degree for that or this? And Right. And kinda saying no more. And even in the corporate world, I'm seeing changes where people say, yeah. If you're gonna come in and be a supervisor with us, there's no need for a degree for that. Yeah. Times have changed, I'll tell you. That was Big time. We told you're not gonna get a job unless you have a college degree. And here we here we are. It's kind of gone full circle. For sure. So we're gonna switch gears a little bit and talk a bit about, kinda just ownership and succession. So when it comes to, like, obviously, many small manufacturers, a huge hurdle is getting capital, raising capital. So from your perspective, you talk about why it's so difficult to raise capital and maybe give some tips for those smaller manufacturers on how they can actually build some? So I'm gonna start with the challenges people run into with the the investors themselves. Mhmm. A lot of investors may have little to no experience with the manufacturing world. And so they don't even know what the challenges are from a money perspective. Manufacturing investment, you've got to think about a variety of things. There's the infrastructure of the factory itself where you've got to be investing just to keep the place functional. Right. Like at General Mills, called that essential investment, essential capital. And so that's kind of just table stakes. You keep your current operation current. Right. Then you start looking at investment for efficiency, for growth, different, you know, ROI kind of projects where you're gonna invest and get that back in two or three years. And that can be a challenge for people not familiar with manufacturing to wrap their minds around. And then there's this whole private equity problem where unfortunately, you've got a lot of actors who have kind of muddied the waters by doing rotten things. Oh, jeez. Private equity firms that go buy manufacturers buy a collection of, like, manufacturers and roll them up into a company and then start extracting capital. Instead of investing Right. They're taking money out of the business and eventually they sell it on to some Porsche love who comes and thinks, oh, It's just you you stripping stripping out parts essentially. Yep. And that's happened a lot. And you talk to small manufacturers, they'll tell you, yeah, I get calls from PE people all the time and it's almost a nuisance because I hate what they're trying to sell. Right. But unfortunately, there are good PE people who get tarred with that reputation. And so finding the right investor, someone who understands that world is essential. Now flipping it the other way, manufacturers have done themselves no favors. And again, it's not to be critical of a founder who, you know, started a machine shop twenty, thirty years ago and built it up by his own his or her own sweat equity into a thriving business. What happens is you have that founder, that owner involved in every aspect of the business. There's no real processes defined. They bring people on as they need them and kinda have them do whatever job they need done. Well, if an investor comes along and looks at that, you don't really have an asset you can sell because if you sell it off and the owner walks away, it's just gonna fall apart. Right. And so every owner should be thinking about as soon as you're stabilized, getting work processes in place, getting defined roles for the people who are there, and backing yourself out of the business. The E Myth Revisited is a book I recommend to every owner. It's all about, you know, you can't be the business. You have to be working on the business, not in the business. And again, that comes with time. You're not gonna do that a year in when you're still juggling and trying to keep Right. Trying to keep the place from wearing underwear. Different hats. Yeah. Yeah. And you reach a point. It takes judgment to say, yeah. Now I've gotta start backing myself out and letting my people run the show so I can create the business entity that's gonna be sustainable when I'm gone. Right. Right. So eliminating yourself from the equation and if it can still stand on its own two feet, that's when you know you've built a strong business. It is. And think about what you just said, how difficult that is for an owner thinking about, yeah, I'm not gonna be here forever. Right. I mean, that is I'm I'm sure a lot of owners have the idea that they want to be integral, like, you know Right. They They need me kind of thing. Yep. Yep. Well, and no one really wants to think about, yeah, I'm gonna walk out that door one day for the final time. That's Yeah. That's just It's a difficult prospect, but it's gonna happen. It's gonna happen on your own terms or someone else's terms. Right. And sometimes someone else's terms is you walk out the door and the company shuts down. Yeah. Which is gotta be sad to see you build something up from the ground up your whole life and then it disappears after you're gone. So For sure. That's really not what we wanna see. Another big issue that many small manufacturers face today is that they're baby boomers who are approaching retirement. So when it comes down to passing down the family business, what are the biggest obstacles that they face? Yeah. You know, baby boomers aren't just approaching retirement. They're there. And and, you know, it ties to everything we just said, but it's also there's the the family dynamic. Do you have people who wanna take the business over? And if so, are they capable? I was just so I've I've been working with an investment group the past six or eight months trying to find manufacturing companies to invest in and had one with a local broker in Grand Rapids where it was a company that was an auto industry supplier. And the founder had family who came into the business, but very clearly they weren't capable of running the business. Now they had roles that could have been important and they could have had a job within it. But it's like they were trying to figure out how to have the owner back away and have these sons run the business when they couldn't. And it's this catch twenty two. They wanted something that clearly when you studied what had gone on with the business and they had lost contracts with General Motors and were kind of negative on cash flow. They really needed serious help on sales and stuff that hadn't been happening for the few years since the kids had taken over. You've got to be aware of that. And unfortunately, you gotta judge your family. Right? And sometimes that can be, you know what? You're not gonna run the business. Maybe you'll work in it when I sell it, but that's the best I can provide. And so having that kind of ability to step away and assess, you know, how how does the family fit? Is it gonna be sustaining? And if not, what do I need to do? Is it bringing in an outside CEO? There's a lot of tough business decisions that go into it. Mhmm. Yeah. What other ways can retiring veterans mentor younger workers so that their skills aren't lost? Yeah. That's huge. You know, you talked about that owner who wanted to be involved. Well, rather than be the guy running things, be the guy teaching people. Right. Right? You can still be involved in the business as you bring the people who are gonna be running it once you do go out the door. Mhmm. You're you're mentoring them. You're instructing them. You're putting together the training plans for even people who aren't there yet. Mhmm. Working with the people who you've brought in and who know those jobs. Now let's put together a a structured program where anyone else who comes in can learn learn the different jobs and make this a sustaining business. Mhmm. Are there any government programs or local partnerships that small manufacturers can use other for funding or succession planning? Yeah. So the manufacturing extension partnerships, you may have heard some news about them being defunded and such, and that's still kinda up in the air around, the US end of the world. But those outfits, they're nonprofits that are advocacies for manufacturing. They are huge around things like those training programs with the community colleges, internships, all the different ways where you can bring people in and train them up on the job, get them skills with the local trade schools that they might need. So they're to me invaluable, especially for smaller places that, you know, they're not gonna have their own training department. There's money available for those kinds of things. And whether it's structuring a training program or bringing in an intern, you can get grants. So definitely, if you're looking for ways to up your training game, look for those partnerships, the public private partnerships. Very cool. So we're actually gonna touch a little bit more on something you were talking about, private equity. And obviously, lot of family businesses, maybe they don't wanna go down that that route of succession, and private equity is something that they're looking into. What do you think that they should really be kind of concerned about when it comes to to private equity? And, you know, as the alternative, you know, what what about things like, you know, selling to existing employees or something like an ESOP? Like, how would you compare those two things? Yeah. So, you know, it's really looking at the different options available to you and where you wanna land. So regardless of whether it's private equity or other investors, VC, different investment strategies for different stages of a business, you really kinda have to school yourself on what those opportunities are and what's gonna be the best fit. You know, if you're selling to investors, you're losing a portion of the control. Right? So you have to assess that piece. As you wanna back out, yeah, there are different options, whether it's having people who come in and buy the whole business or they come in and roll you up as part of a broader collection of similar businesses. Those are all good opportunities. ESOPs, where I come from, they're huge. Actually, West Michigan is like this ESOP central. I've learned just in the last couple of years. And I hear just absolute tales of of wonder around what ESOPs can do. So give an example is a place called Bandit Industries. It's about an hour, a little more than an hour from me in the middle of Michigan. They make wood chippers. And a few years ago, they were at that stage where the family that had built the business was kinda looking at what to do and they chose the ESOP route. And you look at what that's done for the business where now everyone there, you know, hundred fifty, two hundred people, they're all owners and they're all getting annual payouts based on how well the business is doing. And because of their efforts, the do the business is doing extremely well. Mhmm. And it's just these stories of people who, you know, they're thinking they're gonna work till they're seventy, and now they're fifty and maybe thinking, I'm in a good place to retire based on the money I've made. It's like these are kind of a no brainer. You know? I feel like if you, give people stake in what they're actually building and then creating, then they're more inclined to actually, you know, work harder and succeed. Yeah. I mean, you have to do it right because it's kind of a difficult thing who aren't for for people who aren't familiar with that world to grasp is that, jeez, I'm I'm a part owner of the business. Right. And and you're still in a place where you're controlling a little tiny bit of the business. So it's still very much about how do you get everyone on the same page? Right. How do you get people pulling for the right goals, the right direction? So there's still a huge management challenge, but definitely that element of, you know, when we all work together and we promote the business, it's your pocketbook that's truly gonna be the beneficiary. Right. Right. So as far like, we obviously have private equity as one option. Yep. Is another option. Are there any other alternatives for for family businesses who are looking to kind of exit the the space? I mean, there's different kinds of investors out there. So private equity is the one you hear about. I don't pretend to be the expert on it. I would recommend getting with a good business broker to explore those options. There are some really good ones out there and they can help you understand the different kinds of investment and what the implications are for your business and what might be the best alternatives for where you are and also assist you with getting those elements in place like the stuff we talked about earlier with structured work processes and organization of the business so it's a sustaining entity. If you're to give advice to small manufacturers who wanna keep their options open in the future, whether that's scaling, selling, or passing down the family business. What are some key strategies that you'd like to share with them? Well, always be thinking about how are you growing. Right? I don't think every business has to be this rapidly growing entity. And there are plenty of owners who are just fine with, hey, I'm doing well for myself and my employees. I'm not looking to expand. But the challenge there is you get comfortable with your existing vertical of business. You get comfortable with your existing customers. And, you know, like the company I talked about earlier that lost contracts with, for example, General Motors that, you know, they were doing very, very well for years and years kinda having that single buyer for most of their stuff. But it's also a cyclical business and all of a sudden there's a downturn and they lose those contracts. They don't have the salespeople in place because they weren't thinking about growth. Now you're stuck. Yeah. And so what are those elements? It's every business needs to be constantly selling, to be constantly looking at growth just to stay where they are. Mhmm. And so that's what I always recommend is, okay, what are your growth strategies? Is it expanding your your business opportunities? Is it adding different capabilities that you don't have today? Or is it taking the existing capabilities you have and then selling them to a broader audience? You know, if you're making for automotive, can you be looking at agricultural? Can you be looking at defense? Right. Look at those growing areas where what you do is applicable and see if you can branch out into that. Is it adding new machinery and just expanding your your capacity to do what you're doing today so you can sell more to other customers. There's a lot of things that owners just don't think about as they're kinda growing based on the sales that come by virtue of their initial efforts Right. Always be thinking beyond those initial efforts. Yeah. Potential pivots and stuff. I think there's a lot of, during COVID, we see, you know, people making hand sanitizer instead of grain alcohol, things like that. Yeah. So smart pivots. Are there any steps that small manufacturers can take to make their financials or operations more attractive to lenders and buyers? Well, again, that organization piece is huge. I had a guy in private equity tell me, as I look at manufacturers based on how well structured they are as a company, it can make a difference of one, two, three million dollars on what I'm gonna offer for that company. And so it's enormous what a change it can make to what you're gonna get out of the company as you look to exit. Mhmm. And so that's you know, it's that catch twenty two. You've built a business as an as an owner and you don't wanna be in the corporate world. Right? And you kinda see these pieces I'm talking about. Oh, that's corporate, you know, putting in HR policy, in training plans, putting in SOPs. Mhmm. But those are the things that investors are looking at as they come in is, you know, are those things in place where when this person walks away, the company's gonna keep going. Right. So it's not just the the machines, the the facility. It's actually the paperwork and stuff. It's all gotta be. Paperwork is a bad word as we talked about earlier. Right? It should be, you know, especially nowadays, those structured systems like what you guys bring to the table. Mhmm. Software that helps automate those processes and you can show an investor, yeah. Look. When I walk away or my top mechanic walks away, we can bring someone else in and and it's readily gonna continue. So, Jim, thank you so much for being here. It's been a pleasure. Awesome conversation. Some really great insights. Yeah. Thank you so much. And for those who wanna stay connected with you, where can they go to find you? Well, LinkedIn. Connect with me there. I'm I'm pretty open connectors. Send me a request. I'll accept it. I have Manufacturing Talks as my web show and podcast, so that's on YouTube and all the podcast outlets. I have a Manufacturing Talks Substack Mhmm. Where the podcast also shows up and then all the articles I'm now doing on my own. I actually cut ties with Forbes about six months ago, and I'm doing all my writing for myself on my Substack. Oh, awesome. Yeah. Love I love subscribers there. I love paid subscribers. And I'm on X. I'm on Instagram. So just find me. Know, the NOSKY's and easy. Yeah. All the links to Search. Yeah. And manufacturing talks. Mhmm. Search for those. Pay attention. I've got a book coming out in just a few months. So, you know, it's interesting. It's all these stories we talked about the the different companies that I got to discover through my Forbes work. Mhmm. At some point, I thought, man, there's such cool stories here. I should roll them up into a book. And then I started thinking, okay. You know? What else should be in here? And I went and found some other companies I hadn't written about. So it's this collection of things came out of some of my Forbes articles and then some. So it's twenty two US manufacturers and kinda singing the praises of the unsung heroes Oh, wow. Of American manufacturing. Oh, very nice. It's about showing people first of all, so many people think that we don't make anything anymore. And they couldn't be more wrong. I mean, the US is the second biggest manufacturer in the world. Canada's a huge manufacturing country as well, and we do lots of cool stuff. So people should be aware. Yeah. When is that book expected to drop? May. May. Okay. Yep. This year? It's actually headed to the publisher in the next few days. Oh, awesome. Yeah. Yeah. leave the link for that. We'll if it comes out before May. So we'll update it. So if you're watching this past May, you can check the description for that. Yeah. It's called inspiring American makers. Awesome. Yeah. So everyone be sure to follow Jim on his socials, grab his latest book when it comes out, and tune in to Manufacturing Talks to stay updated with the manufacturing world. And if you like this episode, please leave us a five star review, subscribe, do all of the things, share it, and we will see you in the next one. Thanks so much for joining us everybody. Bye. Bye.