Page 1


Will the McGregor-based dock-maker successfully cross over into luxury boats?

Helping Manufacturing Enterprises Grow Profitably SPRING 2018


COLLABORATION Initiative Foundation President Matt Varilek and Pine Tech President Joe Mulford discuss the future of manufacturing and economic development in Greater Minnesota

Enterprise Minnesota 2100 Summer St. NE, Suite 150 Minneapolis, MN 55413

Fifty-four percent of manufacturers say they have a formal strategic plan to achieve profitable growth. Is your company one of them? Call us today at 612-373-2900 or reach us at for a free 90 minute consultation with one of our strategy experts.

We can help you grow profitably! Scan here to learn more about how we can help your business. 2100 Summer St. NE, Suite 150 • Minneapolis, MN 55413




Initiative Foundation President Matt Varilek and Pine Tech President Joe Mulford discuss the future of manufacturing and economic development in Greater Minnesota





McGregor-based Floe International makes a bet, payable this season, that its category-defying boats will crack the luxury market

An increasing number of manufacturers understand that success develops from balancing continuous improvement, strategy, leadership and a commitment to quality management


2 It’s Not About Us Celebrating 30 years of achievements



Big Shoes

Macro Focus

Lean 2.0

Lori Davies is named the first non-family president of Clow Stamping

Looking to grow $3 million in three years, the microbrewers at Urban Growler analyzed 16 functions they need for growth

Samuel Gould takes lean from process to people

Visit the Enterprise Minnesota website for more details on what’s covered in the magazine at

Subscribe to The Weekly Report and Enterprise Minnesota® magazine today! Get updates on the people, companies, and trends that drive Minnesota’s manufacturing community. To subscribe, please visit SPRING 2018 ENTERPRISE MINNESOTA /


bob kill

It’s Not About Us Celebrating 30 years of achievements 1988: Ronald Reagan was wrapping up the final year of his second term as the President of the United States. Bobby McFerrin’s “Don’t Worry Be Happy” was playing on our AM radios. Roseanne premiered on our television sets. Rain Man dominated movie box office receipts, and the Chicago Cubs played their first-ever night game. And the Minnesota Vikings used the league’s stingiest defense that year to compile the second-best win-loss record in the entire NFL. They then went on to get embarrassed 34-9 by the San Francisco 49ers in the divisional playoffs. Just sayin’. In 1988, Rudy Perpich was in the middle of his third and final term as Minnesota’s governor. That year, the legislature enacted one of his pet projects by creating the Greater Minnesota Corporation, which eventually became Enterprise Minnesota. Perpich recognized that a vigorous, competitive manufacturing sector would provide the economic bedrock for every community in Minnesota. He understood that small and medium-sized manufacturers were entering an era of increased globalization, which would bring opportunities and challenges. He wanted the Greater Minnesota Corporation, in part, to give them access to tools and expertise that would help them thrive in that environment. Our consultant teams at Enterprise Minnesota continue to do just that to this day. We’ve come a long way from the early days of merely using the concepts of lean enterprise to bring efficiencies to the work floors of Minnesota’s manufacturers. I could not be prouder of the high level of expertise and broad array of 2


services that we provide to Minnesota’s manufacturers. And we’ve done some other things to identify and strengthen the common interests of manufacturers. We call it our “nexus” strategy. We have consciously tried to make Enterprise Minnesota the organization that strategically connects all the players in Minnesota’s manufacturing ecosystem. In addition to manufacturers themselves, that includes suppliers, advisers, community leaders, educators and policymakers. The most conspicuous element in our nexus strategy has been the State of Manufacturing® survey, which is celebrating its 10th year. Each year our pollster interviews some 500 manufacturers to determine what they view as opportunities and challenges in the coming year. I think it has been a spectacular success. To this day, I think the first year’s data taught me the most about the character of the modern manufacturing executive. We went into the field only months after the economy unexpectedly fell off a cliff, leaving almost all manufacturers stunned and flat-footed. Markets were in chaos, order sheets were drying up, and vendors were scrambling. And many bankers were re-examining even their safest lines of credit. continued on page 14

Helping Manufacturing Enterprises Grow Profitably

Publisher Lynn K. Shelton

Custom Publishing By

Creative Director Scott Buchschacher Contributing Photographer Chris Morse Writers Jo Colvin William Morris Copy Editor Catrin Thorman Contacts To subscribe To change an address or renew For back issues For permission to copy 612-455-4215 To make event reservations 612-455-4239 For additional magazines and reprints contact Lynet DaPra at 612-455-4202 To advertise or sponsor an event 612-455-4225

Enterprise Minnesota, Inc. 2100 Summer St. NE, Suite 150 Minneapolis, MN 55413 612-373-2900 ©2018 Enterprise Minnesota ISSN#1060-8281. All rights reserved. Reproduction encouraged after obtaining permission from Enterprise Minnesota magazine.  Enterprise Minnesota® magazine is published by Enterprise Minnesota 2100 Summer St. NE, Suite 150, Minneapolis, MN 55413 POSTMASTER: Send address changes to Enterprise Minnesota 2100 Summer St. NE, Suite 150 Minneapolis, MN 55413

Editor’s Note: This column is adapted from remarks Bob Kill made at the reception commemorating Enterprise Minnesota’s 30th anniversary. Bob Kill is president and CEO of Enterprise Minnesota.

Printed with soy ink on recycled paper, at least 10 percent post-consumer waste fiber.


Big Shoes Lori Davies is named the first non-family president of Clow Stamping


eggie Clow, the venerable patriarch of Clow Stamping Company in Merrifield, made an indelible first impression on Lori Davies when she attended her first staff meeting 10 years ago as the company’s newly-named controller. The meeting lasted just 15 minutes. She asked a colleague: “Is that the usual length of these meetings?” “Oh no,” she was told, “it was kind of long.” The lesson: Don’t let your culture get distracted by big proposals and long meetings, Davies says. “We don’t necessarily do those things here. I learned that from Reg. He is a get-it-done kind of guy, no messing around. He does not micromanage.” Clow is known inside the company and out as a no-nonsense executive. “I consider myself a master delegator,” he says today. “I like to put the right people in the right job and let them do it—or we’re going to talk about it.” Davies apparently learned her lessons well. In early January she was named the company’s first-ever non-family president. It will be “a bit of a challenge,” she admits. “I have some pretty big shoes to fill.” Replacing owner Clow, she will be just the third president in the company’s nearly 50-year history. Clow and Davies first discussed the promotion four years ago. Clow liked her financial background and admired how she earned the respect of the company’s other top managers. “I also wanted someone with new ideas,” he says. “All my other managers have been here a long time. I wanted someone to come in here with a fresh set of ideas.” Clow Stamping was founded by Everett and Gladys Clow in 1970. Reggie, their son, started working at the company right

Reggie Clow will remain the company’s CEO, but gives the reins as president to CFO Lori Davies.



away, while still in high school. By the early ‘80s he had taken over the company’s day-to-day operations, leveraging a focus on technology to transform the company into a regional powerhouse. Today, the company’s 440 employees occupy some 250,000 square feet in a plant that is situated some 9 miles due north of Brainerd. The company’s services include stampings, weldments, value-added operations, fabrication, assemblies and advanced IT. It provides these services for a variety of industries, including agriculture, light and heavy equipment, hydraulic, recreations, exercise equipment, commercial refrigeration and automotive. They provide products

Clow’s 440 employees occupy some 250,000 square feet in a plant situated 9 miles due north of Brainerd.

to the likes of Kubota, John Deere, Polaris, and Arctic Cat. Davies grew up near Ames, Iowa, spending her summers at the family cabin on Cedar Lake near Aitkin. Anticipating a career as a private accountant, she earned a B.A. in business administration at the University of North Dakota, with an accounting major and a computer science minor. She initially spent time in the hospitality and construction industries, most notably a 10-year stint as controller at Grand Casino. Her job will be formidable. In 2017, under Clow, the company earned $57 million. The 2018 projections, the first under Davies, are set to be $61 million. Her biggest obstacle to achieving that, Davies says, will be worker shortages in the face of retirements and low employment rates. “We have to figure out how to capitalize 4


on the labor we do have and maximize our output where we will see the most benefit,” she says. “We need to figure out how to become more efficient, how to do more with less.” The work force that currently makes Clow Stamping a success comprises several long-time employees, some having 20, 30 and 40 years with the company, a factor she considers integral in the success of her own work. “We have good management and good people and good tenure,” she explains. “My job is to bring everyone together and headed in the right direction.” Although Davies considered herself at a disadvantage not knowing about metals and the manufacturing process, her ability to look at the big picture, and her knowledge of human resources and finance, served her well. Within one year, she was

“We have to figure out how to capitalize on the labor we do have and maximize our output where we will see the most benefit,” Lori Davies says. “We need to figure out how to become more efficient, how to do more with less.” promoted to CFO. “I appreciate the environment that I have the opportunity to work in,” she says. “We have a very family-oriented culture here, and the company does its best to take care of its people. There are just good, wholesome people who work here, and we make quality products.” Clow remains CEO, but has delegated all day-to-day responsibilities to Davies. “I am going to be out of the daily grind,” Clow says, adding that he expects to spend three weeks of every month in Florida dur-

Need Help Finding Skilled Workers?

Manufacturing is vital to Minnesota’s economy, and having the right workers is key to manufacturing. We offer many programs and services to help you find and train the employees you need to thrive: ●

Post jobs and view resumes at, the state’s no-fee online job bank Work with staff at your local WorkForce Center for your day-to-day hiring needs Request specialized help from a regional Workforce Strategy Consultant to collaboratively develop your industry’s talent pipeline Consider starting a registered apprenticeship program through the Minnesota Apprenticeship Initiative grant

Find out more at:

ing the winter. Davies has already determined the projects she wants to instigate and the challenges she will face in accomplishing those goals. Her immediate focus will be to pull the management team together to ensure all are comfortable with the transition, creating a culture of what the team will be like going forward. She also hopes to refine the short- and long-term goals of the company to ensure it is operating within its niche, producing what they are good at, and not getting sidetracked. Behind her is the predecessor to whom she credits with his hands-off mentorship. “Reg trusts his people. When you present an idea, if you have facts that support your idea, he will likely support it. He is very fair,” Davies concludes. “I am honored that Reg has entrusted me with his company, and I look forward to keeping us progressing and moving forward.” Clow has high confidence in the future of the company: “Our core values will be the same. We’re sensitive to customers and employees. We feel that if we can take care of those two things, our success will follow.” —Jo Colvin

We love dreams. But we love action even more. Our business banking experts can help take your business dreams and make them an effective reality, helping prepare you for what’s ahead.

800-908-BANK (2265) Member FDIC. © 2016 Bremer Financial Corporation. All rights reserved.

EnterpriseMNMagazine2016.indd 1

3/30/16 10:48 AM



Joe Plunger, president and CEO of Midwest Metal Products, recently described his innovations to Representative Gene Pelowski (left) and Senator Jeremy Miller (right).

> Two Premier Industrial Parks > 5 to 80 Acre Lots > Shovel Ready Sites > Access to I-94, U.S. Hwy. 10, MN Hwys. 15 and 23 and St. Cloud Regional Airport > Fastest Growing Labor Force in MN and Nation (MN DEED)

Your First Stop for Business Locations, Financing Resources and Development Opportunities St. Cloud Economic Development Authority Cathy Mehelich, Executive Director 320.650.3111





Macro Focus Looking to grow $3 million in three years, the microbrewers at Urban Growler analyzed 16 functions they need for growth


ast summer microbrewers Deb Loch and Jill Pavlak encountered a predicament faced by many smallish enterprises with big plans. “They were spending their time every day working in the business, without a lot of time working on the business,” says Bob Arvold, a business development consultant at Enterprise Minnesota. Loch and Pavlak own Urban Growler Brewing Co., a taproom located near Energy Park Drive and Raymond Avenue in St. Paul. It’s a successful endeavor that consumes most of their waking hours. But their entrepreneurial growth, they agreed, would evolve from expanding their brewery. Their projections indicated that operation could add $3 million in revenue if they could find the focus.

Loch, a long-time avid homebrewer, previously had a career as an engineer and product manager in the medical device industry; Pavlak most recently worked in sales. The birth of Urban Growler was an easy decision. “We both loved the idea because it was a very divisive political time, and we wanted to find something that would bring people together,” Loch says. “We felt if people could just sit down and have a beer, we’d all figure out that we had more in common than what separated us.” Loch says their operation has “been on a tear the last couple of years,” already surpassing the goals of their early business planning. They had reached a point in which they needed to benchmark their

Chuck Miller, Winona Daily News

Owners Jill Pavlak and Deb Loch.

progress and plot a more profit-based strategic plan, she says, “not just focus on getting stuff done.” They started canning and kegging their brew and distributing it to bars and liquor stores. “That’s where we will grow,” Loch says. “We’ll get some small growth in the taproom. But increasing our production capabilities outside the taproom is how we will grow our business and our brand.” But how? Arvold suggested an Enterprise CoreValue assessment, a process in which entrepreneurs analyze and grade their business performance and prospects for growth from the perspective of 16 different functions. Eight are related to

Reserve Your Ad Space TODAY!

They had reached a point in which they needed to benchmark their progress and plot a more profitbased strategic plan, Loch says, “not just focus on getting stuff done.” production, and eight are administrative, including human resources, sales, and marketing. “It gave them a good overview of the business,” Arvold said. “They’ve got a great business; they just want to take it to the next step.” Loch agrees: “The CoreValue assessment was a good way to figure out where we’re at and where our gaps are—what we needed to work on next.” They’re working with Enterprise Minnesota’s Steve Haarstad to plot their next step: a full-on strategic plan in which they’ll design production, marketing, and profitability. Loch and Pavlak plan to revisit their progress according to the assessment every 90 days and identify areas to improve. “The other piece is staying focused on revenue growth,” Arvold says. “How do you purposefully move from a startup canning operation to $3 million in three years? That’s huge growth. If you’re going to achieve that kind of growth, you have to have a really good plan and stay focused.”

Helping Manufacturing Enterprises Grow Profitably Inside Enterprise Minnesota® magazine you will find in-depth information and unmatched insights into the latest innovations, business successes, and ingenious company leaders among Minnesota’s manufacturing community. The magazine reaches over 42,000 readers, including CEOs and additional key decision-makers.

Chip Tangen Relationship Manager 651-226-6842




High Tech Sophistication Winona foundry uses 3D printers to open new doors


n manufacturing, as in most things, the hardest step is always making something out of nothing. Before a foundry—such as Alliant Castings in Winona— can produce 10 or 20 or 5,000 of a particular component, it must have a mold in which to pour the molten iron or steel. To make the mold, though, it must have a tool, a custommade dummy of the desired part composed of materials such as wood or aluminum to exacting specifications. Tom Renk, president of Alliant Castings, says creating those initial tools can represent a big cost for the customer, especially for small-batch orders. “They tend to be pretty expensive, and you tend to need, in some cases, real craftsmen to build these patterns. A lot of them were done by hand. And as those people retire and get out of the industry, you have this gap left because you don’t have those skilled pattern-makers, as they’re called,” he said. “It’s phenomenal the skills these guys have; they’re carpenters on steroids, but you just don’t see those skills anymore.” But in the past two years, Alliant has found another way. In the fall of 2016, the company purchased its first industrial 3D printer, offering a whole new way to create those one-of-a-kind patterns and core boxes. Today, it has five such printers, all of different sizes and capabilities. “[We] found that it defrays our tooling costs as a job shop, and opens a lot of doors that were closed in the past because of those costs,” Renk said. “It’s typically 40 to 50 percent more cost-effective to do it this way as opposed to traditional methods.” The process now begins with a CAD (computer-aided design) model of the 8


desired part, which is used to program the 3D printer. The printer produces the tool out of plastic, which is then laser-scanned to create another computer model that can be overlaid on the original model for comparison. Alliant’s parts must be accurate to within 0.01 of an inch, and the 3D printer meets those tolerances, Renk said. Alliant specializes in abrasion-resistant components for the mining, road construction, recycling, power generation, agriculture and shot blasting markets, and produces its own product lines as well as casting parts on contract for other manufacturers. Renk originally envisioned the printers as a way to help Alliant expand its proprietary product lines. They have turned out to do much more. “We made the investment just for our own internal needs, but we started to find that on the other side, the contract side, our own customer base showed some interest

Tom Renk, president of Alliant Castings: “Business is great, almost too much to process right now. I’ve been here 21 years, and I’ve never seen more new work and opportunity come in than I have today or the recent past. It’s just mind-boggling, frankly. So, we’re in growth mode.”

in creating low-cost tooling for their needs, and so that started to develop. So, we’re working both sides,” Renk said. Now it has gone even further, opening up an entire third business model for the company. “Now we have entirely new customers on a contract basis come in and say, ‘Can you build this tooling, even though you’re not going to make the casting for us?’ That’s something that we’re just starting to get into, where we design the tooling in CAD, print the patterns and core boxes,

and potentially do the first article casting off that to make sure everything is good, and then send it off to the customer and they source the production somewhere else,” Renk said. “That’s a whole new dimension … that we never expected.” Despite their advantages over traditional toolmaking, the 3D printers have their own unique requirements. Individual printers can cost as little as $6,000 to more than $200,000, but only a very few high-end models are what Renk calls “plug and play.” Most require considerable technical expertise to ensure they are holding to tolerances and producing

[Tom] Renk originally envisioned printers as a way to help Alliant expand its proprietary product lines. They have turned out to do much more. usable final products. And while the company is turning to 3D printing in part to address the shortage of old-school pattern-makers, it isn’t necessarily that much easier to find employees with the skills to run the new equipment, either. “We need to find people that can help—technical people and engineers,” Renk said. “That’s the big gap that we find that we need to fill, and we’re trying to fill that right now.” The printers have also forced the company to review its internal processes, a project currently underway with assistance from Enterprise Minnesota. But despite these question marks, Renk said the outlook for the company has rarely been better. “Business is great, almost too much to process right now,” he said. “I’ve been here 21 years, and I’ve never seen more new work and opportunity come in than I have today or the recent past. It’s just mind-boggling, frankly. So, we’re in growth mode.” And embracing industrial 3D printing technology is only speeding Alliant Castings forward. “It’s opened a lot of doors, things that we didn’t expect to happen,” Renk said. —William Morris

G ra n ite E q u ity . co m

Supply Chain Leaders prefer APICS certiiications. Professionals turn to APICS Twin Cities Chapter for the education and networking opportunities needed to accelerate professional development and achieve a higher level of performance.






Brandon LaDoux, industrial tech instructor.

Strength in Partnership The Itasca Area Schools Collaborative brings relevance to tech education at an early age


o develop a more relatable experience with students and local manufacturers, Industrial Tech instructor Brandon LaDoux spent 400 hours over last summer working at Northland Machining in Cohasset, about five miles northwest of Grand Rapids. LaDoux teaches at the Robert J. Elkington Middle School and Grand Rapids High School, both in Grand Rapids. He says he learned “the nuts and bolts of working with different types of metals, tooling, and programming.” His experience was part of a program called the Itasca Area Schools Collaborative (IASC), underwritten by the Iron Range Resources and Rehabilitation Board (IRRRB). The initiative was designed, in part, to bring more relevance to technical education. “We wanted to know that we were



teaching these skills the same way the industry would need them to be taught,” LaDoux says. “These are important things because if we’re teaching apples and oranges, and they want pineapple, it doesn’t make sense for us to be teaching one way and then going out into the industry and finding out that’s not the way they want it done.” The program is one small element of the much-praised joint powers agreement among seven local school districts and Itasca Community College. Members include Deer River, Floodwood, Grand Rapids, Greenway, Hill City, NashwaukKeewatin, and Northland Community Schools. Originally conceived in 1987 to purchase broadband fiber, the IASC through several iterations has achieved a more student-centered perspective, according

to Matt Grose, Deer River superintendent and chair of the IASC administrative committee. IASC’s mission is to leverage relationships and trust between districts to improve sustainable education outcomes through strengthened partnerships and cooperation, state of the art architectures, integration of functions, and enhanced stakeholder understanding. “We’re all facing declining enrollment, and we didn’t want to reduce the opportunities that were available to our students,” Grose said. A key priority was to ensure that “relevant curriculum was available to kids,” he added. Itasca Community College Provost Bart Johnson described IASC as providing a cooperative platform for sharing courses across the districts and back and forth between the college. “We are focused on how to truly deliver world-class educational opportunities here in rural Minnesota” across seven rural districts. The program emphasizes a combination of on-ground offerings at individual high schools and digital or live shared courses. “We want to deliver meaningful pathways that enable students to explore career pathways, starting even in the ninth and tenth grades,” Johnson says. The IASC enables educators to provide more advanced offerings and more real learning experiences for students, he adds. “And manufacturing is one of those career pathways we’re working to develop because of the collaboration.” For his part, LaDoux has eight years of classroom experience as well as an undergraduate degree from Bemidji and an M.A. from St. Cloud. He considers his experience superior to some of his college classes. “A lot of times you don’t learn it unless you do it,” he says. “You are hands-on, talking with companies, building those relationships that we probably would never get otherwise. A lot of times as teachers you go to things and you walk away saying, ‘That was a waste of my time.’ I can’t tell you how beneficial this was.” “I would put this in the top three valuable things that I’ve done in my career,” LaDoux says.”A lot of times we go to these trainings and get information that you don’t even know how to use in a classroom.”


A Bigger Gig Rich Wessels takes on an ambitious new education and training program at the State


he last time we left Rich Wessels, he was helping Enterprise Minnesota host a focus group of students at White Bear Lake High School for last year’s edition of the State of Manufacturing® survey. Wessels was operating the kind of program at the time that ultimately helps Minnesota’s manufacturers overcome the industry’s present and looming skills gap.

older. Just as with his experience in White Bear, these programs will be publicprivate partnerships that will combine employment opportunities with classroom instruction. “I didn’t know exactly what I was getting into,” he told us of his White Bear Lake job. He had deep experience working in schools, with students as well as with assessments, planning, and goal setting. Yet, he says, “I didn’t know anything about manufacturing.” He also had no idea what the program would look like, which he now says was exciting. “I got to be in on that initial planning and creation of this program from basically an idea of, ‘We have the money, how are we going to make this work?’ I think we’ve accomplished a lot.” What has evolved is considered one of the most forward-looking CTE (Career Technical Education) Rich Wessels programs in the Twin Cities, joining the ranks of Alexandria and Fergus Falls. A school psychologist with 15 years’ Today, the lab contains a large assortment experience, Wessels had helped White of high-tech equipment in addition to a Bear transform a $250,000 grant from computer lab. the Greater Twin Cities United Way to “Beyond just the actual skills of using help its two senior high school campuses equipment, there are many things that we enhance their tech classes with updated are learning from our industry partners manufacturing-related equipment. The about what essential skills are needed grant included funds for an outside for the different types of jobs available career counselor for students who would in manufacturing, so that we really are specialize in manufacturing-related setting our students up for success,” advice and help students reach out to local Wessels says. manufacturers. The Minnesota Precision He has since moved on to take his Manufacturers Association will work with skills statewide, by now operating the the legislature in the coming session to Youth Skills Training Program at the retain the program. Minnesota Department of Labor and We’re confident his skills will adapt Industry (YST@DLI). The program helps nicely to the new gig. Grant funding is other local entities develop experiential available for up to five YST@DLI pilot learning opportunities for students 16 and programs in amounts up to $100,000.

You make things. We ship things. Sounds like a pretty good match to us. For over 25 years, KingSolutions has believed in creating customized logistics solutions for every client. Every time. On every project. From ground, ocean and air freight to warehousing, fulfillment and more. Which means after you make things, we’ll make shipping them easy.





Learning to Lead Pequot Tool introduces manager training at the cell level


R professional Debby Hoel understands that one way to combat the growing skills gap that increasingly bedevils Minnesota’s manufacturers is to identify the company’s next generation of managers and gradually equip them with the skills and experience they need to become high functioning leaders. Hoel is human resources manager at Pequot Tool & Manufacturing, a 30-yearold machining and fabricating company located in Jenkins, a tiny community just a few miles north of Pequot Lakes in central Minnesota. The company manufactures high precision component parts and assemblies for a wide variety of industries including aircraft, firearm components, medical, computing, printing, electrical equipment, industrial equipment, hydraulics, and more. Among Pequot Tool’s 170 employees, 30 are in leadership roles. Hoel says the company is now expanding management responsibilities to lower levels of the hierarchy. “We have a very well-defined management team,” she says, which extends to team leaders and shift leads. Her priority now is to develop “cell” leads to help coordinate specialized groups of machines that complement each other to produce a part. “We’re focusing on getting those cells more developed at Pequot Tool, and finding people to lead them,” she says. The company has identified five cell leaders to constitute the company’s first level of leadership, according to Hoel. They likely are already the go-to person in their cell, but have not been exposed to any level of leadership training. To remedy this, Hoel assigned the cell leaders to a roster of 24 of Pequot Tool’s managers who recently completed a training program entitled “Learning to Lead,” facilitated by Abbey Hellickson, a business growth consultant at Enterprise Minnesota. After dividing the participants into two groups of 12, Hellickson led them in monthly learning sessions related to social style, social style versatility, engagement, change leadership, and accountability. 12


“We always offer our employees development opportunities in addition to individual skill development,” Hoel explains. “We certainly don’t want someone who hasn’t had any leadership training. You need to provide a foundation for them. Learning to Lead looked like the perfect fit.” As part of Learning to Lead Hellickson shared the social styles model, which helps people enhance their interpersonal work relationships by learning to understand their fellow employees’ behavioral preferences. “They learn to see how they perceive themselves and how others perceive them,” Hellickson says. The goal of the employee engagement session was to enable potential leaders to recognize that they play a role in engaging their work force and help them understand that they have a direct impact on their employees’ level of engagement. “Change leadership is making sure the leaders understand they need to take the time

to set up any changes, and that employees understand why the change has to happen,” Hellickson says. The accountability component of the training ensures that future leaders not only effectively communicate with employees, but with peers as well, and how to have the courage to hold them accountable. The sessions also emphasize how to put plans into action. “This is the part where as a facilitator, I get so excited,” Hellickson says. “Pequot Tool has taken the action plan very seriously. They are willing to try new concepts and make changes, which is not easy.” After completing Learning to Lead in December, Hoel has already begun implementing some of those changes. A feedback session in January for participants and management noted positive results. “It went really well, especially regarding how they can foster accountability across all levels of the organization,” Hellickson

Mitch Hess, cell lead for Mori Seiki Turning Centers and Debby Hoel, human resources manager at Pequot Tool.


says. “It’s been fun to listen to how people are talking about change. That camaraderie and support sustain the longterm stability of the changes they are trying to make.” Hoel agrees and noted that Learning to Lead has already been a proven success at Pequot Tool. Of the 24 participants, five have received promotions—three to cell leader and two to management positions. She notes that work quality and productivity have also increased. “Overall, it has had a positive impact on their organization,” Hellickson concludes. Hoel said employee reviews of the

The goal of the employee engagement session was to enable potential leaders to recognize that they play a role in engaging their work force and help them understand that they have a direct impact on their employees’ level of engagement. program were outstanding. “The material was extremely relevant to what they’re dealing with,” she says. “Learning how to motivate people, to work effectively with teams and how to best reach employees that you’re leading—these all came quite often in the reviews.” Respondents also admired how well Hellickson connected to them as individuals. “She doesn’t come off as a high corporate official,” Hoel says. “They were able to listen to her and relate to her.” The proof of the program’s effectiveness will evolve as participants start to practice what they’re learning, Hoel says, adding that Pequot Tool has already committed to a return engagement for Hellickson—“Learning to Lead 2.0”— which will add more depth to the concepts she introduced in the first session. “Whenever you offer training, you need to do some repeat,” she adds. “It doesn’t help to just introduce the topics one time and then walk away.” —Jo Colvin

You should see an architect about that.

Facility Assessments

Reed Becker, AIA

Master Planning

Building / Site Design


1968-2018 Productivity Inc

A Trusted Partner for 50 Years Productivity Inc is proud to be a leading provider of dependable products and services to the manufacturing industry for a half-century. Our foundation is built on solid relationships with quality, trusted suppliers and a responsibility to serve you, our customers, with honesty, integrity and responsiveness. You can count on us to help you reach your business goals.

Contact Us Today! Machine Tools Tooling & Accessories Robotics & Automation

Service & Parts Preventive Maintenance Engineering

Rotary & Live Tool Repair Machine Moving Used Machines

Integrated Supply Training

PRODUCTIVITY.COM • Minnesota 763.476.8600 • Iowa 319.734.3403 • Nebraska 402.330.2323 • Dakotas & Western Wisconsin 800.328.3272



continued from page 2 Despite it all, 79 percent of the executives we interviewed were confident about their futures. At first, we thought this was a little weird, and maybe even wrong. But the result was confirmed when we got to the focus groups. Every year we augment the objective data with between 12 and 20 focus groups. Instead of hand-wringing and finger-pointing, manufacturers in that first year talked about finding opportunities in the downturn. Do we retrain? Do we retool? Do we look for new markets or new products? Do we use the time to reinforce our personal sales relationships? Don’t get me wrong. There was a good measure of anguish as executives shared the personal pain involved in cutbacks and layoffs. Small-and medium-sized manufacturing companies are mostly highly personal places in which everybody knows everybody else. Employees

“We’ve come a long way from the early days of merely using the concepts of lean enterprise to bring efficiencies to the work floors of Minnesota’s manufacturers,” Kill said. “I could not be prouder of the high level of expertise and broad array of services that we provide to Minnesota’s manufacturers.” are people, not statistics. But the takeaway was that manufacturers are unflappable. They were—and are—long-haul thinkers and planners. Yet it was evident that these executives had been through previous downturns and would be through them again. The same has been true of the skills gap. I think the State of Manufacturing® poll is the first place we heard about the ongoing challenges of recruiting and keeping employees with skills necessary 14


to operate machinery within the increasing sophistication of modern manufacturing. In all, the State of Manufacturing® survey today provides manufacturers and policymakers with hard data that helps guide their decision-making. Our statewide poll is the only one of its kind in the nation. And we’re proud to be behind it. Another priority for us has been to facilitate meetings between manufacturers and their communities, especially leg-

islators. Over the years we’ve organized well over 250 plant tours. These visits typically include some combination of legislators, local officials, local business advocates and, frequently, members of Congress and their staffs. I really enjoy watching the reactions of first-timers as they discover the creativity, innovation and sophistication within modern manufacturing plants. And one of the real takeaways is when they realize that manufacturing goes way beyond Fortune 500 name-brand companies like 3M or Toro or Medtronic. You know, there are 8,000 manufacturers in Minnesota, but only 22 of them employ more than 1,000 employees. More than half of these manufacturers employ fewer than 20 people; only 44 percent of them are located within the seven counties in the Twin Cities metro area. I don’t want to bore you with statistics, but these tell a compelling story. Manufacturing is growing in Minnesota. The number of people employed by manufacturers has grown nine percent since 2010, today comprising 13 percent of all our private sector jobs.

Enterprise Minnesota last week welcomed more than 160 manufacturers, friends, and allies to our new headquarters in northeast Minneapolis (just off I-35W at the Stinson exit) for an event to commemorate the organization’s 30th anniversary.

Manufacturers are responsible for 16 percent of Minnesota’s total GDP. Each manufacturing job supports 1.9 jobs in other sectors of the economy. That means that fully one third of Minnesota jobs are in, or supported by, manufacturing. And manufacturing jobs pay well. The average annual wage for a manufacturing job is more than $63,000—15 percent higher than the average wage for all industries. Rudy Perpich’s vision was spot on. Today’s manufacturers are the job creating engines that support and sustain our state and each of their communities. I’m especially proud that the legislature has created grants to help make our consulting services available to even the smallest manufacturers in the tini-

est towns. The success of GAP—the Growth Acceleration Program—has been nothing short of extraordinary. GAP is an eight-year-old program whereby the state invests in manufacturers and manufacturers match these investments to receive consulting services that increase operational efficiencies and promote growth. It’s easy to see why the legislature views GAP as a government investment that works. Since 2008, 245 Minnesota manufacturing companies have taken advantage of GAP. These manufacturers have:

Thinking about your business is a big part of ours.

• Created and retained 2,146 Minnesota jobs.


• Boosted company sales by $148 million. • Saved $29.9 million in business costs. Part of our agreement with the legislature is that we determine the value of these services. Our clients report that on average, GAP generates a $30 return for every dollar invested in the program. I know. We regularly recompute these results to make sure they are accurate. To conclude, it has been our honor for 30 years to work with and for manufacturers as they bring quality jobs and overall prosperity to the people of Minnesota.

To make confident decisions about the future, you need a different kind of advisor. One who starts by understanding where you want to go and then brings the ideas and insights of an experienced team to help get you there. Experience the power of being understood. Experience RSM. rsm

RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax and consulting firms. Visit /aboutus for more information regarding RSM US LLP and RSM International.



Photo by Chris Morse

Administrative Genesis New employee will give an organizational edge to consultant team


n part, as an acknowledgment of keeping its ISO compliance obligations, Enterprise Minnesota recently hired Tennessee-native Genesis Johnson as a consulting assistant. One of her key responsibilities will include coordinating the ISO-related Enterprise Minnesota Management System, says John Connelly, Enterprise Minnesota’s long-time vice president of consulting. An increasingly potent part of Enterprise Minnesota’s consultant offerings in recent years has been to guide client companies through the ISO process. As a show of good faith to its clients, the organization achieved its ISO 9000 certification last year, a rarity among service companies. Johnson’s credentials—a B.A. in Eng-

lish from Vanderbilt University and an MBA from St. Thomas—fit well with her new position, says John Connelly, her supervisor. He says she’ll split her time compiling data on behalf of the company’s 12 consultants as well as maintaining a professional and client-specific look and feel to their consulting materials. The updated consultant data is especially valuable to Enterprise Minnesota’s consulting service capabilities for each client as well as coordinating seamlessly with other consultants and departments within the organization. Johnson will ensure a consistent professional look to consultant materials, including PowerPoints and service collateral, in particular, enabling each consultant to

Genesis Johnson earned an English degree from Vanderbilt and her MBA from St. Thomas.

include higher levels of specificity to the organization’s scopes of work. The consultants will always be responsible for the intellectual content of their materials, but Genesis will ensure that they have a consistently high professional look. Johnson, who moved when her fiancé took a position in Minnesota, says she is keen about helping manufacturers make an economic impact in their communities, but is less enthused about the winter. “I’m still trying to get used to it,” she says.

INDIVIDUALIZED ATTENTION MAKING A DIFFERENCE IN THE MOMENTS THAT MATTER. DELIVERING SMARTER SOLUTIONS. It’s not enough to offer the right products and services. It’s about providing individualized attention and solutions. Marsh & McLennan Agency’s advisors know your industry and situation today, and evolve with you as your needs change. We can minimize potential exposures now for a better tomorrow. That’s individualized attention delivered smarter. That’s Marsh & McLennan Agency.

To learn how MMA can deliver a more focused approach, visit


TWIN CITIES 7225 Northland Drive; #300 Minneapolis, MN 55428 Phone +1 763 746 8000

DULUTH 1502 London Road, #210 Duluth, MN 55812 Phone +1 218 336 1540




Other offices throughout the upper Midwest




Four Questions State Representative Joe McDonald, on the skills gap


ow urgent is the manufacturing skills gap in your district? I’m very aware of the gap in skilled labor. My campaign manager is in manufacturing here in Delano, and I do a lot of commercial photo work with manufacturers. Many of my friends who are construction workers and electricians and plumbers and contractors can’t seem to find skilled labor, or sometimes any labor. We have employers who are just struggling tremendously to find good, hard workers. Welding and woodworking and construction are good paying jobs and they are suffering. It’s definitely something we talk about at the Capitol. We need to do more; we need to do better. Does the responsibility lie with Minnesota’s educators? Minnesota has a great educational system. It does a wonderful job. But we keep pushing a narrative that everybody should go to a four-year college. There is still a stigma against getting a two-year degree. We have to change that. A lot of people at the legislature acknowledge it, but we have to act on it. We have to encourage and help our educational systems bring back industrial arts and educate students about these opportunities, even at the middle school level. The principal here in Delano, Dr. Steven Heil, has gone out and met with our manufacturers in Wright County, and asked them, “What kind of labor are you looking for? What are you looking for in a student? What can he or she do to further his or her education and get a job at your company?” He found out that some of these manufacturing companies with good pay, full benefits and a good retirement plan, only require an 18-month certificate in some cases, which you could start right out of school. After that certification, you’re an expert in a field with a starting salary anywhere from $35,000 up to $50,000 a year plus benefits. I have a two-year degree myself. I started out in Normandale where I was going to do my generals and then move on to St.


Thomas and major in photojournalism. I ended up transferring to Hennepin Technical College for a commercial photography degree, and it’s been good to me for the last 30 years. Although I should probably add that ultimately I received a master’s degree in commercial photography. There’s still a stigma, but people are slowly recognizing there are opportunities that don’t come with the burden of debt. We hear a lot about how student debt is a huge weight on students’ shoulders. They graduate with $80,000 or $100,000 in debt and can’t find a job in the field that they’ve chosen. Are legislators aware of the problem or that there is a legislative solution? Some of them may not be aware of this. Many of my colleagues have visited factories in their communities and see good jobs: it’s clean, it’s a good atmosphere, employees get great benefits, employers treat them well, they’re meeting new people and making good friends. But I think there is still a stigma about manufacturing, that it’s a dirty job, it’s hard work, it’s hard on your body and after 30 years of doing it you’ll have arthritis and you won’t be able to move, and that’s just simply not the case. There is a study published by Center of the American Experiment that shows many two-year degrees actually pay better in the longrun than four-year degrees. I’m not yet sure what the solution is. I’ve seen legislation with tax credits for those who are going into the trades. I don’t want to say free college is necessarily the solution, but we should make some kind of financial incentive—like tax credits—for students seeking skilled labor or going into the trades. Are there other aspects to this problem? There might be. I’ll tell you a story. My son, Jacob, just turned 18. For the last two years, he’s been working in the summers doing landscaping: digging trees, laying sod and planting rock

Representative Joe McDonald is in his fourth year representing District 29A in the Minnesota House of Representatives. He occupies the seat formerly held by now Congressman Tom Emmer, and before that K.J. McDonald, Joe’s father, who served in the House from 1977-1990. Representative McDonald serves on the Tax committee, the Health and Human Services Reform committee, the Transportation and Regional Governance Policy committee, and the subcommittee on Aging and Long-Term Care.

gardens. It’s good, hard work. When school started this past year, 2017, his employer hired a 25-year-old strong, young buck who goes to the gym every day, works out, and is tough as nails. The guy lasted two and a half hours before he went to his boss and he said, “Gee, I’m really, really sorry. It’s more work than I anticipated, it’s more strenuous, I can’t handle it,” and he quit. He didn’t have the work ethic to survive even one full day doing landscaping work. I hear stories like this over and over again in my district. Employers just can’t seem to find good workers, and when they do, it’s hit or miss as to whether or not they’re really fully engaged, working hard and able to handle the job. I look forward to looking into this more when we get back into session. SPRING 2018 ENTERPRISE MINNESOTA /





McGregor-based Floe International makes a bet, payable this season, that its category-defying boats will crack the luxury market 18


o understand how Wayne Floe might duplicate the remarkable successes of Floe International’s lines of boat docks, boat lifts, and light-weight trailers in the hyper-competitive marketplace of luxury boating, you don’t have to look beyond his daily commute between home and work. Floe and his family live on an island unconnected to shore in Big Sandy Lake, just a stone’s throw from his manufacturing campus near McGregor, Minnesota. When regulators refused the previous owner’s request to construct a small bridge to connect his island to the shore, Floe bought it and decided to innovate: He built “the porter,” a massive, high-tech floating dock with front and back ramps. With it, he can drive his truck up onto it, press a control button no more complicated than a garage door opener, and the apparatus will carry him the short distance across the water. Another ramp lowers when he arrives, and

thinking up ways to make things better.” That attitude, she says, describes the DNA of the company, not just with its products but with its processes, too—like Floe’s obsession with bringing efficiencies to his manufacturing operation. Floe looks for things that don’t exist in the marketplace. People don’t know they need something if they don’t know what it is, he says. “It’s our job to find what’s missing in the marketplace.”


Wayne Floe says people don’t know they need something if they don’t know what it is. “It’s our job to find what’s missing in the marketplace.”

he drives off. Some of the folks who know him say the undaunted creativity that led to the porter helps explain the personality of an entrepreneur who in 35 years grew a part-time tree removal business into a regional powerhouse, and whose vision for his company is infused with attention-getting ambition. Floe today employs more than 200 people in eight buildings, primarily on a manufacturing campus that straddles Highway 65 about eight miles north of downtown McGregor. His product lines include light-weight all-aluminum docks that are easy to maneuver and durable. Each dock allows top-side leveling that can be accomplished with a cordless drill through its patented Easy-Level System. Floe’s line of light-weight aluminum trailers now includes the CargoMax, a trailer with a deck composed of high-density polymer that will not rust, dent, rot or need paint.

Floe works with more than 250 dealers in 30 states, six Canadian provinces, as well as Korea, Chile and Manila. “Wayne’s mind is constantly clicking,” says Cindy Gray, Floe’s chief marketing officer. “He’s driving down the highway and he sees something and asks, ‘I wonder why they do that this way?’ It may have nothing to do with his businesses, but he’s always

t appears he’s always exhibited those traits. In the spring of 1983, 19-year-old Wayne Floe filled a large borrowed truck with his own brand of lake docks and combed the back roads and highways of northeast Minnesota to build his nascent network of retail detailers. Stopping at, say, a local True Value Hardware store, he’d assemble a dock in their lumber yard or parking lot. He’d show store owners how they could profitably sell his docks, without making a hefty investment of time, product knowledge or customer service. All they’d have to do after ringing up an order would be to call Floe, still a one-man/boy company, who would dispatch contract employees to deliver and install the dock to the buyer’s site. No muss no fuss. Floe has always been good with his hands—“I was more apt to make a present than to buy one,” he recalls, “but maybe that was a lack of funds.” Floe was born and raised in McGregor, today a town of just 391 inhabitants, located south of the Iron Range about an hour either way of Duluth and Brainerd. His parents are both life-long residents; his dad grew up on a farm just five miles from the Floe campus. When only 11 years old, Floe started working on projects at his dad’s logging business. After he and 63 other seniors graduated from McGregor High School in 1981—the largest graduating class to date—Floe bounced around colleges, spending time at Itasca Community College, St. Cloud State University and Anoka Technical College, SPRING 2018 ENTERPRISE MINNESOTA /


Floe today employs more than 200 people in eight buildings on his McGregor-based campus. His product lines include light-weight all-aluminum docks, boat lifts and light-weight aluminum trailers. Left: COO Tom Anderson.

from the dock, the beach or the water. • It must be a place where boat owners and their friends and family want to spend their time.

but the fact is, he says, “I never actually left.” Floe faithfully returned home every weekend to tend to the tree-removal business he founded while still in high school. “It’s how I funded everything,” he says. While still in college, he conceived a modular boat lift that could be delivered inside a box and assembled with pins, no bolts required. A local blacksmith would forge prototype parts based on chalk designs Floe would sketch on the concrete floor. Floe would then take them to the lake and test them out. “It was old school,” Floe recalls. Within a year, he was producing boat docks out of a small rented pole barn in McGregor. He added a bookkeeper and a welder. In 1985, he bought and converted another building and started producing more products. The growth was manageable, he says, and still financed by proceeds from his tree business. “I always said my tree business would support my manufacturing habits,” he says. In about 2002, the same spirit that 20


inspired the 19-year-old version of Floe guided him to another entrepreneurial dream: boat building. “I was looking at getting into a hybrid pontoon that had the Floe Craft amenities –– the power windows and the power roofs,” he says. “That’s really where I was going with it.” The first prototype was a wood model of a simple pontoon boat, about eight feet wide and 26 feet long. Not good enough. Gray recalls sitting in folding chairs on the prototype. “It’s kind of short. It needs to be taller so you can stand up. There’s not a lot of room here; maybe it needs to be wider.” The next prototype morphed into this 11-footwide 39-and-a-half-foot-long boat. Floe outlined six necessities for what would eventually evolve into the Floe Craft Afina. • Internal climate controls should enable boaters to extend the boating season without regard to weather conditions. • Even beginners should find it easy and enjoyable to operate. • An open concept floorplan must expand the occupants’ experience to an unprecedented level of livability. • The hull design must provide exceptional across-the-board performance. • Boarding must be convenient, whether

Floe says that five years of testing and public feedback with three fully functional prototypes have ensured that the boat conforms to his directives. Boat owners can operate the Afina’s 11-foot power retractable roof and 12-foot power side windows with a push of a button, offering what its developers think is the first fully convertible boat in the industry. For climate-controlled comfort, the Afina comes equipped with both heat and air conditioning. Joystick steering enables even novice boaters to drive and maneuver the Afina through tight docking situations like a small runabout.

People don’t know they need something if they don’t know what it is, Floe says. “It’s our job to find what’s missing in the marketplace.” Unlike the fragmented floorplans of other boats, the three zones of Afina’s uni-deck cabin feature a 360-degree view and a full galley. A lower-level stateroom features a full-sized bed, a loveseat, and a television. There is also a bathroom with a stand-up shower and a residential-style porcelain toilet. The boat offers four different points of dock accessibility, with retractable ladders in the bow and the stern. On top of this, the boat is appointed with solid walnut cabinetry and accents, solid

surface countertops, and soft-touch vinyl for all upholstery. A premium stereo system can be controlled independently from four separate zones throughout the boat.


loe has already built and shipped four boats to dealers and is blitzing boat shows. “Now is the time for tons of heavy lifting,” Floe says. The they-don’t-know-they-want-it-until-they-see-it strategy has been magically effective for Floe over the years, but this spring the company will put the concept to a significant test when it takes the Afina to market. CMO Gray says the company uses market research on competitors and price points but acknowledges that incor-

porating high-end upgrades wasn’t cheap. So far, testing at boat shows in Minneapolis, Alberta, Fort Lauderdale, Miami, Palm Beach, and St. Petersburg, among others, has prompted gasp-inducing responses as potential owners examine the boat’s innovative elegance and attention to detail. “It’s been the hit of the shows,” Gray says, if only because of the way it defies categorization. It’s not a pontoon boat. It’s not a cruiser, but it is definitely cool. “It is intentionally undefined,” Gray says. “You define what it is. It can be a great party boat; it can be a great boat to bring your family out in.” Price is relative, according to Gray.


An Army of Robots Floe snares some impressive deals on technology The team at Floe International seems to have a keen eye for a bargain. Last fall, for example, COO Tom Anderson heard from a highly-motivated supplier who was looking to sell 14 Fanuc 200ia industrial-grade robots that came from a decommissioned Ford F-150 fuel tank facility in Detroit. Anderson said it finally came down to asking, “Well, I really don’t want all the robots but, what would you do if we took all of them?” It just worked out better, he said, rather than having to peddle them for the next six months. “Kind of a hard deal to pass up for the money,” he says. “We didn’t want to spend the money at the time or sit on 14 robots for any period of time. But you make hay when the sun shines, right?” The plant is currently running three robots, with plans to deploy four more by the end of the second quarter. Will they use all of them? “I have very ambitious plans for them. We’ll see where we’re at in a year,” Anderson said. Despite the fact that Floe International is located in a sparsely populated area, where recruiting employees can be at a premium, Anderson says the company is not looking to replace people with its robot army, but “add to our effectiveness. We’re taking away jobs people don’t really care to do.” One of those jobs is to perform precise cuts in trimming plastic beds for the Floe trailers. A complex operation that intimidates some. “We’re taking it slow and methodically so that we learn and do it right, and find the right places to actually deploy the robots.” Wayne Floe made another audacious acquisition in the nadir of the 2009 recession when he came across a large thermo former—actually, the largest thermos former in the world. He realized the thermo former would be more efficient to manufacture the plastic beds for his popular CargoMax trailer. He previously subcontracted that construction with a plant in Brainerd. The new plant not only enabled him to save the cost of jobbing it out, but the size of his new acquisition enabled him to build a 13-foot bed.

Boat show attendees will see that the large staterooms in comparably-priced boats mean that boaters have no access to the front of the boat. Plus, she adds, “In back, they’ve got seating for four people.” “We’ve had 22 people on the boat, and it planes in seconds with the full load,” she says. It’s a boat that doesn’t exist in the marketplace. “It’s fun to be at the boat show and have people come in and look at it and go, ‘Oh my gosh, this is the coolest boat I’ve ever seen.’” A proven track record and strong instincts aside, Floe International will

It’s not a pontoon boat. It’s not a cruiser, but it is definitely cool. “It is intentionally undefined,” says CMO Gray. also have to combat the fact that it is a start-up boat company selling a boat with a hefty price tag. Early adopters will have to make a bet on how well the Afina will sustain its ongoing value without the benefit of sales history. Gray says Floe will emphasize the company’s reputation as a premier manufacturer of docks, boat lifts, and trailers, with a roster of loyal dealers. The dealers are “absolutely” on board, Gray says. “They want to sell our stuff and I think that the customers in their area will love it because they know Floe makes top-of-the-line docks and boat lifts. They’re going to trust our brand inherently. Our boats will be just as good as that.” Despite an emphasis on warm weather climates, Floe hopes to capture a profitable piece of the Minnesota market, especially the St. Croix-Mississippi area, Gull Lake and the Whitefish Chain. “This boat is made for Minnetonka,” he says. In the end, Floe is more than pleased with his product. “There’s a certain sense of pride and accomplishment just getting the first one done and seeing something go from an idea to actually driving on the water. That was pretty damn cool. I don’t know if any of us think that it’s really cool yet, until we start selling a bunch of them. At the end of the day, we’re business people.” SPRING 2018 ENTERPRISE MINNESOTA /


A Conversation


As the skills gap continues to hinder an otherwise thriving economy for Minnesota’s manufacturers, Enterprise Minnesota convened Initiative Foundation President Matt Varilek and Pine Tech President Joe Mulford to discuss the future of manufacturing and economic development in Greater Minnesota. What they do, alone and together, could signal how well Minnesota’s economic development will continue to be sustained by public/ private partnerships.



Mulford: You are in your 13th month at the Initiative Foundation, how would you describe the biggest economic development challenges? Varilek: According to survey data and all sorts of anecdotal conversations, the challenge of workforce comes up frequently. We’re fortunate to be in a time when the economy has been strong over quite a long number of months and years; unemployment is low, which also means that the number of people available to fill important jobs in manufacturing is limited. When you get to this low level of unemployment, employers and organizations like yours and mine need to get creative about how we can fill gaps. We can match skills amongst workers to those that are required by employers. We can help populations get access to the resources they need to become successful employees. We can encourage young people to realize there are great opportunities close to home, that they might not have considered if they haven’t had an internship or even a field trip to a local manufacturer. So, we try to help by supporting a number of programs that lead to those outcomes. Mulford: We always tell employers that there’s no silver bullet to the skills gap; if there was an easy solution somebody would have figured it out. We need a multipronged approach. We need to put together partnerships that consider apprenticeship programs, college programs, youth-based programs, and on-the-job training. I believe that if manufacturers knew that the right skillsets are available, we would have some pretty impressive economic development opportunities out there. We can’t have people on the sidelines; we need everybody in the game, involved and working together rather than replicating or duplicating programs that are already out there. Varilek: As a foundation, we try to make an impact on these issues in a number of ways. The most obvious way is by providing grants, and so we do that for things like robotics programs, career exploration and through a number of other vehicles, as well. Partnership is the name of the game around here, and whatever creative way we can find to assist, we’ll give it a shot. Mulford: Workforce issues get complicated when you consider factors like

affordable housing and transportation. We talk about a web-based economy, but do people have broadband? Do they have a place to live? Is it affordable? I’ve talked to local school districts that are having a hard time getting teachers to relocate because there is no place for them to live. It’s not just entry level, it’s not just manufacturing, it’s really across the spectrum. It’s complicated. It requires a diverse conversation. Varilek: Consequently, I think you need partners who can be nimble and adaptive to challenges as they evolve. And you need to listen to the feedback from other people who need to be involved. For example, we sometimes hear about young people who may not have a lot of resources in their lives. In addition to help with tuition, they might also need

is to serve as a convener, to connect dots across the region in particular when we are talking about manufacturing, the skills gap and how future employees need to have the skills that employers want. Joe, how do you go about interacting with private sector employers to know what your institution needs to be offering in terms of those skills? Mulford: I think that’s one of the areas that we do very well. We’re required in our core policies to meet with industry advisory committees for all of our technical program areas once a year. Do they represent every section of every industry? Probably not. But I think they give us an overall snapshot of what’s happening in their industries, which helps us set direction for our programs. Whether it’s machine tooling or welding or nursing, these

Says Mulford: “I’m really passionate about trying to increase the percentage of high school students who have a career path in mind when they graduate.” Varilek agrees: “And just like any of us, those young people don’t know what they don’t know. Maybe they haven’t been exposed to the range of potential employment and career opportunities that may exist in their town. So, that’s why we like to support creative ways of exposing them to different job opportunities.”

help with a gas card. Or with buying text books. So one of the things that we do here at the foundation is that we host a couple of manufacturing funds. These funds assist students with those kinds of additional needs that might otherwise be a barrier to them going on to get training, getting into a great job and meeting the needs of an employer. Another thing we do at the foundation

groups provide part of the vision for our programs. They might tell us that we need to make changes in our curriculum, or that we need to adapt to changes in technology. They are truth tellers to those of us in higher ed. They tell us when things aren’t going well; they let us know when we’re on track and when our graduates are meeting their needs. They’re also great resources: they hire graduates, they donate SPRING 2018 ENTERPRISE MINNESOTA /


Mulford Joe Mulford brought deep experience in the Minnesota State College and University system when he was named president of Pine Technical and Community College in July of 2015. Previously he has served as the system’s director for education and industry partnerships; dean of emergency services, manufacturing, and customized training at Hennepin Technical College; dean of institutional services, customized training, and emergency services at Anoka Technical College; and coordinator of customized training for building and industrial trades at Century College. He also served as chief academic officer at Globe College. He holds an associate degree from Moorhead State University (now Minnesota State University Moorhead), a bachelor’s degree from St. Cloud State University, and a master’s degree from Metropolitan State University. He is completing a doctorate at the University of Nebraska. Pine Technical and Community College was established in 1965. Today it serves a student population of more than 1,400 students. Pine Technical and Community College is part of the Minnesota State College and University system, which consists of 24 two-year community, technical, and comprehensive colleges and seven state universities, serving a total of more than 410,000 students. It is the fifth-largest higher education system of its kind in the United States.

equipment, they sit on our foundation boards, they raise money for scholarships, and they provide their intellectual capacity and their engineering abilities to help us fix a problem on pieces of equipment. We’re fortunate, our employers are so generous with their time and expertise. Varilek: Agreed—our board also has strong representation from the manufac-

“I think you need partners who can be nimble and adaptive to challenges as they evolve. And you need to listen to the feedback from other people who need to be involved.” —Matt Varilek turing sector, which I think helps us to make sure we’re being responsive to their needs. Joe, what’s your diagnosis of the condition of Minnesota’s state universities and colleges at a high level and what do you think can be done to address some of the challenges there? Mulford: Higher Education is historically inverse to the economy and now we have challenges with our enrollment, which puts pressure on our operational funding. We receive money from tuition and from the Minnesota Legislature, but over the last 10 or 15 years, we’ve become 24


more reliant on tuition dollars. We use those funds to maintain buildings, to buy new equipment, to hire support staff, those kinds of things. So there’s a lot of pressure on campuses across the system to solve our enrollment issue. We’re very proud to be open-access institutions. So if a student has a high school diploma or GED and can show an ability to benefit from that program, we work with them—whether they’re under-prepared, or whether they’ve got a strong academic background. We don’t require people to have a 25 ACT, or have a lot of financial means, which creates challenges and the ability to support students that come with additional expenses. Pine Technical and Community College has been fortunate and we continue to grow even in this strengthening economy which puts us in a better position than a lot of colleges. We want to be state-of-theindustry which is expensive and requires a lot of investments. I do think that we are laser focused on our mission, which is helping people get to where they’re going, helping people get those certificates, diplomas and degrees, and getting the right skills. Varilek: Part of what we try to communicate is that post-secondary skills are important, but not necessarily a four-year degree; that you can get education at an institution like yours and soon after land yourself in a very high paying job that’s pretty close to home. Because we’re a regional foundation, we certainly care about the health of the broader economy, but we are specifically focused on the eco-

nomic condition of our 14 counties, and we love to lift up the fact that there are great employment opportunities very close to home, that you don’t have to leave the region to find. And part of encouraging young people to find fortunes close to home is also letting them know that those opportunities are there for them after they finish their degree. We try to help with that in a number of ways by supporting the manufacturers who are creating those jobs. We do that with our gap lending program, as well as our technical assistance and number of other things. Mulford: How do businesses or communities connect with your organization? Varilek: We hope that they will reach out. We try to be out and about as well. We don’t want to spend too much time in our offices; we want to be on the road with our manufacturers and other employers, learning what positions are out there and hopefully getting a referral if there is someone who could benefit through a partnership with us. Lending to small businesses, and to manufacturers in particular, is important to us. A lot of those referrals come to us through our financial partners at banks and credit unions across the region because we don’t typically provide the primary funding in any given deal. Let’s say your manufacturing company wants to expand. We are generally not going to be your main lender on that; rather we’ll work with the primary banker who is perhaps providing 75 percent of the deal

and maybe you as the owner bring 10 percent to the table. But there is still a gap in there of 15 percent. That’s the piece that we can provide, and by doing so we can help to make a deal happen that might not otherwise occur. Mulford: I have always been very impressed that your staff are aware of what’s happening regionally, but also locally. Every county and every community is a little different. Varilek: We do try to be connected and accessible to the community. You and I talked about the fact that as young leaders, we have been fortunate to get a lot of good advice as we transitioned into our upper leadership roles. One key piece of advice was, “don’t spend too much time in your office. Be out in the community.” And then beyond that we also have a staff that comes from across our region. We are based here in Little Falls, which is pretty central to the 14-county region that we serve and yet we don’t all live here. We are scattered across those fourteen counties and come here to do our work every day. But that means that we are all friends and neighbors within a variety of communities around our counties. Mulford: We work closely with around 14 close high schools, each of which has its own culture, challenges and opportunities. Our average student age is 28, so it’s not just high school age kids that are coming to us—and that’s where our organizations overlap and why we are talking partnerships. As newer leaders in our organizations in central Minnesota. We both have a lot of ground to cover, but we recognize that a lot of solutions are going to be very micro as they apply to community x, y or z. Varilek: There is a lot of ground for us to collaborate on. One thing we do here at the foundation is host scholarship funds that help make it possible for young people to afford higher ed, whatever that looks like. Some of those young people end up going to your institution, or others like it, around the region. We also host funds that help to provide grant funding for things like the CEO program—creating entrepreneurial opportunities—in Staples, Motley

Visit us today for all your business banking needs. Craig Veurink Region Business Banking Manager 952.927.1277

Credit Products offered by U.S. Bank National Association. Deposit Products offered by U.S. Bank National Association. Member FDIC. 171245c 12/16

CUT DOWN COSTS WITH MOTOR REBATES. Electric motors are the workhorses of any manufacturing facility. But if they’re not energy efficient, they may be driving up your operating costs. Make the upgrade to energy-saving permanent magnet alternating current (PMAC) motors today and earn rebates from $30–$13,500 per motor* , which will not only lower your up-front costs but also increase the return on your investment. For more information, contact an energy efficiency specialist at 855.839.8862 or visit

*Depending on horsepower.

4.7x4.75_MN-MotorsEntpriseMag_P01.indd 1

© 2017 Xcel Energy Inc.

3/31/17 8:56 AM



Varilek Matt Varilek is in his 13th month as president and CEO of the Initiative Foundation, based in Little Falls. He has previously served as chief operating officer of the U.S. Small Business Administration in Washington, D.C. Prior to that he was the SBA’s regional administrator for the most rural of the agency’s regions, guiding delivery of small business programs and services in South Dakota, North Dakota, Wyoming, Utah, Colorado and Montana. Originally from Yankton, S.D., Varilek ran for Congress from South Dakota, and has experience as an economic development director and speechwriter for two U.S. Senators. Varilek has a master’s degree in environment and development from the University of Cambridge, England, where he was funded by the Gates Cambridge Scholarship. He also has a master’s degree in economic development from the University of Glasgow in Scotland, where he was funded by the Rotary Ambassadorial Scholarship. He holds a bachelor’s degree in philosophy from Carleton College in Northfield. Varilek’s Initiative Foundation is one of six regional foundations working to strengthen the communities and economies of Greater Minnesota. Established by The McKnight Foundation in 1986, each foundation is independent and serves its geographic region with grants, business loans, programs, and donor services, as well as collaborates on several statewide initiatives.

and Wadena—and now I think in Wright County as well—which expose young people to what’s involved in running a business, often a manufacturing business. Schools that want to adapt to the needs of the local communities are sometimes limited by their bricks and mortar locations. Is that a challenge?

“We’re definitely going to change the way we deliver higher ed, but it is just as important that what we deliver is going to evolve.” —Joe Mulford Mulford: Like a lot of organizations our physical footprint defines some of our outcomes. We’ve been in roughly the same building since we were founded 52 years ago. You just don’t have big enough spaces, technologies and methodologies have changed or you don’t have the types of student amenities that students might expect nowadays. The challenges are even greater for a school that historically has been primarily a technical college over its history. A lot of higher ed organizations are less reliant on bricks and mortar, so the buildings are utilized differently than they were even ten years ago and we need to adapt quickly to best serve the regions we are located in. There are long-term concerns about 26


how higher ed is going to be delivered. Will it be delivered out of buildings or on the internet? You can do a lot online, but there will always be a need for that applied learning experience, for somebody to come in and actually run the machine, not just watch videos or do some sort of virtual programming. There is a challenge in our region because we continue to have students with broadband issues. Do students have a place that’s safe and conducive to learning? Do they have a place that they can even get high-speed internet, or can they even afford it? Those are the realities of our students. We’ve done some things locally where we now have offices in Milaca, Cambridge, North Branch, and just opened an access point in Mora, where we’re working to give students a place to go for support.

school students who have a career path in mind when they graduate. It could be military, it could be apprenticeship, it could be higher ed, private school, public school. Two weeks from graduation, there are too many seniors who don’t know what they are going to do. I think that kids are just not as engaged in longer term planning. I tell them that I’d rather you come and do this right now and get your Practical Nursing license or welding certificate, get that out of the way and then have ten years of experience versus doing some of those other jobs and then realizing you have to go back to school when you are 30.

Varilek: You talked about some of the challenges associated with investing adequately in educational infrastructure, bricks and mortar, etc. The Initiative Foundation exists to strengthen the communities of central Minnesota, so we think pretty broadly about what makes a healthy community. Our educational institutions, from early childhood all the way through to post-secondary really are anchor institutions in towns across our region. So, if you look at the return on investment from what has been spent, keeping those institutions vibrant, I feel confident in saying that we’ve received a lot back.

Varilek: And just like any of us, those young people don’t know what they don’t know. Maybe they haven’t been exposed to the range of potential employment and career opportunities that may exist in their town. So, that’s why we like to support creative ways of exposing them to different job opportunities. Young people might think of manufacturing in a certain way, that maybe it’s only for people who have lots of physical strength who are willing to work in maybe a hot or dirty environment. But manufacturing is very diverse these days. In so many cases, it’s high tech. It’s precision. It’s a pristine environment. So there’s a range of possibilities and we like to help support ways of exposing people to those so they can find the one that sparks their interest and leads them to a successful career.

Mulford: I’m really passionate about trying to increase the percentage of high

Mulford: To conclude, Matt, where do you think our worlds are going to evolve

and perhaps intersect in maybe the next five or ten years? Varilek: Because the economy has been pretty strong, our emphasis is largely on workforce issues. Looking into the future, that economic condition is guaranteed to change in some fashion or other. That’s why our strategic plans emphasize entrepreneurship and startups, as well as existing business. Future economic conditions might involve less of a workforce challenge and more about job creation. We want to be prepared to assist in that way, too. That’s why we offer this range of programs and services, like lending, like technical assistance, like grants to support creative career exploration programs, etc. We will adapt those conditions as they change. That’s why it’s important to work with partners like you, to get input and make sure we are rowing in the same direction, continuing to grow the prosperity of central Minnesota. Joe, what about you? Mulford: I envision Pine Technical and Community College to continue to grow as an institution and to provide more options in programming that supports the region. We’re going to start new programming in automation and robotics, welding, commercial vehicle driver and expand web-based courses that transfer to baccalaureate degrees.The broadband issue is going to get better and eventually be able to support some new opportunities, some new entrepreneurialism. So starting new programs, or expanding existing ones we’ll be able to support more communities—industry sectors. I think that’s where our worlds intersect, Matt. We can’t do that alone, as an out-state, two-year, primarily technical college. It’s going to take partnerships. There just won’t be enough extra money for us to do it alone. Success will come from working with people like you to get business and community leaders together. You’re going to run into people I don’t know, but should—and vice versa. That’s going to help us intersect. We’re definitely going to change the way we deliver higher ed, but it is just as important that what we deliver is going to evolve.

Join us for the

Southeastern Minnesota Manufacturers Gathering to network and highlight the great careers available in the region. Exclusive to manufacturers! Date: Wednesday, June 27, 2018 Time: 7:00 a.m. – 11:30 a.m. Place: International Event Center, Rochester Register at:





An increasing number of manufacturers understand that success develops from balancing continuous improvement, strategy, leadership and a commitment to quality management




Several years ago, Enterprise Minnesota took on a project called “Pathways to Business Growth” in which 13 client companies would attempt to double their earnings over two years by deploying a comprehensive array of consulting services. The project was underwritten by a grant from the Manufacturing Extension Partnership (MEP). John Connelly, vice president of consulting at Enterprise Minnesota, today confesses that such an aggressive objective strained the comfort zone of his consultant team. “It was an aggressive goal,” he says, admitting that, “I liked that it put us on edge” as the team analyzed the possibilities of integrating its diverse offerings. The Pathways project concluded with satisfying results, Connelly says. “Our clients were universally happy with the project. Many of them doubled their earnings and every one would tell you that they grew at a much faster pace than they would have without leveraging Enterprise Minnesota’s assets.” The project also provided Enterprise Minnesota with battle-tested insights about the synergistic power of simultaneously leveraging continuous improvement, strategy development, quality management, and leadership training, the service bundles that Enterprise Minnesota today calls its Four Puzzle Pieces. “It required us to get our heads around how we help clients evolve, and develop, and influence the leadership teams that are driving the rest of their organizations,” Connelly says. Enterprise Minnesota had previously developed an array of programs related to continuous improvement, quality management, strategy and leadership—its puzzle pieces—“but we never saw them as separate pieces that were meant to stand on their own. We recognized that each of these represented an engine for growth.” Manufacturing organizations are driven by multiple engines, Connelly explains. “All those engines have to operate in balance. You start to notice that if one engine is working really hard, it can be limited by the other engines. That’s why we have four engines that have to operate in balance. We prefer to see them as independent puzzle pieces valuable on their own that provide the clearest, strongest picture when they are assembled together.”


Connelly acknowledges that Enterprise Minnesota’s expertise is rooted in lean and continuous improvement, just as it is in most manufacturing enterprises. “It was our

A Holistic Look Donnelly’s Kirscht discusses how a plan points out the high points, valleys, and “fruited plains” of a company’s competitive landscape Ron Kirscht describes business planning as “an opportunity for companies to assess how they can get the farthest, the fastest, with the least expenditure of time, talent, and treasure.” Kirscht is widely admired by Minnesota’s small and medium-sized manufacturers as one of their shrewdest authorities in the art and science of strategic planning. From his purview as president of Donnelly Custom Manufacturing, he views a strategic plan as a “holistic look” at a company that helps its executives assess the high points, valleys, and “fruited plains” of its competitive landscape. Donnelly is an Alexandria-based company that focuses on short-run, close-tolerance molding for industrial products. Its 225 employees annually manage 2,800 active molds, over 600 different materials and 15,000 mold changeovers. Under Kirscht, Donnelly’s leadership team embraces planning as a companywide exercise. Its most recent plan, facilitated by Enterprise Minnesota, analyzed 21 business categories through a process that he says cultivated a “healthy tension” throughout the company, as managers evaluated the company’s strengths, weaknesses and needs. A major objective of planning, he says, is to identify and eliminate constraints in an organization that impede flow. “Speed is what we need,” he says and (constraints) are the enemy of speed. His planning philosophy emphasizes how a company differentiates its products and services from its competition, something many companies ignore at their peril. Differentiation, he says, represents an essential step toward producing a viable value proposition. Strategic planning, he adds, should inherently factor in the wants and needs of ownership, employees, customers and suppliers. And in the end, no plan will succeed if it isn’t implemented. “It has to be understood, it has to be agreed upon, it has to embody specific priorities, and it has to be acted upon,” he says.

anchoring puzzle piece,” he says, an early response to companies that were looking for process efficiencies to help them simultaneously improve their margins while also satisfying customer expectations. Continuous improvement is about best practices, Connelly says. Manufacturers have been employing lean manufacturing principles for years, but experts say the challenge is to determine how well the organization is committed to building a culture of continuous improvement. Are employees empowered to identify and eliminate waste at all levels? Those who

do, experts say, can expect to reduce lead times and inventory, increase employee skills, develop stronger leaders, lower production costs, decrease rework, limit scrap, and improve workplace safety.


Discerning manufacturing executives know that efficient growth evolves from strategic planning. They assess and understand the current overall state of their business and work to develop a well-rounded perspective on their management systems, customers, employee skills, marketplace SPRING 2018 ENTERPRISE MINNESOTA /



Taking the Reins Delmar’s Delk says with ISO his company no longer manages him Kevin Delk says his company’s ISO certification in August 2013 enabled him to truly “take the reins” of his company. “We’re managing the company instead of letting the company manage us,” he says. “We used to fly by the seat of our pants. Now there is actually paperwork.” Delk is the founder and owner of Delmar Company, a Lakeville-based manufacturer that specializes in CNC plastic machining and custom plastic fabrication. The company received its ISO certification in August 2013. “Taking baby steps has allowed us to improve our quality, improve our on-time performance, and look at scrap percentages,” he says. It has also energized what he calls the company’s “people power.” ISO has enabled him to create an organizational chart in which a lot of people are held accountable. “Instead of just me being at the top, there are three people at the top. I can be gone, like going to an Enterprise Minnesota peer group meet-

ing. The company doesn’t have to have me there that day.” The ISO discipline also gives Delk better focus about how to grow his business. He’s looking to add to his building’s footprint in a way that will enable up to 50 percent growth in the next three to five years. Part of it, he admits, depends on people. “It all comes down to whether we are lucky enough to improve our people strength,” he says. “We have salesmen who are farmers and those who are hunters. We need a few more hunters.”


The ‘Lean’ Roadmap PN’s Peter Nora acknowledges the challenge of CI in a small company Peter Nora admits that bringing a culture of continuous improvement to a smaller company might be more difficult than with manufacturers that have a larger economy of scale, but that doesn’t diminish its importance. Nora founded Scandia-based PN Products in 1984, a company that specializes in in-line and cut sheet thermoforming, and working with most plastic materials, including trimming, packaging, and assembly for some products. Instilling a lean culture into his 20-person company can be a challenge, he admits. “Everyone wears many hats,” he says. “Our roles aren’t as



well defined. Sometimes we double up on jobs and sometimes we think somebody else is going to do it—and it doesn’t get done.” Factors like time-consuming setup times inspired Nora for years to try to lean up his operation, “but we always reverted back to our old ways,” he says. Enterprise Minnesota gave him a roadmap that helps quite a bit. “We are still working hard at it,” he says, with monthly meetings and spreadsheet analysis. “It seems to be working. “We’re always on a tight budget. There are always lofty ideas, but we can’t afford to do them right now. We’re still sporadic. We get busy for a while; we’re hoping to even it out so that we’re busy all the time!”

conditions, and competitive advantage. And they engage their management team to plot a realistic strategic future. “In its simplest form, strategy is about looking forward to where companies want the organizations to go,” Connelly says, adding that understanding customers is at the center of strategic thinking. Enterprise Minnesota emphasizes seven steps in revenue growth: identifying and understanding customers, establishing objectives, developing a message, connecting with customers, measuring impact, learning from experience, and sustaining progress. Another aspect is accounting for resources, he adds, which includes financial analysis, and assessing the value of the business. “We want companies to understand that the biggest measure of a successful organization is its value,” Connelly says.


Connelly says the biggest lever in helping a company move forward is its leadership team. “And the single biggest obstacle to moving forward is its leadership team,” he says. Savvy manufacturers use leadership programs to respond to the current and future challenges of the skills gap. They proactively attract, engage, and retain their workforces by identifying the employees they need to step up and become their next supervisors or leaders. Their programs empower employees representing multiple generations to solve problems and make decisions. Leadership programs teach employees to manage conflict and assess performance. They also deal with communication, accountability and change. This is all about changing for the better,” Connelly says, “not just understanding that it’s hard, not just understanding the pieces, but being able to step in and say, “‘I can lead these change elements for the betterment of the organization.’”


A dramatic number of manufacturers that incorporate quality management systems (Enterprise Minnesota uses the ISO system) into their company cultures experience improved business performance. They find that their ISO certification accomplishes more than merely improve their credibility with OEMs worldwide (itself a worthwhile outcome). Their companies achieve greater market reach and market share; their employees are more engaged and ISO enhances company-wide continuous improvement initiatives. Most manufacturers realize that ISO


Consistency and Buy-In Aagard’s Dave Lamb: Know who you are and what you need The key to managing the “puzzle piece menu” of operating a small or medium sized manufacturing company, according to Dave Lamb, is “knowing who you are and knowing what you need.” Lamb is the manufacturing manager at Alexandria-based Aagard, a company that makes cartoners, sleevers, case packers, retort unloading and loading, tray packers, and palletizers/unitizers. Founded in 1997, the $37 million company today employs more than 180. Lamb’s 25 years’ experience in manufacturing have taught him that continuous improvement involves “understanding that there are ways to train and empower folks to look for and then take action to cut waste out of the operation.” Training Within Industry (TWI) uses a hands-on approach to teach essential skills for supervisors, team leaders, and anyone who directs the work of others. TWI trains leaders using four components: job relations, job instruction, job methods, and job safety. “TWI is just a training side of lean,” he says. “People got a lot out of it and were able to implement the practices,” Lamb recalled. “The goal for Aagard is to train our workforce in leadership, and [TWI] is a very practical, common-sense approach.” The most important element in tying together the various tools of managing a manufacturing plant is philosophy of leadership, he says, “being consistent and getting buy-in throughout your organization.” Part of Aagard’s success, he adds, is its emphasis on servant leadership. “It is something we are very passionate about,” he says. “It goes hand in hand with the empowerment aspect of lean manufacturing.”

9001:2015 is significantly different than 9001:2008. “ISO 9001:2015 is much more about overall leadership, overall management, overall ownership, and a focus on avoiding, controlling, and reducing risk,” Connelly says. ISO structures a system that helps manufacturers think about the steps to ensure the satisfaction of clients, he adds. ISO empowers people to integrate strategy, Connelly says. “In ISO language, what are the key processes that we will count on to be able to carry out that strategy? And how well do we manage those processes?”


Connelly acknowledges that limited resources constrain a company from easily keeping its “engines” operating in harmony. “No company has enough resources to work

on all of the puzzle pieces all at the same time,” he says. “They are forced to prioritize.” Which is why a frequent challenge for Enterprise Minnesota’s consultant team is to continually evaluate which of the puzzle pieces is a company’s most limiting at the moment and keep it from cutting back the others, Connelly says. It’s a constant balancing act, Connelly says. “Circumstances change, and one of the other pieces will become the new limiter, and you switch to that,” he says. “The ongoing challenge for us internally is to continually think about the full, broad picture of a client. We don’t want to nestle into the place we’re most comfortable. We need to stay broad about all they need and be able to point out the piece that will make the biggest difference.” SPRING 2018 ENTERPRISE MINNESOTA /


Final Word

Lean 2.0 Samuel Gould takes lean from process to people


amuel Gould, one of our business growth experts at Enterprise Minnesota, has the gift of explaining things in ways that are relevant, interesting and usually dang funny. He recently began a conversation about Lean 2.0 with an allusion to Egyptian pottery. If I may paraphrase: The potter takes the clay and makes the vase, puts it in an oven, and fires it. It comes out cracked, maybe there were problems with raw materials, or everything didn’t heat evenly. Some artisans might look at the crack, put a little beeswax in it and cover it with a beautiful painted mural. They take it to a shop where it fetches a premium price. The happy consumer takes it home and puts it on the mantle; nobody’s the wiser. What happens when she takes it down, fills it with hot

The next iteration of lean is about people, and focuses on concepts like simplicity, flow, visibility, partnerships, integrity, and true value. water, and it starts to leak? So here’s the question: When did the crack occur? To Sam, the whole chain has plausible deniability. When the consumer tries to return it, the shopkeeper asks, “How long have you had it? You’re just returning it now?” The shopkeeper takes it to the artist, who says, “What do you mean? You probably set it down too hard on a shelf in your own shop. There’s plausible deniability, but there’s no integrity, is there? Integrity once lost is hard to recover, so our brand has to be filled to the brim with integrity, right? Integrity is a concept he associates with Lean 2.0. Lean 1.0, he says focuses on process: identifying and eliminating waste, improving the manufacturing process, 32


Lynn Shelton is vice president of marketing at Enterprise Minnesota.

meeting customer demands. Five or ten years ago it emphasized inventory reduction, according to Sam, because inventory was a big impediment. But most companies have addressed that issue. Manufacturers embrace lean concepts to find not only better profitability but better customer relations. They integrate the concept of lean and reinforce it with Value Stream Mapping, 5S, and Kaizen events, but remember that the process never ends. Sam is currently using a series of workshops to introduce manufacturers to the next iteration of lean. It is about people, and focuses on concepts like simplicity, flow, visibility, partnerships, integrity, and

true value. He acknowledges that this is a seachange in focus, but worth the attention. I highly recommend his presentation. He’s also writing an article on Lean 2.0 for the next edition of Enterprise Minnesota magazine. Sam has one master’s degree in electrical engineering from the University of Tennessee, Knoxville, and another in management technology from the University of Minnesota’s Carlson School of Management. Prior to joining Enterprise Minnesota, Sam served as a process development engineer for Union Carbide, as director of engineering and manufacturing at Mallinckrodt, Inc., as a senior technical manager for Lockheed Martin, as a plant manager at Tyco Healthcare (now Covidien), and as a senior engineering manager for Nellcor Puritan Bennett. Sam also spent over ten years at the Oak Ridge National Laboratory in Oak Ridge, TN utilizing lean development and six sigma practices. Sam lives in Bemidji, where he helped establish the engineering programs at Bemidji State University and he has served as an adjunct professor. He is involved with the Ingenuity Frontier, an organization dedicated to developing and promoting Northwest Minnesota’s engineering and manufacturing strength. It’s a safe bet that you’ll love Sam. *



The State of Manufacturing.® This spring we’ll produce the 10th anniversary of our State of Manufacturing® survey of Minnesota’s manufacturing executives. We’re proud to say that this has become a go-to event for manufacturers, community leaders, educators and policymakers. If our pollster calls you, please take his call! We’re planning 15 focus groups this year between March 12-29. Watch for more details.

You looked into energy-saving programs and rebates from Minnesota Energy Resources. That simple move led to high-efficiency equipment upgrades, which saved the company energy and money. High-five for you.


FIND THE RIGHT SUPPLIERS RIGHT HERE. The Made in Minnesota Directory of manufacturers is a FREE online directory of products and supplies manufactured right here in Minnesota. Find hundreds of Minnesota manufacturers of everything from food products to breweries, bakeries, shoes and jewelry to fabricated metals components, machinery, and computers and electronics.

Search Our Database.

Search by product, company name, county, industry, and quality certification.

Company Listings Include: Names and addresses of participating companies Corporate contact information and number of employees Products they make – and products they are interested in buying from Minnesota suppliers Information on products and suppliers to key Minnesota industries

Our Manufacturers Supply Chain Database makes it easy for Minnesota companies to find – and be found by – home-state suppliers that are a perfect fit.

It’s easy to use. Register – or search – now! For more information on the Made in Minnesota Directory, contact Magda Olson at 651-259-7183, email:

Enterprise Minnesota Magazine - Spring 2018  

As the skills gap continues to hinder an otherwise thriving economy for Minnesota’s manufacturers, Enterprise Minnesota convened Initiative...

Enterprise Minnesota Magazine - Spring 2018  

As the skills gap continues to hinder an otherwise thriving economy for Minnesota’s manufacturers, Enterprise Minnesota convened Initiative...