College officials discuss declining enrollment, shrinking budgets and COVID-19 on campus
Helping Manufacturing Enterprises Grow Profitably FALL 2020
InLine Motion reinvents itself with its own brand of PPE face shields
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Enterprise Minnesota’s events offer outstanding professional expertise Enterprise Minnesota’s events offer outstanding and practical business solutions to improve competitiveness and growth opportunities for Minnesota’s manufacturers related industries. professional expertise andand practical business solutions
to improve competitiveness and growth opportunities DATE CITY for Minnesota’sTOPIC manufacturers and related industries. 7/10/2018
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DATE TOPIC Leadership/Talent 9/27/2018 Brooklyn Park 10/9/2018 Continuous Improvement Wyoming Sept. 17 How to Sustain Daily Dialogue 10/25/2018 Continuous Improvement Shoreview Sept. 23 Elements of Managing a High 11/8/2018 Continuous Improvement Eagan 11/13/2018 Performing Strategy Anoka Business 12/6/2018 Leadership/Talent Burnsville Oct. 6 Strategically Navigating an UncertainSt. Future 1/8/2019 Continuous Improvement Cloud 1/24/2019 Leadership/Talent Winona Oct. 22 Investing in Your People to Create 2/7/2019 Continuous Improvement Willmar Leaders at All Levels 2/19/2019 The Value of Peer Councils Shoreview Oct. 27 How to Sustain Dialogue 3/7/2019 ContinuousDaily Improvement Mankato 3/27/2019 Strategy Branch Nov. 11 Strategically Navigating an UncertainNorth Future 4/9/2019 Leadership/Talent Apple Valley Nov. 19 Are Your Leaders on Board? 4/25/2019 Continuous Improvement Eden Prairie 5/22/2019 Continuous Improvement Bemidji Dec. 15 Understanding Business Management: ISO 6/27/2019 Leadership/Talent Anoka Jan. 28 Executive Manufacturing Forum
STATEWIDE ENTERPRISE MINNESOTA EVENTS 5/14/2019
2019 State of Manufacturing® Statewide Release
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InLine Motion reinvents itself with its own brand of PPE face shields.
Assessing the Situation Now more than ever an assessment could be the tool you need to inject some adrenaline into your business.
The Planning Paradox
Meeting of the Minds
Why the shrewdest long-term strategy in the COVID-19 economy might encompass only the next 90 days.
College officials discuss declining enrollment, shrinking budgets and COVID-19 on campus.
2 Tech Savvy There’s reason for optimism from state’s tech schools.
North Central Door leverages dedication to build a regional reputation.
A ‘Good Problem’ to Have Call Him Mr. Buttons
SOM Survey Redux
Loll Designs navigated a surge in demand even as production was shut down.
‘Never let a good crisis go to waste.’
Bestway Promotions has been a leader in the button industry for decades.
Visit the Enterprise Minnesota website for more details on what’s covered in the magazine at enterpriseminnesota.org.
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 enterpriseminnesota.org/subscribe. FALL 2020 ENTERPRISE MINNESOTA /
Helping Manufacturing Enterprises Grow Profitably
Publisher Lynn K. Shelton 9001:2015
There’s reason for optimism from state’s tech schools.
chool this year will be far different than any we’ve experienced before. Elementary and high schools are wrestling with hybrid teaching models. Universities are testing the waters of in-person teaching; some already have retreated to onlineonly classes. And at the technical colleges, they’re navigating an uncertain world where students can only learn the skills they need by being on campus, in person, their hands getting to know the technology they’ll soon be using on the job. A few weeks ago, Enterprise Minnesota staff sat down with four officials from technical colleges around the state. And while they did show concern about enrollment numbers and teaching scenarios, they also revealed a level of preparedness and gumption that has us feeling bullish about the state of technical education in Minnesota. Technical colleges, in some ways, are ahead of the curve in terms of teaching remotely. For example, instructors in Alexandria are using a tool called Owl to take virtual learning beyond the two-dimensional world of Zoom. And faculty, some of whom have been teaching in traditional modes for decades, are adapting to this new normal and educating themselves on new technologies. In some ways the coronavirus pandemic has been a blessing: It has pushed faculty, in some cases, beyond comfort zones, forcing them to adapt to new ways of learning in the virtual environment. The result, of course, is better-prepared students heading into the manufacturing community, where workforce issues remain. 2
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There are, obviously, reasons for concern. Enrollments are down everywhere, which was to be expected. With so much uncertainty, few would blame prospective students for postponing a college enrollment decision until things get less weird. State funding for the Minnesota State Colleges and Universities hasn’t been great, either. During the last session, MnSCU asked the Legislature for $246 million in new funding. The system only received $81 million. Parents, according to some of our roundtable participants, could do a much better job of giving technical education the consideration it deserves. As one college president put it, too many parents have the attitude that a technical education is great, “Just not for my kid.” Despite the above concerns, officials at technical colleges say they’re optimistic about the future. As the economy slowly returns to normal, manufacturers are doing the same. And as they work their way through the darkness, one crucial factor plays in their favor: Partnerships with manufacturers, our roundtable with college officials revealed, have never been stronger. So even though technical college enrollments are down and funding isn’t where we’d like it to be, we’re confident these institutions are nimble and creative enough to continue training the manufacturing workforce of the future. Bob Kill is president and CEO of Enterprise Minnesota.
Editorial Director Robb Murray Creative Director Scott Buchschacher Copy Editors Kathy Vos Catrin Wigfall Writers Sue Bruns Tom Mason Peter Passi Photographers Jillian Gandsey Jessie Marx Derek Montgomery
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A ‘Good Problem’ to Have Loll Designs navigated a surge in demand even as production was shut down.
oll Designs of Duluth faces what CEO and co-founder Greg Benson says might be called a “good problem,” but he acknowledges it’s still a “real problem.” The manufacturer of trendy weatherproof furniture has seen demand for its line surge even as the company was forced to temporarily shut down production. Loll has exclusive agreements to supply furniture made from recycled materials to national retail partners, including Room & Board and Design Within Reach. But a couple of years ago, it also began to offer other additional nonexclusive products for sale online directly to consumers — a model that provides larger profit margins. That online channel proved fortuitous when the pandemic hit. “All of a sudden, you have everyone at home, kind of doing two things: wanting to get outside and also shopping online. So, I think that’s exactly what happened,” Benson says, describing how demand for Loll’s product has blown up in recent months. “We’re so busy it’s ridiculous,” Benson continues, pointing out Loll has hired more than 15 people since the COVID-19 shutdown. The company now has a workforce of about 70 and continues to recruit new employees. Loll was in the midst of moving into a refurbished 55,000-square-foot warehouse/ production building in February when the COVID-19 pandemic struck, interrupting its business. “We weren’t even really done and settled in, and that’s when we had to close down for COVID,” Benson says. “So, we had a couple of setbacks this year. Moving the operation set back our production. And then COVID hit and shut
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Despite the pandemic, Loll Designs has added to its workforce and demands for its weather-proof furniture has exploded.
us down for about 30 days with no production at all.” But the move more than doubled the company’s warehouse/shop/manufacturing space, and Benson says it has also made it easier to space out employees at a safe distance from one another. Loll is allowing no plant visits these days and requires employees reporting for work to log in with a temperature test and wear masks on the production floor. Loll’s five CNC milling machines operate around the clock with three shifts of workers. And Benson says the company is adding a second production shift, with operations expanding to 16 hours per day. “We’re killing it right now. But our backlog is huge, and our lead times are long.” Customer wait times for Loll furniture are now running at about 15 weeks from date of order. But Benson hopes to shrink that as the company ramps up production. He also expresses optimism the business will be able to make up ground, matching last year’s sales of about $13 million. “We had no revenue at all for April because we were shut down. And then our shipping in February was impacted because we moved,” he says. “So to get back to ground zero for the year would be quite an accomplishment, and we’d be really happy with that.” Enterprise Minnesota conducted a “lean assessment” of Loll’s operations in the fall of last year to offer advice on how it might 4
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improve production efficiency. Enterprise Minnesota Business Developer Jim Schottmuller says the assessment provides a manufacturer with a scoring system that can be used to evaluate operations. “A lean assessment takes a holistic approach to look at an organization and
“We’re killing it right now. But our backlog is huge, our lead times are long.” – Greg Benson, Loll Designs CEO and co-founder identify opportunities — and maybe scoring them, based on the current state and a potential future state — if they implement certain types of lean activities,” says Schottmuller, explaining it can be used as a tool to measure progress. Loll appears to have tremendous growth potential, according to Schottmuller. “We are bound by confidentiality, so I can’t talk about anything specific. But my feeling is that Loll Designs can sell anything the company can make right now. And its constraint is just being able to meet demand. So it sure looks to me like Loll has no place to go but up.” Nevertheless, Benson takes a measured
view of the situation. “When people say it’s a good problem to have, it kind of is, because you’d rather have too much demand than not enough. But once the demand over time becomes something you can depend on and it’s a pattern, well, then you know you can build up to it.” Benson stresses the importance of not overreacting, however. “We’re doing all these different things to meet that demand. But there’s only so much you can do, and then we also don’t want to overbuild because we do have seasonality. So, what do we do with all that infrastructure and overhead when we are slower?” In future months, Benson says Loll hopes to work with Enterprise Minnesota to implement lean manufacturing and continuous improvement processes. The company already has adopted some of these concepts internally and through its work with the Natural Resources Research Institute, but Benson says he is eager to push harder. “I felt it was important that we go to another level with it.” “So, we’re doing this ourselves, but this is going to be better,” Benson adds. “This is going to get people more engaged at a higher level, more of a textbook level. And to bring someone in with experience to get us there is going to be really beneficial.” —Peter Passi
Four new professionals come on board at Enterprise Minnesota.
nterprise Minnesota recently added new faces to its sales, consulting and marketing teams. Penny Hanson and Ally Johnston join the consulting staff; Kurt Bear joins the business development staff; and Robb Murray becomes part of the marketing team as editorial director.
Edina native Penny Hanson’s entire career has been in marketing. For the last 10 years she has been a marketing director for national and international organizations as well as a small business owner. She says she is excited for the opportunity to help the state’s manufacturing industry with her passion for marketing.
“I hope to help our clients embrace everything marketing.” – Penny Hanson, Enterprise Minnesota Business Growth Consultant
“I hope to help our clients embrace everything marketing,” Hanson says. “I believe marketing is the silver bullet to distinguish you from your competitor to help you win, and win more sales.” Hanson is a lifelong resident of the southwest Twin Cities metropolitan area. She earned a bachelor’s degree in business administration from Minnesota State University, Mankato, and an MBA from Cardinal Stritch University in Milwaukee, Wisconsin.
Ally Johnston hails from Nisswa. Prior to joining Enterprise Minnesota, Johnston served as industrial engineer, quality systems manager and operations manager
“I am very passionate about helping and coaching others.”
Invest in the future with a dual-training program at your company. Learn more at www.dli.mn.gov/pipeline
– Ally Johnston, Enterprise Minnesota Operations Consultant
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for Genesis Attachments in Superior, Wisconsin. She started there as an intern and earned full-time status after that. “I was intrigued about starting a career as a consultant,” she says. “Some of my fondest memories of Genesis included bringing groups of people together to solve problems and make us a better company.” She hopes to continue that kind of collaborative work with Enterprise Minnesota. “I am very passionate about helping and coaching others,” she says. “I love the feeling of helping someone accomplish something new or difficult and seeing them learn and grow from it.” Johnston graduated from the University of Minnesota-Duluth and still lives in Duluth.
and Rolco Inc., of Kasota, among others. Bear says his goal is to help manufacturers become more profitable. When asked what he’s passionate about, Bear answers
“My goal is to make small manufacturers in southern Minnesota more successful.” – Kurt Bear, Enterprise Minnesota Business Development Consultant
Kurt Bear grew up in southwest Minneapolis. Prior to coming to Enterprise Minnesota, he worked for Corrugated Packaging in Albert Lea, Mid-City Steel (a business he owned before selling) and Skipper Liner industries (both in La Crosse, Wisconsin),
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simply, “Capitalism — creating long-term financial independence and wealth for those who want to work. Creating jobs for people, serving customers, solving their problems to help them be successful.” He also cites innovation, product development, digital integration of manufacturing processes and mistake-proofing as areas of interest for him.
“My goal is to make small manufacturers in southern Minnesota more successful,” he says. Bear earned a bachelor’s degree from the University of Wisconsin-Stout in Menomonie and a pair of master’s degrees from the University of St. Thomas in finance and manufacturing systems engineering.
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“I’m very much looking forward to telling the success stories of Minnesota’s great manufacturers.” – Robb Murray, Enterprise Minnesota Editorial Director
Robb Murray grew up on the east side of St. Paul. Prior to coming to Enterprise Minnesota, he worked for 25 years at The Free Press Media, which publishes The Free Press of Mankato newspaper, Mankato Magazine and Minnesota Valley Business magazine. Over the course of 25 years, he covered virtually every beat at the newspaper and has won several national writing awards. When he left The Free Press Media, he was the newspaper’s features editor and Mankato Magazine’s associate editor. “I’m very much looking forward to telling the success stories of Minnesota’s great manufacturers,” he says. FALL 2020 ENTERPRISE MINNESOTA /
The walls are going up on Millerbernd Manufacturing’s new facility in Winsted. Millerbernd is one of the few manufacturers to forge ahead with ambitious expansion plans during the pandemic.
Forging Ahead Millerbernd Manufacturing hopes to add 100 jobs when it completes a $12 million expansion, and it’s doing it at a time when most companies are holding back.
everal years ago, the leadership at Millerbernd Manufacturing came up with an ambitious expansion plan. The company — which manufactures street light poles, steel casings for airfield lighting systems, and rolled rings and cylinders — wanted to build a new $12.4 million facility for its ring and cylinder operation. The expansion promised to add 100 new good-paying jobs with benefits, according to the company’s strategic plan. Construction was set to begin in March. But then the coronavirus pandemic hit. And company leadership began wondering whether expansion needed to wait a year. “When COVID hit, we put everything on hold … for about a week,” says Trevor Millerbernd, the company’s CEO. “We thought about pushing it off until next spring. I mean, there wasn’t a gun to our head or anything.” At that point, Millerbernd had a decision to make. The company could do what most companies with expansion plans were doing and wait for the return of a post-
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COVID “normal.” Or … “This was part of our five-year plan,” Millerbernd says. “The plan was to kick it off this spring. And we decided not to let COVID change our minds.” So, while most manufacturers postponed or held off on building or expanding operations, Millerbernd is forging ahead, even in uncertain times. The project is already underway and is expected to be completed by the end of the year. If you’re unfamiliar with rolled ring and cylinder products, think of the last construction zone you drove through. If there was a “steamroller” on site, then you’ve seen the kind of products Millerbernd’s rolled ring and cylinder division manufactures. The steamroller’s giant cylinder is an example of the work the company does. Adding a new facility to manufacture “steamrollers” and many other parts will enhance productivity across all of the company’s product lines, Millerbernd says. In addition to the rolled ring and cylinder line, Millerbernd also offers custom steel
light pole design and manufacturing. The company provides “an extensive selection of carbon and stainless steel light pole and traffic signal structures.” The company also manufactures airport lighting bases, extensions, base plates, mud plates, covers and accessories, all adhering to Federal Aviation Administration standards. The new facility will be built to allow for future expansion to roughly twice its original size. And the expansion, Millerbernd says, will grow the capacity of its pole production by 35% and its airfield lighting component capacity by 50%. Embarking on such an ambitious project right now is fairly unique. Like everything else, the coronavirus pandemic has left an indelible mark on the manufacturing industry.
In March when the pandemic tipped the world — and any sense of “normal” — upside down, it took just a month for manufacturers to start seeing foreboding signs about the industry. The signs were there even in April. In a survey conducted by the National Association of Manufacturers, 78% of manufacturers said they anticipated a negative financial impact due to the pandemic. Just over 53% anticipated a change in operations. And about 35% said they were already seeing supply chain disruptions. Enterprise Minnesota’s own survey, conducted in March, backs up the NAM findings. In its survey, 46% of post-COVID interviewees said they expect the U.S. to slip into a recession, while only 9% thought so in the pre-COVID interviews. The Enterprise Minnesota survey also found that post-COVID interviewees expect to experience a decline in gross revenue (23% in contrast to just 6% pre-COVID) and profitability (19% post-COVID, 8% pre-COVID). And 26% said they expect to invest less in capital expenditures, as opposed to 14% pre-COVID. Things do seem to be turning a corner, however. In the recently released Creighton University Mid-America Business Conditions Index, the overall health of manufacturing in Minnesota — using metrics such as employment, wholesale prices, confidence, inventory and trade — received an improved grade of 45 out of 100; in March the state’s grade was 39. Anything 50 and over indicates growth. Below 50, contraction. “Since the onset of COVID-19, the state has lost more than 350,000 jobs, or almost 12% of its employment,” says Ernie Goss, director of Creighton University’s Economic Forecasting Group and the Jack A. MacAllister Chair in Regional Economics in the Heider College of Business. “Our surveys point to a flattening of employment with only slight job gains in the months ahead.” Millerbernd says he’s just hoping they’re doing the right thing. “The next two, three years will tell us if it was the right move or not,” he says.
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Mural, Mural on the Wall After a few months of Zoom, it might be time to take your virtual gatherings to the next level.
hen the coronavirus pandemic hit and reduced all in-person gatherings to virtual, David Ahlquist had a problem. Like any consultant, Ahlquist — a business growth consultant for Enterprise Minnesota — prefers handling meetings with clients in person. A major part of his process is doing an exercise called value stream mapping, which uses a visual presentation to illustrate a business’ critical functions. It’s a situation dependent upon plenty of physical space. And plenty of sticky notes. “What we do is put up 4-foot white paper in the room or use a white board and, using sticky notes, map out the entire process from beginning to end,” Ahlquist says of his method to help clients better understand their own processes. “It’s just a way of doing a detailed process analysis.” Pre-COVID, Ahlquist was sort of midjob with some of the clients. They’d done some brainstorming and mapped out the “current” state of things. And they did that
10 / ENTERPRISE MINNESOTA FALL 2020
in person. And then the coronavirus pandemic hit, which meant Ahlquist couldn’t return to those companies in person (at least not yet) and continue working on mapping out the “future” state of things. Enter Mural, a computer program that gives presenters an interactive tool that can take a meeting well beyond what Zoom or Skype can do. “It’s literally an online whiteboard,” Ahlquist says. “That’s how I describe it.” Well, it’s a little more than that, actually. If you’re curious about Mural (or similar software programs such as Whiteboard), your best bet is to fire up YouTube and watch a few tutorials. When you do, you’ll see Mural provides a fairly rich environment for a level of engagement you just can’t get with Zoom. Let’s not knock Zoom — with its shared screen feature, Zoom offers a worthwhile remote meeting experience.
But if you want to take it a step further and allow users to interact, post funny GIFs or topic-focused sticky notes, or even drop relevant videos into the mix for the group to see, you’ll need something with more robust functionality. In a review of various whiteboard software programs on the website Zapier, writer Maria Myre calls Mural useful for meetings with larger teams. “Mural is particularly strong as a team tool, letting you create multiple ‘rooms’ for your whiteboards, each with different permissions to limit access,” she says. “You might have one room for your design team, one for your marketing team, and so on, or you might create rooms by project.” Such reviews, Alquist says, are the reason he chose Mural for his work with value stream mapping. “Mural had good reviews and also had the functionality I was looking for. I looked at Basecamp, but that’s more of a
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The group meeting software program called Mural allows for richer collaboration and more meaningful contributions from group members.
project management program versus a whiteboard.” So far, Ahlquist says feedback has been positive. “Universally, people overwhelmingly were kind of like, ‘Wow, this is a great tool!’” he says. “They really like the graphical nature, as opposed to just having a Zoom meeting where you’re only looking at people.” Alex Altstatt of Western Spring in Hugo says his company, which manufactures precision springs and wire forms, recently participated in a Muralbased consulting session with Ahlquist. “It’s certainly a very useful tool in the absence of an on-site meeting,” Altstatt says. “It makes a timestamp on the meeting. If you didn’t take notes at a meeting, this is a way the notes are all there and it makes sense for everybody.” Altstatt says he’d be inclined to use Mural again even without COVIDrelated restrictions.
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Mitch Bublitz is the owner and president of Bestway Promotions. He also invented his own button-making machines, some of which are still in operation after several decades of use.
Call Him Mr. Buttons Bestway Promotions has been a leader in the button industry for decades. The mastermind behind it all is Mitch Bublitz, a southeastern Minnesota native who is ready to retire.
t’s summer festival season and a national election is on the horizon. That traditionally has meant one thing for Bestway Promotions: plenty of work. Bestway, based in Houston, Minnesota, has been one of the nation’s largest manufacturers of buttons, the kind you get when you sign up for a raffle at the county fair, or the kind you see affixed to the shirts of campaign volunteers knocking on your door. The company is the life’s work of Mitch Bublitz, a machine tool crafter who came to button making on a slightly unusual path. But more on that in a moment. Business may be a tad slower these days because of the coronavirus pandemic, but Bublitz still loves to give tours of his shop, tucked neatly on the northern edge of a town of 900 people. In its heyday, Best-
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way would have dozens of people busily punching circular tins into shiny buttons. Today that number is far lower, though the company is still among the largest producers in the country. “So, this one is for the La Crescent Applefest,” he says, adjusting his eyeglasses and peering at a future button on a computer screen. “Sometimes it’s something some kid came up with. Sometimes it’s folksy or grassroots.” Bublitz is near the end of a career that has seen him create two successful button companies. He’s not just a successful button maker; he’s also a pioneer of buttonmaking technology. The machines on his shop floor, he says, are better and faster than any other button-making machines in the world.
But while he’s had success in the button world, he’s also ready to retire. And this season’s orders aren’t as robust as past seasons — the pandemic has canceled festivals and fall sports, both surefire sources of button orders. But Bestway is still cranking out buttons, and Bublitz is still helming it all, helping apple festivals and political candidates add a little all-American pizzazz to their endeavors.
Bublitz was born and raised in the tiny town of Hart. “You go up the road about 10 miles, take a right on highway 43, and it’s a wide spot in the road. There’s one cemetery on this side of Hart, and there’s one on that side of Hart. I have relatives in both.” After attending Winona High School, he enrolled in technical college intending to study auto mechanics. But there was something about the machine shop classes he took in high school that resonated with him. “When it came time to sign up for tech school, I signed up for machine shop,” he says. “On the first day, class was so packed I had to stand in the back of the room. But by the end of the term, there were only eight of us left. … I graduated as a tool and die man.” After five years and several jobs in the industry, he was ready to start his own company. “I went into the woods and cut down 33 oak trees, hauled them to the sawmill and sawed them into two-by-sixes,” Bublitz
says. “Then I went to Tri-County Electric and bought some used telephone poles. I put up my own building. Took me all summer.” And that first business, of course, was manufacturing buttons. But why? Bublitz says he went to a ski hill once where paying skiers were given buttons to access the hill. “I didn’t have a lot of money, but I bought the damn button,” he says. “And I kept watching these people scoot down the hill and fly through the air. So, that was my first encounter with a button.” In his oak-tree building he also built his first button-making machine, a machine that still sits in his shop, ready to go if needed (though it won’t be because he has dozens of other self-built button makers that are faster and pump out more buttons in a fraction of the time). The design of that first machine was the foundation for all machines that came after. A motor on top powers a piston-like puncher that sandwiches together two pieces of metal and a design. “This machine here applies a laminate or plastic covering,” he explains, motioning to its various components. “It’s printed in there and laminated here. It’s die cut here, capped there and out it goes. When it gets 50 pieces in a bag, it will automatically change the bag.” This is the system that cranks out, literally, millions of buttons every year. “We manufacture all of our own product,” Bublitz says. “In other words, we build our own button-making machinery. My button-making machinery is five times faster than anyone else’s in the world, and it is more dependable than anyone else’s in the world.”
LO CA L F O C U S . G LO BA L R E AC H .
Willing to sell
After building his button-making empire into what he says was “the world’s third largest,” Bublitz sold the company to Tandycrafts, which was hoping to leverage several similar companies into one massive button producer. After some legal tussles, Bublitz says he parted ways with Tandycrafts and started a new buttonmaking company, in which he invested $600,000. Then the 2008 housing crisis-induced recession hit, and his new button-making company hasn’t really recovered. Everything is in place, however — from front-end design software to those patented button makers — for anyone who wants to step in.
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No Time Like the Present Van Technologies used its COVID downtime to upgrade its ISO certification.
Photos by Derek Montgomery
an Technologies Inc., the plucky Duluth manufacturer of environmentally friendly GreenLight Coatings, started 2020 at a sprint. “Our first quarter was huge. We were going full steam,” says Larry Van Iseghem, founder, president and CEO of the company. “If you told me, ‘Let’s go for ISO 9001 starting Jan. 1,’ I would have said, ‘No way.’” But the second quarter of 2020 brought dramatic change to manufacturers across the state and globe in the form of the COVID-19 pandemic. The outbreak forced many businesses, including Van Technologies, to hit the pause button. The company went from being on pace to break all previous sales records to experiencing a decline. Van Iseghem says revenues for the year are now down about 6% from 2019.
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But he’s not bemoaning the downturn. Instead, Van Iseghem is determined to take advantage of the moment to pursue quality control certification, demonstrating that his business meets all the latest benchmarks of the International Organization for Standardization (ISO). “There was no better time to seek this than in the slight downturn that we experienced. We had more ability to redeploy resources,” Van Iseghem says. Keith Gadacz, a business growth consultant for Enterprise Minnesota, credits Van Iseghem for seizing the opportunity. “The reality is Van Technologies saw this time as an opportunity to play strong for the long game — not for 2020 but for what this feels like one or two or three years from now. And the company aimed for that as it worked through this project,” he says. Enterprise Minnesota Business Developer Jim Schottmuller agrees.
“The folks who take these opportunities or maybe a little extra time to sharpen the saw, those are the people who are actually the winners coming out of this,” Schottmuller says. “They’re going to be the first ones coming out with a win.” Gadacz predicts the certification could open new markets for Van Technologies and ensure a smooth, consistent transition if and when Van Iseghem, age 66, reduces his involvement in the business. Van Iseghem says he has yet to feel his age and has no imminent plans to step away from the company. “I really enjoy what I do. I commonly tell people I’ve never worked a day in my life.” But when the time comes to consider retirement, Van Iseghem says he has great confidence in the company’s remaining leadership team, which includes two family members — his son Clint and daughter
Van Technologies CEO and Founder Larry Van Iseghem played the pandemic smartly and pursued a path to get the company ISO 9001 certified.
Kristen. The business employs 14 people in all and operates out of a 25,000-squarefoot facility in Duluth’s former Bomarc missile base. Gadacz says Van Technologies has been able to pursue ISO 9001 certification at an almost unheard of speed because of some of the company’s core strengths. “The company’s culture of improvement and the fact it is highly technical has allowed Van Technologies to compress this certification timeline from a normal implementation of about eight to 10 months down to about four months,” he says. Van Iseghem is no stranger to ISO certification, having helped his former employer, Ikonics Corp., also of Duluth, through the process years ago before launching his own business in 1991. But he says Gadacz’s guidance this time around has been invaluable.
Schottmuller adds Van Iseghem’s commitment to ISO certification has been a key component to accelerating the process. “That’s tough to do with skeptical leadership. You need to be in with both feet.” Van Technologies is a privately held company and typically doesn’t disclose much in the way of financial information, but Van Iseghem says the business had total revenues of between $5 million and $10 million last year. He has ambitious growth plans, saying he aims to double the company’s revenue and profit within the next five years. Van Iseghem maintains that goal is well within reason, although recent events have made the future hard to predict. Most of Van Technologies’ business to date has come with minimal sales and marketing. Van Iseghem says the company has taken on and beaten larger competitors in terms of winning business. Its biggest single account is with North America’s largest window manufacturer, a company that primes and paints its products exclusively with GreenLight coatings. Van Iseghem, who has two master’s degrees — in biochemistry and polymer en-
gineering — says his specially formulated coatings stand out in the field for using no dangerous or environmentally harmful solvents or chemicals and for exceptional durability. The company specializes in water-borne coatings and finishes that can be cured with ultraviolet light. While wood coatings account for the vast majority of Van Technologies’ sales, Van Iseghem says he also has developed specialty products for many other niches, such as direct-to-metal coatings and other composite surface coatings, as well as promising antimicrobial coatings that were already in development prior to the COVID-19 pandemic. Although Van Iseghem says the company has no shortage of unique proprietary trade knowledge, he has shunned patents for the most part. “A patent tells the world and everyone, including your competitors, exactly what you’ve done,” he says, explaining it wouldn’t be difficult for a competitor to tweak a patented product. “We prefer to keep things trade secret.”
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Four Questions Sen. Bill Weber, Senate District 22, owner of Jensen Management Service
hat are the most critical issues facing rural manufacturers? The most current critical issue is making sure that they can provide a safe environment for their workers due to the COVID-19 situation. Beyond that, finding workers — and housing for them amid strong competition for the workforce — remains a major task for employers. This is especially so for border businesses who are constantly being lured across state lines due to the tax climate issues.
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What can the state do to keep manufacturers from leaving Minnesota? The state needs to realize that its tax policies hurt rural development, especially in border communities. In addition, the permitting process in Minnesota has become terribly cumbersome. While agencies like to talk about their improved systems, the time lag between application and permit granting does not support their boasting. Tax and permitting reform would help rural manufacturers greatly. Working with existing businesses in agricultural, mining, timber and technology industries to understand their needs is also essential. In my first couple of years in the Senate, I read in the Sioux Falls, SD paper about a Minnesota software company expanding into South Dakota with 200 jobs. I reached out to the president of the company and learned that Minnesota had essentially ignored its needs. They were needing to spend an average of $45,000 per worker to teach each one the skills necessary to work for that company. A South Dakota college provided that training through a bachelor’s degree. The company provided 200 jobs for college graduates. Upon raising some fuss about this,
I understand that some greater effort is being made to work with industries, but that must be improved. Fall is upon us and, before long, the next session will be upon us. What should manufacturers be paying attention to as we get closer to 2021? With the projected deficit that has resulted due to Gov. Walz’s shut down of business, it will be a challenge to produce the tax reform needed. Yet it is imperative to help get the economy back to where it needs to be. There will be plenty of people claiming we need to raise taxes. That is the worst thing we could do. So, people need to ask the candidates how they will deal with the shortfall. I don’t believe that most people or businesses believe they pay too little in taxes. The cost of workforce housing is also a problem. Efforts were made to deal with this issue but were resisted by the Walz administration. The Luverne area has a unique blend of manufacturers. Tell us something that might surprise people about the industry in your part of the state? We have a unique blend of manufacturers in southwest Minnesota that vary from fastener development to agricultural processing to injection molding. The talents of many local manufacturers border on genius, and the artisanship of the workers is truly astounding. Many people think of my Senate district as a farm district, which I am proud to say is true. In addition, however, the twist tie that is on the loaf of bread was probably made here. The lawn mower or snow blower you use may have been made here. The customer gift was possibly printed or made here. A great deal of equipment made or assembled to help farmers raise your food was made or assembled here, and a
INNOVATIONS great deal of your food was raised and processed here. The fire truck that responded to your emergency may have been built here, and there are many other needs that are met by manufacturers and businesses of southwest Minnesota. We are much more diverse in our businesses than many realize.
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Sen. Bill Weber (R-Luverne) represents Minnesota’s Senate District 22, which includes all or portions of Cottonwood, Jackson, Lincoln, Lyon, Murray, Nobles, Pipestone, Redwood and Rock counties. His company Jensen Management Service, Inc. offers a variety of real estate related services in Luverne. Prior to his election in 2012, Weber served on the Luverne City Council and was mayor of Luverne from 1992-2001. He is the chair of the Senate’s Agriculture, Rural Development and Housing Policy Committee, vice chair of the Environment and Natural Resources Policy and Legacy Finance Committee, and a member of the Agriculture, Rural Development, and Housing Finance Committee and the Environment and Natural Resources Finance Committee.
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FALL 2020 ENTERPRISE MINNESOTA /
Whether you’re looking to implement an ISO certification or begin a continuous improvement journey, assessments are a great place to start.
he change didn’t seem like much. It was, after all, just a “huddle board,” a place where employees in Clow Stamping’s shipping department could gather each morning to talk about the previous day’s highs and lows and see a visual reminder of focus points and safety goals. After a 10-minute chat, they’d report to their work stations and do the jobs they were getting paid to do. “There was no one big, grandiose thing that happened,” Clow
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Stamping CEO Lori Davies says. “But when we go back and look at that huddle board and the savings, we think it’s because we focused on what’s important. It was close to $200,000, which quite honestly surprised me.” Close to 200 grand in savings. Because of a morning conversation. Clow Stamping is a large manufacturing company in Crow Wing County. And this savings came as a direct result of first having Enter-
prise Minnesota do what is known as an “assessment.” Enterprise Minnesota offers assessments in many areas, including the most common one that Clow Stamping did: a lean assessment. Its purpose is identifying areas where waste can be eliminated and efficiency enhanced. Think of it as a diagnosis of sorts. Or perhaps an on-ramp to a highway of internal improvements in areas such as quality management systems, leadership team competency,
revenue growth and other areas. No matter the area, an assessment is a powerful tool because it can reveal growth, highlight weaknesses or, in the case of a quality management systems assessment, potentially open doors to new business. And there are two reasons why now may never be a better time to do an assessment. First, COVID-19 has created downtimes across the manufacturing world. From the “never let a good crisis go to waste” department, many manufacturers are using that time to add ISO certification or, as in Clow’s case, run its shipping department through a lean assessment. Second, there is financial incentive right now to do assessments. Through the federal government’s Coronavirus Aid, Relief and Economic Security Act (CARES Act), the Department of Commerce’s National Institute of Standards and Technology has issued $50 million to Manufacturing Extension Partnerships around the country. Enterprise Minnesota is one of those partnerships and can help manufacturers figure out the steps required to grow, react to the current economic or business conditions, or map an efficient and profitable path to the future. “I find they’re like a puzzle,” Enterprise Minnesota Business Growth Consultant Greg Langfield says. “You have to go into a company and learn enough about them quickly. Then you’ve got to think both on a strategic and tactical level.”
tional chart looks like, etc. In the age of COVID-19, personal protection equipment is also considered, as well as social distancing requirements and any other health concerns. Next, Langfield says they arrange a visit. The assessment site visit is broken up into four categories. The consultant will first interview various employees to understand a typical day and then will observe workers throughout the plant to get a visceral sense of what’s happening on the ground. The company’s workflow will also be analyzed and compared against established criteria.
Anatomy of an assessment
After the site visit, the consultant crunches numbers, analyzes data and puts together a plan. “The next step is to put together a report that says, ‘This is where you currently are, this is where you say you want to go, and here are our recommended next steps,’” Langfield says. The assessments are so powerful, in fact, that roughly half of all clients that go through the process take further steps to improve, according to Langfield. “We like to lay out a journey as opposed to a one and done. For a lean assessment, I always say we’re looking for truth.” Continuous improvement is a sophisticated, worthwhile effort. Langfield suggests companies take the long view on the subject. With continuous improvement, the journey never ends. No matter how
If you’ve never been through an assessment like this before, don’t worry, you’re not alone. Most companies haven’t. But most companies should. Assessments can open eyes, reveal opportunities, and unlock potential. To illustrate how they work, Langfield breaks down the basics. Like all great success stories, a good assessment starts with good planning. “We start out by having a planning meeting with our contact person,” Langfield says. “What we’re trying to do is make sure he or she understands what a day on site might be like.” In that meeting, logistics are established, such as who the consultant will need to talk to, how long on-site meetings will last, what the company’s organiza-
“It’s a five- to 10-minute communication with all the employees at the start of the shift about how yesterday went and where we want to focus today, which seems kind of small. It’s not a monumental change or anything. But it’s had a really good impact on our operations.” — Lori Davies, Clow Stamping CEO
well you do, you can always do better, always continuously improve. For companies considering an assessment, Langfield suggests an introspective approach. Because an assessment can be done on virtually any aspect of a manufacturer’s operation, choosing the right area to improve can be an important decision. COVID-19 has made such internal evaluations even more important, Langfield says. He recommends a rather Zen-like approach. “I think of business in three buckets: Grow the top line. Grow the bottom line. Grow employees. They all need to be in balance. Where is our greatest need right now? What are we willing to do? Should we do a revenue growth assessment? How are we going to manage our costs?” COVID-19, Langfield continues, thrust many companies into areas of volatility and uncertainty. An assessment can help manufacturers temper some of that COVID-related anxiety. “To me the word ‘clarity’ is really powerful,” he says. “There’s so much uncertainty right now, and giving companies a guide can be helpful.”
Stamp of approval
Davies says they chose to do the lean assessment (also known as a continuous improvement assessment) as part of an overall goal to develop a more formalized continuous improvement program. The part of the overall lean assessment Enterprise Minnesota did for the shipping department — where they revamped the huddle board and instituted the morning huddle board meetings — was successful. Davies says the idea for the assessment was floated by Dawn Loberg, a business development consultant for Enterprise Minnesota. Loberg invited Davies to an Enterprise Minnesota focus group where Davies was able to meet with Langfield. After hearing Davies talk about her company and its vision and goals, Langfield suggested the lean assessment, which then led him to suggest the huddle board project. Huddle boards are a commonly implemented tool that, when used effectively and consistently, can yield powerful results. Like any tool, though, it requires a skilled craftsman to wield it. Tools are meaningless unless people know how to use them. “The huddle board is the biggest thing FALL 2020 ENTERPRISE MINNESOTA /
Galaxy Precision, Inc. pursued an ISO certification partly because customers were demanding it.
“We like to lay out a journey as opposed to a one and done. For a lean assessment, I always say we’re looking for truth.” — Greg Langfield, Enterprise Minnesota business growth consultant we did, but in a way it’s a small thing because we just talk about how the day went,” Davies says. “It’s a five- to 10-minute communication with all the employees at the start of the shift about how yesterday went and where we want to focus today, which seems kind of small. It’s not a monumental change or anything. But it’s had a really good impact on our operations.” Because they spend that time focusing on the previous day, they’re able to identify problem areas much more easily than if they’d waited days or weeks to address them. For example, through that communication and work flow discussion, Clow Stamping has been able to decrease wait times for forklifts. (When workflow isn’t monitored or isn’t on track with performance standards, forklifts and their drivers end up waiting to move shipping products into and out of shipping areas.) “The idea is that an employee leaves at the end of the day and knows whether he or she had a good day or a bad day,” Davies says. “We want everybody to come in and have a good day. How do you know? Well, if you were safe, if you produced quality work, if you 20
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delivered what you intended to deliver, if you were productive, if you controlled costs, if your teammates showed up, etc., you had a good day. By defining what a good day looks and feels like, the employee knows whether he or she had one or not.”
Galaxy Precision, Inc. is a custom precision CNC machining facility based in Albany, Minnesota that offers complete part manufacturing. Founded 30 years ago, the company currently employs around 25 employees. Galaxy was born in a small concrete building on the farm where company founder Ralph Finken grew up. Over the
A socially distanced “huddle board” meeting at Clow Stamping.
years, as business grew so did Galaxy’s footprint. The company added shop space, people and, when the time was right, computers. Now the time is right, company officials say, for another upgrade. Otis Ostendorf, operations manager for Galaxy Precision, says he’ll be the one ushering Galaxy through an ISO implementation. “We have run into some of our customers hinting that they’d prefer Galaxy pursued the latest version of ISO,” Ostendorf says. “That’s a big part of why we’re doing this. … It’s more of a trust deal for other companies. It’s like, ‘Hey, they have a system set up, they’ve got their ducks in a row.’” To begin the company’s ISO implementation process, Galaxy took the first step of having Enterprise Minnesota do an assessment. “Following the assessment, my expectations are that our shop will do an even better job,” Ostendorf says.
John Connelly, vice president of consulting for Enterprise Minnesota, says the initial phase
“Following the assessment, my expectations are that our shop will do an even better job.” — Otis Ostendorf, Galaxy Precision, Inc. operations manager
of work with a manufacturer is one of “discovery.” Consultants probe the minds of company leadership to get a sense of what their priorities are. Once that’s done, they can begin to dig a little further. One of the best tools consultants have in that discovery process is the assessment. Enterprise Minnesota offers assessments in seven areas: a lean (continuous improvement) assessment, a quality management systems (ISO implementation) assessment, a leadership competency assessment, a financial assessment, an enterprise evaluation, a revenue growth assessment, and a strategic assessment. Each assessment is unique. Lean assessments, for example, can evaluate a company’s culture and processes and identify opportunities to eliminate waste, improve productivity and cut costs. Leadership competency assessments, on the other hand, evaluate the collective skills of a company’s leadership team and help prioritize current and future development needs. Connelly says the federal CARES Act funding is a good chance for manufacturers to map out and plan for improvement and growth in this unprecedented time of COVID-19. He urges manufacturers to investigate how an assessment might help them.
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FALL 2020 ENTERPRISE MINNESOTA /
Face Value A tiny Detroit Lakes engineering firm asked Facebook if there might be a COVID-19 market for plastic PPE face shields. Within five hours, the post received 20,000 pageviews. Within two days, the company was making products. Four months later, around 90,000 units were on their way to 40 states and three countries — and more are coming.
By Tom Mason • Photos by Jessie Marx 22
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s Lucas Hoffman and Marco Fenu watched the COVID-19 economy reduce the work orders at their Detroit Lakes-based industrial engineering company earlier this spring, Fenu kept thinking about his mother, a doctor on the front lines of Italy’s attempts to fight the coronavirus. Her country’s chronic shortage of personal protective equipment (PPE), she told him, hindered her efforts at every turn. In the four years since Hoffman and Fenu launched InLine Motion to design and manufacture conveyance equipment for the food processing industry, the two engineers/entrepreneurs had harvested impressive success. Increased growth already had prompted the company to move three times in search of larger facilities.
But they wondered about taking a detour into the production of PPE-related face shields. They had the capacity. They had the time. And they recognized they could likely produce protective face shields without a significant upfront financial investment or having to retool their equipment. But how many should they make? And who would want them? “We didn’t want to spend a bunch of money, make a whole bunch of stuff, and then not have anybody even be interested in them,” Hoffman says. So, at about 6 p.m. on Thursday, March 26, they posted a Facebook inquiry to
The two partners prudently tapped into the process orientation of their “inner engineers” and decided not to let the adrenaline rush of administering incoming orders overwhelm their ability to develop orderly manufacturing procedures. gauge market demand for medical-grade PPE plastic shields. “We are able to design and produce face shields, but we do not know where we should send them,” the post said. “We are seeking health care facilities in need that are accepting donations. Please help us get in contact with the right individuals by liking and sharing the post!” In about the time it took for Fenu to make the 20 minute drive from the company’s 4,800-square-foot facility just west of Detroit Lakes to his home in Hawley, the post already had generated a whopping 4,000 pageviews. By 11 p.m., it had more than 20,000 views, with responses from New York to Thailand to Zimbabwe. “That’s viral,” Fenu says, “at least for us it is.” Hoffman still marvels at the quick magnitude response. “I don’t understand how it got out so fast, but people were sharing it,” he remembers. “We knew there was
Lucas Hoffman and Marco Fenu sit with Bella, the company’s shop pet.
something big here.” They soon found out how big. About four months after the initial Facebook post, their new subsidiary, InLine PPE, had leveraged the help of other Minnesota companies to produce almost 90,000 high-quality, easy-to-assemble, reusable face shields for health care customers in 40 states and three countries. And to add a little made-for-TV drama, just before Hoffman and Fenu were to deliver their single biggest delivery of face shields to their most consequential customer, a crucial supplier temporarily ceased operations. Riot-related arsonists had burned down a neighboring building, and the supplier didn’t yet feel safe restarting operations. More on that later. Following their inquiry’s response that first night, the two engineers merely knew they had stumbled upon an intriguing diversion. Working separately from their homes, they turned off their phones and convened a Webex video conference to collaborate on their first prototype. A quick web search revealed that many existing products appeared cheaply made or required unnecessary assembly. “We saw what we didn’t want to do,” Fenu says. So, they started from scratch. Beginning by cutting up paper plates, they fashioned prototypes they hoped would adjust comfortably and easily to the different sizes and shapes of the human heads that would
likely be wearing them for long periods. Finally satisfied with the first night’s model, they went to bed, but not before Hoffman drove back to the office to program their printer to ensure a 3D version would be ready when they arrived the next morning. Yet when they examined that first prototype, they didn’t like it. Not enough comfort. Hoffman and Fenu didn’t like the next one, either. Or the next one. All through the day, they tweaked programming changes into their CNC router — faster than the 3D printer — and produced 22 varieties of the face shield before they settled on the model they wanted to manufacture.
his focused, quick-turnaround attention to detail reflects the work ethic the two business partners used to build InLine Motion. Both graduates of North Dakota State University, Hoffman and Fenu met while working as engineers at Friesen’s Inc., another Detroit Lakes-based designer and fabricator of food processing equipment. Hoffman, 38, originally a North Dakotan, had worked at Friesen’s for 12 years, the last 18 months as an engineering manager. Fenu, 28, arrived in Detroit Lakes through a more circuitous route. A native of Cagliari, Italy, he spent his junior year as an exchange student at Wayzata High School in the Twin Cities; after completing high school in Italy, FALL 2020 ENTERPRISE MINNESOTA /
he immediately returned to the U.S. and enrolled at NDSU. His job at Friesen’s was his first out of college in 2014. Hoffman and Fenu shared a vision that their market niche was ready to embrace an innovative company that emphasized engineering over mere fabrication. “A lot of the companies in this space are basically fabrication companies that have engineers, versus engineering companies that can do fabrication,” Hoffman says. While old-school fabricators tend to produce equipment at their clients’ specs, he continues, the InLine approach identifies a problem, designs a solution, and then builds it. Fenu and Hoffman pooled their resources in 2016, bought the essential computers and high-tech software, and opened the doors of InLine Motion. Their concept included design software that could create 3D models and robotics to help clients address processing conveyance issues efficiently and reduce complexity. They marketed their company with the confident assumption that while food is a massive domestic industry, it consists of a relatively small and interconnected community. “People know each other, they work with other companies, they move on to other companies,” Hoffman says. They already had a good network they could leverage. The two partners hit the trade show circuit and came home with a satisfactory level of new business. The company took off. One single early order accounted for 40 percent of the revenue projected in their business plan. Attracted by InLine Motion’s high-tech expertise, customers warmed to their design/ build concept. Their ability to use software 24
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to project a holographic display of their 3D system that clients can see and literally walk around invited return business. Soon, Fenu says, “the people were starting to find us, versus us having to go out and find them.” * * * InLine Motion’s momentum experienced a hiccup in March, however, when COVID-19 uncertainties assaulted its order books and upended growth. Fenu acknowledges the company’s workload dropped to just one significant project at the time of their Thursday Facebook post, with nothing else in the queue. Which explains why the company saw value in the PPE diversion and moved quickly to make it operational. With a satisfactory prototype in place that Friday, the InLine Motion partners started to research and procure materials they could use to produce shields during the following week. They planned to produce a three-piece unit that could be shipped flat and that end users could assemble and adjust to wear in less than a minute. Their list of materials included a sturdy transparent material for the shield (“the clears”), something to make up the adjustable headband that would affix to the shield (“the halo”), and a piece of equipment that would effectively ensure a tight fit (“the backstrap”). They considered two options for the clears. Transparent polycarbonate, a material 250 times stronger than glass that builders and engineers frequently use in shower doors or safety shields, seemed readily available. But they eventually preferred PETG (polyethylene terephthalate glycol), a thermoplastic material that would be simpler to cut, easier to clean and just as
resistant to scratches. It was also available. For the halo, they agreed on high-density polyethylene (HDP). The InLiners scoured the local home improvement stores — all the way up to and including Fargo — to procure every sheet of HDP they could find for their first production run. The back straps consisted of sports straps that athletes
“That was one of our best decisions. We didn’t want to overcommit. We could have been overwhelmed right away because we hadn’t figured out the processes and logistics. We needed to get that all figured out before we could commit to start shipping.” – Marco Fenu use to keep their glasses from falling off during competition. Not a large market. “We actually bought out the country on the sports straps,” Hoffman recalls. And then, when the partners discovered that most straps were manufactured in Taiwan, “we cleaned out Taiwan.” “That’s Friday,” Hoffman says, as in less than 24 hours from the Facebook post. “We had enough material coming in early the next week to make 6,000 shields.” They started producing shields in-house the next day using their CNC router. But to create enough shields to fulfill the
Employee Josh Teiken (left) joins company owners Marco Fenu and Lucas Hoffman as they model their new face shields inside their Detroit Lakes facility.
steady stream of inquiries and orders, Hoffman and Fenu recognized they would need production partners. “We realized where we were at and what the demand was going to be,” Hoffman says. “We started asking, how can we do more? How can we improve?” They wanted to find partners who could “cut the clears” and use injection molding to manufacture the halos. For the shields, they contracted with Broadway Welding Inc., a nearby company that, although quite busy, had the capacity on their laser cutter, Fenu says. “They were happy to jump on it.” To manufacture the halos, they turned to Twin Cities-based Protolabs. To accommodate marketing and sales, they had Hoffman’s brother Joe create a new website in just a day. Hoffman and Fenu also knew the company would need in-house capacity to fulfill orders coming in for lots as small as 10 shields. So, InLine beefed up staffing from the two partners and their two employees to using up to 10 temps. “They were pretty easy to train, so we’d get somebody out in the morning, and they’d be at full speed by the end of the day,” Fenu says. But before committing to any delivery times, their “inner engineers” told them not to let the adrenaline rush of administering incoming orders overpower their ability to develop orderly procedures. They decided to withhold any shipments for a week and focus only on building up inventory. “That was one of our best decisions,” Fenu says. “We didn’t want to overcommit. We could have been overwhelmed right away because we hadn’t figured out the processes and logistics. We needed to get that all figured out before we could commit
to start shipping.” The streamlined process enabled InLine to fulfill all its orders by the following Friday while maintaining a stockpile of products. During that first week of production, the InLine PPE team got a call from the Veterans Affairs office in St. Cloud, prompted by the Facebook post. How many can you make, they asked, and how quickly can you ship them? “They placed an order right away and told us they would send our information to VA offices in the area,” Fenu recalls. Soon after that, they got an inquiry from the Bloomington-based regional office of the VA, which sought shields for its entire Midwest region. The facility already had received some InLine PPE face shields. The VA rep told Fenu that health care workers preferred the comfort, durability and high quality of the InLine PPEs to the competition, especially the fact that replaceable “clears” made them reusable. The VA requested 15,000 kits, and another 30,000 replacement “clears.” Although newbies to navigating the complicated maze of bureaucracy related to federal procurement contracts, Hoffman and Fenu survived the process with the help of a consultant skilled in the art of filling out government forms. The VA order almost didn’t get filled. To keep up with the growing demand for their faceguards, InLine PPE contracted with several companies around the state to cut the PETG material and return it to Detroit Lakes for final assembly. A week before the VA shipment was due, a large supplier in Minneapolis reneged on its agreement. Protesting arsonists, it seems, had burned down a filling station next door and worries arose
that the fire would spread. The company, out of caution, temporarily shut down. “At that point, there was a little panic, obviously,” Fenu admits. “We started deploying all the different people that we could find to move all the material in that company to another facility that was safe.” Most of it, he says, was relocated to a safer site in St. Cloud, “where there weren’t any riots.” InLine PPE completed the massive order just under the deadline, but it didn’t matter. The VA itself was unable to receive the shipment because of the same turmoil in Minneapolis.
offman says all this short-term success in medical manufacturing will not divert the partners’ attention away from the food conveyance marketplace — the reason they founded their company. The face shield market, he says, “is going to go away at some point. We might keep making a few here and there, but obviously nothing to the extent that we’ve seen recently.” Their mission, he says, will be to find lessons in the PPE project that will improve their core business. The most significant experience, he continues, was seeing how e-commerce will help InLine Motion improve its operation as it transitions back to its core business. “This experience opened up our eyes to the value of an e-commerce website,” Hoffman says. “It can actually produce money, versus just give you the ability to try to go sell something. Personally, I like looking at my phone and seeing how much money we made for the day.” FALL 2020 ENTERPRISE MINNESOTA /
“We’d hit a tipping point and needed to figure out how to handle the company’s growth and to better manage our people and implement strategies to develop leaders.” — Steve Palmer, North Central Door CEO
DOORS Bemidji’s North Central Door has a reputation as strong as a north country pine. Today, after more than 50 years in business, it maintains that reputation by emphasizing work ethic as it zeroes in on quality.
By Sue Bruns Photos by Jillian Gandsey
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rowing from a regional startup in the mid-1960s into an expanding company with markets that stretch across the Midwest and reach into the far west, North Central Door of Bemidji has manufactured residential and commercial garage doors with an emphasis on safety, quality and customer satisfaction for over 50 years. In 1966, North Central Door — its name an indicator of the company’s location — opened a small plant on the south shore of Lake Bemidji, the bull’s-eye in a loosely drawn circle from St. Cloud to East Grand Forks to International Falls to Duluth. Steve Palmer, North Central Door president and CEO, describes the company as “a smaller, more regional door manufacturer, compared to larger companies in Fargo, Illinois, Indiana, Ohio, and Kansas City with national distributorships.” Designed and built in northern Minnesota (where other companies bring their products for cold-weather testing), the company’s doors are put to the test year-round — from those double-digit, sub-zero January days of Canadian clippers to midsummer Minnesota heat and humidity.
rails and stiles for wooden garage doors with quarter-inch NuPly (Plywood) panels. “The company was mostly automated,” Holley says. Back then, they could produce about 100 wooden garage doors per day. The doors were sold initially across Minnesota and then later expanded into the Dakotas and Iowa.
and eventually general manager. In 2001, he and a partner, Bob Houston, bought the business. Today the company has five coowners, including Holley.
By the early 1980s, North Central Door shifted its focus from wood to steel, producing durable, lightweight and longlasting garage doors with more options in color, design and insulation than the wood
In the early 2000s, North Central Door started preparations to expand and relocate. The original box factory building — still in use — had been remodeled, and additional buildings had been added to the campus. The company’s relocation plans coincided with Bemidji’s south shore redevelopment project that involved lake cleanup from previous and existing industry on the
doors. Initially, prefabricated “pans” or exteriors of steel were ordered, and North Central Door processed them into insulated or non-insulated doors. As demand grew, the company expanded production to form its own “pans” from coiled steel. In the 1980s, the original owners sold to Dean Schnell, a sole owner. By then, Holley had worked his way up to foreman
shore: sawmills in the early 1900s, the box company, NuPly and others. In 2008, North Central Door opened its current facility in Bemidji’s Industrial Park. Holley says he was sad to say goodbye to the old site on Lake Bemidji, but they’d known for years they would eventually need to relocate. Plus, the new facility would alleviate inefficiencies of the old
Transitioning from wood to steel
From box company to door manufacturer North Central Door was started by three Bemidji businessmen: Harry Pihl, an auto parts dealer, Russ Eggers, who ran the local NuPly company, and lawyer Clarence Smith. North Central Door’s first home was a warehouse that previously had been a box factory that built ammunition shipping crates during World War II. Over the years, the company’s footprint grew along with sales. Steve Holley, after a stint in the service, took a job at North Central Door when the company was just a year old. As one of fewer than a dozen employees, his first job was unloading wood from boxcars — hemlock and Sitka spruce that would become
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production site. Today an event center, part of the Paul Bunyan Trail (where the M&I Railway line used to run), a new city beach, a restored beach house and several townhomes stretch the length of the south shore — North Central Door’s old neighborhood for more than four decades. The new North Central Door facility’s 109,000-squarefoot plant with 96,000 square feet of manufacturing space put everything under one roof. Machinery from the original plant was relocated to the new facility, and new and updated segments have replaced outdated ones as needed.
A standard design with 200 options A typical assembly includes several steps. Storage shelves at the start of the assembly line hold huge spools of flat steel that has already traveled from Chicago (where it is produced) to Indiana (where it is painted) and back to Chicago (where it is shipped out). On the line, pre-painted galvanized steel is uncoiled from a spool and rolled through the embosser for a wood grain or other texture. From there, the skins or pans are run through the stamping press, which strengthens the steel and gives it the appearance of raised or recessed panels. For insulated doors, Polystyrene insulation is heat-stamped to fit the panels and urethane glue is applied to the insulation before it is “stuffed” between the exterior and interior door skins. A maintenance bay in the facility holds a newly fabricated machine to cut and splice Polystyrene foam for insulation. Designed and built on site, it will soon replace a less efficient piece on the assembly line. North Central Door also applies a thermal break to the tops and bottoms of each door to prevent frost buildup. This detail is not used by all door manufacturers but suits weather-conscious customers well. On the line, the thermal breaks are affixed to the door by a customized piece of equipment, designed and built by Eagle Vision Machining in Hubbard. End caps are fitted to each panel where hardware will be 28
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“We’re looking at the next generation of leaders that will support the company mission. We have promoted quite a few from within. Part of it is seeking out opportunities where employees can grow.” — Steve Palmer, North Central Door CEO affixed. A pinch press bonds the skins and insulation into a “sandwich,” and a gasket that runs the length of the bottom of the door is put into place to prevent gaps between the garage door and the floor. In the hardware department, workers with packing lists package the appropriate tracks, springs, rollers, cables and other hardware for each door, and everything is shipped together. Today, NCD offers a variety of colors, patterns and finishes for both residential and commercial garage doors in sizes ranging from 3 feet to 40 feet wide and up to 20 feet tall. With names like “Aspen Ridge,” “Forest Bay” and “Timberland,” the doors evoke the image of forest-filled northern Minnesota. Four distinctive collections of residential garage doors offer variations in color and decorative hardware to customize the look. North Central Door’s website features a “Door Designer” tool that allows customers to “try on” a door to provide a view of how
different styles would look on their building. Customers can download a photo of their building or home and see it with different doors in a virtual view. Features include composite overlay finishes, carriage house panels and more. North Central Door’s low-maintenance, high-quality, affordable doors not only serve their purpose but also add to the building’s appearance, giving it curb appeal and a positive return on the investment. The company’s “sandwich” doors provide thermal protection with a variety of panel thicknesses for commercial doors. While the basic door design is standard, various styles, door patterns and hardware combine for about 200 door options. North Central Door also customizes to meet specific needs, such as low headroom modifications.
Strategic planning is key “We’ve experienced healthy growth since the recession,” says Palmer, who joined the company in 2006 as general manager and became a fifth co-owner in 2014. He says most of the company’s competition comes from larger plants spanning Fargo to Ohio, so North Central Door focuses on meeting the needs of the Greater Midwest. With a fleet of delivery trucks, the company ships its doors thousands of miles each week. Palmer says if demand continues to grow, the company is prepared to add a second shift. Human Resource Manager Justin Holley says strategic planning done in the past five years includes plans for another shift as needed. Holley, who came aboard 19 years ago, has seen employment at North
Central Door grow by 30-40%. A second shift would add several new workers. Palmer says the top three qualities of an ideal employee are work ethic, work ethic and work ethic. “We need people who are dependable, good listeners, have a positive attitude and follow directions,” Palmer says. “Mechanical aptitudes are helpful, but training is customized to the job description. Sometimes we find out an entry-level person has welding or other skills, and that can open up other possibilities.” Strategic planning with Enterprise Minnesota about five years ago helped the company clarify goals and plan for expansion. “We’d hit a tipping point,” Palmer says, “and needed to figure out how to handle the company’s growth and to better manage our people and implement strategies to develop leaders.” Bill Martinson, an Enterprise Minnesota business development consultant, says he and Mary Connor (former Enterprise Minnesota consultant, now retired) worked with North Central Door on strategic planning. “The sessions Mary led were a good fit for the management style that existed at North Central Door,” Martinson says. “The strength of the process is our holistic approach and the participative aspect of the sessions. All key employees have an opportunity to be involved in shaping the plan.” Justin Holley says Connor and Martinson’s sessions involved every employee and sought input and feedback. When workers were involved in helping to set core values for North Central Door, management was pleased that safety was their top priority. “We had always had a robust safety culture before, but input from the employees reinforced what we had been doing,” Holley says. “It also created greater buy-in from the workers.” In addition to safety, three other areas were identified as core values: continuous improvement, accountability and teamwork — all of which involve aspects of leadership. Martinson says he was impressed at the follow-through North Central Door demonstrated after the strategic planning sessions. “We hang around afterwards and follow up,” he says. “Once a strategic plan is formed, the executive level establishes assignments and tactics that will lead to higher levels of accountability.”
After working with its strategic plan for a few years, North Central Door followed up with additional training through Enterprise Minnesota. “Leadership training was one of the initiatives we decided to work on,” Palmer says. “Leadership development included our core team and then younger employees working their way up into first-time lead positions.” Earlier this year, Michele Neale, an Enterprise Minnesota business growth consultant, worked with North Central Door on leadership skills and strategies. Palmer says Neale helped them identify potential leaders. “We’re looking at the next generation of leaders that will support the company mission,” he says. “We have promoted quite
“Once a strategic plan is formed, the executive level establishes assignments and tactics that will lead to higher levels of accountability.” — Bill Martinson, Enterprise Minnesota business development consultant a few from within. Part of it is seeking out opportunities where employees can grow.” Neale says during the four sessions she did with North Central Door, the company focused on its values and mission, worked on time management and productivity, and discussed ways to recognize individuals’ skills and leadership potential. “A skills matrix was important to (North Central Door) to identify competencies for different positions,” Neale says. “Also, the company developed accountability tools to match the expectations of management and employees, to relay those expectations clearly, and to hold teams accountable — small changes.” Today, Palmer says, “Entry-level workers receive on-the-job training and work with mentors, facilitated by leads who ensure that new workers meet set milestones of development in their training.” One of North Central Door’s strategic initiatives is to train and develop team members and leaders within the company — using the TEAM approach: Teach, Evaluate, Assist and Mentor.
Employee growth, development, training and recognition Continuing to implement the strategic plan North Central Door has in place, nurturing a team-centered workplace and coaching potential leaders are essential keys to the company’s future growth. “Part of it is seeking out opportunities where (employees) can grow,” Palmer says. “A lot of it is work ethic and the ability to communicate with others. Those are the important things.” Through leadership training with Neale, he says, they worked on ways to identify and foster people in that leadership pipeline. It helped them recognize ways to develop those workers’ skills so that they can become the next generation of leaders. Recognition events are held quarterly at North Central Door to honor employees who have reached significant anniversaries with the company. In July, North Central Door recognized one 30year employee, one 20-year employee, five 15-year employees, a few five-year employees and 20 employees who had reached the one-year mark. Justin Holley says Neale helped North Central Door identify workers with leadership qualities and develop processes for bringing them up through the ranks. His own father, Steve Holley, now retired but still a co-owner, is a prime example of a successful climber of the career ladder — having started in an entry-level position, working his way up to foreman and general manager, and eventually buying into the company.
Current production, vision and mission Today North Central Door’s workforce numbers 90 — many of the employees “home grown” — and includes entry-level line workers, sales reps, truck drivers, office and shipping staff, jobs in customer service, accounting, engineering, HR and more. The company produces 200-250 high-quality residential and commercial garage doors per day, Palmer says. Its sales territory continues to grow across the Midwest. With plans in place to meet future growth and cultivate new leaders, North Central Door is focused on its vision: “To be recognized for our excellence in the eyes of our customers, competitors, employees, and community” while working to meet its mission “to sustain profitable growth … and … to continue to grow in distribution across the Upper Midwest and western states.” FALL 2020 ENTERPRISE MINNESOTA /
THE PLANNING Why the shrewdest long-term strategy in the COVID-19 economy might encompass only the next 90 days.
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he Great Recession of 2009 blindsided Donnelly Custom Manufacturing the same way it whacked virtually every American manufacturer. By September 2009, sales for the Alexandria-based plastic fabricator had dropped 31% from the record-setting high it experienced a year earlier. Company President Ron Kirscht recalls that some customer accounts fell 20%, others by 40%. “Everybody was down,” he says. Of the 21 sectors in manufacturing, 18 were down. “All I know,” he continues, “is I wasn’t in the three that were up.” Even at the softening distance of a 12-year recovery, manufacturers don’t forget how they were initially staggered by America’s sudden plunge into what seemed to be an economic abyss.
The only real certainty for some manufacturers in this surreal marketplace is that they don’t know what’s going to happen next.
But once manufacturers recognized what caused the collapse — Wall Street speculators inflating then popping a housing bubble that derailed America’s interconnected economy like train cars lurching off a cliff — strategic planners such as Kirscht rolled up their sleeves and used the downtime to step back from an overheated marketplace and tweak their long-term Steve Haarstad plans. Strategic planners in 2009 worked from an abundance of clarity about their business environment, says Steve Haarstad, a veteran strategic planning expert at Enterprise Minnesota. “We knew what was happening,” he says. “We weren’t overconfident, but we knew what factors were at work and how they were interacting. We could make predictions and traditional business adjustments.” Manufacturers assumed the Giant Pendulum of the American business cycle would eventually, if gradually, swing back toward prosperity. Enterprise Minnesota’s thennew State of Manufacturing survey revealed this shared confidence, as two themes repeatedly emerged in its polling and focus groups: “We’ve been through this before,” and “A recession is a terrible thing to waste.” Says Kirscht: “We knew the fundamentals were sound.” Hoping to jump on their competition as the economy improved, management teams studied improvements that would enhance their product array, their marketing and their in-house efficiencies. They ordered sales teams back on the road to reconnect with customers and prospects to discern market trends that might reveal possibilities for growth. Using that intel, planners considered acquisitions and new partnerships, tweaked product lines and pondered new ones, refurbished and serviced old equipment, bought new equipment, advanced their operations to the next levels of lean and found greater production efficiencies by training employees into new skill sets. But that was then. And this is not then, at least not for everybody. Today’s manufacturers navigating the
current recession understand the circumstances differ from 2009 in two clear ways. First, the big stick of the 2009 downturn hit all manufacturers equally. The damage from the COVID-19 economy is more selective. Manufacturers in supply chains that serve pharmaceuticals or the food industry, for example, are doing OK, if not thriving. Those serving, say, agriculture or the automobile industry, not so much. The second factor is stealthier: It is uncertainty. Vulnerable manufacturers can’t assume the easy assumptions about the predictable strength of the post-2009 economy aren’t in play in 2020. Not even close. For them, the only real certainty in this surreal marketplace is that they don’t know what’s going to happen next. Their confidence in the Great Pendulum’s power has been overwhelmed (at least temporarily) by persistent COVID-19-related questions and uncertainties that evolve from politics and culture, not the logic of the marketplace. “Someone has their hand on the pendulum,” Kirscht says. Would the government allow them to stay open? Would they be listed as a critical industry supporting essential industries? How could they endure the bureaucracy of complying with new protocols and guidelines and rules in terms of hygiene, health, safety, protective equipment — all while social distancing? Answers to these questions could change at any time. And there’s more: How well will public health officials predict and track the spread of COVID-19 infections? Will the virus mutate into something else? Will it just dry up and die? Will masks prevent the spread? Is temperature monitoring effective? Are social distancing tactics practical on the manufacturing floor? Will American pharmaceutical companies develop, manufacture and distribute a vaccine? When? Will it work? Will school opening decisions affect employee attendance? Manufacturers find no solace from experts. They watch with a cocked eyebrow as cable-TV economists use their time on pundit panels to trot out visual depictions of America’s economic recovery. A V-shape? A swoosh? A reverse square root? It’s all entertaining, but manufacturers understand that
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these poor analysts don’t know any more than they do, because to do so would require knowing the unknowable.
Customer Profitability Analysis
The Haarstad model
Even within this muddle of ambiguity, strategist Haarstad fervently believes leadership teams should dive into planning, using the same tools they used a dozen years ago. “It is probably more important than ever,” he says. But with a significant twist. Haarstad says the shrewdest long-term strategy for vulnerable manufacturers in the COVID-19 economy may encompass just 90 days. If long-term planners in 2009 created strategic plans to give their companies a competitive advantage in the recovery, he says, COVID-19-era planning should focus on mitigating near-term marketplace fluctuations. “It’s about viability and sustainability,” he says. “We don’t know what life is going to look like in six months. We have to abandon that long-term view and latch on to any glimmers of hope and convert them into opportunities for the business.” Most manufacturers started 2020 with a positive view of their prospects for the year. When the State of Manufacturing pollster asked executives to rate their prospects for 2020, even as late as March, 89% were highly optimistic about their prospects for the year. But then things changed. “Somewhere around March, COVID-19 hit,” Haarstad says, “and it changed their business, either for the better or worse.” How well a manufacturer survives the upcoming peculiarities of the COVID marketplace, he says, may depend on developing a 90-day plan that creates some clarity amid the shadows of the current business environment. At its core, the Haarstad process urges manufacturers to reframe their vision of year-end success, and then design a path to that endgame using innovative brainstorming and a fanatical focus on a stripped-down set of data and priorities. The reframed success, he says, could be broadly defined as growth, finding new customers, making investments or capturing a new market. Or it could merely be to stop the bleeding. Planners should represent this vision in a single initiative; the steps toward it should be guided by a carefully drawn short list of key decision indicators. Haarstad describes his “sustainability” pandemic planning process as a showcase for “the power of narrowing.” It builds on answers to the same four existential questions that manufacturers would have
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PROFITABILITY BREAK EVEN
Analyzing customer profitability represents a key data point in Haarstad’s COVID-19-era planning model. He points to a client that produced a graph that plotted total revenue by a customer on the X scale and profitability on the Y. The company discovered, to its amazement, that its biggest customer fell below the break-even line.
The discovery forced the client to take action to move the customer above the line. They might have raised their price or improved their cost position. In this case, the company concluded the customer was not the best fit and referred them to a competitor. answered, say, six months ago, when they plotted a more traditional three- to fiveyear plan. • Who are we and why do we exist? What is our purpose? What’s our culture? • Where are we now? • Where do we want to be in the future? What’s our vision for the future direction of the company? • How will we get there? What do we have to do to make the vision a reality? “The answers may not be simple,” Haarstad says, “but the questions are.” His traditional planning assigns equal weight to each answer as a backdrop of a long-term strategic plan. The particular strength of COVID-19 planning lies in what Haarstad characterizes as “the power of narrowing.” He compares it to driving a car. Drivers who navigate city streets at neighborhood speed limits, he says, can safely handle distractions like changing a radio station, talking to a passenger or glancing at a billboard. But driving safely at freeway speeds requires a higher level of focus. “It’s the same with navigating a company through a COVID economy,” he says. “We have to narrow our focus. We’ll stay in our lane, doing what we’re good at doing, without distractions.”
Company data provides essential information in Haarstad’s COVID-era strategic planning. “Data tells a story,” he says. “It helps us clear up uncertainty and evaluate options so we can make decisions for our business.” But current uncertainties, he adds, “require business leaders to make decisions about our business, not just monitor the performance of our business.” More data, however, is not necessarily better. While modern manufacturers have information dashboards that can provide an overwhelming amount of data, Haarstad suggests winnowing to a handful when making decisions, relying equally on essential performance indicators (KPIs) and key decision indicators (KDIs). “It’s OK to manage, manage the performance, but ultimately we need to make decisions to move the business forward and get better.” KPIs and KDIs are essentially the same, he adds. “We are renaming KPIs as KDIs to emphasize the idea that we need to use data to make decisions for and about our business, not just monitor the performance of our business.” KPIs and KDIs are made up of both leading indicators and lagging indicators. Leading indicators are activities that lead to results (such as customer contacts, quotes sent, the number of new customers, pros-
pects added to the pipeline, and economic indicators like raw material pricing or home construction rates). Lagging indicators are results of the leading indicator activities (such as revenue, margin, backlog, customer profitability, warranty, etc.). Haarstad says the following factors deserve attention. 1. Analyze top customers. Evaluate how they might finish 2020 and how their performance might influence your own. “Are they growing? Are they struggling? Do you need to change something with your relationship? If they are struggling, look for ways to support them,” Haarstad says. “If they are really hurting, you might look for ways to replace them.” On top of this, Haarstad urges manufacturers to analyze the profitability of customer relationships. 2. Keep tabs on your competitors. Planners should assess the condition of the companies with whom they compete for business, which starts, Haarstad says, with knowing who they
“We don’t know what life is going to look like in six months,” Haarstad says. “We have to abandon that long-term view and latch on to any glimmers of hope and convert them into opportunities for the business.” are. His notion is that competitors may find their own competitive edge, at the planner’s expense. “You want to know if they’re growing, and you want to know if they’re pulling back,” Haarstad says. “Are they entering new markets? Have they tweaked their messaging? Depending on what you find out, you might need to take action to defend your position.” Those changes might encompass marketing or more aggressive price. On the other hand, Haarstad says, struggling competitors might provide an invitation to enter a new market or capture new customers.
3. Conduct a scenario-based SWOT analysis. Assess the strengths, weaknesses, opportunities and threats based on how well your company has coped with the COVID economy’s constraints over, say, the past 12 weeks. “You’ll get different answers than if you just did a SWOT more broadly,” Haarstad says. “And based on your findings, take action: Leverage your strengths and fix your weaknesses. Shore up against the threats you identify.”
Reframing the endgame enables manufacturers to examine their competitive outlook from other angles. Identifying worst-case or best-case scenarios of a given situation can be powerful, according to Haarstad. He advises clients to reframe their shortterm strategic outlook by using a what-if planning tool called prospective hindsight. By using it, strategic planners conceive of hypothetical future events, and plot actions that will either minimize the potential damage (a “pre-mortem”) or enhance the possible opportunity (a “pre-parade”). “We often look at a scenario or situation from just one perspective. Reframing allows us to look at it from another angle. We can identify the worst-case scenario and our best-case scenario. And this can be really powerful because now we’ve put boundaries around it.” Haarstad says prospective hindsight shares similarities with open brainstorming, but by limiting the conversation to a defined event, the insights and solutions will be more concrete. “Hindsight is always 20/20; we can use this tool to change perspective and reframe the situation a little more broadly,” he says. Here’s an example: Let’s say you have recruited an exceptionally prized employee. She came to the company with a rare combination of talent and experience. She’s a motivated employee with a diligent work ethic and gets along well with coworkers. Lucky, right? But what would happen in six months if she unexpectedly walks into the boss’ office and submits her two weeks’ notice? The management team can use a prospective hindsight brainstorming session to consider the causes and consequences of that possible eventuality and ponder steps to avoid it or at least to minimize the damage. The net effect of the one-off possibility will likely have improved your overall attention to sharpen the company’s overall sensitivity to HR is-
sues in general. Planners will ponder her departure. Why might she quit? Did she get a better job? Was it closer to home? Did she get more money? Better benefits? Did her husband get transferred? Or did she simply want to change careers? If there are a couple of dozen reasons for her departure, Haarstad says, probably half would be beyond your control. But others — circumstances a company can control — deserve forethought. Did she dislike the good ol’ boys culture on the shop floor? Did she have problems with an uncooperative coworker or manager? Did she think job expectations were poorly communicated? Were her responsibilities evolving into areas she didn’t want to pursue? Did she feel overworked, underappreciated? Did she fail to see a pathway to a promotion or expanded responsibilities? A wise company would use the circumstances of this real-world pre-mortem possibility to sharpen its sensitivities on a wide variety of HR issues. “These are ways to discover problems inside your building,” Haarstad says. “If you know about them, you can act on them and hopefully prevent that negative event from happening. That’s the value of the premortem.” Planners can use prospective hindsight in other ways to reframe their company’s outlook, Haarstad says. Consider this: Let’s say you operate a small contract manufacturer that provides machine parts and fabricated assemblies to original equipment manufacturers (OEMs). Last year the company earned $5 million in the second quarter. During the second quarter this year, however, you lost two major COVID-sensitive customers, which immediately sliced 25% from your profits. Haarstad says company managers might mitigate that loss by imagining a “pre-parade” year-end event in which the company has found ways to recover the entirety of that loss. As they look back from their hypothetical future state, what might they have done to squeeze more revenue onto their income statement? Did they capture additional income from existing customers? Did they diversify their product lines or create new products to offer to new and existing companies? Did they identify cost-saving efficiencies in new or better processes? Did they reduce non-value-added expenses? In the final analysis, Haarstad urges all manufacturers to hew to their strategic discipline, whether they are currently thriving or struggling.
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MEETING OF THE MINDS
In a virtual roundtable discussion, four high-level technical college administrators discuss enrollment declines, the impact of COVID-19 on campus, budget cuts and more.
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SPRING FALL 2020 2020
t’s hard to overestimate the impact the state’s technical colleges have on the manufacturing industry. In a very real sense, they are training tomorrow’s workforce, tomorrow’s leaders, tomorrow’s innovators. But like everything else in this new normal, the coronavirus pandemic has the education sector reeling and trying to navigate uncharted waters. With students returning to technical schools, colleges are trying to deal with uncertainty on multiple fronts, including enrollments, funding, and the evolving messages high school students receive about the value and future of work in the manufacturing industry. Enterprise Minnesota hosted a virtual roundtable with high-ranking officials from technical colleges around the state. In a wide-ranging discussion, they revealed that technical colleges are very much prepared for what is sure to be an unusual semester, but a lot of questions remain unanswered. Among the participants were: Michael Seymour, Alexandria Technical and Community College president; Craig Johnson, president of Ridgewater College in Willmar; Daniel Fanning, vice president of institutional
advancement and external relations at Lake Superior College in Duluth and executive director of the Lake Superior College Foundation; and Kellie McElroy Hooper, dean of career and technical education at South Central College in North Mankato. Enterprise Minnesota: As you approach the beginning of your first fall semester in the age of COVID-19, give us a status report on enrollments. Daniel Fanning: We are down a little bit. We were down quite a bit more a few weeks ago, especially a couple of months ago when COVID first hit. Our applications essentially stopped. In the system, we are down 9-10%. For us and specifically for Lake Superior College, we’re down 5-10%. We’re seeing a pretty good rebound right now. We anticipate there’s going to be a lot of last-minute registrations. And we’ve got a lot of students who are either talking about that gap year, or talking about just taking some part-time credits now, a few classes here or there, some online, some on campus, then coming back full time. Manufacturing, specifically, was an area that was hit really, really hard in the spring because those students were sent online and, of course, that just doesn’t work for some of our online programs. So we were kind of nervous about losing some of those students, but the good news is a lot of them actually came back in the summer once the governor gave us the authority to finish those students out. We had about 90% of those students come back, and we’re seeing a pretty good retention number for the fall for those trades programs because we’re fortunate here in Duluth, as I know the other presidents are in their communities, too, where we know that there are still jobs in our backyards. Students know that. For the most part, our manufacturing numbers are pretty solid, and overall we’re down a little bit, but we’re anticipating a pretty decent jump back in the next couple of weeks.
“The manufacturing community here is very, very strong. And we need skilled workers. I don’t know if we’ll ever fully satisfy their needs.” — Michael Seymour, Alexandria Technical and Community College president Mike Seymour: The college in the last five years has trended downward anywhere from 2-3%, I guess, on average. Manufacturing has trended a little beyond that, so both applications and acceptance of manufacturing students have been down and will be down again this fall. Manufacturing represents about 12% of our newly enrolled students, so I don’t know where
the final numbers will land. Last spring, we used the area manufacturers to help us teach a lot of the students and give them experiences they could bring back to the program to make sure as many students who can graduate on time did. We actually took a chunk of our CARES Act money and created a bucket called, “Get Over the Finish Line,” and so in that bucket, we’ve been able to assist students financially in the areas of law enforcement and diesel and welding to come back over the summer and finish because they were in some of the program areas that couldn’t finish remotely. So they’ve been made whole financially, and everybody, for the most part, has come back to keep pace with their program. Craig Johnson: One of the most frustrating things here at Ridgewater was that we had experienced a decline in enrollment from 2011-2019. We had lost about 30% of our students during that time period. That’s a huge blow. But this past year, we had turned that around and we had about a 2% growth, and then COVID hit. And so what’s really sad to see is that pre-COVID the morale boost, people feeling good about the reorganization we had done, and the redesign of our recruiting and retention efforts, was having a positive impact. And now with COVID, we’ve bounced back and forth in our comparison date to date, this year to last year. We bounce back and forth between being up 5% and down 5%. It’s like a pingpong ball, depending on what week you look at it, what date you look at it. Certain events and recruiting efforts have to line up sort of all over the map. I also am concerned, as we go into the semester, that we may have a share of students who are willing to try our new hybrid format, or try to do things in a different way, or do some courses fully online that normally would have been face to face, but then drop out into the semester because it just isn’t what they want. They want to wait and have courses face to face. FALL 2020 ENTERPRISE MINNESOTA /
So, I would say the next four to six weeks at least are critical, and we won’t have a really solid sense until maybe even Oct. 1. The next couple of weeks are critical. Kellie McElroy Hooper: Enrollment right now is doing better. We’re running middle of the pack with the sister schools in the system. We started out pretty bad, at a low of 50% enrollment, but right now we’re hovering somewhere between 10 and 15% down from last year. Where we’re seeing the biggest decrease in enrollment is in the career and technical education programs. For certain ones, students aren’t ready to come back yet unless they know they’re coming back to hands on. That’s the anecdotal information we’re getting. We’re doing a lot to make contact with the students because we do plan on doing faceto-face instruction in the labs, while turning everything else that is not hands on to the online format. It’s been getting better the last two weeks. We’ve really had a big bump in enrollment. So, I think that people are getting to the point where they’re like, “OK, school’s going to be starting in a few weeks. We probably should register.” EM: Are specific programs affected differently? Something that requires hands-on learning is going to be really hard to do online. Are you able to track the enrollment that way? Can you see that some programs are way up or down? And if so, which ones? DF: Our students are very adamant that, particularly in these trades programs, they want to be on campus. It’s really hard to teach a welding class or an aviation class online. But now we have that permission to have those courses on campus with the restrictions in place, such as social distancing and 25 students per class. We’re seeing that enrollment bounce back in the trades programs, manufacturing and specifically health care, and even some of our carpentry programs. We were looking at some pretty significant decreases here a couple of months ago. But those are the programs that have bounced back. CJ: We may have students who drop because they look at courses they plan to take and find out what’s going to be hybrid, or it’s not going to be fully face to face the way they had hoped. We’re doing our best to talk with them, communicate with them and get them to understand that we have a very effective 36
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plan for this, and it can work, but we’re not yet sure. A number of our manufacturing and trades programs are strong, but some were struggling for quite a while, and
“People will often say, ‘The one- and two-year degrees in tech ed and those career paths, they’re great. Why don’t people understand that?’ And they really mean sincerely what they’re saying. But often the behavior really is, ‘But not for my kid. It’s for somebody else’s kid.’” — Craig Johnson, Ridgewater College president we’ve been looking at them. For example, carpentry we cut back from a two-year program to a one-year program because there just was not the interest, the student demand or the workforce demand for that two-year degree.
Welding has the same kind of challenges, and we’re looking at that and saying, “Should we revise that two-year program to handle that in a different way?” We’re looking at adding customized training in welding. The only program that seems to be level and growing a little bit in that regard is machine tool. But we’re really finding in the last several years good reason to look at the design of our curriculum and ask, “Should we create more of a stackable series of smaller credentials that build to a two-year degree, or should we consider not having a two-year degree and going to a one-year degree or a series of certificates?” Automation is the most recent one we’re looking at. Do we really focus on workforce skills rather than a two-year degree? But that’s been going on for a while, that’s not because of COVID. That’s because of trends out there with employers and with hiring. KMH: Our liberal arts and science program took a huge bump this summer. So, we were up overall in the institution over 10% in enrollment. I pulled some numbers on that, and it was people coming from the larger university institutions back home for the summer. We usually have that bump, but not to the extent that we had this year. Not all the CTE programming is running low. Some of them are, and some of them aren’t. Our automotive is at par, our machining is at par. It’s just getting the message out to the students is really what we’re trying to do. And we’ve been contacting students personally, working with the admissions and enrollment with new students. What we did do that was kind of unique is that instead of having a typical advising and registration session where faculty work and meet with the students, and then we have all the enrollment advisers and financial aid, we kind of bypassed that, and we had the students go ahead and do their online orientation. And then they could register right away. EM: COVID has wreaked havoc on every sector of society. We’re guessing technical colleges haven’t escaped that. Have you re-examined or scaled back any program offerings because of COVID? DF: Prior to COVID we were actually going the exact opposite direction. We have a bonding project that was going to expand
and relocate our manufacturing campus because that program had been growing for several years now. We’re still pushing that. Even though we’re seeing a little bit of a flattening with the enrollment to that program, we know that it’s eventually going to come back. So at this point, we’re really just kind of waiting to see. We haven’t eliminated any programs. We’re just kind of watching the trends. We’re seeing some programs go up, some programs go down. But that literally has been changing by the week. At this point, we have not made any knee-jerk reaction. MS: No plans for any program eliminations. We’re looking at a couple new health programs for fall of ’21. But nothing being looked at for elimination in terms of current programming. EM: The world is getting increasingly used to Zoom and other virtual meeting platforms becoming a part of our daily lives. Is Zoom a viable tool in the technical college world? MS: Using Zoom for administrative kinds of things and even in advising ranks now, I think, got more common. But the tool I think we’re focused on for fall, primarily in order to get the 25 or less in a classroom, is a technology called Owl (a Zoom-like program that actually places a 365-degree pivoting camera inside the classroom to allow more flexibility with screen time). I don’t know if other schools are using Owl technology. It’s an allencompassing device that you hook up to the computer in the room and then it sort of follows whomever is talking, and it has a high-end sound system and a camera. And so we’ll actually have students on campus taking a lecture. They want to be in the classroom, but they’ll be sitting maybe in the cafeteria or in some other remote location, and the faculty member would be using the Owl to project themselves across the Internet to the students. That’s one of the benefits I would say of COVID, if there’s been an upside to this. A lot of the trade, technical faculty members who were not indulging technology probably to the extent they should have were forced into a crash course last spring. And as a result, the tech skills of all of our folks have gone higher. CJ: I would agree with that. I think Zoom is just the beginning of where this might go with new technology and new platforms. I’ve experienced on my own — in terms of meetings and interaction
— a higher degree of participation, better quality, better feedback. We could have conversations via Zoom while people are using the chat feature. More people I think
“Our partnerships are key to our success. Even during COVID, when we could not even come onto campus, we had students completing some of their projects and competencies at the employer site.” — Kellie McElroy Hooper, South Central College in North Mankato dean of career and technical education are feeling that they have a voice. People who don’t speak up in a group will put something in chat, or they can send it privately. All of that, I’ve found, has increased participation in meeting discussions. And I’ve heard anecdotally from faculty that they were surprised in spring that some of them actually reported an increase in
attendance and an increase in participation partly because of that new kind of format. I’ve been very vocal in our college that, even if COVID disappeared tomorrow, we should not go back to exactly the way we were. We need to learn from this, how to use technology, we need to spring forward with the opportunity we had to get students, faculty and staff to experience this, and this is a wonderful learning opportunity. We can’t go back to the way we were. That doesn’t mean we wouldn’t go back when we can to fully face-to-face classes. We will and we need to. There are certainly program areas that need that and always will. But it would be a shame to just lose this, because we have discovered opportunities here. I’ve even had students say how much they hated the idea, but by the end of spring semester they could see where certain courses and certain aspects of their learning were enhanced by this experience. EM: How concerned are you about the state’s looming budget deficit? KMH: We’re actively looking at the classes and the programs and how we might be able to consolidate them, maybe remove, have layoffs of faculty and programs that aren’t at the sustainable enrollment. I will say that South Central College President Annette Parker has been very forthright and has had weekly or biweekly meetings for COVID throughout this crisis at which time she does lay out the budget for the entire school and anybody who wants to can join the Zoom and see how the budget looks with a 20% decline in enrollment, with 15%, with 10% — just to communicate those things to people so that when and if we have to do those types of things that they are able to understand where we’re coming from. MS: I inherited here a very robust program review process. It’s really a business metric that they put together for academic programs, which faculty here have, I guess, accepted. I think what they appreciate about it is they can see the profit/loss in their programs, and they’ve agreed to the measures in terms of how much appropriation is brought in and attributed to their program and how much tuition comes in and is distributed. And it shows the expenses and they can debate whether they should incur those or not. But at the end, it says your program is either profitable or it’s taking a loss and losing for a few years, so something has to FALL 2020 ENTERPRISE MINNESOTA /
happen, whether that’s a revision, streamlining things, or a partnership with a high school — something the faculty need to embrace to keep their programs on the books. But a lot of that stuff had happened before I got here, and so it was really tight and the programs that are still standing here are pretty solid. EM: One of technical education’s greatest success stories is the way it partners with industry to benefit the students, the school and the employers. What is the status of those partnerships? Are they as robust as they used to be? KMH: Our partnerships are key to our success. Even during COVID, when we could not even come onto campus, we had students completing some of their projects and competencies at the employer site. And so we’ve just been able to work really closely with businesses and the chambers. Dr. Parker has been able to really leverage those relationships to the benefit of South Central College. And we have been quite responsive to their needs, and I think that in turn makes a good partnership. Welding was a program that started up about five years ago. They built it up slowly, started working with some of the welding programs in the industry. And we got some allocation from the state to do a building redesign — but not enough to do what we really needed to do. And these industry partners stepped up, gave us the money, and we were able to build a stateof-the-art lab in that particular program, and some others, too. DF: Partnerships is really where we shine, and we’re really fortunate to have great partners, not just in Duluth, but throughout the region of northeast Minnesota. And as many of you know, prior to COVID, this area was just buzzing, particularly in the manufacturing side. And some of our partners (Moline, Altec and Loll Designs), these were companies that were doing multi-million dollar expansions that, ironically, are currently either idled or close to idled. But we know the jobs are going to be there when this dust settles, so just to have those kinds of partners in our backyard that invest in our programs, that serve on our advisory councils, that serve on our board and foundations — that’s great for Duluth. MS: The manufacturing community here is very, very strong. And we need skilled workers. I don’t know if we’ll ever fully satisfy their needs. A number of our 38
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students come from greater distances, so they often come and they’re sponsored by a company in their hometown who’s paying their tuition. And so then they go home and
“Our students are very adamant that, particularly in these trades programs, they want to be on campus. It’s really hard to teach a welding class or an aviation class online.” — Daniel Fanning, vice president of institutional advancement and external relations at Lake Superior College in Duluth and executive director of the Lake Superior College Foundation they fulfill their obligation for that. But not all of them. And so what we’ve tried to do is engage our local manufacturing group and match the workforce development grants that were provided by the state in ad-
dition to the match. So $2,500 the first year coming from the state, a promise of the $2,500 scholarship coming in the second year from a local employer, and with the caveat that the students spend part of their summer in a paid job with that particular company. We call it Workplace Learning Scholarships. We’ve been able to place a number of students in one of our local manufacturing facilities who are now coming to get their second year of training. The local manufacturer had the opportunity to get to know these students and their capabilities, and the students in turn are getting their tuition underwritten a bit. That initiative has been very successful for us, and some of the manufacturers who didn’t participate want to try to get in on this. EM: Are high school educators and parents seeing a greater value in technical education? Is there a trend either way? MS: It’s a message being pushed statewide and nationally. Are families getting it? Not sure. Part of it, I think, if we look at manufacturing again is, I don’t know if we’ve done a good job yet of explaining what exactly manufacturing all entails. We’ve tried to package it under integrated manufacturers. I don’t know if that helps or hurts. I think sometimes just saying CNC (computer numerical control) helps people remember what it is more than anything. I think for us, it’s the way we talk about what is manufacturing, and then explain how those jobs have evolved and are very technical and computerized, and you work in clean environments, and the pay is good. I think the wheels are turning on that. I think we’ve made some progress. But I think we have a ways to go yet. CJ: People will often say, “The oneand two-year degrees in tech ed and those career paths, they’re great. Why don’t people understand that?” And they really mean sincerely what they’re saying. But often the behavior really is, “But not for my kid. It’s for somebody else’s kid.” And so do we really believe what we’re saying? Do you really practice that? There’s still that stigma about, “Is that good enough? Is that what people really want to pursue, rather than something else?” And I think we’re still at that tipping point of making that shift, and really being perceived in a holistic way and
across the board, genuinely, as a real education and career path opportunity. And I think we have to own that part of it, and that could involve how we revise our program design. We could probably do a better job of not so much preparing in narrower niches but preparing in program clusters and program pathways, where it gives people more of an opportunity to move further along in a degree as well as move around in a broader path. So they might not feel as much at risk of committing to that trade, and what if 10 or 15 years down the road that job’s not there anymore, or that industry goes away, and suddenly somebody is left underemployed or unemployed. We need to find a way to show that we’re building a foundation that people can build on, and if they do the right thing and we design it the right way, they’ll be just fine. But I don’t think we’re anywhere near that yet. So I think we have to redesign what we do, tell our story better, and get more people to back what they say. Because some of the same people who say we need these workers might be the same people whose kids are going on to something else. They’re not getting a one- or twoyear degree to do tech ed careers. How do we stop talking out of both sides of our mouth? KMH: Educators seem to be getting more on the path of understanding that the one- or two-year degree credential is going to be something that is attractive to students. Parents are the last ones to come along. Here’s something that’s positive: Faribault and Shakopee both voted in their elections to increase the funding so that these kinds of career and technical education classes can come back into the high school. In Faribault, they increased the seventh hour. It’s about an $800,000 increase that they saw, just to add this extra seventhhour period, and then they’re looking at the programming and how they can get the students in a pathway that coincides with them continuing their education, maybe getting industry credentials. And Shakopee actually not only did that, but they got a brand-new high school that is totally geared to clusters. So I think that shows that parents are understanding it a little more. They’re putting their money out there and voting for these tax increases.
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SOM Survey Redux ‘Never let a good crisis go to waste.’
ou’ve probably heard this phrase before: “Never let a good crisis go to waste.” It’s been uttered everywhere from politics to board rooms. And now we’re hearing its echoes again as we navigate the uncertain waters of the coronavirus pandemic. In some ways, even we here at Enterprise Minnesota are following that advice. You may recall that our State of Manufacturing annual survey was cut short last spring when social distancing and stay-at-home orders prevented us from convening focus groups. But instead of merely lamenting the loss of a survey that has become crucial to understanding the industry, we did what any smart manufacturer would do: We thought strategically. We plotted out a plan to reposition the survey as a way to plumb the minds of manufacturers about how the pandemic has impacted their businesses. So this month our survey team is in the field asking all the questions you would ask. We’re also convening focus groups so we can get candid insight into what’s really going on with Minnesota’s manufacturers. When we made the decision to delay, we’d hoped there’d be more stability in the economy. The jury is still out on that, but it’s clear the pandemic isn’t going anywhere for a while. It’s also clear its impact has been profound. Our annual survey provides vital information about every facet of the industry. We have no doubt it will give us a unique look at the pandemic’s toll so far. We’ve already got some evidence of how things are going, and by many accounts manufacturers are proving resilient and nimble. Nowhere is that more evident than in this issue’s cover story. InLine Motion used youthful ingenuity, engineering prowess and good old-fashioned hustle to turn a crisis into an opportunity. A Detroit Lakes-based company that specializes in food handling and manufacturing automation, InLine Motion used Facebook to gauge interest in an idea they’d been simmering when the pandemic made it clear that personal protective equipment would be 40
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Lynn Shelton is vice president of marketing at Enterprise Minnesota.
part of the new normal for a while. Would people be interested in an InLine-designed protective face shield? The response they got — 20,000 pageviews within five hours — confirmed their belief that a quick pivot to face shields would be worth their time. Within four months they’d produced 90,000 face shields and shipped them to 40 states. Elsewhere, we’re seeing manufacturers putting their money where their mouth is. Millerbernd Manufacturing in Winsted, for example, forged ahead on a $12 million expansion that promises to add 100 jobs. That’s not the kind of move you make if you’re not bullish on the future. Still, we can’t ignore that we’re living in an era blanketed in uncertainty, and that includes the economy. We felt a similar vibe during the 2009 recession, but this one feels different for several reasons. The previous recession appeared to hit everyone equally. This recession, on the other hand, has seen
some manufacturers bear a more substantial chunk of the burden than others. Manufacturers in pharmaceuticals or food have fared well; automobile manufacturers have not. Also, the 2009 recession acted more like a garden-variety downturn, the kind economists can size up and make reasonable predictions about. This COVID-19-based recession, however, is anything but reasonable. COVID-related questions and uncertainties have riddled manufacturers’ efforts at planning their futures. How well will public health officials predict and track the spread of infections? Will the virus mutate? Will it just dry up and die? Will masks prevent the spread? Does temperature monitoring do any good? Are social distancing tactics effective? Our State of Manufacturing survey may not have answers to these questions, but it will put a finger on the pulse of the manufacturing community. Stay tuned.
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Enterprise Minnesota Magazine highlights the leaders and innovators in Minnesota's manufacturing industry. The Fall 2020 issue features prof...
Published on Sep 16, 2020
Enterprise Minnesota Magazine highlights the leaders and innovators in Minnesota's manufacturing industry. The Fall 2020 issue features prof...