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Three Tips to be a Master of Manufacturing With Darrin Mitchell
Episode 194th April 2022 • The Manufacturers' Network • Lisa Ryan
00:00:00 00:30:08

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Connect with Darrin Mitchell:

Website: www.manufacturing-masters.com

LinkedIn: https://www.linkedin.com/in/darrin-mitchell-20ab80158/

Lisa Ryan: Hey, it's Lisa Ryan. Welcome to the Manufacturers' Network Podcast. I'm here today with Darrin Mitchell. Darrin has been a global manufacturer of highway equipment for the past 24 years. Last year, he developed an online training platform for manufacturing businesses to find best practices from experts worldwide. So, Darrin, welcome to the show.

Darrin Mitchell: Awesome, thank you for having me. It's a pleasure to be here.

Lisa Ryan: Please share with us your background and what led you to do what you're doing in manufacturing.

Darrin Mitchell: We're a global manufacturer of big highway equipment. If anybody out there listening right now has ever been stuck in traffic, and you've complained that the equipment up ahead is blocking your way or making you late, I'm officially the guy to blame. We build the equipment that was building roads or in the mines or hauling agricultural products. We make big highway trailers for transporting big bulky things. We do that across North America, Australia, New Zealand Middle East, South Korea, and Europe.

Lisa Ryan: And so, and why did you choose that industry? What led you into highway equipment, to begin with?

Darrin Mitchell: So, 25 years ago, I met my business partner, an engineer. He said he was going to start making these highway trailers. I said, "For the love of Mary, please do not ever do that." He said no, no, I think it's a good idea. I said, "Listen, our biggest competitors are out of Ohio. They are vertically and horizontally integrated. They own their suppliers; they are next to the customers; they come and pick up the product from the factory, and they're happy with a five to 9% margin.

Literally, day one - if we tried to compete from a rural and remote community, we've already lost just on the cost of getting materials to our factory. There is no hope in hell of us ever succeeding in competing against someone who has hundreds of millions of cap expending. They're fully automated. They're competing on volume and integrated into the supply chain. We'd never be able to win.

Lisa Ryan: Obviously, something changed.

Darrin Mitchell: I know. He went ahead and started it anyway and then told me. A few months later, he said I'm in deep, help. Oh okay. We started getting innovative immediately, understanding what we were up against—and not doing what our competitors were doing.

One of the things that we did was built a lot of innovation into the product. We were able to ask for a premium. Being from a place where you're removed from your supply chain or customer base, you have to ask for a premium. We built a lot of things moving parts. The products could do things that our competitors couldn't do because they didn't have the capacity.

When I meet with my competitors, they say I hate you and say, well, I, like you. Why do you hate us? They would say I hate you because it's hard to copy you. We have a massive assembly line set up in our factory, but how you've innovated with your products makes it hard to replicate that. They had an enormous assembly line, where you would put 10,000 20,000 products a year. So the first thing that we did was we innovated to make the product more valuable to the customer so that we could charge a premium.

That's how we started growing the business and understanding that we didn't want to compete against the masses. So we tried to skim the cream off the top and ensure that we could show that value to the customer to charge that premium for the product. So that was the first step in what we did for the business's growth.

Lisa Ryan: How did you decide what to add to your products to make them premium? Was that in researching the industry, talking to customers, etc.? How did you choose, and what would be an example of an innovation that you put in a product that your competitors couldn't duplicate.

Darrin Mitchell: The quickest thing we did was we spent a lot of time sleeping on airport floors. We spent a lot of time in a very senior leadership position. We spent a lot of time with customers, so we would say what features do you like? What features don't you like? What can it do? What can I do? What could it do to make you more money? How can we become more valuable in it? We wouldn't get that feedback if we lived in a rural location. So we had to spend that time with the customer to do that.

What we ended up doing is our competitors would make these big dump trailers that go up in the air, and the materials followed at the back. We put a conveyor belt in the bottom of the trailer that you could have a driver that's relatively inexperienced run it. They turn on the trailer, and it loads without going up in the air and having that threat of falling over.

The addition of the moving parts was something nobody could copy because it interfered with the manufacturing process. So we got good at it, and it was a level of complexity that our competitors found it difficult to copy.

Lisa Ryan: Was it also because your competitors had been doing it the same way for so long that they didn't have the flexibility you had as a newer company? Did that play anything into it?

Darrin Mitchell: Most manufacturers are set up for efficiency and effectiveness. We've seen this lately with disruptions in supply chains. Everything goes well when it goes, really, really well. But, as a manufacturer, sometimes you've got things so efficient it's hard to be flexible. You always have to remember that you have to build that flexibility into your innovation, your factory, supply chain, and staff. You have to develop that flexibility. Otherwise, you can get caught flat-footed.

Lisa Ryan: Absolutely. One of the things that we talked about extensively is your focus on culture. That's pretty much what you're known for in everything you do. You gave me a little teaser about what you're going to share - some ways to increase culture by 33%. Tell us more.

Darrin Mitchell: I'm glad I caught your attention. I think 33% is a fascinating number because it does something to the human brain. One of the things you need to think about as a manufacturer is before you that little BS detector goes off in your head is, you need to think about 33% compared to what. I would suggest that companies out there are serious and interested in a genuine and tactical way to improve their company culture today. They should reach out to someone like Lisa Ryan.

Let's get a base level of where to start because many companies don't even know where they're at today versus how they improved from where they're at. I have three tips today because we are limited on time, and we can ramble about things for hours. Divide them by ten; you've got 11.1% for each tip that you can improve your culture. Number one is in a leadership position. When you're a leader, you give up many of your rights and responsibilities. As an employee within the business and as a leader, you have to admit that you never let your team fill in the blanks. Everybody who shows up every day who's worth their salt that comes to the business believes in something beyond a paycheck. They think they're wearing a team jersey, and they're part of something. They gain additional value in their lives beyond a paycheck. Your responsibility as a leader within the business is don't let them fill in the blanks. As a leader, I mean that you always need to be front and center explaining what the future looks like and what our place is as a team. Where do we fit into that future; what is it. You never lie to people because if you do that, they'll never come back once again.

You need to be honest. It would be best to give people that clear indication of the business's future and where they fit into it. I'll give you a good example. This is the bad news during covid because we always like these heroic stories of good things. But during covid, I am sick and tired of talking about it. I had 130 employees. Even the team leads were so panicked and frustrated. They were getting it from work; they were getting it from CNN, and they were getting it from their spouses. They were beyond their capacity to handle the situation. So guess who else wants me.

But I gave up that right to fall into that mode when I accepted the mantle of the leadership position. So what I did was two times a week for the first eight months of the pandemic. I would break everybody into small groups, stand in front of everyone, and say, 'This is what I know. This is what's happening with the business. I understand everybody has concerns, but I guarantee that I will keep standing in front of you until we get to a better day. I will not candy coat anything in front of you, but I do know this one thing you are a world-class team acting like a world-class team today. I have the utmost respect for my coworkers who come to work every day and continue to conduct themselves.

I said that twice a week for eight months. I would always give them an update. What it did, was that it reassured them that someone had the fingers on the pulse of their future. When your home life was unstable, and many of us went through that, you knew you had some stability when you came to work. Someone was thinking actively about your future and where you fit into it.

The first rule would be as as a leader, you can't advocate conversation. Your job in that leadership position is to talk about the future. So how do we, as the business employees, fit into that to give people that sense of accomplishment. We tend to announce the big things and the good things all too often. You have to announce all things because, when people when you're absent, nobody fills in the space. But positive news does, so take that opportunity to be the leader they're looking for in that space.

Lisa Ryan: The funny thing is that we've heard that it's almost cliche so often that people don't leave their job; they leave their boss. Companies will say, oh yeah, Joe left to go somewhere else to make more money. But, no, if Joe were happy, he would have never left. There was something about the leadership. The boss was not transparent because, like you just said, when the grapevine is going, and people don't know what's going on, they're going to make stuff up.

When they're not happy thoughts, they're making up; they're justifying. They're looking at the way that leader is looking. They're looking at their expressions on their face so just that getting in front of people, knowing that your employees aren't always going to like what you have to say, but the fact that you're being straight with them twice a week for eight months. It's probably interesting as your employees were at the bar on Fridays with their buddies talking about work. Their friends are probably saying our boss. I don't even know where our boss is. He disappeared, and I don't know what's going on. You show that level of vulnerability that you're willing to be transparent with them. That communication builds those relationships. That's key.

Darrin Mitchell: And I screwed up a lot of stuff too. You segued very nicely into the second point is who is the boss. We found a lot of times in our cultural development. The senior leadership of the business has a certain level of influence on the culture. Those senior leaders need to realize that managers and team leaders have a more significant impact on your culture.

One of the things we did was to empower our team. An excellent example of this that I was proud of is that we would set out monthly production objectives as a team every month, and we would pick a number and say we're going to get 30 units out the door this month. If all of the employees succeeded in getting those 30 units out the door every month, high quality, with all the needs, features, and benefits that the customers were looking for, we give them a $100 bill. Now, someone could say, hey Darrin, tax issues, and I'm going to shut up. I don't care.

We were very specific in what we would do. I would go to the bank and pick up a stack of hundred-dollar bills, and I would hand those to the team leads before the meeting. I never handed out a $100 bill. If we hit our objectives, the team leads would meet with their teams to say, hey, we hit our goals, and only the team lead was allowed to pass the bill and shake the hand. I was never allowed to touch that. I said, here we are, this is where we're going, and the team leads took that personally. That is a good incentive because it was more powerful than giving them a $1,000 bonus.

Doing this, shaking hands, making eye contact, and saying Thank you to one of your coworkers made a difference. So this month, we turn that into a ritual. It was a very positive effect on the business.

If you want to improve your culture, the second thing is to find ways to empower your team leads because they have more influence over the masses than you do in a senior leadership position. After all, they're the direct reports coming out of the business.

Lisa Ryan: We talked about the difference between $1,000 and $100. When you start, people think that it's all about the money. You illustrated that so beautifully because many times say you had a great month and gave everybody $1,000. If they would be like and then next month, it goes down to 100 now you have people complaining welcome, we only got 100 this month, and it takes away the magic. It's like a $25 gas card given to somebody catching them in the act of doing something right. It will not upset anybody else because you're being recognized, so it's the smaller gifts. What even makes that you could probably have done the same thing with a $50 bill. Because it's the eye contact and the handshake and that personal connection that your leaders are your managers are showing their employees, I see you. I appreciate you. It also sounds like you're getting them to all buy into the system because you often see it all the time. Some managers are great with their people, and some just aren't. Those with the departments with the high turnover, but you're saying, well I can't get rid of them they're our highest producing department, even though they have 100% turnover. You have to get rid of those toxic managers, train them, or do something. You bring everybody into the team, have that meeting, ritualize the experience, keep it consistent, and come together in celebration. You have so many great ideas.

Darrin Mitchell: And number three is the most uncomfortable thing a manufacturer will ever do. I will ask every manufacturer out there today to make a video. Last year alone, we had 6 million views on YouTube. This is how people find out who we are, why they should trust us, and why they should work with us. We use those videos - not needs, features, benefits, products. We created those videos to show who we are, and it's effortless to do business with us. And guess who the star of the videos was.

Lisa Ryan: The employees.

Darrin Mitchell: You got it. I would go and pluck out employees randomly from the floor. I would say you're a star, and they would go on a dare to you. You're going to be awesome. We did many fun, silly, serious, different things with the employees. In one, we filled up a trailer with water in the middle of winter. We just opened the tailgate and dumped it on one of our employees sitting in a little Mr turtle pool. We were trying to show how watertight it was. We took four of our most husky employees, and they were their wives' dresses and wigs, and we said, the new models are coming. All silly tongue-in-cheek stuff, but here's what happened. The rest of the world started saying you look like fun people to do business with. You look like you're a sincere human being.

Secondly, those employees started becoming transmitters for the business, but they also took those videos home to show their children and their spouses. This is what I do every day. So now the business has become part of the family household, so mom doesn't get up at 6 am every morning to go and do something. She actually does something pretty cool because I have just seen her on this little device in my back pocket.

Lisa Ryan: That's great! I talk about the power of video all the time. We're looking at such a tough labor market to attract employees. They're checking you out online, and they want to see. Do you have people who look like me? Does it look like it's a fun place to work? If you have nothing online and all you have is a bunch of negative reviews on glassdoor.com, and you've never even answered to, the chance of that employee ever even filling out an application goes down.

It sounds like you're increasing your business because it looks like you're fun to do business with but just as far as a recruitment standpoint, making it easier. You think about one of your employees going home and telling their spouse, hey, you know I'm going to leave this job. I'm tired of it. They'll say, you can't leave that you're a YouTube video star.

Darrin Mitchell: And when that little transmitter they were able to send that to their family and friends, and there was a particular recipe on the people I would pick for the videos. I wanted them to share that with family and friends. So I was starting to get applications from those family and friends that the video said, hey, I want to be happy like he seems to be happy. We will also give you a paycheck, train you, and do all those good things to treat you like a human.

Lisa Ryan: The thing is, and it sounds like you just brought in your phone, it's not like you brought in a huge production team and did a big fancy thing. You could have. But just that when people think about the technology that we have. I just got the iPhone 13 pro, so I have more power in my hand right now than most movie theaters did ten years ago. So it's easy to do. It's just the point of doing it.

Darrin Mitchell: You hit the nail on the head. Lisa, the recipe is to forget the flashy stuff. It doesn't work - it sets off the BS detector. So grab your phone and be authentic and sincere. People will share that with you.

Lisa Ryan: Out of everything you've seen and done with your culture over the years, what's your favorite thing? If you were to give some advice or an idea that somebody listening today could start to implement immediately, what would that be?

Darrin Mitchell: If you want the most sincere answer. The most heartfelt answer you could get from me is after 23 years, especially for the last five years. Financially, we were in pretty good shape. When you're not under duress as a manufacturer, you tend to take it out on your people. We found ourselves in an okay spot. We were in a safe place, and we set up a high school education program.

I watched many of my coworkers graduate, and they would say privately to me thanks, I don't feel like a piece of shit anymore, and I would go, ah, okay. That's deep. I take so much pleasure out of thinking about those memories. I was fortunate enough. I graduated high school.

To see one of my coworkers associate that with me, I feel like

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