Category Archives: Business

Starting a Machining Company is Hard, with Jon Perin

By Noah Graff

Today’s guest on the podcast is Jon Perin, owner and President of Perin Industries, a young CNC machining company in Webster City, Iowa. Jon, started Perin Industries in 2018, after a 12-year career as a hospital administrator. Like many entrepreneurs, Jon has had to face some daunting challenges. Starting out, he aggressively bought new state of the art CNC equipment to make parts for the medical sector. When he had trouble penetrating that market he successfully pivoted to fire arms work.

Scroll down to read more and listen to the podcast. Or listen on your phone with Google Podcasts, Apple Podcasts, Spotify, or your favorite app.

Main Points

When Jon Perin started Perin Industries in 2018, he planned on making parts for the medical industry. Early on, Perin Industries devoted a lot of resources to obtaining ISO 9001 and AS9100D certifications. Achieving those certifications was costly, so before the company could start the process of obtaining medical work certifications it had to start producing revenue. Also, Jon realized that medical customers prefer to work with companies who have established track records and experience, so he steered the company to work in more general industry. 

Jon grew up around his father’s screw machine shop and learned to run ACME multi-spindles in high school. His shop is right across the street from his father’s shop, which is now primarily managed by Jon’s sister. Jon attended college in Florida and after graduating went to work as a hospital administrator for 12 years. Working in the hospital environment played a part in Jon’s interest in making medical parts. Jon says he appreciates the manufacturing business’s simplicity compared to that of the health care field. He says it is easier to quantify success working in manufacturing because success can be measured by the quality of parts produced.

Perin Industries has eight full-time employees. In addition to managing the company, Jon does CNC programming and setups. He jokes that he is also the janitor. He says his employees are becoming more capable to perform setups, which will free him up to focus on more administrative tasks in the future. 

Jon Perin, Owner and President of Perin Industries

When Jon started his company, intending to do medical work, he purchased state of the art complex CNC equipment, including an INDEX C200 twin spindle/3-turret lathe he bought new for around a million dollars, and a Traub TNX65/42 twin spindle/4-turret lathe that he bought used for around $500,000. He says that after attending Design-2-Part trade shows around the US he concluded that the opportunities for Swiss work and traditional screw machine work were extremely competitive and dominated by established companies. This influenced him to invest in sophisticated turning centers.

After being unsuccessful in penetrating the medical sector, Perin Industries pivoted to the fire arms business, primarily making parts for Glock barrels and slides. Jon says that many companies produce the same parts using Haas machines. However, using his turning centers Jon can single-op the parts, making them in less than a third of the time as his competitors. Getting into medical work is still Jon’s longterm goal. He also aspires to one day buy his dad out, which would open his company up to many new types of customers.

Jon says he preferred to start his own company rather than go into business with his dad, but he says one of the main reasons he has been able to keep his startup company going is having good mentors such as him. Jon’s first year in business he made some costly mistakes, many of which experienced companies are also guilty of. Sometimes he took the wrong types of jobs, he bought equipment too early, and some jobs took him twice as long to set up than he had planned. Through it all, Jon’s father and another mentor have guided him to stay resilient. Jon says he’s grateful his company didn’t make enough bad decisions to fail. He plans to keep learning from the past and push forward.

Question: If you could go back in time and give yourself advice, what would you say?

Share this post

Running a “First Class” Cold Heading Company, with Joe Bennett

By Noah Graff

Our guest on today’s podcast is Joe Bennett, Vice President of Sales at Seaway Bolt and Specials, a privately held cold heading company in Columbia Station, Ohio, founded in 1957.

In the cold heading process, coiled steel is cut into slugs, which are then hit multiple times, ultimately pounding them into a desired shape. The cold heading process is capable of producing several hundred pieces per minute. Some cold-headed products are net shaped blanks that are shipped to machining companies who then finish the parts.

Scroll down to read more and listen to the podcast. Or listen on your phone with Google Podcasts, Apple Podcasts, Spotify, or your favorite app.

Main Points

Seaway has historically focused on cold heading one product family, taper threaded pipe plugs ranging from 1/16” to 2” diameter. The pipe plugs are used in a wide variety of industries such as automotive, oil and gas, and agriculture, going into products like transmissions, pumps, compressors, and engines. Joe describes a threaded pipe plug as an inside out nut. It looks like a nut, but its threads are on the outside. They are produced by cold heading a blank followed by thread rolling. Seaway produces 100 million pipe plugs a year, exporting 30% of its production. A few years ago, the company decided it needed to make a new part family if it wanted to keep growing. Its team decided the logical course would be to cold head female tubular fittings to match its male pipe plugs.  

To cold head its pipe plugs, Seaway uses machines called nut formers. To make the new tubular parts the company purchased three machines called parts formers, which have the capability to make more highly engineered parts than nut formers. Joe says the new machines stand two stories high, have the footprint of three conference rooms and weigh 400,000 pounds each.

The used machines cost several million dollars to purchase and will take millions more to rebuild. Joe says National produced around 18 of the type of 1.5” cold heading machines Seaway purchased. GM was their original owner, buying them new in the 1970s. 

Prior to working at Seaway, Joe worked in sales for 10 years at a large cold headed parts distributor in the Columbus, Ohio, area. Six years ago, he took a job at Seaway because he preferred to work for a privately held, smaller company with around 70 employees, where he felt he could make a significant impact. 

Joe beams about Seaway’s philosophy of running the company with a “first class” management style. He and the company’s owner, Ray Gurnick, offered to cover a roundtrip plane fare for me to come to the company and interview them in person. I unfortunately had to take a raincheck.

Seaway pays 100 percent of higher eduction costs for its employees. The company has three holiday parties a year and regularly brings in food trucks to celebrate company achievements. It offers profit-sharing and gives regular bonuses. Its shop bathroom has been redone in marble. 

Seaway uses open book management, showing its employees the company’s financials on a quarterly basis. The purpose of open book management is to keep employees invested in the company’s success and guide them how do their jobs in the best way to maximize productivity. Also, including employees in the management process makes them feel valued, which can boost performance and satisfaction.

Every Friday, production at Seaway stops for the last half hour of the day so employees can clean the shop–cold heading shops happen to be notoriously filthy. Afterward, the quality department takes photos around the shop and reports to the various departments how well they cleaned up. Joe says that when visitors come to Seaway they are wowed by the shop’s cleanliness, but more importantly, the cleanliness creates a pleasant working environment for Seaway’s people.

Though Seaway is ambitiously expanding its product lines, the company does not aspire to be like its larger competitors. Joe says the company’s strategy is to do all the little things better than its competition. This will attract the best talent to work there, which in the end will lead to success.

Question: If you could buy any new equipment for your shop, what would you buy?

Share this post

Upping Our Machinery Business Game, with Noah and Lloyd Graff

By Noah Graff and Lloyd Graff

Today’s podcast is the second half of our conversation about Graff-Pinkert’s business in 2021. I particularly liked this part of the conversation because we dug deeper into our approaches to selling machinery, talking to people, and one of our favorite subjects—how to find serendipity.

Scroll down to read more and listen to the podcast. Or listen on your phone with Google Podcasts, Apple Podcasts, Spotify, or your favorite app.

Main Points

Lloyd says one thing he wants improve on as a machinery dealer is his tolerance for risk. He believes taking gambles on used equipment is the key to being successful and having fun in the machinery business. Noah asks Lloyd if his willingness to take risks has waned now that Graff-Pinkert is not in debt for the first time in a while. After a moment of reflection, Lloyd says he still wants to take risks and that risk taking is what enabled Graff-Pinkert to get out of debt. Also, he is pleased to say he now sleeps better at night because he is less worried about keeping the machinery business afloat. 

Noah says he is working on getting to know customers more in-depth when they contact Graff-Pinkert. He says it is easy to allow phone conversations to remain merely transactional, only talking about what machines customers are looking for or what they want to sell. In his experience, spending extra time to really get to know people leads to learning important things about business and the world in general. He believes the more information he gathers about a customer, the more chances for serendipitous opportunities—lucky breaks. Also, spending extra time to get to know customers can lead to rewarding relationships that can pay dividends long-term. 

Lloyd says he admires Noah’s conversations and often finds them fascinating to listen to, but he feels he doesn’t have enough energy to have a lot of long phone conversations. His brain is constantly consumed with trying to piece together clever deals. “Connecting the dots,” he calls it. He marvels that all three of his children have careers that revolve around having in-depth conversations. His daughter Sarah is a rabbi and son Ari is a therapist. 

Noah says he wants to work on talking a little bit more during conversations, rather than remaining passive the entire time. While it is great to be an attentive listener and question asker, he says participating more actively is helpful to bring out new important information and create stronger bonds. He tries to use “serendipity hooks,” a phrase coined by Christian Busch, the author of the book The Serendipity Mindset, who he interviewed on a podcast. Serendipity hooks are various statements one inserts into a conversation to spur new discussions. For instance, one person in a conversation could mention they love a certain book or they are passionate about a certain hobby, which then could create a new interesting connection between people.

Lloyd ponders the idea that he likes blogging because it gives him a chance to express himself. He says to Noah that he is disappointed when he doesn’t get any comments on what he writes, interpreting that means the piece didn’t leave an impression on readers. For both men, connecting with readers/listeners, clients, and especially with each other, helps make life meaningful.

Question: What are you working on in your professional life?

Share this post

Ford Wants To Win

By Lloyd Graff

I didn’t think I would see it in my lifetime. I’ve been mocking them for years. 

I thought it would take another nut like Elon Musk to produce a competitive electric, self-driving car that could compete with Tesla, and in my mind a GM, Ford, Toyota, or VolksWagen would never have the guts to get to the finish line before the game was already over.

The stock market thought so too. Tesla was at $750, Ford was languishing at $12. 

Then, out of the blue, Ford decided they would actually go for it. They would convince Tom Brady, metaphorically, to leave New England at 43 years old and join yesterday’s team, so they could get to the Super Bowl.

Ford’s head, Jim Farley, somehow convinced Doug Field, who had led Tesla’s longshot effort to build the Model 3, to come to Ford. Field puts Ford near the top of the self-driving electric car sweepstakes.

When Musk booted Field out of Tesla in 2018, because that’s what he does to get the credit when the company is about to reach the end zone, Field moved to Apple to lead their super secret car project that is supposed to reach fruition in 2024. 

Getting the software right for a self-driving electric car is mighty difficult. Just ask Elon Musk, who is defending a bundle of lawsuits while trying.

Ford’s 2022 F-150

If anybody can make the Ford F-150 a legit contender, it is probably Doug Field. After graduating with a bachelors in engineering from Purdue he worked at Johnson & Johnson, where he met the renowned inventor Dean Kamen, who was attempting to build a wheelchair which could go up and down stairs by itself.

Kamen soon left J&J, and Field followed him to his new venture, Segway, where he was the first employee. The Segway is itself a balancing personal transporter which has morphed into a dozen or so products over the last 20 years.

Field was eventually lured to Silicon Valley, but maintained his interest in wheeled vehicles. Steve Jobs hired him at Apple where he became a prime mover of the Macintosh computer.

Eventually the attraction of building something new and great in America connected him to Elon Musk. Musk evidently saw in Field the creativity and drive to lead the Model 3 project that would take Tesla from a toy of the elite to a practical vehicle that could sell hundreds of thousands if not millions of vehicles a year. Government credits made the car economically feasible, and Musk, the showman, could promote Tesla without paying for advertising. Then Apple came once again for Field, this time to lead their self-driving vehicle venture for three years. 

NOW FORD. YES. FORD!

You have to figure Doug Field’s latest move is not about money. To me, it is absolutely shocking.

Ford does have the F-150 Lightning electric truck, which has about 150,000 reservations for the 2021 model, which now may come out in 2022. It’s running neck-and-neck with Tesla’s Cybertruck, which is also late. Ford has to get this right. If it has endless delays and recalls, Tesla will steal the company’s heart, kidneys, and liver. 

Maybe Doug Field took this job to get his revenge against Musk for firing him three years earlier. I have to believe that Ford, with the company on the line, offered Field, a Midwestern Purdue guy, the kind of authority that car companies would never relinquish to a Silicon Valley lifer. Will he deliver? Or will the Detroit insiders paralyze him before he can? 

We’ll find out in the next few years.

Question: Does Ford have a chance to beat Tesla with their electric truck?

Share this post

Rebound of 2021

By Noah and Lloyd Graff

For today’s podcast, I decided it was a good time for us to reflect on our used machinery business so far in 2021. It’s been an interesting and profitable nine months for Graff-Pinkert, so we had plenty to talk about—enough to stretch it into a double episode. Also, I was having trouble finding a new guest I wanted to interview. 

Scroll down to read more and listen to the podcast. Or listen on your phone with Google Podcasts, Apple Podcasts, Spotify, or your favorite app.

Main Points

Lloyd says the word “rebound” is the first thing that comes to his mind when he thinks about Graff-Pinkert’s business in 2021. In 2020, the pandemic threw a wrench into the used machine tool business, putting Graff-Pinkert in survival mode. The only constant work machining companies seemed to be doing was supplying parts for guns and ventilators. However, by September of 2020, most shops were off and running again. Yet still, they were often too indecisive to purchase many machine tools. The 2020 contested election, which concluded with an incoming Democratic president and congress, caused machining companies to remain uncertain about the future.

Lloyd says Graff-Pinkert’s first quarter of 2021 started relatively slow, but the momentum of the business accelerated in February and March. In the second quarter, business was excellent, while in the third quarter it has softened a bit. Perhaps there is some new indecisiveness in the market due to the resurgence of Covid-19.  

Noah questions Lloyd’s theory that Graff-Pinkert’s business success is directly connected to various market factors. He makes the case that a string of a few great machinery deals can make a fantastic month. He suggests that success is not reliant on all customers doing well, just the right ones doing well. However, Lloyd contends that confidence in the economy can tip indecisive customers one way or the other—if they will buy a machine or stand pat. Both agree they are often baffled when customers don’t purchase equipment that seems like a small investment with a huge upside.

Lloyd says that Graff-Pinkert’s Wickman spare parts business has been weak in 2021 in comparison to its relative success in 2020. He theorizes that lately shops are replacing their multi-spindles with CNC Swiss machines because they don’t have the people to run the old equipment. 

Noah points out that Graff-Pinkert has done well in 2021 selling older cam multi-spindles. However, the majority of those machines were sold to plants in Mexico that have the personnel to run them. Graff-Pinkert has also done well selling cam multi-spindles because most used machinery dealers are afraid to spec on them. Lloyd says he is willing to take a chance on old cam multi-spindles that he knows he might end up scrapping because he can purchase them with a modest investment.

Lloyd and Noah have observed that more customers lately are choosing to buy new machines rather than used ones. They hypothesize this trend is due to the technical service and warrantees new machine tool builders provide.

Noah asks Lloyd what excites him most about the used machinery business. Lloyd says that the challenge of making deals is the reason he went into the business and the reason he has stayed in the business a half century. He says he loves the way it is fueled by serendipity and connecting the dots to create deals. He also admits to enjoying the gambling aspects of the business, particularly placing contrarian bets on equipment others overlook. Both he and Noah say that one of their favorite parts of the business is getting to work alongside each other. 

Question: Has your business followed a similar pattern this year to that of Graff-Pinkert?

Share this post

Tell Me A Story

By Lloyd Graff

Every day I hear the cliched laments about the lack of people available to set up machines and run them to make parts customers want to purchase, except when I don’t.

I was talking to a successful entrepreneur yesterday who bangs out nuts and bolts by the millions. He said that he has no problem hiring great people to keep his massive cold headers banging away. 

The shop owner had written me a beautiful fan note mentioning my recent piece about the apple tree that refused to bear fruit for decades. After thirty moribund years, the tree became prolific when it should have been withering. He loved the story, and when I asked him about his own success, he told me it was about having stories to tell. 

Then he told me one of his stories. He built his business using National cold forming equipment. The president of National had never visited him, despite being located nearby in Ohio. He finally stopped by recently to study the company’s ongoing major expansion. After looking around the facility, he asked if he could use the bathroom and the shop owner pointed him toward the men’s washroom in the plant. 

When he came back to the office, his first comment was, “It’s all marble. Your shop bathroom is all marble.” 

“My people deserve only the best,” the shop owner told him.

This is a story I will remember, and it is a story his employees will tell other people in the business. It is a story that will keep his shifts humming while other manufacturers glumly complain that there are no good people available. 

One of the keys to success in business is developing the stories to tell and then figuring out how to put them all out in the field. 

When my children were young, I would often put them to bed later than I was supposed to. They wanted me to tell them stories and preferred an original genre I had developed over the years. I called them “Ooga, Wooga, Mooga” stories for the three primary characters in them. They were original and ridiculous meandering tales that I would make up on the spot.

The kids loved them because they were not out of a book and thoroughly unpredictable. I think the stories made them feel special. Nobody else had ever heard an Ooga, Wooga, Mooga story. As they got older, they begged for them when they were sick or glum. 

When I heard about the marble bathroom story and felt its strength, it reminded me of the bedtime stories and their lingering memory. Now, as they raise their own children, they still talk about them.

Screens and social media certainly have their power today, but the lasting strength of the story told one-on-one is hard to replace. I think the current trend of podcasts replacing magazines, radio, and TV is fueled by the power of stories and anecdotes with the spoken human voice. It makes them sticky in the human brain. 

When politicians, media figures, and business leaders try to make their point by using numbers and data that point out what “the science tells us,” my brain immediately tunes out. 

Please, just tell me a good story.

Question: What stories do you enjoy sharing?

Share this post

Are They A Buyer?

By Noah Graff

Machinery deals are often like fruit. Sometimes you just have to wait for them to ripen. — Old machinery dealer proverb.

The Swiss CNC market is red hot. Of course, that’s if you have the right machine on the right day.

Graff-Pinkert has a beautiful Tornos GT-26 Swiss machine for sale. It’s manufactured 2015, has about 4,000 hours on it, and looks almost new. A lot of people have come close to buying it—I think.

In July, a dealer I enjoy with working on the West Coast “had it sold.” But when it was time to wire funds, his customer hesitated and then backed out.

Around the same time, another dealer told us he was very close to selling the machine to an old customer who had several of the same model. “A 70% chance they would buy!” he said.

A guy in Estonia has also inquired on it several times in the last year, texting price proposals back and forth with me on WhatsApp. We even reached the point where we were getting pricing to ship the machine to Helsinki, Finland, which I learned is a short ferry ride from from Tallinn, Estonia.

Tornos GT-26 being sold by Graff-Pinkert

A few weeks ago, the owner of a company in Savanah, Georgia, inquired on the Tornos. He makes a product called a KeyBar, a mechanism similar to a pocket knife but for keys. We talked a while about the machine and his company. He hasn’t purchased it yet, but at least it led to a fascinating podcast interview we posted a few weeks ago. Podcast interviews are often the consolation prize for deals that don’t work out.

A job shop in the Midwest called me Monday, saying they thought they were ready to buy the machine. I’ve talked to them several times this year about it. They seemed like they were serious about buying it then as well. Maybe this time they will buy the machine, maybe they won’t. I’m keeping my expectations tempered. 

I spoke to a different customer about this machine also on Monday. He has a business out West making body jewelry. He emailed us, inquiring about a Citizen L20 that we no longer have. I told him about the GT-26 and he got excited. He said he had researched the model but hadn’t thought he would ever find such a good deal on used one. He has never owned a Swiss machine before but told me he is the type of person who “jumps into the deep end of the pool feet first.” He says he’s not afraid of taking a risk if he sees a great opportunity. I told him about the other guy who called the same day, who said he was ready to buy the machine, and he was disappointed. He said finding the used Tornos GT-26 that day seemed like fate. I told him I loved his serendipity mindset and that he should listen to the podcast I recorded about the topic. As of today, the machine is still available, and it’s fair game. Is he another person who got excited but then couldn’t dive into the pool? I honestly don’t know.

I’ve learned it’s hard to tell when someone really is going to buy a machine. Often people I think are hot on a machine, just can’t pull the trigger. Part of my job is to figure out the difference between “someone who wants a machine” and “someone who is going to buy a machine.”

I know most of the machines we sell aren’t cheap. They can sometimes cost hundreds of thousands of dollars. I don’t blame people for shopping around. They want to be sure of themselves before they spend the money.

Also, I have to always remind myself. For me, these machinery deals are the center of my attention. They pay the mortgage. Perhaps at a specific moment, while selling the machine is the most important thing to me, the customer has something entirely different on their mind. That is out of my control.

The question is, what is within my control? Maybe nobody has bought the machine because its price is too high. Maybe I haven’t been persuasive enough. Perhaps if I was more creative we could have made a deal. What I’d like to think is that the machine just hasn’t found its right match for a new owner.

A fellow dealer once told me that finding a wife is like finding the right machine. When you see it, you just know it’s right. That may be true. After all, these days the Web is a good place to find both.

Question: What’s your favorite used machine you’ve ever purchased?

Share this post

I Need To Be More Social

By Lloyd Graff

Noah had a long conversation yesterday with a young fellow machinery dealer who says he is “crushing it” this year. His secret sauce is social media. 

I listened to the conversation for 20 minutes before I wearied, but I have little doubt he is doing well. There is something to be gained for most businesses, including ours, by using social networks to reach the newer players in the machine tool world, from Montana to Morocco.

Believe it or not, I am writing this piece with a drawing pen on an 8×11 sketch pad. It’s the way I connect with the page and hopefully the reader. I send the finished pages, photographed by my iPhone, to Ridgely Dunn, who works for TMW. She types them into a computer and sends the copy back to me for editing. Laborious, very old school, but I can afford it, and it still works for me. We all need to find our own medium.

I do recognize that sending magazines through the mail and relying on flyers and catalogs to advertise used machinery is too sluggish and yesterday if you hope to “crush it,” whether business is jumping like right now, or you’re in survival mode like in 2020. 

In a Google and Amazon World, your customers and potential workers are not going to wait for you and I to wake up.

You have to compete with the shop owners who hire videographers to interview the people bringing their parts to life, and show plant tours to make their businesses unique in the marketplace.

You probably need a few videos on your YouTube channel with several thousand views to make you a credible player against cheap Chinese competition. Your competitors will be doing it soon if they are not doing it now. 

As travel becomes more expensive and laborious while COVID-19 continues to plague the world, we will have to use media and social networking to win the game. 

I am not thrilled to observe this shift from pen and ink to the metaverse. Right now, our businesses are prospering, even as the tide pulls us along. But to succeed in the end, we will have to compete with the people who are willing to focus not just on tooling and coolant, but the social networks and media outlets where younger people spend time, and you can’t just do it from 8 to 5. You have to keep going after the workday is over, while you could be watching Monday Night Football. 

And talking sports, the big money today is in online fantasy football and betting. ESPN is yesterday’s game. 

Machining people run their CNC lathes, lasers, and robots, and manufacture exquisite metal pieces. The problem is that other firms have similar machines and clever people and adequate capital to compete with you every day of the week.

What they lack is your uniqueness, and that is what social media can convey. It can connect you with other unique people who are hoping to reach you.

I am bewildered by all of the computer stuff, but what I do understand is the importance of networking, of reaching those people who need you and who you need. Today you can search and find them all over the world. 

You might not know how to use the maze of electronic highways at your disposal, but there are more people available out there who can navigate this stuff than there are capable machine operators. They work by the hour, and they can do their thing in their homes and when they are out of class. 

If you miss this opportunity, your competitor will connect the dots that you didn’t even know existed.

Question: Have you found customers through Instagram or other social media?

Share this post

Sharing What’s Working and What Isn’t, with Reid Leland

By Noah Graff

Our guest on the podcast today is Reid Leland, founder and President of LeanWerks, a precision machining job shop in Ogden, Utah. Lean Works operates using open-book management, which means the company shares its financial information with all its employees on a regular basis.

Reid says this transparent management style makes its employees aware of how their performance impacts the company’s success. They feel accountable to not only work hard but more intelligently, in a way that benefits the company the most.

Reid learned about the open-book management approach at his previous company, Setpoint Engineered Systems. It was popularized by entrepreneur Jack Stack, author of the best selling book The Great Game of Business.

Scroll down to read more and listen to the podcast. Or listen on your phone with Google Podcasts, Apple Podcasts, Spotify, or your favorite app.

Main Points

Employees Must Understand the Company’s Financial Score

All employees at LeanWerks are required to complete a rigorous training program in which they learn how to understand income statements, balance sheets, and cashflow. 

The object is to teach employees the ultimate financial score of whether the company is winning or losing. Open-book management is intended to illuminate the strategies and practices that make a company profitable and eliminate waste. For instance, at LeanWerks, shop employees might look at how many parts are being scrapped on a job and then study the balance sheet to understand how much the scrap impacts profitability. After analyzing the data, they might adapt some practices—not because they are told to do so from upper management, but because they understand and believe in what they are doing.

Flat Organization With No Hierarchy

Open-book management is based on the tenet that the intelligence of the group is better than the intelligence of any one individual. It also proposes that if everyone at a company shares information, the company will make better decisions. LeanWerks has weekly huddles in which its people discuss what’s going on at the company, what they need to fix, and what will happen if things don’t change. The company’s 35 employees all have the power to influence its decisions. This is advantageous because people working in various departments can contribute valuable perspectives that an upper management team might overlook. 

Reid says he likes that transparency eliminates hierarchy and makes everybody accountable, including him. He is OK with the fact that if he makes mistakes they are out in the open for people to see and call him on.

During the interview, I grilled Reid repeatedly about the obstacles open-book management could create. I asked him if he runs into the problem of having too many cooks in the kitchen who have conflicting ideas about how to direct the business. Surprisingly, he says the company does not waste a lot of time bickering over decisions. 

Reid Leland, Founder and President of LeanWerks

Psychic Ownership

Every month, LeanWerks’ employees have the potential to receive monthly bonuses if the company has turned a profit. This gives them extra incentive to make the company succeed, but Reid says the inclusion of employees in the decision making process is a more significant element in making them feel invested in the company’s success.

Reid says that LeanWerks’ people feel stress when the company is having a hard time and feel good when the company is doing well. He is proud to say that these emotional swings don’t only fall to him and his wife, who also manages the company.

He says that during three financial crises the company faced in 2009, 2015, and 2020, open-book management was instrumental in the company’s survival. All of the company’s people taking ownership and feeling accountable enabled it to endure. They were adept at taking difficult steps when necessary.

In the past, some talented employees left LeanWerks because they didn’t want to participate in open-book management. One talented machinist who quit lamented to Reid that his job at LeanWerks was the one job he had in his life where he would go home and worry. Reid says he is ok with missing out on some talented people who are not a good fit for his company. Talented employees are not enough for him, he wants partners.

Question: Would open-book management work for you? Why?

Share this post

Finally Bearing Fruit

By Lloyd Graff

The apple tree on the west side of the Graff-Pinkert warehouse is having a big year. After over 30 years of failure, it has finally hit its stride. Yesterday, I ate one of its sweetish-tart apples as a late afternoon treat. 

We built the Graff-Pinkert building over 35 years ago, and I planted the tree as a sapling right after we moved in. We gave it a boost this year by spraying in the spring to counter the nasty insects that have made the small amount of visible fruit inedible these many years. It stands a few feet away from a 40-foot ocean container, which flanks our driveway with its original mural that I commissioned 20 years ago adorning its side.

A picnic table sits a few feet away from both the tree and container. It is well used these days for lunch breaks and conversation. 

The apple tree is a magnet for my attention these days. It feels like a symbol of my life and work.

The tree has wounds. One of the major branches, reaching west out of the trunk, is totally dead. For me, it is a reminder of the lateral anterior descending artery of my heart that was completely blocked exactly 13 years ago this week. This kind of blockage kills almost every person who suffers from it. Fortunately, I had enough peripheral circulation, developed most likely from a few thousand miles of morning runs over many years, to live long enough to have a successful quadruple bypass surgery.

The used machinery business has been a struggle, too, these last two decades as machining companies lost so many customers to China and other low-wage countries. The vitality in the turned parts industry faded. Computer work and services pulled so many talented people from businesses that had looked so appealing to post-World War II men and their children. Women and African Americans found the industry unattractive. Machine tools and the people who used them stayed alive like my apple tree, but neither pollinated or bore much fruit.

An apple tree usually requires another apple tree within 40 feet, even a crabapple tree will suffice, to blossom, pollinate, and bear fruit. Our closest crabapple tree is on the east side of the warehouse. The bees have seemed disinterested in doing their work, separated by a 20,000-square-foot warehouse plus 80 feet. No apples year after year. I forgot that the tree was an apple tree capable of giving beautiful tasty fruit.

Two years ago, I spotted a couple of apples. They were small and covered with black insect holes, but still apples. Last year we got an ugly bunch of apples, so, I vowed to spray in 2021. This year, spraying made all the difference. The bounty is remarkable, the tree has close to 100 apples, and they taste wonderful eaten right off the tree.

The resilience of the tree reminds me so much of the 2021 American economy. The vaccines, which defied the usual slowness of modern medicine to come up with effective new drugs, beat back the terror of last year’s COVID pandemic. 

The economy roared back with growth America has not seen for many decades. Our machinery business thrived in a way I doubted I would ever see again. My family regrouped in Michigan with our four grandchildren, which we have not done for two years.

I don’t know what variety of apple we have outside my window, but I do know it tastes sensational and symbolizes resilience and the power to give abundantly in later life. 

Every day I come to the plant, I check the apples. When my daughter Sarah drove me to Graff-Pinkert a few weeks ago, I insisted that she see the tree. She sampled a not quite ripe apple but loved its tart flavor. 

In a few days, we will celebrate the Jewish New Year, Rosh Hashanah, when eating apples and honey is a traditional ritual. This year the apples will be extra sweet.

Question: What’s your favorite apple? Why?

Share this post