In 2018, I left behind a successful 20-year career in commercial construction to take a leadership position at Rathburn Tool & Manufacturing, the Auburn, Indiana machine shop my father founded in 1983. According to many industry consultants, second and third generation companies are a losing bet. So, people asked why I would lean in to take this on.
Rathburn had grown based on a combination of capable people, proprietary processes, and satisfied customers. But industry changes, tightening margins and, in retrospect, some bad leadership choices had flattened the company’s growth. I saw the incredible potential in the company and the people involved, and decided Rathburn was the kind of company that could thrive again into future generations by getting back to its roots.
The ups and downs have been challenging and scary, thrilling and tiring, but given the option, on the whole I wouldn’t change my choices. In the two years since stepping back into the business, with decades of business experience as my guide, we’ve changed the trajectory through modifications to the team, operations, and long-term plans. Along the way, I’ve noted some surprisingly basic but crucial principles that helped.
Here is my list of the 10 things I learned when I rejoined the family business:
- Family business gets in the blood. Even after spending 20 years in a different industry, stepping back into the shop brought back great memories that I wanted to bring back to life and promote even further. I remember the smells. Oil and coolant from the shop floor brought back fond memories from my childhood; of my dad coming home from work and high school summers I spent working at Rathburn Tool. Some people simply don’t have a passion for the family business. When that’s the case, it might be best to let those people go. Keep the members who are devoted to the company and culture, and hire to fill the rest of the team.
- Skill is critical in machining. Machining metals is an art. Watching someone who’s talented at their craft create an intricate object out of a slug of metal is fascinating. There are a variety of ways to approach creating a specific product for a customer. From medical components to commuter train parts to paintball guns to heavy truck clutch systems, they all have a common origin in skill and creativity.
- Manufacturing needs women. In obtaining my engineering degree and working 20+ years in the commercial construction industry, I’m no stranger to being outnumbered by men, but my first manufacturing industry conference left me shocked at how few women leaders there are in the CNC production machining industry. Our industry needs more great people, including talented women who enjoy a challenge and can bring technology and talent together.
- Big companies have a lot to learn from small companies. I went from two decades in a huge corporation with 5,000 employees and over $10 billion in revenue to a 20- employee company closer to $10 million in revenue. There are plenty of differences, but the advantage doesn’t always go to the big company. I gave up stability, structure, and bureaucracy for flexibility, freedom to be creative, and close working relationship with our customers. I work with people who see the impact of what they do in the orders that ship every day. There is a level of personal pride in every piece produced. That can be missing from large organizations, where people work for a check, but not for personal impact.
- Business is business. I was amazed at how many things translate from construction to manufacturing. Best practices are universal: like contracts, forecasting, the science/art of estimating, knowing your costs, contingency planning, managing organizational change and how even terminology spans such different industries.
- Change is hard. My last assignment in the corporate world included the most difficult of organizational change…shutting down a business. It has to be done with the utmost care and compassion, all while continuing to serve customers and working incredibly hard on a transition plan that serves both customers and the business. I took those lessons learned to heart for addressing change within my family business. Organizational change should be based on a well-researched and carefully considered plan. The hardest decisions are made easier when you have a clear moral compass; doing the right thing even when it means personal sacrifice. That includes doing right by your employees while you ensure long term success so the business will live on to create opportunities for family and employees alike. Say what you mean and do what you say you’re going to do.
- Open communication is key when leading through change. New leadership of the company led to a lot more change. Every type of change has uncertainty to it, and keeping people informed builds the trust, confidence, and loyalty necessary to overcome uncertainty. That level of trust proved critical as we navigated through economic and safety challenges associated with remaining open for business through the COVID-19 pandemic, and as we move forward through recovery and growth beyond.
- Give respect, earn respect. I spent decades learning and earning respect in the construction industry, and I’ve been doing the same with the family business. When I returned 2 years ago, I used my married name. Only a few employees knew I was the founder’s kid and I liked it that way. I have the utmost respect for the people who built this company and keep work flowing and product moving every day on the shop floor.
- Be willing to try new ideas! The best solutions often come from people closest to our product. You just have to give people permission to speak up and be willing to listen. Not every idea will work, but all of them should be seriously considered. The hurdle for implementation should be set low: if an idea can be implemented easily and cost effectively, and just as easily undone if it doesn’t work out, then just do it!
- It’s okay to not know everything. Some people still think their job as leaders is to have all the answers. That’s simply not possible. Further, it’s disrespectful to the rest of the team who are subject matter experts. Be upfront and honest about what you know and don’t know. Build a team that can backstop your shortfalls and work together to build a great company.
Are we “there” yet? Not by a long-shot, but as we face a future full of unknowns, our team is applying our unique level of skill and experience to industry-leading automation and quality; confidently overcoming our limitations and looking forward to the next 35 years. Follow me and Rathburn Tool on LinkedIn. As we continue on this amazing journey of growth and discovery, I hope to share more details and insight. If we can help you gain an edge using our precision tooled, manufacturable solutions, give me a call.