Randy McNeil was frustrated. Three
years ago, the president and CEO of
McNeil Industries had implemented a strategic planning process that called for daily
meetings, and he couldn’t see how that part of
the process was going to be productive.
However, it turned out the meetings
improved his employees’ level of involvement exponentially, and the feedback he was
getting from them made him a believer.
The 40-employee manufacturer of bearings, pins and other guide system components has enjoyed annual sales growth of 20
percent or more for six straight years and has
reached $10 million in annual revenue.
Smart Business spoke with McNeil about
how involving more than just the
accounting department in the budget can
help improve your bottom line.
Q: How do you develop a vision?
Wanting to go somewhere and not having the support to get there is a lonely
trip. With involvement and buy-in from
your team, it makes it an enjoyable ride.
While I oversee the process of developing the vision, there’s huge involvement from our management team on
that direction. It coincides with our core
values and the purpose of our business.
When we get that in alignment, all of a
sudden that vision becomes clearer
and clearer. It’s the buy-in of the team
that makes it so successful.
Q: How do you get that buy-in?
Early on, we made everybody in the
company part of the process. We did a
simple survey of what should we start
doing, what should we stop doing,
and what should we keep doing?
Everybody had an opportunity to
comment on that. We got some very good
input, and we documented all of that information.
The people were heard. Now, you can’t
keep every thought and every concept somebody comes up with, but we addressed them
and dispelled them as needed.
We didn’t let people hang; we told them
why we may not implement theirs if we didn’t. For the most part, most of the things were
implemented.
The biggest thing was communication. That leads back to retention. (Employees) know
they’re part of our success, and they are heard.
Q: How do you motivate your employees?
Our people share a lot of information,
including financial information. We have 11
or 12 people who participate in a budget
meeting once a month.
It’s not just the accounting or executive-level people who have line-item accountability on our financial statement. It’s the people
on the floor who may be responsible for buying tooling or the shipping and receiving
clerk who is responsible for cost of freight in
and freight out.
Everybody is involved in the budget. I think
their involvement and understanding of that
has been instrumental in our growth. And
that’s helped the revenue per employee being
driven up.
Q: How does involving employees in the
budget help the company?
It helps them understand how the process
works and how you can make money. They know that something as simple as adding a
person is going to affect that budget number.
So, is there a system we can develop to
make somebody’s job easier so we don’t have
to add a person, we don’t have to do overtime
or ask somebody to kill themselves to perform their job to get to the next level?
It encourages the continuous improvement
and process development that goes along
with product and technology investments
and so forth.
Q: How do you manage business growth?
Controlling costs and managing the rise
and fall in business. You have to be tuned in
to what’s going on in your business so you’re
not overextending yourself. Growth
absorbs cash, so if you’re not managing that and controlling your costs,
when business is really good, the stories heard are that people get a little out
of control with spending.
We think we’re very good at managing cash. That is the lifeblood of growth.
A lot of companies will choke themselves out growing too fast and not really
managing how they’re going to do that.
We don’t go crazy just because we’re
doing better. With the rise and fall of
business, you don’t want to be invested
at a level that if business falls off a little,
you’ll be struck seriously.
Q: How do you manage costs?
Growth affects a lot of different areas.
It’s going to affect your human
resources, your infrastructure, or your
capital resources and your financial
resources.
We have a system of measuring that. We
forecast on a three-year-, one-year- and
quarter-out basis to find out, what does
(growth) mean for employees?
We have to develop the systems and
processes that make it easier for people to do
their job; we’re constantly trying to drive up
revenue per employee without putting so
much burden on them that we work them
into the ground.
You have to make sure you’re not just adding
people per revenue dollar. We’re driving our
revenue per employee up on a daily basis.
HOW TO REACH: McNeil Industries, (440) 721-0400 or
www.mcneilindustries.com