A Minnesota executive has practical advice for CEOs on how to build a strong manufacturing company
By Mark Shortt
Steve Blue is president and CEO of Miller Ingenuity, a Winona, Minnesota-based company with a rich history of manufacturing railroad parts and products that protect railway workers from potentially fatal accidents. A man whose company’s products are aimed at saving lives, Blue apparently knows a thing or two about saving, building, and leading strong companies, too.
Under his leadership, Miller Ingenuity (www.milleringenuity.com) has reportedly grown by more than 400 percent while executing a corporate rebranding and ramping up international sales in North and South America, Asia, Europe, and South Africa. Blue is also the author of the recently released American Manufacturing 2.0: What Went Wrong and How to Make It Right, a book that draws on Blue’s management experiences and historical perspective to lay out an inspiring vision for revitalizing the U.S. manufacturing sector. The book details 7 Values of Ingenuity™ — innovation, excellence, commitment, community, teamwork, respect, and integrity—as a foundation for success.
In a recent phone interview, Blue offered his perspectives on American manufacturing while sharing his insights on the nation’s workforce and how companies can execute a plan to scale up their manufacturing operations in response to changing economic realities. Following is an edited transcript of our conversation.
D2P: Steve, we’re interested in your insights from two perspectives: as author of American Manufacturing 2.0: What Went Wrong and How to Make It Right, and also as CEO of Miller Ingenuity. First, the book: Who is your intended audience, and what inspired you to write it?
Steve Blue: In my view, the intended audience is CEOs of manufacturing companies, although senior leadership can benefit by reading it. But once you drop much below the CEO level, you probably know yourself, the average American worker has very little control over what happens in the company that he works for. Even middle managers are so constricted by, constrained by union rules, human resource rules, and financial rules, that they have very little maneuvering room. So if anybody is going to take advantage of the book, it’s generally CEOs.
As I go all over the world and I talk in front of CEO groups, I understand what their issues are, what their perspectives are, and what their opinions are. And I found that a lot of them just really don’t get it.
I didn’t think that CEOs were getting the message. And then when Trump started lining up to fix one of the major problems that American manufacturing companies have, I felt compelled to write the book and get my message out there in terms of what I think a roadmap is for CEOs to revitalize their companies.
D2P: What would you say is the thrust of the book?
SB: In a nutshell, it’s that you have to build a foundation of people. You have to build a foundation, a framework, before your company can become really cool in terms of innovation, or really cool in terms of operational excellence, and so forth. You have to build a foundation to facilitate that, and it’s what I call The 7 Values of Ingenuity.
In the beginning of the book, I go with historical kind of stuff, and then I go into The 7 Values of Ingenuity, which, if you take that as a roadmap, and implement and install the principles and the practices, and the values of all 7 Values of Ingenuity, that’s how you position your company to take advantage of a resurgence in manufacturing.
I get into the excellence part, the innovation part. I get into very specific tools—hard tools that CEOs can use to improve their market share, develop new products, and so forth, but if you don’t have a foundation, [it’s all for naught]. I know that people sometimes don’t like to hear the word “culture.’ I say to a lot of CEOs, “You have to build what I call a Cirque de Soleil culture before you can do anything else with your company.” Have you ever seen a Cirque de Soleil performance?
D2P: I haven’t, actually.
SB: It’s pretty spectacular. It’s a group of performers that come to work every single day with the intent of performing better today than they did yesterday. They’re all jazzed up. What you don’t see in a Cirque de Soleil performance that you do see in a lot of organizations, including manufacturing companies, is, you don’t see a Cirque de Soleil performer walk into the job and say, “I don’t really feel like [performing today]. I’m not going to perform that well. I may be there when you need me; I may not be there.” You don’t see that in Cirque de Soleil, but you do see that in many companies today because CEOs haven’t built the kind of cultures that they should that engage, enthuse, and enlighten their employees.
If CEOs in leadership in companies treat people poorly, then they get unions, and then they get the kind of employees they deserve. And if you really want to elevate manufacturing in the United States, if you really want to beat the competition, you have to have a jazzed up workforce. And that really is the crux of the book.
D2P: What do you see as the way forward to revitalize America’s manufacturing industry?
SB: Okay, let’s start with the hard stuff, because any CEOs that are going to read this are going to say, “Tell me the hard stuff; don’t tell me the soft stuff! Give me the plans!” So we’ll start with the hard stuff.
Assume for the moment, like him or not, that Trump is going to unravel most of the trade deals that we have, and make them more favorable to United States companies than they have been in the past. We can argue whether he’ll do all of them, or some of them, but a lot of those are going to get unraveled. And so, when that’s done, the CEOs that’ve been blaming the bad trade deals and the government for decades now, don’t have that excuse anymore. And so they better be ready for it, okay?
So here’s what I would suggest every CEO does.
I know who my foreign competitors are that have been taking advantage of me based on the trade deals. I know the product lines they’re doing it on, and so I’m preparing a marketing plan and an operational plan to be able to go take back that share. You just can’t wait for it to happen because your competitor may be prepared once the trade deals come unraveled, and then you’re behind the 8-ball.
So that means you’ll have to build some inventory, you’ll have to prepare and invest in marketing and sales people, and you may have to do some research and development to update and upgrade your product’s features and functionality. Those are the hard things that CEOs should be doing right now—not waiting around to see what happens.
That’s the hard stuff. Now, the soft stuff is, maybe you can rebuild the relationship with the workforce.
They’ll have to hire people, no doubt, because they’re going to have more business and they’re going to have more market share if they do the hard stuff right. They have to rebuild the relationship with the workforce and they have to decide “what kind of culture do I want in my company?”
“Culture” is an overused word, and a lot of people don’t like the word because it’s hard to get your arms around and define. But CEOs have to rebuild the relationships with their people, and that starts with dignity and respect.
If you’ve ever worked in a manufacturing company, or if you’ve ever worked in a number of companies, you know that a lot of times, you work for a pin head. He doesn’t care about you, he doesn’t inspire you, he doesn’t do any of the things that modern leadership should do, and what the CEOs of tomorrow have to do to revitalize American manufacturing. And so when you do the hard stuff, and get the hard stuff done, that’s not going to be any good without an engaged, inspired, and enlightened workforce. So they have to start building that workforce one layer at a time.
By that, I mean, it has to start with the CEO. It can’t be the human resource department dictating this; it can’t be the legal department. The CEO has got to say “This is the culture I have. These are the values that I want to have: I want respect, I want dignity, I want excellence. Whatever they may be, they’ll vary from one company to the next.
My 7 Values of Ingenuity are a roadmap that I can use, that’s worked for me, but they may not be exactly the roadmap for every company. So you define what kind of values you want in your company, and then you see to it that every single leader in that company, and every single person who works in that company for a leader follows those values, or you replace them.
It’s a multi-year process, not a quick fix that you do in 6 months or two months. In my case, it took me the better part of five years. I’ve achieved remarkable results with it. When you unleash the workforce, it’s unbelievable what they can do.
D2P: I noticed that one of your 7 Values of Ingenuity is teamwork. Can you talk a little bit about that?
SB: There are so many myths about teamwork in organizations. It’s a nice buzz word, and people like to talk about it, but one thing about teamwork is that it’s not a natural act in an organization. Everybody says “we ought to have teamwork,” but most organizations have the deck stacked against teamwork. They evaluate people individually, and they compensate people individually. They set individual goals, and they give people raises based on individual performances. Does that sound like teamwork?
And they’re in conflict with each other. The manufacturing guy is compensated and evaluated differently than the quality guy, and those two guys, if you want them to work as a team, you have to give them the same goal. Same goal, not different goals—same, exact goal. You have to stack the deck for them, instead of evaluating them individually.
There should be one goal in any for-profit organization. The one goal is profit. But in most organizations, when you see the criteria for evaluating people, and what their goals are, they’ll have a million goals. None of them have profit anywhere. The only guy who’s got a profit goal is the CEO—that’s crazy! Every single person in the company, their number one goal should be profit.
If the company doesn’t make a profit, then everybody has failed. If the company does make a profit, then everybody has succeeded. They have to bind people together in teams by common goals, and evaluate them in teams. But that’s hard because people don’t want that, generally. That’s why I say teamwork’s a good buzzword, but it’s not a natural act. People don’t want teams to go ‘Now wait a minute—I don’t want to be responsible for what this guy did. I only want to be responsible for what I’ve done.’
D2P: How would you describe your company’s business model?
SB: We develop and implement and deliver and sustain life safety systems in the rail industry. We’re an OEM, and we sell in over 100 countries around the world, to every major railroad operator that you can name, and any country that you can name, you’ll find our products there.
We’re a very high technology company. We actually have a wide range of products, from very low technology, kind of over what I call legacy products that support the environment, improve operations in the railroad, save them money, and we have a very high technology product line that saves railway workers from dying on the tracks.
What you see a lot of times on the news is the highway crossing accidents, but what you don’t see on the news is the dozens of people who are working on the track every year, grinding the track, fixing the track, replacing the track. What you don’t see on the news is the train comes down and kills a bunch of them every year because they don’t know that the train is coming; there’s no warning. So we have a whole suite of high-technology products that virtually eliminate that problem.
D2P: Do you manufacture most, if not all, of your products in the U.S.?
SB: Yes, we do, in Winona, Minnesota.
D2P: President Trump met with manufacturing executives recently, looking for ideas in four key areas: taxes and trade; regulatory reform; infrastructure; and the workforce of the future. Do you have any suggestions in those areas that you believe manufacturers should be looking to accomplish?
SB: By the way, I’ve been trying to get an audience with the Trump people for months because they’re focusing pretty much on the large companies, but they’re not focusing on where most of manufacturing is, which is small and mid-sized companies.
Okay, taxes: We’re disadvantaged because we’re in the global tax system, so we not only pay income tax in the countries where we earn the income; we have to pay income tax to the United States. And most of our international competitors only pay tax once. We pay tax twice. He already knows that; that’s nothing new.
You’ve got to lower the marginal tax rate from 39 and a half percent, or whatever it is, down to something less—20, 25 percent. He already knows that. Infrastructure—he already knows what he has to do. But my point to the Trump administration, and to anybody who asks, would be this: All of the great plans and policies are going to fail if CEOs don’t re-engage their workforces. The workforce of the future has to be engaged, enlightened, and enthused, and you just don’t get that by the way they’ve been treated in the past.
I have a roadmap for Trump or anybody else who wants to look at it. It’s called the 7 Values of Ingenuity; it’s in my book. It tells exactly what to do and in what sequence. When you implement these 7 Values of Ingenuity, they have to be done in a certain order. You can’t jump in the middle and work backwards; you can’t start at the end and work backwards. You have to start at the beginning and put those values in one step and one phase at a time.
D2P: Is there anything else that you would like to add to that?
SB: I’m assuming that companies can get a lot of business because of the unraveling of trade deals. They’re going to need more sales people, and they’re going to need more marketing people. They need to be very focused and specific on what competitors and what markets and what product lines they’re going to go after, resulting from these trade deals. And they have to make sure they have enough manufacturing capacity, inventory, sales people, and marketing people to go after that because it isn’t just going to happen.