11. I Thought Core Values Were Nonsense and I Was Dead Wrong

MakingChips: In my company, we've always had a safe word. Yeah, exactly what you think. A safe word. And we use the word pineapple because we think it's hilarious. And we use the safe word pineapple anytime a conversation is starting to get off the rails or has lost usefulness. And so instead of everybody being awkward and being like, ⁓ I don't know, you know, we just go, ⁓ pineapple. And then we either talk about what we were supposed to be talking about or we disperse. This show is for us. The risk takers, the part makers, and the people getting it done. The real heart of manufacturing. No fluff, no filters, just real people doing real work. Because around here, we push people, not buttons. This is raw material. All right, everybody, welcome to the Raw Material Podcast. I am your host, Jamie Marzilli. This is the second half of my book review of Paul Van Meter's book, Precision Manufacturing, Precision Business. But today's episode is about what the book started, very little about the actual book itself. If you want to learn more about Paul's book, which I highly recommend, it's available on Amazon. Just look up Paul Van Meter, Precision Manufacturing, Precision Business. If you are in manufacturing, you have to read this book. It is literally the how-to book to build an aerospace machine shop. So let's get into it. In the last episode, we talked about the book. I didn't get into it too much. I want you guys to get out there and read it for yourselves and see how it applies to your business. And what I want to talk to you guys today about is how reading that book inspired me to read a couple of other books and how we took what we learned from those books and applied them here on our shop floor. And I'm going to walk you through it so this way you guys can see that. Just because at first you think that a book might be nonsense, or that certain policies and procedures that some of the bigger companies implement, we might think they're nonsense at first. If you can learn how to adapt them to fit your business, they can make an incredible impact on what's going on. And so we're gonna get into it, right? So first thing, core values. I used to hear about core values and I used to think to myself, this is absolute bullshit. This is the kind of stuff douchebags just kind of bullshit with one another with their white collar stuff shirt meetings. And they're like, ⁓ you know, we got great core values and and that's why our people love it here. And then you'd go on indeed and and glass door and find out that your employees think that the place is a hellhole to work. And so I never really paid it much attention until I read Paul's book, I go back, I re-listen to the goal. I listened to it this time on audiobook. I highly recommend it to you to anybody who's in this trade. Go take a listen to the goal. If you have a Spotify premium membership, it is free. You get 15 hours a week of ebooks that you can listen to. And the goal is on there. And it will completely blow your mind about why you are not meeting your throughput goals inside of your company. The second book that Paul mentions in his book is Traction, which I've heard a lot about. And I know some people who have implemented it very successfully. And I just thought it really wasn't Marzilli material. And I gotta be honest with you, I was dead wrong. I was absolutely wrong about this. And so let me walk you through what we learned. Because what we learned is that, yeah, it's just like anything else. If you take it and you apply it the way someone else implied it into their company, you're going to get a mismatch and it's going to feel wrong. But if you take it and you apply it according to the way you see things and the way you want it to be, you can mold these systems to being. What your company is about and the and matching the vision for where you want to take your business. So we did core values exercises here. And I'm gonna be honest, I was dead wrong about this. I'm all right with admitting I was wrong. It's where the growth happens. And honestly, I'm having more fun in my business now than I have had since we moved. This has been some of the best I have ever seen my team respond. And I wanna explain why. We did a QR Word-ify poll and I read the book Traction and I said, look, we're just gonna give it a go. Let's see what happens. Statistically speaking, we should see an improvement on what's going on on the floor. So the first thing that is said to do was to define our company's core values, right? So we're like, all right, you know, what does it mean? And we used to always say, like, what does it mean to be Marzilli? But we never really wrote it down. We never really defined it. You know, I've been on a lot of panels lately, and one of the things a lot of people love to do are these wordify display polls where you go onto the app, you print out the QR code, and We asked everybody this one question. We said, look at the people that you work with and pick somebody that you really admire. And think of three values that person brings to the company. That if you could duplicate this person, these are the values that you think would come and bring an additional positivity to the team, help us with our throughput, coagulate the teamwork happening inside of the company. And so we got inside the conference room. I hung the QR code up on the wall and we told him, Don't pick me, because that's not fair. So I gave my example. And my example is for a ⁓ a gentleman who works here whose name is Richmond White. And big shout out to Richmond. Rich came from a company that did not appreciate their people, who did not have core values. We gave him a job here and he loved working here. He loved and he still loves working here. We moved Rich to manager. Which we talked about in a previous podcast. And it wasn't really a good fit for Rich. But you know something? Until we started doing these exercises, we didn't understand why. But I picked Rich because Rich brought dedication and loyalty and intelligence. And that's what I put. And it showed up on the Word-ify. So we let the entire team, we had the whole team do this. It wasn't just the leadership team. It was everybody who worked at the company participated in this. And what we saw was the words started kind of getting larger on the Word-ify. As the ones that more and more people thought exemplified core values, or what we used to say is Marzilli. You know, those things are really big and a lot of people lot say the same things differently. So we took the whole thing, took a screenshot of it, dumped it into Chat GPT, and told chat that we need to condense this down to five to seven words. And honestly, I love what it came up with. It came up with grit 3D, which when we write the three and we put it up on the wall, we just say gritted. Here's what it what we came up with as a team. Growth, always learning, always improving. Respect. We value people, we listen, we support. Integrity. We do the right thing always, whether someone's watching us or not. Teamwork. One team, one goal. And then we redefine the three D's. So instead of dark, dirty, dangerous, now it's dedication, dependability, and detail as an attention to. And I love this because, first of all, the word grit is everything about Marzilli Machine and who I am as a business owner. And so for the fact that it came out and it says that we are a gritty group of people who exemplify these characteristics in the people who work here, it was like it was meant to be. And it really opened my eyes because we've had a little bit of struggles with some employees. You know, we at the beginning of the year, we recently downsized the company. by about 28% because we just found it to be unmanageable. And we had some people who were working here who were, they did not show the core values. And all that we were able to do was say, like, hey man, we don't think this guy's gonna work out. Like, you know, he's not drinking the Kool-Aid we used to say, or he's not buying into what the rest of the team is doing. He he doesn't seem to fit into the family. You know, and I'm saying he, it could be he, it could be her, you know, but there was a handful of people here that we were just tired of. You know, when things slowed down a little bit and I decided I wanted It was becoming too difficult to manage. And we could not just hire our way out of the problem. And what we found was we cut nine people, not all at once. We did it in two different stages. And you know something? The gross product output didn't move at all. We started putting out the exact same amount of product with 30% less people. And that tells you everything you need to know about if you're stocking too many B players inside of your company. You are doing a disservice to the rest of your A players, and you are basically lighting money on fire. What I liked about this in reading this book was the book kind of teaches you to just start asking two questions. Does this person share the company's core values, which is why it's so important to define core values? And is this person in the right role? So the book says, is it the right person? Is it the right seat? What we found when we started looking back was, yeah, you know, if you put these people up against. The gridded definition, none of them would have passed. And we could have known early, early on that those were the wrong people for our team. But we fall into the same traps as everybody else in this business. You're desperate for help. And so you start hiring people for skill, regardless of their character. You just need somebody who can make some parts so you can sell them. So you know what though? It never works out. They end up poisoning people around them. They end up leaving after they take all of your tribal knowledge and they take it with them to their next job. They're never here for the right reasons. Now we're very, very strict and are showing discipline in our systems. And we're showing discipline in our level 10 meetings, which I'll get into at the end of the podcast. I'm super excited about this, which is crazy coming for me. What we can find now is while we're interviewing people, we're looking for these core values. And if we're hiring them for these core values, if we're hiring for character, And now that we've defined it, it's easy and everyone can see it. We know just get rid of that person early while there's still a temp in the 90 days, regardless of their skill set and regardless of the pain it causes, because it is like ripping off a band-aid and it is what needs to happen and you need to do it early. Fellas, hey, well I got you both real quick. So I'm really trying to drill in like our work holding options at Hill and all of our shops. Any advice? Mike, it's as simple as Raz Ram. As what? Raz Ram. You've never heard of it? I have not. What Nick is referring to is the seven habits of highly effective work holding. That makes more sense. Repeatability, accessibility, scalability, reliability, adaptability, and modularity. If you want to find all of these principles in one catalog, check out the SMW Autoblock catalog. You can find it at SMW Autoblock B-L-O-K dot com. Thanks, fellas. Now here's the other side of this, right? What if this person has these values? What if they're visibly trying, visibly frustrated? That's your fault. If you're a manufacturing leader and you have a person who works for you who meets your core values, but is frustrated and they're not able to produce the kind of throughput that you're expecting from them, you have them in the wrong seat. And we have an amazing example of this as well. And that actually fit rich when we promoted Rich to manager, it was not his natural inclination. Have any of you heard about Peter's principle? So Peter's principle is when you promote somebody until they become their most incompetent, right? You are a great operator, you get promoted to becoming a a machinist. You you're a great machinist, you become a setup guy. You're a great setup guy, you become a programmer. You're a great programmer, you get promoted to management. All of a sudden you're the worst guy that's ever worked at the company. What happened? This is described as Peter's principle. The things that make you a great machinist might not necessarily make you a great manager. And I'm living proof of this. I've had to adapt and evolve five, six, seven times to become the guy I am today. And we've talked about that in podcasts and I'd love to get into that with some of you guys. But for now, what I want to talk about is a gentleman who works here whose name is John Vegas. And it's okay if I'm using their real names, everybody, I've talked to them about this and they're honored to be mentioned as part of the show in such a positive light. John Vegas started here about six years ago as a second shift operator who graduated from A local tech school that had a program just for teaching manufacturing. And he had a lot of things that he did in his past and he loved manufacturing. And he was so excited to come and work for us, but he was not a very good operator, and he'll admit that to you. And we have moved John because John is the epitome of the core values. And we always just knew John was family and that John was Marzilli machine material. But now that we've defined it and we put him to that test as John Core Values. Absolutely. He's hands down. He's he's he's a shining example of core values. And so John has done at least five or six jobs here. And he has settled into estimating. And I have never seen him happier. He is enjoying the work. He is doing a great job. We have given him, you know, metrics that he can meet, that he is learning about in our management meetings. And he is consistently turning quotes out in less than 48 hours using Warp Core, our AI team. technology program that I developed here internally that we are deploying. This whole thing sparked a whole bunch of pieces being moved around on the board. Our shipping manager showed an amazing attention to detail and she understood everything that was going on inside the shop and how all of the pieces that worked inside a Pro Shop are ERP, how they all touched one another. And our office manager was kind of struggling with some of the details and she was working on other things that she was passionate about. So we took our office manager and we moved her into business management, which she has a real inkling for. And we moved our shipping manager into the office manager's position. And both of their throughputs have gone through the roof because now they're both in the right seat doing something they enjoy. And you're always going to get more throughput out of something that somebody enjoys instead of something they're being forced to do or they have to do in order to make a living. What I really like about she didn't give up her shipping management. Responsibilities. What we did was we hired somebody underneath her that she could delegate the actual work happening inside of the shipping department. And this has been amazing because now she's the first person to see a purchase order come in, and she's the last person to see the purchase order go out. And now she understands everything happening in between and is closing a lot of gaps that were kind of getting by us. I highly recommend to you guys read traction, start implementing the EOS system inside of your company. And we want to hear about. How this is working for you when you do your core values and start moving people around in your company. Now we're gonna pivot to the next thing we did around here, which I can't believe we're doing this, but it's been phenomenal. We are having leadership meetings here inside of my company. The traction book calls them level 10 meetings, and we are running them on the traction framework. And I want to give you guys a little bit of a shortcut for this stuff. There is a lot of work happening when you want to implement one of these systems. Take the book. Buy the e-copy of it. Dump it into your AI. Dump it into Claud, dump it into Chat GPT, and ask it to just lay it out for you. That's what we did here. And so it laid it out. It made all the agendas for us. It made all the papers and the documents that we need to bring into the meeting. You answer a few simple questions. This is how everyone can use AI in manufacturing. You do not need to be a leader in AI to bring artificial intelligence into your business. Just start looking for common sense solutions where you can say, hey, you know. This is something I would give to a secretary. Don't give it to a secretary. Do the work yourself and push it through AI. You'll get it done in 10 minutes. You're the domain expert, and it's going to come out amazing. And that's what we did here. And so now we have these structured, time-boxed meetings. It gives the leadership team a defined forum to surface problems and get collective help in solving them. And out of a 90-minute meeting, which you got to be religious about it, you got to start the meeting on time, you have to follow the agenda. And you have to finish the meeting on time, even if you don't get everything done. The discipline about starting the meeting and ending it and making sure that your meetings are productive is what will keep your leadership team coming back to them. And so you spend 60 out of the 90 minutes, once you get into the hang of it and you get through the first one, you spend 60 out of the 90 minutes just addressing your issues list and breaking your issues list down into smaller pieces and then delegating them out. And we were only supposed to solve three issues in our second meeting, which happened Today, because Monday was a holiday, right? You gotta stay disciplined. And we ended up solving five just kind of by accident, because a couple of them were tied together. We added seven more, so we had a net gain of positive two issues, but that's to be expected when you're first implementing it. There are two elements to these meetings that I initially dismissed as corporate fluff. And again, I was wrong on both accounts. Slap my wrist, put me in the corner, shit happens. Both of these things proved to be unbelievably valuable. So the first thing that happens when you start implementing this system is you go around the room and you do a personal win and a business win from everyone at the start, right? That was the first thing I wanted to cut from the meeting. It seemed like complete bullshit. But I followed the book. It told me definitely don't cut this out. It literally said that in the agenda. It said, don't cut this out of the meeting. And so I said, All right, we're gonna give it a go, right? If you're gonna do anything, do a good job. Bring precision to the meetings. If you're gonna bring precision to your parts, bring precision to your business, bring precision to the meetings. Why not? Right. And you know what happened? What you do is you you do a one business win and one personal win, and you go around the table. It only takes five minutes. And you know what it did? It broke the ice. And you could see that the tone for the meeting was going to start on a positive one and that it wasn't going to become a gripe session where everyone was just bullshitting about everything that was going wrong in the company. It set a positive tone for what we were about to accomplish in this meeting. And it kind of brought us all together because now we're starting to talk about like personal wins that are happening to everybody. And this is your leadership team. These are the five, six people in your company that are going to, I'm hoping they're going to replace me in my company. So I don't have to keep coming to work and working 70 hours a week like a lot of us do. This leadership team is being trained and getting on the same page as me. I'm delegating out what needs to happen. And they're bringing their issues to me, and we're solving them together as a team. And you know something? They're using this meeting, and we're not having as many bullshit sessions on the floor now. So it's been a net gain, and we've only done two of them. So that was the first thing personal win and the business win. I thought they were complete horseshit. They were amazing, and we will never skip them now. It actually really helped with engagement, which is super important. People need to buy in on this meeting. Hey, it's Paul from Making Chips. If you've been burned by recruiters who don't understand manufacturing, you are not alone. That's exactly why we created Hire MFG Leaders. We're not just recruiters, we're current and former shop owners, and we know what it takes to lead in this industry. Whether you're hiring your next operations leader, sales manager, or production supervisor, we'll help you find someone who actually fits. Learn more at making chips.com/slash hire. And the second thing was at the end of every meeting, you rate the meeting from one to ten. We go around the room, what you could see was a clear line where like me and my wife who are on the leadership team, you know, we're we're measuring it a seven, right? 'Cause we're 'cause we're lying. That's what's happening. We're fucking lying to each other. We're saying it's a seven because we're lying. That's it. Like it's the same reason why you tell your kids all their artwork is beautiful. It's because it's not. A lot of it's garbage that they scribbled onto paper. And you know that and your wife knows that. And so that's the reason we gave it sevens. But Other people in the meeting were significantly more honest about it. And Mr. Vegas, who is, I love him. I just love him. I can't say enough about my my one of my employees, John Vegas. He rated it a five. And we went, whoa, all right, why? And he said, we don't have the ability to just stay on task and we're we keep kind of digressing into these little side missions, even though we pull back from them very quickly, they just keep happening. And he wants us to stick to the structure of the meeting. And you know something? He's right. And one of the things that you do is you assign everyone a number. And I immediately talked to Sarah, my business manager, and I said, that's going to become one of your numbers. I want you to work on how this meeting functions until we average an eight. We did two things as part of that right before we left because we thought they were important. In my company, we've always had a safe word. Yeah, exactly what you think, a safe word. And we use the word pineapple because we think it's hilarious. And we use the safe word pineapple anytime a conversation is starting to get off the rails or has lost usefulness. And so instead of everybody being awkward and being like, ⁓ I don't know, you know, ⁓ we just go, ⁓ pineapple. And then we either talk about what we were supposed to be talking about or we disperse. The second thing we did was we gave the ability for people to schedule one-on-ones for things that required deeper meaning between me and that person. Now, the book explains that this is going to happen. Your first three meetings are going to be fairly chaotic. Don't give up on them. And that you're going to spend probably your first quarter talking about. A lot of business issues. And then when you get to your quarterly meeting, you're gonna start attacking what it calls rocks. And I'm not gonna tell you what that means. I want you to read the book and I want you to implement it for yourself. And you start attacking these rocks on a quarterly basis. After that, you're gonna start talking more about like day-to-day issues and weekly issues about jobs and things like that, because you've solved most of the problems that are happening inside the company. We're not there yet. In fact, what this meeting brought to light was there are a lot more issues that we need to fix than we first thought. Just keep pushing through when you get started. So here Is what we have found is already working inside the company. Work is moving through the shop significantly faster. Bottlenecks are being surfaced and they're being attacked. We train people on how to elevate bottlenecks to bring visibility and to make sure that anything that is moving through a bottlenecked constraint, we are throwing everything but the kitchen sink at eliminating that bottleneck or elevating that bottleneck up so we can exploit it, so we can get around it. And throughput is starting to skyrocket, which is going to lead to bottlenecks happening in other departments. We've been around the block a couple of times. We know where the bottlenecks are going to come up next. Another thing is people are beginning to treat their roles here inside the company as their own. Instead of, well, I'm not sure what to do. Let me go ask Jamie. They're starting to get to where you want to go. And almost any podcast or book you read about leadership teaches you this progression model about problems and how they go. And what you're probably working with is somebody comes up to your office and they're like, Hey, boss, there's a problem. And that's the end of it. There's just a silence now because they're waiting for you to solve everything. And what you want to start working towards is, hey, boss, there's a problem. And they give you three suggestions for what they think is either wrong or how to fix it. Right. And you encourage them to pick one. You guys work it out a little bit and they go take care of it. Right. And then what happens is they come to you and they're like, hey, boss, there's a problem. And Basically, they need they just want to ask you for permission now. So they already picked it and they're coming to you and they're just saying, Hey, is this okay? I wanna I wanna implement this. Are you okay with this? Right. Then the next thing that happens is that they come to you and they say, Hey, boss, this is what happened and this is what I did to fix it. And I'm just letting you know. Right. That is the progression you are looking to achieve as a leader inside of your company when you're empowering your people to be able to handle their own stuff. Some of my team members are already at the here's how I fix it stage. I've had some guys that have been here with me 11 years. And a couple of other people, they're still working this out and they're coming to me and they're bringing me their solutions. And what's nice about having a few senior members who are already at that point is that they're starting to fill in for me and saying, hey, listen, don't bring that right to Jamie. Come to me first. Let me see if I can handle that. And if I can't handle it, I'm gonna push you up the ladder. You know, let Jamie handle what he's doing. And that is amazing. Watching it, you know, not just be something that's happening, but being something that we're influencing to happen and we're encouraging. And enlightening people that that's what they're doing and that they're on the right path has been really enjoyable for me as a business owner, honestly. You know, there's still some stuff in progress. You know, we're we're still, we haven't even gotten to our first quarterly traction meeting yet, but I think we're making a lot of progress in in a very short amount of time. And we see the bottlenecks about to come. And so there's still a couple of seats we need to sort out on our leadership team. We can see that sales is about to become a problem. And so we're already on the path to hire our first internal salesman. I've been at this for it'll be 15 years in October. You know, 15 years of me just kind of willpowering it together to mask that the structure was never properly built for it to succeed. And that's the point of why I wanted to give the Paul's book a review. I constantly bitched about how there was never a book that explained this. And this guy wrote this goddamn book, and it explains it exactly the way it's happening. And so if I'm at level four and a half, roughly, is what I gauged based on his six steps of leadership. I'm like, why am I fighting this? Like, I'm I'm ready to get to the promised land. I want to grow my company to 20 million bucks. I want to get up to 50, 60, 70 employees, you know. Then I should start listening to people who have already been there. And it's time for me to stop fighting this and just get on board and and take on this mindset. And what's interesting to me is I've always had a real good mindset for Being aggressive about taking on technology. You know, we went completely paperless in 2020. ⁓ Pro Shop, High QA, Accelerant. We've always been an industry 4.0 mindset. But stepping into the traction system, reading Paul's book, this has really made me feel more like a president. Like for the first time, I feel like a president at my own company and not like an employee. And I'm super excited for what the future holds. So what are the next steps for us over here at Marzilli Machine? You know what? I think it's time for us to release a new employee survey. The last time we r released an employee survey, it was devastating to me. That we weren't clear about who it was reviewing, and some people were reviewing those intermediate managers that we've recently let go. So there were a lot of poor scores on there. And me and my wife took that really personally. ⁓ we're gonna do a lot better job about being clear about who it is they're exactly rating on this. But I wanna set a metric. If you wanna know where you're going and if you're growing in the right direction, you gotta measure, right? So we're gonna take a measurement right now. And then I'm gonna take a measurement at our next quarterly meeting. And I wanna see if we're on the right path. And you know something? I'm really excited to see what what do those leadership meetings look like when my business manager, Sarah, gets that average review on that meeting up to an eight. Not only am I excited to see it, I'm excited that it's gonna happen. And I'm not gonna have much to do with it. I'm gonna get to be a participant in this and not the guy driving it. And I'm really interested to see what it's like for me to let go of the sales reins. You know, I've done most of our sales work here in this company for its entire existence. And yeah, I'm excited for the future here at Marzilli Machine. And I I owe it all to a fucking book. I can't believe this. To a book. Hilarious. Anyway, listen, everybody, thank you for joining me here at Raw Material. I want to hear from you guys. I want to hear about some of your stories. I want to share some of your stories. I want you to reach out to me at James at makingchips.com. That is my making chips email. ⁓ you can also feel free to reach out to me both either through the Raw Materials podcast on LinkedIn or through my personal LinkedIn, James Marzilli. I want to hear from you folks. I want to get some of you guys on the podcast. We have a couple of really interesting guests coming up. We're doing a lot of interviews in IMTS. Just remember here at Raw Materials, we are pushing people, not buttons. Sometimes that includes me too. Take care, everybody.