2010: Valuable and stressful: People & Companies

It’s hard to believe December is already upon us, but the Cutting Tool Engineering calendar on my wall reminds me of that every day whether I like it or not. Reflecting on the previous year, it’s clear it was a volatile one from a business standpoint. But, for me, the significance of 2010 represents a year since my dad retired, leaving all management responsibilities to me. That resulted in an interesting combination of stress and learning.

Most importantly, I’ve realized just how much responsibility it takes to own and manage a relatively large shop with more than 40 employees, lots of machines, all housed in a large building. On top of everything else, managing such an operation with fewer employees is challenging. Some left and some were terminated, but replacing them isn’t a quick fix. As a result, we’ve all had to juggle various responsibilities to ensure our service and quality is still high. After all, we need the business.

My brother describes the lingering difficulties from Dad’s reign as “legacy issues.” While dealing with these issues can be frustrating, I try to keep in mind it takes patience. Reengineering a business can take several years and lots of costly trial and error. Reinventing the wheel doesn’t necessarily make sense either, and the comments and advice from many CTE readers have helped prevent much reinventing. Hearing what others are dealing with and how their situations were handled has been encouraging. Getting that feedback makes it clear our shop can effectively compete and be around for many years. Some have written off the value of domestic parts production, but that’s unwise. U.S. shops are still the best choice, even in a global economy.

Another interesting concept that’s been validated for me in 2010 is the good ol’ 80/20 rule. It seems to be consistent no matter how much we spend on marketing, meaning about 80 percent of business comes from about 20 percent of the customers. As those top customers get busier, we follow. If they slow down, we also follow.