Alix James | Crain's Philadelphia

In this ongoing series, we ask executives, entrepreneurs and business leaders about mistakes that have shaped their business philosophy.

Alix James

Background:  

Nielsen-Kellerman, based in Boothwyn, Pa., is a manufacturing firm that specializes in designing and building custom products for outdoor enthusiasts. The company has 80 employees and has been in business for 30 years.

The Mistake:

As a company we are doing something a little bit unusual — building electronics and products here in the U.S. and competing, for the most part, with China-made products. And to do that, you need to be a very, very good manufacturer, which means you don't waste anything. You don't waste effort. You don't waste parts. You don't waste time and you don't waste money. In American manufacturing, there have been a lot of different approaches on how to succeed, but the one that has really stood the test of time is called lean manufacturing. 

We set out to adopt this approach almost 20 years ago, but I think we probably made the same mistake that most companies make when they adopt lean — we kind of thought of it as buying a computer or a new system, as if you were buying a new set of tools and you were going to put those tools to use and just get great results. But what you learn over time are two things.

First, you learn that lean is a process for improving your processes, and that you're never ever really "done." If you think you're going to do lean and get measurable results right off the bat, you've missed the point. The other thing you learn is that lean is a process about involving people in making those improvements. And that takes some understanding, and some patience, and a leader who completely gets that. Because sometimes when you're helping people learn how to improve their processes, you're just not going to see results right away. But you have to have faith that it's going to work. You have to keep teaching those lessons. 

If something only works when you do it in some weird way, it's not a robust and stable process.

The Lesson:

Really, for us, the moment our big transformation took off was when we hired a new director of manufacturing. He's a real people guy, and he's passionate about how well this process works. He wants everyone else to feel that same passion, and to have the confidence that they can solve problems themselves because there is a structure in place to support them. 

We were initially, I think, like many other engineering-based companies. You have these degreed engineers who spend a lot of time designing a product and have very specific ideas about how it's going to work, but sometimes things don't work out that way. So their initial instinct, until they've bought into the process, is to say, "Well, you guys just don't know how to build this right." But in fact, if something only works when you do it in some weird way, it's not a robust and stable process. So once they see that it's not a people problem, but a process problem — once they get that — the whole thing changes. That culture percolates further out.

Now, when we are designing a product, the engineers are right there on the floor, from the very beginning of the process. That's called design for manufacturing, and the products we have recently developed are just designed so dramatically better, it's really fun. It requires an across-the-board culture change, which requires leadership to understand that this takes time. It doesn't necessarily result in dollars on the bottom line right away. But with time it works. When I see where we are today, I feel like there's almost nothing we can't build. That's a very cool feeling, and you can't get there if you concentrate all the knowledge with just a handful of people. The reality is, the people on the floor are the ones who really know how to build this stuff best. 

Follow Alix James on Twitter at @AlixAJames.

Pictured: Alix James. | Photo courtesy of Nielsen-Kellerman.