Kofi Darku: 00:00 Thanks for tuning in to the Skill Up Build Up Podcast. On this episode we'll be talking to the president and CEO of Precise Tooling Solutions, Don Dumoulin. It's going to be a great conversation about what matters most with your workforce. Is it compensation or culture? One thing is very clear from Don's perspective, you've got to invest in people.
Adam Scholtes: 00:22 Yeah, Kofi, and I'm excited to hear what keeps Don awake at night. I think our listeners are going to be really excited to kind of get that perspective of a business owner that's growing his company the right way.
Kofi Darku: 00:32 Ready, set, let's go.
Kofi Darku: 00:45 Welcome to another Skill Up Build Up podcast episode. We're with Don Dumoulin of Precise Tooling Solutions, CEO and owner, and we're gonna ask him how his work world has been changing as we've been focusing on that in a number of our episodes. But before we jump into that, let's talk some sports just just to get warmed up a little bit. Don, you like golf. Do you have any favorite golfers?
Don Dumoulin: 01:12 I'm a big Jordan Spieth fan, you know, he uh, and if you've watched any of the TV on Sunday, it was set up to be a monumental finish for the British Open, didn't turn out that way because everybody backed up a little bit. But uh, you know, you had seven guys within two shots and, and all the big names including Tiger and Spieth and Rory. So it was, it was a lot of fun.
Adam Scholtes: 01:33 That's good.
Don Dumoulin: 01:33 Yeah.
Kofi Darku: 01:35 You know, um, I have been checking out Spieth and how old is he? Like 21? 24. So I haven't been watching as closely as I should have, but that is impressive, what happened this past weekend.
Don Dumoulin: 01:46 He's just a stud, and a good kid too, that's the nice part about it, down to Earth, signs autographs, you know, that's the cool thing.
Kofi Darku: 01:53 Awesome. Awesome. Yeah. So Precise Tooling Solutions. How long has the company been running?
Don Dumoulin: 02:01 Yeah, so we're in our 30th year. I've owned the company for going on six years now. Um, it, uh, it's a great little company. I bought it, I bought it after I had retired and got bored and so I started looking for acquisitions and, and uh, you know, made my first one, it will be six years in March, so five and a half right now. So.
Kofi Darku: 02:23 Awesome. So now that you are six years in, um, what have you done to change or grow the business?
Don Dumoulin: 02:37 Well, you know, I think the interesting thing about small companies, especially when you come from big companies, right? Because my background was always running big companies, Roche and, and uh, worked for Blackstone, private equity group ranking systems here in town. And um, what you find when you moved to a small company is they're, they may be more challenging than big companies, right? With big companies you just make a decision and boom, you implement it and you know, if there's complaints or, or, uh, you know, people aren't quite as motivated, they just, you know, kind of settle into it. With small companies you deal with it every day, right? It's a, it's a living, breathing organism that based on, you know, when you have 50 people, um, you know, it, it gets to be, it gets to be a bit of a soap opera at times, right? Because it's a small group, you see everybody every day, you talk to everybody every day and it allows you to, I think, look at the culture and change the culture and mold the things that you want to mold and change, much faster than with a big company, but, but also you find out that it's, um, it's very malleable, right? You can, it's play dough and I kind of enjoy that.
Kofi Darku: 03:52 To really dig in, we usually when we talk about workforce development, what's happening in the work world, we try and give people some special insight. So innovation is a very important word right now as our culture is changing with uh, companies and how we're growing. So how has innovation impacted your business and uh, especially how you're acquiring and developing talent?
Don Dumoulin: 04:15 Yeah. So you know, the talent development and talent recruiting and talent retention is, is something that, I mean I lay awake at night about right? Because especially when you're a small company, like, we are, what you find is that you'll lose one or two key people and it's not, it's a big hole. It's not, you know, the old adage was pull, pull your thumb out of a bucket of water and see the impact. If you pull your thumb out well the water goes back to normal. In a small company, you pull two or three people out, especially skilled craftsman and you've got a big hole and, and it, it immediately, it's not one of those things that's a long term effect, it's an immediate effect, right? Because, uh, in a, in a manufacturing world, if you've, I've got a machinist that's running a mill and all of a sudden because he's not happy, he doesn't like his boss didn't like, you know, what we did on pay raises, whatever those reasons are, if he walks, that mill sits still, right? And then, oh, by the way, I just upset my biggest customer because that's where the product was on that mill. So, so you really have a, um, you know, a Rubik's cube if you will of challenges from a people and processes standpoint on a day to day basis. So, so what we've spent a lot of time on is getting jobs down so that people understand what they're doing, um, the impact that they're making, and feel like they are almost owner of that process and that machine, so they feel engaged and, and, um, you know, part of the process rather than just a cog in a wheel.
Adam Scholtes: 05:50 Don, you've mentioned small companies a couple of times. Can you give a sense of your def, your definition of what a small company is?
Don Dumoulin: 05:58 It's always, it always is interesting to me. If you look at the US government's definition of small companies, it's under a thousand employees, right? Well, we're 50 employees, actually were 45, I think right now. So, uh, you know, that, that makes it, that, to me, that's a small company. Now, um, to me that's also where the, where the State of Indiana and the growth is, right? Um, I think most of most of the companies in the state are our definition under 100 employees and uh, and I think that's where our biggest probably gap and finding employees because you know, when you're a private business owner and you're competing against whether it's any of the tier one auto suppliers that are in the United States or in, in Indiana or any other major companies, they've got better healthcare, they've got, you know, um, potentially better buildings and nicer benefits and all those kinds of things. So you've got to go after it in a different direction. You've got to build an environment, and, and, you know, I, I always say I'm the luckiest guy in the world because when you acquire a business, you know, you can look at the building and you can look at the equipment and you can, you can kind of look at the customer base, but what you can never look at is the group of employees that are working there. You don't know what's in their hearts and minds. So when I bought the company and uh, you know, I, um, I, I had no idea what the people were like and, and, um, I don't know whether it's the state of Indiana, which I like to believe it is or Columbus, Indiana where my company is, but we just have good people in the city and in the state and they care about each other and in, in my company specifically, the vast majority of them are, if not related friends, they all go to the same church or many of them go to the same church, and it, it becomes a revolving ecosystem of its own, of family work environment, friends kind of environment like that.
Kofi Darku: 07:51 That just happened by chance or?
Don Dumoulin: 07:53 You know, I think that's um, um, you know, kind of manufacturing in America, you know, you, you, uh, you know, one of the things we do is we have a, we have a reward program. People bring in a friend, a colleague, they get a reward, right? They get, they get a extra bonus for that. And, and so that kind of leads that environment. Now, the downside of that is unfortunately, if we have a family member pass, half the company leaves for the funeral. So, you know, there's an upside downside, but you know, we work through that. So.
Adam Scholtes: 08:23 Sure. Um, so, so you've talked, it sounds like you've done a really good job of building a culture within your, within your company there. What's more important when you're attracting and trying to keep talent, compensation or company culture?
Don Dumoulin: 08:38 Well, that's the age old question, you know I think compensation gets them in the door, culture keeps them and you know, if you've got a job and you posted on Ziprecruiter or someplace like that and it's a 15 to $20 and the person who wants $22 an hour, they're probably not going to come in for it, right? But if you, if you meet their kind of minimum threshold and then they get in and they see what quality people they work for and the quality of machines that we have and the way we invest in, in equipment and people and, and all those kinds of things, then I think, um, compensation becomes secondary. You know, if you look at the longitudinal reports that show you that compensation is fifth or sixth on people's lists, right? I'm always a little suspect to that. Um, but, but I think compensation is certainly not the, it is the most important thing usually walking in the door, it's never, it's rarely the reason anybody leaves.
Kofi Darku: 09:42 When you started with Precise Tooling, was culture on the, at the forefront of your thinking in terms of, okay, now I have this company, it's small, different than what I've been doing in the past. Were you intentional about what you're doing with culture?
Don Dumoulin: 09:56 A very definitely. And you know, there's lots of different, um, uh, triggers, if you will, to culture. I think so many people think culture and they think about how you think and feel and talk to people. I think a culture is a much larger ecosystem, right? So one of the first things I did when I came in, um, that, that I knew would affect the culture was we put an ERP system in, right? And, and um, this was a mom and pop, um, tool shop and we've turned it into uh, really a much larger specialty manufacturing system, but in order to do that we needed a, a bedrock basis of data and processes so that we could, we could track and measure and know what our growth potential was. Right? So this ERP system that we put in immediately changed the culture. And let me tell you how so, so the, the, I think the interesting thing is we went from, I think I feel to now what's the data say, okay? That's a huge culture change right there because no longer do you have people walking into any office say, hey, I think I want to do this or I feel that this is the right thing to do in our culture now after four or five years is what's the data tell us. Right. And data is not always right. You know, you've got to have, I think I feel to go along with the data, but it should be the first of the hurdles on making a decision, but see that changed the people's interaction with the company because once everything is in an ERP system, what you find is it changes the work processes throughout the, throughout the shop. Simple example, we used to, before the ERP system, we used to plan in two hour blocks on a machine, so machine, machinists would get a a, a report at the beginning of the day saying these are your four, two hour blocks that you're going to work today and this project's going to go in this one and this one, and they just kept working at, well now we're planned down to 30 second increments because that's what the ERP system does and the machinist, when he or she gets at their machine during the day, they, they log in and it tells them everything that's going, they're going to work on that day and everything they're going to work on the next day and so they can see, you know, what parts they're going to need, what drill bits they're going to need, what cutting tools, all those kinds of things so that they can much better plan out their, out their day and their work.
Don Dumoulin: 12:24 Now the interesting reward for that from a culture standpoint is you ask people today and they feel much more significant ownership of the business because they, they know what they're doing, they know what the, the success rates are, they know what the hurdle rates are and they can control that. Um, you know, we give our guys lots of latitude on how to do the five ways to cut a plate, if you will. We give them latitude to do it just so that they're maximizing speed and feed and cuts and things like that. And, and what a full day and in most cases, two days of work ahead of you gets you thinking about what you're doing and how you're going to do it. So our guys tell us that they really appreciate that and that's a, that's a pretty big culture change from what we were doing.
Adam Scholtes: 13:11 Are there any negatives to it? Like, so if you go from a mom and pop shop as you described it and you start putting in process and you start putting in data, one would think maybe you can't, people maybe were hiding behind lack of data before, right? And now it's there and it's, here's what I'm doing, here's how I'm doing. Do you see any negatives with that?
Don Dumoulin: 13:34 Well I think the negatives, the negatives are, you know, people are now held accountable and there's always gonna be people that don't want that accountability, right? That's exactly right. And, and you know, I think in any organization that I've ever managed, you kind of have that, those three thirds, you've got people that are really, fully dedicated, you've got people that are, you know, coming to work everyday and happy and you've got that people that are transient, right? In and out. And, and so, you know, we have the same thing, we've got a third of the people down at the bottom of that kind of move in and out and, and we'll replace those and we've got a third that are really dedicated and a third that do a great job every day. So it's managing those and then, and then, you know, offsetting skills so that people are trained across the board.
Adam Scholtes: 14:16 Good.
Kofi Darku: 14:17 So you broke down how a company is typically staffed in terms of their level of engagement. It sounds like you have an established culture, there's incentives, there are incentives for those who have friends or family members to come into your company. But based on what you think happens with typical companies, do you feel like you retain staff well due to what's going on in your company?
Don Dumoulin: 14:46 Yeah, I think um, you know we've done a really good job of I think two things over the six years. Um, and it's, it's my team. It's not me. We brought our average age of employee down by some, almost 10 years. Right. And that's by bringing younger people in to the organization and a couple of older guys are retiring. So, so we've got a younger workforce than we've ever had before. Those younger workforce, that younger workforce brings a very different approach to the business, right? Um, they tend to be more technology driven. They tend to, um, you know, like the bells and whistles a little bit more. And so, you know, they're really into the, you know, almost 4 million bucks of new machinery that we bought over the last three years because, and you know, most of these new big CNC machines, they're like playing video games. I mean, they really are. And so the guys are totally into that and, and we've, you know, launched new software and they've, they've got the feel for the software very quick, the ramp up speed of transitioning from old software to the new software much faster than it's ever been. Right because of our younger workforce. Um, so I, you know, I think, I think those are really powerful things that set the future of the business and in pretty good, pretty good pace.
Adam Scholtes: 16:06 Don, as you're looking at your, you're lowering the age of, of, of your workforce, which, which is great and you're still looking and attracting talent because you, as you said, a third, it's still that kind of transient. And we're talking about hiring, hiring requirements. What's kind of your, your, what are your thoughts on companies hiring requirements being too strict or too loose? And how does that kind of affect your, you know, kind of bringing in the new crop of, uh, of employees?
Don Dumoulin: 16:35 Yeah, great question. And one that is, is extraordinarily difficult because in some cases just need a body, right? Well, the simple fact of the matter is you need a body. I'm a firm believer that when you hire a body you never, you never made a good decision. So, you know, we put, we put everybody through a pretty extensive interview process in our group, I mean we have a management team of eight people that really run the company and, and usually our, our, uh, new people joining are gonna meet with three or four of those management team members and then going to spend time on the floor. Um, we've, we've kind of honed down our interview process to where we walk, we can obviously do a lot of office interview, but then we walk them around the shop and say, tell us about how you would use that or tell us how would you...and man that the people that know it go right to the top of the people that don't go right to the bottom really quickly, right? Unfortunately, if they asked me what it is, I go right to the bottom, but that's why. That's why I really good people. Um, but you know, what, what that does is it shows that you, you've got to invest in people and, and you know, the $25 an hour machinists that's had 10 years experience is really hard to find right now, which means we have to then in turn find young people and teach them the trade. And that's what we've been doing recently. In fact, we've got a, we've got three young guys mostly right out of high school right now that are learning the trade and doing great work, right? And it's interesting to me because, you know, a college guy, I sit on the foundation board at Ball State, so I'm very involved with at Ball State and, and, and I'm pro college education, but college is not right for everybody.
Kofi Darku: 18:24 We've been having this debate throughout this show.
Don Dumoulin: 18:27 I mean college is not right for everybody. And, and if it's not right for everybody, what you've got to do is show people, parents of young kids out of college, what modern manufacturing looks like today. I mean, I've got a 50,000 square foot building that is at 72 degrees year round. So it's a pretty nice work environment, right? It's a little noisy at times because you got hammers banging and machines running, but it's 72 degrees so you're not working in a sweatshop, but it just doesn't exist anymore. It's clean, it's a, it's a great environment. And that's not what manufacturing is in most people's heads, right? Most people's heads, manufacturing is a dirty, grimy sweat box that um, you'd never want to relative to work in, let alone your son or daughter. And, and I think what our challenge and I think the manufacturing associations around the United States recognize it, is we've got to help people understand that if college is not right for your son or daughter, instead of letting them work at Mcdonald's or in the fast food industry, show them a skill, I don't care whether it's welding or pipe fitting or, or whatever, machining, show them a skill because, you know, my average guy makes between 60 and 70,000 bucks a year. You know, in Columbus, Indiana, they're driving a relatively new truck. They've taken vacations and um, you know, they're, they're, they've got a good life. And, and fortunately we've got low cost of living here in the Midwest. So that's all beneficial, right? And you know, if you've, not everybody's ready for college, the, you go to college, it's a better, it's a better track for your life. If you're not, then get into a trade and be successful and be proud of the work that you're doing. And, and I think that's a message that we deliver to our, our young guys on a regular basis because they see my senior leaders in the company that started out just like they did right out of high school, will learn how to, you know, um, uh, use a cutting tool and weld and all those kinds of things that you need to know when you're in a manufacturing environment and have been relatively successful.
Adam Scholtes: 20:35 That's good. That's real good.
Kofi Darku: 20:38 There has been a lot of conversation in this episode that's supporting how important culture is so, I hope everyone's checking this out. One last thing, if you could describe or think of one change you made to your culture, one like tweak you made that probably had a larger impact or result than you thought, could you come up with such a change?
Don Dumoulin: 21:05 Yeah, for me it was the management team change, right? So, um, when I came in, after I bought the company, I spent the first six months just walking around and talking to people and then trying to, you know, learn what you learn by walking around. And I found two really dynamic young guys that had been with the company for, you know, 10, 15 years, but were relatively low level and I immediately dumped huge responsibility on them and gave them management jobs and said sit on my management board. And because they had these broad relationships with the rest of the workforce, the rest of the workforce responded. Um, they like working for these guys. They, they like the ability to, to, to learn from them. And you know, I tell all of our team, especially our youngest guys in the group that you're never going to learn from more experienced guys then then what you have now as your, as your senior leadership team at the company. And so you talk about one thing that helped change the culture, giving these guys massive responsibility for the organization, and then me backing away, letting them succeed, letting them fail, letting them make decisions is what I think changed the culture. Uh, you know, I'm a big believer that, um, you know, you can take the best seed and put it in lousy dirt and you're never going to have a great plan. And you can take an average seed and put it in great dirt, fertilize it, and you're going to have a great plant. Right? And I think the culture in many small companies, especially in, I know it wasn't mine before I bought the company was it was lousy dirt. There were some good seeds, but it was lousy dirt. Um, and what we've tried to do is pull those seeds up, put them in, good dirt, fertilize them, give them responsibility, give them the authority to make decisions and watch the plants bloom. And, and a bit of a corny analogy, but I think that's what we've tried to do at my company.
Kofi Darku: 23:07 It works in Indiana, you know.
Don Dumoulin: 23:10 It works and it might not in New York City, but in Indiana does.
Kofi Darku: 23:14 Well, this has been a ton of insightful information. Again, thank you for joining us on this episode. Check out the skill up build up hashtag, #skillupbuildup to stay involved with this conversation. Is there anything else you want to add Adam?
Adam Scholtes: 23:30 No, this is great. A lot of great takeaways. I think for myself personally, and I think for a lot of our listeners out there.
Kofi Darku: 23:37 You've got to invest in people. Thanks Don.
Don Dumoulin: 23:40 You're welcome.
Adam Scholtes: 23:41 Thank you.
Kofi Darku: 23:45 All right that's what I'm talking about. Don just led us on this great conversation, sharing nuggets such as the two tipping points for him in building his culture. Man, that's so invaluable and that talent must be molded to feel the challenges of ownership for them to stay on board. These are some great insights that seriously you can't get anywhere else except for in the room with us.
Adam Scholtes: 24:13 Yeah. I loved his discussion on the compensation versus culture. Compensation gets you in the door, but the culture is going to keep you in the door and you, you have to meet that minimum threshold from a comp standpoint, but once you do that, as long as you have a good culture, you're set. I love that, that piece of information from Don.
Kofi Darku: 24:30 And if you haven't thought about it, establish a management team. That's a very, very, very big point. That obviously made a lot of impact for him. Keep the conversation going with us. Check us out at #skillupbuildup to continue the conversation and we'll see you next time.