Welcome to the B2B Manufacturing Marketing Executive Podcast.

Hello, my name is Dan Konstantinovsky, and welcome to another episode of RH Blake’s Manufacturing Marketing Executive Podcast. We’re honored to have Doctor Ethan Karp, today president and CEO of magnet, the manufacturing, advocacy and Growth Network. As president CEO of Magnet, he helps manufacturing companies grow through technology innovation and talent. Doctor Karp is recognized thought leader and a frequent national media commentator on the future of manufacturing in America, particularly through his regular column on Forbes.com and his podcast, Make It Print Conversations on the Future of Manufacturing.

Thank you, Doctor Karp, for joining us today. We’re honored. It’s my pleasure to be here. Well, let’s start out with, a little bit of a crystal ball question. You know, you’ve been passionate advocate for manufacturing transformation. When you think about the next ten years, what do you believe will define success for US manufacturers? Four things are going to define that success.

00:01:08:06 – 00:01:45:27

Number one talent. Everybody talks about it. We know how critical it is. We know that we have population dynamics that are a little bit upside down. So it’s not as if the shortage is going to get better anytime soon. So as manufacturers, how well manufacturers do and getting into schools, thinking differently about apprenticeship, bringing back some of the training that they would have done 50 years ago, figuring out how to make all the technology that are in the companies exciting for the next generation, and doing it in a very hands on way that doesn’t rely just on a visit to a school, but visit to a school, coupled with a program that maybe the manufacturers created. Maybe that’s in an inner city where people don’t know about manufacturing careers. So looking for people in new places and figuring out how to truly give them that end to end support. So it’s not just, oh, we’re here, come get a job. No, it’s we’re here and here’s the training and here’s the transportation. Let me help you get into this role.

00:02:03:29 – 00:02:36:07

Maybe you use organizations like Magnet. We are a nonprofit that in part does this to to pull all those pieces together. That’s number one, totally transforming how we think of talent and how we get that talent. Number two is technology. So those jobs become better. We all know when more technology is involved and our products get cheaper. So we need to be able to integrate all the technology that is currently available that largely bigger companies already have access to, and already have the greatest consultants trying to figure out.

00:02:36:09 – 00:03:02:15

And the supply chain, the smaller companies, those that magnet, my organization largely works with that help them integrate technology and help them grow their jobs in our local economies. Those, need help, and they need to see the prospects of using a collaborative robot, and they need to see the prospects of using industry 4.0 and gathering data. And they need to take the things that are available off the shelf and implement them.

00:03:02:15 – 00:03:27:16

So that’s the number two area. How fast are our companies, particularly our supply chains, going to continue to move up that technology adoption curve? The third area is innovation. Yes. It’s innovative to do new things with your people and recruit people. It’s innovative to do new things with your plan. But I’m talking about product and service innovation, new products, developing those new products, taking the risk on those new products.

00:03:27:23 – 00:03:49:23

That’s always been the lifeblood of American manufacturing. It needs to continue so, and when it’s really hard to get a manufacturing startup off the ground because investors don’t really want to put that money into it. And we can talk about that a little bit more later. The fact is, it relies on our existing companies to set aside that those dollars and try that new product and try to be innovative.

00:03:49:26 – 00:04:10:23

And then the last thing is leadership and leadership. I’m not throwing around as this big soft term. I mean the leadership to do the really hard things and take the risk on that new product, take the investments in your new technology work. Get your blood, sweat and tears to figure out how to truly crack the nut of a workforce system that works for manufacturers.

00:04:10:26 – 00:04:37:13

That’s the type of leadership that we need in our manufacturers that collectively, if we apply that as a system, we will totally transform American manufacturing. So those four areas, we need talent in new ways. We need innovation. We need, technology and we need leadership. That’s what’s going to propel the next ten years of manufacturing excellence. Yeah, that’s a great blueprint that that many manufacturers, should be following.

00:04:37:21 – 00:05:02:21

When you think about maybe the current state, are there any cracks in the foundation, you know, anything that you think is preventing some of those organizations from taking the next step across those four pillars? There’s many reasons why a manufacturer might not do one of these things. They’re broadly risk taking, lack of knowledge and time and, in that order, right.

00:05:02:21 – 00:05:25:25

Risk taking. If you’re going to do innovation, you’re just going to have to put money down. Let’s say your innovation of your new product has a 5050 chance of success. And I don’t see anybody developing a product for less than a million bucks. That’s a lot of money to put out there. The second piece is knowledge. So when we talk about knowledge, it’s not just, oh, you know, do I know how to do this?

00:05:25:25 – 00:05:44:02

Do you know, can I hire the right people to do it? It’s the knowledge to know how it can actually affect your business in positive ways. There is not a clear path on technology. As much as I love to go in and say, here’s your roadmap for technology, right? There’s not a clear path. When you try to integrate these new technologies, you have to experiment with them.

00:05:44:06 – 00:06:01:17

This isn’t like going for the next gen of, you know, CNC machines and saying it’s better, it’s faster, it’s this. And what’s my ROI? Collaborative robot is doing things that you wouldn’t have been able to do with robotics up until this point, because it can take away a percentage of the labor savings. Will it work in the first application?

00:06:01:19 – 00:06:25:23

Maybe. Will it be way more time than it’s worth in terms of ROI to get that to work? Probably. So having knowledge from the outside or bringing people on with that knowledge, or sending people to retraining classes, that’s the type of knowledge that needs to be there to make it easier for somebody to see the potential, to make it ultimately less risky for them to be able to implement that new technology.

00:06:25:25 – 00:06:47:00

By the way, the national organization, the Manufacturing Extension partnership organizations just like ours across the country that in addition to operations improvement stuff that’s like bread and butter of what our agents do as nonprofits for small and medium manufacturers, thousands of them every single year. So we’re in that sort of knowledge game. I know it very well.

00:06:47:02 – 00:07:03:29

The third category, though, is time, and I cannot overstate this one, because even if you are willing to spend the money and even if you had the consultants sitting out there, if you are dealing with tariffs, if you are daring with the supply chain challenge, if you are just busy because customers want your product all the time, right.

00:07:04:01 – 00:07:26:11

But key people, especially if you’re in a small organization who can actually do this and implement this, are not available to work on the business versus working in the business. And that is often the biggest barrier is how to prioritize a few key individuals to do this sort of thing. So those are the barriers. That’s what we see again and again and again.

00:07:26:11 – 00:07:49:05

And of course, you know, we do not have a robust industrial policy where there’s tons of money to go into these companies to fund them. So we’re already sort of at a disadvantage to our peers in China who are getting a lot more help. So it’s up to us to do it ourselves. And, you know, one little other disadvantages compared to other countries, while China in particular, they have all new stuff in the last 20 years.

00:07:49:07 – 00:08:58:28

Right. That’s when they started manufacturing this stuff. We have these wonderfully profitable depreciated assets. Right. And it’s a little hard sometimes to be like, do I really want to spend all that money to do pretty much the same thing, maybe a little bit better, but it’s basically free to me to do it now. So there is that mentality that has to get in there, as well as succession planning issues of, well, do I want to put all my money in right now or do I want to, you know, take it out so that I can live my life in retirement and sell my business so all of those get wrapped into whether you have the time, whether you have the knowledge and whether you have the risk appetite. Excellent. And so let’s maybe drill down a little bit further around the technology piece, specifically around digital investments. You know, you’re you’re in many facilities, many manufacturing plants. Are there any that you feel there’s there’s a common thread that maybe can drive real ROI that manufacturers are overlooking, or they should be looking closer at every manufacturer should have some reason to have a collaborative robot somewhere, or at least have really exhausted by playing around with one that there is no specific use case for it.

00:08:58:29 – 00:09:25:13

Whether it’s for a safety thing you’re trying to get around, whether it’s repetitive tasks you don’t have the workforce for, whether it’s a dirty task that just people don’t like doing and hurts your culture and makes it harder for you to hire. All of these are reasons that everybody should be playing around with those similarly, real time data, it’s a little trickier because there are a lot of software out there that say they do this, and there are a lot of ways to get data from your machines to know when they’re working.

00:09:25:16 – 00:09:46:13

The next step is actually what’s difficult. So you have to get in there with some pilots to connect your machines and get that information, figuring out what to do with that information, how to display it in a useful way. And I’m not even talking about like predictive maintenance, which ultimately would be amazing for everybody to say, well, there’s these problems going on and I think it’s going to break and I’m going to get to it before I have unplanned downtime.

00:09:46:15 – 00:10:07:19

I’m actually just talking about simply saying, well, now that I know this information, how can I act differently inside my plant? That is a really important thing that is only going to become more important. So getting used to pulling that data off now and experimenting with different ways that you can monetize it, that’s a that’s a second, really, really important thread.

00:10:07:21 – 00:10:42:12

And you know, I, I would be remiss in saying that there’s a lot of electronic automation tools out there. So yes, there’s company automation. And I think everybody’s already thinking of automation and how they can do automation, do more of it is my general stance on that. But then there’s a lot of digital automation, whether it’s in the back office and how people are thinking about, you know, task organization and pinging people, whether it’s getting the right ERP system, which is a real headache to install but critical once it’s there to be able to automate processes.

00:10:42:18 – 00:11:00:08

Everything takes infinitely longer than you think it should to actually automate and do those things. But those tools and getting, you know, those that are on paper can’t be on paper. But I’m just saying, like even the tools that you might have already implemented, there’s probably some plug in, some add in that makes some part of what you’re doing that much easier.

00:11:00:15 – 00:11:21:11

So how do you find it? How do you find the right one? Those are the time components to doing this, but I think all companies should be digitizing more of their workflows. But that’s a great insight. Yeah. Looking at new technologies, but also to your point, you know, maybe there’s some existing technologies that you could leverage a little bit further.

00:11:21:13 – 00:11:49:24

You know, on the marketing and growth side, I would say historically, many manufacturers I think I think it’s kind of, a common, common known fact that there may be great at manufacturing or engineering, but maybe they’re not as good as they would like to be. On the commercial side. But in sales and marketing, you know, anything that you could provide any insights for manufacturers to think differently about growth or about how they should be thinking about positioning themselves for the next ten years.

00:11:49:27 – 00:12:04:06

So one of the things we do with a lot of our clients is we have a process scaling up. It’s one of many things like traction where, you know, I really believe in having some sort of system to set a strategy at the beginning of the year, not a binder strategy, but like, here’s what we want to accomplish.

00:12:04:06 – 00:12:27:09

Here’s our goals. Here are the things we think we’re going to need to do. And then on a weekly, quarterly, having the right cadence to getting the right people to say, are we are we hitting? Those are really important. Why is that important to sales and marketing? Because often for the small manufacturer, media manufacturers, even larger manufacturers who are who certainly can use the much more in depth strategy work that you know, that a McKinsey like I used to work at would do.

00:12:27:11 – 00:13:00:20

But these these processes just to sit down and say two days, here’s what we want to here’s what and how we want to grow. Ultimately it comes down to sales and marketing. And on the marketing side, it all starts with actually understanding what your customers are appreciating about you, what they want, what they like about you. I if if you’ve not actually done that with your client base, there, I guarantee there’s something you do not know about how people perceive you.

00:13:00:22 – 00:13:27:15

Sometimes when we do this with clients, which is often an outgrowth of the strategy planning process, because again, this is like the most important thing. It’s one thing on your operations to get it right. It’s another entirely to be like, are we selling the right thing to the right people? Right? Understanding that voice of your customer, doing some blinded interviews and saying, hey, what do you actually like, can uncover even basic information like, well, that’s not why we buy your product.

00:13:27:18 – 00:13:43:03

We buy it. You know, you say it’s because you’re all fast and stuff and oh no, it’s actually because you ship in three days. You know, we’ve seen that level of, oh my gosh, if you would tweak your messaging and your value proposition and leaned into that, there’s a new sales channel. So it all comes from that marketing feedback.

00:13:43:05 – 00:14:00:22

Once you have that market feedback, you can make your targeting better of who you’re going out to. You can figure out whether your messaging needs to change or whether your products need to change. And from there, then you can start getting into some of the more tactical stuff, which I will say is very expensive and very difficult to build a brand.

00:14:00:22 – 00:14:27:29

And it’s always changing on the internet how people find you and and from our advertising really relevant on what social media channels matter. And what would you have to do to actually have a good social media presence? So there’s a lot of strategy that goes into those communications pieces. But if you know your audience, that to me is by far the first step that every manufacturer should be regularly checking in in some sort of survey blinded way with, with their customers.

00:14:28:01 – 00:14:50:26

And on the sales side, it’s the same techniques, understanding and just making sure that your sales team has all the latest and greatest sales training. A relationship is really good and really important, but if you’re trying to build a new relationship, especially in today’s world, there are ways to do that better than than mechanisms that might have worked 30 years ago.

00:14:50:29 – 00:15:29:02

It’s dependent upon the business. Really? Are you solving a problem for them, or are you just saying you have the best widget? Where where do you lie on the spectrum? It’s very bespoke to the companies, but there is great sales training out there for people. Excellent. You know, you have this unique perspective as a CEO and then, work, you know, in magnet that you get the benefit of working across many different manufacturers, different applications, industry sizes, what separates the ones that may be who are thriving from the ones that maybe aren’t in any examples you could you could mention of of companies or for examples in general.

00:15:29:04 – 00:15:56:00

I’ll give three examples. These all aligned to that blueprint you mentioned. These all aligned to talent technology innovation and leadership. And they’re all great examples of leadership. I’ll go with a big company first Lincoln Electric here. Locally hiring a ton of people have have been involved in our workforce efforts to knit together education and transportation and government and and, and all the workforce systems that get so complicated.

00:15:56:00 – 00:16:16:13

They have been at the forefront with us helping do that for years. They’ve taken on apprentices. They’ve taken on people with a second chance who have, you know, had a criminal background. They have helped us design an experience where thousands of kids every year get tours of manufacturers. Well, they’ve been at the forefront and their reputation has benefited.

00:16:16:16 – 00:16:31:14

They’ve got a lot more people, and they are having far less difficulty finding people in the local economy because they have led in this way really selflessly. They said, you know what? This is the right thing to do for us, but it’s the right thing to do for the region, too. And that’s just a great example of them pulling out all the stops.

00:16:31:14 – 00:16:46:24

And they’ve had to change HR processes to make this work. They’ve had to put a full time person just to be able to engage with the community on these things. And a really good person who understands the organization just really going above and beyond. And many other companies have done this, but I just give them as a great example.

00:16:46:24 – 00:17:14:22

I mean, they created a $40 million facility in Cleveland just to train future welders because they knew it was so well. A second example would be on the innovation front and a, company in Youngstown, M7 technologies spun out a 3D printing company, creating its own system for, you know, very large scale like size of a room type 3D prints.

00:17:14:25 – 00:17:40:20

And they came to us many years ago wanting to do this. This is a, you know, small company. And and why? Because they said the future is in technology and new products and I have to be there. And this leader went around to the conferences there in Youngstown. So there was a lot going around. 3D printing. They did market studies to find out where their market was going.

00:17:40:20 – 00:18:04:11

There were a machine shop, high precision parts, a lot of re grinding. So they had high precision. They actually realized that one of the things they could do is measure inside their, their, CNCs. They could put equipment that would use AI to automatically adjust and er, correct, and it would save them time and money. But then they realized if they took that same thing, they could do it in large scale 3D printing.

00:18:04:13 – 00:18:30:21

And that set them down a multi-year journey of investment and spinning out companies to create now a thriving business where they’re making these large scale 3D printing parts. This was not a clear path that, oh, obviously, this would be a line extension. This would be next. This was an innovative leader that said, hey, I’m doing this. Where else could it be applied and saw the broader world of technology as his playground for doing something incredible into the future?

00:18:30:24 – 00:19:03:02

And what did it take for him? It took the vision to say, we will be a technology company over the next ten years. Our future is in technology. And he found the places that he wanted to to play in. Well, third company is Alloy Precision Technologies. So among the many products they make, that’s really high end aerospace parts, little bellows that all you know, things, accordion style tubing that can, connect into, you know, planes and things with high temperature variations so that they don’t go apart.

00:19:03:02 – 00:19:34:10

Lots and lots of things. Small things, big things. Energy generation are very representative of our sort of core manufacturing type, metals work and CNC. And it’s it’s some bespoke pieces of equipment and it’s welding and it’s, it’s all of those disciplines inside his, his company. And years ago he said, I need to make sure that I’m using all the best robotics and that I am figuring out how to connect my data for all of the reasons to be able to actually see it live and to be able to make process improvement based on.

00:19:34:16 – 00:19:53:26

So he has undergone a multi-year journey, starting with one robot, expanding that robot, doing inline inspection so that he didn’t have to do manual inspection anymore, figuring out now how to actually code his own system because he found that’s the going to be most economical to read all the data and to use his data is a multi-year journey.

00:19:53:29 – 00:20:12:20

His plant looks entirely differently. He’s gone into a new space, he’s combined it, and it’s much, much, much more efficient because of these things that he’s put in. And, you know, he’s not laid anybody off, and he’s expanded his business based on the prospect of all this new, great technology. So three great examples of of companies we see that do this.

00:20:12:23 – 00:20:28:18

And again, for him, what made the difference? He is willing to make the investment. I he thinks of investments. He says, all right. All my money’s in this business. I’m going to put it right there. We’re going to make that one better. We’re going to make the next one better. And there is a workforce thread through all these individuals.

00:20:28:21 – 00:20:46:23

If you really get down to the individual who did the, you know, 3D printing. Yeah, he saw the future of the company, but he just turned his company into an ESOP. You saw his exit and everything he was doing as a way for the future health of all the employees and for the region that he lives in. Youngstown.

00:20:47:00 – 00:21:12:26

I will tell you the same thing for Michael Canty, who runs Alloy Precision Technologies. Ultimately, he’s making business decisions, but he wants to see his company thrive and the individuals in his companies thrive. That’s what motivates him. Obviously, Lincoln doing all the workforce things. There’s a huge component of that as well. So there is this care for people that certainly is an impetus and a motivator to then do the big business.

00:21:12:26 – 00:21:34:20

Forward looking decisions around innovation and technology. While amazing stories and obviously, you know, magnet key part, you know, I’m sure of many of those examples. So it’s a testament to your guys work. And then maybe just the last question here, kind of as a closing, if you had magic wand, what do you what would you wish that every manufacturer would do?

00:21:34:20 – 00:21:41:20

Kind of just one change starting tomorrow. What would that look like? Hire magnet?

00:21:41:23 – 00:21:59:06

No, I mean, we are always there to help, as nonprofit, that’s our mission. Not everybody needs us, and we can’t get to everybody. So people, a lot of what we do is actually trying to catalyze. If we do it. For these couple stories I told you, will other people do it? So I’m trying to think, what are the what are the three things?

00:21:59:06 – 00:22:16:12

If you never talk to me or magnet or anybody, what would I do? One I would decide what new technology or piece of equipment am I going to experiment with? What’s the lowest hanging fruit? What show am I going to go to figure it out? What am I going to put in and and ask my team to experiment with?

00:22:16:14 – 00:22:38:27

I think that’s on technology, obviously on innovation. I would ask myself, do I actually know what my customers want well enough to come up with an idea to make either that service I provide to them better, or the product I provide to them better, or in the extreme case, a new product and on talent. Yes. Get involved in your local system and find out what’s going on.

00:22:38:27 – 00:22:58:26

But I’ll be honest, not all local systems have infrastructure, so you might have to create it, if you’re not interested in creating it, then I would do the next best thing. And this is a weird one, which is seriously, look at your entry level wages. The reality is that everything we do and some businesses can’t support that increase. But just do the thought exercise of what would actually matter.

00:22:58:26 – 00:23:17:11

How much business could you get? What would be the financial impact of a meaningful front line increase? And the only reason I say that is there are companies that have no issues getting people because they’re starting at very high starting wages, and they are very high, you know, mid 20s. Like I’m not saying everybody can do this, but what would it look like?

00:23:17:14 – 00:23:39:08

And if you wanted to get rid of all your workforce problems tomorrow, if you had to go to that higher wage, what would need to be true about your business? A certain automation, certain more amount of business, certain higher caliber people? I don’t know, but do the thought experiment of what it would take because you can get rid of that’s the ultimate way that you can get rid of your workforce problems.

00:23:39:10 – 00:24:07:25

Not totally by but not have those huge shortages is by paying more than your peers are paying. So those are the things I would I would say go to do first. Excellent. Doctor. Karp, thank you so much. Really enjoyed the conversation. Super interesting insights. And just, I appreciate your time here today. My pleasure, my pleasure.