The Second-Generation Operator's Playbook for Not Breaking What Works

Background

I did not grow up planning to run the shop. I grew up around it, but planning around it was different, my dad wanted me to be an engineer, and then a business person. I ended up as both, mostly by accident. When he had the stroke in 2011, the shop had about sixty people, revenue around $9 million, and a customer list that was ninety percent aerospace subcontract.

"The old customers are not stuck with you. They are betting on you. Act like it."

The first ninety days

The temptation is to walk in and change things. Everyone tells you to change things. Consultants tell you, private equity people tell you, your friends from business school tell you. What I did instead was walk the floor for ninety days and ask questions. Not the strategic ones. The dumb ones. What is this machine doing right now. Why does this pallet go here first. Who trained you. Who did you train.

"You inherit a company. You do not inherit the reasons for every decision that got it here. Assume there was one before you overturn it."

What I did not change

I did not change the pay structure for the first three years. I did not change the customers we served. I did not change the shift schedule. I did not change the person my father called every morning at six a.m., I called him instead. Every one of those decisions was tempting to reverse. Every one of them turned out to be right.

What I did change

I changed the estimating process, because we were losing money on twenty percent of jobs and not tracking which twenty. I changed how we hired, because we had never had a real hiring process and the last three hires had all been referrals from a single family. I changed the shop floor layout to cellular, but not because it's fashionable, because I could see people walking a hundred yards to get a part.

Hiring

The single hardest lesson is that hiring is the compounding decision. Everything else recovers faster than a bad hire. In a shop of ninety, one wrong person costs you ten right ones in morale. So we hire slower than we can afford to. We do three interviews minimum. The last one is with a machinist, not me.

What surprised me

How much of the company lived in one person's head. My dad had thirty years of context on every customer, every price, every quirk. When he was gone, that context was gone. I have spent thirteen years writing it down, not because I want everything documented, but because I want the next person to be able to walk in and not be terrified.

Advice

If you inherit a business, treat it like a house that has been lived in. Some rooms need to be repainted. Some need to be gutted. Most just need someone to keep living in them.