Category Archives: Managing

Leading with Heart

One night, about six months back, two of our employees on the graveyard shift overdosed on cocaine. They left the plant around 12:30am — all of this caught on video — walked across the street, and bought from a dealer waiting on the corner. They later claimed they did it because they were tired. The cocaine turned out laced with a near fatal dose of fentanyl, a common additive to drugs, I later learned, because the high is so addictive. One staggered back into the factory and collapsed in the restroom, with no pulse, saved by the actions of a co-worker. The other was later found near death as well. Police and ambulances converged on the scene, and the shift supervisor called our president, Pallavi Joyappa, to come deal with the situation.

How to deal with the employees involved? We asked them to tell the truth about what happened, a truth we more or less already knew. One decided not to, and we let him go. The other did, and we kept him on condition he stop using. When random testing showed that was harder to do than anyone thought, we helped him find a rehab center and told him to take the time he needed to get well. We held his job and let him keep his seniority during his 90 day leave. He returned clean, and remains so, and continues to be a productive printing press helper.

If I tell this story, and our leadership’s role in the aftermath, to senior executives at large companies, they typically can’t believe what they’re hearing. They seem to think we must run a crazy workplace. But those of us at the other end of the business spectrum like Emerald Packaging, with $90 million in sales, a small executive staff, such high touch come with the territory. Over the last decade, we’ve helped employees cope with the suicide of a beloved colleague, the murder of another, the untimely death of a third, and a long-time employee who lost two children, one also to suicide. Keeping our team together and focused through these ordeals has involved listening, hugs as people cried in my arms, even saying the rosary with a group gathered to mourn with the mother grieving her child.

I really can’t imagine leadership any other way. We’ve helped an employee ransom his brother kidnapped in Mexico, paid a tax lien for another, paid for educations, and so on. I look at it very similar to how Pope Francis imagines the Catholic Church. He sees the church as a field hospital tending to the wounded, which every one of us is in some way. We do the same at Emerald, because we have to. People bring their pains and sorrows and crosses to work every day, and unless we show authentic empathy and care, we can’t bring them together in this common project, making a product people need, building community around a common goal where they can transform that negative energy into something positive and tangible, allowing them to provide for their family’s by building a company, and a strong one, that will sustain itself for years to come.

Of course, that means making a profit. We’re a business, so we have to. Otherwise we can’t provide for people, invest and plan for the future. Still, that project — which ultimately falls to the company leadership team — occurs in a setting where real people work and live. And that must be respected, or really, what’s the point? Money alone doesn’t build a successful family or community or business or city or country. Running a smaller company is a human project, and with that comes all the messiness that us human’s live in. So, we pay for an employee’s drug rehab, give him the time he needs, and hold his job until he returns, hopefully with the stamina to avoid drugs and become a productive, loyal member of our team.

Covid sharpened this leadership approach. Since we were an essential business, we asked people to come to work despite the risks as we understood them. As the leader, I knew I couldn’t hide at home while asking others to show-up, so each day I went in. And every day for months, I worried I might kill someone. I knew our company couldn’t survive if people didn’t work, so we made a pact to keep them safe as possible. Our team worked tirelessly, creating protocols, finding ways to encourage safety, to get people to care for each other, and when someone did get sick, support them with groceries and pay as they sat in isolation for two weeks at home. It worked. We didn’t have an internal transmission of Covid until a year and a half after the first national cases. And the company not only survived, but against all odds thrived in 2020, allowing us to give some of the highest bonuses in our history.

So this approach continues. On a recent afternoon I found myself in the conference room talking to one of our better press operators. I asked him how things were going. He proceeded to tell me that his sister-in-law had just been murdered in Oakland, and now he was trying to provide for the children. I listened without flinching. This was his reality and he needed me to meet him there, not as a gawker, but as an equal. I told him if he needed anything to just ask. Weeks later he did, asking for help with a past-due bill. I had to make a decision, my word or my wallet. I picked up the paper and told him I’d take care of it. He had enough things to worry about. I know he’ll be an Emerald lifer, and I’ll have his skills for years to come. And all because I treated him as a person.

Though I find this part of the job incredibly rewarding, I know I pay for it in blood. My own blood, to be clear. You can’t help but take on people’s pain, their sorrows, as you help them focus on a common goal. There are many days where I sit in my chair and say to myself “I’m tired”. But as a business owner, I think you have no choice but to meet your employees where they are, and deal with all that means. If you don’t, your business won’t thrive because your people won’t work with the commitment you need. You end up giving yourself away. Doing so is both exhausting and exhilarating, and if you let it be, transformative of your own soul, as you come to understand how fragile humans are, and how being present helps. And in turn, allows them to tap into their best selves to make Emerald an extraordinary place to work, live and thrive, including financially.      

Immigration Daze, Part 1

The politics around undocumented immigrants continues unabated, no matter the abject need for workers in the United States.  The Democrats use the lack of reform as a recruiting tool, while the Republicans use the possibility of change as fear bait.  All the while American businesses scour the landscape for employees, hanging signs outside their offices broadcasting job openings, as my company has done for several years.  Emerald Packaging entered the pandemic in March 2020 with 25 openings, and still has 18 today, a stark contrast from most of my years in business, when we could hire freely and rarely had any unfilled positions.

I know we aren’t alone. Ask any businessperson their most pressing issues, and lack of labor comes in the top three. With the unemployment rate trending around 3.5%, the Bureau of Labor Statistics, a government agency, says the country currently has over 8.8 million job openings, over 1.5 million more than just prior to the pandemic, when openings were already near an all-time high.  Ten years earlier, we had less than 4 million openings.  A historically low Labor Participation Rate has hurt, with only 62.8% of able working age Americans employed, compared to 66% prior to the 2008 recession. That’s roughly 5 million missing workers, most of whom retired, according to new research by the San Francisco Federal Reserve.

Meanwhile, we have around over 11 million undocumented immigrants in the United States, with around 6.5 million in the workforce currently, according to the U.S. Department of Homeland Security.  However, many of those working — if not most — are trapped in the informal economy, stuck in jobs they can’t get out of without papers, regardless of skills.  Many Americans want the undocumented thrown out of the country en masse, which would only exacerbate a horrid labor shortage that’s draining growth from the economy.  I know this firsthand. Our sales could have been at least 5% higher last year had we been able to fill jobs.  And don’t lecture me about low wages. We’ve increased pay 15% over the last twelve months, and have packages equal to Tesla, the automaker down the highway from us.

The answer isn’t to throw workers we desperately need out of the country.  It isn’t to pretend we want immigration reform and do nothing about it.  The answer clearly lies with finding a path to legalization for workers already in the country. And creating a system that allows in the immigrants we need each year with the skills needed. Likely it’s a number that would end up in the many millions given the onslaught of Baby Boomers due to retire over the next few years.

I have more experience than I want with this issue. Around 12 years ago U.S. Immigration and Customs Enforcement audited us.  We had to let 18 long-term employees go, including supervisors and foremen.   Though seven came back over the next year having obtained legal status, I don’t think we’ve ever replaced the talent lost. And just a year ago six employees from a company across town that had closed applied for jobs, with the exact skills needed to fill open positions. But they failed the ICE e-verify check we now do to confirm status. Those jobs remain unfilled.

So, here’s a call for a sane immigration debate that leads to realistic solutions. It seems a remote hope right now, especially with the silly season of Presidential primaries upon us.  American business needs realism on this issue more than ever, and posturing politicians and media empires calling for blood serves us badly.  We have to speak up. I’m not saying this as some bleeding heart. I’m saying it as a businessman looking at the “Now Hiring” sign that has hung from his building for three years now.  With no end in sight.

 

 





Business in the Time of Covid

Before March 10 I remained fairly convinced that the virus known as Covid-19 wouldn’t break horribly upon our shores. I don’t know what lead me to believe that, perhaps the lack of cases and the few deaths seen here so far, perhaps a false confidence that everything would work out somehow.  But while driving to work I listened to CNBC  as the market crashed. And I heard former Food and Drug Administrator Dr. Scott Gottlieb describe in harrowing terms the pandemic headed our way.  Without mitigation measures Covid-19 would sicken tens of millions and kill millions in a matter of weeks. Within 45 minutes my mind flipped completely.

I sped to the work and literally ran down the hall to the office of my chief operating officer Pallavi Joyappa and demanded the scheduling meeting due to start in 10 minutes which stuffs 25 people into a small conference room be conducted on a conference call instead.  We had to start social distancing, I said, we had to make major changes now to make sure people didn’t get sick and die.  Over the next three and a half days our company, lead by our Ops team, completely changed how we did business.  We required people to use iso-propyl alcohol to wipe down machines at the beginning and end of each shift.  We hired two people per shift to disinfect the rest of the factory and offices. Customers and suppliers no longer could come on-site nor were truckers allowed inside.  We positioned hand sanitizers around the facility, requiring people to wash hands and sanitize before clocking into work. We staggered breaks and lunches, and reconfigured cafeteria tables to ensure social distancing. New systems were implemented so people could work from home. Overnight we went from 22 people in the office to just eight.  Finally, we held shift meetings to explain the changes and emphasize the seriousness of the conflagration on the horizon.

On Friday evening March 13 I breathed as sigh of relief. We had done what we could. Now we had to get back to work. But over the next several weeks Covid defined the contours of business for me and the rest of the company.  It seemed every day I’d come to the office expecting to deal with one set of challenges only to end up back confronting  Covid issues.  We had to write new protocols for health and hygiene including an ironclad rule that people not come to work if they had Covid symptoms or go home if they developed while at work. Employees had to stay home for 14 days if someone in their household got Covid. We decided to pay for Covid absences in order to encourage people not to come in. We instituted a protocol for reporting Covid symptoms. And we worked with our insurance company to pay for any hospitalization costs not covered under our plan.

It seemed to never end. When Alameda County closed all but essential businesses we had to make sure we stayed open so we could supply packaging to our produce customers.  Local officials helped us understand the regulations and we wrote letters for our employees identifying them as working for an essential business in case a sheriff or police officer stopped them while coming to work. We posted notices on our doors and asked customers to give us letters saying we were a supplier to an essential industry. We had to do it all over again when the state of California closed non-essential businesses across the state.

Meanwhile the list of new protocols grew. We implemented temperature checks the moment the Equal Opportunity Employment Commission allowed companies to do so. I bought about 10 temperature guns out of China that read only in centigrade — they were the only ones I could find — and Operations Director Michael Rincon distributed them to shift leaders and trained them how to use.  But then we noticed people bunched together while waiting for the checks as they entered and left the factory so we had to space people six feet apart by marking where to stand as they waited to get checked.  To make sure we took everyone’s temperature we decreed that people had to come and go through a single door in both of our buildings. We asked employees to observe social distancing rules in the factory which wasn’t easy given the noise from our printing presses and bag-making machines. We solved this by distributing masks and mandated wearing them.

We found we had to over-communicate with employees to make sure they understood the reasons behind the new protocols and the need to follow them. We began weekly shift meetings outside the facility where people could socially distance while being close enough to hear me speak, in a voice that would become increasingly raspy.  At the beginning people were stunned by our decision to make changes because the virus hadn’t begun its rampage and the federal government hadn’t started moving. I patiently described the violence headed towards us and the economic implications, including high unemployment. Following the protocols would allow us to stay open, enabling them to keep their jobs.  Work had become a matter of life and death I hammered home thanks to Covid. Each week we announced new measures and asked for suggestions. An important one involved replenishing cleaning supplies and soap on weekends when managers weren’t around to supervise.

Just as I thought we had things in hand we had our first real crisis. Rumors swept the factory that an employee had Covid and that we had covered it up.  Yet the employee had not communicated his condition to any manager.  We were blindsided. We had to chase him down only to find out he didn’t have Covid though he had posted a warning the night before on his Instagram account that he might have it because he had a high temperature and body aches, though they subsequently went away. We disciplined the employee for not following our reporting protocol and causing panic in the facility.  We then created posters which graphically displayed our Covid reporting rules and posted them around the factory.

Two weeks later we had our first real scare. An employee, following our new work rule, reported to a manager at work that he did not feel well — chills and joint aches — and we sent him home. Our human resource manager Diana Gonzalez checked on him later in the day and he had a temperature, so they advised him to get tested which he did the next day.  His father and brother, who also worked for us, were asked to quarantine at home until we got word. We meet with his shift to dampen panic. And then shut down the department and to do a major cleaning, including spraying the floor with disinfectant.  The following day his verdict came in — no Covid. Relief abounded.

Our costs for doing these things have added up. Between the six cleaners, lost production time disinfecting machines and Covid sick days, and the purchase of a computer system that automates temperature taking, the bill hit $250,000 in five weeks. I thought about putting a temporary price increase through to help pay the tab but then decided against it. Many of our customers, it turns out, were getting battered by lower prices as growers that used to sell to hotels and airlines and restaurants had dumped their product onto the retail market.

We implemented our Covid changes while bookings rose over 100%, introducing challenges of another sort. We scrambled to meet deliveries which we did often by the skin of our teeth. Fortunately, most customers worked with us to prioritize their orders but we continually asked for more overtime, as employees had to fill in for those who got sick or worried they might have Covid. During this time we also finished installation of a new printing press and a new bag machine during these weeks. These are Herculean tasks at the best of times. We also threw ourselves into community service, donating n95 and surgical masks and other person protective equipment to local hospitals. We even made plastic surgical gowns for nurses and doctors.

Even matters like finance became Covid driven. I made sure we had enough cash available to survive for many months if sales tanked due to a deep recession or the closure of customers due to Covid cases. We applied for a Payroll Protection Program loan to cover our employee costs if things went sideways. Our controller Marty Ankenbauer did a brilliant job getting our application in and the bank moved quickly. The loan approval was one of the happier moments of my career.

I know for the eight of us who made it into the office each day, these have been the most stressful days of our working lives. We not only had to meet delivery dates, we had to keep our employees safe. I constantly emphasized that working now meant battling with death.  Personally I have battled the worst asthma since my childhood, thanks to an explosive pollen season and doctor refusals to prescribe common steroid treatments for fear they’d compromise my immune system. The overlap between asthma and Covid symptoms unnerved me, as did the knowledge that if I did get Covid the odds of a bad outcome increased thanks to my compromised lungs.  But I felt I had no choice but to go to work, where the odds of catching the virus certainly were higher than if I stayed home. If I asked others to work, I had to as well. I knew I had to lead by example, not allowing fear dictate my actions.

It’s now April 26 and six weeks have passed. We’re still rolling out new protocols. Last week we created a company-wide SMS broadcast system to more easily communicate with employees. At the same time I could feel a more measured pace settling in, with more room for the tasks I normally do. People have begun taking time-off to recover from the punishment meted by the previous weeks. We’re smiling more it seems. But I don’t kid myself. It hasn’t grown any less stressful looking over my shoulder at a virus that may yet morph in unexpected ways.  And the thought that someone may get Covid at work continues to haunt me. The new normal has arrived.

 

Dedicated to those in sales and operations who have made it possible.





On Bids

bidEvery so often a bid lands on my desk. It’s either a current customer seeking lower prices or a prospect looking to see if we’ll compete for their business. Whatever the case, it usually means someone asking for bottom dollar, or close. No other qualifications matter. Such exercises drive me nuts.  Any company can find someone desperate or dumb enough to buy business.  Even we’ve been guilty of such stupidity, always discovering it doesn’t pay.  Some customers can’t help themselves.  Supplier madness is just too tempting.

Sometimes we run into a company that takes an entirely different approach. They work to find a way to create a win-win. I know that sounds cliched,  but it does happen. It requires hard work on both sides, a willingness to find creative ways to cut costs or limit price increases.  The process works because it cements partnerships that lead us to bring new ideas to them first and help them through hard times when needed.

Two or three times this year customers took this approach. They stated up front that they value what we bring to them, usually quality and new technology. Another appreciated our willingness to extend terms when they ran into a financial blip. Each wanted to trim cost, but they wanted to understand what we needed as well.  They didn’t want to disrupt a supplier relationship that worked, and valued that over the lowest price.

The approaches varied. One customer sat down with us and reviewed their packaging cost drivers. Plastic resin is one, but they understand we have little control over price movements pounded through by oligopolists like  Dow Chemical and Exxon Mobil.  However, this customer had an obvious way to reduce their prices. They used several different packaging sizes for the same item, an old practice that wasn’t required anymore.  Multiple bags meant we had to run smaller batches, which lead to higher prices. Together we worked to rationalize their bag sizes, taking four down to two, which allowed us to produce larger orders and reduce their prices.

Another customer took an entirely different approach. When they did their biannual bid we sat down and talked over their current prices. We contended they needed to go up, thanks to low prices exacted on prior bids and our need to cover cost increases in other parts of our business, like health care. We’ve done business with this company for many years and they appreciate the new ideas we bring to the table, and the consistency with which we meet their specifications. So they listened. In the end we compromised. We still provided highly competitive pricing, but we got enough bump to help. We kept most of our business.

On the opposite end of the spectrum there’s a company that bids their business every two years. They send a multi-page questionnaire asking about our technical ability, financial stability and willingness to help them develop new products. I spend hours answering the questions believing for some reason that even if we are not the lowest price, our service orientation and our engineering prowess will win the day. It never does.  The buyer awards the business to the lowest price, and my impassioned pitch goes to waste. Someday I won’t accept their invitation to bid.

Our company takes a holistic approach.  We do check resin prices rigorously, but award most of our business to the company that has delivered consistently good product. We work with our ink company to find ways to reduce cost, but we don’t toss them if someone shoots in a lower price trying to buy our business.  That doesn’t mean we never cut lose a supplier. Currently we have one on the way out. They didn’t deliver, rarely reduced cost and never brought new ideas.  So why be loyal?

Bid can cut prices. But they guarantee nothing when it comes to quality or service or willingness to work with a customer to reduce total cost.  Bids won’t reveal if a supplier will work with you when you run into trouble, as most companies do at some point. I know those companies that have gotten us where we are remain the ones which will drive us into the future. We hitch our wagon to them. We appreciate and value and help those customers that do the same.





On Growing a Family Business

wwaHistoryWhen my father started Emerald Packaging in 1963 he did so with three partners.  Over the years he bought them out, until in 1993 we became a family business.  Through the years the second generation slowly jumped on board. My brother came first, about 30 years ago, and took a sales role.  My sister followed and entered customer service.  I arrived almost 18 years ago after a career in journalism helping in operations.  My father ran a tight ship. The business prospered making iceberg lettuce bags back when such things were novelty.  He had a good plant management team, which allowed him to focus on sales, strategy and finance.

Then in the late 1990s he decided to begin handing over the reigns.  By then my brother handled some of our largest accounts and my sister oversaw scheduling, a tough assignment given the ever shifting demands of customers.  The  general management role came to me.  I apprenticed under my father and the plant management, sopping up as much as I could about how to run a company.  Certainly journalism had prepared me little except for providing me a grasp on strategy, the effect of world events on a business, and some understanding of finance.  It provided precious little experience managing people.

In 2002 my father officially retired.  My years as chief executive started.  I wish I could say all went smoothly but it did not.  Within my first month on the job we lost our largest account.  Then a month later our second biggest customer left.  Over $4 million of $18 million in sales disappeared overnight, more or less.  They left for different reasons. The first because of price, the second because they felt we didn’t have the technology they needed.  Almost instantly cash flow disappeared, we posted our first ever loss, and Union Bank froze our line of credit.  The family came together and weathered the storm.  We landed new customers, found a new bank that helped us upgrade our equipment and one of the two recalcitrant’s came back.  But the experience scarred me.  I never wanted to worry about financing or making payroll ever again.

Since then I have never had to face such times.  Instead we’ve built a vibrant, diversified company.  My brother developed accounts in Salinas and Bakersfield, my sister became a magician with the schedule, and I found the equipment, money and new markets to keep the business humming.  We bought our father out almost ten years ago.  This fiscal year we clocked in with over $80 million in sales and employed 275 people.  The factory runs around the clock, 7 days a week, 362 days a year.  We have the largest packaging operation on the west coast, making everything from stand-up pouches to complicated structures that preserve shelf-life to basic potato and lettuce bags.

But to get here we faced a different kind of challenge.  We had to hire the right people, give them responsibility and let them do their jobs.  We had to bring in capable middle and upper management and blend them into a family culture that tended to control every aspect of the business and gave trust sparingly.  Not an easy environment.  However over time we loosened enough that we’ve been able to attract several product development and industrial engineers, a strong technical sales manager to whom my brother reports, and a young woman who cracked the family tree and has become the second-in-command, our chief operating officer. Recently, to help us navigate our way to $100 million we signed on an experienced controller charged with financial analysis, replacing our deeply loved bookkeeper who plans on retiring in 2015.

I am not entirely sure how we made the transition from family business to a thriving corporation. Undoubtedly we recognized that to grow we needed help.  Our product development people helped us create new products which we could not have done on our own.  Our COO, who started out as a process control engineer, whipped our factory into shape, introducing quality systems, pushing productivity, and slashing inventory, saving cash.  Our sales manager pushed organic growth. He became the face of the company at many accounts, a first for us.  We also teamed with great outside salespeople, brokers, suppliers and distributors who helped us move into new markets, like fresh-cut fruits and vegetables and pouches for dehydrated potatoes.

Ultimately, I believe my siblings and I came to understand the difference between managing and owning.  Any family business set on survival has to recognize the limits of blood.  I cannot, for instance, develop new products.  We need a polymer scientist to do that.  Our sales team needs someone to oversee a large network of people selling our products and help organize customer service.  My brother did not want to do that.  My sister feels comfortable juggling the schedule but we needed someone to run operations.  If we tried to do all of these tasks we’d either be out of business or a much smaller, less successful company.

Parting with authority has not been easy.  Our COO earned our trust over 8 years.  The sales manager received responsibility only after 3 or 4 years.  But ownership means keeping an eye on the bigger picture, building a company of people whosZAZe skills help drive it into that future.  Ownership as a family company grows does not mean day-to-day responsibility.  Accepting this has allowed our family to look towards the horizon while letting people manage who will make us successful today and in the future.  My siblings and I accept we are stewards, who must protect the company and yet let go of it at the same time.





Emails, Texting and Business

iphone_addiction_798185Recently I banished iPhones and PDA’s from company meetings.  Over time it had become increasingly common to see staff checking their phones while a colleague tried to bring their attention to an issue. Or worse, they’d begin texting.  Not only is such behavior rude, study after study has shown that you cannot divide your attention between your phone and a conversation and do justice to either.  “Not unless you are negotiating Middle East peace,” went the one caveat I offered for getting on the phone during a meeting.  Our confabs aren’t very long, and if someone is expecting a call they can always bow out or reschedule it.

I became alert to the issue when I noticed people glancing at their phones during customer visits. Doing so just communicates exactly what you don’t want in the first place.  If I’m the customer I take away that we aren’t terribly important.  It doesn’t matter if you check by looking down at a phone slightly obscured by a table.  You can’t hide downcast eyes, nor fingers working quickly on a message.  Everyone present knows exactly what’s going on.  More importantly, the customer knows we’re not paying attention.

I don’t think anyone at our company means to be rude.  We’re just part of a culture that has become addicted to our phones.  Surveys show, for instance, that over 50% of Stanford University students believe they’ve developed an iPhone “habit”.  An unbelievable 8% report feeling that their iPad is jealous of their iPhone (these kids are smart?).  Businesspeople obviously aren’t immune.  We’ve become accustomed to putting our phones in our pockets and on our desks or on conference tables just waiting for that tweet, text, email or call to come through that requires  seemingly immediate attention.  Meanwhile those around us suffer from the attention deficit of others.

Worse yet, I think, people generally, especially younger employees, refuse to phone about an issue.  Instead they’d rather email or text.  When they email the cc line gets so crammed full of names it seems like a birthday invitation.  Then everyone kicks back their comments with those on the cc line getting whipped through circuits of information they often don’t need.  A wonderful rule I heard one company adopt states that after the third round emailing about an issue employees had to pick up the phone. Hearing a voice also helps develop a personal relationship in a way a message does not.

Some object to calling because they desire a paper trail.  They want proof a supplier or customer agreed to something.  The alternative? Summarize the phone call in an email, or better yet, trust that an understanding has been reached like we did in days of old.  Where agreement needs documentation, say like on pricing or scheduling, a quick note following a conversation should suffice.  If we are so suspicious of each other that we need documentation of every exchange, then other problems exist, trust being the most obvious.

Digital communications can present other tripwires.  Even in my wise old age I misunderstand tone in emails.  I don’t know how many times I’ve taken umbrage at something written only to find out I got it wrong.  On the equal and opposite side I’ve seen emails from normally balanced individuals that libel the recipient.  If the person had walked down the hall to work through the dispute, or picked up the phone, they wouldn’t have raised their blood pressure and that of others.  Instead, whatever caused the issue to devolve would have gotten solved.

I know I am no saint when it comes to iPhone abuse.  Too often I forget to turn it off when I get to the office. Then it rings during a meeting.  I’ve written angry emails when I should have picked up the phone.  I’ve disciplined myself over the last year to put those aside to decide once I’ve calmed down whether to hit “Send”.  Usually I end up spiking them.  My one exception: Complaint emails to airlines.  I figure venting can’t hurt because no one reads them anyway.

The final frontier remains internet use.  Games, shopping, stock trading, and so on also clog working hours, often leading to longer less productive days.  My first boss in journalism was an exceptionally disciplined man.  He came at 9, left at 5, and  wrote more stories in a year than just about anyone else.  Our chief operating officer Pallavi Joyappa is much the same.  I’m not there yet, but I’ve started to wean from Google.

I hope our iPhone policy helps us have more productive meetings.  Undoubtedly the messages will wait for us. Unless its President Obama texting for advice on Syria.  Then company policy says make excuses, quickly step outside and answer.





Expansion, Worry and Tums

indexI remember exactly where I was when the insurer American International Group (AIG) collapsed in 2008–standing in Intercontinental Airport in Houston, waiting for a flight to Mexico. The news sent a shiver through me. I knew at that moment the long expansion of our economy had ended. I also concluded in an instant that we would not purchase the $4 million printing press that I had been on the verge of buying. Time to preserve cash, I figured. Get ready for reduced demand. Hunker down.

My mindset remained unchanged for the next five years. When we needed additional printing capacity to meet new demand thanks to competitors who had gone out of business we bought a used machine for $250,000. We upgraded our bag making equipment but that cost less than $300,000. One year we invested only $1 million, unheard of prior to the crash. During that time we did not touch our Wells Fargo line of credit, instead building a cash balance. I can’t say this didn’t frustrate them. After all, they make bucks when we borrow, not when we stockpile. Of course our strategy mimicked many companies. Paying down debt, holding onto earnings, avoiding investment became a wide practice. Given our anemic recovery, it remains the recipe.

This year has been radically different for us though. Rising demand has compelled us to buy a printing press,  additional finishing equipment including a laser system to perforate plastic so it breathes, a slitter to make small rolls from larger ones, a tandem laminator to produce multilayered packaging structures, and a pouch machine.  We’ve had to purchase a new building to make room for  these investments. So far we have ploughed over $14 million into our company, the largest amount in our company’s 51 year history. Most of this equipment is an extension of things we already do.

Not the pouch machine. It’ll be our first. It allows us to dive deeper into value-added packaging.  Retailers and grocers have embraced the stand-up pouch for good reasons.  They attract shoppers with dazzling graphics.  Pouches take up less space than the cans and glass containers they’re replacing. Their lighter weight allows more packages per truck, cutting carbon emissions.  Now we’ll be able to participate in this growing market leveraging the print quality of our ten and eight color printing presses.

If this isn’t enough we’ve become the beta site for a new print technology for flexible packaging called digital printing. We’re working arm and arm with Hewlett Packard  to launch their 30″ Indigo  printing press.  Our company is one of two in the country they’ve partnered with and the only one making flexible packaging.  It’s quite an honor HP chose us to help roll out this technology, which makes short run, customized or personalized packaging suddenly economic and at a quality unmatched by any other print technologies.  I know they picked us because we’re a thriving company and market leader in our industry.  But being a beta site rattles my nerves. We’ve never been the first to market with a disruptive technology before.

So the outlay of cash to move into the building along with the debt taken to buy the equipment has my teeth on edge. We’re investing while other manufacturers continue to hold back. I’m breaking my dictum that cash is king. Instead I’ve bet on the future. I’m betting customer demand will continue to grow, that all the new business we’ve accumulated will not disappear. As a pessimist — and who would dispute that economic fundamentals justify such an attitude — I worry. I worry hard. I don’t sleep.

But what saved us during the recession would kill us in the future. The failure to invest, to remain on the cutting edge of technology and have enough capacity to meet new demand, has undone many companies. I know that. I’ve seen it. So despite my anxiety our company has surged forward. I can’t claim to see the future as clearly as I did standing in Intercontinental Airport six years ago. But my gut tells me all will work out. I just need to keep a steady supply of Tums at my side. Ultimate Strength preferably.





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