Saturday, June 30, 2012
Thomas Friedman says the world is getting flat. From 1492 to 1800 countries went global. From 1800 to 2000 companies went global. Now individuals are going global. What does that mean? We live in a networked world. More and more information is available for free. There are more and more opportunities for entrepreneurs--the people who can do things with ideas. Maybe an example will suffice. Let’s listen to Camden Brieden’s story.
“At age 15, I was intrigued by the stock market and the stories of entrepreneurial companies. When my father allowed me access to my college fund, I used the money to help me learn the basics of doing research and stock trading. Soon I experienced the adrenaline rush of making and losing money in a short amount of time.
“After making some lucky bets on Ebay and Starbucks, I was eager to learn more. I devoured book after book, learning everything I could about market indicators and how to evaluate a company within an industry. My infatuation for the market led to day trading and then to options trading.
“During my freshman year at Hope College, I became consumed by the market. The stress of trading began to affect my studies and I was unable to focus on pursuing my long-term goal of getting into medical school. I liquidated my portfolio and dreamed of investing in a local company with some of the proceeds. I wanted to find a company to invest in that would combine my passions for business and medicine.
“To pursue my dream, I began attending networking events. I met my first business partner, Phillip March, at a networking event sponsored by Lakeshore Advantage. At that time, Phillip was CEO and lead engineer of DO-Engineering, a medical device firm located in Zeeland. Phillip and I exchanged business cards and a few days later exchanged ideas.
“One of his ideas was a non-evasive DVT pump to help protect people from blood clots of the legs. Another idea was completely unrelated to medicine, yet also on the forefront of a technology-related trend. Phillip wanted to pursue alternative energy by building Michigan’s largest wood pellet plant. Because I had learned how to do research in my stock-trading days, I was able to perform the necessary due diligence. I learned that wood pellets can be used for heating residential homes and businesses, creating savings on heating bills of up to 50%. Wood pellets are made from the waste of managed forests and land clearings, and excess saw dust from lumber yards and saw mills.
“After obtaining a loan, we moved forward in selecting a location in Holland and procuring the necessary equipment. I was 19 years old when we started Michigan Wood Pellet Fuel, LLC. It took us 12 months to build Michigan’s largest wood pellet manufacturing facility, capable of producing over 70,000 tons of wood pellets annually. I was involved with managing the operations of the company, drafting financial projections, hiring employees, creating a sales team and marketing strategy, assisting certain building and contracting projects, and developing partnering strategies.
“In pursuit of our partnering strategy, I invited executives from a German company that was planning to build several wood pellet plants across the USA. They were very pleased with the quality of the plant and offered to purchase the entire company. I think I learned as much from selling the company as I did from starting and building one.
As more and more individuals get connected into a single global network, we have to adjust our thinking. Forget about attracting countries and companies. Think about attracting, educating, and retaining creative and collaborative individuals.
Friday, June 29, 2012
The Egemin Automation USA is a case study of success through collaboration.
Egemin Automation began as a product development team of Lear Siegler, in its Grand Rapids location. The product development team's task was to find non-defense applications for some of Lear Siegler's defense-related technologies. One application they developed was an automated floor scrubber. The floor scrubber had a black light sensor that would follow a line on the floor made of paint mixed with fluorescent particles. Unfortunately, the scrubber kept scrubbing the line off the floor!
The next application was for a mailmobile that used the same guidance technology. The mailmobile was capable of running a fixed route through large office buildings, such as those with modular floor plans, carrying mail and other packages.
The first order was for a mailmobile for every floor of the Sears Tower in Chicago.
The second order was for 60 mail machines for Citigroup.
In 1976 LSI moved the design, assembly, and sales of this product to Zeeland, at 280 E. Riley Street.
But LSI didn't have the brand image for selling such products and the mailmobile business wasn't large enough to generate brand recognition on its own. So sales of the product didn't materialize.
In 1980 the conglomerate sold the mailmobile business to another conglomerate.
In 1981 Jerry Dekker joined Bell and Howell.
Bell and Howell had a brand image more consistent with selling mailmobiles because it did a lot of business with the U.S. Postal Service. Bell and Howell thought the mailmobile would sell like copy machines. It didn't. Only 150 mailmobiles were sold per year. That was too small of a business for Bell and Howell, so it wanted to find industrial applications for the mailmobile technology.
In 1983, because it didn't have a foothold in the area of industrial applications, Bell and Howell sold the mailmobile business to yet another conglomerate, Litton Industries. However, Bell and Howell maintained the marketing rights for the mailmobile. Litton manufactured the mailmobile but also began to apply the technology to materials handling. Major companies like Honda, Chrysler, Bridgestone and IBM became major customers. Then Litton decided materials handling was a low growth and high risk business.
In 1994 Litton sold the business to Schlafhorst, Inc., a German company.
In 2000 Egemin International, headquartered in Belgium, bought the mailmobile business. Egemin needed the materials handling product, and the local firm needed additional software capability.
According to President Jerry Dekker, now President of Egemin Automation USA, while the companies are geographically separated, they share the same knowledge.
In 2006 Egemin Automation, located near James Street and 120th Avenue, was in the business of designing, assembling, testing, and selling automated guided vehicles: vehicles that resemble forklifts without drivers. These forklifts can be programmed to move inventory in warehouses—even on to trucks—guided by technology such as lasers and reflective tape above the floor, sensors and magnets in the floor, and sensors and chemical paths on the floor.
In short, Egemin helps companies move inventory efficiently. What makes Egemin work?
First, it is a job shop: the automated guided vehicle Egemin produces and sells are either one of a kind or part of a small lot of vehicles.
Second, Egemin is a design, assembly, testing, and sales organization. In fact, it is heavily weighted toward design: nearly one-third of Egemin's team of 47 employees consists of mechanical, electrical, and software engineers.
Third, Egemin Automation is an assembly, not a manufacturing, facility: it subcontracts with those companies that can manufacture components more efficiently. It puts assembly, testing, and sales together in order to get immediate feedback on its automated guided vehicle designs.
Fourth, Egemin integrates employees with various perspectives by putting them into cross-functional teams. Some say that great ideas come from being able to see one functional area from the perspective of another. That can happen on cross-functional teams.
At the time, Jessica Woodworth was manager of quality and organizational development. Jessica's role was not to test quality at the end of the production process, but throughout the organization. She spent her time building cross-functional teams among suppliers, Egemin Automation employees, and customers.
In 1885, according to Art McCafferty of the Michigan Golfer online magazine, the Brooklawn Country Club of Fairfield, Connecticut was the first country club established in the United States.
By 1898, two golf courses had been built in Harbor Springs, Michigan, and another on Mackinaw Island.
By 1910 there were over twenty golf courses in Michigan, including “clubs” in Grand Rapids (Kent Country Club and the Highlands), Battle Creek, Kalamazoo, and Muskegon.
It was furniture mogul L.C. Walker who brought renowned golf course architect Donald Ross to “upgrade” the Muskegon Country Club course. Ross would go on to design or redesign at least twenty golf courses in Michigan.
Between 1911 and 1920, despite the fact that we fought World War I, the number of golf courses in Michigan tripled . One of the new courses was the West Shore Golf Club of Douglas.
From 1921-1930, the number of golf courses more than doubled to 162. The flamboyant Walter Hagan helped the popularity of golf grow by winning four times at the British Open and claiming five PGA Championships.
In West Michigan, golf courses were established in Allegan (Eagle Creek), Benton Harbor (Berrien Hills), South Haven (Glenn Shores), Belmont (Blythefield), Fremont (Briar Hill), Grand Rapids (Cascade Hills), and Holland.
The Holland Country Club was originally constructed as a private club in 1921, according to Paul Olman, General Manager.
The Great Depression of the 1930s all but stopped the development of golf courses.
The banks foreclosed on the Holland Country Club.
In the late 1930s the banks sold the property to Leon Kleis. Kleis did well to maintain and improve the property during the slow economic growth years extending through World War II.
In 1945 Kleis sold the property to the Holland-area American Legion post. The American Legion operated the property through the 1960s.
Between 1931 and 1940 only 19 courses were built in Michigan. Some golf courses were even converted into pastures.
But after WWII golf continued to grow in popularity. Arnold Palmer and televised golf tournaments brought golf to the people.
In response, between 1961 and 1970, at least 150 golf courses were built in Michigan. These new courses included the West Ottawa and Grand Haven Country Clubs, Crestview (in Borculo), and Winding Creek Golf Course.
In 1968 the American Legion leased space in the clubhouse to the Holland Tavern Club.
In 1979 the Holland Tavern Club purchased the Holland Country Club property from the American Legion. In hindsight, this was a good move for the Tavern Club in hindsight, as the popularity of golf would soon skyrocket again as the baby boomers aged.
Sometime in 1980s and 1990s the Holland Country Club became member owned.
By 1990, Michigan had signature golf courses by Jack Nicklaus (The Bear), Arnold Palmer (The Legend), and Robert Trent Jones (Treetops).
During the 1990s, Michigan also became the national leader in golf course construction, averaging 22 new golf courses per year! With the fourth largest golf course inventory behind California, Florida, and Texas, as well as a relatively short golf season, Michigan became even more dependent on the tourist trade.
In the 2000s “High end,” signature golf courses were built: Wuskowhan, the Ravines, and Macatawa Legends to name a few. Memberships at the Holland Country Club began to peak.
According to Paul Olman, “Private clubs are a want, not a need. They struggle during poor economic times.”
In 2007 Holland Country Club members voted down a possible merger with Macatawa Legends.
But membership continued to decline.
In 2009 the Holland Country Club defaulted on a $1.5 million loan from Macatawa Bank.
In 2010 Macatawa Legends defaulted on a $3.2 million loan from Macatawa Bank.
It is generally known that one out of five children lives in poverty.
Not coincidentally, two out of five children live in single parent homes.
In addition, millions of children don’t reach their potential as givers and receivers in our global village because their ability to learn is seriously hindered.
That ability may be held back because they do not have a relationship with an adult who cares.
In May, 1993, Virgil Gulker, then employed by International Aid, conducted a research project. The objectives of this project were to answer two questions:
First, what are the most pressing needs facing American Youth today?
Second, how can the church reach out to these children and their families?
By November, 1994, he had an answer and a plan and was looking for at least one church to test his ministry idea.
By February, 1995, members of Mason County Reformed, Grace Reformed of Holland, and Ottawa Reformed of Zeeland agreed to sponsor ten children.
By 2003, members in 217 churches connected with 3,800 children.
In 2006, members in 440 churches in the US and Australia were sponsoring 7,000 children, and the numbers keep growing. But success isn’t always measured by numbers.
In 2007, Kids Hope USA is its own organization headquartered in Zeeland, at City on a Hill Ministries. “Kids Hope USA is a turn-key mentoring program that reflects best practices,” explained Jinny Bult De Jong, President. “We provide encouragement for directors of local churches, training materials for mentors, a newsletter, and the opportunity to be part of something big—a growing movement.”
The movement is built around the idea that churches adopt a school and individual church members develop a relationship with individual students. “Our focus is on elementary students,” said De Jong,
“The mentor-student relationship provides a foundation.” That foundation gives students a sense of dignity. The result is that the student feels special and valued and gains confidence to tackle learning issues.”
Kids Hope USA also provides mentors with a template for that hour of “pull-out” meeting time. During the first few minutes, mentors encourage students to share and mentors are expected to listen. Then the students and mentors spend two fifteen minute academic session broken up by a time of creative play.
Teachers say that 96% of Kids Hope USA children benefit from a having a mentor. Many mentors’ lives also are positively changed.
In short, the challenges of life can cause some students to lose hope, and losing hope hinders learning. On the other hand, overcoming challenges can build confidence and generate hopefulness, which can motivate learning.
Unfortunately, we as a society have created institutional structures and workplaces that contribute to, if not cause, a sense of hopelessness. We should put more effort into working with people and organizations that believe in people.
How many times have you heard that the only constant is change? Not so at John’s Battery and Electric. Although John C. Gras and his father John Gras have had to adapt to economic and technological changes, some things about their business have never changed.
Needing work at the beginning of the Great Depression, John Gras decided to go into business for himself. So he acquired a battery charger, a soldering torch, and a few other tools, and John’s Battery and Electric was born.
To make potential customers aware of his services, John circulated a flyer that set the standard for the next 72 years. It read:
Dear Friends, I wish to announce that I have opened a Battery and Electric Shop located next to Isaac Van Dyke Co. Implement Store on North Church Street, Zeeland. I believe my prices will be of interest to you. Your battery recharged for 24 cents. Also special prices on repairing generators, starters, batteries and other electrical work. Genuine Grant Batteries at $4.95 and up, all guaranteed for 12, 18, and 24 months (according to size and price). Also have used and rebuilt for $2.50 and up. Your leaky milk cans soldered for 15 cents each and cash paid for junk batteries. All work guaranteed and at ‘depression’ prices. Give me a trial and be convinced.
Friendly service. Low prices. Guaranteed. If you couldn’t count on the batteries, you could count on John. According to old newspaper and newsletter clippings, at first customers brought in batteries. Technology had advanced to the point where many people living on farms around Zeeland didn’t have electricity, but they had radios, and radio batteries would have to be recharged weekly. As electricity became more accessible, electric motors became more popular and John worked on them. When cars become more popular, his business of rebuilding starters and alternators blossomed as did the selling of car batteries.
As John’s business grew, so did his need for space. One reason more space was needed was because John didn’t throw many old parts away. As John C. relates, “Dad was sure there’d be another Depression, so he saved parts thinking he might need them someday.”
In 1936 John moved his business to Elm Street, just north of Main Street, directly behind what was then the Zeeland Motel.
In 1952 he moved his business one-half block north to 41 N. Elm, a space it has occupied ever since.
Even though the location and service mix of John’s Battery and Electric changed, the values of the proprietor didn’t. Customers were friends. As one old supplier newsletter reported, for many years, when John made service calls or went home for lunch, he would leave the doors of his shop open. Customers would come and go, bringing in things to fix or pick up things already repaired.
In 1976 at the age of 68, after 44 years in the business, John sold his business to one of his nine children, John C. Gras. But John didn’t really retire: for the next 20 years he continued working part-time in the shop.
As the new owner, one of the first things John C. did was unload metal accumulated by his father. Fearing another Depression, his father had accumulated 4 tons of scrap.
But John C. accumulated quite a bit of scrap on his own waiting for prices to rise, because technology and economics still significantly influence the business.
One important influence has been the impact of car parts made in foreign countries. “Today, in certain circumstances it is cheaper to by a new alternator or starter from countries such as China, Japan, and India than it is to rebuild an old one,” says John C.
Another important influence has been the proliferation of specialized car parts. “We used to be able to stock 70% of all relevant parts made; now, even with more space allocated to parts, we can only stock about 5% of all parts made.”
A third important influence that is impacting not only John C., but many small entrepreneurs, is the cost of health insurance, which has increased eight-fold since the early 1990s. As John says, “Enough if sales remain the same year-to-year, a small business owner has a harder time staying in business.”
Asked why customers continue to frequent John’s Battery and Electric, John surmises it is because of referrals, a “small-town feel,” and competitive prices.
For instance, John C. says “Customers still come into the shop and say ‘My dad came here.’”
Friendly service and a good sense of humor also seems to be a draw. The other day I noticed that customers entered and left the shop with a smile on their face; even a customer who just paid his bill was smiling.