Miller Ingenuity CEO Steven Blue On Taking Manufacturing From Rust Belt To High-Tech

Steven L. Blue, CEO of locomotive and freight car parts manufacturer Miller Ingenuity, has plenty of experience in taking Rust Belt manufacturing operations into the modern age—he’s been doing it for decades now.

In his new book, “Metamorphosis: From Rust-Belt to High-Tech in a 21st Century World,” Blue highlights lessons he’s learned in turning traditional manufacturing operations into high-technology companies leveraging advanced electronic products to maximize efficiency (and profitability).

Blue talked to Chief Executive about the common mistakes business leaders make when taking an organization into the high-tech manufacturing space, how CEOs can sell the idea of transformation to key stakeholders within an organization and how his personal leadership style has evolved with the company. Here’s an excerpt from that conversation:

Common pitfalls for manufacturers making the jump into high-tech manufacturing

There are three big ones. Let’s assume that you’re a Rust Belt manufacturer, and you make, plastic things, metal stamping, low tech or no tech kind of products, you have a workforce that doesn’t know how to do anything any different, and it’s not their fault. So, you don’t just one day grab that workforce, say, “Guess what? We’re going to make you all electronic engineers and digital guys and if you can’t do that, we’ll go hire a bunch of people who can.” That’d be really silly. So, the first thing that you have to do and the first pitfall that I see is they don’t prepare the organization to make the change, not only to make the change from a functional point of view of job skills. You have to have a culture that is amenable to change, a culture that’s energized, what I like to call a Cirque du Soleil culture.

I tell CEOs all the time when I make keynote addresses, “Your model in your mind when you’re getting your organization ready for transformation, is you want a Cirque du Soleil culture.” You want people who come to work every day, all jazzed up, and the only thing they want to do today is they want to make today better than it was yesterday. That’s what Cirque du Soleil does. Every day their performance they want to make it better than yesterday. And of course, the push back is, “Well, we’re not circus performers and these are employees and they hate their jobs.” Well, whose fault is that? I tell them all the time, when you start modelling kind of culture, you want to create the environment, create incentives, create the spaces, create the place where people can feel like they can be creative and want to do better than they did before. And that’s the first place that feels will go wrong if they try to make this transformation is the organization isn’t ready for it. You have to transform your organization from what it is today to what it needs to be to be ready for this technological shift tomorrow.

The second big pitfall is, once you’ve done that, you got people all jazzed up and energized and they really want to do good stuff, make new stuff, well, they don’t know what to do unless you provide what I call “Ignite the spark for innovation.” You have to train them in how to be innovative. You have to train them in how to be creative. You have to train them in the fundamentals of brainstorming.

The third major area is what I call disrupt. So, you transform the organization and then you ignite their creativity. You’ve got all these great project ideas, there’s a lot of work to be done to make those ideas from an idea into an actual product. And it’s probably not worth the time to go into that now, but the third part… So, you got all these great products, so you got some high tech products, you can’t go to market with the same old tired marketing clothes you used to go with the old products are. You have to disrupt. You’ve now got new technology products and you’re trying to repurpose your company as a new technology company and you’ve got to rebrand. I did that with Miller Ingenuity four or five years ago and got it rebranded. And then you’ve got to start telling your story about why anybody should believe that your high technology when you’ve been nothing but Rust Belt stuff forever.

Social media is one example. We just released a television series—our flagship product in the high technology space is a safety product. It’s a life safety product, so we actually went down to Orlando to a production studio and recorded eight or nine episodes of what we call “Safety Starts Here.” And it’s really a thinly-veiled advertorial for our safety products, but because it goes through a logical and professionally produced series, it’s almost like you’re watching a television show. And it positions us and further deepens the perception in the marketplace that we are a high-technology company. In fact, we’ve been at this for a number of years, but now people call us when they want a technology solution. Three years ago, they had no idea we did anything like that.

The best ways to communicate a vision of transformation to key stakeholders within an organization

The way not to do it is to say, “Listen, I got this great opportunity and it’s going to cost a lot of money, it’s going to take a lot of time and it’s going to be really risky.” All of that’s true, but that’s not the way to do it. The way I like to communicate anything of importance, and it doesn’t matter what it is, is I like to talk about the good if we do it, and the bad if we don’t. If there’s a good side to doing something, there must be a bad side to not doing it.

Let’s just take exercise as an example: The good side, the good reason, the good benefits to exercising is you’ll be healthier, you live longer, cholesterol could go down, all that kind of stuff. The bad thing is if you don’t do it, you’re going to die younger, in a very simplistic explanation. So, whenever I talk about an initiative like this, especially this one, I say, “Here’s all the great things that we’re going to have once we make this transformation. Higher margins, intellectual property protection, a commanding lead in the marketplace, etc., etc., etc. But here’s what’s going to happen if we don’t do it: We’re going to have declining margins, the Chinese are going to eat our lunch, everybody knows that, and eventually, the business is going to go out.”

So if you paint one side of the picture, the opportunity side, too many constituents will say, “I’m comfortable right where I am. Why can’t we just stay right where we are?” So, you have to paint both sides of those pictures and you have to be relentless, especially with your board and your shareholders, you have to be promoting this initiative all the time. And what we did is clearly successful. Now the board is breaking their arms, slapping themselves on the back for how smart they were. Even now, every chance I get I talk about, “Here’s what’s happening, here’s the good stuff, here’s where we’ve had successes, here’s how it’s working.” And you have to tell them if there are major setbacks, but you have to ruthlessly promote these initiatives with your board and with your employees because otherwise, they’ll slip back into comfort land.

The ways in which his leadership style has evolved as the company has evolved

I can’t say that my style has changed a whole lot because my style has always been engaging very much, employee empowerment very much, recognize, reward, reinforce. That’s been what it is. But I have to say to change technology in a company just affects every single person, every employee, every shareholder, every director. And so now I’ve learned to be part salesman, part cheerleader, and part bully. What I have to be. Sometimes people need to be nuts when cheerleading doesn’t work. So, I’ve learned to juggle different sort of personas in order to get this thing done because if you just say, “Let’s do it guys. Rah, rah, rah, sis boom bah,” and sit back and watch it happen, it’s just not going to work.

Related: How Emerging Technology Is Driving Job Creation, New Industries