Episode Transcript
Speaker 0 00:04 Make it right. The manufacturing podcast, almost five decades ago, two firefighters got together to manufacture helmets for California firefighters and now Phoenix technology manufacturers, safety products for firefighters and first responders around the globe. Some six years ago, Phoenix began a lean journey. The journey was not without its challenges, but the result has been positive changes company-wide. Their focus is on respect for people and continuous improvement and this has led to an increase in staff, domestic and international sales and profit. This is the make it right podcast. I'm Janet <inaudible> and I'm pleased to have angel Sanchez jr the director of global operations at Phoenix. Join me on the show to talk about the unique culture Phoenix has and to share the Phoenix simple lean story. So welcome to the podcast. Angel. Thanks for joining me.
Speaker 1 00:59 Thank you for having me. I'm thrilled to join you today.
Speaker 0 01:01 Well, this is great because, um, our good friend Jane Sherman out of vocab me, uh, introduced the two of us and he said that you would be a great guest and I think the Phoenix story is awesome. So I'm really happy to share it. Um, with our podcast audience. So, um, just give me a little bit of an overview of the manufacturing that Phoenix does, so people kind of understand your onsite setup.
Speaker 1 01:25 Sure. Well first let me acknowledge gene. He's an incredible man and I listened to the podcast and it was wonderful. So he's got great things going on. Um, so a little bit of Phoenix about Phoenix. We, uh, are a manufacturer. We make American made fire helmets as well as some accessories and some other implements for first responders. But our primary focus is on delivering high quality American made firefighter fire helmets for firefighters. Uh, worldwide. Yeah, we're located in Riverside County or fornia. So in Southern California we have a relatively small family business, but we've been very successful over the last almost 48 years.
Speaker 0 02:02 Wow. So when you say small family business, how, how big is the company right now?
Speaker 1 02:06 So we have a kind of a, um, a mixed design. So we've worked with contractors or vendors and suppliers as well as internal staff. So here in our headquarters we have just under 30 staff members. So no totally small. In the scale of things.
Speaker 0 02:21 Okay. And how do you know approximately how many helmets might you manufacture in a year?
Speaker 1 02:27 Yeah. So we, uh, produce tens of thousands on an annual basis. So we stay quite busy in our humble little a facility here.
Speaker 0 02:34 Yeah. All arms and hands are going at the same time. That sounds great. Yeah. So it's my understanding you joined Phoenix some eight years ago. What were you brought in to do?
Speaker 1 02:45 I did, I was brought inside known, uh, one of the founders, Ray Russell for many years back, uh, from fire service days. And um, I had also had a lot of experience more on the corporate side, uh, business, um, kind of on a larger scale, um, in, it was very unique for me when I first came on board because I wasn't used to working with a company that was smaller than the average, uh, work group teams I worked on. And so, um, it originally was, um, kind of eye opening for me to see how much you can get done with a lot less people. They brought me on originally to essentially help grow the business. And really just start to instill some of those business business disciplines that are necessary for a business of scaling the way that it was. Um, and also I think most importantly, it was to initiate a journey that would help develop our company into an environment of joy. So one that is, um, really a delightful experience for not only our customers but also for our, what we call family members or employees.
Speaker 0 03:44 That's a, that's a bit of a unique mandate I would think in today's day and age, an environment of joy in your working environment. I think that's a, that's really interesting.
Speaker 1 03:56 Yeah. It's something that we, you know, initially it's, it's really had a developed, so initially it was a lot of the focus on the business disciplines. But as we started to evolve, we really started to identify and realize that, um, if we have an environment where this is almost like the happiest place on earth for people because you spend most of your time working, at least your time that you're awake. Um, there's nothing else you do on a daily base. I mean, a weekly basis for roughly 40 hours. But sleep. So we want people to truly enjoy the time that they spend here so that they want to come in. Monday should not be the worst day of the week. You see all these, uh, these cartoons or people are dragging them on Monday. I think Garfield, back in the day, if anyone remembers, Garfield would talk about the Mondays and you know, those are, that's, that's a joyful day for us here. People want to be here and a lot of times, even myself, when you're out on vacation, you're having a great time, but you, there's always that little part of you that misses being at work. And I think that's somewhat unique to our culture.
Speaker 0 04:51 Yeah. Um, I want to jump ahead a little bit. Um, and just, I want to talk about you're very people focused company and what a typical day looks like at Phoenix. Because if you're talking about that joyful environment and you know, loving a Monday, you know, give me an ideas of people, understand what the culture looks like there.
Speaker 1 05:09 Sure. I'd be happy to. So it's, it's going to be a little bit different. It's something unique. We do, uh, we open our doors for tours to companies and educational institutions and things like that and they come in and they're kind of at first taken back because, um, our days a little bit different. So we start every, every morning with the first 30 minutes is what we consider to be improvement time.
Speaker 1 05:31 And it's also a lean concept that we learned from many others. Uh, where you three S or some people will know it is five F plus one, but we, we focus on kind of cleaning up the place a little bit. Although it doesn't take a lot of work for that. Most of the time is actually spent making our lives easier. So our family members take those 30 minutes to fix what bugs them. It's kind of a terminology that we've picked up through the lean environment. Uh, you just simply look at what you do on a daily basis and try to figure out a way to make it easier, make it simpler to make it safer, improve the quality of what you're producing. And that's a, uh, every, we work four tens. So we work four days a week and four days a week, every day of the year that we work, that 30 minutes is dedicated to that.
Speaker 1 06:13 So we're not building product, we're not answering phone calls or emails, we're not handling what you would consider to be standard production. We're just trying to make our job easier and better. And so that's the first 30 minutes. And then we go into a brief kind of department meetings. So each, each department meets for about 10 minutes. And like I meet with my assistant, we looked at my entire calendar, we look at what's coming up the next day and so forth. And each team kind of does that. And then around seven 40, we start at 7:00 AM so at 7:40 AM we get together as an entire company for our daily meetings. And this to me is the most important part of the day. It's so, you know, oftentimes where the biggest breakdowns in the business is communications. Well, we communicate on a daily basis to our global environment. Um, we start our meetings kind of following a practice of gratefulness.
Speaker 1 07:03 And so we start with gratefuls and everyone has the opportunity to share things that they're grateful for. We go into somewhat of an educational component. So the presenter will share a topic such as, uh, gosh, you may be talking about a lean topic. You may be talking about, um, how to present better, uh, how to read body language. I mean, it really goes across the entire array of disciplines. And then we actually have started studying, uh, an old Greek philosophy called stoicism. And so we have a daily reading from a book called the daily stoic by Ryan holiday. And we talk about that. And that kind of was what sets the tone for the rest of the meeting. And then we go into business numbers, production numbers, what's coming down, what are we running low on and what, whatever, you know, really talking about every department journey so that everyone's aware of how we're operating.
Speaker 1 07:56 Uh, if we have challenges, we discuss them there. We have a suggestion period where people can offer suggestions to make changes within the organization. And it's what we've found is that it's an <inaudible> incredibly effective for helping everybody to understand where they fit into. We call the little boat. We don't, we don't really use the term okay. The right people in the bus. We talk about being on the right seat in a rowing. And so we're a crew team. And so, um, it really just helps everyone understand where everyone else is out and then the day starts. So we, uh, well we, we finish up with a little stretch, so it's voluntary. People can stretch and then they go to return to work. Uh, and then the rest of the day is spent in whatever environment they're assigned to. So production or quality or administrative or whatever it is.
Speaker 1 08:45 But the other thing that we do that's very unique is that we offer 30 minutes per day, a paid personal development time. Um, I shouldn't even say offer because it's a requirement. We want people just spend 30 minutes every single day on their personal development. And we have a number of different tools that we offer for that. So cross training, it's something that we offer to everybody. And it's benefited the company tremendously because a good example of that is in the production environment. If we have, you know, maybe we have supplier that was running a little bit behind on a component and it came in and now we've got to get a lot of helmets out the door. Everybody back there knows how to work in every different role or in every role that's there. The other thing is a lot of our people that are in administrative and are in quality, they're in finance and marketing.
Speaker 1 09:35 They know how to build, how much. And so we're able to shift people around and really kind of make an impact and get things out quickly. Um, but it's also allowed us to take a very small family business and grow it internally. And so when you look at people that are in our senior leadership roles, they started as customer service reps or they started in as a production technician and that development time allow them the opportunity to kind of go through the university level of training and get paid for it and become, you know, the perfect candidate for new roles that we have. And then of course, you know, and even little things like our break times, it's, you'll see, especially the afternoon break, you know, I walked around and you have a group that's reading a book together. So there, I think this month is working on like personal finance. So one of the people, one of them is reading and like five or six other people are listening and they're engaged. Um, we actually do meditation in my office in the afternoon. So people come in and they meditate together and it's just various things that really have a community kind of feel to it.
Speaker 0 10:42 I'm wondering if you have people lining up at your door to get a job there. Like it sounds, it sounds like a really fantastic place to work.
Speaker 1 10:51 Okay. I think it's somewhat unbelievable. I don't, I don't, it's hard to, to really capture what the culture's like until you're here. And so our hiring process is a little bit different. We require people to come through kind of an immersion tour before we interview them. So they come in and they get to experience the morning with us. They, they go through our improvement time, they go, they sit in and one of our department meetings and our daily meeting and then they get a tour of the facility and then we interview them. So make sure that they're going to be well, more importantly, not just a fit for us, but that we're a good fit for them because this, it's not necessarily the best environment for everybody. There are people that like to come into work on time, work hard, be told what to do and go home at the end of the day. And that's not necessarily a good fit for us because everyone is involved in the success of the organization and you have to, you know, fit into, well we consider five virtues and one of them is courage and it's very important that you're willing to step outside of that comfort zone and help to implement change in our company.
Speaker 0 11:54 So how has this approach impacted your business?
Speaker 1 11:58 Oh, it's 10. It's revolutionary. I don't even know how to really classify it. I'm not sure there's words for it. So, um, you know, a lot of people are looking for the business metrics. Sales are up tremendously. Um, profits ha. We went from a kind of profitable company to a very profitable company, which allowed us to offer a lot of benefits we didn't use to have. And so things like pay and um, paid vacation and health benefits, life insurance, uh, we have like a 401k, which is a retirement plan here in the States that, uh, we offer matching on. We have profit share and none of that stuff was really available a few years ago. And so that has increased tremendously productivity. Of course that's a natural thing would bleed you become more efficient and you start to produce better or faster. Um, and of course costs have gone down, which helped drive up that net operating income in the process.
Speaker 1 12:47 And so that is kind of the business side of it. But I think the most important part of it is that yeah, the employee experience or as we refer to people that's family member experience is incredible. And so like we do employee satisfaction surveys on a weekly basis. I think they go out weekly. Um, it's, it's actually through a software program that test how we're doing as a business and <inaudible>, you know, when you look at how our satisfaction ratings and our happiness ratings, our personal growth and our net promoter score ratings are in the really in the top, in our industry, we're not the best, but we're really much better than most. And so I think one of the big things I noticed as far as the temperature gaze goes is when I do our daily meetings first started and we opened with gratefuls. People used to be so grateful that it was back then we worked five days a week yeah. That it was Friday and that they had the weekend and that was kind of a common theme. People were so happy to be going home. I never hear that anymore. Um, it's, it's a such a huge cultural shift that you, people are not like excited about not working. So now they're grateful for what's taken place in the business or within their partnerships and friendships that they've grown with here.
Speaker 0 14:07 So I'm curious to know what prompted you to go to the four 10, um, the system and, and are you actually closed for three days a week?
Speaker 1 14:18 We are. We are. So, uh, one of the things that I did when I first came on board with the organization is my wife actually worked, um, two jobs and works essentially 11 days in a row. And we only had off one to two weekends a month. And so, um, my agreement coming on board was kind of that I was going to take off every other Friday. Of course, I, you know, I was working back then 90 hours a week anyway, but I wanted to be able to spend that time with my family. And, um, as you know, last year I started having the conversation with our leadership and saying, why doesn't it everyone have three days a week to spend every week with her family? I mean, you know, who's to say that we have to work five days a week. And so I started looking into it and there was a number of different studies.
Speaker 1 15:02 I know Microsoft did one over in Japan where they found that their people were actually 40% more productive when they worked a shorter work week. Um, that wasn't necessarily the original intent, but what we found as we made the shift is that of course satisfaction went way up and productivity also went way up. So you don't have as many distractions. You don't have as many stops and starts, which we all know that was, you know, very, um, detrimental to production capabilities. And you don't have as many meetings other than the breaks. We work longer days and they really pushed to get everything done. So like Thursdays instead of like, Oh, we've got one more day, they're, they're done for the week, they've already got their workout and then they know they can enjoy that three day weekend. So, um, absolutely every single week everyone has that. I think what most people in the stage cherish, so that three day weekend they give it every week.
Speaker 0 16:00 I think that's amazing because, you know, I don't know how long the, the business world has been talking about, you know, the four day work week and yet nobody does it. Well, very few people do. And somehow you guys have managed to do it. Congratulations. Think that's, that is, that is fantastic. You're, you're probably the envy of the business community out there. Um, I'm curious to know because you did go on a lean journey and initially this wasn't as success for you. Why was the lean journey at the start and not a success?
Speaker 1 16:33 Yeah, it was. Um, it's been a journey, definitely. So I had a background in six Sigma and lean had been a topic of discussion that started to come up through the years, six Sigma, looking at the <inaudible>, the elimination of variation. And then there started to be more and more discussion about the elimination of waste, which was lean. So I kind of had a mindset like we need to do this lean thing. And so we started working with various consultants in different things and you know, they're amazing people, but they were bringing it to us kind of a PhD level academic approach. And we were just some simple manufacturers and a small family business. And so a lot of the tools and the techniques that were being introduced to us, we just were not ready for. And I think that is a really a failure point for a lot of companies is they, you know, you hear about lean and then they're taught that you have to do this value stream and you've got to do this.
Speaker 1 17:26 And we figured out a tack time and all these different academic approaches when in fact the first thing they need to do is fix the culture and recognize that the processes need to be improved. And so our first couple of years on our lean journey as you were counterproductive, we got worse. And so we are less productive. Employee morale was really, really going down and we just did not have the right approach. And the other thing was it was only the leaders involved in the training and involved with the meetings and frankly leaders in most organizations, I don't know what's going on on the floor level, they don't get engaged. And so here we are making decisions for what works best, having no idea what goes on. And so it just, it was kind of a dark period for us in regards to how we were operating.
Speaker 1 18:17 And then a good friend of mine named Zurich Aglio owns a company that's very close to ours called fire blast. He introduced me to a book called two second lean by an author named Paulie acres. And it's simply, well, it just basically simplified the approach. And let us to recognize in that first you have to work on your culture. It has to be everybody involved. The most important people in our organization are really what most companies consider the entry level because they're the subject matter experts. So the ones doing the processes every single day. So they have to be part of the engagement. It can't be top down, it can't be bottom up, it's gotta be everybody. And so we started to change our approach to it and begin a journey focused on people and the continuous improvement. And that is really been what the catalyst that's taken us to where we're at today.
Speaker 1 19:13 Um, and it, you know, it started a little rough. We daily meetings and things like that. You're almost like standing around going, what do we talk about? But as it evolved, we started to see this strengthening culture. It's amazing culture of joy, which is something that came along with it. And by empowering our people, they in turn drove the success of the business. You know, in a lot of ways I feel like the least effective person here because I'm not the one that's making the business great. It's our people. And so over the last three or so years, that journey has, has been wonderful. And so we also found that in that simple approach to lean, that two second lean approach is poly Cruz coin. Um, there's this whole environment globally of people that are doing it. And oftentimes it's thought that 1% of companies practice lean and 1% of those companies practice the type of lean that we do. And I've been able to engage hundreds of those people and they've helped her grow her business too. So this, this community that we're involved in is very Mmm, big on sharing information, sharing success stories and challenges. And that's really helped just kind of give us explosive growth in many different ways.
Speaker 0 20:28 Wow. So you see yourself in this whole process and in this simple lean approach, you say that you are a servant leader. Okay. So what do you mean by that?
Speaker 1 20:40 I try to be. So I'm sure I've got a lot of room for opportunity there. But you know, most like I don't allow to people to call me boss. I don't allow them to say that that's my boss because I don't feel that way in most companies. I think the approach is these are my people. They work for me. Here it's a little bit different. I don't believe that they work for me. I believe that I work for them and that my role in the role of our leadership team is to serve our people so that they can be successful because frankly, they're the ones making a difference. And so what we do is we spend a lot of time on, in a lean term or a Japanese term, gemba is a workplace. And so our leaders are to spend a lot of time in the workplace supporting their people, not micromanaging, not watching over, but standing by prepared to help them do whatever they need to get to the next level or to help the organization get to the next level. And so, um, I've dedicated a lot of my time in my own personal development towards kind of gaining this, the skillsets or the knowledge to be an effective servant for our, all of our stuff.
Speaker 0 21:53 And I would guess that in that position you're hearing from people, um, as you say, the entry level people, the subject matter experts, you're hearing from them, things about the process and what's happening on the floor that you otherwise, if you had a different type of leadership would never know about and you wouldn't see some of the issues that people are having.
Speaker 1 22:15 Absolutely. In fact, I work alongside them often and you know, there's other executives that have given me a hard time, like you get paid way too much money to be working in building parts and doing those things. But I will go and I'll spend time working right alongside everyone and almost every department and <inaudible> first off, I'm not nearly as good as they are, but it helps me to understand their pain points. And we've had some, some stories of success where I'm probably, the best example was I was working with them and I noticed we were pulling very small parts like screws and things like that that were being sent out as parts and accessories. Hundreds of them though. And I thought, are you counting these out every single day? And they said, yeah, we do it every day. And I thought this is horrible. You have to, I can't believe we have to do this.
Speaker 1 23:01 Why don't we have scales for this? And the next day we had skills because I wasn't aware of that. That was a little taken place. I was, I was kind of blind to a lot of their pain points. And so our leadership team now is responsible for not only being alongside but also doing observations. We have a thing called lean rings. It's kind of a great, you own a thing where you would sit on the gemba and observe, but they also work alongside the people and can see that like this thing is really hard to twist. You know, maybe the, maybe we need a new tool for that or this is hard to cut. So maybe we need a different type of cutting mechanism and that has really led them to be more comfortable in sharing with us that, Hey, I'm having pain here and we can address that quickly.
Speaker 0 23:46 Hmm. So I want to ask you, I'm going to take it, take this in a, in a direction to talk about exporting because it, if I'm correct, when you joined the company, the company was not exporting yet. So sometime in the last eight years you've began to take your helmets and, uh, equipment beyond the borders of America. How was that process?
Speaker 1 24:10 So, yes, correct. We were, I mean we probably had some export green, but it was done through domestic distributors. Um, we weren't actively engaged in the global community, um, small family business, very successful, incredible products, um, strong customer base, especially in the Western part of the United States. And we had grown throughout the United States. But the reality is 95% of the world's inc or economy is outside of our borders. And I recognize that. And once we kind of started to get the business disciplines in place and I knew we were able to scale, we started looking for the opportunity to get outside of our business. And so, um, we didn't want to just like, okay, we're open for business and let's sell all over the world. We actually focusing energy for the first year, year and a half on learning how to export. And so our, um, now she's our chief compliance officer, Melissa.
Speaker 1 25:00 She went through something like 500 hours of training and development external to the company to learn how to export. And then once we were comfortable with that, we started knocking on doors. And today we now have 95 distributors and about 20 different countries. We still have a lot of the world to, to introduce ourselves to, but um, it's been quite successful. So we went from 0.01% of our business, possibly, maybe even less than that, being outside of the United States to now about 12% of our business. Um, and we actually were recognized by the office of the president. We received the presidential E award by secretary of commerce, Wilbur Ross, just in 2018. So, um, a few years of investment turned into an incredible journey.
Speaker 0 25:47 Well, and I guess your employees must be really excited about the fact that there are people around the world now wearing your helmets to protect them on the job. That's a great, yeah.
Speaker 1 25:59 Yeah, it's neat to, when you look on, especially like on our social media, Instagram, a lot of our, a lot of our family members are on like Instagram and in the various, uh, social media outlets and you know, you see somebody down in Chile or you see somebody in Thailand that's in our helmet. And so it's very exciting. And the other thing we did is every time we have a new country, we put up a flag. So when you go into our production environment, we have our E award flag, which we're incredibly proud of. But then you have all of the other countries that we are participating in their flags up as well. And so it's been, it is quite exciting.
Speaker 0 26:33 Angela, you have an incredible culture there. And I'm like, I am just so in awe of what you guys have achieved. Can you leave us with any tips on how start on a simple lean people focused approach to business? Because I'm sure there are business leaders sitting here going, wow, how do I get going on this?
Speaker 1 26:54 Yeah, I'd love to. I think the first thing for, and this is directed at the business owner, the owner, the CEO, the executive, it starts with you. Um, we have to recognize that we're not always the smartest person in the room. We have to recognize that we have an entire development journey that we need to take. And so ego's a really big thing that most of us suffer from. We'd have to eliminate that. The ego has to go away and we have to be open to feedback and we have to be open to development just because you have an MBA or just because you've been doing it for 30 years, don't think you know at all. And so you have to start with yourself and then you have to understand what respect for your people really means. And that means empowering them. And exposing them to opportunities and it means trusting them.
Speaker 1 27:39 And sometimes you got to take those leap of faith. You've got to get beyond that wall of fear so that you can find that success. And so that's a big deal. Daily meetings, that's just a nonnegotiable. You have to have data it and they don't have to be long. They can be five, 10, 15 minutes. Some of ours are, you know, we average 20 to 25 minutes, but they can be very quick. But you have to initiate that communication and then simply take an approach of fixing what bugs you. If something's in your way and you trip on it every single day, then move it. And if sometimes it's just that simple. Um, and I would encourage you to, if you're looking to really become a lean company yes. To visit Paul Akers website and read his book too. Secondly, I think he's, he's simplified the approach and it really helped us.
Speaker 1 28:22 So, um, and it really start working in the global community to identify mentors. So we have, I mentioned that, you know, in our kind of lean community, we have several hundred people. I talk to no less than 30 or 40 business leaders a month around the world that are practicing lean and say, Hey, I have this challenge. Do you have an idea that can help me? And so that's a really, really big thing and make sure that everybody's engaged and not, you know, when you start your journey, the people that you have may not be the people that are on your journey as you go along. So you will have shifts. We had probably half of our staff turned over in the first year because it wasn't right for them. But once everybody's in sync, it's, it's an amazing thing. So that, uh, that kind of hopefully will give you a little bit of <inaudible> a way to get started.
Speaker 0 29:15 Well, angel, I think if nothing else, you have truly inspired some people. You've inspired me and the tools that you've left us with, I think, uh, will, uh, be put to some good use by some of our business leaders. So thank you so much for sharing. The Phoenix story and uh, for the, the lean journey as well. I really appreciate it.
Speaker 1 29:35 It's been my pleasure. Thank you so much for having me.
Speaker 0 29:38 You're welcome and good luck as the, as you continue on the journey. Angel Sanchez. Yeah, it sure is. I hope we'll talk to you again. Angel Sanchez jr is the director of global operations at Phoenix technology. They are based in Riverside, California, and that is our show for this week. I hope you're inspired. Check out our Twitter and LinkedIn feeds that are on our podcast page and subscribe and share this podcast with your friends and colleagues through iTunes, Google play, Stitcher, Spotify, and YouTube. And the makeup right podcast is brought to you by Kevin sniff, leadership advisor and author bestselling book. Make it right, five steps to align your manufacturing business from the front line to the bottom line. Until next time on Janet Eastman. Thanks for listening to the makeup right podcast.
