Manufacturing

Staying inconsistent

By Erik Cassano

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Fred Merritt
CEO, Riverside Manufacturing LLC

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While many business leaders preach consistency of message, Fred Merritt subscribes to a different philosophy when it comes to communication. The president and CEO of $65 million Riverside Manufacturing LLC — a manufacturer of harsh environment electrical products — says that if you concentrate too hard on keeping every message to your employees the same, you run the risk of creating a drone mentality in which no one brings new ideas to the table. You also run the risk of becoming predictable, allowing certain employees to take advantage of your system. If you can create an approach that is unpredictable without becoming confusing, Merritt says you will be better able to keep your team on its toes.

Smart Business spoke with Merritt about why inconsistency is sometimes the right approach.

Don’t become too predictable. If you vary different things you’re looking for or focusing on them during different points in time, it keeps the organization focused on many different aspects of the business and the future of the business. Too many CEOs are focused on trying to be so consistent, their employees and even themselves fail to look outside of the box. Furthermore, if you’re overly consistent, it allows people to manufacture proper answers that they know you want to hear.

I found that being inconsistent can actually be a benefit really from watching managers I worked for in my past and seeing how some co-workers had been able to take advantage of that consistency. They would spend time developing ways to work the system.

But if this so-called system randomly changes, it’s difficult for someone to take advantage of it.

Keeping that type of mindset is a challenge. What has made it easy to prevent that in our case is the rapid growth of our company. I explain to people that when you look at the growth we’ve had over the past five years since I initially acquired Riverside, we’ve gone through several paradigms of business growth, to the point that we, as a company, simply don’t stand still.

Staying unpredictable also promotes creativity. One thing that I try and translate to everybody is I don’t know everything. There is no possible way for me to know everything that goes on. Every individual is going to know certain things about aspects of this company better than another person.

By having something that’s not just set in stone, not just a marching order, I tell people that you’re intelligent, you can suggest things to make your job better and make you more efficient. Maybe it’s a quality improvement, a safety improvement or a cost reduction.

I’d really like to try and promote individual creativity. In a manufacturing scenario, I get the sense that a lot of people view those people on the shop floor as the drones who come in, do one thing, then go home. That’s not what we want.

Keep a wide-angle view. If you focus on an overall objective, you are able to better utilize the talents of your management and employees. If you become too microfocused, people will then tend to only strive to meet a single objective at one point, as opposed to broadening that out to see how far that truly affects our business long term.

I’m a firm believer in the fact that in a lot of private companies, one of the biggest advantages they have is that they are able to operate their business according to a long-term strategy, whereas public companies or companies owned by investment entities tend to operate on a two-year business plan.

This is almost countercorpo-rate, but it’s about not having detailed goals. I don’t believe in budgets. The reason I don’t like budgets is that what typically happens is a budget will have people dedicate resources to purchase or utilize services that are not necessary because they don’t want to lose their budget money the following year.

What you see on the other side, even more, is a company or manager not purchasing software or equipment or training that will have a quick return on the investment because if it’s not in their budget, they won’t recommend it. All things said, we evaluate everything on a general understanding of, ‘Does it make sense? Is it the right thing to do?’

Typically, one of the bigger pieces when determining if something is the right thing to do is, ‘What is your payback period on the investment?’ Secondly, ‘What are you preventing from potentially happening?’ That’s another thing I don’t think people pay enough attention to.

Value different perspectives. If your employees have the exact same core values and are all after the exact same objectives, there is not going to be a very good check and balance. A common theme with a lot of companies is that everybody’s vision is to cut costs.

A CEO might walk into a room and tell everyone the goal is to cut our costs by 20 percent. On the surface, it sounds great. But I want to have somebody who is going to say, ‘These things you’re cutting, there is long-term value to them. They are important to the process.’

HOW TO REACH: Riverside Manufacturing LLC, (260) 637-4470