If you boil down what IPEG Inc. tries to do for its customers and employees, the answer is simple — add value. That’s the theme behind every move the parent company makes for its four industrial businesses: Conair, Republic Machine, Thermal Care Inc. and Pelletron, which between them employ 700 people, including 500 in the United States.
“Over the last six to eight years, we’ve tried to develop IPEG into much more than purely a holding company,” says CEO Chris Keller, who’s been in various IPEG management roles for 16 years.
It’s not a matter of centralizing, he says. Rather, it’s a pooling of resources to offer a higher level of support to each of the businesses — serving the global plastics-processing, pneumatic conveying, waste recycling and industrial heat-transfer markets — than it would be able to afford individually.
The oddity, however, is that as IPEG works to enhance each business, Keller’s personal goal has been to move in the opposite direction.
He’s attempting to make himself obsolete within IPEG by surrounding himself with the strongest possible teammates and empowering them to do what they do best. For example, at the end of 2016, Keller stepped back from the president role. As CEO, he focuses on strategy and culture.
“It’s not about me. It’s about our employees. It’s about the business. It’s about making sure we’re growing, we’re sustainable,” he says.
By owning industrial B2B companies where machinery is made to order, Keller says there is a high barrier to entry. It isn’t easy to build up a level of applications’ know-how to solve customer process challenges.
“We don’t make things by the millions. We don’t even make them by the thousands. We make them by the ones and the tens,” he says. “We have two product lines where we do sell a couple thousand units a year, but every single one of those is configured to order.”
Conair has been part of IPEG since 1986. Thermal Care and Republic Machine were added to the industrial group in 2013, and IPEG bought Pelletron in 2016.
IPEG owned Swedish company, Rapid Granulator, from 1998 to 2014. The business wasn’t for sale, Keller says, but IPEG received an offer from Sweden’s Lifco AB that it couldn’t refuse.
IPEG’s overall acquisition strategy values quality over quantity. Keller looks for $10 million to $50 million industrial businesses that are application intensive with intellectual property, a strong management team and an emphasis on legacy.
“It’s a very hot M&A market out there, right this minute, with lots of cash sloshing around — a lot of it in the hands of private equity funds and so forth,” he says. “We tend not to go looking for the auction process opportunities because those tend to be the ones that go to the highest bidders, and those aren’t probably the ones that are going to fit best for us. Forget about the fact that we don’t have $1 billion of cash in a fund with the clock ticking to be put to use.”
One of Keller’s priorities for 2017 and 2018 was to find potential acquisitions. He looked at dozens of opportunities and didn’t make a single offer. Some were too small. Some weren’t ready. Others didn’t fit what IPEG was looking for.
“While I love working on it, it’s really frustrating when you don’t have results to show for it,” he says.
But IPEG won’t do a deal just to do a deal. It doesn’t put out capital unless it sees a good business and a great cultural and strategic fit.
“The bottom line is, we say — it sounds joking to some people, but we’re dead serious — ‘We spend money like it’s our own because it is our own,’” he says.
The next wave of tech
One recent investment IPEG has made — its biggest in both time and money, aside from an acquisition — is its Conair Smart Services platform, which falls under Industry 4.0.
Industry 4.0 refers to the fourth industrial revolution, which combines automation, artificial intelligence, data, the cloud, internet-enabled devices, etc., to solve business problems.
IPEG partnered with Pittsburgh’s Maven Machines to create an Industry 4.0 product for plastics manufacturers, which can be used for predictive maintenance, machine learning and data analytics.
As of May, Keller says the company had achieved connectivity with real-time visibility to data, which uploads every second or two and comes out in dashboards tied to individual machines, lines of machines and to a degree, a customer’s plant.
Maven had focused on safety and fleet management in the trucking industry its first few years in business, but the software company’s long-term vision is to use its underlying platform for many industries.
“The ability to take in vast amounts of data in real time and instantly analyze it, join it together, run algorithms for optimizing an operation, is the same core technology whether it’s a fleet of trucks or a fleet of machines making plastic parts,” says Maven CEO Avi Geller.
While the process started with Conair, Keller says Smart Services could be applied to Thermal Care in the future, too.
So far, Industry 4.0 has created buzz, but many people still need to be educated. Keller saw this firsthand at NPE2018 in May, a major plastics expedition held every three years, where suppliers touted Industry 4.0 as a way to market themselves.
“We found ourselves with what we’ve developed together with Maven a major step ahead of even the next closest folks that were trying to build the Industry 4.0 platforms, and light years ahead of the majority of folks who really don’t even have an idea of what it is and what it can do,” Keller says. “Going forward, it should be a major competitive advantage for us.”
NPE2018 is also where IPEG officially launched its product. Geller says 100 customers signed up for Smart Services during the conference.
The connectivity at IPEG, however, doesn’t stop with Industry 4.0. The company’s business system, AMPLIFi, adds value in all four companies by focusing on the customer, the employee, continuous improvement and shared services.
An emphasis on continuous improvement and employee engagement has already resulted in improved metrics. Because of its focus on customers and employees, IPEG gauges how it’s doing through a net promoter score or NPS, which takes the temperature of customers, while a separate ENPS focuses on employees.
“We’ve seen our ENPS go from a -12, when we first started measuring it four years ago, up to a +31 in our latest survey,” Keller says.
IPEG’s philosophy is that if it does right by the customers and employees, everything else takes care of itself. But its business model is a mix of autonomy and cohesiveness.
Each business acts independently from a commercial standpoint. Walls prevent each company from seeing the others’ customer lists, sales leads or commercially sensitive data.
“That’s part of our overall commercial strategy, a belief that multiple channels of distribution will lead to higher market share,” Keller says.
That means on the rare occasion IPEG companies compete with each other, such as Conair and Republic Machine, the parent company doesn’t mettle. It doesn’t play price games, believing the best choice will win.
However, IPEG follows a shared services model for finance, information technology, human resources and some internal operations. For example, Keller and his management team of six, plus a larger group of about 45, spend time each month using information from surveys and town hall forums to identify opportunities for improvement.
Another shared component is an online suggestion program, which enables employees to input ideas as part of the workflow.
“They go to evaluators and then if they’re accepted, they go to project managers and so forth, making sure that no idea falls through the cracks and is forgotten,” Keller says.
While encouraging employees to bring ideas has always been part of the culture, over time, it has compounded as people see that IPEG not only listens, it also consistently acts on those ideas.
Today, the company gets, on average, one idea per employee per year and it accepts 60 percent of those.
Another recent goal has been to see every employee, no matter his or her role, get 30 hours of annual training. As of August, Keller says, the average hit 36 hours.
“That’s something, again, we took out of survey results and town hall discussions,” he says. “Folks wanted the opportunity to do better in their jobs. They wanted the opportunity for more training. They want the opportunity for development paths and career paths and ultimately the opportunities to earn more.”
So, IPEG stepped up and invested in a learning management system within AMPLIFi and made it a corporate-level objective for the organization, which is measured and monitored monthly.
Not everyone, however, understood why training was worth the time.
Keller says there’s always a risk of people thinking: It’s just one more thing you’re asking us to do. So, you’ve got to encourage people to have faith that it will be to everyone’s benefit.
“You have to be really, really careful of how you get people to buy into it, how you ultimately get them to see, this is all part of what we do,” Keller says. “This is all part of not just making ourselves better, but ensuring that we stay competitive, ensuring that we’re creating opportunities for each other, week by week, month by month, year by year.”
- A disciplined acquisition strategy cuts through the noise.
- Invest in areas that amplify your business strategy.
- Listen to your employees and customers; then act on what they say.
Name: Chris Keller
Company: IPEG Inc.
Born: New York City
Education: Bachelor’s in American studies, with a concentration in history, Yale College; MBA, University of Michigan’s Ross School of Business
What was your first job and what did you learn from it? I was a summer intern, otherwise known as a gofer, on the Joan Rivers Show in Hollywood. I learned that you get an opportunity to start at the bottom and you work your way up. There is no lower rung on the entertainment ladder.
Did you always want to go into business? After college, I went into the investment business, then realized that it was intellectually interesting, but wasn’t ultimately fulfilling. I wanted something more tangible. I saw manufacturing, actually making something and being inside a company, as the two keys.
So, I used going back to business school as the way to make the leap from the investment business to manufacturing. It’s funny because everybody at Michigan business school was trying to do the opposite.
Where might someone find you on the weekend? Being active — it depends on the season. I could be up at the lake, on the boat with my family, wake surfing, water skiing and just hanging out with my wife and three kids. Or, it might be mountain biking, golfing, skiing, in the gym.