Lessons Learned

When regulators from Government agencies showed up I learned to listen rather than resist my basic instincts. Early on, I was resistant to “State Inspectors” who would show
up at our door, asking for IDs and being generally uncooperative.ÿDebby (CFO & Spouse HBS ’81) quickly intervened and announced that Environmental and Compliance visitors should be directed to
her and not to me!
For years, our State waste water discharge permit allowed us to drain hydraulic oil from our aluminum extrusion press into the sewer. ÿHowever, one day we were told that the municipal treatment plant could no longer handle these hydrocarbons!ÿ Our two-story high piece of equipment was a tangle of pipes and hoses filled with over 1,000 gallons of oil and it leaked badly.ÿ We had developed a series of “pits and channels” to accumulate the oil and funnel it into the sewer lines and were consuming 25,000 gallons of oil a year. ÿAdditionally, when the oil in the system needed changing, just like in a car, we simply poured it all down the drain and replaced it.

We were given 6 months to rectify the situation and called in the equipment manufacturer and local hydraulic press service company.ÿ With a minimal investment in more flexibile seals and some more robust welds and monthly maintenance, we discovered we could stop the leaks entirely and the press ran more consistently, giving us better quality.ÿ We also found an “oil recycling” company that would periodically “process” the oil in the press on-site, cleaning, filtering and applying additives; no longer having to “replace” the oil, just “topping it off”.ÿ By doing these new “right things” we had saved tens of thousands of dollars in oil and improved quality at the same time.

ÿ Under another State government “mandate” we had to eliminate our chemical cleaning system that was used to get all the chips and dirt off the parts we were making. ÿI was told that “Sam says that’s what we have to do!”, and after all he was the Operations manager who had been with the company for 35 years when I purchased it. ÿHowever the chemical we were using evaporated during the process, settled onto the concrete floor and permeated into the groundwater under the building. ÿAfter an extensive review, we discovered that when we sent the same parts offsite for post-treatment finishing, our vendors were “re-cleaning” them! ÿWe immediately shut the process down, eliminating the step entirely, boosting profits and improving the environment! ÿAs for Sam, I learned he was the kind of manager with lots of experience doing the same thing year after year instead of embracing a philosophy of continuous improvement over time.

OSHA, the government agency that oversees worker safety, made a “drive by” stop at our factory and “offered” to review our processes. ÿThat old cliche “We are from the government and here to help you!” immediately came to mind. ÿBy then, I knew to let Debby handle it! ÿIt turned out that their observations were accurate, helpful and relatively easy to implement. ÿThe payoff for us was in lower Worker’s Compensation rates and a safer environment for our factory workers. ÿAs a business owner, it felt terrible when an employee had an accident in the shop because I always felt ultimately responsible. ÿThey also helped us see the value of monitoring our employees’ hearing levels both to provide the information and to address the higher noise levels in the factory.

Over the years, we took advantage of numerous State supported training/education programs in the area of quality, lean practices and supervisor training. ÿGovernment supported Energy savings incentives allowed us to replace all our lighting systems twice over 20 years and supported a 200-panel solar system on our roof to reduce our electricity costs.

I wish I could honestly say we would have done many of these things on our own, but in truth, there were a lot of things on our plate and the regulations and mandates were necessary to “make us do the right thing”. ÿI also learned to let Debby deal with their initial visits!

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Jim Sharpe (MBA `76) is one of the HBS Entrepreneurs-in-Residence for the 2009-2010 academic year, who ran an aluminum manufacturing business for 21 years while working with his wife, Debby Stein Sharpe (MBA `81) after both left careers at GE and large companies and sold the business in late 2008. Jim can be reached at: jsharpe@hbs.edu, 310 Rock Center, 617-496-6285.