Paul Reetz Joins Adam to Talk Small Manufacturing Operations, FDL Culture + More!

Introduction

Adam: This is episode 37 of the WiLLCast, and our guest today, Becca, was Paul Reetz of Integrity Saw & Tool
Inc. Paul has a local manufacturing business right here in Fond du Lac. I think
they have about 30 employees. They make cutting tools, they sharpen saws — they
really make the tools that make the parts that make the parts that go into a
lot of different manufactured goods. It was a lot of fun. What was your take?

Becca: You and Paul just seemed to be
having a lot of fun. Hearing you two spitball your different manufacturing
brains, small-town ideas, businesses — you guys were very much on the same
wavelength. It was really fun to watch from the other side of it.

Adam: It was cool because Paul has a
sales background, which in small business manufacturing in this area is
actually kind of rare. A lot of people are focused on the product, they're
focused on the manufacturing process. Paul is able to see both sides of the business
equation — both the product engineering/manufacturing side and also the product
sales and marketing side. You really need both of those to grow your business,
and he has clearly done that.

Becca: Definitely. He's been with
Integrity — he started as a regional sales manager in November of 2000, so he's
been with the company for a super long time. I believe he took over as
president about a dozen years ago. He's been doing some really great things,
and he's a great presence in the community. Very similar to us, in that his
team loves him, they seem to have a really fun culture over there, and there's
a lot of alignment — synergy, fun working environment, clean shop. If you go to
his website and look at pictures of the manufacturing space, they really kind
of defy a lot of the manufacturing stereotypes. It seems like a really fun
space for people to work, both in the office and on the floor.

Adam: This episode is brought to you
by WiLL Sport, which is Wisconsin Lighting Lab's sports lighting brand. We do
tennis complexes, football fields, baseball fields, soccer complexes, trap
ranges — indoor sports, outdoor sports. If you're interested in partnering with
us on your sports project, please reach out. You can find our sports lighting
products at www.WiLLBrands.com. All right, enjoy episode 37 of the WiLL Cast.

Why the WiLL Cast?

Adam: You asked, you know, why WiLL
Cast? A lot of people ask that. Now a lot of the content is non-lighting
related, but really it's about promoting the community. We're talking to other
business leaders. If we're interested in something or want to learn something,
why not record it? Other people can learn from it. So often the things that you
learn are through conversations with other people. I look back for the last 10
to 15 years like, man, I wish I had been recording more of those conversations
so you can look back and learn after the fact, and also broadcast it for other
people to learn. So we've had the Fond du Lac city manager on here, we've had
people at Wisconsin Lighting Lab talking about lighting-related things, and we
had a NASCAR car chief on last week. We're trying to keep a Wisconsin theme —
Wisconsin people, manufacturing, engineering. That's the genesis and evolution
of it.

Paul: Have you had that chance to talk
to Sam Kaufman, the person who's running for county executive?

Adam: I don't believe so, no. But we
should. I think we've connected.

Paul: He did a tour of our shop
yesterday, and I never met a guy like that who seems so enthused from the start
when he walked in, to the 90 minutes later when — really during his hour tour.
He wasn't stumping for anything, he was just being himself and was really
inquisitive and really cared about not only a small business but the county.
It's not all about the big businesses in the area. It was really cool to see.

Adam: That's another reason for doing
this — there are so many cool things happening in the area that people don't
always hear about. Like you said, we both have small businesses, and there are
a lot of opportunities in small business. Small businesses can probably do a
better job of promoting themselves in general, so why not start to provide a
platform for doing some of that? Enough about us — tell me about Integrity Saw
& Tool.

Company Background

Paul: Integrity Saw & Tool — we're
a growing company, it's exciting. We have a lot of great people that we've been
fortunate enough to hire and retain over the last few years to help us set our
sights on different markets, different areas. The sky's the limit. The previous
owner started the company a long time ago, in 1986, out of the basement of his
house. Turned it into a garage, doubled the size of the garage. By 1998, they
moved into a building in the industrial park across from Rolling Meadows Golf Course.
To have it grow — that was about as far as he thought it could get. Hired a
young whippersnapper salesman at the time, and kind of the same thing that I'm
going through right now — you hire younger people, get different ideas, meld it
with the experience that you have with the people who've been around for quite
some time. It's a really exciting time to be in our business, in our industry.
There's a lot of changes, which I'm sure you're seeing on your end. It's just a
great time, especially after everything we've all gone through the last two
years.

Sales Background in Manufacturing

Adam: I was really interested looking
at the site and understanding that you had a sales background. One observation
I've made with small businesses in the area is they're so good at the
engineering and the manufacturing side of things, but sometimes there's not as
much of a focus on the sales side. Really, to have a growing business, you need
both — that demand creation, you need to get into new markets, you need to
develop the sales and marketing side, and also have the
engineering/manufacturing capacity. How has your sales background contributed
to the growth?

Paul: I have a pretty diverse
background prior to coming to Integrity Saw & Tool. Worked in the insurance
industry, the print industry, promotional products — before working in cutting
tools.

Adam: There's nothing that's connected
there at all.

Paul: But to be able to sit once I got
to our company and had a front-row seat for 10 years as a salesperson, and
being — not given, but worked very hard for the previous owner to get an
opportunity to do what very few people are able to — when you sit and it's
like, man, if I had the chance to run this company, I would do this. Well,
you're making notes the whole time for 10 years. So it's like, wow, if we could
have more of a website presence — we had no website in 2010, picture that, no
real website presence. To develop that, to look at marketing differently. We
used to do everything directly to customers. Now we're doing more through
distribution. It's changed our mindset, especially the employees who've been
there the longest. It's tough — why can't we just talk to the customer? Why do
we have to talk to a distribution center?

Paul: Through different people, not
getting the answers we're looking for — it's definitely changed our mindset.
But it's been the best way to grow, because the bigger companies we're
targeting all use distributors. They don't want to talk to, who's Integrity Saw
& Tool? They'd rather talk to a supply house that they're familiar with. So
even the biggest boat manufacturers in town have that wall between us and
actually talking to their engineers — their existing buy channel, their
existing terms, their existing account managers. It's just been a different
mindset from our standpoint. Our previous owner didn't like computers, he
wasn't texting. He scribbled down notes, didn't like voicemail. He wanted to
talk to people directly. For us to realize, well, we can't just walk in, knock
on the door, and say, hi, I'm Paul, I'm going to sell you something today. It
takes — it's such a slower process to develop those relationships. Because we
don't want to just be selling people a product one time. We want the partnerships
to get the repeat orders. And that's where the expansion has come from — us
going from the service work to the manufacturing and hitting everything in
between.

Voice of the Customer Through Distributors

Adam: Do you still get the voice of
the customer? If you've got guys going along with a distributor or wholesaler
to the shop floor and the people that are the end users of the product — do you
still get intel on things they like, things they don't like? So you still have
an indirect path to market but can also get direct information from the people
that are using it.

Paul: We're fortunate to have a
business development manager who is really good at cold calling and
establishing relationships and developing that. Because a lot of the
distributors don't want us to know who the user is.

Adam: Is that a fear that you might go
around them?

Paul: Yeah. And back in the day,
that's how they did things. Some of the distributors that dealt with our
previous owner — they knew that the second there was an issue, we would go
direct. So we had to overcome some of that and reestablish some of those relationships
with distribution. But it has gone much better now, with the combination of
knowing, hey, we know it's going to take some time, and we just have to
continue to prove ourselves. One thing we really strive for is a level of
world-class customer service. Instead of, hey, what's good enough for Fond du
Lac is good enough for everybody, it's like, no, not quite that.

What Integrity Saw & Tool Does

Adam: Taking a step back to the
product — what is your product? What is your service? What does your business
do?

Paul: The company was based on service
work. Within the industries that we've targeted, in manufacturing and
woodworking, we're built on sharpening of cutting tools. With manufacturing
metal cutting tools — whether it's aluminum, steel — they're using drill bits,
end mills to machine parts. You'll never see any of our products. You're not
going to go into Walmart and see our name on anything. But we've had a hand in
building many of the things that are at most of the stores, manufacturers, or
industries that you'll see.

Paul: Within that, we've been able to
grow and expand from just doing the sharpening and service work to
manufacturing of the tools itself. We have nine different CNCs on the cutting
tool side, the round-shank cutting tool side. We're able to buy the material,
make it from scratch. We've made millions of dollars' worth of investments the
last four-plus years to help our product line expand, our capabilities expand.
The other thing that we've tried to push is to be the fastest producer out
there. We know we're not the cheapest. Quality is expected within our industry,
because everybody has CNCs — you should expect high quality no matter what. But
we're trying to be the fastest company out there. You can contact us and three
other companies — we're hoping to get the PO because our quote's already in
your hands. We're hoping to get the PO before they even get back to you.

Adam: Speed to lead.

Paul: The mentality has been there,
and that's where our experience really helps. A lot of the employees that we
have — they're just used to sprinting when they get there.

Adam: Such an important cultural
element. We operate in a very similar way. If somebody's asking the world of
us, we get kind of excited about delivering on that. If it's custom and it's
fast and it's a nice order, and it's something within our wheelhouse, it's nice
when everybody rallies behind it and gets it done, rather than a big sigh,
like, oh man, we have to do this again. Once you don't have that culture
anymore, it'd be difficult to get it back.

Paul: That's one thing we have to
remind each other. I have to tell myself that some days. It has nothing to do
with our egos. It's not, oh, them again. It's always based on the customer.
Customer requests. It's not because one of our people says, I want it there
sooner. That's what they're asking for. To base our lives around that for 40
hours — sometimes — but to just have that mindset when you come in, that it is
for someone else. It's not for me. It's for the customer. And if they leave us,
guess what — there's going to be a lot less of us here, until the point there's
none of us here.

Communication: Phone, Text & In Person

Paul: Here's the thing — because I'm a
little bit older than you — the struggle that I have is guys on our team will
tell me this: they don't like to pick up the phone. Young people don't like to
pick up the phone. So when they're typing, everything sounds angry. Nothing
really sounds happy. And you put in some capitalization and it really sounds
angry. So I'm like, did you call them? No. Breathe. Did you call them? We need
to. When do they really need it? Because it sounds mad.

Adam: And then if you do it via text,
it sounds even more upset. We probably send a hundred text messages a day to
different customers. We have contractors, sales agencies, we sell through
resellers as well. There's so much communication via text now. You think about
the days of salespeople walking in and cold calling, completely face to face.
Now you're doing six-figure projects that start out via text messages. A
completely different world. It's hard to interpret some of that communication.

Paul: I'm a big fan of the exclamation
point. But I feel like I've been left behind. Can't we just pick up the phone?
Because then you could hear how urgent they are. They can give it to you — I
need it soon, I'm not scolding you.

Adam: You're absolutely right. And
then the next best thing is to be in person. That was also some of what was
lost the last couple years. You can't solve everything digitally. There's no
substitute for going to an application, talking to the people that are solving
the problems. If we have an install problem at a job site, get the technical
people down there and work through it with the contractor, rather than the
40-thread email chain. Phone is great, phone's probably better than text, but
even better is in-person meetings.

Paul: It's fun for our products. Our
process engineers — one of them has some advanced machining expertise that he
can walk into a shop and put his hands on the side of the CNC, or a couple
knuckles, and feel the vibration, and tell you there's something wrong,
something's out of balance.

Adam: That's crazy.

Paul: But to see that, or to have them
smell the chips — is the cutter cutting too hot? Because you can smell the
burnt chips, the metal shavings. I'm not familiar with that expertise, but hey,
we hired somebody with that sixth sense. That's that extra layer of service
that we like to have over what our competitors do. That's where we tell our
younger guys, who tell me, I'm really not comfortable picking up a phone. Like,
we hired you for sales, holy cow.

Perfection vs. Progress

Adam: Do you think that people are
concerned about making mistakes at times? I've noticed a lot of people are just
used to experimenting and trying things and making mistakes and trying again.
But it seems like maybe there's also a trend where people expect 100%
perfection all the time, which is good to strive towards but also good to
realize that not everything is going to be perfect out of the gates.

Paul: At my computer, I have multiple
sayings around my keyboard. The one right above is, “Don't let perfection get
in the way of progress.” When you're dealing with engineers, when you deal with
customers who want something, they're not used to making mistakes. In sales,
you make a mistake, we'll fix it. And our people are more programmed to, we've
got to get this right. Take a little extra time. So I've had to change my
personality — I've surrounded myself with a couple people who've really steered
me the right direction, to take a little extra time and let's get it right. We
could still be faster than everybody. Versus in the past, it was like, if
somebody called, I want to give them the answer as soon as I can on the phone,
because if they hang up, they're going to call somebody else.

Adam: That is a very common dynamic
between sales/marketing and engineering/manufacturing. Sales — you kind of want
to make an estimate and move on. Everybody has their tolerance of, did you
promise four weeks when historically we can do it in eight weeks? They are
different worlds. One world is a lot more abstract, the other world is super
technical. I think what is needed is just to acknowledge that there are
differences. Certain people are going to thrive in certain teams, in certain
environments. But also knowing that everybody can learn from each other. A
salesperson is a translator between the customer and the internal team. In some
companies they have product managers, which are translators between the sales
team and the engineering team. Engineering is a translator between your product
managers and vendors. It's just — people need to appreciate each other and know
that people speak different languages. That's a common theme on the WiLL Cast.

Embracing Change & Learning From Customers

Paul: We had a discussion this morning
amongst a group of process engineers and our operations manager and myself —
we're talking about this new custom opportunity, and there's this guy, he's a
know-it-all. Great, if he knows more than we do. Even if he doesn't use us,
let's learn as much as we can. Let's put our egos — what does that mean, that
you've already tagged them as something? You've already had your mind made up
about somebody with one conversation. That means everything downstream of that
initial interaction, you're probably not going to be listening as much as you
should.

Paul: So to see the difference between
yesterday, where it was, we should never deal with this person — we pulled the
team back together and said, hey, let's really look at what's going on here. We
can learn as much as we can about this. It's opening us a door to another
potential product line, based on the knowledge that this gentleman is giving us
— giving us for free. It's free advice. I'm like, we should be sponging this
up. By the end of the conversation, we're all nodding our heads. He's like,
yep, we're going to do this, take it a little further. It took an hour to get
to that point, but it's progress. And it's all in the name of the customer.
Even if it's not this one customer, it's going to help the next 10 that we've
been avoiding. We didn't have this knowledge before.

Adam: Another thing we've talked about
on the WiLL Cast as well is the different timelines that people operate on. If
you're machining tools, if you're building lights, you're really thinking in
terms of hour increments in your day. If you're in a planning role, you might
plan out a couple weeks. If you're in a supply chain role, you plan out a few
months. If you're running a business, it's really your job to interface between
all those timelines but also not forget about the future. Sometimes I've
noticed that I'll be speaking on one timeline because that's the current
problem I'm trying to solve, when the other person is operating on a different
time frame, which I think can also contribute to some of these communication
breakdowns.

COVID: Break Even & Cross-Train

Adam: One way that I view the COVID
period over the last couple years is, it's like 10 years' worth of problems
compressed into two years. Weak points of businesses exposed themselves, strong
points exposed themselves. We swung from demand issues to supply issues to all
kinds of things. Within your business, what were some of the really strong
points that revealed themselves, and what were some of the things where you had
to work on things you didn't expect?

Paul: Certainly supply chain is one of
those things that everybody had to work on. The biggest thing, as an eternal
optimist like myself, was how long is this going to last? It can't last
forever. This is a six-week thing, this is a 12-week thing — oh my gosh, we're
many months into it. One of the big tests was — not knowing what was going on
with the rest of the world — how do we plan for it? I had the worst plan ever.
I pulled out our dry-erase board, stood in front of everybody, and it was
empty. They go, here's our plan — we don't know. We just don't know.

Paul: Six weeks into it, twelve weeks
into it, it was basically the same plan. We don't know what it's going to be,
but we're going to stick together and we're going to cross-train as much as we
can. We made a decision very early — we're not going to lay anybody off. We
asked people, if they were uncomfortable with what could happen by being at
work, if they wanted to take a voluntary layoff. We had two people do that out
of 30 employees. It worked out well for them because of the reimbursement.

Paul: We told people early — our goal
was to break even. We aren't looking to make a profit this year. I wanted to
make it through so every family felt safe, and knowing that the more training
we can do during this time is going to pay off down the road. I just didn't
think it would take that full year-plus to really get back in the flow. But the
people who've stuck it through — we can rely on them more than ever. They did
take advantage of the opportunity to learn more from each other. We did more
cross-training. I'm very confident that 95% of the jobs, we have a good backup
right now.

Adam: Necessity is the mother of all
invention.

Supply Chain & Price Increases

Paul: Supply chain issues are
different for us because we're used to delivering so quickly. But the thing
we're fortunate with — during that time, the customers that we retained have
been through it together with us. They understand. So when you make that uncomfortable
phone call — hey, this used to take six weeks, now it's going to be four months
— and they're like, okay, we get it, because we're telling our customers the
same thing.

Adam: What did the carbide supply
chain do, or how did it react? Early on, say 2020–2021, and then current state?

Paul: The biggest reaction has been —
hey, we can offer people a price increase, and another, and another. We just
kept absorbing it and passing it to customers. That's been the most frustrating
thing — when is this going to end? The first couple of price increases, we just
ate. We don't want to lose anybody, we don't want to raise our price when times
are tough. That'd be the worst thing we could do. So we'll just eat it. Well,
when they continue — we have to take a long-term approach.

Adam: Death by a thousand cuts. We had
12 price increases in one year. That's like a decade's worth of price changes.
We had certain electronics that we ordered July of last year that we still
haven't received. We took a very similar approach — just trying to meet
everybody where they were at. Also keeping in mind that we are a manufacturing
company. You can't make light poles from your living room. But that's a very
generous approach you guys took. I'm sure the people you're able to retain
really appreciate that.

Paul: What surprised me was when the
government came out and said we have to have the essential companies. Like,
what's essential about cutting tools? But we got letters from our customers
saying, you're staying open, we need you, because we have to produce paper
toweling. We have to —

Adam: You guys are really at the front
of the line. You're making the tools that machine the tools that make the
parts.

Paul: That first week, it's like,
we're going to be shutting down pretty quick here. And we got a couple letters
from some of our customers saying, you have to remain open because we're going
to be open. Next thing you know, they're making masks and we need to have
blades there for them. And saw blades apparently are essential for something
along the way. I was thinking, well, construction is just going to stop. Oh no,
it seemed to have picked up.

Adam: Are the saw blades carbide as
well?

Paul: Carbide-tipped. Yeah, so carbide
coming from China — we didn't ever really run out of it, but the prices
increased tremendously during that time. The thing that's a bigger surprise has
been this past year, getting steel. Like, we're America, we should have steel
here. We're struggling with that. Something we could get in four to six weeks
is now nine months.

Adam: That's the world we live in. The
light pole structure side of things — a product that used to take four weeks or
even faster, it was up to 20 weeks in some cases. Things are getting better
now. And also when we got done with the building design about a year ago, it
seemed like every week that we waited to sign the contract, the cost would go
up another few percent. We were able to lock that in earlier on, but every
single month it was lead times getting longer and prices going up. Everybody
was caught in the same boat.

Paul: Never in my life did I think
that a quote is valid for three days from a vendor. Wait, what?

Adam: We got to the point with a lot
of our part vendors where it really is good for a morning, because they're
working with supply houses and they were getting different pricing every single
hour that they would send in a quote. And then at some point, instead of even
updating quotes, you just get a surcharge. It used to be a quote that was valid
for 90 days. Something you had quoted, you order the next day, and then it
would ship, and it would come with a 10–20% surcharge. Things seem to be
leveling off a little bit, which I think is good.

On-Time Delivery & ISO Certification

Adam: When you think about growing
your business, do you think about adding additional property, plant, equipment,
direct labor staff? Or do you also think about the demand side — adding sales,
business development, marketing? Where do you see the biggest growth potential?

Paul: As we expand with our product
line, I believe that's more of it, instead of just adding more people for our
sales. By dealing with the distributors, they are your sales staff,
essentially. When we have a place in Menomonee Falls that has 27 salespeople and
we're only dealing with seven of them, we know we have to work on those
relationships to get to the other 20. We're planning on hosting their monthly
state sales meeting in Fond du Lac in October. We just had confirmation this
morning that we're going to have 27 of their salespeople at our facility. It's
a big opportunity for us — not have to hire our own, but if we even got five
more salespeople of theirs talking about us, that's a big percentage. Better
than us hiring five salespeople.

Paul: When we became ISO certified a
few years ago, one of the measurables was on-time delivery. We looked at what
can we do to get to a Walmart type of service? I had read years ago that
Walmart demands 98% on-time delivery from their vendors, or you're done.
Measuring you on a quarterly basis. So it's like, okay, we'll do that. That
seems pretty lofty. Well, we've averaged that or above for the last six years.
So it doesn't seem like that big of a deal because we're doing it all the time.
And returns — it's less than 1% of the work that we do. So we know we're good
at what we do, we're delivering it when we plan on it. We just need to spread
that word more. So like we discussed, we're working on our website now to try
to get that as more of a presence of what we do.

Giving Back to the Community

Adam: I know you're big into community
involvement and your involvement in the business community. What does that look
like for you in Fond du Lac? Giving back, Envision, business communities?

Paul: Giving back — that is something
that had, again, having that 10-year front-row seat to what the previous owner
was doing, and looking at how few opportunities we had at the time. If you
wanted to do volunteering, you did it on your own. Also being raised by parents
who gave back an awful lot — you just kind of get a mindset: if I ever get in
that position, I'm going to give people opportunities around me and take
advantage of opportunities myself to get involved with the local community.

Paul: Back in 2016, I was fortunate
enough to join the board of directors for Envision Greater Fond du Lac. They
did the merger at the time between Fond du Lac County Economic Development and
the Association of Commerce. I was able to be part of that merger. Learned an
awful lot from a lot of great people. When you start hanging around with those
people, it raises your own level of what you think you can do and what we
believe in the community. Nobody ever said it, but you start to realize, hey,
we're in this together. What can we do together? Not maybe for each other, but
for other people — get them more involved. That's just a very powerful thing.

Paul: I was on the board of directors,
I was board chair, and went through some transitions internally on their end. I
was part of the manufacturing innovations and technology group that we put
together for small businesses to start touring each other's places.

Adam: Now you're on the committee.

Paul: We had momentum, COVID hit, so
we shut everything down. People didn't want to go see Mercury or Sadoff or
Mid-States Aluminum, Giddings & Lewis — all these places we've had tours
of, to go see what they're up to. And now we're going to get back into doing
that again. That's really exciting for me, because you see it more — we are all
in this together, whether we're buying things from each other or we're
neighbors. It's a short time, a short time to make a big impact. It snowballs
in such a positive way once you get momentum behind some of that good stuff.

Paul: A couple things — for any of the
area schools, I don't think any of the tech ed programs or shop classes should
pay for any of the sharpening they receive. When they come in — North Fond du
Lac or Fondy High or Winnebago Lutheran Academy, a handful of others — we're
not charging for any of that, because that should go back to the students so
they can learn something else or get more technology. Sharpening a saw blade
for them? No big deal. We'll do it all day, every day for them. Blue Line
Hockey — for all the skaters — we haven't charged Blue Line Hockey for
sharpening of their Zamboni blades for nine years. Because that's important.
It's a great facility to support. A bunch of young kids are able to — we have
our logo on top of one of the Zamboni machines, which is kind of cool to see.
Any of the veterans who come in our back door looking to have their saw blades
sharpened — no, you've done plenty. We just want to give back, because we're
all in this together. Why not make the best of it while we're doing it
together, and hopefully we can all come out on top, instead of pushing people
down to get where we want to be? I don't agree with that.

Adam: Small businesses in the
community can be such a force for good. You're doing it for all the right
reasons. The word spreads and maybe it ends up impacting the business in a
positive way. With our business, 98% of our business is outside of Wisconsin,
and we still try to give back in various ways as much as possible. It's all for
those reasons — to try and be a small force for good in the area, network and
collaborate. Small businesses are really important.

Paul: It's fun to do. Donations here,
there — when we say we can't write the Mercury-size big check, we can write a
lot of small checks and just see the excitement of it. Dealing with Big
Brothers Big Sisters, participating in their bowling. Doing things for St.
Vincent de Paul, the Boys and Girls Club. The things that you should be doing,
because we're in a position that's better than a lot of people that they are
serving. So what can we do to help?

Adam: Absolutely. It's a lot of fun.
Well, man, thank you very much for coming on.

Paul: Come back. We could keep going.

Adam: We can save that for next time.
Thank you very much. Nice to meet you. Good to see you.