TAMPA, FLA. (March 5, 12:10 p.m. ET) — Techmer PM President John Manuck isn't going to retire anytime soon.
But like most longtime business owners, Manuck now realizes he has to prepare for that day. Manuck shared some of the business lessons he's learned from 30-plus years in the plastics industry at the Plastics News Executive Forum, Jan. 30-Feb. 1 in Tampa.
Techmer is a maker of color and additive concentrates and engineering resin compounds based in Clinton, Tenn. The firm operates six plants nationwide and has annual sales of about $200 million.
Manuck founded the firm along with partners at plastic pallet and container maker Rehrig Pacific Co. in Los Angeles in 1981. He recalled how he met with them for the first time at NPE in 1979. Taking on an additional business partner allowed the firm to make the big move east of the Mississippi to Clinton in 1987.
Manuck said one of his major business decisions came in the mid-1990s when Techmer was doing big business making white concentrates at its Clinton plant.
“We were selling a lot of white masterbatch to diaper makers, but then other producers caught up in quality and the price of the product dropped,” he said. “We were thinking of adding a second line and an additional rail line and a warehouse. But we decided not to be in the commodity business.”
Techmer later struck up a joint venture partnership with German compounding firm Lehman & Voss & Co. KG, and just last year began making compounds based on engineering resins in Clinton.
Retirement hadn't been a priority item for Manuck, age 63, until a couple of years ago, when his personal assistant asked him about it during a year-end review. He then realized it was an area of concern for his employees, since the company's senior management was getting older.
Manuck understood that his firm needed outside help to handle Techmer's management structure and succession process – his stepson Ryan Howley has worked at the firm since 1999, and his stepdaughter Heather Howley joined in 2004.
Manuck found that outside help in an unusual place – at a basketball game at the University of California at Los Angeles, where his family has held season tickets for many years. It turned out that one of the fans with seats near Manuck was management consultant Eric Flamholtz, who along with his wife Yvonne Randle operates Management Systems Consulting Corp.
With that help, Manuck took a closer look at Techmer.
“You have to figure out what happens when you can't get from one step to next,” he said. “There can be growing pains if your infrastructure can't keep up.”
“Where you place the most emphasis depends on your state of growth,” Manuck added. “A classic growing pain is to grow in sales, but not in profitability.”
To handle these challenges, Techmer has adopted a pyramid of organizational development – designed by Flamholtz's firm – that's based on the pyramid of success used by legendary UCLA basketball coach John Wooden. Manuck said the pyramid has given Techmer a good business foundation that's allowed the firm to survive and thrive. At Techmer, the pyramid explains as much as 70 percent of the firm's gross margin, 55 percent of pretax profit and 22 percent of return on investment.
“Before, we didn't have a good long-term strategic plan,” Manuck recalled. “Now, we've developed a three- to five-year plan and it's had a positive benefit.”
Techmer also has long had a policy of trying to hire three or four new engineers out of college each year in order to have, according to Manuck, “smart people who know the company.” Two or three of these new hires usually stay with the firm long-term, he said.
Along those same lines, Techmer recently wrapped up its first class designed to train employees in the firm's management method. Twenty-eight employees took part in the course at Techmer's Clinton location. The year-long class focused on how to achieve continuous sales and earnings growth. The second class at the Clinton site is now under way.
With Techmer working to incorporate the firm's next generation, Manuck said employees don't have to worry about “what happens if John's gonna go fishing.”
He also shared one of the favorite sayings he's come across in his long and successful career. “Fate deals the cards,” Manuck said. “But you play the hand.”