Minneapolis mold builder and injection molder Dynamic Group is opening a new chapter in its history, with a recent transition to second-generation leadership.
Dynamic Engineering was founded in 1977 by two toolmakers, Dave Kalina and Peter McGillivray, eventually renamed Dynamic Group to reflect the businesses' expanded capabilities. In January 2016 the founders transferred management duties to three second-generation family members: Joe McGillivray, CEO; Steve Kalina, president; and Brian Kalina, vice president operations.
The three leaders each started at the organization at age 13, working as “maintenance technicians” — sweeping floors, cleaning toilets. Joe McGillivray remembers how on his first day of work, his dad introduced him to the closely held workplace philosophy of demonstrating initiative, drive, leadership and commitment:
“Following a pleasant conversation during our commute, my dad stopped me, looked me directly in the eye, and calmly told me that I ‘was the easiest person to fire in the whole building,'” he recalled. “His complete lack of agitation was the only thing that kept my jaw from hitting the floor.”
Like it or not, his dad explained, some people would see Joe as an extension of his father, and he would be watched very closely.
“I quickly realized that he wasn't threatening me, he was helping me understand what it means to work in a family business: our employees' livelihoods are at risk, being a SOB [son of boss] means that expectations are higher, and that my role in the company was earned by my contribution,” McGillivray said.
As a toolmaker, the elder McGillivray embraced the mantra “measure twice and cut once,” applying it as well to how the business is run, and to the succession process.
The three second-generation leaders took different paths to their present roles. Brian Kalina went to Saint Paul College and became a toolmaker. Steve Kalina held roles at an injection molder before joining the Marines and completing two tours of duty in Iraq. Joe graduated from Gustavus Adolphus College with a management degree, for a time worked in retail as a selling manager and even considered an architecture career before returning to Dynamic.
Peter McGillivray encouraged his son to carefully consider the decision, bringing him along on a business trip to meet customers and prospects and encouraging him to take time to think it over.
When it came time to lay out a path for succession, the second generation was first invited to begin observing management and board meetings, and from there responsibilities were gradually added. They saw first-hand the effects of the economic recession on the business. The founders even hired a psychologist specializing in evaluating business leaders — evidently the results were encouraging.
The three were eventually tasked with developing a formal transition proposal, with help from consultants, and implemented much of it as the founders gradually reduced their day-to-day involvement. Joe, Steve and Brian finally received their promotions nearly two years after the initial proposal, with the company founders taking on new roles as directors.
Joe McGillivray said that despite the incremental steps, taking on the official CEO role still had an impact. “I didn't expect it to feel different, because I'm not really doing a much different role than I had previously, but now the responsibility is clearly set on my and my partners' shoulders, and the responsibility is there and it feels different,” he said, adding that though the cautious pace of the transition could be frustrating at times, he sees its value.
“There is risk every day when you have a privately held, small company,” he said. “This isn't something that my dad and his partner started up because they had a bunch of money, and it was a hobby, and if it succeeds or fails, no big deal. They had — and have — almost everything riding on it, and not only that; 120 employees have a lot riding on it. So the slow-and-deliberate is necessary for them to feel safe and be able to go to bed at night — and for me as well — and know that I haven't made a rash decision, I haven't gambled, more than someone who has their own business does on a daily basis … and at the same time not letting it get in the way of change when change is needed, being able to move quick when you have to.”
He looks to local and industry-specific organizations as a way to balance the team's limited industry experience outside the family business — what he jokingly calls “inbred business experience” and is glad to have the support of partners.
“My dad has always said that partnerships are never perfect; there are always issues. But he said he'd never trade it for anything, that when times are bad, the value of a partner is hard to comprehend,” Joe McGillivray said. “The fact that I could come up with ideas and propose them and present them to two other guys who are in nearly the same seat I am, that grew up in the business and were trying to make this thing work for ourselves and for our fathers, and understand the gravity of the decisions we're making, not having to feel like this is all on my shoulders, I decided this — that is invaluable.”
