Businesses, at the end of the day, always come back to its people. It is with this that company culture is so crucial to having business success. At the center of this is the role of the founder or CEO who are the ones steering the entire organization in the right direction. Greg Higgs, the Founder and CEO of Fab Fours, sheds light to the challenges that come with these leadership positions. Taking us through his own experiences growing his manufacturing company, he shares great nuggets of wisdom not only on leadership but building a team and dealing with clients. Greg also shares how he set up his yearly planning cycle and some methods that help keep his team on schedule and on budget.
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The Challenges Of Being A Leader with Greg Higgs
This is going to be fun as we get to visit with Greg Higgs, a Generation X entrepreneur, Founder and CEO of Fab Fours, a steel manufacturing plant right here in the United States. They make aftermarket bumpers and accessories for pickup trucks and jeeps. Fab Fours has changed the industry with what I would call over the top parts that fit right, look great and are delivered the next day anywhere in the United States. His plant has the capacity to produce $30 million of parts per year with 130 people using his homegrown version of lean manufacturing. You’re going to want to see some of his awesome truck builds online and watch two shows he did with Jay Leno on Jay Leno’s Garage. The Legend vehicle on the first one we built together in my garage with some of his friends. I know that sounds like a lot of fun, but he will tell you the challenges of being a Founder and a CEO are unending. He’s a one in a million visionary that is helping to change his industry. I think we’re going to learn some great stuff. Greg, welcome. I’d like you to provide a little on your background growing up and how you ended up founding Fab Fours.
Thank you for the introduction. That was fun. Normally, I have to say all that to somebody else on the outside or be out before we get started. It was a relief hearing you do it. I’m going to circle back to growing up. I want it to kickoff, knowing this show is going to be about culture. I got a laugh earlier reflecting on it. My wife can vouch for this, but I am not off charts in sensitivity and compassion, as some of those touchy-feely emotions, that’s not my strong suit for better or worse. Culture, as an idea, elicits those reactions on everybody, the soft side. You’ve done a great job in your book and I know talking about growing up, watching the tough decisions, leadership you exemplified through Mustang. There’s the soft side of Bill Higgs and then there’s the hard hit and get it done business side you cannot get away being soft. That is how I got here. To your point, it is endless challenges to run an organization.
I like that term, it’s dog eat dog. That’s the way the real world is. There are competitors nipping at you all the time.
It’s true and you also taught me early in your entrepreneurial career, it’s not even just your competitors. It’s everyone supposed to help you is trying to kill you. Your tankers, advisers, everybody you turned to for help has their own dog-eat-dog vested interest. It’s great for them if you also succeed, but they’re going to get there first as your vendor, suppliers and others, for anybody who even survives the startup phase of entrepreneurship.
Kudos, because like you say, everybody’s bleeding you dry while you’re churning and running fast trying to create something from nothing. It drives you nuts.
You’ve got to have a balance. You’ve got to have empathy, sympathy and those abilities on the soft side to drive productivity out of humans. Businesses come back to people and culture is a lumped together phrase for the people, the mantra and the energy, how that company operates differently than others. My first brush might be like others that have my emotional compass and that’s the soft side, but an interpretation of culture that I want to bring this side to it so everyone can resonate. The people who get what you say and see it when you drive into the garage because of the banners that are hanging, that’s the soft side of culture.
A piece of culture, we already believe may be a factor. It might mean as a concept, it has become a culture. Fast growth at that forum is our culture. It’s in our DNA. That has nothing to do with warm fuzzies or feeling good. It doesn’t even feel like work because it’s so fun. It’s not that side. It’s saying our tribe here is all about momentum and growth. That’s been evidenced through this soft spot in the market that we’re experiencing right now. That started in October of ‘18. Things started softening up in the entire market, which is a little bit odd because it seems contrary to a lot of the headline news. Maybe our spot in automotive is some canary outpacing in a sense.
We’re talking about that Fab Fours has been double-digit growth for thirteen years and Inc. 5000 and Inc. 500 numerous times. That’s what we do. We manufacture bumpers, but what we do is grow. We’ve been growing and growing. Two people to 130 people, that’s not massive by headcount company, neither is our revenue. When you come to understand the complexity of Fab Fours, the fact that we are so vertically integrated from having engineering in-house, sales and marketing in-house, accounting in-house, manufacturing in-house. There are so many entities like job shop, they don’t have any sales and marketing. They just have me and then there are companies that sell the service of sales and marketing.
They have nothing to do with this whole challenging dark world of converting steel into the product. We’re all under this roof. With that limited headcount, we’ll probably be doing the work of 200 by being very efficient at it and learning it brick by brick over time. That’s this cool spin on culture that I wanted to emphasize that it’s not always about the hurrah, it’s also how you do business. Our mantra, quality…on-time. Quality on time, that’s a lot of our culture and that drives those daily meetings.
You can see it rear its head where we do like a quality initiative and I get pushed back from the team. We’re production-oriented. We’re war guys for perfect parts, but there’s always that more around, “Rodney, that guy can grind 47 bumpers in a shade.” That’s pride. That’s ego but why was that rewarded? I think it comes from that foundation of growth since we’re always out booking our abilities, when you’ve got those heavy-hitting, LeBron James is on your team, you load them up and immortalize as your gold standard. When you do that for year after year, that becomes that culture of crushing it fast-paced. It shows you that that’s so ingrained in the DNA. Anytime you try to cut against that grain, which is a, “Slow down and focus on this.” “What? There’s no slow down. This is Fab Fours. We didn’t get here by being slow. We’re rolling.” That is the culture of it. That’s why it’s so hard to remove that Titanic is because that’s in the DNA. That’s exactly why we see a lot of operators wash out in the first ten days because they come here and they’re like, “There’s no place like this place.”
Nobody moves at this speed in any manufacturing plant.
Our 90 operators are pounding it that hard, “You’re telling me you do this every day for eight to ten hours?” It’s like, “They do and it works for them. That’s part of the culture. If that’s not how you like to spend your time, you don’t fit here. If it is how you like to spend your time, busy and feeling like they’re trading time for dollars, you fit that culture and that’s what would wash out the others.”
They’d come in, they better be ready to crank because you’re going to put them jumping right into it on the first day. There’s no pause.
For better or worse, you’ve got to know that when you’re driving that culture, you better be in love with it. It’s something you can change quarter to quarter or even year to year. It’s so deepened because once you start to have employees of tenure, two, three, we now have ten and twelve-year-long employees. They came in and we’re part of it. They stuck because they fit the culture and then they deepened the trenches of that culture. If you think, “I want to change how we think of things.” Let me tell you, you’re probably going to change the people that got you there and that becomes very tough. You get to steer your culture in a slow direction. If you’re at the beginning of starting your company, I think you ended up in the trenches so much, you don’t have much time to think about it. A lot of times that culture is going to reflect the entrepreneur. It’s the immediate leadership team that set those standards of behavior.
There was a time early on where you felt that each job needed a person on it and it took you a little experience before we realized these people can do multiple jobs. You didn’t have some people that just swept the floors and other people that just welded. You started cross-training to where everybody would be gainfully employed all the time. They could wear multiple hats that allowed you to then run a leaner company and organization as you went forward.
We coined a phrase which probably carried a bunch of risk with it but I didn’t care, I no-layoff company. That was important to me because it was different. It was a differentiator in our community, knowing that we’re asking a lot from our employees. When you’re on double-digit annual growth, it means that you have to do today’s work, but figure out how to do tomorrow every day. That is a completely different universe than a well-established, extremely mature company that’s growing at a 3% annual rate to have in the last eighteen years. That is ho-hum, don’t mess anything up. Whereas Fab Fours, it’s super engaging if you’re into it, but big ass because getting the mail out is already hard. That’s back to dog-eat-dog, we’re fighting every day for every sale and to make sure we have that high quality, we’re taking care of our customers. To be then also figuring out, “We’ve got to go from two press brakes to four press brakes, where are we going to lay them out? What happens when we have to take this one down to have the power pumped in?” That’s work that the customer never sees.
It stretches all the people when you do it.
The consumer that has a truck in Boise, Idaho, it’s irrelevant whether we’re growing or dying. All he cares is if he gets his bumper on time.
I like one of the things that you said and I’d call it in the book, no fate leadership. It’s like you don’t believe in the fate that you have to go up and down with the industry. You want to keep churning up, taking over market share, creating more innovative parts and differentiating yourself in the industry but that takes a constant, continuous focus for you across time.
Like that culture of no-layoff, that has a risk and a downturn, you do have to stay completely overloaded. You do have to be cross-trained. To dissect all of that take longer than this has, but we are a lean manufacturer, meaning that everything we build is sold. It is pretty remarkable considering that you can also live in Portland, Oregon, completely another side of the country from Fab Fours in Charlotte, North Carolina. If you need to buy 21 super duty blacks steel full grill guards, they will all show up tomorrow if you’re ready to go. Combining those two things that everything we build is sold, then how can you do that? It’s tricky. I can’t give it all away here. We are utilizing wholesale distribution, our model and their inventories. Where I’m going with that is keeping that pipeline full when you don’t have the luxury of building the inventory.
That’s traditional manufacturing 101. That no year, January 1, December 31st, all those days in between, if the consumers, which is America, don’t all get aligned to buy the exact same dollars every day, then you go the way 99.9 up to 100 manufacturers go and you build the inventory. Because you cannot handle those ebbs and flows in demand and feel like you are maximizing your profitability in all the metrics when normally tracks in a plant, which is set up times etc. because you’re trying to drive that absolute bottom part cost per unit. You can only do that when you’ve got the luxury of consistency. I’ve always said to have a business like mine, it has to be run by a maniacal salesman.
That’s what you are.
No manufacturer, which is what Fab Fours is. We are a manufacturer would ever operate like this if it was run by an ops guy, which is pretty typical. A lot of times it’s ops-minded folks that have the knowledge to make something, then they decide to start a business. They build that world around the making. In my opinion, since I’m on the other side, it can be a trap because you fall victim to the 900-year-old manufacturing philosophies, which do serve well, but I would argue are a major limitation to innovation.
My personal passion is derived from innovating. Not many people get to live their absolute dream. My dream is I can bar napkin sketch something a bumper or the new Jeep Gladiator. It used to be very sure at two days, now I can say within five hours since we re-engineered our internal process of getting prototypes from our own plants to our front office. Five hours, I can test fit that on a jeep. What’s cooler than that is within 30 days, Americans will want that part. They will see it online, decide they want it, they will buy it and put it on their Gladiator. They tie that off. They go from my imagination to their smiling face walking out of the house in the morning to see their Gladiator in 30 days is amazing. Do you know who can’t do that? People that build to forecast. It doesn’t work because the inventory carrying cost then becomes prohibited in the analysis.
You kill projects.
They’re stillborn because at some point, nobody wants to sign up for the risk of an obsolete inventory not to mention the cash. Every new attempt is tying up cash, whatever that minimum run is, net out what you’re able to sell at that run, that is cash money on the shelf. Our model is shockingly cashflow positive, the velocity of money back to the bar napkin sketch to the money in the bank being on such a short time frame. It’s not tying up any working capital and inventory gives me carte blanche to innovate as many things as I can pull off in a year to my heart’s content.The real world is a dog-eat-dog. There are competitors nipping at you all the time. Click To Tweet
What’s your planning cycle? How do you set up your yearly planning cycle to where you don’t just drive your leadership team nuts with the things that you’re coming up with?
I thought you’ve still done enough crazy items but we do have a reasonable place. We do an annual forecast, very detailed. That’s by channel, by the customer, all the way down into product category and mix, which is quite detailed given our size. It matters because the ops team has to back into those numbers with their productivity metrics in order to drive staffing assumptions in the same forecast. We’ve got your typical things. What’s that top line? What are you going to spend on marketing? What is the front office fixed offs, overheads, but then you get to have fun dissecting new products that we intend to launch that are going to have their own unique price points, meaning what is this $1,000 product, a $2,000 product or $500 product? Furthermore, within those, what are their gross margins? That is hypercritical in my organization because of the fact that what we’re going to build on Tuesday is essentially what was ordered six days ago.
You have to react.
We don’t have a choice what we make. We’re going to make what was bought. By the way, our catalog has 2,000-part numbers that have wildly varying revenue dollars and associated gross margins depending on the categories that they’re in.
Also, tasks that have to be performed to make them within your plan.
If we have a product that has no finishing, meaning grinding, you go, “Sweet, that’ll fly through.” That’s easy to say unless you’re the guy in fab where it’s got all this assembly and no finishing. What are those nine operators doing? Sitting on their hands? That’s where that cross-training would come in. You multiply that times the 2,000-part numbers. They all share some amount of process, which is shape cut on the laser, form on the press brake, assemble, weld, finish and final weld size too, vary, QC and then outer coat. Those eight steps, they’re going to have wildly different amounted time in each one. We house 2,000 parts that then boils down to my daily production number. Imagine sitting there trying to release that plan on January 1 for the year by product category, by month is broken down to the day, trying to make those assumptions on what that staffing requirement will be. We do it, we give it help and this goes back to the culture of growth.
When you’re growing double-digit for a year, and I don’t mean 10.1%, we have years that we are at 23%, 27%, 15% and those numbers aren’t that impressive when you’re going from $400,000 to $800,000, but they’re impressive when you’re talking millions. It does not just slide through the plant. That takes serious rearrangement, that takes CapEx, that takes more equipment, purchases that have long lead times. It takes designing. We need to go from four frontline leadership to seven. Who are they? What’s their training cycle? With that fast growth, we realized when you start planning for January and you end up finding yourself in an argument about what we’re going to do in October, it’s pretty futile. In Fab Fours’ years, which we likened to dog years, it goes away. We’re probably about seven years in doing this, but a disciplinary forecast.
When you know a little bit about what’s happening in the year in May.
I know what it does on two hands is you are going to have a forecast for May moving forward. One of the bigger benefits, I would argue, for those reading that might have lean teams that freak out about the planning cycle and the commitment of the time it takes. When you are sitting there planning the year that you know you get to re-plan in May, it means you get to make January, February, March and April really good. You can probably straight line some stuff out. Don’t end up getting wrapped around the axle trying to figure out what’s going to happen way out there. What happens if this customer acquires that guy? What happens if we see a downturn in the commercial side? You what if yourself to death and you are never going to tie a bow on the plan.
One of the things that I think you could help young people understand was I know when you started and we were trying to do our first plan and I asked you to estimate the sales for your first year and you said, “I haven’t even sold any bumpers. I don’t know what that’s going to be.” I tried to bracket it for you. I said, “Are you going to sell ten?” “I’ll sell more than ten.” “Are you going to sell 1,000?” “No, I’m not going to sell 1,000.” “Now, we’ve got to bracket it.” Would you talk a little bit about how I harassed you on estimating but you’ve taken that and made it into a game to where you estimate everything? I think a leader that can estimate, ends up having a stronger leadership position because people are looking and going, “How do they always get that number just about right on?”
Thanks for serving this topic out. A few opportunities I’ve had to go back to A&M and talk to classes in my degree in industrial distribution. We’ve had programs through the state where they brought young kids to the plant, which by the way they love. We have pretty much the number one plant who are in the region.
Everybody wants to come.
I’m trying to leave an impression, something they can walk away with, I always go back to the lessons you taught me in estimating that I doubled down on. I’m talking to twelve-year-olds to eighteen-year-olds and they’re thinking the same thing we did. They didn’t ever sniff it in business. They’re not even seeing the challenges. I said, “Start tomorrow, just this skill of estimating.” I likened it to this. I said, “You’re eating your cereal. You start to get towards the lower half of the bowl. How many bites are left?” You’d say, “I don’t know, maybe eighteen bites?” You do it the first time and maybe it’s 22, maybe it’s ten. The next time you guess, you might be a little bit closer. You can do the same thing. If you’re walking down the street, you see a light post. I do it all the time. How many steps do I think that is to get there? Here comes the magic sauce. The more times you focus on this, you don’t necessarily become a better guesser, you become a better executer.
You make that estimate work.
You need to find how big a bite a cereal is. If you’re counting down and you have five bites left of the countdown, but it sure looks like eight bites, in your last gigantic mouth. It is the same thing if you’re walking down the street. You make smaller steps or you make longer steps, but you can start to deliver. If you do that all the time, you start to get such a knack for guessing how long something is, how much it weighs. I blow people’s minds out there. It happened. We’re looking at a product on the ground and there are some boxes about twelve or fifteen feet away. He’s like, “They also could fit in that small box and save cost.” I’m like, “That won’t fit in there.” I just know. My mind is calibrated to it. It’s a form of estimating. He is an engineer. He knows or could know the inches of why that bumper and the box. I don’t have to, I can estimate the width of the box and say it’s not going to fit. He didn’t believe me.
I picked up the box, brought it over and it was about five inches too narrow of a box. That skill in estimating everything you do clearly, it’s going to serve you in a forecast. The nature of forecasting is guessing. If you said yourself, “I don’t know if I’m going to have a complex business where I have to guess stuff,” try again. I don’t care if you work at the shoe store in the mall. Your boss is going to benefit from you being a good estimator, which will make you a better employee and which will create opportunities. No matter what your job is and it’s certainly if you have any aspiring hopes on your own business, being able to estimate is probably the highest skill you could have.
When you do that, that person automatically looks up to you as a leader and a knowledgeable person, even though it’s a skill you’ve developed in lots of different ways. That’s fun. Thanks a lot for that. One of the things that you’ve done over the past few years is you’ve diversified significantly in the sales channels. What drove that for you? You had an initial plan of, “I’m just going to lock into these two clients and we’re going to partner and take over this industry.” Now, you broadened that out a little bit.
That one’s harder to speak to, particularly as it pertains to the culture. It still goes back to our ability to keep innovating and growing fast. We have to make sure that it’s not even about our client’s desire to grow. It’s also their ability, their means, their breadth of lines that they’re carrying. It’s one of those things where you were to just provide my team, my people the best opportunity to do what they’re best at and in the needs of picking winners and losers, there could be a risk to that. I think that my track record shows that I do not believe in being over distributed. There’s a risk to that because you want to do good solid business and to hear your words make heroes of clients. To do that, you’ve got to not bite the hand that feeds you. My no inventory model at Fab Fours is 100% supported by external inventory which allows 21 super duty bumpers to be delivered tomorrow in Portland. I have a high sense of loyalty to the eyes that put me there, but as we grow and grow and look for a different opportunity, whether it be like we are doing now also diversifying into the side by side market. There’s going to be core skills and competencies that are existing customers that don’t leverage as strong to those. We’ve got to make sure that we’re keeping all of those options open out there while never losing sight of what got us here.
Taking good care of those who helped you build the business. One of the things that I talk about in the book is boxing in the artsy part of your company. For us at Mustang, it was engineering and it feels like grinding and things like that. In your company in some ways are artsy, but still the main artsy part is engineering in your business. What have you found have been some good methods to help boxing your engineers to where you get loose type properties? It’s loose enough for them to do a good job, but it’s tight enough to get it done to a schedule and a budget.
It is a super fine line because you’re right. There are a lot of subjective pieces all throughout the business, but you and I are kindred spirits when it comes to managing engineers. Part of the challenge of engineering is not everybody can do it. It’s become complex, even these days with things like SolidWorks and AutoCAD. There’s a real discipline to learning the software to understand how that works. I’m challenged with anything that’s so technically specific leading groups like that. Oftentimes, leaders in any discipline, in any realm, they don’t have to always be the best operator because there are different skillsets. It certainly helps when you’re a leader and knows how to do it. Pull your sleeves up and you can lead by example and you can also challenge the yes when you hear it instead of just thinking it sounded like a yes.
Let me give an example. You being able to go back there and put down what they call the big bead, which is the toughest weld to make. You as the owner doing it at automatic credibility with all of these welders when you point out something to them, but not every owner can also weld. You have to lead without that.
I much rather would weld than I would learn SolidWorks. It’s a little patience game to get in there. My point is that it’s hard to demystify some of the technical elements of what an engineer’s doing when you’re in their pursuit of simplifying. In our world, it’s a lot to do with standards. There’s nothing more irritating in the world than a hole or a 7/16th bolt that doesn’t fit a 7/16th bolt. That sounds insane unless you have a business anywhere near mine and you’re like, “I know what he means. I did that before.” That’s because there are a lot of lines of code in the software and on the spring, you could drive a Mack truck through it and it’s just a fat finger thing. To not expose yourself to as many of those potential, we’ll call them dumb errors because it’s more of a binary thing. It’s not aesthetic. I wish it was higher and tighter. It’s like, “That doesn’t fit there.”
Is it a right or wrong?
“These parts are not sized properly. How could that possibly happen?” It can only happen if there’s not a standard. There’s a standard of which the best standards are programmed into the machine because you can set your own blocks and force that. Second to that is a discipline, so that engineer A and engineer D do it the exact same. Of this material thickness, our tab and slot clearance is X style. Every time, no matter what and they’ll always fit.
It’s a totally repeatable process. It works every time.
To somebody’s reading out there, you may wonder why they would ever dare evade from that. Trust me, it happens. What I’m coming to you here is when you take an artistic thing, whether it be designing ads and marketing or subjective finishing with a grinder or designing a part in CAD, a person wants to express themselves which is a proxy for the value they feel they’re bringing. That’s rooted in a good positive thing. I’m trading my time for this service to your company. I’m going to give you the best I’ve got. I’m on a journey. What I did before, I should be better. What if that tab and slot could be improved? I think the foundation for that has some merits in positive. The other is could you put this pessimistic spin? They’re like, “If we’re all doing the exact same, what do you even need me for? Anyone could do this.” Have you ever saw that old movie, Joe Versus The Volcano or something? The guys working in all gray cubicle with dim light and life just looked miserable.To make heroes of clients, you got to avoid biting the hand that feeds your mind. Click To Tweet
I think that’s human nature. If you’re going to rob me of creativity, force me into these standards, then why even come? Life is too short. I’m not going there. This is long-winded. Here’s the answer in my opinion, is to accept that as a leader. As an owner, recognize and sympathize with that challenge that you wouldn’t want that either to come in and be in that routine. You’ve got to sell it and back it up, that inner employee. This is why you want to do it. If you can execute this way, we have metrics that prove that we can do more and more. At least in our world, it’s fun because right now you’re making the black steel bumper for a Dodge Ram, the next queue up happens to be the innovative brand-new rear for the Gladiator Jeep. How cool is that?
Hurry up and finish this thing.
That’s your job on the corner of the desk philosophy, “I want to move on to that.” “Good.” If we dare make from our standards and that necessitates a recut, because if we find it, we change it. We will always prototype it at Fab Fours. Don’t expect what you don’t inspect.
That’ll slow them down.
It slows us all down if we have to. What you’re starting to point to is plain vanilla seems boring, but what’s more boring? Doing eight things in a year or 40 things? “Eight is boring. I want to do 40.” It seems vanilla in the mouse click to use the standard, but it’s a cornucopia of adventure for your employee. Fab Fours’ benefits from 40 done with standards every time.
You can feel a lot better about yourself that you cranked 40 out.
Everybody does. There’s that little dark area in the middle because the first day that you feel like your spirits are broken and you have to work towards these standards, it’s not faster. There’s no game. It takes time for that to become having discipline and then get the flywheel going. Now you can walk into my engineering department and there are all sorts of self-policing and accountability to standards because they’re bought in and they’ve seen the light, which is the heightened productivity. That’s where the fun comes. It’s not from the snow flaking of the design. That hits on a couple of your things. The job on the corner of the desk that’s keeping it in front of them. That’s fun. Also back to your repeatable process, letting the team free if you go file anew and that’s where you get your adrenaline from.
You start with a blank sheet of paper.
It will be fun, but then it’s not fun. The hurrahs and the hurrays are in the final pictures taken in the studio of our bumper on a truck. That’s when you get the gold ribbon and it’s considered a negative to have five prototypes due to error. That’s costing us money. That’s disrespecting the plant operator’s time who has to cut and bend it all because of a fat finger oversight in the code upfront.
A person wanting to be an individual in this design.
We’ve migrated that culture, that realm to the real prize is one and done. One prototype that fits right is the grand slam, the holy grail of engineering. We’ve now earned the agreement from the team that the best possible way to get there is to utilize the standards. Believe me, that’s a long, hard fight. It’s years and years in the making.
One of the things you do, you start everything off with a kickoff meeting. What do you try to do in that kickoff meeting that sets you up for a one and done prototype?
One thing that we’ve found in the kickoff meetings is we’re trying to get everybody’s thoughts in the beginning. This happens so often where this has nothing to do with those design standards per se, but one that most does is say, “What’s my go by? What’s the most similar bumper?” The prior generation dives to the new guys. They change some sheet metal, but the frame is the exact same. There’s no reason to start from scratch. You pull that up because at least the brackets are already done. Now you’re working on the shelf. The bigger thing that we capture in the kickoff meeting and this happens everywhere, we’re not pulling the clients in most cases unless we think there’s real price sensitivity. We do need to pull in some input from operations and in sales and market. The thing that’s worse is engineering is ready to sign it off, a powder-coated prototype is all done and somebody walks by and says, “I think this one should use the factory models.”
At that point and there’s no denying it, everybody’s like, “The first door, why didn’t we think of that?” Everybody’s got their core discipline, but the ability to take a product to market requires everything I talked about in our vertical integration. Every last piece from what the part number is, to what’s on the traveler, to what sales and marketing things that the customer wants to be competitive to the features of the part. How are they going to sell it? Its compatibility with what winches. It’s a lot of data that goes into it.
To this day we still find ways to get burned by not having enough information early in the kickoff meeting. The knowledge that our company possesses over and over, we have it. We deploy it too late. For as good as you get, the journey never ends, but pull off a kickoff meeting, particularly when you have anything that resembles what we do and a product that has a development life cycle. Getting all that information from every constituent upfront saves time. By the way, when you change, we have to make another prototype because we changed the tab and slot. The SolidWorks and I’m sure this rears its head and in Visio and InDesign and marketing programs too, depending on the tree, you never know what’s connected somewhere else.
You’ll mess something else up fixing that one thing.
You may underline all those stage gates. We already did a detailed design review for manufacturability where we go inch by inch, seam by seam. Now even if it’s marketing’s fault who walks up out of nowhere at the end and says, “Did you know this as blind spot monitor or something?” We’ll make that adjustment in engineering. There is a chance that that somehow displaces a bolt hole by a half-inch somewhere else. It’s just knocked this whole thing so far back.
The thing that I talk about in the book as a project influence curve and it shows that you have the best ability to affect the outcomes very early in a project. What Greg is talking about is getting all those stakeholders in there and getting all that input to where as you move through the stages of a project, you can design freeze the different pieces to where you don’t have to back up to design because marketing comes up with something down the road. One of the questions I have for you, are there any business books that you would recommend? You’re a 40-year-old, one of the younger guys in the world. What would be applicable to some of our younger readers?
The first that I will say if you had anything to do in my world like manufacturing, that book is The Goal. Goldratt is the author of that. I hope he stumbles upon this and if you do, here is a cordial invitation to my building where you can see the words on your book have left off and become a reality. I’m a pretty literal guy. I decided I hated my golf putter stroke so much and I was going to get a lesson. Trust me, this is relevant. I walked in there to the pro and I said, “I need a putting lesson, but let me tell you how this is going to go.” I hate everything about mine so I’m not loyal to it at all and I am a great learner. Meaning, I can copy what I see and I can do what you say. Trust me, no holds barred. You get to take it the best borrow line up, stance, grip, stroke that you’ve ever read about or learned about in your entire professional career as a golf instructor. I want you to feed that to me and literally by the book is now my new putting stroke. I did it. I take it. I don’t say, “I don’t like that piece of it.” I’ve got some funky claw grip, crazy thing and that is now mine. Literally, as the book was written, that night, I went out and rearranged the plan. Luckily, that was in late 2010, so we’ve been doing it awhile. That’s a real testament back to culture over time because our main manufacturer, there was a time I didn’t want people to see pictures or videos of the inside of my plant.
Obviously competitors are thinking, “They’re going to pick up on my secret sauce on how I’m able to execute this lean methodology.” No, you bought all of us on social and I say, “The heck with it. I’m so proud of this plant. I want our customers to see where their bumpers are born,” and I now realize you can’t copy it, what you see. What’s right there on the surface, the fact that bumpers are on cards, we’ve got trump equipment, that’s 5%. What makes that work is a decade of driving this culture of fast growth that we deemed necessitated quick turn that we didn’t have inventories, so it was single-piece flow. It’s built to order regardless of its dollars, which means it has to have certain standards and engineering for fixturability. It has to have a certain amount of bins allotted for time to get through this process. It has to have standards for finishing, inches of weld and so many fundamental pieces. If you were to even pick up on 70% of them, buy all our parts, measure our seeds, it will matter because then you’re starting tomorrow with your people and it’s not yours and you didn’t fight for it, bleed for it or believe in it. You can’t sell it to your people and if your people don’t buy it, you can’t start living it and you have to have done all those, believe it, buy it, sell it, live it for a decade and then you can compete with me.
You’ve built that culture. We had the same thing at Mustang. We had developed systems and processes and things and I would give those spreadsheets and things to the clients and to the fabricators. My partner says, “You can’t do that. That’s what differentiates us.” I said, “No, every company has a way to count drawings. The way we execute is our culture. It’s our DNA. We’ve developed it over ten years.” If you don’t have that culture, you can have all those same tools and you’re not going to get there. If you don’t have the culture, your tools are going to have to be way more complex to drive that out the door product. What you have is you’ve got good cross-communication to where you can make it happen and people look at it and it’s magic. How do you go from a napkin to a product?
Back to that ten years of putting it in and making it work and you hit so many of those crossroads with real hard decisions to make. It’s having that true north, that vision for that end game and that belief in the system that influences all these little decisions. There’s a reason I have $270,000 press brakes while my competitors have $40,000 press brakes. A press brake is not a press brake. My press brake is not your press brake. My press brake is exactly what you need for my model so you can’t get in the pictures and you can’t see the intensity of maintenance required to support this model. You can’t maybe fathom how many grinders we throw away to keep new grinders. You can’t understand our tolerance for scrap rate because it would never work in your metrics, but it’s required for my lean model. It’s just 1,000 little slices of what seemed like objective choices, but they’re all needed in this true north vision towards a goal that you could ask anyone here. There are 130 people out there, go ask them if Greg Higgs will approve them building up some whip or some inventory.
They try it every two weeks.
The answer to hard manufacturing problems is always inventory, but I’ve had the same answer for ten years. We’re going to solve it a different way. Sometimes the way it solves is far less profitable in the short-term. That takes that gumption, that belief in why we’re doing it. Why are we focused on being lean? It’s because we are building a company to sustain the test of time and be a market leader and innovator with profitability being a secondary focus. That’s the journey we’re on. You’re going to be the world’s leading bumper manufacturer in every metric, by size, by innovation and by every measure. To get there, we had to stay on course and no matter how hard it got, that true north was the guide.
There were times when you’re tempted to change it. One of the things that you did and I think to help weld the team together, was you came up with a name for your people that they could all rally around. How did that happen?
I mentioned a little bit of cheating, which I also don’t condone, but my wife gives me just a hard time for our nickname of the pirates. Red and black was always our color and that maybe helped it a little bit. I started to think of us as a pirate ship probably first because I believed in doing a quarterly profit share, as I always thought, even to my leadership team’s chagrin. I did not mind if I had to cut someone $800 check or a $2,000 check or $1.50. Profit was based on a metric. To have unyielding integrity to that, because I’ve heard stories where the leadership team plays games with the numbers and that’s not right to me. We all win and we ride it as high as we can go or we go as low as we can go. I never passed that hat around for contribution to losing months. They have always thought it’s bizarre that I would be willing to cut checks for $3, but that’s just back to that culture. I know we’re one team that wins. We live, we ride and die together.The answer to hard manufacturing problems is always inventory. Click To Tweet
That’s profits share, where does that come from? You make a profit off of revenue. Where does that revenue come from? It’s from two forces. It’s either super innovative or taking market share. I’m a competitive person and a creative person. I love innovating new products, but I probably like taking someone else’s bumper sale even more. We are stealing work out there and then sharing the booty. That’s what started that whole pirate mentality. We’re banded together. It’s us against the world. We have our competitors. It’s dog eat dog. Let’s go win this thing. How do you win? The most innovative products with the highest quality and the best delivery. Let’s go.
Let’s put the systems together and do it.
When we win, we all win. That started that pirate mentality. What’s fun is whenever we do big talks, which you gather people for a pizza party or something, you’ve got this massive crowd out here and I’m doing some ad-lib, rebel-rousing. Whenever it’s over, everybody knows it’s coming, “Can I get an ‘Arrr’ on three?” I go, “One, two, three,” and everyone throws their arms in the air with a giant, “Arrr.” It’s pretty cool. I catch that when I’m walking by that little pirate mentality. One thing you can do, just that tribe, that norm, the fact that if you walk around the building, I would say 100 folks are wearing the Fab Fours.
Some don’t because you only get issued five shirts per quarter and you like to keep them a little nicer. Some will wear the uniforms, but even the front office everywhere, there’s got the Fab Fours’ colors on and we don’t even have clients visit our building. I renovated the whole front office to company colors. We’ve got huge images all over the walls. It’s driving this cool factor that is Fab Fours, the leading bumper company. They are everywhere. You see people that are leading Fab Fours. That’s true. You get that by that focus on taking care of our employees, just like we do our clients and having that focus on quality on time. That’s what we’re all about.
It makes it more exciting and fun to be at work.
The second book is Culture Code Champions.
Is this a lot better than the first book?
It is. I’m telling you out there, if you’ve got sleeping problems, go pick up dad’s first book. If you’re not in the oil patch, it’s pretty detailed, which if you’re engineering-minded or you have anything to do with living through those twenty years in offshore oil and gas, you’re going to love that book because the whole world knew those projects. I love that book because I grew up learning through osmosis from dad about how we ran that business. I remembered the rolls. I remember some of the big projects. I remember almost every one of the names of the people that were in that because those are the most influential in dad’s life.
Where it was missing, my sister and I got to learn so many things, not just on how we were raised, but when we would hit questions or seek advice from dad, you always get the gems. A lot of times for me, it’s insane. Those three words all the time, never limit your options. Things like that become my own personal culture. They get embedded in your mind. When you hit those decision points in a day or in a quarter or a plan, those rear their heads. These dad-ism quotes, we encouraged him like, “That’s what you need to share with the world.” Every single person could benefit from having Bill Higgs on their board. You can’t have him because I’m keeping him busy enough. He’s having too much fun golfing.
I think the show is a phenomenal way because you get the anecdotal influence as we did, but you totally figured it down into this book to make it a super easy read that feels applicable to anyone. It’s exactly what we’re hoping for, the type of thing I could pick up at the airport. I have read numerous business books despite my inability to recall them. It’s like no matter how good or bad they are, it doesn’t matter. When you read their chapter, you’re instantly thinking about your life, your immediate trials and tribulations, your leadership team and how you can correlate that. What Bill’s done in the Culture Code Champions is going to do the exact same thing. Each chapter is going to make you think about your organization. Peeling away all the oil and gas intricacies and boiling it down to what he’s learned is a proven formula and what would come across if you are anecdotally working through problems. He managed to get into this book that you can pick up and blaze through.
Greg got the fun part of reading through it a few times and there are some sentences in there verbatim from Greg. It’s been fun talking to my son and my best friend and good golfing buddy. He jokes that his business life should be measured in dog years. You heard him say that because everything is tough as he works to change an industry in a positive way and positivity affects the lives of people in Lancaster, where several years ago there was 25% unemployment. It was horrible down there during the downturn. He’s a champion in my eyes as he helps to make heroes of his suppliers, his clients and his pirates. I plan to enshrine you in our Culture Code Champions Hall of Fame for contribution. I’ll put you on the spot a little bit, “What would you want to be known and remembered for when we put you in that Hall of Fame for Culture?”
If I had seen ten examples, maybe I would know where you’re going with this because it’s so open-ended.
That could be changing the industry.
From my gut, for me, I think that your culture is going to be a reflection of your true self as a leader. To thine own self be true, you don’t get to just pick a culture that sounds good on paper that you wish would work for you. That’s too bad. To me, that would be like the risk of telling lies. You have to keep track of it. You have to remember and cover your tracks. If the culture that you established and that suits you isn’t serving your business, maybe you need to look at if you’re in the right business. I can’t imagine doing this different. If I had to put on a culture hat that wasn’t my own every day, it wouldn’t work. For me, I know I’ve got plenty of weaknesses, plenty of them that are sacrificed in my culture of growth of orientation to innovate. We can’t all be everything. You take what works for you and where your heart is, and then you build an organization around that that mitigate some of the weaknesses that thrives on that core piece of your culture that’s true to yourself.
Be honest and authentic in what you do so you never have to remember what you said. You would always react the same way in the situation. It just makes life so much easier if you can do it that way.
You can’t create a culture without consistency. If every time you’re hitting adversity, you have to remember the party line you made up, I think after changing your armor. For me, if you tap me on the shoulder and ask me a question, you’re going to get the same answer because it’s just the truth.
I think you’ve provided some great gold nuggets, especially for your readers here in manufacturing. It will drive their brains nuts. What Greg has shown you is how to put some of those seven steps from Culture Code Champions to work in your business. I want you to remember when you’re reading that you need to assign a champion to each one of those steps or it will be a flavor of the month that just disappears. A champion can take that step and help you make it become a habit. If you want to learn more about Fab Fours and learn more about Greg, you can contact him at GHiggs@nullFabFours.com. If you want to see some awesome vehicle builds on the website, look at FabFours.com. Are those the best ways to contact you?
Yes. I do have 23,000 unread emails. I might not be the most reactive there, but absolutely. We’ve got a massive social presence both on Facebook and Instagram to supplement our website to show you what we’re all about.
As the last thing, tell them what it was like to be on Jay Leno’s Garage.
That was a cool experience. Jay is probably unrivaled for such a ridiculous collection. I wish I had the pleasure of actually seeing three times because the first time there was a mistake and they had to fly me out and tow the car back out. He is a classic car guru. That is his sweet spot. Trucks? Not so much. He didn’t know anything about it. The first Legend was insane. Low lift, with the 50-inch tire, chop top Jeep Wrangler with red-tinted windows and a crazy brushed metallic rack. He had no left or right on that thing. That was fun, just being myself and harassing him for his lack of acumen on trucks.
He didn’t even know what questions to ask.
The next time I had our Chop Top 2015 Chevy Colorado. It had a rear-engine, 12-valve, twin-turbo Cummins diesel on top of five and a half tons end rack, steering front and rear military axles with Baja-style trophy truck travel suspension. The thing is insane. He was clueless and I had to ride shotgun while he’s driving this thing on the trail. About to roll us hitting the rear steer at the wrong time. Both of them are super fun because you can tell he was tickled. I think both of those episodes are definitely amongst his most viewers because just the thumbnail image alone piquing everybody’s curiosity versus some old whatever, ‘55 Corvette.
You could tell he was having fun because he giggles and laughs and you were giving him tit for tat on some of his jokes, which is always a lot of fun. That vehicle, that Chimera, that crazy one you described, I can’t wait some time to take that over to Fort Bragg. I think all the Rangers in the Delta Force guys will be clamoring to get on it. This was pretty fantastic to visit with Greg Higgs. He is a world-class Generation X thought and action leader who puts people first and has a strategic vision for his industry. Until our next time, get out there and make heroes of everyone you come in contact with and remember to make your culture count.
- Fab Fours
- Jay Leno’s Garage
- The Goal
- Culture Code Champions
- Facebook – Fab Fours
- Instagram – Fab Fours
About Fab Fours
Fab Fours’ was born out of a passion for customizing vehicles and a love of the outdoors. Fab Fours’ owner and CEO Greg Higgs provides the creative force and product DNA that goes into all of Fab Fours’ products. Our engineering team uses the latest 3D design software to turn new product ideas into reality. In our factory designs come to life with the combination of cutting edge technology for metal cutting and forming and an American workforce that puts it’s heart and pride into every product that we manufacture.