A lot of companies fail to scale because they think the key to scaling is to be lean. The real key is to develop your company culture. Have a culture where people are excited to go to work and have conversations. Treat your people like family. This is what Phenix Technology, Inc has been doing to great success. They prioritize company culture and personal development above all things.
Join Steve Farber as he talks to Angel Sanchez of Phenix Technology about how he created such an amazing company culture. Angel is the Servant Leader of Phenix Technology, Inc., a public safety equipment manufacturer. His goal is to leave the world a better place. In this episode, learn how to develop your people like a family would. Discover why you need to fix your own ego first before you can fix your team. And find out how to still be a lean business, especially with the great resignation going on. Scale your company correctly today!
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Building Your Company Culture: The Key To Being Lean And Successful With Angel Sanchez
Welcome to another episode of the show. My guest is Angel Sanchez, who runs a company called Phenix Technology, Inc. They make fire helmets or helmets for firemen.
Our business is developing people but we fund that by making helmets for firefighters and first responders. Firefighters will be our core business.
Why I invited you to the show, Angel is because of your perspective on what your business is all about. Selling that stuff enables you to develop people. My understanding is that the core value of the company is to leave the world a better place.
We have five core values but one of the key ones is to leave the world a better place. At one point it was, “Leave the world a better place with responsible business practices.” We decided, “Let’s keep it basic.” The world does not mean the whole world. It means your world. We are doing our best to impact our local community, especially.
How many employees do you have in the company?
We are around 40 with vacancies. It is in that 35, 37 range but we have a few vacancies that we are open to filling some growth vacancies, thankfully. We will be in the 40.
To the layperson, which I am, the vast majority of people reading this are not in the fire helmet business. Let’s assume that is the case. What does that business look like? You are essentially a manufacturing concern.
Thankfully, not everyone is in the business so it cuts down the competition. It is a manufacturing process. There are different ways of doing that. You have injection molding and compression molding. You have got a lot of sewing, believe it or not, that goes into the manufacturing. It goes from raw pellets through a helmet that goes out the door fully ready and able to protect America’s and, in our case, the world’s heroes.
In your business landscape, I was hyper-facetious. Virtually, nobody is in the fire helmet business. What is your competitive landscape? Who are you vying for business with?
We have some good competition. There are a couple of publicly traded companies that are out there that are in our business. We would be more of the boutique level, comparatively. Some very large companies that make great products have been doing it for a long time. We have been doing it for a while too. We will celebrate our 50th birthday on September 1st, 2022.
I made the comment about competition but we have come to the perspective that our only competition is us. We strive to compete with ourselves. We never talk negatively about others that sell the same products. We do not try to keep up with the Joneses, as it is said. We do our best to improve every single day. It has proven to be successful. We are going to continue that model.
Some of those companies that you are “in competition with”, this is not their major line of business. It is one of many lines of business, I am assuming. For you, it is your only line of business.
There are a couple of things we have here and there but for those that are reading in Southern California, In-N-Out is a good example of that. They make hamburgers and they do it very well. There is a reason it has a two-hour waiting time when you pull up to an In-N-Out. They are good at what they do. They keep it simple. They take care of their people. We are following that same principle.
We know helmets. A lot of us have an experience in the fire service. We are good at it. We want to focus on that core. I cannot say that will not change in the future and we may not expand as we grow and continue to provide exceptional products for people but we are good at what we do and we want to keep it that way.
Give us the high-level origin story of the company going back to the beginning.
It pre-dates me a little or at least, my working life. It was two firefighters, Ray Russell and Ronny Coleman. They were in Orange County and were helmet collectors. Each of them will tell you that this person had more than the other one.
Did they collect helmets of all kinds or fire helmets?
Fire helmets, primarily. We have a museum in our facility that has helmets that date back to 1740, which is the oldest helmet that we have. It is a beautiful collection of what is on display and then we have hundreds more in storage. They were both collectors. They collected fire helmets and were not happy with the products that are on the market. They did not think that they had an ergonomic fit.Lean manufacturing is not the way to scale. Focus on culture, and everything else will start to fall in line. Click To Tweet
You are talking well before people were talking about ergonomics. This is dating way back then. They did not think that they were lightweight enough or functional. What they did is they looked at all the helmets that are on the market and decided what the best features are of each one. They designed one around 1968 and had it made by another company. In 1972, they decided to incorporate. That is when Phenix Technology was founded.
We have always kept the technology name in there so that we have the opportunity to expand without having to go through a major rebranding. A lot of people know us as Phenix Fire Helmets because that is what we do. Phenix Technologies was born many years ago with a passion of a firefighter duo that decided they did not like what was on the market and come up with something that they felt was better. Here we are many years later and we are still one of the leaders in the industry. We are quite blessed.
What about the name Phenix? Where did that come from?
Phoenix, as a lot of people know, mythology-wise is a bird that revitalizes itself. It burns itself away and then comes back out from the ashes. They were looking at the same thing. What was on the market at the time, they did not think it was doing well so they wanted to have a rebirth. They use the Phoenix as a symbol of that. We continue doing that. We’re years in the business but I consider us a startup. The last number of years and the way we have been acting and performing is almost like a rebirth of ourselves. We are looking to change. The products are still similar. They have improved substantially but it is who we are that has improved and that is where our Phenix has come alive.
It is your rebirth within the company in terms of, not just product innovation but the way you are, the way you work and the expectations that you have of each other. Let’s talk about that origin story within the origin story. How did that start to happen? At what point did you say, “We got to do things differently?” Why?
The business was pretty stable for the better part of 40 years. I came on board around 2012 with a couple of other very talented people. We started finding success. Our marketing and product development was starting to work. We started growing as an organization. Anyone that is an entrepreneur that started a small business and did not know how to scale well, learns that you can grow too fast. We started to experience that. We realized that we needed to find a better way. We started pursuing lean manufacturing. I was familiar with it. I had a Lean Six Sigma background. We thought, “We got to be lean. That is the way we are going to fix all these problems and be able to get the product out the door.”
In the beginning, it did not go very well. We hired some consultants to come in and they, overnight, wanted to make us Toyota. We failed miserably. We got worse. I was reading a book by a gentleman named Paul Akers called 2 Second Lean. I had jury duty, which made it great because I was sitting in the jury room for a few days. I read the book three times and wrote a bunch of notes. The key message I got from the book was it is all about culture. I came back and talked to the owner, “We are not going to change our people or processes. We got to change our culture.” That was where we started the journey that we are on, focusing on culture and everything else starts to fall in line.
To change it from what? Describe the culture that needed to be changed first.
It was a small family business. We had that family thing going on. We also had that fire station mentality. We ate lunch together. A lot of things were very similar like disciplines and things like that were in place but we did not have a growth mindset. It was just, “Let’s do what we can do and get out the products.” We want to grow sales but we did not focus on growing ourselves and people.
The pay was not the greatest. We did not have the benefits. We would hire somebody’s cousin or somebody to come in. It was more like a hobby in many ways instead of a business. While it was fun and people loved each other back then, it was not the right type of culture that we have. We focus on personal development, growth and continuous improvement. Here we are years later and it has had a significant impact.
You have seen it show up on the bottom line? How so?
Yes. We have seen our production capability but there is a lot that goes into it. For one, sales are up dramatically. In most cases, profitability is up but most people that are in manufacturing know that with the supply chain, you have to buy a lot of extra stuff. It is a little bit of a challenge but those bottom-line financials and P&Ls look much better than they did at that time.
More importantly, it is what we have been able to do for our family members. We do not have employees and teammates. We have family members. We were low paying with no benefits. Now, we pay a livable wage and are in that average range for our industry and market. From what I understand from agencies that we used to hire, we have some of the best benefits.
We have a matching 401(k), a profit share, a medical and dental plan, life insurance, Aflac, vacation and paid time off. That never existed years ago. Those things come into play. When you look at that Maslow’s needs, we started knocking off those things that were important to people. The other thing we do is we put a lot of energy and money into developing people. We offer 30 minutes every single day of personal development time.
If you work for us, you would have 30 minutes of every day to work on something to expand your knowledge. If you are a helmet builder or a painter, you do not have to train in just that. You can go train with marketing. We have over 400 online courses in an LMS that we maintain. If you want to take an Excel class or learn about finance, it is all available and you are free to do it. If you want to learn how to Ollie on a skateboard, we are probably not going to give you 30 minutes for that. That is something that we make a significant investment in.
We have a daily meeting. In that meeting, we have an educational component. Everyone gets to experience probably 1 hour to 1.5 hours a day of development time, which seems costly to most companies. I will talk to CEOs from other organizations like, “You could get so much more out of your people if you added another hour back in and cut out all those meetings and training.” My initial response is, “Do you think you get eight hours out of your people every day?” Our people are empowered, educated, feel respected and give us 120% in those other hours. It is one of those things that if you make that investment, your long-term ROI is there.
You get 30 minutes of personal development time to work on whatever you choose to work on, as long as it relates to the business. In your daily meeting, there is a part of that that has got an educational component. What does that look like? Who is doing the educating on what in those meetings? First of all, before you answer that question, I want to back up. I am trying to imagine that meeting. The demographics of the people in that meeting are people working on the line and in the operation. Paint the demographic picture of that group so we can visualize it.
We have administrative functions, engineers, salespeople, finance people, people that build helmets, people that paint helmets, people that order parts and all of those different positions within the organization. We start at 7:00 AM every day. When we start our day, we have a brief department meeting for 5 to 10 minutes where the individual departments get together and talk about what went well, what they need to work on and what they are working on. We spend twenty minutes making life easier. During that time, everyone is working together to improve their workstation and workflows. We call it three essences.If you have a great relationship with your customers, they'll forgive you even if you burn their house down. Click To Tweet
For people that are familiar with lean, we take 3 of 5 essences. We do that every single day but it is to focus on continuous improvement. We are not building, answering emails or taking sales calls. We are making life easier. That goes on for the first 30 minutes of every day. At 7:30 AM, we come together around the campfire. We have a couple of remote workers and they are on screen. We start sharing stories and the stories begin with being grateful.
The first thing we do is talk about what today is. If it is National Turtle Day, we talked about turtles a little bit but then we talk about gratitude. We open the microphone up to anyone in the organization to share what they are grateful for, whether it is spending time with family over the weekend, figuring out how to Ollie on a skateboard or whatever it is they are grateful for, they start with. We are firm believers that if you have a scarcity mindset, that is how your day is going to be filled.
You are going to be filled with anxiety, fear or make bad decisions or you can have a grateful mindset. With that, comes peace of mind, good decision-making and positive results. We start with gratefulness and those can go anywhere from 5 to 20 minutes, sometimes it keeps going. The financial side of me is in the background going, “Should I stop him?” 20 minutes is a long time for 35 people to be talking.
Do you hear from everybody or is it just whoever wants to share?
We have some that share more often than others but in 1 month or 2 periods, almost everyone steps up to the microphone. It is a wonderful thing. We have our gratefulness and then once those are done, we step into a reading from The Daily Stoic, a book by Ryan Holiday. We started studying stoicism years ago. I started it earlier and we started doing it as an organization. We discuss The Daily Stoic. Sometimes that can go on for several minutes. That one can be the most impactful. There are a lot of tears that come out in our meetings and usually, it is related to The Stoic. It hits most of us pretty deeply.
There is a knowledge enhancement. Who leads the meetings? That is everyone. One of our other core values is to be humble, curious and courageous. You cannot work for us if you are not courageous because you are going to have to lead a meeting in front of everybody, which may also include visitors. Every day, we have a different person. I lead every 35, 36 business days. That will be my meeting but aside from me, every other person in the company gets up there and share their story.
They get to pick out the educational topic. It is the same type of parameter. It has to impact the business. They give a 5 to 10-minute presentation on topics like Gantt charts and project management. We then go into suggestions. Forget the suggestion box. You do not put something in a box. We talk about it around the campfire. We go into going over the numbers, how is the business performing, where orders are at and what inventory levels are. We talk about the business. At the end of the meeting, we have what we call lean hansei, which is self-reflection.
This is the opportunity for the person that presented to get feedback from all of their peers on what went well and what they could do better as a speaker. We take people that are scared to death of standing in front of people and make them into professional speakers. One good example of it is we have a young lady that works for us, who would not even get in front of 4 or 5 people in the beginning. She was not comfortable. She went overseas to Austria right before COVID in 2020 and spoke in front of hundreds of people at a software convention and nailed it. She went from not being comfortable in a small group to go into a foreign country, speaking in front of hundreds of software developers and doing an incredible job.
What is her role in the company?
She is our Chief Transformation Officer. She has got a strange-sounding role but is responsible for ensuring our transformation through continuous improvement.
Is that what she started as?
No, she started part-time as a Customer Service Representative.
To be clear, you do this every day.
We work a 4/10, part of a positive work-life balance. We rarely ever work overtime. Every day, regardless of whether I am there or maybe there are only four people there, for some reason, they still have a meeting every single day. Later in the day, you got your 30 minutes of development time. We spend hundreds of thousands of dollars on the development of our people every single year. I would not change a thing.
It has paid incredible dividends. It shows on the financials. I am not worried about those. It shows in customer experience. We are about delighting our customers. In hard times, if you have a great and loving relationship with your customers, they will forgive you even if you burn their house down. By delighting our customers over all these years, they have been a lot more patient with us as we have experienced some challenges getting raw material.
Imagine that I have not gotten a formal education. I needed a job and I applied to work at Phenix to do something in the manufacturing line to build helmets. Do you ever have anybody that is coming in with that mindset and then deciding that they do not want to work there because the idea of running a meeting and expanding their education and capacity is not what they are looking for? Do you have anybody say, “No, thank you?”
We have. It is usually within the 1st week or 2 but it is very rare because part of the onboarding and interview process is giving them the opportunity to interview us. We do some things a little differently. We require a video resume, which a lot of people are not comfortable doing. For a customer service position, we call them customer experience specialists. We had 440, 450 applicants and only 1 turned into a video resume. This was years ago.
Honestly, we do not care what is on the video resume. We just want to know that you are courageous enough to do something outside of your comfort zone. That is one thing. That is a Litmus test for a lot of people. We have panel interviews where people come in and they interview no less than four of our team members or family members.You need to have a reason that people want to be in your office. You need to have a culture that is full of joy. Click To Tweet
The questions that we ask are very character-based. They are not like, “Show us on this Excel sheet how you do this.” We want to hire for character. We will figure out the skill. We open it up to them and try our best to make sure we cover everything in the Phenix experience so that they know what it is going to be like. They are going to be required to be on video and lead these meetings. Let them ask as many questions. We take them around. A lot of times, we will try and do a tour where they can sit in one of those meetings and figure it out before they can start it.
What does not work for us is the employee that wants to come to work on time, do their job, go home and be told what to do. That does not work in our environment. You got to show up on time and do your job but more importantly, you have to be there to benefit the family and help the person next to you grow and the organization grows. Being told what to do does not work.
We are empowering people to drive the business forward. Not everyone fits that mold. It can be a challenge. Going back to when we first transitioned to this, I knew we were going to lose people. We ended up losing about half of the people that are with us at the time. It is not the right culture for everyone.
Our turnover is relatively low. We have lost a few people in the last number of years but it’s because they are following their dreams. One of them decided she wanted to travel the world and stayed with us long enough to get everything situated or most things. I do not think we can ever replace her but she is starting her journey around the world. Another decided she wanted to go to school in Europe and pursue a graduate degree.
I am happy about those things. I will also be happy if somebody that is in a production technician role wanted to be a law enforcement officer and we were able to help give them the skills to qualify and move on into that. That is not a bad thing. Everyone that comes through our doors is going to benefit the community as a whole one way or the other. They are fulfilling one of our core values. We are quite blessed. We do not lose a lot of people to turnover. The Great Resignation, thankfully, has not hit us.
The Great Resignation is a snappy and fashionable term to describe people leaving places that they do not love, connected to and fulfilling them in any way. We are at the point where it would say, “If I am not going to get that, I am out of here.” It seems to me, tell me what you think about this, that what you are doing is noteworthy because it is not the norm but it should be the norm.
The Great Resignation is a buzzword. The other thing is LinkedIn is starting to bother me because I go on and see all these things about, “Everyone wants to work remote. You have to open up your business remotely. Otherwise, everyone is going to leave.” What I do not ever see talked about is you need to have a reason that people want to be in your office and have a culture that is full of joy. Those are things we should be talking about. Flexibility, being able to work from home and all those things are wonderful but what if people do not want to be in the office? There are a couple of things that I have witnessed that are temperature gauges for me.
The first is February of 2021. I started to talk to my executive assistant. We were growing and our production capabilities needed to grow. The existing facility we were in needed more space. I was like, “Let’s blow out some of these offices. We can put machines in there.” She goes, “Where are we going to sit?” I said, “You and I will sit in the same place.” She goes, “What about everybody else?” I said, “Doesn’t everyone want to go remote? That is what I keep seeing all over the places, remote this and that.” She goes, “They do not want to work remotely. People are tired of being at home.” I go, “No way.” We did a survey and offered four options.
You could work from home full-time, come to the office 2 days a week and work from home 2 days a week or you could come to the office whenever you feel like it. We will have some hot desks. Whenever you feel like coming in, you can come in. The fourth one is you can come to the office full-time. We had one person that wanted to work remotely. Everyone else wanted to be in the office.
I am stuck with, “I do not have enough office space.” We moved and found a new office in a few months. In June 2021, we moved the company. Our happy family came back together. There is flexibility if people need to take work remotely for a day because of the plumbers coming or something. That stuff takes place still but for the most part, people are in. That was the first temperature gauge that told me, “Something must be going right.”
The other one, I noticed this. I had to go to several companies during the week around lunchtime. I noticed when the lunch bell rang, everyone bolted. They all went their separate ways. Some went to their cars, some went to this desk over here but it was rare to see more than two people together. In our environment, it is rare for those tables not to be shoved together, which is a challenging code but you are like, “You got to stay apart.”
They come together at lunch or we because I am part of it too. At break times, we are out throwing the football out back. Every once in a while, we get somebody that wants to go for a walk but as a whole, everyone is together. I never thought about it. It would seem natural to me. It has always been that way. Compared to other companies, they are just there to work. Our family is there to be together. Those are two big temperature gauges that say, “We are not perfect but we are doing something right.”
Isn’t it obvious that if you like somebody, you want to hang out with them? The fact that they want to hang out with each other during the times when they are not working like eating or on a break, says, “We like each other.” When you have noticed in visiting other companies, that is not the norm because most companies do not value it as something that they should strive for. How many manufacturing organizations will say, “What do we need to do in our culture to have people connect and become friends?” 1 out of 1,000 maybe?
I do not think I have ever heard it outside of ours.
What you are doing is such a stark contrast to so many companies. What is it that turned your lights on? You help facilitate this shift because it is a collaborative effort. I understand but somebody starts a discussion. Were you the one who started the discussion or did you join in?
I am constantly full of these crazy ideas that I come forward with. It is not just liking each other. It is loving each other. That is a big thing. How you and I connected is through Rich Sheridan and he and I were having breakfast one day.
He and I having breakfast one morning and I was sharing with him a story about love. We were talking about the fact that you cannot work at Phenix if you do not love each other. This is not a romantic thing but you got to love each other. The story I was sharing with him is we had two people that did not get along. They did not like each other. They both did pretty good work but I told them, “You cannot be this way. You got to love each other.” They said, “Why? We come to work and not love each other.” “You cannot because you are not going to be there as a member of the family then.” We spent thousands of dollars on a marriage and family therapist to come in and counsel them.You can't work at Phenix Technology if you don't love each other as family. Click To Tweet
For one person, it worked. For the other, it did not and unfortunately, they could not be here anymore. They moved on. When we were introduced as I was telling the story to Rich, he said, “You got to meet Steve Farber.” Here we are. It is truly about love. It was so refreshing to read your books and talk to you. I do not know how many episodes I have listened to. It makes all the difference in the world.
We do not just hang out with each other at break time. I went hiking with somebody in the organization on Friday, the week before that, a bunch of them went and saw Paul McCartney. That gratefulness a lot of time is like, “So-and-so had me over their family.” They are friends inside and outside of work. It does not mean that 35 of us every weekend follow each other around. Some groups have similar interests and do things together. It is a great culture. They support each other beyond the norm. They care about each other. If so-and-so does not come in, I will have twenty people going, “Is so-and-so okay?” “They are fine. I cannot tell you why they are not here but they are good. Everything is good.” That means a lot.
I love the way you use the word family because of what you are doing to follow up on it and live it out because, in a lot of places, the word is used lightly in a lot of places of business. “We are a family.” Are you a family or does it just sound nice or a family-owned business? It sounds warm and toasty but oftentimes, a family-owned business is not a great place to work if you are not part of the literal family. A family-owned business where people come from the same literal family, the way we normally think about it, sounds warm and toasty. Sometimes it is. Sometimes it is not. Sometimes it has got the terrible challenges that come along with it.
This blows my mind. I want to make sure it does not slip by but you said, “We are a family.” What do families do when they are in conflict and having trouble? They bring in a family counselor or therapist. You did that for the family members in your company. That is extraordinary. Is that a common thing or do you that when the need arises as it were?
Thankfully, it has only happened once but we have mediated. I have been involved and most of our leadership team has in one way or even not leadership. Two people might be butting heads that day and somebody will take them both aside and go, “Let’s go talk it out.” If somebody is complaining to me about somebody else, I said, “Let’s bring them together and have a conversation.” We will go to a conference room. I sit back and let the two of them work through their differences, which typically are misunderstandings. “I did not know that is what you meant by that.”
The next thing you know, they are hugging and are back on the floor or in the office and everything is back to normal. Thankfully, because of the culture we have developed over the years, that story I told you about with the therapist was a few years ago, they are pretty comfortable sharing and talking to each other. Those crucial conversations take place but not always. We are like any other family. We have our moments but we work through them.
What is it that sparked the need for this change in you? Let’s talk about you for a minute. t is a collaborative effort and all that but what was it for you that got you thinking, “We have to do this differently?”
It was not just what we had to do differently. It was what I had to do differently. I mentioned the initiation of what is today’s lean journey. As part of that, I went over to Japan on a study mission, to Toyota and a couple of their suppliers.
Were you working at Phenix at the time or is this before?
This was in 2017. I went over there to learn more about lean from the experts. We had learned plenty but what impacted me the most was an evening meeting. We had a keynote for a dinner. I was notoriously running late to things. It was not like I was being lazy but I would always answer that last email or do something different and then wind up being a few minutes late.
Was this a program that you were attending?
It was a study mission. You paid to participate in this, go to all these different events and visit all these different companies, including Toyota. On one of the evenings, there was a gentleman, Mr. Amasawa, who was going to be our keynote. I was under the impression that it started at 6:00 PM and I was going to get there early. I am going to get there at 5:30 PM so I was not late.
I walk in and I am the only person there except Mr. Amasawa. He was working on his presentation and cleaning things up. I said, “I am sorry to interrupt. I will come back.” He goes, “No, come sit down.” Here I get the former CEO of Toyota, Kentucky and former VP of a Lexus. He is been with Toyota his whole life and is an incredible mentor to me. We then started talking. Most executives or leaders would say, “How do I fix my people?”
That was the question you asked him?
Yes. He says, “You do not fix your people. You fix yourself. You are the biggest problem in your organization. It is all about you. Do you have bad people that work for you? You hired them. Do you have people that make mistakes regularly? You trained them. You have got the responsibility for everything. Do you have bad suppliers? You signed off on them. Everything in the organization is yours. You have to take ownership of that. Before you go worried about fixing your people, you got to fix yourself.” It had a tremendous impact on me. I got a twenty-hour flight home because I wound up going down to Thailand to visit one of our other companies and then flying back. For twenty hours, I was thinking, “What do I need to fix?”
What I found is my ego was tremendous, disgustingly so. I had to get over that and realize that I am not that special. I got to start focusing on developing myself. Temperance came to mind and I thought, “I fly off the handle over the silliest things.” I got to work on my temperance and ego. I found Ryan Holiday’s Ego Is the Enemy that turned me into Marcus Aurelius, Seneca and all these Stoics. I spent about a year well-invested in a personal journey and recognized that it all starts with me. I have to become a better person. I still got my moments but once I started to improve who I was, then it started to change who we were as an organization.
It started to impact everybody. We started to realize that things that seemed important previously were not as important. What is important is building that culture of happiness, joy and love. That is how my journey started with that. I am a student of lean, stoicism and yours. I read a lot and focus on developing myself and then sharing the story with those in our family. That was a dynamic shift. It started with me in that regard.
When you embarked on that journey into and beyond your ego, the change in yourself started to result in the change in the organization. I am assuming that a lot of it had to do with the example that you were setting starting to change. The way that you were showing up for and communicating with other people started to change. I imagine there is a part of that that was an ongoing journey. Was there ever a time in the early days of this transformation when you surprised yourself and said, “I did that differently from what I had done before?”Being lean is about respect for people and continuous improvement. Click To Tweet
That happens regularly. There are a lot of things that you look at and think about how you react to something, speak differently and the patience that you have. You notice that regularly. I do not know that there was a key mile marker that I hit and said, “This is different.” It’s because change is slow and you have to be patient. I have noticed it over time. It is easier to look at it now compared to then versus seeing and telling you about that one incident where I went, “I’ve changed.”
That is such an important point because, with instant gratification, a lot of us and I will include myself in some contexts, start to work on something like the change in ourselves or do differently in the way that we approach things. We are looking for that payoff, moment or a big piece of evidence that says, “Look how I have changed in twenty hours.” Instead, to realize that this sounds like a cliché but it is true. It is an ongoing journey. Therefore, we may not notice the evidence of our change until further down the line. For a lot of people, if they do not notice it, they give it up.
It is easy to give up because it is not working. “I have been doing it for 30 days. It is not working.” It is hard to measure. It is different than being on a diet. You can measure how many pounds you lost or your waist size but it is hard to measure culture and say, “We reached this Sigma level of culture.” That does not exist. It is what you have noticed over the long run and when you start looking back, the performance, sales, turnover improved and all those things start to improve but you cannot tell until you have been doing it for a while.
We are at a phase where we are years into this journey so we have got a lot to compare. Plus, we are seeing the impact we are having on others, not just our customers but other businesses. We give tours to thousands of people and see their change more than even our own. We will follow up with them like, “You have come so far.” It seems more natural to us that it happens and a little bit easier to recognize it with others.
Let me put a little punctuation mark on that because here is what it gets me thinking about. You say, “We do not measure culture. We measure the things that we measure that are important to any business like productivity, profitability and turnover.” What you are saying is, “We have been working on the culture and it shows up in those other metrics but we do not measure culture per se. We do not have a culture metric that we are ticking all the boxes?”
Not exactly. There are a few things that we do. I look at the net operating income and all these numbers. If you do not, you are not going to have a business but there are five things I want to look at. I want to know what people score on personal growth, score alignment and satisfaction and happiness. Those are things that we look at to see how we are doing as an organization. Some of that is closely tied to culture but you are right. There is not a check box that I can go like, “We have a wonderful culture, check. We love each other, check.” I cannot go around and go, “Steve, do you love Joe? Check.” It shows the results.
You have also given us a couple of other metrics that any company can look at. One of these is to what degree do your employees want to be at work versus home? That is a measurement. The other one that went by quickly is how interested are other companies in touring your company to see what you are doing there? You give a lot of tours. Why are they there?
It started when people wanted to learn about lean. They wanted to see how we set up workstations and were able to put 4 times or 5 times as many products out the door. We found in the surveys that we sent out afterwards that the biggest impact we were having on people was not how lean we were. I always say we are on a 365-day journey and it is 8:00 AM on day 1 for us in our lean journey. We are not that far advanced. It’s cool and neat things to take back but what they are getting the most out of was the culture. They would say, “Your people are amazing. It is incredible to see how they get along with each other, how they talk and how comfortable they are. How do you do that?”
We started to realize, “Maybe lean is not what it is all about. It is a major component but it is about sharing our culture.” We called them Lean Tours but now we call them the Phenix Experience. “We will show you some of the things that we do well lean-wise.” Lean is about respect for people and continuous improvement. More importantly, we want to teach you about respect for people because if you do not get that right, forget everything else. It is not sustainable.
We started to introduce our culture. When one company comes and they visit, it is a tell-a-friend type of thing like, “You got to go visit this place.” COVID put a little bit of a stunt into that. We could not do tours for 18 or 19 months. We are starting those back-up but it is exciting. It is good for us as students because when people come in there, we are always on our top game. You do not want to be embarrassed and not know something so you are going to put a little more effort into it. We grow with every single one of those experiences.
It reminds me of the same thing that happens at Rich Sheridan and Menlo Innovations. They run tours for people that are interested in what they are doing there. That is a great metric for all of us. Those two things, I have never heard anybody say before that they are looking at that. How much in these days of a hybrid world do people want to be in the office? That is measurement number one. How often are people wanting to tour your place because they want to learn what you are doing because of how great your culture is? We can measure those things. I love that.
The other aspect of this it seems to me is the influence of the experience of working at Phenix. How have you seen this carry over into people’s lives outside of work? I am not crazy about the phrase “work/life” because that implies that there is a difference between work and life. We all know that that is not true. Life is life. Some of it, we spend working. Some of it, we spend at home with our family and friends. Have you seen an effect of, “With my experience at Phenix, it has affected my life positively in the other roles in relationships that I have?”
An experience for one, “I am a better husband and father.” That has come in the last number of years where I thought I was doing my best before but that journey of self-discovery pushed me into that. I have had somebody that works for us come in and said, “I want to say thank you for all that you do here. I have a better relationship with my son because I have learned the importance of communication, awareness and being there.” That is something that we hear regularly. People are taking their experience with our family and sharing it with their families.
When you come on tour, you will have an opportunity to see. We have pictures of all of our family members up on the board and then next to that is we have pictures of their family members. Everyone that comes to work for us, we ask to put up a picture of their loved ones. Originally, I wanted it in my office because I wanted to know that the mistakes I made would affect that small child or those people.
I realized I am not that important. It is not me that has changed in the business, it is them. We put it in our dojo where everyone can see it. The stories that we get regularly of how it has changed people as a whole and what it has done for them in their family, friends or maybe in their academics or whatever it is, are shared over and over again. It is something that is changing the world.
That is, “We leave the world a better place.” That is both the small W and the capital W. I make sure that people reading this develop the professional personal development opportunity that you are giving people every day. The caveat is it has to be something that relates to work. The overall impact of that focus is that it affects every aspect of our lives beyond work as well. It is a beautiful story. I imagine there are going to be people reading this who are already saying to themselves, “I want to come and tour Phenix.” How does that work? How do people do that if they want to?
You can send an email to Lean@PhenixFireHelmets.com. We will set up a tour for you to come in. We do them on Tuesdays. We used to do them on Tuesdays and Thursdays but we are trying to do it one day a week for now until we get back into the rhythm of it. Share your interests there. They are free. We invite you in. It is a three-hour experience. We want you there at 7:00 in the morning. If you cannot be there until 9:00 AM, there is no point in trying.
We want you to see how it works and how people come together at the beginning of the day. We want you to see the daily meeting and how they go to work and do their duties daily. We talk about things like our onboarding process. We have a special onboarding process too. It is important to us that on your first day with the company, there is no, “Let me find you a computer. We got to get your sign-on.” That stuff is done.
On your 1st day, it is as if it is your 20th day. Your system setup, access to everything, technology in place, a brand new chair for you, if you need it, all of that is in place but we also have your training plan done for the first 45 days. You know what you are going to be working on day 23. That is an important part of it. We share that with people and go over some of our technology some of our project management tools, the training system that we have and the LMS system. It is a great experience and something that helps us grow. We love doing it.
I am sure you will have some people reaching out to you. I encourage you guys to do that. You are in the LA, Riverside area?
We are in Riverside. Close to North High School is the best way to put it. We hosted the 2019 Global Leadership Summit. We had people from 22 different countries and over 200 executives come visit us. No matter where you are in the world, our doors are open.
Angel, this has been a pleasure and there is so much to learn. I got so many insights from our conversation. Thank you for that. We will make sure that as many people as possible know your story. We live in a time where it’s not just inspiration but the mechanics of how to go about building a culture where people love each other and love working. It gets back to that now more than ever. It is always been true. We can all use a bit more of that. Do you have any last words of wisdom for our readers?
As leaders, work on yourself. That is the most important thing. Be patient and love each other. Your way of saying it is, “Do what you love in service of people who love what you do,” but you got to love each other. Love your people and yourself. That is an important part of it. Make that your daily devotion to doing that.
Thanks for reading. Until next time. As Angel just said, do what you love in the service of people who love what you do.
- Phenix Technology, Inc
- 2 Second Lean
- The Daily Stoic
- Rich Sheridan – Past Episode
- Joy, Inc.
- Menlo Innovations
- Ego Is the Enemy
About Angel Sanchez
Angel Sanchez, Jr. is the Servant Leader of Phenix Technology, Inc., a public safety equipment manufacturer in Riverside, Ca. He is a passionate student of Lean manufacturing who is committed to the development of a family oriented culture. He is a true believer of people-centric Lean and has helped lead the Phenix organization to exponential growth in sales and profitability while more importantly developing a business culture centered around love.
Building off the organization’s Core Value of “Leave the World a Better Place” they work with various organizations to employ neuro-diverse candidates, they have welcomed thousands of visitors during their weekly Phenix Experience tours and in 2019 hosted the Global Lean Leadership Summit that welcomed top executives from over 22 countries.
They are a widely recognized organization who has received multiple awards for talent development, marketing, small business of the year, and exporting including the 2018 Presidential E-award for excellence in exporting. He has over thirty years of experience leading business efforts from Fortune 50 companies to small family businesses. In addition, he has committed his life to serving his community and served on numerous city, county, and state boards and commissions. In 1993 he founded a non-profit organization that today serves thousands of children and seniors in the Inland Empire and also spent over 25 years in the California Fire Service
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