After 12 years of no growth, Micronetics Inc. sought outside help to reenergize management, staff, and its corporate mission
By James Buchanan
If you feel like your company is sleepwalking its way to its next earnings report, and you’re looking for a way to turn up the volume, Dave Robbins, president and CEO of Micronetics Inc., recommends you get some outside help.
In particular, Robbins sings the praises of Gazelles leadership training, which he credits as playing a significant role in reinvigorating Micronetics.
The Hudson, N.H., based company is primarily a developer and manufacturer of microwave and radio frequency components and integrated subassemblies used in a variety of defense, aerospace and commercial applications.
“This is very important to us,” he says. “The training is very good and is meant for high-growth companies, so it fits well with us.”
According to Gazelles website, the program is an executive education and coaching program for leaders of mid-size forms with 30 to 2,000 employees. The program focuses on providing actionable and practical tools and support for managing growth, as well as access to what are described as “thought leaders” and executive coaches.
“It’s done by a third party, which means it’s professionally done, and you also get a little better buy-in from the employees that are participating in it, because they see the training as having more legitimacy,” says Robbins. “It was about the same time that we started this program that our company began to develop and mature.”
Though Robbins credits Gazelles with a large part of his company’s transition, there was a combination of factors at play.
“We were essentially reborn in 2000,” he says. “In the late 1970s and early 1980s, we were close to a $3 million company and stayed there for the next 12 years or so. There were essentially four things that helped us turn it around.”
The first of these is the training, which he says sparked the thinking to manage the company “by the numbers, and then not try to be all things to all people. Instead, we began to focus on the core elements of engineering and marketing.”
Then the company brought in an Enterprise Resource Planning (ERP) system in order to make managing the company by the numbers a reality.
The company also started to outsource more of its manufacturing processes, and then used acquisitions to bring technologies into the company and to expand its capabilities.
As an example of this latter point, the company announced on June 5th of this year that it had acquired MICA Microwave, Inc., which also reflects the company’s focus on engineering and marketing.
“We are excited about the growth opportunities at MICA, especially in the IED jamming, point-to-point radio, and space marketplaces,” says Robbins. “MICA’s high performance mixers and ferrites strengthen Micronetics’ ability to provide its customers with complete microwave subsystems and system solutions.
“MICA’s existing relationships with customers such as General Dynamics, Lockheed Martin, BAE, and Boeing will provide access to sales channels to expand Micronetics existing business within the commercial and defense marketplace,” he explains.
This focus on marketing and engineering is a prime driver for a number of the initiatives the company undertakes.
On the marketing side, Robbins says the keys are communication, openness and providing high quality products.
“Being great at marketing also means we are visiting our customers a lot and talking at high levels to find a way [to ensure] we are inline with something that is going to have value for them, where we are meaningful to them” he says. “You don’t get to that point unless you are close to the customer, finding out what their key development goals are.
“In a general sense, we think of ourselves as a junior partner to our customers, as they are generally a lot bigger than us and they don’t like to take risks,” Robbins says. “They want to know that the company that is supplying them with these components has the capabilities and capacity to serve their very demanding needs, which we can.”
Robbins adds that Micronetics is very open with its customers with regard to its profit margins on a particular job, and that the company will share its intellectual property with its customers.
“It’s almost as if we are viewed as an extension of that company, and because of our openness, technical expertise, and capabilities, we have built trust with our customers,” he says. “And we work very hard to maintain that — we do what we say we are going to do and are willing to take on more of the risk.”
Part of being able to follow through with its customers is making sure its own supply chain is in order. To that end, the company seeks to strategically source some of its supplies in Asia, where cost savings can be had without sacrificing on quality of efficiency.
“We are also doing more local sourcing on the east coast, particularly in New Hampshire and Massachusetts,” says Robbins. “The advantage to local sourcing is that we have the ability to increase capacity much more quickly.”
Having local suppliers also helps with most of the company’s metrics on control, quality, and on-time delivery, he adds.
On the engineering side of the equation, Robbins says there are a few areas where the company has managed to improve itself.
“Our philosophy behind being great on engineering is to not be just a ‘build a prototype and develop’ company, but to focus on manufacturing consistency and looking for ways that the process can be more automated,” he says. “Our products are designed well and designed for reproductability, which means they can be manufactured quickly and uniformly, and we have the equipment to do that.”
The processes developed by the company have been ISO 9001:2000 certified.
Robbins also says that it is important not to let the company get bogged down by being too focused.
“The high growth area of our business is in the custom made products we produce for sure,” he says. “But for us to say that we make the best product means we also have to excel at a more standard production model where we are making non-custom made products better, quicker, and smarter than anyone else.
“One area where other manufacturers have failed is in non-local sourcing, and that they stopped making non-custom made stuff,” Robbins says. “They focused instead only on the high growth products — custom made — to the exclusion of other products, and they lost the heart of their business. This is a lesson we have learned from our observations of why some businesses in our market have failed, and this is what our examinations have shown.”
Robbins also says the company is focused on contracting out more manufacturing. Currently the company contracts out approximately 50 percent, but would like to be up around 80 percent. The exceptions to that are products with a low rate of initial production, or those for the military that involve classified technologies.
Asked about how he would like to see the company grow, Robbins says both organically and through acquisitions.
Robbins says the company is missing some key technologies that he feels it needs in order to be as much of an enabler for its customers as he hopes it to be. He also believes there are markets where with the right resources Micronetics could be more competitive in.
“Well timed and thought out acquisitions are a great way to bring talent into the company, because when the right company is found, we both can grow much more quickly combined than individually,” he says.
When it comes to integrating these companies, Robbins says Micronetics generally gains more by leaving them in place than trying to force them all to relocate.
“The problem with trying to consolidate is that you may lose the people you are trying to bring into your company; you may lose the thing you thought you had,” he says.
“Though, I suppose that on the HR and accounting side, you might get some better efficiencies by bringing these functions into a central corporate location, but these may be small savings and would be far down on our list. By leaving it alone we feel we get the best chance of leveraging off these acquisitions,” he says.