American Dream Achieved
IBA, as an approximately fifty-year old business brokerage firm serving the entrepreneurial community of the Pacific Northwest, has been uniquely positioned since before the American Bicentennial celebration of 1976 to witness and hear the stories of thousands of people who have lived the American dream through entrepreneurship creating beloved businesses by employees, customers, and communities while finding personal fulfillment and financial prosperity through execution of their ideas, hard work, perseverance, and ability. In an effort to share these stories heard throughout the years by our team of business brokers, who are commonly regarded as the “best listeners” in the M&A industry, IBA has retained highly regarded writer, Nesha Ruther, to tell their stories. It is our goal to share one story a month. It is our hope that you will find the stories as inspirational and motivational as they are to us and the buyers who bought the businesses in IBA facilitated transactions in Washington, Oregon, and Alaska.
The Story of Mike Brown (Manufacturing Services)
By Nesha Ruther
Bud Brown was introduced to electronics when the U.S. Airforce trained him to become a radar technician. After his discharge in the early 1950s, Bud worked odd jobs and continued his education. Within a few years he landed a job as an electronics technician. For the next 20 years he worked for a handful of companies in the San Francisco Bay Area and continuously took on additional responsibilities and promotions, eventually becoming manager of operations.
Bud may not have realized it at the time, but he was beginning a legacy his family would continue. Bud’s oldest son Mike got into the electronics business by accident. At 20 years old, he was managing a fast-food service restaurant that went out of business. Suddenly unemployed, he began seeking new opportunities. Within a couple weeks, he received two offers, one from another food service company, and one for an entry-level position in the stock room of an electronics business. The latter offered higher pay, and so despite being new territory, Mike took the job.
Mike was able to move through the materials management side of the business. Over the next 25 years, he worked at a variety of different technology companies, rising in the ranks. His last position was as the worldwide operations manager responsible for order processing and fulfillment.
In the mid 1970s, Bud was recruited by a company in Pasco, Washington. Eventually, that company relocated to the west side of the state. Bud had fallen in love with the Tri-Cities community and decided to stay. In 1979, when there was little in the way of electronics in the Tri-Cities, Bud founded Manufacturing Services, Inc., an electronics manufacturing company.
Bud had developed several helpful contacts during his time in California and his first large production job came from those contacts. At the same time, Bud met Carl and John Cadwell: Carl was Bud’s dentist and during a routine visit Bud learned that Carl’s brother John (a neurologist in Seattle) had an idea for a product. Upon learning about Bud’s expertise, Carl and John contracted with Manufacturing Services to assist in the product development and launch of Caldwell’s first product. The relationship grew over the years and Cadwell Industries, Inc. remains today one of Manufacturing Services’ largest customers.
Manufacturing Services grew rapidly in the 1980s and well into the 1990s adding several new customers along the way, but then technology started to change. This new technology required a reengineering of the production processes and a transition from labor intensive functions to one heavily dependent upon robotic equipment. “Bud was old school,” Mike says. “He learned about electronics in the 1950s and 1960s and could not see the value in this technology shift. Consequently, he was a little slow in getting on board.” Manufacturing Services was beginning to lose opportunities as the old technology was slowly becoming obsolete.
Mike and Bud had several conversations over the years about the possibility of Mike joining the company. Finally, in 1998 the time was right: Bud was starting to think about retirement and Mike was ready for a new challenge and a lifestyle change. Together they worked out a plan whereby Mike would make an initial investment, join the company, and work towards buying Bud out of his shares. For the next eight years Bud and Mike worked side by side. They began to make the necessary investments in equipment, employee training and recruitment, and reengineering of virtually all company processes. They started to win back opportunities previously lost and the company started to grow again.
In 2006, Bud retired. “Dad left at 76 years old, and trust me, he wasn’t ready to go. I like to say he went out kicking and screaming, but that’s not accurate. We did have a sit down one Saturday afternoon and agreed to terms and a schedule for the transition.” It was hard for Bud to walk away from the business he had built. More than a year after retiring, he would still show up at the office every day. Eventually, he became confident in the continued growth and success of the company. Mike would run Manufacturing Services, Inc. for the next 11 years.
Together, Bud and Mike had rescued the company from obsolescence and transformed it back into a healthy and growing entity. But there was much more to be done. Mike’s education (Bachelor’s in Organizational Behavior from University of San Francisco), countless leadership seminars, and years of on-the-job experiences had culminated in a very focused management style that was reliant upon employee participation. Daily production meetings, weekly staff meetings, and quarterly “all-hands” meetings were used to communicate priorities and progress while reinforcing next steps and vision.
Manufacturing Services’ focus was People, Processes, and Technology. Their mission was to grow the company by being “quality driven and customer focused.” During Mike’s 11 years as President there was significant change and growth.
The company invested in new technology and equipment nearly every year, resulting in additional capacity, capability, and productivity. Manufacturing Services’ processes were completely redesigned, documented, and certified by the International Standards Organization. “I ended up recruiting a lady who was trained as an ISO 9001 auditor,” Mike says. “She knew it inside and out. Within a couple of years, we got our ISO certification.” This changed the game for Manufacturing Services, Inc. The first question new potential clients would ask was, “Are you ISO certified?” Now, they were finally able to answer, “Yes!”
Mike worked to engage and motivate his employees to facilitate these changes by rewarding them with Bonus Programs, Service Awards, 401K participation, and more frequent opportunities for time away.
Critical to Mike’s leadership style was his focus on his people. While people skills may seem unnecessary in a technology-based industry, nothing could be further from the truth. “The people that worked in our company knew they were our most valuable resource,” Mike says. “They heard that from me from day one and they were very loyal because of it. If I needed them to put in extra time, they would put in extra time, and we rewarded them for that.” Mike made an effort to show his employees they were appreciated, by giving annual bonuses and closing the company between Christmas and New Year’s.
The creation and implementation of advanced technology required expensive machinery. Obtaining the cash to reinvest in equipment proved a challenge both Mike and Bud faced in their time running the business. Thankfully, Mike was able to capitalize on the connections his father made when running the company; “The guy that started our local bank came knocking on our door early on and was raising money. My dad became a shareholder of [the bank].” That particular connection proved helpful when Mike needed a loan to invest in equipment.
When asked if Mike inherited Bud’s networking abilities, Mike demurrers. “I’m not sure I have the gift of gab that he has. I’ve always been pretty focused on the task at hand. I’m not much for small talk, but my father did it to his credit, and it paid off.”
Another challenge Manufacturing Services faced was guaranteeing product quality. “There are literally millions and millions of ways for something to go wrong,” Mike says. Ensuring product quality was crucial to the success of the business, and after Bud retired, the first thing Mike did was pursue certification from the International Standards Organization (ISO).
Mike developed a system of checks and balances to ensure each product was exactly as it was designed. At each major step of the production process, Mike installed inspectors to ensure nothing had gone wrong and the product would function according to the client’s needs. “Early on, it was all visual inspection and very tedious work, but important,” he says. “You might have an assembly that’s five square inches with a thousand components on it, 3,000-4,000 solder joints, and each of those solder joints is an opportunity for failure.”
Over time, technology improved to the point where a computer could compare a successfully built product with one still in production and issue an alert if there were any differences between the two. Even then, however, the operator still had to check each difference to ensure there weren’t defects.
When not focusing on internal challenges, Mike spent much of his time attending to MSI customers. Understanding their needs, special requirements, issues, and demand forecasts were all necessary to help drive internal change and investments. This focus on Mike’s part paid off over time; sales from existing customers combined with the addition of of new customers contributed to overall sales growth of over 240%.
Because company revenue was customer-driven, Mike always stayed aware of opportunities to provide a higher quality experience. One such strategy was setting up quarterly reviews with customers to ensure their satisfaction. “We would sit down and I’d say, ‘This is what we’ve done for you, these are the issues we’ve had, this is what we’re doing about them.’”
He also prioritized high levels of communication between him and his staff by establishing 4 o’clock production meetings to touch base on the work done that day. “I would take the information I had gotten in the meeting, update all of the schedules, and send them out so they would have them on their desk when they came in the next morning. Each day was a juggling of priorities based on the commitments we’ve made to the customer,” Mike says.
Mike’s natural ability to focus on a task through to its completion, when paired with his trusty Excel spreadsheet, allowed him to keep track of the many moving parts of an already complicated business.
Despite the focus Mike gave to his daily responsibilities, from day one, he was looking towards retirement. He planned to run the company for ten years and estimated a selling price he would need to reach in order to comfortably retire. “That was my vision from the start,” he says, “That’s what drove me.” Through investing in equipment, scaling the staff, and adding the testing capability to ensure product quality, Mike not only met his goals but exceeded them.
While Mike loved running Manufacturing Services, his primary goal was always to make enough money to retire comfortably after ten years. Every business decision he made was in service of that long-term goal. “Once you have that vision, the steps fall into place. They may change, the game plan probably changed 20 times over the course of 10 years, but the next step would generally become clear. You just have to take it one step at a time.”
In order to set up the infrastructure to reach your goals, whatever they may be, Mike prescribes three things. “You need people, you need equipment, and you need sound processes. The processes are the road map of the entire production process, the technology is dictated to you based on the business you’re in, and the people are the backbone. If they are not on board with your vision, then you don’t have a chance.”
Mike’s background in organizational behavior deeply forms his belief in people. “People need to feel supported, and they need you to be clear about expectations. Communication is a huge part of the endeavor; people need to know where the business is and where it is trying to go.”
Mike also refers to the three management styles: autocratic, participative, and laissez-faire. He recommends assessing each situation and determining which style best suits the needs of that particular moment. “You might have an employee who’s misbehaving, in those cases you have to put your foot down and be authoritarian. I’ve had employees who I have 199% confidence in their ability to manage a group, and so other than monitoring the output of that group I leave them alone.”
At heart, however, Mike is a participative style manager. What has allowed him to succeed both in his work for other companies and in running his own, is assembling highly skilled teams that don’t require large levels of oversight. “I didn’t tell people what to do. I would sit in, pick my sergeants and generals, and have frequent staff meetings.”
In addition to communication, without consistent processes the company cannot succeed. “I’ve been in situations where there was no defined process,” Mike says. “It becomes a hostile environment where each group is isolated from the rest of the company.” In one particular instance at a previous employer, production and order processing had grown to resent one another due to a lack of communication and solid processes between the two departments. Upon the recommendation of an employee, Mike solved this issue by having each group try their hand at someone else’s position. They called it the Walk In My Shoes Program, and it allowed employees to gain a better understanding and respect for the work their colleagues do.
Another aspect of Mike’s strength as a manager is his determination to get to the root of a problem. In another instance at a previous company, it came to Mike’s attention that production had 300 orders that had not been fulfilled. Mike was horrified, but when he told his team, they said that had always been the way things were and there was nothing to be done about it.
“I went to the two engineers that were in charge of [production utilities] and said, ‘Can you give me a list of the orders that are in our queues?’ Took us about three days to create the report, share it, and begin processing the orders. By the time I left that company nearly 7 years later, we were the most respected group in the company.”
After 11 years of running Manufacturing Services, Mike was ready for his long-awaited retirement. He began searching for a business broker, and it was through that search that he found Gregory Kovsky and IBA. “[Gregory] came over and we spent an afternoon together and he agreed to take us on. He’s very good at what he does.” Within seven months, Gregory had found a buyer and Mike sold the business.
Once retired, Mike and his wife moved from Washington to Henderson, Nevada, but he still stays in contact with many of his former employees.
For Mike, the American Dream is a comfortable and happy retirement. “I wanted to be able to retire, I wanted to pay for my day-to-day expenses, I wanted to travel, and do all the things I was limited in doing while I was working,” he says.
Since retiring, Mike has gone on three major motorcycle trips with his wife, Donna, and a couple friends. He has gone to Nashville, Tennessee, British Columbia, and Kitty Hawk, North Carolina. Mike and Donna also completed a 26-day cruise starting in Italy, with several stops in the Mediterranean, and an Atlantic crossing to Fort Lauderdale.
He also enjoys spending time with his six grandchildren and teaching himself how to golf. After a successful career, Manufacturing Services, Inc. allowed Mike to achieve his American Dream of rest and relaxation, all before the age of 76.
Nesha Ruther
Nesha Ruther is a writer and editor from Takoma Park, Maryland. She received her BA in English Creative Writing from the University of Wisconsin Madison, where she received a full tuition scholarship through the First Wave program based on academic and creative merits. She was a 2016 Young Arts winner in spoken word, a 2016 winner of the DC Commission of the Arts Larry Neal Writing Award, a 2017 winner of the Mochila Review Writing Award, which was judged by Nikki Giovanni, a 2020 winner of the University of Wisconsin’s Eudora Welty Fiction Thesis Award, and a 2022 Tin House Winter Workshop Participant. She has been commissioned to write and perform for the National Education Association, and has had work published in NarrativeNortheast, Angles Literary Magazine, Beltway Quarterly and more. She currently lives in Cincinnati Ohio and is the Lead Manuscript Developer at Holon Publishing and Collective Press.