Posted by Dawn Marie Bailey
In 1974, University of Texas machinist Lee Brumit saw an opportunity to start his own company for precision manufacturing, so he borrowed $1,100 to buy a used machine to make parts out of his garage. That was before the advent of total quality management in the 1980s, the off-shoring of many U.S. manufacturers in the 1990s, and the “telecom tech-wreck” of the early 2000s.
Forty years later, the company he founded, KARLEE remains a privately owned, family business, with his wife as the CEO and their two sons serving in leadership positions. The company now comprises 250,000 square feet of manufacturing in three locations with over 400 team members and multiple other support businesses located in Texas.
“We are thankful for the many growth opportunities that have allowed us to create jobs, give back to our community, and make a positive difference in the lives of others,” said CEO Jo Ann Brumit. “It is an honor to share this exciting celebration with the many team members, customers, suppliers, and community supporters who have made our success possible. We look forward to the next 40 years as we transition into a second-generation company.”
I asked Jo Ann Brumit about the secret to the company’s sustainability and about her take on the significance of U.S. manufacturing.
Significance of the 40th Anniversary
We need to share “success stories about manufacturing thriving in the U.S., which is really important to the overall viability and security of our country,” Brumit said. “What makes this fortieth anniversary so significant is that KARLEE, a midsize U.S. manufacturer, has survived the off-shoring of manufacturing, the great recession of 2008, in addition to the challenges of running a small business. . . . To me, that makes forty years of sustainability significant.”
Brumit gives all of the credit to people: the KARLEE team (of which two team members are celebrating over 30 years in the company and more than 25 have over 20 years). She said leaders role model the company’s values through behaviors by showing love, respect, trust, and integrity.
“It’s really all about the people and wanting to make a difference,” Brumit said, “and I think that’s the sustainability piece. . . . If you want your community of people to be better, then it’s about doing the right thing. If you care about your people, they will care about the customers and that leads to the bottom line; I think that’s the secret to 40 years of sustainability.”
As far as making a difference for the community, KARLEE’s team members take that seriously, including supporting a clinic for the medically under- and uninsured; donating time, talent, and funding to community churches, food banks, blood drives, and other charities; and even adopting families at a local elementary school.
KARLEE’s team members can also donate to a fund for colleagues in need, for example, colleagues who need help with bills during an illness or a plane ticket for the death of an out-of-state family member. Brumit said KARLEE’s team member annual survey consistently reflects a rating of 95% for being a great place to work.
Challenges Faced and Overcome
KARLEE survived the “telecom tech-wreck” in 2002, right after receiving the Malcolm Baldrige National Quality Award in 2000.
During the “’telecom tech-wreck’ . . . everything without any warning just failed,” Brumit said. KARLEE went from a $112 million company to a $18 million company in about a year and a half (read the story).
Soon after the wreck, many U.S. manufacturers began moving their operations off-shore, so KARLEE had to work at defining its niche to compete in a global economy. It also become difficult to find team members with specific manufacturing skills, especially machinists; such manufacturing skills are becoming a lost art, Brumit said.
“The view of manufacturing by the younger generation has not been one of innovation and excitement, thus making it even more difficult to attract the future workforce into this industry,” she said, citing KARLEE’s success with developing the next generation and overall succession planning.
Most Proud Moments
“I’m really most proud of the difference we have made along the way in the lives of the people who have been a part of KARLEE,” she said. “We call them the extended family. . . . You don’t just walk in and it’s a job; you walk in and it’s part of your family, and that makes a difference.”
Brumit recounts a story of a Hispanic team member who couldn’t speak English. KARLEE supported his education and skills development, and now he is a department manager at another company and his children are all English-speaking high school graduates. Several other current and former KARLEE team members have come to the company with basic accounting knowledge; some are now accomplished certified public accountants, with one a chief financial officer for another company and another running her own firm.
“I think you live life with the purpose to make a difference. . . . It’s very rewarding to see people come in and be a part of the company and know that KARLEE wants them to grow to their full potential, even if that means they reach a point where KARLEE can’t provide that next opportunity and they leave us,” she said.
Brumit is also proud of the trust that customers have in the manufacturer, which has led to long-term relationships and referrals: “Customers trust us and know that we’re going to be honest with them. And we’re going to do everything in our power to make them a success.”
Advice for Senior Leaders
“Perseverance is the key,” she said. “You have to trust and have faith in your vision. Be very open, honest, and very appreciative of people. The team needs to feel your passion, energy, and commitment. They will follow your lead.”
Brumit added that seniors leaders “always have to keep the big picture in mind. Sometimes it’s not easy when you’re down in a valley struggling to see the next mountain top. . . . Our big picture is that we always wanted to make a positive difference. We wanted our customers, our team members, our suppliers, and our community to be better because KARLEE existed. . . . So when you’re struggling in the valley, and you know that’s the big picture, it’s easy to stay the course and overcome the obstacles.”
When it comes to recognitions, for which there have been many, Brumit said winning the Baldrige Award was the highlight.
Brumit, who is also a founding member of the Baldrige-based Quality Texas Foundation, said KARLEE started using the Baldrige Criteria in the 1990s because she felt it was a “great platform to build our business on.”
Today, the company still uses the Criteria as its business model to help it stay agile in a changing industry. “For us, it’s the way we do business,” Brumit said, referencing the Criteria for leadership development, voice-of-the-customer processes, key performance indicators, and measurements. She and several of her team members have also served as examiners for Quality Texas, a member of the Alliance for Performance Excellence and partner of the Baldrige Program.
Baldrige was “never just a program for us. . . . It was really what we thought was a great model to run your business. . . . Baldrige allowed us be strategic, to manage by fact, and be process focused.”
She added that Baldrige also provided a community. “You should surround yourself with knowledge, whether it’s gained through relationships, or by study, but be a continuous learner. And I think Baldrige did that for us as well. . . . Being strong here in the Texas area, we had a great network of go-to people when we needed to consult experts about something or we just needed reinforcement.”
Being a Female Manufacturing CEO
Brumit said as a female manufacturing CEO she was quite the novelty in the 1980s and 1990s. She was able to play that to her advantage to get in the door; however, she quickly learned that once in the door she had to prove that the company could perform to expectations.
As a woman in manufacturing, Brumit said it had always been difficult to get support from the financial institutes, especially after the telecom industry collapse in the early 2000s. She recounted one negative experience where she felt a banker didn’t have any trust or confidence in the company because it was woman-owned (a rare thing for a manufacturer).
Brumit said things have changed, and she’s often asked to serve on boards and other entities because of the diversity and experience that she brings to the table.
Where Does KARLEE Go From Here?
At KARLEE, succession planning is taken seriously, and Brumit said she’s blessed to have the next generation of leaders already in place, with mentors and coaches (herself included) in the wings.
“I think . . . some companies don’t have that succession in place,” she said. “They don’t think about their sustainability and what it takes to reach the next mountain top? Where do you want to go?”
Brumit said the company has always done strategic planning, with both long- and short-term plans to keep up with the rapidly changing industry and customer expectations. KARLEE is always looking to see where the markets are moving/changing and where it needs to add capabilities.
Brumit said she is especially excited that U.S. manufacturers are bringing their operations back to the United States (i.e., on-shoring). “The U.S. is regaining its global competitiveness. Manufacturing is important, and it’s coming back, and it does make a difference. . . . Leaders and influencers in America realize that manufacturing is critical for our country. It makes us stronger and secure, creates jobs, and protects our future.”
In honor of its 40th anniversary, KARLEE invites past and present team members, customers, suppliers, and the business community to its Garland, TX, headquarters on Friday, June 13, 2014, to enjoy a day of fun and celebration. For information, contact email@example.com.
In addition, KARLEE will present at the 21st annual Texas Quest for Excellence Conference on June 23–24.