Volume 1, Issue 4 - Spring 2017

Manufacturing the Monarch way

By Roy Cook. 

When I was first asked to contribute to this issue of Prairie Manufacturer Magazine, Ronda and Derek suggested that sharing some thoughts on how Monarch Industries has sustained and grown over its long history would be of interest to other manufacturers. I hope that proves to be true.

Let me begin with some background. Monarch is a privately-owned Canadian company, with its head office and main manufacturing facility located in Winnipeg. Our foundry operation is headquartered an hour southwest, in Winkler; we also have a joint venture in China, as well as a distribution centre in Kansas City. We manufacture hydraulic cylinders and iron castings, primarily for original equipment manufacturers (OEMs), and the majority of our sales are within North America.

Monarch was founded in 1935 by John Klassen, as a family-owned and -operated business, and remained under family control for roughly the first 55 years of its history. In the early 90s, the company transitioned over to investor and senior management ownership. I joined at the latter stages of this transition — a long time ago, in other words — and am therefore most familiar with our company’s ‘recent history.’

So, what are the key factors driving our longevity and — from my admittedly-biased point of view — Monarch’s ongoing success? There are hundreds of decisions and elements that could be pointed to as being influential, or even imperative, but for the sake of brevity, I will wrap them under two umbrella headings.

The first is living and working your values.

While I can’t comment on the actions and strategies of the first 55 years, there is no question the culture and product lines that were built over this period laid a strong foundation for future growth. Well-engineered products and a strong commitment to quality and customer service, all coupled with a quintessential ‘Canadian Prairie work ethic’ and approach to business, were then, and still are today, an invaluable legacy and enduring strength for our company. Many years ago, we set the following standing priorities for Monarch: Quality, service, and safety (and, more recently, environment). And we express and summarize our values into the following, simple statement: We strive always to do what’s right and to do what we say we’ll do.

We strongly believe that sustaining these strengths and core values is critical to our future; and we dedicate a great deal of attention and resources accordingly — not only on a day-to-day basis, but also as part of our longer-term planning efforts. It isn’t enough to do the same as we did yesterday. Throughout every facet of our organization, we work hard to continually improve, adapt, and respond to changing demands. Doing so effectively means staying in close touch with customers, employees, and regulatory agencies, and strategically evolving our business to stay ahead of the changes.

I’m not suggesting these priorities or values fit for every person or every business. These are ours and they work for us. They guide our decisions and — perhaps most importantly — our actions on a daily basis. Our shared commitment to them is, frankly, what makes the difference. Staying true to ourselves is not always an easy task, but it is at the heart of our success.

The second overarching theme is a compound of strategic planning and follow-through.

Strategic planning has been and continues to be one of our cornerstone business management processes. Every 12-18 months, we formally take a step back from our business and undertake an objective review of the overall economic environment, our markets, our competitive positioning, and our current strategic opportunities and challenges.

Sustaining objectivity throughout this stage is particularly crucial, as it provides facts and balanced input for the subsequent steps. This review then feeds into a reassessment of current strategies and potential new strategic initiatives. At this stage, active engagement in the actual planning is essential to overcoming resistance to change and the emergence of innovative solutions. Informally, we take the same approach to opportunities and challenges that arise on a daily basis, pausing before proceeding to make sure we understand the full implications of the issue and to consider all possible solutions.

For us, and I suspect for most businesses, the strategic planning process (whether the formal or the daily informal process) usually results in small modifications to responses or the overall longer-term plan. But, occasionally it will lead to significant change. Some examples from our history would be: Our decision to shift the emphasis of our pump business toward the retail market channel in the late 1990s; the significant commitment of resources to expand our hydraulic cylinder product lines to include welded cylinders in the early 2000s; the sale of the pump product line in 2007 (which, at the time, represented almost a third of our business); the major investment in 2009 (in the trough of The Great Recession) in a multi-million-dollar paint line to address anticipated future customer standards; and, more recently, further significant investment in the development of larger bore, highly engineered welded cylinders and the formation of a joint venture cylinder manufacturing operation in China.

Our team is what ties these two elements together and makes the magic. Monarch’s staff (then and now) is comprised of talented, dedicated, and effective people, who ‘walk the talk’ when it comes to our values, execute our plans effectively, and ‘make a difference.’

I won’t say these changes were obvious or easy (they weren’t), or that success was guaranteed in each case (it wasn’t), and that the execution of these decisions didn’t take a lot of hard work by our people (it definitely did), but all of these major initiatives have paid off for us and we are a very different company today than we were 20 years ago because of them.

Today, we are proud to be a major supplier of cylinders and castings to OEMs and to the industry leaders within our targeted markets. We are weathering the current cyclical downturn in the global agricultural equipment market, which is one of our major market segments, but are continuing to gain market share in all of our targeted markets. We also remain strongly committed to sustaining our core strengths and values, and to executing our longer-term strategic initiatives.

Perseverance is another Canadian Prairie character trait that is a proud part of our heritage.

Roy Cook is the president and chief executive officer of Monarch Industries. He has previously served as both the Manitoba and national chair of Canadian Manufacturers & Exporters.