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Industrial Scientific President Justin McElhattan Goes Live on Business as Usual

Business as Usual

We are excited to welcome Justin McElhattan, President of Industrial Scientific, back to Business as Usual.

Justin will provide us with an update on how the company has navigated the COVID-19 Pandemic and how it has helped its customers worldwide create safer work environments.

Industrial Scientific is a global leader in designing, manufacturing, selling and servicing gas monitoring instruments, systems and related products. With continuous improvements in engineering and R&D, lean manufacturing operations and expanded service capabilities, Industrial Scientific is widely known for providing rugged, dependable products that excel in monitoring hazardous gases in the most demanding work environments in the world.

Transcription:

So good afternoon, everyone. This is Audrey Reese. I'm president and CEO, the Pittsburgh Technology Council. And we have a great guest today like we do each and every day. And in a moment, I'm more formally introduced. Justin McElhatton. But before we get started, I want to thank everyone, not only for joining us, but just to sort of, you know, comply with the rules of the road here, which include we've muted your microphones. And we have a chat session section. And that is only for asking questions of our guests, not selling your wares not self promoting anything. It's really just to focus on our guests, joined here by Jonathan kersting. Each and every day, Vice President of Marketing and media at the tech Council, and meeting all of our storytelling focuses. So he's going to be keeping an eye on the chat and facilitate ways for us to get engaged with our speaker today. We have big shout out to Huntington bank after year, they've been our partners and doing so many things in terms of experimentation. And I guess after a year, it's probably not experimentation. It's somehow we've created something that is moved us into what's the next year ahead and how we're going to keep people connected. It's very exciting. And Huntington bank has been just a tremendous partner with us. And then there's 40 by 80, you see that on the screen there left the longitude and latitude of Pittsburgh, but more important, that's a wholly owned subsidiary of the Pittsburgh tech Council. And that's where we focus on work that's tied to apprenticeships, you're going to hear more about that coming up, as well as helping entrepreneurs. That's our charitable arm of the tech Council. So without any further ado, I want to introduce Justin McElhatton. He's the president of industrial scientific, which is a company that's wholly owned by fortive. But he's going to talk more about that himself. And Justin, actually, what we just found out was that Justin was on the show one year ago today, totally coincidental. But we wanted to make sure that we were checking in with how things were going. And to give sort of an annual update. Or maybe it's an annual State of the Union of industrial scientific. But I'm thrilled that Justin's here he is someone who's deep friend to the tech community, and he is someone who is has built along with his family and incredible company and incredible story, and just someone that the region needs to shine the light on. So I want to welcome Justin, thank you for joining us today. And we cannot believe that it is actually a year ago, which is quite funny. So how are you first, let's say welcome, Justin, and how are you?

I'm doing better than I deserve Audrey. And I want to say thanks to the tech Council for what you've done this last year, I think these businesses usual series, what a great touch point. And really adapt adaptability of business. That's been something that we've all talked about. And I this is so much value that you've brought, you know, adapted and brought value. So I'm very grateful, a lot of gratitude for that. And I'm sure somebody else does as well. So thank you.

Well, thank you. So So how are you doing before we usually start? I don't know if you remember, but this is what we do. How is Justin? How are you holding up one year after we saw you did, like everybody, it's

it's been a tough year, I think we've been you know, we as a business, and a family I think we're very blessed with with through the year given given the circumstances, it's why I say better than I deserve. We we've seen you know, when you when you look at our business, and I know that every company is impacted in different ways, by this but as a leader of a business, you're suddenly the stakes, you know, this last year, the stakes have gotten much higher. And you're concerned about things much lower on the hierarchy of needs, the you know, the day to day safety and health of your people in a very material, right. And, you know, I just I'm so grateful to the you know, to the people in our business who've been able to keep our customers up and operational. And really to do it in a safe way we've we've had 12 sites around the world open and operational through, you know, with with with you know, without missing a beat with lots of adjustment and lots of work. And you know, controls work, all of the the precautions we take of staying six feet away and we've built a lot of barriers here in our building out and Robinson and our other sites around the world and people wear masks and you know we've we've not had any workplace spread COVID through the year so so very, very proud of how our people have reacted and just made a number of you know adaptations over the last year or so

but safety is your business

yeah yeah we've we talked about if you know the we have a vision in industrial scientific we say we're dedicating our career to eliminating death from the job by 2050 that when you look at that problem statement there's three or 400,000 people killed in accidents each year and there's about 2 million people who died due to occupational illnesses and we are posting that as our problem statement that we own and we are working to do things that create inflection points in fatality rates and illness rates and other things that contribute to people not coming home or you know alive or their whole selves at the end of the workday and you know one of the big changes we've seen this last year i think i talked about this a year ago but i feel like for years industrial scientific has tried to to wave the banner and say this is a critical component of your work right that keeping your people safe and healthy is a strategically important thing and i think too many times companies have viewed this as just something that we have to do we have to comply and in a very rapid way over the last year we've seen businesses realize out of necessity the strategic importance of keeping people safe and healthy to the point that when you think about the esg world and sustainability that the public you know public companies are beginning to view this what a great tailwind to get to shake this loose so that we get the visibility around the importance of those aspects of how companies work and how they view their people and the health of their folks so that's been that's been one positive this year that that kind of you know we've been shouting this for so long i think we're finally getting you know that that's been something that's carried the voice very very very broadly so

so tell everyone remind everyone hear about industrial scientific

yeah industrial scientific we have about 1300 employees or in about 20 countries around the world we're headquartered in pittsburgh we were founded here and grew out of a mining mining used to be 100% of our business it's now about four or 5% but we really do two main things with the businesses we industrial scientific as a brand the products we offer are about gas detection personal monitoring sensing live monitoring of people in critical operations if somebody has a heart attack and goes down how do we enable notification if they're alone worker applications like that we preserve human life in some of the most dangerous workplaces in the world and so that's what industrial scientific does we knew that wasn't gonna be enough to chase our vision down and so we've made a number of acquisitions one of the bigger acquisitions we made in 2019 was a company based out of toronto called intellects intellect is an environmental health safety and quality enterprise software company it's about 500 people delivering ehs q enterprise sas solutions and so applications of that range from greenhouse gas emissions reporting automation through to incident management at some of the largest companies in the world if there's a health or safety safety incident risk assessments those those kind of things and supplier quality so it gives us the opportunity to touch so to speak the boardroom and i think a large part of what we are going to do it's kind of a two prong approach that keeping people safe at work is really really critical but also setting expectations for supply chains what businesses will tolerate in their supply chains from human trafficking slavery conflict minerals and those kinds of things through to scheduling those are all contributing factors to safe healthy clean efficient workplaces and so that's kind of the body of work that intellects does and so those are the two main centers of gravity within industrial scientific

so given that this whole year has just sort of exploded in terms of innovation around safety or people thinking about you know safety whether it's contactless you know design or anything in terms of alerts do you see have you seen any new verticals

yeah i we've seen verticals going more to small medium business you know we tend to get into likes that part of the business to serve a lot of you know big enterprise customers we've seen a we've seen places like municipal smaller municipal He's suddenly needing to deal with this, you know, with with, with things that they hadn't thought about before and managing, you know, exposure trackers. So we very quickly brought out an exposure tracker and tracing system that the customers are using. And, you know, scheduling we we do work with a lot of big airlines on in terms of if somebody is exposed and working that backwards, and then forward scheduling. So, you know, those pains that big companies, I think we're in a high state of readiness for, you know, suddenly the little town that, you know, that you might live in is dealing with that with with a staff of 15 people. And so that was, that was one impact we saw. The other was a desire for more automation, just how do we suddenly we're doing a lot more? And how do we do that in a more automated way? I we've always talked about digitization as an enabler for automation. And I think that pathway has really accelerated this this year as well.

And said, Do you think ahead that there'll be some application across some new verticals for you? Are you saying ladder? Yeah, we're

seeing that already. Yeah. So I think people care about people, people, both in industrial, scientific and intellects, people care about where their people are. The accountability around around badges is something that's, you know, that we're hearing a lot of a lot of interest in, and seeing it and connecting it up to a broader I think we're having conversations at a level of the business that we hadn't before. And this gets up to the broad ESG kind of sustainability messaging that companies are wanting to, you know, they're wanting, they're getting pressed by their shareholders. Um, you're seeing this in private equity, we're going after the public companies and doing terms buying public companies and doing a PE turn because they're going to introduce sustainability and things like that. So they they're, they're hungry for capabilities to execute at a world class level, maybe it's the best way to say it.

So three years ago, industrial scientific was essentially acquired by fortive. You want to talk about that and remind people

yeah, so we had industrial scientific was a private family owned business. We company was private family took it Arras public family took it private in 1999. And for 18 years, industrial scientific operated as a as a as a family owned business, which was wonderful. And as we came into 2016 and 2017, we really began to think hard about what what the true potential of this business was. And were we the best owners, I loved being an owner, right. Our family this was this is still part of who we are right. And it's in it's hard to, but but we realized that we probably weren't the best owners to help the business reach its full potential. We had a number of conversations went through a process looking at strategic acquires and ended up with a with a company called fortive, which is a spinoff of Danaher, if you've heard of Danaher. And one of the things that we really loved about what Ford have brought to the table was that it was two things that Ford have brought to industrial scientific, it was Ford of business systems, which is a very disciplined operating system around growth, innovation in lean. And secondly was m&a capital. This is a company that's grown prime, you know, grown aggressively through acquisitions. Over the years, in these three years, we've made three acquisitions and been able to deploy a lot of capital, not only to the acquisitions, but to to growth accelerators, which is part of the FBS process of experimentation. And so, you know, it's it's been a it's been a great marriage fortive continues to transform its portfolio, but it's a it's a, you know, fortune 500 business. And it's been a completely different lens for me personally, to learn, you know, to learn it at scale, what, what life is like in this and it's been it's been a very good thing for industrial scientific,

so, and going through an acquisition with that kind of support.

Yeah. Yeah, there's, there's great support, you know, from from Ford of the business. It's an interesting model. I always tell people, I still have all the same direct reports I did when I was CEO of industrial scientific. But there's, you know, in Florida is about 20,000 employees. Across all the businesses, they own fluke and Tektronix accrued gordion companies like that, but but about 100 of them have Ford have business cards. So it's a very light corporate group. But the people that are a corporate are supporting with strategy corporate development and m&a support and things like that so it's nice to be able to plug into that that power source on some of these some of these deals so

so what um let's think about this you may you know you're in a beautiful facility that's out headed nobody's here there so that's what i want to talk about

yeah

nobody's there what's your plan what's your plan

i shouldn't say nobody's here we have about we typically have 400 to 500 people at one life way which is our facility along the parkway and we're down to about 110 right now and the people that are here are for the most part producing goods or you know in manufacturing or doing testing or design you know where they need to be in the building we you know we can get into the whole return to work thing you have some thoughts around that but we went through one phase last year where we were going to start doing a phased in approach the people that wanted to come back to work could it 1/10 levels we were doing 10% waiting a month or so and then trying it again and we got through two phases of that before we before we started so you know we're looking at this year and you know trying to decide how we want to do it we have some guideposts right that certainly we're supporting everybody to get vaccines with pto will pay for it you know we'll make sure you're you know there's no barriers and encouragement we've stopped short of mandating it but we're strongly encouraging people to get the vaccine but i think that flexibility i mean this is i'm not gonna bring anything profound here right flexibility is here to stay i think that our brains have been so rewired over the last year that work is never going to look like you know like it did before and and that's going to that's creating all kinds of interesting dynamics i don't know if you've read that recent report from microsoft just put out a really compelling document about are we ready for hybrid work but i think it's a couple of anchors that we're really hooking onto one is we want to be able to offer flexible workplace right that is a you know we're we're likely not to mandate unless you need to be here so that's one we want to we want to embrace that flexibility to this is a this is a there's two more thoughts i have the second one we are now it like so many other businesses optimized around remote meetings and and the meetings that we're going to have in the next whatever x number of months where we have some people in person and some people remote we're gonna be like this stinks this is awful and and so i think figuring out how what the world looks like when you have teams who like to meet who need to be together from a creativity standpoint creation but then have remote people i think those are going to be optimized around teams right it's each team is going to have to work through their own cycle and what days they want to be in and we want to support that but it's going to i think it's gonna take a while to get the rhythm where we're not feeling frustrated with somebody on the screen over here but you and i are in person we have three people here and it's just so much better when you're optimized around one kind of meeting modality and i think the other just to conclude the other thing that's really on my mind if you rewind to the last year and kind of mid march through mid may the world acted largely it didn't feel like it at the time but it acted largely in unison in terms of response companies responded states responded countries responded in a very similar way emerging over the last year we felt pain and how people view emerging from that and i think that pain is likely to get even worse in the next year where we're going to have massive disparity between how people think about when families are comfortable coming out of doing things you know i just and paying a lot of attention to that on where people are emotionally and psychologically as companies try to feel their way or company particularly tries to feel its way back to dealing with a lot of people who as i said before had their brains we were in our in our terrified in some instances and are not afraid it's just this massive distribution of standard deviation on that so

well listen you know leadership is changed i mean so your role as a leader is change you now you now have to if you want to run an incredible company you have to pay attention to things that you might not had to pay attention to before. And it's almost like mass customization. You know, when we moved in, in the 90s, we moved into this whole model where you could do mass production that was customized. I think that's where we're moving to. and leadership, the skills that leaders have, are definitely not the same skills that were required a year ago. And, you know, my hat's off to you with trying to wrestle with these complexities. Because it's, you're, you're across so many different countries. I was just reflecting with Brian Kennedy, that we were in China, visiting you, I think it was in Shanghai, right, like, seven, eight years ago, like you're at your facility there. Right. And I'm thinking not only do you have to care about, you know, safety in your people in leadership, what about the supply chain disruption? What have you seen over this past year? Because that's something that, you know, boards are wrestling with, as well. What does it mean, and I don't want to use the word reshoring. But it certainly, you know, the Suez Canal the other day, yeah, you know, it's

a massive we've, we do our production of our products in two primary sites, Pittsburgh, and then Shanghai. And over the last two years, we've been executing a strategy. That is really the position shank, we call it China for China, right? It is, it's a it's a big market, Asia is a big market for us, China's a big market for us. And so we've really repurposed the China facility to serve to serve China. And tariffs were impactful on that. And so, you know, we have we have actually, and watch as soon as I say this will have some big part outage, but but we have had, I think, given some of the problems, I've heard talking to peers in other manufacturing companies, we have not had the magnitude of issues. I'm, that's so this has not been kind of a it's not been at a at a an existential level of criticality, we've been able to keep our site's operational, our tier distributor tier, supplier, component suppliers have been able to keep us in business and do well. And, you know, we've done things in terms of getting multiple multiple vendors on our suppliers on component. So work has paid off a bit, but

might not have hit you, like it's hit so many other companies,

I talked to a lot of companies that it's you know, they're feeling it very sharply and shortages and demand its way out of the realm of, you know, predictability. We were not impact. So I think that's been a big factor in that is that you get you get these wild swings in demand that up 300% or down 90%. You know, we've not we've not had that kind of we've been in a much tighter band. So it's great.

So what about companies who want to get involved in working with industrial, they think they have a solution, they think they have a way to help you with your innovation? Is there a pathway? Yeah, I

think, I mean, there's a couple of there's a couple of pathways, I think one is, you know, we have we have a partner. You know, we've we do partnerships with companies, both intellects and industrial scientific, will partner with companies on AI net and our connected offering. You know, so those are those are, those partner ecosystems are one of the primary way that we that we deliver value, you know, this all starts with the customer pain, right? Every bit of innovation. I love the Eric Reese quote, that all starts with somebody saying it's way too hard to do this. Right. And that's the, that's the, the foundation of innovation. And so, you know, when we have that, and when we find somebody that can help us, you know, partner with us to do that we, you know, we embraces opportunities. So, it has to have that fundamental, you know, solving pain for a customer piece.

Right, right. Right. Do you have an innovation center that sort of rests in your organization?

We do. Yeah, so we we have, we have our r&d teams. And one of the things that we do with with for to business system, one of the one of the big areas of focus that has been on the last couple of years is around innovation. It's a growth accelerator process. And if you look kind of, you know, the dream, developed deliver kind of the three big phases of innovation. There's a very we actually have a team in it right now. around digital permanent, but they're, it's a very accelerated three months. Four person team, that is they are immersed, we pull them out of the business, we throw them in there and they are trained for two weeks and then they're doing vo they're doing upwards of 15 voc calls for a number of weeks. It's It's incredibly disciplined and intensive around around that, and, you know, you kill half the ideas that come out of it. But it's been really an interesting way to way to, you know, have a repeatable innovation process. And so that's been a, that's been something we've been, you know, building building capability around.

So just just sort of on a personal slash professional level, how have you over this last year? think you've changed as a leader? And, you know, and what has what, what's in store for you ahead? Because we talked about working remotely, we talked about flexibility. We talked about sustainability, we talked about verticals. A lot in a year? Well,

yeah, I, I'll say maybe a couple of things about how I've changed a number one, I am, I am, I have a level of gratitude for our people and what they do everyday and how they do it. That is, it's very different, it's deeper and different, it maybe is the simplest way to say it, if a lot of people that are doing you know, that are that are supporting critical work, or customers doing sitting at their kitchen tables, getting their kids through, you know, what a what an incredibly difficult way to, to, you know, just to do that. So, you know, so it's, it's gratitude. I also, I think I'm a bit more aware, I don't know if anybody in my company would say so. But I hope I'm a bit more aware about the need to focus on the critical few, that, you know, we were able to absorb a level of complexity at a baseline. And I think when human beings are under stress, and we're all under stress, we will have kids who are not have, you know, getting graduate, whatever, whatever it is, or your parents were, you know, whatever it is we're in, we're under stress is in different ways. Everybody. And I think helping people clarify what what we need to be working on, and keeping things very simple from that is really, really important. And I think that will be ever more important moving forward.

And so, how do you take care of yourself?

I love my job, right? So that's, I, I am very fortunate to have a job that I that I, that I love, and I love the people I work with. I you know, exercise when I can I I am intentional about getting enough activity in my life and, and those kinds of things. And I have a I have a wonderful wife who keeps me in check and keeps me focused on what, what, you know what to get stressed about what not to get stressed about. So yeah, it's Yeah, see, do you ever we all do our best, right?

And so you go to the, into the office every day?

I do. I worked remotely, I worked remotely. For the first time I was going into the office, maybe one day a week. And you know, more kind of like, I want to be present with our team here. And I think from a very pragmatic standpoint, I feel that I am, I feel that I'm more positively impactful in the office than I am out of the office. And we have team members here. We are following controls and doing things and I think that's good. So I've made that decision to to work from work. And and that's been and that's and that's been a good thing.

Do you think there's anything else that I might have overlooked in terms of the conversation here?

No, we touched on a lot, I think. Yeah, I think this is going to be I I'm incredibly hopeful. It's been it's been great to see the acceleration of the rollouts of vaccines and things like that. And I you know, as we kind of had a really interesting inflection point where I'm not sure people know how to feel they're getting a lot of conflicting sentiments in the news. And I think if we kind of rise up and look, you know, look at the steps that we're taking as a society, I think they're, I think they're in, you know, in the right direction from public health perspective. I think all of us, you know, any chance I get to talk about grace and empathy towards each other, I think the world needs a heavy dose of that. And, you know, we're trying to exert that I've resurrected I've had this long standing war against using the word resources. When we talk about people I have no idea who came up with this absurd notion. They're going to call people resources. I heard at a business school we were talking about, we got to put some resources. What do you talk now?

It's like dirt. Right? It's like

Yeah, yeah, it's it's it's dehumanizing. It's It's not how people it's not how we talk because people and so you know, that's been something that I fought that battle. You know, years ago in industrial scientific, I think we've largely held that I've picked it up. And I've been more important than things like that. So, but empathy towards others and understanding I think is really, really I feel

the same way about the word users. I'm like you, what's it? Yes, sir, is that you know, there are people, right. Well, Justin, thank you so much for joining us one year later and getting a catch up with you. But if you want to reach out to Justin, I think he's on LinkedIn. There's there's a website, all about their company. There's ways he's active in the community, and has just been a great ambassador for Pittsburgh, and beyond. So I can't thank you enough, Justin, for joining us.

Thank you, Andrew. Thanks for all you're doing you and the team great technology doing great work.

Thank you. And then I'm gonna lean over to Jonathan and say What's up?

Well, Audrey, I'm going to sleep early tonight. I need extra rest. And you should too, because tomorrow is our big one year celebration of business. As usual. We have Suzy Shipley from Huntington bank, our partner with business as usual since day one. I'm invited to interview you. So you got to study up and all your answers for tomorrow. But even better yet, join the call. Tomorrow we're giving away six $100 gift is to the big burrito group, restaurants. Eaton Park primanti these are sheets the winners will get to pick which restaurants they want. That's fun. All these restaurants have been on business as usual in the past. We're trying to local community Plus we're using giftya local platform. And in order to make that happen, it's gonna be so much

fun. That's great. Okay, well, we'll see everyone here tomorrow. Thank you, Justin McElhatton, mentor, your team and industrial scientific have a great thing.

Did you sleep

Transcribed by https://otter.ai