Appendix C2

Open-ended Responses from Center Directors

SOURCE: Information request to Center Directors, June-August 2012.

What strategies and tools do you use to convert touches into clients? How do you see the “new strategy” being funded? What are the major challenges that you see over the next three years?
Find pain points. Do assessments. Use referrals to motivate action. New pools of funding are limited, and we have to invest in new strategies before staff can deliver services to generate fees. So we have to tighten budgets and shift existing funds to invest in new strategies. Reductions in base funding from NIST and state partner. Increased emphasis on reporting metrics to justify/counteract threats to federal and state funding. Slow economic growth limiting the availability of
Mostly face to face discovery meetings where we visit with the CEO and discuss their major business pains.   Transformation Center to an Innovation Practice with the adjustments in staffing and development of a
Documented sales process and experienced sales staff    


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Appendix C2 Open-ended Responses from Center Directors SOURCE: Information request to Center Directors, June-August 2012. What strategies and How do you see the What are the tools do you use to "new strategy" major challenges convert touches into being funded? that you see over clients? the next three years? Find pain points. Do New pools of Reductions in base assessments. Use funding are limited, funding from NIST referrals to motivate and we have to and state partner. action. invest in new Increased emphasis strategies before on reporting staff can deliver metrics to services to generate justify/counteract fees. So we have to threats to federal tighten budgets and and state funding. shift existing funds Slow economic to invest in new growth limiting the strategies. availability of client fees. Mostly face to face Transformation discovery meetings Center to an where we visit with the Innovation Practice CEO and discuss their with the major business pains. adjustments in staffing and development of a balanced portfolio Documented sales process and experienced sales staff 446

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APPENDIX C2 447 We build relationships Maintaining our with C level executives growth plans which and growth oriented require staff to be companies. We follow more productive. a process we refer to as "Value-based relationships". It is a 10 step guide from first contact through project success and measurement open enrollment Shifting focus to continuing education technology offerings deployment and product innovation Sandler sales and Revenue from Too many management system. clients priorities. funding. Sales Logix CRM Finding the right package. Business people to staff the Advisors. Center. Increasing stick to revenue to offset un stable state and federal funding Follow up personal Increased market visits penetration will occur with smaller companies. This will require new sources of funding because smaller companies lack the capital to invest in growing their business. Value selling, high Client fees C level level (CEO, COO) appointments / partnering of overall meetings growth view.

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448 21ST CENTURY MANUFACTURING -Incentive funding -Economic when available - Uncertainty - Referrals to satisfied Maintaining federal clients -Regular commitment to follow-up importance of manufacturing - Changes in State priorities and funding (which matches MEP) - developing collaborations that avoid competition for limited funds Intense Innovation Federal Funding workshops, marketing Cuts State budget seminars, value-added deficits continued sales seminars, Lean slow recession training, energy audits, recovery Innovation Engineering Leadership Institutes. Newsletters, invitation Providing additional developing staff to events, follow up Growth Services skill set to support sales calls growth services Follow up contacts. IE We see increased Evolving to Jumpstarts (new) state and economic complete adoption development of MEP. support as sell as Innovation Practice new fee generating throughout the opportunities. state. seminars focused on we need to develop 1. Adjusting to Critical Business a practice & then NIST - CORE Issues. Solution promote from inside metrics, Selling to get into the where possible & (specifically plants. And then to go hire from outside as getting companies thru the discovery needed. to answer the phase to find the surveys). Sales to "pain" of the company Smm's 3. Adjusting & offer a solution. to mandate of Innovation Engineering as the lead product offering

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APPENDIX C2 449 Build a valued If NIST MEP does Unquestionably it relationship with them not "fund" the is 2:1 cost share. by providing resources opportunity, we will 1:1 cost share is that help them become invest in the reasonable more competitive and opportunity to the help them to grow point we can cash through innovation flow the strategy. Our base strategy is Eroding funding... based on relationships no change in base so "personal" MEP funding for a invitations work best decade and it is for conversion. becoming a threat. Also, heavy investment in staff training will be required to meet evolving client needs. We start at the corner The biggest is office when we can. funding. My staff We want to be a has gone from 23 strategic partner first to 12 in the last 3 and then the years and the State opportunities will could continue to come out way. cut more in the years to come. I need to do a better job in finding new sources of revenue. We do not maintain a Transitioning to sales staff. Companies meet new MEP contact us via field directives. staff and partner referrals.

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450 21ST CENTURY MANUFACTURING Low-cost introductory I believe that MEP Transition to assessments. MEP and other public innovation. Success Stories that funding will be Adapting to address the issue needed to launch reduction in state uncovered during an "new strategy" funding. Creating initial meeting. services until they value proposition become self- and calculation sufficient from ROI for clients. client revenue. The initial "seed capital" for these new services will likely be from federal and state grants, but only until self-sufficiency is reached. This may take 2-4 years, but should be achievable. Federal and state support will then be used to support "new-new" strategies so that we continuously update our service set to meet changing manufacturer needs and evolving technologies, business models and successful methodologies. Some existing funding will be shifted from existing programs, as they have become (or should by now be) self-sustaining.

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APPENDIX C2 451 Person follow-up Maintaining meetings, continuing talented staff with to send them electronic decreasing state newsletters and notices funds. Managing of events. to increasing requirements from MEP for a Cooperative Agreement that is not much money. As state funds are decreased, Centers may need to maintain funding that is not necessarily aligned with the MEP mission such as targeting larger companies that are willing to invest. Counselor sales - Lean will continue Regaining state relate, discover needs, to be a solid base. funding or advocate for solutions Growth or obtaining other (even if the solution innovation with sources of funding. source is not within the enhance the C-level The small and mid MEP), and follow up, conversation. The sized follow up, follow up. vast majority of the manufacturers Stay in touch with the current staff "get it." desperately need client on a regular New hires need to help and would be basis. Provide already be ready to hard pressed to get information that the talk with the C- it without the MEP. client might find level. useful. Invite the client to events. Make business connections for the client. on-site visits Being appropriately staffed, collecting impacts. There seems to be building resistance to the survey, how

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452 21ST CENTURY MANUFACTURING many times we survey and an unwillingness to share. Also, with the D&B difficulties we are turning small businesses away. CEO entry level, Entry to and buy-in listen, address issues by small to mid prohibiting size mfg. company growth/profitability CEOs, resources (primarily $ ) to fund growth activities with smaller clients (less than 100 employees) solution selling ability to adopt NIST MEP services and new requirements that create add ional administrative or operational burden partner organization, references Assessment tool(CR) We have already Potential reduced In the past, we run made the switch to State and Federal about 9.2 proposals for the new strategy. funds. Loss of every 10 CR's. We hired three new Manufacturing in agents to help us the United States. increase our market share. This is a new goal from the NIST metrics. We let go some positions that the skill set didn't match our current or future needs. We then hired the current skill set to help us grow.

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APPENDIX C2 453 Develop relationships, New management conduct discovery at and new field staff companies, draft development, discovery agreements, potential reach consensus, draft restructuring proposals Our Field Staff has Less funding and face-to-face contact the single focus on with clients. Innovation Engineering Personal visits, email MEP has Growing MEP unfortunately not reporting been increasing requirements. The funding to Centers new CORE system despite increased coming on-line funding at the October 1 is national level overkill and nothing more than a system behavior modification project. Too much emphasis on innovation vs. needed core services Detailed , multiple Centers are going to By far the largest conversations have to develop challenge for us addressing all additional funding will be the questions and sources for some of transition to the explaining how and the new initiatives, NGS from the where we can help banks, state EDA traditional service them improve or help funding , offerings. Our them solve a specific partnerships, etc. As client base consist problem. FOLLOW the success grows. of the types of UP. Additional MEP companies that still funding should be require the provided for initial traditional services. efforts. So making that transition and maintaining some balance between the new and old will be a large challenge.

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454 21ST CENTURY MANUFACTURING What are your plans Recommendations And if funding were for the medium and --Assuming that to be increased, long term? How do MEP funding what would your you see your Center levels remain priorities be for changing over three constant, what utilizing additional years and again changes would funding (perhaps further out, in the you recommend also explain what next 5-8 years? be made at the level of additional Federal and state funding would be levels to make required to your use of MEP implement the funding more changes you effective? recommend) Less reliance on Maintain and refine Apply leverage to federal and state balanced scorecard solve the myriad funding. Greater metrics. Apply problems at Dun & reliance on delivering leverage to solve Bradstreet NAICS professional services the myriad reporting system. Get from contractors. problems at Dun & funding directly into AMEP will move up Bradstreet NAICS job creating the hierarchy of reporting system. technology startups. companies to work Expand NIST MEP with top tier oilfield client definitions to services companies. include technology & software clients. Much more focus on Stronger state $200,000 focus on export support and technology grants for collaboration in growth and export business retention services to encourage and expansion the smaller companies to get involved. We have invested Communication We would hire more heavily ($2M) in the from MEP to experienced staff past four years in new Centers and back. with backgrounds in Growth services and Things are directed Business Growth consulting staff. In to Centers as if consultative sales and the coming 1-3 years they are all delivery of services. it will be a focus on alike...they are not. staff development to take advantage of our investment in new

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APPENDIX C2 455 services. Change cost share Technology Adoption to 50/50 and Scouting, and product innovation Focusing more on refine focus. put as Increase market innovation and long much funding out penetration and term engagements the Centers as continue to focus on with clients. Longer possible. Increase top line growth and term, spending more base funding. innovation as a way time on succession to revitalize issues and possibly American creating a family manufacturing. Add business Center. staff in outreach and key delivery areas. Double or triple the base funding amount. THE ROI is extremely high on the program and the funding is a small amount and has been stagnant for a long while. 3 yrs - Transition Predictability of Increased funding from a traditional funding levels at could be used to business model with the Federal and assist smaller Project Management state level would companies that don't generalists assigned make the use of the have the resources to to geographic funds we receive do the improvement territories to a mix of more effective. projects that they specialists with a know they need to focus on company do. growth opportunities in industry clusters. 5-8 yrs - Develop and train staff on a full suite of tools to address both top and

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456 21ST CENTURY MANUFACTURING bottom line growth for companies that is responsive to their needs in an evolving global market. Sorry- you're asking Less time in More innovation, for a strategic plan in surveys and delete deeper assessments a tiny box- this is not NIST requirement as lead in low cost realistic. Basically for Duns activities higher level long term registration- engagement vs. point MAJOR issue for source fixes clients 1. Moving to longer Align MEP with -More funding term engagements other new support for MEP's to with clients as trusted programs such as use in leveraging advisor (in contrast to NNMI and build resources from "point solutions" MEP's into universities/colleges provider) 2. More delivery model to -Reinstitute TIP (or focus on assisting provide access for some variation companies with small-to-mid-sized thereof) growth strategies manufacturers based on innovation 3. Aggressive effort to broaden and diversify funding base. More collaboration elimination of the More innovation with strategy More match requirements measures and more engagement at the that serve more of tools to demonstrate highest level of a hindrance than a change and success to leadership More catalyst for potential clients. innovation leadership success. communities formed Expanding Allow for a We would add Technology predictable NIST addition field staff to Acceleration Services funding Cash Flow. cover our expanded Developing Only receive 1/3 of new service Innovation Services funding within in offerings. Would be the fiscal year looking for a 15%

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APPENDIX C2 457 increase Medium--Have At the Federal Could use additional implemented Level, maintain at funding to implement MEP.ms Innovation least current new growth and Practice throughout support to MEP.ms sustainability areas five MEP.ms Centers and lower the cost- for MEP.ms such as and in use in all share requirement in E3, Export, and MEP.ms projects. to 50%. At the implementation of IE Long term: MEP.ms state level, Practice. is helping proactive continue increasing companies in state support for Mississippi to grow. MTA (host) and MEP.ms, particularly in the emerging innovation areas. we are focused on 1. Get the money you could require helping companies out to the Centers. Centers to increase "transform" working The Centers are the penetration based on with their "C" working with additional money. management in a companies. This Every Center should advisory roll. Setting would allow receive - or be Strategic direction Centers to work eligible to receive and implementing more with extra dollars. this change. companies and way you can gain increase the political support for penetration the program on both NIST/MEP wants. sides of the aisle. As 2. Have Commerce a Center you can say & NIST change the I benefited form the "Match" to 1:1, a additional money. majority of the And as a result the Centers are having MEP system is more difficulty making effective and the match because reaching more they have lost state manufacturers. A funding 3. have a review of all the 3rd party Centers should be evaluation done of done on a per capita Innovation basis - those who are engineering to under funded should determine the ROI. get a larger portion of

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458 21ST CENTURY MANUFACTURING funding. Focus more toward Reduce Cost share Increase Staff to leading companies to 1:1. serve more with Growth manufacturers. Strategies. We will NOTE: As it stands continue to assist now, since cost share companies with is 2:1 and many helping them to states cannot get that reduce operating much cost share, costs...but will focus increasing federal on ways to help them funding would not reduce operating get down to the costs as part of a Centers. Many MEP strategy for growth. Centers cannot "draw" down all their program money now due to the cost share issue. Engineers will have Relax match A total of $150,000 to learn to shorten the requirement so per year would allow sales cycle from funds can be used us to add an engineer contact to contract. to match other which would increase Both because it will grants. In a similar our capacity by 20%. make them more fashion, if MEP In turn, the effort in efficient and because would provide client growth and clients will need greater subsidies resulting impact faster engagement for the training would increase more and delivery. conference and than 20%. other training events it would help stretch Center funds greatly.

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APPENDIX C2 459 We are good in Finding talent for I wish I could work listening to the needs Manufacturing with more companies of out customers so companies is the and with more money the core work we are biggest problem I could add the doing won't change our companies needed staff to get too much. We have have these days the job done. been doing Top line and this will only for 6 years and expect get worse. MEP to implement should lead the Innovation fight to help to Engineering very well improve the image over the next year. of manufacturing Things change very in the US. quickly these days but I have been in manufacturing for 43 years and most of our problems have been around for a long time. I see the basic work we are doing not changing that much because we have been working with the corner office for a long time. Having been a CEO of Manufacturing Companies for years, I know we are doing what they need. It is hard to look out 5 years but as long as we listen to out customers we will continue to be an important part of the growth of Manufacturing.

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460 21ST CENTURY MANUFACTURING Transition to "new Change NIST MEP 50-50 block grant strategy" services and funding process to funding scenario. efforts to serve "new "block grant" clients" as defined by format to reduce NIST MEP. No extensive overhead strategy beyond 5 associated with years. current Cooperative Agreement and free up funds for additional deliverables to mfg clients. Our plans are to I believe that MEP program identify the "legacy" national promotion development (new services that have of the MEP brand service achieved self- is critical to the development). MEP sufficiency and retain improvement of all national branding. the capability to (collective) MEP MEP leadership deliver those services, effectiveness. We development. MEP- but shed off those that need to leverage funded research on are not self-sufficient that we are a manufacturing topics UNLESS they are network that rivals (industry reports). critical and directly any "big" tied to our public consulting firm, but mission. Those that right-sized for the do not have a "public small and mid- mission" fit AND are sized manufacturer. not self-sustaining We need branding financially need to be at a national level. wound-down. This will free up resources for Next Generation services that are very important to our manufacturers. I suspect that our Center will see a complete transformation over the long term. We are currently known for LEAN, TRAINING and, to some extent, SUBSIDIES. In 4-6

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APPENDIX C2 461 years, we will likely be known for INNOVATION, ROI, CONSULTING and VALUE. This is already happening and will continue. Bolster our third Much less Marketing support party resources (we reporting layers for from NIST-MEP are a brokered model) the Centers. Fewer National focused for growth services. administrative staff down to the State and This has already at the Federal level. Center Level. begun. Further out Centers have to Packaged videos we will be more produce the result highlighting the integrated with the but as Federal staff national tools State's entities increases, it seems available to Centers focused on economic additional demands that can be used with development. are placed on the potential funding Centers. Centers partners. Increasing are struggling with Center base awards decreased state would sure be funds and how to appreciated so we manage to add some much increasing and needed administrative changing metrics help to meet the all the while trying current NIST-MEP

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462 21ST CENTURY MANUFACTURING to develop new demands. growth services for companies. Something's got to give! C-level conversations Reduce the cost It dependents on the - a more strategic share burden. structure of the outlook. Building an Modify the money. I don't see a MEP that will help definition of cost use for additional small manufacturers share. State restricted funds. grow and think changes are up to strategically. the Center to effect. Double the size of our Reducing Match Hire additional staff, Center in terms of requirements improve training for revenue. Become and staff, and invest in integral part of the new services. Unsure state and local of the funding economic required, development. Integrate further the resources of the University, faculty and students, with the NWMOC. Our 5 year strategic 1) Eliminate or Use the funds to; 1) plan addresses: 1) reduce significantly Create Client revenue the matching funds programs/initiatives growth ROI and requirement (too that would provide profitability ROI 2) much resource subsidies to the mfg Increasing required to ensure in the 10-100 stakeholder making) 2) Allow employee range. expectations (metrics) the use of non- They are hard pressed by ~3X 3) Attain a MEP funds for to identify resources self-sustaining projects that (people & money) to financial model of support economic address growth our Center. sectors that support opportunities on a manufacturing, e.g. consistent basis. 2)

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APPENDIX C2 463 utilities, Create distribution, programs/initiatives transportation. that would address market penetration. Made in America & NGR are starts. more partners and NIST MEP - Historically NIST third party implement the 1;1 MEP doesn’t relationships match, as the law distribute additional has intended it to funds to the Centers be for the increases they have gotten so this seems unlikely We are working on We would like to Hire more agents to growing the company see several MEP's help with market over the next four around the system share. Help develop years. Looking at help create the a system to help developing different National NIST Inventors grow into revenue streams MEP Strategy. decent size outside of the Federal companies. Increase and State money. the number of Road shows in the state to help educate the manufacturing community on new trends or services. Looking at additional $1,000,000 to do the above. It would help a great deal if we can get the Federal cost share reduced from 2 to 1 to 1 to 1. This would help a lot of MEP Centers.

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464 21ST CENTURY MANUFACTURING Near: Increased Reduce match Additional MEP focus on Food and requirement at the funding would be Dairy, and recreation federal level. used to target the technology sectors Work to increase food and dairy sector with innovation. state funding of with additional staff. Medium: MEP program. Approximately 25% Restructuring team ($125,000) would leadership and staff allow us to add two responsibilities. staff to support this Long: More and critical under-served more sector affiliations/partnershi ps on initiatives addressing key industry sectors, developing/improving state partnerships, sustainable programs with potential to be independent of grant funds. Develop a full Reduce match to 2X current funding. innovation strategy 1X We would do more which includes partner funding Innovation Engineering More emphasis on Reduce staff at Increase the base growth through MEP HQ. Reduce funding of all Centers innovation. More number/frequency to enable the addition engagement at the C of costly Directors of at least 2- 4 more level of companies. meeting. Eliminate FTEs ("feet on the Plan is to respond to MEP Regional street"). Do NOT the most pressing Managers. They increase staff levels needs of Vermont add little to no at MEP HQ any SME’s and the value. Fix the Cost further. priorities of Share problem so Vermont's MEP Centers have stakeholder (State of enough match to VT) despite MEPs draw down their growing, heavy federal funds. handed approach with all Centers (i.e. always asking for more and more from

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APPENDIX C2 465 Centers without providing any increased funding - despite increases provided at the national level by Congress. MEP field staff has shrunk from about 1600 in 2008 to about 1200- 1300 today. MEP HQ has significantly increased its staff. What’s wrong with that picture? The Center has to Streamline the Increases in staff grow in terms of renewal and review levels client fees and staff process. numbers. We should be adding additional staff over the next 3 years and beyond. We will be shifting expertise and skill sets towards energy work and the Next Generation strategies. Also a much tighter relationship with our university partners and a heavier involvement by our board and other partners in the state to promote the MEP expand the MEP.