Jay Ward has high hopes for Minnesota Rubber

MINNEAPOLIS—It didn't take long to sell Jay Ward on joining Minnesota Rubber & Plastics.

The executive was named CEO of Quadion L.L.C., which does business as Minnesota Rubber & Plastics, in February after spending the last 18 years with Donaldson Co. Inc., a $2.5 billion filter company. He was most recently in charge of its Engine Products division that accounts for $1.5 billion in sales.

It's safe to say Ward is scaling down a bit at his new company.

"It's a blast," Ward said. "We have about 1,300 employees so you can actually get to know almost everybody. You can be extremely agile in making decisions without bureaucracy."

The move to Minnesota Rubber & Plastics allows Ward to also be closer to home. He and his wife have lived in Minnesota for the last 10 years with their 10 kids—eight of whom are still local. He got connected to the company from doing previous business with Norwest Equity Partners, Minnesota's private equity owner.

He was impressed by several things, primarily the firm's strong technology. Minnesota Rubber & Plastics produces rubber and plastics components with sealing being one of its core products. The firm operates seven global sites—three in the U.S. plus its headquarters and one in Mexico, France and China. About 60 percent of its business stems from rubber-related compounds, including a small silicone presence, with 20 percent from plastics and another 20 percent from integrated components, or bonding rubber/plastics together or with metal.

It also seemed to align with what he was looking for, to find a company that wanted to emphasize customer focus. And many of those customer requirements are the same as those of his previous experiences.

"They want lower cost with better performance," Ward said. "To bring them what they need, you have to bring them some innovation. A lot of times it's doing things differently than it's historically been done. They're willing to pay to make a problem go away.

"We get paid because we have customers. Being customer-focused is really the heart of my message since I've showed up."

Customer alignment

Ward said one of his strengths is getting large organizations to align around a priority. With Donaldson, the executive was selling to eight different businesses and running complex sales organizations with innovation and technology.

The key to success, he said, was to focus on what's happening with a customer—bring them value trends, then bring them solutions that solve their problems. And one strength he has now at Minnesota is it being a smaller firm, he can react faster to those needs.

"You have to be close to the details," Ward said. "Be close to the details because then you can pivot. I can find out really what's happening, change course and get involved whether it's a customer or operational issue. It's a lot easier to do that in a relatively small company, you can get out there, touch things and interact with people. You need to be close with both customers and employees, understand what they're thinking, what they're trying to do and where they struggle."

At Minnesota Rubber & Plastics, Ward said he sees the chance to change the focus from internal improvements, infrastructure and cost structure improvements. In 2015, the firm closed a facility in South Dakota and relocated production to Mexico. It also realigned its focus into four core market segments—transportation and automotive, medical, fluid delivery and fluid power.

While internal improvements certainly won't cease under Ward, there will be a conscious effort to build off the foundation and chase external growth.

"The opportunity I saw was this chance to now be able to pivot and become externally focused," Ward said. "How do we work with customers and grow the company again? Part of that is getting out in front of customers and bring them the value."

He credits the firm's board of directors for empowering him to do so.

"The board is great," Ward said. "I got to know them all before taking on the role and they were very candid. It just felt very comfortable and it's an extremely supportive investor. They're long-term oriented, the biggest questions they have for me is 'What can they do to help me?' They want to grow the company and make it stronger."

Growth areas

Overall, Ward said the firm has about 30 major products launching within the next year, all geared toward new customer requirements. While he is open to bolt-on acquisitions, he also only wants companies that help further its strategic interests or accelerate its organic growth goals.

"But I tell everyone it's not our No. 1 priority," Ward said of acquisitions. "We have a lot of organic business already coming our way and we need to do that well. We have to execute on the business we have in hand and continue that growth. That's our primary focus, and secondly we'll look to what we can add on."

Transportation and automotive still is a big market for Minnesota Rubber & Plastics, and Ward doesn't see that changing anytime soon. The firm also has a solid presence in fluid delivery, products for the water and beverage industry like dispense machines. Fluid power is tied to oil and gas and hydraulics.

However, Ward said the medical area is the fastest growing, and the firm recently has made significant investments to expand its clean room space by a couple thousand square feet, Ward said.

"It's a massive market," he said. "We have a very good customer base, pretty broad with a lot of the big names. What we have been able to offer is the mid-level volumes within those companies. The differentiator for us, though, is responsiveness. We can respond quickly to customers and help them through the development cycles, whether it's material formulation or design. They come with outlines and our design teams are quickly able to make recommendations."

Minnesota Rubber & Plastics also is experiencing some significant growth in China, primarily on the transportation side. He stressed that the manufacturing in China is designed to service the local markets.

Local sourcing accounts for about 30 percent of Minnesota's growth, the other two-thirds is coming from Chinese companies enhancing their technology.

"A lot of western companies have set up shop in China," Ward said. "Their China divisions want to localize, and we are a very good choice. We're competitive, have good technology and in some cases they can't even buy those components locally. Where an automotive company may have been buying from Germany, they're able to buy it from us."

But if the firm is going to capitalize on these opportunities, it needs a strong foundation. While Ward was impressed with Minnesota Rubber's technology, he was more impressed that it came with a solid base of talented PhDs and chemists.

"Employees are what make things work," he said. "That's really the value of the company. As a leader, if I can give them the tools, direction and vision, and cheer-lead them on the right things and hold them accountable on the others, we can do great things."