Episode Description
As the famous quote goes, “There are decades where nothing happens, and there are weeks where decades happen.”
It’s been less than a year since Luke Orszag, President of Firstar Precision, appeared on Empowered Owners, but it’s been an eventful stretch. In this episode, host Chris Fredericks, CEO of Empowered Ventures, reconnects with Luke to discuss Firstar’s first acquisition, the importance of cultivating a culture of accountability, and how data is transforming the way machinists approach their work.
They also talk about Firstar’s strategies for organic growth, the challenges of entering new industries like aerospace and defense, and the role of employee ownership in driving sustainable success.
In this episode, you’ll learn:
- Empowering Employees Through Data: Luke highlights how providing machinists with real-time data on metrics like efficiency and scrap rates helps them take ownership of their work and strive for continuous improvement.
- A Seamless First Acquisition: The integration of Ameritool, a trusted vendor, into Firstar demonstrated how strong relationships and strategic alignment can make acquisitions a smooth and beneficial process.
- The Challenges and Rewards of Growth: Luke shares his experience navigating new industries like aerospace and defense, balancing organic growth with acquisitions, and developing innovative strategies to position the company for long-term success.
Jump into the conversation:
(00:00) Introduction to Luke Orszag
(01:39) Luke’s journey from VP of Finance to President of Firstar Precision
(02:49) Highlights from the past nine months, including Firstar’s first acquisition
(03:38) The seamless integration of Ameritool and lessons learned from the acquisition
(05:39) Luke’s vision for future acquisitions and the ideal profile for Firstar’s growth
(07:40) Addressing the challenge of finding employees and the importance of talent retention
(08:41) How data-driven tools empower employees to take ownership of their work
(11:33) Expanding into different industries through strategic partnerships
(14:48) How Luke’s background in finance shaped his approach to sales and marketing
(15:46) Exploring content marketing strategies for increased visibility
(19:02) Looking ahead to Firstar’s future
How to Listen or Watch
Listen below or wherever you listen to podcasts.
Watch below or @Empowered_Ventures on YouTube.
Read the full transcript below the media links.
Episode Transcript
Chris Fredericks: Welcome to Empowered Owners, the podcast that takes you inside Empowered Ventures. I’m your host, Chris Fredericks. In each episode, I’ll have a discussion with one of our employees to discover and highlight their distinct personalities, perspectives and skills, while also keeping you in the loop with exclusive news, updates on company performance and a glimpse into the future plans of Empowered Ventures. This is an opportunity for me to learn more about our amazing employee owners and an opportunity for you to hear regularly from me and others from within Empowered Ventures. Welcome to another episode of Empowered Owners, the community-building podcast about and for the employee-owners of Empowered Ventures. My name is Chris Fredericks and on today’s episode I’m talking with Luke Orszag, President of Firstar Precision. Luke joined as Vice President of finance shortly after EV acquired Firstar in 2021 and was promoted to president in 2023. This is Luke’s second time on the podcast, and in this episode he provides an update on what’s been going on at Firstar since we last spoke earlier this year.
Chris Fredericks: We cover a lot of ground, including Firstar’s first acquisition and how Luke is thinking about evolving their approach to sales and marketing to more consistently grow revenue or organically. I always enjoy my conversations with Luke. He’s such a positive and energetic leader, and I think that combined with the incredible team of skilled machinists and talented professionals at Firstar, the sky is really the limit for this company and I’m so excited for them. With that, let’s get to my conversation with Luke. Luke, welcome back to Empowered Owners.
Luke Orszag: Thanks Chris.
Chris Fredericks: Appreciate you coming back on. We were just talking off air that it was about nine months ago when you’re on before which, which maybe seems like it was a little longer ago, so a lot’s happened since then. But really excited to check in with you and hear kind of what’s been going on at Firstar lately.
Luke Orszag: Sure, yeah, there’s been a lot that episode we were saying nine months ago, it feels like that was so much longer ago. There’s been a lot going on.
Chris Fredericks: What comes to mind? What are kind of some of the highlights of just big picture, like what’s been going on? What have you guys been working on? What kind of progress has been made? Just what comes to mind?
Luke Orszag: One of the big things I think, going on right now is we’re trying to figure out sales at Firstar. What does that look like? How do we grow, you know, organically and organically with acquisitions. And so one of the things we actually had go on, it was August, middle of August, is we acquired a company, Ameritool. They were a vendor of ours, and we had a great relationship with them. They did some of Firstar’s work really well, and so we had a lot of trust that they knew what they were doing, and so we explored that with them. The seller wanted to retire, and then he had one other employee, his son, who actually came over to Firstar which was great. I mean, so, you know, we got a few machines, a great employee and their customer list. And so that got integrated pretty quickly at Firstar, and it’s been going really well.
Chris Fredericks: That’s really cool. I mean, that’s a big deal to do an acquisition. So for you personally, what was the experience like? Any learnings? Like, just what was that like for you?
Luke Orszag: Yeah, I think it was probably not a great first acquisition because it was so easy. So it. So it kind of gives you a false sense of, oh, that’s going to be easy going forward. They’re local here, so actually bring the machines over was pretty easy to do. The financials weren’t all that complicated to dive into and have to do a lot of diligence. And then just one employee who we already knew. And so it just. The whole experience was a lot easier.
Luke Orszag: So as far as learnings, I’d say it’s almost like you want to unlearn some of that experience. But no, it was great. So I think going forward, I mean, we’re looking for those kind of niche things that fit really well with Firstar, you know, ideally locally, that are easy to integrate. So that’s what we’ll continue to do.
Chris Fredericks: Yeah, I mean, what comes to mind? I mean, you said locally, obviously there’s, you know, being in the Cleveland area, just that’s a hotbed for industrial activity still today. What’s an ideal profile for you of the types of things you’re interested in?
Luke Orszag: Yeah, I think for us, you know, just given the industries that we’re already in, we’re looking, you know, ideally for companies that are in other industries already that we’d like to be in, we don’t do much aerospace work. We do some. So we’d like to do more. We don’t do hardly any defense work, so we’d like to do more. So those are two areas specifically that we’re looking for. You know, if a company has a higher concentration in that type of work. Because the other thing that goes along with that is a lot of certifications you have to have, and it’s a pretty big expense and adding a lot of overhead to add that type of certification without having a compelling reason to. And so, you know, if we’re looking at a company and you’re bringing out a book of business, and ideally we can integrate them within the building here, we would have to have that certification.
Luke Orszag: And so, you know, bringing a company that gives us that ability to do it, I think would be a good entry point into that. So, yeah, that I think industry is important. I think size of the company too. You know, we’re not looking to double the size of Firstar with one acquisition. I mean, you never know. But it’s not what we’re looking for right now. So size, I think, is pretty important. And then just the similar to Firstar in terms of that customer partnership.
Luke Orszag: We’d really like to understand that with a company that, you know, if the business is moving to our facility, you know, and maybe the owner is leaving the business, and maybe there’s a few employees coming over. But knowing that that business is staying with the company because of the relationship they’ve created, that’s important for us too.
Chris Fredericks: That’s exciting. I assume so. It’s probably a profile where a business owner is thinking it’s time to potentially retire at some point in the near future. Is that probably the kind of situation you’re. You’re looking for?
Luke Orszag: Yeah, absolutely. That’s what kind of worked out with Ameritool. I think in the business in that case, too, was small. Small enough that it almost didn’t make sense to, you know, find a broker and all that kind of stuff. It was mostly just relationship. So that would be ideal too, is starting to make those relationships. So even if they’re not ready to sell now, maybe that’s something where they think of us one year, two year, three year, four year, five years from now, you know, whatever it ends up being, let’s start planting those seeds.
Chris Fredericks: Yeah, and I think I’m putting words in your mouth, but I’m guessing key to all this too is you’re wanting the talent that would come. Like, you would love to have the people, too?
Luke Orszag: Absolutely. Absolutely. Yeah. It’s getting harder and harder to find experienced machinists. And so typically, if a business is successful, like what we’re looking to have, you’d have some really good employees, so that’s important, too.
Chris Fredericks: So it’d be an opportunity for those to become employee-owners as part of Empowered Ventures. Yeah, that’s really awesome. What else is coming to mind as far as, like, things you guys have been working on? Interesting insights into the business. What else is going on at Firstar?
Luke Orszag: Yeah, I mean, I think just in general, there’s been a lot of culture work. So one of the things that we’re trying to do is push accountability down to the individual employee. You know, we make them feel like, hey, I have control over my own responsibilities, how I’m doing with my efficiency for machinists and that sort of thing. So important for that is letting them know how they’re doing in terms of data. So we’ve been building a lot of different ways to get at the data in our ERP system and putting it into a format that’s really easy to read for an employee. So right now, we have it set up that any given day, an employee can go up to their supervisor and say, hey, how’s my scrap rate? How’s my efficiency, utilization? All that kind of stuff. And he’d be able to get that information not real time, you know, but as of the previous day and whatever time period he wants to look at. So I think that’s pretty empowering for them because they can see, you know, they can kind of push themselves a little bit if they wanted to, and they see that there’s a need to.
Chris Fredericks: So that’s incredible. I mean, I think most business owners and leaders and businesses dream of having the ability to drill down to levels like that and provide that kind of information. How difficult was that to ultimately? Because I know nothing like that was in place when you first joined Firstar. So how did you do that?
Luke Orszag: Yeah, no, well, I think first it was more of a learning for the company and the employees to say, hey, this isn’t Big Brother, where we’re, you know, hey, we see your efficiencies down. You better pick it up. You know, that we were really cautious about presenting it in that way. We want to present it more as, hey, here’s a tool you can use to improve yourself. And so that was a big part of putting it in place, is just establishing that culture around it, but actually creating the data so Our ERP system job boss, we’ve only had it for a few years and so that’s been a culture change in itself to just shifting to that, but building up, you know, a knowledge base with Power Bi, using Excel and then training some of the employees to be able to use those tools that they can integrate those different data sources into a easy to read report. It’s been, you know, several iterations to get there, but I think it’s going pretty well so far. It seems like based on our efficiency, it seems like it’s working.
Chris Fredericks: So any good examples you could share of specific situations where someone’s been like, wow, this really was helpful.
Luke Orszag: Not to mention any names specifically, but there’s been a few conversations I’ve had with employees where it was not like shocking to them what their efficiency was or their scrap rate was or anything like that, but just the fact that they had ability to get to see that data. And we’ve also tied bonuses to this to kind of help with that. But knowing that they have that data, knowing that they have the ability to go in the next day and see how they ran that same operation, you know, if it was a two day operation, I’ve had pretty good feedback so far from a few people. You know, they’re going to come in and they’re going to, you know, clock in, clock out and do what they’ve always done and that’s fine. But I think making it more of a game for yourself and being able to see that and pushing yourself I think is, you know, helped a lot of people improve themselves.
Chris Fredericks: Yeah. From what I’ve gathered, the folks at Firstar take a lot of pride in their work. And I would think to some degree this would just be interesting way to measure that. Like, wow, look at what I do, look how efficient I am. I think it’s a really cool way to be able to just feel that sense of accomplishment in real numbers. Yeah.
Luke Orszag: And for a good number of employees, it was almost validating to see like, oh yeah, I feel like I’ve been flying around, you know, with my hair on fire and yeah, it looks like it. So yeah.
Chris Fredericks: Yeah, I would think so. That’s awesome. Anything else come to mind in terms of just things you’ve been working on or highlights from the past, let’s say nine months to a year?
Luke Orszag: Sure, yeah. So one particular customer that we’re working on, it’s a defense customer in Portland. So most of our customers are all local here to Cleveland, as many machine shops are. But we’ve had one customer in Portland that we’ve had for many years. And so recently we’ve got in contact with another one who the engineer left our existing customer, went to a new place and sought us out after. And so we’ve been working with them again, trying to get more defense-type work. This particular company, they do a lot of telecommunication equipment for the US Military, and it’s really cool stuff. It’s not stuff that Firstar has typically done.
Luke Orszag: So it’s been challenging. I think the employees have responded to that challenge and it’s, you know, makes it more interesting. And I think the end product, just given the fact that it’s going to help America, the military and the servicemen, I think that adds a layer to the pride in your work for it. So we’ve been working on that customer like anything. We don’t want to just drown ourselves. And so what’s been working out well with them is it’s smaller volumes at first and. But they want us to do a lot more. So right now it’s good.
Luke Orszag: But we could see this big wave coming, so we’re trying to prepare ourselves.
Chris Fredericks: For it, which would be both exciting and probably a little scary, potentially. That’s really awesome. Congrats on that progress.
Luke Orszag: Thanks.
Chris Fredericks: Yeah. What about looking forward? What are you thinking about for the future? What’s there, you know, exciting, you know, on the horizon for you to work on or think about working on for Firstar?
Luke Orszag: Yeah. I think the biggest thing for me, I think, is really exciting is just continuing to dig into this. You know, what does sales look like at Firstar? So as we kind of mentioned, acquisitions being one path, but the harder path, and I think probably the more impactful, is growing an organic sales function. And, you know, Firstar has never done that before. We’ve tried a couple different paths that haven’t been as successful as we were hoping for. So it’s just kind of almost not wiping the slate clean, but starting from scratch each time and seeing what’s got some potential, that’s been pretty exciting for me. I think most machine shops don’t typically do great with marketing from what I’ve gathered and doing some different research. And so I think if we can get really good at that, it kind of gives us a competitive advantage over others.
Chris Fredericks: Yeah. And you being, having more of a finance accounting type background, how has it been for you just to kind of dive in on that customer side?
Luke Orszag: Different. Definitely different. Yeah. Finance is very structured. There’s, you know, debits and credits. Everything balances.
Chris Fredericks: It’s a right answer.
Luke Orszag: There’s always the right answer. But, yeah, that is very different in the sales world. It’s more squishy, I guess, is maybe a word for it. You know, you don’t have that, like, okay, I’m going to do this and then this is going to be the result, or this is the deadline that I need to hit that doesn’t exist. So it’s a continuous effort. And a lot of times, you don’t necessarily see the fruits of that labor. Some of it, you may never see the fruits of that labor because it didn’t end up working out. And so building that muscle to be able to do that is.
Luke Orszag: It’s different, but it’s fun.
Chris Fredericks: I’ve sensed that it’s not been like, oh, gosh, I don’t like doing this kind of a thing.
Luke Orszag: No, yeah, I definitely like, even in finance roles that I’ve had, I’ve always liked roles where I’d come in and there’s almost not a turnaround, but there’s a lot of work that needs to be done because things haven’t been going too well. So I’ve always gravitated to those type of experiences where it’s somewhat unstructured and, you know, it is almost a blank slate that we can build it up and however we want it. And so that’s something I see with the Sales function at Firstar is starting from scratch and building it up.
Chris Fredericks: That’s exciting because, like, I think Firstar is not dissimilar to a lot of companies that get to a certain point, just kind of on word of mouth and reputation and doing great work. And, you know, that can take you a long way as a business, as a has for firstar. But what you’re talking about is how do we take that to the next level, which can require a different way of thinking maybe about how to find and engage new customer opportunities.
Luke Orszag: Yeah, absolutely. I think something we’re going to explore here coming up is more content marketing just to even just get the Firstar name out there. So we’re doing a little bit of a redesign on the website. We’re kind of shifting the website focus a little bit to, you know, here’s everything we can do. Here’s our capability. We got mills and lathes and that sort of thing to almost. Here’s the type of parts that we feel like we’re pretty good at. And so we’re adding a menu option on the website to say, here’s some applications, you know, geared parts, reaction bars, angle heads, you know, that type of stuff.
Luke Orszag: So when people, you know, and we post some content about and people say, hey, we have a part that kind of looks like that, and then they have a need for it and all that kind of stuff. So that’s something we’re going to try next.
Chris Fredericks: That’s really smart. I mean, if I think about it, and this probably applies to any industry, if I’m in purchasing or I’m a buyer at some company that needs some metal components for whatever I. My company is making, I’m not necessarily going to go and Google wire EDM or whatever. The mechanism of that is, the capability that Firstar has to make something. I’m going to Google, you know, whatever kind of component it is that I want to buy, the actual piece I want to buy. So that’s what you’re talking about, right? To kind of really focus the marketing on what that buyer would have in mind, that component or part that they want to buy from someone.
Luke Orszag: Yeah, I mean, ultimately we’re selling machining services with these different capabilities. But I don’t think that’s necessarily, like you say, how a buyer is looking for it. They’re looking to buy an angle head. They’re looking to buy a gear. And so if that’s the search term that they’re using, you know, precision machining gears, we’d want Firstar to come up on the top of the list or, you know, near the top of the list or some way that they could see that’s a capability of ours. And then, you know, the sales process goes from there.
Chris Fredericks: So that makes so much sense when you put it that way. That’s exciting. I think we’ve covered a lot. What about you personally? Like, anything you. Are you coaching? Like, what are you enjoying right now on the personal front?
Luke Orszag: So our football team. So I took on the head coaching duties this year. I had been an assistant coach for a couple years, and then that head coach had dropped down a couple grades to be with his younger son. And so I stepped into that role somewhat begrudgingly because it is, it’s. It’s some effort, you know, it’s not just showing up to practice and, okay, corralling the kids and, you know, that sort of thing. So there’s definitely a lot more planning, practice planning, you know, planning plays and all that kind of stuff, game management. So it’s a totally new element. But the season went really well.
Luke Orszag: We made it to the semifinals, and then I honestly, I think the kid just got tired because we got blown out by the end of the first quarter. It was pretty much over. But yeah, so we had a really successful year. So that’s for my son. So he was doing football, so he’s now going to be into his baseball off season program that I’m, I’m helping him with. And then my daughter, she’s been doing gymnastics. Well, she was doing cheering for the football team, which is great. So it was both of them, you know, on the field the same time.
Luke Orszag: That was fun. And so now she’s doing gymnastics and she actually has her first meets coming up here. So that’s a new experience in itself because I’ve been around boys my whole life, right. So just going to gymnastics meet, it’s exciting.
Chris Fredericks: That’s really cool. Wow, Luke, you’ve got a really fun and interesting life going on right now. Thank you. Thanks for coming back on Empowered Owners. We covered a lot of really interesting tidbits in a pretty quick amount of time, so look forward to having you back on again sometime in the future.
Luke Orszag: Appreciate it, Chris, Thanks.
Chris Fredericks: I hope you enjoyed that conversation with Luke Orszag. Empowered Owners is a podcast by and for the employee-owners of Empowered Ventures. Special thanks to ShareYourGenius for producing. You can find show notes and transcripts on our website at empowered.ventures. Full video episodes are on YouTube @Empowered_Ventures. If you have a question for us about EV, our companies or employee ownership, contact us at [email protected]. You can also text or leave a voicemail at 317-643-2383.