Emteq: A culture of innovation

By: Christine McMahon: This is a story about Emteq, an American dream-come-true built on a culture of innovation. Founded in 1996, Emteq is a worldwide leader in the production and supply of innovative products for the aviation industry. Like a number of other great companies, Emteq began in its founder’s basement. Jerry Jendusa conceived of the company in 1996, and in his basement he focused on sales and marketing by day, and built product by night. Today, Emteq has grown to 475 employees and is located in an 82,000-square-foot state-of-the-art facility in New Berlin with six additional offices located in the United States, Canada, Brazil and Switzerland. As with many first-time entrepreneurs, Jendusa founded the company using a personal line of credit, obtained initial capital from personal savings and family/friends, and a U.S. Small Business Administration (SBA) loan that came with restrictions, such as the business needing to relocate from his basement to a Waukesha business complex. Emteq delivered its first product in October, 1996. “Every problem is an unforeseen opportunity” is Jendusa’s credo. When discussing Emteq’s growth, Jendusa candidly describes how at strategic points he had to re-evaluate his leadership style. The first serious assessment took place when Emteq hit $10 million in sales and Jendusa realized that he “couldn’t do it all.” To grow the business, he had to objectively evaluate his strength areas in order to understand where he should (and could) hand off responsibilities to others. This shift of responsibility also contributed to the first major cultural shift. Emteq survived 9/11. During this difficult time when airlines were not flying and were reducing staff, Emteq personnel looked for other opportunities. Team members made cold calls and asked for referrals. They also hired people who understood and lived innovation. When Emteq reached $20 million in sales, Jendusa admitted that “the business ceased to be fun.” Some intensive soul searching led to Jendusa’s awareness that the business was outgrowing his autocratic leadership style. It became obvious, once again, that he needed to transfer more responsibilities to others, which resulted in reorganizing the leadership team, putting leaders in their respective areas of strength and adding new members to the team. Candid conversations with various employees also identified the need for a dedicated organizational development director (outside of HR) who would be responsible for defining, growing, developing and nurturing human potential; facilitating Emteq’s culture with newly acquired businesses; and developing business tools that tie individual goals and actions into business unit goals which, in turn, drive enterprise target accomplishment. The second major cultural shift occurred when Paul Schulls was hired. The next significant cultural threshold was the $50 million mark in Emteq’s 11th year. The business had now become a middle-market company. As the business model continued to evolve, autonomous and self-directed work teams demanded leaders, not managers, who were customer-centric, selfless and more focused on delighting the customer than advancing their careers. This demanded a complete change of management mindset. “Decentralizing allowed the business to become agile, flexible, resourceful and responsive. People are the difference-makers,” says Jendusa. “The goal is for everyone to work toward their fullest potential, which begins with the business plan. At Emteq everybody understands what the strategic business goals are and how they contribute…everyone is responsible for driving revenue.” “Our culture, structure and business tools allow us to rapidly change directions to delight our customers. People’s roles, plans and processes can switch quickly. Agility is a core strength,” adds Schulls, director of organizational development. “To accomplish this, decisions are made by those closest to the customer.” Emteq is built on a culture of listening to each other and to the customer. Schulls says, “Our leaders are more concerned with helping others succeed than advancing themselves; this holds true for our customers as well. We created a culture of listening: What are the customer’s pain points? What does the customer want? What do they want their experience with us to be? We have an extremely talented sales team that takes it upon themselves to mentor our brightest engineers and program managers to engage with customers directly. This has really fueled our growth because we can exponentially increase our ability to service our customers as well as find new opportunities.” The Great Recession didn’t play favorites, and Emteq, like most companies, was negatively impacted. But Jendusa’s philosophy that “there is opportunity in every problem” directed the team to consider new revenue sources, and Emteq is tracking to hit $90 million in sales this year. Emteq’s Business and Regional Aircraft Group director Mark Ciepluch indicates that Emteq’s culture of innovation is driven by hiring the right people, communicating clear direction and following through with a process of accountability. “At Emteq we move at a fast pace. Right communication is critical to our success. When a problem arises, the root cause is almost always because someone didn’t understand the expectations or outcomes,” Ciepluch says. “Since we all work for the customer, embracing open and honest communication is critical and that starts with me. In this culture, it’s all about the customer. If we do that right, we all benefit. That’s a hard philosophy to buy into, but it’s a very special situation when it works.” “Our success, in part, is the result of hiring for values, which means that we may have to teach the technical piece but it creates the right culture for success,” Schulls says. From its business model to its customer relationships, the Emteq company leaders do not create innovation. They live and breathe it.