Front & Center: Pearson CEO focuses on being indispensable in manufacturing
Sun., March 26, 2017
Picture all the products in your refrigerator, pantry and bathroom.
If any were manufactured by Procter & Gamble, Coca-Cola, Unilever or MillerCoors, there’s a good chance West Plains-based Pearson Packaging Systems played a significant role in getting those items to you.
Pearson builds machinery that assembles cardboard boxes, loads products into them, then seals the boxes for shipment, lickety-split.
“Our machines can box 1,000 products per minute,” says Michael Senske, Pearson’s president and CEO.
“Cynics might say our equipment replaces people, which is true. But those jobs are very repetitive and prone to injuries. It’s not very good work,” he said.
Twenty years ago, Senske was employed at Microsoft, with no intention of leaving.
During a recent interview, he discussed the company his grandfather, R.A. “Lefty” Pearson, started in his garage, and his own unlikely return home to run the business.
S-R: Where did you grow up?
Senske: I was born and raised in Spokane, and attended Ferris High School.
S-R: What were your interests?
Senske: Anything outdoors – skiing, biking, tennis. And technology.
S-R: What was your first job?
Senske: I started working at Spokane Alpine Haus when I was 16 – mostly menial tasks.
S-R: Did you envision a particular career?
Senske: I was interested in the law. My father ran a civil engineering firm, and I found the contractual side of business interesting.
S-R: Where did you attend college?
Senske: The University of Washington. I started out in economics, and ended up in psychology.
S-R: Then what?
Senske: I went to work for Microsoft immediately upon graduation.
S-R: With a psychology degree?
Senske: They were looking for people with attitudes and aptitude that fit the company. I started out in ’94 as a product support engineer in their consumer division before moving into different jobs. I really enjoyed the culture, and had no intention of ever leaving Microsoft.
S-R: What happened?
Senske: The second generation of Pearson owners – my mom and two uncles – were weighing whether to sell the business, and asked me if I was interested in taking over. After discussing it with my wife, we decided to move back to Spokane.
S-R: Why hadn’t you envisioned working in the family business?
Senske: Manufacturing isn’t talked about much in high school or college. I knew very little about Pearson, and always assumed my brother and I would go out into the world and do our own things. I’d never even set foot in the plant before being approached when I was 28, so my perception of manufacturing was that it was a dirty, grimy profession. I was very skeptical until I visited the company for the first time in 1997.
S-R: What was your initial impression?
Senske: Once I met the employees, saw the products they were manufacturing and realized the tremendous growth potential, I got really excited.
S-R: What skills from your previous jobs transferred to this one?
Senske: Coming from Microsoft, I realized the importance of creating a culture – hiring bright people and treating them well, and then aligning them around a very clear and concise strategy of where we want to take the company.
S-R: What was the first thing you did?
Senske: I asked to go through an orientation. I wanted to work on the assembly floor for a few months, and observe engineering – get an understanding of how everything flowed through the business. And I set about modernizing the company’s information technology infrastructure, which was something I was already familiar with.
S-R: What’s been your best idea?
Senske: Focusing on our core competencies. Before I arrived, Pearson proudly proclaimed it had 69 standard products. Since I took over, we’ve cut the line to about 20 products, and focused on selling them more efficiently globally.
S-R: How else has the company evolved?
Senske: The technology is much more advanced. Our machines used to be very mechanical in nature. Now they’re more electro-mechanical. The user interface is more intuitive, like an iOS or Android device. Customers really appreciate that.
S-R: And you’ve expanded?
Senske: Yes. In 2008, we acquired a Chicago company whose product line matched up very well with ours, allowing us to offer complete end-of-line solutions – case erectors, packers and sealers. In 2012, we acquired another company that made equipment complementary to our own.
S-R: Will you continue buying companies?
Senske: Our independent board has tasked me with acquiring a company every six months to a year for the next four to five years.
S-R: Could Pearson Packaging Systems be acquired?
Senske: I can’t rule it out. But we are not for sale, and we’re not actively seeking outside investment.
S-R: How did you learn to run a company?
Senske: Harvard Business School has a three-year program for owner/president management, where you go back to Boston for two or three weeks at a time. I went through the program and met some individuals who influenced me greatly.
S-R: What lesson stuck?
Senske: One professor said something that completely changed the way I look at things. She asked, “If a comet hit your business, what value to the world would be lost?” If you’re Microsoft, a lot of the world’s infrastructure doesn’t run. On the other hand, if you’re Apple, your customers will simply buy their phones from someone else. That question really focused me on how do we become indispensable.
S-R: What’s Pearson’s annual revenue?
Senske: We’re approaching $100 million.
S-R: What affects sales?
Senske: When consumer companies don’t anticipate continued growth, historically that’s been very negative for our industry. But since 2008, there has been more investment in technology than in any time in our history. A lot of online-commerce companies are growing so incredibly fast that they can’t keep up with staffing. Our products help solve that problem.
S-R: What’s your typical schedule?
Senske: Most of our customers are on the East Coast, so I get up at 6 and take phone calls from 6:30 to 8:30. I get to the office around 9, and work until 6. Then often I’m with clients or key suppliers after hours.
S-R: What’s the best thing about being based in Spokane?
Senske: The quality of life.
S-R: And the worst thing?
Senske: How far we are from our customers.
S-R: What do you like most about your job?
Senske: The people I work with.
S-R: What do you like least?
Senske: The amount of work that goes into creating mutually beneficial relationships between us, as a small-to-medium-size business, and our customers, which are predominantly very large. That’s getting harder and harder in a globally competitive world.
S-R: You’ve been outspoken in support of the Trans-Pacific Partnership trade agreement, which the Trump administration withdrew from in January. What impact will a more protectionist trade policy have on your business?
Senske: It definitely puts us at a disadvantage compared with our competitors in Germany, Italy, France and Spain. We’ll adapt. But our strong preference would be for more free-trade agreements. Not so we can manufacture overseas, but for more access to those markets.
S-R: What’s been your biggest surprise since joining Pearson?
Senske: How much I enjoy this, and how much it’s changed my outlook on manufacturing in general – how much of it goes on in the United States, and how competitive we can be.
S-R: Are there misperceptions about your business?
Senske: A lot of people think we actually package products, as opposed to build the equipment that does it.
S-R: What’s the outlook for your business?
Senske: Our goal is to reach $150 million to $200 million in annual sales within five years.
S-R: What qualities do you look for in employees?
Senske: Attitude – people who want to continue learning and improving what they do – and aptitude – smart, energetic people who can help us grow.
S-R: How much do your assembly workers earn?
Senske: Typically between $25 and $30 an hour. They start at just over $20.
S-R: Do your employees tend to stick around?
Senske: Yes. The average tenure is over 12 years. One of our engineers has been here more than 40.
S-R: What has this job taught you about yourself?
Senske: To trust my own instincts. Some of the biggest mistakes I’ve made were things I was persuaded to do, even though they didn’t feel quite right.
S-R: What would you have done differently?
Senske: This company tended to be very conservative in how it made significant changes. In many respects it still is. And that’s not consistent with my values – I have a very high tolerance for risk. So I probably would have taken steps sooner to change the company’s risk profile, both in product development or acquisitions.
S-R: What would you change about yourself?
Senske: I’d be a better listener.
S-R: Any guilty pleasures?
Senske: I love wine and tequila – in moderation, of course. But I don’t feel the least bit guilty. (laugh)
S-R: What’s at the top of your bucket list?
Senske: I would love to ski in Portillo, Chile.
S-R: How do you relax?
Senske: Spending time with family and friends at Lake Coeur d’Alene in the summer.
Writer Michael Guilfoil can be contacted at email@example.com.
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