After seven years at the helm of Mercury Marine Group, Pat Mackey retired March 1 and will soon move back to his home in Ireland. Mackey’s tenure with the company brought with it a great deal of change within the organization, as new production philosophies and techniques led to a host of new products. Boating Industry asked him about those changes, Mercury’s future, his departure and other industry issues, in a recent interview.
B.I.: What made this the time to leave?
Mackey: Oh, wow. My wife and I have been talking about it for some time. We’ve been here seven years; I [originally] came for four to five years. And I guess we have to make a decision whether we’re going to do things for a much longer period of time or decide that now is the time to move.
So I’m not sure there was a defining event, I just think it’s better to go five minutes before people want you to leave.
B.I.: What will you look back on most fondly? Are there particular accomplishments you’re most proud of?
Mackey: I think the accomplishments … we have a plethora of brand-new, 21st-century products, whether it’s in outboard engines or electronic interfaces, our mechatronics, our four-stroke family of engines and our direct-injected family of engines and then all of the MerCruiser interfaces with Zeus and Axius and joystick docking and global positioning and all of those sort of things.
Those are milestones, and I think some of these technologies have and will now really revolutionize boating. I think our Zeus product and our Axius product will encourage more people to come into boating. It takes a lot of hassle out of boating. And forever I will be able to look back and say, “You know, I was there with the people who thought all that stuff up,” and I take great pride in that.
We built a greenfield plant in China, which from breaking ground to making first-quality, great products, took 18 months. You just can’t conceive of doing that on a greenfield site with hiring brand new people off the street and training them in a different culture, but we got it up and running.
We built a new plant in Japan, exactly the same thing. So the globalization of our business, the growth right around the world, the name of Mercury and MerCruiser and all of the associated brands, that really gives me a lot of pride.
B.I.: During your time at Mercury, you really seemed to be able to ramp up the pace that the company was able to introduce new products at. Was that something you set out to do initially and how were you able to do it?
Mackey: Yes, it was something I set out to do, maybe not from day one, but certainly from day 100, when I saw where we were. I thought in my mind that Mercury, with its history they were always in the technological lead, and I thought that maybe that mantle had slipped away from them.
So we decided that we were going to get new products in the market. We’re going to get them in there and they’re not going to be experimental products, they’re going to be high-quality, durable, modern, contemporary products. So we set out in a very methodical way to get our house in order so to to speak so that this constant flow would become the norm.
As I look back on it right now it seems a long time ago. We put in very disciplined stage-gate processes for product development. We hired people from all over the world to augment our design and engineering capability. We put in modern manufacturing techniques. We integrated all of our Pro/E and information technology that the engineers needed.
So yeah, the rate of change has been phenomenal, and sometimes when I look back on it I don’t quite believe it. We introduced, I think it’s 49 now, 49 new outboard engines in like 40 months. That’s just unheard of.
B.I.: On day one, when you first walked through the door, what was your first order of business, your top priority when you started with Mercury?
Mackey: The first thing that I started to talk about [within Mercury] which was very deliberate, I started talking about our product quality, the quality of the product that was going to the consumer. I went to every manufacturing plant and I stood up in front of virtually every employee who was available on different shifts and I said “Our product has to be the best that it can possibly be, because we’re asking people to spend a lot of money on products more expensive than an automobile. They have the right to expect to use that in a completely hassle-free way.”
And when I look at the warranty and the amount of service that goes on and I look at the amount of telephone calls that we get, that’s not an acceptable metric, and we’re going to have to put the seal of approval on. So you go from there to instituting international standards like ISO 9000, which we did. And we did that in 18 months for an organization of 7,000 people with many different manufacturing facilities. We were the first, and I think only, marine engine company that’s totally ISO certified.
So that was my foundational block and after that I started to preach about the safety of our employees at work because those are the people that make the difference. It’s not people like me sitting in an ivory tower. So we started making sure that our safety performance became a key metric here.
And then that drives you into things like Lean Six Sigma and it starts to build on itself, and I always intended that these things would always be building on each other and be complimentary. Not the flavor of the month, as some people do: one month let’s focus on cost and the next month let’s focus on customer service and the next month let’s focus on something else.
I very much look at Mercury Marine as a complete system, therefore everything has to be working properly.
B.I.: Can you talk a little bit more about Lean Six Sigma, how that has been important to the company and what it has done for you?
Mackey: Oh, wow. I could talk for four weeks on Lean Six Sigma. But what it has done, it does a hell of a lot. The Lean part of it … is obviously to process map everything and get rid of the waste. I always say “There’s nothing more inefficient than doing that which should never be done in the first place.”
So let’s get all of the waste out. And we started to process map things and then we started to clean the place up under proper Lean principles. The Six Sigma piece of it is you remove variation and you remove variation at everything, whether it’s physical dimensions or physical attributes or time or paperwork or whatever. You remove that variation.
And then when you have it Leaned out and you remove all the variation, you can actually see what you’re doing, and that gives you the foundation to move to the next level. If you’re in a state of chaos, there’s no point in thinking you’re going to get real success if you really don’t know what you’re base is.
You can’t do fast innovation if you don’t know precisely where you’re coming from. That sounds very infantile, but there’s not a lot of people that really practice it with vigor or dedication.
So you’ve got part of the equation. The next part of the equation is Lean Six Sigma gives you the opportunity to engage the minds and the skill sets of virtually every employee.
Let me go back to old, old HR jargon, sometimes you think employees should check their brain at the gate. Well, I don’t want employees to do that, I want employees to bring in their creativity and bring in their energy and be involved. And they can only be involved when they’re making change. You can’t have them doing mundane, routine things day in and day out and feel motivated. But once you get people involved with each other and building off each other’s creativity, great things happen.
B.I.: When you first started with Mercury one of the things you wanted to do was change the culture of the company. What did you want to change?
Mackey: Changing the culture for me was almost multi-dimensional. First of all, I believed the culture should be one of being very responsive to the customer and really understanding the customer and doing customer relations management in a formal way as opposed to an ad hoc way. So we formalized that, getting the voice of the customer into our design processes right at the concept stage as opposed to engineers building stuff and hoping it sells. Build what the customer wants and there’s a better chance of it being successful.
The other part of it was we needed to change the culture and be able to be very fast on our feet. We’re a big, big company but I want us to use our skill in terms of being able to purchase stuff, obviously, and do things that big companies do. I also want the entrepreneurial spirit and I want the spirit of people moving quickly and empowering people to move on as opposed to running in a very hierarchical way.
I don’t think you can just empower people by saying, “You know what, starting on Monday you’re empowered.” But if you train people through Lean Six Sigma, you can let go of the controls because you know they’re working from, and to, very defined standards and goals. So you take all the risk out of it.
There’s a lot of empowerment speak which is sort of Kumbaya-type stuff. Well that’s not what I mean. This is a disciplined industry, and it has to be disciplined by definition. But being disciplined doesn’t mean being a control freak. It means being a standards freak.
B.I.: Are there any other processes or procedures that you instituted that you think have really played a key role in the success that Mercury has had?
Mackey: Yes, absolutely. Talent development, bringing in skill sets that we didn’t have and then cultivating people here to develop skill sets that they didn’t even know they have. I have a very extensive MBA program running. So we’re attracting really bright young people from the best schools in the country. That was a major thing.
Being global. Having facilities in different parts of the world and making sure that different cultures are at the table, that you’re just not outsourcing low-cost work to low-cost labor for example. I see my China plant very much as a strategic part of my operation, not just a low-cost place. It’s a high-quality, modern operation.
That’s a customer base that’s going to come, so they need a voice at the table for process and for design and all the rest of it. Our European operations are very much integrated into our company, so the people part of it is something that’s very close to my heart.
B.I.: As you look forward, what are some of the significant hurdles that the company, engine manufacturers and the industry as a whole will need to confront in order to be successful?
Mackey: Our products need to fit the needs of our consumer. They need to be reliable, durable, fun to use and so on. Sometimes, as an industry, we’ve been arrogant about that. We need to make sure that the customer is the center of everything we do.
I believe the initiatives of Grow Boating, if you want to encapsulate them, is we need certified builders making sure the customers are getting the guarantees they should expect in this industry, and dealer education and certification, meaning [customers] are getting a pleasant and professional experience when they’re going through the buying process and the after-sale process from our dealers.
Those things are all really important in this industry. So we need to really be less inward focused and more customer-oriented focused going forward to make this industry a success.
Sometimes we make it hard for people. I really want this industry to grow and prosper. Boating is one of those things to do with other people, whether it’s family or friends, whether it’s cruising or fishing, it’s one of these things that I actually believe is good for society.
I don’t want to get too ethereal about it, but we have a job to do here and we need to get on and do it. We need to make sure that we’re cognizant of the environment whether it’s fuel economy or emission control or noise control. We need to be proactive in that to make this industry attractive.
B.I.: Do you think the industry is on the right track and moving in the direction it needs to be moving in at this point?
Mackey: I think the industry really now is beginning to understand that we need to be progressive. Are we on the right track? For the most part I think we are. Are we moving fast enough? No, I don’t think we are. I think we can move a lot faster than we’re moving.
B.I.: What impact is your leaving going to have on Mercury, on the employees and your customers and the products and is there going to be a big change as you step aside?
Mackey: I don’t know, they may be glad to get rid of me. But there’s a very strong team at Mercury. This isn’t Pat Mackey’s Mercury. This belongs to the management team that’s here. I have a very strong, professional management team. I have employees in every part of the world that are very passionate and loyal to both the company and the industry.
Hopefully I left it a little better than when I arrived, and hopefully in a few years from now it’s going to be a lot better than when I left. I think this organization has got that fundamental potential.
B.I.: Do you anticipate the management style to change when your successors step into your role?
Mackey: Dusty McCoy has decided that he wants Kevin Grodzki, who is the president of our MerCruiser division, and Mark Schwabero, who is the president of the outboard division, who report through me … he wants them to report directly to him. So that flattens the organization.
In terms of Kevin and Mark, these guys lead their respective businesses and, collectively, Mercury as a whole. They do the things they do because they believe in them and that’s where the progress is coming from. Will they make changes? Obviously, they will make changes, and so they should. I look at myself as a bit of a change agent. If they stop changing, I’ve totally failed. That would be terrible.
But I think they’re coming from a really solid base right now and I think they’re very futuristic in what they believe in terms of product and people, systems and all the rest of it, I think they keep looking out there. So they will be ahead of the curve, no doubt about it.
B.I.: Is there anything else you would like to pass along to anybody in the industry that’s reading this?
Mackey: Well, all I can say is I really have enjoyed every minute that I’ve been in this industry. There’s been ups and downs and there’s been battles, but looking back on it the good times far outweigh, far outweigh, any frustration or any bad times that I had in this industry. I think it’s a wonderful industry, I think it needs to be nurtured.
B.I.: What do you mean by nurtured?
Mackey: I think we need to be careful of our customers. We’re not an exclusive club, we need to invite new people in. We need to invite people in from different ethnic backgrounds, different gender, different nationalities. We need to be a global family and get people into boating, not just count on repurchases.
This whole Grow Boating thing I think is extremely important and the industry needs to make sure we’re always pointed in the same direction, to stop focusing on our internal differences and start focusing on our external opportunity.