Diecrafters, Inc.: Common Sense Leadership, Steady Growth

by: Bob Windler

Editor’s Note: Diecrafters, Inc. is located in Cicero, Illinois. The company identifies itself primarily as a finisher, providing diecutting, foil stamping and embossing, and specialty folding/gluing. Approximately 15 percent of its annual sales come from bindery services. A member of the Binding Industries Association (BIA) for more than twenty years, owner and president Bob Windler has served in a variety of positions for the association, including a term as president from 2005-2007.

The story lies in the company’s people, rather than the company itself. The seeds of success were planted by Jack Windler in 1956, and the vine has been tended by his son, Bob, since 1985. With a no-nonsense operating philosophy, an old fashioned work ethic, and a steady hand on the plow, Diecrafters continues to grow despite a shrinking economy.

With a true love of the industry and a knack for systematic business investing, the story of the Windlers is one where the lessons learned apply to far more than just the family. In this narration lies the history of an industry, a pragmatic business philosophy, and an optimistic outlook. Here, Bob Windler tells the tale.

When two men in business always agree, one of them is unnecessary.
– William Wrigley, Jr.

Diecrafters incorporated in 1947, although old records indicate the founder, Walt Hahn, started as far back as 1936. Hahn worked out of the proverbial “garage” while moonlighting from his day job at Barrett Bindery, one of the oldest known binderies with diecutting services in Chicagoland. My family’s history with Diecrafters started in 1956 when, after nine tumultuous years, Walt decided to sell the business. My father, John “Jack” H. Windler, saw an ad in the Chicago Tribune about a diecutting company for sale for $7,000. My father had worked his way up in the folding carton business as a bookkeeper, accountant, and production manager.

Dad learned that Walt had never achieved a level of sustained profitability, but after studying the situation my Dad decided that he could make a go of it. He estimated that if he could “stop the bleeding,” draw a small salary, and break even his first year, then he would have a good chance of survival. To line up the necessary working capital, he took his savings and borrowed some money from his father, purchasing Diecrafters, Inc. in June 1956. This was quite a gamble for a 36-year-old father of three, with number four (me!) just around the corner. After his first six-month period, ending December 31, 1956, he was able to pay all expenses, plus draw his salary and generate an additional $10,000 profit. Dad never lost money in any year he owned the company.

Dad owned the controlling interest in the company from day one. In 1961, his brother Bob came to work at Diecrafters and purchased a minority interest. The two brothers made great partners. As the saying goes, “If two men in business always agree, one of them is unnecessary” – they argued often, had very different viewpoints, and always seemed to reach a decision whether they agreed or not. Bob was the “people person,” while Dad was all about the numbers. They were quite a team until Bob sold his shares back and retired in 1978.

When Dad bought Diecrafters, the company rented 2,000 square feet on the 4th floor of a five-story building in Chicago. I heard stories about how the tanks of developing fluid on the 5th floor “sloshed” back and forth from the bed motion when Diecrafters’ cylinder diecutting press was in operation. In 1961, Dad bought a 4,300-square-foot building next door to the original site. In 1963, he doubled the size to 8,600 square feet, and then added another 1,500 square feet in 1968, which was as much as the city would allow for the lot size.

In 1980, one of our competitors wanted out and it was too good of a fit to pass up. Dad bought out Belman Die Cutting & Finishing in October of 1980, which provided the company’s first automatic-feed presses, as well as high-speed folding and gluing capabilities. In 1989, Diecrafters acquired a 70,000-square-foot plant and consolidated operations in Cicero, Ill., which is our current location.

The problem with owners is they hang around after they’re useless.
– Jack Windler

I started working there as a kid in the summer of 1973, jumping down crates of waste paper and stripping waste off the diecut forms at the end of the presses. Around 1976, I started doing payroll and a few other accounting functions, and by 1979, I had become heavily involved in the management of the business. With the next generation in place, Dad began a five-year phase out into retirement beginning in 1980. His exit strategy put a vice president/general manager in charge and developed a lead pressman into the senior production manager.

In March of 1983, Vice President/General Manager Forbes Lange had a very serious heart attack that left him incapacitated. Forbes had been a close friend of my Dad’s for 40 years, so this not only had an impact on the business, but also was very hard personally. The heart attack happened on a Sunday, so the production manager and I came to work on Monday expecting my Dad to come back in and take charge. Finally at about 9:30 a.m, I called the house and asked Mom, “Where is Dad?” She replied, “Right here,” and handed him the phone. When I asked Dad who was going to take over and run things, he simply replied, “Sink or swim” – and then hung up! We began treading water frantically – and eventually we swam. Ten years later, I was talking to my dad and said, “I couldn’t believe you did that!” Dad acknowledged a little trepidation. Actually, what he said was, “I was scared to death” “I wasn’t sure if I’d ever get my retirement money, but I had faith.”

On January 2, 1985, Dad sold Diecrafters to me and I remain the sole shareholder today. I was still young and green then, but he surrounded me with talent and a management team with many good years ahead of them.

Once Dad retired, he wanted to stay out of the business. I used to go over to ask his opinion, but he would say, “I’m out!” He often said that the problem with owners is they hang around after they’re useless. He did love investing, so he acted as the fund manager for our profit sharing plan, which he started in 1966. A portion of the profits are distributed to the employees each year we make a profit, giving the employees a stake in our success. He outperformed the Dow and S&P consistently.

Just because I said it, doesn’t make it right.
– Bob Windler

We’ve expanded over the years, and our reinvestment into equipment has been steady and measured, with a long-established plan for reinvestment of profits into both our equipment and our people. All the iron in the world is merely iron without the talent to maximize what it can do. The real difference in any business is its people and Diecrafters’ employees are the best! Our staff is structured with a core group of 40 employees who have been with us for some time – many since the 1960s, ’70s, and ’80s. We recruit and develop new talent through a cross of bringing in new blood and drawing top performers from our extensive part-time staff.

Our business is not a happy-go-lucky, fun-filled adventure every day. It’s certainly not without its challenges. But I think people enjoy their jobs more when they’re being pushed. And I expect my employees to push me, as well. Just because I said it, doesn’t make it right. “Yes men” don’t cut it in my organization. I don’t need that. And I hate to hear anyone say, “That’s the way we’ve always done it.” Recently, I was talking to one of my supervisors and asked him why we were doing something a certain way, and he got this extremely guilty look on his face. He knew I wasn’t going to like the answer! Finding ways to be more efficient is critical. What differentiates us is that what is good enough for everybody else isn’t good enough for us.

That doesn’t mean we can’t make mistakes. I would love to claim that we are perfect but, of course, we have had our share of problems. How we handle problems is what sets us apart. I have always felt that making mistakes is a natural part of growth and development, but making the same mistakes over and over again is the definition of failure. As long as we learn from our mistakes, and are making new and “better” mistakes, then we are progressing.

If you don’t get any value out of it, don’t pay me.
– Jim Niesen

One way to keep learning is to stay involved with the industry. In the late 1980s, we joined our local PIA affiliate, Printing Industry of IL/IN Association, and learned of the BIA through this affiliation. Jim Niesen was the head of BIA for many years, and he worked out of Chicago. He came in one day and wanted to know why we weren’t a member. He gave me the big sales pitch and wouldn’t take no for an answer. He said he was enrolling me, and he said, “If you don’t get any value out of it, don’t pay me.” It was a great sales technique!

Jim made a point of engaging me every time an event came up, making sure I stayed involved. Very quickly, I found that networking with companies from across the nation was valuable – what my local competitors wouldn’t tell me, a similar company from the other side of the United States would happily share and vice versa.

The BIA used to put on bind-a-thons once or twice a year. The BIA would pick a host, and the attendees would fly in, get a hotel, and then hop on a bus to do four or five plant tours per day. It was a two-day event that exposed us to eight or nine companies. The real value was talking to industry peers who had a different perspective. We would sit on those buses and we’d ask each other questions – what are you paying for insurance, what are your benefits – information you couldn’t get from a local group because of the worries of competition. Some of the binderies we toured also had finishing and other integrated services, some being done successfully and some, unsuccessfully. There was a true value in sitting down with industry leaders after those tours to discuss what worked and what didn’t work.

Well, I was hooked. Diecrafters has been involved in the BIA for twenty years. I’m a past chairman of BIA and I’ve held other positions, too. I think the hardest thing about any trade association is to recognize and quantify what your return on investment is, but I have learned that there’s a direct correlation between what you put in and what you get out. The time that I’ve spent going on bind-a-thons, the depth of information that I’ve shared with allies in the industry – that stuff is invaluable. It’s a key part of identifying the opportunities that will avail themselves as your business grows and as the industry grows. We are involved not only with the BIA, but also the FSEA (Foil & Specialty Effects Association) and the PIA. All of them give me a direct line, a way of tapping into the various views of the future. Today many views are quite pessimistic but there are little gold nuggets of ideas. Not having exposure to those people and those ideas would be like bowling with your eyes closed.

If everybody else is doing it, it’s probably wrong.
– Jack Windler

We certainly don’t approach things the way everybody else does. It’s both a strength and a weakness. My dad used to say, “If everybody else is doing it, it’s probably wrong.” He taught me to challenge the traditional view. He’d look at the same situation I was looking at, the same facts I was looking at, and he’d burst my bubble with an obvious point that I just didn’t see.

Obviously, with the market right now, the masses are looking at the industry from a survival standpoint. Binders and finishers are in a waiting game. They’re lowering prices as far as they can to get work in the door, but I think that’s a never-ending downward spiral.

Diecrafters is in a very unique position in that we have financed ourselves through the investing and saving of profits, so we don’t have outside debt to hold us back. The market has taken big hits, and the future is in question, but we’re not panicking. I think the reality is that big changes don’t just happen, they unfold. A business plan has to be a living, breathing document that evolves, and Diecrafters is in a good position to evolve as the market does.

Even now we’re moving ahead – we’re forging alliances. We’re exploring and focusing our energies on developing the business, which is what we have always done.

We’ve always added services to support our clients’ needs. Often, this coincides with an opportunity to reduce costs and increase turnaround times with new equipment purchases. Several years ago, I told my wife the market was changing and the climate was getting tough. I needed to make a decision – all in or all out. We went all in. We bought a number of additional Bobst machines, an Eagle foil stamping unit – over about three or four years, we did some pretty heavy expansion. We bought material handling equipment in order to reduce payroll costs and improve service. Slower diecutters were been replaced with faster machines, and the foil unit that I mentioned delivered cost reductions with faster makeready times and run rates, as well as providing more efficient foil utilization. We have expanded affixing capabilities and integrated many of our services to run in-line with other functions. None of those efficiencies would have been implemented if our clients didn’t have a need; if they didn’t ask us to provide a service knowing that we would do it better than the other guy.

My kids have asked me if I hold on to the business because of my Dad’s association with it; if I’m emotionally tied to Diecrafters, rather than evaluating it from a purely business perspective. If I’m honest here, I’ve probably given it a little more slack than I should have. My decisions have definitely been influenced by my love for the industry. It’s been good to me for a number of years. I’ve been doing this longer than my Dad did. And I guess I’ll be at it for a while longer.

John “Jack” Windler, age 89, died peacefully on February 15, 2009.