Big Red

When Al Carlson and other Sun Hydraulics executives sought engineers for their new China office, they refused to compromise on five qualifications.

The right employees were so vital, Carlson jokes he's glad China has 2 billion people from which the company could choose.

The list of skills: a mechanical engineer; a deep, college-level understanding of fluid power; fluent in English; ability to travel to the United States for up to three months at a time; and, not insignificantly, a sense of humor. The company looked at a few hundred resumes, met with a few dozen applicants, and eventually, hired two people.

“We bypassed a whole bunch of people who maybe had four out of five, not five out of five,” says Carlson, president and CEO of Sun Hydraulics. The publicly traded firm manufactures and sells valves for industrial and commercial use. “We worked really hard to find the right people.”

Sun found its people in Kimi Xi Nanjun and Robbie Zhu Beidou.

Those hires, and the firm's growth in China, are the backstory to what has become a solid turnaround at Sun. In fact, second quarter profits were up 70%, from $6.1 million, or 24 cents a share, last year to $10.4 million, or 41 cents a share in the 2011 second quarter. Second quarter revenues were up 40%, from $39.2 million last year to $54.8 million this year.

The extensive training program Xi Nanjun and Zhu Beidou are enrolled in, meanwhile, is a lesson for executives to not skimp on details when hiring — and training.

Xi Nanjun and Zhu Beidou are in a Sun cultural immersion program, where each employee rotates 90 days in the U.S. and 90 days at Sun's Shanghai office. The firm leased a condo in Sarasota for the employees and bought a car, a Volkswagen Jetta, for them to share. It also bought a cell phone for each employee.

Carlson took the first employee to come to Sarasota, Xi Nanjun, to a Tampa Bay Rays game in August. Carlson bought Xi Nanjun a beer and a hot dog at the game.

But the key to the program is the work. Xi Nanjun and Zhu Beidou will walk around the company's facility and speak with engineers, product managers and other employees. The trainees also learn the nuances of Sun's horizontal management structure, where decisions are made in groups and clusters, and formal job titles are mostly shunned.

That culture, which emphasizes products and innovation, is one of the reasons Sun has been so successful in China in such a relatively short period of time, says Carlson.

Sun first went into China in 1998, when it signed a joint venture agreement with Links Lin, an Asian company. The two firms created Sun Hydraulics Systems Co. Ltd. Sun sold its interest in that venture late last year, and by early 2011, it launched its own office in Shanghai. Sales in China made up 5% of Sun's total sales in 2010.

Carlson is confident the growth track in China will continue, though he declines to project specifically how much the firm will grow there. The biggest challenge, he says, will be to find the best-trained employees to build more growth.

“We take all we can get and we're not satisfied with just hitting a sales target,” says Carlson. “That helps us to overachieve and not be disappointed when we underachieve.”