Dawn List

Dawn Lissy has always shot for the moon. Growing up, the president and founder of the Empirical family of companies wanted to be an astronaut.

“That dream came to a quick finality when I didn’t get into aerospace engineering,” she said. “I went into engineering mechanics instead.”

Born and raised in Cleveland, Ohio, Lissy earned a degree in engineering mechanics from the University of Cincinnati and received a master’s in biomedical engineering from the University of Akron.

“I moved back to Cleveland for my first job designing spinal implants for AcroMed, the second-ranked spinal implant company in the world at the time,” she said.

After a couple of acquisitions and an offer to relocate to Massachusetts, Dawn’s husband Chris persuaded her to go into business for herself.

He said, “You’ve been doing this mechanical testing since your undergraduate career. You’ve been complaining you can’t find someone who understands the testing or the FDA requirements.”

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Lissy spoke with the Business Journal this week about meeting workforce challenges in manufacturing and getting back on one’s feet when things don’t go as planned.

How did Empirical start?

I wrote a business plan and started Empirical Testing Corp. 20 years ago. The company was in Ohio for about 5½ years and the lease was running out, we were out of space and power. Chris said, ‘Where do you want to live?’

In true engineering fashion we eliminated all the places we didn’t want to live and started looking at all the places we did. … A friend said, ‘Have you ever looked at Colorado Springs?’

We came to Colorado Springs, I’m not kidding, and we walked out of the airport to blue sky, Pikes Peak — it was perfect. I said to Chris, ‘This is where we’re moving to.’

Chris was like, ‘How about we make sure there’s a good business environment and that sort of thing?’

I said, ‘That’s your job now.’

We moved here 14 years ago.

Why the engineering path?

I’m very mechanically inclined. And biomedical engineering did not exist 30-ish years ago. But I was fortunate enough to be connected with our biomechanics lab at the University of Cincinnati, so I learned a lot about engineering principles with the human body. It wasn’t a biomedical program but it was certainly one of the best programs I’ve been part of. At the same time my dad was starting to have neck problems. How could I fix that?

It was something that was interesting to me and something that gives back to people — helps people. That’s kind of why I got into this.

What does Empirical do?

In the United States, if you are an orthopedic company and want to legally market your device, you have to have FDA clearance. There are different classes for medical devices that go through the FDA. Class 1 are things like wheelchairs and orthotics and canes and crutches — things that come into contact with the human body but don’t hang out there. You have to register your device with the FDA but there isn’t a lot of regulatory environment around it. Capitalism comes into play. If your product isn’t awesome it’s going to go away.

Class 2 devices are things that come into contact with your body or stay in your body. There were a whole bunch of devices grandfathered in. For example: Hip and knee replacements existed before the FDA laws. … Now you have to show your devices are equivalent or better than something on the market that’s doing the same thing.

That showmanship, that proof, is the mechanical testing we do.

Talk about the process.

We break stuff. And we have three logos because we’re actually a family of companies. What happened was, when we moved here we found manufacturing was pretty limited in Colorado Springs. My joke is: If you live east of the Mississippi you can throw a stone and hit someone who makes something.

So we have to make fixtures and test blocks for all our testing and they’re custom test blocks. That’s the connection from the device you’re testing to the machine. …

We bought our own computer numerical control [machine] and a machinist — and then a second machinist, and then a few more CNCs. Word got out and we started doing small-batch stuff locally. Our lawyers said, ‘These two things aren’t the same anymore. You need to form another entity.’

That’s how Empirical Machine came to be, which just celebrated 11 years. We also do prototyping as well.

And our third company is called Empirical Consulting. We incubated this idea from a former client at the time. She came to me and said, ‘Hey, testing is the last thing you need to do before you send in your package to the FDA for clearance. Once you get clearance, there are a number of things you have to do afterwards to validate your processes, like cleaning. If you think about surgery, all these parts go into the [operating room] and have to be cleaned and sterilized. Manufacturers have to show that everything is set up so it can be cleaned and sterilized repeatedly. … A lot of the folks we deal with don’t even know that’s something you have to deal with.’ So we formed Empirical Consulting as our third company with the idea that we help with the regulatory support, the quality support and the validation support. Our tagline is, ‘We make it as a machine shop, we break it in testing and then we write about it in our consulting group.’

Talk about your growth.

Well, we went after production in our machine shop, so we added another cell to production a few years ago. We grew 30 percent every year, but I’ll be honest with you, we just shut down that production leg a few weeks ago because 30 percent of our sales were using 60 percent of our manpower.

That equation doesn’t work. We’re really good at the small-batch prototype stuff but we weren’t able to scale production and pulled it back. … It didn’t make financial sense. … Before we shut down machining we were actually on pace for 80 percent growth this year. We had to lay off about 10 of our staff.

Are you thinking of bringing it back?

That is the goal. But if you have to stop the bleeding to figure out where your issues are, that’s OK.

What’s the biggest difference between manufacturing in Ohio and here?

Workforce. We struggle here. We can’t find folks with skills like the machinists I worked with in Ohio. I import all of my engineers as well. I would love to not pay expenses for people to move here. In Ohio, there are generations of guys who are machinists and the structure exists for those companies to be there. … The other part is there’s no way to seek out someone [for those who want to relocate here], like, ‘Hey, I’m moving to the Springs. Do you have a job opening?’

It’s not intuitively accessible.

Is it less intuitive here because there’s less of a history here?

When we first moved here, the Economic Development [Corp.] loved our business because it was technical, biomedical and woman-owned. We fit the sweet spot of what they were looking for in Colorado Springs. But I think there’s a mindset in the community of not wanting manufacturing.

The other piece is those who can perform manufacturing skills is dwindling across the country. When you start behind the eight ball, you stay stuck behind the eight ball. I don’t know how to fix that.

We’re participating in a Medical Product Outsourcing [industry publication] summit in Denver. I’ve been a presenter, been on a panel and this year they asked me to put a panel together. So I’m moderating a panel that actually talks about what we just went through — having an idea and working towards it and it’s not working. How do you recognize that and readjust your course to correct it?

No one wants to say they failed. What we just went through was one of the hardest things for me as a business owner and it took a lot of time and energy and effort to be sure it was the best decision overall. There were people directly impacted by it. Me too. It wasn’t an easy decision, but in order to protect what we’re good at and make sure we don’t all go away, it was something that needed to be done.

Editor’s note: This article has been corrected. Lissy is founder and president, not CEO.