Achieving organizational nirvana

These local companies have committed employees who know their roles and perform their jobs with the customer in mind. Your company can reach this higher plane, but it’s not an easy journey.
When Randy Wojcik first went to work as a shipping manager for Woodlore in Port Washington five years ago, relations between managers and line-level employees were poor, and production lagged.
That was before Woodlore President Jay Wilcox took steps to create an organization of self-managers, one in which employees are entrusted to make their own decisions and mistakes, and one where everything the company does is with the customer in mind. Now Woodlore employees think of each other as customers. Departments within the organization view each other as their customers so that they develop a keener understanding of the inter-relationships and are better able to respond to their needs, Wojcik says.
“Each department knows what the bottom line is, and in what time frame and shape they need to get it to us,” says Steve Rammes, a production manager.
Now in its 11th year, the 90-employee division of Allen-Edmonds Shoe Corp. is setting records for production of cedar shoe trees and cedar accessories, all without the benefit of mechanized improvements. The difference is in the attitude of the people, and the way they interact with each other. People know their roles.
Employees are involved, committed. No task is considered too great. The prevailing attitude is “can-do,” such as the time last December when production employees worked overlapping shifts to crank out 45,000 pairs of shoe trees in short order for Amway of Japan, the company’s largest-ever order. The job was achieved by letting employees come up with their own solution, Wilcox says.
“We simply asked the people in the factory how they were going to accomplish this, and they came up with the solution,” Wilcox says. “What we try to do as managers is set out the goals and the expectations, and then let the employees execute.”
The process of engaging your employees does not happen overnight. At Woodlore, it took a change in company culture that Wilcox says was years in the making.
But once it happens – when people stop pointing fingers at one other and take personal responsibility as if they had an ownership stake in the company – the results can be dramatic, says Michael E. Gerber, author of “The E Myth Manager,” a best-selling book that debunks the idea that most management theory works.
Rather, Gerber believes the truly successful companies are those that encourage an entrepreneurial mind-set within their own employees, one in which a division views itself as a company within a company. This state of mind begins and ends with the personal commitment that employees bring to their jobs, Gerber says. It is a conviction that once a decision is made it is deemed a commitment, and that employees will move mountains to keep that commitment.
“It’s a matter of doing whatever it takes to satisfy our customer,” Wilcox says. “It’s a willingness to act and take action. A lot of companies have the words, but it takes actions for it to become part of the culture.”
Take a step back
But before you reach that almost magical state where employees are committed and the organization generates a forward momentum all its own, you have to step back and analyze your internal structure.
Gerber says the problem in most organizations is that employees fail to understand their roles, which leads to a dysfunctional workplace in which days are spent flailing about solving immediate problems and putting out fires instead of operating in an organized, systematic fashion.
At his E-Myth Academy in Santa Rosa, Calif., Gerber starts with the premise that there are essentially three roles, or three forms of work: that of the entrepreneur, who is typically someone who is good at making something, that of a technician, who thinks that gives him the ability to run a company – It doesn’t. Then there is the role of the manager, who formerly was a technician, and who may know very little about managing/organizing an enterprise.
The entrepreneur’s role, Gerber says, is to impart the vision and create a system whereby that vision is manifested at the practical/technical level of the organization. The manager’s role is to impart that system for accomplishing the task to the technicians, who carry out the task. What commonly happens is that everyone in the organization ends up doing the work of a technician, and the larger structure evaporates, which leads to chaos.
Understanding of the relationship between those three levels is critical before you can move toward becoming a vital, customer-driven organization, Gerber says.
“Because most people don’t understand what they are truly accountable for, they become confused by the notion of work, and end up doing the wrong work for the wrong reason,” Gerber says.
This fundamental organizing principle helps people understand their roles. In the 20-year history of the E Myth Academy, Gerber says it has not been uncommon to hear owners and managers who go through the course say, “Oh, so that’s what I’m supposed to be doing.” That’s when Gerber knows that he got through to them.
It’s all about the ability to transcend the day-to-day trivia and implement a system that creates momentum and eliminates confusion, Gerber says. But first, the head of the company must have the right vision and clarity of purpose.
“Until I can rise above the tyranny of daily routine and see it as it is, then I can’t transform it,” Gerber says. “Without this system for doing what you do, you end up making it up as you go along,” Gerber says, adding that this is what the majority of companies do every day, whether they realize it or not.
“If you do that, there is no way you can become a brand like a Federal Express, or McDonald’s,” he adds. “The branding of any company resides in its ability to do what it does in its own proprietary and identifiable way, so that each time customers go there, they have the experience of the brand. Until everyone [in the organization] understands that, there is no way of going to work on what we do to create the brand.”
Remember that it is not enough to simply empower your employees and to trust them and allow them to learn from their mistakes. Without first putting the organizing principle in place, leaving it up to your employees will ultimately result in chaos, Gerber says.
Think small
As companies start to grow larger, they start to think big. And that’s suicide, according to Harry V. Quadracci, founder of Quad/Graphics, an 11,000-employee commercial printing giant with operations spread out across Southeast Wisconsin.
Quadracci has built Quad into what it is today by engendering an atmosphere that relies on close personal relationships to get the job done. The 100 Best Companies to Work For in America gives Quad five stars for camaraderie and four stars in both opportunity and fairness. Author and consultant Tom Peters has praised Quad as a learning institution.
Quad got to where it is by thinking small, by continually cultivating relationships between employees, Quadracci says.
“Where companies go wrong is, they become too professional, too impersonal,” Quadracci says. “They forget that the basics of a successful business are close personal relationships – employee to employee and employee to customer.
“These relationships aren’t legislated, they are established over a period of time,” Quadracci says. “It becomes a matter of getting to know each other, which leads to establishing a bond of trust. And, you only trust people if you know them.”
And trust, says Quadracci, is the basis of all teamwork, which is at the core of all successful business practices.
And how does Quad build trust? By throwing elaborate parties for its employees. And by having everyone wear the same dark blue uniform, from Quadracci, himself on down to the janitor. Quadracci’s egalitarian vision manifested itself in the early stages of the company back in 1973 when he refused to appoint a head of the pressroom. Instead, he let the pressmen be in charge of their own presses.
Then there is the oft-repeated story about the time Quadracci left it up to drivers to make Quad delivery trucks more profitable by hauling cargo on return trips. According to a published account, Quadracci handed each driver a set of keys to the trucks, instructing them that they were all owner/operators in a new division called Duplainville Transport. When a driver asked what kind of loads they should haul , Quadracci shrugged, saying he knew nothing about driving an 18-wheeler. This principle has been referred to as “management by walking away.”
That fragmented, non-traditional approach to management is behind the theme that has everyone marching in lock-step at Quad. As the company grows larger, Quadracci encourages his employees to think small. At twice-a-year “think small” meetings, a dozen people who work on the same press get together to discuss problems and build teamwork.
“In order to get your job done here at Quad, you’ve got to know a lot of people,” Quadracci says. “And, we make it that way. It’s also a lot more fun.”
Helping foster that trusting, team-centered approach is an absence of rules, or the fear that one will be punished for making a mistake. And, it works. Not only has Quad/Graphics experienced phenomenal growth, doubling in size in the last six years, but pressmen, many of whom begin with no previous experience, advance faster than the industry average.
Quadracci estimates that 95 percent of his time is spent with employees and clients. While Quadracci can no longer personally communicate with everyone in the company the way he could in the days when the company numbered 60 or even 150 employees, he spends up to four hours a day personally responding to 170 to 180 e-mail messages he receives daily from Quad/Graphics associates. That is his way of continuing to “think small,” and, also, to impart his vision to the troops.
Terry Anderson is the CEO of Omni Tech Corp. in Pewaukee, a fast-growth company with 175 employees that expects to do $100 million in sales this year. Anderson is exploiting the gap between his personal computer assembly company and his mega-size competitors, IBM, Compaq and Dell Computer, by being more responsive to his customers’ needs.
Omni Tech takes advantage of its relative smallness by doing things the big computer makers can’t because of their lumbering size. Anderson does that by constantly staying in touch with his customers and providing a level of personal service the big boys can’t match.
“Our top 50 customers get a lot of attention from us,” Anderson says. “We do a lot of customization of our product. We solve problems for our customers – things like network and software problems – and we create machines that will work under their unique environments.
“The big guys always leave crumbs, and we go around gobbling up those crumbs,” Anderson says. “There are not many who can match what we do. We are not bottom feeders, we just do those things they can’t do as well.”
Unleash your employees
Once upon a time, having a unique product or service was all the competitive edge a business needed, observes Christine McMahon, a business performance trainer on Milwaukee’s East Side. The lead time a business had over its competition was significant, as it was years before a competitor could duplicate products or services.
But now, because of technology, people can duplicate your products and services within a short period of time, McMahon says. Technology makes the playing field more level. It means others can often deliver your product faster, better and at a lower price.
“When you think about developing that competitive edge, it’s company culture, and its your employees,” McMahon says.
The new term being bandied about called “the capital intellect” is the information, the know-how, and the passion that exists within the collective mind of your employees, she says.
“It is their ability to be creative, not only to delight the customer, but to wow them,” McMahon says.
By listening to a suggestion from one of its employees, Midwest Express came up with the idea for its signature in-flight baked chocolate chip cookies.
The idea came about as the result of a quandary the Milwaukee-based airline had during its early years. The problem was on a flight that Midwest Express CEO Tim Hoeksema frequently took out of Milwaukee at 4:15 p.m. to the former parent of Midwest Express, Kimberly-Clark Corp., which is headquartered in Dallas. It was an odd time to serve a full meal, and Hoeksema would arrive there feeling sleepy and anything but ready to hit the ground running.
An employee in the dining services area came up with the idea of substituting chocolate chip cookies which were baked in-flight and served warm. After six weeks of testing, Midwest Express introduced the cookie and went to a smaller dinner tray. Not only was the cookie a hit with passengers, but no one ever complained about smaller dinners, and the airline saved $85,000 a year in the process.
Hoeksema likes to repeat a comment an employee made four years ago on Midwest Express’ 10th anniversary: “One of our employees said that he doesn’t think of himself as an employee of Midwest Express, that the employees are Midwest Express,” Hoeksema recalls. “That, to me, is really the ultimate mind-set that you can hope to achieve with your workforce.”
Although it now numbers 2,400 employees, Hoeksema says Midwest Express tries to encourage decision-making at the level closest to the customer. As an example, he tells of the letter he received from a woman who flew out of Milwaukee on Midwest Express with her mother, who was denied a 10% senior citizen discount at check-in because she couldn’t produce valid identification. As part of her letter, the woman included a photocopy of her mother’s driver’s license, which showed she was 95 years old.
In the case, the elderly woman received her senior citizen discount sometime after the fact. But when an employee takes care of a problem on the spot, you can make the customer happy and create goodwill for the company, Hoeksema says.
“We talk about this a lot with our employees, but it is not an easy thing to do,” he adds. “You have to encourage it by highlighting examples of where people have gone above and beyond the normal call of duty to serve the customer. This way, they know they will be supported for using their best judgment at the time.”
Treating everyone, especially fellow employees with respect is at the core of Midwest Express’ team-centered approach. It’s also a bedrock principle at Woodlore in Port Washington.
“We really treat our people well,” says Woodlore’s Wilcox, who is a believer in the management philosophy of Edward Deming. “It starts with respect, and the way we interact with one another. One of Deming’s key points is to drive out fear in an organization and create an atmosphere of trust.”
Part of this employee-centered approach is the willingness to allow people to make mistakes, Woodlore’s Wojcik says.
“You give them tasks to perform and let them go with it, let them make mistakes,” Wojcik says. “You can fix the mistake. People remember more if they made a mistake. You don’t have to be a friend to everyone, but, you build trust by getting to know them and giving people freedom to do the job.”
At Medical Advances in Wauwatosa – a maker of coils used in magnetic resonance imaging machines – global sales manager Steve Pareja does not set individual quotas, preferring instead to set out a team goal for his sales force to reach. This helps take the pressure off by not forcing salespeople to meet individual quotas. Pareja also performs his role of manager by focusing on internal issues such as manufacturing, customer support and product launch.
“I like to be the buffer zone for them,” Pareja says. “I act as the liaison, which allows our salespeople to focus on the outside, which is selling our products.”
One of Pareja’s salesman, Lee Taylor, appreciates the ability to act as his own boss.
“I make my own appointments, manage my own time and make my own decisions,” Taylor says. “I don’t need to be held by the hand. My manager is understanding enough to realize that we know what we have to do to get the job done.”
Taylor also has a keen understanding of his role. He realizes that his customer does not see the rest of Medical Advances such as engineering, manufacturing or quality control.
“All they see is the sales person,” Taylor says. “I am Medical Advances to these people.”
Pareja’s hands-off management style and the clear understanding of roles has led to sales figures that Pareja claims he could have only hoped for when he started with the company one year ago.
It starts with hiring
Creating the right internal bullseye within your organization has everything to do with hiring the right people to carry out the job, McMahon says.
Jewish Family Services is a Milwaukee non-profit organization that does more than most with precious few resources. Operating within a $2.2 million budget, the 70-employee organization (40 are full-time) does whatever it takes to get the job done. The East Side non-profit has resettled 1,500 refugees from the former Soviet Union since 1990. It also provides family counseling and other services to the elderly and children and the developmentally disabled.
When Jewish Family Services hires someone, it looks for more than just skill and qualifications. Executive V.P. Elliott Lubar asks prospective employees why they want to work there. He wants to know if they have the passion for the job, and if they can work as part of a team.
“People are here because they say they believe in the what our organization does for people,” Lubar says. “I think when people have a commitment to what they do, it becomes a culture. It becomes very strong and almost has a life of its own. The people that come in here almost have to have that culture, or they are not successful.
“When we hire, we look for more than qualifications and passion for the job,” Lubar adds. “We try to determine if they are going to be team players. We can’t work in isolation. We have to be dependent on each other. If someone in accounting or clerical isn’t going to be supportive, it’s going to have a ripple effect within the organization.”
At Medical Advances, one of the first traits Pareja looks at is personality when he hires someone for his sales team. Rather than apply a cookie-cutter approach to filling a sales territory, what he looks for is someone who will mesh with both the sales team and the culture at Medical Advances.
When Steve Rammes first went to work for Woodlore six years ago, “We used to hire anybody and everybody as long as they would work.” But now, the company is more selective. Team leaders are involved in the process. Undesirables are weeded out.
“We are very honest with people, Rammes says. “If they are not cutting it, we let them know about it and give them a number of chances to get it going in the right direction.”
This process is what McMahon calls “setting the expectation,” which is establishing the standard employees are expected to meet. Your employees need to have a clear understanding of what they will be measured on in terms of their performance, McMahon says.
Woodlore allows each department to draw up its own expectations, “and then we hold them to it,” Rammes adds.
Recognize achievement
Woodlore’s philosophy of customer service, quality, teamwork and flexibility is constantly reinforced, whether it’s within a sign in the entryway or in the breakroom or on business cards.
“We talk about it in meetings,” Wilcox says. “It’s reinforced all the time. The result is, it becomes part of our culture. It’s part of our daily behavior.”
Another constant within successful organizations such as Quad/Graphics, Woodlore and Medical Advances in Wauwatosa is giving recognition for a job well-done. At Woodlore, spoken praise from management sustains the intrinsic motivation of employees, Wilcox says, adding: “It becomes part of the increased expectations we have of each other.”
Every quarter, Medical Advances brings its 57 employees together for a town hall meeting. Company leaders give presentations on where the company has been, where it stands, and where it is headed. The company’s financial information is shared with every employee. And, as Medical Advances reaches thresholds and breaks records, these are recognized in the form of banners that recognize individual and group contributions, Pareja says.
“We will take luncheons where we can bask in the glow of our success,” Pareja says. “So, that happens at all levels of our business.”
But, before you can transcend the tyranny of routine, you have to rise above it and see it as it is, warns Gerber, the E-Myth man.
Remember that before you as a manager can become connected in a meaningful way to your employees and your customers, you’ve got to step back and think about it, and see the dysfunctional nature of daily life and work. Once you take this step, you can then begin to see the organizing principle behind the work that your organization performs, Gerber says.
“We first have to think differently about who we are and what we do,” Gerber advises. “It starts with thinking first as opposed to feeling or acting first.”sbt
Details about the E Myth Academy, and other E Myth books authored by Gerber can be found at www.EMyth.com.
July 1998 Small Business Times, Milwaukee