Employers change from within to meet the demands of employees, customers
It’s not unusual to see companies change during hard economic times. In an era of slashing costs and running lean, change becomes inevitable.
Change in the 21st century is coming from all directions, but companies can’t run lean without qualified employees running the operations. Some companies are attempting to prevent the need for downsizing by cementing relationships with customers; others are changing management’s relationship with employees.
When all is said and done, business is coming down to relationships — period.
While "old-school" management techniques in 2002 may mean top-down, dictatorial-style managers trying to squeeze as much productivity from rank-and-file workers, management consultant Karen Vernal says that managers these days are turning to the tried-and-true methods of the old-old school of her father who used to say: "People don’t care what you know until they know that you care."
"Most successful businesses have always appreciated that business objectives get done through people," Vernal says. "That would lead to an appreciation that attending to the needs of the people would result in a successful business."
Customer intimacy
With thousands of companies in the plastics molding industry, the management of Trostel SEG of Lake Geneva knew it had to do something to differentiate itself from the competition. Steve Jenkins, the director of sales and marketing, came up with Trostel’s "customer intimacy" program to do just that.
Customer intimacy is Trostel’s way of becoming a consultant to its customers for everything from inventory-turn goals to electronic-data invoicing, according to Tom Sloane, Trostel’s president and CEO.
"Our mission is to really understand what it is that’s important to our customers," Sloane said. "… What we try to do is understand their needs and then get in there and make sure we can do whatever we can to make their business successful."
As with any new management initiative, it took some time to get everyone on the same page, but management team members and the union employees could see the long-term benefits of changing the company’s philosophy.
"I think that our union people have always been pretty sensitive to the fact that it’s really our customers who pay our bills," Sloane said. "And if we were going to survive and prosper, we had to make sure that our customers felt like we really care about their businesses."
The program, initiated about nine months ago, appears to be working. While most molders were down 15% to 20% in 2001, Trostel had an 11% increase in sales in the injection-molding side of its business. Year-to-date sales in 2002 are more than 20% higher than the previous year, while the industry as a whole is only slightly better than 2001, according to Jenkins, who also credits finding niche markets and advances in technology for Trostel’s continuing success.
Jenkins emphasized that everything starts with communication and a team environment, something that’s not so new in managerial lingo, but certainly new to an old-school business like plastics molding.
"Rather than work under a dictatorial mode that many manufacturers worked through in the 1980s and 1990s, we’ve really implemented communication internally on what’s really happening to our customers, because the entire team needs to understand the relationship status of our primary customers," Jenkins said. "And this relationship enhancement only increases the level of communication and commitment."
It’s important for management to walk the walk, says Vernal, because employees lose faith in company leaders who profess one thing — through mission statements or marketing — without putting it into practice. Employers can say that they care about employees, but when it comes down to it, if employees see that management is just prattling on about working in a team environment where none exists, employees lose their will to carry out company goals and will eventually leave. And if they don’t, they can darken the mood throughout a company.
"A key success indicator is a leader’s ability to excite employees to carry out the business’s mission," Vernal says. "When it’s done right, it’s almost like there’s an aura throughout the company — a sense that everyone’s on fire. There’s an excitement, an energy and a focus."
So if the success of the company is dependent on people — employees — carrying out the mission of the company, it stands to reason that managers play a key role in drawing out the best in those employees. The problem is, in many cases, what makes a candidate successful enough to be promoted to management may not necessarily make that person successful as a manager, Vernal says. So more and more companies are focusing on training managers of all types with the skills they need to become successful managers.
Why is that important? Some may say that turnover in the workforce is inevitable, and that employees usually leave to pursue a higher paycheck; yet the No.1 reason people leave companies is due to their direct relationships with their supervisors, Vernal says.
But Vernal doesn’t think that a top-down style is necessarily a bad thing in today’s managerial world, as long as managers are consistent in their treatment of subordinates and are able to motivate them successfully.
"Some people see the two styles as being mutually exclusive, that is, we either do all of this warm and fuzzy stuff or we have good business practices," Vernal says. "You must have both a good system in place and good business practices to be successful, and you must have good people who are on fire — who know that they count — whether they are in the mail room or are a top executive. They need to know their position makes a difference.
"There’s the classic example of a guy walking up to a building that’s under construction," she continues. "He watches as a laborer lays bricks one at a time. When he asks the worker, ‘What are you doing?’ The worker replies smugly, ‘Isn’t it obvious? I’m laying brick.’ The same man walks around to the other side of the construction site and watches as another laborer lays brick. Again he asks, ‘What are you doing?’ And the second worker says, ‘I’m building a cathedral.’ It shows what happens when employees are ignited by the mission of the company. Everyone gets that feeling."
Old-school industry, nouveau management
Printing, like plastics molding, is about as old-school as you can get in the industrialized world; but even within this industry, owners and managers are incorporating new philosophies into how to run their businesses. Printing is also a highly competitive, rapidly changing industry where employee retention is one of the keys to a successful operation.
When Dan Kipp, vice president of administration at New Berlin-based Sells Printing Company, began to analyze how the company could keep employees, he found that happy workers are productive workers, and the source of a lot of unhappiness came from supervisors and managers. The old way of thinking simply placed a person into an available management position without regard to personality and skill sets. Now Sells is screening employees before placing anyone in a management position.
For example, screening for supervisors might look for traits that show a person can deal with different types of personalities, Kipp said. In the past, some of the only qualities required of supervisors related to getting workers to work faster and harder, and the supervisors pretty much treated everyone the same.
"The hiring process has become more sophisticated," Kipp said. "An easy way to look at it is you’re getting employees for their behavior now, not just to come in and do a job, and if someone has performed a certain way in the past, that’s a good indicator that person will perform that same way in the future. People have certain ingrained behaviors in them — they can change a little bit and learn to grow but, for the most part, people stay who they are for a long period of time. You can’t take somebody who has no people skills and doesn’t like working with people, send him to some seminars, and expect him to be able to work with people."
The screening also works when moving individuals from one department to another, to make sure those people fit the job, like the transfer of a receptionist into a customer-service position. The flexibility to see an employee’s potential for other jobs, with the help of screening, and that fact that Sells — at 155 employees — has been a growth business keeps turnover low, Kipp says.
Keeping turnover low saves companies time and money — anywhere from one to three times the person’s salary — according to SBT columnist and human resources consultant Dan Schroeder of Organization Development Consultants in Brookfield.
Schroeder says that companies are being forced to change their ways by entry-level employees from Generations X and Y, who have seen their parents downsized and treated badly by former employers. The days of a career employee are over; Gen X employees aren’t loyal to a company — they’re loyal to themselves.
Emboldened by self-loyalty and the Information Age, these workers aren’t afraid to ask why their employers don’t offer the same benefits or incorporate similar policies as the competitor down the street or across the country.
"They have a different world view," Schroeder says of Gen X and Y workers. "They grew up with a computer at home, they grew up as latch-key kids, they grew up as self-sufficient individuals. They grew up asking ‘Why? What’s in it for me? How come?’ And they expect answers. Go back and talk with their elementary school teachers and their high school teachers. They’d say that these students that grew up in the 1980s and 1990s were a challenge to work with at the time.
"Well, now they’re in the workplaces and managers are having to confront that reality," Schroeder said.
Another factor that is forcing companies to change the role of managers and supervisors is technology. Advances in how things are done cut across almost every industry, making most jobs within a company a life-long learning process. That means managers and supervisors must fill the role of coach and mentor along the way.
"Managers and supervisors are spending more time developing employees, helping them acquire new skills and knowledge than they ever have before," Schroeder says. "And, by definition, that’s more of an intimate relationship. I don’t think you teach someone by sitting behind a desk. You teach people, you help them learn, by being there with them."
Power to the people
D&S Dental Lab in Waunakee is a company that Schroeder calls "the best example" that he has seen in taking a whole new approach on how management – in this case, owner Dick Pilsner – deals with employees.
Pilsner, from the outset, said that in order to be successful he needed to get the employees involved in decisions, even if that meant going against what he thinks is right. For example, the company is building a new facility and, through discussions with the employees, the building evolved differently than what Pilsner envisioned. But he’s OK with that.
"When we really do empowerment, we don’t just set them up and watch over them and lead them toward the way we want," Pilsner says. "It’s an act of letting go.
"There’s more than one person in the room that can be right," he notes.
Pilsner empowers workers to make day-to-day decisions, too. Departments within the company can change procedures without his approval. He lets them find their way, saying that although mistakes happen, it’s usually due to lack of knowledge, which usually can be fixed.
Pilsner is also a believer in continual education, but unlike many employers that offer to pay for technical classes, D&S also offers personal-growth classes for employees — everything from basket-weaving to philosophy. If someone at the 103-person lab shows an interest in a subject, it usually ends up as a class.
It’s about building a community, he insists. At social events the company sponsors, such as field trips — visiting museums, going to ball games — and parties, employees must bring their families along. For employees who don’t have a spouse or children, that means inviting their parents — all in the name of "inclusiveness."
Pilsner’s ideas may sound like pie-in-the-sky to some, but he — and his employees — have proved it works. When employees asked if they could have a daycare center at D&S’s main lab (there are also satellite offices in Baraboo and Watertown), Pilsner agreed. A lot of companies would shy away from providing that kind of benefit due to the cost, but what started out as a benefit to employees with children has turned into a profit center — and that’s with employees getting a 40% discount. The center, which initially started with 23 children, is at capacity caring for 90 children and has a waiting list of 180.
The fact that D&S has more than four employees is also an anomaly for dental labs. Eighty-two percent of labs in the country operate with fewer than five employees, according to Pilsner. Only .5% of all the dental labs in the country have as many or more employees as D&S.
Ultimately, the experts say, the success of companies and managers comes down to relationships with people — customers and employees.
"Engaged managers today aren’t holding hands, singing songs," Schroeder says. "They’re out there connecting with people in genuine ways so that the person can do a good job, so ultimately the company can benefit. … It isn’t something you do just because everyone else is doing it. You’re connecting with employees and you’re helping them be more and do more because it’s necessary for success."
May 24, 2002 Small Business Times, Milwaukee
