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| Taking It To The Next Level: A small Business Success Story by Linda Bush Published in Human Capital Strategies & News, January 2000 “Was it difficult?”, a woman business owner in the audience asks the keynote speaker, Dale Crownover, CEO and President of 1998 Malcolm Baldrige Award winner Texas Nameplate Company, the smallest best company in America. “Yes,” he replies, “it was difficult. But let me tell you what I’ve learned ‘difficult’ is. The first five years as President of this organization was a daily grind of EEOC complaints, customer complaints, a lawsuit over copyright infringement, people quitting every day, company information stolen and shared with the competition, City of Dallas citations for our waste water’s hazardous discharge, EPA violations to correct. That was difficult.” Dale Crownover holds audiences awestruck with the story of the business turnaround of his second generation, family-owned business that makes chemically etched metal nameplates for everything from jet aircraft cockpits and 18-wheeler hubcaps to desktop computers and pressure valves. A small band of 66 high-spirited and diverse employees celebrates this organization’s accomplishments with their unassuming leader over pizza parties, back-lot barbecues, and trips to customers’ and suppliers’ locations and to awards ceremonies. So why the transformation? Crownover recounts the day he drove to the office, knowing that a problem with a major government defense customer awaited him, and hearing on the radio that only 1/3 of one percent of family-owned businesses succeed to the 3rd generation. Whatever the customer had in store, now he had a bigger problem: save the business for his young sons. The customer, Lockheed Martin (formerly General Dynamics), had mandated for over a year that Texas Nameplate become SPC certified and now made good on their threat to cut off their nameplate supplier by closing its access to EDI (electronic data interchange). Crownover believed SPC (statistical process control) was only for the “big guys” and ignored the customer’s deadline. But the “we’re so small” attitude hadn’t worked with the City of Dallas, and wouldn’t work with the customer. Now he reluctantly agreed to buy a computer and took the SPC courses himself first, then encouraged his management team to follow suit. Texas Nameplate saved this customer by providing a 45-page SPC plan, and was the first of General Dynamics’ 1,700 suppliers to get certified. SPC jump-started the company’s eight-year journey to achieve world-class quality. Crownover often drew a baseball diamond to describe to employees and customers alike his vision of achieving world-class recognition. SPC got, he said, got them to first base. Second base was Total Quality Management with its Zero Defects mantra, and third was ISO 9000 certification. Scoring at home plate, the Baldrige award, would take eight years and a lot of persistence and consistency by managers and employees alike. Seven key business drivers were identified to strategically plan the future of the business. Crownover and his managers listed them as: Customer Satisfaction, Employee Satisfaction, Environmental Consciousness, Fair Profit, Controlled Growth, Process Optimization, and External Interface. Then, by using the Baldrige Award criteria as a business plan, the company set its goals and action plans each year to improve in all seven categories of the award: Leadership, Strategic Planning, Customer and Market Focus, Human Resource Focus, Process Management, and Results. Not only do the criteria serve to elevate a company’s performance standards and expectations, they also facilitate communications and sharing (within and between companies) and provide a working tool for planning, training, and assessment. “Everything we do should have six linkages to our overall business plan,” says Crownover. The team of supervisors called the DOIT, for Daily Operations and Innovations Team, leads daily operations. To watch this team at its semi-monthly meetings is to see empowerment in action. Individuals represent their functional area but also own a key measurement, such as on-time delivery or customer satisfaction. The team shares results, discusses problem areas, and records action items. Employees weren’t always convinced the quality journey held something for them. Reluctance to engage in Dale’s bold guarantee, “On time and error free or it’s free”, was particularly strong among the veteran employees, many who had built Texas Nameplate from a fledgling post-WWII business. “Defect-free sounded like a bunch of hooey,” remarks Ernest Burleson, self-made tool and die maker with over 40 years tenure. To date, only four shipments have been given away due to defects. “The guarantee’s greatest effect was on our people. They’re proud of our record 16 days (out of 21 in a month) where zero defects was achieved.” “It was important for us to learn that it wasn’t about the trophy, it was about the competition. It wasn’t even about getting bigger financially, it was about getting better,” affirms Crownover. Though the company grew from $2.1 million to $4.5 million annually during the journey, Dale prefers to talk about the improvement in employees’ quality of life. For the first time in the company’s 46-year history, human resources was integrated with overall business planning, Employees were dubbed the “internal customer” and received comprehensive training and education linked to organizational goals. In a four-day leadership skills course, offered at the Hogan Center for Performance Excellence by Bush Anderson & Associates, all supervisors and managers learned and practiced ways to empower their employees and facilitate collaborative decision making. In addition, employees received cross training to provide flexibility and adaptability during workload shifts and absences. “People want to do well, that’s God’s plan for them,” remarks Crownover. “Support and recognize them, and they will. And, they’re more open to critique when they see it as an opportunity to improve.” At the beginning of the journey, there were no college graduates at the company. Many employees had no high school diploma. Dale led the way by finishing his own degree in 1997 and paying the tuition for employees to earn their GED or a college degree. Everyone participates in learning Spanish or English at company expense as well. Recognition, turnover, safety, benefits and attendance all became important aspects of the strategic plan. When Texas Nameplate won the Texas Quality Award in 1996, Crownover closed the plant and rented buses to carry all employees to the award ceremony in Austin. Similarly, everyone was offered the time off and travel expenses to attend the Baldrige Award ceremony in Washington, DC in February 1999, and half the employees took the offer. A gain-sharing plan, tied to billing, sales, attendance and safety, was instituted in 1997 to give back the gains achieved from eliminating re-work. By ensuring that manufacturing and sales employees work together better, employees have enjoyed an average of $2,700 yearly bonus, paid quarterly. Profit-sharing, tied to on-time delivery, also improves the compensation package. In fact, annual compensation per production employee grew from an average $23,000 in 1994 to nearly $31,000 in 1998. Benefits also improved dramatically. Turnover dropped from 45% in 1991 to 8% in 1997. What’s the next level for a leader who’s accomplished the Baldrige Award and written a book about the journey to give credit to his employees for their efforts? (see Take It to the Next Level, copyright 1999, NextLevel Press, Dallas) “I want to continue teaching small businesses about the Baldrige process, with speeches and seminars and the US government’s Manufacturing Extension Programs. I encourage company presidents to apply for their state awards that use the Baldrige criteria and to be trained as state award examiners for what they can learn to apply in their own business. That’s how we can strengthen America. And we’re pursuing a patent for the waste elimination process we’ve developed, and that can have international impact.” What’s the next level for you, for your employees? Has empowerment gotten a bad rep in your organization? Need an effective business plan that integrates your human resources effectively? Visit the Web for your state quality award foundation and download the criteria. It’s free. The decision to pursue it with desire, determination, and commitment is up to you. ________________________ Linda Bush, Bush Anderson & Associates, Inc. is co-author, with Dale Crownover and John Darrouzet, of Take It to the Next Level, ”1999 NextLevel Press. She serves as leadership coach and facilitator for small to medium-sized businesses in pursuit of performance excellence. Excerpts from the book are available on www.nameplate.com. Leadership course descriptions are available on www.hogancenter.com. ”November 1999, Bush Anderson & Associates, Inc. For reproduction rights, call 940.686.0200 or email lindabush@bushanderson.com. | ||||||||||
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