Once Led Through Fear, a Small Manufacturer Reimagines Itself
In October of 2013, my father-in-law called to let me know that his company's CFO had left. He asked me to lead Onex, a family-owned, 50-year-old manufacturer of industrial furnace components, based in Erie, Pennsylvania.
It's hard enough to take charge of a business that is doing well, but this one was, to say the least, in disarray. The employees were not only not working together as a team; they were actually pitted against one another, while others had a "not my job" attitude. All the business units were siloed. The previous CFO led through fear. We were no longer the friendly "family" company we once had been where people loved to come to work.
So, there I was, trying to build trust in a team who had been betrayed by their former boss and did not know me, and with a business that was in severe financial distress. But I was motivated and determined to figure out a way to turn the business around.
My road to business success was truly the road less traveled. You see—my education was in engineering, not in business management. Even though I had no idea what strategies the business books would have suggested for solving my dilemma of trying to turn around distressed business, my background came through in spades, because engineering taught me to solve a problem by knowing how to find a solution.
When I began my career, my father was quick to tell me that just because I had a degree in engineering, that did not mean I knew more than the personnel on the plant floor. He stressed that in order to put my degree to work and make the textbook learning practical, I had to ask the people on the frontlines doing the actual work their perspectives. These individuals very likely knew the solution to the problem I was working on but had never before been asked by management for their input. So, I set out to identify problems and create solutions.
A Change in Style
From the outset, we changed our leadership style from command and control to a coach approach. The coach approach begins with training your managers to understand how they can better connect with their people to find common ground, even when they do not share the same beliefs. Teach them how to ask clear and specific questions and provide feedback appropriately without raising the other person's defenses. Start them off by encouraging them to engage in peer coaching conversations to practice coaching in a safe setting. This will allow them to gain more confidence before coaching employees.
By encouraging more frequent conversations between employees, you can and will improve company-wide communication as people begin to know and trust each other and share ideas. The very act of becoming friendly will help the workforce unite and build a team spirit to give you a competitive advantage and retain your top talent.
A Lean Journey
Lean was a toolkit that helped us change our culture from "not my job" to one where everyone from the plant floor to the CEO was in charge of making things better every day. Our lean journey began when we mapped out our value stream. First, our production personnel created a comprehensive spaghetti diagram of their movements in the production process. (Boy, was that an eye-opener!) My production manager was averaging 20,000 steps a day.
While that might be the perfect number of steps for weight loss, it is a terrible waste of motion for productivity in business.
In the end, we reduced the non-value-added movement by relocating the entire operation to a more efficient building. The outcome? Reduced overhead costs and a more productive, efficient operation. And the production manager's steps were reduced to 5,000 per day.
So, how did we become lean? Through a number of ongoing strategies, some of which involved working with our region’s Manufacturing Extension Partner (MEP) NWIRC for training and collaborative programs, such as Lean Together and Kata. Here are some specifics.
1. Encourage daily improvement: In Paul Akers' book, 2 Second Lean: How to grow people and build a fun Lean culture, Akers breaks down the idea of lean into one simple question: "What bugs you?" I asked similar questions of Onex personnel as we began our lean journey:
"What takes up most of your time? What do you find frustrating?" With each response, we worked together to reduce waste and non-value-added steps. The key is to allow the person closest to the problem to suggest the solution, and then implement it quickly. In cases where the process cannot be changed, it is up to you as the leader to communicate (not criticize) why the suggested change is not possible.
2. Remember lean is a journey, not an event: The hardest part of the lean journey is sustaining the change. You cannot change a culture with an event; therefore, lean must become embedded into your business culture. At Onex, we made it everyone's job to improve processes, from the CEO to the production floor personnel. We worked not only to improve our processes, but to improve our clients' processes as well. Because manufacturing is the lifeblood of the community, we believe in making things better and doing our part to keep small-town USA alive and thriving.
3. Grow your people: Akers also points out that lean is about growing people. I have always said that my engineering degree taught me how to think, in that it showed me how to solve any problem through a series of steps. Kata is a tool used by Toyota to teach personnel to analyze the current situation, define a target condition, and experiment changing one variable at a time, documenting the expected outcome as well as the actual outcome. The key is to experiment quickly, fail fast, and try again! Not every idea will be successful, but if you don't have failures, you won't learn. Become an organization that recognizes that it is all right to make some mistakes. I agree with the old adage, "You can learn more from your failures than your successes." Just don't make the same mistake twice.
4. Set high-level goals: Instead of micromanaging your employees to meet goals, outline high-level goals and allow them to work together to figure out the best way to attain them. Allow personnel to report their progress and plans for the future at quarterly meetings, and if at any time you feel a plan is not sound or progress made is not in line with your expectations, you can intervene. This new approach will cause everyone to do his or her part in working toward high-level goals as a unit. More work will be completed as cross-functional teams band together in pursuit of a common goal. My advice is to encourage people to think creatively and be agile. It is less stressful for everyone, and the results will be better than you can imagine—I promise.
5. 5S – Sort, Set in Order, Shine, Standardize and Sustain: Change is inevitable, but it doesn't have to be traumatic—it's all in your approach. We utilize the 5S philosophy every year to clean out the old and make room for the new. Times change. Don't become complacent. Clients' needs change, and therefore our operations must change too.
6. Practice servant leadership: American manufacturing has been historically autocratic, command-and-control since the Industrial Revolution. Today's global business environment requires manufacturers to become more agile, which means employing a more democratic leadership style where all ideas are expected to be on the table. Onex leaders practice servant leadership, which means we listen to the concerns of our personnel and empower them to make decisions by removing obstacles to help them become more successful. Then, we celebrate our successes as a team!
Reimaging "Family Owned"
After all the improvements, it became time to think about next steps in regards to succession planning. Most family-owned companies fall in the range of small to mid-sized, which is also the space Onex occupies. In 2018, my husband, Drew, and I acquired Onex from Drew's father, Ric Walters. Since then, we have worked very hard and have enjoyed several years of consistent growth. Today, the company has achieved a level of success and stability that finally allows us the space we need to be able to take a step back and consider our next steps, which include discussing our own personal goals and, ultimately, succession plans. At the age of 40, we may seem too young to some to be considering succession options; however, as leaders we are cognizant that we must always have a clear vision for the future of our company. Long-term business success is not based solely on today's financials, the next quarter's sales, or even the next presidential election—it is about being profitable so the next generation can reap the rewards.
We see our Onex employees as our family members, and we enjoy living within the company culture we have built together. Onex is proud to be known for our experienced, creative, hard-working people who are committed to finding innovative solutions and who treat one another and our clients like the family we are. And, as Peter Drucker and the Ford Motor Co. say, "Culture eats strategy for breakfast."
This family focus and the culture it has created has made Onex both strong and successful. This unique and powerful engine for success actually changed the playing field for us and helped us to reimagine what the term "family-owned" really meant. Was it possible that the greater Onex employee family could own the company themselves?
We began by investigating Employee Stock Ownership Plans (ESOP). An ESOP would ensure the company's culture and legacy remained intact while rewarding hard work with a stake in the growth of the company. Owning stock in their own company will lead these new owners to make better suggestions for improving performance, and encourage them to be long-term members of the team and work more cooperatively with colleagues. We believe this option will allow each employee to feel inspired, safe, and fulfilled each day, because they will all know that their work matters in the greater economy.
Our journey is not complete. I have written a book to share our journey with leaders who may need inspiration. Drew and I are also in the process of locating other companies to purchase that we can fold into the Onex umbrella.
Ashleigh Walters is president of Onex and author of Leading with Grit and Grace.
