If you want openness and trust, Swiggett urges, then you have to act openly and with trust, every day. Thus, every division president sees the monthly financial statements prepared by every other division president. And the employees are similarly kept informed at monthly meetings that cover the company's progress, as well as the division's specific performance and its effect on the RONA bonus.
In the words of the Kollmorgen Philosophy: "Trusting people to be creative and constructive when given more freedom does not imply an overoptimistic belief in the perfectibility of human nature. It is rather a belief that the inevitable errors and sins of the human condition are far better overcome by individuals working together in an environment of trust, freedom, and mutual respect than by individuals working under a multitude of rules, regulations, and restraints imposed on them by another group of imperfect people."
The whole weight of the Kollmorgen structure and culture seeks to confirm its members in service one to another and to sustain a sense of caring among them that includes yet transcends their time on the job. Again, the events at the Industrial Motor Drives Division during 1982 and '83 provide an excellent case in point.
As order rates declined and cancellations accelerated during the second quarter of 1982, Griggs and others cautioned employees at the monthly "News Conference" that "hard times were inevitable." Be careful of your discretionary spending, they urged, and don't make long-term financial commitments. By the third quarter however, it was aparrarent that roughly 30 people -- or 10% of the work force -- would have to be laid off indefinitely.
"I felt terrible as hell when we had to lay off people," says human resources manager David Workman, 34. "My way of trying to cope with that feeling was to get everybody committed to getting them back as soon as possible." At the News Conference in December, when the lay-offs began, departing employees were told in detail what their friends would be doing to restore their jobs in the interim. They were told that their health, dental, and educational-assistance programs would remain in force, that the company would help anyone facing a financial emergency, and that they were welcome at all future Conferences. "In our minds, the still very much our employees," an says. "They were being convenienced."
"It was shown that they worked every way they could not to lay anybody off," says motor assembler Billy Hubbard, 34. "They even tried to help people get other jobs. They told every employee what to expect. There was no hiding this and hiding that, things which other companies just don't seem to do."
Fred Paris, 45, a maintenance man at Industrial Drives, describes his feelings this way: "This is the best job I've ever had. A lot of people won't realize how good it is unless they've had a chance to work somewhere else. We're like a family here. In December, when our people were laid off, we all pitched in and promised ourselves that we would get all those people back as soon as possible. And we did it." Indeed, recalls began as soon as business turned around during the second quarter of 1983. By July, everyone who had been laid off was back at work.
Encountering Kollmorgen for the first time, the serious student of corporate America is apt to feel a sudden flush of exhilaration that here, at last, in the cogency of its inner logic and the inspiration of its design, is the perfect answer to perpetual growth. But the system is not perfect; it is only close. Sales more than doubled, and earnings per share quadrupled between 1975 -- the year productization really took hold -- and 1979. But for whatever reasons -- national economic conditions, flawed judgments, or both -- Kollmorgen did not reach its objectives in 1982 or '83 as earnings declined both years.
Today, Wall Street analysts are projecting hefty earnings gains through 1985 at a rate well above the company's own goals, but here, too, there is a sense that these measures cannot adequately express the complexity of Kollmorgen's progress. In 1974, Swiggett began a correspondence with Prof. Jay Forrester of Massachusetts Institute of Technology, who in 1965 had written a paper that anticipated many of Swiggett's later thoughts. In the paper, "A New Corporate Design," Forrester wrote: "The precedents set in the last several hundred years by changes in the form of national government suggest that corporate power will also evolve from the authoritarian toward the constitutional. With this evolution, the primary objectives of the corporation would change from the already diluted idea of existence primarily for profit to the stockholders and toward the concept of a society primarily devoted to the interests of its participants." Therein lies the real significance of Kollmorgen. If nothing else, it is certainly part of that evolution.
"There's a lot of sin out there in the world," Swiggett says. "People lie, they cheat, they steal, they rip off your car radio. You don't have to set up your business like it is in the outside world. You want people to feel as free from threat as they do in their own bedrooms. We just assume that everybody's honest, and we run the business that way. And people rise to this. But the devil's out there, and he's always whispering in the ear of some manager, 'Hey, you've got to control these suckers or they'll run away from you.' So we can't even give away the secret of our success, because most people think it's crap."
But not everybody thinks so, as Skip Griggs can attest. On that day in 1980 when he finished reading the Kollmorgen Philosophy, he went straight home and asked his wife, Sue, to read it. He waited impatiently as she turned the pages. "What do you think?" he asked.
"It's okay," Sue said.
"Just 'okay'?" Griggs demanded.
"Well," Sue asked, "aren't all companies run this way?"
