Hearing Technologies Inc. adds a team approach to its organizational structure.
What happens when employees start working at cross-purposes
One of the unfortunate consequences of rapid growth is its tendency to overwhelm the key principles on which a business is built. We see it time and again: a company is founded on a strong commitment to, say, quality or customer service. But once things are up and running, the notion gets lost in the daily whirl of getting the product or service out. Employees concentrate on their own jobs (assembling widgets, counting beans) and neglect the company's broader goals. Founders themselves often get so caught up in the daily details that they, too, can lose sight of the big picture. The challenge is to figure out how to bring things back into focus -- and keep them there.
Tom Huber, president of Hearing Technology Inc., knew exactly what his goal was when he cofounded a hearing-aid company in 1985. To be sure, plenty of other companies were manufacturing and selling custom hearing aids -- he had worked for one of the bigger ones -- but none, he felt, was sensitive enough to the needs of dealers and their customers. Dealers had always complained about the inflexibility of manufacturers when it came to quick turnarounds on orders and other special requests. So with Hearing Technology, in Eden Prairie, Minn., Huber wanted to do things better, to create an organization where service was paramount. "We wanted a company," Huber says, "where everyone understood that the details were the difference."
In the beginning the newly hired six employees embraced this attitude without hesitation. Salespeople initiated relationships with hearing-aid dealers, and employees elsewhere in the organization did what they could to make things happen. The credit department, for example, quickly set up dealer accounts; the production department did its best to turn orders around within three days. This isn't to say there weren't occasional snags. Some orders took a day or two longer, and the production people weren't always pleased by what they saw as undue interference from those in marketing. On balance, though, things were off to a pretty good start. During the first year and a half Hearing Technology, with sales of around $1 million, made money -- and had a growing list of satisfied customers.
But over the next year or so pressures grew -- both inside and outside the business. Sales, for instance, increased 150%, and as orders flowed in, the production department in particular struggled to keep up. Hearing Technologies added staff -- it soon had 80 employees -- but for reasons that Huber couldn't fathom, turnaround times often extended to five days, sometimes even to eight. Whatever the source of the problem, dealers had little tolerance for delays, and some took their business elsewhere. Sales and marketing people blamed the production department. But turnaround wasn't the only thing slipping. As time went on, salespeople were besieged with phone calls from dealers who were upset with the way they were handled by the credit department as well; simple inquiries about account discrepancies, they claimed, went unanswered for days. Huber, who spent a lot of his time trying to get a handle on the manufacturing end of the business, recollects that he was aware of some of the complaints. But his mind was elsewhere.
Then, too, it wasn't easy to know which side of the story to believe. "Sometimes," Huber says, "it was like being at two different companies." Employees, on the one hand, would mention ideas they said they had given to one manager or another weeks ago -- suggestions for improving, say, the performance of a product or the flow of work, or a way to appease a disgruntled dealer. What happened to them? Huber would inquire, and the manager in question always had a ready -- and plausible -- answer. Maybe the ideas weren't practical. Or, Huber might be told, it was just another customer trying to delay payment. This was all rather unnerving. Sales continued to grow, and the company was profitable, but it was hard to argue that customers were coming out on top. And though Huber might not have been able to articulate them at the time, the reasons are clear in retrospect: his employees -- whether because of turf battles, lack of confidence, or personality conflicts -- were working at cross-purposes to one another and to his goals for the company.
For several months, Huber tried to refocus efforts and attitudes -- of managers, in particular -- through one-on-one sessions, companywide meetings, and casual comments. But the problems persisted. Customers had the same beefs, and employees were increasingly jaded. Finally, beginning in August 1988 Huber and his board initiated a series of changes intended to put customer service at the top of everyone's agenda. It was a wrenching time, in which four of the eight key managers ended up leaving the company. But the changes, geared to opening up the company to employee suggestions and making it more responsive to the market, are working. In the production area, for example, four longtime employees together supervise the department and since last January have been reshaping the way products are designed and built. The result: what used to be a tightly controlled operation that discouraged input from underlings is wide open to new ideas. Huber's ultimate compliment these days is "They understand what's needed in a sales and marketing business. They're part of the team."
And many of the best ideas at Hearing Technologies now surface at weekly team meetings, sessions in which employees and managers who work together talk openly about problems and ways to do things better (see "The Team Approach," below). Sometimes the suggestions are limited -- a change in components that will save a few cents, for example. But occasionally they're more far-reaching. At a meeting of the manufacturing department last April, for instance, somebody had a bright idea for dealing with the chronic delays in entering new orders. Historically, it had taken order-entry people close to eight hours a day to input orders into the computer; first they had to open the mail, and by the time they were ready to enter the orders, the computer was in heavy use -- and slow. Many of the orders didn't even begin the production cycle until the following day -- a slow start for a company that talked about providing service to its customers. The suggestion? Rushing the new orders into the computer as early in the day as possible. How? By shifting two or three employees from the accounting department for a couple hours every morning to open the mail and then later in the day shifting order-entry workers to help out accounting. Today, manufacturing superintendent Kathy Bundy offers, this type of thinking is actively encouraged. "We're looking for ways to make things more efficient."
It's too early to know how well Hearing Technology will be able to sustain its new orientation. Lately the hearing-aid industry has been in a bit of a slump, so sales have leveled off to around $6 million a year; it's unclear how manageable things would be in a period of rapid growth. But there's no question that several facets of the business are looking up. Even with 80 employees -- 24 less than last December's peak -- the turnaround time on the typical order is down to around four days, Huber says. Employees, moreover, are learning how to work together solving problems -- and they appear to be enjoying it. "We are in the best position we've been in for at least three years," says Marty Ormsby, vice-president for sales and marketing. "And the great thing about it is that our customers are the ultimate beneficiaries."
THE TEAM APPROACH
Some techniques for getting everybody on the same wavelength
An organization where employees speak the same language sounds great -- far preferable to a Tower of Babel. But like a lot of things involved in running a company, you can't mandate it. Here's how Hearing Technology Inc. is making it happen:
* By holding regular meetings. If employees don't hear about problems, their commitment to solving them will be weak, says Marty Ormsby, vice-president for sales and marketing. The answer: hold meetings with a clear focus. Every week employees in each area of the company get together to discuss how to improve their aspect of the business. The sales and marketing people talk about customer feedback; production employees talk about how to turn work around more efficiently. Most teams hold meetings at 7:30 a.m. to avoid distractions. "It's a great way to keep the lines of communications open," one employee says.
* By encouraging departments to talk with one another. It's easy to blame the folks at the other end of the hallway when they're not able to talk back, but not very useful, Ormsby argues. To reduce the tendency to view everything as "us versus them," Ormsby and president Tom Huber urge managers to include representatives from other departments in their weekly meetings. The sales and marketing meeting, for example, is attended by production and accounting -- and vice versa. The result, Ormsby says, is a less fractional environment. "People are interested in solving problems."
* By sharing power with employees. One of the surest ways to kill a feeling of cooperation is to discourage people from having a voice. "People like to feel they have good ideas," Huber says, "especially in areas they think they know." Often they do. While Hearing Technology's top management still makes decisions about companywide policies and budgets, it gives teams a big say in what happens in their end of the business -- who gets hired, how salaries are divided, and how jobs are structured. "When people have some control," Ormsby contends, "they're better team players."