(continued)
INC.: Do you ever find yourself in danger of losing your credibility?
STACK: If I see something coming, I try to get there first. I try to make sure we're the ones to get the information out on the shop floor. We confront the problem, and we communicate. Nine times out of 10, it passes without a storm.
INC.: You're saying that one of your main jobs is to anticipate credibility problems before they arise.
STACK: Absolutely, especially when you're talking about the bonuses. That's why it was so important for us to take action on the liquidity goal even before the first-quarter results were in. We knew that the first question people were going to ask the frontline supervisors was "What are we going to do to get the bonuses?" We had to prepare an answer for them, and it had to be good one. And the answer was "OK, we blew it, but we're dead serious, and we're committing top people and about $300,000 in resources toward solving the problem. This is not going to be a part-time attack. This is going to be a full-time attack for the next three quarters."
INC.: Can we go back to your point about taking emotions out of the business? A lot of people would argue that businesses thrive on emotion, that companies don't do enough to motivate employees, that we need more pom-poms and inspiration, not less.
STACK: Don't get me wrong. I'm really big on pom-poms and celebrations and inspirational messages. I just don't think they should replace solid information about the condition of the company. People should understand why those pom-poms are there. It's not fair to pat workers on the back all the time, telling them what a great job they're doing and what a great company this is, and then two years later close the door on them. They deserve more than that. They deserve to evaluate the situation for themselves. I don't want people to sit there and passively accept leadership. I want them to become active in leadership, and that means giving them a constructive path to follow. I don't think management should be some kind of glorified cheerleader.
INC.: OK, so you go by the numbers. But haven't you ever gotten into a situation where the numbers tell you to do one thing and your heart wants you to do something else?
STACK: Do I ever feel torn? Yes, of course. I felt incredibly torn after General Motors canceled those 5,000 engines in December 1986 ["Crisis Management by Committee," May 1988]. I mean, the numbers said we had to cut 100 people from the payroll or risk the company. But that kind of layoff would have been a tremendous failure of management. There was nobody else to blame. You've got to take responsibility, even if there was no way you could have seen it coming.
INC.: I guess that decision wasn't much fun.
STACK: Aw, no, it was awful. Because you're deciding whether to take somebody's job away. You could protect your own ass. But you'd sit there and stare at the ceiling and think about these people who were told they had a job. It should be their choice, not yours.
INC.: What did other people think?
STACK: There was a small group of senior employees who didn't want to take the chance. They weren't close to the new group, the ones who would be laid off. They said, "Hell, if it's between me and them, let it be them." And they had a very good point. In order to get by without a layoff, we would have to get 100 new product lines up and running in three months. Well, you just can't introduce products that fast. And if we failed, we would have had to do a much bigger layoff, get a new infusion of outside capital, and change the whole thinking of the company. It's possible there would have been a change in management as well.
INC.: So what happened?
STACK: Eventually those senior people came around. That's probably what sold me more than anything else. The hard-core guys came back and said, "Geez, we've been thinking about it, and we can weather it. We'll have to train these kids, but we'll make it. We can do it."
INC.: Was that an emotional decision?
STACK: No, I think they'd figured it out statistically. We told them we thought it was an impossible task, but they could break down the elements of the job in more detail than we could. I guess they just realized they had 33% more left.
INC.: You must feel pride in the way you dealt with that situation.
STACK: I don't know. I think the system took care of itself. If I'd heard something else from the organization, I might have had to react differently. But when those guys said, "Let's try it," that was all I needed. I really wanted to go that way. When you can see compassion in your fellow workers, that's a big reward. It motivates you even more, because you see what a good group you're working with.
INC.: What was it like to introduce all those new lines?
STACK: It was pure hell. We told people that the pressures would be overwhelming, but I don't think we had any idea how overwhelming they were really going to be. We cried in July, it was so rough. We couldn't get our quality up. We couldn't get our routines together. We had severe start-up problems. It was like recovering from a stroke -- very slow and very painful, and it hurt. It really hurt. I'm talking about long-term pain. I think we're only getting over it now.
INC.: But you made it without any layoffs.
STACK: Yeah. In fact, we added 100 people.
INC.: It's interesting that you feel so strongly about letting employees decide whether to stay or leave, about letting it be their choice. You must have a hell of a time firing people.
STACK: Well, I don't want to work around unhappy people, and if people aren't happy, I don't mind telling them that they're unhappy and they should go somewhere else. Of course, you have to understand, I really don't have to fire many people. This system does a lot of the work. The nonperformers take themselves out. Peer pressure takes them out. But, yes, anytime somebody leaves, you feel the loss.
