So enamored has he become of this idea swapping that -- inspired again by Wal-Mart -- he completely reorganized his 10-member sales department. About five years ago, explains John Kahl, Manco unexpectedly lost a major piece of business, causing the company to reexamine the quality of its communication with its salespeople. Though most were supposed to file weekly reports, few actually did. Looking toward Wal-Mart, Jack Kahl noticed that most of its salespeople were based in Arkansas, flying out to their territories. Soon Kahl had all his people right where he wanted them: Cleveland. "Now," says John, "ideas spread quicker."
At 4:15 every Monday, all the salespeople who aren't out on the road meet at headquarters. They share ideas -- for instance, about seasonal promotions. Recently, one salesperson told the others about a successful promotion that involved selling two packs of duct tape at a special price. "They all got out there and got their plans set with other retailers before our competition even caught on to it," says John. Because salespeople are at the company -- as opposed to being represented by faceless faxes -- they have a much easier time pushing through custom orders or especially important customer requests. "It's the conviction in their voices," says John. "The urgency comes across."
Even though salespeople have to travel out to their territories, the system isn't as expensive as it sounds. Because they have limited time, they plan their trips more efficiently. The company also saves money by buying nonrefundable tickets, and there are no company cars. Last year, with sales of $60 million, Manco spent only $155,000 on travel and entertainment for its 10 salespeople. The benefits, though intangible, are real. "If I were just in my territory," explains Steve Janas, a national account manager, "there's information that I might not get back to the company for a week."
But Kahl doesn't want employees to hold back on any of their ideas. He urges them to be fearlessly innovative, even at the risk of looking silly. And he's perfectly willing to look foolish himself. In 1984 Wal-Mart founder Sam Walton embodied this daring spirit by performing a hula dance down Wall Street. Last October Kahl demonstrated his own prodigious wiggling skills.
It was, by all accounts, quite a sight. There was Kahl, clad in a Manco green sweater, brandishing a Manco bath towel, and trailed by the West Lake High School band. On the shores of the small lake out front, he peeled down to a microscopic black bathing suit, which, when he bent over in a particularly unflattering way, read "the $60-million plunge." Kahl had promised that if sales hit that number, he would literally jump in the lake. During the last two days of the fiscal year, some salespeople worked round the clock, pushing sales to $60.09 million. "People wanted to see the big duck in the water," says John Kahl.
After his brief but frigid dip, Jack Kahl scampered to the company cafeteria, where he handed out bonus checks. "It was outrageous," recalls Donna Rae Smith, a sales consultant who was among the invited guests. "But there was a real sense of fun, joy, and accomplishment. He was saying to his people, I want you to do risky things."
Indeed, says Kahl, it's crucial for companies to create "a language and a culture that allows failure," as Wal-Mart has done. He has tried. Four years ago Manco brought out a specially treated double-sided tape aimed at painters and other contractors. The product's selling point, allegedly, was that it left no adhesive residue. It made no mark on consumers, either. "It became what is known as a genuine dog," concedes Kahl. Wal-Mart, in fact, had to mark it way down just to get rid of it. The venture cost Manco some $200,000, plus "slight damage in reputation," he says.
Nevertheless, Kahl behaved gracefully. "I didn't beat up on my marketing guy," he says. "We all felt bad, but what can you do? You cut bait and you laugh about it."
To no one's surprise -- least of all Kahl's -- Wal-Mart didn't fire its buyer, either.
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Rubbermaid Inc.: Measuring Innovation
"All I know," says Jack Kahl, "is that if I study excellent companies, I come up with excellent ideas."
Not all of those ideas are as broad or as sweeping as the ones Kahl has adapted from Disney and Wal-Mart. In 1987 he and Corbo were attending a trade show when an executive from Rubbermaid happened by. He said he had heard about Manco through Wal-Mart. Some insiders believe that Rubbermaid may have been interested in acquiring Manco. In any case, Kahl left the show with an invitation to visit sometime soon. "I take every opportunity to see a good company," he says.
When Kahl and Corbo made the trip, Corbo immediately spotted all the charts that served as wallpaper in the office of the vice-president of R&D. The graphs seemed to track atypical activities, such as creating new molds. "What really struck me was the idea that innovation is something you have to measure and focus on," says Corbo. "They innovate by plan." When he asked about it, the executive handed Corbo a book to study. Returning to Manco, he worked on figuring out just what vital signs he ought to chart. He had the measurements up on his wall within two weeks.
Corbo's wall now features charts that measure, among other things, the number of new customers so far this year, the number of quality improvements, the number of new products introduced, gross margins by product category, and the number of million-dollar ideas since 1986 (there have been seven). At the start of each year, Corbo sets goals in these areas. "American car companies say they are working to improve," he explains. "Then you go to Japanese factories, and you see that they have 20 systems to make sure they are working to improve." Last year, for instance, Manco landed at least 50 new customers and kept gross margins stable.
