We started teaching other skills -- math, blueprint reading, Japanese manufacturing techniques. We started preparing people for their high-school-equivalency diplomas. We taught team building so we could implement team management in parts of the company. We began inviting other companies in to train our people. (AT&T taught a class on quality.) In 1991 we offered 7,000 hours of training, everything from English as a second language, to how to use small tools.
We did it all in-house, bringing together people from all departments. Running this kind of program in-house gives you more control over the curriculum. You know where the money you invest is going. We can use our own materials -- manuals, job specs, company newsletters -- so while people's basic reading and English skills are improved, so is their understanding of their jobs and the company. We can teach them the specific skills they need to be effective on the job.
We've seen the benefits in a number of ways. The most significant benefit is the sense of dignity people have. The training programs literally changed the company culture. People appreciated the opportunity to educate themselves and improve their skills, and they feel more confident and secure in their jobs. We used to get countless grievances through our two unions. Today we don't. We actually settle contracts early now. The old walls of distrust between management and union have fallen because of the way we treat our people.
Turnover used to be above 25%; now it's below 10%. We've seen tremendous improvement in safety. In 1988 we had 180 reported accidents. This year it'll be just over 30. The number of workers' compensation claims filed has plummeted. We now pay one-tenth of what we paid four years ago. And productivity is up. In one year alone we saw the turn-around time on orders drop from seven days to one.
As for costs, the program has been surprisingly inexpensive. We've spent a couple hundred thousand in payroll by taking people off the floor or away from their desks to train them, but we get a return on everything we spend. We get more productive people, people coming in who are not checking their brains at the door. We get better ideas out of them, better performance. A 5% improvement in productivity or quality of ideas negates the cost. Plus we get better relationships with people. The power of the people who work for you is incredible if you choose to use it. But you have to unlock it by educating them, by giving them the opportunity to develop their skills. It's at the top of my list of concerns. Satisfying your employees is not something you decide you'll budget 20% of your time for. You have to do it all the time; you've got to live it. It's got to be part of your style of doing business.
I don't think of this as some kind of heroic effort. It's a necessity. Most of our competition comes from foreign companies. And they don't have the education or language problems we have. In Japan and Germany workers tend to be better educated. So for us to invest so heavily in training is sort of playing catch-up. Many enlightened companies are doing what we're doing. There is a growing realization that if you don't empower workers, if you don't educate them, teach them to pay attention to quality, you will lose out in the long run. You've got to turn to training to compete and survive in a global economy. Maybe in some industries that haven't yet been touched by foreign competitors, managers can afford to sit back like fat cats and not worry about improving and satisfying their people. But their day will come. This is the direction all companies will have to take.
IMAGE BUILDERS
Bread Loaf Construction
At Bread Loaf, a $30-million, 150-employee full-service construction company in Middlebury, Vt., the focus on providing a good workplace grows mostly out of a natural concern for employee hopes and needs. But there's a strategic payoff, too, says executive vice-president John Leehman: the reputation for having a happy and creative work force positions Bread Loaf as the creative leader in its market -- and attracts customers.
We do a lot to build a sense of teamwork among our employees -- things that really open up communication. When there's a complaint of any kind, we address it right away. We want the negative information because only then can we do something with it.
Our employees know managers have an open door; that's just our culture. So we're always looking for ways to break the barriers in communication, like having a consultant come in and spend a half hour with each person, or doing a ropes program -- a kind of personal-adventure center, in which our employees, wearing harnesses, climb 30-foot trees, then dive into a net.
We take about 12 people at a time, for three days, on that kind of trip. It's designed for team building and to make us stretch beyond our personal limits. In the evenings we teach people how to build their personal visions and talk about how to build the company so people can use it to reach their goals.
Then there's also a lot of teamwork on a smaller scale around here. People are broken into teams so they get used to working with the same people, and communication shortcuts are developed. That teamwork even carries over into our rotating-layoff policy: our employees agree to work 33% fewer hours during off-peak seasons, so we don't have to lay anyone off totally.
There are two reasons we try to differentiate our workplace -- why we do all this stuff to build a sense of teamwork among our employees. One, we like it: we really like working in a place where there's creative energy, where people are able to feel pride. Two, it brings work to us. A lot of the more creative designing-and-building work comes to us first. And generally speaking, we negotiate a tremendous amount of our work directly, without having to go to the bid market. It just comes in the door.
We have an image in the marketplace that's much different from anyone else's. We're considered to be employee-focused, honest, of high integrity, and always giving the customer what we promise. Several years ago we came up with the slogan "Promises Made Are Promises Kept." So we're seen as trustworthy first, and second, as a very innovative company, not only in terms of our employees but also in terms of actual product ideas -- and we get a lot of those from our employees.
