Leegin's office is noisy and crowded, with 16 account specialists crammed into a space scarcely larger than a good-sized living room. But watch an employee such as Theresa Van Frankfoort at work, and you get a sense of what has changed. Van Frankfoort and her partner -- who are known as the Blue Team -- handle the Pacific states plus Arizona, roughly 1,000 accounts in all. They take orders, schedule shipments, approve credit, handle collections, authorize returns, answer salespeople's questions, solve problems such as lost invoices, and perform a dozen other tasks, most with a phone call or a few keystrokes. Charts on the wall track each team's key measures -- credits issued, accounts receivable, cash collected, and so on. Overwhelming? At times it is, acknowledges Van Frankfoort, who in the evening finds herself jotting notes about things to accomplish the next day. The payoff is that the responsibilities -- and the customers -- are hers. "I love what I'm doing," she says. "I know the customers and they know me."
The attractions of the one-stop shopping provided by Van Frankfoort and her colleagues aren't lost on the customers. "I don't need Perry to come in," says Lottie Shamie, manager of a western-goods store that is among Patton's top accounts. "I can call and place an order, and they ship it right out. Even if it's just one belt. Another company we deal with, their orders get messed up all the time and I'm constantly returning stuff."
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In the factory the transformation probably started the day Mickey Zaldivar, Chava Sanchez, and the other bosses went out to clean up the cafeteria. Or maybe it was earlier than that; Zaldivar says things began to change "the day Jerry came back from Harvard."
Whatever the key event, the facts aren't in dispute. Kohl began talking to manufacturing director Zaldivar and production manager Sanchez about what he was learning. He gave them books on subjects such as quality and empowerment. Before long the two men found themselves going on retreats, talking to consultants, and taking seminars, often with the plant's dozen or so supervisors. A workbook in a course on continuous improvement suggested the group give employees a live demonstration of the importance of housekeeping. At an appointed time, the managers and supervisors marched into the lunchroom. There they swept and polished the floor, scrubbed the walls, and set flower vases on the tables.
"Everybody stopped working," recalls Zaldivar with a chuckle. "There was, like, this silence. 'Have you guys gone crazy or what?' " But the exercise conveyed an inescapable fact: change was in the air. Now Zaldivar could begin experimenting.
Since belts require a lot of hand labor, Leegin's factory is in many ways old-fashioned. Workers toil over cutters, punch presses, and sewing machines. In the past, employees stayed in one functional department. They cut or sewed or punched or dyed all manner of belts as they came through, and collected a wage determined by a complicated system of piece rates. Wanting to change all that -- and brimming with up-to-the-minute ideas of empowerment and teamwork -- Zaldivar and Sanchez handpicked 20 experienced workers and put them in charge of a complete belt line. From then on, Sanchez and Zaldivar announced, those workers would own that category of belts and would monitor their own production. All would be paid an hourly wage, based on what they were earning before.
The experiment produced a little good news: quality levels in that category of belts rose sharply. But the bad news was dismal. Output dropped like a stone. Unused to working as a team -- and with no financial incentive to hustle -- the group turned out half what the managers had expected. Once again, it was September, the company's busiest time. With production falling, deliveries had to be postponed.
Zaldivar and Sanchez, disciples of a stubborn mentor, didn't quit. They divided the group of 20 into four or five subgroups. They instituted a group-incentive wage. Soon output was up to the hoped-for level; eventually it climbed even higher. In another six months the two men started a second team, this one with only 10 or 12 people. That seemed to go more smoothly. Slowly, carefully, a line at a time, they pressed on. For each line, production systems were mapped out. Machinery was tagged and moved. People were selected and cross-trained. By 1990 most of the plant had been transformed into minifactories, work cells responsible for categories of belts from start to finish.
Care alone couldn't eliminate the costs, either human or financial. A couple of the plant's 12 supervisors wanted no part of the changes and had to be replaced. Employees, suddenly asked to chart production levels and several other variables, were baffled and resentful. Zaldivar hired a consultant to teach basic math skills and graphing. Since most of the hourly workers are native Spanish speakers, classes were conducted in Spanish. Later he brought the local school district in to teach English. All this training and instruction was on company time.
Today the factory is as cluttered as ever; workers are jammed together as closely as the account specialists in the office are. But Zaldivar, walking through the plant, points out the signs and symbols of a transformed organization. See the computer terminals scattered around the plant? Everyone can use them. On-line information helps the teams figure out daily priorities. Workers punch in batch numbers as the belts move along, so managers know where everything is.
Oh, and check out these boards. That's where the teams chart cost, delivery, quality, absenteeism, and safety. Every day each team meets for a few minutes to go over any problems. Every week the lead people review the numbers with managers. Says Zaldivar: "We'll have a meeting where everyone announces the figures, and Chava sits there with a laptop putting them in the computer. At the end of the meeting he pops out a report, and the lead people then go back and discuss the numbers with their teams.
