Managers have begun to talk openly about profit goals. Although the company has long shared its financial results with employees, it has not always convinced them that the difference between $2 million and $4 million in earnings might affect them. "We must have financial health in the company or we just won't have the rest," Gun says. "I want people here to feel the money, you know."
But she doesn't want it to preoccupy them. "If you focus too much on the bottom line, it can be deadening to the spirit of the company. The bottom line cannot be the only thing."
While managers are reevaluating many of the company's business practices, they are mindful not to reengineer the parts of the company that work. "If you have the ultimate bib overall," says Gun, "you don't need to reengineer that." And if the company is cutting costs, not everything is under the knife. The child-care benefit, though no longer limitless, remains sacrosanct. The commitment to charitable giving also stands, although lower profits have resulted in smaller donations.
"The culture here is changing because it has to change to survive and grow," insists Gun. "But we are not abandoning our values. We are modifying them."
Can Hanna Andersson maintain its heroic ideals in the face of cutthroat competition? Can it still afford to do the right thing? "It would be the crowning glory of this company if we could," replies Tom. He concedes that the odds are even at best.
When Gun considers the quandary, she can't help thinking of her homeland, which for decades thrived by practicing its "third way" -- in a marriage of socialism and capitalism -- but in recent years has struggled with a no-growth economy. "You know, Swedes have always had a protected life, and Hanna's had a protected life, too. Now they're up against reality in Sweden. And we're up against reality at Hanna. It is not so easy."
Doing the right thing by employees, it turns out, is not always twin to doing the smart thing or even the prudent thing by the business. What happens when the current well-being of employees collides with the future well-being of the company? And the right thing is not nearly so obvious as it was in better times?
"We struggle with it," says Gun, who has arrived at the conclusion that "the right thing changes over time." There are few fixed stars. Even when the founders are committed, the management is able, and the employees are informed, the task of being a providential employer and a lean competitor is just plain hard. "It's a tension you never resolve," says Roberts.
it has been more than a year since the layoffs, and while many employees -- including Daphne Clement -- have been called back to work, the cuts' effects can still be felt, like ghost pains jabbing now and again, in the organization. "There's a level of trust we might never regain," laments Roberts.
The awards and plaques trumpeting the company's commitment to the care and maintenance of its workforce still hang on its walls. But the call center Clement returned to last summer is not the same place she left in despair months before. There have been improvements, it's true. For starters, the walls were torn down, the room was freshly painted, and new workstations were installed. Self-directed teams are now being organized to run the department. And sales this spring were running 20% ahead of plan.
Although Clement, who relied on family members for financial support while she was jobless, is grateful to have her old job back, the place feels different to her. "We're not this family business with cushy benefits and high ideals anymore. At least not just that. It's a different atmosphere. More businesslike. More corporate.
"The experience has made me wiser," she says. "It's easy to have high values. But when the going gets tough, it's difficult to maintain them."
The managers, Roberts reports, are growing accustomed to the complaints and the nostalgia for paradise lost. "We have to get used to hearing the noise."
Financial Comparisons
Children's apparel
industry Hanna
benchmarks* Andersson**
Gross margin 55.3% 50% (estimate)
Marketing expenses 23% 15% to 20%(includes catalog prep, printing, postage, list rental, and advertising)
Operating expenses 17.7% 18% to 20%(includes labor costs, shipping materials, outbound freight, telephoneservice, and other operating expenses)
General & administrative 11.2% 15% (estimate)(includes salaries, occupancy, insurance, and other operating expenses)
Income 12.9% Below 5%
*From "Catalog Survey Results," by Bruce, Dean and Co., a survey of financial benchmarks for the catalog industry. Figures are for 1992, the latest year available.
**1993
* * *
Employee-Productivity Analysis
$40-million Hanna benchmark Andersson
catalog company* at $43 million**
Number of full-time 116 300employees
Average revenue per employee, in thousands $349.3 $143.3
*From "Catalog Survey Results," by Bruce, Dean and Co., a survey of financial benchmarks for the catalog industry. Figures are based on 1992 sales volume of respondent companies.
**1993 n
