Real-World Reengineering

When Chuck Mitchell took over troubled GTO, he quickly realized that its most damaging inefficiencies were not in its processes or even its products. They were hidden in the hearts of its employees

He was only 12 then, but Chuck Mitchell can never forget it: he was tumbling through space, plummeting into a field with a fence around it, a pond, and -- peering through the dim light of dusk, he couldn't quite make it out -- either a horse or a cow. Feeling just seconds from death, with a cold sweat coating his chest, he let out a high-pitched scream for help.

It was just loud enough to wake him up. He sat bolt upright in his bed. For about a year he had been gripped by the same horrifying nightmare at least twice a week. Finally, his parents persuaded him to stop sleeping on his belly with his arms outstretched. "That seemed to make it go away," Mitchell says.

Until, that is, it happened.

He was a 19-year-old daredevil, taking his third jump of the afternoon. Though dusk had settled below, there was still plenty of light 15,000 feet above the ground. Mitchell jumped out of the plane and stretched out in a prone position, his arms wide and his legs spread. His two buddies had jumped just ahead of him, and the three planned to link hands across the sky. But when he looked down to find them, there was his childhood nightmare: the same pond, the familiar fence, even a grazing horse. "It was absolutely the field out of my memory," he says. "I froze up." He blew past his pals, so mesmerized by the field of dreams that he didn't hear their exhortations: "Open up! Open up!"

Less than 1,000 feet above the ground -- maybe it was divine intervention, or a deeply buried impulse for self-preservation -- he finally tugged the rip cord, giving his parachute barely enough time to inflate, so that he wouldn't be killed on impact. He took down a portion of fence, slitting his skin from heel to hind on both legs and fracturing his left leg. By the time his friends found him, lying in the soft, freshly plowed field, he had made up his mind: his skydiving career was kaput. "It was probably meant to teach me more than that," says Mitchell, now 42, "but I was too dumb to figure out what it was."

Not so. Actually, that very lesson -- a hearty respect for the world as a "mysterious place" in which "anybody who thinks they've got it all figured out is either a complete idiot or a liar" -- traveled with Mitchell from that day on. And the assumption that there was plenty he didn't know remained foremost in his mind late in 1993, when he took yet another daring leap into treacherous terrain.

This time he landed hard at GTO Inc., a deteriorating five-year-old maker of automatic gate openers based in Tallahassee, Fla. Only five months earlier, the company's energetic and charismatic 56-year-old founder, Lester M. Tabb, had suffered a fatal heart attack. Mitchell, a builder and real estate developer who had also invested $60,000 in his late friend's venture, stepped in at the behest of the 16-member board. He felt a heavy sense of obligation, he admits, because as a board member he had personally enlisted nearly every investor who had kicked in $25,000 or more.

He didn't have to know anything about manufacturing to see that this was one troubled company. In an average month GTO was raking in $250,000 in sales, $35,000 short of its break-even point. Dun & Bradstreet Corp. assigned its creditworthiness a ranking of 32; the average for the industry stood at 75. No surprise, perhaps, given the fact that GTO had no line of credit, and most suppliers would send wares only on a COD basis. Then there was the IRS, which had just stopped breathing down the company's neck after Tabb paid the back payroll taxes he'd eschewed for a year. From a financial perspective, notes chairman Laurie L. Dozier Jr., a retired cardiologist who has invested nearly $300,000 in the company, "I guess his death was a window of opportunity. I'm not sure what would have happened." Adds Wayne A. Payne, senior vice-president, "If Lester had lived another six months, GTO would have been bankrupt."

Things weren't good on the shop floor, either. Given Tabb's insistence that being an effective manager required him to bicycle through the factory while barking epithets at hapless workers -- commanding them to "work faster" or haranguing them for filing claims on the company's health-insurance policy -- employees avoided any interaction with him or simply quit. Jo Tubbs, who works on the assembly line, reports that "we saw quite a few people come and go. They left running, sometimes with Lester right behind them." W. Jay Payne, who worked as an outside designer for Tabb, recalls that "when you walked through, you could see that he managed by intimidation. He burned people out." So it was, too, with equipment. Tabb's budget for mold and machine repairs came to a nicely round number: zero.

Another person in Mitchell's position might have burnished the balance sheet by quickly lopping off 40% of GTO's 50 employees. Or he could have scoured the factory, looking to sell off equipment that was expensive to maintain. The computer insertion machine, for instance, could easily have fetched $150,000 in much-needed cash. Not only could GTO have outsourced its computer boards; it could also have stopped making its own motors. And surely it would have been prudent to restrict export sales, given their scrawny margins.

But Chuck Mitchell, again jumping into the unknown, found himself in the grips of another powerful vision that he could not shake -- one inspired not by buzzwords or best-sellers, consultants or convention, but by a much more powerful guide. He wanted to boost the numbers, sure, but the usual financial scorecard couldn't begin to capture the changes he had in mind.

To be honest, Mitchell wasn't even thinking about turning the company around. What he urgently needed to do, he knew, was to transform the culture.

"I want you all to know that I am going to be committed to making GTO a success," Mitchell said in his inaugural address to the company's employees, on December 7, 1993. "I am used to hard work, and I am used to success."

He paused for a moment and scanned the room. "They were shrugging with their eyes," he says. Soon a couple of hands shot up. Mitchell nodded at one of them. "How long?" the employee wanted to know. "How long will it take?"