If I Were President

Plenty of employees say things would be different if they ran the show. When former machinist John Strazzanti built his own company, he got the chance to show how

Ask a group of workers what they would do if they were company presidents, and no doubt you'd get an earful. Give everyone Fridays off! Fire the managers! Pay the people who really do the work well enough so they don't have to struggle! A few do make it to the exalted rank of company owner -- and change their tunes as they begin to experience the real-world pressures of ownership. But John Strazzanti didn't.

Strazzanti is the president of Com-Corp Industries, a $13-million, 100-employee metal-stamping shop he incorporated in Cleveland in 1980. He'd started out as a machine operator with a tool-and-die manufacturer, rapidly climbing the ladder to become general manager of another stamping company. Along the way, he didn't just dream about what he'd change if he were a company president. He figured out ways to make his dreams a reality. Recalls Strazzanti, "I knew I wanted my company to be different from anywhere else I had worked. I had some ideas."

Did he ever. Com-Corp, which specializes in making headlight parts for the auto industry, is an open-book company. Compensation-rate decisions are in the hands of employees. Employees can get tenure. They earn above-market wages as well as a fair share of the profits. Com-Corp has results to show for Strazzanti's grass-roots management system: turnover is less than 5% a year, and the company has been able to earn better-than-industry-average profits over most of the past 10 years while maintaining a sales-growth rate of 20% in a capital-intensive industry. It has also become one of a very few shops to get onto Ford Motor Co.'s supplier list in recent years.

The glue that holds the programs together is an elegant management system designed by Strazzanti to give workers a real say, and intended to hold up during money-losing years. It's all written down in Com-Corp's Policy and Procedure Manual, an exhaustive set of guidelines that functions as a corporate constitution. (See "The Big Book of Checks and Balances," page 4.) Mimicking the framework of the federal government, the system controls the three centers of power in a company -- owner, managers, and employees -- with a pioneering arrangement of checks and balances that makes the government of the company more democratic.

A for-instance: At many companies where financials are shared with employees, workers must take the management's word that the numbers are true. But Strazzanti has a standing bet with his workers. If they doubt the veracity of the numbers, they can hire their own certified public accountant to audit the books. If there's a discrepancy, they get a 50¢-an-hour raise.

Most of Strazzanti's formative experiences occurred during the 1970s, as the Steelbelt rusted before his eyes. Some incidents were memorable -- so much so that Strazzanti credits them with originating many of Com-Corp's current practices. He can pinpoint those moments as if they happened only yesterday.

On Showing Workers That Money Doesn't Grow on Trees
Cleveland, 1977. Jackie Presser was vice-president of the notoriously demanding local chapter of the teamsters' union. The chapter controlled a metal-stamping plant where Strazzanti had just been promoted from floor supervisor to general manager. Strazzanti recalls:

"Two coworkers marched into my office. It was a hot summer day; they had had a few beers at lunch and were fired up. They worked hard in the warehouse and saw the engineers working in the air-conditioning and getting paid a lot more. They didn't think it was fair and wanted more money. I knew I was in a no-win situation. If I told them I thought they were being paid fairly, that's what they expected; they were going to argue, and they weren't going to be happy with the results. If I gave them more money, I was being unfair to everybody else.

"So I took out a legal pad and I told them to write down whatever they wanted to be paid. Thirty days from that date, they would get that pay -- with one caveat. During the 30 days, I would shop for replacements for them. If I could get highly qualified people to work for anything less than that number, they would have to take a hike. They asked for time to think about it and never came back with a number.

"A lot of these guys think that if a company fills an order for a million dollars, it earns a million dollars in profit. I realized that if workers understood how a company earned a profit and how it had to be competitive, a lot of the resentment between managers and employees could be eliminated. And they needed to understand that if they improved their job skills, they could receive a higher wage."

A few years later, after launching Com-Corp, Strazzanti had his chance to put theory into action. He designed a 90-day orientation program that aims to break down some of the prejudices that workers and managers hold toward each other, so they can participate harmoniously in running the company. For instance, Strazzanti figures that much of the rancor directed at higher-paid managers can be eliminated if employees simply learn to live within their means. So Com-Corp's recruits are given personal-money-management lessons on subjects such as structuring a household budget, buying a car with cash instead of borrowing for one, and gauging the advantages of buying a house compared with renting an apartment.

Another Com-Corp workshop broadens employees' horizons by teaching how the value of goods is determined on the open market. The teacher (it used to be Strazzanti) grabs students' attention by holding up a bag of "moose eyelashes" in one hand and a bag of "gold" in the other. The class then deduces why gold is more valuable -- because in addition to being rare, it has a wide variety of industrial applications, is admired for its beauty, and is expensive to mine.

With those lessons under their belts, employees and managers can more easily make the leap to understanding how Com-Corp manages its finances with income statements and balance sheets, as well as how the value of one's skills determines worth in the job market. Strazzanti's decision to open up financials to employees was part of his successful turnaround of a unionized metal-stamping factory, executed from 1978 to 1980. Explains Strazzanti, "This system is designed to preserve the company so employees can enjoy the most basic job benefit of all: job security."

On Letting Workers Set Compensation Rates
In 1969 Strazzanti's first job was as a press operator in the stamping department for a manufacturer that supplied parts for bicycle makers. During his first week he became uncomfortably familiar with the traditional manager-employee relationship:

"The maximum number of parts ever produced off the machine I was assigned to was 40,000 in a 10-hour shift. So, eager to make a good impression and keep this new job, I went to work trying to learn how to make the machine run faster. By the end of the week I had produced 46,000 pieces. The next day, the plant manager came over and said, 'I understand you got 46,000 pieces off this machine yesterday.' With a lot of pride I said, 'Yes.' He said, 'I always knew we could produce that many, if not more. I really think 50,000 is attainable. That's what I want you to shoot for.' No pat on the back. No congratulations. I was not going to be rewarded for what I had achieved.