Guaranteed Growth

A story of how a manufacturer promised customers money-back guarantees and in so doing transformed his company.

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In a world of newfangled management theories, there may still be nothing that transforms a company quite like keeping promises to customers. Especially when those promises are in writing

On April 20, 1994, Saby Behar, worried about the onslaught of competition and fearful of an increasingly ugly price war, rallied his managers to take the only sensible action he felt they had left to them: a dramatic reading.

Behar, the president of General Stair Corp., a $2.7-million maker of prefabricated stairs and railings, had been searching for a way to prop up the company's wobbly margins and raise its market share in the business he sometimes describes as "the vertical transportation of people." Practically since the day he cofounded the company in 1987, he'd been taking steps toward those goals. He had studiously attended seminars, participated in a CEO group, read books, pored over a do-it-yourself manual for strategic planning, and even consulted an ad-agency executive -- all in the service of answering one crucial question: how do you sell a commodity without sweating out a constant price war? "All prefab stairs are pretty much the same; they go up, and they go down," says Behar. "With customers, we needed to get the conversation away from price."

When he sat down with the three managers who ran daily operations at General Stair, which is based in Opa-Locka, Fla., Behar wanted to lay the groundwork for the change he had in mind. As they entered the company's conference room that day they found written scripts at each of their seats. Not that their weekly meetings ever lacked spontaneous drama, what with Behar snapping open his Toshiba laptop and firing follow-up questions from the agenda he had stored there. Do we have the latest drawing on the new top-mounted railing? Where's the updated pipeline report? And hardly any gathering was complete without the climactic moment in which Behar, hearing a reply he did not appreciate, narrowed his brown eyes and asked edgily, "Tell me, do I have the right to be mad?"

But as the General Stair managers read aloud from the prepared handouts that morning -- taking turns, as Behar had instructed -- they had every reason to wonder if their ultrapractical boss had been brainwashed by some touchy-feely management cult. Borrowing a technique he had learned from a nonprofit group, Behar had told them to recite the biblical tale of Moses' leading the Israelites out of slavery. "It was a break from the routine," offers controller Esther M. Garver with a shrug. That was about as much as anyone could make of it. After all, Behar's managers did not exactly think of themselves as wandering in the desert -- although they did tend to linger at Don Shula's All-Star Cafe.

But aided by charts on an easel, Behar then annotated the biblical story, showing how different players had had to assume certain roles to make change happen. "As Saby talked," recalls William B. Yager, director of operations, "it became clear that this was a story about us, not about Moses."

Behar had a big change in mind, and in one sentence he let the managers know exactly what it was. "What I want to do," he told them, "is offer our customers a guarantee: We're on time, every time. Or your money back."

His idea, everyone could see, made sense. Timeliness was key for merchant builders, who work on at least 30 houses simultaneously. Without stairs, they can't undergo a framing inspection, one of the milestones that means payment from the bank. And they need stairs to get certain items to the second floor, such as bathroom fixtures. Yager, the company's chief salesperson, thought he understood one effect right off the bat: We'll sign more contracts, he thought to himself. "It was another sales tool, another bullet in our gun," he says.

But sitting across from Yager, Garver, who is by her own admission "always concerned about the money," interrupted his reverie with her own loud shot. To this day she remembers her exact word to Behar. "I said, 'No," she recalls. "Then we had a little disagreement."

Behar's absurdly simple idea, reshaped and then hardened in the kiln of heated debate, ultimately reached into every aspect of General Stair, changing everything from the phone system to the compensation system. It altered how the company's 35 employees worked together, and what they wore while working. It played a key role in slashing such costs as labor and raw materials while boosting productivity. The process forced General Stair to define its business clearly, and in doing so freed it to pursue compatible products and businesses.

Not that anyone could have foreseen such dramatic consequences. "I don't think any of us understood the power of what Saby said that day," admits general manager Moises Vainstein.

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