All three managers gave speeches at the 7:30 a.m. gathering, which served as the official kickoff of the guarantee program. There was a pink cake in the shape of a step, and new shirts -- bearing patches that read "Quality Products on Time" -- all around. One by one, employees came up and signed the various on-time pledges: one to be hand-delivered to customers with a wax seal; another to cement the agreement between departments, including sales, production, engineering, the controller's office, and senior management; and a third in which Behar pledged to employees, among other things, the "financial resources" to carry out the guarantee and a "program of bonuses, company functions, and other benefits." He also vowed to ensure "constant communication" both between management and workers and between the company and its customers. Employees got to keep the pens they used to sign the pledges. Garver hung a board that would be used to keep track of the bonus pool, so that everyone would know how much was in it at any one time.
Installer Sergio Vidal, who has actually won the monthly lottery three times since its inception, says workers have agreed that after each drawing the five lottery winners will kick in $10 apiece "so that everybody can celebrate. After work, we go for an hour and we share something like a beer or a Coke."
Behar knows nothing about that; but then, neither he nor his managers feel they have to get involved in every arrangement among employees. When Gustavo Sanchez hired a friend of his to help him make railings, he actually agreed to split their piecework proceeds 50-50. "It was too much," Sanchez now says. "But I did it because I wanted to motivate him, to make him feel responsible." Some two-worker teams split earnings 60-40; others 65-35. "I don't decide how they want to share the money," says Garver.
As of May 1995, nine months into the guarantee program, General Stair had issued five vouchers. Not enough, complains Behar, who worries that employees aren't giving out the vouchers unless customers specifically ask for them. The beauty of a $50 voucher is that it can be given out without bankrupting the company. "It's easy to give, and it makes the client feel like a million dollars," he says. "It shows people that we are serious about this."
And Behar is very serious. In fact, he's far from finished implementing the guarantee. For one thing, Behar believes it has been more successful internally than externally. Productivity is three times higher than it used to be, he says. And Garver reports that absenteeism is down about 20%, thanks to the lottery.
While area housing starts are down roughly 5% this year, General Stair's monthly pipeline of work is up about 20% -- though Behar is quick to point out that the lucky timing of jobs, which is unpredictable, can account for some of that growth. Despite increasing competition, per-unit margins are holding steady, according to investment banker Karl Sprague, who attends the company's management meetings monthly, asking managers any financial questions that Behar might by some miracle have missed. Behar now refers to the company as GSC, a reflection of the fact that he feels the on-time system could be used for other "quality products," like windows or shutters or doors. In early May he asked Lupien to meet with employees again, department by department, to solicit ideas for how they might make the guarantee better known to the outside world. Somebody suggested affixing a tag to every product. How about handing out buttons that say "The On-Time Company"? Behar didn't sit in on those groups, but he's monitoring the results very carefully. He wants to make sure employees have not forgotten their pledge. "If I stop pressing on it, we'll go back to doing business the old way," Saby Behar says. "That much, I can guarantee."
PROMISING RESULTS
Forget what you've heard since childhood: there are actually plenty of guarantees in life. But not all of them produce the intended effects -- either externally or internally -- as the one put into place by General Stair Corp. did. Coming up with an effective guarantee requires thinking about the following fundamental questions:
What would customers consider a breakthrough in our product or service? At General Stair, president Saby Behar first wanted to guarantee the quality of the company's prefabricated stairs, but by talking to customers he learned that "more quality won't fetch more money." Timeliness, on the other hand, is key to builders, which is why he turned to on-time delivery.
What would an ironclad guarantee sound like? When it comes to injecting accountability into a guarantee -- deciding exactly what the payout ought to be -- it's easy to be intimidated into coming up with "a totally watered-down guarantee, where the promise is not very lofty and the payout isn't much," warns Christopher W.L. Hart, a consultant who has studied guarantees. "People end up putting greater value on minimizing the payout expense than they do on maximizing the value from customer loyalty and goodwill." General Stair avoided that trap in part by asking for employee input. Not only did employees tell the company what they thought was possible; they are also consumers and know what kind of companies they like to buy from.
What if my customers cheat? They will, says Hart, but not as much as you or your employees fear. Most customers seek revenge -- by cashing in on a guarantee -- only when quality is truly lacking. So the guarantee isn't really the issue. "The fact is, you've gotten their distrust the old-fashioned way: you earned it," says Hart.
