Rodel's Leadership Intensive Training ended internal battling and refocused the war where it belonged: on competitors
A rush of cold fear shot through Tammy Casper as she stood unsteadily on a platform no bigger than a Frisbee, some 40 feet in the air atop a wobbling wooden pole. Climbing up, she had told herself she couldn't get hurt; she was, after all, wearing a safety harness. But once she reached the top, her calm fled. If she had looked down, she'd have seen 30 people cheering her on, but looking down was out of the question. "I was shaking like a leaf," she recalls. Then, steeling her nerve, she pivoted and leaped. Handling the ropes attached to her harness, her colleagues on the ground broke her fall.
A jump like that might be routine for an airborne ranger candidate, but Casper is a 35-year-old factory worker with two kids. The experience, just one of many different kinds she had over the course of a recent year, taught her a few things about trust, teamwork, and leadership--which was exactly the objective. She and a few dozen other employees of Rodel Inc., a manufacturing concern based in Newark, Del., are graduates of the company's Leadership Intensive Training program.
Fostering leadership among their employees wasn't what brothers Bill and Don Budinger had in mind eight years ago. They were trying to save their company. They didn't have a strategy problem. Rodel had the right product in a growing market. What it couldn't do was execute its business as well as the increasing numbers of its mostly foreign competitors. The solution the Budingers stumbled onto was leadership, a potent answer to a question that bedevils countless entrepreneurs: How do I make the people around me as effective as I am, for the sake of our mutual self-interest?
The Budingers aren't miracle workers, but today Rodel--with four times the sales and employees--is much healthier than it was in 1990, largely because 50 or so Leadership Intensive Training graduates have become missionaries of transformation at every level and in every corner of the company. "When people walk out of Leadership Intensive, they own this place," says Rodel executive Lloyd Fickett, who helped design the program. "And their actions and outlook are contagious."
Teaching leadership, or trying to, is a hot trend in management consulting today. Yet leadership itself remains a nearly ineffable art. Attempts to define or describe it concisely are futile. Warren Bennis, a business professor at the University of Southern California, knows of roughly 800 definitions of it in the literature. "Having written eight or nine books on the subject, I can tell you there is no single one," he says. "The reason is that leadership is squishy, hard to get your conceptual arms around."
Remarkably, the Budingers and their lieutenants have hit on a way to make leadership training concrete and hard-edged. Theirs is a homemade system, not one they bought off the shelf. The objectives of Leadership Intensive Training are tied to specific company needs. And whereas most companies find the value of leadership training tricky to gauge, the Budingers achieve tangible, measurable results. They know the program has merit in part because it pays for itself.
Rodel, a supplier to the electronics industry, manufactures polishing pads and slurries used to process silicon wafers and microchips. Bill Budinger, a Notre Dame- trained physicist and onetime Du Pont salesman, entered the business in 1972, when wafer production was a U.S. domain. "We had this huge cluster of American firms that dominated the world's silicon manufacturing," he recalls. But during the 1980s nearly all those companies went bankrupt, moved offshore, or sold their wafer divisions. Whereas in 1979, 90% of Rodel's sales were to domestic companies, a decade later nearly that same portion of its sales went to foreign companies, mostly East Asian ones, that were operating plants here or abroad.
Even so, in 1990 Rodel sailed in excellent trim. Revenues, about $35 million, were growing by 12% a year. Profits were acceptable, given the chip industry's rabid stress on cost reduction, and as the employee count rose to 150, then 200, Rodel was outgrowing one building after another in a Newark industrial park. "We were riding high," recalls Don Budinger, the president. "We had come from a garage shop to be the best in the world at what we did."
But new competitors, primarily from Japan, were moving up fast--"out of nowhere," Bill recalls--and they often enjoyed cozy connections with the same foreign companies that had bought or outcompeted Rodel's original customers. In that environment, continual incremental improvement--getting a little better year by year--could not keep Rodel out in front. "To survive and flourish, we needed to do more," Bill says. The company needed what consultants and academics like to call "profound change," and the Budingers set out to learn how they might achieve it.
Exhibit A in testimony to their success is Rodel today, more than six years into a deliberate, dead-serious makeover. Since 1993 its sales have grown 50% annually, rising to about $100 million last year, with a joint venture in Japan generating another $50 million. In a hugely competitive field of some 20 players, Rodel leads the pack, controlling a market share of nearly 40% that's still growing. Its customers, numbering about 1,000, include the likes of Samsung, Hitachi, and Fujitsu as well as such premier U.S. semiconductor makers as IBM, Motorola, Intel, and Micron Technologies. "There isn't a chip made anywhere in the world without at least one of our products," says Bill, who at 57 (Don is 54) is very much a hands-on chief executive.
The personal-computer boom, in pushing microchip demand to record highs, has fueled part of that growth. Also, new multilevel chips, like Intel's Pentium, require more use of the polishing systems Rodel makes. But growing demand is just half the story. "We are frankly blowing the doors off our Japanese and other competitors, in their own land, without government help," Bill maintains. "They say that when the Japanese get you in their gun sights, you'd better make out your will and say your prayers. But we've been sitting in their crosshairs a long time, and we're growing faster than any of our competitors over there. One of our biggest customers is Mitsubishi, and their electronics division buys from us even though Mitsubishi has another division that competes with us. The reason? Our quality is higher."
A fired-up workforce has allowed Rodel to fully exploit its opportunities. In 1993 the company had planned for 12% growth but experienced 50% instead. The strain would have caused most organizations to snap. But Rodel's on-time shipping record remained almost perfect. "Our people have a deep sense of commitment and caring," Bill says. "I think we've created a culture that is extraordinarily different from most other companies we know."
Eight years ago Rodel would have won no corporate-culture prizes. Internal strife was pervasive. Operating people didn't trust salespeople, mechanics nursed grudges against engineers, and department heads battled fiercely over budgets and turf.
"The place was a real meat grinder," recalls Dale Davis, a facilities manager, "an environment of intense emotion. If you could dominate a situation or grab the most resources, you were the winner. My own style--and I wasn't alone--was to yell and scream and beat people into submission. We weren't enemies. Some of us drank beer together after work. But there would be the occasional fistfight in a bar over something that had happened during the day."
The Budingers had tolerated that culture for nearly two decades because--well, because somehow it worked. But then their market began to migrate offshore, and Bill got inside some Japanese factories and saw how they worked. "I paid close attention to the people I interacted with over there," the CEO says. "I observed how people behaved on behalf of the institutions they worked for. There were real differences between Japanese 'salary men' and what we'd call midlevel, white-collar folks. The Japanese identity was totally hooked to the company; their allegiance to it appeared unbreakable. It was a total team orientation." That was scary. "We realized," he says, "that our approach could not possibly compete."
At roughly the same time, the Budingers began to catch the scent of disappointment in some of their customers. Large semiconductor manufacturers routinely audit their suppliers' operations. "They don't just buy your product, they buy the system that produces it and the culture of the company it comes from," Don says. Rodel usually scored well overall, but most customers had a serious concern or two, mainly with product quality, product variation, or the "cost of ownership"--which, in the case of a Rodel polishing pad, say, includes such things as the time required to mount, demount, and condition it. "Customers drive us hard to reduce the cost of ownership," Don says.
As the Budingers looked around the industry for ideas, what impressed them was that the leading companies were all transforming themselves. "They had people engaged in a rigorous effort to upgrade performance. The key point," Don says, "was that no matter how good their performance was, it would not be good enough in the future."
Increasingly, the Budingers felt the same way: without a fundamental change, Rodel would never achieve the quality and efficiencies and cost-effectiveness in the finished products that would enable it to compete long-term against Asian companies. In Rodel's fractious culture, "everybody had their own set of goals, and often the adjacent group's were seen as an interference," Bill says. "The friction was real." With internal conflict, there was no alignment to a common goal. Nor was there a sense of vision, at least among employees. "What we wanted to know," he says, "was, How do we go about changing ourselves so we could have a fully empowered, fully integrated and committed workforce, so we'd all function as a team rather than 'us versus them?' "
Uprooting ingrained work habits and implanting new ones, the Budingers understood, would demand nothing short of a cultural revolution, a notoriously tough thing to manage.
"We needed skilled people to help make a change this big happen," Don acknowledges. Wayne Wilson was one of them. An M.B.A. with a manufacturing background, he was Rodel's new chief operating officer, in charge of production. Another was Lloyd Fickett, a Phoenix-based management consultant, who had already done some work with Don and his sales-and-marketing group, which operates out of Scottsdale, Ariz.
Fickett's work had impressed Don, who had in turn impressed Fickett with his fervor to reinvent Rodel. "Most executives I encounter are all for things like empowerment--for the employees," Fickett says. "They're not real interested in going through some kind of change themselves."
The Budingers were different. They had already investigated other companies' transformations. "I talked to executives to see who else had tried something like this," Bill says. "Then I'd call up the management and go talk to the employees. The CEO would always give a glowing account, but the people who had gone through it would ask, 'What planet is he on?' Where we saw transformations fail--and virtually all the ones we looked at had failed, by our definition--it was because top management wasn't fully engaged."
For precisely that reason, the brothers had ruled out using the self-styled transformation experts and empowerment specialists they had interviewed. "They all wanted to sell us a package," Don explains. "The temptation for people like Bill and me is to subcontract out the job, but we didn't think that would work. For a transformation to be authentic, not perceived as a gimmick, we had to be right in the boiling water ourselves. We had to be willing to get up on top of that 40-foot pole and have everybody laugh at us."
In late 1989 Fickett became a consultant to Rodel; two years later he would come on board as a part-time but permanent executive. His initial task was to help the owners articulate their vision, then to plan an implementation strategy. Foremost, the Budingers wanted greater harmony at Rodel, a cohesive culture with everyone pulling together. They also wanted to encourage employees to take more initiative and ownership--much more. Toward that goal, they sought to obscure boundaries between blue-collar and white-collar folks. "We're all important members of the team," Bill says. "We wanted to eliminate any adversarial attitudes and break down walls between departments."
To begin with, Fickett distilled the Budingers' vision to eight core values, which they called the Rodel Way. (See "The Rodel Way," below, for five of those values.) Circulated companywide in 1990, the Rodel Way aimed to define "how we intend to relate to each other in our business," as the introduction put it. "There are eight fundamentals that when practiced consistently give our company its speed, agility, and profitability....By harnessing our collective intelligence, imagination, and spirit, we gain an essential competitive edge."
"Speaking straight" was one of the precepts. Another was "listening generously." A third, "being for each other," was meant to inspire teamwork. Fickett drove home the doctrine in special orientations; new employees even went off-site for two-day immersions. But preaching the values was one thing, and imbuing them in people was another. Among employees, the initial attitude was "you gotta be kidding," Fickett says. "But slowly we began to work through these things." Still, it was a radical departure from Rodel's existing ethos, and the principles of the Rodel Way were not easily absorbed.
"Something like 'listening generously' sounds easy, but it's tough to put into practice," says Dale Davis, the facilities manager. "To me, it means really wanting to understand someone's opinion and why they hold it. Before, I always assumed my opinion was right and yours was wrong--the conversation involved getting you to accept mine. Changing that," he admits, "would be a long and tortuous process for me."
Two other changes made in 1990 helped nudge the company toward the transformation the Budingers had in mind. The first was a switch to open-book management, augmented shortly thereafter by a new system of quarterly bonuses pegged to profits and productivity. The second change was the debut of monthly company meetings.
The move to open-book management came about as part of a "philosophical wholeness" the Budingers hoped to bring to Rodel's reincarnation. They saw everyone as a stakeholder in the enterprise, attuned to its fortunes. "We were not at all sure how folks would react to it," Bill says. "We were concerned at first that if people saw a profit, they'd want a wage increase. Or that the information would seep out. But we'd discuss in the company meetings the importance of keeping it confidential. Even at that, you're telling people they have something of value they could go out and sell. So open-book management was one way to be straight with everyone and provide a feeling of ownership."
The monthly meetings were Don's idea. He still flies in from Scottsdale to run them, typically drawing some 400 employees during the day and hundreds more at night in a session for the late shifts. At both, he lays bare even Rodel's most sensitive financial data. "We were clear when we started these," Don says. "We explained that anything the company did would be discussed with them, except a colleague's salary."
Besides furnishing a forum for an open-book dialogue, the meetings served as a clearinghouse for anything employees wished to discuss--competition, benefits issues, pay scales. Moreover, they intrinsically made the Budingers more visible and accessible to the employees, who were invited to challenge and even criticize the top management. "We required people to speak their minds," Don says. "We wanted that sense of authenticity and realness. But at first, no one said much."
There was nothing magical about those early moves. The Budingers expected Rodel's transformation to gain traction slowly, and it did--too slowly, in fact, to suit Wayne Wilson and Lloyd Fickett, the change agents. By the end of 1992 they had spent two years working closely with employee groups--19 production supervisors to start with, and then a crew from engineering, manufacturing, and research and development--only to see little progress.
The supervisors had seemed perfect as initial targets. For most employees, the supervisors are Rodel. "We thought that if we could engage them, we could leverage their exposure to get the biggest impact on the largest number of people," Wilson says. "We were trying to change their attitudes, their supervisory styles. But old habits die hard." The supervisors, he says, had difficulty opening up. "Many of them just didn't want to be there."
With the second group, the challenge involved breaking up Rodel's top-down structure and engendering innovation and smart operational decision making from the bottom up. "We had good people, but we needed to fully involve them in building quality products," Wilson says, "to keep pace with a fast-moving industry." The technical types, he thought, relied too heavily on "the company" instead of themselves to solve problems. "There is no the company," Wilson says. "It's them. But we couldn't get across what we wanted, which is that everybody owns quality. They kept making excuses why something couldn't be done. I wanted an attitude that said, 'I can't get that done, and here's what I'm going to do about it.' They needed to learn how to communicate and marshal resources to make something happen. That meant they had to learn how to be leaders."
By the fall of 1992 open-book management and the Rodel Way were slowly gaining currency throughout the company, but Fickett and Wilson knew they needed something dramatic to speed up the transformation. From that realization, Leadership Intensive Training--or LIT, in Rodel's shorthand--evolved.
Fickett had never run a leadership program, but he was well-read on the subject and had a knack for bringing it alive in ways that made sense for Rodel. He defined leadership as "stepping forward, seeing what is missing and calling attention to it, then enrolling others in the task and guiding the path of engagement." And to him, it was a fluid thing. "One person might provide leadership at one moment, and someone else might provide it at another," he says. That definition argued against creating a program strictly for the company's brass. Why couldn't lower-level folks learn to supply that sort of leadership in their own spheres?
With a formal regimen built around leadership, Wilson hoped to underscore that Rodel's transformation was no fleeting fancy. "Quite often, management gets fired up about some new idea, and it dies after six months," he says. "We wanted to emphasize that this idea was here to stay."
One avenue for learning leadership skills, Wilson and Fickett determined, could come in the context of a group project--not an idle exercise but a serious attack on a current company problem. That idea yielded another potential benefit. "We knew this was going to be expensive compared with what we usually spent on training," Wilson explains. "I wanted to make sure we'd get something back, and the project we picked could save us a lot of money."
As for length, a year seemed about right. Change, Fickett believed, required constant reinforcement. "If we had them for a year, we could catch them when it got tough and they tried to bail out," he says, "and they'd have time to get back on track." Underpinned by the Rodel Way, the LIT curriculum drew ideas from existing programs--Outward Bound, for one--and from the writings of Peter Senge, Stephen Covey, and other leadership luminaries.
On the premise that leadership could happen anywhere in Rodel--"it's not the same thing as managing," Wilson points out--he and Fickett opened the program to employees from all departments and all levels. And remembering the grudging compliance of the supervisors' group, who chafed at mandatory attendance, they made it voluntary. In fact, to add panache, they made it available by application only.
To be considered, candidates first had to answer, in writing, five questions designed to weigh their commitment to Rodel's success. For example: "The key to leadership is being a passionate advocate for something that forwards our mission. What are you a passionate advocate for?" Then came interviews. "If the people were freely self-selected and had to clear hurdles to get in, they'd have more chips on the table," Fickett reckoned, "and we'd have a mandate to ramp them up at a steeper gradient."
For the inaugural class, set to begin in February 1993, the program accepted about half the 50 or so applicants and made sure the group represented the whole company. One goal--breaking down barriers between departments--required a good cross-section. There were 18 people from Newark and 8 more from Scottsdale, ranging in rank from the Budingers, to salespeople and engineers, to factory workers. Few of them knew what to expect.
The course commenced with two days of shock treatment. The leadership skills of all the participants had already been rated anonymously by about a dozen of their superiors, peers, and subordinates. They'd been graded from zero to 10 on 11 specific behaviors, such as, "When you're on a team with this person, you know that the objective will be accomplished," and "I feel when I work with this person, he or she has my success in mind."
On day one, the class got the results. On day two each participant had to stand before the group to interpret his or her scores and outline individual goals for the upcoming year. Intimidating? Revealing? "To begin with, it was public speaking," says Deborah Resler, a materials specialist, who remembers it well. "And you're talking about something personal--what people think of you. It was revealing because others see you differently than you see yourself. I was embarrassed by some of my scores, so it was very uncomfortable."
The biggest jolt of those first two days, however, came at the end of the second day, when Fickett and Wilson assigned the group its project for the year: reduce production waste material from 18% to 10%.
Even the idea of a group project came as a surprise, and the way Wilson and Fickett broke the news guaranteed a wild start. After the announcement, they left, expecting chaos to ensue. It did. The dazed trainees wondered what to do next. "With no lines of authority to lean on, they were forced to have leadership emerge," Fickett says, noting that the Budingers exempted themselves from this part of the program. "Natural leaders tried to dominate the situation, but without the power that comes from position, they had to exert influence through persuasion. People learned that leadership isn't always easy or convenient, and that sometimes it means being a good follower."
Fickett anticipated--correctly--that periodic breakdowns and crises throughout the yearlong project would serve as opportunities to impart leadership lessons. "We coached them, but we wouldn't tell them what to do," he says.
The group eventually split into five teams to handle different facets of the project, and they had to enlist the active support of people all over Rodel. "We'd always been real turfy, but we forced ourselves to work outside our normal areas," says Dale Davis. "Suddenly, I was dealing with people who had no responsibility to me whatsoever." Winning them over was itself a leadership test for the LIT students. "They carried with them all the things they were learning," says Fickett, "and they infected other people with it."
Given the project's complexity and the extra hours it occupied on top of people's regular jobs, some participants occasionally tuned out. Their classmates pulled them back. "Keeping people involved--that's a big part of leadership," says Fickett. "We didn't know how they'd pull this thing off, but the important thing was the engagement itself. They couldn't help learning, and they couldn't learn without getting some results. The two things come together."
Fickett and Wilson met monthly with the 18 Newark-based participants as a group, expecting progress reports and giving out homework assignments. Required reading included a few books--Lester Thurow's Head to Head, about competing in the world marketplace; Peter Senge's The Fifth Discipline, about how organizations learn; and High Output Management, by Intel president Andrew Grove. To each meeting, students also had to bring real-life illustrations of leadership, something they had seen or learned in the past month. "We had a basket of Ping-Pong balls, and if your number came up, you had to stand and tell your story," Fickett says. "We started every meeting with a few of those. That kept them awake in a different kind of way, always looking for some incident or example to draw on. We coached them on how to make a point as they told those stories, because telling stories is part of how you transfer leadership and influence other people."
As the year unfolded, the individual LIT participants grew closer, weaving a support network for themselves across department lines. "There's a powerful bonding that goes on," says Davis. "It's like foxhole buddies. When you go through something like this, you really bare your souls to each other."
Davis's foxhole analogy certainly applied during the three days in September when the entire class, including the Budingers and the eight trainees from Scottsdale, met at a camplike retreat center called Sandy Cove, on the Chesapeake Bay. Bill Budinger hoped that a bit of Outward Bound- type training, undertaken in the context of the Rodel Way, would punctuate the group's overall experience.
It was a spartan regimen--early morning calisthenics, evening classroom work, no TV, no drinking. In short, it was no picnic. There was also a full day of adventure training. Fickett brought in Phil Bryson and Tom Lutes, a high-ropes team from On the Edge Productions, a company in Durango, Colo. They staged three action exercises designed to build confidence and teamwork, including the pole-jumping number that so frightened Tammy Casper.
In fact, it frightened everybody. "I was crying before I went up," admits Linda Ritter, a special-projects director. Don Budinger calls it "one of the most harrowing things I've ever done." But, he adds, "you cannot have a high-performance team unless you trust each other. You have to get people in touch with their fears, which the adventure stuff does, because later, in the classroom, you get a lot more ability to discuss what people fear in the workplace. That coaxes them to speak straight about the company's challenges and opportunities and not fear that what they say will somehow hurt them if it's negative."
For a second and final session at Sandy Cove, Fickett brought in Richard Strozzi Heckler, of Petaluma, Calif., a psychologist and fifth-degree black belt in aikido. Much of Heckler's leadership work is with the likes of Green Berets and navy SEALs. "It was very unusual for a small company to call me in," he says. "I found them open, curious, and willing to learn how to learn. They had a great program."
His work with the group drove at the importance of staying centered in the face of pressure or change. In one exercise, for instance, the students took turns standing inside a circle as about 25 classmates started coming at them--two, three, and four at a time. The objective was to remain focused and avoid panic by grasping the oncomers' arms and pulling them past as you moved.
Materials specialist Resler found that a good metaphor for business. "It really showed where I needed improvement," she says. "I saw how at first I got all frenzied, and how that got me nowhere. We learned a way to do it calmly."
By the end of that first class, Fickett , Wilson, and the Budingers had pronounced it a success, based on specific measurements. To build in accountability, Fickett had videotaped the individual presentations from the first two days, when the trainees received their leadership scores. On the final day, as they rose to recap their accomplishments, the tapes were played back. There was no ducking commitments made 12 months earlier. Furthermore, a second round of anonymous surveys told participants whether their coworkers had noticed a behavioral change. By and large, they had. "All of them grew to some degree," Fickett says. "You'd see it in how they carried themselves. And some people made truly amazing breakthroughs."
The most immediate payoff came from the project to reduce waste material. Even though the group failed to hit their percentage targets, they did save some $200,000 that year by Wilson's estimate. "The program cost about $40,000, including Lloyd's time," he says, "so we were definitely surprised and pleased. Remember, they didn't automatically have the cooperation of the rest of the company to accomplish this."
With results like that, Rodel ran a second group through LIT in 1995. A third class will begin this July, and it's unlikely to be the last. Without changing the main elements, Fickett fine-tunes each iteration, trying to squeeze out more juice.
The second group took on a different project, which involved reducing cycle time by 20% in all the company's work units. During their monthly sessions with Fickett and Wilson, which spanned a day or two, they also met with members of Rodel's executive committee to discuss big-picture issues--customer relationships, operating challenges, industry trends. In that way, they developed a rapport with the top management that helped build trust and teamwork.
"Leadership Intensive, this whole way of working together, is a phenomenal competitive advantage for us," says Dale Davis. "It brings to bear the talents of everybody in making decisions and improvements. We're not the biggest company in our industry, but nobody else has this culture. We live, eat, and breathe speed and response."
Meanwhile, dividends from the Rodel Way and open-book management have accumulated throughout the company. Nowhere is the before-and-after sense of ownership and common purpose more striking than in Don Budinger's monthly meetings. "Six years ago nobody had the guts to challenge us," he says. "Now people do. If they demand to see the expenses for a sales trip to Korea, we provide them. If they ask about the costs of the company plane, we tell them. They think of this as their company. Once you engage in something like this, you've got a tiger by the tail. When you inspire people and unlock the power that's in them, they will hound you to the ends of the earth if you don't perform for them."
Bill Budinger doesn't pretend that the transformation is complete. There's no finish line. But LIT and the other initiatives have kept Rodel in the game. Otherwise, he says, "I doubt we'd still be here."
Rodel's Leadership Intensive Training (LIT) program is by invitation only.