Thus the board was born.
Life at Setpoint has changed, everyone agrees, since the introduction of the board and the weekly huddle. "Before that, we had monthly meetings to go over the numbers, but it was too little, too late," says Ken Waudby, the shop manager.
Now there's a huddle every Monday at 11 a.m. "[But] we don't just look at the budget and the hours on Monday," says Brad Stryker, a project engineer. "We monitor them throughout the week, and we make decisions based on them. Should we buy component x or y, considering the price difference? Should we put an extra 15 hours into this project to do such-and-such? It's a constant, daily process."
Nor is it simply a matter of figuring out how to cut costs. "A lot of people think it's all about saving money," says Cornwell, "but it's not. It's about leveraging resources. Sometimes you have to spend money to make money."
When it comes to leveraging resources, moreover, the technicians on the shop floor are as focused as the engineers. "I watch GP per hour," says Johnny Lane, a technician. "Like that one," he says, pointing to a line on the board. "Twelve dollars an hour is not acceptable. What is acceptable? We average $60 to $80 an hour. If we could make $100 an hour, it would be great, but a lot of jobs aren't bid for that." But do people actually talk about their GP per hour while they're working? "Oh, yeah, sure," says Lane. "We discuss it all the time."
That's true, says Waudby. "Like someone will say, 'I worked my butt off, and we only made $50 an hour.' People are always talking about the hours."
That's the most interesting part: the process itself serves as a motivator. "It keeps you involved and lets you understand your impact," says Lyman Houston, a project engineer. "I like to know what condition jobs are in, and why, and what I can do about it. That totally interests and motivates me."
Not that Setpoint shuns the use of incentives. Back in 1998, while the rest of the business world was going crazy with stock options, Joe K. came up with the idea of giving all employees a denim jacket if they generated enough gross profit in the fourth quarter to turn around an otherwise lackluster fiscal year. (They did.) In addition, Setpoint has an annual bonus plan.
What's striking, however, is how small a role such incentives actually play at the company. That became clear last year when a brouhaha arose over the Joes' decision to split Setpoint into two separate companies with two separate bonus programs. Based on their company's financial performance, the people who worked on the roller coasters weren't eligible for a bonus. They didn't complain, but the people in factory automation, who did earn a bonus, were upset. Their leader, Waudby, argued that the bonus money should be divided equally among the employees in both companies. "I just didn't want the bonus to mess up what we have here," he says. "I like the way things are."
Asked to elaborate, Waudby tells a story about an experience he had a couple of years ago. It was during the summer, a busy time for the automation business, and as he was leaving one day, he noticed that a couple of the roller-coaster guys were working in the parking lot. When he asked them what they were doing, they said they were setting up a braking station for a test the next morning. A crane was arriving at 6:30 a.m., and all the sensors had to be mounted, wired, and checked that night. It was a big job, and the coaster guys obviously needed help. Waudby put his lunch box in his car and came back to lend a hand.
From the plant floor: "I watch gross profit per hour," says Johnny Lane, a technician. "We discuss it all the time."
Meanwhile, other people from automation were emerging from the building on the way to their cars. One by one, they walked over to see what was going on, then put their lunch boxes away and returned to help. At one point the coaster guys looked up and saw five people from automation working on the sensors. Not until 11:30 p.m. did people knock off work for the night. By then, everybody was getting "a little rummy," says Waudby, so he and Johnny Lane came back at 4:30 a.m. to finish the wiring.
"No one planned it," he says. "No one asked us to do it. No one said, 'Hey, guys, let's go help.' We all just did it on our own. That's what I like about this company. You don't need to ask for help. It's just there. Which goes back to the deal about the bonus. I don't want things like that to mess it up by causing friction between the people who get the bonus and the people who don't."
It's an interesting story, for sure, but you have to wonder, Where did the sense of urgency come from? Why did seven Setpoint employees feel it was so important to get the braking station ready that they worked late into the night to finish it? Why not just finish it the next morning?
When asked about it, Waudby seems perplexed. "If it wasn't ready, we'd be paying $300 an hour for the crane to be there, doing nothing," he says.
Right. Of course.
Considering the way people feel about Setpoint, and about change in general, it's not surprising that a wave of anxiety swept through the company when the Joes first began talking about a merger with Petersen Inc. They went to great lengths to explain the logic behind the deal, but people were still nervous, and so Setpoint started holding "merger meetings" at which employees could air their concerns and the Joes could try to address them.
Steve Petersen came to some of the meetings. "I thought I was open-book, but I hadn't seen anything," he recalls. "They went into a lot of detail about banking relationships, about sales volumes. And they asked me some very personal questions. One woman asked me what kind of vehicle I drove. I was very happy I could say Chevy pickup rather than Lamborghini.
