The Power of Listening

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The culture also promotes employees buying in to tough decisions, instead of the kind of grousing that undermines morale and performance at a lot of companies. Health insurance costs are going up? Both company and employees are going to have to pay more? Okay, let's put it to a vote: Do we want to change the coverage, or keep it the same and dig deeper into our pockets? It's the employees' call, not management's. The decision to buy the new machinery for the corrugator wasn't so different. Installing and learning a complex piece of equipment is always costly and difficult. But once they voted on it, it was the employees' machine, and they had a lot invested in making it work. The installation took three days when it might easily have taken a week -- the smoothest in the company's history, says Paul. Sure, people continue to grouse at Atlas. They just don't do it much, because there's no "them" to grouse at.

If the devil is in the details, the details reveal a company in which people take ownership of problems because they can understand and see -- and know everybody else can understand and see -- exactly how the problem shows up in the financials. Take Ralph Layman, the corrugator superintendent. He watched the line for inks and starch, under cost of goods sold, creep up. Maybe he could change the formula for the starch used in corrugation, he figured, using fewer solids, and thus save money. The first try didn't work -- too much warped board. Eventually, he found the right mix: "More quality boards with less starch dollars," says Paul approvingly.

Shipping manager Russell Jones was coming under fire because the shipping cost line was high. The problem, he realized, was that he couldn't use full truckloads for shipping, because the right combination of orders wasn't coming off the production line. So he talked to the production crews and learned that the job scheduling needed to be changed. A group met with the scheduler to explain the problem and work out a solution. The result: lower shipping costs and less work-in-process inventory.

Customer service is just one more department in which employees go out of their way to reduce costs. Everyone there knows the department has to monitor one key number: credits issued to a customer because an order was entered wrong. "You have to watch your own orders when you're booking them and when you print them off," says Paul Snider, "and double-check your orders before you put them in." If customer service keeps credits below $2,000 a month, everyone gets a small gift certificate. "That's the 'game' in our department," says Snider.

"We'll jump on a problem with a lot less resentment and foot dragging than you would find in another company," says chief financial officer Thomas Downing, who spent most of his career working for other companies. The culture "creates an organization that's more responsive and more malleable," which is a nice way of saying that what we have, a lot of companies would kill for.

Of course, the proof of Altas's cultural pudding comes when the company buys another business. In a mature industry like boxes, acquisitions are the surest and fastest -- maybe the only -- route to rapid growth, and hence to the Centenaris' dream. But what happens when you try to impose the togetherness approach on a company that may have a quite different set of expectations and practices?

The question, it turns out, is being answered even as we speak in Meriden, Conn., where in October 2001, Atlas bought a 200,000-square-foot box plant from Weyerhaeuser. The plant was by all accounts a microcosm of corporate America -- a facility that was well equipped but had a toxic atmosphere, the kind of place where managers perpetually told employees what they were doing wrong and union workers retaliated by finding excuses not to work. "We had monthly reports, but they were always negative," says Walter Vazquez, now a supervisor but then a union steward. "There was always finger-pointing." When Atlas bought the plant, its on-time delivery stood at about 60%. It was losing between $150,000 and $250,000 a month.

By year-end 2002, however, a turnaround was in full swing. The union was history, decertified in a formal National Labor Relations Board­supervised vote by a whopping 40 to 17. Average monthly sales were up 30%; on-time delivery was up to 97%; labor costs had dropped. New customers were being courted for higher-value projects such as complex point-of-sale display boxes. The bottom line -- net profit -- turned positive in about a month and a half, and at the end of 2002, it stood at more than $500,000. The adversaryism was drying up as well: Rather than working on only one machine, for instance, shop-floor employees moved from one to another to help jobs get out the door more quickly. "When Atlas came in, it was, 'Everybody's equal," says Vazquez. "Everybody works together."

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