"Look at this number," he yells, his tone carrying that elusive mix of "Isn't this cool?" and "Pay attention!" found in the voices of the best teachers. "Look at this! Is this high or low?" The audience members whoop. They know the answer to this one: Several people shout out, "High!" Grinning, Centenari chucks a pack of M&Ms in the direction of the first person to answer. "High? How high? Where should it be?" More shouted answers, more M&Ms sailing across the room. If he loses his class for a moment, he says, "Hey, are you with me?" and waits until he has everyone's attention, which he invariably gets, and not only because of his engaging manner. People know that their monthly bonuses, not to mention the health of their employer, depend on these financials.
The number of the moment is sales, general, and administrative expenses, or SG&A, which at 14.2% of sales is higher than Centenari wants it to be. ("We're gonna cut two points off that. We've got a team working on it," he says.) But it could be operating profits, monthly shipments, or indeed pretty much anything that will determine whether Atlas makes its financial goals. The point of the meeting isn't to solve problems, rather just to make sure everybody knows the score. Some employees will be asked to join that SG&A team or perhaps a team working on reducing paper waste. Others might be asked to work Saturdays to make a production goal or to postpone some elective maintenance on the machinery. Centenari wants them to know the reasons for all those moves. And the reasons, he has taught them, lie in the financials.
A side benefit: The monthly meetings are one helluva sales tool. Sitting in on one, two representatives from Timberlane Woodcrafters, a customer, couldn't quite believe the energy and enthusiasm of Atlas's employees. "We said, 'We need to find out what they're doing," says Timberlane's Dave Seelig. "It wasn't just their salespeople or managers; it was everybody. They were cheering and shouting out answers to questions."
Anatomy of a Vote
The problem: A sharp, sudden rise in health care costs at Atlas Container Corp.
The touchy issue: Should both the company and employees pay more to maintain the same coverage as before? Or were there cheaper alternatives that employees would view as preferable?
How to resolve it: In traditional Atlas fashion: Let the people decide. "We'll vote on it," said Atlas CEO Paul Centenari.
Preparing the ground: First came an announcement, at the company's regular monthly meeting, that the cost of health care was on the way up and that management was looking for solutions. Later, insurance broker Tom Benney met with purchasing agent Kim Hall and a small group of Atlas staff members to review the plans of competing insurers and winnow the field. All agreed that Blue Cross Blue Shield (known in Atlas's region as CareFirst of Maryland Inc.) offered the best value. But the group didn't know which of Blue Cross's alphabet soup of plans -- HMO, PPO, and so on -- was best for the employees.
Informing the voters: Benney kicked off a long all-hands meeting with a PowerPoint presentation. Costs and coverage for each plan. Deductibles. Cost per week -- taken out of the paycheck -- for individual, parent-child, family plan, and so on. The biggest concern: Is my doctor on the plan? "We had computers set up right there so people could check the Blue Cross website [to see the answer]," says HR director Sherri Renner.
The vote: Employees got a couple of days to talk it over with their families. Then they selected two plans, an HMO and a PPO, for the company to offer. The savings: substantial, both for the company (which pays two-thirds of the premium) and the employees. People buying individual plans, for instance, would see only $2 more a week taken out of their paychecks, compared with an extra $11 if Atlas had stayed on its previous plan.
The payoff: "I was coming out of the parking lot one day, and there was a guy who's been with us for a long time," says Centenari. "I said, 'Hi, Larry. How're you doing?' He said, 'Not that well.' I walk over. 'What are you talking about?' He said, 'Well, my doctor is not in the new insurance.' I said I was sorry to hear about that. He said, 'Yeah. But I'll tell you what, Paul. I understand why we moved from this insurance plan to the other plan. It saves us and the company a lot of money. It's a pain in the butt to me, because I don't have my doctor. But I understand.' That's exactly why we do it. You present the options, and they make their own decisions. The voting itself creates such a valuable learning experience."
Contributor John Case is a nationally known writer on entrepreneurship and management. He is the author of five books, including Open-Book Management: The Coming Business Revolution and The Open-Book Experience: Lessons From Over 100 Companies Who Successfully Transformed Themselves.
To learn more about open-book management and how you might use it in your business, check out Inc.com's guide to open-book management at www.inc.com/keyword/openbook.
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