Take Two Company Founders. Add 10 Years of 80-Hour Workweeks. Fold in a Formidable Outside Ceo. Mix Carefully. Very Carefully.
Two Chefs wanted to nurture the good kind of chaos--the openness to exploration and ferment that kept the new-product pipeline primed.
The chef-to-chef conversations have proved so fertile that when Swartz isn't available the company now routinely sends an R&D chef along with the account manager. Both founders also do stints in their clients' kitchens, scouting for ideas and insights as they work alongside the line chefs.
Swartz and Daniel scout for ideas not just among their customers but also out in the broader world, where thousands of next new things are waiting to be discovered. Few industries are globalizing as rapidly as food: U.S. restaurants offer everything from Spanish foams to Mongolian barbecue, while specialty retailers brand themselves as purveyors of the exotic. Under Goh, the company's annual travel budget is in the hundreds of thousands of dollars and managers have visited more than a dozen countries. (The only executives who rarely go anywhere are Goh himself and the CFO.) "Half the time I have a customer in tow so I can see how he or she responds to things firsthand," says Daniel, who last year spent 27 weeks on the road.
Two Chefs' transformation was not painless, of course. Most of the stress built up around people issues. Goh had determined to go the Good to Great route and assemble a top-notch management team before embarking on strategy. Specifically, he needed people accustomed to the kind of high-performance operation Two Chefs wanted to be. In some cases that meant big-business experience at places such as Unilever, General Mills, and Mars. In others it simply meant willingness to accept more structure and hierarchy.
But many employees fit neither criterion. Goh fired some; others fled what they perceived as encroaching corporatism. In 2003 and 2004 the controller, the director of sales, and 10 out of 25 key managers left. "Some people liked it better when it was smaller and we could all meet together in one room and decide things for the company," says Goh. "Other people discovered that we needed a higher skill level or a little more experience. That was just attrition as we moved to a much larger business." Still, he concedes, "it should have been less."
The hiring process, meanwhile, took longer than expected. Goh recalls sitting late one night in his office after firing a direct report and "thinking to myself, I have more vacancies on my executive team than positions filled." Haunted by the leafless branches of his org chart, Goh fought the urge to start hiring just to fill the slots, just to be done with it. He succeeded, though it meant he spent months searching for talent.
Daniel and Swartz accepted their colleagues' departures with stiff upper lips and sometimes trembling lower ones. And while they abided by Goh's hiring decisions, they didn't always agree with them. "We would have new employees in particular positions and I wouldn't see how they could be successful," Daniel recalls. "And Jeff would say, 'They're doing fine. Just let them be.' And I would say, 'I don't see how it's going to work, and if I don't see it, I don't see it."
Elsewhere in the company, changes were less seismic but still felt. The enterprise resource planning system, a behemoth brought in to manage processes as varied as resource planning and allergen management, altered the day-to-day work of whole swaths of the company. Approximately a quarter of the work force--many with very little computer experience--found themselves wielding scanners and pecking at keyboards as they processed more than 40,000 discrete "transactions" each month. Training remains a work in progress.
By contrast, the other huge disruption--moving to a new factory--emerged as change management at its best. Goh and Swartz made sure everyone interested had a say in designing the plant, and as moving day approached they and Daniel brought groups to tour the facility and hold parties in the new parking lot. Employees grasped one another's hands to see how far their human chain would stretch across the vast space. Some raced around the empty rooms on bicycles. "People cheered," Goh says. When the move at last took place in early 2003, Two Chefs didn't miss a day of production.
Exhilaration over the move has naturally abated, but morale is buoyed by the company's growth and rising industry profile, say the founders. And now that they've absorbed the shocks, Daniel and Swartz are punch-pleased with their own roles in the new regime. More than two decades after launching the business they finally have the luxury to think strategically. Relieved of his go-to-guy mantle, Swartz can follow his interests into any department and choose whether to participate or simply observe and advise. Daniel spends time just talking to employees, with whom she enjoys warmer, more relaxed relationships now that "we're no longer the bosses and the heavies." She's also emerged as the company's public face at industry events.
Perhaps ironically, the founders have come to embody the brand more than at any time since they were inventing four-layer pies in their tiny rented kitchen. On the conference circuit, in clients' offices and kitchens, and on their website (designed by Daniel) the two talk endlessly and animatedly about, not the business of food, but rather food itself. Their message is simple. Because the company is what it is, customers can count on 10,000 pounds a week of reheatable creme brulee. Because Daniel and Swartz are who they are, customers can trust it will be satin on the tongue.
People visit the plant to inspect its operations, says Swartz. But the first thing they always ask is, "Who are the two chefs?"
Leigh Buchanan is an Inc. editor-at-large.
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Leigh Buchanan is an editor at large for Inc. Magazine. A former editor at Harvard Business Review and founding editor of WebMaster magazine, she writes regular columns on leadership and workplace culture. @LeighEBuchanan
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