The Education of an Educated CEO

APPLIED OVER TIME, CRITICAL THINKING SKILLS SUCCEED

As he became more patient, he realized that some workers had in fact grown. Debbie Stokes, a longtime employee, remembers wondering, upon Jeff's arrival, "Who's the geek with the bow tie?" But as the years went by, she saw a kindred spirit, and she understood that her own compulsive urges to organize could now be unleashed at the office. "It was fun to set up all these new processes," she says.

Koeze Co. became smarter. A lot of running a business is project-based stuff few entrepreneurs do frequently enough to truly master. Reading up helped Koeze and his employees pull off a series of big improvements.

The mail-order catalog, 30 to 40 items on 12 pages when Jeff arrived, is up to 100 items this year, on 28 pages. The million copies are sent out bearing about 70 key codes, which allow the company to track sales by cover art, days the catalogs are mailed, and which rented mailing list was used.

A new phone system is being installed. Before the company signed a contract, Deborah Owsinski, now an executive, read up on the topic and then produced a 10-page request for proposal. It resembled something that a far larger company would issue, says Mike Borowka, director of business development at Quantum Leap Communications, the vendor that won the contract. "They had it all storyboarded out, this whole process. It's a little intimidating," Borowka says.

Koeze asked Owsinski to research incentive pay. She had done so several times for Scott Koeze, only to see her work ignored. But she read up again and became enamored of a book, Punished by Rewards, by Alfie Kohn, that argues against individual incentives for children, students, and workers. She persuaded Koeze to implement a profit-sharing plan without individual bonuses. It rewards collective performance. "I wouldn't run an investment bank this way," Koeze says. "But it works for us."

Fixing the call center in 2007 may have been Jeff Koeze's finest hour. A sample of orders taken showed that a disturbing 35 percent contained errors: the name Whithead typed in as Shithead; the gift greeting with our love rendered as with out love. Those were caught before they went out. Who knows what wasn't caught?

Koeze Co. has a 550-page training manual for the dozens of temporary workers it hires every fall to staff the call center, and some get as much as seven weeks of paid training for their 10 weeks of productive work. But there was a history of bad blood between the auditors and supervisors who correct order mistakes and those who take the orders.

All the measuring in the world wasn't going to fix that. So Jeff Koeze hired Marybeth Atwell, a clinical social worker with minimal business experience, to counsel the opposing groups. As Schwarz had, she examined speech patterns. Auditors and supervisors stood over the order takers, and she suggested sitting down next to them to discuss errors. The auditors and supervisors tended to command ("I need to talk to you") rather than ask ("Do you have a minute?"). And they voiced exasperation ("You made the same mistake you made yesterday. What's the deal here?") instead of constructive suggestions ("I notice you made this mistake on a number of occasions. Can you go back and examine how you did this?").

Order takers, many returning from previous years at Koeze, needed a fresh outlook, too. "If you start a dynamic in the group of hating the supervisor, then nobody benefits," Atwell told them. "A lot of these people are unemployed and really wanting work," she says. "So they bring a lot of their own frustrations."

Order-taking errors declined to as low as 10 percent, and nearly all mistakes are caught before shipping.

A SMART BUSINESS IS MORE THAN JUST PROFITABLE

The cashew company, after a dozen years, bears a strong resemblance to its owner. Numbers-obsessed but compassionate. And smart. In long conversations, DeWilde, the philosophy professor, and Koeze, the cashew man, talked about Aristotle's notion of friendship: surrounding yourself with people who challenge you to be your best. For Jeff Koeze, the business is that friend -- or, in DeWilde's words, "an avenue for him to be who he wants to be." Koeze, he adds, "wants to go to work in the morning. That wasn't always the case when I met him."

And Koeze says he remembers his father's advice -- that you can't learn to run a business by reading books. "I guess I'd say you can, by reading lots and lots of books, and then running it."

Jeff Bailey is a writer based in Chicago.