Many small businesses operate on “ask Marlene” principles. Marlene is the person who knows everything there is to know about the company’s products or fulfillment capabilities or delivery schedules. She holds such mastery over her domain that she can quickly make decisions whenever a customer or vendor issue arises: one reason that customers and vendors love both Marlene and the business. Unfortunately, for companies that want to grow exponentially, Marlene’s individual-rock star capabilities are not a viable scalable solution.
Steve Cobb has struggled with the tension between size and agility as he’s grown the Henny Penny Corporation from a small business to a mid-sized enterprise with 600 employees. The company builds heavy-duty machines for quick-service restaurants: it is the global market leader in pressure frying. If you frequent Chick-Fil-A, McDonald’s, Wendy’s, or KFC, chances are you’ve eaten something prepared by a Henny Penny product. Cobb bought the business from his father and siblings in the late 1980s and has been expanding it ever since.
We visited Cobb in the spacious conference room at Henny Penny’s Eaton, Ohio, headquarters and manufacturing facility, where most employees work. (There are 50 more in a Chinese factory that Henny Penny built to serve the Asian market.) Surrounded by shiny pressure fryers and other large test-kitchen equipment, Cobb told us about Henny Penny’s history and the strategies he is developing for the next phase of the company’s growth.
We asked him about his challenges, expecting to get an earful about the negative publicity aimed at fast food. But Cobb had bigger chickens to fry than the anti-fat movement.
Cobb explained, “After you grow to a certain point, you have to evolve around scalability. That is hard to do. I step back and make sure we don’t have heavy reliance on individual knowledge within the business that detracts from our ability to scale.”
In other words, Henny Penny is sensitive to the “Marlene” issue. In one situation at the company, Marlene was Greg. An executive who had been with the business for 35 years, Greg was Henny Penny’s master pricer and sales leader. “I would match Greg’s skill and experience against anyone in the industry, and particularly on how to price products,” Cobb told us. “He understood that there are many variables that go into it. Case-by-case-by-case, he would nail it. It was priced right for the market. It was priced right for the situation. It was priced right for the customer.”
But most of Greg’s skills and knowledge lived in his head. “It was very valuable for us, and it allowed us to be nimble and quick because he could respond like that,” said Cobb, snapping his fingers. But a Greg-based solution wouldn’t work as the company approached a size where it needed more decisions on more and more products.
So Henny Penny evolved from Greg to a software model where salespeople can formally enter details about prospective deals. The system “feels a little clunkier, it feels slower,” said Cobb. “But it’s scalable.” Meanwhile, Greg, along with all of his valuable talents, was able to go off happily into retirement.
The lesson: Good companies value their people. But in a scaling business, at some point, a single company star must be replaced by a process-;ideally a process informed by that person’s expertise. Or, as Steve Cobb put it, “You better have an open mind about how to go from an organization that is driven by events to an organization that adapts to processes.”