A Successful Alignment and Cross-Functional Approach to Company’s Value, Mission and Long Range Goals
By Rudi Scheiber-Kurtz, CEO of Next Stage Solutions, Inc
The QUABAUG Corporation was founded in 1916 in North Brookfield, MA. Named after a regional Native American tribe, the company began manufacturing a variety of mechanical rubber goods. Today the company’s focus is providing the most technologically advanced products for the performance oriented footwear customer.
Kevin M. Donahue, Chairman and CEO became sole owner of the company in 2010. By maintaining a strong work ethic, Quabaug continues to grow and flourish. The strategy is to make soles more important than shoes. Don’t sell to everyone and grow the brand globally. Make the best products in the world.
I had the pleasure to interview Kevin in how he approached some major changes in his company.
1. As companies grow, they build out departments and before we know, each department becomes a silo of its own. What key issue or challenge led you to believe that you needed to address an alignment?
It was anti-management by objective. I firmly believe that compensating people for accomplishing their objectives is detrimental to team work. We implemented a compensation plan that was based on the individual yet more heavily weighted towards the team.
Sales personnel were focused only on sales but had no long term commitment to customers.
We used to have a budget process, but abandoned this process and replaced it with a quarterly rolling forecast planning towards long term goals.
2. What was the first step you took to bring greater transparency between the key business elements such as sales, operations and finance?
Given that we have 270 employees, we created a champion team. It is now called the leadership team with 35 members. That is where I first made all major financials available to them, and then transitioned into the Rockefeller Habits (Verne Harnish) from predictability models to prioritizing. Now I make all financials available to the leadership team.
Those people then met with the rest of the associates to discuss the broader goals and broader financials. We have always had KPIs (Key Performance Indicators) but we used the 20/20 planning from the Rockefeller Habits. We established both service metrics and quality metrics, including lean metrics that should be measured and accounted for in a cascading method.
My job is to support the people above and by managing bottom up.
3. Did your managers and employees embrace this change? If not, how did you approach the change?
They embraced it. We approached it in the spirit of continuous improvement and learning. We gave everyone a chance to grow. We also created a 20/20 plan, an instant rewards program.
4. Where did you come across the strongest push back and why?
The accounting department gave us the hardest push back. They wanted to stick to GAAP rules, often confused and wanting to lead the company by making the numbers. A budget can be totally detrimental, especially in a private company.
5. Today, you are running a very agile business and your employees accept change and are part of the overall problem solving mentality. What positive affect did you see short –term and long term?
Making a disciplined investment in ISO, Lean and Rockefeller Habits. If you believe that freely chosen discipline and procedures breed autonomy, then give people the freedom to actively participate in the profit and progress. QUABAUG is a company built for participation, no spectators are allowed. Accountability is the most important aspect in achieving corporate goals.
6. A Benchmark Assessment is really the first step in attacking this challenge. What is the most important message you want to give to other CEOs of growing businesses, something they really should pay attention to now?
Create an atmosphere where change and continuous improvement is rewarded and embraced. This will be the foundation for long term growth and profitability. For a company to grow, employees need to be inward driven where they can grow.