Transforming a Small-Town Manufacturer to be Forward-Thinking

Having worked as a transformational change consultant and leadership coach for decades, I’ve had the honor of working with dozens of talented business leaders. Such is the case with Erik Koik who has deep experience transforming manufacturing plants, and I’ll share one such transformation in northeastern Indiana. Determined to be successful from the start, Erik mapped his goal to completely change the work culture toward becoming more innovative and customer-focused. His is a fascinating story of “small-town manufacturing meets culture and transformational change.” You will likely find these insights useful in your culture work.

Inheriting regional and organizational cultural attributes

In 2001, Erik and his company SP3 purchased a plant in northeastern Indiana. They made this purchase because while his company had a process for making industrial diamonds, they needed a plant to build tools to use them. In the days following the acquisition, Erik encountered massive resistance from employees. The plant had been a family business and the owner became the “dad.” He took care of everyone. Now Erik was there to run this as a business and not a family. There were great people, but workflows were poor. He needed to optimize manufacturing and improve customer service.

Erik KoikTo understand a little about the environment at the plant, you need to understand more about this little town of less than 10,000 population. There was a culture of accepting things the way they were. There was no desire to change. People in the community rarely challenged the status quo. And they were stubborn. If it always worked before, then why change it now? And even if it didn’t work before, that’s okay, we’ll accept it for the way it is.

When Erik arrived there, he and some colleagues went to a local restaurant that had Mexican food night every Monday. Excited to find a restaurant in a small mid-western town serving Mexican food, Erik ordered a round of guacamole and chips for the table. The server informed him that they had run out of guacamole. In fact, they run out of guacamole every Monday by 6pm. Erik asked, “why don’t you make more?” The server responded, “You’ll have to speak with the manager.”

Don’t accept things as they are. Make them better.

Another example comes from inside the plant. A customer broke a tool and urgently required a replacement. He waited until the end of the day to call the plant, and Erik answered the phone. The customer told Erik of his problem, and Erik, knowing that UPS had already come that day, drove the part to Fort Wayne to the UPS depot. The part was delivered overnight to the customer.

Curious why the customer waited until the end of the day, Erik asked him about the delay. The customer replied, “If I called earlier, I’d reach Sarah (name changed), and she’d tell me it was too late to send it by UPS even if it wasn’t. I took a chance calling later thinking I might reach a more senior employee. It worked.” Erik spoke with Sarah about this. She said that UPS comes earlier in the day and there was no way we’d be able to satisfy his request. Erik challenged her to have a conversation with UPS to come at the end of the day, not the middle as they had historically.

Through his transparency, he was able to demonstrate a new way of communicating in the organization. People started to share more as a result.

Simply put, Erik led this new organization transparently. He spoke openly about why the organization needed to change to remain viable. Between changes in legislation and the economy, this plant was at risk. Erik spoke of these risks and helped employees understand that not only was there a better way, but they also needed to pursue this path to save their jobs.

Erik also led by example. The customer incident described above is one way he showed others how they could behave differently and did not need to accept things the way they were. Through his transparency, he was able to demonstrate a new way of communicating in the organization. People started to share more as a result.

On being a transformational leader.

The leadership team soon learned to lead a different way. They created the concept of “staged accidents.” One example occurred during a major renovation of the plant. The plant manager, knowing there would be enormous resistance to the new layout, intentionally left the new plant layout on a table in the cafeteria with a cup of coffee, making it look like he left to handle another matter. Employees took advantage of this opportunity and reviewed the plant layout. This was followed by a chorus of immediate feedback complaining that various elements of the layout were wrong. Erik and his plant manager follow up with, “Ok, what is your idea to make it better?” This enrolled the employees in the change and soon mitigated most of the resistance.

In those early years, Erik had many one-on-one conversations and provided quarterly reviews to describe how progress was made since prior years.

In these conversations, Erik shared how the changes were required for the organization to remain viable, and for employees to keep their jobs. He described that when the organization continued to improve, they could ride the wave of economic change.

In quarterly meetings, he also shared key metrics the leadership team was monitoring. Measures such as Sales, ISO9000 ratings, and EBITDA.

Clarifying purpose. Enrolling others. Becoming coach.

Clarifying the purpose of the transformation required lots of communications. It required setting the example. It also required Erik to realize that he could not do this alone and that other members of his leadership team needed to help drive this transformation.

One such leader was Barb. She had been with the company for many years, and unlike many of her counterparts, quickly bought into the cultural changes required for the plant to remain viable and enjoy even greater success. Barb became an ambassador for the transformation, taking every opportunity to talk with others about the why’s and how’s. This in turn led to greater acceptance and reduced resistance.

Erik never liked the idea that you must accept things as they are. There can always be a better way. As he learned how to convince others of this, he found that he was building coaching skills. He was helping others see a better way. In his first job decades ago, Erik was exposed to this idea. He asked his new boss for more details about his job. His boss replied, “What do you want to do?” So, Erik built his job around this. For him it wasn’t about asking permission about what to do, but rather, he asked himself, “how can I make this happen?” It was an early, powerful lesson for Erik to learn how to be transformative.

His advice to up and coming transformational leaders?

Learn as much about the subject matter as you can. Dive into the trenches to learn the environment and demonstrate how to do things differently. Example speaks volumes. It will also earn you a great deal of respect.

About the Author

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Steve Salisbury

Steve Salisbury is an organization change, leadership, and culture consultant who has helped dozens of executives lead change and grow their businesses. Steve’s unique approach is to understand and adjust organizational culture and then execute strategy quickly, effectively, and with the highest return possible. Steve evaluates interpersonal, organizational, and process elements to eliminate cross-functional dysfunction and builds teams to create a leadership culture to drive exponential growth. Steve has worked with the world’s most recognizable and global organizations to drive growth by creating capacity, galvanizing leaders, and driving accountability. In 2020, Steve published his first book, Activate: 15 Steps to Profitable Strategy Execution. The book explains how to drive greater profitability faster. Steve also serves as a volunteer mentor for SCORE, an organization that provides small business advice to help companies start, grow, and operate efficiently.