A people transformation takes time. It starts with listening to and trusting people. It is enabled by valuing and demonstrating gratitude for people’s contributions. It is a journey of incremental steps forward. In any transformation there are defining moments. The 2008 financial crash gave the leadership of Barry-Wehmiller an opportunity to demonstrate their intent. They passed the intent test and that is what “sealed the deal” and convinced people that the GPL (Guiding Principles of Leadership) “was real”. If they had failed the intent test they would have given people cause to believe the opposite. Whenever leaders pass the intent test (put their people’s interests first and do the right thing rather than the expedient thing) their people trust them more.
OUR SUMMARY OF THIS VIDEO: When children say they want to be a doctor, a pilot or a fireman, they are envisaging occupations and jobs which will be fulfilling. It is not surprising that they have these positive hopes because each one is someone’s precious child. Someone cares for them, someone values them, someone wants them to be happy and find fulfilment in their life.
To those children, work is going to be fun. They never dream that work might be a dismal existence in which they’re micromanaged into oblivion.
So why is it, when we go to work, most employers don’t think of us as precious or valued?
Instead, we are what we do. We are functions rather than people. We’re expendable, we don’t really matter.
A contributor to the documentary said: “Most managers and bosses, they’re mean. They don’t show that they care. That’s really how they are.”
Another contributor: “Once you care for them, they feel something for the company and it’s not just, ‘I’m working.’ It’s “I’m working for someone that actually cared for me when I needed someone to care for me.’”
Another contributor: “My company has been good to me, but they’d drop me if the dollars and cents aren’t there. But I don’t blame them for that. That’s business. That’s America.”
Another contributor: “Anybody that’s got a job they complain about, they need to go somewhere else, because that’s not good for your health.”
And a lot of people are doing just that: leaving. A Mercer study showed 32% of the US workforce is actively looking for a new gig at any given moment, and 75% of workers say they’d take another job if one came along because they don’t feel valued, appreciated, or cared for by their employer.
A contributor: “I talked to a lady that worked for me at the other company. She hasn’t had a raise in 7 years. She went to the boss and asked if she could get a raise. Their response was, ‘You’re getting a paycheck every Friday. If you don’t like it, leave.’”
The shortsightedness of this sort of thinking is common, and the productivity loss due to low moral is staggering. A Gallup study found that in the US alone, unhappy, disengaged, unfulfilled workers cost the economy up to $500 billion per year.
And that’s just the financial toll. What about the human loss? What about the fact that just doing the right thing, doing good, could actually make work and the world a better place?
Best-selling author Simon Sinek has been saying that for years. Said Sinek: “I think the major problem with business leadership today is that there is no leadership; there’s a lot of management. It’s a very short-term attitude to just think of people as a resource that you just pay and expect them to do their work. I mean, you don’t even have to take it from a human perspective … If you want to be cold-hearted about it, people who like coming to work more are more productive. People who feel safe amongst their own, who can trust the people that they work with, are more likely to offer bigger ideas, take better risks, be more innovative, be more productive.”
Barry-Wehmiller is a manufacturing and consulting company based in St Louis, Missouri, that builds and designs machines that make things like the tops of aluminum cans, cereal boxes, toilet tissue, corrugated boxes, all kinds of labels, pet food bags, etc.
They build bottle fillers, pasteurizers, conveyors, corrugators, labelers. The list is endless.
80% of the world’s medicines pass through a Barry-Wehmiller centrifuge.
They’re made up of more than 80 companies with over 10,000 employees worldwide.
Around the year 2000, they came to the realization that the most valuable part of the company wasn’t their manufacturing or consulting, but rather their people. And leadership, not management, was going to make the difference.
Bob Chapman, Barry-Wehmiller’s CEO, is the first to admit that in his early days of leadership, people-centric thinking was not part of his business plan.
“I did things. I was a nice guy. I had a positive attitude, but I wouldn’t say to you I was sensitive to the impact of my initiatives on people. It was about numbers. I came from accounting and MBA programs, and it was all about building shareholder value, not human value.
“So, my early days were very traditional. If you had to let people go, you did it. I mean, that’s what you do in business … that’s business.
“That’s the conventional thought that exists in most places today. It’s just business. It’s not human, it’s business. It’s about numbers.”
How did people feel working for that company?
A contributor: “Like a number. Like a prisoner really.”
Like a number is how most of the employees of Barry-Wehmiller felt for the majority of its life before they changed and began to put people in the forefront.
The Barry-Wehmiller Company dates back to 1885.
Thomas Barry opened a machine shop in St Louis, and was soon joined by his brother-in-law, Alfred Wehmiller. They made bottle washers, conveyor systems, pasteurization machines, and most customers were from the brewing and beverage industries.
Fast-forward to 1950. In 1950, Bill Chapman, Bob’s dad, an accountant from Arthur Andersen, came aboard as general manager and treasurer. In 1953 he was named president and a decade later, ownership of the entire Barry-Wehmiller Company passed to the Chapman family.
Bob attended college and grad school, then worked at Arthur Andersen and Price Waterhouse.
And in 1969, he began working for Barry-Wehmiller. In 1975 his father died unexpectedly.
Says Bob: “Clearly, I was shocked that all of a sudden he wasn’t here, and I think motivated by my dad’s sudden death, the fact that I felt his hard work to try to build this company that I’d grown to appreciate fully, a sense that when it happened, I was ready to take command.”
But the company’s bankers in New York were not as confident.
Bob: “They said, ‘Sorry about your father, but given the performance of the company, your father’s death, we really think we need to be repaid our loans and we need to end this relationship.’
“That was exactly what I need in hindsight, because my reaction was to grab ahold of that business, pay down that debt, and get the company on track. The next year was the most profitable in the history of the company. We paid down our bank debt, and all of a sudden we went from not being bankable to banks approaching us.
A contributor: “For the first time in over a century, Barry-Wehmiller was a thriving company.”
As it thrived, it developed new technologies, like solar and automatic inspection systems. They bought out a joint venture in the United Kingdom. Revenues soared from $18 million to $71 million in only four years.
Bob: “Everything we touched turned to gold. But that was going to come to an abrupt end. In 1983, the core markets dramatically changed overnight. Instead of building new breweries, companies started buying breweries that were being shut down. Solar energy systems started having technology problems. Electronic systems had technology problems. We wound up with warranty issues. We had a bunch of inventory that became obsolete. We had a $5.5 million warranty and inventory write-off, which put us in a very big loss. The banks, who had told me how much they supported us, shut down, radically, our credit lines to the point where we didn’t know we could make payrolls.
“The consequence of all of this was we were buried in debt, we had no money coming in, and we had all of our vendors and people who wanted money knocking at our door, including the bank.
“As one of our last resorts, we took an asset-based loan – pledging all of the assets that you have to this loan, which gave you a ceiling. We went that was because we really had no other opportunity. I walked around the table and signed hundreds of documents that basically said, ‘If you ever hiccup, your business is ours’. It was my only chance to get out of jail free so I would’ve signed anything.
“As time went on, we continued in survival mode on a day-to-day basis. One day I went to my finance team and said, ‘We’ve got to do acquisitions to create a future.’ They responded, ‘Bob, we don’t have any money.’ I said, ‘I didn’t tell you we had to have money. I told you we need to do acquisitions because that’s the only way we’re going to be able to create a future for our people.’”
So, what kind of company do you buy when you have no money? Companies that nobody else wants.
So, over the next few years, Barry-Wehmiller acquired several small companies which individually weren’t worth much, the hidden value was clear when they merged.
With the debt pressure mounting, an idea came from the European team to combine these new acquisitions with the European division and sell them off on the London Stock Exchange as an IPO. They hoped they’d make enough money to pay off their debt and maybe end up with an extra $2 million in the bank.
A contributor: “Out of debt, $2 million in the bank sounded like heaven. So, we went forward with the IPO, and as it turns out,
it was 31 times over-subscribed …
“So we wound up with approximately $28 million in the bank, well in excess of the $2 million that we anticipated. It was so remarkable that it was something that Harvard determined would be an appropriate case study for them to do.”
This was a new era for Barry-Wehmiller. Bob and his team were on a mission now to design a company that could thrive, even in the tough times.
Bob: “So, we designed a business that balanced markets, products, technology, after-market equipment. We designed it, and then we went out and looked for companies that allowed us to achieve that. We began doing acquisitions with the clarity of exactly this balance that we never had before. But now, we had the luxury of cash, experience, and credibility.”
A contributor: “When you get into an acquisition, probably your greatest anxiety occurs as soon as the seller says yes, because then the reality sets in of, ‘I hope we know everything that we need to know to be successful with this acquisition.’”
Another contributor: ”Everybody was sick of losing. It was a deflated, demoralized team here. This acquisition of Marquip was absolutely the best thing that could’ve happened.”
Another contributor: “Marquip was going through bankruptcy, and its town, Phillips, Wisconsin, was small.”
Saving Phillips, and through the effect of acquisitions like the one in Phillips, Bob and his team were challenged to realize a greater sense of responsibility for their rapidly-growing number of employees.
Bob: “What I realized is that everything I learned about being a good parent was about leadership. Everything I learned in business school is about management. Everything I learned was wrong in terms of the relationship I had with the people in our organization.”
THREE DEFINING EPIPHANIES
Bob: “From the late 1990s, three different experiences began to shape my view of how we could be better stewards of people’s lives.”
A contributor: “We had realized the power of writing down what we wanted our company to be, and our vision, putting that on paper, and now we realized that there would be power in writing down how we wanted it to be to work here.”
Another contributor: “Management suppresses people’s ability. What we need to do is allow people to rise to that, and that’s what our leadership does. We don’t do this to improve profitability or productivity. We do it because this is the way you are called to lead.”
Another contributor: “So, we really started to articulate, ‘What would it feel like to work here? What would the experience be that people had here?’ That document came to be the Guiding Principles of Leadership, the GPL.
Another contributor: “The GPL basically threw out all the rules. It’s no longer strictly about profits or how well you manage people, but it’s about true leadership and caring for people.
“If you’re going to go down this road, it is a genie-out-of-the-bottle. You can’t come back and say, ‘That whole thing where we said we want to treat everyone with trust and respect, and we believe in people? We’re not doing that anymore.’ You can’t bring it back.
“For instance, we were asked: ‘Hey, if we’re based on trust, and respect, and treating people, and everyone has an equal voice, why are the first 16 rows of our parking lot reserved for vice presidents who don’t arrive until this time in the morning, and I’m on first shift at 6 am and walk past all those empty spots when it’s snowing?’ Great question.”
Another contributor: “One of the best things that happened is that we got some very challenging feedback. How were we going to be any different from other companies with beautiful values statements?”
That led to management deciding to ask the people for their reactions to the Guiding Principles of Leadership.
Another contributor: “We sat down with groups of about 20 people and talked to them about this vision for our culture that we had written, and asked them, ‘How are we doing against that?’
“We learned there were a lot of skeptical people that did not see the GPL vision.”
Another contributor: “One lady said, ‘I don’t trust you at all, lady.’ Her company had been bought out of bankruptcy, she’d seen a lot of her friends come and go.
“There is incredible power in listening as a leader. I think it takes a level of bravery as a leader that few leaders have.
We needed to earn your trust by our actions.
Bob: “A gentleman said to me, ‘I had the opportunity, the privilege, to represent the company to go install some machinery “in Puerto Rico. I had an expense account. I handled myself professionally. When I came back … if I wanted to call home, I had to get my money to go use the pay phone, because we weren’t given the right to use company phones. If someone in the office wanted a cup of coffee, she went and got it. I had to wait until the bell rang for the coffee break. Why is it when I’m in Puerto Rico you trust me, and when I’m in the plant, you don’t?’ He wasn’t complaining, he was just pointing out. He gave us a chance to start changing to live these principles more fully.”
Barry-Wehmiller changed that the next day.
A contributor: “When you first walked out into our assembly area, there was a caged area, and if I wanted to get safety glasses, a drill, a cap, a piece of tape, a battery for something that I needed to do my job at work, I would have to go to an attendant and ask them to give me that component. When Bob took a tour of our shop, he said, ‘That cage comes down. We’re going to trust our people.’ We gave him all the reasons why that’s not a good idea – that our costs were going to go up because people might take them. He said, ‘We’ll deal with that, but that goes down. We’re going to trust our people.’
Another contributor: “We now have a cafeteria that’s self-serve. We trust people to scan what they buy. There’s no cameras watching us. It is totally on our honor.”
Trusting people, listening to people, all of the changes being implemented were resonating. The GPL was proving to be more than just words hung on a wall.
One of the biggest examples came in the form of recognizing and celebrating people for living out these new values.
Another contributor: “Recognition and celebration is a very important piece of our culture.”
Another contributor: “One way to do that is we plan these events around the person that’s actually the recipient of the award, and we try to incorporate as much of their family members, close friends, sometimes we bring people from their churches, and make it very special and meaningful to that individual.”
Another contributor: “People want to know they make a difference.”
But even with the changes, the listening sessions, and celebrations, there were still many naysayers refusing to embrace the people-centric culture.
Another contributor: “I just ignored it. People-centric was just another catchphrase, a flavor-of-the-month type of thing. To say that I didn’t believe in it would be an understatement. I was completely against it and was actually fighting against it because it didn’t make any sense to me.
Another contributor: “What’s this stuff? We’re used to coming here, working, doing our job, coming home. But when 2008 came, that was the big test.”
What’s happening on Wall Street was challenging.
Another contributor: “In March of 2009, we had about a $30 million order from one of our major customers put on hold because of the financial situation, and we all realized that we were probably in trouble.”
Another contributor: “We didn’t know where the bottom was.”
Another contributor: “It was heart-breaking.”
Another contributor: “You figured you didn’t have a job, or wondered when you were going to be laid off. It was scary. But you could see it happening all over the place.”
Bob: “But I think this is where leadership occurs.”
Another contributor: “And think of our campus in Phillips, Wisconsin. The huge amount of the population that worked there. This is going to affect not just individual lives, this is going to affect a town.
Bob: “That was the first real test of whether Barry-Wehmiller could do what it said it was going to do. What would a caring family do if one of the family members was under crisis? They would all pitch together so that everybody might take a little pain, so that nobody had to take a lot of pain.”
Another contributor: “Bob sent an e-mail to everybody saying that we are in the midst of a crisis, orders are down, and this is what we are going to do.”
THE FAMILY RESPONSE
Bob reduced his salary to his starting salary at Arthur Andersen.
Bob: “What if, instead of letting anybody go, we just gave everybody a month off without pay, and they could take it whenever they wanted to? People came to me and said, ‘Bob, you can achieve the same goal if you just cut everybody’s salary by 5%.’ I said, ‘That doesn’t seem fair. If we’re going to ask people to compromise, we must give them something in return, which is quality time at a time they want to take it.’
Another contributor: “In business units that were doing well, people still took a furlough. You think about, how would a caring family respond? We would all sacrifice some so that nobody would have to sacrifice a lot.”
Another contributor: “And that was a huge sigh of relief for everyone.”
Another contributor: “You could swap – if Joe didn’t want to take his week of furlough and Mike wanted it.”
Another contributor: “It was a good program for everybody.”
Another contributor: “It actually became a great coming together across the organization of how we’re going to get through this as a family.
Another contributor: “That’s what the real question was. Are we going to live to our ideals? That built trust of maybe this company is really for real. Maybe they really do care about us.”
Another contributor: “A lot of the people that were skeptical at first, now they’re in. That sealed the deal. This GPL is real.”
Having won over many of the skeptical hearts and minds, productivity and revenue flourished, even in the midst of the recession.
The people-centric culture wasn’t perfect, but at its core, people were getting it. Leaders were learning to listen, and trust, and care, and even some of the hardest of hearts were changing.
Another contributor: “Yeah, it was a point in my life where I was realizing that I had that in me to care for somebody. And when somebody would say, ‘I really can’t afford to take a furlough,’ I felt it. I felt like, ‘I can take that for you. If you can stay here and work, I really do want you to be okay,’ which was a new thing for me to worry about someone else. I have a completely new perspective on how I view people. People are the most important thing to me. I used to push people away, now I need to surround myself with people. But also, I looked for the ones that were like I was. I want to have that opportunity to do for them what everyone’s done for me.”
SPREADING THE MESSAGE
A contributor: “We don’t teach this at our schools. We obviously don’t teach this in the MBA programs. I think you need those quantifiable skills, but I think you also need human skills. You need people. You manage a spreadsheet, you don’t manage people. No one likes to be managed. No one likes to be bossed.”
Another contributor: “In the Guiding Principles of Leadership, we have a bullet that says, ‘Leaders are called to be visionaries, coaches, mentors, teachers, and students’. And so, that’s why we created Barry-Wehmiller University. We wanted to create a way to share this new thought on what leadership is.”
PEOPLE ABOVE PROFITS?
A contributor: “One of the things that people always will misquote us saying is that it’s people above profits, right? That’s just simply not the way it is. It’s people and profits in harmony. The biggest way that we touch the lives of our people is by them knowing that they have the security of their job tomorrow. That is an awesome leadership responsibility.”
Another contributor: “Numbers are important here too, but we feel if you focus on people, if you use the ideas of people, if you give people responsible freedom, the numbers will follow.”
Another contributor: “If my value was measured by the size of my paycheck, I’m not going to have a fulfilling life. If my value is measured by the lives of the people I impact, and if I, in small ways, have a chance to contribute to the fulfilment of others, that’s something that I’m going to look back on years from now and be proud of.”
Another contributor: “Having children whose parents work in our company also come to work in our business is one of the best compliments you can have, because it reflects the parents coming home and speaking positively about our culture and recommending that their kids actually come here. To me, it allows a thriving legacy to continue.”
IS THIS UTOPIA?
A contributor: “We’re far from perfect.”
Another contributor: “I don’t think we want to be perfect.”
Another contributor: “This is a journey; there may be somebody that we haven’t asked to express their gifts yet. Shame on us. We will get there. We will focus on it. All we ask is that we have the time and we ask our leaders to go out and keep on providing environments where there’s trust, where there’s listening, and opportunity to express people’s frustration, and that is okay.”
Bob: “Somebody once told me the greatest motivator in business is fear. People need to be afraid of you and afraid they’re going to lose their job, otherwise they won’t do what they need to do. That’s terribly wrong. You want to work, you work for it, and you want to work for other people like that.”
Another contributor: “I think that what Bob has achieved and what Barry-Wehmiller demonstrates is that it doesn’t all change overnight. It is a momentum. It is like exercise. It is like parenting. It’s hard work.”
Another contributor: “I don’t think it’s possible to overstate the importance, and the power, and the potential of creating a work environment where people feel valued, and respected, and have an opportunity to be fulfilled in their work.
“At the end of the day, everyone wants to be part of something. And if you give me an opportunity to play a meaningful role, I’m going to give you 150%. And any organization powered by people who care and are cared for is a heck of a lot better place to work. It’s a better place to buy things from. It’s just a better place.”
Bob: “The most exciting part of life is learning, and being a better listener, being a better husband, being a better father, being a better leader, being a better friend, being a better community member. We should all aspire to never be satisfied with where we are and always be better. And that’s our whole message – to be good stewards of the lives entrusted to us. That is what leadership is. It is the stewardship of the lives entrusted to you.”