Building a healthy company culture

Nation's Business, Sept, 1997 by Michael Barrier

Since Bob Johnstone founded Napa Printing & Graphics Cente in Napa, Calif., 16 years ago, the company has endured several floods. When the waters rose in 1986, he recalls, "the employee attitude basically was, `Give me a call when you get the place cleaned up.' There was very little assistance."

In March 1995, though, when Napa Printing was virtually wiped out -- almost all the furnishings and equipment were destroyed, with losses totaling more than $300,000, most of it not covered by insurance -- the employees' reaction was very different.

Even though Johnstone was forced to lay off everyone, "they all came back on their own time and worked day and night," he says, "tearing stuff out and cleaning up. The press operators tore their presses down and took the motors in to have them rebuilt. Spouses came in and helped." Johnstone was rehiring within two weeks, and in six weeks he had rehired all but two of his 14 employees.

"If the employees had said, `See you later,' I could easily have been discouraged to the point of bailing out," he says. "Their support made a huge difference." In April 1995, just after the flood, Napa Printing had its biggest month in history. The year as a whole also set a record; then, in 1996, Napa Printing saw a 31 percent increase in revenues.

What had occurred in the years following the 1986 flood was a transformation of the company's culture. Its employees, who once saw themselves as distinct from the company and their co-workers, saw themselves as part of a team. So impressive was the change that it led to Napa Printing's being named a Blue Chip Enterprise earlier this year. The Blue Chip program is an annual competition co-sponsored by Massachusetts Mutual Life Insurance Co. (also known as MassMutual -- The Blue Chip Company), the U.S. Chamber of Commerce, Nation's Business, and "First Business," the Chamber's syndicated morning business-news television program.

Every company has a culture, a set of values that govern how its owners and employees conduct themselves. That culture may or may not translate into a common effort, from top to bottom. In many companies, it doesn't, because the culture is authoritarian; employees simply do what their bosses tell them, and no more.

Such a culture may even breed success when a company is very small and its founder is pursuing a brilliant idea with single-minded zeal. But an entrepreneur's style -- so often autocratic -- can easily become "dysfunctional" as a business grows larger, warns Barry Phegan, a Berkeley, Calif., consultant and the author of Developing Your Company Culture: The Joy of Leadership (Context Press, $12.95).

Morty Lefkoe, head of a consulting firm, the Decision Maker Institute in Westport, Conn., and the author of Re-create Your Life (Andrews & McMeel, $22.95), says that "most CEOs believe that their job is to figure out what needs to be done and then get everybody to do it." The problem is, he says, "a culture is not just one thing. It's millions of things" -- all the components of a company's daily activities, far too many for one person to understand or control.

"In a fast-changing world," Lefkoe says, "there's an alternative that, more often than not, will be more effective: Get everybody else in the organization to do your job, while you create an environment so that they can do it."

It was just such a participatory culture that Johnstone tried to create at Napa Printing with the help of Napa-based consultant Bill Truby, who shepherded the employees through training at intervals spread over six months. Learning how to work as a team was especially important.

"In a company like this," Johnstone says, "the work flow is very erratic, and it's very common to have one department overbooked and a couple of others underbooked. You have to have clear handoffs, and you have to communicate well, and you have to have the willingness to help."

For his part, Johnstone had to relax his grip on the company and let his newly trained employees assume more responsibility; as he says, he had to accept "that not everyone was going to make the same decision I would."

Johnstone "let go, with fear and trembling," Truby says, "and within a month and a half he was able to go on a two-week vacation. The place ran perfectly; every person was on time every day. Trust begat trust."

Now, Johnstone says, he sees evidence of a team-based culture "all the time: I see customer-service people in pre-press, pasting up a job; or I'll see the pre-press people answering the phone because they can see that the customer-service people have a line of people waiting to talk to them."

At some firms, employee involvement is more than a concept for improving the service that customers get; as Gerald L. Davis says of his Denver-based company, DSM Manufacturing, employee involvement "is what we provide to our customers."

DSM -- another firm that was designated a Blue Chip Enterprise this year -- is a contract manufacturer of electronics hardware; its customers come to it with the specifications for the parts they want. Typically, parts go straight to a customer's assembly line; there's no inspection once the parts leave DSM. Davis says: "Our customers count on us to make sure that the parts are correct. For that service, they pay us a premium."