Sausage Executive Finds New Recipe for Success
Ralph Stayer took a long, hard look at his company, the Johnsonville Sausage Co., and didn’t like what he saw. Yes, the sausage the plant was churning out was still good. The business was making money and growing larger.
“I could see we were not performing anywhere near as good as we could be,” Stayer said. “Quality, if anything, was slipping. We still had a good reputation, but was that because we were so good or because we were less lousy than the other guys? I thought it was a little too much the second thing.”
But the harder Stayer, then a typical control-and-command executive, tried to manage his company of 700 employees, the more frustrated he became. Finally, he realized wholesale changes needed to be made.
“I was smart enough to realize I was the problem,” he said by phone from his office in Corler, Wis., “and I couldn’t be part of the solution until I realized I was the problem.” Everything he had ever learned about management had to be tossed out.
“Change is difficult,” he said. “It’s not easy to do something you can’t imagine. It takes commitment and it’s scary. It makes your guts crawl. There are a thousand reasons not to do it and only one reason to do it: because it’s the right thing. That’s why leadership is so important. It takes one person to make a difference.”
What Stayer led was nothing less than a revolution in the way his employees went about their jobs, redefining for themselves how they could go about making sausage that their customers would kill for, to become workers so great they could get a job anywhere, to be a company that applicants were begging to be a part of, and to have the best financial return, including profit sharing for all.
From the top down, Stayer, who wrote “The Flight of the Buffalo” (Warner Books), detailing the company’s transformation, worked to create a climate within Johnsonville Sausage that encouraged groups of people to accomplish goals that none could do alone, by allowing them to unleash their own creativity.
“The way you often get teams to learn and develop and do extraordinary things is to put together groups of people who normally don’t get together and then hold them collectively accountable for output. And holding them accountable often means rewarding them based on the team’s product and the effectiveness of the team rather than the individual,” said Ed Lawler, management professor at USC’s Marshall School of Business.
And that’s a key element of innovative leadership, said Jean Lipman-Blumen, co-director of the Institute for Advanced Studies in Leadership at Claremont Graduate School.
“A good leader should have a broader view of the organization, should understand the people in the organization well enough to be able to discern which people could, in fact, work together. They don’t have to be compatible across every dimension, but they may have certain kinds of knowledge and skills that, when brought together, could be an incredible combination,” she said.
More often, though, management puts a damper on creativity by throwing cold water on new ideas suggested by employees because they may take some time to implement.
“So the next time you have a good idea, you say: ‘They’re probably going to say it’s a bad idea. I’ll do it the way they do it all the time. That makes less waves. That’s what they want.’ It dulls your creativity, it dulls your desire to think about innovation,” said Lipman-Blumen, author of a book on leadership called “The Connective Edge” (Jossey-Bass).
And that may simply be because the older an organization becomes, the more its arteries start to harden, which means it may defend the bureaucracy it has developed over the years, said Jack Kyser, chief economist at the Economic Development Corp. of Los Angeles County.
“It’s a feeling you may lose control,” he said. “If you let your staff start to suggest ideas, [managers] may feel threatened that people are too bright. There are still a heck of a lot of control freaks out there.”
So creativity starts with leadership.
“Management is preoccupied with issues of control and predictability, and the bottom line where leadership is concerned is with building the institution, building the corporation. A manager looks for problems and solves them. A leader is much more of a divergent thinker, wondering what else could we be doing? They’re always scanning the horizons, taking information from the environment, looking for where the trends are, where the markets are,” said Burt Nanus, who co-wrote “Leaders: The Strategies for Taking Charge” (HarperCollins) with Warren Bennis, professor of business administration at USC’s Marshall School of Business.
Simply put, Nanus said, leaders are the creative embodiment of an organization. “If you want to excite creativity, if you want people in an organization to be turned on, the leaders themselves have to be turned on,” Lipman-Blumen said. “When an individual is given a task that that individual sees as meaningful or significant or having the potential to make a difference in the world, that makes a difference in people’s lives, that employee gets turned on.”
All too often, companies are good at getting a standardized product out of their employees but dreadful at unleashing their employees’ potential.
“If you have a senior team who basically believes that they are the wisest, most all-knowing, then you won’t be able to unleash or capitalize on the brainpower of the organization below you effectively. If you hold that belief about yourself, then you simply need other people to carry out your tasks--in other words, worker bees who will carry out what you think should be done,” said Jay Conger, chairman and professor of the Leadership Institute at USC.
All throughout an organization are tremendous sources of knowledge that are largely untapped.
“Organizations are rarely able to use anywhere near their potential in terms of the brainpower that exists within them. That’s due to lots of factors--bureaucracy, having to report up through many levels, inadequate training, poor information and community systems,” Conger said. Once management realizes there is an enormous reservoir of intellectual capital, it must figure out how to unleash it.
“If you’re trying to harness brainpower, you have to begin to sit down and figure out what you mean by that. You have to ultimately figure out what you want. What does that really mean? You have to create some kind of performance guidelines.
“When you figure out what you want to be unleashed, and you try and begin to get some measurements about it, you also need to involve the people whose brainpower you want to unleash. You have to get them involved in the process in terms of designing the measures and standards and how that’s best delivered. That goes on the assumption they know better than you do,” Conger said. “In the ideal world, the manager sets parameters; they don’t set all the details. That’s up to the individual to come up with.”
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But once those decisions are made, the company needs to act on them.
“That conveys trust. If you ask and don’t implement, it’s just an exercise,” said Conger, who wrote “Learning to Lead” and “Spirit at Work,” both published by Jossey-Bass. “Then you’ve also got to reward them--money, bonuses as well as intrinsic rewards, getting them to see they actually came up with the solution the company adopted.”
And a final word of advice from Stayer: “I would say that if anyone wants to make changes, if anyone really wants to do something, the goal has to be valuable enough to sustain you because it’s going to take a long time, a substantial commitment. There are days you’d rather play golf and say to hell with it.”
But it paid off. His employees are striving to achieve their maximum potential. They are far better compensated than before the changes began. And they make great sausage.
“People like working here. There’s a spring in their step. I like being around the place,” Stayer said.
“We still have substantial issues we’re dealing with. The gap between our potential and our actual is huge. But it’s an entirely different level.”
