Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, March 21, 1993 TAG: 9303190167
SECTION: BUSINESS PAGE: F1 EDITION: METRO
SOURCE: SANDRA BROWN KELLY STAFF WRITER
DATELINE: LENGTH: Long
TEAMS PAY OFF/ ROWE FURNITURE TOOK ITS TIME RETREATING FROM MILITARISTIC
WOODY Woodlief embraced quality management like an evangelist had invited him to be saved.But, after 40 years in Rowe Furniture Corp.'s militaristic management, the conversion took him a while.
"Our attitude to employees was, `Hit the door if you can't do it our way,' " said G.O. Woodlief, who retired in December as the senior vice president in the company's Salem offices.
His last major duty was to help choose his replacement.
But now there is no successor to Woodlief, who ran the company's plants. Instead, his duties were sprinkled among a four-man team that included one new hire, Gene Winters, a quality management expert.
Woodlief still serves as a consultant to the company and occasionally sits in on meetings of the team. The meetings are a long way from the way it used to work, he said.
"I would call people into my office and tell them what I wanted done. Now, people sit around the room and bring up items and there's more input from the whole group.
"Before my conversion, I didn't ask anyone's opinion," he said.
But old habits die hard.
At a recent team meeting, Woodlief remarked that Winters had overslept and was late.
"I didn't oversleep," said Winters, who had been out of town for several days. "I intended to sleep late."
Everyone, including Woodlief, laughed about how that was the old way of acting.
Tuning to a management philosophy based on employee involvement was the hardest thing he's had to go through "except for my divorce," Woodlief said.
He grew up as a manager under the company's founder, Donald E. Rowe Sr.
Rowe was a patriarch to his staff. He was described as brilliant, an engineering whiz, fair, a hard taskmaster.
Gerald M. Birnbach, current Rowe chairman and president, said he always called the senior Rowe "Mr. Rowe."
"The king is dead," was how T.V. Anderton, who hauled Rowe's furniture, reacted to Rowe's death. "He was the smartest businessman I ever knew. Cold, but fair, always fair."
Rowe also preferred a low profile and the son, Donald Rowe Jr., although viewed as a softer management type, likewise wanted to stay out of the news.
"If you don't say anything, you're not going to put your foot in your mouth," he once said.
Rowe Furniture still is reluctant to tell much. Its staff still doesn't talk readily to furniture trade publications.
But, after almost a decade of search for a management philosophy that treats employees less like mushrooms and more like partners, Rowe has started to change.
Already it has spent more than $3 million, much of it with W.P. Dolan & Associates, Kansas City, Kan., labor and management consultants.
And since he was hired as a consultant, W. Patrick Dolan, a former Georgetown University dean, has been elected to the Rowe board.
A news article about Dolan says his personal philosophy is that the work environment "should foster optimum levels of productivity and creativity for both management and labor."
Birnbach says what Dolan & Associates has taught his company so far has allowed it to gain a competitive edge over other manufacturers. It has allowed Rowe to improve its furniture - producing better cushions, for example - without raising prices.
New team spirit has driven production costs down and pushed employee bonuses to as much as 19 percent a month above their monthly earnings at the company's frame plants.
Rowe wanted to do something to change to improve its quality as far back as 1978, Woodlief said.
A bitter proxy fight had affected business, Woodlief said. Plus, "our entrepreneurial leader [Birnbach] was looking ahead. He reads a lot and was hearing a lot about quality."
Birnbach also met Patrick Dolan in this period.
"We tried to do something internally, but it didn't amount to much. We formed an employee relations committee."
In 1984, Dolan was invited to Rowe to analyze the company's culture.
"He found we had little trust, a lot of hatred; but people felt like a family still," said Woodlief.
"The culture of the company was that we knew everything internally," said Art Dunkin, secretary-treasurer.
"I'll never forget what Pat Dolan told me," said Woodlief. "He said a lot of change has to take place and it has to start at the top."
Rowe then adopted an "employee involvement process." Woodlief and others visited the Kansas City Ford plant to see Dolan's philosophy in action.
"Then we began to form teams, and management did not select the people for the teams," Woodlief said. "Word was passed asking people interested in being on a committee to come to a meeting. By consensus, we selected committees."
A steering committee was set up of six managers and six nonmanagement employees.
"A lot of people joined teams to get their gripes out, but then they learned that when they suggested a problem, they had to solve it. That narrowed the team membership," Woodlief said.
That employee involvement process limped along for three or four years until the company realized something was wrong.
It decided it had to rethink its system of rewarding employees for work done. Plant workers still were being paid based on their production.
"We were preaching quality and paying on quantity," Woodlief said.
About this time, Rowe bought Montgomery Chair Co. in Christiansburg and, in converting it to as a Rowe operation, introduced a gain-sharing program to employees. Under that plan, every employee got a bonus if the whole work group performed well.
The chair company closed in 1988 because of slow sales. But by then the gain-sharing experiment had caught on, so Rowe explored it. It found "CostBan" at an Asheville, N.C., company and decided to introduce it at Salem Frame Co., the Rowe subsidiary that makes frames for upholstered furniture.
"We had a lot of problems right off. People were upset going from a piece pay system to socialistic pay," said Woodlief.
With a piecework system, the company had some high producers who made more than others, he explained. The company had to guarantee those workers that they weren't going to lose money when they were put on an hourly wage.
Rowe supplemented the pay of those workers; but when there was a monthly bonus, theirs was reduced by the amount of the supplement.
"They might not get much of a bonus check, but they get more in their weekly check than those not subsidized," Woodlief said.
The system hasn't made everyone happy, he said.
The bonus formula was based on controllable costs of production for the previous two years before the plan was introduced. Thus when workers produce more with less labor and less material waste, the costs are driven down. That savings is put into the CostBan bonus pool, which is split 50-50 between company and the workers. (Under Rowe's system, 5 percent of the monthly bonus pool is held back and put in a year-end bonus pool.)
Initially, bonuses were 5 percent to 6 percent but the percentage grew each month.
"We had supervisors handing out checks to employees making more money than the supervisors," said Woodlief.
The bonus went up each month and the number of people needed to do the work went down, he said. "Peer pressure set in. If we had slackers, other workers put pressure on them."
Rowe also started sharing more financial information with workers.
However, the success at Salem Frame didn't assure similar success at the Rowe manufacturing plant. In 1988, when Woodlief tried to introduce a similar system there, it generated "lots of anger," he said.
"We decided to cool it for a while," he said.
Instead, the program was introduced at the company's Poplar Bluff, Mo., plant, which has about 450 employees. Next, Himmelburger Harrison Frame Plant in Morehouse, Mo., which supplies frames to the Poplar Bluff plant, accepted CostBan readily, Woodlief said. It is Rowe's only union plant.
While the Missouri programs were getting started, employee bonuses at Salem Frame rose and caught the attention of Rowe Furniture employees.
"Then we almost had people at Rowe begging for it," Woodlief said.
But, not totally persuaded.
"I figured it was hogwash. Some of the same old crap as usual," said Charles Jones Jr., a fabric cutter who has worked at the Rowe plant in Salem for 19 years.
In Jones' experience, "the company didn't want you to believe you had any insight."
Jones said his attitude has changed, but he recently backed away from a chance at supervisory responsibility.
Jones said he was one of the workers who didn't lose any money under the new program, but neither does he see the increase that some employees do.
The Rowe plant employees didn't make a bonus in their first month of CostBan, which was December 1990. The second month's bonus was small. But, by last month, the bonus percentage was 13.2 percent at Rowe. At Salem Frame, the bonus was near 20 percent.
Rowe then extended a similar plan to the corporate staff, which includes its credit and accounts-payable offices.
Problem-solving teams have tackled issues from why notches aren't cut properly in upholstery patterns, to how to hold down health and medical costs and how to stop smoking in the cafeteria.
"And we continued to squeeze management throughout this," said Dunkin. For instance, there no longer is a credit manager at the company. The administrative and clerical staff is 30 percent smaller.
Cross-training - having engineering understand production and vice versa - is important, Woodlief said. He thinks it makes employees feel less "stuck."
Adopting a quality management program allowed Rowe to solve problems that it has been trying to solve for 25 years, executives say.
There's nothing magic about the system Rowe has put in place. It calls for supervisors to be coaches. It calls for quality work as a standard, not by inspection. It puts problem-solving in the hands of people doing the work.
When the company had a problem with material it was getting from one mill, a manager didn't call another manager to complain. Rowe employees who had to work with the fabric went to the mill to discuss the problem with workers who made the fabric.
Some of the fabric suppliers have since visited Rowe to learn more about its employee involvement program.
"We still have a long way to go with this program," Birnbach said last week. "I don't think it is something that ends."
Until about eight months ago, the company still used inspectors on the production line rather than relying on an employee commitment to quality.
"We changed our corporate culture. Also I think you try to build trust with employees. I don't think it has been achieved. I think we're starting to build employee trust," Birnbach said.
"Am I any different? It's hard though. It is not an easy thing. I think you really have to look within yourself and be willing to surrender authority, or what appears to be surrendering authority," he said.
"At first you feel a loss of power, then the satisfaction from seeing everyone contributing is thrilling. That is what to me business and life are all about."