Providing Employees Stability in Unstable Times
Founded in 1928, Van Meter Industrial (VMI), a wholesale distributor of electrical, automation, lighting, data communications and power transmission products, has grown to over 340 employees who work across 13 locations in Iowa.
While the economy led VMI to a decrease in revenues in 2009, they performed better than their industry and increased their market share. More striking is the fact that the company's management strategies – most notably, Quick Kaizen, discussed in detail below – strengthened their bottom line last year to the tune of over $230,000.
VMI reaps incredible results from its workforce because leadership has demonstrated time and again that it will take care of them, in good times and bad. There is perhaps no better example of this than the company's reaction to the flood that devastated the city of their headquarters, Cedar Rapids, in 2008. As part of the employee interview due diligence process Winning Workplaces did that helped our panel of judges select VMI as one of our 2010 Top Small Company Workplaces, Counter Salesman Dean Balwin told us how the company walked the talk in providing financial support for personal crises – first following a surgery he had, and again not long after when the flood hit.
"They gave me time off – a whole week to get things cleaned up – and they gave me money to help offset what insurance didn't pay," Balwin said. "(President and CEO) Barry Boyer called me and said, 'We're sending you a check. Let me know if it's enough and if you need anything more.'"
The company didn't stop at helping its affected employees cope with the disaster – all told it donated a quarter of a million dollars to aid in rebuilding efforts. In 2009 the employee-owners once again rose to the occasion, donating close to 7,500 volunteer hours (approximately 22 hours per employee) to other community-related efforts.
Giving back to the communities in which they and their employees reside is certainly not a novel concept for companies; many are motivated to do so for the positive PR it brings. But VMI has intentionally built this focus into its workplace culture and its core values, one of which is Place.
"We allow employees eight hours to volunteer on company time," Marketing & Communications Manager Erin Koester told us in VMI's award application. "Not only is this good for the community, it is also a reward for our people."
The company's other four core values, all of which except for one also start with the letter P, include:
- People: building and sustaining an engaged workforce is a key strategic goal
- Provider: get the right product to the right customer
- Continuous imProvement: continue to empower and to expect each of our employees to make the appropriate changes for improving process, services and other activities in our company, and to continue to have a workplace that is constantly reinventing itself
- Profit: continue to drive value in our stock price so our fellow employee-owners can reap the rewards of employee ownership
Specific employee practices were created to ensure a focus on Continuous imProvement. One of these practices that employees talk about the most, and actually regard quite passionately, is the company's adoption of the Kaizen philosophy used most notably by Toyota. At VMI, it is called Quick Kaizen, and it uses technology (their intranet) to empower employees to make small changes in their work habits that collectively lead to large-scale process improvement.
"You can enter ideas and they go to whoever is in charge of that area, and then they interact with you by phone or email," says Delivery Driver Larry Botts. "They ask you about cost savings or a better way to do it. For example, I tried to get a new form for the customers so they don't have to sign multiple times for a delivery. Our competitors make people sign multiple times and another company even takes a picture of the person signing for the delivery. Now we work with the customer so they can either sign, or they don't have to stop what they're doing to sign. This helps us build trust with the customer."
Another core value at VMI – one that exists for every company whether it's stated or not – is Profit. To incentivize its employees to both perform at their best and to seek out ways to continue to produce quality work cost efficiently, the company opens its books to employees and teaches them how to understand the financials. It also invests in compensation programs including performance bonuses, sales commissions and merit increases. These initiatives are partly responsible for VMI's consistent ranking in the upper quartile performance of financial measurements.
Then there's the ownership structure, via an ESOP. It's flipped at VMI versus many other companies, especially large, public ones: the CEO only owns 1 percent, while directors and managers own 7 percent and the remaining 92 percent is owned by non-managers.
"We have a vested interest in how our company performs," says Matrix Coordinator Amy Grossman, a 19-year veteran of the firm. "It's the thing that's going to allow me to retire, and sooner than most."
Company: Van Meter Industrial
Web site: www.vanmeterindustrial.com
Industry: Wholesale distributor
Location: Cedar Rapids, IA
Number of Employees: 342
Sales: $165 million