Consumer Products
Evasive maneuvers
How to steer your company out of a nosedive
By Patrick Mayock
Smart Business Los Angeles | April 2008
Ed Phillips
CEO, Matthews Studio Equipment Inc.
Ed Phillips often compares
companies to airplanes
— you have to constantly make the necessary adjustments to keep both out of a
nosedive.
And a nosedive is exactly
where the president, owner
and CEO of Matthews Studio
Equipment Inc. found himself
four years ago. As pilot of the
company, Phillips had stubbornly neglected changing
market conditions and found
his company in a free fall.
“The company had become
complacent and was continuing to do the same old thing in
the same old ways,” he says. “It
was either change or crash.”
Fortunately for his 85 employees at the specialized hardware
provider for the film, television,
still photographic and theatrical
industries, Phillips embraced
change, and Matthews is now
very much nose up, having
nearly doubled its revenue
from 2004 to 2007.
Smart Business spoke with
Phillips about how to steer
toward clear skies by admitting mistakes, selling change,
and articulating goals and
incentives.
Q. How do you address problems before initiating change?
It starts at the top. It’s nobody
else’s fault but your own. If
you’re not willing to take that
finger that you’re pointing and
turn it to yourself, nothing is
going to change.
That’s what I was doing early
on. I was so afraid to change
anything. All I kept doing was
putting more pressure on people to perform, but they would
be performing in the same
wrong way.
If they’re doing it wrong, and
now they’re going to do it
wrong faster, you’re going to
hit the dirt that much sooner.
You don’t want to put the pressure on people to do the same
old things. They would only be
accelerating the decline.
If what you’re doing isn’t
working, then do something
differently. It’s very simple.
Q. How do you get people to
buy in to change?
The whole premise of change
is something you have to sell.
In order to do that, a
CEO or a president has
to be visible. By being
visible, you are then
approachable.
Make time and a conscious effort to get out
of the office and go
through the various
departments. Interact
with the people and
make yourself visible
so they feel you are
approachable.
I take everybody who
has a birthday to lunch
every month. That gives
me the opportunity to
sit with 10 or 12 or 13
people, however many
there may be that
month, and just have a
casual lunch and talk to them
about what we’re doing, what
we want to do and how we’re
going to get there.
That also gives me an opportunity to hear from them so
they feel a part of it and so
they can embrace it.
You can’t dictate change.
That doesn’t work as well as if
you can cause all of those who
will be a part of it to embrace
it so that it’s partly their idea
and has some of their authorship.
Q. Do you offer incentives to
help make that sale?
We’ve developed a bar graph
that reflects our shipments
each and every day.
‘Let me try to incentivize you
to the next level. If we can hit X
number of dollars in shipments,
I want to share something with
you. If we can hit beyond that, I
want to share even more.
‘You will see at the time clock
when you punch in our shipments from the prior day
against three benchmarks. If we
hit the first one, you’re going to get X at the end of the month.’
Each day, our graphics guy
here takes the word ‘stretch’ —
he’s got two little guys on either
side of it — and each day,
they’re stretching it a little bit
further. Employees can see by
this colored bar graph how
they’re doing relative to the
benchmarks for the shipments.
Since we’ve begun posting
these about six weeks ago, we
have exceeded our daily and
weekly shipments almost
every day.
Why keep (that information)
a secret? The only risk factor
is that I didn’t want them getting out on the street. That
was a concern of mine. But
then I thought, ‘You know
what? If it works, the benefits
are going to outweigh the risk.’
And it is working. It’s making
the people feel a part of it. I
overhear them talking about it:
‘Hey, we hit it! Let’s get to the
next one!’
It’s a feeling of wanting to win,
and if we win, everybody wins.
Q. What is the benefit of
clearly articulating such goals?
The benefit to the company is
continued growth and success.
The benefit to the employee, if
you can sell them on this concept, is their success — their
wealth creation. Their success
is my success and vice versa.
You don’t want your employee base to feel that they’re
working to make you rich.
To the contrary, if you can
cause them to believe that
you’re working to help
enhance their lifestyle, then
you’re going to get more cooperation and less animosity or
resentment.
HOW TO REACH: Matthews Studio Equipment Inc., (800) 237-8263 or www.msegrip.com
