How Tim Jahnke got Elkay Manufacturing to change its ways

Tim Jahnke, President and CEO, Elkay Manufacturing Co.

You can’t blame Tim Jahnke for feeling a bit like the wrong man in the wrong place at the wrong time as the new president and CEO at Elkay Manufacturing Co. He was taking over a construction product manufacturer that had experienced double-digit growth every year from 2001 to 2006.

Two million new homes went up in 2006, and it looked like Elkay was positioned for more of the same in the years ahead. Then Jahnke arrived in late 2007 as the company’s new man in charge and everything began to fall apart.

It wasn’t Jahnke’s fault. Many factors led to the global recession that socked economies and businesses around the world beginning in late 2007. But that didn’t make it any easier for him as he searched for answers to keep Elkay from going under.

“It’s not just that we went from a really good market to a challenging market,” Jahnke says. “It was the speed at which it happened that created such an emotional and terrifying set of consequences within our market.

“All the numbers just changed so dramatically and the market shifted so fast that you couldn’t run down the hill fast enough as a company. You couldn’t cut fast enough, you couldn’t close enough factories, and you couldn’t do all the things that needed to be done to cut costs.”

Jahnke knew people were scared, and he knew they were looking to him for answers. But he also knew that if the company was to be saved, it wouldn’t be done solely through his leadership and decision-making. He would need all of his employees to play a part in finding ways to help Elkay stay on its feet and to continue to be a viable option for customers.

“If there is a bit of good news to the dramatic speed that the market was changing, it was that it got everybody bought in pretty fast,” Jahnke says of the initial response he got at the now 3,775-employee company. “It didn’t take long for people to understand that you couldn’t just modify what we did. We had to change what we did.”

Demonstrate your resolve

Jahnke began the effort to turn around Elkay by issuing a challenge to every employee. He wanted the employees to begin looking at ways to make the company stronger, better and more efficient in the work that they did.

“We had to look at everything we did,” Jahnke says. “Not just how many people we had and how many factories and all this sort of thing. But really look at every procedure, every process, every method that we used for those many years in running our business. I had to believe it wasn’t just going to happen from me above telling people that they needed to do things differently. We needed to start looking at things in a very mechanical way.”

Jahnke had no desire to just make a series of desperate sweeping changes that would demonstrate action but produce no results. He wanted to get to the heart of the matter with his people and see what could be done to make Elkay a better company.

“I remember having a conversation when we were talking about customer service, which is such a critical area,” Jahnke says. “I said, ‘Who is the best person we have in the entire company?’ Everybody looked around and said, ‘Laurie Goldman,’ who at the time was customer service manager for our cabinet division. I said, ‘We need to get her involved in this team.’ When that got said, everybody looked around and said, ‘Wow, he’s serious. I really do have to ante up my best people.’ We did that pretty much across the board.”

Jahnke wanted his senior management team to bring forward talented people with ideas to improve functions. He made it clear that he wasn’t going to stand in the way of their efforts to make changes.

“I could voice my opinion on how we had to make change, but these were folks who were inside the organization working every single day in these areas and generating new ideas,” Jahnke says.

He found leaders for each key area in the business and then an overall leader who would coordinate the team’s efforts. That leader was not going to be Jahnke.

“It’s important that it not just be from the top,” he says. “It started to create some understanding in the middle of the organization.”

Jahnke would get reports about what was happening with the team and the team leader would report directly to him. But it would serve as another indicator that he wasn’t going to micromanage the process to remake Elkay.

“You’ve got these people who make a difference way beyond the job or the job title that they carry,” Jahnke says. “In our case, we took it very seriously. This team got things started. It wasn’t necessarily important that they got everything done. But they started to send the message through the organization that we were very serious about adapting and changing to the world as it was changing around us.”

You need other people in your company, people that are viewed as leaders in your organization, to be on board with you and to support your plan of action.

“You have to have your key leaders, functional leaders or divisional leaders participate and get involved,” Jahnke says. “If they’re not part of it, they’ll fight it until the last breath of implementation.”

Jahnke said despite his best efforts, he still faced some opposition from a few at the management level.

“There were more than a few conversations that had to become pretty aggressive,” Jahnke says. “You will participate, you will give up your key people, or you will listen to the recommendations of some of these teams. They were generating ideas that were going to cause us to do things differently.”

They needed to know that Jahnke was completely supportive of their ideas.

Get on the same page

As the team began to assess Elkay’s ways of doing business, it quickly discovered a key flaw: Elkay was not nearly as close to its customers as it needed to be.

“During that period of time of growth from 2001 to 2006, we really focused on getting the product out the door,” Jahnke says. “Orders came in so fast that the whole concentration of running the business was, ‘How do you get it out the door?’ What ended up happening was we became very internally focused. What was best for us? How do we manufacture it easier? How do we take that order from our perspective in a way that makes it easier for us?

“We really stopped looking from the perspective of the customer and the end user and the consumers of our products and what they wanted. It made it easier for us, but in some ways, it made it more difficult for our customers.”

As team members dug deeper, they found that the way Elkay was doing things wasn’t really easy for anybody, customer or the company itself.

“We had three distinct product divisions: Our cabinet division, our plumbing division and our countertop division,” Jahnke says. “Each of the divisions had multiple manufacturing facilities. We had separate sales teams, separate finance teams. Everything was done very separately. Then within each of our facilities, they were allowed to pretty much do what they want. Everybody purchased at each manufacturing site pretty much on their own what they needed from local suppliers. It really created complexity in our business that we didn’t need.”

Awareness of these problems filtered throughout the company not because they were announced by Jahnke, but because teams of their peers had brought the problems to the surface.

“When people saw we were doing things in so many different ways, they said, ‘That doesn’t make any sense,” Jahnke says. “We should be doing this the same way. It got buy-in from all levels of the organization in a more rapid way than if it was just pushed from above.”

Jahnke tried to reinforce the idea that there could only be one “best” way to perform a particular task. Things such as sales practices, financial decision making and the ordering of supplies needed to be more uniform.

“There can’t be six best ways to do the same thing,” Jahnke says. “We started identifying ways we could take out waste in our own processes and systems to become easier to do business with. It was not only a message from me that we needed to do things differently, these were individuals who had been with the company for many years. They were experts in their own field and their own areas of responsibility.”

Jahnke wasn’t looking to create drones who would eradicate the character and uniqueness that separates selling countertops, cabinets and plumbing. But in the areas where tasks are pretty standard, it would be much easier all the way around if more systems were uniform.

The key is creating teams that can help you take a deep look at your business and then not getting in their way when they take that look and come back to you with their observations.

“They have to trust you,” Jahnke says. “Many times I use the phrase, ‘People do business with people that they like, trust and then ultimately respect.’ That goes whether you’re a customer, a supplier or an employee. For example, initially with an employee, if they like you, they’ll come to work for you. They like what they hear and they like what they see and you’re at that level. After a while, they are starting to trust you because you’re doing the things you said. They start to develop a trust level with you. Then ultimately, they develop respect because they see the results and they see the impact on them and that you have their concerns at heart also and they develop that respect.

“You could apply that mindset to customers, suppliers, employees, everybody. If people who lead realize that it is all about getting people to trust and respect you, that doesn’t mean telling them what they want to hear all the time. It doesn’t mean that everything is always going to be great. If they really trust what you’re saying and respect what you’re trying to accomplish and you get everybody pulling in the same direction, it makes the journey a lot easier.”

Jahnke rewarded the trust of his employees by taking their suggestions to heart about the problems that existed at Elkay and the hurdles it was creating in building solid relationships with customers.

“You have to sit in front of folks and let them ask you questions and make sure you that you don’t either ridicule or be negative toward the people who ask you the questions that are the most important ones,” Jahnke says. “Those are invariably the toughest ones to answer. You have to reward the folks for asking. Create an environment where they understand that you’re willing to not just stand in front, but answer the questions and take the heat.”

Jahnke earned even more trust when the changes to create better task alignment and customer service procedures at Elkay led to positive growth in 2010 and a projection for growth in 2011.

He believes one of the keys to his success was convincing employees that the enemy they were facing was not the sales team or the finance team or anybody else at Elkay.

“We got people looking at things and seeing that the enemy is not within our walls,” Jahnke says. “The enemy is outside. The enemy is a declining market, high unemployment and falling house prices. Those types of things. We had to take action.”

How to reach: Elkay Manufacturing Co., (630) 574-8484 or www.elkay.com

The Jahnke File

Born: Green Bay, Wis.

Education: Bachelor’s degree in business administration, University of Wisconsin Oshkosh

What was your very first job?

I took care of a Little League field when I was 13 years old. I put the bases out and drew the lines out on the field and then umpired the games. It was the best job I ever had. I love sports and being involved in anything sports is a lot of fun. But it taught me lots of things.

I had to deal with the coaches, and they weren’t always that nice to the umpire. And I had to deal with the parents. It gave me a level of self-confidence that you normally don’t have when you’re 13. Sometimes you had to turn around and look at a parent and say, ‘Be quiet.’ When you’re 13 years old and you’re talking to a parent, that’s not the easiest thing to do.

Who has been the most influential person on you?

My dad. I think a lot of people say that, but my dad just passed away a few months ago, so it comes to mind real fast and the work ethic that he showed me every single day growing up. He didn’t rule with an iron fist. He was demanding of me, but that combination of knowing that he loved me every day and at the same time he had expectations of me that needed to be met, that helps create the balance you have to have in life. Having expectations doesn’t mean that you don’t care for a person. Being able to share both frustration and at the same time, caring, is important whether you’re a CEO or a dad or a husband or a member of a community.

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