Cultural revolution Featured

11:53am EDT January 31, 2006
Six years ago, when Charles R. Eitel became chairman and CEO at Simmons Bedding Co., he realized things had to change if the company were going to grow.

As it stood then, its policies were counterproductive, making Simmons an unattractive place to work.

“Simmons was a very autocratic, formal, stiff, bureaucratic company,” Eitel says. “Corporate thought the people at the plants were there to serve them. They had it completely backwards. The only communication was from corporate to say, ‘This is what you will do.’

“Our plants all had very different cultures. They had very little communication; they competed with each other. We had awards we would give out. If it meant hurting another plant to win an award, they would actually do it. It was a very fouled-up culture. And it started right at the top.”

Eitel knew the entire corporate culture of the bedding manufacturer needed an overhaul, so he set out to change the way people throughout the entire organization thought about the $870 million company. To do that, he spent $10 million on a new philosophy, dubbed the “Great Game of Life.”

“The key here is to create an environment where people feel like they’re making a difference, where they can have fun, where they are free to make decision beyond the boundaries of a typical company,” Eitel says. “A lot of this comes from the culture that we’ve created.”

Eitel’s investment in the Great Game of Life was used for training and development and for experiential activities to regularly push associates outside their comfort zone into their learning zone.

“For example, almost every employee of this company has been through a two- or three-day outdoor experience, including a ropes course, classroom training, experiential learning exercises, all geared toward continually helping us to reinvent our company, helping us build a better company,” Eitel says. “There’s a lot of power in people coming together and sharing their truths and their beliefs about what’s what. That’s what the Great Game of Life is about.”

Employees learned how to think in new ways, take charge and have fun along the way. By focusing on changing the attitudes of employees by showing a commitment to caring about them, Eitel more than doubled his company’s earnings in five years.

Value reinforcement
The Great Game of Life represents the core culture at Simmons, and the values of that culture have to be communicated constantly and consistently to get results.

“One of my jobs is to make sure that I have a senior leadership team that’s connected,” Eitel says. “The most important area of connectivity is on the subject of the culture and how we behave. I’ve got five people that report to me, and all five of them believe as I believe on this subject. We’re all different. We all have different perceptions and behaviors, but when it comes to how we treat our people or how we walk our talk, it’s not open for discussion. We have to have this consistency.

“When you have that consistency of behavior and demeanor, it flows through the organization. It takes years to get this message through. Occasionally, somebody messes up at a senior level and goes astray from that behavior. Then you have to back up, regroup and go forward. That’s just part of the process that you’re going through to communicate to people, ‘I care about you.’”

To communicate in simple terms what the company is about, Eitel developed the acronym C.H.O.I.C.E.S. Each letter represents a company value — caring, history, opportunity, innovation, customers, empowerment and support. It is a simple, straightforward way for the Simmons’ management team to communicate the company philosophy to thousands of employees.

“People have trouble, particularly as you work your way down the ranks of an organization, bringing clarity to what a company stands for and what a company is trying to become,” Eitel says. “That word clarifies who we’ve been becoming and also puts emphasis on what we think is the most important going forward.”

And while each letter in C.H.O.I.C.E.S gives represents one of the company’s values, Eitel considers one of them — caring — the most important.

“For us, caring is a very specific core value,” Eitel says. “We care about each other, we care about our customers, we care about our suppliers, we care about our health and our mental health.”

The value of caring is demonstrated both externally and internally. For example, following Hurricane Katrina, Simmons worked with the Red Cross to offer mattresses at significantly discounted prices and encouraged employees to give blood and make donations. Simmons sent more than 6,500 mattress sets at a rate of six trailers per day to dealers near the devastated areas, making it possible for individuals to purchase mattresses at or below wholesale cost.

Caring plays out inside the company, as well.

Eitel says that employees in the plants did their jobs but had difficulty understanding the corporate culture. At the Charlotte, N.C., plant, for example, communication was difficult because 17 languages were spoken there.

“The Great Game is about hooking people up across cultures and across belief systems to come to a common understanding of what is important,” Eitel says.

Now communciations are translated into the languages spoken by employees, making it easier for them to understand the company’s goals and values. It also makes it a better place for people to work because language barriers no longer isolate them from what the company is all about.

Measuring success
Eitel’s cultural shift isn’t just about making everybody feel good about work; metrics measure just how much the culture is affecting key performance measures in the areas of safety, quality, service and cost.

“We rank them in that order,” Eitel says. “We have monthly business reviews and we examine those four categories in considerable detail. If we focus on safety, quality, service and cost, we believe that everything else will take care of itself.

“Treating safety as an unquestioned initiative and behavior says a lot to our people about how we feel about them, about how we care about them,” Eitel says. “As the CEO or the head of manufacturing, I can’t allow anything to go on in this company that is unsafe. There is nothing else more important than safety.”

Employees take the caring message seriously. Three years ago, the company’s annual workers’ compensation costs were $3.3 million; today, they are about $600,000.

“This has been traditionally an unsafe industry, and Simmons wasn’t really running safe plants,” says Eitel. “Today, our safety performance is exceptionally good. A lot of that is just by focusing on it and connecting the Great Game of Life to safety. We’ve driven our OSHA recordables [work injuries that require reporting to OSHA] from a number that I’d be too embarrassed to talk about to below four.”

The Great Game of Life also led to morning meetings at which plant workers discuss the day’s activities. Anyone with a safety concern of any sort immediately reports it to a safety committee.

“The biggest problems you have in bedding plants are back strains,” Eitel says. “That has resulted in moving more toward automated handling of product.”

The second most important metric is quality, and that focus has led to an improvement in how products are shipped. Simmons had problems with returns because the plastic that protected mattresses during transport often tore. That allowed mattresses to drag on the ground, leading to returned products.

One plant’s team solved the problem by putting an extra guard on the bottom of the bed so if it dragged, the guard would protect it. The company also returned to a thicker plastic wrapping.

“We thought we were being conservative and correct for using a thinner material for our bagging,” Eitel says. “The cost of quality from tears was greater than the cost of going to a thicker material.”

The third most important metric is service.

“We’re a make-to-order company,” Eitel says. “When we get an order, there’s always been a belief that you have to make it immediately. We learned that not all of our customers wanted everything immediately.

“We had a flawed belief system — if we didn’t deliver everything in three days, then we were going to disappoint them. Through better communication, we found that a week is fine, even 10 days is fine. Instead of automatically making product and immediately shipping it to them, we’re more likely to ask, ‘When do you need this?’ And then we would provide it when they need it.”

And when customers are served more efficiently, there is more time to plan production, which ties directly to the fourth metric — cost.

“If we have more time in production to plan and still meet service needs, then that reduces our costs,” Eitel says. “Service is measured daily and tracked. Most of those ideas come from product planning and the way product is scheduled. So that comes more from the office side. They’ve been through Great Game as well. They have their own meetings to decide what went right, what went wrong.”

When all four initiatives are done correctly by the employees who have been trained in the Great Game of Life, financial success follows.

“The final performance would be the bottom line,” Eitel says. “If you were to look at the company the year before I came here — our (earnings before interest, taxes, depreciation and amortization) were approximately $50 million. Last year, it was $130 million. We went from $50 (million) to $130 (million) in five years [on revenue of about $870 million], and in the middle of all that, sold the company for over 100 percent improvement in value.”

Eitel’s Great Game of Life has changed the attitudes of employees, and the company has joined Fortune magazine’s list of the top 100 companies to work for. Simmons debuted on the list at No. 100 in 2004 and last year moved up to No. 93.

“Being selected as a Fortune 100 company, for me, is the most important report card that I could get, because my No. 1 job is to create an environment where people can grow and develop,” Eitel says. “What I’m trying to do at Simmons is leave a legacy that goes way beyond me, way beyond my successor and way beyond my successor’s successor to say that we have created a culture here built on a great legacy that, at the end of the day, is about caring for each other, caring for our customers and caring for the environment.” HOW TO REACH: Simmons, http://www.simmons.com or (770) 512-7700