“What I saw was a company that had many different products, many different markets and a lot of problems, both internally and externally,” he says.
Company management at the time thought the myriad problems were all technical. Years of disappointing revenue led them to believe that processes not the people were to blame. In an attempt to turn the ceramic and refractory products manufacturer around, Zircoa’s management sought out Kaniuk, then a rising star in the research department of a nearby refractory manufacturer, to take over as president.
Despite his technical background, Kaniuk wasn’t so quick to adopt the previous interpretation of the problems. His experiences in numerous strategic planning initiatives made him think the issues might be more widespread. By digging a little deeper and talking to nearly everyone at the company, he eventually concluded that a comprehensive approach was better suited to address so many ills.
“We needed to get everybody involved to determine how to proceed because there were so many problems,” he says. “Instead of trying to just tackle the technical side of the business, my focus became, ‘What do we need to do to get everybody involved to turn this company around and do the things necessary to be successful?’”
To answer that question, Kaniuk empowered his employees by making them active players in his quest toward quality. He organized dozens of committees, each consisting of six to a dozen workers, and charged them with fixing processes and developing key initiatives. His only guideline? Keep it within budget.
That trust and autonomy has helped push the company to 2007 revenue of $30 million, while making it one of only four, nine-time recipients of the NorthCoast 99 Award, which honors great work-places in Northeast Ohio.
Here’s how Kaniuk turned things around at Zircoa by getting his employees involved and then holding them accountable.
Make employees part of the solution
When Kaniuk stepped into the maelstrom of problems at Zircoa, he didn’t start yelling rash directives at his crew. That, he says, is an urge you must fight in a high-intensity turnaround situation. To get everyone paddling in the same direction, you must first gain trust by consciously following through on everything you say.
“The first thing you need to do is to get people to trust you to go down this path,” he says. “There’s no magic way to get people to trust you other than being very, very diligent on whatever you say you’re going to do. When you’re in a tight situation, for people to believe in you, you have to be very diligent in keeping every little promise you make, even if it’s just a side remark. That’s the first step.”
Kaniuk says such diligence is a long-term objective. In the short run, one of the most beneficial things you can do to gain trust, get buy-in and address a number of ills is involve your employees in nearly every aspect of the turnaround process.
“Instead of me coming in and saying, ‘We need to do this, this and this,’ we formed teams,” he says. “Each department solved their things. We must have had two dozen teams out of hundreds of people. Everybody was on three or four teams working on different things.”
Forming these teams isn’t as simple as asking certain employees to solve a given problem. Kaniuk sought outside help from consultants to give his employees the skill sets to better identify areas in need of improvement and to better work within groups to address them.
“Everybody at Zircoa goes through three days of facilitator training so that they know how to run meetings, how to communicate and solve problems,” he says. “The first year, we did 6 percent of our total work hours in training. A huge amount of facilitator training, communications, listening skills all those kinds of things so that people could talk, communicate and decide which problems to solve, what’s the priority and get them done.”
Once employees have the necessary training, the committees they form will typically fall within departmental lines. The fabrication department at Zircoa, for example, formed a group, identified 85 things that needed to be improved, and then spent six months working on them.
For companywide initiatives, such as incentives, workplace rules and health care plans, committees weren’t so easily defined. In those situations, Kaniuk met with union officials to identify what employees were best suited for each task.
“If it has significant monetary value, such as gain sharing, health care or job evaluations, we work with the union to decide on the group,” he says. “The plant manager and/or I will talk to them and make sure they understand the assignment.”
While consultants and front-line supervisors may be brought in to oversee larger projects, Kaniuk and his direct reports are decidedly absent from the proceedings.
“We can approve it, but we won’t be involved,” he says. Granting such freedom ensures that each project is the employees’ own, which then leads to buy-in.
That’s not to say that Zircoa’s 140 employees operate with complete autonomy. Kaniuk sets careful budgetary restraints for every initiative.
“I usually go to my (chief financial officer) to see the value of an initiative to determine the right amount,” he says. “The guidelines are, ‘We’ve got this much money.’ Other than that, it’s pretty open.”
An authoritative executive may have a hard time relinquishing so much control. Kaniuk certainly had his doubts at first. When a committee first presented their gain-sharing plan for the entire company, for example, he was very hesitant to approve it.
“I was pretty adamant that we had made a big mistake, and they had made a big mistake in setting it up, and I went in and was very vocal about it,” he says. “They said, ‘Yes, we understand your problems, but this is the plan for us.’ So I said, ‘OK,’ and we went ahead and did it. Two years later, I realize they were absolutely right.”
Kaniuk says the success of this strategy and the resulting buyin it yields will ultimately depend on your ability to take your ego out of the equation.
“The only pitfall you can have is your own thoughts of what’s the right way to do some things,” he says. “Even when I said I trusted them, I had my own reservations. I found in the end that you’re much better off trusting their judgment. I went ahead even though sometimes my gut told me no. In the end, you’re better off trusting their judgment.”
Hold employees accountable
Autonomy without accountability is a realm few executives should dare tread. Yes, Kaniuk gave his employees the freedom to address problems. Yes, he allows them to form committees to start initiatives and address changes today. In each and every instance, he demands transparency to make sure his employees are churning along the same track.
“Everybody has a communication board up, and they list all of their initiatives and where their status is and what they are doing,” he says. “They routinely report their progress and sometimes ask for our assistance. In all these cases, communications is frequent and open.”
To facilitate that open communication even further, Kaniuk also practices diligent transparency on his end through regular correspondence.
“In my monthly communication meetings, I keep all employees up to date on progress,” he says. “In this manner, others can get and give feedback on any initiative. In this way, there is greater buy-in by all employees.”
But while transparency may help track progress, it certainly isn’t the end all for Kaniuk’s highly autonomous approach to employee relations. You can communicate as often as you want with your employees, but that doesn’t necessarily mean they’ll approach such responsibility with gusto.
Kaniuk says one way to get employees to really take charge is by setting up an incentive or gain-sharing plan. At Zircoa, the company went about it as it would any other initiative: A group of employees formed a committee and got to work.
“The biggest mistake people do is when management does it and puts it in place,” Kaniuk says of gain-sharing plans. “We let the people decide what was critical. It was their system. They said, ‘Here’s what’s important, and here’s how we are going to do it.’”
Letting your employees decide what’s important can often create problems if their goals don’t align with those of the company. To help minimize that risk, Kaniuk says to articulate and continually communicate the company goals before that committee is formed. Repeat yourself again and again and again in meetings and during informal correspondence. This will help ingrain the business’s objectives in the minds of your workers.
When it comes time to actually form a committee, he says to hire a consultant to help guide it. A skilled third-party representative is usually able to keep the proceedings on track.
Finally, Kaniuk says to trust that your workers will do what’s right for the business. “We’re not telling them what’s best,” he says. “We trust them to hopefully make the right decisions.”
If you do those things, your employees should emerge with an incentive plan outlining goals that are firmly aligned with those of the company. The next step, then, is to implement a system to monitor progress toward them.
The Zircoa committee based its gain-sharing system on productivity gains and yield gains. Management already kept track of this data, so it was simply a matter of communicating it frequently and efficiently.
To do so, Kaniuk posts appropriate data on a large board near the employee entrance. The information is broken down by department and is updated every week. He also holds a meeting every month to share a companywide update and address any questions or concerns.
“I have monthly meetings,” he says. “I meet three times a day. Each shift as well as all the [salaried employees] can go to any one of them. I go through what’s going on monthly financially as well as what’s going in sales and development so everybody knows what we’re doing, where our problems are, and if they have any questions, they can ask me.”
While Kaniuk also posts a monthly update on that same board with the weekly information, he says it’s still important to set regular sessions to communicate with employees face to face.
“In a public forum, people can ask questions if they don’t understand something,” he says. “No matter how good you are, two-way dialogue is always the best. People trust you more whenever you’re looking them in the eye and talking to them.”
In the end, that trust can make all the difference when it comes to turning a company around.
“A business leader has to look at his business, and they have to decide how important your people are,” Kaniuk says. “If you decide your people are critical in getting you to where you need to go in your goal, then you have to put trust in them.” <<
HOW TO REACH: Zircoa Inc., (440) 248-0500 or www.zircoa.com