Window of opportunity Featured

8:00pm EDT April 25, 2007
It’s not something he looks forward to, but Rod Hershberger doesn’t shy away from breaking bad news to his 2,400 employees at PGT Industries.

“Bad news needs to be delivered by the top,” says the president and CEO of the $370 million window and door manufacturer. “If you send lieutenants out to deliver bad news, every time theysee a lieutenant coming, they figure it’s going to be bad news, and they think all you are trying to do is deliver the good news.

“It’s like a coach. You win or lose with your team, and you go to the press conference and say exactly what happened. I believe that good news can be shared by almost everyone, especiallyeveryone in management.”

Hershberger sees being upfront with employees on what is happening with the business as a key role for a CEO.

“There are things that happen in the business that aren’t necessarily bad,” says Hershberger, who co-founded the company. “But if you don’t tell your folks what’s going on, it’s going to be perceived as bad, or the press is going to write about it and spin it because the newspaper likes bad news better than good news.

“It’s important before it gets spread out that we get out there and tell them what is happening and what we are doing about it. We stand in front of them in small groups and tell them what exactly is happening.”

It’s all part of a culture in which Hershberger is determined to be honest with his employees and create an environment where people know they are an important piece of the puzzle.

“We want our employees to know that when they come into work, they are going to be listened to,” he says. “If there is something that concerns them, good or bad, someone is going to listento them, something is going to be done about it, and they can take it all the way to the top.”

By finding the right type of employees, sharing the company’s goals with them and then keeping the lines of communication open, Hershberger says you create an environment that benefits allaspects of the business.

“It provides benefit to all our constituents — employees, customers, suppliers, shareholders and the community in which we live and operate,” he says. “PGT’s culture attracts qualified employees while also encouraging dialogue that leads to early identification of problems and/or issues that could hinder our success. An open environment provides a safe place for the development ofnew ideas, no matter how small, that help to improve our business performance.”

Finding employees who fit
Hershberger wants employees with integrity and a willingness to solve problems in his culture, but identifying employees with those qualities can be a challenge.

“That’s probably the hardest one to answer because people know the right answers to give in an interview,” he says. “We’ve got a pretty sophisticated interview process. I often consider it almostrunning the gauntlet. By the time you finish the interview process for higher level and even a mid-level position, you will go through a full day’s interview process and be interviewed by six to eightpeople. It might take more than a day to get it done. You’re going to get different questions and situations from everyone asking them.”

The team doing the interviewing is comprised of representatives from departments the potential hire will work with on a regular basis. During the interview process, interviewees are asked toexplain situations they have been in and how they handled those situations.

“We are asking about specific things that happened,” he says. “It depends on what category we are looking at. From a leadership point of view, we’ll ask who they developed under them to taketheir job. If they are interviewing for a job, we are assuming that they developed someone who can take their role. So, we ask them specifically what they did. Not what the company had in placeor what training was in place.

“Specifically, what did you do? How did you mentor that person and bring them along? What was the situation? Give us something they did well and you built on it, or something they did not dowell and you needed to repair that. As you go through that process with five to six people looking at it, I think we’re able to determine it pretty well.”

Hershberger said the reason for the questions is to get a feel on how the person reacted to a certain situation.

“What I don’t want to hear is, ‘Our company has a training program, and I enrolled them in that program,’” he says. “I want to hear, ‘We got together once a week after work, and we talked aboutthe job performance.’”

Sharing goals with employees
Hershberger says PGT puts a plan together that covers the next three to five years and has a number of measurable goals in it, from sales to profit margins to growth of particular products asobjectives.

The goals are listed on what the company calls a ‘One Sheet,’ a single sheet of paper that also includes ways to achieve those goals.

“Every significant department has a One Sheet that says, ‘These are my five or six goals,’ and underneath that, they’ll develop ways to hit those goals,” he says. “We take those measures and goalsand just hand them to people and say, ‘You run manufacturing. Here is a set of goals.’ They are part of setting those goals, and it’s their responsibility to get there.

“I’m not a big believer in having documents that are so thick that they put them on a shelf and never read them. One sheet of paper, you can see in a quick glance if we are meeting our objectives or not. There are always ways to dig down deeper if we aren’t meeting them. Or, if we are doing good, there are ways to dig down deeper and find out why.”

Once those goals are set, Hershberger steps back and lets employees take over.

“Employees love to be engaged in the company and to have a say-so in where the company goes and how it achieves its goals,” he says. “This gives people the ability and authority to look atthose goals and achieve them. We all don’t achieve them the same way.

“There are particular things I would do to get there. But, if you get five people in a room, we’re going to have five different ways to get there, and none of them are necessarily right or wrong.But the combination of five people is more powerful than one person thinking they can do it.”

Hershberger says it’s difficult for him to step back and let someone work on a task differently than he might. It’s even harder to stay away when things aren’t exactly going right. However, hesays being patient is the best method for success in the long run.

“You learn over time, the more times you step in, the less effective the folks that work here will be,” he says. “You have to back off and let them make decisions. Part of the learning curve isunderstanding when it’s OK to make a mistake and when it’s not. There are certain times you look at it and go, ‘This could be a problem and this could be a mistake.’

“We are going to have a wonderful learning experience from it next week. We’re going to have a chance to sit down and talk about it.”

Other times, you will look at a situation and realize the potential consequences are too severe to let it go, so you have to step in and redirect people away from a potentially serious error.

“We learn almost more fro m our mistakes than the things we do right,” Hershberger says. “It’s not OK to make the same mistake twice, but it is OK to make a mistake.”

If done correctly, delegating power can positively affect your customer base.

“If we do the authority correctly, a customer should be able to call in and get an answer from anybody they are talking to and feel comfortable that, that is exactly what will happen.

“When I call someplace, even when it’s good or bad, you talk to the customer service person, and they tell you its going to happen, but you know it’s not going to happen. So, you have to ask fortheir supervisor or their supervisor’s supervisor to make sure it does happen. That’s the kind of thing we don’t ever want to happen here.”

Developing a culture with a high level of employee involvement also helps with retention.

“You hear a lot about employees going to other places because they pay a dollar more,” he says. “Employees need to know why and how their job is important and what their role is and howimportant that role is. We make sure we give that information to our employees. We have a lot of meetings and spend a lot of time talking to them.”

The personal touch
While giving employees the autonomy to achieve goals is a positive, it doesn’t mean you can disappear and not be seen around the company. Hershberger says talking to the employees face-to-face can foster a more open culture that keeps communication moving in both directions.

“You can talk one on one to an employee on every line, and that employee is going to tell the rest, ‘If you have a problem, go talk to him. They’ll listen to you,’” he says. “If we need tobuild windows, then let’s build windows. It doesn’t matter if you are an hourly employee or a vice president or CEO. You go do the same thing.

“We work together, we laugh and we play together. That’s the relationships we have.”

Hershberger says rewards and incentives are also more effective delivered in person.

Sometimes that may take management going the extra mile by showing up early or staying late.

“We go through a lot of cakes,” he says. “We have a celebration on the line with a lot of our management team there. It’s not unusual to see our entire management team here at 4 a.m.doing a party on a line that has achieved something special and spending as much time as the employees want to talk to them one-on-one.”

That reputation was built around consistently preaching core values and remembering one simple lesson that can easily be forgotten in a day and age filled with e-mail and text messages.

“There’s nothing that beats a one-on-one conversation or being able to look somebody in the eye and shake their hand,” Hershberger says. “Walking up to a corner office and saying,I need to talk to whoever it is, is difficult for an hourly employee to do. Sometimes you need to make sure you aren’t in that corner office. You are wherever you need to be so they canstop you and talk to you.”

HOW TO REACH: PGT Industries, (800) 282-6019 or www.pgtindustries.com