Evasive maneuvers Featured

8:00pm EDT March 26, 2008

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