Open Book Management - PowerPoint

							          Foldcraft Co.:
       Transformational Journey
            Steve Sheppard

Chair and CEO, Foldcraft Co. (Retired)

 CEO,Winds of Peace Foundation
(Current)
    Introduction
• Incorporated 1948
• 100% Employee-Owned S Corp
  – 350 Members
  – 4 Wholly-Owned Subsidiaries
• 2006: $50MM Consolidated Sales
  – 2007 Plan: $53MM
• Companies, Products, Services
• Transformational
• Values-Based
     Foldcraft Business Objectives
•   Grow Equity By 12% Per Year
•   Diversify Our Business
•   Manifest Employee Ownership
•   Improve Competitively and Globally



         Simple….But How?
                     What if…?
• You could substantially increase the involvement and
  satisfaction of your employees, and in the process afford
  better benefits, twice the retirement income of comparable
  companies and higher wages?
• You could increase productivity at your company by an
  average of 5.3% annually?
• There is a “magic pill” that could boost your investment rate
  of return by 2.7% every year?
• There is an initiative that can increase sales, employment
  and sales/employee by 2.4%?
• You could increase the likelihood of the longevity of your
  firm by 15.2%?
• There could be a strategy that would better assure your
  firm would continue operating independently?
• You could eliminate corporate income taxes?
                 What if…?
• You were working for the benefit of you and your
  co-workers, not some absentee owners?
• You had the opportunity to create real wealth
  through owning equity?
• You could buy into owning a company without
  investing any of your own money?
• You woke up one day and realized that you
  really will become old and retire some day?
• You had the opportunity to create twice as many
  retirement bucks as the average worker?
        ESOP Noteworthy
• Outstanding Employee-Owner in America,
  1993
• Outstanding Employee-Owner in
  Minnesota, 1993, 1994,1996
• Outstanding Employee-Owned Company
  in Minnesota, 1996, 1998
• Outstanding Employee-Owned Company
  in America, 1998
        Foldcraft Statistics
• 47/200 Participants Own 6-Figure
  Accounts
• The Average of Those 6-Figure Accounts
  Is More Than $160,000
• 30/47 Accounts Are Owned By Non-
  Managers
• 19 Accounts Are Owned By Factory
  Participants, 11 By Office
• Average of ALL 200 Accounts Is More
  Than $75,000
CORPORATE WELLNESS:

       I NTELLECTUAL
       S OCIAL

       E MOTIONAL
       S PIRITUAL
       O CCUPATIONAL
       P HYSICAL
         II. Open Book Management:
                Chapter and Verse
•   Chocolate Chip Cookies
•   The Great Game of Business
•   The School Desk Company
•   The ESOP Huddle
•   Weekly Closes
•   Individual Profit/Loss Statements
•   White Boards, Hour-by-Hour Charts
   III. Foldcraft’s Lean Journey
Industry
 Week                                1st
                    Participate
publishes                         Foldcraft
                     in Pella
“Kaizen     Pella                 Shopfloor
                      Event
 Blitz”     Visit                   Event



 9/97       5/98      6/98         8/98
Unleashing Ownership Potential

• Kaizen Teams
• Inside and Outside, All Members
• Intense, Focused, Accountable (25%-50%-
  40%)
• Educate, Facilitate, Elucidate, Celebrate
• Cara’s Story
  Foldcraft’s Lean Journey

1st Foldcraft Kaizen Event Results:
 •The Vent!
 •25% Productivity Increase

 •66% WIP Reduction
 •50% Floorspace Reduction

 • Proved to ourselves that it could be done
               Process Lead Time
                       1%

    Typical                                                       Original
                                      99%
   Company                                                        Lead Time

                      0.5%
 Traditional
  Process                             99.5%
Improvement
                                               Minor
                       10%                  Improvement

Kaizen Waste
                       90%                     Major
 Reduction                                  Improvement


                                     Time

           Value-Adding Activities            Non-Value-Adding Activities
Foldcraft’s Lean Journey
  Tool
          Foldcraft   Kaizen
 & Die
          Acquires    Comes
Becomes
           Baker       To
Process
          Furniture   Baker
 Build


 4/02      4/02       5/02
Results Achieved ‘98-Present:
•   Process Lead-Time        66%
•   Floorspace               42,000 sq. ft.
•   Productivity             240%
•   Claims                   48%
•   On-Time Ship 95.2%            99.3%
•   Significant product expansion
•   Insourcing previously purchased items
Foldcraft’s Lean Journey
    Kaizen Continues Every Day,
            Every Hour!

  •Monthly Events
  •Point Kaizens
  •HOT Lab Work
  •Public Events
  •Hour-by-Hour Charts
  •White Boards
  •Etc.
            IV. Ownership “Magic”
•   Opportunity for Culture Shift
•   Holistic Development
•   Participation
•   Ownership
                      Stewardship
• Membership in an organization means that
  we have chosen and accepted this playing
  field. This choice and acceptance becomes
  our contract. Our desires for compensation,
  self-expression, participation…whatever we
  want from a place…are viable only so long
  as we can commit to the mission, results,
  constraints, principles, difficulties of the
  larger institution. If we cannot support these
  requirements and boundaries, then we
  should leave. Stewardship offers more
  choice and control in exchange for a
What I Promise to You:
   *Open Book Management
   *Member Involvement
   *Stewardship
   *Servant Leadership
   *Listening
   *Vision
   *100 Best Companies
   *Change
   *Opportunity
What You Promise to Me:
    *Partnership
    *Commitment
    *Participation
    *Attitude (Courtesy, Respect)
    *Body, Head, Heart
    *Change
    *Self-Management
    *Peer Pressure
    *Desire to Be All That You Can Be
     Cross Boundaries
•Transformational
•Educational Travel
•Third-World Realities
•Broadening Member Thinking
•Educating Re: Diversities
•Global/Cultural Sensitivities
Foldcraft Foundation
•Established 1997
•Funded by Foldcraft
  •10% Pre-Tax Profit
•Separate Member Board
•Global Focus
Does It Make A Difference?
    •Competition (Falcon)
    •Customers (YUM!)
    •Acquisitions (Millwork)
    •Share Appreciation
    •Distributions
          V. The Global Context
•   Winds of Peace Foundation
•   Martha Valle Valle
•   Honduras ESOP
•   Organizational Workshops