Employee Engagement & the CEO-HR Partnership
Sue Johnson is President & CEO of Futura Industries, an aluminum extruder. Spencer Burt is the company’s HR Director. In this joint interview, they describe their efforts to create an engaged work culture.
JATHAN JANOVE: You’ve been lionized for creating a highly engaged workforce in a physically challenging, 24-7 manufacturing environment. But just how have your efforts contributed to the business bottom line?
SUE JOHNSON: That’s an easy one! As CEO, my first priority is increasing shareholder value. Over the past 13 years, Futura Industries’ operating income has risen 29.1% per year and its return on net assets has averaged 14.8% per year.
JANOVE: What’s the connection between high employee engagement and enviable financial performance?
JOHNSON: Everyone here comes to work motivated to do their best and maximize their contributions. That translates into high productivity, customer satisfaction and safety, and low turnover, waste and defects, all of which contribute directly to the bottom line.
JANOVE: What are your best techniques for promoting high employee engagement?
JOHNSON: It’s not a matter of technique. It’s the basic approach you take to running your company. The late Stephen R. Covey talked about how way too many leaders operate with “scarcity mentality.” That promotes a transactional approach: “I’ll do what’s necessary to get my pay and benefits, but only that.” That’s where everything gets regimented, spelling out in excruciating detail what you get and what you don’t get, what you can’t do and what you must do. That creates work environments where everyone is out for him or herself.
By contrast, we lead with abundance mentality.
JANOVE: What do you mean?
JOHNSON: We start with the premise that the people at the top are no better than anyone else. I’m no different than a press operator with an eighth grade education who struggles with English. We both want safety, security, our kids to be successful, and some fun in our lives.
If we contribute to our employees’ wellbeing and their families’ wellbeing, the company benefits as well.
JANOVE: Has this abundance mentality inspired certain programs or practices?
JOHNSON: Yes. To respond to our employees’ needs, we’ve done the following:
- We created an onsite medical clinic. It provides primary care to our employees and their families. Over the years, we’ve added services and negotiated discounted rates for procedures with hospitals and other area providers in order to make healthcare affordable for all of our employees. I can’t count the number of times employees have expressed their happiness with this program–having easy access to medical care vs. the hassle of scheduling time off; having doctors who know and care about your family; not cutting corners on health because of time or money shortages. Since we started the clinic, the wonderful physician who’s worked with us, Dr. Donna Milavetz, has taken our model on the road. She’s since helped open 17 other such clinics! Also, in a time of runaway inflation, we’ve been able to lower our health insurance premiums.
- We started a college scholarship program for our employees’ families. One of our longtime heavy equipment operators put his wife and all four of his children through college using this program. He couldn’t be prouder!
- We sponsor sports teams that our employees coach or have kids playing on them.
- We offer jobs to our employees’ children when they’re ready to enter the workforce. For 15-18 year-olds, we created a summer work program where we assign them to projects. Last summer, we had 33 participants, including my 16 year-old son. He learned what real work is!
JANOVE: Where does HR come into the picture?
SPENCER BURT: Futura Industries doesn’t make a profit, its people do. We’ve moved away from an entitlement mindset to one based on empowerment, fundamental fairness, and caring for employees as human beings. We’ve also gotten away from HR as “Compliance Cop” or “Department of ‘No’.” We maintain policies and procedures that comply with the law but we don’t treat the employee handbook as an inflexible set of rules.
JANOVE: Can you share an example?
BURT: A plant worker’s mom died unexpectedly. He had no vacation or other leave time available. Nor did he have the money to fly to Mexico on short notice. But he’s a terrific employee. So we gave him the time and the money to attend his mom’s funeral.
JANOVE: Isn’t that the type of inconsistency that comes back to haunt an employer?
BURT: Not in our experience. We made a policy exception that’s fully consistent with our core values. Within our ability, we seek to do what’s right for our employees based on the circumstances at the time.
JANOVE: Aren’t you worried about legal claims?
BURT: No. We’re not foolhardy. We have legal counsel to advise us. But we’re also not afraid of litigation. In my eight years here we’ve had two employee claims–neither of which gained traction in the legal system.
JANOVE: What other steps have you taken as HR Director to promote an engaged work environment?
BURT: I participate in every job interview. I stopped using a temporary agency because I wanted everyone working here to feel they were a full-fledged member of our team.
We created a mentor program for new hires. For us, onboarding is more than imparting information. When a supervisor gets a new employee, that supervisor must learn three things about the person, and write them down so that I can see them.
I make it a practice to know every employee personally. Doing so has created bonds. It has also provided information helpful in making decisions about transfers, promotions or reassignments. I have a much better idea of where someone’s best fit is.
JANOVE: With Futura’s business results to support what you’ve done, why isn’t your company’s approach the rule not the exception?
SUE JOHNSON: Management arrogance. As they climb the ladder, far too many people get caught up in the hero’s journey of “I.” I got this position because I know more, I’m better, I’m this, I’m that. This type of thinking is epidemic. It promotes scarcity mentality–“Why should they get more? I’m the one who deserves more!” Arrogant managers view people as interchangeable parts, not human beings.
I frequently lead tours of our facility. When visitors discover that I know all of our 320 employees, they often express surprise. I’m surprised by their surprise! If you’re an arrogant leader, knowing employees on a personal basis is surprising.
It also surprises them to see a CEO personally writing holiday and birthday cards for all employees, keeping names and pictures of new hires with her to make sure she connects with them, or staying late to hand-deliver anniversary thank you cards and gifts to nightshift employees.
JANOVE: Aside from humility, is there anything else that leaders often lack?
JOHNSON: Courage. Many leaders lack the courage to articulate and stick to a clear vision, to take chances on new initiatives such as we did with the onsite medical clinic, and to acknowledge mistakes instead of escalating bad decisions that everyone else knows are bad.
Courage also means getting people out of the organization who don’t belong. An engineer by trade, I’m not a “warm & fuzzy” person. I treat people with dignity, respect and compassion–and I’m tough. It doesn’t matter whether you’re a janitor or a CFO, once it becomes evident that you’re not right for our culture or values, or aren’t meeting our performance expectations, and corrective efforts aren’t successful, you must go. It’s incredibly disrespectful to subject other employees to working for or with people who don’t perform or mistreat others.
Organization leadership is not rocket science. It takes humility, courage, vision and creating a work environment predicated on performance, accountability, empowerment, mutual respect and caring for each other as human beings.