Freedom, Inc_ - Brian M. Carney [56]
And there were the meetings: of the executive committee, of managers, for planning, for reviewing the past month’s quality problems. There was an annual lunch with managers, monthly bonuses to everyone—for quality, for tons produced, for perfect attendance, for when the temperature in the foundry got too high. And lastly, there were routine end-of-the-month furloughs—workshop by workshop—to keep pressure on the workers. Zobrist commented that if he hadn’t started with this four-month observation period, he’d simply have continued to manage the company in the same old way, as it followed common practices used by industrial companies at the time. But he had observed and listened to people. And during these four months a different reality revealed itself to him.
One of his first epiphanies came with his encounter with Alfred and his gloves outside FAVI’s storeroom, as we described in chapter 1. Armed with the accounting discovery he made as a result, Zobrist applied it next to the coffee machine. He calculated that having only one machine for the whole plant made an average refueling trip last three to five minutes. This made the real cost to the company of a cup of coffee one hundred times more than FAVI’s cost of supplying the coffee itself. What’s more, the “free” coffee offered in the summer was even more expensive. Even when free, the machine required special tokens, which had to be procured from the receptionist for each cup, making the journey even longer.
Zobrist found similar false economies throughout the plant. The adjustable wrenches, for example, which were used to save money on tools, rounded off the corners of the nuts and bolts on the machinery over time. This, in turn, required the use of pliers on the damaged equipment, wasting still more time, worsening the condition of the nuts and bolts, and accelerating wear and tear on all the equipment.
Most of the weekly “planning” meetings were spent making excuses about not following last week’s plan and assigning blame elsewhere for these failures, leaving little time for the ostensible purpose of the meetings, which was to plan for the coming week’s production.
The CEO devoted one full day a month to calculating monthly performance bonuses with managers. These bonuses, moreover, were arbitrary. The bonus for tons produced was unfair because a machine operator had no control over the size of a client’s orders in any given month. As for the bonus given when temperatures in the foundry were too high, he noticed that some workers responded to this incentive by closing the windows in the summer to overheat the plant. Talk about unintended consequences.
Then there were the monthly furloughs when business was slow. In the first place, this punished the workers on the foundry floor for the performance of the salesman, which seemed wrong. It also created a disincentive to work faster and more productively—work expands to fill the time allotted to it, a law unknown to Newton and Boyle but familiar to any office worker.
Zobrist then reflected that, though the salesman did a good job, having a single person for that role for the entire plant was not sufficient—saving money on sales staff was another false economy. So Zobrist employed one of his bawdy metaphors: “I recalled in my youth while dating that the most difficult thing was not making love to the girls, but bringing them to bed. So I told myself that we’ll need more people to bring clients to our company’s bed.”3
Finally, he noticed that, at the end of the day, many of the employees raced for the time clock. Some even gathered around it before the whistle blew to be the first out the door when their shift was over.
At first, all these observations were just that—observations. He knew that they pointed to something wrong,