To the employees who kept walking past it, the broken case of beer in the warehouse at Monarch Beverage Co. Inc. was a mess that they didn’t make and didn’t need to clean up. But to John Xenos, the puddle of beer was symbolic of a much larger problem.
Thirty minutes had gone by and the mess was untouched. But instead of grabbing the first employee he could find and handing that person a mop, Xenos, the company’s general manager, decided it was time for a lesson.
Phil Terry, Monarch’s CEO and executive vice president, picks up the story from there.
“He gets all the warehouse managers together, he picks up a case of beer and he throws it on the floor and breaks it,” Terry says. “Then he says, ‘Now we have two broken cases of beer. How long are these going to sit here before one of you does something about it?’”
Terry laughs now, but the story did not paint a pretty picture of what was happening at Monarch. And had things continued this way, with the company in disarray and spills that were left for somebody else to clean up, Terry wonders where the company would be today.
“It was a very good way of demonstrating to people that we didn’t have clear direction,” Terry says. “We didn’t know what our priorities were, and we were just here to get a paycheck. That’s a prescription for disaster for your company when your people are just earning a paycheck.”
Terry knew things had to change at Monarch. Sales were not growing, and as a result, the beverage distributor’s profits were taking a hit. There just seemed to be no motivation to pick up the pace or to even pick up a broken case of beer.
No matter what kind of business you’re running, Terry says you have to have a reason and a sense of motivation to be doing whatever it is you’re doing. It sounds simple enough, but it clearly wasn’t happening at the 630-employee company.
“If you don’t all agree on what you are trying to get done, everyone will make it up on their own,” Terry says. “It’s just human nature that when you get up in the morning and you engage in an activity, you have a reason for it. If you allow everyone to make up their own reason, you might be working at cross-purposes. If you wake up in the morning and decide the reason I’m going to work today is I’m just going to make money for myself, that’s not an illegitimate reason. It just won’t be the one we want everybody to focus on, which is being consistent with our mission statement.”
And so that’s where Terry started. He reminded employees that they were there to serve the customer and increase distribution of the company’s product. He didn’t tell them that their job was to make money for the company, which achieved $290 million in sales for 2008.
If they focused on the mission, that would take care of itself.