Get your people on track
Bassoul doesn’t sugarcoat some of the
facts that come with turning your company
around: If you want to do things like
Middleby, you’re going to have to fire some
people and you’re going to have to pay for
orthodontics.
Those things might not sound like they go
together, but if you’re looking to make big
moves, you need the right employees and
the right culture. Middleby was focusing on
cash flow to help fund innovation, so there
was an obvious need to cut some sites and
some people. So Bassoul went through a
quick process of cutting the dead weight
and then put the people he had left in a
more simple structure that was only three
layers deep with better bonuses for everyone.
Do you want to know who he got rid of?
He cut four types of personalities without a
second thought: the whiner, the sniper,
the passive-aggressive and the contaminator. Fittingly, the names for all four tell
you what you’re looking for.
“The whiner is the person who every
day whines about everything,” Bassoul
says. “‘The weather isn’t good; the coffee
isn’t good.’ The sniper is the person who
snipes at everybody else. ‘I can’t do my
job because accounting didn’t give me
that’ — they have to go. The passive-aggressive can tell you everything you
want to hear, and then a month later,
they’ve done nothing. And then the contaminator: Those people have a history
in the company. They are smart, but they
use that to build arguments to prove
you’re wrong instead of working to
make it successful.”
Those traits stick out at any company
and, with all due respect to Jack Welch,
Bassoul says you can’t cut just the bottom 10 percent of your company.
“Most people talk about, ‘Oh this person is not performing; we take out 10
percent of the nonperformers,’” he says.
“Of course, if they’re not performing,
you should take them out, but it’s
tougher to take out people who are performing, but they are whiners. Those
four (personalities) create morale
issues.”
Bassoul knows it’s not easy to let people go, but he’s worked out a way to be
civil while being quick: He gives people
one month of severance pay for each
year they worked at the company.
“It took me a long time to convince my
board that (good severance pay) needs
to occur because then you free people to
take people out,” Bassoul says. “A lot of
people expect managers to fire people
and give them one week per year. You
know what, nobody is going to do much
unless they are forced to because they
feel guilty.”
If you’re cutting nonperformers and the
four bad personalities, Bassoul says what
you’ll be left with is a group of employees
that he calls game-changers and plug-and-play people. Both are autonomous and
self-driven, and you need to hold on to
them. That’s where the orthodontics
comes in. Middleby gives all of its employees lavish health care that includes orthodontics and vision.
Like paying the severance to get rid of
people poisoning your culture, the
health care costs are worth it once you
have efficient employees. And once you
get to that point, Bassoul says those
employees will bring in more of the
same. Today, Middleby’s primary mode
of hiring is from employee reference
because he believes his people understand the culture the company has created and the type of people that will fit in.
Look, no one is telling you to risk your
entire company on one project or to fire
all the whiners in your company. Bassoul
wants you to feel free to take any part of
this and apply it to your turnaround. Of
course, if you are willing to risk it all,
he’s seen some benefit to it.
“We have 2 percent turnover from,
remember, 33 percent,” he says. “Our
employees have referred 85 percent of
our new hires since 1999. We have the
most productive work force in the industry, as our sales per employee has risen
from, in 1999, around $130,000 in sales
per employee to around $500,000 per
employee.”
Oh, and Middleby has one more chip to
bargain with in case you still think the
plan was half-baked: In 2003, it had net
sales of $242.2 million with net earnings
of $18.7 million, but in 2007, it had net
sales of $500.5 million and net earnings
of $52.6 million.
HOW TO REACH: The Middleby Corp., (847) 741-3300 or
www.middleby.com
