Crown Point Cabinetry was founded in 1979 by Norm Stowell when he began making cabinets in his garage. Crown Point was a family run business which included all seven of his children and expanded to 100 employees by 1992. Brian Stowell, with his father’s and siblings’ agreement, became lead executive in 1993.
When Brain Stowell took over, things were not running smoothly at Crown Point. Annual worker turnover was 300 percent and absenteeism was a major problem. Employee/management relations were described as “horrible. ” Management’s solution to handle the situation was to wield a heavy hand but this had little effect.
The greatest problem at this time was poor in-process quality control. Some cabinets were built three or four times before they got out of the shop. Brian decided to take a different approach. Brian called a company meeting and announced that he would be making changes. Brian wanted people to say that they loved to work at Crown Point (which was not a desirable place to work at the time).
He encouraged his skeptical workers to trust him. From 1994 to 2002, Brian Stowell and his wife Becky, introduced many changes to Crown Point Cabinetry. First he reduced payroll from 76 to 53 people.This increased unit and dollar sales. The management system was then revamped.
The management layer was removed and replaced by a team-based management approach. These employee-based management teams were empowered with personnel and management decision-making responsibilities. These teams held daily meetings to facilitate communication, air complaints, suggest work improvements and schedule production. Co-worker review sheets were created to evaluate team member performance and recommend salary increases. These teams also had the power to hire and fire teammates. In an effort to reduce abor costs (which constitute 25 percent of costs) a program termed gain sharing was introduced. A set percentage was multiplied by sales figures for each month, labor cost were subtracted from this amount and the remaining funds were distributed fairly among employees. Gain sharing bonuses were paid out 95 percent of the time averaging 11-20 percent of annual compensation from 1997 to 2001.
Other changes were also introduced by Brian and Becky Stowell. A penalty of $1000 to the gain sharing pool for every backorder was implemented. If no backorders were incurred during the week a lunch was held for the workers.This reduced backorders noticeably. Wages were increased in 1998, 2000 and 2001. This increase contained gain sharing bonuses at less than 25 percent on an annual basis and gave workers a more stable wage. Safety teams were also introduced, which determined penalties (including dismissal) for violators. Retraining on safety standards for all employees (even the founder) was also introduced.
In 1992 experience modes (a measure of worker injury claims) were 40 percent above the state average; by 2002 it had dropped to 32 percent below the state average.Crown Point introduced a 401K retirement plan in1996 and now provided its employees with annual picnics, a box suite at the sports arena and a downhill skiing program. Crown Point Cabinetry has now completely transformed itself from its low times of 1993. Crown Point is now a desirable place to work and the Stowell family is now viewed as truly caring for their employees.
Employee turnaround has been reduced to near zero, absenteeism is negligible and management employee relations are at an all time high. Sales have more that tripled between 1993 and 2001. Gross margin has increased 6 percent and is more than 15 percent over the U.S.
average for cabinetwork plants. Net margin has moved from breakeven to over 10 percent. Crown Point has addressed the issues that it was facing in 1993 when Brian Stowell became lead executive and has become a more profitable company. This is due mainly to a much happier workforce that is involved in the management process. Line employees now have a stake in reducing labor cost, reducing backorders and reducing absenteeism.
Employee management teams are also responsible for safety and the hiring and termination of employees. This has made Crown Point Cabinetry a more profitable company with a more stable workforce.Clearly Brain Stowell has addressed the problems Crown Point had with its workforce and it is now a model for what a company can do when it addresses employee issues. For the future, Crown Point Cabinetry should continue the programs it has started. They must continue to monitor the company’s financial results and employee attendance and turnaround records. If Crown Point notices an unacceptable decline in these figures, new programs should be examined and implemented to correct these drops. If Crown Point continues to treat its employees well and reward them for making a quality product they should continue to be a successful company.