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Growing Leaders at FAI, Inc.

Cathy Ivancic

June 2001

In 1997, employees became owners of FAI, Inc., a wire harness manufacturer headquartered in Mishawaka, Indiana. Tom Whalen, president of FAI, was hand picked by the departing owners to lead the company. Whalen inherited leadership of a firm with all the habits and practices of a company run by two entrepreneurs. "I was the only person who had the responsibility for growing the business and reaching our goals. I didn’t want to be that guy forever," notes Whalen. He decided to cultivate a team of leaders and teach employees about the business they owned.

Cultivate the Soil and Plant Seeds

In that first year, FAI began developing an ownership culture. Whalen started by getting the ground ready for change. A critical mass of employees at each plant went to a training sessions where they learned about the firm’s ESOP, stock value, and where the profits go in a business. The sessions clarified expectations about employee ownership. Employee ownership is about shared rewards at FAI, but it is also about shared responsibility.

Provide the Right Nutrients

Next, it was time to start building the skills of leaders and creating a focus on the business. Plant level leaders were asked to start tracking critical numbers. The leadership team went through a series of coaching sessions in which they built communication and leadership skills. They learned to use Rapid Improvement techniques and expanded their own business knowledge. "In two months, I went from being completely in the dark about the financial part of the business to making pretty accurate projections for our plant’s income statement," says Kim Cansler, plant manager at the firm’s plant in Keota, Iowa. Plants started tracking performance information through monthly meetings and charts about performance. "We made charts and showed people how they could help improve performance. We found out who wanted to help and gave them to opportunity to do it!" states Cansler.

Plan for Changing Conditions in the Environment

In addition to developing skills and knowledge of the plant-level leadership teams, FAI worked on developing a stronger top-level leadership group. In 1999, FAI embarked on a six-month strategic planning process that involved plant leadership and key corporate functions. This group learned together about how their parts of the business are connected to other parts of the business. They developed a plan about where they would like to take the business and explored several alternative plans. They developed a corporate team, which continues to meet monthly by conference call and quarterly in person.

Do the Weeding Even Though It Isn't Fun

All leaders may not want to join the team in the quest for shared responsibility and shared success. "The more focused we got, the more clearly we saw the need to make some difficult decisions about the composition of our leadership team," according to Mindy Lawmaster, the manager of the plant in Mishawaka, Indiana. Like most companies are creating an ownership culture, FAI found that some team members did not fit well with the new environment of shared responsibility. Sometimes these people chose to leave the organization and sometimes they needed to be weeded out.

Harvest the Rewards

"When we started, some of our jobs were more than four months behind schedule. In our industry, on-time delivery is a key to success," notes Lawmaster. "And now we are winning awards for our customer service." FAI’s Mishawaka Products Division recently won the John Deer Achieving Excellence Award, which recognizes excellence in customer service including on-time delivery.

FAI is in a better position to deal with slow periods because of the broader understanding of the business. "We have been able to break even in times when others in our industry are in the red. It is because our people are responding to the business conditions more quickly. And we think we can get even better as we continue to learn."

Don't Stop Working in the Garden

The task of growing leaders at FAI is not finished and more "gardeners" have been added. The mid-level leaders are now taking on the job of cultivating the soil and planting the seeds for developing the front-line leaders. "Yesterday, two people raised their hands during the plant meeting. I figured they were going to give me static on the ideas I was presenting about change. Instead, they turned to their co-workers and explained the whole idea, using their own words," says Lawmaster. She added, "They are becoming leaders."

Cathy Ivancic is a consultant and co-owner at Workplace Development Inc. Since 1985, she has helped more than 100 ESOP companies enhance ESOP communications and develop an ownership culture. She is active in national organizations that promote shared ownership and has served on the NCEO's board of directors and as an officer of the Ohio chapter of the ESOP Association.She can be reached at civancic@workplacedevelopment.com.

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