One of the hopes that I had held during my years at Foldcraft Co. was that some day we might be able to compete successfully enough to acquire one of our local competitors, Waymar. We actually engaged in conversations with the owner of the company who was contemplating his own retirement, but we never could advance the conversations in any substantive way. You might imagine my sense of satisfaction, then, when last month Foldcraft completed the process of acquiring that company and its subsidiary in Seattle, Washington. Some good things just take time to develop.
The acquisition wasn’t free, of course. The employee owners of Foldcraft have their work cut out for them in order to make a success out of this acquisition. They will have to learn new things. They will have to familiarize themselves with the way that Waymar conducted its business. They will have to envision changes that can be made to blend the two manufacturing operations. They will have to learn about an entirely new set of customers and their demands. They will have to make Waymar a profitable enterprise if they are to cover the debt incurred from the purchase, and almost certainly surprises will be encountered along the way. The two cultures will have to be blended into one, and a collaborative workforce will have to be fashioned out of two previously competing ones. A great deal of education within both companies will be required. When you stop to consider all of the hurdles that exist in such a transaction, it sounds downright risky.
That’s one of the realities about being in business of any sort: every one has both its risks and rewards. It’s never any different. If success was guaranteed in any particular economic undertaking, everyone would be doing it. But the tensions between the risks and rewards are what make the success stories so compelling to us. We marvel at the obstacles that successful enterprises have overcome, and we listen longingly to tales of financial success, often concluding that we should be able to accomplish as much. Whether a cooperative in rural Nicaragua or a factory on the plains of Minnesota, we love to hear stories that affirm the notion that unlikely- even miraculous- things can and do happen despite the odds.
As a member-owned company, Foldcraft will tackle the challenge in the manner that best assures success, a process that will draw upon some truths and methodologies which pertain to organizational life everywhere. The first thing that management will do is to recognize that people need to know. Leaders will ensure that members understand clearly the risks mentioned above and what exactly will be required to counter those risks. Truth will not be a luxury but a necessity, because where information is lacking, rumors will fill the void and success cannot be built upon innuendo. There will be nothing automatic about success in this venture, and the owner-members absolutely must know the truths of their new organization, good and bad.
Engagement will require that the members of the organization- Foldcraft and Waymar both- become educated in the new organization’s success equation, those elements that must occur in order for the new business to succeed. Unfortunately, in all too many organizations even today, members simply do not have knowledge about what creates success for their business. They only know that they perform certain activities which they have been directed to do, without knowing why or how those activities synchronize with the efforts of others in the organization. As in any game, the objective is to score, and the players need to understand how those points are made, how certain actions and reactions mesh within the company to reach the goals. They want to know how to win. In the case of Foldcraft, principles of open book management will teach members exactly what needs to happen for success and then will track success (or failure) so that members know whether they are winning or losing the game.
Foldcraft will create ways for its members to be involved. The transition difficulties encountered simply won’t be able to absorb people who not fully engaged in its success; that’s a reality of any business. Participation of every member becomes magnified in an undertaking such as this. The company will continue to assemble teams and special project groups to address issues, and for at least two reasons. First, even when members are excited about contributing to change and improvement, they may not fully recognize what role they should play or where to begin. The leaders of Foldcraft can help with that by “positioning the players.” Second, sustainable and effective change needs the wisdom and experiences from as many sources as possible, and that means broad member involvement from all areas of the organization. Foldcraft has already utilized this approach as it was performing its evaluation of Waymar as a possible acquisition. Teams of Foldcraft people were involved in assessing factors such as financial health and transparency, company ethics and integrity, employee safety, production methods, opportunities for improvement, marketplace strategies and more. Members of Foldcraft shared the responsibility of gathering and evaluating this information under the belief that “no one of us is as smart as all of us.” As a result, the evaluation was performed more rapidly and thoroughly than it would have been with only a few involved.
Finally, success of the new organization requires that there is a reward for all of the effort and responsibility-taking exhibited by members at both worksites. In addition to strengthening their job security by forging a stronger company, the members of Foldcraft are owners of their enterprise. By participating in the Employee Stock Ownership Plan (ESOP) of the firm, the members are the ones who benefit from stock growth. And that wealth accumulation can have a major impact on those members who remain with the company for many years. The incentive to make this acquisition successful is firmly in place, for those members who want the chance to make a better future for themselves and their families.
Of course, Foldcraft knows that success is not fated. It’s only an opportunity, as any enterprise is. The good news is that the truths and methodologies mentioned above are ones that resonate with most of us. They feed a human need to belong, to understand, to contribute, to succeed, to be part of something bigger than ourselves. It’s a truth that transcends national and cultural boundaries because it touches something deep in our psyches, something innately human.
Some organizations allow opportunity to slip through its hands, whether through leadership power struggles or greed or lack of transparency or too few members being seriously involved; good ideas die every day at the hands of ignorance and self-centeredness. Success stories, though, emerge from the foment of universal truths that absolutely lie within our reach when we’re willing to stretch….