Menasha Packaging Company (MPC) of Neenah, WI is the original and largest business of $1 Billion 163 year old, Menasha Corporation.  We had a history of success and a culture of entrepreneurship, collaboration, autonomy and trust and faith in each other. Back in the early 1990’s, Jerry Hessel, one of our General Managers, believed team-based manufacturing improved performance and asked Jeff Krepline, Training Coordinator, to help improve the “Management-Union” relationship in his plant.  Through Jeff’s program, including a steering committee of management and union reps, innovations arose from the plant floor, collaboration increased and trust developed.

Success was coming to an end. In 2003, we were not doing well. We were a niche player in the “brown box” corrugated commodity market without the economies of scale and scope to compete with the big integrated firms. We made some specialty and display packaging, but the core was “Brown” and the numbers were going red. We were struggling to compete in a consolidating industry with increased regulation and with customers moving their manufacturing offshore.  Our historical culture had significantly suffered from these pressures.  When it was announced that we were up for sale, the uncertainty and fear of our then approximately 2000 employees further compounded the weakening culture.

We were a relatively new leadership team with little time to turn the business around.  We decided to create a bold, living strategic plan that included deliberate cultural revitalization.  Our strategy invested in 1) our people; 2) our business model; and 3) our processes and equipment to deliver the first two.  We believed executing this strategy would create significant growth that would also create the credibility and evidence to revitalize our culture.  Today, our 1900 employees design and manufacture specialized packaging, merchandising solutions and provide consumer shopping/purchase/retailer insights for category leading Consumer Product Goods (CPG) companies.  And oh, we still do  “brown” but it’s in the black now.

In 2004, Jeff started experimenting with an innovative way to go to market (RII – Retail Integration Institute).  This changed how we viewed our customers’ retail challenges and their customers’ buying decisions. We used that merchandising insight to highlight our unique customer benefits.  Mike Waite, recently promoted to President, gave ‘air cover’ to protect RII from skeptics while it gained acceptance with customers.  The encouraging financial and cultural results gave us hope as we embarked on a new strategic planning process with Deb in 2005.   

We believed culture was key to success.  Our strategic hypothesis?  Turning the company around meant we wouldn’t be sold; not being sold and being successful would restore trust and faith, renew autonomy and entrepreneurship resulting in more success, which would further strengthen the culture – a virtuous cycle. The strategy focused on our people, products and processes with aggressive top and bottom line goals based on a non-traditional new business model.  The “AND/BOTH” (not “Either/Or”) strategy let us achieve customer AND employee-advantage with increased customer value AND decreased costs (not price).

In Deb’s opinion, a large key to our success was, and is, Mike’s willingness to make himself vulnerable, which, as John Hagel rightly says, is needed for trust.  He admits when he doesn’t know or understand which frees others to learn and share. Mike is the epitome of a servant leader.  As an in-law to the founding family (Mike Waite is married to a 5^th generation daughter), he sees himself as a steward of MPC for employees, customers, shareholders and the community.

The new strategy drove significant product, service and process innovations (see attached “Helpful Materials: Documents: MPC Strategy and Innovation Timeline.pdf”) by increasing employee autonomy, self-management and self-organization.  Our plants were already entrepreneurial and we (headquarters – HQ) were fairly hands-off, but the scale and scope of autonomy needed to grow to achieve our strategic goals.  By freeing our people to innovate, they did just that.

Unlike other companies with formal processes and procedures for self-managed and organized teams, our approach is informal, emergent, and maybe even ‘’genetic.”  We felt creating policies and procedures for how teams are chosen, organized, led, or resources allocated ran counter to employee autonomy and entrepreneurship.  This is not to say process isn’t important, it is; however we wanted to emphasize outcome not dictate a prescribed process. So, as people at any level see an opportunity or challenge or get an idea, they freely gather the appropriate people together to work on it.  When, and if, they need management, they’ll bring us in. The impetus for a team is passion – someone who cares enough to go for it. No one in management or with a specific title needs to approve or sanction the effort. These various opportunities and ideas may already exist in a department or function or they may not.  In essence, our team culture is ad hoc, complementing and at times changing, our existing structure.

We stay out of the way as much as possible. Of course any major capital expenditures or corporate-level hiring need our approval, which is easier as we move to rolling quarterly budgets vs. fixed annual budgets. Otherwise, the teams are free to gather the resources they need without a formal process.  They create their own ROI/Business Cases (with the support of local finance department help) and present it to us, if necessary.

Now, along the way, we have made mistakes. A few years ago a self-managed team on a large machine was cheating on over-time so we had to give them a supervisor again. However, that’s been very rare.  Most of our self-organized/managed teams have been very successful.

For example, Jeff’s RII market-approach started from a self-organized and managed team of sales, marketing and design people in different plants and functions.  As they succeeded, they told us in order to scale and capture value, new corporate and plant-level roles needed to be created.  The team created the business case themselves, including the human and financial resources and re-allocations.  Since this was corporate-wide, they presented the case to us and it was approved.  This was one of the best decisions we made.  RII remains a self-managed team that has been essential to our growth. (Deb thinks the RII team is one of our most fun to work with – a unique combination of intense debate, disagreement, honesty, trust, friendship, humor and insight.)  As RII has grown, it does get a bit more oversight form leadership based on their budget for both expenses and sales growth. 

Here are some examples of a few self-organized and managed teams at the inter-plant, intra-plant and individual levels. As we continue to have success, we have more examples of our ‘autonomous’ teams.  See how, when we stay of our people’s way, their passion to delight our customers and each other creates success.

Inter-Plant Teams: 

Don Thaemert,  account manager for a major customer in the Lakeville, MN (LV) plant, knew we could be doing a lot more than we were for his customer.  He invited 20 people (no management) from production and print manufacturing, design, and customer service together and challenged them to create something innovative (both in terms of cost and value) for the customer.  In our “ask and they shall come” tradition, Don just asked them – he didn’t ask permission, didn’t check with everyone’s management, just asked and they came. No process, no forms, very ‘ad hoc’.  While the team’s purpose was mostly within the scope of their day jobs, this effort clearly went above and beyond.

One of the most promising innovations came from two different plants 300 miles apart who reported to different VPs who report to Mike: Don’s (LV) and Mike Beinemann’s (sales) Folding Carton (FC) plant in Neenah, WI. That didn’t matter.  LV’s designers and FC’s pre-press operators experimented with various designs and finishes, including special 3D, animation and light effects. The team made all their own decisions through discussion and consensus and allocated the resources required for prototyping. Don and Mike B conducted a seminar for the customer and their ad agency on our capabilities.  It met with great success.

The solution required additional funding since it affected FC’s press time. The team created a simple business case and presented it to the FC plant General Manager via conference call (detailing the what, why, how, when including upsell, approximate costs and sales).  The General Manager said yes, and that was that.  It was off and running.  Recognition was simple but powerful.  Within MPC, the team was recognized in our monthly newsletter, in sales meetings and with praise and “pats on the back” which mean a lot in our culture.  The customer recognized the team within their own company, holding them up as an example.  Don now holds an annual meeting with the team, continuing to challenge the status quo on adding value to the customer. Don and Mike B. turned this process into a ‘template’ used corporate-wide to anticipate and solve our customers’ needs.

Just this past month we had another typical example of teamwork.  Our Iowa plant asked a few other plants (300 and 650 miles away) for help designing a customer solution.  Two employees from the farthest plant drove our Mobile Design on Wheels lab (a design and prototyping ‘lab’ inside a semi-tractor trailer) out to Iowa, giving up two weekends with their families without complaint and without expecting extra compensation or reward (though they will get it in time off and gifts for themselves and their families).  Designers came from two other plants just to help; one of them doesn’t even do any business with the Iowa plant or customers.  People checked schedules with colleagues and management.  They didn’t need to ask ‘permission’.  Each plant paid for their people to go; they didn’t ask the Iowa team to pay everyone’s way.  There was no boss asking for this – the idea, request, and execution was all done by and for themselves, simply because a plant needed help.

Intra-Plant Teams:

In strategic planning, we knew project management was a gap. Mike asked a few people to look into how to fix it (the extent of his request), gave them free rein and said to come back when they had a solution.  They organized a team from all the plants to understand and define the challenge and come up with solutions.  No one was “freed up” to work on this, and though it related to his or her ‘day jobs’, it was a significant added task, which was eagerly taken. Anu Varma and Angie Shepard, original team members, remarked that the team’s passion was pretty typical of MPC’s teams, especially those led by the businesses, not management.

The team developed a discovery process.  They didn’t pick a leader but used a ‘divide and conquer’ approach to maximize productivity.  Leveraging their type “A” strong personalities with lively debates, they reached decisions through discussion and consensus. The process was energizing.  They realized culture was their biggest challenge.  In searching for analogs, they used the success of our safety initiative as a model. The proposed solution asked for a full time corporate champion with each team member serving as a local plant champion. The presented proposal included a job description, list of required competencies and names for the full time role.  We approved it right away and the team started conducting formal interviews.  They put one of their Lean gurus, Aaron Pontow, in the full time position. 

The next challenge was making the project management process very easy to use.  The manual process couldn’t scale, requiring a technology capital investment. The team did their own in-depth competitive and technology analysis, issued an RFI, vetted the finalists, chose a vendor and did the ROI case which they presented to us.  We accepted it with one caveat; we wanted their 3yr plan reduced to 2! We trusted the team’s ROI case – which says a lot about the team and culture.  Today, the team provides oversight.  Everyone is at his or her real day job that includes championing the new project management program locally.  The team has been publicly recognized in the newsletters, but the informal recognition and respect in the company and meant even more.

Individuals: 

A few years ago, Heidi Schultz, Senior HR/EHS (Employee Health & Safety) representative at the FC plant, noticed safety hazards going unreported and/or untracked.  People really cared about safety but the system was hard to use. Heidi created an easy to use system for reporting, tracking and fixing safety hazards she called Safety Snags.  As the plant-floor employee volunteer Safety Committee promoted its use, Safety Snags’ grew.  When the number of snags grew significantly, Heidi asked one of the administrative assistants to track them.  The answer was an unequivocal yes, without asking for compensation or changes to job descriptions. 

Employees were excited to see hazards fixed faster than before.  At quarterly plant meetings, Heidi gave prizes to randomly selected people and those who reported the most snags.  Safety Snags became a fun competition.  Heidi didn’t need approval or allocation for the prizes or the process.  Because of how Heidi packaged Safety Snags (training, promotional material, tools), it was easy for the other plants to adopt it.  Word spread in the monthly conference calls organized by each plants’ EHS representatives.  By 2011, Safety Snags was corporate-wide. 

In recognition for her efforts, Heidi received 2 prominent awards from both MPC and Menasha Corporation :  The President’s Award to any individual or team “for extraordinary innovation and/or performance which significantly contributes to the Company’s Vision” including a financial award, public recognition in person and in MPC’s monthly newsletter; and the Living the Vision award selected from President’s Award winners with the Menasha Corporation Foundation donating $5000 to Heidi’s non-profit of choice.

[Postscript: On Feb. 2, 2010, 17-year-old Kylee Hyde of Greenville, WI was killed in a car accident coming home from her varsity basketball team.  Kylee was a straight-A student and varsity basketball, volleyball and track star.  Her family created a scholarship for graduating seniors and has been raising money for a fitness center at Kylee’s high school. The campaign was kicked off with a $2,500 donation from someone the Hyde’s never met – Heidi Shultz, who had heard about Kylee and wanted to help.]

Culture/Mindset

As we’ve said, very little of our self-organizing culture is prescribed, it just happens.  People feel empowered to experiment and innovate.  Perhaps this is because of our strong family culture.  Donald “Tad” Shepard, Mike’s father-in-law and the great-grandson of Menasha’s founder Elisha Smith, said, “Arrogance, pomposity and self-importance don’t have a place here.”  We hold ourselves accountable to our values and each other (see “Helpful Materials: Documents: Menasha Commitment Letter Final Draft.pdf”).  We deliberately and carefully hire for culture and values (see “Helpful Materials: Documents: Core Values.pdf”). We look for team players willing to get their hands dirty no matter what level, a servant-leadership mentality, a “Yes, and” mindset, comfortable in ambiguity and the unknown, humble, confident (but not arrogant), unpretentious, and a strong value on community. 

While the strategic plan specifically focused on “fostering a culture that thrives on change, innovation and growth without compromising our core values”, the basics of that culture are ingrained.  Everyone (almost) has a great attitude.  When you walk through a plant people smile, say hi, laugh together and work together.  Employees are hard pressed to remember a time they reached out to a colleague, peer, subordinate, or superior, who wouldn’t help.  People just do whatever needs to be done to help a customer and each other.  We (management) are rarely involved except for major capital expenses.  Rarely have we turned down a capital investment with a compelling business case. The hierarchy is intentionally fairly flat, ranging from a span of 4 to 6 between Mike and the plant floor employee, depending on the plant.

This may seem rather unusual to some.  Autonomy and teamwork are not institutionalized; it’s in our DNA.  Why? Well, we are not totally sure, but we think our people and sense of community hold the key.

• People:  We have really terrific people. Relationships based on trust, common purpose and focus matter more than hierarchy.  For the most part, our people enjoy what they do and who they work with, creating a virtuous cycle.  There is an innate passion and excitement about doing the right thing – to do whatever it takes. It’s not for extrinsic benefits. Our salaries and benefits are in line with our competitions’. Unlike most competitors, we do give all our employees a meaningful share in our profits and invest in their training and development beyond industry benchmarks.  That said, our people tend to be motivated more by intrinsic than extrinsic rewards, in line with Dan Pink’s views; it’s the handwritten thank you notes from Mike, newsletter articles, respect, pats on the back, praise and personal “thank you’s” that mean more. Even more are the praises, awards and recognitions by our customers. These energize us and drive us to further innovate and delight our customers.  It’s this passion and energy that makes us all go above and beyond and is part of the reason our turnover rate is lower than the industry’s.  Especially poignant was when one of our plants’ employees wanted to learn sign language since a recent machine operator hire was deaf.  They felt it would foster more natural communication than writing, so we provided weekly on-site sign language classes.

As management, our role is to get out of our people’s way, to give them the autonomy, encouragement, training and tools. A 35-year company veteran who always brings a smile to our faces, “Moe” (Eugene Moseng), recently said, “They [management] invested in new equipment and got us ahead of the curve so we survived.  People are working together better.  You see people on the floor helping each other more and a more positive attitude.  The new machines make things more exciting and fun.  I have to start over with a new machine and that’s fun.  They have given me opportunities to learn at other plants without feeling pressured so I can come back and train people here.  There are always things to work on and improve in life and I have the tools to learn here.  Learning is a gift, even if pain is the teacher!”  (Moe is a Flexo Folder Gluer operator on our new $5M Flexo machine.)  

• Community:  Mike views himself as a steward of the company and its communities.  Our success directly impacts our communities’ economic and social health.  Many families and small businesses depend on MPC and our ecosystem. We take this very seriously. We run into each other outside of work all the time.  We meet in the grocery aisle, the baseball or soccer field, the gas station, the parent/teacher conference, and the hardware store. In fact, many of us grew up together on the baseball field, in the band, and at school. We are from our communities. These bonds and relationships transcend walls and raise the stakes and sense of accountability. Is this why we are so involved in our communities?  Well, all we know is that our core values are truly core.

There are several ways we are involved, most of which are probably fairly typical. Our employees are involved in various community activities such as Big Brothers and Big Sisters, school boards, town counsels, clothing and food for local shelters and food pantries, soup kitchens, town cleanup/beautification and recycling. During the holidays, entire plants adopt families and provide complete Thanksgiving and Christmas dinners, food baskets, clothes, presents, provisions for heat, etc.  One plant’s motto is “Never walk by a free sample”.  They collect the sample-sized beauty and health supplies from hotels, salons, doctors’ offices etc. and donate them to local shelters.  A growing area of involvement is in supporting diseases that are touching our families and friends – diabetes, cancer, etc.  Additionally, since many of our employee families have or know of someone in Iraq and Afghanistan, we’ve enlisted the support of our vendors and customers in sending supply packages to our troops.

It’s also important at a corporate-level to give back to our employees – to ‘walk the talk’.  The Menasha Corporation Foundation provides tuition reimbursement to finish college, financial “matches” to non-profits in which employees and their families volunteer time and college scholarships for our employees’ children.  The matches and scholarships are published in our monthly newsletters along with employees’ and their families’ other accomplishments: scholarships, awards for community and other service, academic awards, athletic accomplishments, awards by our children, races, fundraising walks and activities, etc.

While Deb, being from NJ/NYC, has often wondered if this is a ‘Midwest’ thing, her favorite community involvement is a unique and fun one – The Muscatine Great River Days Annual cardboard boat race. In 2011, a volunteer team from our Muscatine plant entered canoe-like boats and a 30’ long 11’ tall Pirate ship.  They even used their Lean training to design and build the boats!  The team met during lunches and after work to design and test prototypes, commenting that though it took them out of their comfort zone, they had a lot of fun.  On it’s maiden voyage, it carried 4 employees for 10 minutes without leaking! (http://youtu.be/3FLnPxvhA-o).

• Timeframes & Perspective: Our Company’s heritage and legacy puts time in a unique perspective.  While all of us, including our board and Family Council, have high performance expectations for MPC in terms of ‘outputs’ (revenue, profit, etc.), we also have high expectations for sustaining meaningful, impactful outcomes.  Our outputs are the means to provide the outcomes our customers, employees and communities’ value.  All of us at MPC are here because, for the past 163 years, our leaders have worked to balance short-term performance AND long-term growth. This is not easy and it is vital. Managing that balance requires accepting the paradox of deliberate and flexible decision-making.  One of the ways we’ve tried to achieve this balance is by adapting our ROI and ROA requirements to include “intangibles” such as sustainability and innovation…still a work in progress.  It is both formidable and joyful.

Our strategy arose because of who we are and what we want to be able to do for our customers, our people, our community and our shareholders.   Executing that strategy has been critical to our cultural and financial success, which positively reinforce each other.  But as rosy as this sounds, in 2005 when we started creating the new strategic direction and spoke about increasing autonomy, we had many challenges and many many skeptics, from the board to the plant floor.

The benefits to MPC are tangible and intangible. 

MPC’s tangible results are continual, consistent increases since 2005 in market share, revenues, profits AND ROI.  Before the recession, RONA (Return on Net Assets) increased consistently by 7% and even up to 17%, with higher RONA on the higher-valued (e.g., non-commodity) products and services.  During the recession, sales increased by significant double-digits due to capitalizing on 2008's investments and facility alignments.  Retail and CPG market sales even increased in the down market.  Gross margins were the highest they'd been in 5 years because of win-win relationships with suppliers, price management, rapid utilization of new investments and inventory turns. EBIT even rose!  We ended all years, including 2008, 2009, 2010 and 2011 with a strong cash position and exceptional current receivables. While the bigger integrated firms dismissed us, we became a formidable competitor.  Instead of just taking market share, we created new share with new solutions in new markets (what some call "blue ocean").  Many customers view us as a vital part of the merchandising process.  Key retailers require CPGs to use our products and services in their stores and CPGs can measure how our products help both their top and bottom lines.

The intangibles are more powerful.  As you walk through our plants, you can feel the energy; people on the floor smile and say hi, people are laughing and working together, people feel free to ask for help.  Employees feel free to try ideas and fail. Innovation pipelines are visible; there are easy to use vetting tools. We continue to invest in training, education and equipment so our people can try new ways to work, easier ways to make "stuff' and new ways to put things together. The attrition rate is low and we attract talent around the country to work at this “cool” company in the “Fox Valley” of Wisconsin.  The board has more confidence in us which results in a willingness to invest and take risk. The legacy and story of our private family-held business is strong with the emphasis on doing things better and making things better - things that affect customers as well as the communities where our employees live. This isn't a tag line; it's real and palpable. As Mike says, “I want to make sure our people get to live their dreams at home.”

The real credit goes to our employees whose curiosity, enthusiasm and dedication have created compelling customer solutions and a wonderful culture.  Credit also goes to the rest of our leadership team: Jerry Hessel who, today, focuses on future opportunities; Mike Riegsecker & Denny Lee who oversee the various businesses; Gail Constancio, Finance VP, who isn't afraid of innovation; Rick Calhoon, Procurement, who knows how to manage and unleash resources: Don Jansen, HR, who positions HR as a strategic player; Dennis Bonn, Marketing, who has taken MPC's image to a new level; and Bill Kime, Lean, who has showed MPC how lean & innovation fit hand-in-hand. 

Deb’s Note: Though he will deny it, Mike is one of the best leaders, epitomizing servant leadership, I've known or had the honor to work with.  His passion for his people is contagious and his integrity and commitment to do what is right shows through MPC's success at many levels.  I am honored and blessed to have been a small part of this team's success, in the past, the present and the future.