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Building Customer Connections by Opening the Books: A Conversation with Tim Kerrigan

Aug 21, 2014 by Tim Kerrigan 0 Comments

Tim Kerrigan has long been a believer in the power of open-book management and The Great Game of Business to turn around the performance of a company. In fact, it was during his first stint working for Stalcop, a manufacturer of cold-formed metals based in Thorntown, Indiana, that he helped pave the way for the company to begin sharing financial information among its 75 employees.

But, after a reprieve where he left the company for several years before rejoining it as president in 2012, Kerrigan has now come to recognize how the GGOB can help build deeper connections with the company’s customers as well.

We sat down with Kerrigan recently to find out what he’s learned about why he decided to open up to his customers.

Q: When did Stalcop first begin playing the GGOB?

TK: We actually first came across open-book management and the GGOB back in the late 1990s. We initially began to implement a lot of theory behind it until the early 2000’s, when it started to lose momentum.

Q: You then left the company for a few years, right?

TK: I left in 2005 after starting in 1994. I felt like the company was heading in the wrong direction under a new management team. But the ownership group brought me back in 2012 as president. The company had suffered through more than seven bad years and was in desperate need of a turnaround.

Q: Did you feel like getting back to the GGOB could be a part of that process?

TK: Absolutely. After I came back and started to put the pieces back together, I came across the 20th anniversary edition of Jack’s book. By August 2013, I really wanted to get things moving. So, using information Rob Kelsey sent me, I put together a presentation for all of our employees about how we were going to use the GGOB and open-book management as our operating system. I told everyone that we needed to do this together or we would fail.

Q: How did you start?

TK: Initially, all of our Executive Team members read the new editions of the Great Game of Business. I then facilitated a meeting of the Executive Team with the sole purpose to identify and determine initial critical measures needed to significantly improve the business. Once we identified the critical measures, we broke all employees into one of 10 different teams, each of which came up with its own MiniGame goal to eliminate waste, cut costs, or improve efficiency. While it was a little rough around the edges in the beginning, things worked out really well.

Q: What kind of results did you see?

TK: By the end of the year, we saw cost savings of about $135,000. We were still losing money, so we didn’t hit our profit sharing numbers, but the ownership group put in some additional money for a bonus because they liked what we were doing. We were off and running. For 2014, we have already realized about $500,000 in additional savings.

Q: Wow, that’s really impressive – congratulations! I understand that you’ve also begun opening yourself up to your customers as well, right?

TK: Yes, that’s right. We’ve invited five of our customers to come visit our plant where we have given them a presentation of what we’re doing and how the GGOB is part of that. We talk to them about why our culture is different and how engaged our workforce is as a result. We also share how we will pass on our increased efficiency and cost savings along to them.

Q: How do you share that information with them?

TK: We first show them an introductory Stalcop PowerPoint presentation. But then we bring in several of our employees off the floor to talk about what they’re doing in their GGOB team. We don’t rehearse or choreograph that, they just tell it from their hearts. And that blows our customers away. They tell us they’ve never seen anything like it.

Q: How does that affect your relationship with your customers?

TK: We are trying to change the language and dialog of the business. There will always be someone else out there who can sell what we do for a nickel less than we will. But we don’t want to compete just on price. We want our customers to appreciate the value-added services and superior customer support we offer. They can see that firsthand when they walk around our facility, see scoreboards and talk with our employees. We also want to encourage our customers to then go visit our competitors and see how they can’t compete with us on any of that.

Q: Has opening up to your customers led to any new sales?

TK: Actually, it helped us close a deal with a large existing customer we were at risk of losing. We had been missing deliveries and experiencing quality issues with them. As a result, they were holding off renewing a large purchase order they usually place with us. There was also another new part of theirs we were hot to get, but we knew we faced competition for those. They were on the edge before they came to visit.

Q: What happened?

TK: I’m not sure what the purchasing person who visited expected, but we gave him our presentation and told him everything we were doing with the GGOB. Then we brought in the employees who were running his part on the line and they explained everything they were doing to correct the issues we had been having in the past. They had begun calling their MiniGame, the “Stal-Shank Redemption.” Our customer was blown away. Before he left, he asked to sign the purchase order for the new parts and then followed up with the big order once he got back to his office the following week. It was a very powerful experience, and it’s why we now want to get all of our customers to visit us so they can also see what we’re doing.

 

To hear more about the Stalcop story and how it’s using the power of the GGOB to open up to its customers, you can catch Tim Kerrigan’s breakout session, “Using The Game to Attract Clients,” at the upcoming Gathering of Games conference in St. Louis.

 

 

Topics: Open-Book Management

Written by Tim Kerrigan

About The Great Game of Business

Our approach to running a company was developed to help close one of the biggest gaps in business: the gap between managers and employees. We call our open-book approach The Great Game of Business. What lies at the heart of The Game is a very simple proposition: The best, most efficient, most profitable way to operate a business is to give everybody in the company a voice in saying how the company is run and a stake in the outcome. Let us teach you how to develop a culture of ownership, where employees think, act and feel like owners.