Malco, which started in 1950 and is now 100% employee owned, manufactures high-quality, specialty hand tools that help construction contractors—including HVAC professionals who service heating and air conditioners—do their jobs better. The company also added a second manufacturing facility in DeWitt, Nebraska, that used to make the iconic “Vise-Grip” pliers—now called “Eagle Grip”—which will be released to the market in the near future.
While the company had a strong foundation in top-down planning, they wanted to find a way to evolve into a bottom-up approach. They also needed a way to establish their new facility and to give the Nebraska associates a better understanding of the overall company.
Implement The Great Game of Business® (GGOB) inside the organization, including embracing financial projections, weekly management and company huddles, financial literacy training for all associates, and a Critical Number™ and scoreboards. Also create a Critical Number that helps drive engagement between the company’s two locations.
Since implementing GGOB in 2015, sales and net operating profits have reached record levels. Malco has also become more transparent as a company, says president Mardon Quandt. “GGOB dovetailed well with becoming 75% employee owned in 2015 and 100% in 2018,” he says, while pointing out that Malco has run numerous MiniGames™ that have helped employee owners develop direct line of sight to the company’s net operating profit line. Since 2015, associates have collectively received more than $1.7 million in company incentive bonus payments. “Associates are more engaged since they have a greater stake in the performance of the company,” says Quandt. The company also exceeded its Critical Number in 2019 by getting a 90% participation rate in associates supporting their new facility. “Our business expansion in Nebraska is the largest Malco has undertaken,” says Quandt, “We needed involvement at all levels of the company to make it a success. GGOB has ensured that we have had the resources needed through High-Involvement
Planning ™, communication, and continuous improvement to make that happen.”
“GGOB has been great for Malco as we are in the process of bringing two separate locations together as one company. It allows the employees to have interactions through MiniGames and our company incentive goals.”
~ Tim Peterson, National Sales Leader - HVAC
Spotlight on the Pandemic
Back in April, the situation looked bad at Malco. Revenues dropped by 50% as their wholesale distributors held off on placing orders. The possibility of cutting back to four-day workweeks was discussed. “GGOB helped with regular communication of our financial situation throughout that time to reduce the fear and uncertainty as we continue to work through the volatility together,” says Quandt. The two plants did stay open, and all of the associates remained symptom free. With some extra capacity, Malco began making custom face shields for associates and a local healthcare facility as well. Then things began to pick up in May—especially with their retail and e-commerce customers—and then sales really took off in June, where they came in 50% above their plan. “I guess all those people working at home decided it was time to remodel and/or build a new home, especially with historic low mortgage interest rates,” says Quandt. Malco’s associates are now working voluntary overtime shifts, including Saturdays. They’ve even begun hiring new associates to try and keep up with their surging demand. “Our team hates being behind and everyone is pitching in to help catch up to our plan,” says Kirk Langbehn, HR manager.
MiniGames have evolved from management driven improvements to more grass roots department level problem solving, many of which have resulted in a direct line of sight to the net operating profit line. MiniGames are announced at the company’s weekly huddles, where the participating team members give a presentation detailing their achievements.
“Communication at work makes my life outside of work much clearer in terms of separating both. If you work for a company that is not communication friendly, you will wonder outside of work hours if what you're doing matters, or if your opinion counts. By Malco utilizing GGOB, it makes it easier for all associates to understand their role and feel better that we're all in this together and we do count.”
~ Scott Friese, Graphic Designer
Going into 2020, Malco has established a Critical Number centered around lead time reduction and cross training their workforce. “We understand the need for our organization to be flexible with our processes and how fast we can respond to our customers,” says Quandt. “Malco competes on high quality and service and that’s what sets us apart.”
“GGOB has a positive affect on us; it especially flows well with us being a 100% ESOP. Engagement has increased which leads to more transparent information and communication. It has also taught me to be more transparent personally, communicate better, and to set personal goals and strive to achieve them.”
~ Marvin Kampa, Accounting Manager