Weaving a New Corporate Culture

How a carpet maker stemmed turnover by believing in its workers.

Those who have taken one of the courses applaud the opportunity to interact with a cross-section of company personnel. Casey Johnson, senior vice president of residential sales, who came to Beaulieu a year ago after 24 years at competitor Shaw Industries, notes that at his table were a machinist, a shipping clerk, a lawyer, and a nurse from one of the mills. “You’re out in the woods [at a conference center], and there’s nothing to do but be together,” Johnson says. “We really got to know each other, and I learned an awful lot about Beaulieu.”

“They Own the Solution”

Beaulieu has taken additional steps to win employees’ trust and respect since HPWP concluded its involvement. It has extended the team-decision approach beyond hiring, for example, to things like improving manufacturing processes and creating efficiencies, giving employees even more say in how the business is run.

Senior executives learned the hard way that when they tried to push new processes on factory-floor workers that the workers didn’t believe in, the process failed. “They know their job best and can resolve problems far better than someone from a 50,000-foot level,” Land says. “And they will not let the new solution fail, because they own it.”

For example, a four-person team comprising three hourly workers and one salaried employee not from senior management conceived and implemented a new process for routing product from cutting to shipping, saving $100,000 annually.

Such efforts allow the company to now routinely identify $15 million to $20 million a year in cost-saving projects that improve efficiency or reduce waste — three to four times more than before, says Land.

Beaulieu also made a notable change to workforce optimization. When the cyclical carpet industry entered a lengthy slump in 2006, Beaulieu began reducing its employee base. But in ’08, with the downturn growing even more severe, the company introduced a new policy: “Rolling Right Size.” If a market ebb indicates the need for a 10% cut in workers, each employee at every level takes off one week in 10 without pay until demand recovers. Certain executives who can’t take a week off, like the CEO or CFO, have their pay reduced by 10% for the duration.

Beaulieu also helps hourly workers file for unemployment compensation for the missed weeks, and everyone’s health benefits remain in effect.

Another leap forward came last year, when a group of 60 employees who had displayed a zeal for the new culture rewrote the company’s employee policies to ensure they were “adult-to-adult” and respectful in both content and tone. “When 60 people who have talked for a year say, ‘This is a better way of doing business,’ it’s hard to argue with that,” says Chambers.

Among the more notable policy changes that sprang from the effort was the decision that when a shift must be eliminated — because a product is being discontinued, for example — decisions about who stays and who goes are based on merit rather than seniority.

These cultural changes have won over most employees, but not all. At 17%, the annual turnover rate is still 12 points higher than Beaulieu’s goal. The company estimates that at any given time, about 5% of its workers have not bought in to the revamped culture. In such cases, Land says, “We help them to see that it’s better to be a Beaulieu alumni than [an unhappy] partner.”

Among the happier set, there are daily reminders of how the revised culture helps stem turnover. David Moses, the company’s director of strategic initiatives, says he treasures how “you can speak your thoughts without worrying about the ramifications.”

For senior vice president Johnson, what is most rewarding is that Beaulieu’s core workplace tenets also apply outside the workplace. “Treating others the way you want to be treated, having positive assumptions about people — those are good principles for being a family man or a friend,” he says. “I try to live by them always, but it’s great to have them refreshed in your mind every day.”

David McCann is senior editor for human capital and careers at CFO.

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