Thinking Outside of the Box

Posted on Jul 1, 2010 :: Up Front
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Posted by , Insight on Business Staff Writer

For Bob Pedersen, president and chief executive officer of Goodwill Industries of North Central Wisconsin, putting people first not only makes good business sense, it also creates a more productive and happier workforce.

“People ask, ‘How do you manage the bottom line while at the same time you’re investing in your people through wellness and development programs?’ and I say you’re dependent on your people to have a good bottom line. If you’re good to employees, they’re happier. That shows through their customer service – so customers are happier and business gets better,” he says.

While many people may think of Goodwill as a retailer, it’s also a provider of services, such as financial counseling through FISC, and a key partner in community partnerships.
Menasha-based Goodwill, which was also the first winner of the New North People,

Possibilities and Progress Diversity Award two years ago, stands out for transforming its culture and building a financially strong, environmentally friendly business model while always putting people first, says Al Hartman, a professor at the University of Wisconsin-Oshkosh and one of the judges of the New North Workplace Excellence Award.

“Goodwill is about the number of people served vs. the bottom line. But company leaders were wise enough to realize that the way they were doing business wasn’t always the best at serving a key demographic – their employees,” he says. “Goodwill went through a complete cultural change that really put people first.”

The organization’s success can be seen in its employee turnover rates. In 2003, the employee turnover rate was 52.45 percent; it was expected to total 35.67 percent in 2009. (The turnover numbers were even higher before 2003; at one point the rate was 100 percent.) While turnover decreased, business improved. Goodwill went from 17 stores with annual retail sales totaling $20.1 million in 2003 to 21 stores and retail sales of $35.1 million in 2008.

Goodwill’s transformation began in 2004. With a high turnover rate, it was clear something needed to be done. The first thing to go? The annual review.

“Research will tell you people hate getting them and giving them,” Pedersen says. “So I’m thinking, why do we do them at all?”

Goodwill instead implemented an employee appraisal process that tackles issues with workers as they come up rather than waiting for the dreaded review. “They also do it in a caring way – it’s not about confronting someone, but rather ‘care-fronting,’” Hartman says. “The whole culture was turned around to focus on employees and caring for people.”

The key, according to Kristine Hackbarth-Horn, chief operating officer for people, was changing communication. For example, team leaders received training about how to communicate more positively.

Employees throughout the organization are kept updated whether it’s through daily or weekly team meetings (the frequency depends on the location and workforce), e-mails from Pedersen about a particular topic or placing information on the company’s Intranet site.

“Team members are really a part of everything that’s going on,” says Susan Hammes, store team leader in Darboy. “We have a different person read the mission statement and we really try to create a positive environment that focuses on the mission and what we’re all here to do,” she says.

Pedersen says Goodwill’s approach to employee relations can be tied directly to the organization’s Values Road Map and True North mission statement, which begins with the statement, Putting People First.

“Living and staying true to our values is critical to maintaining and enhancing our intended organizational culture,” he says.