Accountability System: Interview with BJ Filthaut, President, JB Cutting

You will be surprised how powerfully this second generation brother and sister have implemented their new accountability system and how performance standards have contributed to almost 40% growth in their business in approximately three years. Their openness to learning and creating a great place to work is a powerful example of recognizing how to leverage outside experts.

Your company has experienced tremendous growth for the last three years in a row. How has that helped your management team focus on your top three business priorities?

We have found that the simplicity of our three business goals are key. Our three target areas for 2017 are: 1) Rework/quality; 2) Reaching an individual performance of being either an “A” or “B” performer; and 3) Hitting the productivity sales goal. The key is keeping the goals simple and providing frequent feedback.

Regarding the performance of your executive team: How has your new accountability system enabled you to coach and provide feedback for your executive team?

Our Performance Assessment accountability system was implemented two years ago. This documentation is useful for coaching and feedback, as it clarifies to each manager specific performance expectations. Each year, once the company goals are established, I meet with our managers to collaborate on expectations. In addition to providing periodic feedback, we then sit down mid-year to discuss improvements and modifications based on what has been accomplished or what needs to change by year-end. The daily coaching/feedback conversations that maintain our alignment are paramount. Prior to implementing this system, we never knew what to work on—we focused on the urgent instead of the big picture. The system has helped the whole organization grow and thrive through accountability.

In the last two years your company has linked profit sharing bonuses to all of your employees based on whether the plants reach certain goals, as well as each individual’s performance. What tips would you give other business leaders about how to link pay to performance?

Fundamentally, it is quite simple. First, identify the most important goals or areas of your business that need improvement. Next, communicate to your associates the criteria for your profit sharing program in an all-employee meeting, including detailed explanation of the criteria. Lastly, create a scorecard that shows progress weekly or monthly, so your employees always know how close they are to reaching their goals. Having a department and a plant-wide scorecard is very beneficial in linking pay to performance.

On alignment: Since you and your sister took over your father’s business a few years ago, how has your new accountability system helped both of you focus on the execution of your annual plan?

Our annual discussion with our Business Advisor helps us set the business goals and keeps us aligned. Without that alignment, we would work on a number of different items, but without focus. We meet twice weekly to discuss progress toward our goals. The meeting gives us the opportunity to coach one another on what to do next, which keeps us on target. These discussions have significantly improved our execution.

In terms of your company’s scorecard, what have you done to keep everyone apprised of how the plant is performing in relation to the targets and goals?

I have a department-wide, all-employee meeting every quarter. There I discuss our target vs. actual scores so all the plant associates know our actual numbers. This meeting also gives me the opportunity to address new hires so they are made aware of how important the scorecard and metrics are to the organization. We also post charts and graphs throughout the plant weekly, so every associate knows their department’s scores.

What have you personally learned about your role in accountability in the last couple years?

Accountability starts with the owners. I have learned I must communicate regularly with all my managers and associates in terms of where the company is headed. We have grown so much in the past three years that everyone is becoming stretched with their responsibilities. If the managers, and associates don’t know that the company is expanding through new equipment, new and better processes, as well as investing in better talent, they may disengage. I always make it a point to communicate what our focus is for the quarter, which helps give everyone in the organization reassurance that the company is always improving. Having a coach has also played a significant role in helping me grow as a business owner.

Your results have been phenomenal. The plant’s scorecard for one nine-month comparison shows on-time delivery at 99.4%, sales volume continually increasing by double digits, overtime reduced by 32.4%, and productivity up 27.1%. How has accountability helped you achieve such great—and consistent—results, while keeping customer retention at an equally impressive level?

I will have to say giving the information to the managers by way of the scorecard is key. When we have our daily huddle, or gather for departmental data scorecard meetings, the focus is on improving the numbers you mentioned. Each department is accountable for delivering the results to that scorecard. Previously, without a plant-wide scorecard, we never knew where we needed to improve. Now each department meeting focuses on the fundamentals from that scorecard that indicate to everyone in the organization areas for improvement. Continuous improvement is becoming a new habit in our culture.

What is one tip you would give any business leader who may be today struggling with accountability?

Accountability starts at the top; without accountability, your execution is determined by luck. Start by designing a Performance Accountability System that can measure performance. Then train everyone on implementing the new system—people like to know what is expected of them. This system will help your managers and associates focus on not only what’s important to the organization, but also their individual contributions. Now having performance standards for every associate has made a tremendous impact on our plants ability to execute with more consistency. Managers and associates now have accountability for delivering results and living our values. Each goal or target must be specific, measurable, achievable, realistic, and time bound. Having a coach who has years of experience in this area has had a profound effect on our plant’s success. Don’t wing it. It is critical to your company’s execution.

Mr. Filthaut can be reached at 586 468-4765 or visit www.jbcutting.com

 

John Lankford

John Lankford was recognized as the 2007-2010 Associate Business Advisor of the Year in North America and brings proven executive experience and best practices to select companies every year. He served 18 years at the Executive Education Center at Ford Motor Company and is former Senior Director of Ascension Health Learning Institute. John has developed top leaders around the world in partnership with the University of Michigan Business School, the Center for Creative Leadership, Comcast University and GE University, to name a few. His business expertise has been tapped by prominent business media such as the New York Times, CBS and Dbusiness magazine and has been a syndicated business columnist. He is the author of The Answer is Leadership and Superstar for life…Career Transitions. John’s keynote speaking has landed him on the elite team that trains and certifies the new Executive Coaches joining the worldwide coaching community. John is also former Chief Executive Officer of the Innisbrook Leadership Institute. Lankford can be reached at john@premierexecutiveforums.com or call (888) 730-1950

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