1998 Financial Impact Optimas Award Profile Trident Precision Manufacturing Inc.
In 1987, Trident Precision Manufacturing Inc. in Webster, New York, was a good, profitable little operation that was humming along quite well at about $5 million in revenue a year. Trident had started as a three-person operation back in 1979, and by the late ’80s, Trident had become a fast-growing, precision sheet-metal fabricator and electromechanical assembly business, with such big-name clients as Xerox, Kodak and IBM.
On the surface, Trident’s customers were happy with its products, which ranged from simple brackets to machines that sort X-rays. Business was in the black.
But below the surface, problems were firing up. Turnover was clocked at a staggering 41 percent with many workers quitting within only a few months of starting their jobs. And because the firm had no particular quality process, products often got to the end of the assembly line with major defects and had to be completely redone. The company’s informal motto was: “We make it nice because we make it twice.”
Even so, products were getting made, customers were buying them and the company was profitable. But seeing operations from the inside, the company’s owner, president and CEO, Nicholas “Nick” Juskiw, knew there must be a better way to do business. So he set out to find a solution and eventually headed his company down a path of total quality management (TQM). Trident senior managers decided to focus on workers, not products, yet the products improved. It turned out to be a visionary HR move and also a formula for financial success.
Ten years later, the company has more than quadrupled its annual revenue to more than $19 million, lowered its product defects from 3 percent in 1988 to virtually defect-free in 1997 (99.993 percent) and celebrates its revenue per employee at 73 percent. (The company didn’t measure revenue per employee before 1988.) And two years ago, Trident won the Malcolm Baldrige National Quality Award. This year, it wins a Workforce Magazine Optimas Award in the Financial Impact category.
The key to Trident’s success story is that the company didn’t just embark on a run-of-the-mill TQM process. The privately held firm proactively focused on improving its human resources practices in a TQM environment that translated directly into customer satisfaction. The journey started with a clear vision.
In 1988, Juskiw attended a presentation on quality management at Stamford, Connecticut-based Xerox Corp. called “Leadership Through Quality.” Juskiw came back to Trident with a new management vision — TQM. He pulled his senior team aside for nearly three days to discuss whether managers thought it was a good direction for Trident. They did. But they realized a big part of their problem was that they needed to value workers.
So, the senior management team of 10 people (now 17) spent 14 months developing an entirely new management strategy to revamp company operations, which included everything from overhauling their training initiatives to changing the company culture to be more people-oriented. They called the new plan Excellence in Motion, and the strategy has guided their actions ever since. The plan focuses on five key business drivers: supplier partnerships, operational performance, customer satisfaction, shareholder value and, last but not least, employee satisfaction.
Interestingly, April V. Lusk, the company’s total quality administrator in the HR department, explains that at Trident, she’s responsible for “Big Q” — the quality of the people and the environment. Lusk’s associate, Joe Conchelos, vice president of quality administration, is responsible for “Little Q.” It’s unusual for a company to put workers before products. But that’s where Trident started.
Worker issues were primary concerns.
“In 1988, we actually [were proud] that we had 41 percent turnover [because it] was lower than the industry standard of 52 percent,” says Lusk. “The irony of it all was that our people were leaving for as little as a nickel [more] down the street.” Lusk explains that the industry was famous for not listening to employees’ ideas or rewarding them for good work. Trident wanted to change this scenario.
Senior managers asked an employee team to investigate the problem, identify the root cause and help develop a corrective action. The team’s answer was direct: Managers didn’t care whom they hired so long as they were breathing and could do the job. The team members suggested the firm revise its hiring practices.
So, Trident’s small HR department did just that — and much more. Now, instead of hiring just anyone, candidates are interviewed first by HR, then by the hiring manager and finally by members of the team with which the candidate would be working. “It’s a lengthy process, but we feel we’ve been able to hire better people by having more input,” says Margery Haywood, Trident’s HR manager who has seen the turnover rate drop to 3.5 percent in the past 10 years. (Turnover in 1997 was 1.2 percent among employees with five years’ tenure or more.) Of course, winning the Baldrige has helped the flow of resumes to this small business located in a suburb of Rochester, New York. Adds Lusk: “We try to get as many perspectives as possible. We want new employees to come on board and immediately feel part of the family atmosphere we’ve created.”
Corporate culture was another big issue to tackle. In 1987, employees at Trident weren’t especially happy and weren’t particularly team-oriented. Now employees are completely empowered. They can — and do — halt production for the smallest of flaws. Instead of passing problems to the next person on the line, workers own the problems and fix them. In 1990 for example, 8.9 percent of employees’ time was spent reworking nonconforming products. In 1997, they spent only 1 percent of their time “making things twice.” But the first step to employee ownership was education, with HR standing diligently at the blackboard.
Empowerment through training.
One of the first things the HR department did to move the company toward its goals was to implement a 25-hour training course on TQM tools for each employee. The education included basics on problem solving, quality improvements, just-in-time manufacturing and even interpersonal communications skills. Each year, employees receive at least 15 hours of TQM refresher courses along with information on such topics as safety and customer negotiations.
“We teach workers to read blueprints, [to do] trigonometry and [to learn] English as a second language,” Juskiw said in a USA Today article (October 17, 1996) when his company won the Baldrige. Before 1987, most workers received no formal training. The only exception was for workers with technical jobs who always have received technical training offsite.
Since 1987, the company has spent an astounding 4.7 percent of payroll on training each year. According to the latest research at the Saratoga Institute, an HR consulting firm in Santa Clara, California, most companies spend just over 1 percent of payroll on training. The average in Trident’s industry is 1.5 percent.
The training has made a huge difference. Not only are workers empowered to shut down the line for problems, they also proactively improve their work processes through participation in a number of processes including the Total Quality Roundtable. In 1997 alone, employees made more than 2,200 process improvement suggestions. In the past several years, 98 percent of employees’ suggestions have been implemented in daily work routines. “We tell people: ‘You own it. Fix it,'” says Lusk. Clearly, they mean it. And they reward employees generously for their efforts.
Say thank you.
Each year, the average Trident employee receives special recognition from the company 10.6 times. In fiscal year 1997, company supervisors and managers handed out more than 1,700 items — from hockey tickets to gift certificates for dinners for two — to say thank you for a job well done. It’s a rare company that tracks its recognition efforts this closely. But to Trident managers, individual recognition is an extremely important part of Trident’s strategy to keep employees happy, productive and working. And it was a big key to moving toward the more family-oriented culture they were striving for.
The HR team believes employees need to know their work is appreciated — often. “If you want to change your culture, start thanking people,” says Lusk. “[And] don’t wait until the end of the year.” Trident’s HR managers haven’t left their recognition efforts — or the measurement of their progress in each of the five major business drivers — to chance.
Measure your progress.
The lesson for all HR professionals is: HR can and should measure progress. If you don’t track results, it’s difficult to learn from your efforts.
In addition to tracking things like turnover and retention, HR at Trident measures employee satisfaction and customer satisfaction twice a year. In 1997, employee satisfaction ranked at a whopping 94 percent. Company managers also measure many other aspects of the firm’s five key business drivers as well.
And while it isn’t uncommon for a company to measure business results, it is unusual for a company to push the envelope on business measurement so diligently. You might say it’s Trident’s way of climbing the quality mountain — one HR track at a time.
Workforce, February 1998, Vol. 77, No. 2, pp. 44-49.