Best Practices -- Leadership At All Levels

Stoner Inc. did away with top management to empower employee entrepreneurs.

What do you do when you're in charge of the family business but want less responsibility? If you're Stoner Inc., you look for outside resources to help you empower internal resources. More specifically, you look to The Baldrige National Quality Program and the Malcolm Baldrige National Quality Award. "Our relationship with Baldrige goes back to the late 1980s when Robert Ecklin Jr., our company president and grandson of company founder Paul Stoner, had an interest of getting out of the business day-to-day and leaving in place a leadership team," explains Rob Marchalonis, general manager of Quarryville, Pa.-based Stoner, maker of specialized cleaners and car-care products. "We struggled for a few years, and around 1992, we discovered the Baldrige program and principles and decided to use those principles as a way to run the business." According to Marchalonis, Baldrige doesn't prescribe how to run a business but rather gives a framework of checks and balances that results in organizations developing their own best practices. Indeed, Stoner's best practices positioned the company to become a 2003 Baldrige winner. With 48 employees, Stoner is the smallest business to receive the award. "Having Baldrige helped to ensure our survival as a new, young non-owner leadership team," says Marchalonis. "It gave us a template, gave us a program to build the business around." Stoner modified the Baldrige business excellence model, simplifying it to three key things: leadership, strategy and process. "One of our top beliefs under the leadership category is the concept of leadership at all levels," says Marchalonis. "That means that we don't want to have a company culture where some lead and others follow. We encourage everybody to think and act like an entrepreneur." And with entrepreneurship comes reward. Twenty to 50% of compensation is through incentives. Morale benchmarking indicates the Baldrige-baed system works well. "Our most recent survey in January 2004 had Stoner measuring at the No. 1 position of more than 50 companies. We know among that group, several are Baldrige award winners or applicants," says Marchalonis. According to Marchalonis, one of the reasons that Stoner ranks No. 1 is because of its approach to human resources. It doesn't have an HR department, but puts those responsibilities in the hands of its team leaders. The company also replaced annual reviews with regularly scheduled one-on-one meetings. "It really is a neat example of how Baldrige gives us the freedom to approach [human resources] the way we would prefer." Other impressive results include 400% growth in sales over the last 15 years, 150% growth in manufacturing productivity since 1991, and the company has logged fewer than five lost-time accidents in the last decade. "These results are the kinds of results that are appealing to Baldrige because they are [not only] looking for results, but they also are looking for best practices or different or innovative practices and how organizations achieve them," says Marchalonis. He also adds, "By having a Baldrige site visit, which is one of the aspects of the Baldrige program, we were able to get direct oversight and feedback on some of the things we were doing. All of those resources, to us, were really not intimidating at all.. That was the value of it."

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