In tough times, it’s much easier to cope when you have a workforce which is engaged and on your side. And, to get where you’re going, you have to help others get where they are going.
These were two lessons drawn by Bradley Salters, former managing director of Jurgens Ci, a South African manufacturer of caravans, from his two and half years of running the company (until it was recently sold). During that time, Salters jokes, “we probably had the monopoly on adversity”.
Jurgens Ci was, until its sale in January 2017, owned by the Imperial Group, a major diversified South African motor group. Salters had filled various senior finance roles in the group before he was appointed managing director of Jurgens Ci.
At the recent Legitimate Leadership breakfast with the theme Leadership in Times of Adversity, Salters described the Jurgens Ci experience with him at the helm.
WHERE I STARTED
“Jurgens Ci is the largest manufacturer of caravans in South Africa and will be 65 years old this year. It has been in various formats and owned by different people over the years. In the early 1990s, the factory was moved to Garankuwa (an industrial area near Pretoria), where the government was paying incentives to manufacturers.
Imperial acquired the business in about 2007.
Jurgens Ci also makes luggage and off-road trailers, manufactures canvas products, wholesales camping gear, and has an assembly plant in Australia.
The company employed about a thousand people when I started (fewer now) and operated from three plants in South Africa.
I started there in August 2014. I had been a director of the business so I knew something about it.
We had two unions in the business, NUMSA and CCEPAWU (the Chemical Energy Paper Printing Wood and Allied Workers Union). For the three years before my arrival, Jurgens Ci had had strike action every single year. In the middle year, it had a bargaining council-related strike of 2-3 weeks; in the years on either side of that, it had unprotected strikes.
The shop stewards were the first line of communication. So if there was, for instance, an issue on the floor, the shop stewards got involved and they went to senior management. Management was frustrated, extremely cynical and very tired of the whole situation.
There was very little in terms of people development. It was all about technical training and safety and ‘how we get the business done’.
A lot of disciplinary actions were taken – on the staff complement of about one thousand, we clocked about 600 disciplinary processes in one year.
Our caravanning products are luxury products and when disposable income is under pressure (as it was in 2014-2017 in South Africa), sales decline. We had inconsistent and poor profitability.
That’s where I started.
RESETTING THE POWER BALANCE AT A COST
Through September and October 2014 we had a number of unprotected strike actions – work stoppages, downing tools, etc. None of it was for substantive issues – ‘we don’t like this boss’, ‘this is not being attended to’ – little, niggly things, nothing to sink your teeth into or have a meaningful discussion about.
We decided on a strategy to deal with this in the short term: that, when unprotected strike action occurred again, we were going to lock the staff out.
So at the end of October, after the workforce had downed tools again, we issued notices and we closed the factory for a month.
This action was really to reset the power balance between employer and employee – it was not, and is not, the solution. This was how management chose to say ‘we are serious’, and to buy some time to figure out what we were going to do. It was obviously at a massive cost to our business and even more so to our employees, who were not paid for most of a month.
In the last week of November, two weeks before the annual December shutdown, we managed to get everyone back to work with an undertaking that they would not engage in unprotected strike action and would start engaging on a meaningful level.
We had unhappy workers, unhappy managers, and we had just been through a significant loss of over R15 million (over one million dollars) in four weeks. Other than a commitment on paper to not engage in unprotected strike action, there was no resolution on the table to prevent this sort of thing in future.
LEGITIMATE LEADERSHIP AS THE VEHICLE FOR REGAINING TRUST
I had been exposed to the care and growth framework in 2007 in the Imperial group so that was sitting in the back of my mind when I thought about how we could change our relationship with our staff, the power dynamics, and how we could start getting the trust relationship working again.
That was really the essence for us: how could we regain the trust of our employees?
So we brought Legitimate Leadership on board. I did not decide – I got our 18 managers into a room and Wendy Lambourne presented the model to them over a two-day period. And then I left the decision to them – I said, if we are going to go down this road, you are all going to have to buy into it.
The decision to go ahead was unanimous barring one person who had reservations – the most cynical person of the lot.
We also agreed the process, which started in February 2015 when leadership profiles were done for the managers for two reasons: firstly, we wanted to get them to understand that what they thought they are doing and what they were in fact doing might not be aligned; secondly, to set a benchmark so that we could know, in two years’ time when we might redo the profiles, whether we had improved.
We started with nearly 50 people in the process and we had an 18-month Legitimate Leadership plan.
BEGINNING WITH CARE AND ACKNOWLEDGEMENT OF THE GOOD THINGS
Early indications were that certainly the care part of the Legitimate Leadership process was adopted very quickly. People started getting to understand the people that worked for them, having discussions one-on-one – there was a very clear, quick shift with people trying to get to know one another.
The empathy side started coming into the business – trying to understand our people as opposed to just saying “tomorrow we’ll see you in the disciplinary”.
For example, in one of our warehouses in Garankuwa the manager was chatting to a staff member who was a bit distracted. The manager asked him what was happening; he said he was sending his kids to school but he had no stationery for them. That evening the manager got together some stationery which he handed to the employee the next day. The shift in the employee’s willingness to work and engagement at work was 180 degrees. It was just a simple thing but the story spread through the business.
There were a number of instances like that – where managers would previously have overlooked the circumstances of the person that explained why they were not performing at work or not getting to work on time (but rather just stuck to the rules and said ‘that’s not acceptable’).
So the catalyst in getting this process going was the care side.
Also, we started to identify the good things that we were actually doing. People started identifying that they were in fact doing some things right and that caused a rise in morale.
As a business we saw some growth in sales in 2015 and we started seeing a slow shift in terms of attitude.
A FIRE PUT CARE AND GROWTH ON HOLD BUT PEOPLE RALLIED IN THE CRISIS
Then, in August 2015 we had a fire in our fibreglass factory which was up the road from our main factory. The entire building was destroyed.
It was incredible how much rallying happened. The care and growth process took a bit of back seat, but by then the willingness was remarkable. It’s amazing how a crisis cements a few things in place.
We recovered from the fire relatively quickly from a production viewpoint – we had interim production scattered all over the place and we went into a new factory in January 2016.Thanks to insurance we were able to recover a lot of the financial impact and ensure that our staff was paid through the whole process.
Thereafter we got back on track with the care and growth process.
MAINTAINING MORALE DESPITE RETRENCHMENTS
Going into 2016, the market turned against us again. There was a significant decline in demand and we took the decision to restructure the business and retrench about 100 staff members.
One of the positives out of the situation was that what we were communicating to our employees was accepted as being what we said it was. They weren’t second-guessing us. The union officials were the obstacle in this process. They tried to second-guess everything and tried to delay the whole process.
But in the end we achieved our objective fairly easily given the circumstances – we managed to move the people out with relatively little disruption to the business. And we did not end up with very low morale.
Again, it was testament to the communication and the discussions happening at the right level. It was an indicator that the trust relationship was improving.
We completed the formal process of restructuring/retrenchment in July 2016 having seen a marked improvement in terms of morale and the ability to have the hard discussions.
Although the plan was not necessarily agreed to, it was accepted. The trust relationship was saying ‘we understand that management has a plan, we will go along with that and see it through’.
REDUCING MANAGEMENT LAYERS AND IMPROVING CAPABILITY AT SUPERVISOR LEVEL
We also took the decision at that time to do away with a layer of management. Previously we had had, in a factory, a departmental manager working for the factory manager, and underneath him a foreman and then a supervisor. From this over complicated, overlapping structure, we took out the supervisor-foreman layer and we properly specified a job description for what we now call a section manager. Then we went out and recruited people for these roles.
We obviously gave people in the company the opportunity to apply and about 40% of the posts were filled by existing employees. But we found that we brought in a far better calibre of person by recruiting from the outside. In the end we had far more of the right profile of people in the business, the right job descriptions, and the right people in the roles.
The restructuring has allowed us to, for instance, to bring in junior engineers into a position that has predominantly in the past been occupied by people with matric certificate – far better for the business.
With the restructuring, in our fibreglass factory for instance, we replaced the entire first line of management in the business. The factory manager initially had a ‘minor heart attack’ because he said all the skills would be lost and he would not be able to operate. But within four weeks, he said it was the best thing that had happened to him. By doing this we got rid of all the bad habits, we got people in who were willing to engage, who adopted the care and growth model, who started talking to the employees – and new blood brings new ideas.
So one of the messages is: don’t be afraid to change things.
INVESTING IN THE SHOP FLOOR
Previously there had been no real investment in people on the shop floor. In the midst of restructuring we ran both the Legitimate Leadership’s Grow to Care workshop (making giving or taking at work a choice) for non-managers in the business and a Change Management workshop for both those leaving and those left behind who were still affected by the change to structure and employee numbers. We heard people say “well, actually I do count”. These workshops resulted in some real positive feedback. The positivity that you gain from investing in people at this level is far in excess of the cost.
BENEFITS AND DISAPPOINTMENTS
The primary gains for us were in terms of trust in the relationship between management and employees and the effects of this on employee allegiance and engagement.
Specifically, we saw:
- A shift back to the traditional union (Numsa), partly because of the care and growth process. The other union made lots of promises and very little delivery – what they did deliver was people not getting paid. It is a positive thing to have one union in the business – in a large factory environment in South Africa you are never not going to have a union in your business, and you have to have a relationship with them and make it work.
- A marked reduction in the number of disciplinary processes due to going through the model and first asking the right questions about tools, abilities, etc – before you assume that people are being obstructive or don’t know what they are doing or are not engaging.
- A decline in the non-substantive issues raised. The real issue was wages. In this business, we were physically unable to pay higher wages. That was the burning issue, we did away with all the innuendo, unsubstantiated allegations and unhappiness about it.
There have nevertheless been some disappointments.
- Our inability to progress our operators – the lowest-rung employees – from a maturity point of view. For instance, when we announced the sale of the business in mid-January 2017 we were very clear on the process in our communication to staff – the fact that it was a sale of shares and there was no impact in terms of employment. But our fibreglass factory staff then downed tools purely because they wanted to be paid out their provident fund money. But our hands are tied by law in that regard. It was seven people holding 90 to ransom – in one-on-one discussions, most individuals said they didn’t want to participate. But again we saw a mass mentality – they still went off in a group, and it cost them wages and us productivity. So the maturity level is something which I think takes a lot longer to fix. That is still a struggle which Jurgens Ci has.
- The two unions are still a problem – they still jockey for position, and a lot of promises are made which they can’t necessarily deliver on. People are still not understanding that.
- There are still people who have attended the care and growth courses and have been enthusiastic, but when they get back to the job, they go back into the detail, forgetting what the gameplan is.
- Make the tough decisions and get the people who are holding up the process out as early as possible. It starts at the top. Deal with the people who are not on board – call them out, have the tough discussions. Tell them that they are either with the plan or not, either in or out.
- Accept that it takes time. People progress at different speeds. Certain people were quick off the mark, really got their people engaged and got the process happening. Others took longer.
- Focus on a few things. We initially focused on three things:
- Having one-on-one discussions. Using the care test for people to get to know their team members.
- Setting deliverables and making sure they were implemented. Deliverables are about enabling people to add value to the business.
- Setting the standard and then moving the standard upwards. Once these are working you can then start adding after that.
- There needs to be an understanding that the care and growth model is a leadership tool for managing and leading teams as opposed to something you do over-and-above management. Many people did not understand that and asked ‘how do I care and grow my people and still do my job?’ These are the people you find making caravans on the floor when they should be sitting back and watching the game, making plans and implementing them.
- We had fallen into the trap of promoting people into management positions because we wanted to retain them and we wanted to pay them more. But clearly they were specialists and they shouldn’t have been managing or looking after people because they didn’t have a clue how to do that.
- And we were very much in the numbers game – so many caravans, earning so much money. Obviously the numbers are important, but we were able to move the mind shift away from purely talking about money, to also talking about an enabling environment – ‘how do we get to the end goal and what do we have to put in place to make it happen?’
You have to convince the workforce that ‘your success is the business’s success and vice versa’. You need selfless action at the lowest level – then you will see a change in terms of cost savings, efficiencies, wastage etc. It’s far easier to deal with tough situations when the whole business is on the same page.
When the market was declining you want people who say ‘how do we fix this?’; not ‘what’s in it for me?’ You don’t want to be saying, ‘one day when things are better we will work on our people’. By then you might not have a business.
In reality we would probably have done care and growth irrespective of whether we had had a burning platform or not. We knew that when this business had the opportunity to expand and grow, we would want to have the team behind us to make it happen.
Finally (to quote Zig Ziglar), ‘to get where you’re going, you need to help others to get where they are going to’. That was key in Jurgens Ci – we told managers that their job was to help the people reporting to them to do their jobs.”
August 2014 Appointment of Bradley Salters as managing director.
October 2014 Lockout, followed by an agreement not to engage in unprotected strike action.
February 2015 Start of the Legitimate Leadership process.
August 2015 Fire in the fibreglass factory.
March-July 2016 Retrenchment of 100 employees (10% of the workforce).
July-September 2016 Reduction in management levels and improvement in supervisory capability.
July-September 2016 Investment in workshops for non-managers.
February 2017 Sale of the business.
COMMENT BY WENDY LAMBOURNE, DIRECTOR, LEGITIMATE LEADERSHIP
Bradley Salters epitomised the very best of “care and growth” leadership acting with a combination of generosity/compassion and courage throughout his tenure as managing director of Jurgens Ci.
I think significant aspects of the Jurgens Ci story are:
- Beset by one unprotected strike after another, there was a great temptation to simply close down the factory and relocate it. Bradley decided to rather try another approach to leadership, and in so doing kept about 800 people (each of whom supported 6-7 people) in employment.
- It would have been very easy to say “one day when things get better we will work on our people”. Instead he deliberately chose to invest in his people believing that, when business conditions changed and there were opportunities to expand and grow, he would have the people behind management to make it happen.
- It was no small feat to shift employee allegiance from the union(s) to management. The union(s) tried, unsuccessfully, to take the site out on strike on several occasions in 2015-2016 and failed to do so.
- He demonstrated that when there is a trust relationship between management and staff it is possible to go through even a significant downsizing without a concomitant drop in morale.
- Finally, he was not scared to change not only the structure (taking out a level of management) but also the people populating the structure. By bringing in a different calibre of person into first line management roles he significantly improved the quality of supervision in his business. In South Africa, supervisors are typically weak leaders and most companies live with that reality. Bradley and his team changed that– not an easy thing to achieve.