Employees key ingredient in company's 'winning culture'

BY BOB MIODONSKI OF CONTRACTOR'S STAFF LINCOLN, R.I. To create a winning company culture, Gem Plumbing & Heating here discovered it needed two things: a clear mission statement that told its employees how it intends to be successful and a value statement that laid out the rules to accomplish the mission. "Once we started to worry about employees, the culture began to change," said Larry Gemma, who

BY BOB MIODONSKI
OF CONTRACTOR'S STAFF

LINCOLN, R.I. — To create a winning company culture, Gem Plumbing & Heating here discovered it needed two things: a clear mission statement that told its employees how it intends to be successful and a value statement that laid out the rules to accomplish the mission.

"Once we started to worry about employees, the culture began to change," said Larry Gemma, who along with brothers Anthony, Lenny and Edward own Gem Plumbing. "Once employees realize what's in it for them, the culture will start to change."

Larry Gemma made his comments during the Gem Institute for Performance Excellence, a day-long seminar and shop visit conducted at Gem Plumbing and led by the Gemma brothers, Gem employees and consultant Larry Girouard. Topics include the building blocks of growth, marketing, fleet management, new technology and developing a winning culture. Attendees are other contractors and business people from outside the plumbing industry. Recent sessions took place in September and October 2006; 2007 dates include Feb. 23, March 23, April 29 and May 18.

Gem's mission statement is, "Through our world-class customer service, our dedication to excellence and our random acts of kindness, we will exceed your expectations everyday!"

"Your mission statement needs to be short and direct," Larry Gemma said. "Our mission statement directs the technicians to three goals for Gem: providing word-class customer service, high-quality workmanship and community service."

The values shared by Gem employees and management, Gemma said, are honesty, respect, diversity, balance, reliability, integrity, courage, openness, patience and thriftiness.

The Gemma brothers decided in 1999 that they needed to create a winning culture for their company, which had been founded by their parents, Larry and Gloria, in 1949 in their garage. Fifty years later, the company had grown to 80 employees and nearly $7 million in sales but faced challenges such as outdated equipment, lack of sufficient operating systems and theft.

The brothers were faced with three options: quit and sell the business for whatever they could get; downsize it; or grow it by putting systems and policies in place. They selected option No. 3.

Today, Gem employs more than 300 people and runs about 160 service trucks. Its sales are $35 million.

After they had chosen the path to growth, the brothers' first concern was figuring out how to convince their employees that growth was necessary and in their best interest.

"In order to implement a culture change, leadership must be 100% committed to the change," Larry Gemma said. "Trust is the foundation of change, and job security cannot be compromised."

Employees were encouraged by the Gemmas to speak candidly about the company and their jobs. The candor not only increased employees' buy-in of the changes being made, but it also cut costs when they told their supervisors how they could do their jobs more efficiently, Larry Gemma said.

"Owners must stimulate employees to openly communicate their thoughts and ideas with the company, and they must reward this type of behavior," he said.

Company leaders also have to provide tools and training to reinforce the employees' new behaviors; celebrate their successes and accomplishments; create systems and structures that reinforce new behaviors; and prepare people for the next change, Gemma said.

Gem Plumbing has a bonus plan for its technicians. It states that a tech must achieve $24,000 in sales; callbacks, customer refunds and damages to vehicles reduce his sales. If the tech's labor as a percentage of sales is less than 16%, which is the company standard, then he receives the difference.

In addition, techs are given incentives for generating leads for additional services.

"Do not give out incentives based on productivity," Gemma said. "Bonuses are based on productivity. Incentives are based on going above and beyond the call of duty."

For more information on the Gem Institute for Performance Excellence, visit www.gemplumbing.com.