Hagie Manufacturing grows with emphasis on company culture

We Create Here was an initiative within the Gazette Company to develop evolving narratives and authentic conversations throughout Iowa's Creative Corridor. read more

The best welder in the world may not be the best welder for Hagie Manufacturing.

On Tutu Tuesdays, it's not unusual to see a plant manager in a skirt. Employees of the manufacturing company participate in city-wide scavenger hunts. There's a fully-stocked Tiki bar for team meetings, and the president, Alan Hagie, gave up his office to create an "innovation lounge" with couches and another bar. Company-wide meetings feel more like a pep rally, starting with high fives and ending with a chant of "I freaking rock." Suffice it to say, the 500-person agricultural equipment manufacturer has an extreme emphasis on company culture.

It's not for everyone.

The company averages 22 percent employee turnover, with the bulk of that representing employees who choose to leave, said Sam Titus, vice president of operations. Likewise, Hagie's management team saw 80 percent turnover between 2008 and 2011.

The company also saw 68 percent growth in 2008, and it has averaged 30 percent growth per year since then.

It's better to be high-performing than stable, Titus added.

Hagie has been a family-owned company in Clarion, Iowa - population 2,789 - since 1947, with manufacturing, direct sales and service on-site. They were always a good company, Titus said, but they weren't growing.

That changed when the company started focusing on culture. In addition to the impressive revenue growth, Hagie was also recently named to an international list of the World's Most Democratic Companies, compiled by WorldBlu. It was one of four companies in Iowa, along with ICAD Group, Geonetric and FusionFarm (part of the Gazette Company).

Hagie is trying to show that the principles of creativity and democracy at work, beloved by startups and companies in traditionally creative fields, can also have a profound impact in a blue-collar workforce.

On May 19, ICAD Group arranged a tour to learn about nurturing a creative culture in a manufacturing environment. The tour included representatives from Whirlpool in Amana and Centro, Inc. in North Liberty (and myself). We were greeted with high-fives as we entered the plant.

Building culture: 

Many of Hagie's early transformations dealt with "soft culture," leaders said, such as free snacks, flexible start times or allowing employees to wear jeans to work. But culture also goes much deeper. Clint Middleton, Hagie's culture coach, explained some of the programs the company has implemented:

• Family values: Alan Hagie drafted the company's nine family values, including things like "deliver wow," "respect, trust and honesty for everyone," and "be humble.". Nine employees who best embodied the values were chosen to introduce these to the company in a peer-driven roll out.
• Communication is a priority: All new hires take a class in effective communication. Managers have access to additional coaching, since meetings focus on creating inspiration and grabbing attention, not monotone reports. As a vice president, Titus said he spends 70 percent of his time coaching other managers.
• Stay interviews: Many companies do exit interviews when an employee leaves, Hagie makes a point of asking top performers why they choose to stay on a regular basis.
• "The attitude project:" Employees were asked to name coworkers who they perceived to have negative attitudes. The named employees then had meetings where they were told: "You are perceived by your peers as having a negative attitude. Why do you think that is?" Some were astonished, some were coached in more effective communication skills, and some had a laundry list of things that bothered them at work - valuable information for their managers. Hagie adapted this program from an anti-bullying initiative at the local middle school.
• Hire slow and fire fast: Potential employees are interviewed a minimum of five times.
• Company-wide activities: Many more programs were discussed, including paid volunteer days, a company lending library and book club, handwritten thank you notes and team-building activities.

While "create fun and be adventurous" is one of the nine family values, Middleton said there's always a balancing act between fun and productivity. The company has five guidelines for proposed activities:

• Must be legal
• Can't negatively impact safety
• Can't negatively impact quality
• Can't negatively impact productivity
• Doesn't overly offend (and in the spirit of open communication, it is up to the offended person to bring it up if something crosses the line).

Measuring inputs: 

The biggest shift in mindset was from outputs to inputs.

Titus came to Hagie from Pella Corporation, and said it took him years to adjust from a large, corporate environment to an employee-centered culture.

It's not that the corporate environment doesn't value employees, he said, but when leaders "go to sleep at night thinking about safety, quality and productivity," it's easy to let culture slip.

But safety, quality and productivity are outputs of the system - and to create a change, Hagie had to change their inputs.

“Metrics are like a report card – they tell you how you did, not where you're going,” Titus said.

The four inputs they focus on today are employee happiness, employee engagement, road block removal and sense of purpose, Middleton said.

Sound familiar? Hagie has followed the lead of Zappos CEO Tony Hsieh, who famously prioritizes company culture above all else. The Hagie team made multiple trips to Las Vegas to learn from Zappos along their culture transformation journey.

Hagie employees are evaluated on their job requirements,  and also on whether they live the company's nine values, effective communication and their team building skills.

So, the best welder in the world really may not be the best welder for Hagie Manufacturing.

Read more: 

• Three Corridor companies make WorldBlu's list of 'Most Democratic' on We Create Here
• Building a democratic workplace on the Geonetric blog
• Workplace (R)evolution, a new event on June 12, will focus on workplace culture - see coverage on We Create Here or workplace-revolution.com.
• Many thanks to ICAD Group for letting me tag along on the tour.