Atlas Container CEO On Building Manufacturing Talent

Finding a dependable workforce is a consistent issue for manufacturers. Job numbers are just recovering from Covid-era lows, the plants can be hot and the work physically demanding.

Paul Centenari encountered this issue when he first acquired and became CEO of corrugated packaging company Atlas Container more than three decades ago, and it continues to be a sticking point.

“I would say 85 to 90 percent of our workers are long-term workers…They’re not going anywhere. But there’s a pool of about 10 to 15 percent, 20 to 30 workers, that just go through a revolving door, and it’s hard to keep those guys. You have to find ways to get them to stay,” Centenari says.

What’s worked, he has discovered, is not the command-and-control style leadership of years past, but rather a deeply empathetic strategy that puts employees at the heart of everything.

“If you give to your employees, they’re going to give back. And they’re going to appreciate it. It’s a much healthier relationship,” he says. “I do believe at the end of that math equation, you create a culture that makes people happy, your customers are going to be happy.”

In an interview with Chief Executive, Centenari digs into some of the workforce strategies he’s using today, from open book management to GED funding to work-release programs with a local prison. The following Q&A has been lightly trimmed and edited for clarity.

You’ve grown your company, Atlas, from a $5.5 million operation into a company generating around $100 million in revenue. What would you say are the decisions that mattered in creating that growth?

Well, the most important decision was to buy the company. We were zero revenue before we bought the company. And then we took the company from five and a half, six million in sales to, south of 100, but getting close.

There’s a lot of moving parts in all this, but the two biggest changes or strategies that we were pushing were, always say yes to the customer. Just figure it out, right? And we still fall down on this, by the way. I got involved in something this week where the customer needed something and I was getting some can’t dos from our guys. And they figured it out, as they always do.

But I love the approach always that, “Yeah, we can do this.” The first thing is to never say no, and treat your customer as the most important thing in the world. The second thing is to do the same thing with your people. Show appreciation, listen, do what they ask, or try to. I really believe that there’s a mathematical formula that if you have happy people, you’re going to have happy customers. That’s it. It’s that simple.

You’ve said previously that your leadership style evolved from a kind of command-and-control style more toward consensus. What happened that convinced you that the old approach wasn’t working?

I met a guy in 1996 named Bob Argabright. He was running a plant in Maryland. He’s the one that introduced me to open-book management. When I heard about the concept, I thought, this is exactly the way we have to run our business.

The original owners that we bought out, they always treated people with dignity. We learned from them as well. But then Argabright came in and took it to another level. Where, the more you give, the more you get. If you give to your employees, they’re going to give back. And they’re going to appreciate it. It’s a much healthier relationship. I do believe at the end of that math equation, you create a culture that makes people happy, your customers are going to be happy.

Can you tell me about what the open-book management process looks like for you and your company?

Fundamentally, you teach the people in your organization to read financials, the income statement. You show it to them once a month or once every couple months. And then you draw a line of sight between what they do every day and the financials at the end of the month with scorecards. On these daily scorecards, speeds, waste, safety, quality translates into what they do every day affects what we do at the end of the month.

Most of our people that work with us, as in most manufacturing operations, are CPAs when it comes to their own paycheck. They know exactly what’s going on in that paycheck. So they’re interested. They care about it. If you can get them to that level of interest where they care enough about what’s going on in the plant,  they will do things to help improve the profitability of the plant. And if you give them the tools or the scorecard, they’ll learn it and they’ll do what they can to make it work.

You tie that into bonuses or other kinds of compensation, it makes it even more powerful. It’s money, so that’s important. But let’s say, the crew gets $100 each, it’s also winning that they care about. It’s not just $100. They love $100, but they want to win. They want to get it done. I think that makes a big difference to get people involved.

Do you have any examples of a time that someone’s decision-making or a change that an employee pointed out directly because of open-book management?

We have employees coming to us telling us that, “Look. In order for us to run this machine faster, there’s three things that maintenance has to do. They gotta fix the first down printing operation. They gotta fix the counter ejector and they gotta fix the pre-feeder. If you do that, then we can get it to 5,000 pieces an hour or 10,000, whatever.” There’s a lot of that kind of dialogue that goes on. You know, if you want me to do this as an operator, then can you do this for me? It’s a quid pro quo.

It’s happening all the time. I believe that if they don’t see the score, they’re not going to work as hard. I mean, imagine playing baseball, football, tennis, any sport, but you didn’t keep score. You wouldn’t get a crowd. Nobody would watch it, nobody would care. But in manufacturing, if you start scoring what they do on the floor, they’re going to perform at a higher level.

Have you ever had employees misunderstand or react negatively to this process? If so, how did you handle that?

Well, yeah. We’ve gone through periods of time when we weren’t doing that well. And we’re giving them the black and white, no-nonsense truth. And we’ve lost people during those periods of time, because they see the company is not doing well, they’re worried about it and they go work for somebody else. That’s a huge fallout. We’ve lost some good people.

But again, this is the game. They have to see what we see. And most people, 95-plus percentage, hang in there and figure out ways to help, make it work.

From what I understand, you also hire people who have been incarcerated?

We hire people on a work release program. They come to us during the day and they go back to the prison at night.

How did that effort begin?

I recall it started about 10 years ago, and then we stopped doing it. And then about four years ago, we started doing it again. We go to Jessup, which is the closest facility to us. We got to know the warden and some of the other folks. We only get non-violent offenders. They’re under scrutiny, by us and by the other guys. They can’t leave campus during the day. Most of them, I’ll tell you, are no-nonsense. They come in, they want to learn, they want to change their lives. And, you know, the batting average is pretty high.

While they’re incarcerated, while they’re doing this back-and-forth thing with the prison, they’re very consistent. When they get out, it gets a little sticky because a lot of these guys have been in prison for 20 or 25 years. They don’t have a license. They don’t have a car. They can’t get to work. They may live far away. We have one guy, he gets on a train, then he gets on a metro, takes a bus and walks a mile and a half to work. So, this is a guy that I’ve got pinpointed, and, at some point, I’d like to offer him a leased car that we’d take the payments out of his paycheck, and he has a car now. But again, think about it. They’ve been out of society for 25 years. They have to reinculcate.

How has it impacted your business?

We have had problems finding people that want to work. Unfortunately, I think everybody has the same problem. And our plant gets hot in the summer. I think we can do some things to improve that ourselves in the infrastructure.

I would say 85 to 90 percent of our workers are long-term workers. They’ve been there for a long time. They’ll be here for a long time. They’re not going anywhere. But there’s a pool of about 10 to 15 percent, 20 to 30 workers, that just go through a revolving door, and it’s hard to keep those guys. You have to find ways to get them to stay. And a lot of it is mentoring, learning, getting better and doing more things, getting more responsibility in the plant, in the office.

You said, in regard to your employees, what you give them is what you get back. What does that mean for you in terms of how you run your business?

We had a handful of guys get their GEDs through us. They never went to high school, and we paid for them to study for it. We paid for the tutors, and these guys graduated and walked in graduation at one of the local community colleges. They got their high school degrees. We’re always offering that. We offer a lot of training for people that want to do it.

And then we’ve also offered tutoring for kids to help them better themselves in schools. My brother and I were very blessed. We had parents that were very keen on school more than anything, more than sports, more than anything. If we needed tutors, we’d get them. I want to provide the same services that we had to these kids. It’s expensive, but the results are huge. The kids go from an absentee problem, sitting in the back of the class, to showing up every day and sitting up front, because they’re getting it now. They understand it. We’ve seen some almost miraculous turnarounds over the years with kids.

I’m always trying to get our people to get their kids involved. It’s getting tougher to do that, but it helps them. Same thing goes for them, too, if they want any kind of training. I’m trying to get as much training as I can, because I believe that the more you exercise the cerebellum, the more you’re going to get out of people. And they’re going to enjoy more of what they’re doing and appreciate their job and so forth. So that’s big.

I really believe that those are the kinds of things that, if their kid is doing better in school, they’re going to appreciate where they work more.

What advice would you give to other manufacturing CEOs?

The basic stuff. A lot of manufacturers don’t watch their costs. They don’t pay attention to the costs as much as they need to. And they have to look at their costs in a pecking order. What’s the biggest cost as a percent of sales? Are you buying it at the best price you can buy it at? You have to keep on it all the time.

I’ve been doing this for 38 years. Two years ago, we got fat in the plant. You know, we had 217 people doing what 171 could do. I did the math, looked back a couple years, saw that we had 46 fewer people and were doing more in the plant. We let 46 people go. We had to. And the mistake wasn’t letting them go. The mistake was hiring them in the first place.

I don’t want to have that happen again. I don’t want to have to send people home because it’s depressing. You’re doing this to these guys, you’re letting them go, they don’t have a job. So we score hard. Every single day I see how many people we have in the plant. And yesterday we had 171, which is the number that we had when we let all those guys go. I’m going to watch that thing hawkishly because I don’t want that to go up and then have to look back and [ask] why we have this many people doing less work. It’s learning all the time.

I would tell a fellow CEO, keep an eye on your headcount because it’s a natural fantasy to hire people. Just a natural reflex. And if you’re not disciplined, you’re going to overstaff. That’s the cost side.