Masters of Manufacturing: E.W. Grobbel Wins By Winning With Workers

This is the latest in our “Masters of Manufacturing” series, presented in partnership with The Indiana Economic Development Corporation. Each month we share insights and ideas from innovative, growth-minded manufacturing CEOs from across the nation as they navigate this tricky time in history.

Optimizing the workforce is the most important thing a manufacturing CEO can do, says Jason Grobbel, CEO of E.W. Grobbel Sons, a Detroit-based producer of corned-beef products. And with every tick of the American economy toward full employment, he believes, this truth gets truthier.

Grobbel should know: The company was in deep trouble a recession ago and broke through by how its cares for and treats its employees, who now number about 350. The fourth-generation owner of the 137-year-old company has grown it to $110 million in annual revenues from $4 million when he took over.

“It’s a complete competitive advantage that no one else has and that I want to give away,” says Grobbel about his approach to labor, which he codified in a book, Leading America Back to Work: Reimagining Today’s Workforce. “That’s what keeps me going. I love to do what I do, build our team and see people do well.”

Grobbel told Chief Executive that he sees CEO handwringing about worker shortages as largely excuse-making. “The labor market is tight, you think, but there’s still a boatload of people who aren’t in the market—they just don’t get counted,” he said. “We don’t always bring people directly out of that [pool], but the more you get to this level of employment, the more people are attracted off the sofa and into the labor market.”

In fact, he said, the problem is “not with the workers but with the business operators. They’re trying to run their business like their daddy used to.”

Grobbel identified three bedrock principles for managing the workforce toward success and renewal for manufacturers, under his approach. The first is to “understand where you are” as a company and to help employees get that grounding for them as individuals. Among other things, he said, that means helping people face and adjust to the “brutal reality” that they’re naturally equipped in different ways.

“Most people are in the wrong job, but there’s a perfect job for everyone,” he said. “People do what they want to do, which is the most ridiculous thing in the world. When I was young, I wanted to be a rock star, but I didn’t want to learn an instrument and I didn’t have the patience to do it. So I had to grow up.

“Everyone wants to be the boss. But that doesn’t mean they’d be good at it. And if you’re doing something you’re not good at, it’s the worst idea in the world. So [people] have to find where the three circles intersect for them that are described in Good To Great: What they can be best in the world at, what they can be passionate about, and what makes economic sense.”

Second, Grobbel said, CEOs must embrace the fact that “all employees want today to be part of something great that matters.” Americans are “less engaged” today, he said, for a number of reasons. For one thing, younger workers “have had too much interaction with their parents, and guidance, and so then they get into the workforce and all that ends, and they still expect to operate as they did.

“But giving them ping-pong tables in the office and stuff like that isn’t the answer,” Grobbel said. “Companies first must identify the noble mission of what they’re doing. I don’t care if it seems menial; each job matters. Our mission is to make the greatest, safest food products in the world. When you convey that sort of idea to your team on a regular basis, that helps them grow personally and professionally.”

The third main principle for Grobbel is that CEOs must create a culture of mutual respect with workers. “The reason people float from company to company is they don’t feel respect,” he said. “A lot of managers don’t understand this. For example, they want to mold people into what they need instead of understanding where they’re at.”

Grobbel further outlined five tactics—under what he calls the ACE System, for “attitude,” “competence” and “energy”—that can bring companies closer to having such a culture. It starts with recruitment and cultural fit, both for the company’s culture and for the specific task that needs to be performed. For example, he advised, executives should include not only managers in interviews of new employees but also, he wrote, “people who actually specialize in the task that needs to be performed. No one knows the job better than they do.”

Onboarding and engagement is the second crucial area under Grobbel’s system. This includes, for instance, hiring people only for half-days initially. “This not only minimizes our investment in new people who can’t be expected to contribute much right away, but it also takes the pressure off them to do too much too soon,” he wrote.

The third pillar of the ACE System is supervision and leadership. Among other ideas, Grobbel believes that “most organizations take people who are proficient at the technical side of the mob and ask them to be supervisors”—to everyone’s detriment.

Fourth, there’s evaluation and guidance, which at E.W. Grobbel is reflected partly in the role of “personnel leader” who works with employees on the skills comprised by ACE. The role includes meeting with each employee once a month “just to make sure we’re listening and understanding how people are doing.”

The final principle for Grobbel under creating a culture of respect is process evolution and task fragmentation. This runs counter to the now-conventional wisdom of cross-training workers. But his company has found that simplifying the objective for each employee and the training process “made it possible for each person to become proficient, and then productive,” much more quickly. From there, the company “give[s] our people the chance to learn new tasks even as they continue to focus on the one, fragmented task to which they’re assigned at present.”

Grobbel also pursues other policies and approaches that some CEOs may find surprising in the modern era in which many coddle their employees—especially now, with rampant fears about turnover. For example, E.W. Grobbel is tough on attendance, putting poor performers on “standby.” Instead of firing them, the company docks these workers’ pay by $1 an hour and assigns them what Grobbel called “special projects” when they come to work. Within about two months, if those employees come around, they’re restored to the workforce proper.

“When people can’t fulfill attendance obligations,” he said, “we don’t consider it their fault. They may have a hectic home life or [other problems]. There are all kinds of reasons. But we don’t try to tell people they’re bad because of that. We just tell them there are jobs they don’t have to be there every day for a while. And if they can make the changes they need to in their lives, where there are fewer restrictions on getting to work, they’ll have a wider array of jobs to choose from.”