Are You Aligned?

Christina Lewellen
January 15, 2008
COLUMN : Talking to Dealers | Markets & Trends

Ahhh, there’s nothing like an eye-popping news story to get me all charged up at column-writing time, and I know it’s a good one when I’m still baffled after the third or fourth read.

The folks at Milgard are in the courts attempting to iron out an unfortunate situation. The former executive assistant to President James Sweeney Jr. allegedly embezzled $1.6 million from the company in about five years. The Associated Press story points out that Lindy Robertson, at the ripe ole’ age of 27, faces 27 counts of theft and three counts of money laundering. She is accused of working up a credit card scheme to hide her purchases—including online shipping, paying off her mortgage, remodeling her house, buying two cars, socking away nearly $30,000 for her children’s college fund and purchasing airfare for her father to visit Uganda.

That’s a heck of a bonus plan—$1.6 million in five years.

I’d be willing to bet it’s tougher to find a trustworthy employee in today’s corporate environment than a suitable spouse at a karaoke bar (no offense to those of you who were successful at such a venture). For the majority of window and door specialty dealers, leaking $1.6 million out of the company coffers could be more than enough to stall expansion to a new geographic area, hire additional key employees or even keep the doors of the business open.

But let’s say we’re not talking about millions of dollars—or money at all. What about employees who take an extra half-hour for lunch instead of getting back to the service phone lines or dawdle around installing the last windows at Job A so they don’t have to drive out to Job B until tomorrow? Those types of behaviors are leaks in the revenue pipe as well. You’re kidding yourself if you think that more oversight will plug the drips. After all, there’s only one of you and a whole bunch of them.

The key is aligning the goals of your employees with the goals of your business. It’s really not too much of a stretch. They want to make money and the business wants to make money. So connect the two and empower, and subsequently reward, your team for making good choices. Show them how the dealership making money will result in them making more money, getting more time off, having cheaper health insurance or getting an occasional Starbuck’s gift card—whatever the incentive.

Here’s an example. Indra Nooyi, the top executive at PepsiCo, makes around a million a year in base salary, but she brings home around $4 million a year thanks to performance-based bonuses and stock options. She owns a bunch of stock in Pepsi, so why wouldn’t she want the company to perform well? A million is a nice salary, but who wouldn’t jump at the chance to earn $4 million?

Now I realize the only stocks most window dealers handle are 3’0”-5’0” windows. But some of our industry retailers are figuring out how to align the wealth functions of the employees and the company. Several dealers I’ve profiled in the last few years have an “open book” policy with their companies’ financial performance, and their employees really appreciate the opportunity to affect the bottom line. Others have opened the door to ownership, allowing the brightest stars a spot on the company letterhead. Incentives are controversial beasts and I myself am not convinced they work on a long-term basis. I think the ticket is making employees feel like owners.

If you think you’ve got the wealth-aligning game figured out, by all means, send me an email. Maybe your approach could save another one of our window and door brothers from suffering Milgard’s $1.6 million fate.

Contact Christina Lewellen, senior editor, at clewellen@glass.org.