By: Randi Feinberg
A strong shared purpose can inspire people to innovate and reach for more, keep employees engaged and connected, and fuel a company going through a major turnaround or transformation. Yet activating purpose so that it becomes a living part of a company’s core way of operating, rather than just another “corporate slogan on the wall” is not easy. At the May 23rd Center for Higher Ambition Leadership (CHL) Learning Visit hosted by Masonite, CEOs, CHROs and other senior leaders explored how companies are making purpose actionable – and the business outcomes that make the effort worthwhile.
As CHL Board Member Dick Gochnauer said in his welcome to the group, “Each company’s journey is different, but there are some commonalities that we can all learn from.” Here are some key learnings from the day, illustrated by Masonite’s story.
Masonite’s Evolution: From Turnaround to a Greater Purpose
In 2010, Tampa-based door manufacturer Masonite was at a low-point. Founded in 1924 by William H. Mason after he discovered a more effective way to use wood in building materials, the company was reeling from the unprecedented housing downturn. To avoid complete ruin, the workforce was reduced by half (from 15,000 to 7,800 employees), 50 plants were closed, and the company filed for Chapter 11 bankruptcy protection.
Less than a decade later, Masonite has transformed. It is experiencing strong growth and profitability (From 2011-2018 Masonite’s net sales grew 35% and EBITDA grew 207%) and is #1 or #2 in every category in which it competes. Masonite is now the largest door manufacturer in North America and produces 35 million doors annually — enough to circumvent the world almost twice.
To get through the downturn, the leadership team had focused on more immediate issues to get the company back on track. According to Masonite CEO Fred Lynch, “At that point, our purpose was to survive. But once we did that we started to ask, what’s next?” As the company’s performance continued to strengthen – EBITDA grew from $100M in 2013 to $250M in 2016 – senior leadership recognized they were in a new era. Says Lynch, “We realized that the purpose of crisis that sustained us during the downturn would not sustain us during the long term. We needed to be more aspirational, to focus on our true purpose.”
Defining Purpose: Make Your Purpose Inspiring and Distinct for Your Organization
As the Learning Visit began, many wondered –- what could be the higher purpose of a door company?
Cathy Carlisi, President, Americas, BrightHouse, and advisor to Masonite explained that powerful purpose statements address two fundamental questions, “Who Are We?” and “What Need Do We Fill?”
Masonite answered these questions through an intensive process that included delving deeply into its history and culture as well as expanding its thinking with the help of external luminaries that ranged from PhD scientists to improvisational actors. The result — a resonant and inspiring purpose statement that captured the unique essence of the company — “We Help People Walk Through Walls.”
The metaphor of “walking through walls” – the primary function of a door – is about overcoming obstacles and breaking down barriers for employees, customers and communities.
One of Masonite’s biggest challenges is retention and engagement of its hourly workforce, which comprises 80% of its total employee base. As Tony Hair, President, Global Residential Business, explained “Our ability to get the right people, whether it’s salaried or hourly workers, at a time when unemployment is 3%, is our biggest challenge. We must engage employees, and we can do this by helping to break down the barriers in their lives so they can bring their best selves to work every day. This is not ‘fluffy,’ it good business sense.”
CEO Fred Lynch agreed “Our employees have all kinds of struggles, including transportation, housing, speaking English. We need to help eliminate these struggles. If we can create a culture that breaks down barriers and is less stressful, it will change our employees’ lives. Our intention is about how to make our employees’ lives better, not how to make a better company. But, by doing this, we get better retention and engagement. It’s a flywheel effect.”
The deep investigative process Masonite undertook to define its purpose also resulted in the identification of five core themes which are deeply rooted in its history and culture:
- Integrity Under Pressure
- People are Key
- Hold the Door Open
- Flexibility in Every Fiber
- On the Threshold of What’s Next
These cultural pillars are in turn being used to align expectations for Masonite’s employees and inform the criteria for new hires, for performance assessment and associate development and many other aspects of the business.
Masonite has incorporated its purpose and cultural pillars into a powerful single-page blueprint. See the Masonite Blueprint
Activating Purpose: Build in Enough Flexibility So People Can Operationalize in a Way That is Meaningful for Them
Rolling out the purpose to the employee base was something the Masonite “Purpose Team” – the group of employees responsible for identifying, articulating and communicating the company’s purpose – took very seriously. They understood that the employees need to own it, that it needs to be actionable, and have meaning on the local level. Breaking into groups of 3-5, the 15-person team personally visited every one of Masonite’s 65 locations over a 3-week period. The objective of these visits was to invite action on the local level in ways that would break down barriers for the local employee base. The specifics of what matters in one location is different than what matters in another location. As Gail Auerbach, recently retired Chief Human Resources Officer of Masonite explained “Our purpose is open enough to allow for variability but also defined enough to help people understand who we are.”
The Purpose Team realized that there were two groups who were strongly represented within Masonite’s employee base who face particular challenges—high school graduates who are hoping to launch careers without an advanced degree and new immigrants to the US. It is meaningful and motivating for Masonite associates to help others in these two groups more effectively “walk through the walls” they face to realize their dreams. These are clearly areas that most employees can rally behind. It also makes good business sense. In a tight labor market, Masonite wants to be the employer of choice with two groups that represent the heart of their recruiting pool.
The Purpose Team then challenged each Masonite facility to consider how they could make purpose real for these two groups at their locations.
At the Greenville, Texas plant, for example, Plant Manager Robert Taliaferro took advantage of the purpose initiative to better understand how he could help his employees and, in the process, reduce the very high turnover that cost him hours of time in constant hiring and training new staff. One of the key challenges workers at this plant faced was that many did not speak English. To help break down this barrier, Taliaferro suggested that Masonite offer English as a Second Language classes at the plant facility on Saturday mornings. Masonite covered the cost of this program for their staff with one condition – employees had to complete the course. It was a phenomenal success. Gabriel Arriaga, who traveled all the way from Greenville to Tampa so that he could personally share his experience said, “This English class has changed my life…now I can get a better job, and I can help more people by doing a better job.”
In another example, David Perkins, Vice President Marketing, challenged Blake High School students to help solve a problem. Most people don’t give much thought to the style, color and the overall look of the interior doors in their home – until they learn that interior doors comprise 800 square feet in the average house. 800 square feet is a lot of space. Armed with this realization, Masonite challenged 22 art students from Blake High School to each decorate a door (equivalent to 800 square feet in total). Hung side by side at the International Builders Show in Orlando, the biggest builders’ show in the world, this exhibit became the talk of the town, simultaneously making the point that door décor can have a big impact in ones’ home and giving local high school students an outlet for their beautiful and unique artwork.
Unlocking the Power of Purpose: Real Business Impact
Companies that engage in purpose often find they have to justify to investors why this is important. But as learning visit participant Michael Wilson, CEO, Ingevity observed “I don’t see the conflict between purpose and financial performance. If this initiative drives employee engagement, you’ll get better performance. It’s a virtuous cycle.”
Lynch highlighted, “What I love about our purpose is that it builds self-confidence so that people can do their best. As we run into obstacles – whether it’s a developing a new product or overcoming a problem with a customer, you hear people use these words “walk through walls” and, as a team, we can do anything. I believe this has empowered our employees to take on more risk and be more innovative. There is a passion and energy in the company that did not exist before.”
“When you do purpose right, it’s employee-centric. Employees should own it and say, ‘Yep, that’s us.’ The CEO should be able to walk away and the purpose lives on, because it’s at the core of the company.”
–Fred Lynch, CEO, Masonite
For example, innovation – and in particular digital innovation – has been a major thrust at Masonite for the past year. Purchasing a door is currently a remarkably complicated process, but Masonite has high ambitions to make this process much simpler, faster and easier for customers. Through their Advisar unit, currently being piloted in South Florida, Masonite has created a system where, with the click of a button, customers can order custom doors and have them delivered in five days, remarkably fast compared to the 6 weeks the process usually takes. As evidence of the company’s commitment to technology, the Digital Department grew from 2 employees to 80 in the span of one year.
“Hearing the Masonite story, I am struck by your move into new products. It seems that this purpose work has inspired diversity of thought, which drives innovation.”
— Bob Mauch, President, AmerisourceBergen
Another positive impact for Masonite has been in employee retention. According to Tony Hair, turnover at one Masonite plant fell from 21% a year ago to 9% today. Employee engagement surveys verified that a key driver of this improvement is the changes the plant made to help employees overcome barriers – changes as simple as getting more microwaves to make lunch breaks more pleasant to more intensive interventions, like offering English language instruction.
Finally, the purpose initiative has helped unite a group of disparate business units. Masonite is largely a company of acquisitions, but the higher purpose has become the common rallying cry. Now employees from various business units are emotionally connected to the same common purpose and a more unified Masonite.
We thank Masonite for a remarkable day. CHL participants left armed with new insights into how to activate purpose in their companies. AmerisourceBergen President Bob Mauch expressed the sentiment of the group by saying, “This is a must-do for every company.”
The Center for Higher Ambition Leadership (CHL) supports a community of CEOs and senior leaders who aspire to lead organizations that have a higher purpose – to provide value not only to shareholders, but to employees, customers, partners and the community as well. For details on the next CHL Learning Visit or to contribute to the CHL Playbook on Activating Purpose, contact Randi Feinberg at firstname.lastname@example.org