Training & Education Winner: Steinwall Inc.

Companies Mentioned
Posted on Jun 09, 2006

Ever hear the one about the boiled frog? This unfortunate creature made the mistake of not noticing when the water he was sitting in went from cold to scalding. Because his body kept adjusting to the changes in temperature, he did not know enough to jump out of the pot before he was cooked. You may not be familiar with the parable of the boiled frog, but employees of Steinwall Inc. (Coon Rapids, MN) learn it on their first day. That's because Steinwall, an $11.9 million maker of custom precision thermoplastic injection molds, is a leader in employee orientation and training. Maureen Steinwall, president of the company her father Carl founded in 1965, wants every one of her 94 employees to be on the lookout every day for so-called boiled frogs -- things that don't make sense but that everyone accepts as a matter of course. So, Steinwall makes sure the boiled frog story, corny as it may be, is part of every new employee's orientation. In fact, new-employee orientation is a huge focus at Steinwall. Back in the 1980s, long before multimedia courseware or computer-assisted training were buzzwords, Steinwall taught herself the basics of developing effective computer-based training modules. Then, she set out to create a suite of interactive courseware. From those early days, Steinwall's self-developed e-Trainment program has come quite far. She credits these training modules -- now numbering 250 -- for saving the company from ruin during times of high labor demand and for shoring up employee retention, protecting the tiny company from the effects of offshore labor. "There is really nothing left in the manufacturing world relating to raw materials and equipment that can't be copied in a short period of time. The human element is the only remaining variable that can't be imitated immediately," Steinwall says. "If I can get my $15-per-hour people to produce more work than someone else's $10-per-hour people, I can win." Steinwall believes that employees who understand their jobs from their very first day are more likely to stick with their employer, saving the company the hassle and expense of continual recruiting. But she also believes that showering the employee with training on matters interpersonal and cultural, as well as technical, is a direct way of reducing human error in the manufacturing process. "I see myself as a process engineer. I'm always trying to get the most improvement out of any process. And the biggest variable in the process is always the human. So I set out to automate that part," Steinwall says. Steinwall believes the emphasis on training has created a more flexible company that is more responsive to customer needs and offers a better quality product, traits that earned Steinwall Inc. Managing Automation's Progressive Manufacturing Training & Education Mastery Award for 2006. A Training Guru Is Born Steinwall grew into her belief in and commitment to employee training. In 1983, when she took over from her father, employee training and education were not exactly in the forefront of her mind. She was anxious to learn everything there was to know about designing and producing high-tolerance molds. Steinwall Inc. was then a job shop, making custom molds and plastic parts for OEMs. But if she didn't start off with workforce issues top of mind, they soon came to the fore. In the late '80s in the Minneapolis area, as elsewhere in the country, finding and keeping workers was a problem in all industries, not just manufacturing. At the time, the full-time staff of 24 was constantly in flux. "Our turnover rate was 270%. Essentially, all of our employees turned over an average of three times a year," Steinwall says. This meant the company was constantly in crisis mode to find employees to operate the three shifts in its factory, five days per week. An acceptable rate of turnover, she believed, was 12% to 15%. "We had a long way to go." Sue Durst, a long-time production manager, remembers those days. "You would just get someone trained and then they would leave, within a couple of months to a year," says Durst, who with 21 years under her belt is second only to Steinwall in company longevity. Steinwall did all the obvious things in response: bumped up wages, put in apprenticeship programs, offered tuition reimbursement. Nothing seemed to work for long. In desperation, she joined a working group sponsored by the state. There, she brainstormed with other employers facing the same problem. By mining the few academic studies available at the time and listening to employment experts, the group arrived at the conclusion that adequate employee orientation was a cornerstone of retention. "The better the job one does with orienting people day one, week one, the better your chances of holding on to folks," Steinwall says. "If you can tell them what they need to be successful, the chances they will stay are much greater." It was a simple enough idea, but she found that almost none of her CEO peers in any industry did much of anything for orientation. Steinwall also became interested in the work of Dr. Martin Seligman at the University of Pennsylvania. Seligman believed that optimism was a learned behavior rather than an in-born trait. Steinwall embraced this concept, and went on to earn her own Ph.D. in the subject. She believed that optimistic employees were more likely to do quality work, keep their eyes open to innovations in both products and processes, and stay with the company for the long haul. 160 Modules In the late 1980s, Steinwall started to brainstorm what employees need to know on their first day on the job. She came up with 160 items, ranging from the prosaic ("How do I fill out my time card?"), to the technical ("What are the parts of a plastic mold?"), to the cultural ("What is Steinwall's mission?"). Even in those days before computer-based training, Steinwall knew automation was critical. "You can go broke training people the old way. As a manufacturer, we focus on automation; why not in education, too?" So, Steinwall set out to create a field that did not yet exist. Since she already had more than a full-time job running the company, Steinwall only had a half an hour per day to work on the training modules. So each module was short, between five and 10 minutes (it is now an accepted principle that adults learn best in short, focused bursts). There were no multimedia courseware authoring systems then available on the market. "If PowerPoint was out then, it was brand new," Steinwall says. So, she hired a programmer, working in the Borland Delphi development environment, to program what they later called E-Trainment, the platform for the computer-based training modules delivered via the corporate information network. It took many years, but by 1995 the 160 segments were part of orientation for every new hire. Steinwall did not expect the new person to absorb all the modules at once -- she intuitively knew they would go on overload. Instead, plant employees typically shadowed a more senior employee in the same role and went through a few segments at an open PC several times a day for the first week or so. Orientation at Steinwall still works like this today, more than 10 years and many dozens of new employees later. The segments are not just for new employees, however. One course is featured every week for review and managers can point employees who are struggling in a particular area to the related segment. Pay raises are tied to completion of the segments. Timothy Hovey, operations supervisor, came onboard two years ago. Hovey's previous employment had been mostly in retail management, so he remembers feeling a bit anxious about going to work in manufacturing. "[The segments] helped me put the pieces together very quickly. I needed that jumpstart." Hovey thought the training was much more engaging and entertaining than just being given documentation to read. "Usually they just tell you to read until your eyes drop out," he says. "This was a much more effective tool." Indeed. Steinwall saw retention rates improve almost immediately after implementing the orientation training program in the mid-1990s. "Our turnover rate dropped to 15% and has stayed there for 10 years," she says. Steinwall now has a staff of three doing multimedia course development. She figures each course takes about $1,000 of staff time to develop. Steinwall budgets $100,000 per year for segment development. She has been tempted to cut down that number, but she's never done it. "I'd love to cut it, but I can't. It's too valuable. [Training] is a long-term strategy toward controlling the most volatile variable in my process -- the human. I can't not do it," she says. The company has a library of 250 E-Trainment segments, and employees often submit their ideas for new topics to explore. In fact, Steinwall bumped up her E-Trainment budget this year to $150,000, with 150 new topics slated for completion. Steinwall believes her well-educated workforce is helping shield her company from the rigors of globalization and increasing pressure to keep up with OEM-led lean initiatives. Doug Engel, vice chairman and U.S. manufacturing industry leader for Deloitte and a Progressive Manufacturing judge, applauds Steinwall's strategy. "This is an intriguing way to build employee skill sets and increase employee retention. [Steinwall's] single-minded focus on people development is admirable and has paid performance dividends over the years," Engel says. Though she is often hailed as a training and workforce guru, Steinwall sounds somewhat amused as she looks back at what has become her labor of love. "We're just having a hoot of a time doing our thing," she says, boiled frogs and all.

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