Q: Could you present yourself and your position within the company, in a few words?
My name is Tricia Fulton, I am Chief Financial Officer at Sun Hydraulics Corporation, which is a publicly traded company at Nasdaq (SNHY)
Q: We heard that SH makes use of what is known as “agile organization”. Could you tell me more about this?
I’ve worked in the company for more than 20 years at various capacities, and I’ve been CFO since 2006. None of our business cards have titles, but I have the title of CFO because of legal reasons (a company is required to have a designated CEO and CFO). We have a flat, or horizontal organization. No job titles, no pay grades, and collaboration is encouraged and facilitated by this type of organization.
People get together and work in peer groups, instead of one perceived top level executive.
Q : According to you, is AO the management of tomorrow ? If not, what would it be ?
Yes, actually I think many companies are trying to move towards this type of organization, towards a more decentralized decision making process with more collaboration. I think many more companies will soon function like this. I think it is easier for us because we’ve always worked this way, while for other companies it would be harder yet feasible to decentralize decision making.
Q: What about firing people? When there are restructuration plans.. How do you know who to fire as everyone as the same status and that there is no job description? Do you use financial criteria (wages)?
That is usually done according to a performance matrix. If an employee is perceived as a weak performer, we will assist that person with a coaching plan, but they would likely be the first people to go in case of restructuration. We would usually try to keep the employee and move them around the company towards a more suitable position, but if that is not possible then we would have to remove the position.
We have never had a layoff until last fall, and had the first recently, and our new CEO needed the company to lay off some of the low performers, but we did it to optimize our production areas. That is one of the things we have communicated to employees, we did it so that we could remain more competitive. It is necessary to operate at a high level given our company’s actual situation (international expansion and recent acquisitions). Having less workers encourages them to perform better, and in conjunction with keeping only the high performing employees, this results in improved processes.
Q : How does your team feel about it ? don’t you think they could feel a lack of recognition without any job description ?
People are usually receptive to our particular environment. The people who need the type of recognition you peak of tend to leave the company on their own accord fairly quickly, and usually it is the people that enjoy this type of structure that tend to stay. I obviously love it, since I have been working here for 20 years and would have never seen myself work in the same company for 20 years.
Q: In your corporate video, you told us that there were no job titles. How do you know who can help you with a certain area of expertise when needed?
Everybody works in a specific functional area, and everyone knows who works in what, and which person has which specialized function at a time being. Many people also change functions, thus many people might be able to help you with a request or at least orientate you towards a person that would be able to help you.
It is actually much more efficient than it seems, the cross training of our employees allows it to be very efficient.
Q: Could you tell me more about the Culture of the company. How do you see it?
The way the company is setup, the CEO is not necessarily the central decision maker. The Harvard cases show how this works, with sub-groups working together and people talking to each other. There are a lot of ad-hock meetings happening at people’s desks, everything is decided much quicker and efficiently, using peer groups to quickly make a relevant analysis. They usually need to do an ROI analysis for a machinery purchase, to have some form of justification for it. This process might be a bit more expensive (because of potentially higher machinery spending), but it allows for much more creativity from the workers. And the people needing the machinery are the ones who know best what additional equipment they might need to optimize their process.
Q: Do you think your high performance is due to this type of organization?
I do. I think we are able to function and make quick decisions, and make employees more empowered, which allows the business to function as efficiently as possible, and it allows the employees to make express their creativity and different viewpoints, as opposed to classic management styles.
Downsides: if you have people that are not willing to be autonomous, and people that need to be driven, and peers will usually try to make sure that the workers either improve or are not part of the company anymore.
Q: Could you give me an example where maybe you missed/ were nostalgic of the former structure?
I don’t miss it; I don’t think I could go back to it. Even having an office to myself, I’m so used to being surrounded by people all day long, to getting all this feedback. It would be difficult for me to stop doing that. I used to work for very structured companies (with paygrades, job descriptions, job-specific responsibilities, etc…), and I have to say I have really enjoyed the freedom that I have found with SH.
Perfect, that’s all for us, thank you for your time!