Initially, employee empowerment was an unpopular concept at Kowalski Sausage Co. But three siblings used the idea to reinvigorate the company-only after worker doubt turned to respect
by Larry Aylward, managing editor
The modish world-and a meat industry that has adapted to its own contemporary style-has not left 74-year-old, time-tested Kowalski Sausage Co. entrapped in a time warp.
Kowalski Sausage still resides in Hamtramck, Mich., a city settled by Polish immigrants. The old, ethnic neighborhood is located on the northern edge of downtown Detroit. Kowalski's manufacturing facility has an aged look that matches the distinctive aura of its locality.
Kowalski continues to manufacture its kielbasa, kiszka, natural-casing franks and deli products with the traditional human touch. Robotics have not completely replaced the manufacturing process.
But behind the doors of the old brick building, the wraps are being removed from new ideas by young executives. Kowalski's fourth-generation owners-Audrey, Michael and Linda-have implemented latter-day management concepts and new technology to go with old-style products.
The Kowalskis have introduced Total Quality Management, employee empowerment, group problem-solving and human resources to their nearly 300 employees. They've also instituted a computer system, "The Monitor System," to bar code product, track inventory and deliveries, and improve company communications.
Not all employees jumped for joy when the new management concepts and technology were introduced. But something is right: The company has experienced 5 percent sales increases in each of the last two years. Annual sales are about $20 million.
Their generation
The siblings have equal share in the company. Audrey, 32, manages Kowalski's 14 retail deli operations in addition to its warehouse and legal matters. She is a lawyer.
Michael, 30, is in charge of the company's production, sales, marketing and advertising departments.
Linda, 27, heads up the accounting and foodservice departments, and manages Hershel's, Kowalski's restaurant in Troy, Mich.
The three have been running the company since 1989, after their father, Ronald, died of cancer at age 49. But the old building is a friendly and familiar place; a home away from home since childhood.
And as children must mature into adults to keep pace with life, companies must mature to keep profitable. It was for this reason that the Kowalskis decided they needed to institute some changes.
Ten years ago, Kowalski employees didn't have much say in company matters, and no one objected to this standard operating procedure. Ronald ran the business and made most of the decisions, as did his father, Steve, and his grandfather, Zygmund, who founded the business.
The young Kowalskis don't fault their predecessors' management style. The elders were from generations that mandated an "employer-says, employee-does" philosophy. Still, the siblings knew they had to keep the company abreast of the times.
"New technology was beyond what our father and grandfather wanted to deal with," Michael says. "Our generation has had more exposure to things like that."
A time for change
Change can be difficult, and at first the Kowalskis found the going tough.
Per capita sales were down, mainly because people were eating less red meat, and veteran employees were not interested in new management styles.
And to make matters worse, there was the age factor.
"We had a credibility problem when we started," Audrey admits. "We had not earned any respect. We were younger than most every manager."
Aside from age, the Kowalskis also discovered they had a lot to learn about themselves. They realized that college degrees did not prepare them for the practical side of running a business.
"You can have all the book knowledge you want, but it's the practical application that's most important," Audrey points out. "You have to learn how to deal with people."
The siblings didn't force their management philosophy, but some employees did leave the company because they continually resisted adapting to the new philosophy.
"Over the first year, there wasn't much change," Michael says. "At times, we'd make a change and it got a lot of resistance and didn't work out. But we would take a step back and make the change slowly."
Jim Traskie, the company's director of foodservice and a Kowalski employee since 1956, still refers to Audrey, Michael and Linda as "The Kids." But Traskie, a good friend of Ronald, says he has no problem with the ages or the business philosophy of "The Kids."
"You have to go along, and you have to change," Traskie adds. "If somebody has a better idea than I do, I'll take that idea and give the person credit for it."
Traskie reports to Linda, who is more than 30 years younger.
"They know what I'm doing, and they trust me," Traskie stresses. "I've got a good job, and I'm happy here."
Joe Adolph, Kowalski's plant manager, has worked for the company for 21 years, starting when he was 18 years old.
Ironically, Adolph was Michael's boss when Michael worked at the plant as a laborer during his college years. "It felt funny for me to tell him what to do," Adolph admits.
But Michael didn't take advantage of the situation.
"He was a damn good worker," Adolph insists. "He was one of the best ones I've ever had."
Now, Michael and his sisters are Adolph's superiors.
"We get along fine. I have no problems with them," Adolph says.
'Channeling resources'
Over time, more workers have taken a liking to the concept of employee empowerment, according to Michael. But it took some prodding to get employees involved in making decisions they were not accustomed to making.
"For some employees, the bigger the decisions the more reluctant they are to make them," Michael notes. "But we tell them: The only bad mistake is when you make the same bad mistake twice."
As part of employee empowerment, truck drivers were asked their opinions when the company decided to redesign its truck bodies.
Employees are encouraged to voice their opinions, a notion previously not promoted among workers. Michael says it's simply a matter of using employees' experience.
"Our employees know things we don't know," he points out.
Group problem solving was introduced so employees could "make decisions on the future of the company," says Michael, adding that he often meets with managers to discuss problems and implement solutions.
Employees were also given more control over their own pay. Salaries were made more competitive, and bonuses were tied to employee objectives.
Kowalski's Total Quality Management programs take on formal and informal facets. The company created a two-person quality assurance department, which is in charge of temperature control and scientifically checking fat levels in product. It's the most formal TQM program, Michael adds.
Informally, TQM is implemented in the grinding room, where employees visibly inspect meat before processing. And at the warehouse level, employees are encouraged to dispose of product with the slightest discoloration.
"This kind of thinking goes on throughout the plant," Michael says.
Audrey points out the new management concepts were implemented so employees could feel like they would make a difference.
"(The management concepts) weren't just edicts from the three of us," she adds. "We knew that we didn't have all of the skills. We knew we had some great knowledge of the past, and we knew we had great resources here.
But we needed to start channeling those resources in the right direction," she notes.
Adolph admits, at first glance, he didn't like all of the changes. "I had problems," he says.
Adolph recalls the first day of computer training at the plant. It wasn't fun.
"I'll be honest with you: I didn't want to touch the computers," he admits.
Today, Adolph is the owner of a home computer.
Despite the management concepts, especially those of TQM and merit raises, there have been no problems with Kowalski's two unions, according to Michael.
And with the management concepts in place, the Kowalskis can concentrate on the bottom line.
To combat the fact that many people are consuming less red meat, the company is expanding to more areas to gain more customers. Recently, Kowalski introduced its products to Indiana, and it plans expansion to Chicago, Cleveland and Toledo, Ohio.
"We've been very aggressive in our expansion, and that has helped us a lot with our growth," Michael adds. "We plan to expand throughout the Midwest and eventually throughout the nation."
The siblings are doing all they can to try and figure out consumer wants and needs, instituting focus groups to help in the process. New packaging will be introduced, and bright yellow-colored new trucks are driving the streets.
"We can't sell our product as the lowest cost product," Michael says. "We have to build relationships with our customers, and give them a reason to buy our product."
The namesake
Audrey, Michael and Linda have no written pact that says they will work together for the rest of their lives. Rumors have surfaced that the three would sell the company and laugh all the way to the bank. But the Kowalskis chuckle at such gossip.
The three grew up with the business, and they may grow old with it. And despite changes unheard of in their father's day, the Kowalskis agree that Ronald would be pleased.
Linda recalls a conversation she had with her father shortly before his death.
As a former management trainee at a large bank, Linda became discouraged by big business and the bureaucracy it can breed. She longed to work for the family business.
"Before my dad died, he sat down with me and said, 'Do you really want to work here?' " Linda says. "I told him I really did want to work for the company. He said, 'I never imagined in a million years that my three children would want to work here.' "
And it's not just the Kowalski children who want to "work here." Traskie and Adolph don't want to leave.
Adolph, 39, is proud to say that he feels like he's part of the building.
"I wouldn't mind it," he says, when asked if he'd like to be employed at Kowalski for the rest of his life. "I'd be a fool to leave."
Kowalski Sausage at a glance
Company profile: Kowalski Sausage Co., Hamtramck, Mich. The 74-year-old company's main business is manufacturing and distribution of processed meats, including hot dogs, bologna, sausage and lunch meats. Kowalski's annual sales are roughly $20 million and volume is about 5.5 million pounds a year. The company employs approximately 300 people.
The company has a retail and foodservice division. The retail division includes 14 delis and a restaurant. The company has foodservice arrangements with many Michigan-based clients, including Joe Louis Arena, the Palace of Auburn Hills, the Pontiac Silverdome, Tiger Stadium, Michigan State University and the University of Michigan. Distribution: Kowalski primarily distributes product throughout Greater Detroit. It expanded to Grand Rapids, Mich., about four years ago, and recently began dispensing product in Indiana. The company has plans to expand to Chicago, Cleveland and Toledo, Ohio. Goals are to expand nationally. Kowalski does not export product.
Other products: Some of the company's specialty products include kiszka (blood sausage), knockwurst, bratwurst, polaki and head cheese.
Kowalski prides itself on its natural casing franks and Polish sausage. All products are based on family recipes.