Jake Avery, Liz Donato, Michelle Greenway, Aimee LaBlonde, Erica Schmaezle, and Dave Taylor
Mike and Carmen Strand, a happily married couple with three children, are the founders and the lifeblood of StrandWare. In 1988, StrandWare originated in Eau Claire as a small, private, entrepreneurial software business. StrandWare, still private and still based in Eau Claire, is now a larger and very successful company that designs, develops, and markets bar code and label printing software. This software is used worldwide for industrial and business applications. The process by which the company originated, grew, and developed into the company it is now makes for a fascinating tale. An essential component of its success is the culture created by its originators, Mike and Carmen Strand. We begin our story with a general overview of the business and its development, and then proceed with an analysis of its management style. We hope to demonstrate how StrandWare’s management philosophy has changed significantly as a result of company “ups and downs.” We will conclude with a discussion of the methods StrandWare uses to retain its employees, and will display how the interweaving of the Strands’ moral and ethical values with the elements of their business leads to a healthy and thriving company.
To understand the company’s culture, it is important to first review StrandWare’s origination. We will then move to a discussion of StrandWare’s product line, market share, business philosophies, and its competitive advantage. Finally, we will provide a comprehensive overview of its current characteristics.
Mike Strand graduated from the Chippewa Valley Technical College in 1982, and then again in 1984, with associate’s degrees in Data Processing and Electronics Technology. While there, an executive from Cray Research made a presentation in one of his classes, and was impressed with the depth of the questioning he received from Mike. This impression led to Mike’s subsequent employment at Cray Research; Mike was employed at Cray from 1982 to 1986. After Cray, Mike worked at a small software firm called Delta Technology for two years. While working in this field, he decided he would like to try to start a company that sold videotape rental software, but soon realized there were about a thousand competitors.
While developing the videotape rental software, Mike was faced with printing bar codes for customer cards and tape labels. He looked through PC magazines, and couldn’t find any information about the existence of such software, so decided to create his own. He wrote a small bar coding program called “Bar Code Library,” and advertised it in an ad in PC Week. The advertisement ran for 17 weeks, and he was immediately contacted from potentially interested clients. Mike made his first sale, and quickly found that many of his customers were not programmers and were thus unable to use his product. Mike responded by inventing a new bar coding program called “Quick Draw.” At first, sales were slow, so he decided to present it at a technology exposition. Potential customers indicated that they wanted software that would work with thermal transfer printers, so Mike made modifications and developed a new product. Mike and his brother spent four months developing their new “Label Matrix” product, which worked with six different types of printers – the dot matrix, the laser, and a few specialty bar code printers.
With the exposure of Label Matrix at the industrial show, sales began to pick up rapidly. Several resellers had purchased the product, and the word was soon out that Label Matrix was easy-to-use, and that Mike’s company was responsive to client needs. Within five years, the business was in an enviable position. StrandWare had expanded to 50 employees and had also hired outside managers and vice presidents, thereby delegating authority. The Strands soon found that they had lost control of their company. Mike and Carmen had allowed this new administrative staff too much autonomy, and were left with a professional reputation not in keeping with their standards. Without Mike’s technical expertise, and without the Strands at the helm of the company, StrandWare’s customer service and technical expertise lost its edge. The dilution of their strengths caused resellers to defect; this was definitely not the direction in which they had wanted to move.
The Strands made the difficult decision to refocus and to streamline their business; about three years ago the company was downsized and the situation has turned around. StrandWare now focuses on providing good service and products rather than profits. One of the positions that has arisen from the Strands’ business experience is that corporate owners should reinvest the bulk of profits back into the company, instead of keeping them for personal use. Mike states that his roller-coaster business ride has left him with the firm belief that “starting a new business is not for the weak of heart.”
Currently, StrandWare has about 30 employees. Mike is President and CEO of the company. StrandWare now has only one vice president, but they still employ several department managers. The one department they outsource is Marketing. StrandWare’s three main products are Label Matrix, Quick Draw, and the newer “Backtrack” software. These products program bar-coding software for companies, who can then implement their own bar-coding schemes. The programs now work with over 500 types of printers. The software also allows access to user databases; therefore, the customers can use the software to interact and link with their current information.
We believe StrandWare’s competitive advantage is twofold. According to Mike and Carmen, the relationships they have with their customers are of the utmost significance. However, we feel that a further competitive advantage comes with the trust they instill in their customers. Incredibly, StrandWare does not have copy protection on their software; Mike Strand feels his customers are trustworthy and, therefore, it is not necessary. Whatever the particular reasons for their success, StrandWare has become hugely successful in the field of bar coding software. StrandWare now sells to 80 of the world’s countries. They own 80-90% of Mexico’s market share, 70% of Brazil’s, 40% in the European market, and 30-40% right here in the U.S. The Strands have sold their automatic I.D. products to all of the top 15 of the Fortune 500 companies; 65 of the top 100 currently use their products. The target market, however, consists of small-to-medium sized companies.
Analysis of Management Style:
As we have heretofore pointed out, StrandWare has gone through many changes. Mike began his business from scratch, and because he came up with a product that found a market niche, he was able to quickly find success and expand. With that incredible expansion came many new twists and turns – some of them positive, and some of them negative. Throughout the entire process, we feel that Mike Strand has been very successful in his role as founder. In Chapter 15 of our text, it states, “The founder of an organization and his or her personal values and beliefs have a substantial influence on an organization’s culture and the norms, stories, myths, and legends that develop in a company.” We believe Mike and Carmen’s behavior has helped to create the culture and the norms of StrandWare. The following excerpt from the first StrandWare handbook clearly sets out their mission:
“The goal at StrandWare is to profitably achieve and maintain industry prominence by producing and marketing quality, innovative products that meet and exceed the needs of the customer. The business is operated based on the principles of courtesy, honesty, respect, and consistency, with the customer always as a top priority.”
Inherent within this statement, along with the goal of achieving industry prominence, is a deep and underlying commitment to the customer. This commitment has proven to be more than mere rhetoric. Mike clearly states, “I firmly believe in doing what is right, no matter what the cost. I figure it will come back in the end. I always try to look and focus on the positive rather than the negatives.” When Mike and Carmen Strand established their organizational values, as demonstrated in their company mission, they began to create their own corporate culture. Some of their bedrock values were embedded in the Forward in the earliest StrandWare company handbook.
“It all comes down to the way we feel about the value of the ‘individual.’ We are not much into titles, gender, last names, with or without initials in front of or behind it. The knowledge to perform your job, of course, is valuable to us – but we really don’t care where you got that knowledge, so long as you have it. We don’t look at what race, income group, family situation, or where it is a person comes from. As an employer we believe that all our employees are equal to and deserving of our best efforts in helping them meet their individual aspirations and goals. “
These underlying beliefs came in handy. When Mike first began hiring employees, he selected people with similar values and interests in order to develop the organization’s culture. Over time, members of the organization began to share in Mike’s vision for company achievement. The terminal value of a company is “a desired goal that an organization seeks to achieve.” Our book mentions several examples of terminal values that might be adopted by an organization: “excellence, stability, predictability, profitability, innovation, economy, morality, and quality.” Originally, Mike’s vision, or terminal value, was to expand and to grow. However, as sales increased, and outside managers were brought in to help with the expansion, Mike’s satisfaction with the outcomes, paradoxically, decreased.
Mike explains, “I felt that I lost control and was disappointed that things were not going well. I was not hearing what the customer needed. I continued to invest in ideas that the management had, but only to find that they were not the right moves. After spending huge amounts of money and not seeing positive returns (and not having any fun because of it), we, along with our management team, finally decided to re-focus on the more important things in life.”
Mike and Carmen were not happy with the results they were getting in their push to economic success. In conforming to the stereotypical business model, the values that they held as significant inadvertently became watered down, and their customers responded by defecting. Mike and Carmen listened to their customers, and began to expand on their value system. They adopted a new and revolutionary set of business principles. They began to refocus.
Mike says, “I think that the move to restructure helped the family life. Having money to feed the family is a good thing! It did take more time on my part, which was a major detriment, but Carmen has always been one to push me into doing things that I like because I don’t complain as much and am easier to live with. When I let the first vice president go and discovered all the things that had been done, my personal feelings were distress. We had built a strong reputation over 8 to 9 years of being a company that built strong products, relationships, and markets – largely because of my personal ethics. Fortunately, most of the customers didn’t believe that it was me, but, unfortunately, the damage was already done.”
Financial reasons were the main reasons for the refocus, for as Mike puts it, you “can’t have fun without profits.” He was forced to lay off workers, and saw this as an opportunity to develop a new structure for StrandWare. He began to lay the groundwork for a new company – new in that it would be built upon principles seemingly contrary to those in the business world. He says, “We focus on satisfying customers first, profits second. Part of satisfying customers is staying in business, so profits are involved in the equation.”
To compare the difference between a weak company culture and a strong one, we look at the following example from our textbook. In our text, a weak company culture is defined as one that would “provide little guidance to organizational employees about how they should behave. Organizations with weak cultures use formal organizational structure, rather than values and norms, to coordinate organizational behavior.”
In contrast, a strong company culture is said to “have cohesive sets of values and norms that bind organizational members together and foster commitment from employees to achieve organizational goals.” The text goes on to say that “strong cultures generate high performance and give an organization a competitive advantage.” The Strands, even while reducing their staff, decided to focus on customer service and product innovation. This soon became their competitive advantage. Mike explains, “When it comes to setting policies, I try to remember to make it easy for the majority who do things honestly, rather than making it hard for everyone to do business with us, by setting policies that keep the minority who try to cheat us under our thumb.”
Mike adheres to several of the behaviors indicative of a leader in a strong company culture. He encourages his employees to take risks, and to have entrepreneur values. He encourages his employees to contribute ideas, and strives for them to uphold a team spirit. He regularly asks his employees many questions, in order to get their viewpoints. Here is another excerpt from the employee handbook, which illustrates this point:
“WE NEED YOUR IDEAS:
Ask any of our employees who have worked with us for a long time and they will probably tell you of the many changes and improvements that have come about in their departments since they first joined us. We believe the person doing a job is in the best position to think of ways of doing the job most easily, efficiently, and effectively. If you think of a better way of doing your job, or the job of a fellow employee, discuss it with your manager, who will welcome your suggestions and ideas. Remember, there may be areas in StrandWare’s operation that can be improved. These could be in service, production methods, equipment, communications, safety, ways to reduce costs, losses and/or waste, or other improvements you may see a need for. Please give us the benefit of your unique experience and thoughts. Your contributions, as well as those of others, are valuable to StrandWare.”
StrandWare has strengthened after its restructuring. Employees feel valued, and encouraged to share their knowledge and ideas. They are committed to the organization, and to Mike and Carmen’s vision. Because of their new company focus, customers are satisfied again, and sales are robust. Mike shares his profits with his employees, as we will soon demonstrate. StrandWare is now a global company, with a strong market for their products. StrandWare’s customers feel they can communicate their needs to the company, and that company employees will respond. StrandWare employees take customer needs seriously, and channel that information into producing products that the customer wants. Although Mike’s position as CEO mandates a great deal of business travel, he is still closely involved in the daily operations of his business. He says, “I am involved in the day-to-day activities of the business, although I am out of the office a lot. I am very comfortable with the staff handling everything. This allows me to feel comfortable that things are generally running in an ethical and above-board manner. That is my main concern.”
The Strands continue to keep the focus on what the company does best, which is satisfying customers first, and making profits second. StrandWare symbolizes the ideals of its founder. Mike and Carmen Strand’s ethics and ideals are communicated to their employees through annual reviews, conversations, company documentation, and their own actions. The Strands believe in leading employees through managers who act as role models.
Our text lists several of the traits of a company with a strong culture:
- emphasizes the values of autonomy and entrepreneurship
- encourages the employees to take risks – for example, to find new ways to provide high-quality products or customer service
- top managers are closely involved in the day-to-day operations of a successful company and do not simply make decisions isolated in some “ivory tower”
- employees are committed to instrumental values and norms that encourage a “hands-on, value-driven approach”
- the organization sticks to what it does best and maintains control over its core activities
- establishes close relations with customers and adopts customer-oriented norms as a way of improving the company’s competitive position
- learns customer needs and improves their ability to develop products and services that customers desire
- tries to establish values and norms that motivate employees to do their best
- believes that productivity is obtained through people and that respect for the individual is the primary means by which a company can create the right culture for productive behavior
- develops values that demonstrates their commitment to investing in their human resources, to increase their worth and promote the success of the organization
- encourages employees to learn new skills or better utilize existing skills
- increases spending on education and training and invests in the long-term development of workers
We are sure Mike and Carmen Strand did not read any of this research by Thomas Peters and Robert Waterman, Jr., but they serve as a good example of its tenants, through their own actions.
How to Lead by Example, and Inspire Employees:
The Strands’ actions dictate how they retain employees, and underscore their philosophies of management. They also enable the company’s success. The Strands exhibit an exuberant amount of respect and gratitude for each individual employee. Some of the means by which the Strands run an employee-satisfying organization are through their training and retraining programs, their level of communication, the employee benefits, mentoring within the company, multi-tasking jobs to alleviate boredom, and an overall company culture that exudes a true feeling of teamwork. In addition, management philosophies aid in attaining the employee-friendly environment. Altogether, these ideas and programs make StrandWare the success that it is.
Mike employs managers in his Sales Department, the Support Area, in Administration, and also in Research and Development. As mentioned earlier, Marketing services are outsourced and managed by one person. The “Backtrack Group” is a separate division, and has two people managing it. Mike likes his managers and staff members to fit within the culture of the company. He believes this to be very important. He believes managers need to have the ability to delegate when necessary, yet also “be willing to be in the trenches” when necessary. This is a good example of vicarious learning. Vicarious learning is “learning that occurs when one person learns a behavior by watching another person perform the behavior.” A manager’s “getting in the trenches” shows employees that everyone at StrandWare is part of the same team.
When it comes to training employees, methods vary. Some training is hands-on, while some is via written materials or video. Mike believes the first day on the job is crucial. He tries to pair new employees with a company mentor, which he feels is important for employee success. Mike tries to have nametags, badges, and business cards set up at the new employee’s desk so he/she immediately feels welcome. Within the first few hours of employment, new employees have already taken care of administrative paperwork and have signed required nondisclosure agreements. Each new employee is given a full itinerary for their first day, so they feel important and a part of the team. This also gives them some structure for their activities.
Retraining of StrandWare employees is a constant, since new releases are always being worked on. StrandWare is always looking to the future, and is ready to take advantage of new opportunities. To this end, StrandWare has created an advisory council to look over the present and future aspects of the business, and to make comparisons. These advisors are from around the nation, and are owners and vice presidents from many different industries; they come together to share their ideas. Many aspects such as these help a new employee feel welcomed to and secure in the company, and furthermore, contribute to their desire to stay with the company.
In order to continue as a successful company, StrandWare needs to have effective communication. Communication is “the sharing of information between two or more individuals or groups to reach a common understanding.” From what we have seen, StrandWare does have effective communication. Mike holds regular employee meetings. His company is currently focusing on a “Best in 10 Years” award, and has an employee campaign to remind the staff of this goal. Mike encourages employees to contribute ideas, and strives for them to uphold a team spirit. He regularly asks employees a lot of questions, in order to try to get their viewpoints. Mike likes all of his employees to feel as if they are contributing to the company.
Mike wants all employees to contribute, men and women alike. StrandWare actually has more female employees than males. The building is handicapped accessible. However, Mike states that there are not a lot of opportunities to achieve a diverse workforce, due to the general make-up of Eau Claire area residents.
Most of StrandWare’s employees have great personalities. Personality is “the pattern of relatively enduring ways in which a person feels, thinks, and behaves.” Many StrandWare employees exhibit the personality trait of extraversion, which is “the tendency to experience positive emotional states and feel good about oneself and the world around one.” Of Mike’s current employees, he feels there are only two or three who do not have a personality trait that fits directly with the company culture. He estimates that 90-95% of his current employees are totally committed to the company, and he feels these employees are actually 150-200% committed. These employees exhibit intrinsically motivated work behavior, which is “behavior performed for its own sake.” The money doesn’t motivate most of them; they are motivated to do good work because they love the job and they love the company culture.
Now, this is not to say that salary is not important. StrandWare’s Vice President of Sales receives a salary along with a commission. Employees receive regular bonuses, which are added to their salaries. These bonuses are actually a form of “gain sharing” for employees, and are based on a percentage of company profit. Mike estimates that about 10% of sales are used to run the company. He then takes about 1/3 of the profits over this level and divides them evenly among his employees. The gain sharing is paid monthly; employees have made from $200 to $450 extra per month from this gain sharing. However, there are occasional months where the employee receives nothing extra. On top of the gain sharing and other rewards, employees also receive Christmas bonuses. Mike also has an “Employee of the Month” selection. That employee receives free parking and a half-a-day off.
Another significant aspect of StrandWare’s company culture is the parties it has. One example is the “Going to Extremes” party StrandWare had several years ago. “Going to Extremes” was the motto for the company and staff. The company and employees pledged to “go to extremes” to meet the needs of their customers. Employees were encouraged and rewarded for going the extra mile for customers, resellers, and each other. There were many incentives to encourage the employees to be the best they could be. This was a yearlong program, beginning with a kick-off party. The “Going to Extremes” party was held at a bowling alley, where gifts and prizes were awarded, and everyone was thanked for their efforts in “going to extremes.” At other StrandWare company parties, you might find beer packed in ice in a kiddie swimming pool, and numerous squirt gun fights breaking out. Fun is a prerequisite at StrandWare.
Turnover, however, is the opposite of fun. Turnover is “the permanent withdrawal of a worker from the employing organization.” Because of all the perks his employees receive, Mike says turnover is virtually nonexistent. If an employee were to complain that they were not receiving enough credit for his or her work, Mike says he would look at management processes to try to resolve the issue for the present and the future. He believes working with employees to achieve remediation of complaints is key.
Some employees tend to complain when they become bored. Mike tries to multi-task his employees so they avoid boredom. As mentioned earlier, he tends to hire people who are self-motivated and think creatively. Another asset at the plant is a recreation room where employees are encouraged to go when they are feeling stressed or need physical activity. In this room, Mike has a pool table and a dartboard, as well other items people can utilize when they need a break from their work, such as weight-training equipment. This type of employee perk is just another way that Mike seeks to reach optimum performance from his crew.
StrandWare does have annual performance reviews for its employees. The first review comes 90 days after they begin work. The review is about 3 to 4 pages long, and allows for constructive criticism and positive reinforcement. Either Mike or his Executive Vice President evaluates the managers. All employees are encouraged to use a self-review process.
Another key to StrandWare’s business success is its responsibility to society. Social responsibility is “an organization’s duty or obligation toward individuals or groups outside the organization that are affected by its actions.” StrandWare makes many special donations. A certain percentage of profits are allocated for special causes. Donations may also take the form of time, financial donations, work with the Habitat for Humanity, or help with the RCU Classic Charity Race and the Special Olympics.
In summation, StrandWare is a company that possesses the positive company culture that makes employees happy, loyal, and a permanent asset to the company. Through many of StrandWare’s programs, employees are encouraged to feel like part of the team, ask questions, insert creative ideas, and most of all, socialize and have fun. All-in-all, Mike runs a company that upholds its responsibility to retain satisfied employees that work hard to make their customers happy, and to help the business run smoothly.