Wander into Spitz International’s sunflower seed processing plant in Bow Island, Alta., at quitting time on a Thursday and you might find yourself in the midst of joyous bedlam.
One of the quirks of founders Tom and Emmy Droog is the habit of handing out $100 bills to every worker when a production record is set.
“You’d never see the head of a publicly traded company handing out $100 bills and I sure never dreamed of doing something like that,” says vice-president Myles Hamilton, who took over day-to-day operations in 2006 after a 15-year career with Frito Lay.
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“But we’ll do that two or three times a summer when certain business milestones are hit.”
Of course, you can afford to occasionally hand out a few thousand bucks to your 50 employees when you’re No. 1 in your category in Canada, No. 3 in the United States and doing $30 million worth of business annually.
But the Droogs’ insistence on treating people well and the success of their 25-year-old company is not unrelated. Nor does it stop at cash incentives.
For example, Spitz’s production plant closes for the week on Thursdays. There are no nights or weekend work.
“That’s not something our competitors do, but our motto is ‘sunflowers with a difference,’ and it’s not just our brand but how we run the company,” Hamilton said.
“So we run production Monday to Thursday from 7 to 5:30. That lets our workers get home for dinner and spend weekends with their families, and means we can attract a different kind of labour pool.”
Different is a polite way of saying better. Any floor manager of any plant or factory can tell you that finding people who will regularly show up for their night or weekend shifts is a significant challenge, much less finding conscientious workers who care about what they’re doing.
The same philosophy extends to Spitz’s group of 40 sunflower growers in Alberta and Manitoba. Once a summer, Droog and Hamilton show up with a bus and the 10 or 15 growers in that area get on for a tour of each other’s farms, including a walk in the sunflower fields. Then they have a big barbecue and kick back.
“I would be very surprised if our competitors know their growers on a first name basis as we do,” Hamilton said.
Again, doing the nice thing is also the smart thing. Wouldn’t you put in that extra effort if you knew the head of the company that buys your product would show up? What’s more, any time one of the growers does something that produces a better-than-usual result, it’s noticed and shared as a best practice with all the growers.
“Most companies will grind producers as hard as they can because they want to be competitive on price,” Hamilton said.
“But Tom’s philosophy is different. It’s ‘I want there to be something in this for you because I want to be sure that you’re going to look after me.’ “
The best example of Droog’s win-win philosophy was his approach to “jobbers,” those men and women who drive confectionary products from store to store, making sure the display rack is full and chatting up the store manager about maybe moving that rack to a more prominent location.
Spitz started in business with its own distributors, who generally work on a straight commission, typically a 10 to 20 percent cut of the wholesale price.
Spitz paid 30 percent and guess what? Distributors pushed Spitz sunflower seeds like crazy, and sales exploded, including a stretch from 1990 to 1995 where they tripled or quadrupled every year.
Hamilton, who also spent six years with consumer products giant Procter & Gamble, reveals his corporate colours when he describes this as overinvesting in a product. However, he was obviously impressed enough to leave the corporate world to work for Droog.
So what’s the point here: find a company like Spitz to buy your product?
Great, if you can. But there’s a deeper lesson.
Business doesn’t have to be a dog-eat-dog affair in which you grind your suppliers or distributors, even though that is the norm in corporations where the focus is all about making quarterly revenue and profit targets.
An owner-operated business can choose to act differently. You can choose to be generous even if it’s not the most profitable move in the short term. As Droog and the success of Spitz have shown, generosity can pay big long-term dividends.
Glenn Cheater is editor of the Canadian Farm Manager, the newsletter of the Canadian Farm Business Management Council. The newsletter as well as archived columns from this series can be found at www.farmcentre.com.
