When the top leadership position was taken over by Theodore Greeff as CEO in 1978, it marked the end of the family-owned and run tenure of leadership at Simmons, and the beginning of corporate ownership of the market leading mattress manufacturer. Fenway Partners purchased Simmons from Investcorp for $513million in 1998 and began the search for a new CEO within 6 months, ultimately appointing Charlie Eitel to the position in January 2000.
Eitel instigated and spear-headed significant cultural reform through the first 24 months of his position with the company, and faced significant internal and external, economic and cultural challenges along the way, some of the more material of which will be discussed below.
Aside from the obvious economic aftershock and downturn felt by the US as a whole after September 11, 3 of Simmons’ largest customers (Montgomery Ward, Heilig Meyers, and Home Life) went into bankruptcy, representing 17% collectively of total sales in 2001. This placed pressure not only on the management and leadership team as they scrambled to address and avert the material impact this would have on the company’s profitability, but the news inevitably alarmed and worried the Simmons employees.
Furthermore, over the last 24 months up to December 2001, Eitel uncovered and addressed significant cultural issues in the company. He added 3 more values to Simmons’ long-standing and historically significant core values, established a ‘leadership vision’ for the company as well as a ‘workforce vision’, all of which were intended to effectively and efficiently address the company’s cultural identity and unity short-comings, but he found this more difficult than he envisioned.
Simmons operates 18 manufacturing plants across the US and Puerto Rico. Although these were all Simmons plants and hierarchically rolled in to the Simmons corporate manufacturing structure, they essentially operated as separate entities. The disjuncture in corporate alignment and unity was so pronounced, the plants were perceived to compete against each other. Any efficiencies and innovations made by one plant were not shared with others, and culture within each of these plants was far from ideal. From the manufacturing floor where supervisors patrolled the floor akin to the command-and-control leadership style of a military staff sergeant, to plant offices, morale was low amongst employees.
There was no goal-congruence between these plants and Eitel didn’t take long to recognise this as well as the exception to the observation being the Janesville, Wisconsin plant. Comparing Janesville to its counter-parties, Eitel found that employee morale was higher than any other plant whilst productivity and efficiency was also the best among all plants (evidenced by the plant being awarded the internal award for operational excellence and quality every year between 1994 and 2000). The fact that this plant was the largest contributor to total group production (17%) further solidified its standing as the outright best in the group, so naturally it appealed to Eitel’s curiosity as to what and how they were operating differently.
It was found that the difference between Janesville and the other plants was mostly attributable to the management style of the plant leadership team – they empowered plant workers to take responsibility for not only their jobs, but of the smooth operation of the plant and each other to create a highly team-oriented environment. It was found that they encouraged plant worker input and involved them into the decision making process, held monthly meetings for all staff and had in place a sound reward and recognition system for all.
Eitel used this as an opportunity to implement a radical and controversial cultural reform program called the Great Game of Life. It was controversial because during a period of financial and economic instability and uncertainty, one in which 3 of the largest customers are no longer a source of revenue for the
