When guitar manufacturing icon Gibson Guitars was on the ropes they called an audible, hiring an unknown outsider who transformed the company by listening to his team.
When was the last time you watched Undercover Boss? I became aware of the show in 2013 when the company I was working for announced our CEO would be on the show. My co-workers and I thought this ought to be good, being that employees in our property restoration business respond at all hours of the day (or night) to various damages including water, fire, mold and blood. How would our CEO, who started in the trenches, respond to the everyday challenges that our technicians faced as he interacted with our counterparts in other parts of the country?
Long before Undercover Boss popularized the concept of executive level leaders donning terrible wigs and getting their hands dirty in their own operations, there were innovative leaders like Ted McCarty. Who is this Ted Mc-WHO-ty? We will answer that question but before we do let’s take a brief walk through the time period and the organization to which he was called, the iconic guitar manufacturer, Gibson guitars. If you have observed any value from leaders going undercover in their businesses, wait until you see what Ted can do by being an out-of-cover manager and listening to his employees.
Gibson Guitars in the pre-McCarty era
If you know anything about rock and roll, would you be surprised to know that Gibson had initially passed on the option to usher in the dawn of the solid body electric guitar? Could you imagine Jimmy Page of Led Zepplin or Slash of Guns N’ Roses without their Les Pauls?
In 1930, Les Paul brought his ugly little innovation “the log” to the Michigan based manufacturers and they wholeheartedly rejected his idea. An inventor who wasn’t yet a player in the instrument market, Leo Fender, soon rose as the first to market in the absence of Gibson’s collaboration with Mr. Paul. Even though Leo was first, neither Fender nor Gibson would be strumming for success in this market segment for several years. At the turn of the decade, Gibson wouldn’t even be producing instruments at scale as they transformed their factory into a wartime production line.
World War 1 officially ended in 1918, but things in Europe and abroad were still simmering with tension. Many point to September 1, 1939 when Adolf Hitler’s German forces invaded Poland as the final straw that brought the reluctant nations of England and France back into the fray of opposing Nazi expansion. For two years, up until December of 1941, the United States was resolute to avoid participation in the Allied efforts of World War 2. The bombing of Pearl Harbor in Hawaii on December 7, 1941 by the Japanese quickly changed that decision.
“Yesterday, December 7, 1941 a date which will live in infamy the United States of America was suddenly and deliberately attacked by naval and air forces of the Empire of Japan.” — President Franklin D. Roosevelt
A proud history of working women rising to the challenge
By early 1942, The United States was in full swing to mount a defense against the advancing threat of a Japanese invasion as well as assisting their Allies to recapture land taken by the Axis forces in Europe. Gibson guitars, like many other manufacturers in the States, transformed their operations into wartime production plants. At their headquarters in Kalamazoo, Michigan, Gibson hired over 200 women between 1942 to 1946 to make munitions. The Kalamazoo Gals were also responsible for producing upwards of 25,000 of the highly sought after Gibson “Banner” guitars.
Necessity gave hard working women an opportunity to display their abilities in the workplace. When the world went to war, even those who were not fighting on the front lines were enlisted to help the military efforts. Our allies in England set the example as, “The British government mobilised civilians more effectively than any other combatant nation. By 1944 a third of the civilian population were engaged in war work, including over 7,000,000 women.” Gibson, joined factories across the Allied nations, to produce wood and metal products for the wartime effort.
Gibson Guitars in a downward spiral
Chicago Musical Instruments (CMI) purchased Gibson Guitars in 1944. Mauric Berlin soon discovered that there was trouble in Kalamazoo. He was sitting at the helm of a company that had an iconic image but was hemorrhaging upwards of $10,000 a month (estimated equivalent to $175,000 in today’s dollar). Berlin called upon a former business acquaintance, Ted McCarty, who was an engineer by trade and had been working for the musical manufacturer Wurlitzer for the last 12 years.
McCarty had hit his growth ceiling at Wurlitzer and was ready for a new challenge. Whether Berlin knew it or not, Ted was ready to sign an agreement to become the assistant treasurer with the Brock Candy Company. Maruric was available for lunch and hungry for talent. By contrast, Brock’s decision making ability had stalled out when the owner could not be reached while he was on vacation. In that void of decision making ability, the Candy Companies lapse became the first break for Berlin and the future of his new acquisition at Gibson. Gibson was quicker to get the pen into the hand of emerging talent than Brock, which brings up a few nuggets for those in a position of leadership to take note of:
“We decided that every day we would go through the factory and find one operation that we thought could be improved.” — Ted McCarty on his relationship with John Huis
Listening to and empowering employees might just work
McCarty was hired by Gibson in 1948, the same year that Leo Fender started producing his Broadcaster solid body electric guitar. Ted’s first visit was back to the production floor where many of the issues revolved around poor management by then general manager Guy Hart. If morale continued in its low state, the transformation Ted was orchestrating would not generate any harmony. His visits at the ground level allowed him to identify a 15 year employee, John Huis, who expanded his understanding of the problems while also helping Ted to identify solutions.
Listening to employees enabled McMarty to make progress in the process of improvement. Ted believed that there were too many foremen and without a central superintendent who was responsible for oversight of all the sections there were glaring inconsistencies. This lack of clarity was prohibitive. McCarty promoted Huis to this new role and Hart resigned. The overlooked diamond in the rough was promoted and the cancer (Hart) was removed. Freeing Ted to move on to bigger issues within the Gibson organization and empowering Huis to improve the production systems while establishing a strong working environment for the team.
“We were growing, from 150 employees, growing and growing and growing, and we had about 1,200 when I left in ’66.” - Ted McCarty on growth
When leaders empower their people, everyone wins
Not only did Ted listen to employees, he Ted believed that being friendly with the staff was important. He even went so far to make it his goal, with only 150 employees, to remember the names of individuals as well as something significant about them as people. This commitment transformed the attitude of the employees towards management. McCarty and Huis continued to collaborate and decided to walk the floor daily, “To find one operation that we thought could be improved (Bacon, 2018).” Ted understood the impact of leading by example, to hold himself and his core leaders accountable for the change in culture as well as the commitment to growth.
By identifying issues, taking action and empowering people, McCarty and Gibson went from bleeding money in March to making a profit by May of 1949 (Price). Ted was Vice President within a year and President of Gibson by 1950. How refreshing is it to see that a leader who is committed to making their organization a good place to work can find the means to revolutionize a dying brand? Ted had clarity, consistency and accountability working in the organization. He was enjoying his work, employees were thriving in a positive environment and the organization was firing on all cylinders.
“I was working with the rest of the engineers, and we would sit down, like in a think tank, and we would talk about this guitar: Let’s do this, let’s try that.” — Ted McCarty on innovating with his team
Once the core of the organization is healthy, the possibilities are limitless for innovation
With Gibson back in the business of making guitars it was now time to improve the position of the business in their market. They weren’t the first to the market for the solid body electric guitar but Ted was instrumental in building an innovative culture. They started by partnering with Les Paul to be the public face of their electric guitar which bore his name and came to market in 1952. Ted pioneered many of the features and worked out the deal with Les on a napkin, a deal that held when reviewed by the lawyers.
Ted McCarty was never a musician and yet he had a 60 plus year career with three successful companies in the industry and is regarded as a key figure in the golden years of Gibson as well as the evolution of the solid body electric guitar. How was Ted able to leave such a mark in the industry? When he wanted to fix the factory, he listened to the employees. So, he took the same approach to revolutionizing the guitar — listen to guitar players. His team focused on quality and made adaptations that addressed the needs of musicians.
Even though Gibson had passed on the guitar innovation back in the 1930’s, after Fender brought his unit to the market there were many manufacturers who still thought it was just a fad. Ted was undeterred when his competitors told him, “Anyone with a bandsaw can make a solid body guitar. Bandsaw and a router, that’s all you need.” Ted sought ways to innovate without sacrificing the quality that had built their company’s brand.
“Fender was talking about how Gibson was a bunch of old fuddie-duddies…I was a little peeved. So I said, ‘Let’s shake ’em up.’ I wanted to come up with some guitar shapes that were different from anything else.” — Ted McCarty on maintaining a competitive edge
Unleash your strengths and allow others to do the same
Ted left splashes of his fiercely competitive nature. One of the signature features of the initial Gibson Les Paul was the arched top which Ted incorporated primarily because he wanted, “To do something Leo Fender couldn’t do.” When rival Fender called Gibson out for it’s archaic approaches to the market, McCarty made it his personal mission to launch designs that had never been seen. The Flying V, Explorer and Moderne came out of this competitive drive, which weren’t commercially successful at the time but have experienced periods of popularity in more recent years.
McCarty developed key collaborations from within and without to the benefit of Gibson. He also was able to guide the successful acquisition and integration of their competitor Epiphone to drive his vision of expanding their capacity to compete in the market for bass guitars. McCarty led Gibson from hemorrhaging money to consistent profitability which steadily increased 15 times. His sales grew by 1,250 percent, the work force expanded tenfold and production went from 5,000 to 100,000 guitars per annum.
“I went there [to Gibson] on March 15, we lost money in March, we lost money in April, we made money in May, and we made it for the next 18 years — never had a loss. I left there in ’66, when I bought this company from Paul Bigsby.” — Ted McCarty on his achievements at Gibson
Old dogs don’t always need new tricks
McCarty continued his habit of walking the floor at Gibson where he could see the issues clearly. In later years, McCarty saw that trouble with leadership was on the horizon and he decided to look for opportunities elsewhere. Good talent can slip through your organization’s fingers in many forms including slow hiring processes, poor engagement, overlooking internal talent and devaluing contributors. Ted and then Vice President John Huis resigned at Gibson in 1966 and started a new venture as owners of Bigsby Accessories, Inc.
While Gibson and McCarty was not a relationship that endured the test of time, his relationship with Huis was. It should be no surprise that McCarty at 56 years old still had fuel in the tank and was successful at Bigsby, implementing many of the same core values in the new company. He was brought out of retirement by Paul Reed Smith who credits Ted as being a critical mentor to his own success even though Ted was legally blind by the time they met in the 80’s. As we said, while you may have never heard about Ted McCarty, there is much to learn from his story that can be applied to any organization.
Ted is no longer with us but you can still glean key takeaways from the methods of Mr. McCarty in transforming an organization into a competitive force in the market.
Six timeless keys for building success from Ted McCarty’s playbook:
Additional Resources from The DYOJO:
Pro vs. Joe is the podcast with a podcast, brought to you by The DYOJO Podcast. Bryan the "Joe" and Jon the "Pro" share their unique perspectives on entrepreneurship, property restoration and growing as a leader.
Applying risk, needs and responsivity (RNR) best practices for reducing recurring bad behavior (aka recidivism) to become predictive and proactive as a leader in an office context.
By Jon Isaacson
In the world of criminal justice, probation is the most commonly utilized sanction for both offenders in jail as well as those in prison. It is a rather staggering statistic to know that nearly 1 in 60 U.S. adult residents are on probation (Allen, et al., 2016, p.101), as currently there are 4.1 million offenders on probation and 780,000 offenders on parole. Probation is a means from which an offender can remain under supervision by the criminal justice system without being incarcerated, or so the theory goes. While the reasons for probation are many, some of the most discussed include cost effectiveness, overcrowding and theories related to best practices. To the cynic we release offenders from incarceration because we are soft, it costs less and we just don’t have the room, to the idealist we remove offenders from the institution so that we can rehabilitate them.
Why are we talking about probation in a business context?
If offenders on probation are those individuals who have been deemed fit to reintegrate into society but whom still require supervision as well as resources to fully transform into trustworthy productive contributors to their community, there are many potential correlations to an organizational framework in the business world. Wise leaders understand that not every employee who fails should be fired, fined or demoted – the harshest of sanctions within the business world - but many require further supervision and training to be restored to prior responsibilities or to reduce the chance of repeat mistakes in the same areas. In the realm of jurisprudence the term is known as recidivism which is a fancy word for that natural human habit of criminals cyclically returning to their illegal behavior following release from incarceration or sanctions including probation. In business, we too want to prevent recidivism, we want to be proactive so that we do not keep making the same mistakes over and over again or like the criminal justice world we will be in a continuous negative cycle of behavior that can cost time, money, resources or even lives.
Probation practices are relevant to business practices because recidivism affects both.
Principles for effective intervention have long been the pursuit in devising best practices for probation in order to address both cognitive and behavioral based issues while assisting individuals to make positive predictive as well as proactive changes in their wayward lives. This is not unlike a business scenario where something has gone awry, an issue has been addressed, consequences have been laid out and now it is time to re-establish a team member into the organization and renew the bonds within a team that were affected by negative actions. Criminal justice would divide an individual’s needs into risks, needs and responsivity (RNR) as a model for how to devise interventions that will be most effective for productive reintegration. Identifying the attitudes, behaviors and needs that should be targeted to effect change is good practice for working with offenders in the legal system but is also good business sense for leaders within a business framework dealing with interpersonal dynamics that can negatively affect cohesiveness within the organization.
The RNR model is based in psychology demonstrating that targeting criminogenic risks and needs in a calculated manner is much more effective than unstructured or vague clinical approaches (Lutze, 2014, p.108). How many businesses also chase their tails with unstructured disciplinary practices and vague team building approaches? So what can we learn from the risk, needs and responsivity approach that may help our organizations predictively as well as proactively build employee engagement even when the actions are disciplinary in nature?
The risk principle includes utilizing proven risk assessment tools to predictively identify levels of risk for repeating negative actions. Similar to criminal justice, when tools are sought by management care must be taken to ensure that the tool itself is not so cumbersome with administrative tasks that it becomes a full time job just to enter data for the assessment. There is a sweet spot with assessment tools, which for most businesses may be some sort of personality profile, must be user friendly, adaptive and resource effective especially in consideration for time management. These assessments should incorporate feedback from bottom up so that the vision is clear and the implementation is effective for the whole organization. In the criminal justice world a properly administered risk assessment will enable risk prediction, identification of level of risk and will direct proactive treatment intensity. For business, the right assessment tools can enable an organization to prepare managers, employees and prospects for understanding communication styles as well as create guidelines for effective team development.
What tools can we use to attempt to identify points of friction prior to their occurrence?
The most commonly utilized risk assessment tool within criminal justice circles is the Level of Service Inventory-Revised (LSI-R) which assess offender risk by examining 10 domains including criminal history, companions, emotional problems, attitudes and orientation (Allen et al, p.106). This tool helps judges (ie executive level management) and probation departments (middle management) to make better predictive as well as proactive decisions regarding fitness for probation (hiring), supervision levels and what type of services are needed. In the business world there are so many personality and profile tests available, if you already have one in use then commit to that, if you do not have one you may consider its value for the same reasons LSI-R is utilized. As noted by author Lex Sisney, many of the tools utilized by business were created mid-last-century and do not allow predictive understanding or proactive management, “To get a complete picture of the total team makeup and predict it’s performance in advance – as well as what adjustments to make when things get off track.” In his book Organizational Physics, Mr. Sisney proposes what he has titled the PSIU framework which categorizes individuals into Producers, Stabalizers, Innovators and Unifiers as a framework for effective team building and development.
The need principle directs efforts toward those dynamic risk factors that are changeable as well as criminogenic needs, or those factors that contribute to offending such as antisocial personality or hanging with the wrong crowd. What is referred to as risks in criminal justice might better be understood in the business context as those factors which contribute to The Three D’s of Dysfunction, Disruption or Disorder. As leaders we need to need to identify those ingredients that will lead to the manifestation of The Three D’s when we are hiring new employees, dealing with interpersonal dynamics and making key decisions as an organization. Understanding and effectively addressing needs is key for probation officers as well as management practitioners. Best practices within criminal justice have been recognized under Effective Practices in Community Supervision (EPICS) developed by researchers at the Univerity of Cincinnati with the goal of teaching probation officers how to more effectively target criminogenic risk factors. So man of the practices identified by the developers of EPICS directly apply to good leadership practices including: effective reinforcement – immediate statement of approval and support and the reasons why this behavior is desirable; effective use of authority – being direct, specific while specifying choices and consequences; relationship skills – empathetic, engaging, solution focused; skill building – teach and practice new skills with offenders, and more (Allen et al, 2016, p.108). If these don’t resonate as being relevant, helpful and effective within a business environment than there isn’t much use of reading further.
Conflict resolution is first mindset and then skill set. – Unknown
The responsivity principle in criminal justice describes how to provide treatment in a manner that is most conducive to an offender’s learning style, motivation and abilities. Whether we are inmates behind the bars of the criminal justice system or employees of a for profit organization, a significant portion of our lives are occurring within the structure and with the people we are surrounded by – it is to the benefit of all that we structure our efforts to be effective in working together. Interestingly enough, in a recent study covered in Forbes, while most employees would answer that personality differences or incompetence is the source of their frustration at work when the conductors of this study dug a little deeper they found that the most common source of friction in an organization boiled down to clarity.
“In fact, teams in conflict had much higher levels of ambiguity in three categories of work: their team’s goals, roles and procedures. So, while it’s very human to assign personal motive and blame in times of trouble, there isn’t really anything personal about the core of workplace conflict. If you back up and look at the facts, a lack of clarity is what’s truly to blame.” (Wakeman, 2015)
As individuals working together voluntarily for an organization we often want the same end goal but do not perceive or interact with the world in the same way, so understanding both how the individuals on our team communicate as well as receive communication is an essential area for sustained success. Leaders do well to invest in means to predictively understand friction points in their organization as well as proactively work through these potential growth barriers.
Any organization where humans are involved will have risks, needs and responsivity principles. Understanding the implications of RNR can assist to develop as system that is predictive as well as proactive or ignoring these principles can result in a repetitious cycle of negative behavior. Best practices for probation within the criminal justice realm are applicable to effective cognitive and behavior business practices because both organizations face issues with recidivism. Best business practices for leadership as well as those for probation management are continually evolving, impacted by bureaucracy and contingent upon adaptation. If you find yourself stuck in a mental road block, perhaps you just need to take a walk on the wayward side.
Allen, H.E., Latessa, E.J., Ponder, B.S. (2016) Corrections in America: An Introduction (14t Edition). Boston, MA, Pearson.
Lutze, F.E. (2014) Professional lives of community corrections officers: The invisible side of reentry. Thousand Oaks, CA. SAGE.
Sisney, Lex Style Assessments. Retrieved from http://organizationalphysics.com/the-psiu-talent-management-suite/
Wakeman, Cy (2015, June 22) The number 1 source of workplace conflict, and how to avoid it. Forbes. Retrieved from http://www.forbes.com/sites/cywakeman/2015/06/22/the-1-source-of-workplace-conflict-and-how-to-avoid-it/#32a27f89126e
In business there are rituals that neither management nor employees enjoy and yet they are widely practiced because a) it’s what everyone else is doing, b) we’re required to do it by the unwritten codes of business handed down from our ancestors and/or c) leadership is unwilling to admit that something needs to change. Enjoy our fun video that reviews the tried-and-failing process of annual employee reviews as acted out by children.
If you do not recognize a need to evaluate and improve your processes, you are probably right – everything is fine and you are going to be awesome (sarcasm). But, if you recognize that there are always areas that can improve, you may start by relieving the additional strain on managers as well as the deflating of employee morale that is often tied to the annual employee review as currently practiced.
There are plenty of examples of what isn’t working, please tell us what you have been trying and what is working with improving employee engagement. Please help up gather some data on process improvement by taking our brief survey HERE. Keep doing good things.
Thoughts on personal and professional development.
Jon Isaacson, The Intentional Restorer, is a contractor, author, and host of The DYOJO Podcast. The goal of The DYOJO is to help growth-minded restoration professionals shorten their DANG learning curve for personal and professional development. You can watch The DYOJO Podcast on YouTube on Thursdays or listen on your favorite podcast platform.