Crown Point Cabinetry: Reinventing How Custom Cabinetry is Built and Sold
- Written by: Crown Point Cabinetry: Reinventing How Custom Cabinetry is Built and Sold
- Produced by: Crown Point Cabinetry: Reinventing How Custom Cabinetry is Built and Sold
- Estimated reading time: 6 mins
According to Gary Marco, founder of leadership development agency Synergy Leadership Solutions, nearly 80 percent of all family-owned companies in the U.S. fail within the first five years after a transfer in leadership to the next generation. Marco goes on to say a full 97 percent fail to make it 10 years following a management changeover. Under the capable leadership of Brian Stowell, the second Stowell generation at the company helm, Crown Point Cabinetry (Crown Point) is one of the three percent of businesses that has not only survived to see its 10-year anniversary following a leadership transition, but is also thriving in an extremely difficult construction market.
The Claremont, N.H.-based, high-end custom cabinet-making company got its start in Norm Stowell’s garage in 1979. Crown Point soon gained a local reputation for superior craftsmanship, and by 1990 Norm had grown the business to more than 75 employees, including four of his seven children. At that time Crown Point Cabinetry was sold through traditional means; a total of 74 kitchen dealers and home centers carried the company’s product. Revenues were growing annually along with the company’s reputation, but Crown Point’s bottom line was suffering. Brian, wanting to take a more active role in the company, made an agreement with his siblings and father. It was at that critical time that he took both distribution and cabinetmaking into a whole new direction.
In 1991 New England was experiencing the worst of the national housing recession. Revenues were dropping and the family-owned business teetered on the edge. During this time there were many family meetings that involved cutting expenses to keep Crown Point afloat. As employees were not overpaid, and every family member on the payroll worked for their checks, wages were not an area that looked to provide any savings. Norm was a true Yankee in every sense of the word, so the company was not saddled with excess debt. Benefits were almost nonexistent, so nothing could be saved there.
Brian quickly determined that, in order to survive, he had to find a way to sell more product. Adding more kitchen dealers was first considered. Unfortunately, kitchen dealers were all in the same boat, and very few wanted the expense of adding a new line. Investing in a display, samples, counter tops, installation, etc. was not high on any dealer’s list. When it came down to it, Brian decided he was going to have to create a whole new model of distribution for the family business to survive. That model would be selling direct.
Brian started by taking one of his two dealer sales representatives “off the road.” Instead of calling on dealers, he became the first direct sales designer for Crown Point. His job was to work with clients that were “outside the dealer territory.” Years earlier Crown Point had started advertising in national publications that focused on period homes, and because of this the company would get inquiries from prospective clients around the country. Inquiries from around New England were directed to the nearest dealer, and up until this change those inquiring from outside of dealer territories were informed they could not buy Crown Point.
With the Direct Division up and running, Crown Point now had a program to sell fine quality custom cabinetry anywhere in the United States without a dealer showroom. This increased the company’s market by leaps and bounds. Because this had never been done before, the program was met with a great deal of skepticism. Fortunately, Crown Point had a reputation as an honest family business that did quality work and kept its commitments, so many a client decided to take the leap of faith and buy custom cabinetry from a company that in the past would be considered “too far away.”
Over time the program became so successful that Brian decided he needed to pick one means of distribution to put his marketing dollars and efforts behind. As the direct model was such a huge success, the choice was an easy one. Around 1995 Crown Point parted company with its remaining dealers and went 100-percent direct.
During these same years, Brian decided the company was going to have to change the way it built cabinetry. Even though clients were thrilled with the company’s product, Brian estimated that every cabinet was handled so many times that labor was twice what it should have been. This was mainly due to the amount of rework that was done throughout the cabinetmaking process before it left the cabinet shop. The reasons for this were many, including poor communication, inferior materials, inadequate machinery, lack of proper training and excessive employee turnover. The end result was an internal quality problem that was devastating to the bottom line. Brian joked that the company “had ‘nonprofit’ down to a science!”
Brian met with his father about changing the company culture to create a quality-first approach in everything it did. After much discussion, Norm decided to trust Brian with the overhaul. The first step was to shut down the shop and hold a company-wide meeting on the factory floor. The focus of the meeting was about one thing: internal quality.
“Right now we are wasting tremendous amounts of money on rework and wasted materials,” Brian was quoted as saying. “I don’t want that money going out the door; I would rather give it to you. But I don’t have it, because we are spending it on overtime and excess materials. Right now, people can leave here, go to work somewhere else and get a raise. You have almost no benefits. It breaks my heart to see this happening. I want to be able to afford to give all of you better pay and benefits. But I need your help to make it happen. And it all starts with quality first. From now on, if you don’t care about first-time quality, there won’t be a job for you. If you do care, you’ll always have a job here.”
Crown Point’s managers carefully monitored employee quality, and within one year the number of employees fell from 76 to 53. During the same time frame, cabinet and dollar sales increased as rework decreased. Front-line production was secured, but the issue of tensions between staff and management remained a sticking point. It was at that time Brian’s wife Becky came up with the slightly radical solution to dismantle the management level and to let teams of employees judge their peers equally.
Team-based Approach to Management
The team-based concept gave employees an incredible amount of decision-making responsibility in terms of personnel and management decisions. Crown Point’s eight-person management level was melted back into the production teams. Floor workers were divided into teams and each team had coworker review sheets, or scorecards, that were used to evaluate each team member’s performance and eligibility for a pay raise. Teams met daily to discuss production requirements, set goals, and deal with any personnel issues that may arise. Teams were charged with the responsibility of hiring, training and when necessary, firing their coworkers. Teams became actively involved in safety, quality and productivity improvements.
While Brian admits the culture change to team-based management was difficult and painful at times, the transition has been a tremendous success. Because of increased productivity and employee stability, Brian has been able to increase his employees’ wages to be some of the highest in the region. Employee benefits have been added over the years, including an innovative gain-sharing program that allows employees to earn bonuses that are paid out every four weeks.
Built by a self-motivated and customer-minded staff, Crown Point is more popular than ever. The company now has a staff of 90 quality individuals and builds cabinetry for some of the nicest homes in America. Examples of the company’s work can be viewed at crown-point.com.
Brian explains, “We only build one quality, but a kitchen can cost $20,000 to $100,000, depending on choices a client will make. The size of the project, wood, finishes, hardware, style, options and accessories all affect pricing. The average kitchen is about $35,000, but it really is up to the client.”
Crown Point has a loyal base of fans around the country, and the company’s employees feel a sense of pride when they let their fiends and family know that they work at Crown Point. This sense of pride is carried over into the quality of their work. With the help of his wife Becky, his parents Norm and Deanna, his siblings and his dedicated staff, Brian Stowell made the proactive decisions necessary to reinvent the family-owned business. These decisions laid the groundwork that allows Crown Point Cabinetry to succeed in any economy.
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