Cases

Archway Marketing: a great company committed to ongoing improvement

Less than an hour by car from Minneapolis is Rogers, a town that at first glance seems like any other small, sleepy Midwestern town. But, as is often the case, appearances can be deceiving. That’s because, business-wise, Rogers is a real hotspot, home to all kinds of large and interesting companies. One of these is Archway Marketing, a company whose activities would not be possible in a small country. Archway provides storage and distribution of marketing materials for Fortune 500 and 1000 companies including leading big box retailers, quick service food chains, and automotive giants. This means that all advertising materials, as well as shelf lettering and promotion displays, are transported from Archway’s warehouses to its clients’ shops. For a medium-sized client, this easily amounts to 6,000 different items. It is therefore not surprising that companies outsource their marketing logistics to a specialist like Archway, whose efficient business practices save its clients considerable amounts of money. But Archway does more than transport marketing materials alone; the organization not only profiles itself as a logistics provider, but also as a marketing fulfillment service provider. Archway thinks along with its clients on their strategic marketing and promotion policy and the logistics consequences of that strategy. A new promotional campaign, for instance, must be supported by all kinds of materials that must in turn be present in all shops across the country at the same time. This approach allows Archway to not only lower its clients’ logistics costs significantly, but also prevents complaints from end consumers. Since 2005, Archway has been successfully applying this formula and, after a new management team was appointed, has experienced continuous growth.

The HPO diagnosis at Archway began, as usual, by collecting data using the HPO survey at all locations. Nearly 300 people responded. This formed a good basis for the interviews, which were held at the Archway head office in Roger with managers like the President, Chief Operating Officer (COO) and Chief Intelligence Officer, as well as with people from the Sales Department and supervisors from the main warehouse. It quickly became clear why Archway has been so successful. As with the other three American “great companies” that I have studied, Archway demonstrates an unrelenting focus on its clients. As part of this, the organizational pyramid has been reorganized so that the client is at the top, the Client Services group (Sales Department) in the middle (whose only focus is clients), and the Shared Services group below that. This group combines all departments (IT, logistics, warehouse, HR, finances) that enable the Client Services group to serve clients as best as possible. The Shared Services group does this by identifying and fulfilling the desires of the Client Services group (which, in fact, is nothing more than a translation of client desires) as effectively and as quickly as possible. It is clear to everyone that both groups are on equal footing and cannot survive without the other, which means there is no internal competition about “who is more important than whom” for the success of Archway. The client focus is also expressed in quarterly meetings in which the client fills out a “Performance Review Scorecard” for Archway. This card contains the performance indicators that must be continuously addressed by Archway. Interestingly, the Client Services team, which is responsible for this client, first evaluates Archway in relation to these indicators. In other words, not only are the absolute scores given by the client discussed, but also the difference between the client scores and Archway’s own scores. This takes place every quarter so that Archway is precisely aware of where it stands with clients and can make the necessary adjustments, if any, immediately. This client focus is supported by a strong culture of continuous improvement. This is primarily expressed in attention to the development of Archway’s people. Every quarter, for example, a meeting is held by the Archway Leaders Academy, in which the COO discusses the values, norms and rules of engagement (the way in which Archway aspires to work) with small groups of managers from every level and every Archway location. Teach-outs are also organized regularly, during which Archway’s senior leadership team holds a presentation for the management level below it in order to explain and discuss certain messages (such as changes to the strategy, operational matters to be focused on the next quarter, etc.). This management level then takes this presentation and shares and discusses it with the next management level, and this continues to cascade downward until everyone (including all employees) has been reached.

Archway plans to double in size in coming years in order to serve and continue to serve the largest companies in the United States. The concern is how the organization can achieve this without compromising its strong culture and client focus. The HPO diagnosis revealed a number of focal points. It is clear to everyone, for example, what the targets are, but not how they should be accomplished. In spite of a strong focus on continuous improvement, there is still the issue of poorly standardized and therefore inefficient processes at all locations and the fact that ideas for improvement from the shop floor do not often reach the upper levels. Finally, there is the danger that, in spite of the overturned organizational pyramid, further growth will result in the Client Services teams no longer be working for Archway and for each other, but more for themselves and their own clients. During the concluding meeting on the HPO diagnosis, these focal points were discussed at length and, two days later, I received the following e-mail from the COO:

“I really enjoyed our brief time together, André. You cannot imagine how hard I’ve worked over the last 4 years to implement the HPO pillars. Our culture and practices supporting our VALUES, our Client Centricity, our Continuous Improvement, and our Employee focus is something I’ve made a personal priority since my first day here. The Archway Leadership Academy is the process I use to institutionalize these critical components. As a leader I’ve waited for years to “leave my mark” by developing high-performance organizations. Thanks to you (and your research methods) I arrived home from work tonight and told my wife Mary, “I’ve finally done it….I’ve left my leadership fingerprints”. So thank you again for providing the feedback to Archway, and thanks even more for making my day, and making my career with Archway the most rewarding experience of my leadership career.”

This response strengthens my conviction that Archway not only has the desire but also the capacity to remain a “great company” and to be an HPO in its sector. The organization plans to repeat the HPO diagnosis annually in order to stay on track, so….to be continued!

André de Waal, Rogers, August 2010

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