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Marshall Industries
Marshall Industries is a large electronics distributor that has been in business since the 50s and recently reinvented itself in a way that made it the talk of the entire electronics distribution industry. Marshall has 38 locations with about 1300 employees, half of whom are sales people. CEO Rob Rodin describes the organization as a junction box, selling and packaging the goods of over a hundred suppliers to meet the needs of over 30,000 customers.
Until the early 90s, Marshall was a master of MBO-based compensation plans. It was very proud of its elaborate system of incentives for everyone in the organization. Then, Rob Rodin and other senior managers in the company were exposed to the ideas of Dr. Deming and attended one of his four-day seminars. They began to realize that the MBO-system they were so proud of was actually a barrier to innovation as it discouraged full cooperation between business team members and increased sub-optimization.
Over a one-year period, Marshall eliminated all individual incentives, including sales commissions and all supplier-sponsored promotions. This action created a flurry in the industry as it was labeled everything from "communist" to "visionary." It turned out to be more on the visionary side as it set up an environment which has created a doubling in sales and earnings, a reduction in employee turnover of over 50%, and the achievement of an ISO 9002 certification in every warehouse and value-added operation in less than 6 months, without using outside consultants.
A detailed report of the innovation initiatives of the seven George Land World Class Innovator Awards are available for $49.95. See Product Order Form