Combine a declining housing market, a faltering economy and a company that greatly depends on builders and architects – and what do you get?

In the case of Kolbe & Kolbe Millwork Co. Inc. in Wausau, it was the restructuring of the company’s strategic plan to include a strong emphasis on continuous improvement and the development of new and innovative products in order to increase market share.

“Starting in late 2005, residential housing starts began to decrease substantially, so over a three-year period there has been a substantial challenge to the window and door industry and the construction industry,” says Mike Salsieder, president and general counsel of the 63-year-old company with 1,600 employees and approximately $200 million in annual revenues.

“In late 2004, our executive team met for several days off-site and strategized about what we wanted to be as an organization. We decided that our market would be the high-mid to high-end window and door market,” he adds.
For Salsieder – the first non-Kolbe family member to serve as company president – this reshaping of the custom window and door manufacturing firm has enabled it to more clearly focus on the needs of its employees and its customers.

“We are one of the few major window and door companies I’m aware of that has not had any layoffs, reduction of hours, or closure of any plants due to the housing market and the economy,” Salsieder says.

MAKING A DIFFERENCE

Salsieder is described by those who know him as “driven” and a person who works hard to get employees and management staff to do the best they can. He clearly believes in the principles of the company’s founders, Herb and Ervin Kolbe. The two brothers, now both deceased, started the company in their mother’s wash house, where they built window and door frames, repaired window sashes and made storm windows. The old homestead near Wausau still exists, and the Kolbe family has created a historic village just through the woods called “The Sawmill Village.”

In 1948, the Kolbe brothers purchased a 2,100-square-foot building and relocated to Wausau. Today, Kolbe & Kolbe has nearly one million square feet of space and sells its products inside and outside of North America through a network of dealers and distributors. Among its high-end products are a number of energy efficient, “green” products aimed at assisting customers in meeting the company’s own strong commitment to the environment.

About 1,500 of the Kolbe & Kolbe’s 1,600 employees work in Wausau, and the rest at a vinyl window manufacturing plant in Manawa and in Fort Collins, Colo. Fort Collins is the home of a company subsidiary, Point Five Windows Inc.

In 1976, Herb’s daughter Judy (Kolbe) Gorski joined Kolbe & Kolbe. She currently serves as CEO and chairperson of the board and works closely with Salsieder to ensure that the original founders’ vision is not forgotten.

“The employees were the most important thing to my father,” Judy Gorski says. “He walked the factory floors, talked to them on a regular basis and remembered their names. He wanted the company to stay in the community. What is most important to me is keeping the company right here in this community and keeping it privately owned.”

Salsieder, who grew up in nearby Rothschild, is a graduate of the University of Notre Dame Law School and the Notre Dame Graduate Business School. He spent 25 years in top management at various corporations, but always had a desire to get back to his hometown. In September 2002, Salsieder joined Kolbe & Kolbe as vice-president and general counsel. Three months later, Herb Kolbe died, and Salsieder began working closely with Gorski on how to best take the company forward into the future. In spring 2005, he assumed the position of president.

Salsieder says his most important personal belief is that “you have to gain the respect of all of the employees that work within the organization.” Like the company’s founders, he believes that one way you do that is by spending time on the plant floor talking with employees.

“If you’re out there and walk around the floor, it has never happened where an employee hasn’t walked up to me and suggested something to make his or her work area more productive,” he says.

Yet increased productivity, he believes, isn’t going to be achieved unless the leader of an organization shows respect toward all employees.

“Such personal attributes as treating people with respect has become very important to me,” Salsieder says.

“Degrees are very interesting, but you need to understand what motivates people because no business that I’m aware of succeeds based on one individual. You start out with the basic principle that you treat employees with respect. Then they respond by respecting you and having confidence that you will act in the best interests of the organization as well as in their best interests.”

A major outcome of the Kolbe & Kolbe executive team’s late 2004 strategizing session was the decision to implement “continuous improvement” on a companywide basis. “In March 2005, we had 15 different meetings with our employees, each with about 100 people in the meeting, and explained to them that it was important to modify our culture such that we would incorporate continuous improvement into everything,” Salsieder says.

“We were going to remove as much wasteful activity as we could from all of our operations. What was left is that everybody would be working in a way where they could provide value-added tasks.”

Salsieder also told all of the company’s employees that “no one would lose their jobs as a result of continuous improvement.” Since that time, the company has had more than 420 “rapid improvement teams” with participation from virtually all of the company’s employees.

“We have taken people and moved them into areas where they are more challenged,” Salsieder says. “People want to feel they can make a difference. You have people who would have never normally worked with each other who have really grabbed onto this continuous improvement idea and embraced change. All of Kolbe & Kolbe’s employees have a say in how they can do their jobs better.”

THE FUTURE

Kolbe & Kolbe executive team members’ meeting in late 2004 also determined that it was important to make sure that all of the company’s dealers and distributors were aligned with the decision to focus on the high-mid to high-end custom window and door market. The firm’s dealers and distributors, Salsieder notes, “sell based on value – on the features and benefits of our products and the services we provide – not based on price.” Kolbe & Kolbe, he says, doesn’t target a specific percentage for growth each year, but rather judges itself by additional market penetration. One way the company will continue to achieve that in the future, he believes, is by bringing on new and innovative products.

“This is an area we have not stopped investing in even in the most difficult times,” Salsieder says. “There is a high demand for our products in the Southeast, and we have invested a lot of money on high-impact products.” One such product is a new high-end lift and slide door with special hardware that makes it easy to slide the doors open. This and other new lift and slide doors are being designed to meet high impact/hurricane codes.

Success in the future, Kolbe & Kolbe’s executives believe, will also include continuing to make it easier for customers to do business with the company. “At the same time we have been increasing our efficiency, we have been stressing that we are ‘easy to do business with,’” Salsieder says.

As an example, the company invested millions of dollars in ProQuote. The ProQuote bidding program, developed through work by Kolbe & Kolbe and an outside vendor, facilitates a much easier electronic order entry to shipping process.

The company has also created “a library of our products that architects can access and use 3-D capabilities,” Salsieder says. Part of Kolbe & Kolbe’s future plans is for its salespeople to “meet with architects about the features and benefits of our products. If we can get in there and work with the architects when they spec high-end projects, that is good for Kolbe & Kolbe,” he says.

The firm also continues to work on further development of its Web site. Through use of the Internet, Kolbe & Kolbe’s customers are becoming more and more sophisticated in terms of the homework they do on windows and doors, Salsieder says. “Because we are not as well known as some of our competitors, it is important for architects and high end builders to be aware of everything we have to offer.” Continuing development of the company’s Web site, he believes, is one good way for that to occur.

Finally, Salsieder says that in the future, Kolbe & Kolbe will continue to “give back to the community. I am a strong believer in high ethics. I think that lends itself to an even more successful business. We play a very important role in the local community and have a very high respect for the community in which we live. We do our best to give back to that community.”