L. Bart Adams

I know the expression is actually “on a slow boat to China,” meaning it takes a long time. The supply chain is in a state of chaos originating with shutdowns from the COVID worldwide pandemic, and even as a small business in rural Utah, we have not been immune to these effects.

I understand why inflation is heating up—first, government stimulus in the form of one-time payments and monthly payments for child tax credits. Increasing the spendable income of consumers drives demand for consumer goods. Second, supply chain issues for lack of shipping containers. 

The best explanation for the supply chain issues I’ve read is from Lazaro Gamio and Peter S. Goodman’s article in the New York Times called "How the Supply Chain Crisis Unfolded." As I understand it, when the pandemic hit, there was increased demand for masks and personal protective equipment throughout the world. China produced most of these items, which subsequently used up the supply of shipping containers to distribute these in-demand goods. Meanwhile, the shutdown reduced the production of goods to export back to China. Consequently, the price of the containers increased because of the reduced supply. As pent-up demand has grown for other goods, the ports have been logjammed to compound the issue. It is a complicated issue that I’m learning more about daily.

Some of the items we’ve struggled to procure include equipment parts, packaging materials, and chemicals. In one case, we needed a bearing to repair a torque hub for one of our compost turners. The replacement part was unavailable until 2023, thus forcing us to purchase a new torque hub for around $12,000 to remedy the issue. We had a customer run into our trailer door during delivery, causing enough damage to require a new door. We are waiting for the parts that are still out 6-8 weeks. We replaced a garage door on a rear entrance to the farm that took four months to receive. In another case, we have to order paper bags for packing mushrooms with eight week lead time.

The article also points out that Just In Time (JIT) Manufacturing/Inventory has contributed to supply chain issues. Many companies, mine included, have scaled back the amount of onsite inventory to preserve cash flow. JIT works on the assumption that the goods and services required are available quickly. The supply chain issues exposed the cracks in the JIT model for manufacturing and inventory management.

Many questions remain. How much longer will inflation last? When will the supply chain loosen up? How can we change our purchasing process to mitigate a future event like this? 

You often hear of business owners who have had a difficult time making payroll. It seems that most entrepreneurs have a story. Here is mine.

During my first year of ownership, in 2013, we struggled with growing enough mushrooms to supply our market demand. We also had many equipment struggles. We had to purchase four new forklifts, complete a major overhaul on our steam boiler, rebuild a water tower for our chilling system, and numerous compost turner issues, which led to purchasing a “used” compost turner. To top it off, the line of credit from our bank was approaching the credit limit. The combination of these elements was forming the perfect cash flow storm.

I started extending my payments to vendors to improve cash flow for the near term. It got to a point where I was three weeks past due on many of our accounts. The time came where I could not extend these vendors anymore without paying long-term consequences. The time came for the perfect storm to hit our shores. We were not going to make payroll.

To make the next weekly payroll, I had to act fast. I liquidated all of my savings and lent it to the company as a loan from the owner. Next, I negotiated with one of the most prominent vendors to hold off on payment for an additional three weeks on top of the three weeks we were behind.

I never made a more significant sale than selling this idea to my wife. She needed to believe in me and the progress we were making at the farm. She needed to believe that I could restore our life savings in a timely fashion. She needed to believe that the company could recover. She believed.

We made payroll that week.

The following week, I negotiated with my bank to change the way the credit limit was calculated. This more favorable credit limit gave us the breathing room we needed to be current with our vendor payments and pay back my loan. To improve our production, we started increasing the number of trays for each mushroom crop, increasing our ability to meet the market demand and improve profitability. Our financial picture began to be more favorable.

My “making payroll” story happened over three years ago, and we are still recovering from the financial consequences, namely paying down the line of credit. I believe this experience was a test from the Almighty to see how bad I wanted it. Did I want this business to be a success? Was I willing to put it all on the line? Did I have what it took to sacrifice for my employees and business success?

Yes.

About six months ago, we began using a tool called Start, Stop, Keep for our semi-annual employee reviews. (We meet with each employee twice annually for a review.) We have a form that the supervisor uses to ask the employee three questions:

1. What should Mountain View Mushrooms START doing?
2. What should Mountain View Mushrooms STOP doing?
3. What should Mountain View Mushrooms KEEP doing?

We also ask for an annual goal and how we can help them achieve this objective.

I first heard about this method from the book Scaling Up by Verne Harnish. He suggests using this method for employee surveys before annual planning meetings. We have used these questions before yearly planning meetings, as well.

We find the tool effective because it gives us feedback that never shows up in a suggestion box. I prefer our supervisors fill out the form while asking the questions. The supervisors like having the employees fill out the questionnaires on their own. There are three reasons the supervisor needs to ask the questions and complete the form:

1. It allows the supervisor to interact with the employee differently than typical day-to-day work.
2. The supervisors can dig deeper and gain clarity on some of the employee’s answers.
3. The employees can talk instead of worrying about filling out another form.

Once the form is complete, we review the results at the weekly manager’s meetings. Here action plans are created to address the various topics in the Start and Stop questions. The Keep questions provide positive feedback to the group about what we’re doing right!

We have had many great ideas stem from these questionnaires in only six months. I’m excited to see what great solutions our employees come up with next.

Several months ago, I started writing a weekly newsletter for my employees. In it, I would include a brief statement from me about the status of the farm, upcoming events, and good news. Along with employee birthdays and work anniversaries, I had “Stories of Our Values.”  The stories include employees who exemplify our values. I felt like reinforcing the values with public praise by sharing these stories would also increase our teamwork and camaraderie. I was wrong. I found out that their coworkers were putting down many of the employees we recognized. Therefore, those recognized were left feeling worse and less valued as a team members. As soon as I heard about this, I removed this section of the newsletter.

It turns out in the Hispanic culture that they are good team players, so long as the team gets the praise and recognition. Recognition of individual members of the group appears to lead to jealousy and resentment. The unpraised employee seems to take it personally when someone else received recognition as not good enough. In their culture, this does not motivate them to do better, to receive praise themselves. It leads them to lash out at those receiving the recognition to bring them back down.

What have we learned from this experience? Each culture has its preferred form of praise and recognition. We have now changed our practice of public appreciation to praise in private by their supervisors and managers. I have also started recognizing teams in the weekly newsletters to reinforce our values. Ironically, one of our values is teamwork.

Our business culture comprises the many cultures of our employees. (In our case, about 70% Hispanic, 3% Cambodian, 27% Caucasian.) Each of these employees brings something different to their teams and, in turn, the farm as a whole. As leaders, it is our responsibility to learn how our values, vision, and purpose can be communicated and executed within each culture to form the business culture we are seeking.

Earlier this year, I participated in the Goldman Sachs 10,000 Small Business program. It was a 20-week course, where I spent about one day per week in a workshop setting with other business owners. We learned about how to operate our businesses better and develop a growth plan. We were assigned to present a “Cultural Artifact” from our company in one of the sessions. A picture, story, or another item that defined or played a role in our culture.

There were a lot of exciting and meaningful artifacts presented, from pizza dough balls to specialized hand tools. For my business, I chose a $10 gift card for our company store.

How has a gift card become part of our culture? Well, it’s been a tool to reinforce our values. Each week in our team meeting, I ask my managers for stories of our values, which are:

• “Above and Beyond” – Dedicated and hard-working
• “Continuous Improvement” – Making it better
• “Teamwork” – Working together

If the managers share a story of an employee or employees who have exemplified one of the values, I give them a gift card to give to that employee.  Some examples are an employee who comes in on their day off to cover for another employee who called in sick or an employee who stays late to clean up and organize their work area or equipment. We also use this card for employee birthdays, or when we see other positive behaviors, we want to reinforce them.

As a team, we have been doing this practice for over two years.  It seems to be working well, but I have noticed that most of the stories my team shares only involve the “Above and Beyond” or “Continuous Improvement” values. I see teamwork throughout the farm daily. Why are we not rewarding these values? How are we missing these values in action?  A couple of weeks ago, I had an epiphany. With the gift card, we have been rewarding individual efforts, not team efforts. Our managers are looking for persons who are excelling, not teams. So, I made a slight change to the weekly stories of our values. From now on, we will have a pizza party or buy donuts for examples of excellent teamwork. The managers are currently looking for team efforts along with individual accomplishments.

Maybe our new “Cultural Artifact” will be a slice of pizza or donut box. Time will tell.

I have read and heard many definitions of CEO disease. Wikipedia defines it as “CEO disease,” which refers to the information vacuum around a leader; that arises when employees withhold relevant (or unpleasant) information.

In my experience, diagnosing CEO disease in the company is evident by one or more the following symptoms:

1. The CEO is the last person in the business to receive the bad news
2. The CEO does not get all of the information needed to make crucial decisions
3. Subordinates believe they are protecting the CEO by withholding some or all the necessary information

I recently discovered that I was suffering from CEO disease at my business. It’s been almost four years since I have been in this role, and only now am I uncovering the symptoms. I cannot say how long it’s been happening because, like sign number 1, the CEO is the last to know. The most recent incident had to do with several interpersonal conflicts among my office staff. When I got the bad news, I was blindsided by what was going on and surprised that they hadn’t brought the issue to my attention sooner, so I could help resolve it before it came to a head.

In light of my new understanding and study of this disease, I am currently using the following prescription to help fight this disease at our facility.

1. Don’t kill the messenger. How the CEO responds to terrible news makes an impression on the person delivering the message and can have a lasting impact on the CEO promptly receiving any bad news in the future.
2. Build trust with subordinates through weekly/monthly one-on-one meetings. Direct reports will be more apt to share valuable information if they trust you. Increasing the frequency of one-on-one sessions can help build this confidence and give the subordinate a forum to share helpful information with you.
3. Ask good questions. If the CEO is not getting all of the information, they are most likely not asking thoughtful questions. It is the leader’s responsibility to ensure that clarity exists in all communication with direct reports.  Asking the right questions is a way to deepen understanding and gain clarity.

I am making a special effort to apply this prescription and hope to rid myself of this fallible yet curable disease. I’ll keep you posted on my progress.