A few years ago, Kent Murdock had an intuitive sense that O.C. Tanner Co. just couldn't keep on being a "service award" company and remain competitive — even though it was tops in its field.
That prompted a change that was subtle but significant. "We began embarking on becoming 'an employee recognition provider,' " said Murdock, the company's CEO.
O.C. Tanner's new vision and way of doing things netted it a 1999 Utah Best Practices Award for Strategic Leadership. The award is sponsored by Arthur Andersen, First Security, the law firm of Parr Waddoups Brown Gee & Loveless, and KSL 1160 News Radio.
The firm last year also won the prestigious Shingo Prize for Excellence in Manufacturing.
The company, which expected to exceed $300 million in sales in 1999, is known for the nearly 4,000 merchandise items it offers.
In practical terms, this change in thinking at O.C. Tanner meant finding several related niches to add to the highly profitable service award the niche has always served. The firm added such things as performance awards, sales awards, executive awards and collaborative selling with other vendors, making heavy use of the Internet.
Additionally, O.C. Tanner now works with other companies to help them design their own employee recognition programs.
The change also meant a substantial technology upgrade, enhancing production capabilities and creating a strong and different marketing approach.
Answers to many questions came from thoughtful brainstorming by Murdock and a strategy development team of six executives, as well as meetings with 54 people from all parts of the company. There also were new efforts by what Murdock terms a "re-created" marketing department.
Murdock is quick to give credit to O.C. Tanner employees for evolutions the company has undergone in the past few years. "I never thought of it alone or conceived it alone or did it alone. It's really 'we.' It involved a lot of people," he said.
Murdock also repeatedly emphasizes how important the Internet has become to the company.
An example? Instead of giving print brochures for employee recognition awards that show what kind of gifts people can get for doing well on the job, O.C. Tanner can send an e-mail and an access code. Individuals can select what they want electronically. "We've won a lot of business with that," he said, listing such clients as Microsoft, Apple and Merrill Lynch.
The research-it-well-and-come-up-with-creative-solutions approach extends throughout the organization, which employs 2,200. A few years ago, company officials decided they needed to build a big warehouse to hold all the merchandise it buys from other vendors.
But first, a woman whose job involved filling orders wore a pedometer to track how much walking she had to do to fill an order. The results were a shock. She walked a mile just to take care of one client.
So, O.C. Tanner rethought how it wanted to store and handle merchandise. The firm then built a $10 million "awards distribution center" that bar codes items, records everything in a computer and uses a robot to fetch what is needed.
"It paid for itself in less than two years," Murdock said. "We eliminated 125 jobs. We didn't have any layoffs. We just used attrition and placed people in other parts of the company so they could work more effectively."