Achievements

• CPES Wins National Award!
• Agency's Finances An Open Book: Social Services Firm Workers' Access is Total

CPES Wins National Award!

CPES was recently selected as a winner of a national award at the Gathering of Games conference in St. Louis.  The Ownership Culture Award was given to CPES as a “company of entrepreneurial thinkers that charts its own financial destiny.”  CPES competed against 80 companies and was one of 11 finalists for the four awards.

Agency's Finances An Open Book: Social Services Firm Workers' Access is Total

By Shella Jacobs
ARIZONA DAILY STAR

For recent quarterly meetings of CPES, Chief Executive Officer Tom Schramski has dressed as Mickey Mouse, Elvis and Zorro.

Not only has his attire drummed up attention, but the company's new open-book management style has earned it recognition among businesses across the country and helped to dig it out of financial troubles.

Wearing costumes is Schramski's own twist to the strategy, which he uses as a way to create a relaxed atmosphere as employees get used to the company's new way of doing business.

The central tenet of open-book management is allowing everyone in the company - not just those at the top of the hierarchy - to view financial information about the business and have input on yearly budgets and revenue goals.

Open-book management isn't a new business model. But the strategy is rarely used by firms in the social services industry, where the focus has been on people, not profits.

CPES provides residential, educational, treatment and vocational programs for children and adults with disabilities. Schramski co-founded the company in 1980. It became employee-owned in 1995 through an employee stock ownership plan. Now 675 employees work there, about half in Tucson at the company's North Side office.

CPES embraced the open-book philosophy just over a year ago. Reeling from state funding cuts, soaring costs of running the company and a high turnover rate, managers felt they had nothing to lose by turning to a new way of doing business. After all, the top-down system, where those in charge develop budgets and impose it on employees, was faltering.

"It's something a lot of companies are afraid to do," Schramski said about the open-book style.

One worry was that the company could end up spending too much time on financial information instead of improving its services.

"I certainly had some reservations," said CPES Regional Director Bob Bennetti, when Schramski suggested the plan.

"I told him we'll give it six months to a year," Bennetti said. "We're a social service agency, so the whole notion of paying closer attention to the bottom line was kind of far from all of us."

Local independent consultants also say one pitfall of open-book management is that employees might become resentful of differences in salaries when they see what everyone makes.

James S. Wood / Staff (Arizona Daily Star)
CEO Tom Schramski, center, and employees, clockwise from bottom left, Sally Davis, Gregory Stewart, Jonathan Patton, Chip Foust, Pat Navarro, Annette Carr and Michelle Folsom.

But, Schramski said, "do you want them to be blind to the reality of financial matters or do you want them to be pretty smart about that stuff?"

"When you get people from the bottom up involved, then you get a clear picture of what the capabilities are," he said.

In the first year the firm opened its books, morale and financial literacy improved. Revenues grew by about 20 percent to $20 million, and CPES started turning a profit instead of just breaking even.

Amy Rubinson, support supervisor, said employees have become more disciplined about little things they can do to cut costs, including turning off lights and air conditioning when they leave work.

"They're much more empowered," said Chris Ledyard, who as CPES associate director overseeing behavioral health sites now helps create budgets instead of just accepting what's handed to him.

"I've learned more accountability for our budget, about how to become more creative with our limited resources," he said.

The employee turnover rate also has gone down to about 50 percent this year from as much as 100 percent. Maintenance costs on the company's vehicles, which had been rising 15 percent annually, also tumbled by 10 percent.

"You don't want to sacrifice program quality because you want to save a dollar," Bennetti said, but "That really hasn't been the case. It's increased employee retention, which translates into better services."

In May, CPES won the Ownership Culture Award at the third annual All-Star Awards, honoring entrepreneurial thinkers who chart their own financial destiny. It was sponsored by The Great Game of Business, a division of Springfield, Mo.-based SRC Holdings Inc., which teaches open-book management strategy.

SRC Holdings includes Springfield ReManufacturing Corp., which rebuilds diesel engines and parts. It was a division of International Harvester until employees of the division bought the nearly bankrupt company in 1983.

Jack Stack, one of its managers, pioneered the open-book style and wrote about it in a book called "The Great Game of Business."

"It worked so well for us that other businesses came to us and said, 'Would you help us?'" said Tom Samsel of SRC, which now helps companies, including CPES, use the method.

SRC soon created "The Great Game of Business" solely to train others how to use open-book management.

Bennetti said it takes another 12 to 15 hours a month for some to review company goals under open book, but the extra work is worth it and paves the way for others in the industry.

CPES was the only social service company on the list of more than 80 nominees nationwide to compete for the Ownership Culture Award.

"We can't pretend it's not a business," Bennetti said. "It is a business, so we have to be successful."

Contact reporter Shella Jacobs at 434-4083 or sjacobs@azstarnet.com

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