The Revolution at Johnsonville Foods   Ralph Stayer joined his family's sausage-making business in Sheboygan, Wisconsin, after graduating from Notre Dame in 1965. In 1978, he replacedRalph Stayer joined his family's sausage-making business in Sheboygan, Wisconsin, after graduating from Notre Dame in 1965. In 1978, he replaced his father as president of Johnsonville Foods. Stayer inherited a stable company with annual growth averaging around 20%. Johnsonville was a successful company by all accounts, yet Stayer sensed problems. He noticed workers wereoperating far below their potential. Employees were disinterested. Most who worked at Johnsonville Foods appeared to be doing no more than meeting minimum performance expectations. Few seemed concerned with excelling in their work. Stayer felt there had to "be a better way." After attending a series of seminars by University of Wisconsin communication professor Lee Thayer, Stayer became inspired to revolutionize leadership practices at Johnsonville Foods. In1982, Stayer wrote a six-page letter to his employees. Leadership at Johnsonville Foods wasgoing to change. Employees would be asked to take far more responsibility for the work they performed. Further, the compensation system would be overhauled. Instead of across-the-board annual raises, employees would be paid for performance. Those who learned new skills anddeveloped their talents would receive the largest salary increases and profit-sharing bonuses. The traditional organizational structure was dismantled. First-line employees were organized into self-directed work teams. These employees, known as members, were given a wide array of responsibilities ranging from budgeting, scheduling, quality control, and marketing to strategicplanning and personnel, including the hiring and firing of their fellow team members. Middle managers, formerly responsible for the tasks turned over to the first-line workers, now focused their efforts on teaching and on coaching members to lead themselves. Meanwhile, Ralph Stayer turned his attention away from the day-to-day operation of Johnsonville Foods and began to focus more energy on maintaining his philosophy of transformational leadership. Slowly, members working on the production line began to take over more of the responsibility for operating Johnsonville Foods. The watershed moment came in 1985 when Johnsonville was asked to produce a new line of meats for another manufacturer. To make the venture work successfully, employees at Johnsonville would have to make tremendous sacrifices. During the start-up phase, members would have to work six- and seven-day workweeks for months on end. Further, quality would have to be maintained at the highest level to ensure that the contract continued. In the past, Stayer would have consulted with his senior management team before making a decision of this importance. This time, however, Stayer continued with his plan to revolutionize leadership practices at Johnsonville Foods. He conducted a forum with all members in the plant and presented the problemto them. Two weeks later the members decided, almost unanimously, to take the business. The venture was a great success! Quality rose on the new product line as well as on the original Johnsonville product line. The reject rate dropped from 5% to less than one-half of 1%. Revenues increased 19-fold in a 10-year period. All this occurred at a time when people were eating healthier and most other sausage products were experiencing declining sales. Today, transformational leadership has fully taken root at Johnsonville Foods. Members have assumed so much responsibility that Stayer has moved away from the day-to-day leadership of Johnsonville. He now works primarily on other projects, including the development of a line of pasta products and a successful leadership consulting business. To maintain the leadership approach, every new employee attends a series of courses at "Johnsonville University" beginning with an overview of the company culture and continuing with courses in teamwork, diversity, and financial operations. The company supports a philosophy of worker involvement. Production lineemployees hold meetings before each shift to discuss the operation and address any problems. Further, all members are authorized to shut down the production line at any time if they believe something isn't right. Johnsonville has been recognized by HR Magazine as one of the 50best places to work, and employees seem to agree. In an industry with turnover rates approaching 20%, the turnover rate at Johnsonville is a mere 8%. Although it took more than a decade to fulfill his promise, Ralph Stayer did revolutionize leadership practices at Johnsonville Foods, and the changes he implemented in the 1980s are still reaping rewards today

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