Appleton papers: roadmap to a training turnaround, Solutions!, Online Exclusives, September 2003

APPLETON PAPERS: ROADMAP TO A TRAINING TURNAROUND

By Janice Bottiglieri, Senior Editor

In the face of drastically declining markets and a tough industry climate, a company has two basic options: grow or die. But for Appleton Papers’ employee owners, death was not an option.

Appleton Papers was destined for a slow, agonizing death—and its employees knew it. After making paper products for 93 years, the company was in danger of becoming just a side note to papermaking history, as new technologies drastically affected demand for Appleton’s key products.

Since 1907, the company had grown a reputation as an innovative producer. In the late 1920s, Appleton had developed a facility for making and coating paper in a single operation; in the early ’50s, Appleton worked with researchers from National Cash Register Company on ways to successfully apply NCR’s new microencapsulation process to paper. This led to the introduction of NCR PAPER* brand of carbonless paper in 1954. At the time, the development represented an industry milestone; less than 40 years later, it served as more of a millstone, as business technologies rapidly advanced into the digital age. “As an organization, we began talking about the eventuality of decline as far back as 1989. In those days, we used the word ‘renewal,’” recalled Dave Badilla, people development director at Appleton.

	Discovery Maps allow groups of employees to discuss difficult business concepts in an open, idea-oriented manner.

The company had developed other direct thermal paper products, such as fax printing papers; but these markets also faced increasingly limited demand. In 1995, Appleton entered the coated freesheet business as a way to bolster itself against the inevitabilities of market decline. “We made substantial investments in the Combined Locks mill, and acquired another mill in New York,” Badilla explained. “Along the way, our owners decided to break the company into product-based divisions. In doing that, they put that coated-freesheet initiative into a coated freesheet division, leaving Appleton in a carbonless and thermal division. And there went our renewal.”

To some people—both outside of and within the company—Appleton seemed likely spend its final years just plodding along, churning out niche products like carbonless and thermal paper in the face of increasingly “paperless” society. Still, management saw too much potential within the company to allow this to happen. In a business climate where companies must evolve or die, Appleton Papers has shifted gears and established itself in a new marketplace. It wasn’t easy for 2,500 employees, many of them long-timers, to make changes; it took creative training and an offbeat motivational program created in partnership with Paradigm Learning. To stress the imperative nature of the change, said Badilla, they called it “Grow or Die” training.

A map to the future
Today, Appleton is clearly a company that has weathered the transition well. Headquarters offices are located in Appleton, Wisconsin, USA, with manufacturing facilities in Wisconsin, Ohio and Pennsylvania. The company also operates eight distribution centers and a network of sales offices across the U.S. With nearly $900 million in annual sales, Appleton is the worldwide leader of carbonless and thermal papers. The company has developed its capabilities in microencapsulation and coating, and produces other specialty papers, including security paper. Although the company’s legal name is still Appleton Papers, their market branding is simply Appleton, with the added tagline, “What Ideas Can Do.”

In 1986, the company began its Customer Focused Quality initiative, efforts rewarded in both 1994 and 1996 when Appleton was named a finalist in the Macolm Baldrige National Quality Award. Employee enthusiasm for the program was evident—in a show of support, about 700 employees opted to get personalized license plates with CFQ themes.

In spite of this success, market realities demanded more if the company was to thrive beyond the 1990s. In 1999, Appleton began working on what it called a “growth visioning process.” The end result was a circular transformation map that included a new vision statement for the company. “That map was published, put on walls, desks, in conference rooms—it was the first overt communication to the company’s broad population saying, ‘okay, here’s where we need to go,’” said Badilla. “The circularity of it allowed us to use concentric circles, beginning at the middle and working outward, that represented each year in a five-year span. At the outside-most of the transformation map were what we called ‘N statements.’ We could work back in time from those statements, asking ourselves, ‘if that’s where I want to be in five years, what will I have had to accomplish in four years? In three?’ and so on. We probably engaged 150 people in the creation of that map. It was a major undertaking that covered all aspects of the company.”

As with the Customer Focused Quality initiative, Appleton employees responded enthusiastically. The Growth Opportunities (GO!) program was founded the same year as a way for employees to submit ideas for new products; in less than six months, employees had submitted approximately 800 ideas.

By the year 2000, said Badilla, company management was talking about the next move. That year, they began the relationship with Paradigm Learning, headquartered in Tampa, Florida, USA. “We put an extremely aggressive timeline in front of those folks, and started sending them mountains of information about our company—both current conditions, and our desired future. We didn’t know what to expect; we wanted to come up with a tool that would enable us to build greater awareness and understanding of what was to come ahead, and why we needed to change. If we can’t get folks to understand why we need to make the move in the first place, it makes the change terribly more complex,” he said.

Paradigm helped Appleton create a Discovery Map. Highly customized, with strong, iconic graphics, Discovery Maps help capture abstract ideas, strategies, and initiatives in a way that employees can understand and internalize. In essence, the images on the map become a motivational metaphor for the specific actions important to a company’s success. Appleton’s map was called “Discovering the New Appleton.”

The images on the map were straightforward and, says Badilla, almost brutally honest. “We even had what we called a corporate graveyard embedded in our map, which contained the names of notable companies that had tanked—for example, Eastern Airlines. Around that time, we had closed one of our plants; we included that plant there, too, so we could see every day that we weren’t just talking about some theoretical thing that was going to happen to somebody else.

“The map became a fabulous metaphor,” he continued. “We were able to bring large groups of people and place them at small tables in our cafeteria to discuss the map, and we discovered tremendous value in the dialogues going on at those tables. People who had experience would be able to share that experience with folks who had no preconceived ideas. People who had started to formulate an opinion about the future could share those opinions. Copies of the maps began appearing in cubicles; we posted large copies on the walls. We’d discover little groups of people stopping momentarily and peering at the map. We began to hear some of the language embedded in the map coming up in the language of the community.”

According to Badilla, the Discovery Map was initially met with some skepticism, yet eventually it became a launching platform for even more growth. “We identified other areas of learning,” he reported. “ For example, we wanted to become more innovative as a company, so one of the things we needed to help people learn to do was to be more creative in an ideation session.” The company began training a core group of employees to conduct ideation sessions, and a large portion of the organization participated in an ideation process.

“The map process caused us to take a look at what we would and would not do moving forward,” Badilla noted. “We determined that we’ve got a lot of iron, like every paper company, so we need to make products.” One area where Appleton has expanded its business is in security papers—a market receiving increasing attention in a global and highly competitive business arena. Appleton security paper products include its DocuCheck® security papers, designed to prevent check fraud; TechMark® Intelligent Solutions, which the company describes as covert, machine readable security technologies that offer the highest level of security; and DocuMark™ Custom Solutions, which allows clients to customize fraud prevention products to their specific needs.

The focus on product development also brought to light the company’s need for better project management. “With the help of Paradigm, we undertook a program to build project managers,” Badilla said. “About 80-100 people have been through that training. We’ve also investigated Paradigm’s Countdown: A Strategy Game For Project Teams, which is a softer, less demanding program; it teaches that you don’t need a big, important project to use some of these tools. We’ve run bunches of people through that.”

Because the training programs are provided as complete packages, Appleton was able to do all of its training onsite, relying largely on internal resources.

On their own
In November, 2001, Appleton Papers made another culture change that had a tremendous impact on its workforce—it became 100% employee-owned. Employees acquired the company from its European parent company, Arjo Wiggins Appleton, in a unique purchase deal that offered employees a one-time opportunity to roll the proceeds from their 401K into a stock program. They collectively invested $107 million to complete the $810 million employee buyout; their investment served as the only equity funding for the deal. The company secured bank debt and other financing to complete the transaction. “No one could just go to their savings account or their stock fund and get a bunch of shares; we all were literally banking our retirement,” said Badilla. For the organization, it was tremendous cultural boost.

“All of a sudden we were taking all of this activity and energy about being a different kind of company and moving it into a new light—we weren’t being a different kind of company for Anglo-French owners that we would never see; it was ours now, we were doing it for ourselves.”

Having the Discovery Map in place beforehand, he said, was critical to the success of the purchase. It not only gave employees a sense of the future, but it boosted customer confidence as well. “We have a habit of sharing with our customers what we’re doing; when you post Discovery Maps on the wall, both customers and suppliers can’t help but stop and ask, ‘what’s that?’”

Another Paradigm product Appleton has tapped is the Zodiak game, which serves as a primer course on finance—a particularly important concern for an employee-owned company, confirmed Badilla. “We’ve tweaked Zodiak a little bit to fit our needs internally, to try to break the notion that you have to be a financial wizard, when really you just need to use some common sense judgment.” Designed to promote what Paradigm calls “business literacy,” Zodiak is structured as a game in which players run a multimillion dollar company over a simulated three-year span. The focus is on getting participants to think and act like business owners.

It has been a long journey, Badilla said, but employees are confident and the company continues to look into new markets. “We’ve made a lot of strategic decisions, and I’m sure we’re going to change some of them,” he said. “We’ve come a long way from the aspirational goals of a products company with a historical foundation in carbonless and thermal. Are we going as fast as we would like? Heck no! Anyone who could say that they’re completely satisfied with their progress, and doesn’t desire more, needs to be buried. They died.”
But as Appleton and its employee-owners have demonstrated, that is a fate that is not necessarily inevitable.

Janice Bottiglieri is senior editor, Solutions! For People, Processes and Paper, and editor of TAPPI Journal. Contact her at jbottiglieri@tappi.org.
To learn more about Appleton Papers, visit its corporate website at www.appletonideas.com; for more information about Paradigm training products, go to www.paradigmlearning.com.