When fixing company culture requires more than cosmetic surgery.
WINDER, GEORGIA
When Wallace Johnson and his brother took over Southeast Culvert in 2010, Wallace became co-owner of a manufacturing business in which he’d worked since high school.
“We manufacture steel and plastic pipes for storm drains,” says Wallace. “Only a handful of companies do dual-material manufacturing for that purpose.
“We’re coming up on 11 years, and we haven’t crashed and burned yet,” he jokes.
Although the business enjoyed some early success, Wallace knew that in some areas, they were struggling with an unhealthy company culture.
He remembers: “We desired to be a God-honoring culture, but how could we get there?
“Without a solid set of core values and direction for the company, it was very difficult to hire and retain good people, especially in leadership positions.
“We also had a lot of dissatisfaction with compensation and working conditions,” Wallace admits. “We were still operating equipment that I had driven in high school: forklifts that were 30 to 40 years old. We maintained them, but they weren’t ideal.”
“We had a lot of dissatisfaction with compensation and working conditions.”
In addition, many company employees were known to use recreational drugs and abuse alcohol. This is common in the manufacturing industry—not unique to Wallace’s company—so they tolerated it.
“When you think about manufacturing,” Wallace explains, “there are lots of blue-collar guys. Sometimes, they smoke pot or drink at night. But we figured that if they were here and functioning well, then we wouldn’t make a big issue of it.
“That’s kind of how I learned to approach the business.”
Over time, these issues had the potential to create disaster within the company.
“We were headed toward an avalanche of crash and burn problems,” recalls Wallace. “With everything going on, there was a good chance that we’d have folded the tent on an entire division and let go of a lot of people.
“We were headed toward an avalanche of crash and burn problems.”
“It kind of scares me to think about that,” he shudders.
Wallace knew that he wanted better for his company, but he didn’t know where to start. Then, one day, Wallace’s legacy planner introduced him to Tom Lutz, a Convene Chair.
“I had no idea that Convene existed,” remembers Wallace. “I was sold immediately.”
Wallace enjoyed the many benefits of Convene membership: peer-to-peer connection with like-minded CEOs, breakthrough learning content, and dynamic speakers to help improve business performance.
But the most impactful moment for Wallace came when he was challenged by his team about implementing a drug-free workplace.
Wallace remembers: “I told them, ‘I’d probably lose half my workforce.’ A drug-free workplace means that we’re not going to last as a company.”
His Convene team didn’t relent.
“They asked me,” Wallace recalls, “’Do you think that it honors God to have this as part of your culture?’ After answering them, I knew what I had to do.”
In a huge step of faith, Wallace began to implement a drug-free policy.
“We offered free help to anyone who came forward and said they needed help with drug addiction,” says Wallace. “Otherwise, if they tested positive, they would be subject to termination or strong disciplinary action.”
Along with the new policy came an overhaul of company culture: new core values, updated equipment, and leadership hires that freed up Wallace to work “on” the business instead of “in” it.
However, even as the culture began to shift, some deeper issues threatened the long-term stability and future of the company.
Wallace recalls: “A couple months after we hired our new Operations Manager, he uncovered a drug problem in our plastics division. We ended up drug screening all the employees over there; within a few months, we’d lost 21 of 24 people.
“That was when unemployment was 3.5 percent. We had to hire, train, and replace over 20 people in our plastics division, including all our supervisors and management.
“It was a huge hit for us,” says Wallace. “A lot of pain.”
But, with Convene’s support, and an improving company culture, Southeast Culvert gradually recovered.
New equipment meant that employees were happier to come to work.
“In the past, people were disgruntled with the tools,” remembers Wallace. “Now, they raved about them.
“I started to hear things like, ‘I’m happy to get up and come to work in the morning.’”
“I started to hear things like, ‘I’m happy to get up and come to work in the morning.’”
As compensation and benefits packages improved, the company was able to hire and retain better employees.
“When you’re trying to hire people, those things mean a lot,” says Wallace. “We’re now moving toward offering three weeks of vacation per year. In manufacturing, that’s a big deal.”
Now, with the company flourishing, and a goal to one day reach $100 million in annual revenue, Wallace reflects upon his decision to introduce a drug-free policy:
“At the time, it impacted us hard; but if you look at the long-term, it was the best thing we could have done.
“We needed to feel that pain. I don’t want to ever go back to that former culture.”
Wallace continues: “Through that, I realized that not abiding by God’s laws will catch up to you at some point. Now we have a great-performing team over there. It’s been night and day.
“I don’t see how we could have gotten there without belonging to Convene.”
Wallace Johnson is the President of Southeast Culvert in Winder, Georgia.
Disclaimer: Some quotations have been edited for length and clarity.