[Takeaways] How Literati sets a culture for high-quality warehouse productivity

Thomas Wales, the General Manager of Literati, shares how he matured his warehouse operations to fulfill 3x the orders in a year. 

When Tom joined Literati a little over a year, the warehouse lacked the people and processes to fulfill orders at scale. As a subscriber to leadership principles outlined in the NYTimes best-selling book, “Extreme Ownership: How U.S. Navy SEALS Lead and Win”, Tom set a culture foundation that has helped Literati grow into a now 35,000+ sq. ft warehouse.

Assess the people, operations, and metrics for growth

Tom first shared what he did to create the right environment for change. 

• Identify a growth-minded leadership team. Not everyone is going to do well with change—some may be downright change-averse. Even if you execute change flawlessly, not everyone will rise to the occasion, which can slow your progress. Build a culture that will embrace change and grow with the business. Ask yourself: Who’s willing to change? Who’s willing to have difficult conversations? Tom knew that to build consistency, he needed leaders who were compatible with him and the environment, and who could communicate the vision and strategy. 
• Focus on points of leverage. For Literati, the biggest areas of operations are fulfillment and returns. To grow with efficiency, those functions had to be improved first. Then, other areas of the business could be refined.
• Set meaningful metrics on an individual level. Everyone’s metrics will be different, but it’s accuracy and relevance that matter most. Focus on metrics that you can control and create operational drivers for each. While Tom measures overall metrics such as cost per unit, he also sets measures on an individual level, usually at units per hour (e.g. pick rate). Focusing on those individual metrics gives people motivation and benchmarks for improvement.
• Tip: don’t forget to measure quality and safety too. At Literati, orders are tracked to a person, so Tom's able to count returns due to errors a person makes and factor it in their overall score. Having a counter-balancing metric ensures you keep quality high.

Distribute authority and hold the individual accountable

Ultimately, people need to believe they are in control of their own destiny in order to stay motivated every day. Here are a few things Tom shared to make everyone an owner.

• Standardize operations and training, so everyone has the right tools for success.
• Communicate clearly on how the vision and company goals relate to individual goals so they can make a bigger impact. Explain your intent and goals as a manager, and tie them to numbers they can work toward.

• Tip: Use visuals to distill down the message, whether it’s flow charts or mathematical equations. Some of the concepts may be complex, so be sure you’re getting your message across in a way that’s easy to understand.

• Provide constant feedback, both formally and informally throughout the day. This is where having a strong leadership team that embraces the culture and vision is critical.

Devise different levers to motivate your team

While Tom admits “cash is king,” there are many ways that aren’t financial to help frontline workers understand what’s in it for them—and to keep them motivated. Workers like to see leaders working for them and their wellbeing, too. Here are some of the ideas shared by Tom and others present at the roundtable.

Incentives:

• Performance-based bonuses for hitting a goal. Use cash or gift card bonuses for hitting a threshold. But make sure it’s not always a competition so you don’t risk damaging a collaborative environment. Performance bonuses also work because you can directly calculate the ROI on productivity (helpful for your accounting friends).
• Contests. Everyone loves feeling like a winner. This is great for changing behaviors that may not be directly tied to their performance metrics. Also, Tom suggests ways to get creative with awards, such as printed certificates or recognition ceremonies. Grant access to perks like “Being DJ for a Day,” where workers can choose what music to play in the warehouse. Or, if you can swing it, give winners a few hours off.
• Learning and development opportunities. People like to see you’re making an investment in them. Many attendees cited that career development opportunities are well received, especially among high performers. Attendees mentioned formal training options like Udemy or Purdue Lean Six Sigma Online. Tom also offers informal coaching by leading book club discussions. 

While monetary incentives are definitely motivating, the non-monetary incentives also show people that you care. Building an inclusive community also goes a long way. Tom and others share tactics for doing this:

• Taking health and safety programs seriously. Showing that you’re serious about keeping everyone safe is not only good for business, it’s a meaningful retention tool that’s about more than just the optics. Make sure you share what you’re implementing and show these measures in action, so they can see that it’s happening. Mark out break rooms, do the deep cleaning, and take proper precautions so everyone feels at ease.
• Lunches and fun activities. Tom bought a smoker and brings it on-site to cook BBQ for the team on occasion. While you may not have the skill or interest to cook, going the extra mile to show you care can have a lasting impact on your team. Involve your leadership team in these activities as well—it can show consistency and depth in the culture you’re building.

Lastly, Tom was quick to point out that he always includes his temp workers in these activities and communication as well—the good, the critical, the side-of-desk meetings. Even though temp labor only comprises 10% of his overall workforce, having everyone feel like an equal member of the team is what makes it work.

To convince your accounting team, beat the plan

Tom used some spirited words when describing how he works with his accounting team. (To hear live, check out 15:15 of the recap video.)

At the end of the day, boosting your warehouse productivity can result in the need to hire fewer people. Tom includes the cost of these initiatives into his budget. Ahead of each quarter or year, he sets a budget and headcount need based on current productivity measures and projected business. Then, they agree that if he can reduce his headcount needs, he can take a portion of the savings and invest them back into his operations. That creates an incentive structure that motivates Tom to continually experiment on operational efficiencies and gives him the authority to invest as he sees fit.

Get started today

The roundtable brought together leaders from different-sized organizations and regions of the country to discuss a common and persistent problem. Many of the tactics shared require little to no technology or long-term investment. What is critical is being committed to investing in the right people and warehouse culture. 

If you want to dive deeper into any of these topics, check out the live recording here. The video includes timestamps to jump into a specific topic.

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