1990 was a bad year for Barnet Annenberg and his downtown Baltimore graphics company. Sales were in a slump, and clients were going out of business. He overspent on office renovations. He couldn't pay bills on time, and suppliers began to cut him off. His bookkeeper was so harried that she didn't even have time to calculate the extent of the cash hemorrhage.
When the year ended, he was $150,000 in the hole and on the verge of bankruptcy.
Drastic action was needed to save Maran Graphic Specialties Inc., the 63-year-old company Mr. Annenberg's father started. He involved selected employees in the management team, trimmed the staff elsewhere and tightened up on expenses. He even changed his own role.
The result: He closed the books on 1991 with a $60,000 profit on sales of $1.8 million.
To celebrate, he split the earnings evenly with his workers, giving each hourly worker an extra week's pay and each manager $500.
"Nothing could have given me more pleasure," says the tall, balding Mr. Annenberg. "I told them if we made it, we would share profits, even if it was only $20."
He can smile now, but the salvation of Maran was not easy. The commercial and plastics printing company at 320 N. Eutaw St. had grown accustomed to the opulent 1980s, when members of the sales staff were more order takers than salespeople. "We had the fat-cat syndrome," says the blunt-spoken Mr. Annenberg, called Barney by his employees.
The first task Mr. Annenberg undertook was a review of his 35 employees. He and his department heads scrutinized each employee's performance and attitude. Some lost their jobs or retired. The company now has 23 full-time employees.
To increase productivity, many of the remaining workers had to learn new jobs that would make them more flexible.
"Everyone is functioning in six different capacities now," says Chris Glover, who used to supervise typesetting and now is learning to manage production.
The company next began to find new ways to use its computers. With the increased computerization, the bookkeeping department was reduced from four workers to one. A purchasing system kept better track of expenditures. A computerized inventory system was developed. The company began a computerized listing of all work orders. And the work space was consolidated to increase efficiency.
The next task was to take a close look at expenses. Employees had to pick up a larger share of their health care costs. Overtime hours were cut.
Mr. Annenberg admits he was partly to blame for the company's woes because he spent much of the time out of the office on sales calls and did not pay close attention to cash flow. "I was the last to find out what was going on and the first one to have to take responsibility for it," he says.
To help, he created a 10-person management team with representatives from each department. The team met once or twice a month to come up with ideas for further reducing costs.
Employees joined in the effort to find ways to reduce costs, going as far as turning off the lights in areas not being used to save electricity.
Mr. Annenberg says the experience taught him the value of a team effort and that he plans to continue to increase employee involvement in the company so that he can hand the company over to his workers when he retires.
As well as sharing the work, he plans to continue sharing the profits. In the old days, workers received Christmas bonuses equaling one week's pay.