This case study is about the strategies of Crown Point Cabinetry.

1. CASE STUDY:
CROWN POINT CABINETRY
Financial Controllership
MA. JOANA G. BARRION

2. CROWN POINT
CABINETRY
Norm Stowell founded the business
in 1979, producing the first cabinets
in his garage. Embracing principles
of quality and service, by 1992 Norm
had grown the business to more than
100 employees which included all
seven of his children. While revenues
were growing substantially, the
bottom line was suffering. Brian
Stowell, one of the Stowell offspring
involved in the company, managed
sales in 1992 but took a special
interest in running the business. With
the agreement of his siblings and his
father, Brian assumed the lead

4. PROBLEMS ENCOUNTERED:
1. Annual worker turnover was 300 percent and
absenteeism was a major problem.
2. Employee/management relations were described as
“horrible.”
3. Poor in-process quality control. Some cabinets were
built three or four times before they got out of the
shop.

5. SOLUTIONS TO ADDRESS THE
PROBLEMS:
• Brian reduced payroll from 76 to 53 people. This increased unit and
dollar sales. The management system was then revamped.
• The management layer was removed and replaced by a team-based
management approach. These employee-based management teams were
empowered with personnel and management decision-making
responsibilities. These teams held daily meetings to facilitate
communication, air grievances, suggest work improvements and schedule
production. Co-worker review sheets were created to evaluate team
member performance and recommend salary increases. These teams also
had the power to hire and fire teammates.
• In an effort to reduce labor costs (which constitute 25 percent of costs) a
program termed gainsharing was introduced. A set percentage was
multiplied by sales figures for each month, labor cost were subtracted from
this amount and the remaining funds were distributed evenly among
employees. Gainsharing bonuses were paid out 95 percent of the time
averaging 11-20 percent of annual compensation from 1997 to 2001.

6. SOLUTIONS TO ADDRESS THE
PROBLEMS:
•A penalty of $1000 to the gainsharing pool for every
backorder was implemented. If no backorders were incurred
during the week a lunch was held for the workers. This
reduced backorders noticeably.
•Wages wereincreased in 1998, 2000 and 2001. This increase
contained gainsharing bonuses at less than 25 percent on an
annual basis and gave workers a more stable wage.
•Safety teams were alsointroduced, which determined penalties
(including dismissal) for violators. Retraining on
safetystandards for all employees (even the founder) was also
introduced.
•Crown Point introduced a 401K retirement plan in1996 and
now provided its employees with annual picnics, a box suite at

7. QUESTIONS:
1. What is the strategy of Crown Point Cabinetry?
Crown Point Cabinetry has transformed itself into a profitable
company with a motivated & content workforce which should be a
role model for other small companies. Brian Stowell implemented
changes in 1993 that have greatly reduced absenteeism and made
turnover almost nonexistent. This was accomplished with programs
such as gainsharing which also reduced labor costs and wage
increases. Management level was eliminated in favor of employee
based management teams which control employee reviews and hire
and termination of employees. This reduced cost and increased
employee participation. These changes have transformed Crown
Point Cabinetry into a profitable, admired company that people
want to work for which was Brian Stowell’s goal. No changes need
to be made at this time as what Brain did was successful.
Continuing to focus on its employees is all that Crown Point needs
to do at the present time.

8. QUESTIONS:
2. What is responsible for the company’s turn-around?
 Crown Point does not have any noticeable problems. It has
addressed the issues that it was facing in 1993 when Brian
Stowell became lead executive and has become a more
profitable company. This is due mainly to a much happier
workforce that is involved in the management process. Line
employees now have a stake in reducing labor cost, reducing
backorders and reducing absenteeism. Employee
management teams are also responsible for safety and the
hiring and termination of employees. This has made Crown
Point Cabinetry a more profitable company with a more
stable workforce. Clearly Brain Stowell has addressed the
problems. Crown Point had with its workforce and it is now a
model for what a company can do when it addresses
employee issues.

9. QUESTIONS:
3. Is the Crown Point experience transferable to other
business settings?
The programs that Brian Stowell has implemented
may not work in all industries but they are working
well for a manufacturing company with the size of
Crown Point and in the cabinetry business. Crown
Point should continue the programs that it has
implemented and continue to focus on treating its
employees as its priority.