Meet Rio Grande

It's Saturday afternoon at Rio Grande in Albuquerque, N.M., but Nora is happy to be at work. "We're expanding an on-site warehouse," she explains, before dashing off to join about a dozen colleagues also working on the project.

According to Andrea Hill, a company director, Nora's attitude is typical. Hill cites the company's low turnover rate, flexible workers dedicated to "manning the phones" during high customer-call periods, and a supremely organized environment (97% of orders are filled the same day) as evidence of a company that's both a model of efficiency and a fountain of optimism.

It's no coincidence that the surrounding community is an artistic one. Jewelry making, among other creative pursuits, is endemic to the area (Rio Grande's neighbors account for 5% of its sales of findings, tools, equipment, and packaging), and when company founder Saul Bell stopped in Albuquerque on his way to California in the 1930s, he saw opportunity and stayed. Many of Rio Grande's employees are part of the artistic milieu (every employee knows how to restring a strand of pearls), and the company hosts an on-site craft fair every autumn to encourage and inspire them. "It ends up being filled with our employees buying each others' jewelry," says Hill.

Thinking like partners. It isn't hard to find evidence of progress at the Rio Grande complex. Besides its current warehouse expansion, the company plans to carve additional warehouse space from a block of old training rooms. It's also constructing a new work area for a team of graphic designers and copywriterswho create the company's catalogs.

Instead of hiring outside contractors, Rio Grande relies on its facilities team to handle such projects.Workers in the loading area even insist on building the shipping crates for large pieces of machinery; they worry that commercial crates might deteriorate, resulting in delivery of a damaged product. Hill explains the company's philosophy of self-reliance this way: "Who hires a mechanic that doesn't work on his own car?"Jobs that aren't economical or don't fit the company's brand are outsourced, she says.

Rio Grande has borrowed some successful strategies from Toyota Production Systems' "Lean Manufacturing" approach. The company also has devised 15 principles to foster a positive atmosphere and mutual respect among co-workers, vendors, and customers (see sidebar). "We're a principle-based company, not a rule-based one," says Hill.

To maintain employees' focus on goals, including financial growth, the company has rejected the typical corporate hierarchy and its numerous levels of managers. Instead, 20 employee "coaches" and six "directors" are cross-trained to work alongside the other 424 "associates" to develop the company. "We teach everybody to see the long-term value of customers," says Hill. "We teach everybody to think like partners."

In addition to providing healthcare benefits, paid holidays and vacations, a 401(k) plan, and tuition reimbursement, Rio Grande shares about 30% of pre-tax profits with employees every year in the form of cash and stock. "Our employees know customers' worth to all of us," says Hill. "For people who like to get the work done, this is a warm and civil environment with incentives given for hard work."