Orion Industries is a social enterprise whose business is aerospace manufacturing and contact center services. Their mission is to change the lives of people with barriers to employment by employing them in those businesses and providing transformative training, skill building, and education. Orion is among the select group of social enterprises around the country that are part of REDF’s national portfolio. John Theisen joined Orion Industries in 2000 as President and Chief Executive Officer. A graduate of Washington State University School of Business, John spent 23 years in the private sector, working at an executive level for a variety of national and international Fortune 500 companies including Westin Hotels and Seattle’s Best Coffee, among others. In that capacity his specialty was developing strategic plans, building strong management teams, turning around underperforming companies, and positioning companies for expansion. In 2000 he decided to apply that formidable expertise to doing good. Here’s a conversation about that journey.
Before you became President/CEO of Orion you were the COO of Seattle’s Best Coffee for 9 years. What made you decide to put that business experience toward a social purpose? Was there a particular moment or person that catalyzed that?
As COO, I helped Seattle’s Best Coffee grow from an $8M to $95M company. But to get there I had to do a lot of traveling. I was always on the road. At one point, I remember sitting in a hotel room in Boston. It was cold and grey, and I realized I hadn’t seen my wife and kids for well over a week. I began to wonder when I’m dead and gone what was going to be on my tombstone: “He brewed a great cut of coffee”?
But all that hard worked paid off. The company’s success made us very attractive to other companies. In 1998 we got an offer we couldn’t refuse, and we sold to the American Food Corporation. At 47 I was way too young to retire, so I started thinking again about my legacy. I decided I wanted to work for a company that did more than just sell products. I wanted to make an impact in people’s lives.
When I looked at the typical nonprofit executive level job, it involved a lot of fundraising, which wasn’t what I wanted to do. At that point I had never heard the term “social enterprise”, but when a recruiter told me about Orion Industries, I knew it was exactly what I wanted to do.
So what was so attractive about Orion?
At that time the company had just a single contract with a single customer making them extremely vulnerable. Three years before I started working at Orion NAFTA passed. Orion lost half of its business and was struggling to stay afloat. To make matters worse, the 2008 recession was in full force at the time. Then their CEO left. That’s when I interviewed with them. I guess I really like a challenge.
Orion’s board was smart in that they let all three candidates who were interviewing for the position take a really deep dive into their business—we had access to their books, the board, and the staff. Despite the current state of affairs – I saw great potential. Including a relationship with Boeing that went back all the way to 1957!
They knew I had a lot of success turning around under-performing divisions and organizations. I had developed a management model that really worked, and the idea of applying it to the challenges facing Orion was very intriguing. I told them my plan would be three fold: 1) implementing sound organizational processes, 2) stemming the bleeding and 3) growing and diversifying their sales. I guess they liked that because I got the job.
But just as I was starting to make headway, 11 months into my tenure 9/11 happened. Needless to say, the bottom fell out of the aerospace business. The firm hit rock bottom. My first two years there were really hard. But I just kept doing what I had planned – executing against the strategic plan and working to realize the vision.
By executing against the strategic plan, the firm was able to remain profitable through the 9/11 downturn. 2014 marked our 12th consecutive year of 20% or better growth in revenue and services. We doubled in size between 2012 and 2014.
How has your experience as a leader in the for profit business sector informed your approach at Orion?
There’s this assumption that people working to improve society have to sacrifice their income in order to do so. I completely disagree with that premise. Most social enterprise businesses understand that if you want great results you need to hire great people. I’ve worked hard at Orion to be able to offer compensation packages that match the for profit world for similar work. After all, we’re competing with the for profit world when we sell our products/services – it’s no different when it comes to the people we are looking to hire.
Strategic thinking and strategic processes are just as important to social enterprises as they are to for profit businesses, maybe even more important because we have a double-bottom line that we have to answer to. For any program or initiative we have to ask ourselves–what is the return on that? We have to find a way to drive profit in enough areas of the company so that you can support other areas that are not as profitable. For every new program we conduct a business analysis where we look at our ROI and the impact on our mission.
Another important point is your USP – or unique selling proposition. How are you different/better than what’s out there? When we look to expand Orion’s product offerings, we purposely stay away from services that are already well-covered in the sector, like janitorial and landscaping for example. So our lines of business include aerospace manufacturing and call center services. These focus areas allow us to be more specialized – beyond the financial value and value to our mission. This specialized focus also allows our employees to get more specialized training that allows them to transition out into jobs with more specialized skills and therefore, higher earning potential.
You are the President/CEO of Orion. What responsibilities do you have in that role?
Probably the most important thing I do is lead the strategic planning process. It’s an innovative approach that begins with an offsite board retreat. Among other things, during that retreat we conduct a SWOT analysis that allows us to establish our priorities. Once we have a draft of the plan I flesh it out with each of the divisions/leadership teams. The final process is with the senior leadership team where we develop our strategic plan goals for year. These goals are a big part of our performance management system – so just like in a for-profit business, the senior staff are evaluated based on hitting business targets.
This year we developed a longer term strategic plan with a 2020 vision. We challenged ourselves to grow the number of people we serve and/or the services we provide them at the same rate we grow the business. That gives us two options: we can grow horizontally—hiring and providing services to people with employment barriers different from those we currently serve, like people with more significant developmental disabilities. Or we could grow vertically, by providing more services to the people we now employ, like housing.
And again, just like a for profit company, another way for us to grow Orion’s business is through mergers and acquisitions. We have our niche and we know what we are good at, and that’s providing job training and community job placement for people who have employment barriers. So we are currently looking at an opportunity that would allow us to acquire a complimentary manufacturing business and overlay our human services template. This plant is in an area where there are lots of aerospace employers—firms our program participant graduates can go to when they leave our program. If it works out, it’s a smart business decision, and a smart people decision. And that’s really at the heart of running a social enterprise.
Another aspect of what I do at Orion that’s no different from my role in the for profit space – I hire people that are smarter than me, make sure they have the resources to deliver on the strategic plan and let them do their job. I’m fortunate in that I have I have a very talented senior management team. I also do a lot of coaching, which I really love doing.
Orion is competing with other businesses that have only one bottom line to answer to. In fact, one could say because your competitors don’t have to worry about hiring people with employment barriers and providing them training/support, their work is infinitely easier than yours. This is especially true in your industry because of how specialized/technical it is. How does Orion successfully compete with these businesses?
Here’s the thing – we are operating a business, selling our products to other very successful businesses. No one is going to give us a pass on anything, just because we also happen to be doing good in the world. Whether it’s a product or a service you have to meet their requirements for quality – that’s the price of entry. Of course the firms we partner with truly value the work we are doing. It’s an extra benefit, but if we delivered an inferior product, it wouldn’t matter.
What advice would you give to an experienced business person who wants to make the career change you did and use his/her expertise to help people with employment barriers enter and succeed in the workplace? What kind of support do these leader needs to make that transition?
I spent a lot of years in the for profit business sector and I thoroughly enjoyed that work, but leading a social enterprise, well for me, that’s the best job in the world. Not a day goes by when I don’t think how fortunate I am do be able to use my business skills to help people who would otherwise be shut out of the work force to get the training and support they need to succeed.
In terms of the change your social enterprise is creating, what impact are you most proud of, whether it involves a person or another aspect of your business? Around this point, is there an anecdote or moving story about that impact that you can share with me?
In 2000 we did 9 community job placements. In 2015 we did 135. We provided services to over 350 individuals in 2015 with more significant barriers than ever before. We now have multiple training programs, and businesses to conduct those training programs in. We now provide training opportunities throughout the company. All of this allows us to offer greater choice to program participants to meet their various levels of ability and interests. It also allows us to access employment opportunities in a wider variety of companies and industries for our graduates.
85% of the people who go through our program are still employed one year later. That alone would be impressive, but it’s even more so because we are getting those results while running a world class company. We’ve been selected as a Boeing’s Supplier of the Year twice, in 2011 and in 2015. We’ve received the Boeing Supplier Excellence Award for the past six consecutive years. Our contact center has received multiple gold and silver medals from both Contact Center World and the American Teleservices Association. Orion is a world class business in every way. And now, people are starting to look at us as a model for social enterprise. That’s something we’ve aspired to and now we are reaching that goal.
In terms of a particular success story, we work with three different school districts in their transitional student program which is for their special education students. Kids can stay in that program until they are 21, but when they turn 18 they enter a different program that is more focused on employment skills. One young man who enrolled with us in this program was struggling at school. After working with us he started doing so well at school, we offered him a job over the summer. And he was such a great employee, and did such a great job, we hired him as a permanent staff member in our hydraulic assembly area which is a very technical job. In this role he does final assembly on fuel pumps and hydraulic pumps. He is now a tenured hydraulic technician earning $60K a year. He’s married, owns his own home, and drives new pickup. There are many success stories like that at Orion.
What are the most important lessons you’ve learned from running a social enterprise? What is the biggest challenge you had in running a social enterprise and how did you overcome it?
Well, it’s certainly not an easy job, but everyone at Orion works hard every day to make it work. The mission of the social enterprise is complementary to our business, and the mission is an advantage to the business as long as you can meet supplier requirements. It’s also an advantage to us internally. Because of our mission we have more dedicated employees – they know they are doing a good thing for the community because they see up close and personal people who otherwise would have a heck of a time getting and keeping a job transform into some of the best employees a business could ever hope to hire.
And all the process and structure we use to run a successful business also helps us better design our training programs. For example, there is a concept in manufacturing called “value stream analysis” – once you’ve identified an opportunity you have five days to design and implement a solution. To get there you remove all the steps in the process that are not value add – you streamline to eliminate waste. We’ve used that method in our employee services program – Kathy Powers, our VP of Services, analyzed our entire program participant process from the moment of intake to when an employee leaves us to determine value add and the point of diminishing returns. From that analysis she determined an optimal time for our program to move a training program participant from training into a job. If we were using old school criteria for managing our mission we wouldn’t be implementing that type of analysis.
Finally I guess I’d say that when done right, work at a social enterprise can be most rewarding career you’d ever have.
What is the vision you have for Orion in particular and the social enterprise field in general?
For Orion, our vision is to serve individuals with barriers in multiple businesses in multiple locations. With the upcoming merger, we will be providing services in two different cities in Western Washington. We also have a cohort of workers staffing a contact center services contract in Virginia. We want to be seen as a national model – creating living wage opportunities for people overcoming employment barriers.
Our program teaches people skills that allow them to earn a living wage. The average hourly wage for people leaving our social enterprise is $13.87 an hour, and we place them in industries where there is room to advance their skills and increase their wages.
I truly believe in the social enterprise model for the delivery of many types of human services. When done right, it frees the non-profit organization from much of the uncertainty associated with more traditional types of non-profit funding. Conversely, it also frees the non-profit from some of the short term decision making that owners and shareholders often demand from a for-profit organization. It allows the non-profit to make sound long-term decisions that are in the best interest of the mission. The social enterprise model is the perfect blend of business and mission and will become more and more important as an efficient and effective way to deliver services.
If you could say only one thing to a potential business partner about why they should partner with Orion what would you say?
I’d emphasize that both their customers and their employees find real value in this approach. It’s not enough to just buy from a supplier who meets their technical requirements for pricing and product and service quality. Your customers and your employees are looking for more – they want to see a social impact. Partnering with a social enterprise will allow you to deliver a quality product or service, and improve someone’s life. I call that, a win-win.