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Aligning Business with a Value Statement

Conversation with Dacor Executives:
Michael Joseph, CEO
Stephen Joseph, Director, Interactive and Direct Marketing
Mauricio Roca, Director, Business Development
Tony Zavala, Executive Vice President, COO

Graziadio Business Report, 2007, Vol. 10, Issue 2
This article is copyrighted and has been reprinted with permission from Pepperdine University

With over 600 employees, Dacor has established itself as one of the few successful high-end kitchen appliance manufacturers in the United States with annual sales of over $200 million. Dacor is a family-owned business founded in 1965 by Stan and Florence Joseph. Their son, Michael Joseph is now CEO; his son, Stephen Joseph, is director of interactive and direct marketing. Stephen graduated from Pepperdine University's Seaver College with a BA in business. Michael's son-in-law Mauricio Roca has completed the two-year management program at Dacor, and his responsibilities have increased to director of business development; he is currently pursuing his MBA at Pepperdine.

In 1997, Dacor CEO Michael Joseph and his wife felt the growing need to place God as a priority in their lives and embarked on a journey to become part of a religious community. Soon after, Michael decided to bring his renewed faith to Dacor in the form of a company value statement.

Not long after the statement was introduced, Tony Zavala joined the company as vice president of human resources. Tony created an eight-hour training course on the meaning of the Dacor Company's Value statement which every Dacor Associate is required to attend, thus, evolving the value statement into a values system. Six years and several promotions later, Tony is Dacor's executive vice president and chief operating officer. Tony is a graduate of the Graziadio School's Presidential and Key Executive MBA program.

Dacor grew from a struggling mom-and-pop business to sales of $200 million in 35 years. What were some of the strategic moves to your success?

MJ: There have been several strategic moves we have made which have allowed us to survive and prosper in a very difficult business, but from day one we’ve been a product-driven company. We’ve always known that we must continually develop innovative and high quality products in order to grow in the high end segment.

One of our big steps was getting into the gas cooktop segment. We developed a six-burner gas cooktop that was well received in the LA market—so boom!—we jumped from $6 million up to $14 million in two years time.

Next, we developed the first 30-inch convection wall oven because we had enough money to invest in tooling, and that took us up to $25 million. Then sales hit a plateau for a couple of years while we adapted to our new challenges and prepared for future growth. Our sales have increased sharply since 1993 and we’ve done awfully well. Our sales growth has compounded annually at over 25 percent for the 35 years that I’ve been with the company.

Growth is just a habit we’ve gotten into. It’s the culture of the company, still driven by great products, but now we have very capable people in all areas of the company.

SJ: I think some consumer trends helped out too. We’ve always been an upscale, high-end appliance manufacturer and the market for high-end products grew with us. So maybe part of it was being in the right place at the right time. Blessings from God, too, that’s a factor.

Blessings or sound business decisions?

MJ: They certainly are blessings. Getting up to $100 million took some time and some 25 years. But since the introduction of the value statement we’ve doubled that. So, to the more secular-minded, my message is that acknowledging God in the workplace certainly hasn’t hurt our business. And, of course, I think it has made a wonderful difference.

What has been the impact of the value statement on Dacor?

MJ: Employees know they are going to be treated fairly, and I think that helps create an environment where people feel safe. I think that can be measured in our low turnover.

MR: For the most part, I believe there are always strong similarities between any family’s values at home and the Dacor ones. Moreover, God is within all of us at anytime, right? Well, at Dacor all we are trying to do is to bring our faith and those family values to our workplace, where we spend a great deal of our lives. This has a great impact on every aspect of our business activities and our personal lives.

SJ: In meetings, our value system comes up regularly—when there’s an ethical dilemma, it’s referred to, or someone might even say, "That’s not in line with our values.”

MJ: We have it on our business cards, our newsletters, in all our showrooms, and our offices as a reminder that this is how one should behave, and if we have a bad day, we have a good moral compass to get us back on track.

The nice thing is that the value system isn’t mine anymore; it’s now owned by the Dacor associates. That is a sign of success.

SJ: There’s one part of the value system that I really like because it helps to cover all the bases: the “celebrating our lives” part of it. I think that really helps people feel like they’re not just here to work hard, but also to enjoy life.

I think it makes them feel good that their CEO wants them to live good lives—and not just here at work. We are 600 people, but if you add all the families, our suppliers, and our customers, we affect a whole lot more people than that. So it helps us affect them all positively.

MJ: A big part of our marketing initiative is to bring dealer groups in from all over to spend two or three days with us. One of the consistent comments we get back is that there just seems to be a different attitude at our plants in the way people approach their work.

MR: You have to take the plant tour or visit our headquarters in order to experience the impact of such a powerful message. Dacor is an extension of our homes and all our stakeholders are part of our family. If we are constantly trying to honor God in all we do, how would you think we are doing? We are one of the industry leaders with a very strong reputation in high quality, innovation, design, and performance. We are also well known for our strong ethical standards.

SJ: It also helps to attract new talent. A lot of our executives came to us because they read our value statement, like Tony Zavala.

Tony, how did you find out about Dacor?

TZ: It was a friend of mine who showed me a job posting for Dacor. The posting talked about this company with these special values that was looking for an HR executive.

My friend urged me to look into Dacor, but I was happy with my job. He ripped out the ad and left it on my desk. I ignored it. About a week later I had a discussion with my boss that irritated me and I got mad. I said, “Okay, fine.”

I called and spoke with Dacor’s then HR Director, Chris Fesmire, now director of community relations. After a brief conversation he advised me to visit their website. I said I would, but after I calmed down, I forgot about it.

Four days later Chris called me and asked if I wanted to pursue the job. We had only spoken superficially—I hadn’t sent in a resume. I said, “No,” so he asked me to do him a favor and take a look at the website. I finally went to their values web page thinking I would see different financial indicators. What I saw was Dacor’s Company Value statement. I looked at the header and thought I’d gone into a religious organization’s website. I said to myself, “This must be a for-profit organization that simply does not take those values seriously. Everybody gives lip service to a lot of things, but this is not real.” I kind of just set it aside.

A few days later Chris called and asked me to send him a resume. I sent it and then I began the interviewing process.

Mike asked me why I was interested in Dacor and if it was because of the Value Statement. I told him he had a major challenge in front of him, that I was interested in learning how to run a successful business and at the same time practice these values.

MJ: Tony came on board and showed us the way we could implement the Value Statement in the company to take it to the next level.

>> continued on page 2 >>

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This article first appeared in Graziadio Business Report, 2007, Vol. 10, Issue 2

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