A COMPANY OF VISION AND FORESIGHT

By: James F. McGlinchy

October 1981 - Vol. 46, No. 10



When American Optical Corporation began operations in central Massachusetts in 1833, Andrew Jackson was the President, the bulk of what is now the continental United States was inhabited by Indians and small scale agriculture was by far the nation’s leading occupation. American, in fact, was at that time an undeveloped nation.

In the intervening century-and-a-half, the country and the Southbridge-based company have grown vastly in wealth and sophistication, but some aspects of industrial life seem to be going through a phase of reincarnation.

As in its early days, the United States is once again facing shortages of capital and invasion of its markets by foreign manufacturers. Then, as now, American industrialists had to work quick and smart to keep up with their foreign challengers and to survive.

William Beecher, the man who founded the company that was to become American Optical, felt that he could make a spectacle frame in his shop in Southbridge as good looking and as serviceable as any of the high-priced models then being imported from France and England.

His early efforts were passably successful and he was shortly joined by George Washington Wells, a young man destined to be one of the first in a long line of American entrepreneurs. Wells was an early model, cut from the same pattern that later gave us Henry Ford, Thomas Edison and Alexander Graham Bell.

Beginning with nothing more than Beecher’s idea, he built American Optical into an international institution managed from a growing colony of red brick offices and factories on the bank of the Quinebaug River in Worcester County.

The senior Wells set the stamp of technical excellence on every product the company produced and that tradition persists to this day. AO, as it is universally known, is still the industry’s acknowledged leader in development of new optical concepts and new lenses and has introduced literally hundreds of new products and techniques to the optical field.

Wells and his successors were also noted for picking up and utilizing the most modern business methods and were among the first firms in Massachusetts to make use of such new-fangled ideas as electric illumination and the type-writing machine.

Today, under President Gene E. Lewis, a transplanted Texan who has lived in New England for more than 23 years without losing all of his Southern diction, the company continues to stay with industry leaders by keeping up its technical excellence and by making the most of sophisticated modern management techniques.

In the face of severe buffeting from low-cost imports and radical changes in retail markets, Lewis has put the giant company through some rigorous conditioning. The result is a more nimble, aggressive organization that he likes to describe as “smarter and leaner.”

Typical is the case history of Ron Hyslop, veteran manufacturing executive at the company. When he was elevated this year to vice president/general manager of the firm’s worldwide ophthalmic business, he also retained responsibility for manufacturing, worldwide. Similarly, when the executive in charge of distribution left, James J. O’Connor slid over from his post as vice president, Employee Relations to handle both jobs, adding vice president of Administration to his title.

Despite the heavy administrative load, Lewis and his slimmed down staff have company management functions firmly under control and they continue to introduce imaginative and forward-looking manufacturing and management techniques and policies to get the most out of their people.

A case in point is the introduction of the matrix management technique to the company’s research and development operation.

The matrix program consists principally of assigning a research job to an individual scientist and making available to him (or her) all of the resources of people and equipment in the research division. His authority cuts all organizational lines but the appointment isn’t hierarchical or administrative. However, it does give a scientist tremendous investigative power to accomplish a specific task.

According to R&D Vice President Dr. Don Rotenberg, the matrix concept cuts through artificial barriers inherent in traditional table-of-organization management structures. “It permits everyone to make a maximum contribution,” Rotenberg adds.

He points out that matrix management tends to work well in an R&D atmosphere where people presumably are more open to new ideas. “Not everyone is comfortable with it; you have to be flexible. Everyone has to be flexible.”

Unsuspected entrepreneurial talents have been uncovered among the researchers and in some cases investigative scientists have led the development of a product right through to the marketing phase.

For example, Scientist Don Carmelite played a leading role in the development of a scratch-resistant protective coating which is applied to both sides of a plastic lens, rather than just one surface. As program manager, Carmelite followed the product, Permalite, through market testing and is now on other development projects.

John Young, a research engineer, led the search for a new lens for patients who have had cataract surgery. After the developmental stage, he followed the lens, Ful-Vue, into marketing and became the product manager. Young designed the strategy and led the marketing effort to introduce this product to its prospective customers - and in this case, wholesale distributors.

AO has found that by tapping the entrepreneurial instincts of its researchers, it is getting a high level of enthusiasm and knowledgeability from the researchers who become very personally involved with new product ideas. This, in turn, makes them extremely valuable marketing representatives with the eyecare professionals - especially with highly technical products.

Optical manufacturing is a highly labor-intensive business and AO is now making use of worker’s councils, employee Town Meetings and other worker participation techniques to assure clear channels of communication between management and production workers.

“Nobody has a corner on good ideas,” President Lewis points out. “We want to make sure that we don’t let any of our employees’ ideas go to waste.”

One example is the lens plant - the traditional backbone of AO’s business. By simply explaining to the workers the cost to the company of the historically “standard” spoilage rates in the lens manufacturing operation, a grass-roots movement was initiated to see if the loss couldn’t be reduced.

Within months the spoilage dropped dramatically at an annual savings to the company of several million dollars. It had been assumed, for many years, that a high spoilage rate was an inevitable result of high-speed production practices. An unlooked for dividend was that lens production per worker has gone up as spoilage rates dropped.

The latest development in formalized employee-management communication is the introduction of a voluntary “Quality Circle” employee organization in the distribution department of the people who deal by telephone with AO’s customers, principally wholesalers and distributors.

At AO, Distribution functions on two levels. Half of the operation is customer communications and the other half is warehousing and order fulfillment.
 
 
 
 

The Southbridge company stocks a dizzying array of lenses, contact lenses, frames, safety products, tool, parts and cleaning agents. In the words of Charles “Skip” Annett, director if distribution, “The opportunities for errors in order-filling are astronomical.”

That’s especially true when you realize that virtually all non-bulk orders received by 3 p.m. are processed, documented, picked, wrapped and shipped the day they are received.

The Distribution Department has always been noted for its gung-ho performance, so it was a natural place to introduce the Quality Circle concept.

Annett says the circles, in place only two months, have already shown results by improving customer service in several areas, and he cites one example.

“Our function is to take orders and ship product,” Annett explained. “The pricing is a separate function handled in a different department. It used to be that when a customer called in on our “ordering” WATS line to ask for price information, we would tell him he had to call a different number, etc.

“However, after one of our Quality Circle groups pointed out that this practice was confusing and annoying to our customers - and not worth the few dollars a month it saved us on our phone bill - we changed our procedure and now transfer the customer directly to the pricing department.”

Linda Bouthillier, a lead person in one of the Customer Representative Quality Circles agrees with him that the circles are working and are very popular with most of her workers.

The Quality Circle project she’s proudest of is the mailing piece her group designed to send to their customers. Every representative has her own group of customers she talks with on the phone every day, and warm business relationships grow out of this contact.

Secondly, there are questions about shipping times and methods, questions on policy and questions about where to get information that keeps cropping up every day.

Linda and her associates designed and wrote a three-color poster with maps, charts, phone numbers and policy points that is designed to be hung near the customer’s phone. The poster was designed with a space where each representative could paste a color picture of herself (supplied by AO photographer Marcia A. Meinsma), and room for her to sign her own name to a personalized letter written by the group. The finished product printed by a commercial printer makes a handsome combination mailer and poster.

“We get many requests for pictures from our customers,” Linda says, “so this personalized chart helps us achieve closer relations with them. It also provides our customers with information about the company that is useful to them at the time they are ordering.”

AO is still located where it was founded nearly 150 years ago, but it has come a long way since then and is alive and well on the banks of the Quinebaug. Its economic health is a tribute to the imaginative leadership of President Lewis and his philosophy of “smarter and leaner” and the high morale of its workers.

This is typified by the T-shirts, painted by one of the workers in the lens plant, which carry snappy slogans such as “Get Smart, Buy American” on the front and on the back the new AO “American System” logo. The AO workers voluntarily and enthusiastically responded to the American System theme and concept of “Buy American” when they received copies of trade ads at home.

“Customer response to the AO ‘Buy American’ marketing campaign also has been extremely satisfying,” adds Lewis.
 

1999 Photo of John Young (Founder of the AO Museum and former AO Employee) holding up the T-shirt mentioned in the above article.

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