Business Journal

Investing in Employees' Development

by Rodd Wagner and Jim Harter

How a Cargill manager gets a solid return

As a teenager in Lethbridge, Alberta, Pete Wamsteeker was looking more for a job than a role model when he found both. A man who attended the same church owned a local feed business. He approached the 15-year-old about working for him.

In his first real manager, the boy found someone who handled adversity with grace, followed good values, and invested a lot of time in other people. "There was no value judgment" of other people in the owner, Wamsteeker says. "Often, you'll hear people say 'That guy's a clown.' I never ever saw that with him. Everybody was important. It was all about serving people well and, 'You have to respect people for who they are.'"

This guy modeled values for me in everything that resonated with me. I was always afraid of letting him down.


Over the next few years, the businessman challenged his young employee. "I was a 15- or 16-year-old kid, and he would say things like, 'What are your plans?' 'What are you doing?' 'Why would you go to college?' Some would say it was in a Socratic way, but he would challenge me about what I learned and why I did the things I would do."

As the end of high school approached, Wamsteeker applied to and was accepted at several colleges. The manager kept pressing the young man about his intention to leave a stable job in his hometown.

"It got to be the summer between my senior year in high school and my freshman year in college," says Wamsteeker. "He pulled me into his office and he said, 'Now, I really want you to consider whether you want to go to college. You could stay here, and I'll pay you this kind of money, and you really don't need college. You're suited for this business.' He was going on and on, and I felt like, 'Enough already! No more!'"

The businessman kept testing the then 18-year-old's resolve, asking what he was going to do with his education and whether he realized the sacrifices he would have to make to attend school. "Man, that's going to be expensive! Do you know how much college costs these days?" asked the manager.

"I'm perfectly aware of how much it costs," Wamsteeker said.

"What does it cost?"

Wamsteeker quoted the cost of tuition at one of the schools he wanted to attend. The feed business owner pulled out his checkbook and wrote a check to contribute to Wamsteeker's tuition.

"He ripped it out and said, 'You'll come to work for me next summer? I think you're the kind of guy who has a place in this business long-term. I'm awful proud of your resolve."

The feed business owner supported Wamsteeker during his college years and -- more for the reasons behind his generosity than through the money itself -- made a lifelong impression on the kid he hired in the hallway at church. "It's very reinforcing," Wamsteeker says. "He grew up with the right values. He's done the right things, and you have to be proud of that. You have to listen to him because he knows what he's doing. This guy modeled values for me in everything that resonated with me. I was always afraid of letting him down."

Just before Wamsteeker graduated from college, his employer sold the business to Cargill, the Minneapolis-based food and agricultural conglomerate. In the process of negotiating the sale, the manager arranged for Wamsteeker to keep a job with the business.

Two decades later, Wamsteeker is an accomplished Cargill manager applying the principles he first learned as a teenager. His team says he applies those principles quite well. Both in their numeric responses to Gallup's employee engagement survey and in interviews, the team rates Wamsteeker exceptionally high as a manager -- particularly on how well he encourages their development. That aspect is the sixth of 12 crucial elements Gallup discovered in its research into what makes a team productive and profitable. (See graphic "The 12 Elements of Great Managing" at the end of this article and see "Feedback for Real" in the "See Also" area on this page.)

Converting tradition to vision

Wamsteeker needed everything he learned about being a mentor when he was asked to leave Canada to reinvigorate Cargill's U.S. pork business in mid-2002. Decades-long trends had changed the nature of the industry and unsettled the company's place within it.

Founded in 1865, Cargill is one of the world's largest privately held companies. The uninitiated may associate the enterprise with some of the more quaint aspects of its history, such as the Saturday night "barn dance" it sponsored generations ago on a high-powered Minneapolis AM radio station or the "pretty print" material used for feed bags so farmers' wives could make them into tablecloths or clothing. Back then, the business model was not much more complicated than farmers raising hogs and Cargill selling feed. Traditional concerns -- weather in the American Midwest and matching mill capacities with demand -- loomed large.

Pork production today is more scientific, more concentrated in the hands of large companies raising hundreds of thousands of pigs, and, in some cases, done by enterprises that have their own milling facilities to make feed. "The pork marketplace has consolidated out of the hands of what you and I would term the classic American farmer into the hands of a much more businesslike person who is really about operating a manufacturing facility," says trading specialist Mark Hulsebus.

The challenge for Wamsteeker was to improve Cargill's position within an industry that needs less of what the company traditionally delivered. From a business perspective, a pig is just an organic version of the most basic accounting equation: revenue - expenses = profit. When everything is working well, it costs about $100 to get a pig from birth to market and then the animal will sell for about $120, giving the producer a $20 margin.

But factors outside the producer's control -- many of them moving with global financial markets -- can reduce, eliminate, or even invert the profit. If poultry farmers raise an abundance of chickens, it depresses the price of both chicken and pork. Pig feed is primarily made of corn (for carbohydrates) and soybeans (for protein). Higher oil prices are creating greater demand for corn because companies can use it to make the alternative fuel ethanol. The price a driver pays at the pump is connected to the price of the bacon he had for breakfast.

What is at first a simple formula quickly becomes complicated. Over time, making the right decisions about where and when to buy grain, to whom to sell the hogs, and how to improve efficiency in between can mean the difference between a pork producer thriving and going out of business. An industrial-scale pork business may not need bags of Cargill feed, but having the right expertise is imperative. "So in this sense, could Wamsteeker form a team of consultants and specialists who could bring together what Cargill knew about pork biology, feed, and financial markets to fulfill the needs of the country's largest pork operations?

I want you to be like a prize fighter. I want you to get out and fight a bit on your own. I don't mind if you get knocked down a few times.


The answer turned as much on Wamsteeker's coaching abilities and the interpersonal abilities of his staff as much as it did on the technical knowledge of the company. "Hog producers are survivors," says Mike Astrauskas, 1 of 10 "pork consultants" in the workgroup. "We've gone from thousands of [producers] down to fifty companies owning fifty percent of the pork now. They don't tell everybody everything. When you build a relationship, they understand you're trying to help their business and then they let you know what you need to know on a need-to-know basis."

'Something is different about this guy'

Luke Wells had been with Cargill only a few years when he transferred to Wamsteeker's newly formed group, headquartered in West Branch, Iowa. "The first time you meet him, you know something is different about this guy," says Wells. "You spend any time with Pete, and you'll pick up very quickly that his passion is about developing people and developing teams."

Several years ago, Wells and Wamsteeker were at a tailgate gathering before an Iowa State University football game in the large hospitality tent of one of their biggest customers. The customer had earlier asked Wells to research some information for him. "We went up to him in the middle of this group with a whole bunch of people around and gave him the information he was looking for," says Wells. "I was nervous. It was really early on in my time with Pete, and, quite frankly, I was in a new job and doing things that I didn't even know if I could do."

After the conversation with the customer, Wamsteeker pulled his employee aside. "I sensed you were a bit nervous there," he said. The manager tried to calm Wells' fears and build up his belief in himself. "I want you to be like a prize fighter," he said. "I want you to get out and fight a bit on your own. I don't mind if you maybe get knocked down a few times, but you've got to have the confidence [that] I'm never going to let you get knocked out."

A large part of encouraging someone's development is helping him to find the kind of job that matches his talents. In this way, the Sixth Element and the Third are closely related. (See "The Third Element of Great Managing" and "Item 6: Someone Encourages My Development" in the "See Also" area on this page.) For several of the members of Wamsteeker's new team, finding that match was one of the most important ways in which the manager could be a mentor.

The company struggled to find the right position for another promising, although arguably misplaced, employee, Patrick Duerksen. "He's a very quiet guy. He's very deliberative. He's often misunderstood because he is quiet and a little hard to get to know," says Wamsteeker. Several options -- working in electronic ventures, becoming a business manager, a turn at sales -- didn't seem to produce the right fit. "After getting to know Patrick, I was convinced that there would be a right fit created for him by focusing him on what he is good at," says the manager.

One of the crucial aspects of raising pork is "productivity." It covers such variables as the number of piglets a sow produces, the optimal conditions for rapid growth of the hogs, and the most efficient processes to reach the result: more piglets that grow faster relative to what the farmers have to spend raising them. Improving those factors reduces expenses and increases profits.

Wamsteeker put Duerksen in that role, and things soon clicked. "We developed this specialist role around productivity, and I would say in Cargill's pork business globally he's probably one of the most requested guys in that capacity," says his manager. "He's really flourished. It's very rewarding."

Duerksen attributes part of his success to Wamsteeker being his advocate, advertising his talents inside the company. "Pete takes the time to question and understand what you are doing," he says. "A poor manager would only look at what's on the surface and wouldn't question any deeper than that."

Hulsebus grew up on a farm in southeast Iowa and got a degree in animal science from Iowa State University, but at Cargill he gravitated toward the mathematics of food production. "I am relatively analytical, and I'm very good at math and have an affinity for numbers," he says. "A lot of people will ask something, and I'll tell them, 'It's just numbers.'"

Hulsebus struggled when he tried to be a sales leader. "I could just sense he wanted to get a passion around being involved with trading and helping to coach people, but he didn't want to supervise people," says Wamsteeker. When Cargill made Hulsebus a trading specialist, he teamed up with Duerksen and another specialist. When the company challenged the three of them to come up with innovative ways of helping pork producers, some incredible things happened, says Wamsteeker.

Using proprietary software and processes with names such as "PigPlan," "SowPlan," and "MarketFlex," the Cargill team helps producers forecast their cash flow and income under various alternatives to find the one that maximizes their profit. "Too often people get caught up in the emotion of the moment and forget that they really are working on margin per head," says Hulsebus.

Astrauskas likes to tell people that when he was hired seven years ago, "They gave me a laptop, an American Express card, and a plane ticket, and said, 'So there you go. Go do it!" Virtually no training was in place. New college graduates today go through a yearlong education process in which they learn pig physiology, nutrition, and the production business.

But all that education doesn't help unless someone coaches the new consultant and prepares him before having him face a tough clientele. "Pete's pretty good at that. He just doesn't throw those kids in," says Astrauskas. "He lets them win. They build confidence. They build understanding. Most of the producers we're calling on are professional people who can easily sense when a consultant does not understand the intricacies of the business, and they will not do business with people who do not understand the business. They're not a bunch of weaklings out here. They're successful, hard-core-survivor business people."

Endless questions

Wamsteeker's means of accomplishing the Sixth Element revolves around a host of questions, not unlike the interrogations he took from the feed business owner in Lethbridge. "I really, truly, want to learn all I can about you," he tells his employees. "I can't effectively serve you unless I really know what makes you tick." Later, when the person is gone, he writes notes to which he can refer when coaching the person. The manager says he does this in part because "I can't invest superficially" and because he deeply enjoys seeing his people succeed.

I was viewed as soft, that I couldn't make the tough people decisions. In a self-satisfying way, that pendulum is swinging the other direction in business today.


"At first I thought, 'what's he after?'" says Astrauskas. "But he really wanted to know. I mean he really wants to know. He's engaged with his employees."

"He asks the right question in a manner where it's not offending," says Wells. "He's earned the right to ask them."

The engagement of the pork team isn't limited to their manager's coaching. They also mention that Wamsteeker quickly follows up to eliminate technical problems, advocates for them with the company's leadership in Minneapolis, and -- with almost three decades in the agriculture business -- knows what he's talking about. "He gets it," says Astrauskas. "He's been around this business quite a while, but he really understands the people aspect." The team says their manager takes the same approach with his employees as he does with the business: Invest in the relationship, do the right thing, and the results will ultimately follow.

To ask Wamsteeker why he manages as he does is like asking him why he's 6' 4"or why he has blond hair. "I'm just wired that way. I view the world that way. I really want to do the right thing." And, of course, there's the desire not to disappoint his mentor, with whom he visits or plays golf when he returns to Lethbridge, and who inquires into Wamsteeker's family as much as the Cargill manager inquires into his team's relatives.

When Wamsteeker's team was surveyed on the 12 Elements during the summer of 2006, their answers put them in the top 20% of business units in the Gallup database. Their Sixth Element responses were in the top 10%.

His approach and philosophy makes Wamsteeker a somewhat unconventional manager within his company. The phrase "not a typical Cargill guy" is frequently repeated in interviews with his employees. "Pete's not the traditional Cargill guy, but I do feel that Pete is what will be successful as the new kind of Cargill leader," says Wells.

"For a lot of years, I was viewed as soft -- that I couldn't make the tough people decisions," says Wamsteeker, who points out he's quite willing to confront problems when needed. "In a self-satisfying way, that pendulum is swinging [the other direction] in business today, and particularly in our organization.

Now senior leadership is saying, 'Wow, there's a lot of merit in that! We've got to really focus on people's strengths. We've got to coach. We've got to develop. We've got to see potential. We've got to really focus on engagement."

When it's all boiled down, Wamsteeker says, "I really want to do the right thing."

The 12 Elements of Great Managing


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