The Evolution of Culture at Shuman Plastics

Philip Shuman and Sons (Shuman) was founded in 1947 in Depew, New York, as a scrap dealer, collecting and reselling paper, metals, rags, and other recyclable materials. From the 1960s through the 1990s, the company was led jointly by Hy and Charlie Shuman. In the early 1960s, Shuman had the good fortune of a chance encounter with a company in the plastic recycling business. After investigating this company, Shuman decided to reinvent itself as a plastic recycler. It quickly learned the business, the suppliers, and the buyers of used plastics and decided to shift its entire business to trading in recycled plastic. The transition worked, and Philip Shuman and Sons was reborn as Shuman Plastics.

Together, Hy and Charlie grew the company to nearly 100 employees working three shifts. This fast growth created tension with manufacturing workers, culminating in a successful unionization of the factory workforce. According to Ken Shuman, son of Charlie and the current CEO of Shuman Plastics, the company always had a strong ethical culture based on “doing the right thing for employees, suppliers, community, and customers.”  However, this culture was based on the personal values of its owners, and these values were not always understood and practiced by supervisors and executives responsible for day-to-day management of the company. This erosion of the culture was particularly true when the business was booming and the expanding production needs took precedence over treating employees with respect and dignity.

In 1992, the company went through a difficult transition when it faced changes in its markets; China was sharply reducing its purchases of scrap, dealers in scrap were consolidating to remain competitive, and there was a steep decline in sales. These challenges were compounded when Shuman Plastics’ bank decided to exit the part of its portfolio of businesses that included the company.

Shuman Plastics responded by dramatically downsizing, outsourcing much of its processing work, and reducing its employment by 80 percent. During this transition, the company’s industry-wide reputation for fairness and honesty was instrumental in retaining suppliers and customers.

Early in his career at Shuman Plastics, Ken had championed creation of a business unit to manufacture and sell a purging compound that cleaned thermoplastic molding machines. Given what the company had gone through, the decision was made to expand the sales of purging compounds to diversify its product mix. This strategy was successful, and its purging compound became a major source of sales and profitability.

In 2008, Ken and his brother Dan entered into an agreement to buy the company from their father, Charlie. Convinced that its culture was central to its existence, Ken and Dan decided to establish culture as a deliberate company strategy, aligning everyone on the same core values. They engaged four long-term employees to validate a set of core beliefs that would be the basis of how Shuman Plastics operates. The result was a list of seven core values: doing the right thing; protecting our reputation; acting with integrity; taking personal responsibility; embracing service over self; respecting each other; and expressing gratitude. Ken was quick to respond to the list and emphasize the role these core values would play: “These values are not intended to be aspirational; they are meant to define who we are.”

To communicate these values, Ken chose one value each month to elaborate on its meaning, giving examples of how it was being observed and lived within the company. He also integrated these values into the performance review of each employee, establishing them as a benchmark and reinforcing the company’s commitment that these values were not just a goal or a paper exercise but the way that Shuman Plastics conducted and managed its business.

Shuman Plastics’ culture initiative was well received by employees. They responded with openness and a willingness to take on even more responsibility. One reason for this support of its culture is the company’s commitment to making it safe for employees to admit their mistakes and share their lessons learned with others. An example was when key union workers stepped up and publicly took responsibility and apologized for two production errors. This acceptance of responsibility was met with appreciation by management and communicated to all employees as a testament to the open culture of the company. 

Failure to live up to its culture will lead to coaching and dismissal if coaching fails. However, there is convincing evidence that the culture has been internalized by management and workers who are vocal with their appreciation and support for the goals of the company.

In the 12 years since Ken and Dan bought the company, it has seen continued growth in sales, profits, and employee retention. This success has allowed the company to weather market volatility, avoiding layoffs or disruptions in employment. This was particularly true during the COVID-19 pandemic. With sales dipping and business uncertain, the company kept its entire workforce, allowing most of its non-production employees to work from home to avoid exposure to the virus. To thin out its production floor for social distancing, half of these employees volunteered to work a second shift. There is little question that workers benefited from a company culture that offered them job security, and they reciprocated by volunteering to make changes required by government regulations imposed during the pandemic.

The company has incorporated culture into how it operates as a business. According to Ken, “We now recruit, hire, review, reward, and promote, all based upon these critical seven attributes. This makes all our decisions, big and small, crystal clear for us.”

Shuman Plastics is an excellent example of making culture intentional and embedding it into the everyday life of a company. The openness and willingness of top management to involve employees in clarifying core values, and continually communicating them with living examples of how they work in action, sets Shuman Plastics apart from its peers. Its owners believe it lays the foundation for sustainability and future success. 

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