In the fall of 2003, Chris Repp was ill. His doctors, uncertain of what he had, nevertheless put him on medication to ease his discomfort. The combination of the medication and stress resulted in a man who, in his own words, was “inconsistent and frustrated everyone in the office.” Not good skills for the president of a $1.5-million remodeling firm.

But an extraordinary thing happened: Repp's employees fired him and, because of their core values program, were able to save the company. Repp is forever grateful.

It was up to then–office manager Nicole Gremmel, a five-year employee at Repp Construction in suburban Buffalo, N.Y., to tell the boss that he wasn't following the company's core values. After the hours-long meeting, Repp, who had always had an open-door policy, put Gremmel in charge of finance and operations. He put then–production manager Dave Olejniczak in charge of the production side and arranged for check-signing privileges for him. Then Repp walked away.

Two days later he landed in the hospital, thinking he was having a heart attack. It turned out he had diverticulitis, and a few weeks later Repp underwent surgery. He spent three months out of the office, and when he returned he says he wasn't very effective for the first month.

During the handover, says Repp, the team “sold projects, got signatures, collected money, made payroll, even fired an employee.” Like individual actors in a play who had memorized each character's lines, the 13 employees at Repp were ready for opening night. “The guys,” Gremmel says, meaning the lead carpenters, subcontractors, office staff, even the vendors, “all stepped up.” Clients were understanding and confident in the company's integrity and workmanship.

Repp and Gremmel say it all worked because of core values and behaviors. “We [always] worked together as a team and tried to compartmentalize the company to create systems,” says Repp. “We can break everything down in a job description and each department knows what responsibilities are under which person. We'd been working on cross-training critical parts.”

The behaviors and values were developed by the employees a few years ago in a meeting without Repp. Each person identified company strengths and weaknesses. Then they combined notes, took a consensus, and came up with a list of company values.

Gremmel is now director of finance and operations and Olejniczak is director of production. “They are in on part of the bottom line,” says Repp, “and get a percentage of the net profit. When I was sick, I lost sight of my goals, vision, and drive. My employees didn't.”