As with all of humanity, there are good people and bad. They come in all sizes, shapes, colors and creeds… and corporate level. Despite the Scrooge McDuck visualization most people have of CEOs and the impending Ronamov-style executions of their entire family, there are the good ones. They don’t stand out because humility is one of the traits that make their products and services the top and their employees the happiest. How do they do that?
I’ve worked for some of the largest corporations in the world and I’ve finally come to accept that corporate structure is a twisted, mutated version of how the flow of nature works. Anti-Darwinism and Superman’s Bizzaro World rolled into one. If you have at any point in your career you worked for a large corporate entity, then you know to what I refer. The playground for Peter Principle victims and the prime example of hoping for employee evolution to Soylent-eating slaves who were never taught how to tell time through the use of reduced pay and cut benefits.
It’s not that hiring is down because profits are also down. When a corporation bloats to the point that there is no way to tie all departments and operations into one cohesive unit of information sharing, then the financial wastes increase, causing the need to get tough on the lower end (the workers and consumers). It’s beyond laying out examples as they are in the news every day. Chances are you or someone close to you works at a large corporation and you marvel at the stories that abound.
A Unique Way of Managing
While I worked at one large corporation, I was enthralled to hear the stories of life-long employees about the founder and former CEO. Although he started with a couple of shoeboxes filled with merchandise when he arrived in town, he built a global empire and household name. Competition popped up but no one could touch his company, at least while he ran things.
People told tales of how the owner spent most of his time walking the halls, popping into meetings to see what was going on, talked to workers in every department, asking their opinions and desires and using these unannounced visits to keep people on their toes… everyone. There was, naturally, a bit of fear about his visits. Some people say that he would order people to pick up trash left on a hallway floor or demand they walk faster back from lunch. Still, the feeling most had for him was as a loving but stern father. Did it work? No one can deny that the company grew, profited, had no layoffs and workers retired rich from their profit sharing plans. One day, he was gone. His son took over as CEO.
His son, who had a top college education in business, took the reigns firmly and led the corporate giant as we believe most CEOs would… from an ivory tower. It’s hard to say whether the company had grown too large for one man to keep an eye on all board-level functions AND walk among his troops to see the company from their perspective. Whatever it was, things started to slide downhill. By the time the grandson of the founder took over as CEO, there was little left and rather than return to the methods of good ol’ grandpa, he withdrew even further from the rank and file, leaving too many decisions on innovation and new products to too few taste filters. These artificial funnels of information to the top and vice versa, strangled everything and everyone.
But was it those chance encounters or “dad” coming by to see how you acted in class? Overall, there was a humanism to the company that was lost, as was employee trust and engagement. Remember that sentence as you will see it again.
One of the Crew
Have you ever heard the name, Howdy Holmes? Some may remember Mr. Holmes as a former Atlantic Racing Champion. He is also the CEO of the $100 million per year baking mix company, Jiffy.
Holmes and Jiffy surfaced a couple of weeks ago when a Ph. D. student in economics at Temple University and writer, who is a consumer of Jiffy products, wrote to the company just to say he preferred the taste of real blueberries to the artificial ones Jiffy uses in their mix (a box of mix to make 8-10 muffins is about 50¢). To his surprise, it was Mr. Holmes who called him to apologize.
In his article on policymic.com, “7 Reasons This Muffin Mix Can Save America,” Cory Suter includes a little history of the product, if you are unaware of Jiffy mixes, although you shouldn’t be.
Anyone who has dared venture down a grocery store’s baking aisle or opened their grandparent’s cupboard has probably seen one of the timeless white and blue “Jiffy” boxes that haven’t changed much since the mixes were first invented by Holmes’ Grandmother in 1930. What I didn’t know until I did some homework, was just how great of a company is behind Jiffy mix. After a 16-minute long chat with the Jiffy mix CEO, and 11 years of studying business and economics, I knew I had discovered one of America’s last great businesses.
WOW! Am I impressed with this company or terrified it’s the LAST of its kind? Still, the way Mr. Holmes ran his grandmother’s company was exemplary. Suter’s “Seven List” is or should be, inspiring to every business, large and small.
- Jiffy mix sells over 55% of all muffin mixes in the United States, but doesn’t spend a dime on advertising.
- Jiffy mix denies Wall Street a chance to make money from other people’s work.
- Jiffy mix management treats their employees the way they would like to be treated.
- Jiffy mix genuinely serves their customers needs, instead of being obsessed with profit.
- Jiffy mix staff find meaning and purpose through their work.
- Jiffy mix is honest.
- Jiffy mix makes long-term decisions to benefit future generations.
An interesting list. I would have laughed at the commonality the list has with every mission statement a corporation has, included on their web site, printed on annual reports, blaring on posters in their hallways and printed on the rolls of toilet paper in the executive and HR bathrooms, but the list was created by Suter and not anyone at Jiffy.
I’ve seen the usual propaganda hanging in hallways and department bulletin boards, urging workers on to work harder as they are a part of the company and family. “That the people are our company’s most valuable resource,” was one belief high on the posters my former employer put everywhere.
Another assertion adorned these posters. “High standards of ethics and integrity.” When the layoffs started, in spite of denials of anything such as that taking place, only to hear the official announcements the next day that entire departments were being closed, people started shaking their heads and fuming over the very words slapping them in the face every ten feet down the hallway and into the rest rooms. Whether it was employees ripping down the framed posters or someone at corporate decided to lower the numbers of posters placed around the company, my coworkers and I noticed they were fewer.
I won’t reprint all of Suter’s article but I highly recommend you read it in its entirety. I will however, as a contrast most corporations have with Jiffy and CEOs with Holmes, include part of Suter’s conclusion:
One of the world’s most widely recognized ethical standards is to do to others as you would have them do to you. By separating the owners and executives of companies from the communities where these same companies do business, the corporate structure of business has increasingly lost sight of this traditional American ethic. Cutting employee benefits and jobs to enrich Wall Street has become almost as common as hidden fees, and hiring lobbyists to gain unfair competitive advantages.
Small businesses and exceptional American companies like Jiffy mix, built our country’s once broadly-shared prosperity.
Who’s Crazy Now?
Sir Richard Charles Nicholas Branson, the Founder and CEO of the Virgin Group of more than 400 companies has created eight separate billion-dollar companies in eight different industries and the man had no degree in business. Although known for his rumored “death wish” by enjoying risky sports and activities as well as risk-taking in business, chances are, he has some good advice worth following about running a corporation.
- A workplace should be one in which the boss and his or her employees communicate well and work together toward the same goal. “If employees aren’t associating themselves with their company by using ‘we’, it is a sign that people up and down the chain of command aren’t communicating,” says Branson.
- If you think there might be discrepancies or tension between employees and management, Branson advises to check with the middle management first to try to uncover the source of the problem and address it head-on.
- Employees must feel free and encouraged to openly express themselves without rigid confines so they can do better work and make good, impactful decisions.
- “This may sound like a truism,” begins Branson, “but it has to be said: It takes an engaged, motivated and committed workforce to deliver a first-class product or service and build a successful, sustainable enterprise.”
- A manager needs to be someone who “brings out the best in people,” someone who communicates well with others and helps an employee learn from a mistake instead of criticizing them for it.
- Not everyone does this well, and that’s okay. The founder can but doesn’t have to be the CEO; if the fit isn’t right, he or she should know when the role is meant for someone else.
There’s a Reason It’s Called “Sound Advice!”
Warren Buffet is an American business magnate, investor, and philanthropist. He is widely considered the most successful investor of the 20th century. Buffett is the primary shareholder, chairman and CEO of Berkshire Hathaway. He has also made headlines consistently for his open advice to the government and American corporate CEOs.
Buffet, who gained huge press and kudos for his voluntary paying higher taxes, while urging congress to raise tax rates on Americas wealthiest 2% and creating a fool-proof plan for balancing the federal budget and reducing the deficit… which called for congress to be fired if they didn’t accomplish it. In the following letter, Mr. Buffet asks fellow CEOs to stop complaining about uncertainty in business.
A thought for my fellow CEOs: Of course, the immediate future is uncertain; America has faced the unknown since 1776. It’s just that sometimes people focus on the myriad of uncertainties that always exist while at other times they ignore them (usually because the recent past has been uneventful).
American business will do fine over time. And stocks will do well just as certainly, since their fate is tied to business performance. Periodic setbacks will occur, yes, but investors and managers are in a game that is heavily stacked in their favor. (The Dow Jones Industrials advanced from 66 to 11,497 in the 20th Century, a staggering 17,320% increase that materialized despite four costly wars, a Great Depression and many recessions. And don’t forget that shareholders received substantial dividends throughout the century as well.)
Since the basic game is so favorable, Charlie and I believe it’s a terrible mistake to try to dance in and out of it based upon the turn of tarot cards, the predictions of “experts,” or the ebb and flow of business activity. The risks of being out of the game are huge compared to the risks of being in it.
My own history provides a dramatic example: I made my first stock purchase in the spring of 1942 when the U.S. was suffering major losses throughout the Pacific war zone. Each day’s headlines told of more setbacks. Even so, there was no talk about uncertainty; every American I knew believed we would prevail.
The country’s success since that perilous time boggles the mind: On an inflation-adjusted basis, GDP per capita more than quadrupled between 1941 and 2012. Throughout that period, every tomorrow has been uncertain. America’s destiny, however, has always been clear: ever-increasing abundance.
If you are a CEO who has some large, profitable project you are shelving because of short-term worries, call Berkshire. Let us unburden you.
Are There More Out There?
Each and every day, decisions are made that affect workers, consumers and share holders. Some good, some bad but all based on the principle of increasing profit. So, does profit negate the human factor the spotlighted CEOs believe is part of any business decision?
Howard Schultz, the Chief Executive Officer of Starbucks, has added another pro-worker notch to his belt: support for increasing the minimum wage.
Schultz already has a relatively good reputation on workers’ issues; his company offers health care to all of its employees, and doesn’t mind spending more on health care than on coffee. Starbucks also launched, in 2011, a pro-jobs effort where patrons could donate to a loan program that helps small businesses keep jobs and hire. He has also come out with his corporate support of gay marriage, which has caused a ripple among a few investors.
Lord Wolfson, CEO of Next, the U.K.’s biggest department store chain, gave his entire annual bonus of $3.6 million, to his employees.
Lenovo CEO, Yang Yuanqing decided last year to use a $3 million bonus he received for the company’s record-setting year to reward thousands of the company’s rank-and-file employees. Yaunqing gave around 10,000 employees worldwide bonus checks for their hard work.
Unfortunately, there are few other CEOs who show such generosity. Of course, it must be mentioned that the Bill and Melinda Gates foundation does incredible philanthropy work, as does several other large corporations, but the question of this subject is how do they treat their workers and customers. Some people have certain complaints about Microsoft and other companies.
When the 2012 elections were in a dead heat, several high-profile CEOs announced they would layoff employees and raise prices to cover Obamacare if Romney were not elected to repeal the law. Consumers, however, didn’t sit quietly and many CEOs reversed or at least lightened their plans. It seems threatening consumers or the average working person, who is the consumer, doesn’t sit well these days, after massive layoffs, foreclosures and daily news of graft and scandal in the government and private sector, using taxpayers money.
Business is business and the end result has to be profit. The question seems to be, is it worth forgetting the human factor and society to meet those end means? There are some of the most successful CEOs who say it isn’t. Do they make more sense than the pizza CEO or a poster that can be mounted and removed whenever the mod strikes?
Images ©GL Stock Images, Jiffy package ©Jiffy