Business Leader Profiles for Students
Business Leader Profiles for Students Volume 1 Jaime E. Noce, Project Editor Foreword by David Kelly, College of Lake County
Business Leader Profiles for Students Staff
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Editorial: Sheila M. Dow, Editor. Jennifer L. Carman, Susan J. Cindric, Donna Craft, Andrea L. deJong, Kelly Hill, Jane A. Malonis, Rebecca Marlow-Ferguson, Jenai A. Mynatt, Terry Peck, William A. Petrick, Michael Weaver, Contributing Editors. Diane Maniaci, Managing Editor. Synapse, the Knowledge Link Corporation, Indexer.
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Table of Contents INTRODUCTION . . . . . . . . . .
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ADVISORS AND CONTRIBUTORS
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A Scott Adams . . Paul Allen . . . Gil Amelio . . Wally Amos . . Arthur Andersen . Marc Andreesen . Hiroaki Aoki . . Steven Appleton . Minoru Arakawa. Elizabeth Arden . Ted Arison . . Giorgio Armani . Mary Kay Ash .
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1 5 9 12 15 18 22 25 29 32 35 39 42
Charles B. Babbage . . Steve Ballmer . . . Jill Barad . . . . . P. T. Barnum . . . . Eddie Bauer . . . . John Jacob Bausch . . L. L. Bean. . . . . Scott Beck. . . . . Alexander Graham Bell Lyle Berman . . . . Susan Vail Berresford . Jeff Bezos . . . . .
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45 48 52 55 58 61 64 67 71 76 79 82
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Nicholas Biddle . . . Edwin Binney . . . Cathleen Prunty Black . William Edward Boeing Richard Branson . . . Christina Brown . . . Helen Gurley Brown . William Cullen Bryant . Warren Buffett . . . Daniel Hudson Burnham Adolphus Busch . . . Nolan Bushnell . . .
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85 88 91 95 99 104 107 110 114 117 121 125
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129 132 136 139 143 147 150 154 157 160 163 168 171 175 178 181 185
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189 192 195 199 202 206 210 214 218 222 226
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230 233 236 239 243 247 251
Marshall Field . . . . . . . . . . . Debbi Fields . . . . . . . . . . . . Paul Fireman . . . . . . . . . . . . Harvey S. Firestone . . . . . . . . . . Donald Fisher . . . . . . . . . . . Jane Fonda . . . . . . . . . . . . Malcolm Forbes . . . . . . . . . . . Eileen Ford . . . . . . . . . . . . Henry Ford . . . . . . . . . . . . Benjamin Franklin . . . . . . . . . . Tom Freston . . . . . . . . . . . . Alfred Fuller . . . . . . . . . . . .
254 258 261 265 269 273 277 281 284 289 293 296
C Ely Callaway Jr. . Andrew Carnegie Hattie Carnegie . Steve Case. . . Stephen Chao. . Arthur Cinader . Liz Claiborne . . Jim Clark . . . Lilia C. Clemente Bennett R. Cohen Colonel Sanders . Scott Cook . . Joan Ganz Cooney Camille Cosby . Casey G. Cowell. Jenny Craig . . Mary Cunningham
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D Arthur Davidson . Suzanne de Passe John Deere . . Michael Dell . . Fred DeLuca . . Cecil B. DeMille Richard DeVos . Walt Disney . . Donald Douglas . Charles Dow . . du Pont, Éleuthère
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E Robert Earl . . George Eastman . Robert J. Eaton . Thomas Edison . Michael Eisner . Roger Enrico . . William Esrey .
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Nely Galán . . . George Gallup . . James Gamble . . Bill Gates . . . . Anne Geddes . . . David Geffen . . . Louis V. Gerstner Jr. Jean Getty . . . . Roberto Goizueta . Christina Gold . . Ellen Gordon . . . Berry Gordy Jr. . . Leon Gorman. . . Jay Gould . . . . Katherine Graham . Earl G. Graves . . Jerry Greenfield . . Andrew S. Grove . Daniel Guggenheim.
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300 303 307 310 314 317 320 324 328 332 336 340 343 347 350 353 357 360 364
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367 371 374 377 381 384 387 390 394 398 401 405 409 412 416 420 423
H J. C. Hall . . . . . James Halpin . . . . John Hancock . . . Ruth Handler . . . . William Harley . . . William Randolph Hearst John Heinz . . . . Leona Helmsley . . . John Hendricks . . . Milton Hershey . . . Tommy Hilfiger . . . William Hilton . . . Charles Elmer Hires . Herman Hollerith . . Ron Howard . . . . Howard Hughes . . . H. Wayne Huizenga .
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I Lido Anthony Iacocca . . . . . . . . . Masaru Ibuka . . . . . . . . . . . . Michael Ilitch. . . . . . . . . . . .
428 432 436
J Steve Jobs . . . . John H. Johnson . . Linda Johnson Rice . Robert Johnson . . Quincy Jones . . . Michael Jordan . .
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440 444 448 451 455 459
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463 466 469 472 475 479 483
Edwin Land . . . . . . . . . . . . Estee Lauder . . . . . . . . . . . . Ralph Lauren . . . . . . . . . . . . Geraldine Laybourne . . . . . . . . . Andrew Lloyd Webber. . . . . . . . . George Lucas. . . . . . . . . . . . Henry Luce . . . . . . . . . . . .
487 491 495 499 502 506 509
K Donna Karan . . . Will Keith Kellogg . William Russell Kelly Calvin Klein . . . Philip Knight . . . Blanche Knopf . . Raymond Kroc . .
Jean Nidetch . . . John W. Nordstrom .
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Mo Ostin . . . . . . . . . . . . . Elisha Graves Otis . . . . . . . . . . Michael Ovitz . . . . . . . . . . .
588 591 595
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P David Packard . . . Roger Penske . . . . Ronald Owen Perelman Steve Perlman . . . Ross Perot . . . . . Eckhard Pfeiffer . . . Jane Cahill Pfeiffer . . T. Boone Pickens . . Bob Pittman . . . . J.D. Power. . . . . Barbara Gardner Proctor William Cooper Proctor Wolfgang Puck . . . Joseph Pulitzer . . .
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598 602 605 609 612 616 620 624 628 631 634 637 640 644
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648 652 656 660 663 666 670 675 680
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M Stanley Marcus . . . Willard J. Marriott . . Oscar Mayer . . . . Cyrus McCormick . . Dick McDonald and Mac Scott McNealy . . . Andrew Mellon . . . Charles Merrill . . . Jane Metcalfe. . . . Thomas Monaghan . . J. P. Morgan . . . . Akio Morita . . . . Samuel Morse . . . Peter Morton . . . . William Mow. . . . Rupert Murdoch . . .
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Sumner M. Redstone . Jerry Michael Reinsdorf R. J. Reynolds, Jr. . . Sylvia Rhone . . . . Tony Ridder . . . . John D. Rockefeller. . Anita Lucia Roddick . Helena Rubinstein . . Margaret Rudkin. . .
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512 516 520 524 528 532 536 540 544 547 551 555 559 563 567 570
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David Sarnoff . . Dorothy Schiff . . Howard Schultz . . Richard Schulze . . Charles Schwab . . Frederick August Otto Richard Sears. . . Melvin Simon . . Isaac Merrit Singer . Samuel Slater. . . Alfred Sloan, Jr. . . C. Harold Smith . . Frederick Smith . . Jack Smith . . . Russell M. Solomon Steven Spielberg . . Leland Stanford . . Thomas Stemberg .
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N Condé Nast . James Near .
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S . . . . . . . . . . . . . . . Schwarz . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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683 686 690 694 697 700 703 707 710 713 717 720 723 727 730 733 738 741
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John Stevens . . . . . . . . . . . . Martha Stewart . . . . . . . . . . .
744 748
T Dave Thomas. . . . . . . . . . . . Susie Tompkins . . . . . . . . . . . Donald John Trump. . . . . . . . . . Earl Silas Tupper . . . . . . . . . . Ted Turner . . . . . . . . . . . . Donald John Tyson . . . . . . . . . .
752 757 760 764 768 772
V Jay Van Andel . . Cornelius Vanderbilt Gloria Vanderbilt . Lillian Vernon . . Gianni Versace . .
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776 780 784 788 792
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795 799 802 805 809
Sam Walton . . . . . . . An Wang . . . . . . . . Charles B. Wang . . . . . Vera Wang . . . . . . . Aaron Montgomery Ward . . . Andy Warhol . . . . . . . Jack Warner . . . . . . . Sam Warner . . . . . . . Thomas J. Watson . . . . . Jack Welch . . . . . . . Helmut Werner . . . . . . Leslie Wexner . . . . . . Eli Whitney . . . . . . . Charles Kemmons Wilson. . . Oprah Winfrey . . . . . . Kenneth Wolfe . . . . . . F. W. Woolworth . . . . . Stephen Gary Wozniak. . . . Frank Lloyd Wright. . . . . Wilbur Wright and Orville Wright William Wrigley, Jr. . . . . Samuel Wurtzel and Alan Wurtzel
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812 816 820 823 826 829 833 837 840 844 848 851 855 858 862 866 869 872 876 880 884 888
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MASTER INDEX . . . . . . . . . .
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W Linda Wachner . Ted Waitt . . . Charles Walgreen DeWitt Wallace . Lila Wallace . .
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Z Darryl Zanuck
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Advisors and Contributors Advisory Board A five member board consisting of teachers and librarians on young adult business literature needs was consulted to help determine the contents of Business Leader Profiles for Students. The members of the board for this volume include: Maria Cummins: Cataloger for Yahoo.com; Librarian, Santa Clara County Library/Cupertino Public Library, San Jose, California. Katherine Bailey: Librarian, Seabreeze High School, Ormond Beach, Florida. Chris Erdman: Teacher, Skyview High School, Vancouver, Washington. Bob Kirsch: Librarian, Lake Forest High School, Lake Forest, Illinois. Alan Nichter: Librarian, Lutz Branch Library, Lutz, Florida.
Contributors Many writers contributed to the text of Business Leader Profiles for Students including: Mary Alice Adams Geraldine Azzata Beth Babini Kari Bethel David P. Bianco Carol Brennan Daniel S. Burt Alan M. Campbell Karen Cangero
Lorna Cunkle Laurie DiMauro Cathy Dybiec Holm Debby Felder Andrea J. Fine Kristen Grifka Stefanie A. Halliday Daniel J. Harvey Evelyn Hauser Scott Heil Norman W. Leahy Patrick J. Longe Wendy H. Mason Chrstine Miner Minderovic Jacqueline Mitchell Sally A. Myers Donovan M. Rothschild Robert E. Schnakenberg Ann M. Schwalboski Pamela Shelton Kenneth R. Shepherd Elizabeth Shostak Geri Speace Jane E. Spear Jill Stanley Deborah A. Straub Mark Suchowski Richard P. Wasowski Joan S. Wheeless Angela Woodward
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Introduction The purpose of Business Leader Profiles for Students is to provide readers with a comprehensive resource of business biographies, giving them easy access to information on past and present business leaders. The book focuses on prominent individuals who have made significant contributions to business and industry. Part of Gale’s successful line of business products for students, BLS is specifically designed to meet the curricular needs of high school and undergraduate college students and their teachers, as well as the interests of general readers and researchers studying business figures. See Gale’s Company Profiles for Students for in depth information on 280 prominent U.S. corporations. The material in this book focuses on the company’s founder and reports on his/her management style and impact on society. Each entry in Business Leader Profiles for Students includes an overview of the person’s greatest accomplishments, information on his/her personal life, career details, and a section on how the person influenced society and the economy. The reader will also learn about the person’s education, management style, and business philosophy. To aid the reader a chronology is provided in each entry, detailing key dates in the person’s life, and interesting and important facts about the leader’s life and career. The topic list for this volume was selected by surveying many sources on business, economics, and history and also by analyzing course curricula for various school districts. The list of both historical and contemporary business leaders was approved by an advisory panel of five high school teachers and high school and public librarians.
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and begins by the person’s name, date of birth, and their company affiliation or occupation. The following elements are contained in each entry. • Overview: this section provides a summary of the person’s most important contributions to business, industry, and society. This paragraph will give interesting information on the person’s greatest achievements. • Personal Life: this section includes a detailed description of the person’s life, circumstances of birth and childhood, family life, influential friends or relatives, experiences that may have affected the person later in life, marriage, religion, and circumstances around their death. This section also includes information on the person’s education, business or personal memberships, affiliations, or awards the person has won. • Career Details: this section discusses significant factors about the career of the individual, especially when their greatest successes were achieved. It focuses on highlights of the person’s career including details about what the person may have invented or innovations and new practices that have impacted business and industry. This section may also include information on how the individual tailored their product or service to compete successfully in the marketplace. It may detail the past and current strategies of the person’s professional career or management style.
How Each Entry Is Organized
• Social and Economic Impact: this section discusses what effect the individual or their product or service has had on industry or on society in general.
The chapters in BLS are organized alphabetically by last name. Each profile focuses on one business leader
• Chronology: the element featured in an easy-toread box lists dates of major events or achievements
I n t r o d u c t i o n
highlighting the individual’s personal and professional life. • Sources of Information: lists mailing address and/or web site when available to help the reader with further research. • Bibliography: this section provides user with suggested further reading on the business leader. These sources, also used to compile the essays, are publicly accessible materials such as magazines, general and academic periodicals, books, and online databases. • Master Index: includes business leaders, companies, and industries.
to suggest business leader names for inclusion in future volumes or who have other suggestions are cordially invited to contact the editor at: Editor, Business Leader Profiles for Students Gale Research 27500 Drake Rd. Farmington Hills, MI 48331-3535 Telephone: (248)677-4253 Toll-Free (800)877-GALE Fax: (248)699-8070 E-mail:
[email protected]
Comments and Suggestions The editor of Business Leader Profiles for Students welcomes your comments and ideas. Readers who wish
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Scott Adams Overview Scott Adams is the mind behind “Dilbert,” a comic strip that spoofs the absurdities of corporate life in topics ranging from diabolical bosses to moronic marketing ideas to the very cubicles that encompass most office workers. Taking aim at every facet of the business world, Adams is the keen spokesperson for the “Dilberts” in the world. His strip is featured in 1,700 papers around the world and debuted as an animated prime-time television series in the fall 1998.
(1957-) “Dilbert” Comic Strip
Personal Life Scott Adams was born in June 1957 in Windham, New York, in the Catskill Mountains. His father, Paul, was a clerk at the post office, and his mother, Virginia, was a homemaker who also worked on an assembly line. As a child, Adams admired cartoonists. “I always wanted to be Charles Schulz and work for Mad magazine,” he recalled in America’s Network. At age 11, he ambitiously submitted a lengthy application to the Famous Artists School in Westport, Connecticut, supplying information about himself. He told the school that he was a “C” student who had been interested in art for “about four years” and that his favorite artist was Al Capp, who penned the comic strip “Li’l Abner.” He expressed a desire to create sports and animal drawings as well as cartoon strips, and answered “yes” to the question, “Are you willing and able to study at home and work by yourself?” The application also asked, “Why would you like to become an artist?” Adams replied, “It could be a good job when I get older. I like to draw.” He was also required to include
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ministration from the University of California at Berkeley. Throughout his career, he held a number of “humiliating and low-paying jobs,” as his Harper Collins biography stated. Adams worked as a computer programmer, financial analyst product manager, commercial lender, budget manager, strategist, project manager, and eventually, as an applications “engineer” at Pacific Bell, where he was employed from 1986 to 1995. There, he was responsible for figuring out how to make the ISDN lines run properly, a telecommunications position that he chose because he “thought it would be a happening industry,” as he remarked to Patty Wetli in America’s Network. For a time, he admitted to Robert McGarvey in Entrepreneur, he was a manager himself, in charge of a group ranging from 7 to 15 people. Also along the way, he became a certified hypnotist.
Scott Adams holds an ink drawing of his popular comic strip character “Dilbert”. (AP Photo/Ben Margot.)
several samples of his work and received a “B” from the test grader. However, he was not accepted, because at age 11, he was too young. The letter from the Famous Artists School explained that he could enroll at age 12, but he never followed up. Adams lives in Dublin, California, with his girlfriend Pam Okasaki. They have two cats, Freddie and Sarah. Most of his time is spent reading the hundreds of e-mail messages that readers supply each day, as well as working on his web site, The Dilbert Zone (http://www. unitedmedia.com/comics/dilbert), which is one of the most popular sites on the web. He also gives interviews and speeches. Like Dilbert, Adams is a “techie,” someone who enjoys technology for its own sake.
Career Details After high school, Adams went to Hartwick College in Oneonta, New York, where he got the worst grade given in a drawing class. Practicality overcame creativity, and he got a bachelor’s degree in economics instead. After graduating, he was hired in as a teller at Crocker National Bank in San Francisco in 1979, where twice he was robbed at gunpoint. He worked there for eight years, and went on to get his master’s degree in business ad-
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This string of corporate positions gave rise to Adams’ now-famous “Dilbert” comic strip. As he sat in boring meetings, he considered the ludicrous nature of the business world and began doodling his thoughts. He lampooned his boss and coworkers, developing the character of Dilbert to reflect his feelings of disillusionment. Dilbert is the typical cubicle dweller frustrated with the incompetence of corporate management. His cohorts include Dogbert, the corporate consultant whose goal is to conquer the world; Catbert, the evil human resources director; and Ratbert, a lowly worker rodent. Dilbert’s world also includes his pointy-haired boss, named Boss, and his coworkers Alice and Wally. In 1988, while the strip was still a collection of sketches, Adams caught a television program about cartooning and wrote to the show’s host, Jack Cassady, to ask how he could break into the business. Cassady returned a hopeful letter and Adams started at the top, sending his comics to the New Yorker and Playboy. When he was rejected, Adams decided he probably was not good enough, and set aside his dream. Cassady sent him another encouraging letter, however, which convinced Adams to keep trying. Among other places, Adams mailed his work to United Media, which picked his strip out of the thousands they receive each year and began syndicating it in 1989. “Dilbert” began appearing in about 50 newspapers to start, and by 1998, it was reaching more than 1,700 papers worldwide. In 1993, he was the first comic artist to print his e-mail address (
[email protected]) in the strip, inviting readers to contact him, and he also set up a web site called The Dilbert Zone. Adams kept his job at Pacific Bell for several years while fulfilling his contract to United Media to draw “Dilbert.” It was at the office, in fact, that the character was christened after Adams held a “name-the-nerd” contest. He told Training magazine that he kept both jobs for the extra money and medical benefits, and because it “prevents me from becoming a hermit, which I have a real ability to do. I’m not the most social creature in the world.” He also admitted, “Of course, I get a lot of material from
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there (Pacific Bell), so it is a source of constant inspiration. Probably the more interesting aspect is that when you don’t need to work there anymore, it’s a completely different experience. It still takes long hours, but things that would frustrate you if you knew that you just couldn’t escape them don’t frustrate you if you know you could leave any time you want.” His boss finally hinted in 1995 that he should resign, although Adams does not feel that “Dilbert” had anything to do with his departure. Adams noted that his bosses never contacted him about the strip, although he assumed they must have heard about it. He was profiled in a number of periodicals, and “Dilbert” became extremely popular in offices nationwide. By the mid-1990s he also had published a number of collections of the “Dilbert” strips in books, including Dogbert’s Clues for the Clueless, 1992; Shave the Whales, 1994; and It’s Obvious You Won’t Survive by Your Wits Alone, 1995. Later, he also came out with Dogbert’s Top Secret Management Handbook, 1996, as well as more collections. Adams also released a book featuring a young Dilbert that was designed to help kids use and understand computers. By the end of 1997, Adams had over 20 books in print, many of which hit the New York Times bestseller list. On April Fool’s Day, 1998, the socially conscious corporation Ben & Jerry’s introduced a new flavor of ice cream called “Dilbert’s World Totally Nuts!” after Adams’s hilarious character. “The thing that’s special about this is that it’s the first Dilbert product that doesn’t have any bitterness,” Adams commented wryly. To kick off the enterprise, Ben & Jerry’s, with permission of United Airlines, set up cubicles at New York City’s La Guardia airport and offered free samples. They even wrote checks to some lucky fliers, refunding the price of their airline tickets. In the fall of 1998, United Paramount Network (UPN) debuted the Dilbert animated prime-time series, with Adams and Larry Charles, the Emmy-award winning producer of Seinfeld and Mad About You, as executive producers. Fox had developed a live action Dilbert in 1997 but decided to shelve it. UPN programming director Tom Nunan, quoted in the Business Wire, said the series was a good fit for the network because “it’s smart, slightly subversive, and has broad appeal.” Also in the Business Wire, Charles remarked, “Like the Dilbert strip, the television series will explore the surreal subculture of the corporate world, with its rigid rules, rituals, languages and customs, thereby revealing the absurdity of the society at large.”
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Chronology: Scott Adams 1957: Born. 1968: Applied to Famous Artists School but his application was denied. 1979: Began working for Crocker National Bank. 1986: Began working as applications engineer at Pacific Bell. 1989: United Feature Syndicate launched “Dilbert” comic strip. 1992: Published first book of “Dilbert” selections. 1993: Published e-mail address in strip, asking readers to write to him. 1998: Ben & Jerry’s Ice Cream introduced “Dilbert’s World Totally Nuts” flavor. 1998: Aired first Dilbert animated television series.
spirit-shriveling tedium, Adams captures the lunacy of our little lives just as surely as Pogo or Peanuts or Doonesbury did in their primes.” In an Associated Press article printed in Newsday, Robert E. Cole, a business professor at the University of California at Berkeley, noted, “I think he’s extraordinarily skillful at tapping into the kind of dissatisfaction and stupidity that most American workers experience in the workplace.” Adams undoubtedly hit a nerve among workers, writing about the numerous frustrations of office life, including low morale, dumb dress codes, bad decisions by bosses, power-hungry coworkers, senseless meetings, and the like, especially targeting faddish management concepts such as empowerment, business process re-engineering, and total quality management. He also explained the power structure as a root cause of worker dissatisfaction in modern corporations in Industry Week, saying, “Lots of employees want to be creative and have control. But how do you run a company that way? Ideally, companies want a few creative people and lots of competent followers. But most employees want to be the creative ones.”
Lisa Schwarzbaum in Entertainment Weekly summed up the social significance of Dilbert, writing, “In nailing the Kafkaesque world of office existence, with its petty humiliations, meaningless jargon, and
Adams expanded on this with Robert McGarvey in Entrepreneur, telling him, “Employees are constantly being put in situations where their expectations of what they are getting are rising. Empowerment is a good example
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‘We’re going to give you lots of power!’ But then they are told ‘Check with me before you order that pencil.’ So employees are in a position where they see all these little contradictions, and those contradictions make them feel powerless.” Adams, in addition, outlined the age-old battle of capitalism: “There’s a constant battle. The employer is trying to get you to work more for free, and the employee is trying to do less work and get paid more.” Adams is also known for putting into words The Dilbert Principle, also the title of one of his books published by HarperBusiness. As he outlined in Entrepreneur, “The Dilbert Principle explains why there are so many incompetent managers. It holds that the least competent people are promoted into management so that you don’t waste your good people on trivial issues like writing mission statements and holding meetings. What managers do doesn’t add a lot of value.” Using light, sarcastic humor, Adams sheds light on the power struggle between workers and management at all levels and between workers and colleagues, which allows millions of unhappy employees each day to find a little solace in the fact that they are not alone. Adams also accuses firms of instituting policies that have little or no meaning to the average worker and tend to condescend to them. “When companies go to employees and say stuff like, ‘Quality is No. 1’ or ‘The customer is No. 1,’ that seldom works,” Adams told Industry Week. “In my ideal company, I’d say to the employees, ‘You, personally, are No. 1 you! and then your family and then your coworkers.’ And somewhere after that is the customer and the stockholder. Of course, it’s often in your family’s and your coworkers best interest to treat customers as No. 1. But let’s not lie to workers. They’re smarter than that.” The appeal of “Dilbert” has not been limited to just corporate American culture. It reaches about 150 million fans around the world in about 35 countries, and was the first syndicated strip to appear on the World Wide Web. It remains one of the most popular Internet entertainment sites, with 4.5 million hits each month. The Dilbert Principle is the best-selling business book in history, spending 27 consecutive weeks on the New York Times bestseller list. Adams’s strips, by lancing the sacred cows of the business world, have altered the way many people view corporations and bosses. Perhaps the corporate world will benefit from the mockery and become a better place in which to work, or maybe not. Adams remarked in Newsday, “My goal is not to change the world. My goal is to make a few bucks and hope you laugh in the process.”
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Sources of Information Contact at: “Dilbert” Comic Strip United Media, 200 Madison Ave., Fl. 4 New York, NY 10016 Business Phone: (212)293-8500 URL: http://www.unitedmedia.com/comics/dilbert
Bibliography Barrier, Michael. “‘Dilbert’ Creator Thinks Small.” Nation’s Business, October 1997. Brown, Tom. “Decoding the ‘Clueless’ Manager.” Industry Week, 3 July 1995. Cawley, Janet. “Corporate Raider.” People Weekly, 3 June 1996. Filipczak, Bob. “An Interview with Scott Adams.” Training, July 1994. HarperCollins Publishers. “Scott Adams.” New York, NY: HarperCollins Publishers, 1997. Available from http://www. harpercollins.com/authors. “High Flying April Fool’s Surprise Launches Ben & Jerry’s Newest Flavor, Dilbert’s World Totally Nuts.” Business Wire, 31 March 1998. Locke, Michelle. “Dilbert’s Dad/Scott Adams’ Goal: Yuks, Bucks.” Newsday, 23 February 1997. Luscombe, Belinda. “Adams’ Family Values.” Time, 21 October 1996. McGarvey, Robert. “The Adams Principle.” Entrepreneur, September 1997. Newsmakers, 1996 Cumulation. Detroit: Gale Research, 1997. Schwarzbaum, Lisa. “Books: Comic-Strip Relief: If You Have to Ask Who Dilbert Is, You Don’t Work in a Cubicle. EW Looks at Why the Quirky Character is Suddenly as Popular as the Office Water Cooler.” Entertainment Weekly, 31 January 1997. “Short Takes: Dilbert, Dogbert, Wally and the Gang Head for TV.” The Atlanta Journal and Constitution, 12 February 1998. Snider, Mike. “‘Young Dilbert’ Teaches Kids About Computers.” USA Today, 15 September 1997. Thatcher, Mike. “The Truth about Cats and Dogs.” People Management, 19 December 1996, 30. United Media, Inc. “The Dilbert Zone.” New York, NY: United Media, 1998. Available from http://www.unitedmedia.com/ comics/dilbert. “UPN Announces the Primetime Animated Series Dilbert from the Popular Character’s Creator Scott Adams and Emmy AwardWinning Producer Larry Charles.” Business Wire, 10 February 1998. Wetli, Patty. “Dilbert Exposed!! Meet the Man Behind the Dweeb.” America’s Network, 15 July 1994.
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Paul Allen Overview Paul Allen cofounded Microsoft Corporation with his childhood friend Bill Gates. Together, they built Microsoft into a multibillion-dollar empire by developing software that revolutionized the world of personal computing. Allen left the company in 1982 due to ill health and has subsequently pursued investments in high technology, entertainment, and sports.
(1953-) Paul Allen Group
Personal Life Paul Allen was born January 21, 1953 in Seattle, Washington. His parents, Faye and Kenneth Allen were both librarians. They helped him develop a wide variety of interests, taking him and his sister, Jody, to museums, galleries, and concerts. Allen showed an early interest in science. When he was 10, his mother hosted meetings of his grade school science club. In 1965, Allen entered the seventh grade at Seattle’s Lakeside School. Three years later, Allen met an eighth-grader named Bill Gates. The two shared an intense interest in computers and quickly became friends. Gates and Allen became so proficient that they helped teach computer courses at Lakeside while still students. In 1971, Allen graduated from Lakeside and enrolled at Washington State University. Over the next decade Allen collaborated with Gates on several business ventures, including the founding of Microsoft Corporation. In 1982, Allen developed Hodgkin’s disease, a cancer of the lymphatic system. His illness dramatically changed his life, causing him to leave Microsoft. Never
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produced by the MITS company of Albuquerque, New Mexico. MITS hired the pair and made Allen their director of software; he and Gates moved to New Mexico. While working for MITS, Gates and Allen formed their own company to develop and market computer languages. They named their company “Micro-Soft.” In 1976 he left MITS to work full time for his new company. The company’s name was later altered to Microsoft. Allen’s success with Microsoft was rapid and enormous. Microsoft developed software for Apple and Radio Shack, makers of the best-selling personal computers of the day. Other early contracts were for Texas Instruments and Ricoh. In 1978, Microsoft sales went over the $1 million mark, and the company moved to the Seattle suburb of Bellevue, Washington. Microsoft grew quickly, forcing Allen and Gates to hire more employees, delegate authority, and buy software when they did not have the time to develop it themselves.
Paul Allen.
(AP Photo/Tim Sharp.)
married, Allen spent more than two years traveling and enjoying time with his family during his recovery. He also used his time away from work to pursue his many interests, including art collecting, basketball, and music. An avid electric guitar player, Allen emulates his musical idol Jimi Hendrix in his rock band called The Threads.
Career Details Even while attending college, Allen was eager to start his own business. He had read about Intel Corporation’s 4004 chip, the very first computer microprocessor. In 1972, Allen and Gates purchased the next generation of the chip, the 8008, for $360. It was the main component of a special computer they built to measure traffic volumes for cities. Gates and Allen formed the Traf-O-Data company to sell the machines. The venture was shortlived but gave the duo important experience running a business and writing a special version of BASIC, a simple, interactive computer language designed in the 1960s. Allen left Washington State University in 1974 to accept a job as a programmer with Honeywell in Boston. Then came a major turning point for Allen. He read a magazine article about the Altair computer kit, the world’s first “minicomputer.” Inspired, he convinced Gates that they should write a BASIC interpreter for the machine. An interpreter is a program that executes a source program (such as BASIC) by reading it one line at a time and performing operations immediately. The Altair was
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The turning point for Allen (and Microsoft) came in 1980 when he was approached by computer giant International Business Machines (IBM). IBM was secretly developing its own personal computer and needed to purchase programming languages for it. IBM bought virtually every program Microsoft had. In addition, Allen acquired a program from nearby Seattle Computer, reworked it with Gates, and sold it to IBM as the Microsoft Disk Operating System (MS-DOS). Gates and Allen convinced IBM to allow other computer manufacturers to copy the specifications of their Personal Computer (PC). The resultant flood of PC “clones” encouraged software developers to write programs compatible with these machines. The PC, using MS-DOS, became the dominant computer platform in the world. In 1982, Allen discovered he had cancer. He took a leave of absence, and eventually left his position with Microsoft. When he returned to work, Allen took his career in a dramatic new direction. Although his illness ultimately led to a positive change in his life, he was initially forced to leave the company he founded just as it was poised to conquer the world market. In 1985, Allen founded Asymetrix, a company devoted to producing computer applications to help programmers and non-programmers develop their own software. A year later, he formed Vulcan Ventures to research and manage investments. This endeavor marked the beginning of Allen’s new career as an investor, following his vision of a “wired world.” Over the next decade, Allen invested well over $1 billion in a wide variety of companies, including Ticketmaster, America Online, Inc. (AOL), Egghead Software (a retail chain), and many lesser known technology firms. In the early-1990s, he invested heavily in new media and entertainment ventures. These included companies to provide entertainment and information for the Internet as well as Dreamworks SKG, a movie and television studio. Among the technology firms in which Allen has invested are the Seattle companies Cell Ther-
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apeutics, Inc., a biotechnology developer, and the biopharmaceutical company Darwin Molecular Corp. To make his vision of a “wired world” a reality, Allen created his own think tank, Interval Research, in 1992. Allen provided funding for 100 scientists for ten years to create a facility similar to the Palo Alto Research Center (PARC) funded by Xerox Corporation in the 1970s. Its purpose is to imagine future uses for the Internet and compatible technologies. He subsequently formed the Paul Allen Group to encourage cooperation among his numerous investments. As an investor, Allen looks for projects that combine his many interests, such as sports, art, and music, with emerging technology. His massive fortune allows him to take risks and be patient with his investments. By 1996, Allen had amassed a fortune of about $8 billion, making him one of the three wealthiest people in the United States. Even after leaving Microsoft, he kept his seat on the board of directors and remained the company’s second largest stockholder. His enormous wealth allowed him to pursue his “wired world” vision as well as other interests. He bought the Portland Trailblazers of the National Basketball Association in 1988 and housed them in a state-of-the-art arena. He also acquired the right to buy the National Football League’s Seattle Seahawks in 1996. Allen’s sometimes risky investment strategy has occasionally led to setbacks. Some analysts believe he has paid too much for his investments, and some of his companies have gone bankrupt. In addition, America Online rejected Allen’s attempts to form a close alliance after he acquired 18 percent of the on-line service.
Social and Economic Impact By cofounding Microsoft, Allen profoundly changed the lives of people everywhere. MS-DOS revolutionized personal computing, eventually selling more than one hundred million copies. Allen also played a major role in other breakthroughs, including the Microsoft Mouse, a device to input data, and the evolution of graphical user interfaces (GUIs), which had first been conceived by PARC researchers and which led to the development of Microsoft Windows. In the early days of Microsoft, Allen and Gates did the vast majority of work themselves, employing a tiny staff and checking every line of computer programming themselves. Although they conferred on virtually all decisions, Allen said the pair played different roles in the company, “I [Allen] was probably the one always pushing a little bit in terms of technology and new products, and Bill [Gates] was more interested in doing negotiations and contracts and business deals.” As an investor, Allen still prefers generating ideas to managing the daily operations of his companies. He delegates executive duties to a small number of trusted aides and gives them a great deal of freedom to make decisions.
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Chronology: Paul Allen 1953: Born in Seattle, Washington. 1968: Met Bill Gates. 1975: Cofounded “Micro-Soft” with Gates. 1982: Diagnosed with Hodgkin’s disease. 1985: Founded software developer Asymetrix Corp. 1986: Formed the management investment firm Vulcan Ventures. 1988: Bought the Portland Trailblazers of the National Basketball Association. 1992: Created the think tank Interval Research. 1994: Won Lifetime Achievement Award from PC Magazine. 1997: Given Lifetime Achievement Award by the Software Publishers Association.
As a high school student, Allen had relentlessly sought ways to spend more time working with computers but was frustrated by the high cost and limited access of the emerging technology. Allen and Gates looked to a time when every person’s desktop would have a computer. With Microsoft, they began to see their vision become reality. Since leaving Microsoft, Allen has followed his personal vision. He anticipated the coming of the “information superhighway” as a young man and has worked to create a “wired world,” as he calls it, in which personal computers can link people to “content sources,” such as newspapers, libraries, data bases, shopping outlets, and more. His motivation, according to an interview in the Seattle Times in 1992, stems from “a desire to do new and creative and exciting things with technology— products that people can use and really enjoy and hopefully enrich their lives.” Allen has made many charitable contributions, mostly to institutions in Seattle and the Pacific Northwest. He and Bill Gates donated a science and math building to Lakeside School in 1987. Allen also funded a library at the University of Washington to honor his father’s work at the school. Since 1986, he has created five foundations devoted to charity, the arts, medical research, music, and forest preservation. The Experience Music Project, which includes a museum dedicated to
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rock guitarist Jimi Hendrix, supports “education and creative innovation in American popular music.”
“Paul Allen: New Age Media Mogul.” Business Week, 18 November 1996. Schlender, William. “Bill Gates and Paul Allen Talk.” Fortune, 2 October 1995.
Sources of Information
Seattle Times, 27 September 1992.
Bibliography Kirkpatrick, David. “Over the Horizon with Paul Allen.” Fortune, 11 July 1994.
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“The Wired World of Paul Allen.” 13 June 1997. Available from http://www.paulallen.com.
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Gil Amelio Overview
(1943-)
Gil Amelio took over a struggling Apple Computer Corporation in 1996 as president and CEO, and helmed the sinking ship for 17 months before being unceremoniously fired. Amelio, an expert in semiconductor technology and a respected Silicon Valley executive, later wrote a book about his experience at the computer industry’s most legendarily rebellious innovator.
Personal Life Amelio was born in New York City in 1943. He attended the Georgia Institute of Technology throughout the 1960s, earning a Bachelor of Science degree in 1965, a Master of Science two years later, and a Ph.D. in solidstate physics in 1968. A Republican and a Roman Catholic, he is married to Glenda Amelio, with whom he has two children, Anthony and Tracy; he is also parent to two stepchildren. Though Amelio does indulge in a love of aviation—he enjoys flying his own Piper Cheyenne—he is described as being far from the classic charismatic, media-savvy computer industry executive.
Career Details In 1962, when he was still in college at Georgia Tech, Amelio cofounded an Atlanta software company, Information Sciences. After earning his advanced degrees, he was hired in 1968 by Bell Telephone Laboratories in New Jersey in its Device Development division.
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tem, and a corporate culture that was legendary for its nonconformity. Amelio was tapped early in 1996 to take over the reins of Apple, which was rumored to possibly even be on the auction block.
Chronology: Gil Amelio 1943: Born. 1962: Cofounds Atlanta software company. 1969: Earned a Ph.D. in physics. 1971: Began working in the semiconductor industry. 1983: Became president of Rockwell International. 1991: Named CEO of National Semiconductor Corp. 1995: Elected chair of National Semiconductor Corp. 1996: Named CEO of Apple Computer. 1997: Fired from Apple. 1998: Co-authored On the Firing Line: My 500 Days at Apple.
He remained there for three years before heading west to Mountain View, California, to work for Fairchild Camera and Instrument. Fairchild was the first microchip producer in Silicon Valley, and Amelio became general manager of its microprocessor division. He stayed there until 1983, when he was wooed by Rockwell International to be president of its semiconductor division. When Rockwell merged that division with its communications sector in 1988, he was made president of the new group. Amelio joined National Semiconductor Corp., located in the heart of Silicon Valley in Santa Clara, California, as its president and CEO in 1991. The company was in perilous health, and Amelio was taking over from the retiring company founder. National Semiconductor had performed poorly in recent years, suffering huge financial losses as a result of increased competition in the semiconductor field from Japan. Amelio’s strategy was to refocus on improving analog chips for specific industries, and to increase market share. He was also credited with injecting the ailing company with a much needed morale boost. By 1993 the company was profitable again, and he was elevated to the position of chair of its board of directors in 1995. A book published that same year, Profit from Experience, chronicled his experiences there. Amelio had also sat on the board of Apple Computer since 1994. The company, developer of the revered Macintosh personal computer, had begun to flounder in recent years after a string of notable flops, heavy competition from Microsoft and its Windows operating sys-
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Apple had witnessed phenomenal growth in the 1970s and ‘80s with its innovative products and enjoyed a cult of dedicated, near-fanatical devotees as its user base. When Amelio entered the executive offices of the Cupertino, California company, however, its staff was demoralized, it was bleeding money every quarter, sales were dismal, and its stock performance was very poor. Its first-quarter losses for 1996 were $740 million. Just a few months after Amelio came on board, Apple shares descended to a ten-year low. Furthermore, Apple had only enough cash on hand to see it through two months, which is usually a predictor of certain financial doom for a company. Amelio was hailed as Apple’s savior, partly based on his record in turning around National Semiconductor. He was given a five-year contract that paid almost $1 million annually, plus stock options and bonus stock if Apple’s performance improved. He reorganized the company twice, and laid off 2,800 employees in an effort to stop the bleeding. But Apple’s share in the personal computer market continued to slip, and hovered below five percent (Microsoft and Windows enjoyed the rest of that market). He engineered a comeback of sorts for fired Apple founder Steve Jobs, who had gone on to launch a new Silicon Valley company, NeXT Software. Amelio was fired from Apple in early July of 1997, after just seventeen months on the job. The stock had just sunk to an eleven-year low, and the board was dissatisfied. Ellen Hancock, whom he had brought on board to become Apple’s director of advanced technology, departed with him. Jobs then became CEO. Ironically, it seemed to cost Apple more to get rid of Amelio than to keep him: his severance package was estimated at about $7.5 million in both salary (the remaining years on his contract) plus stock. He went on to become a partner at the Parkside Group, LLC, a San Francisco investment firm, and coauthored a book on his experiences at Apple entitled, On the Firing Line: My 500 Days at Apple, with William L. Simon.
Social and Economic Impact Though Amelio is known as a savvy corporate leader for his business sense, his scientific background is also noteworthy. His name is on sixteen patents, and he is the coinventor of the first charge-coupled image sensor, which greatly aided the development of the consumer camcorder. Some industry watchers theorize that Amelio was fighting a losing battle in attempting to rescue Apple, given its nonconformist corporate culture that viewed au-
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thority and standard business practices with a healthy dose of skepticism. Amelio seconded this idea in a speech before the Commonwealth Club in San Francisco. “Around Apple they still believe that no one ever got a really great idea while wearing a suit and tie,” he joked a few months after his departure. The company then seemed in even more dire straits than before: after he was fired, Apple nixed launch plans for Rhapsody, a new operating system, after the company had spent over $400 million to buy it from Jobs and NeXT. Others believe that Apple would have been sold, possibly to Sun Microsystems, had Amelio not stepped in and exerted some control over the balance sheet when he did. Amelio has called Apple “a contrary organization,” and later likened his tenure there to overseeing a group of teenagers who would willfully disobey. But he also said that accepting the much publicized salary offer in the first place, which the Apple board of directors had sweetened to lure him from National Semiconductor, was a decided mistake, simply because of the hostile press it brought; many wondered why Apple was paying a hefty six-digit figure when the company was suffering such losses. There was resentment from inside the company, among stockholders, and in the press. “You don’t expect your religious leaders to be making big bucks, and I was leading a religion,” Amelio later told ComputerWorld’s Joseph E. Maglitta. Amelio did, however, set Apple on the right track, primarily by lowering its “break-even point,” or point at which a company stops losing money and begins to operate at a profit. He is also credited with improving the quality of Apple products, a factor that helped win back some loyalists. In retrospect, Amelio saw his tenure as a
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positive one overall and—as a Macintosh devotee and Apple shareholder himself—was happy that the company did not end on the auction block. Under his leadership, Apple introduced several new products, especially in the first part of 1997, and Amelio notes that unlike other Apple launches, all were released on time. The appearance of Steve Jobs back at Apple headquarters was also a significant event. Jobs is a legendary figure in Silicon Valley, and his return in December of 1996 gave the devoted Apple base of users, employees, and stockholders great hope for the company’s viability. With Jobs, Amelio devised a blueprint for Apple’s future, a plan that is still in place.
Sources of Information Contact at: The Parkside Group 650 California St., Ste. 2400 San Francisco, CA 94108 Business Phone: (414)393-0630
Bibliography Gruman, Galen, and Tova Fliegel. “Amelio Ousted.” MacWorld, September 1997. Hamm, Steve. “At the Core of Apple’s Amelio.” PC Week, 20 January 1997. Maglitta, Joseph E. “My Tough Luck.” ComputerWorld, 27 July 1998. Schlender, Brent. “Something’s Rotten in Cupertino.” Fortune, 3 March 1997.
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Wally Amos (1936-) Uncle Noname Cookie Company
Overview Wally Amos gained prominence as an entrepreneur in the mid-1970s when he developed and marketed a brand of chocolate-chip cookies under the name “Famous Amos.” In a world of mass-produced food products, Amos seemingly hit upon the universal “soul food”: the American home-style chocolate-chip cookie. Two years after opening his first store in Los Angeles, Amos was at the helm of a large corporation, selling cookies as well as other “Famous Amos” paraphernalia, worldwide.
Personal Life Wallace Amos, Jr. was born July 1, 1936 in his parents’ home in Tallahassee, Florida. He was the only child of the marriage of Wallace and Ruby Amos. The senior Wallace Amos, whom his son once described as a “good person . . . who always remained true to himself,” worked in Tallahassee at the local gas company. Neither parent could read or write. The Amos household was characterized by a strict code of personal behavior. His mother, especially, was an uncompromising disciplinarian. Amos later recalled that the person of greatest influence in his childhood was his father’s mother. In Current Biography Yearbook, Amos reported that his grandmother treated him “with a very tender and understanding kind of love.” In his autobiography, The Famous Amos Story, Amos said that his parents rarely laughed and seldom displayed affection toward him. He added that they were both conscientious churchgoers who regarded “anything that appeared to be fun, like dancing” as a sin.
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At age 10, Amos began attending a school established in his mother’s church. Amos said: “We were made to think, to be curious, to seek solutions, and not add to problems.” At school, he claimed that he had developed an intense desire to become successful and to make money. When Amos was 12, his parents separated and later divorced. At the same time, he moved to New York City to live with his mother’s sister, Della. He described his Aunt Della as “happy all the time,” and as a woman who loved to cook and bake, especially chocolate-chip cookies. Of his experience living with his Aunt Della, Amos noted “for me, chocolate-chip cookies have always been an expression of love.” In 1951 Amos moved in with his mother and grandmother, who had also moved to Manhattan. That same year, his fascination with cooking led him to enroll in the Food Trades Vocational High School. He quit after two years, however, and joined the U.S. Air Force in 1953 where he earned his high school diploma equivalent. Amos has married three times, first in 1958. He has three sons and a daughter and lives in Hawaii.
Wally Amos.
(AP/Wide World Photos, Inc.)
Career Details After his discharge from the Air Force, Amos enrolled at the Collegiate Secretarial Institute in Manhattan. He attended classes there and worked also as a stockroom clerk at Saks Fifth Avenue department store until 1961. He then started another job, in the mailroom of the William Morris Agency, a leading theatrical booking and hiring agency. Because of his intelligence and high motivation to please others, he went, in a few short months, from mailroom worker to become a personal secretary to Howard Hausman, who was a senior vice-president with the firm. Amos ultimately advanced to the position of a full-time William Morris talent agent where he contributed to the careers of such entertainers as Paul Simon, Art Garfunkel, Diana Ross, Sam Cooke, and Marvin Gaye. In 1967, five years later, feeling “burned out” and “stagnant,” as he put it, Amos left the agency and went to Los Angeles to create his own entertainment agency. Working in the business in Los Angeles was frustrating, and Amos was nearly always in debt. As he wrote in his autobiography, he began slowly to console himself and his frustration by making chocolate-chip cookies in the style of his Aunt Della. At first Amos used the Nestle’s recipe printed on the side of the chocolate-chip bag. He began using these cookies, later, as “calling cards” when meeting with clients, and when attending meetings with producers. “The cookies’ reputation began to grow as my contacts multiplied,” he recalled in his book, The Power in You.
versation with a close friend. To establish his store he raised $25,000 from entertainment friends including singers Marvin Gaye and Helen Reddy. The store opened on March 9, 1975, on the corner of Sunset Boulevard and Formosa Avenue in Los Angeles. On the first day, customers were lined up outside. Within two years, his business operation evolved into a corporation which sold cookies nationwide in a variety of upscale stores. The cookies now carried with them a line of paraphernalia for the “Famous Amos” fans who desired them: t-shirts, umbrellas, duffle bags, and “Famous Amos” jewelry. His two factories were then making six tons of chocolate-chip cookies a week. By 1985, however, the Famous Amos Cookie Company was suffering debilitating financial losses, and Amos sold a controlling share in the venture to a Texas investment group. He retained a position on the board of directors but was relieved of day-to-day responsibilities in the company. In the late- 1980s the company changed ownership several more times, and Amos ultimately became a mere figurehead with no role in the operations of the company he had founded. He finally parted with the Famous Amos company in 1989. Recalling the episode in the Providence Business News in 1995, Amos said, “I was irresponsible. I didn’t have a good management team . . . . Ultimately, I started having cash flow problems. I started losing the company in 1985. By 1989 it was gone. The new owners came in and I was outside looking in.”
Amos decided to sell his cookies as a full-time occupation in October 1974, after a long and searching con-
Within two years Amos returned to retail marketing based on a chocolate chip theme with his Chip & Cookie concept. Located within department stores, Chip &
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Chronology: Wally Amos 1936: Born. 1975: Opened first Famous Amos retail outlet. 1986: Won President’s Award for Entrepreneurial Excellence. 1987: Won Horatio Alger Award. 1989: Ended relationship with Famous Amos Cookie Company. 1992: Started Uncle Noname Cookie Company. 1996: Uncle Noname released line of low-fat baked goods.
Cookie included baked goods, storybooks and a variety of merchandise. He was sued by the owners of Famous Amos who successfully contended that Amos had relinquished the rights to use his name and likeness in marketing a food product. Barred from using his name in future cookie ventures, in 1992 Amos developed and marketed Uncle Noname (pronounced no-NAH-may) baked goods, the name being a play on his enforced anonymity. Among the products developed by the company are pound cakes in such flavors as banana blueberry and orange cranberry, and fat-free muffins in a variety of flavors, including corn and honey raisin bran, apple cinnamon, chocolate passion, and blueberry. Amos is a popular motivational speaker who has used his celebrity status to promote literacy and to support drop-out prevention programs. Amos is also the author of four books: the autobiographical volume The Famous Amos Story: The Face That Launched a Thousand Chips (1983), the motivational work The Power in You: Ten Secret Ingredients for Inner Strength (1988), The Man with No Name (1994), and Watermelon Magic: Seeds of Wisdom. Slices of Life (1996).
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In developing his cookie business, Amos’ approach was highly personal. He had enormous enthusiasm for his products, and he used his boundless energy and personal popularity to promote them. Amos was disciplined, cared about quality-control issues, and was not afraid to leave one endeavor to explore another. As an article in Current Biography Yearbook, states: “In the process of promoting his client, whether an entertainer, or a cookie, Amos himself became a star of sorts on the American scene.” On June 13, 1977, Amos’ picture was on the cover of Time magazine, which ran a lengthy article about him and his success. In 1986, President Ronald Reagan formally presented to Wally Amos the President’s Award for Entrepreneurial Excellence. “I am in the people business, not the cookie business . . . I deal in love.” With this remark, made by Amos after he sold his cookie business, Amos turned to the new passion in his life—lecturing on inspirational issues. With his vision of obtaining, maintaining, and increasing the quality of love in his world, Amos has been recognized for his passion, conscience, caring, and charity.
Sources of Information Contact at: Uncle Noname Cookie Company P.O. Box 897 Kailua, Hawaii 96734
Bibliography Amos, Wally and Camilla Denton. Man with No Name. Lower Lake: Aslan, 1994. Amos, Wally and Camilla Denton. The Power in You: Ten Secret Ingredients for Inner Strength. Chicago: Nightingale-Conant, 1988. Amos, Wally and Leroy Robinson. The Famous Amos Story: The Face That Launched a Thousand Chips. Garden City: Doubleday, 1983. Graham, Judith, ed. Current Biography Yearbook. New York: H. W. Wilson and Co., 1995. Hughes, Allan J., Jr. “Wally Amos Still Famous but with a Lower Case “F.” Providence Business News, 11 December 1995.
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Arthur Andersen Overview Arthur Andersen was the founder and senior partner of Arthur Andersen and Company, now the second largest of the Big Five accounting firms. His Chicagobased firm offered a full range of financial services including auditing, tax services, and specialty consulting in areas such as technology applications. Andersen established the company’s focus on maintaining a strong organization through training, effective corporate policies, and a strong understanding of economics and business trends.
(1885-1947) Andersen Worldwide
Personal Life John William and Mary Aabye Andersen, Arthur Andersen’s parents, immigrated to the United States from Norway in 1881. Arthur Edward Andersen was born on May 30, 1885, in Plano, Illinois. He became the youngest certified public accountant in Illinois when, at the age of 23, he earned his degree from Illinois University in 1908. He went on to receive a B.B.A. from Northwestern University in 1917. Andersen married Emma Arnold on August 8, 1906 in her hometown of Chicago. The Andersens had three children: Ethyl Bernice, Arthur Arnold, and Dorothy Emma. Andersen was considered a “liberal Republican” and enjoyed photography, fishing, and golf. He died in Chicago on January 10, 1947. Before receiving his business degree, Andersen took a job teaching accounting at Northwestern University. In 1911, he briefly worked as controller for Schlitz Brew-
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emphasized the importance of a sound understanding of economics and finance. He based his philosophy on the belief that this knowledge should come from three sources: experience, education, and research, and he set out to build his company on these principles. “We want to measure our contribution more by the quality of the service rendered than by whether we are making a good living out of it,” he claimed when he opened his company. “It has been the view of accountants up to this time that their responsibility begins and ends with the certification of the balance sheet and statement of earnings. I maintain that the responsibility of the public accountant begins, rather than ends, at this point.” The firm was licensed as accountants and auditors in most states and soon acquired large corporate clients, including ITT, Colgate-Palmolive, Stratton, Briggs and Co., and Parker Pen. When the company expanded in 1915 and opened an office in Milwaukee, it strengthened ties with one of its most important clients and Andersen’s former employer, Schlitz Brewing. Andersen’s partner Clarence Delany left the firm in 1918, and Andersen continued as director of the company.
Arthur Andersen, standing, pictured at the annual Associated Business Papers, Inc. conference in 1930. (Corbis-Bettmann.)
ing, but returned to Northwestern to become the head of the accounting department at age 27. Andersen would continue to teach at the university until 1922. He also worked for the Chicago office of Allis-Chalmers Co. and, from 1907 to 1911, was a senior accountant for Price, Waterhouse. During 1911-12, he was comptroller for the Uihlein interests of Milwaukee. Andersen was a member of numerous professional and civic organizations, including the American Institute of Accountants, Illinois Society of Certified Public Accountants, American Economic Association, United States Chamber of Commerce, Norwegian-American Historical Association, Illinois Historical Society, Alpha Kapa Psi, Beta Gamma Sigma, Beta Alpha Psi, and several golf clubs. He received LL.D. degrees from Luther College in 1938 and from Northwestern University, Grinnell College, and St. Olaf College in 1941. In 1940, the government of Norway made him a commander of the Royal Order of St. Olav.
Career Details In 1913, Andersen founded his own accounting firm, Arthur Andersen and Company. He was the first university professor to go into public accounting, and aimed to challenge existing practices in the business. He envisioned a firm that would be a knowledge enterprise, and
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The firm grew rapidly, and Andersen became an authority on financial affairs. He was often asked to provide expert analysis in legal cases and provided advice as a member of various boards. He served as chairman of the board of certified public accountant examiners for the state of Illinois; he was a director of the State Bank and the Trust Company of Evanston, Illinois; he served as a trustee for Chicago’s Century of Progress, and he was the president of the board of trustees for Northwestern University. Andersen also authored a number of magazine articles and books, including Major Problems Created by the Machine Age, (1931); Duties and Responsibilities of the Comptroller, (1934); The Future of Our Economic System, (1934); Present Day Problems Affecting the Presentation and Interpretation of Financial Statements, (1935); and A Layman Speaks, (1941). Andersen’s fledgling firm was aided by the 1913 implementation of the federal income tax, which created an increased demand for accounting services. To be near the Internal Revenue Service, he opened an office in Washington, D.C. During the 1920s the firm opened six new offices and began providing financial investigation services. This led to Andersen’s appointment in 1932 as the representative for several New York banks when Samuel Insull’s utilities empire collapsed. The firm investigated Insull’s financial affairs, Andersen testified in court on the matter, and the firm guarded the remaining assets during refinancing. This proved to be an important event for the firm during the Great Depression, and helped establish its superior reputation. The company also grew to be an international force under Andersen’s direction. In 1930 he coordinated expansion to other countries and continents, with his firm’s affiliation with McAuliff, Davis & Hope, Chartered Ac-
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countants. This led to work in the British Isles, Europe, Asia, and South America. In 1938, Andersen was asked to become the first salaried president of the New York Stock Exchange. Though flattered by the offer, he declined to focus on management of his growing firm.
Chronology: Arthur Andersen
Social and Economic Impact Andersen instituted managerial, recruiting, and training advances that provided an important foundation for the company’s continued growth. In 1915 the company became the first accounting firm to adopt a formal recruiting program for college graduates. In 1940 a school was created for training the firm’s 35 new auditors. This tradition was evident when, in the early 1970s, the company opened Andersen University, a center for professional education. Andersen also established policies and procedures that transformed the workings of the small, informal company and allowed it to become a large, complex organization. In 1942 a new branch of the firm was created, that would become known as management information consulting. When Andersen died in 1947, his 25 partners felt the tremendous void that was created by the loss of his strong influence and presence. However, with Leonard Spacek as the new managing partner, Arthur Andersen & Company was positioned to further develop its reputation as a progressive firm and to grow into the largest organization of its kind. It tested the practicality of using computers in business by computerizing a client’s payroll in 1952; and it made important contributions to the emerging areas of industrial engineering, functional accounting, and management information practices. The business is now divided into two separate organizations, Arthur Andersen and Andersen Consulting, which have been administered from a headquarters in Geneva, Switzerland since 1977. Today, Arthur Andersen is a global organization employing more than 58,000 people in 363 offices in 78 countries. In 1950, Ohio State University established The Accounting Hall of Fame. The board elected Arthur Andersen in 1953, commending his “contributions as an educator and outstanding practitioner . . . . He had an unswerving faith in education as the basis upon which the new profession of accounting should be developed.”
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1885: Born. 1908: Became youngest C.P.A. in Illinois. 1913: Founded Arthur Andersen & Co. 1915: Became the first accounting firm to adopt formal recruiting program for college graduates. 1930: Coordinated expansion of firm in Europe, Asia, and South America. 1932: Appointed to represent several New York banks after collapse of Samuel Insull’s utilities empire. 1938: Invited to become first salaried president of New York Stock Exchange. 1940: Opened school for training new auditors. 1942: Created new branch in management information consulting. 1947: Died.
Sources of Information Contact at: Andersen Worldwide 225 N. Michigan Ave. Chicago, IL 60601 Business Phone: (312)782-0225 URL: http://www.arthurandersen.com
Bibliography “About Arthur Andersen.” 27 May 1998. Available from http:// www.arthurandersen.com. “About Arthur Andersen.” 27 May 1998. Available from http:// www.fsti.com/tei/triad/arthur.htm. National Cyclopaedia of American Biography. New York: James T. White, 1949. Spain, Patrick J. and James R. Talbot, Hoover’s Handbook of American Companies 1996. Austin, Texas: Reference Press, 1996.
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Marc Andreesen (1972-) Netscape Communications Corporation
Overview The amazing growth of the Internet and the World Wide Web has been due in large part to the genius of Marc Andreesen. His browser software, Mosaic and Netscape Navigator, has made using the World Wide Web easy and popular for both businesses and average consumers. The company he helped found, Netscape Communications, made Andreesen an instant millionaire and helped to bring the Internet into the lives of ordinary people.
Personal Life Andreesen was born in Iowa in 1972. He grew up in the small town of New Lisbon, Wisconsin, with his parents, Lowell and Patricia. Marc Andreesen’s father works as an agriculturist and his mother works for Land’s End, a catalogue retailer. Andreesen was not the typical New Lisbon boy. He spent his early years reading and learning about computers to alleviate the boredom of small town life. In sixth grade, he wrote his first computer program—a virtual calculator for doing his math homework. But the program was on the school’s PC, and when the custodian turned off the building’s power, Andreesen’s program was wiped out. The next year, his parents bought him his first computer, a TRS-80 from Radio Shack that cost only a few hundred dollars. Marc taught himself BASIC programming from library books so he could write video games for the new PC. Andreesen’s teachers and classmates from New Lisbon remember him as a good student who excelled
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in computing, math, English, and history. “Marc had an intellectual capacity that could intimidate people,” said his former principal Ken Adams. Andreesen could also challenge teachers, and was known to question the relevance of their assignments. At the University of Illinois, Andreesen planned to major in electrical engineering, which he considered his most lucrative option, but then changed to computer science. He graduated with a BS in 1993. Andreesen now lives in Palo Alto, California with his fiancée, Elizabeth Horn, and their pet bull dogs. He enjoys a range of interests, including science fiction, classical music, philosophy, and business strategy. As might be appropriate for a computer whiz, Andreesen claims to be a “Netizen” himself—he gets all his news from the World Wide Web, buys his books from the online site Amazon.com, and even uses the Internet to check theater times.
Career Details A $6.85 an hour job at the University of Illinois Champaign-Urbana’s National Center for Supercomputing Applications (NCSA) got Andreesen interested in the Internet. At the NCSA, he worked with master programmer Eric Bina to develop an interface that could navigate the World Wide Web, integrating text, graphics, and sound. The result was Mosaic, which the NCSA team completed in 1993 and posted for free over the Internet. Over 2 million copies of the browser were downloaded the first year. Mosaic was responsible for a 10,000-fold increase in Web users over a period of two years. After graduating from Illinois in 1993, Andreesen took a job with Enterprise Integration Technologies, a producer of Internet security-enhancement products, in California. Soon, however, he received an e-mail from Jim Clark, a former associate professor of computer science at Stanford University. Clark had founded Silicon Graphics Inc., which made computers that specialized in graphics processing, and was interested in improving on Mosaic. He set up a meeting with Andreesen, and the two decided to combine Andreesen’s technical knowhow and Clark’s business expertise to launch their own company in 1994. The company was named Mosaic Communications Corp., but when the NCSA, which owned the copyright to the Mosaic software objected to the name, the partners changed it to Netscape. Andreesen, as vice president of technology at the new company, worked to make Mosaic faster and more interactive. Andreesen was helped by several team members from the original Mosaic project at NCSA, whom he persuaded to join Netscape. Soon, the company released their new browser, which the development team wanted to call “Mozilla”-
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Marc Andreessen.
(Courtesy of Netscape Communications.)
short for Mosaic Killer. The marketing department, however, insisted on Netscape Navigator. The program was distributed free on the Internet, and quickly became extremely popular. This established Netscape as a “brand” name, and prompted computer users to try other Netscape products. Soon, the company was profitable. On 9 August 1995, Netscape first offered shares in the company to the public. That day, shares opened at $7 and shot up to $36. They closed at $29. In one day, the then-24-year-old Andreesen became worth more than $50 million. To celebrate, he went out and bought his first suit. By December of that year, Netscape’s stock reached an all-time high. The value of Andreesen’s shares in the company skyrocketed to $171 million. But at almost the same time, Microsoft Corporation, which until then had been focusing primarily on PCs and had ignored the Internet, realized the value of browser software and announced that it would begin to work in that area. In July 1997, Andreesen became executive vice-president in charge of product development at Netscape. In charge of a staff of 1,000, Andreesen set out to stay ahead of the giant Microsoft. In September 1997, Microsoft launched its first browser, Internet Explorer 4.0. This was Netscape Navigator’s first real competitor, and it began to lure Netscape users away. In January 1998, Netscape shocked Wall Street by announcing an $88 million loss for the quarter. By April, according to Business Week, Microsoft
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Navigator for free, he took a chance. But the browsers became so popular that users quickly developed confidence in the Netscape brand, and purchased other Netscape goods and services.
Chronology: Marc Andreesen 1972: Born. 1993: Developed Mosaic. 1994: Cofounded Netscape Communications, Inc. and released Netscape Navigator. 1995: Netscape IPO earned millions in first day. 1995: Microsoft announced it will enter browser market to compete with Netscape. 1997: Andreesen took control of product development at Netscape. 1998: Andreesen shifted focus to intranets and content-rich Netscape Website.
had captured about 40 percent of the browser market, while Netscape’s share had shrunk from about 80 percent to around 60 percent. Andreesen’s challenge is to get Netscape back to profitability. He no longer writes software programs himself, but as the head of product development, envisions new solutions for emerging technologies. With Netscape CEO Jim Barksdale, Andreesen is shifting the company’s focus away from the browser market and toward innovations for intranets (corporate networks) and electronic commerce. He is also developing Netscape’s Website into an Internet gateway similar to America Online.
Andreesen is known for putting in long hours at Netscape, but his management style differs very much from that of his main competitor, Microsoft. Andreesen remains close to the programmers who work for him, and he maintains a collegial, team-like atmosphere. He does not insist that his employees work long hours-in fact, he encourages them to limit office hours to 50 per week. Characteristic of this team-oriented approach is Andreesen’s decision to offer Netscape’s browser code over the Internet to anyone who wants it. His reasoning is that the feedback he gets from other software developers could lead to new ideas for Netscape. Andreesen has had to respond quickly to the intense competition within the computer industry. Microsoft’s entry into the browser market has challenged Andreesen to continue to improve Netscape’s products and to develop new ones. One new focus is to add substantial content and services to Netscape’s Website, making it a rival of America Online. “Our biggest mistake,” he told Business Week “was we didn’t think of this two years ago.” Though he admits he needs more experience, Andreesen likes business strategy. Venture capitalist John Doerr commented that Andreesen “has retained his fresh point of view about what’s possible . . . . He has grown a lot . . .” And investment analyst Mary Meeker said of Andreesen “He’ll be a great CEO-five to ten years from now.”
Sources of Information Contact at: Netscape Communications Corporation 501 E. Middlefield Rd. Mountain View, CA 94043 Business Phone: (650)254-1900 URL: http://www.netscape.com
Bibliography Chandrasekaran, Rajiv. “Netscape’s Boy Wonder Looks Beyond the Browser.” Washington Post, 25 March 1997.
Social and Economic Impact Andreesen’s browser software had a profound impact on society. According to People Weekly, Mosaic stimulated a 10,000 percent increase in the number of Web users within two years from its debut. And Netscape Navigator was even more popular. The astronomical growth of the World Wide Web could not have occurred without a simple product that helped users find their way through the vast, and sometimes disorganized, material on the Web. And the first such product was invented by Andreesen. From the beginning, Andreesen used innovative strategies to get his program out to the public. By allowing computer users to download Mosaic and Netscape
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Collins, James. “High Stakes Winners.” Time, 19 February 1996. Hamm, Steve. “The Education of Marc Andreesen.” Business Week, 13 April 1998. Harmon, Amy. “Cyberspace Stars: Can They Stay Online?” Los Angeles Times, 28 October 1996. Holzinger, Albert G. “Netscape Founder Points, and It Clicks.” Nation’s Business, January 1996. “Illinois’s Boys Make Noise and They’re Doing it with Mosaic,” Highlight from CS Alumni News, Winter 1994. Newsmakers. Detroit: Gale Research, 1996. McCarthy, Ken. “Marc Andreessen: The Man Behind Netscape,” E-Media 14 August 1995. Available from http://www.e-media.com.
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Marc Andreesen: Netscape Communications Executive. Newsmakers 1996. Detroit: Gale Research, 1996.
Tetzeli, Rick. “What It’s Really Like to be Marc Andreessen,” Fortune, 9 December 1996.
“Spinning a Golden Web: Marc Andreesen’s Internet Software Earned Him $50 Million in One Day.” People Weekly, 11 September 1995.
“VeriSign Hall of Fame: Marc Andreessen,” VeriSign, Digital ID Hall of Fame, 1997.
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Hiroaki Aoki (1938-) Benihana
Overview Hiroaki “Rocky” Aoki is the founder of Benihana Restaurants, which brought Japan’s teppan table cooking to America. The popular chain of Japanese style eateries are located in the United States, Canada, Mexico, England, South Korea, Japan, Australia, and Thailand. He is also a world-class sportsman and participates in longdistance road rallies, speedboat racing, and ballooning. He is a noted philanthropist and fundraiser. His charitable interests include international art exchanges and environmental causes.
Personal Life Hiroaki “Rocky” Aoki was born on October 9, 1938, in Tokyo, Japan. He was the first child of Yunosuke and Katsu Aoki, a well-to-do couple. Rocky’s parents owned a popular Tokyo jazz, coffee, and tea club, named Ellington after celebrated American jazz musician Duke Ellington. After Japan bombed Pearl Harbor in December, 1941, Japan and the United States entered into a state of war. Despite this, the Aokis stayed in Tokyo until 1944. Then the war forced them to leave and the family moved to Rocky’s mother’s hometown in the rural province of Gumma. After the war, the Aoki family returned to Tokyo. They started a new enterprise in the nearly destroyed city, a restaurant called Benihana. Rocky Aoki attended Keio, an exclusive private high school in Tokyo. He then pursued his studies at Keio University. He was a gifted student, but was in trouble more than once for fighting. Athletics are where Rocky
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truly excelled. He competed in track and field, karate, and wrestling. He was captain of the Keio wrestling team and was one of Japan’s top wrestlers by age 19. In 1959, he was an alternate on Japan’s 1960 Olympics wrestling team. The team toured the United States and Rocky was undefeated in his weight class. America intrigued him and he decided to pursue an athletic scholarship so he could study in the United States. Several colleges offered Rocky a wrestling scholarship. He lived in New York City while deciding which scholarship to accept. In New York, he lived with Seiji Ozawa, an old family friend from Japan and later conductor and music director for the Boston Symphony Orchestra. Rocky first enrolled at Springfield College in Springfield, Massachusetts. He quickly transferred to C.W. Post College in Long Island, New York. Rocky soon found himself in trouble for fighting again and was dismissed from Post. He then entered New York City Community College and earned an associate’s degree in management in 1963. Rocky married his wife, Chizuru, in 1964, the year that he first opened a Benihana restaurant in New York. In Benihana’s early years, Aoki lived frugally, investing everything he had into his new enterprise. By the early 1970s, the investment paid off and Aoki was a wealthy man. He then began to live like a wealthy man, sometimes investing in opportunities that netted him fiscal losses, but gained him notoriety. He backed a Broadway play starring Joan Rivers that flopped, opened a posh Manhattan club that failed after only one year, and promoted a boxing match in Japan for long-time friend Muhammad Ali that attracted publicity, but little money. Rocky Aoki’s leisure activities took on a note of flamboyance and recklessness. In 1974, he won the world leisure class backgammon championship. He became a champion powerboat racer and was nearly killed in a 1979 accident. He piloted a helium balloon across the Pacific in November 1981. Rocky won the first Milan-Moscow Road Rally in 1987 in his 1959 Rolls Royce Silver Wraith. Later, when asked to reflect on his rapid rise to fortune and fame, Aoki admitted handling the whole situation poorly. Rocky told Jack McCallum, author of Making It in America: The Life and Times of Rocky Aoki Benihana’s Pioneer, “When I first started making money, my personal life got poorer . . . . And I kept my family poor. I didn’t want to put money into them. I wanted to put it where it would show.” In the 1990s, Aoki settled down a bit and has devoted his time and money to more socially responsible ventures, including art and environmental programs.
Career Details
Hiroaki “Rocky” Aoki.
(Courtesy of Benihana.)
from various part-time jobs to help attain this goal. After graduating from New York City Community College in 1963, Rocky was presented with the opportunity to realize his dream. The owner of an unsuccessful Chinese restaurant offered Rocky his prime midtown Manhattan space, charging only a pittance for rent. Rocky sought the assistance of his wealthy parents. They helped him secure a loan so he could bring their Benihana restaurant to New York. In May 1964, Rocky Aoki opened the first American Benihana restaurant. Benihana is a Japanese word meaning red flower and saffron. Benihana features teppanyaki-style Japanese cooking. Teppanyaki actually means steel top in Japanese and at Benihana, guests are seated around a steel-topped table that incorporates a grill. The diners’ meals are prepared on the grill while the chef’s knife-wielding skill provides dinnertime entertainment. Benihana’s business was very slow for the first six months. Then, an enthusiastic review in the New York Herald Tribune brought hungry customers to Aoki’s door. Benihana became a most fashionable eatery, with stars like Sean Connery, Lawrence Welk, and Burt Bacharach as regular customers. Rocky opened the second Benihana on May 15, 1966 on Manhattan’s East Side. Chicago saw its first Benihana in 1968 and Benihana of San Francisco, the West Coast’s first, opened in 1969.
Long before graduating from college, Rocky Aoki had wanted to open a restaurant. He had saved $10,000
Benihana’s popularity soared during the 1970s and 1980s. A publicly traded arm of Benihana-Benihana, Inc.
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Rocky Aoki resigned as Benihana chairman and chief executive on May 19, 1998, amid speculation that his personal investments are under investigation by the U.S. Attorney’s Office. Aoki released a statement saying that the investigation does not involve Benihana or its stock. He remained majority stockholder of Benihana and continued to be available as a consultant.
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1938: Born. 1960: Emigrated to the United States. 1963: Earned Associate’s Degree in Management. 1964: Opened first American Benihana restaurant in New York City. 1969: Expanded Benihana business to the West Coast. 1974: Won World Leisure Class Backgammon Championship. 1987: Established Benihana, Inc. a publicly-traded arm of Benihana. 1995: Sold 21 Benihana restaurants to Benihana National Corporation. 1998: Resigned as chairman and CEO of Benihana, Inc.
was created in 1987. Aoki’s privately held restaurants were now known as Benihana of Tokyo. He began to turn his attention to other business ventures, including Dyna-Tech Nutritionals, Inc., a line of diet and health products. In 1989, Benihana, Inc. was sued by shareholders accusing Rocky Aoki of diverting funds from the publicly owned Benihana to Benihana of Tokyo. The lawsuit was settled in 1991. The early 1990s brought dismal performance to the Benihana chain. In 1995, Aoki sold all 21 U.S. restaurants, except those in Hawaii, to Benihana, Inc. The buyout deal was worth about $6.15 million to Aoki, who remained majority stockholder, chairman, and chief executive of Benihana, Inc. From 1993 to 1998, Benihana again enjoyed mass popularity and financial success. The company’s net income rose 191% and revenues rose nearly 43 percent over those five years. For the fiscal year ending in March, 1998, sales were a record $99.8 million, a one-year increase of 18.2%, while net income rose 20.4% In 1998, the Benihana chain consisted of 49 restaurants-including 9 recently-acquired Samurai and Kyoto restaurants.
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In 1964, nobody knew what a theme restaurant was. But, before Hard Rock Café and Planet Hollywood, there was Rocky Aoki and Benihana. His innovation led to the creation of one of the most successful restaurant chains in history, and brought entertainment and Japanese food to American diners. Rocky Aoki is no stranger to philanthropic causes. He was recognized by the United Nations’ Environmental Program Directorate for sponsoring the New York Times environmental supplement, Imagine. He also established a Green Arts Program promoting international art exchanges. In 1993, Aoki sponsored art exhibits in Japan, the United States and England, showcasing the work of environmentally concerned Japanese artists.
Sources of Information Contact at: Benihana 8685 NW 53rd Terrace Miami, FL 33166 Business Phone: (305)593-0770
Bibliography “Benihana Buying Founder Aoki’s Units.” Nation’s Restaurant News, 16 January 1995. “Company Capsule, Benihana, Inc.” Hoover’s Online, 1998. Available from http://www.hoovers.com/. Gall, Susan and Irene Natividad, eds. The Asian American Almanac. Detroit: Gale Research, Inc. Kane, Cheryl. “Rocky’s New Gig: Diet Pills.” South Florida Business Journal, 21 January 1994. Walker, Elaine. “Benihana CEO Quits Amid Personal Inquiry.” Miami Herald, 20 May 1998. Zia, Helen and Susan B. Gall, eds. Notable Asian Americans. Detroit: Gale Research
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Steven Appleton Overview
Micron Technology, Inc.
When Steve Appleton became chairman and chief executive officer (CEO) of Micron Technology in 1994, his role was to guide the semiconductor manufacturing company through a turbulent time. With increasing competition from Japanese manufacturers and the company’s management in turmoil, the then-34 year old Appleton provided the direction and leadership necessary to maintain Micron’s dominance in the industry.
Personal Life Steve Appleton grew up in Los Angeles, the son of a school teacher mother and a father who owned doughnut shops. He studied hard and graduated from high school as class salutatorian, but according to a profile by Peter Burrows in Business Week, he ran with a rough crowd. One friend reportedly died of gunshot wounds and others ended up in prison. Appleton looked to Tennis as the ticket out of the tough neighborhood. By sheer guts and determination, Appleton made himself into a top high school player. His success on the courts led him to Boise State University (BSU), which he attended on scholarship. Competing for BSU in the Big Sky tennis tournament in 1982, Appleton broke his right hand. The next day, he cut off the cast and competed in the finals, finishing second in singles and winning in doubles. He taught himself to play lefthanded to finish the season. Today, Appleton is a fitness fanatic who can bench-press three 300 lbs. His daily schedule includes
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Career Details After completing his bachelor’s degree in business administration at Boise State in 1982, Appleton joined Micron’s graveyard shift in 1983. He started at $4.46 per hour on the company’s 64-Kbit DRAM line. DRAM (Dynamic Random Access Memory) chips are the most common type of memory chip used in the computer industry. By the time Appleton began his career, many U.S. DRAM manufacturers had been destroyed by Japanese competition. Only Micron and Texas Instruments were still manufacturing the chips in the United States, and Micron, using a unique manufacturing process, had established itself as the low-cost producer. Appleton’s drive propelled him from the production floor to the board room in just 12 years. On the way, he worked as production manager, director of manufacturing, and vice president for manufacturing. He became president and CEO in one of the executive upheavals for which Micron has been notorious. In 1994, company cofounder Joe Parkinson, along with his chief operating officer and chief financial officer, left the company for “personal reasons.” Industry analysts suspected friction between Parkinson and Jack Simplot, a potato farmer whose $150 million investment in the company made him Micron’s largest single investor.
Steve Appleton addresses the media during a news conference following Micron’s annual shareholders’ meeting. (AP Photo/Idaho Statesman, Chris Chung.)
just four hours of sleep, but he schedules his long work day around 4:00 a.m. and 9:00 p.m. workouts in his gym. He also flies his own fighter plane and competes in triathlons, skydiving, and motorcycle racing. Appleton is divorced and is the father of two daughters. He is a member of the board of directors of the Semiconductor Industry Association and of St. Luke’s Hospital in Boise, Idaho. He is a trustee of Boise State University and a member of the Semiconductor Technology Council.
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The announcement that Appleton would take over management of the company surprised Wall Street, according to Idaho Business Review, and indicated that there might be a serious rift between shareholders and management regarding the future direction of Micron. But as stock analyst Thomas Thornhill noted in Idaho Business Review, “The silver lining in all this is that Steve came up through the operating side of the company, and has great depth of operating experience, and has day-today responsibility for the principal operating unit.” According to the Seattle Times, workers cheered Appleton’s ascension, saying that he knew the company from the ground up and would be the right person to keep Micron competitive in the industry. According to Business Week, Micron’s workers admire him for his work ethic, enthusiasm, and willingness to hear all sides of an issue. As a line manager, it is said, he once mediated a worker’s complaint with his boss by interviewing all 22 workers on the shift, and then moving the supervisor. He also introduced a novel, but popular, pay plan. Micron employees are given a lower base pay than they would receive at other companies, but they take home 10 percent of the company’s profits. Thus, the payroll drops in a bad year, limiting layoffs. In a good year, workers share in the bonanza. When Appleton assumed leadership of Micron in 1994, he announced that the company would continue the basic strategy that had brought it success. It would continue to emphasize quality and low cost, and to control as much as possible in the production process. By
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also focusing on its workers, the company ensured a loyal and skilled labor force. Appleton’s widespread popularity throughout the company ultimately saved his job. It was the support of 20 angry and frustrated friends and colleagues that set in motion his recall when he was dismissed by Micron’s board of directors in January 1996. Company executives demanded that the board rehire Appleton and insisted that the board end its autocratic interference in the company’s management. According to Fortune’s Andy Sewer, the board, recognizing it had fired the best man to run Micron, was in a no-win situation unless it acted immediately to rehire Appleton. As part of his agreement to return, Appleton obtained a promise that the board would cease its day-to-day oversight of the company and later saw to it that many of his rivals left the company. By 1997, Micron had topped Japanese and South Korean companies to become the largest unit-volume DRAM producer in the world. Converting to smaller geometries and larger wafers in the production process, enabled the company to beat its competitors. Micron produces some of the semiconductor industry’s smallest die sizes: all of Micron’s DRAMs are manufactured in eightinch wafers at .25 or .21 micron (one-millionth of a meter) line widths. Micron uses a unique intelligent burnin and test system as part of its stringent quality assurance and testing process on every device it makes. In late 1997, Appleton announced that Micron would devote 10 percent of its wafer starts to 64-Mbit chips. His announcement made it clear that Micron intended to remain competitive in the future of the memory chip market. “Micron will be there when the 64 Meg takes off, and we will become the market leader—just as we have in 16-Meg,” Appleton told Jack Robertson of Electronic Buyers News. He also announced that the company would spend up to $1 billion in capital investment in fiscal 1998.
Social and Economic Impact Micron has remained a success due to Appleton’s unique business strategy. Under Appleton, Micron has survived the fierce competition in the DRAM industry by focusing on quality and low cost. The company’s main facility is located in Idaho, where costs for land, facilities, and labor give it a competitive edge. Micron has been very conservative about expanding operating facilities. It runs its plants at about 90 percent capacity while other manufacturers run at 60 to 70 percent, enabling Micron to keep production costs low. The company began construction of a $2.5 billion test facility in Lehi, Utah, in 1995, but has decided not to open the plant until market conditions warrant.
Chronology: Steven Appleton 1983: Joined Micron Technology as a factory worker. 1994: Appointed chairman and chief executive officer of Micron. 1996: Fired and re-hired as chairman and chief executive officer. 1996: Micron received ISO 14001 certification for environmental standards. 1996: Joined team to negotiate U.S.-Japan Semiconductor Agreement. 1997: Micron became world’s largest unit-volume DRAM producer. 1997: Micron earned U.S. EPA Evergreen Award for Pollution Prevention
mental issues. In 1996, the company received ISO 14001 certification—an internationally recognized standard for environmental management. Micron’s environmental team focuses on reduction of hazardous chemicals in the manufacturing process and on recycling. In 1997, Micron earned the U.S. Environmental Protection Agency’s Evergreen Award for Pollution Prevention. EPA regional administrator Chuck Clarke praised award recipients as “models of how American businesses can achieve economic prosperity while not jeopardizing the environmental quality of future generations.” Appleton was appointed to the National Semiconductor Technology Council by President Clinton. In 1996, Appleton was one of three SIA executives involved in negotiating the U.S.-Japan Semiconductor Agreement. Appleton has been instrumental in ensuring a place for U.S. companies in the computer age.
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In addition to its sound business strategy, Micron has served as an example in its commitment to environ-
Contact at: Micron Technology, Inc. 8000 S. Federal Way PO Box 6 Boise, ID 83707-0006 Business Phone: (208)368-4000 URL: http://www.micron.com
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Bibliography Burrows, Peter. “Micron’s Comeback Kid.” Business Week, 13 May 1996.
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Robertson, Jack. “One-On-One—Appleton plots Micron’s 64-Mbit DRAM strategy.” Electronic Buyers News, 1 September 1997.
Corporate Profile, Micron Technology, Inc. Available from http:// www.micron.com/html/body_corporate_profile.html
Robertson, Jack. “Steve Appleton-Micron Scores Gains as Others in DRAM Arena Hemorrhage.” Electronic Buyers’ News , 22 December 1997.
Dunphy, Stephen H. “Staying chipper: Despite shake-up, Micron exudes confidence in future.” Seattle Times, 3 October 1994.
Sanchez, Jesus. “Micron CEO is reappointed days after resigning.” Los Angeles Times, 27 January 1996.
Environmental Policy, Micron Technology, Inc. Available from http://www.micron.com/html/body_environmental_policy.html
Yoder, Stephen Kreider. “Micron Watchers are Left Baffled by Resignation of Top Executives.” Idaho Business Review, 26 September 1994.
MacLellan, Andrew. “Appleton Incident Puts Focus on Micron.” Electronic News, 5 February 1996.
Who’s Who in America. New Providence, NJ: Marquis, 1996.
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Minoru Arakawa Overview Since 1980, Minoru Arakawa has served as president of Nintendo of America, a subsidiary of Nintendo Ltd. Under his leadership, the company grew to become a major provider of computer games and software to American consumers. Forced in the mid-1990s to shift strategies, the company remained a viable competitor in the industry and has made internal changes, such as developing more resources in-house, to continue as a force in this highly competitive industry. Moreover, the company continued to develop new games and resources to meet consumer demands.
(1946-) Nintendo of America, Inc.
Personal Life Minoru Arakawa was born in 1946. He studied engineering and obtained master’s degrees in that subject from both Kyoto University and the Massachusetts Institute of Technology. In 1981 he immigrated to the United States and began serving as president of Nintendo of America, a subsidiary company of Nintendo Ltd. Although an outwardly quiet and mild-mannered man, colleagues at Nintendo described Arakawa as a savvy negotiator with a competitive and stubborn streak. He worked well with coworker Howard Lincoln even when Lincoln was selected over Arakawa for the top position of chairman of the company. The two shared adjoining offices and regularly spent family holidays together. Arakawa married Yoko Arakawa, the daughter of Hiroshi Yamauchi, head of Nintendo Ltd.
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After its 1993 assault and advertising coup, Sega grabbed 57 percent of the American market for the 16 bit consoles used to play the games. Yamauchi, Nintendo’s president, blamed Arakawa for the loss in market because Arakawa failed to respond quickly and effectively to Sega’s ad campaign.
Chronology: Minoru Arakawa 1946: Born. 1949: Fusajiro Yamauchi started Nintendo Ltd. 1980: Immigrated to United States of America. 1980: Became president of Nintendo of America. 1992: Nintendo Ltd. purchased Seattle Mariners baseball team. 1993: Nintendo negatively impacted by Sega ad campaign. 1993: Stalled publication of Game Over: How Nintendo Zapped an American Industry, Captured Your Dollars, and Enslaved Your Children. 1994: Arakawa bypassed for chairman promotion by Howard Lincoln. 1997: Released Nintendo 64. 1998: Released Zelda 64.
Yamauchi publicly commented on his decision, claiming that he wanted to see Arakawa give more authority to high level Americans but that was not all. Yamauchi publicly criticized Arakawa, making it clear that his job was in jeopardy if his performance results did not improve. Such criticism exposed the company’s weaknesses. A Nintendo vice president of marketing, Peter Main, admitted in a Television Digest article that the business needed a jolt and that a lot of fundamental changes were underway, including relying less on Japan for supplying company software and hardware development. The change in leadership was needed to redirect the company along a more aggressive and visible direction. Arakawa instigated an aggressive marketing campaign to respond to market share losses caused by Sega. Software began to be developed in-house in order to cut costs. Nintendo also directed its focus away from CDROM software, believing that consumers would find the necessary hardware too expensive.
Career Details Arakawa came to Nintendo of America in 1980, when he was hired by his father-in-law and head of Nintendo Ltd., Hiroshi Yamauchi, to serve as president of Nintendo of America. Previously, Arakawa had built office buildings and hotels in Vancouver, British Columbia and had worked for trading companies in Japan such as the Marubeni Company. Prior to 1993, Nintendo held the majority of the $6 million market for video games in the United States. In 1994 a number of changes were implemented by the president of Nintendo Company Ltd., the parent company of Nintendo of America, which redirected the company strategy and, to a large extent, affected the career of Arakawa. The reason for this action was Sega, Inc., which proved to be a formidable competitor in this market. Sega unleashed its Sonic the Hedgehog character, and it rose to become a popular selling product, beating sales of Nintendo’s Super Mario character and related games. Sega was merciless in its strategy of upstaging Nintendo. It launched an advertising campaign that labeled Nintendo’s Mario character as uncool. Sega’s offensive was swift and fierce, making it difficult for Nintendo to respond quickly.
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Moreover, Yamauchi implemented several changes in response to the situation. In a move that surprised the business world, Yamauchi elevated Nintendo of America Executive Vice President Howard Lincoln to chairman, bypassing his son-in-law Arakawa in the process. According to Television Digest, the move demonstrated an unexpected power shift in the company.
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Despite what may have looked like internal rivalry to outsiders, Lincoln and Arakawa remained close friends and often spent holidays together when they weren’t overseeing the company from adjoining offices. By 1995, Nintendo Ltd’s sales had climbed to $4.7 billion, with Nintendo of America contributing less than half to the total. Arakawa had enormous respect for Lincoln and according to Arakawa’s wife, was very impressed with Lincoln from the start. Another Nintendo customer, Gregory Fischbach, founder of Acclaim Entertainment, commented that the company had recognized that the two men knew how to work together and if the company aligned them, maybe one plus one gets three. The two complemented each other with their skills. The more extroverted Lincoln served as media point person, and dealt with abstract ideas, while Arakawa was better with numbers. Both were skilled negotiators. Typical of past Nintendo strategy, Arakawa and Lincoln kept their future plans quiet while Sega publicly touted triumph. Unknown to Sega at the time, Nintendo was developing the game Donkey Kong Country, a product released in 1994 that sold 7 million copies in its first four months on the market. According to Lincoln, Nintendo also was in better financial shape than Sega dur-
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ing the public trouncing. In Puget Sound Business Journal Lincoln claimed that in 1994, Nintendo profits were five times greater than Sega’s, and that Sega held $2 billion in debt while Nintendo had none.
Social and Economic Impact Between 1985 and 1995 under Arakawa’s leadership, Nintendo of America grew from 75 to 1,400 employees and sales rose from $100 million to $4.7 billion. During this time the company introduced three new game platforms: the Nintendo Entertainment System, the Game Boy, and the 16 bit Super NES. During those 10 years, American consumers purchased more than 65 million games and corresponding software programs in the millions. Throughout the 1980s and 1990s, Nintendo and Sega dominated the video game market and filled a void left by the failed Atari Company in the 1980s. Nintendo and Sega sold game hardware—machines to play the games on—relatively cheaply and made money off related software. In fact, software proceeds made up a large part of Sega’s and Nintendo’s profits in 1993, with a combined total of more than $1 billion. Walter Miao, an industry analyst said in Fortune that “you can talk all you want about the electronic highway and video on demand but the only place anyone has ever sold anything interactive is in games.” Miao predicted that the computer game market would grow to $7.5 billion in 1994. Between 1987-1993, Nintendo and Sega managed to place 64 million game machines in American homes, nearly half of that market penetration was achieved in 1993, when Nintendo games reached 30 million American households. Nintendo continued to diversify its products and released the Nintendo 64 in 1997. The new product boosted Nintendo sales figures and attracted players other than the typical Nintendo customer, a 7-14 year old boy. Market research by Nintendo indicated that 40 percent of those buying the new Nintendo 64 were over 18 years old. In 1998, Nintendo planned a release of a related product, the game, Zelda 64. Nintendo, while monitoring the Internet gaming market, did not believe that the two types of customers overlapped. The company, in the late 1990s, continued to focus on video games rather than interactive games that could be played over the Internet. Nintendo used its clout to modify the publication of Game Over: How Nintendo Zapped an American Industry by forcing the publisher to discard thousands of book dust jackets that featured the Nintendo character Mario. The book gave an inside look at management practices
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at the company, portrayed Yamauchi as a workaholic and Minoru and wife Yoko as fearless bootstrappers who weren’t afraid to work on assembly lines when needed. Arakawa and other Nintendo peers such as Lincoln regularly practiced community philanthropy and remained quiet about it rather than taking the opportunity to promote themselves. When Yamauchi purchased the Seattle Mariners baseball team for $75 million to keep the team in the community, Arakawa and others annually gave away 600 baseball tickets to a boys and girls club. Cost to the company for the yearly donation (including tickets, soda and food) was estimated at $500,000.
Sources of Information Contact at: Nintendo of America, Inc. 4820 15th Ave. NE Redmond, WA 98052 Business Phone: (206)882-2040 URL: http://www.nintendo.com
Bibliography Baker, M. Sharon. “A Feistier Nintendo Fields Tag Team of Lincoln and Arakawa.” Puget Sound Business Journal, 10 March 1995. Carlton, Jim. “Nintendo’s Lincoln is Named Chairman of U.S. Unit as Market Share Slides.” Wall Street Journal, 16 February 1994. Deutschman, Alan. “Books and Ideas, Mind Games, Trade Myths, and More.” Fortune, 31 May 1993. Dun & Bradstreet, Inc. Million Dollar Database. Dun & Bradstreet, 1997. Available from http://www.dnbmdd.com/netbrs/ pgate...cope=range&x_rangelo=1&x_rangehi=1. Gross, Neil and Robert D. Hof. “Nintendo’s Yamauchi: No More Playing Around.” Business Week, 21 February 1994. Newnham, Blaine. “Mariners Home: Ditto Fans: Team has to Wait for Any Boost in Attendance.” Seattle Times, 13 June 1992. “Nintendo America Shuffles Top of Deck.” Television Digest, 21 February 1994. Sheff, David. Game Over: How Nintendo Zapped an American Industry, Captured Your Dollars, and Enslaved Your Children. Random House, 1993. Snider, Mike. “Nintendo Plans Zelda 64 for Next Big Play.” USA Today, 23 June 1997. Tetzeli, Rick. “Serious Fun, Forget Pacman.” Fortune, 27 December 1993. Who’s Who Among Asian Americans. Detroit: Gale Research, 1994.
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Elizabeth Arden (1878-1966) Elizabeth Arden, Inc.
Overview Elizabeth Arden was a pioneer in the U.S. cosmetics industry, introducing American women to products such as lipstick, rouge, and mascara. Starting with a single shop on Fifth Avenue in New York City, she developed her company into an international business that reached $60 million in annual sales. While she cultivated a sophisticated, high-society image, Arden promoted the idea that beauty was within the reach of all women.
Personal Life Elizabeth Arden was born Florence Nightingale Graham in 1878 in Woodbridge, Ontario. Her father, William Graham, was Scottish and her mother, Susan (Pierce) Tadd, was English. She was the fourth of five children. The couple immigrated to Canada, where they worked a farm near Toronto. Arden was married twice, to banker Thomas Jenkins Lewis in 1915 (divorced 1934) and to Prince Michael Evlanoff in 1942 (divorced 1944). Subsequently, she lived with her brother’s daughter, Patricia Young. Arden had a particular love for horses and dogs. She enjoyed flower and landscape gardening and interior design. By the end of her life, she had an extensive art collection that included works by O’Keefe, Cassatt, Laurencian, and Chagall. Contemporary accounts of Arden’s childhood put a rosy cast on her upbringing in Canada. Accounts of her father describe him raising exotic vegetables under glass, and her education was supposedly carried out in Cana-
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dian schools and by tutors. Since her death, however, it has been thought that Arden did not finish high school because she was poor and needed to work. She worked as a dental assistant, cashier, and stenographer before moving to New York City with her brother in 1908.
Career Details Arden was introduced to the cosmetics industry when she took a clerical job with Eleanor Adair, a London firm with a shop on Fifth Avenue. She learned how to give facial treatments and studied the basic elements of cosmetic formulas. By 1909 Arden had opened her own Fifth Avenue shop with partner Elizabeth Hubbard. The pairing did not flourish, however, and Arden soon was sole owner of the company. She then adopted the name Elizabeth Arden for the business and for herself. Some sources say Arden formed her name by taking “Elizabeth” from her former associate, Elizabeth Hubbard. Other sources attribute the new first name to Queen Elizabeth. It is agreed that “Arden” comes from a favorite poem, Tennyson’s “Enoch Arden.” Arden’s own flawless and youthful complexion was excellent advertising for her facial treatments and creams. In 1914, however, Arden traveled to France, where she saw cosmetics skillfully applied and where—unlike in the United States—they were gaining popular acceptance. She proceeded to offer products such as lipsticks, rouges, mascara, and foundation creams, as well as fluffy, nongreasy facial creams. Working with chemist A. F. Swanson, she developed two products that became extremely popular, Cream Amoretta and Ardena Skin Tonic. Such products were truly innovative and demanded premium prices. Their success allowed Arden to move into improved quarters in New York and to open branches, first in Washington, D.C. and Boston, then in Paris by 1922. By 1957 there were some 150 Elizabeth Arden salons.
Elizabeth Arden.
Arden increased her cosmetics sales by developing a wide range of colors and shades, allowing her customers to coordinate their makeup with their own coloring and clothes. Having established herself as a beauty expert, Arden opened two health resorts that offered special diets and exercises for clients. Her first health and beauty spa, Main Chance Farm, located in Mount Vernon, Maine, was the first of its kind in the United States. Later, she opened a second spa in Phoenix, Arizona. Beginning in the 1940s, she also sold custom and readyto-wear clothes, designed especially for her salons. However, Arden did not build her empire solely on sales to the elite clientele who could shop her salons. She also promoted her business to a far larger audience by selling her products in department stores and by offering written advice, such as the pamphlet “The Quest of the Beautiful.”
As chairperson of the board and director of Elizabeth Arden, Inc., Arden was an extremely feminine figure: petite and often dressed in pink. Although her first husband worked as manager of the cosmetics line during their marriage, she was always in full control of the company’s development. In her beloved hobby of horse racing, Arden was also known as a hands-on manager and a successful one, too. Not only did her horse Jet Pilot win the Kentucky Derby in 1947, her stables often made impressive winnings, such as the $589,000 they earned in 1945.
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(The Library of Congress.)
Social and Economic Impact Beginning at a time when no respectable woman would use a product beyond facial cream, Arden succeeded in selling makeup, as well as expensive facial treatments, creams, and tonics. She provided her customers with superior products formulated by her own chemists and presented them in stylish, elegant salons. She quickly made her cosmetics business a popular and financial success. During her lifetime, the company reached $60 million in annual sales and cosmetics became one of the top 10 industries in the United States.
Arden was an astute businesswoman, who gave equal attention to developing breakthrough products and to creating a sophisticated, high-society image for her company. In the case of one of her best-selling products, Amoretta face cream, she persisted in working with chemists until they created a pleasant, light cream that
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Chronology: Elizabeth Arden 1878: Born. 1908: Moved to New York City and took first job in the cosmetics business. 1909: Opened shop on Fifth Avenue in New York City, selling facial creams. 1909: Changed her name from Florence Nightingale Graham to Elizabeth Arden for business purposes. 1914: Began selling cosmetics such as lipstick, rouge, and mascara. 1940: Began selling designer clothing. 1947: Arden’s racehorse, Jet Pilot, won the Kentucky Derby.
Arden was an active Republican and during the 1940 presidential election, campaigned vigorously against Franklin D. Roosevelt and for Wendell Willkie. Soon after the election, she ran into trouble with the Federal Trade Commission (FTC) who charged her with violating the Robinson-Patman Act by not properly training her employees. Convinced that the Democrats were behind the FTC’s actions as punishment for her stand against Roosevelt, Arden appealed the FTC’s charges to the U. S. Supreme Court. She lost the case, but the ruling required little change in the structure of Arden’s company. Now under the corporate ownership of Eli Lilly, the Elizabeth Arden, Inc. continues to be a successful and respected entity. However, it has lost some of the cachet that it carried during its creator’s lifetime. Arden was a key figure in the company’s corporate life and in its public image. Seemingly, Arden herself could not imagine the company existing without her, for although she was approaching the age of 90, she never made special arrangements for the disposal of her company, which had to be sold in order to pay inheritance taxes. Until her death in 1966, Elizabeth Arden remained the sole owner of her company.
1953: Named to the Boston Distribution Conference Hall of Fame. 1957: Owned over 150 Elizabeth Arden salon branches. 1966: Died.
Sources of Information Bibliography Bondji, Victor, ed. American Decades: 1940-1950. Detroit: Gale Research, 1995.
was far superior to the oily petroleum products that were common. To create an elegant, elite image for her business, Arden not only focused on carefully decorating her salons and using finishing touches such as a liveried doorman, she also established herself in New York society. This difficult task was aided by her friendships with Elizabeth Marbury and Elsie De Wolfe. She also made advances in social circles by marrying a Russian prince. This event is sometimes seen as a competitive stroke against her greatest business rival, Helena Rubenstein, who had also married royalty. The rivalry between these two women was highly publicized, with Arden referring to Rubenstein as “that woman.”
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Candee, Marjorie Dent, ed. Current Biography Yearbook. New York: H. W. Wilson, 1957. Current Biography Yearbook. New York: H.W. Wilson Co., 1966. Fucini, Joseph and Suzy. Entrepreneurs. Boston: G.K. Hall & Co., 1985. Gay & Lesbian Biography. Detroit: St. James Press, 1997. Martin, Albro. Encyclopedia of World Biography. Palatine, IL.: Heraty, 1987. Vare, Ethlie Ann and Greg Ptacek. Mothers of Invention: From the Bra to the Bomb: Forgotten Women & Their Unforgettable Ideas. New York: William Morrow, 1988. The World Almanac Biographical Dictionary. New York: World Almanac, 1990.
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Ted Arison Overview In 1973 Ted Arison retired from his commercial shipping operation in New York City and moved to Miami, Florida. There he bought an old, outdated ship called the Mardi Gras for $1. Although the ship soon ran aground, Arison turned the debt-ridden vessel into the flagship of his Carnival Cruise Lines. By 1988, Carnival had become the biggest cruise operation in the world and Arison himself had become one of the world’s richest men, with net assets of more than $1.5 billion.
(1924-) Carnival Cruise Lines Inc.
Personal Life Ted Arison was born in Tel Aviv in 1924, the son of Meir, a multi-millionaire magnate who operated the largest shipping company in Palestine, and Vera Arisohn. “He and his family were on vacation in Yugoslavia in 1939 when World War II broke out,” writes Estelle Lander in New York Newsday. “Arison’s father secured live seats on a flight out of Rome, stuffed his relatives into a cab for a 600-mile ride, and escaped.” Arison married Mina Wasserman in April, 1948. The marriage, however, ended in divorce and Arison married again in 1968, this time to Marilyn B. Hersh Lin. He has two children, Mickey and Sharon, from his first marriage, and a son, Michael, from his second. Arison began his career working as a manager for the firm M. Dizengoff & Company in Tel Aviv from 1946 to 1951. He had served in the British army during World War II and he interrupted his position with
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Ted Arison.
(AP/Wide World Photos, Inc.)
Dizengoff to serve with the Israeli Army during the 1948 war for independence. In 1952 he liquidated the family business, according to David Nickell in South Florida Business Journal, and relocated to the United States. He “formed a syndicate to organize a cargo line,” explained Lander, but “went broke after buying too many ships during the Korean War; when the war ended, the ships’ value dropped.” By 1959 he had reversed his misfortunes, becoming owner, chairman and president of Tran-Air, an air freight transportation company in New York. In 1966, at the age of 42, he retired from Tran-Air, sold the company, and moved to Miami, Florida.
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Career Details Arison’s career as a cruise line executive really began after his retirement. Only two weeks after selling Tran-Air, said Nickell, returned to the shipping business as owner and operator of the Arison Shipping Company. His connections in Miami brought him in touch with Meshulam Riklis, with whom Arison founded Carnival Cruise Lines in 1972. The oftenrepeated story of the company’s beginnings is that Arison paid Riklis a total of $1 for a retired transatlantic ocean liner, which he renamed the Mardi Gras. Arison also assumed the new company’s $5 million in debts.
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Although there were some early failures—the most spectacular of which was the running aground of the Mardi Gras on its first trip with a passenger list made almost entirely of travel agents—business quickly picked up. Arison bought Riklis’s share of the company in 1974, and by the early 1980s he was showing profits in the millions of dollars. In 1985 Carnival Cruise Lines was rated the top private company of the year by the South Florida Business Journal, and the following year, Arison sold shares of Carnival to the public, but retained about 80 percent of the company’s stock. In the early 1980s Arison began to diversify his holdings. He surrendered the presidency of Carnival Cruise Lines to his eldest son Mickey in 1980 and began to enter other lines of business. Arison created Carnival Leisure Company to run a casino and hotel facilities in the Bahamas, and Nosira Shipping Ltd., a freight-transport company operating out of the United Kingdom. He also acquired New York City-based Ensign Bank, a small thrift institution, and began cautiously looking for opportunities to merge it with other small banks. “In 1984 and 1987,” wrote Susan Harrigan in New York Newsday, “he withdrew offers to buy Freedom Savings & Loan Association of Tampa, Fla., and the Miami-based American Savings & Loan Association when talks entered the detail stage.” Attempts to merge the institution with Anchor Savings Bank in 1988 and Centrust Bank of Miami in 1990 were also abandoned. Finally, in September of 1990, the federal government had to seize control of the bank because of severe losses, costing Arison about $11 million. The bank, explained Newsday contributor Greg Steinmetz, “had $1.79 billion in assets before the failure and lost $34 million since the beginning of the year.” Ensign was not Arison’s only problematic investment in the late 1980s and early 1990s. He owned about 50 percent of the Miami Heat, a National Basketball Association (NBA) team that suffered the league’s worst season-opening losing streak in its first 18 games played. In Miami he also owned a 27-story luxury condominium property, Harrigan added, which went mostly unoccupied during the late 1980s because of a downturn in the local real estate market. Arison retired from active daily service with Carnival in 1991, turning management of the company over to his son Mickey. Since that time, he has divided his time and money between supporting the arts and contributing to philanthropic foundations in Israel, especially providing housing for new immigrants, said Betsy Mullins in the South Florida Business Journal.
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Chronology: Ted Arison 1924: Born in Tel Aviv. 1946: Began working as manager for M. Dizengoff & Company. 1948: Served in Israeli army. 1952: Emmigrated to United States. 1959: Became president of Tran-Air Company in New York City. 1966: Moved to Miami, Florida, and founded Arison Shipping Company. 1972: Founded Carnival Cruise Lines in partnership with Meshulam Riklis. 1983: Created Ensign Bank. 1988: Carnival becomes largest cruise line in the world. 1991: Retired from Carnival, turning the business over to his son Mickey.
in the South Florida economy. “Company officials,” stated the South Florida Business Journal in 1985, “estimate that its cruise business pumped $60 million into the local economy last year in the form of hotel stays, meals and local transportation utilized by Carnival passengers before and after their cruises.” The company pays no U.S. taxes because its ships are registered in Panama. Arison’s policy of keeping a fairly large part of the profits in the company, also helps keep Carnival almost debt-free. Carnival experienced regular growth during the 1970s, but it was during the 1980s that the line saw large-scale success. Arison, said Lander, “developed the seven-day cruise package while working with what is today Carnival’s major competitor—Norwegian Cruise Lines. After buying Carnival . . . he turned it around by promoting free cruises for airline personnel and cutting prices.” “The company follows a policy of strict expense control and lean management,” stated Harrigan, “but heavy service aimed at keeping passengers happy.”
With projected yearly incomes in the hundreds of millions of dollars, Carnival has become a major force
Carnival is credited with pioneering the modern notion of a vacation cruise for average people. By the 1970s the passenger shipping industry was viewed by
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many as a dying business because flying had become a more convenient and popular mode of travel. What made Carnival Cruise Lines special was Arison’s concept of marketing cruises—once reserved for the wealthy and retired—to young, single people. Arison lowered prices in order to attract these professionals. Cruises in 1989, said Susan Salter in Newsmakers, could start as low as $425 for three days on board, including airfare to and from the point of departure. The magnate also launched an aggressive advertising campaign that emphasized fun and excitement. Carnival ships regularly carry casinos, discos, movie theaters, and nightclubs in order to keep their clientele entertained. This was due, said Harrigan, “more to serendipity than to studies. In order to save money, the Mardi Gras had to cruise slowly, and Arison filled it with entertainment such as discos and casinos in order to distract the passengers.” Such measures made the cruise itself an attraction rather than just transportation to a vacation spot, as had been true before Carnival entered the business. Arison has made the “fun cruise” concept work in several different markets, providing destination cruises to resorts and casinos in the Bahamas and elsewhere. In partnership with developer Douglas Spohn he also created the Olde Towne Athletic Club, a business and social club that was aimed at middle and upper-class families. Olde Towne Athletic Clubs Inc. opened several branches in Georgia in the late 1980s. Arison’s desire to remain in the business swirl never ceased. Retirement never held him back from pursuing other interests. Failed ventures did little to dampen his business spirits. He is a prime example of how good busi-
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ness skills can be transferred, reshaped and updated to address a variety of business needs.
Sources of Information Contact at: Carnival Cruise Lines Inc. 3915 Biscayne Blvd. Miami, FL 33137 Business Phone: (305)263-1007 URL: http://www.carnival.com
Bibliography “Carnival Gets Nod from Business Journal, DHS as Initial Winner of Top Private Company Award.” South Florida Business Journa, 19 August 1985. Fogarty, Fred E. “Arison: Life Is a Carnival.” South Florida Business Journal, 22 July 1985. Harrigan, Susan. “Ensign, Anchor Try to Set Sale.” New York Newsday, 26 December 1988. Lander, Estelle. “Ted Arison Builds His Empire with Shipping and Savings.” New York Newsday, 19 November 1998. Mullins, Betsy. “Arison Sells Stock, Profits $17.7 Million.” South Florida Business Journal, 26 February 1993. Nickell, David. “Arison’s $1.8 Billion Makes Him Wealthiest in South Florida Area.” South Florida Business Journal, 30 May 1988. Salter, Susan. “Ted Arison.” Newsmakers, 1990 cumulation. Detroit: Gale Research, 1991. Steinmetz, Greg. “Feds Take Over Ensign; High-Risk Loans Cited.” Newsday, 1 September 1990.
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Giorgio Armani Overview Giorgio Armani has been a major fashion influence on both sides of the Atlantic since the early 1980s. He challenged traditional designs by creating elegant clothing that emphasized the body, becoming in the process one of the most respected creators of apparel for both men and women. His fashions are in great demand among celebrities and have also changed the way average Americans approach fashion.
(1934-) Giorgio Armani SpA
Personal Life Giorgio Armani was born on July 11, 1934, in Piacenza, Italy, a small town southeast of Milan. He was the second of three children of Maria and Ugo Armani, who managed a transport company. Though Armani never had any formal art training, he has said that growing up in Italy helped foster his aesthetic sense because it afforded him so many opportunities to see excellent design in architecture, interiors, sculpture, and painting. Armani entered the field of fashion in an indirect way. To please his parents, he began studying medicine at the University of Bologna in 1952. He quickly realized, however, that becoming a doctor was not for him because he could not stand the sight of blood. After briefly pursuing photography and then serving in the Italian Army, he took a job as a window dresser at Milan’s La Rinascente department store. Armani remained there for seven years, learning the nuts and bolts of merchandising and discovering that he had a flair for retailing that enabled him to work his way up to the position of menswear
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change the rigid, boxy jackets that had until then dominated men’s fashion. “They turned out the jackets like cars—they all looked the same,” declared Armani. Instead, he emphasized fluid lines and achieved his characteristic “unstructured” look by eliminating interfacings, shoulder pads, and linings. “I invented a type of sports jacket that’s relaxed, informal, less stiff,” he observed. “The body moved easier in a suit made of soft fabrics.”
Giorgio Armani.
Though Armani’s styles were expensive, their elegance was undeniably appealing. Within a year, he was designing for women as well as for men after observing that they were shopping for themselves at his menswear stores. In 1976, only two years after Armani’s designs debuted in Italy, Barney’s of New York introduced the Armani line in the United States. Combined sales of Armani clothes reached $90,000 that year, and soon other designers had begun to imitate his distinctive style. In 1979, the designer launched a second line of clothing. It was more traditional but still focused on elegance of structure and material. That same year, Armani received a Neiman-Marcus Award for Distinguished Service in the Field of Fashion. In 1981, more than 600 American fashion writers chose him to receive a Cutty Sark Award as outstanding international designer. (Popperfoto/Archive Photos.)
buyer and later fashion coordinator. He eventually went on to become a major success in the fashion world. Armani lives what he calls an “absolutely banal” or dull life in his 400-year-old palazzo (palace) in Milan. This building houses his studio, his two-level apartment, an indoor pool, and apartments for both his mother and for his partner, Galeotti. At the center of the palazzo is a ballroom where he puts on fashion shows. While he is known in Milan as “The Maestro,” Armani is a shy man who prefers not to be in the limelight. A vegetarian, a non-smoker, and a nondrinker, he describes himself as a workaholic who oversees every detail of production at his company, from designing to advertising. He considers his employees his “family.”
Career Details The various positions Armani held at La Rinascente enabled him to obtain an extensive education in the complex world of retailing and marketing. After leaving La Rinascente, Armani took a job at the textile and garment firm Nino Cerruti, where he developed an understanding of fabrics and industrial tailoring. In 1974, Armani launched his own design label with money that he and a partner raised by selling a Volkswagen. The new company, named Giorgio Armani SpA, had a working capital of only $10,000. From the very beginning, Armani’s styles were distinctive. As he explained in an interview with Playboy, his goal was to
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In 1980, Armani opened Giorgio Armani U.S.A. in New York City. Employing mass production techniques from the Italian firm Gruppo Finanziorio Tessile, he was able to lower the prices of his garments significantly while retaining their high quality. Featuring men’s suits priced in the range of $275 to $400 instead of $700 or $800, the Armani line began attracting a wider range of customers. That same year, Armani designed the wardrobe worn by actor Richard Gere in the film American Gigolo, which brought him even greater visibility. By 1982, his company’s estimated total revenues were $135 million, a figure that represented a 60 percent increase over 1981 sales. In 1982 Armani became the first fashion designer to be featured on the cover of Time magazine since Christian Dior. During the 1990s, he dressed several prominent movie stars for Oscar night ceremonies, imbuing Hollywood with “drop-dead glamour.” According to the Fashion Page web site, in 1998 his company boasts sales of almost $1.7 billion, with 2,000 stores selling Armani products worldwide. His products now include not just clothing but perfume, accessories, and even umbrellas. Armani believes that the future of the fashion industry lies in lifestyle marketing. As he told the Daily News Record, “I would like to develop new product applications that could be used for interior design, such as furniture, lamps, and other objects .... The designer has entered our lives in all sectors—people just won’t accept a mundane object anymore.”
Social and Economic Impact Armani considers his greatest achievement to be the creation of a more casual, relaxed image for men. “I al-
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ways believed that men needed to be as comfortable in their clothes as women were,” he told the Daily News Record. “I think I will be remembered as someone who, to a certain extent, broke the rules.” By eliminating the superfluous, focusing on comfort, and acknowledging the elegance of simplicity, Armani has changed fashion for women as well as for men. His flowing, neutral-toned jackets for career women replaced the austere, “dress-for-success” suits that aped what businessmen typically wore. He introduced beautiful fabrics and subtle tailoring, following his own inspirations rather than a rigid fashion formula. For example, a trip to Japan inspired much of his 1981 collection, and an Italian motorcycle sport influenced his “Easy Rider” collection of 1982. “Drastically imposed a fashion . . . would mean having no respect for the consumer,” he once explained. “As far as I am concerned, I do just the opposite: if I catch sight of a man or woman on the street dressed in a way that strikes me as uniquely elegant, I might interpret it for my collections. The goal I seek is to have people refine their style through my clothing without having them become victims of fashion.” Fashion critics have praised Armani’s designs for their elegant simplicity, prompting New York Times writer Bernadine Morris to refer to him as “the world’s master tailor.” Celebrities such as John F. Kennedy, Jr., Michelle Pfeiffer, and Jodie Foster regularly wear Armani clothes. In the music world, Gwen Stefani of No Doubt has modeled his fashions, and Jakob Dylan of the Wallflowers has become known for his trademark black Armani suit. Thus, more than two decades after launching his own line of clothing, Armani continues to shape the worldwide fashion industry.
Chronology: Giorgio Armani 1934: Born. 1954: Began working at La Rinascente department stores. 1954: Joined Nino Cerruti as menswear designer. 1974: Introduced first Armani menswear collection. 1975: Cofounded Giogrio Armani SpA and added women’s designs to Armani line. 1976: New York retailer Barney’s introduced Armani line in United States. 1980: Designed Richard Gere’s wardrobe in American Gigolo and launched Giorgio Armani U.S.A. 1985: Won the Cutty Sark Men’s Fashion Award. 1991: Awarded Honorary Doctorate from Royal College of Art
“Giorgio Armani.” Playboy, May 1993. Hirshey, Gerri. “Giorgio Armani.” GQ: Gentlemen’s Quarterly, November 1996. Intimate Architecture: Contemporary Clothing Design. Cambridge, MA: MIT Committee On the Visual Arts, 1982.
Sources of Information
Kopelman, Jill, et al., “Interview’s Women Who Rock!” Interview, November 1996.
Contact at: Giorgio Armani SpA Via Borgonuovo 21 Milan, 20122 Italy Business Phone: 02-723181
“Law: In Corruption Case, Armani Agrees to a Plea Bargain.” Wall Street Journal, 13 May 1996.
Bibliography
Martin, Richard, ed. Contemporary Fashion. Detroit: St. James Press, 1995.
Agins, Terry. “Who’s News: Calvin Klein Names Forte, Executive at Rival Armani, To Two Key Positions.” The Wall Street Journal, 24 March 1994.
Martin, Richard and Harold Koda. Giorgio Armani: Images of Man. New York: Rizzoli, 1990.
Bruzzi, Stella. “Sight and Sound A-Z of Cinema: Fashion.” Sight & Sound, November 1996.
Martin, Richard, ed. The St. James Fashion Encyclopedia. Detroit: St. James Press, 1997.
Current Biography Yearbook: 1983. New York: H.W. Wilson Co., 1983.
Mead, Rebecca. “The Last Designer.” New York, 16 September 1996.
“The Fashion Page: Giorgio Armani.” 27 May 1998. Available from http://www.glitter.com/designers/Giorgio Armani/index.html.
Pendergast, Sara, ed. Contemporary Designers. Detroit: St. James Press, 1997.
Forden, Sara Gay. “Giorgio Armani: The Past, Present and Future of Designer Men’s Wear.” Daily Record News, 8 June 1994. Forden, Sara Gay. “Numero Uno: Giorgio Armani, the World’s Most Successful Designer, Still Isn’t Satisfied.” Women’s Wear Daily, 26 October 1994.
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Spindler, Amy M. “Couture Skips the Revolution.” New York Times, 4 February 1997. Ward, Melanie. “Armani in America.” Harper’s Bazaar, September 1996.
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Mary Kay Ash (1918-) Mary Kay Cosmetics
Overview With innovative sales techniques and programs aimed at boosting the self-esteem of her employees, Mary Kay Ash has built the largest direct-sales cosmetic empire in the United States. Mary Kay Cosmetics is a Fortune 500 company with more than $1.5 billion in retail sales annually.
Personal Life Mary Kay Ash was born May 12, 1918, in Hot Wells, Texas. She was the youngest child of Edward Alexander and Lula Vember Wagner. As a child, Mary Kay was forced to be self-reliant. Her father was ill with tuberculosis, and her mother worked 14-hour days managing a restaurant. Ash did the housework, cooked meals, and cared for her father. She gives much of the credit for her later success to her mother, who constantly encouraged her. Ash was an honor student with a keen competitive streak. One of her favorite hobbies was extemporaneous speaking, which she enjoyed doing competitively. She placed second in a statewide speech contest while still in junior high and was an honor member of her high school’s debate team. She completed high school in just three years, but her family could not afford to send her to college. Instead, she married J. Ben Rogers when she was 17 years old, and they had three children. The marriage failed after her husband, who had been drafted by the military, returned from fighting in World War II and announced he wanted a divorce. At 27, Ash enrolled in
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undergraduate courses at the University of Houston, intending to become a doctor. The emotional turmoil surrounding her divorce, combined with her other duties of homemaking and child-care, prompted her to quit college and concentrate on a career in sales. Ash remarried in 1960, but her second husband died suddenly of a heart attack three years later, just as she was preparing to launch her new business. Shortly afterward she met her third husband, Melville Jerome Ash, whom she married in 1966. Although Ash took this husband’s surname, she was already widely known as Mary Kay by 1966. Ash has documented her experiences in two books: an autobiography entitled Mary Kay: The Success Story of America’s Most Dynamic Business Woman and a leadership guide entitled Mary Kay on People Management.
Career Details In 1939 Mary Kay began work as a salesperson for Stanley Home Products, which sold household products at “parties” hosted by a housewife and attended by women friends and neighbors. Her sales were remarkable, and in 1952 she was lured away to become national sales director for World Gifts, another direct sales company. In little more than a decade she extended World Gifts distribution into 43 states and earned a seat on the company’s board of directors. In 1963 Mary Kay sustained a devastating blow. After less than a year at work, a male assistant, whom she had trained in everything she knew about selling and training others, was promoted above her at twice her salary. In response to this incident, she quit. At the age of 48, a veteran of both direct sales and the corporate boardroom, Ash felt challenged to offer energetic women business opportunities they might not find elsewhere. She soon came up with a blueprint for a workable direct-sales company. What she needed was a product, something that could be used up and reordered again and again. With her life savings of $5,000, Ash bought the recipes for special skin softening formulas from the daughter of an Arkansas hide tanner. She furnished a modest storefront in Dallas and set up a small manufacturing plant. Ash’s first employees were her second husband, a chemist, and nine of her friends. Tragically, her husband died of a heart attack just a month before the business was to open, but she still launched Beauty by Mary Kay on September 13, 1963. Through sheer hard work and enthusiasm, Ash, her son Richard Rogers, and their staff of consultants made $198,000 in wholesale revenue the first year. The following year the total reached $800,000. By then, Beauty by Mary Kay had been rechristened Mary Kay Cosmetics and had attracted a sales force of 3,000 women. Mary Kay Cosmetics offered its stock for sale to the public in
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Mary Kay Ash.
(Courtesy of Halcyon Associates, Inc.)
1968 and the company’s greatest period of growth after its formative years came in the 1970s and early 1980s, when stock prices rose by an astonishing 670 percent. In 1981 sales reached $235 million, an increase of 41 percent over the previous year. Sales dropped from $323 million to $249 million between 1983 and 1985. The stock bottomed out at nine dollars a share. In part, the crisis was a result of the improving economy. Women traditionally quit their jobs or found steadier employment rather than continuing to work in direct sales, according to Texas Monthly. The company’s growth was stagnant. “What few analysts or business reporters understood, however, was that Mary Kay Ash was prepared to give up her entire net worth to stay on top,” wrote Skip Hollandsworth in Texas Monthly. “In a major $450 million leveraged buyout in 1985, Mary Kay and her family purchased all the company’s publicly issued stock and took Mary Kay Cosmetics private. A new group of younger executives, brought in to handle the day-to-day operations, quickly updated the company’s image. The rather bland line of cosmetics was revamped and pretty young models were pictured in the product catalogs. The executives also boosted the commissions paid out to consultants to persuade younger women to leave their highrise offices and join Mary Kay.” Ash was succeeded by her son Richard in 1987, but remains active in the business. In 1995, a decade after the leveraged buy-out, Mary Kay was selling an esti-
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Chronology: Mary Kay Ash 1915: Born. 1963: Launched Mary Kay Cosmetics in Dallas, Texas. 1964: Mary Kay Cosmetics earned $198,000. 1968: May Kay Cosmetics stock went public; sales top at $10 million. 1970: Opened first Mary Kay branch office. 1981: Wrote autobiography, Mary Kay: The Success Story of America’s Most Dynamic Business Woman.
Perhaps the most outstanding characteristic of Mary Kay Cosmetics is the enthusiasm of its sales force. This infectious fervor for both product and company philosophy is largely the result of Ash’s personal style. She showers top performers with lavish gifts and public praise. Every year the company awards trademark pink Cadillacs, diamond jewelry, and five-star vacations to deserving employees. The affection of her work force was once the subject of amusement in the business world, but now other companies study her program of self-esteem boosts and generous incentives. Ash has been credited with offering a business run by women to benefit women. Remembering the promotion she lost to a man 30 years earlier, Ash told Texas Monthly, “Those men didn’t believe a woman had brain matter at all. I learned back then that as long as men didn’t believe women could do anything, women were never going to have a chance.” She continued, “I feel God has led me into this position, as someone to help women to know how great they really are.”
1983: Named one of America’s 100 most important women by Ladies Home Journal. 1985: Leveraged buy-out returned company to private ownership by family. 1987: Succeeded by her son, Richard, as head of Mary Kay.
Sources of Information Contact at: Mary Kay Cosmetics 16251 Dallas Pkwy. Dallas, TX 75247 URL: http://www.MaryKay.com
Bibliography mated $866 million in products, at wholesale, to 20 million women annually. Over 6,500 of the 30,000-member sales force drive complimentary pink Cadillacs and other automobiles worth more than $90 million. The company also claims responsibility for creating more than 75 millionaires, calculated by the number of women who have earned more than a million dollars in commissions over the course of their careers. The Ash family’s personal fortune, according to Texas Monthly, is estimated at more than $325 million. From its base in Dallas, Mary Kay Cosmetics has grown into an international empire, with consultants throughout Canada, Europe, and even the former Soviet Union.
Colwell, Shelley M. “Mary Kay at 30: Still in the Pink.” SoapCosmetics-Chemical Specialties, September 1993. Current Biography Yearbook. New York: H.W. Wilson Co., 1995. Farnham, Alan. “Mary Kay’s Lessons in Leadership.” Fortune, 20 September 1993. Fitzpatrick, Doreen D. “New American Heroes: Women Venture Forth Where Capital Fears to Go.” Westchester County Business Journal, 23 May 1994. Hollandsworth, Skip. “Hostile Makeover: In Dallas the Frenetically Fashionable Jinger Heath is Locked in a Beauty War with the Venerable Queen of Cosmetics, Mary Kay Ash.” Texas Monthly, November 1995. Layman, Richard, ed. American Decades: 1960-1969. Detroit: Gale Research, 1995. Neely, Jamie Tobias. “In the Pink: Makeup Queen Mary Kay Remains Driven by Success.” Spokesman-Review, 19 October 1995.
Social and Economic Impact The company’s success rests nearly as much on Mary Kay’s dynamic personality and personal sales ability as it does on the quality of the merchandise. From the outset, Ash’s company was different. Her salespeople were called “consultants.” They demonstrated products on clients at home “classes” aimed not only at selling cosmetics but also at fostering better self-images among women customers. Ash managed company affairs, particularly the important task of motivating and rewarding her consultants.
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Newsmakers. Detroit: Gale Research, 1997. Steffy, Loren. “No Powder-Puff Battle: Mary Kay Sues Two Rivals Over Names.” Dallas Times Herald, 9 November 1990. Terry, Dian. “Mary Kay Reports Record Sales for First Half of 25th Anniversary Year.” Business Wire, 8 August 1988. Who’s Who in America. New Providence, NJ: Marquis Who’s Who, 1996. Who’s Who of American Women. New Providence, NJ: Marquis Who’s Who, 1996.
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Charles Babbage Overview Although Charles Babbage never built an operational mechanical digital computer because of technology limitations, his design concepts conceived 150 years before the computer came into practical usage have been proven correct, and Babbage is regarded as the “father of the computer.” Babbage was an expert mathematician who was also a significant economic theorist and inventor. He invented many measuring tools and standardizing techniques, including the cow-catcher on trains, the lighthouse signaling device most commonly used, a mathematical means for code-breaking used by the British government, the dynamometer, and the ophthalmoscope.
(1792-1871) Inventor
Personal Life Charles Babbage was born in a wealthy rural area of England known as Teignmouth, in Devon county, on December 26, 1792, at the beginning of the Industrial Revolution era. He came from a family with a long heritage in England; he grew up as an aristocrat. His father, Benjamin Babbage, was a well-known banker. Babbage grew up in a region of England that was economically based on agriculture, mining, and the seaport town of Dartmouth. After a comfortable childhood filled with curiosity about science, Babbage attended Cambridge College in England, where he excelled in mathematics. With friends at school he modified some aspects of calculus and transformed calculus throughout all of England. In 1817 he received his master of arts degree from Cambridge University.
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Career Details Babbage lived his life largely in the role of an amateur scientist and inventor who pursued several other avocations as well, including that of philosopher, aesthete, politician, professor of mathematics, and founder of several scientific societies. He spent his life as a booster of science in general and as a champion of technology and the Newton physics of the day. He was a member of the British Association for the Advancement of Science and the founder of several organizations, including the Statistical Society of London, the Royal Astronomical Society, and The Royal Society. He was also honored with the Lucasian Chair of Mathematics at Cambridge University. Throughout his life Babbage invented many mechanical items, including the cow-catcher on trains, the dynamometer, the standard railroad gauge, lights for lighthouses, time-signals for the world’s most accurate clock in Greenwich, England, as well as the heliograph and ophthalmoscope. He is known today primarily as the man who spent his life trying to literally build the first universal digital computer.
Charles Babbage.
(The Library of Congress.)
Charles Babbage lived a life that earned him the title of eccentric. He was known as a cranky, rather continually distracted man “with a dirty collar.” He was extremely intelligent and lived much of his life pursuing his curiosities in uncommon ways. He was, for instance, intensely interested in beauty, but spent his time finding beauty in unusual objects: stamped buttons, the shape of stomach pumps, the physical appearance of both railroad trains and train tunnels. He found beauty in most things that suggested humans’ mastery over nature. He married Georgianna (Whitmore) Babbage while at Cambridge University in 1814, at the age of 23. The marriage was a comfortable one, but in August of 1827, at age 35, his wife died suddenly. Babbage left England after his wife’s death to wander Europe for a year, presumably to deal with his grief. His personal life did not demand that he pursue a career. He was somewhat independently wealthy and so continued to pursue directions that intrigued him personally. He had considered becoming a minister for a time, but that was largely because he had little interest in pursuing business or law, which were common careers for affluent educated men of his era. When Babbage died in 1871, at age 81, few knew that a crater on the moon had been named for him. His burial procession was small, and his passing was virtually unnoticed in the English press. His life of science and invention was basically ignored during his own time.
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The idea of the computer first occurred to Babbage while in college. As a member of an academic society, he had been given the task of verifying tables of astronomical data. He found numerous errors. Indeed, errors in mathematical tables were becoming increasingly common during these early years of the Industrial Revolution, and they often had disastrous results. For example, mistakes such as inaccuracies in navigational tables were often the cause of shipwrecks. Babbage thought there should be a way to create a machine that could calculate mathematical data much faster than a human could, and without error. He then set to work to try to make such a machine. By 1822 Babbage had worked out all the ideas for the logical structure of the computer, which he had called the “Difference Engine,” a machine that could compile and print mathematical tables. His small working model won the Royal Astronomical Society’s first Gold Medal. The following year, Babbage received government funding to build a full-scale model. But progress was slow and expensive, and in 1834 the government withdrew its support. By then, Babbage had conceived of the more complex idea of the “Analytical Engine,” which was a programmable automatic machine that could not only compute a single mathematical function but could be programmed to perform many different computations. Although the Analytical Engine was never finished, due partly to the limitations of nineteenth-century technology, it was Babbage’s invention of the Difference Engine and the Analytical Engine that earned him the modern-day title of “the father of the computer.” Babbage was also an important political economist. He was one of the first to talk about the impact of the factory in economics and to discuss the division of labor. His theories and discussions were later incorporated and dis-
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cussed by John Stuart Mill and was fundamental to Marxist theory of capitalist socio-economic development.
Social and Economic Impact Babbage saw the computer, if developed, as working hand-in-hand with industry to improve the lives of people with accurate and scientific knowledge of the world. His research into many areas, because of the limitations of existing technology, made his ideas of genius seem merely visionary and impractical. Even though Babbage’s attempts to build his Difference Machine and Analytical Engine did not result in an actual product that could be used at the time, his efforts had a profound effect on mechanical engineering. Many improvements to machine tools and techniques ensued from his research and efforts, which included a study of all mechanical devices that could be used to build his machines. Babbage also had a profound effect on society by organizing large social gatherings where the European intellectual elite could meet and discuss ideas. Despite his reputation of being cranky and cantankerous, he was a leading London socialite and his famous Saturday night parties often numbered between two and three hundred guests. Babbage’s ideas planted the seed that eventually grew to be the modern-day computer. No other device can claim such a staggering effect on society in the twentieth century as the computer; and Babbage’s visions for the machine were finally realized more than 100 years after his death.
Chronology: Charles Babbage 1792: Born. 1822: Won a Royal Astronomical Society Gold Medal for his invention, the “Difference Engine.” 1823: Received government funds to build a full-size “Difference Engine.” 1833: Wrote and published The Economy of Manufactures and Machinery. 1835: Created the first reliable actuarial tables. 1835: Conceived the idea of the “Analytical Engine,” the direct ancestor of the modern digital computer. 1837: Wrote and published A Ninth Bridgewater Treatise. 1864: Wrote and published Pasages from the Life of a Philosopher. 1871: Died.
Crystal, David, ed. Cambridge Biographical Encyclopedia. London: Cambridge University Press, 1994. Hyman, Anthony. Charles Babbage, Pioneer of the Computer. New York: Princeton/Oxford University Press, 1982. Hyman, Anthony. Selected Works of Charles Babbage. London: Cambridge University Press, 1989.
Sources of Information
Mosely, Maboth. Irascible Genius: A Life of Charles Babbage, Inventor. Hutchinson, 1964.
Bibliography Adams, W. Davenport. Dictionary of English Literature, Detroit: Gale Research, 1966.
Muir, Hazel, ed. Larousse Dictionary of Scientists. New York: Larousse, 1994.
“Charles Babbage.” Available at www://ei.cs.vt.edu/history/Babbage.html.
The World Almanac Biographical Dictionary. New York: World Almanac, 1990.
“The Cranky Father of the Computer.” Fortune, March 1964.
World of Invention. Detroit: Gale Research, 1994.
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Steve Ballmer Microsoft Corporation
Overview Steve Ballmer who has worked for Microsoft Corporation since 1980, has left a lasting impression on his business colleagues and the Microsoft employees with his energetic and motivational style. Credited for revamping the Microsoft marketing program, Ballmer has served as second in command to Chairman Bill Gates. Gates relied on Ballmer for his opinions and as an information provider. Ballmer has continued to benefit Microsoft Corporation by combining his personal charisma with business savvy and a sharp intellect.
Personal Life Born in a suburb of Detroit, Michigan, Ballmer’s charisma and talent as a motivator were revealed early in life. While attending school in Birmingham, Michigan, a teacher remembered that Ballmer was always very excited and animated. Ballmer first met his future boss, Bill Gates, in 1973 when they attended Harvard University. In a Computer Reseller News article, Gates described Ballmer as his opposite. Ballmer was involved in a wide variety of extracurricular leadership roles, while Gates knew no one. Although Gates dropped out after his first year at Harvard, Ballmer completed school with a degree in applied math and economics. After graduation, he worked for Proctor and Gamble. He also attended Stanford Business School before Gates recruited him to join the young Microsoft Corporation in 1980. In 1992, Ballmer surprised many in the software industry by publicly voicing his support for the Clinton-
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Gore campaign. Other industry players, including Microsoft, had traditionally steered clear of taking political stances. Ballmer insisted that his support, which included a $2000 personal check, had nothing to do with the views of the company and were based on his respect for Al Gore. However, Microsoft at that time had been undergoing an 18 month investigation by the Federal Trade Commission, who questioned whether the company was complying with fair competition laws. Ballmer denied any connection between the investigation and his personal support of Clinton and Gore in that year’s presidential campaigns. Ballmer remained largely devoted to work in his life, though in a 1992 Seattle Times article he mentioned that he had decreased his working hours down to 60 hours a week from a previous 90-100 hours per week. He was hoping to spend more time with his wife, Connie, and their two sons. His hobbies include jogging, golf, and watching basketball games. But generally, he said, “I don’t juggle, I don’t ride a unicycle. I work. I’m consumed by it. It’s fun.” (An August 1998 Time magazine article values Ballmer at $14 billion.)
Steve Ballmer.
Career Details In 1980, Ballmer joined Microsoft in the company’s first non-programming position. Gates hired him at a starting salary of $50,000. Ballmer’s immediate advice to Gates was to hire 50 to 60 more people (the company at that time had a base of 30 employees.) Gates reacted strongly, claiming that Ballmer was going to “bankrupt the company.” In their first years together, Gates and Ballmer often clashed on strategy. They learned to work together and modified their strategy so that they planned for the long term, without losing control. Ballmer undertook such tasks as heading the systems software division, driving the company’s marketing efforts, and providing a crucial link with key company customers. Ballmer and Gates worked together in the early years to achieve their long term vision for Microsoft. Although they were fortunate to have International Business Machines (IBM) as a first customer for their MS-DOS program. Ballmer and Gates actively recruited college graduates to work for the company, and established offices in Europe. They were also careful to ensure that the company had no cash flow problems so that they could continue to keep their focus on becoming a billion dollar software company.
(AP/Wide World Photos, Inc.)
the company sales strategy and taking it to unprecedented heights. Between 1991 and 1995, sales increased at the rate of $1 billion per year. According to a 1995 article in Computer Reseller News, employees were inspired by Ballmer’s hard driving motivational style and his productive work habits. When the Federal government began to object to what was perceived as Microsoft’s monopoly on the software market, sources close to the company attributed the origins of the troubles to less senior employees who were trying to imitate Ballmer’s competitive style and strategy. As one Microsoft marketing manager put it, “(Ballmer) challenges you to think outside the box. After a session with Steve, you want to run through walls for the guy.”
During the late 1980s, Microsoft made new strides in the software industry and continued to penetrate new markets for their products; Ballmer was instrumental in guiding and representing these company moves. They collaborated with Ashton-Tate to provide a software development kit, released an improved operating system, and signed deals with such companies as Compaq and Novell. By 1995, Microsoft had annual revenues of nearly $6 billion. Ballmer was responsible for steering
Ballmer was also instrumental in the success of Windows 95 software, having previously laid the groundwork for the development of earlier Windows versions. Additionally, he smoothed the original Windows partnership with IBM, a relationship that was not always easy due to philosophic differences and IBM’s bureaucracy. Ballmer later referred to the relationship as dancing with the bear. Microsoft wanted IBM to install Windows on its computers. IBM, however, wanted its own versions of Windows and DOS, which eventually became known as OS/2 and Presentation Manager. However, the partnership ended in 1992, when IBM announced a plan to combine Windows into OS/2, with the emphasis on the latter. Ballmer argued that the arrangement would not work technically. Microsoft also opposed IBM’s move
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Chronology: Steve Ballmer 1973: Meets Bill Gates at Harvard University. 1980: Joins Microsoft Corporation. 1984: Begins directing Microsoft work on Windows. 1984: Named head of Microsoft systems software group. 1987: Begins directing Microsoft work on OS/2. 1992: Promoted to Microsoft’s head of Worldwide Sales and Support. 1995: Becomes the 29th richest man in America. 1998: Appointed President of Microsoft Corp.
because it had the potential to undercut sales of Microsoft’s successful MS-DOS program. The incident ended a relationship of 11 years between Microsoft and IBM. Shortly after the break in that collaboration, Microsoft changed the name of the newest version of OS/2 to Windows NT, standing for New Technology. Ballmer designed the means by which Microsoft distributed and resold its products, and he created strategies for pricing and branding that led Microsoft to the forefront of the software industry. To market Windows 95, Ballmer made a mock television commercial which became famous and which demonstrated his charisma and salesmanship. Ballmer’s extroverted style, according to peers, masked his sharp intellect. Though Ballmer served Microsoft’s sales force, industry observers such as software newsletter publisher Jeffrey Tartar warned that, “the notion that Ballmer is the rah-rah king of Microsoft really underestimates his role. He’s the marketing genius behind that company. He comes up with the branding, the pricing. These are things that Bill Gates neither knows nor cares about.” Ballmer’s ability to take in and retain information worked to his advantage, both with colleagues and potential competitors. One colleague in the industry, Doug Hamilton of Hamilton Laboratories, encountered Ballmer at a trade show. Hamilton was shocked when Ballmer “knew my product, knew where I was, knew all about me because Microsoft makes it their business.” Hamilton contrasted that with the attitude he had encountered at IBM, who acted like they could not be bothered.
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Besides being a good listener, Ballmer admitted to being a sponge for information and is recognized for being an excellent strategic thinker. Ballmer was well known for his loud and forceful meetings; in one case, he damaged his vocal chords and required surgery to recover. At marketing presentations he often cut straight to the point, insisting that presenters cut out the marketing talk and get to the real issues. Company sources called this strategy “push back.” By 1995, Microsoft had grown to more than 20,000 employees. In mid-1995 Ballmer and Gates announced the company’s next strategic direction, to facilitate customers’ use of the Internet and intranet applications. Ballmer promised that Microsoft would lead the way in providing new Internet technologies that would satisfy customers needs. The company updated software such as Internet Explorer and Windows NT to keep up with technological advances in the Internet. In an article in Computer Reseller News (November 16, 1997) Ballmer commented on Intenet trends, emphasizing that the Internet provided an excellent way for businesses to access potential customers. He predicted more and more commerce being conducted on the Internet once issues such as security and speed of transactions were overcome. (Ballmer also believed that an increasingly mobile workforce would lead to changing customer needs, such as increased demand for sophisticated laptops and new functions provided by PCs, like videoconferencing and better links, to work mainframes and the Internet from home.) Microsoft’s entry into the world of the Internet reflected how the company had reacted to technological trends in the past—Microsoft was not always the first company to recognize an opportunity but when it did, it was especially skilled at spotting or creating products that would catch on. While Microsoft had excelled in selling PCs to corporate customers, it still had not sold corporate customers on the use of Microsoft software for more centralized corporate functions like record keeping or budget management. Ballmer recognized that as a weakness and focused company efforts on customer service and developing software that could meet corporate needs. Ballmer also recognized the threat to Microsoft from companies that were working on ways to eliminate operating systems such as Windows from computers. Two contenders included Lotus Development Corp. and Netscape Communications Corp. Bill Gates appointed Ballmer president of Microsoft Corp. on July 21, 1998. His new responsibilities included addressing these problems. An August 1998 Time article quoted Bill Gates citing that one benefit of making Ballmer the president is that Gates will be freed up to work on “architectural breakthroughs” for a variety of computer devices.
Social and Economic Impact While Ballmer has been at least partially responsible for Microsoft’s meteoric rise in the software industry, he
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also realized that the ongoing government investigation into the company was shaking company relationships with customers and hurting company morale. The probe was initiated when the Justice Department decided that Microsoft was violating the tenets of fair competition when it included its Internet software with every sale of Windows 95. In 1998, Ballmer admitted that the company, known for its hardball tactics and fearlessness, was examining whether its corporate culture needed to change. But Ballmer refused to apologize for the company’s aggressive stance in business. In an article in the San Francisco Chronicle Ballmer said “I’m not apologetic. This is America. This is capitalism. The notion that added value for consumers is criminal is ludicrous. If we can’t add innovation, then that doesn’t help the customers.” Ballmer went on to describe the future of Microsoft, including such as simplifying software, doing everything on the Internet, and making software smaller for appliances and bigger for networks. Ballmer’s influence on the computer world is undeniable. His participation in the development of the Windows operating system has meant that the average person can easily navigate computers. Though Microsoft has been accused of being monopolistic, the domination of this operating system has allowed a nearly universal exchange of information. Ballmer has also contributed to Microsoft, and by extension the computer world, in less tangible ways. He has brought a new philosophy to Microsoft and the computer world. In a world of technology where Microsoft is sometimes seen as the evil, monopolistic empire, he has understood the importance of maintaining customer satisfaction on all levels, whether the customer is a business or an individual. According to Microsoft, his new goal is to reinvent “the Microsoft working environment so that the company is even more responsive to changing customer needs, new technologies and market dynamics.”
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Angwin, Julia. “Microsoft’s Power Player - VP Steve Ballmer Defends his Company.” San Francisco Chronicle, 6 December 1997. Burgess, John. “His Firm Facing AntiTrust Probe, Microsoft Executive Stumps for Clinton.” Washington Post, 30 October 1992. Corcoran, Elizabeth. “Microsoft Official Says Battle is Taking a Toll.” Washington Post, 8 January 1998. Darrow, Barbara. “Steve Ballmer.” Computer Reseller News, 13 November 1995. Dellecave, Tom, Jr. “View From the Top: Perched Atop Microsoft, Steve Ballmer Tells How to Turn a Profit on the Internet.” Sales and Marketing Management, September 1996. Flores, Michele Matassa. “Microsoft at 20, Bill Gates at 40—A Look Ahead.” Seattle Times, 13 August 1995. Hamm, Steve. “The Hard Sell.” PC Week, 10 October 1994. Hinsch, Kathryn; Taucher, Marty; Lematta, Claire; and Pam Edstrom. “Microsoft Announces Version 1.2 of MS OS/2 With Presentation Manager.” Business Wire, 16 May 1989. Jewitt, Joel. “Everex Announced the Availability of Microsoft OS/2 Operating System for Its Personal Computers.” Business Wire, 17 October 1988. Johnston, Margaret. “Headaches Greet Microsoft President: Ballmer’s Major Challenges Include Customer Satisfaction and Rivals’ Complaints.” InfoWorld, 27 July 1998. Maloney, Janet. “Mr. Surround-Sound: Think Bill Gates is Competitive? New Microsoft President Can Outbark Him Any Day” Time, 3 August 1998. Richardson, W. Knox; Taucher, Marty; Hinsch, Kathryn; Edstron, Pam; and Claire Lematta. “Ashton-Tate and Microsoft Announced Software Development Kit for SQL Server.” Business Wire, 14 September 1988. Selingo, Jeff. “Right Hand at Microsoft: Gates’ Pal Touts Firm’s Latest Products.” Arizona Republic, June 21, 1995. “Steve Ballmer: President.” Microsoft Corporation Available at http://www.microsoft.com/presspass/exec/steve/steve.htm. Sweney, John; Globe, Debra; Berman, Mike; Rice, Nora; and Tony Sapienza. “Compaq Signs Integration Agreements with Microsoft, Novell, and SCO.” Business Wire, 15 October 1990.
Sources of Information Bibliography
“The Top 25.” Forbes 13 October 1997.
Andrews, Paul. “The Man Considered No. 2 Behind Gates Hopes for Order in Windows-OS/2 Battle,” Seattle Times, 15 April 1992.
Whitaker, Mark. “How We Did It.” Newsweek, 23 June 1997.
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Jill Barad (1951-) Mattel, Inc.
Overview As president and chief executive officer (CEO) of Mattel Inc., Jill Barad has made a name for herself as a savvy executive in the toy industry and as one of only four women to head a Fortune 1000 company. Barad was responsible for the boom in Barbie doll sales, which account for more than one-third of Mattel profits. She took part in management decisions that helped to revitalize the company after a corporate crisis in the mid-1980s.
Personal Life Jill Barad was born in New York City on May 24, 1951, to parents Larry and Corinne Elikann. A television director and pianist/artist, the couple taught their daughter that she could be anything that she wanted to be, that being female was not a barrier to having a career and that no field of endeavor was off-limits.
Career Details Having been named as one of 1994s “50 most beautiful people in the world” by People magazine, Barad’s good looks and fashion sense often lead to comparisons between the Mattel executive and one of the company’s most famous products, the Barbie doll. In fact, Barad’s first jobs were in the beauty field. While in college, Barad took a part-time job as a beauty consultant for Love Cosmetics. Later, she became a traveling representative for Coty Cosmetics, training department-store sales staff.
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She sent unsolicited proposals for marketing campaigns to the company’s executives, which led to a management position. In less than three years, Barad was promoted to brand manager for the entire Coty line. When Barad married in 1979, she quit Coty to move to Los Angeles, where she became an advertising executive for the firm of Wells, Rich, and Green. One of her biggest clients was the Max Factor cosmetics company. She left the agency when she was pregnant with her first child, staying at home for a few years. Barad joined the Mattel toy company in 1981, after presenting an idea for selling makeup for little girls. While her proposal was not developed, it led to her job in Mattel’s marketing department. In the mid-1980s Mattel suffered a financial crisis when its Masters of the Universe product line dropped in popularity. At a time when the company was looking to reduce inventory and lay off employees, Barad accepted a transfer to product development. This move may have been the key to her longevity at Mattel, although it also earned her criticism for being disloyal to her coworkers and boss. In her new position, Barad soon demonstrated her ability to generate viable new concepts as well as to enhance existing products. She was responsible for the expansion of the Hot-Wheels toy car line, for negotiating financial deals with key companies like Disney and McDonald’s, and for the revitalization of Barbie products. Under her guidance, the Barbie product line grew to account for half of Mattel’s revenues in 1992. That same year, Barad was made president of the Girls and Activity Toys Division at Mattel. In addition to improving other products and developing new ones, Barad became a key player, alongside Mattel CEO John Amerman, in negotiating purchases and partnerships that greatly improved the company’s fortunes. After 15 years with Mattel, she became CEO of the company in January 1997, when Amerman retired. Consequently, Barad became the only woman to head a Fortune 500 company. As CEO of Mattel, Barad will be working to expand the company. At the time of her ascension, Mattel’s growth was slipping, and a merger with competitor Hasbro toys was abandoned. Business Week reported that Barad counteracted these developments by expanding the company’s overseas business, saying, “The business is there for the taking.” She will also preside over Mattel’s continued push to produce multimedia software and video games, including products that break away from the adventure and combat themes that dominate the market. Barbie products are on the forefront of this campaign. The most popular of the computer programs has been the Barbie Fashion Designer, which allows users to create 15,000 outfits for Barbie that can be viewed in 3-D, and then printed out on special fabric and assembled without sewing. Although some critics question whether these toys simply reinforce sexist stereotypes, Barad sees such products as resources that have been de-
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Chronology: Jill Barad 1951: Born. 1973: Graduated from Queens College, New York City, with a degree in English and psychology. 1981: Joined Mattel, Inc. as a product manager. 1982: Named marketing manager of Barbie dolls. 1988: Barbie doll sales climbed to over $1 billion. 1990: Became president of Mattel USA. 1991: Elected to Mattel’s board of directors. 1992: Became president and chief operating officer of Mattel, Inc.
nied to her sex. She told Time, “Equal tools mean equal opportunity . . . . You can explore and create on the computer in boundless ways. I want girls to have those skills at their fingertips.” Some of the most successful products to be introduced by Barad are the Heart Family, P.J. Sparkles, and L’il Miss Makeup. The L’il Miss Makeup doll, which utilizes a color-change technology that allows a little girl to “apply” makeup using cold water on a sponge or “remove” it with warm water, was a project that was particularly important to Barad, since it introduced cosmetics to little girls. Barad also worked with Amerman to make Mattel more than a doll company, with the acquisition of FisherPrice, Inc. and Kransco (the Frisbee and Hula-Hoop manufacturer.) She also participated in negotiations for a product agreement with Walt Disney Co. The Disney partnership was identified by Brandweek’s John McManus as one of several influential alliances that are expected to impact advertising on network television due to Disney’s ownership of ABC/Capital Cities. As Kim Masters noted in Working Woman, “Barad’s rise hasn’t been without controversy—whether because of others’ jealousy, lingering sexism or her personal style. Her admirers say she has prevailed through a combination of charm, talent, and underlying toughness; detractors say Barad worked her way up the ladder with a false smile, cutting out anyone who got in her way.” Certainly, Barad operates in a manner that defies all obstacles. She summed up her professional philosophy for Masters thus: “There’s no such thing as ‘can’t.’”
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As a boss, Barad tries to inspire her team by reinforcing images of their successes rather than focusing on their failures.
Social and Economic Impact Undoubtedly, Barad is best known for taking the Barbie doll from an old reliable seller to one of the hottest products on the toy market. Barad masterminded the Barbie “brand expansion” that included many new, and often costly, products. Now there are some 100 different Barbie dolls on sale each model year—costumed for careers such as doctor, business executive, pilot, and astronaut. There are also Barbies in designer clothes, kidsize Barbies, and a Gold Jubilee anniversary Barbie that sold for up to $1000. Over the course of eight years, Barad tripled Barbie sales. In 1988, Mattel reached $1 billion in sales and in 1997, the company topped $4.6 billion. Eighty percent of all sales are generated by its four main brands: Hot-Wheels, Fisher-Price, Disney, and Barbie. A much sought after executive, Barad limits her board membership to three outside boards: BankAmerica, Pixar, and Microsoft. Finally, Barad’s continual success has allowed her to act as a role model to young girls. Her high profile career has served as a reminder of what women can and, indeed, do achieve in the business world.
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Sources of Information Contact at: Mattel, Inc. 333 Continental Blvd. El Segundo, CA 90245 Business Phone: (310)252-2000 URL: http://www.mattelmedia.com
Bibliography Carlat, Larry. “Queen of the Aisles.” Brandweek, 12 February 1996. Current Biography Yearbook. New York: H.W. Wilson Co., 1995. Donlon, J.P. “A Doll’s House.” Chief Executive, September 1997. “The Fifty Most Beautiful People in the World.” People Weekly, 9 May 1994. Greenwald, John. “Barbie Boots Up.” Time, 11 November 1996. Hoover’s Online. August 1998. Available from http://www.hoovers. com. Lubove, Seth. “Barbie Does Silicon Valley.” Forbes, 16 September 1994. Masters, Kim. “It’s How You Play the Game.” Working Woman, May 1990. Sellers, Patricia. “Women, Sex, and Power.” Fortune, 5 August 1996. Who’s Who in America. New Providence, NJ: Marquis Who’s Who, 1996. Who’s Who in American Women. New Providence, NJ: Marquis Who’s Who, 1996.
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P. T. Barnum Overview P. T. Barnum called himself the “Prince of Humbugs,” in reference to the many outrageous stunts and exhibits that were part of his exploits as a showman. His tours, museums, lectures, and biography made him famous and wealthy long before he entered the circus business. He eventually formed the innovative Barnum and Bailey Circus in the 1880s.
(1810-1891) Barnum and Bailey Circus
Personal Life P. T. Barnum was born on July 5, 1810, to parents Philo F. Barnum, a farmer and storekeeper, and Irena (Taylor) Barnum. When Philo died, his son was just 15 years old and was forced to find the means to support his mother and five brothers and sisters. At 19, Barnum married Charity Hallett, with whom he would father four daughters. Following Charity’s death when Barnum was 64, he married 24 year-old Nancy Fish. After trying his hand at various jobs, including store clerk, lottery agent, and grocer, Barnum bought the newspaper in his home town of Bethel, Connecticut, a weekly called the Herald of Freedom. Over the course of several years, he was arrested three times for libel and once spent 60 days in jail. In 1834 Barnum moved to New York City to become a shopkeeper, a job he held for about a year.
Career Details Barnum was transformed from shopkeeper to showman when he discovered an elderly black woman,
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seum was a source of tremendous financial success for Barnum. Some of his most popular attractions were human freaks, such as the Siamese twins Chang and Eng; Anna Swan, the tallest girl in the world; Annie Jones, the bearded lady; and 26-inch-tall “General Tom Thumb.” Equally important to the success of the museum were the stunts and advertising that Barnum created to publicize his exhibits. For example, General Tom Thumb was actually five-year-old Charles Stratton from Bridgeport, Connecticut. In 1842, Barnum contracted with the boy’s parents to exhibit him. Despite the fact that Barnum had discovered a truly extraordinary child, he still decided for publicity purposes to embellish the story and generated hype that the boy was “General Tom Thumb,” an 11 year-old who had just arrived from England. The publicity played well and Barnum, Stratton, and Stratton’s parents traveled across the United States and toured in England for almost three years.
Phineas Taylor Barnum.
(Public Domain.)
Joice Heth, who claimed to be George Washington’s nurse. A promoter in Philadelphia had not had much financial success when he tried to present Heth as the president’s 161-year old nurse. On August 6, 1835, Barnum paid $1,000 for the rights to exhibit Heth for 10 months. Under Barnum’s management, Heth was promoted by sensational advertisements and toured the country telling her supposed memories of the president’s childhood. When ticket sales to the exhibit finally started to fade, Barnum sparked new interest in a manner he often employed; he sent anonymous letters to the newspapers declaring the show was a hoax. One story he circulated claimed that Heth was not even a human, but an automaton, constructed of whalebone, India rubber, and numberless springs. Her so-called memories, the letter declared, were imaginary conversations actually told by the exhibitor who was a ventriloquist. People returned to see if they could figure out the truth of the matter. Upon Heth’s death, an autopsy showed that she was actually around 80 years old. Barnum claimed that he was the victim of a hoax. Having witnessed the public’s taste for the outrageous and improbable, Barnum sought an opportunity to satisfy such interests on much larger scale. In 1841, he scraped together the means to buy John Scudder’s American Museum, which housed conventional exhibits of stuffed animals and wax figures. Barnum transformed the place, turning it into a place of entertainment. The mu-
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Despite the nature of his human exhibits Barnum was not simply entertaining the uneducated masses. With Tom Thumb as his calling card, he was received by heads of state including President Lincoln and England’s Queen Victoria. Barnum’s European tours were tremendously successful, as were his lectures such as “The Science of Money Making, and the Philosophy of Humbug.” In his most “legitimate” endeavor, bringing Swedish soprano Jenny Lind to tour the United States, Barnum made a fortune for himself and for the singer. He acted as her manager from 1850-1852. Although Barnum is famous for developing the Barnum and Bailey Circus, this business was something of a postscript to his career. He formed his first circus in 1871, at the age of 61, promoting it as “the greatest show on earth.” He transformed the typically small, wagonbased show into a railroad-travelling, three-ring, electrically lit extravaganza. In 1881, he merged with his main competitor, James A. Bailey, to form Barnum and Bailey’s Circus, which became the most popular circus in the country.
Social and Economic Impact Barnum understood that people enjoy being fooled if they are knowing participants in the ruse. As he once said, “My dear sir, the bigger the humbug, the better the people will like it.” For Barnum not only wanted to make money with his shows, he also appears to have enjoyed the excitement of making each “discovery” more outrageous than the previous one. To this end, Barnum’s advertising claims were far more incredible than the actual events he promoted. For example, a Grand Buffalo Hunt proved to be a racetrack filled with listless animals that he imported from Boston. The American Museum display called the “Feejee Mermaid”, purported to have been caught off the Feejee (Fiji) Islands, was actually a fish body topped with a fake human head.
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Barnum also made his own life the subject of public scrutiny, albeit in the form of an autobiography designed to entertain as much as inform. Published in 1855, The Life of P.T. Barnum, Written by Himself, was repeatedly revised by the showman. He claimed sales of a million copies for the work, and, presumably with the hope of even greater exposure, he later placed the book in the public domain. The showman’s obsession with publicity was so strong that, when he became seriously ill at the age of 81, he asked a New York newspaper to run his obituary in advance so that he could read it himself. Two weeks later, he died at his home. Barnum’s exaggerated claims constantly ran the risk of public exposure as fraud, but the showman was not daunted by negative press. As he told the New York Tribune in 1877, “I don’t care much what the papers say about me, provided they will say something.” Barnum also used two seemingly disastrous events, both fires at the museum that practically gutted it, to generate more publicity for his business. The financial success of Barnum’s many endeavors made him one of the country’s earliest millionaires. He was forced into bankruptcy in 1856, however, a number of his performers came to his aid. P. T. Barnum still fascinates the American public with his contradictory ways. While his display of human freaks is judged as demeaning according to current values, he was most often a friend to his cast of “curiosities,” many of who became rich in his employ. Barnum continues to be the focus of numerous exhibits and biographies, which celebrate the contributions he made to American culture and examine the fascinatingly complex character of P. T. Barnum.
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Chronology: P.T. Barnum 1810: Born. 1834: Moved to New York City. 1835: Began traveling with a woman who claimed to be 161 years old. 1841: Started operation of the New York City museum. 1844: First international tour with “General Tom Thumb.” 1855: The Life of P. T. Barnum, Written by Himself is published. 1871: Formed his first circus. 1881: Formed Barnum and Bailey Circus. 1891: Died.
Hart, James D. The Oxford Companion to American Literature. New York: Oxford University Press, 1995. Kunhardt, Philip B., Jr., and Philip B. Kunhardt, and Peter W. Kunhardt. “For an America That Loved Freaks.” New York Times Magazine, 20 August 1995. McCain, Diana Ross. “P.T. Barnum’s Early Years.” Early American Life, February 1996.
Sources of Information
“P. T. Barnum, Master Showman of the 1800’s, Is the Star of an Exhibition.” New York Times, 9 March 1996.
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Berendt, John. “Notes on Hype.” Esquire, November 1993. Dictionary of American Biography. New York: Charles Scribner’s Sons, 1964.
Raffel, Burton. Politicians, Poets, & Con Men: Emotional History in Late Victorian America. Hamden, CT: Archon, 1986.
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Tresniowski, Alex. “P.T. Barnum: America’s Greatest Showman.” People Weekly, 2 October 1995.
Farnham, Alan. “America’s Original Huckster.” Fortune, 5 February 1996.
The World Almanac Biographical Dictionary. New York: World Almanac, 1990.
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Eddie Bauer (1899-1986) Eddie Bauer, Inc.
Overview Eddie Bauer’s name is a familiar presence in mailboxes, shopping malls, and closets. Moreover, the Bauer name is tagged to a billion-dollar company boasting more than 500 stores nationwide and over 30 stores abroad as well as an enormous worldwide mail-order business and online catalog store. It all started with the invention of lightweight goose down and stitched products, such as vests, jackets, and sleeping bags. Eddie Bauer is synonymous with high-quality products and high customer satisfaction.
Personal Life Eddie Bauer was born on October 19, 1899, on Orcas Island, in Washington’s Pacific Ocean inlet, Puget Sound. His parents, Jacob and Mary Bauer, were Russian-born immigrants of German ancestry who grew and sold Italian plums. Bauer’s father taught him how to be a skilled fisherman, hunter, and outdoorsman. However, when Bauer was 14, his parents separated. He and his mother moved to Seattle to live with his aunt. There Bauer found part-time work at Piper and Taft, a sporting goods store. Six years later, after completing a twoyear, part-time course in business practice, he opened his own store—Eddie Bauer’s Tennis shop—which specialized in re-stringing tennis rackets. In 1927, Bauer married Christine “Stine” Heltborg, who shared his love of the outdoors. In 1929 their son Eddie Christian Bauer was born.
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Career Details Bauer was a popular and well-known expert fisherman, hunter, and marksman in the Pacific Northwest. In 1920, this popularity helped Bauer succeed in his early sporting goods business where he began tying dry flies made out of high-quality goose feathers for local fisherman. Unsatisfied with the performance of the wool clothing he had worn on fishing trips, Bauer used feathers to develop a new kind of insulated clothing—downinsulated outerwear. His patented product was Skyline, a quilted jacket lined with goose down. Later, he patented and produced the first down-filled jackets, coats, sleeping bags, and other lightweight, weather-resistant, and warmth-retaining outdoors equipment. His apparel gained immediate acceptance with hunters and fishermen, but it was another unlikely group who bought his products: aviators and pilots. In the brutally cold temperatures of high altitude flying, Eddie Bauer’s products helped to keep pilots warm. He produced thousands of his down-filled garments for the U.S. government during World War II. Because he routinely labeled all the items he sold to the military with a tag bearing his name, pilots from all over the world sought him out after the war ended to obtain their own downfilled garments. When Bauer saw the flood of interest, he asked the government for an address list of the men he had helped clothe during the war. The government cooperated, and in 1946 Bauer used the list to create his mail-order business by designing a mail-order catalog of all his products, and then mailing one to each person on the list. For the next 22 years, Bauer continued to be active in all aspects of the expanding business and in developing the growth of national outlets for his products, as well as refining and expanding his catalog. Bauer also continued to design, develop, test, and patent a variety of innovative sporting products until his retirement in 1968.
Pioneer of the goose-down garment industry, Eddie Bauer. (AP/Wide World Photos, Inc.)
Oddly, because Bauer used such simple business practices in a business that had become enormous and unwieldy, Bauer also had to face the challenge of dealing with wild ups and downs of cash flow—the money that sustains daily business operations—even when he was making huge sums of money. If his stores did well, often his mail-order enterprise slowed, and money had to be diverted to pay down debts in various areas of the enterprise. The challenge of modernizing his business style was a great one for Eddie Bauer, and it remained a struggle.
However, what made Eddie Bauer a success? Throughout the book The Legend of Eddie Bauer, a personal and business history of the Bauer corporation, author Robert Spector made it clear that Bauer’s winning personality, energy, and integrity were the key elements to the Bauer’s successful business style. He aimed to please and most often did, guaranteeing everything he manufactured with no exceptions. His guarantee was in writing and became famous: “Every item we sell will give you complete satisfaction, or you may return it for a full refund.”
Bauer’s great success came as a result of his creation of down and quilted garments. Using goose-down exclusively as the basis of all his lightweight, heat-retaining garments revolutionized the outerwear segment of the apparel industry.
Yet, Bauer’s successful products were not created without a personal cost to him. He was exhausted by long hours of work and by the ongoing pain caused by an early sports injury. He frequently experienced what he called “unbearable pain” and was bedridden, often for days, because of the pain. Nevertheless, he persisted in the expansion of his business.
Quilted-down apparel, from vests, jackets, hunting jackets, sleeping bags, blankets, and more, allowed Bauer to obtain sixteen different design patents, and enabled him to enjoy a virtual monopoly on the entire quilted-down-filled materials business. Quilted-down clothing eventually gained worldwide acceptance, and Bauer’s items were consistently used and praised by
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tomers with high-quality furniture, tableware, decor products, and linens. By 1997 Eddie Bauer had also opened 50 outlet stores.
Chronology: Eddie Bauer 1899: Born. 1920: Opened first store in Seattle. 1922: Established unconditional guarantee. 1927: Married Christine Heltborg and began women’s apparel clothing line. 1936: Produced the first goose down insulated jacket. 1937: Designed original DownLight vest. 1945: Issued first mail-order catalog. 1968: Retired—partner William Niemi and son Eddie Christian take over. 1971: General Mills bought Eddie Bauer and expanded to 60 retail stores. 1986: Died.
In the 1990s Eddie Bauer also further expanded its product line to include A/K/A Eddie Bauer, a men’s dress apparel line plus for men and women: an updated line of sportswear, shoes, and accessories; Eddie Bauer Travel, an outdoor and adventure travel program; and EBTek, which included Eddie Bauer’s patented Premium Goose Down as well as other popular outdoor fabrics like GoreTex and Polartec 200. Eddie Bauer did not live to see this huge national, international, and virtual expansion. He died in 1986 at the age of 85. The Eddie Bauer creed, “To give you such outstanding quality, value, service, and guarantee that we may be worthy of your high esteem,” has lived on, but more than that has endured. He has left a legacy that will carry the Eddie Bauer name well into the next century.
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sportsmen, mountain-climbers, and adventurers from the Arctic and Anarctic regions to the peaks of the Himalayas. In addition, Bauer brought something new to life: lightweight clothing made from a light fabric that brought warmth, comfort, and ease of movement to those who wore it. After his retirement in 1968, Bauer’s son Eddie Christian pursued the next successful phases of the Bauer product revolution: the change to computerassisted mail-ordering and billing, the refocus to casual apparel, and in 1988 the purchase of Eddie Bauer by Spiegel, Inc. This purchase resulted in aggressive expansion, and by 1989 there were a total number of 100 Eddie Bauer stores nationally. Two years later, Eddie Bauer again expanded, this time in its product line, by creating Eddie Bauer Home. These stores provided cus-
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During this period, Eddie Bauer began to expand abroad and from 1993 through 1998, Eddie Bauer opened over 20 stores in Japan, seven stores in German, and two stores in the United Kingdom. In 1996, Eddie Bauer launched its “virtual” online catalog.
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Contact at: Eddie Bauer, Inc. 15010 N.E. 36th St. Redmond, WA 98052 Business Phone: (425)882-6100 URL: http://www.eddiebauer.com
Bibliography Eddie Bauer, Inc. “Eddie Bauer Company History.” Redmond, WA, 1998. Available from http://www.eddiebauer.com Facts on File World News Digest, 1986. Halter, Jon C. “Eddie Bauer Guide to Backpacking.” Boy’s Life, July 1984. Skorupa, Joe. “In Search of Eddie Bauer.” Popular Mechanics, February, 1994. Spector, Robert. The Legend of Eddie Bauer. Lyme: Greenwich Publishing Group, 1994. Steinberg, Steve. “The Eddie Bauer Guide to Family Camping.” Consumer’s Digest, May-June 1983.
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John Jacob Bausch Overview John Jacob Bausch, a German immigrant, came to the United States in 1849 and, in 1853, started one of the first optical companies in Rochester, New York. This company became the international company Bausch & Lomb Incorporated, a maker of contact lenses and related products. Bausch stocked his first store with $62.00 he borrowed from his friend, Henry Lomb, who later became his partner.
(1830-1926) Bausch & Lomb Incorporated
Personal Life John Jacob Bausch was born July 25, 1830, in Gross Suessin, Wurttemberg, Germany. He was one of seven children born to George Bausch, a baker, and Annie Schmidt. Annie died when John was six. Bausch immigrated to America in 1849 and married Barbara Zimmerman six months later. They had three sons, Edward, Henry, and William. Bausch was married a second time in 1902 to Caroline Zimmerman. As a young man, Bausch learned the optical trade and the trade of wood turning from his older brother, who had served apprenticeships in both occupations. Bausch was more interested in the grinding and polishing of lenses, and at the age of 18, he heard of a job in an optical shop in Berne, Switzerland. He traveled there by stagecoach, and received the job and began work for $.36 a day. Because of the poor economy and political unrest in Switzerland, Bausch decided to go to America and immigrated in April of 1849. Landing in New York City
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croscopes, telescopes, magnifiers, and field glasses. He also began grinding lenses by hand. The partners struggled for seven years, during which time Lomb lived at Bausch’s home, and both had other jobs. Still they made no profit and by this time Bausch owed Lomb $1000. When the Civil War began and Lomb went into the army, he sent Bausch part of his pay as a soldier, which carried the business through four years. The two remained friends and partners throughout a series of ventures until Lomb’s death in 1909.
John Bausch.
During this time, a turning point was reached when Bausch noticed a piece of vulcanized rubber while walking down the street. He had an idea that this was good material for making frames. Until then frames were imported from Europe and were made of horn or metal and sawed by hand. Volcanite frames were a great deal less expensive than other frames and more durable as well. He began to make frames out of the new material and was thus one of the pioneers in manufacturing plastics. These frames became so popular that Bausch and his two sons had to work seven days a week, often into the night, to make enough frames to meet the demand. When Lomb came back from the war, Bausch paid off his debts and had a bank balance of $800.
(AP/Wide World Photos, Inc.)
after a tempestuous sea journey, the ship’s passengers were told New York was overcrowded and were immediately advised to travel west. They went to Buffalo, where Bausch worked at odd jobs for a few months and then headed for Rochester to try to find optical work. Instead he found work as a wood turner for a dollar a day.
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Bausch became less interested in the retail store and turned it almost entirely over to his younger brother, Edward E. Bausch, who had come to New York State with another brother, George. Bausch now bought power equipment for grinding and polishing lenses. From the India Rubber Comb Company, he secured the exclusive rights to manufacture optical instruments out of vulcanite and thus formed the Vulcanite Optical Instrument Company, incorporated in 1866. Later he changed the name to Bausch & Lomb Optical Company. The business required Lomb to move to New York, where he stayed for 10 years.
Seven weeks after his marriage, Bausch hurt his hand in a buzz saw and had to have two fingers amputated. He was incapacitated for four months and was unable to go back to wood turning. It was then that he decided to start his own optical business. He obtained some optical materials from his brother and set out as a peddler of spectacles. He managed to sell the goods in six months and then he finally obtained some space in a shoemaker’s store. During most of the winter, they used old shoes for fuel. Along with odd jobs, he was able to make four dollars a week.
Bausch told an interviewer that it was only in 1890 that the business began to make any real money. By that time he was 60 years old he had been in business for 37 years. In 1893, the Zeiss Works of Jena developed a new type of binoculars, and Bausch & Lomb acquired the American rights to these patents. The Bausch & Lomb instruments became the standard for the United States’ Army and Navy. The company continued to expand, opening offices in Chicago in 1896; Boston in 1903; San Francisco in 1904; and London in 1908. In that year, the company incorporated in New York. Bausch also acquired a manufacturer of fire-control instruments, George N. Saegmuller.
In 1853 Bausch established a modest optical shop in the Reynolds Arcade in Rochester. After a year of struggling, Bausch borrowed $62 from his friend, Henry Lomb, with the promise of taking him on as a partner if the business took off. With this loan, Bausch expanded the business. He traveled back to Germany to obtain materials, rented a better store, and stocked his shop with a variety of products such as spectacles, thermometers, mi-
After the death of Henry Lomb in 1909, Bausch continued to expand the business and began to develop equipment for “testing” eyes for vision and disease. During the latter part of World War I the company’s products were sold almost exclusively to the military. Dr. Arthur L. Day, director of the Carnegie Institute in Washington, supplied several scientists to assist in the project of producing glass to be used in range finders, binocu-
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lars, telescopes, periscopes, and other instruments for the armed forces. In 1915 Bausch introduced motion picture lenses for the new movie industry. In 1918 at the end of the war, the company had 6,000 employees and sales of more than $14 million. John Jacob Bausch lived to the age of 96—long enough to see the business he had started from scratch as a poor immigrant grow to be the largest optical company in the world.
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Chronology: John Jacob Bausch 1830: Born.
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1848: Went to work in an optical shop in Switzerland.
When Bausch died in 1908, the company was producing more than 20 million lenses annually. One of its most successful products was Ray-Ban sunglasses. Bausch & Lomb went public in 1938, won an Oscar for its Cinemascope lens in the 1950s, and made it onto the Fortune 500 list in 1975. Since the 1970s it has been a leader in contact lenses, medical products, and research, having acquired several other companies in the 1960s through the 1990s.
1849: Immigrated to America. 1853: Established an optical shop in Rochester, New York. 1865: Started making optical frames from vulcanized rubber. 1866: Incorporated the Vulcanite Optical Instrument Company (later renamed Bausch & Lomb Optical Company). 1893: Acquired the American rights to a new type of binoculars.
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1896: Expanded the business by opening offices throughout the United States.
Contact at: Bausch & Lomb Incorporated 1 Bausch & Lomb Pl. Rochester, NY 14604-2701 Business Phone: (716)338-6000 URL: http://www.baucsh.com
1912: Developed equipment for testing eyes. 1915: Introduced motion picture lenses for the young movie industry. 1926: Died.
Bibliography Eisenhart, Martin Herbert. J. J. Bausch, 1830-1926: American Pioneer. Newcomen Society of England, 1948. Fucini, Joseph J. and Suzy Fucini. Entrepreneurs. Boston: G. K. Hall, 1985. Hoover’s Handbook of American Business 1997. Austin, TX: Hoover’s Business Press, 1997.
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Randall, Michael, “Do You Think That Luck Is Against You?” American Magazine, September 1922. Who Was Who in America. Chicago: A. N. Marquis, 1943.
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L. L. Bean (1872-1967) L. L. Bean, Inc.
Overview Leon Leonwood Bean, best-known as L. L. Bean, became known worldwide for his mail-order catalog focused on equipment and clothing for the serious outdoorsman. With the invention and patenting of a simple rubber-soled, leather-top shoe in 1911, Bean gradually began marketing his shoe, the “Maine Hunting Shoe,” to an increasingly large audience of people, through the mail. L. L. Bean, Inc. has become the world’s largest mail-order company, with over 150,000 orders per day, totaling sales of $1 billion a year. Hunting, fishing, camping, as well as casual outdoors dresswear, are the primary items sold.
Personal Life Leon Leonwood Bean was born on November 13 1872, in Greenwood, Maine, one of six children born to Benjamin Warren Bean, a farmer and horse trader, and Sarah Swett. His parents died when he was only 12 yearsold. Thereafter, he, his brothers, and his one sister lived with relatives in South Paris, Maine. Late in his adolescence he went to live with his uncle in rural West Minot, Maine. Early in life, Bean developed a passion for hunting and fishing, and for the outdoor life. Even though Bean’s formal education ended at the eighth grade, he eventually turned this passion into a career. In 1892 and 1893, Bean took commercial courses at the Kent’s Hill Academy, in Maine. These courses indicated to the young Bean how he might blend his love for the outdoors, with
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business. Bean later spent a semester at the Hebron Academy, in Maine. Until the age of 40, Bean maintained, his life was uneventful, except for his marriage to his first wife Bertha Porter in 1898. Together they had three children and moved around often as Bean worked at a variety of jobs to support them. Bean lived a long life and worked at developing his business, for the most part, after the age of 40. Unlike his first wife, who died young, in 1939, Bean lived to the age of 95. He married his second wife, Claire Boudreau, in 1940, and lived with her until his death. By 1960, when Bean was in his late 1980s, he was still only semi-retired, but he had moved away from his business and the hard winters of Maine, and had settled in Miami Shores, Florida for his last years. He died there on February 5, 1967.
Chronology: L. L. Bean, Inc. 1872: Born. 1911: Designed the “Maine Hunting Shoe.” 1912: Began selling the “Maine Hunting Shoe.” 1917: Opened manufacturing headquarters in Freeport, Maine. 1918: Granted American and Canadian patents for shoe. 1934: Incorporated into L. L. Bean, Inc. 1967: Leon Gorman took over as head of L. L. Bean, Inc.
Career Details Bean spent most of his first 40 years in Maine, loving the life of an outdoorsman. In his frequent moves around the state, he worked as a farm hand, an itinerant soap-peddler, and later, as a business partner with his brother Otho who ran a small store operation in Freeport, Maine. At the same time, Bean was able to pursue his love of the outdoors and continue hunting and fishing. Because both his work and his leisure kept him outdoors, Bean was always, he recounted, getting his feet wet in the marshlands of Maine. Because of the structure of the shoes of the time, he always had problems keeping his feet warm. Warm feet were crucial to outdoor life. After a variety of efforts at shoemaking, he designed the first modern lightweight, warm, dry boots. They had leather uppers, to keep them light, sewed onto heavy rubber overshoe bottoms, to keep the boots dry. He came to call them: the “Maine Hunting Shoe,” and began selling them to others in 1912. Bean was pleased with the fact that he had invented shoes for the sportsman that kept out water and retained warmth. He eventually patented these shoes, and they became his entryway into business. Bean found his first audience for these revolutionary shoes by obtaining the names of licensed Maine hunters, both in and out of the state. Bean then sent each of them his first mail-order catalog, which amounted to little more than a three page brochure, extolling the virtues of these new shoes, and guaranteeing 100 percent satisfaction or a full refund.
1967: Died.
now included outdoor and casual clothing items, as well as fishing and hunting equipment, and canoeing and camping gear. Bean adopted Freeport, Maine, as his home town and continued to expand his mail-order business. The business was incorporated on July 1, 1934. During World War II, Bean served as a consultant to design boots for the Army and Navy. His company received several contracts for military versions of his hunting boots, and other Bean products. By 1960, Bean was clearly winding-down his own career as the Chief Executive Officer (CEO) of L. L. Bean, Inc., and he was now spending more time in Miami Shores, Florida, at his winter home. His worldrenowned name remained with the L. L. Bean Corporation, and by 1967, Bean’s grandson, Leon Gorman, had become the CEO of this billion dollar operation, with Bean himself spending less and less time involved in daily business activities.
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By 1917 business was so good that Bean could finally afford to open his manufacturing headquarters on the main street of Freeport, where it remained in operation until 1962. In 1918, Bean received American and Canadian patents for his hunting shoe. By the early 1920s, Bean’s catalog had been greatly expanded. He
Bean always expressed his own philosophy of life in a simple home-spun style, and his customers responded positively not only to his products, but to the old-fashioned style and character of the L. L. Bean Corporation. Their prescription for success was: “Sell good merchandise at a reasonable profit, treat your customers like human beings, and they’ll always come back for more.”
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Much of what Bean practiced in business during the 20th century seemed “old-fashioned” to many, but in a fast-paced and growing industrial culture, that illusion of an earlier, less complex time was increasingly attractive to his many customers. Bean’s unwittingly seductive style was to maintain his old-fashioned operations, even though, by the 1930s, the business operations were large, complex, and increasingly multi-national. Through his life, Bean maintained a kind of simple Yankee trapper philosophy and resisted potentially unmanageable expansions in his operation. His customers increased as the outdoors became to increasingly represent a good way for the whole family to “get away from it all.” As American life became more complex, crowded, and mobile, the Bean strategy was to represent a simple, natural, and even sentimental view of American life to his customers, a view Bean truly believed in. Furthermore, he believed in a straight-forward, honest, fair-profit business practice, that included the “100 percent moneyback if dissatisfied for any reason” guarantee. Bean spent long hours of daily, customer-personalized work. His mail-order catalogs, most of which he wrote himself, maintained a warm personal style in handling all business orders. This style of communicating with his customers earned L. L. Bean, Inc. annual sales of $2 million through the 1950s and 1960s. L. L. Bean, Inc. continues as a family enterprise, with world-wide operations, one of the world’s largest mail-order concerns, with sales approaching, during the 1990s, $1 billion per year. Phone representatives continue to report daily orders of 150,000, which include expanding sales via the Internet web-site that L. L. Bean, Inc. maintains, as well as through expanded outlet stores world-wide. The main store in Freeport, has been open
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for business 24 hours a day and 365 day a year since 1951. Bean, at age 40, had an idea for developing and selling a new kind of warm shoe for the outdoors. He developed a corporation in 1934, which, by the 1990s was the world’s largest mail-order concern, with sales at $1 billion annually. In 1995, the company reported 150,000 orders per day and $4.5 million in customer sales annually. The growth of L. L. Bean, Inc., along with the love and reverence the name conjures, has been an extraordinary success, reaching far beyond the dreams of its founder.
Sources of Information Contact at: L. L. Bean, Inc. Casco St. Freeport, ME 04033 Business Phone: (207)865-4761 URL: http://www.llbean.com
Bibliography “Bean Sticks To His Backyard.” Economist Magazine, 4 August 1990. Berman, Phyliss. “Trouble in Beanland.” Forbes Magazine, 6 July 1992. Brubach, Holly. “Mail Order America.” New York Times Magazine, 21 November 1993. Dictionary of American Biography, Supplement no. 8. New York: Charles Scribner’s Sons. London: Collier MacMillan Publishers, 1988. “Gumshoe.” Gentleman’s Quarterly, October, 1992. “Obituary.” New York Times, 7 February 1967.
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Scott Beck Overview Scott A. Beck along with two partners acquired Boston Chicken in 1992. With Beck as CEO, the chicken restaurant and carryout franchise, renamed Boston Market, underwent the fastest growth of any restaurant chain in the country. In 1998, however, Beck tendered his resignation after the company’s stocks plunged for a year. Despite the company’s financial setbacks, Boston Market’s success as a home cooked meal franchise changed both the fast-food restaurant and supermarket industries.
(1959-) Boston Chicken, Inc.
Personal Life Beck was born in Chicago, Illinois in 1959. His father, Lawrence, was the cofounder of a high-tech waste management firm. Beck attended two colleges over a 13 year period before receiving his undergraduate degree from Southern Methodist University. Beck is married and has three daughters. Among corporate executives he is uncharacteristically religious, claiming he goes to church virtually every Sunday and strives, he has said, to serve God. “I think my primary purpose in life is to be a steward of what God has given me in talent, time, stamina, and I’m driven to do the best I can with those things,” Beck said in an interview with Nation’s Restaurant News. When not working, his favorite activity is spending time with his family; his personal hero is Winston Churchill. When he was young, Beck spent several summers working at his father’s company, Waste Management,
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Career Details Upon purchase of the Colorado-based Boston Chicken Inc., Beck became chairman and chief executive, while Nadhir and Shearer, his longtime business associates and friends were vice chairmen. In the first three years of their association with the chicken business, the chain experienced almost unprecedented growth, from 175 outlets in 1993 (28 of them operated by the company) to 525 in 1995. Not surprisingly this rapid expansion brought renewed attention to a business—rotisserie chicken chains—that seemed ailing at best. Boston Chicken had found a niche, that of home meal replacement.
Scott Beck.
(AP Photo/HO.)
Inc. and learned a great deal about business from talking to his father and his father’s partners. In 1985 Beck invested in Blockbuster with his father, when the company had only one store. The two acquired a sizeable stake in the business, sensing there would be a strong consumer demand for this service. This was the same intuition, which would draw Beck to Boston Chicken six years later. In the case of Blockbuster, their instincts proved sound, and within a few years, the business had grown into a national enterprise. In 1989, Beck sold his 104-unit Blockbuster franchise back to the company. As part of the sale, he became chairman and chief operating officer of the video chain; he also received $120 million in stock. Beck used the capital to join with two partners, Jeffrey J. Shearer and Saad J. Nadhir. Beck had initially met Shearer, who had been with Steak & Ale for 14 years three years earlier, after Beck’s financial consulting firm, Pace Management, was hired for financial services. Nadhir had been a longtime friend and business associate. Shortly after their meeting, Shearer left Steak & Ale and went to work for Beck at his franchise company, Blockbuster Midwest. It was Nadhir who first foresaw the potential of what was then Boston Chicken. He was driving through Boston one night in 1991 and was surprised to see people lined up to get into the then-virtually-unknown restaurant. When the three men bought Boston Chicken in the Spring of 1992, the chain then had only 33 outlets.
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The idea behind home meal replacement is that consumers who longed for home cooked meals, but were too busy to cook them, could go to Boston Market and buy items that were fresh and either ready-to-eat or nearly prepared. Beck was a pioneer in this market, using research that tuned into consumers’ shopping habits at the supermarket. At a 1997 conference, Beck described consumers who were buying fewer items and insisting on fresh products. Determined to deliver the meals that consumers wanted, but with no precedent to follow, Beck became a trailblazer in this new field of fast food. In an interview for Nation’s Restaurant News he said, “We’re learning on a daily basis. We’re serving fresh, convenient meals in a fast-food environment, and there’s not a model by which to do that.” Beck and his partners managed to reach the market that they identified by offering freshly prepared side dishes along with chicken that was rotisserie roasted, rather than being fried in pieces. During their early years with the company, Beck concentrated on the company’s infrastructure, while Nadhir focused on both company operations and consumer trends. The two shared a common space with other members of the executive workforce. “It’s a team approach and a team attitude that have worked here,” Beck has said when he has been given credit for the success of Boston Market. Beck’s team philosophy is reflected in the various programs that he implemented within Boston Market to gather data and feedback. The Performance Measurement System attempted to monitor feedback from every facet of the Boston Chicken chain, including from customers, shareholders, employees and management. The Boston Notes system allowed executives, employees and executives to share ideas. Another of Beck’s ideas was the establishment of flagship stores. These stores serve as a central location for the preparation of foods for nearby Boston Market stores. Beck hoped that this new idea of centralization would decrease labor and other costs for the individual satellite stores. Beck’s ideas about franchise management were different than any that had been implemented in the restaurant business before. He took what he had learned about retail through his success at Blockbuster and applied it
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to the restaurant world. In many ways he was successful, demonstrated by his fast growing company and Boston Market’s establishment as the leader in homemeal replacement. Beck’s company broke records when its stock prices more than doubled in its first day of trading in 1996. It was when he strayed from his focus on home meal solutions and the retail aspects of the business that Beck and his company began to be criticized. When Boston Market began to focus on their lunch menu and on diversifying their menu, critics wondered if the restaurant had lost sight of its original and most successful market. The company began to lose money and as Boston Market restaurants spread rapidly across the country, the company’s stock began to fall. Beck and Nadhir resigned in May 1998 following a 16-month period during which Boston Market stock lost nearly 90 percent of its value. In an interview with Nation’s Restaurant News in June 1998, Beck blamed himself for the company’s demise. He said, “We should have stayed at the retail end of it, the prepared food and packaged food for people to buy and take home, maybe with some groceries . . . . but we strayed from our core home-meal-replacement strategy. It was my mistake. What I’m talking about is leadership.” Beck also admitted that he missed the retail business, preferring it to the restaurant business.
Social and Economic Impact Even though Scott Beck blamed himself for his lack of staying focused before his resignation, he is known as a pioneer in the field of home-meal replacement. The success of this concept has forced both the fast food and supermarket industries to take notice. A June 1998 Time magazine article commented, “Credit Boston Market (formerly Boston Chicken) with fomenting the HMR decade. The company . . . transformed the notion of fast food by serving the kind of fare one would expect to come piping hot out of the kitchen oven but instead comes right out of a ready-to-eat or ready-to-heat package.” Beck and his coworkers studied consumers and identified a group of people that were longing for fresh homemade food that could be prepared with little or no fuss. Since Boston Market began there have been many similar companies who, have been focussing on the new consumer group that Beck recognized. The display of the fresh food by Boston Market has also been imitated by other chains. The magazine Chain Store Age Executive described Beck’s influence on the supermarket world saying, “Beck and his company woke up the supermarket industry to the fact that many of their customers no longer have the time to prepare their own meals, no matter how much they yearn for the home-cooked dinners mother used to make.” Supermarkets and convenience stores responded with what the magazine called the “most significant
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Chronology: Scott Beck 1959: Born. 1985: Invested in Blockbuster video stores. 1989: Beck becomes vice chairman of Blockbuster. 1992: Purchased Boston Chicken with partners; Beck named Chairman and CEO. 1993: Boston Chicken went public. 1995: Boston Chicken announced record revenues. 1997: Boston Chicken revenues down sharply; company cuts-back staff. 1998: Beck resigns from Boston Chicken.
change in many years in the way they market food.” Many supermarket and convenience store chains have begun to offer home-meal solutions. The trend of offering more prepared foods has extended to offering a variety of other goods, such as flowers and plants, and services, such as dry-cleaning. Due to Beck’s strong retailing skills and his identification of a new market quick, homemade meals are within reach of the hurried consumer.
Sources of Information Contact at: Boston Chicken, Inc. 14103 Denver W. Pkwy. Golden, Colorado 80401-4086 Business Phone: (303)278-9500 URL: http://www.bostonchicken.com
Bibliography “Beck: BCI Turning Around by Refocusing on Human Resources.” Nation’s Restaurant News, 27 October 1997. “Boston Chicken CEO Wants to Rule Meal-Solutions Roost.” Supermarket News, 16 June 1997. “Boston Chicken Heads Roll.” CNNfn, 1 May 1998. Available from http://www.cnnfn.com/hotstories/companies/9805/01/boston/ index.htm “Fears Come Home to Roost For Boston Chicken Speculators.” The Dallas Morning News, 11 June 1997. “Joy of Not Cooking.” Time, 1 June 1998.
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Melcher, Richard A. “Does Scott Beck Have Another Winning Recipe?” Businessweek, 13 December 1993.
“Scott Beck: Chairman, Chief Executive, Boston Chicken, Golden, Colorado.” Nation’s Restaurant News, January, 1995.
Papiernik, Richard L. “Ex-Boston Chicken Chief Says Chain Veered Too Far Off HMR Path.” Nation’s Restaurant News, 29 June 1998.
“Scott Beck and Saad Nadhir: Entrepreneurial Partners Balance Each Other as They Clide Along the Cutting Edge” Nation’s Restaurant News, 9 October 1995.
Romeo, Peter. “What’s So Special About Boston Chicken?” Restaurant Business, 10 April 1994.
“Scott Beck and Saad Nadhir.” Nation’s Restaurant News, 9 October 1995.
“Scott Beck.” Chain Store Executive with Shopping Center Age, September 1997.
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Alexander Graham Bell Overview Alexander Graham Bell invented one of the most common instruments in use today, the telephone. With his supporters, he founded Bell Telephone, which has become one of the world’s most successful corporate conglomerates, American Telephone & Telegraph Co. (AT&T). He was also an outstanding teacher of the deaf and a prolific inventor of other devices.
(1847-1922) Inventor
Personal Life Alexander Graham Bell was born on March 3, 1847, in Edinburgh, Scotland. His father, Alexander Melville Bell, taught deaf-mutes to speak and wrote text books on correct speech. His mother, Elisa Grace Symonds, was a portrait painter and an accomplished musician. Known as Aleck in his early years, Bell received his primary education at home from his mother. Aleck also had natural musical talent and studied music. He could play by ear and improvise at the piano from childhood and continued to play throughout his life. His fine ear helped him in his later work with the human voice. At the age of 14, Aleck showed his inventive spirit when he combined a nail brush with a paddle and made a rotary-brushing wheel that removed the husks from wheat for a flour mill. Encouraged by their father, Aleck and his older brother later designed and built a speaking machine with a mouth, throat, nose, maneuverable tongue, and a bellows lung. The boys worked long hours perfecting the machine and learned how the sounds of a voice are produced. The apparatus actually produced human-like sounds.
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to speak. When Aleck was 15, he and his two brothers started helping their father demonstrate Visible Speech. While the boys waited outside, audience members suggested difficult sounds which were written in symbols on a blackboard. When the boys returned to the room, they could always reproduce the sounds from the symbols on the board, even Russian words, for example, or the sound of a yawn. Aleck studied at Edinburgh University in 1864 and later at University College, London. When Grandfather Bell died in 1865, Aleck’s family moved to London. From 1868-70, Aleck assisted his father at University College teaching the deaf Visible Speech. After Aleck’s two brothers died of tuberculosis, Melville Bell decided to take his remaining family to Canada’s healthier climate. In 1870, the Bells settled in Brantford, Ontario. In 1871, Alexander Graham Bell began his professional career as an educator, inventor, and scientist in Boston, Massachusetts. On July 11, 1877, 30 year-old Alexander Graham Bell married his student, 19 year-old Mabel Hubbard, the deaf daughter of his partner Gardiner Hubbard. For their wedding, Aleck gave Mabel 1,497 shares of Bell Telephone stock and kept only 10 shares for himself. The stock made the Bells wealthy. But because they sold a large portion early on Bell did not become as rich as other entrepreneurs like John Rockefeller. During their 45 year marriage, Bell’s wife helped him through difficult periods in his career. She managed the family finances and up to 40 employees to support his experiments and prevented Bell from withdrawing completely from society. Later in his career, Bell limited his social activities in order to do the necessary thinking work for his various inventions. His daily routine included sleeping until 10 or 11, walks with Mabel, meals, dictation, and work in the lab up until three or four in the morning. For more than 25 years, he spent weekends in total seclusion on his houseboat at his summer home on Cape Breton Island, Nova Scotia.
Alexander Graham Bell tests a new telephone invention. (U.S. National Aeronautics and Space Administration.)
In 1860, Aleck spent a year with his grandfather in London. He gave Aleck lessons in elocution, Shakespeare, and the treatment of speech effects, and refined the boy’s country manners and dress. When Aleck enrolled soon after as a student-teacher at Weston House, a boy’s school near Edinburgh, his students had no idea that the London gentleman was only 15 years old. Aleck taught music and speech and, in turn, received instruction in other subjects. Aleck’s father had invented “Visible Speech,” symbols for all spoken sounds used in teaching deaf people
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In 1882, Bell became a naturalized United States citizen. Always curious about the world, Bell and his wife traveled extensively even in their 70s. Alexander Graham Bell died on August 2, 1922. On the day of his funeral all AT&T telephone lines fell silent for one minute.
Career Details While teaching Visible Speech in London, Bell became deeply interested in the study of sound and the mechanics of speech. As Edwin S. Grosvenor and Morgan Wesson wrote in Alexander Graham Bell, “Aleck sketched how the mouth produces sounds and used tuning forks to measure tones of different parts of speech. Impressed by the young man’s original research, leading phonetician Alexander Ellis referred him to the work Hermann von Helmholtz had done with electrical tuning forks. Mistakenly thinking that the German scientist had transmitted vowel sounds electronically, Aleck then be-
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gan to study electricity.” He came to believe that it would be possible “to talk by telegraph some day.” Bell joined the Boston School for the Deaf—the first such school in the world in 1871. Shortly afterwards, he became a professor of vocal physiology and speech at Boston University and also tutored private pupils. Boston, an important center for commerce and culture, proved a fertile location for Bell’s creative talents. In 1873, Bell began experimenting with different technologies to investigate the transmission of sound over wires. In particular, he worked on the harmonic telegraph—a device that could send several messages simultaneously over a single wire. To transmit the human voice, Bell also experimented with vibrating membranes and an actual human ear. Financial backing for his work came from Gardiner Hubbard and Thomas Sanders, the father of one of his deaf pupils. Early in 1874, Bell met Thomas A. Watson, a young machinist and technician, at a Boston electrical shop. Watson brought the necessary electrical engineering expertise to Bell’s experiments and became the inventor’s indispensable assistant. The two men spent endless hours experimenting. In the summer of 1874, Bell formed the basic concept of the telephone. He used a varying but unbroken electric current to transmit the varying sound waves of human speech. But no one believed the telephone would be anything more than a toy, and Hubbard insisted that the inventor focus his efforts on the harmonic telegraph. Bell complied, but when he patented one of his telegraph designs in February 1875, he discovered Elisha Gray, a professional inventor, had patented a multiple telegraph just two days earlier. Greatly discouraged, Bell consulted Joseph Henry, a physicist who invented the first electromagnetic telegraph. He urged Bell to pursue his idea of speech transmission. Consequently, Bell and Watson continued to work on the harmonic telegraph but with the telephone still in mind. Accidentally, in June 1875, an intermittent transmitter produced a steady current and transmitted sound. Bell had proof that his 1874 idea worked, and he quickly sketched a design for an electric telephone that Watson then built. The partners experimented all summer, but failed to transmit voice sounds. That fall, Bell began to write the patent specification. Hubbard finally filed for the patent on February 14, 1876—just hours before Gray appeared at the same patent office to file an intent to patent his own telephone design.
Chronology: Alexander Graham Bell 1847: Born. 1869: Began teaching deaf students in London. 1874: Elected president of National Association of Teachers of the Deaf. 1876: Received U.S. Patent for his telephone. 1881: Financed Science magazine. 1884: Opened school for hearing and hearing-impaired children. 1897: Elected president of National Geographic Society. 1907: Organized Arial Experiment Association. 1911: Designed 100 science experiments for children. 1914: Coined the term “greenhouse effect.” 1919: Developed world’s fastest ship with Casey Baldwin. 1922: Died.
After a year of refining his telephone, Bell and his financial backers, Hubbard and Sanders, founded the Bell Telephone Company on July 9, 1877. Later that year, the first telephone was installed in a private home. While on his honeymoon in summer 1877, Bell introduced the telephone to England and France and one year later, the first subsidiary, the New England Telephone Company, was organized. One decision important to the success of the Bell Telephone Company was to lease telephones instead of selling them. Leased telephones could be easily replaced as improved models were developed. This concept helped spread telephone technology and standardize equipment, an important factor for high quality service and the eventual financial success of Bell Telephone.
Bell’s patent, U.S. Patent No. 174,465, was granted on March 7, 1876, four days after his 29th birthday. On March 10, the first message transmitted by telephone passed from Bell to Watson in their workshop: “Mr. Watson, come here, I want you!” Three months later, Bell’s invention became a star attraction at the International Centennial Exposition in Philadelphia, the largest fair in American history. Despite this progress, Bell was still broke, desperate for money to apply for patents overseas and even begging lunch money from Watson.
Although the phone company grew rapidly, Bell left its day-to-day operations to others. He remained active in the company, however, as the principal defender of his telephone patents. Bell Telephone encountered early competition from the Western Union Telegraph Company. Bell had offered to sell his invention to Western Union for $100,000, but the company had refused. Later however, Western Union employed two prominent inventors, Thomas A. Edison and Elisha Gray, to work against Bell. Western Union’s actions nearly ruined Bell Telephone financially before a patent infringement suit
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was filed. The courts upheld Bell’s patent and in 1879 Western Union had to agree to stay out of the telephone business. Altogether, the Bell Telephone Company was involved in 587 lawsuits, five of which went to the Supreme Court; Bell won every case. A convincing argument was that no competitor claimed originality until 17 months after Bell’s patent. After returning to the United States from England in 1879, Bell continued his work as an inventor. In 1880, he won the French government’s Volta Prize for his telephone. With the $10,000, he established the Volta Laboratory for research, invention, and work for the deaf. Among the new devices Bell invented were the graphophone for recording sound on wax cylinders or disks; the photophone for transmitting speech on a beam of light; the audiometer for measuring hearing ability; the telephone probe used in surgery before X-rays; and the induction balance for detecting metal within the human body. Bell also remained interested in education of the deaf. With the profits from the Columbia Gramophone Company’s commercialization of his phonograph records, Bell established the Volta Bureau in Washington to study deafness. In 1890, he founded the American Association to Promote the Teaching of Speech to the Deaf, renamed the Alexander Graham Bell Association for the Deaf. In the 1880s Bell became involved with organizations and publications that introduced the results of scientific research to a broader public. In 1882 he and Hubbard acquired Science magazine. Despite significant losses in its first years, they were convinced it would be successful. In 1888, 33 prominent scientists, explorers, and authors responded to the partners’ invitation to start a group to be called the National Geographical Society. After Hubbard’s death, Bell took over its presidency in 1899 and helped establish the society and its magazine, National Geographic. After 1895, Bell’s primary interest was the possibility of flight. He built gliders capable of carrying human beings, supported pioneering aviation experiments, and helped organize the Aerial Experiment Association in 1907. In his 70s, Bell continued reading, studying, and working long hours on various projects. He designed a hydrofoil boat that moved across the water on a cushion of air, and worked on air conditioning, a sheep breeding project, an early iron lung, solar distillation of water, and sonar detection of icebergs. Many of his experiments involved energy conservation. He created devices that used the waste heat in chimneys and lamps as well as rooftop devices to collect heat from the sun.
Social and Economic Impact Bell’s invention of the telephone changed the world significantly. His patent for the “electric speaking telephone” was the most valuable single patent ever issued.
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It opened a new age in communication between people and businesses, as well as in communication technology. The Bell Company built the first long-distance line in 1884, connecting Boston and New York. Today, millions of phone calls are made daily, connecting the most remote places all over the world. Bell’s vision of transmitting voice messages from one place to another made advanced communication devices—wireless and cellular phones, pagers, and personal communication systemspoasible. Bell also contributed to the development of other key technologies. Decades before the radio, Bell’s “photophone” used light waves to transmit sound, the basic principle of today’s fiber optics technologies. So advanced was the photophone, that improvement was impossible until the invention of the laser in 1957 (this helped overcome transmission interference over longer distances). Bell’s support of scientists interested in aviation led to the development of the hydrofoil boat, which set the world water speed record in 1918, and a biplane, which recorded the first flight in Canadian history. The organizations and publications Bell helped to establish are powerful forces today. By the 1980s AT&T, which emerged from Bell Telephone, controlled virtually all telephone traffic in the USA. Although Congress has since passed laws deregulating long-distance service and ending AT&T’s monopoly, the company still employed 128,000 people in 1998. Science magazine is still the official organ of the American Association for the Advancement of Science, a group with over 143,000 members in 1998. The National Geographic Society, known for its award-winning nature broadcasts and high quality monthly magazine, has millions of members throughout the world. According to Grosvenor & Wesson, “One of Bell’s lesser known invention-the nonprofit society promoting membership nationally through a popular magazine-would serve as a model for publications such as Smithsonian, National History, Audubon, and National Wildlife.” Inspired by his two daughters and nine grandchildren, Bell remained interested in education throughout his life. He founded a kindergarden for deaf and hearing children. Later, Bell supported the ideas of educator Maria Montessori, which stressed schoolchildren’s interests rather than forcing them to memorize, and designed experiments that taught basic science principles. The Bells founded the Montessori Educational Association, funded its magazine, Freedom for the Child, and opened Canada’s first Montessori school. Far ahead of his time on many things, Bell even foresaw the environmental problems the world is grappling with today. By 1917, he worried about what would happen when coal and oil resources were used up and encouraged engineering students to develop new sources of energy. He also wondered about the effects of burning fossil fuels on the atmosphere. Bells answer is quoted by Grosvenor and Wesson: “While we would lose some of
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the sun’s heat, we would gain some of the earth’s heat which is normally radiated into space,” Bell wrote. “We would have a sort of a greenhouse effect . . . . The net result is that the greenhouse becomes a hot-house.”
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Byers, Paula K., and Suzanne M. Bourgoin, eds. Encyclopedia of World Biography, 2nd ed. Detroit: Gale Research, 1998 Delaney, Arthur A. “Alexander Graham Bell: Canadian-American Hero,” Stamps, 20 January, 1996. Flatow, Ira. They All Laughed . . . . New York: HaperCollins Publishers, 1992.
Sources of Information
Grosvenor, Edwin S., and Morgan Wesson. Alexander Graham Bell: The Life and Times of the Man Who Invented the Telephone. New York: Harry N. Abrams, 1997.
Bibliography American Association for the Advancement of Science. “General Information.” Washington, DC: American Association for the Advancement of Science, 1998. Available from http://www.aaas. org/aaas/geninfo.html. AT&T web site. “AT&T: A.G. Bell Net Grahams.” New York: AT&T, 1998. Available from http://www.att.com/agbell/ netgrahams.html.
“Happy Birthday, Alexander Graham Bell.” Newsbytes, 4 March 1997. “Birth of the Society.” National Geographic Washington, DC: National Geographic, 1998. Available from http://www.nationalgeographic.com/society/ngo/birth/. World of Invention. Detroit: Gale Research, 1994.
Brogan, Tom. “Alexander Graham Bell.” Canadian Geographic, March-April 1997.
“Yahoo! Finance Home. AT&T Corporation.” Santa Clara, CA: Yahoo! Inc., 1998. Available from http://biz.yahoo.com/p/t/t.html.
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Lyle Berman (1942-) Grand Casinos, Inc.
Overview Lyle Berman is the chairman of the board of Grand Casinos Inc., which develops, builds, and manages casinos. He is also the chairman and CEO of Rainforest Cafe, an innovative concept combining restaurant and retail shopping with an environmental flair, including live birds and lush plants.
Personal Life Lyle Berman was born around 1942 and raised in Minneapolis, Minnesota. The son of Theresa and Nathan Berman, he graduated from the University of Minnesota in 1964 with a degree in business administration. Berman and his wife, Janis, live in Wayzata, Minnesota, and have four children. In October of 1995, the B’nai B’rith, a Jewish organization, honored him with the Great American Traditions award, and in April of 1996 he was named the recipient of the Gaming Executive of the Year award. In 1996 Berman donated $2 million to his alma mater, the University of Minnesota, to create the Berman Family Chair in Jewish Studies and Hebrew Bible in the school’s College of Liberal Arts.
Career Details Berman started his career working in his family’s leather business, Berman Buckskin. The company flourished with his ideas, eventually opening 27 stores. The family sold the operation in 1979 to W. R. Grace, but
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Berman continued as president and chief executive officer. Under his direction, the business grew to include over 200 branches across the country. In 1987 Berman bought out the company and the next year, sold it to Melville Corporation for millions, which made it part of Wilson’s: The Leather Experts chain. In 1996 Berman and Wilson’s management bought back the entity from Melville Corporation. With plenty of business experience behind him, Berman was semi-retired when he went in another direction in 1991, helping to found Grand Casinos, Inc., for which he began serving as CEO. Investing $3 million, he pledged to develop and manage casinos for a Minnesota Native American tribe, the Mille Lacs Band of Ojibwe. In a little over five years, Grand Casinos had grown to include 13,000 employees and owned or operated seven casino resorts in the United States. Berman’s first casino was built on Lake Mille Lacs, about 90 miles northwest of Minneapolis/St.Paul, but it immediately proved to be too small to handle the number of customers it attracted. He put Grand Casinos stock on the public stock market and raised funds for a building five times the size of the original. “A lot of my friends thought putting a casino up in rural Minnesota was crazy,” he remarked to Richard S. Teitelbaum in Fortune. “But I knew the power of a slot machine.” The company is now listed on the New York Stock Exchange Berman then opened two casinos in Mississippi: Grand Casino Gulfport, opened in May of 1993, the largest casino to operate between Las Vegas and Atlantic City; and Grand Casino Biloxi, the largest floating casino in the world. In 1996 it opened the third of Mississippi’s three largest casinos, the Grand Casino Tunica. As of 1997 Grand owned and operated these three casinos, plus two casinos on Indian lands in Louisiana, and the Mille Lacs and Hinckley casinos on reservations in Minnesota. To set Grand Casinos apart from other casinos, Berman’s theory was to offer more extras, like golf, restaurants, and hotels. “We want to become known as the biggest casinos with the best amenities,” he noted, according to Wall Street Transcript Digest.
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Chronology: Lyle Berman 1942: Born. 1979: Berman family sold chain of leather stores. 1987: Bought back leather retailers. 1988: Sold leather stores for a tidy profit. 1991: Cofounded Grand Casinos Inc. 1994: Appointed CEO of Stratosphere Corp. 1995: Named chairman of the board of Innovative Gaming Corporation of America. 1995: Received B’nai B’rith Great American Traditions Award. 1996: Named Gaming Executive of the Year. 1996: Donated $2 million to University of Minnesota.
However, Berman suffered a blow in 1996 when Stratosphere stock plunged, affecting Grand Casinos, which owned about 42 percent of the project. He was caught in a controversy when shareholders learned that while he was selling them on the idea, he was secretly selling his own shares, perhaps indicating that he knew the casino was doomed, he vehemently denied all of the allegations. Berman continued to be optimistic about the project, but nevertheless, it declared bankruptcy and Berman resigned from the board of directors in July of 1997.
Stratosphere, a giant entertainment/casino complex in Las Vegas, was another way in which Grand Casinos was continuing to build its dynasty. This project included a 100-story, 1,149-foot free-standing observation tower, the tallest such structure in the country. David Spanier in the Independent claimed that “it pierced the skyline like a white rocket.” The tower offered a 360-degree revolving restaurant and a roller coaster which zoomed over 900 ft in the air around the outside of the tower.
Rebounding from the failure of Stratosphere, Berman soon became involved with a new entertainment venture as chairman and CEO of the Rainforest Cafe. This intriguing concept blended entertainment, retail, and a “rainforest” theme, complete with waterfalls, lush plant life, colorful live tropical birds, and bird keepers to give talks about the various species for the benefit of patrons and passers-by. It operates under the registered trademark motto, “A Wild Place to Shop and Eat.” As of May of 1998, there were 15 such ventures in the United States and three in Mexico and England, with a number of new stores planned, including expansion into Canada, Hong Kong, and Singapore. Unlike Stratosphere, stocks were healthy in the first year of operation. Also in early 1998, Hilton Hotels was conducting talks with Berman to possibly purchase Grand Casinos, which had seen a sales growth of 24 percent from 1996 to 1997.
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Meanwhile, in 1995 Berman was named chairman of the Innovative Gaming Corporation of America, a video game developer and distributor. Grand Casinos was the firm’s largest shareholder, owning about 17 percent. Berman had also been chief executive officer of the Stratosphere Corporation since July of 1994 and in 1996 he took over as its chairman as well.
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Social and Economic Impact Not long ago, gambling was the almost exclusive domain of Las Vegas, Nevada; Atlantic City, New Jersey; and Reno, Nevada; unless illegal back-room operations, private poker games, and church bingo were counted. Casinos started cropping up on Indian reservations in numerous states after a law passed in 1988 making them legal. As the popularity of casinos increased, more and more people saw that there were substantial profits to be made. Soon, various state and local governments around the nation gave the green light to put up casinos, seeing them as a sure bet for raising muchneeded cash. These added and updated venues have transformed the reputation of gambling. From the glitzy Vegas establishments to the heart of the Midwest, gambling has a new image. Retiree bus trips make frequent stops to these more down-to-earth establishments, but the range of demographics that can be found gambling is not limited to seniors. Moreover, there is an escalating number of gamblers: casinos brought in twice as many visitors in 1993 compared to 1990, according to Corporate Report-Minnesota, and more and more cities saw these numbers as a good reason to add casinos to their business communities. With this rise has come a bevy of social problems, including gambling addicts who rack up thousands in debt. However, a great majority enjoy casinos as just another diversion. Berman was at the forefront of this new gambling frenzy with the Grand Casinos chain, which brought slot machines and games to rural reservations and added family fun to Las Vegas, which was previously marketed as adults-only. In 1993, Grand Casinos’ 40 percent share of the profits from the Mille Lacs and Hinckley casinos was $10.7 million, an increase of 16 percent from the $9.2 million it took in 1992. By 1997, Grand Casinos sales revenue was over $607 million, with a net income of over $66 million. With Berman’s leadership of the fast-growing Rainforest Cafe, valued at around $500 million, it looks like he has yet another winner in the entertainment business.
“CEO Interview-Lyle Berman, Grand Casinos, Inc.” Wall Street Transcript Digest, 7 March 1994. “CEO Interview-Lyle Berman, Grand Casinos, Inc. (GRND)” Wall Street Transcript Digest, 10 May 1993. Dorn, Bill. “Berman Maps Out a Gambling Strategy.” Corporate Report-Minnesota, May 1994. Fenster, J. M. “Nation of Gamblers.” American Heritage, September 1994. “Grand Casinos, Inc.” Hoover’s Online, 17 June 1998. Available from http://www.hoovers.com. Grand Casinos, Inc. “Management Profile: Lyle Berman.” Minnetonka: Grand Casinos, Inc., 1998. Available from http://www. grandcasinos.com. Grand Casinos, Inc. “Welcome to Grand Casinos.” Minnetonka: Grand Casinos, Inc. Available from http://www.grandcasinos. com. Hallonquist, Sarah. “New Endowed Chair at U. Minnesota Stresses Biblical Inquiry.” University Wire, 20 October 1997. Kurschner, Dale. “Performance Anxiety.” Corporate Report-Minnesota, November 1996. Lowry, Tom. “Partner Rift, Problems Bring Stratosphere Back to Earth.” USA Today, 30 July 1996. “Lyle Berman Appointed Chairman of Innovative Gaming Corporation of America.” PR Newswire, 18 December 1995. Millman, Chad. “Cruisin’ for a Bruisin.” Sports Illustrated, 3 April 1995. Oslund, John J. “FYI/Hilton and Grand?” Star Tribune, 1 April 1998. Popkin, James. “America’s Gambling Craze.” U.S. News & World Report, 14 March 1994. “Rainforest Cafe Announces Preliminary Fourth-Quarter Results.” Business Wire, 5 January 1998. Rainforest Cafe, Inc. “Locations.” Hopkins, MN: Rainforest Cafe, Inc. Available from http://www.rainforestcafe.com. “Rainforest Cafe, Inc. Reports First Quarter Earnings of $0.16 Per Share.” Business Wire, 4 May 1998. Serwer, Andrew E. “Welcome to the New Las Vegas.” Fortune, 24 January 1994. Spanier, David. “Gambling.” Independent, 27 June 1996.
Sources of Information
“Stratosphere Announces Resignation of Directors.” Business Wire, 31 July 1997.
Contact at: Grand Casinos, Inc. 130 Cheshire Lane Minnetonka, MN 55305 Business Phone: (800)566-4763 URL: http://www.grandcasinos.com
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“Stratosphere Corp. Elects Lyle Berman as New Chairman.” Business Wire, 22 July 1996. Teitelbaum, Richard S. “Winners: America’s 100 Fastest-Growing Companies.” Fortune, 17 April 1995.
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Susan Vail Berresford Overview Susan V. Berresford is the president of the Ford Foundation, the second-largest philanthropic organization in the United States with about $9 billion in assets. It gives grants and loans to individuals and institutions that promote democratic values, fight poverty and injustice, increase international cooperation, and advance human achievement.
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Personal Life Susan Vail Berresford was born on January 8, 1943, to Richard Case and Katherine Vail (Marsters) Berresford Hurd. She is quiet about her childhood, so biographical accounts begin with her college years. Berresford attended Vassar College from 1961 to 1963, then graduated cum laude in 1965 from Radcliffe College with a bachelor of arts in American History. During her summer break from school in 1962, Berresford worked with the United Nations Volunteer Services in New York City, and in 1964, she served as a secretary to historian Theodore H. White. Her immediate goal after graduation, she told the New York Times, was to “engage directly with antipoverty work.” Berresford married David F. Stein and they have one son, Jeremy Vail Stein, but their union ended in divorce. She is known as a slender, quietly elegant woman who works long hours. Colleagues note her intelligence, her attention to detail, willingness to listen, and down-toearth nature.
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In 1995, she was made executive vice president and chief operating officer (COO) of the foundation. She was elected the first female president of the organization, effective April 3, 1996, replacing Franklin I. Thomas, the first African American to head the agency.
Chronology: Susan Vail Berresford 1943: Born. 1962: Worked with United Nations Volunteer Services. 1965: Hired at Neighborhood Youth Corps, New York City. 1967: Began working for Manpower Career Development Agency. 1970: Started at Ford Foundation in the national affairs division. 1972: Became program officer at Ford Foundation. 1980: Promoted to officer in charge of women’s programs for the Ford Foundation. 1981: Named vice president for the U.S. and International Affairs programs at Ford Foundation. 1989: Took over as vice president of the program division in charge of worldwide programming for Ford Foundation. 1995: Became executive vice president and chief operating officer (COO) of the Ford Foundation. 1996: Elected the first female president of the Ford Foundation.
Career Details After graduating from Radcliffe, Berresford did pursue her goal of social improvement. She became a program officer with the Neighborhood Youth Corps in New York City in 1965, and stayed there until 1967, when she took a job as a program specialist for Manpower Career Development Agency, also in New York. The next year, she was promoted to program specialist there, and then spent a couple of years as a freelance consultant and writer in Europe and the United States. Berresford joined the Ford Foundation in 1970 as a project assistant in the national affairs division, and in 1972 became a program officer in that area. She served in that post until 1980. In 1980 Berresford was promoted to officer in charge of women’s programs for the Ford Foundation. The next year, she became vice president for the U.S. and International Affairs programs, a position she held until 1989, when she took over as vice president of the program division in charge of worldwide programming.
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Some critics were initially skeptical of promoting an “insider” to president at Ford. As Karen W. Arenson stated in the New York Times, “To critics who viewed Ford . . . as a sleeping giant in need of shaking up, wedded to many of the same projects it supported 15 years ago, the appointment did not seem a prescription for change.” But Berresford instituted a number of important changes at the foundation. She brought in department heads from international offices as well as some outsiders to help generate new ideas. She reorganized grant-giving around three major focus areas. She also began to emphasize communications, establishing it as a new department in order to strengthen public relations and advertising. This emphasis on communications was Berresford’s most significant innovation at the Ford Foundation. Previously, the foundation had kept a low profile, but Berresford wanted to push the organization into the spotlight. “The new Ford will most likely be more conspicuous, with more attention to press coverage of its programs and positions,” commented Karen W. Arenson in the New York Times. The new president also touted programs for women. “Feminism is now a theme interwoven in everything we do,” claimed Berresford in an article in Working Woman. Feminist leader Gloria Steinem supported Berresford’s new appointment. “It’s more important than naming a woman Cabinet member of president of a corporation,” Steinem remarked in Working Woman, “because the Ford Foundation can initiate and support social change here (United States) and internationally.” On April 24, 1997, Berresford announced that $50 million would be put forth to pursue the Ford Foundation’s priorities. According to Business Week, the foundation was dedicating $20 million to “create or expand institutions that lend and invest in low-income communities in the United States and overseas;” $15 million to “seed and strengthen foundations in such fields as economic development, women’s rights, and the arts;” and $15 million to “revitalize college-level research and teaching on understudied places, languages, and cultures.” Berresford also aimed to increase the amount of non-U.S. grants to 50 percent (previously at 40 percent) and to hire more African American, Asian American, and Latin American staff.
Social and Economic Impact Berresford has guided the Ford Foundation through a period of major change. Founded in 1936 by auto baron Henry Ford and his son, Edsel, the private non-profit organization began as a local Michigan philanthropy ded-
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icated to the broad purpose of improving human welfare. In 1950 it became a national and international organization, with its assets composed almost entirely of Ford Motor Company stock from the two men’s estates. From 1956 to 1974, the foundation got rid of its Ford stock and spread itself over a range of investments, and in 1976 Henry Ford II quit the board, severing all connections between the Ford family and the foundation. Today, Ford is the largest organization of its kind in the country. The Ford Foundation’s objectives are to reduce poverty and injustice, strengthen democratic values, promote international cooperation, and advance human achievement. Grants for these purposes are given in three focus areas, which Berresford has outlined: Asset Building and Community Development, Peace and Social Justice, and Education, Media, Arts, and Culture (EMAC). Asset Building and Community Development focuses on fighting poverty by helping people and communities build assets and give them future options, which includes bank-like programs to assist low-income individuals and areas. Peace and Social Justice promotes democracy and freedom, and helps fund organizations that work for civil rights and fair laws. EMAC funds the arts and cultural institutions and promotes awareness of various cultures in hopes of building strong international relationships. As of mid-1997, the Ford Foundation had assets of about $9 billion, making it larger in terms of finances than 99 percent of all American businesses, and had provided $8 billion to about 9,000 institutions and 100,000 individuals around the globe. The money comes from a diversified investment portfolio. The organization dispenses about $400 million annually and employs almost 600 people—400 in the New York office and about 200 in 16 offices overseas. During the 1960s, the Ford Foundation functioned mainly as a springboard for liberal ideas but relied on the government to institute them. Such programs as the War on Poverty, the development of public television, and Head Start—a preschool enrichment program for disadvantaged children-were supported by Ford but implemented through government initiative and tax dollars. But with waning support for government spending in these areas, the Ford Foundation has had to change tactics. With Berresford in the lead, the Ford Foundation is positioning itself as a leader in socially responsible activism. Since government is drastically cutting funds for
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social programs and services, the private sector, especially nonprofit groups, has had to find new ways to promote social goals. Instead of relying on tax funds, Ford is now exploring ways to tap into community resources to fund its programs. It gave $2.5 million, for example, to help an Oregon bank develop environmentally responsible lumber and fishing businesses. And its “individual development accounts” provides matching funds to those saved by low-income individuals to buy a house, pay for tuition, or open a business. Such grassroots enterprises have earned the enthusiasm of political conservatives as well as liberals and helped to dispel the notion that Ford only promotes liberal causes. With Berresford’s guidance, experience, and insight, the foundation will undoubtedly continue to thrive and promote its goals.
Sources of Information Contact at: Ford Foundation 320 E. 43rd St. New York, NY 10017-4816 Business Phone: (212)573-5000 URL: http://www.fordfound.org
Bibliography Arenson, Karen W. “At Ford Foundation, a New Chief and a New Style.” New York Times, 14 February, 1996. Collingwood, Harris. “A Woman at the Wheel of the Ford Foundation.” Working Woman, April 1996. Coy, Peter. “Fewer Giveaways, More Self-Reliance.” Business Week, 12 May 1997. Ford Foundation. “The Ford Foundation.” New York, NY: Ford Foundation. Available from http://www.fordfound.org. “Ford Foundation.” Hoover’s Online, 26 March 1998. Available from http://www.hoovers.com. “Ford Foundation to Host Unique Meeting of Corporate Leaders to Discuss the Benefits of Integrating Work and Personal Life.” Business Wire, 14 September 1997. “Franklin Thomas Set to Leave Ford Foundation.” Jet, 23 January 1995. Mercer, Joye. “The Ford Foundation Shifts Its Focus and Structure.” The Chronicle of Higher Education, 15 August 1997. Who’s Who in America, 51st edition, 1997. New Providence, NJ: Marquis Who’s Who, 1996.
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Jeff Bezos (1964-) Amazon.com, Inc.
Overview Pioneer retailer on the World Wide Web, Jeff Bezos has proven that a fortune can be made by convincing people to rethink the way they shop. With Amazon.com, Bezos has created the world’s largest bookstore of available titles with virtually no inventory or property costs. Browsing for a book will never be quite the same again with the online ease and convenience that Amazon provides. Bezos caught the online wave at the right time and must compete with the many imitators who wish to similarly succeed in selling products over the Internet.
Personal Life Jeff Bezos was born in Albuquerque, New Mexico in 1964. His father is an Exxon executive, and Bezos was brought up in affluence and privilege. Until he was 16, Bezos spent his summers rounding up herds and fixing windmills on his grandfather’s ranch in tiny Cotulla, Texas. Although he did not pursue a career as a cowboy, there is something about the lure of the frontier that caught Bezos’ imagination and spurred his interest in the untapped potential of the Internet. From an early age, Bezos wanted to be an entrepreneur. He attended Princeton University, where he graduated in 1986 with a Bachelor of Science degree in electrical engineering and computer science (summa cum laude and a member of Phi Beta Kappa). He is married to an aspiring novelist, MacKensie, and shares his home with a Labrador retriever, named Kamala after a minor “Star Trek” character. Relocating from New York City
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to Seattle to create Amazon.com, Bezos set out to found a company that could take advantage of the 230 percent annual growth in Internet usage. When the company went public in 1996, Bezos’s net worth was valued at more than $500 million. Amazon is growing at a rate of 3,000 percent a year, and Bezos expects to reach $1 billion in annual sales by the year 2000. When Amazon sold its millionth book, Bezos fulfilled his promise to personally deliver it: a Princess Diana biography to Tokyo. Bezos works in a somewhat rundown section of Seattle, Washington, in a small office with a desk he made of a door nailed to two-by-fours as legs; he built all his company’s desks according to this model in Amazon’s early days. As he proudly declares, “We spend money only in areas where it matters to our customers.” Analytical and methodical, Bezos is also enthusiastic and tireless in promoting his company and the potential of the Internet to change the way people buy. Ironically, however, Bezos confesses to buying about half of his books in regular stores where the browsing helps fulfill a social function.
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Chronology: Jeff Bezos 1964: Born. 1986: Graduated from Princeton University. 1986: Hired by Fitel. 1988: Hired by Bankers Trust, Co. 1990: Promoted to vice president. 1990: Hired by D.E. Shaw & Co. 1992: Promoted to senior vice president. 1995: Started Amazon.com. 1997: Amazon.com went public. 1998: Amazon.com sold its millionth book.
Career Details When Bezos graduated from Princeton he headed to Wall Street. Interested in a job with a high-tech start-up company, he joined Fitel, a new company that coupled high tech with high finance by creating software for tracking international stock trades. Under the management of David Shaw, whom Bezos credits for teaching him a great deal about becoming a good manager, Fitel had only 11 employees when Bezos joined the firm. In 1988 Fitel was sold to a Japanese firm, and Bezos joined the Bankers Trust Company, which leads the development of computer systems that helped manage more than $250 billion in assets. In 1990, Bezos moved to D.E. Shaw & Co. where he helped build one of the most successful and technically sophisticated quantitative hedge funds on Wall Street, becoming the company’s youngest vice president in 1992. The genesis for the creation of Amazon.com began in the Spring of 1994 when Bezos was struck by the amazing annual growth of Internet usage. Nothing was growing as quickly, and Bezos began to explore the idea of creating a business that would tap into that growth. He decided on Internet retailing and methodically prepared a ranked list of the leading products that could best be sold over the Internet. Books led the list because there are so many items and no existing traditional bookstore could possibly offer 2.5 million titles as Amazon.com does. The largest bookstore carries fewer than 200,000 titles. Settling on his product, he next considered a location for his business. Bezos carefully and methodically examined his options. He needed a location near a major book wholesaler, within reach of a pool of high-tech talent to make on-line sales work, and in a small-population state, to avoid sales tax when products were
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shipped across state lines. Narrowing it down to the western United States, Bezos eventually chose Seattle, Washington. In choosing a name for his company, Bezos was equally precise and analytical. He wanted a name that started with the letter A to head any alphabetical list, would be short and easy to spell, would be internationally recognizable, and most importantly, would convey a sense of size that his company would offer as the largest bookstore in the world. He finally settled on Amazon.com, after the largest river in the world. Bezos launched Amazon.com in June 1995. Early investors who put up $30,000 in 1994 would be holding Amazon stock worth $4.5 million at the end of 1997. The company, with 600 employees, ships books at a rate of about $150 million a year, which equals approximately 30 traditional chain bookstore superstores. The secret behind Amazon’s amazing quick growth is that the vast majority of books ordered are then purchased from book wholesalers’ warehouses, which allowed Bezos to start his company with little capital and does not require large investments in real estate or inventory. Despite his company’s successful growth, analysts predicted that Amazon.com could not survive once the other bookstore giants such as Barnes & Noble and Borders copied Bezos’s simple idea. So far, however, the analysts have been proven wrong. Bezos is confident that his company has an advantage over the others because Amazon.com is technologically based and focused exclusively on-line. Other companies that are real-estate based, he predicts, will have a harder time successfully accomplishing both Internet and traditional retailing.
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Success will depend, according to Bezos, on customer satisfaction and ease of service, which Amazon.com is determined to provide. Eventually, Bezos anticipates moving onto other information-based products such as CDs and videos. Although Amazon.com has achieved remarkable success in dominating the online book market, the company lost $30 million in 1997 and expects to lose the same amount in 1998 before showing a small profit in 1999. Bezos has invested his profits in expanding his business, following the principle of GBF: “Get Big Fast.” Long-term success, according to Bezos, will depend on becoming one of the few “brands that matter.” As he has said, “There are always two or three or four brands that matter. With the lead we have today, we should be the number one player.” Jeff Bezos is a pioneer in on-line retailing who has played an important role in helping to transform the way people shop today. Although skeptics have dismissed the financial viability of conducting large businesses on the Internet, Bezos has shown how it can be done by anticipating what his customers want and skillfully using the best technology to re-imagine the book business. Bezos realized that the Web could offer what a traditional bookstore could never deliver: a “stock” of more than 2.5 million titles. Customers can sample reviews and follow links to other books by the same author or to other books on comparable subjects. Convenience and service, the Amazon.com specialty, are factors that could substantially alter retailing.
inventory, but with considerable focus on his market and the demands of on-line retailing, Bezos almost immediately challenged the largest bookstore giants. Information is the Internet’s greatest attribute, and Bezos has shown how his customers’ need for books can be satisfied in a radically different way. Amazon.com has also established new benchmarks in the publishing industry, while raising the level of customer service. Amazon has caused publishers to lower inventory and centralized distribution. The industry can also advance order certain books and pre-sell some titles by getting feedback from readers about what their favorite authors should publish. For the customer, Bezos through Amazon.com has cut prices up to 40 percent on special featured books, has customized book selections, has created reader forums, and has provided interactivity between readers and authors. In response to changes in book retailing, traditional bookstores have also changed what they sell, stressing more reasons to visit their stores, such as coffee and pastries, poetry readings, and book signings.
Sources of Information Contact at: Amazon.com, Inc. 1515 2nd Ave. Seattle, WA 98101 Business Phone: (206)622-2335 URL: http://www.amazon.com
Bibliography Business Week, 13 January 1997.
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Fortune, 9 December 1996.
Bezos, in creating a business plan and implementing it with Amazon.com, showed how an upstart company can quickly become an industry leader in the hightech age. Without the need for great initial investment or
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Gentlemen’s Quarterly, March 1998. Newsweek, 28 April 1997. Publishers Weekly, 5 January 1998.
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Nicholas Biddle Overview A talented administrator and pragmatic businessman, Nicholas Biddle developed the Bank of the United States into a prototype of the modern central banking system. Using the power of the Bank to expand and contract the money supply, he played a prominent role in bringing order to the chaotic American marketplace and creating a stable currency.
(1786-1844) Bank of the United States
Personal Life A member of one of early America’s most aristocratic families, Nicholas Biddle was born January 8, 1786, in Philadelphia. His parents were Charles Biddle, a successful merchant and vice president of the Supreme Executive Council of Pennsylvania, and Hannah Shepard, the daughter of a North Carolina merchant. In 1810, Nicholas Biddle met and eventually married Jane Craig, whose father’s estate was one of the largest in Philadelphia. Biddle was a precocious student whose parents took a keen interest in his education. He was admitted to the University of Pennsylvania at the age of 10 and three years later transferred to Princeton University as a sophomore. He graduated from there as valedictorian (the top-ranked person in his class) in September 1801 at the age of only 15.
Career Details In the fall of 1804, Biddle joined General John Armstrong as a member of the American legation (diplomatic mission) to France, where he worked on claims resulting
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loans and bank notes in circulation and one-third of the total bank deposits and specie (gold and silver). Although he tried to remain neutral in the presidential race between John Quincy Adams and Andrew Jackson in 1828, Biddle came under fire amid allegations that some branches had exercised improper influence by refusing loans to Jackson’s supporters. Biddle’s defensive handling of the accusations only made the situation worse. In addition, Jackson harbored a strong personal prejudice against banks that was based not only on a general resentment of the power they wielded but also on his own unfortunate dealings with them. All of this caused the relationship between the Bank and the government to deteriorate rapidly following Jackson’s election to the presidency.
Nicholas Biddle.
Uncertain about the Bank’s future, Biddle decided to ask for it to be rechartered in 1832 (which was four years earlier than necessary). Because it was an election year, he hoped that Jackson would not dare oppose the request for fear of losing popularity. Biddle had miscalculated, however. Jackson not only vetoed the recharter, he also publicly denounced the Bank of the United States as a monopoly that was under too much foreign influence. In spite of the goodwill Biddle had managed to create for the Bank, public opinion soon turned around to favor Jackson’s point of view.
(Archive Photos, Inc.)
from the Louisiana Purchase. After spending about a year in that post, he toured Europe and Greece and then served in London as secretary to James Monroe, who was at that time the U.S. minister to Great Britain. It was during his lengthy stay overseas that Biddle gained valuable insights into the problems and techniques of international finance. Biddle returned to the United States in September 1807. Three years later, in October 1810, he was elected to the Pennsylvania legislature. The highlight of his term came when he mounted an eloquent defense of the first Bank of the United States, which was facing a hostile attempt to deny its charter to operate. He declined renomination until 1812, when he returned to the legislature to support U.S. involvement in the War of 1812. In 1818, Biddle was defeated in a race for the U.S. Congress. He was subsequently passed over by thenPresident Monroe for appointment to office because of their differing political views. However, after mismanagement of the second Bank of the United States prompted the removal of its president, Biddle was named one of five directors of the troubled institution. Four years later, in 1822, Biddle assumed the presidency of the Bank. During his tenure, he dropped the restrictions his predecessor had imposed upon branch operations. The enlargement of credit operations stimulated the economy, which was still suffering from the effects of the Panic of 1819. Biddle increased the Bank’s profits and eventually gained complete control over its operations. Under his guidance, the Bank expanded to 29 branches. It also controlled one-fifth of the country’s
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Bolstered by his supporters, Jackson resolved to destroy the Bank. He directed the removal of almost $10 million in government deposits that were then placed in state institutions dubbed “pet banks.” Biddle responded by curtailing loans. Though such a move may have been necessary to protect the Bank, the restriction of credit dealt a serious blow to the U.S. economy. Bankruptcies multiplied, while wages and prices declined. Jackson made the crisis worse by declaring that the government would no longer accept branch drafts issued by the Bank for the payment of taxes. In 1836, Biddle was forced to secure a charter from the Pennsylvania legislature to operate as a state bank. The loss of a central bank to provide order, combined with the overheating effect of government deposits in state banks, led to frenzied speculation and the Panic of 1837. Banks across the country—including Biddle’s new United States Bank of Pennsylvania—were forced to suspend payment of specie for the redemption of notes. Biddle was still the most prominent banker in the nation despite his ongoing battles with Jackson, he played an important role in trying to shore up the U.S. banking system. He managed to resume specie payments in August 1838 and also intervened heavily in the cotton market to prevent its collapse. With order seemingly restored, Biddle resigned from his post in March 1839. That summer, however, the world was again plunged into financial chaos. Falling cotton prices and mismanagement by the Bank’s directors led to a second suspension of specie payments in October 1839. The Bank continued to operate, but its situation grew more and more unstable. Finally, in February 1841 it collapsed, taking Biddle’s personal fortune with it.
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The Bank’s failure made Biddle the target of many lawsuits during the final years of his life. In 1842 he was arrested on charges of criminal conspiracy. Although he was eventually found innocent, he continued to be plagued with other legal problems until his death in 1844.
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Social and Economic Impact Biddle was a brilliant administrator who maintained complete control over the Bank of the United States. Unfortunately, his political instincts were less astute. Because he recognized the value of a central bank to the nation’s economy, he believed that all reasonable citizens recognized it as well. But his naivete proved disastrous. Despite his failures, Biddle remains an imposing figure in American history. He understood the potential of the American economy and formulated a method for realizing it. With his background in international finance and relations, Biddle felt that a powerful central banking system would establish American prosperity and make the country stronger and more secure. Although the American economy survived the crisis of 1839, it then experienced a period of exuberant economic growth characterized by wild speculation and uncertainty. By the late 1800s, the ruthless and sometimes illegal business activities of the so-called “robber barons” (including such notables as John D. Rockefeller, Jay Gould, and Cornelius Vanderbilt) had prompted calls for reform. One such change involved reestablishing a central banking system very similar to Biddle’s bank. But the struggle continues among policymakers to establish a system of “managed” economic growth without curtailing freedom or the fiercely independent spirit that characterizes American entrepreneurs.
Nicholas Biddle 1786: Born. 1801: Graduated as valedictorian from Princeton University at age 15. 1804: Worked in France as member of American legation. 1810: Elected to Pennsylvania legislature. 1818: Appointed director of Bank of the United States. 1822: Became president of Bank of the United States. 1836: Rechartered Bank of the United States as United States Bank of Pennsylvania. 1841: United States Bank collapsed. 1844: Died.
Govan, Thomas Payne. Nicholas Biddle: Nationalist and Public Banker, 1786-1844. Chicago: University of Chicago Press, 1959. Hammond, Bray. Banks and Politics in America from the Revolution to the Civil War. Princeton, New Jersey: Princeton University Press, 1957. McFaul, John M. The Politics of Jacksonian Finance. Ithaca, New York: W.W. Norton and Co., 1968. Temin, Peter. The Jacksonian Economy. New York: W.W. Norton and Co., 1969.
Sources of Information Bibliography Caterall, Ralph C.H. The Second Bank of the United States. Chicago: University of Chicago Press, 1903.
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Wilburn, Jean Alexander. Biddle’s Bank: The Crucial Years. New York: Columbia University Press, 1967.
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Edwin Binney (1866-1934) Binney & Smith Inc.
Overview A pioneer in the manufacture of carbon black, EdwinBinney was a founder of Binney & Smith, better known today for its Crayola products used by millions of children. Smith’s innovations made black automobile tires, electric light carbons, and many other technological advances possible. He was also active in many natural gas companies, was instrumental in the development of parts of the state of Florida, and was a noted philanthropist.
Personal Life Born at Shrub Oak, Westchester County, New York, Smith was a son of Joseph Walker and Annie Eliza (Conklin) Binney. His father was an English stockbroker who emigrated to the United States in 1860, later founding an early lamp black factory near Peekskill, New York. Smith went to work at an early age and attended public schools in Peekskill and New York City. On October 16, 1887, in Brooklyn, New York, he married Alice Stead of London, England, with whom he had four children: Dorothy, Helen (whose husband, Allan Kitchel, succeeded Binney as president of Binney & Smith), Mary, and Edwin Jr. Binney enjoyed spending time in the state of Florida, where he owned large orange groves in St. Lucie County. He was an important force in the opening of the east coast port of Ft. Pierce in 1930. He enjoyed deep sea cruising, fishing, hunting, and designing sail and motor boats. Binney was known not only for his impeccable business sense but also for his integrity and good will. Dur-
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ing the Depression of the 1930s, for example, Binney & Smith gave destitute local farmers work hand-labeling boxes of crayons, a tradition that continued for many years. While his partner Smith spent much of his time traveling and selling, Binney was known as a quiet man who used his time to diversify the company at home. Binney died in Gainesville, Florida, on December 17, 1934, while visiting a grandson at the University of Florida.
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Chronology: Edwin Binney 1866: Born.
Career Details Following his father’s lead, Binney also became associated with the carbon black and lamp black business in Wellsville, New York. For a time he was a traveling salesman for a paint company. He later joined his cousin Charles Harold Smith in a very successful firm which manufactured lamp and carbon black for paint, printing ink, oil cloth, and enameled leather. Later developments included the manufacture of carbon black for stove and shoe polishes, coloring paper, pencils and crayons, and ink for high-speed printing presses. By the first part of the nineteenth century, Binney and Smith had reorganized into the Pigment Division (for carbon black and related products) and the Crayon Division. The Pigment Division introduced carbon black as an ingredient for reinforcing rubber automobile tires and as a component of electric light carbons. Later introduced was a superior version of hydrocarbon gas black, which was manufactured in Pennsylvania. In 1902 the firm of Binney & Smith was officially incorporated with main offices in New York City and subsequent branch offices in Philadelphia, Pennsylvania; Cleveland and Akron, Ohio; London; Paris; and Copenhagen. In Easton, Pennsylvania, Binney & Smith bought a water-powered stone mill to begin extracting the area’s large slate supplies. The slate was used to make school pencils. The company also manufactured school and industrial crayons, blackboards, and dry colors. Binney & Smith also introduced dustless school chalk and improved their school crayons by adding color pigments and making them smaller than their industrial counterparts. The name “Crayola” was created by Edwin Binney’s wife Alice, who combined the French word craie (chalk) with ola (oleaginous—for the petroleum-based paraffin in the crayons). The first box contained eight pieces and sold for five cents.
1882: Began work with Charles Harold Smith in lamp and carbon black manufacture. 1885: Entered firm of Binney & Smith. 1887: Married Alice Stead. 1902: Binney & Smith incorporated. 1914: Created Columbian Carbon Company. 1920: Became president of Columbian Carbon. 1930: Became president of Binney & Smith. 1930: Port of Ft. Pierce, Florida, opened. 1934: Died.
Binney was also, at various times, president of the Ft. Pierce (FL) Financing and Construction Company, Sebs Chemical Company, and Teton Gas Products Company; vice-president and director of the Coltexo Corporation, the Peerless Carbon Black Company and other carbon companies, Southern Gas Line, Inc., Piney Oil & Gas Company, and other oil and gas companies. Binney was a philanthropist whose most notable donation was Binney Park in Old Greenwich, Connecticut, where he maintained a family home. The park was constructed on former swamp land and included expansive, landscaped green areas as well as a lake. The city later enlarged the park by purchasing additional acreage. The Binney family was also responsible for the construction of a parish house adjoining the First Congregational Church in Old Greenwich. Binney was a member of many professional and civic organizations, including the Sons of the American Revolution, the Natural Gas Association, the Yachtsmen’s Association of America, the New York Zoological Society, the Navy League of the United States, the Riverside (CT) Yacht Club, the Innis Arden Golf Club (Old Greenwich, CT), and the Congressional Country Club (Washington, D.C.).
Binney and Smith exchanged the presidency and vicepresidency of their company each year until Smith died in 1931, when Binney took over the presidency and held it until his death. In 1914 along with Smith, Charles Henry Heim, Felix Frederick Curtze, and Nathaniel Burrows Bubb, Binney negotiated the consolidation of seven carbon black companies into one, the Columbian Carbon Company. Until his death, Binney served as voting trustee, vice-president, and director of the company, which was important to the development of the natural gas industry.
Today, the name Binney & Smith is almost entirely associated in the public’s mind with Crayola drawing and
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art supplies. No school child begins a new school year without a box of Crayola crayons, packed in boxes with as many as 96 assorted colors. In February, 1998, the 40th birthday of the 64-crayon box was celebrated with the reintroduction of the original packaging and the donation of memorabilia to the Smithsonian Institution. More than 100 billion crayons have been manufactured at the company’s plant in Easton, Pennsylvania, with over 2,600 people employed in its worldwide operations. Packaging is printed in over a dozen languages. Edwin Binney’s original vision, however, was not to create art supplies but to provide improved uses for common substances. He learned techniques for making better lamp black (the product of burning liquid hydrocarbons such as kerosene) and carbon black (the product of incomplete combustion of natural gas), which were both in high demand during the late nineteenth and early twentieth centuries. Carbon black in particular became indispensable to the manufacture of automobile tires and thus boomed in sales as more and more cars crowded early highways. B.F. Goodrich Company was the first to change its traditionally white tires to black, discovering that the carbon black made the tires more durable. Binney also supervised the refinement of lamp black to make carbons for electric lights with less than two percent ash, thus making electrification more accessible to millions of Americans. Binney was a major force, moreover, in the development of natural gas and gasoline resources. Binney & Smith at one time was the largest producer of natural gas in the United States, selling it to industries all over the world. In addition, at a time when the state of Florida was becoming a mecca not only for tourists but also for permanent residents and businesses, Binney participated in
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development efforts there. He was a director of the Ft. Lucie County Bank and also chairman of the board of the Fort Pierce Port Commission. He contributed substantial funding for the opening of the Ft. Pierce harbor, which became the only port at that time for the more than 300 miles between Miami and Jacksonville, and later erected a large storage facility at Ft. Pierce to house citrus fruits awaiting shipping. In short, Edwin Binney seemed to be in the right places at the right times with the right products and ideas, in a period when America saw no limits to its economic expansion. Much more than just the developer of the popular Crayola, Binney was an entrepreneur whose vision encompassed the economic possibilities of a growing nation.
Sources of Information Contact at: Binney & Smith Inc. 1107 Broadway New York, NY 10010-2582 URL: http://www.crayola.com
Bibliography “Crayola: A Colorful History.” http://www.crayola.com/history.
1998.
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“Crayola Trivia.” Available from Binney & Smith Inc., Easton, PA. “History of Binney and Smith.” Available from Binney & Smith Inc., Easton, PA. National Cyclopedia of American Biography. New York: James T. White & Co., 1936. Kitchel, A.F. The Story of a Rainbow. Binney & Smith Inc., 1961. Who Was Who in America. Chicago: A.N. Marquis Co.,1943.
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Cathleen Prunty Black Overview Cathleen Black, as president of Hearst Magazines, oversees 16 high-profile titles, including Cosmopolitan, Esquire, Harper’s Bazaar, Popular Mechanics, and Redbook. She worked her way up the ladder in publishing, beginning in advertising sales for New York and Ms., and becoming publisher of New York and then USA Today. She served about five years as the CEO of the National Newspaper Association of America, an important lobbying group, then she took over at Hearst Magazines. Her determination and talent have made her an important figure to working women and a major force in the field of publishing.
(1944-) Hearst Magazines
Personal Life Black was born on April 26, 1944, in Chicago, Illinois, to James Hamilton Black (a food company executive) and Margaret Harrington Black. She has one brother and one sister. Black grew up in a home where current events were openly discussed, so she was exposed to newspapers from a very young age. Black also had ample opportunities to explore the rich array of arts and entertainment available in her home town. At age 14, Black was deeply affected when her father lost his eyesight. Not one to give up easily, he overcame this disability. He changed careers and became an investor, continuing to be productive in the face of adversity. “We both have a strong determination to succeed,” Black remarked to Paul Farhi in the Washington Post. “We both have outgoing, forceful personalities. I owe him a lot.”
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female. Though she sold plenty of ads, she was not given the chance to work on the larger accounts, which usually went to men. After she complained, she received a raise but still earned less than two of her male coworkers. Black left Travel & Leisure in 1970 to join the advertising department at New York magazine, staying only two years. In 1972 she took over as advertising manager for the recently launched feminist magazine, Ms. She remembered that it was difficult to sell ads for the publication because feminism was so controversial at the time. Many women as well as men felt threatened by the movement, but Black was able to set a reassuring tone. With her relaxed demeanor and dedication to her work, she managed to convince advertisers that working women were a good market, because they had financial power. She was promoted to associate publisher in 1975.
Cathleen Black.
(AP Photo/HO.)
Black graduated from Aquinas Dominican High School and went on to get her bachelor of arts degree from Trinity College in 1966. While job hunting, she had an interview at the large advertising firm of J. Walter Thompson. She knew the job was not for her when the interviewer dismissed her question about the executive training program. He “practically tweaked my cheek. He said, ‘Why would a cute little thing like you be interested in the training program?’” she related to Kristin Choo in the Chicago Tribune. Black would later break through the “glass ceiling” that was in the path of so many ambitious women. Black is married to Thomas Harvey, an attorney. They have a son and daughter, and make their home in New York City. The five-foot, eight-inch Black has been described as upbeat and perky; she works out to maintain her slim figure. She is on the board of directors at the Hearst Corporation, IBM, and the Coca-Cola Company, and has a number of honorary degrees.
Career Details After her disappointing experience at J. Walter Thompson, Black decided to go into publishing and moved to New York City. There, her first job was selling advertisements over the phone for Curtis Publishing. After that, she moved on to sell ads at Holiday magazine, and in 1969, took a similar job at Travel & Leisure. Here, she again encountered prejudice because she was
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After proving her worth at Ms., Black was recruited to go back to New York magazine as advertising director. She took the job in 1977 with the understanding that if she increased business, she would be named publisher within a year and a half. The timing could not have been worse. Advertisers were scared because Australian-born media mogul Rupert Murdoch had just bought the periodical. Due to Murdoch’s reputation for emphasizing exploitational articles, many predicted that New York’s content would begin to slant more toward sex and violence. Black overcame this perception, sold the ads, helped the periodical turn a profit, and in 1979 became the first female publisher of weekly consumer magazine. She was chosen Outstanding Woman of Communications in 1982 for her contributions to publishing. Black’s business prowess had been gaining attention, and in 1983, the chief executive officer (CEO) of Gannett Newspapers, Allen H. Neuharth, offered her the position of president at the innovative national newspaper USA Today. The following year, 1984, Black was made publisher and later joined its board of directors. The newspaper offered a revolutionary look and focus: it printed short, easy-to-read stories with a broad interest, used bright colors on the section heads and fullcolor photos, and boasted more graphically interesting layouts. During Black’s eight-year tenure at USA Today, its circulation reached 1.8 million—second only in the country to the Wall Street Journal. “To have taken (USA Today) from the infant stage to a mature product is something I take great pride in,” Black commented to Paul Farhi in the Washington Post. “Every cynic wouldn’t have given us a prayer to make it to our first birthday.” In May of 1991, Black left Gannett to become the president and CEO of the American Newspaper Publishers Association (later renamed Newspaper Association of America.) Farhi noted that the group enjoyed “considerable political heft, given that the 1,400 members of her organization control the nation’s editorial pages.” The association vowed to meet the $600,000 annual salary that Black had earned at Gannett, even though
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the person she replaced had drawn a salary of only $240,000. Black therefore became one of the highestpaid lobbyists in Washington, D.C., with a salary reaching $885,000 by 1995—a figure that caused some controversy among members. As CEO, Black’s main duties were as a spokesperson and lobbyist. She spent $2.8 million in lobbying efforts, tackling topics such as First Amendment rights, telecommunications, taxes, and environmental issues. She also merged six separate trade groups into one under the new name of the Newspaper Association of America. When she took over the organization, newspaper profits were in decline due to falling circulation and lower ad sales. But Black told Mark Fitzgerald in Editor & Publisher upon her departure in 1995, “Now the association is in strong shape: Membership is up 35 percent, it’s totally reorganized and focused on the right issues. In many ways, I feel I have done what I came to do.” Some smaller papers were upset that Black seemed to concentrate her energy on representing the larger daily papers, and others complained that she raised dues too high. Others, however, applauded Black’s improvements in the group’s structure. One person impressed with her accomplishments was Hearst president and CEO Frank Bennack, Jr., who had recruited her for the position in the first place. He asked her to join the media conglomerate as president of Hearst Magazines. In 1995, Black took over as the first woman president of Hearst Magazines. In this position, she became responsible for the world’s largest publisher of monthly magazines, with 16 titles in the United States and 95 international editions sold in more than 100 countries. The family-owned Hearst Corporation magazines divison includes Cosmopolitan, Esquire, Harper’s Bazaar, Marie Claire, Motor Boating & Sailing, Popular Mechanics, Redbook, Sports Afield, and Town & Country. The wellestablished firm had been printing some of its periodicals for over 100 years. Black initially told Ann Marie Kerwin in Inside Media that the Hearst position was “a plum job. The company is well-positioned for where we are in terms of a very competitive and challenging marketplace. It seems to me they are doing the right thing. They have a whole new media division. They have a number of interactive home pages already started. But most importantly, the titles that they represent are some of the finest, exciting franchises that exist, literally, in the world.” Despite her enthusiasm, though, Black immediately faced two major challenges: pressure from advertisers in the wake of an ad rate increase combined with rate base cut and the burden of lagging circulation. Kraft, for one, pulled $30 million of its food ads and $20 million of its tobacco ads.
Chronology: Cathleen Prunty Black 1944: Born. 1966: Began selling ads at Holiday magazine. 1970: Joined advertising staff of New York magazine. 1972: Became advertising director of Ms. magazine. 1975: Promoted to associate publisher of Ms. magazine. 1977: Became associate publisher of New York magazine. 1979: Promoted to publisher of New York magazine. 1984: Assumed duties as publisher of USA Today. 1991: Appointed CEO of the Newspaper Association of America. 1996: Named president of Hearst Magazines.
negotiated a lower rate with them while maintaining their hard-line presence in public. And Donald Van De Mark on the CNNfn website asked Black if Hearst was discounting or giving away ad pages, which Black denied. Though total number of pages were down in 1996 from 1995, Black maintained that the magazines were financially healthy, telling Van De Mark in 1997, “We’re running over 13 percent ahead in revenue and we’re running 8 percent ahead on volume or in terms of advertising pages.” The New York Times in 1997 reported that ad revenue under Black’s leadership improved at a surprising rate. In addition to her work with advertisers, Black also launched a number of new titles during her reign, including Bob Vila’s American Home, Mr. Food’s Easy Cooking, and Healthy Living magazines.
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Black defended the company’s new ad rate policy, telling Jeff Gremillion in Mediaweek, “The bottom line is that it was a very successful and very important, strategic long-term move for Hearst.” Gremillion, however, reported that at least one agency claimed that Hearst had
Black first entered the workforce during a period of great social change in America. A significant issue was the push for women’s rights. Traditionally, women were expected to stay home or to take jobs such as nurse, secretary, or teacher. Women in the workforce had few options for advancement to positions of power in business, since top jobs were usually held by men. But Black persisted in her ambitions and overcame these obstacles to assume a position of great responsibility.
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Black’s stint at Ms. was difficult at first, with companies reluctant to buy ads in the magazine because they mistakenly believed that feminists were political radicals. Black worked hard to dispel this negative stereotype and succeeded in generating much-needed ad revenues for the publication. Due to her dedication at Ms. and her subsequent leadership at New York, she helped promote positive images of feminism. Black also proved that women are capable of leadership roles and blazed the trail for others after her. Black helped establish USA Today as a publication that would revolutionize the newspaper industry. Initially, many journalists and critics were skeptical of the publication’s brightly colored pages, national focus, and shorter stories in simple language. Some even derisively dubbed it “McPaper” and predicted that it would never work. Consumers, though—especially business travelers—enjoyed the publication, and its circulation soared. This led some writers and editors to complain that USA Today’s popularity would compromise journalistic standards and eat into the profits of local papers. But eventually, most newspapers began to copy the USA Today format, printing fullcolor photographs and jazzing up layouts in order to compete for the more visually-oriented customers. Even the “Gray Lady,” the New York Times, added color late in 1997.
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Sources of Information Contact at: Hearst Magazines 959 Eighth Ave. New York, NY 10019 Business Phone: (212)649-2000 URL: http://www.hearstcorp.com
Bibliography “Before Hours.” CNNfn, 12 November 1997. Available from http://www.cnnfn.com. Brady, James. “On Cathie Black’s Watch, a host of Changes for Hearst.” Advertising Age, 16 September 1996. Colford, Paul D. “INK: New Gender at Men’s Club/Cathleen Black Joins the Higher Echelons of Hearst.” Newsday, 7 December 1995. Current Biography. January 1998. New York: H. W. Wilson Co., 1998. Farhi, Paul. Washington Post, 13 May 1991. Fitzgerald, Mark. “NAA President to Join Hearst.” Editor & Publisher, 2 December 1995. Gremillion, Jeff. “Hearst’s Fall Color: Basic Black.” Mediaweek, 14 October 1996.
As CEO of the Newspaper Association of America, Black increased membership and reached the goals of the group which improved the newspaper industry in a variety of ways. In addition to important lobbying efforts, she claimed that over 100 new papers were started during the time she was in charge. As the first woman to head one of Hearst’s divisions, she turned around sluggish ad sales and breathed new life into what some thought was becoming a stuffy and old-fashioned business. Hearst Magazines, the biggest player in periodicals today with more than $1 billion in annual revenues, now sets the standard for other publishers.
Gremillion, Jeff. “Hearst Goes Up for Rebound; Black Touts Strong First-Quarter Ad-Page Growth at Several Titles.” Mediaweek, 28 April 1997.
Black’s rise to president of Hearst Magazines was an important step for women as well as for publishing. A Newsday headline went so far as to say, “New Gender at Men’s Club,” alluding to the fact that Hearst typically had been known as an “old boys’ club,” where women were excluded from positions of power. Thanks to Black’s motivation, she has made impressive gains for women in American society, and her insight and leadership skills have undoubtedly improved many facets of the publishing world.
Kerwin, Ann Marie. “Paint It Black.” Inside Media, 13 December 1995.
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Hays, Constance L. “Magazine Chief Shakes Things Up at Hearst.” New York Times, 2 June 1997. Hearst Corporation. “Hearst Magazines.” New York: Hearst Corporation, 1998. Available from http://www.hearstcorp.com. “Hearst Corporation.” Hoover’s Online, 17 June 1998. Available from http://www.hoovers.com. Kerwin, Ann Marie. “Hearst’s Black Aims for Higher Profile.” Advertising Age, 28 April 1997.
Manly, Lorne. “Leading the Charge at Hearst.” Folio: The Magazine for Magazine Management, 15 September 1996. Taft, William H. Encyclopedia of Twentieth-Century Journalists, New York: Garland Publishing, Inc., 1986. Who’s Who of American Women, 20th ed., 1997-1998. New Providence, NJ: Marquis Who’s Who, 1996.
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William Edward Boeing Overview William Edward Boeing was an aviation pioneer and supplier of the B-17, B-29, and B-52 airplanes to the United States military. The powerful company he built through mergers and acquisitions eventually included manufacturing, supplier operations, and a passenger airline service. By the mid-1930s, the U.S. government had begun antitrust action, causing the company to be broken up. Boeing was very displeased by this action and withdrew from active participation in his company. At this time, he pursued his interests in deep-sea cruising, fishing, and raising thoroughbred horses and cattle. To pursue his leisure activities, he purchased the Aldarra Farms estate in Fall City, Washington, in 1946. Upon the purchase of Aldarra Farms, Boeing donated his mansion in Seattle to the Children’s Orthopedic hospital. In the fall of 1956, after struggling with failing health for several years, he died aboard his yacht Taconite in the Puget Sound waters of Washington state.
(1881-1956) The Boeing Company
Personal Life William Edward Boeing was born October 1, 1881, in Detroit, Michigan. The only son of Wilhelm and Marie (Ortman) Boeing, the family was wealthy and owned substantial timber and mining interests in Michigan and Minnesota. His German-born father died when he was eight years old, leaving him to be raised by his Austrian-born mother. While growing up he attended private schools in the United States and West-
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Bill Boeing.
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ern Europe. His college career at the Sheffield Scientific School at Yale University lasted three years before he left without graduating in 1902 to start a lumber business in the Pacific Northwest. In 1908 he established a permanent residence in Seattle. Around 1910, Boeing became interested in aviation and in 1915 he learned to fly at Glenn L. Martin’s flying school in Los Angeles. Soon thereafter, he purchased his first aircraft, a Martin seaplane. Eventually his aviation interests led him to found his own aircraft manufacturing company. On September 27, 1921, he married Bertha Porter Paschall, and the couple had one child.
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Career Details In 1916, William Boeing and Conrad Westervelt, an officer in the U.S. Navy, established the Pacific Aero Products Company. This was soon to become the Boeing Airplane Company. Initially they built experimental seaplanes under the name B and W. During World War I, they were awarded a contract to build Curtiss flying boats for the United States military. Armistice was reached before any of the boats were completed and the contract was canceled, however. The resultant lack of work left his company, like others in the industry, in difficult financial times. To increase revenue, the Boeing
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firm built furniture and sea sleds. The company built, in 1919, a flying boat, the B-1, which carried mail for several years between Seattle and Vancouver, British Columbia. The competition from war surplus planes, however, resulted in production being scaled back. With the move to private carriers by the Post Office, Boeing began to produce commercial transport planes. In addition, they were fortunate to receive orders for reconditioning army planes. The company’s first major manufacturing contract came in 1920 to build 200 Thomas-Morse MB3 fighter planes. This deal was reached under a new system that allowed aircraft manufacturers to bid on each other’s designs for military orders. In July 1927, Boeing Air Transport began flying mail and passengers on its M40 plane between San Francisco and Chicago. Still, the company’s major business during the 1920s was derived from the production of fighter planes for the army. In a move to integrate transport and manufacturing activities, Boeing along with Fred Rentschler, president of aircraft engine maker Pratt & Whitney, and his brother Gordon, president of National City Bank, created the United Aircraft and Transport Company. Merging firms included Pratt & Whitney, Hamilton Standard Propeller, and the Stearman, Chance, Vought and Sikorsky supplier operations. The new operation also provided passenger service to New York, the Pacific Northwest, and San Diego. This combination became the most far-reaching and profitable aviation operation of its time. United enjoyed continued success as a commercial airline. The company also produced the Monomail 200, which introduced the all-metal, low wing design and was further updated to the innovative twin-engine 247, in 1933. This plane was so superior to others that the competition had to quickly play catch up to survive. The all-metal, lowwing design was also incorporated into Boeing’s military aircraft, including the B-9. Boeing became less involved with aircraft design as he began handling the company’s chief executive duties. During the Hoover administration, Boeing with reservations agreed to the Postmaster General’s plan to use air mail contracts to create a stable and financially sound postal system. The company had continued to be a supplier to the Post Office but when allegations of improper business conduct surfaced, under the Franklin D. Roosevelt administration, Boeing canceled all airmail contracts. After investigation of the industry by a U.S. Senate committee, Congress passed the Air Mail Act of 1934. One of its major directives was to separate the manufacturing and transport activities of the industry. United Aircraft and Transport was divided into Boeing Aircraft, United Aircraft, and United Airlines.
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Chronology: William Edward Boeing 1881: Born. 1916: Founded Pacific Aero Products Company (soon renamed Boeing Airplane Company). 1920: Won first major order from United States military for 200 MB-3 fighter planes. 1921: Married Bertha Porter Paschall. 1929: Merged company to form United Aircraft and Transport. 1934: Introduced B-17 plane for U.S. military. 1934: United was divided into Boeing Aircraft, United Aircraft, and United Airlines. 1938: Introduced B-29 plane for U.S. military. 1956: Died after several years of failing health.
The antitrust activity left Boeing quite embittered and led him to resign from active participation in the company. Ironically, in the same year he was awarded the Guggenheim Medal for successful pioneering in aircraft manufacturing and air transport. During the late 1930s, the Boeing Company capitalized on technological innovations and expanded operations in anticipation of war. In 1938, the company employed 2,960 persons expanding to 28,840 at the time of the Japanese attack on Pearl Harbor. The United States military used three Boeing planes during the war: the B-17 (designed in 1934), the B-29 (designed in 1938), and the Kaydet trainer. Both the B-17 Flying Fortress and B-29 Superfortress were instrumental in winning the war. The B-29 carried the first atomic bomb dropped on Japan. During the 1950s, the company continued to prosper focusing on the expanding commercial airline travel market with the Boeing 707 passenger plane. Since then the Boeing 727, 747, and, most recently, 777 passenger airplanes have been popular with commercial airlines. Military orders during the Cold War also continued to contribute to the company’s success and resulted in the development of the B-52 jet bomber.
The breakup of the United Aircraft and Air Transport marked one of the major antitrust actions in the history of the United States. William Boeing argued that attempts to limit the scope of his activities and his ambitions were illegal, unfair, unnecessary and against the best interests of the nation.
William Edward Boeing’s innovations in aircraft design and manufacturing set the standard for both military
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and commercial aircraft use. The company continues to be the world’s largest commercial aircraft manufacturer and a leading producer of military and specialized aircraft as well. Historically, its development of bomber planes for the United States military played a key role in winning World War II and the United States remaining a dominant superpower. The company’s passenger planes have also proved reliable and are in use around the world.
Bibliography Bondi, Victor, ed. American Decades 1940-1950. Detroit: Gale Research, 1995. Byers, Paula K., and Suzanne Bourgoin, eds. Encyclopedia of World Biography. Detroit: Gale Research, 1998. Garraty, John Arthur, ed. Dictionary of American Biography. Charles Scribner’s Sons, 1980. Who’s Who in American History. Chicago: Marquis Who’s Who, 1966.
Sources of Information Contact at: The Boeing Company 7755 E. Marginal Way S Seattle, WA 98108 Business Phone: (206)655-2121 URL: http://www.boeing.com
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Richard Branson Overview Richard Branson is the self-made British billionaire who began Virgin Records and Virgin Atlantic Airways, among a host of other enterprises. He chairs the Virgin Group, which is the umbrella over Virgin Interactive, Virgin Megastores, Virgin Cola, and other divisions. Branson is also noted for the adventurous spirit he brings to both his work and his personal life. He has embarked on record-setting boat trips and hot air balloon escapades to boost publicity as well as for his own enjoyment. Due to his entrepreneurial spirit and enormous wealth, he is known as the “Bill Gates of Britain.”
(1950-) Virgin Group
Personal Life Richard Branson was born July 18, 1950 in Surrey, a London suburb, to Ted and Eve Branson. Branson’s father, like his grandfather and great-grandfather, was a lawyer, and his mother was a former ballet instructor, glider pilot, and flight attendant. This combination undoubtedly made an impression on her young son, who would grow up to head a music label and airline, and develop a love of hot air ballooning and sky diving. Branson’s parents encouraged him to set high goals for himslf; in fact, his mother used to tell her friends that her son would become prime minister of England some day. As a boy, Branson was an avid athlete who often put more time into sports than studies. Bored with school, Branson set his sights on business as an adolescent, growing Christmas trees and breeding birds. His father, however, wanted him to study
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for college entrance exams and sent him to an exclusive boarding school. At age 15, Branson introduced Student, a liberal current events and culture magazine that he edited and published while attending Stowe. Before long, luminaries such as Jean-Paul Sartre, Alice Walker, and Robert Graves were submitting writings, and Branson landed interviews with famous figures such as actress Vanessa Redgrave, writer James Baldwin, and psychoanalyst R. D. Laing. When Branson dropped out of school at age 16 to devote himself to the periodical, his headmaster reportedly told him, “Branson, I predict that you will either go to prison or become a millionaire.” Branson’s first marriage in 1972 to American Kristen Tomassi ended in divorce. He later met Joan Tem-
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pleman, with whom he had a son, Sam, and a daughter, Holly, they married in 1989. Though he affects a swashbuckling persona and flirtatious attitude, Branson is reportedly a devoted family man. In fact, one British poll named him, after Mother Theresa, the person most suitable to rewrite the Ten Commandments. Branson has a home in the Holland Park section of London and a country home in Oxfordshire, where he entertains the likes of Margaret Thatcher, Mick Jagger, and Boy George. In 1968, Branson founded the Help Advisory Centre, which gives counseling on birth control and sexually transmitted diseases. He is also involved in a number of other causes, including Parents Against Tobacco and AIDS education. In the late 1980s, Prime Min-
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ister Margaret Thatcher named him chair of UK 2000, an environmental group.
Career Details Though Branson began his career as a free-wheeling liberal journalist with Student,, his hippie days were numbered. “I never had any interest in being a businessman,” Branson commented in Business Week. “I started out wanting to edit this magazine. But the business side became all-important, and I realized that if I didn’t get all that sorted out, I wouldn’t be able to be an editor.” To help raise funds, he began selling advertising. Operating without an office or a phone, he would use a pay phone and convince operators that the slot took his coins but did not provide a connection. This way, he saved money and connected to potential clients without them hearing change clinking into the phone. Though Student got off to a good start, ad revenues were lagging by the late 1960s. Inspired by the enormous success of a record ad that had run in the magazine, Branson started a mail-order music company to keep his magazine afloat. He and friend Nik Powell thus began Virgin Records in 1970. The discount record firm was the first such business in England and was an immediate hit. Branson decided to shut down the magazine and concentrate on his new business. When a postal strike threatened Virgin’s mail-order profits, Branson and Powell opened their first record shop on Oxford Street in London. As Virgin Records became profitable, Branson and Powell were fined about $90,000 for tax evasion. Branson spent a night in jail, and his parents mortgaged their home to post his bail. “One night in jail teaches you that sleeping well at night is the only thing that matters,” Branson remarked to Echo Montgomery Garrett in Success. “Every single decision since has been made completely by the book.” To pay the fines, Branson and Powell expanded their chain of stores. In 1971, Branson began working with his cousin, Simon Draper, to organize Virgin’s own record label. With Branson supplying the business know-how and Draper handling the artistic decisions, they built a studio in 1971 and in 1973, recorded the first original album on the label. Mike Oldfield’s 49-minute song “Tubular Bells” was a hit in Britain, selling over 7 million copies. The haunting instrumental effort was later used in the film The Exorcist, bringing instant acclaim to the fledgling firm that would later become the sixth largest record label in the world. Virgin Records shot further into the limelight in 1977 when it signed the rowdy British punk rock band the Sex Pistols, dropped from two other labels due to their outlandish behavior and radical music. The risk paid off, gaining Virgin a reputation for signing up-andcoming acts. After a brief dry spell, in 1982 Virgin signed
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Chronology: Richard Branson 1950: Born. 1965: Began publishing Student magazine. 1970: Cofounded Virgin Records mail-order business. 1971: Virgin Records built first studio. 1973: Virgin Records produced first original album. 1977: Virgin Records signed alternative rock-band the Sex Pistols. 1984: Founded Virgin Atlantic Airways. 1986: Broke transatlantic speed record for powerboats. 1987: Made first transatlantic hot air balloon voyage, with Per Lindstrand. 1991: Became first, with Per Lindstrand, to cross Pacific Ocean in a hot air balloon. 1992: Sold Virgin Records to Thorn EMI for $1 billion. 1997: Virgin entered ventures with CBS, Kinko’s, and Royal Bank of Scotland.
The Culture Club, with its eccentric lead singer Boy George, who became a pop icon for the 1980s. The band sold millions, and Virgin continued to sign groups with an unmistakable “Eighties” sound, including the Human League and UB40. In 1984, businessman Randolph Fields approached Branson to ask for help starting up a new airline. Fields proposed an all-business class operation flying from London to New York and offered Branson a 75 percent stake in return for financing. Eager to branch out from the music business, Branson ignored his advisers’ initial objections and went ahead with the deal. Branson opened Virgin Atlantic Airways in June of 1984, flying passengers from London’s Gatwick Airport to Newark, New Jersey, for the discount ticket price of $189—far below competitors’ prices of $579. Virgin even offered such frills as champagne, live bands, and seat-back video screens. To gain attention for his new venture and establish a thrilling image for the airline, Branson began performing publicity stunts. In 1985, Branson tried to break the transatlantic powerboat speed record but crashed and sank just 150
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miles from his destination. The next year, he set out again and broke the world’s record in the summer of 1986 with a time of three days, eight hours, and 31 minutes. In 1987, he almost died when he pulled the wrong ripcord while skydiving. Also that year he embarked on the first transatlantic hot-air balloon ride with Swedish aeronaut Per Lindstrand. Though they made it across the ocean, they crashed, landing in a group of Royal Navy seamen who came to their aid. In 1991 the pair were the first to cross the Pacific by hot air balloon. They landed about 1,800 miles from their intended touch-down and were stranded in the Northwest Territories of Canada on a frozen lake for about six hours.
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million for charities after the princess’s death. Virgin also has holdings in bridal shops, radio, railroads, interactive video games, and modeling.
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Meanwhile, Branson’s Virgin Records in the 1980s grew by four times its size in four years. In 1987, Branson decided to expand Virgin into the United States. He sold the stock for an immediate profit but then took a loss when the market crashed in October of 1987. He pulled back and made the company private again, but in March of 1992 sold the division to Thorn EMI for about $1 billion, making him one of the richest men in the world at this time.
With the start-up of Virgin Records, Branson was simply trying to get into a business that he knew could turn a profit. Little did he know that a few decades later he would be one of the richest and most influential men in the world, with a hand in an array of global businesses. Thanks in part to his willingness to take a risk on new bands, he helped popularize punk rock and new wave music and made his company into a global conglomerate. When Julie Baumgold in Esquire asked how he built such an empire, he replied, “I immerse myself in getting the business set up and am very involved the first three or four months, get good people to run it and give them a stake in the company and a lot of freedom, and then step back and move on to the next.”
Meanwhile, in 1983, Branson had launched Virgin Vision, a film and video distributor. This company later evolved into Virgin Communications. Branson formed Virgin Airship & Balloon in 1987 and began opening Virgin Megastores the following year. Also in 1988, he opened Virgin Hotels, continued to build recording studios, and added a new music division, Virgin Classics. In 1991 Virgin Publishing was formed, combining W. H. Allen, Allison & Busby, and Virgin Books.
As of 1998, Virgin and its various divisions employed about 15,000 people in 22 countries. Though the stock is not public, estimates claim that Branson is probably worth almost $3 billion. Though his holdings are gigantic and varied, Branson prefers to operate each as its own small company. He told Echo Montgomery Garrett in Success, “Once people start not knowing the people in the building, and it starts to become impersonal, it’s time to break up a company.”
Mergers and joint ventures with firms around the globe abounded. In 1994 Virgin Retail Group formed Virgin Cola, Ltd. to produce and sell food and beverages under the Virgin brand name. That same year, Virgin Trading Company, in cooperation with William Grant & Sons, entered an agreement to market Virgin Vodka in Britain. Virgin Atlantic in 1995 partnered with Malaysia Airlines to fly from London to Kuala Lumpur and Australia. In March of 1995, the conglomerate introduced Virgin Personal Financial Service as a joint venture with Norwich Union to sell low-cost financial services; that same year, Virgin went in with a few others to buy MGM Cinemas.
Indeed, Branson’s unconventional management style emphasizes his employees. He socializes with them, asks them to call him by his first name, and encourages them to have fun at their jobs. “If you can motivate your people,” he explained to Manfred F. R. Kets de Vries in Across the Board, “you can get through bad times and you can enjoy the good times together. If you fail to motivate your people, your company is doomed not to perform well.” Branson enjoys promoting and recognizing good people—on one occasion, for example, he rewarded the organizational skills of a cleaning woman by promoting her to management.
In 1997, Virgin formed several important partnerships. In July, Virgin entered an agreement with Kinko’s, the copy shop and office services business, to open stores in Britain and France. Also in September, Virgin Century Television partnered with CBS, and Virgin bought 55 percent of the London Broncos rugby team, with Branson becoming chairman of the team. In October, Virgin joined with The Royal Bank of Scotland to launch Virgin One, a banking service that offered combined savings and borrowing.
Virgin Atlantic Airways, Branson’s crown jewel, was flying almost a quarter of all passengers between London and New York by 1995. Virgin’s personalized service and abundance of amenities set it apart from other airlines. “America’s airlines are too big,” Branson told David Sheff in Playboy. “They get worse as they get bigger . . . . They have these sprawling routes, and they have become impersonal, and, for the passengers, depressing.” He takes pride in not making customers wait in long lines, and enjoys offering free limousine service to business class travelers.
In late November of 1997, Virgin Group was responsible for producing the commemorative album Diana, Princess of Wales Tribute, which raised over $100
Branson, worth about $3 billion, is one of the biggest businessmen in Britain, and his Virgin brand is getting more and more ubiquitous. An article in the Sunday Tele-
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graph noted that a person could “board a Virgin Atlantic flight in New York, relax on board with a Virgin V2 CD and a glass of Virgin cola, land in Britain, take a Virgin Railways train, bump into a supermodel form Branson’s agency, Storm (possibly even Kate Moss or Elle McPherson), catch a movie with her at a Virgin Cinema, send her off to the one-stop wedding shop Virgin Bride to book a Virgin travel honeymoon . . .” the list continues. Needless to say, Branson has indeed left his mark on British business, and since the 1980’s, with his spiraling number of mergers and joint ventures, has had a large hand in world economy as well.
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“Comment: Can He Keep It Up? Profile Richard Branson.” The Sunday Telegraph, 11 January 1998. Contemporary Newsmakers, 1987. Detroit: Gale Research, 1987. Current Biography Yearbook, 1995. New York: H. W. Wilson Co., 1995. “Head of Virgin Was Asked Over Lunch What It Would Take for Him to Pull Out of the Race for Glittering Prize.” The Daily Telegraph, 14 January 1998. In Play. “CEO of Virgin Airlines” (interview by John Metaxas). CNNfn (CNN financial network), 25 February 1998. Available form http://www.cnnfn.com. “In the Courts: I Was Not Jumping to Any Conclusions, Says Branson.” Independent, 20 January 1998. Kets de Vries, Manfred F. R. “The Virgin Iconoclast.” Across the Board, February 1996.
Sources of Information Contact at: Virgin Group 120 Campden Hill Rd. London W8 7AR England URL: http://www.virgin.com/
Sheff, David. “Richard Branson: The Interview.” Forbes, 24 February 1997. Sheff, David. “The Virgin Billionaire.” Playboy, February 1995. Stackel, I. M. “An Interview with Richard Branson.” South Florida Business Journal, 22 January 1993.
Bibliography Arias, Ron. “Adventure: Balloonatic Richard Branson Puts His Faith in Hot Air.” People, 15 June 1987. Baumgold, Julie. “Born-Again Virgin.” Esquire, August 1996. “Branson Accused of Being Cowardly and a Liar.” Independent, 15 January 1998. “British Tycoon Wins Libel Case Against GTech.” Los Angeles Times, 3 February 1998.
Virgin Group. “Virgin Corporate History.” London: Virgin Management, Ltd., 1998. Available from http://www.virgin.com. Virgin Group. “Virgin Press Releases.” London: Virgin Management, Ltd., 1998. Available from http://www.virgin.com. Wastell, David. “Blair in Row over Branson Knighthood.” The Sunday Telegraph, 14 June 1998.
Business Week, 30 June 1986.
Who’s Who in America. New Providence, NJ: Marquis Who’s Who, 1996.
Cavuto, Neil. “Virgin Atlantic Chairman Interview.” The Cavuto Business Report (Fox News Network), 25 February 1998.
Yates, Andrew. “Branson May Float Airline.” Independent, 11 May 1998.
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Christina Brown (1953-) The New Yorker
Overview Christina Hambly Brown was the former editor-inchief of the British magazine Tatler before moving to the United States to take over as editor-in-chief of Vanity Fair magazine at the age of 30. She mixed a little controversy with a target population of yuppies and got booming magazine sales at both publications. Her success led to her being named as the editor-in-chief of the distinguished The New Yorker in 1992. Brown has a record of success in magazine publishing where she continues to demonstrate an ability to dramatically increase magazine sales.
Personal Life Christina Hambly Brown was born on November 21, 1953, in Maidenhead, England. Her father, George Hambly Brown, worked as a film producer and her mother, Bettina (Kohr) Brown, worked as a writer and had once worked as the press agent for legendary British actor Sir Laurence Olivier. She and her brother, Christopher, were raised in the upper-middle-class village of Little Marlow in Buckinghamshire, England. The home was filled with love and support for the children but also contained an excitement brought by the family’s close association with the motion picture community. Brown attended St. Anne’s at Oxford University in 1971, intending to follow the career path of her mother and become a writer. She was well on her way when she won the 1973 award given by the London newspaper, The Sunday Times, for her play “Under the Bamboo Tree.” She graduated from Oxford University in 1974 and decided to enter the magazine business.
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In 1978 Brown moved in with her future husband, Harold Evans, whom she married on August 20, 1981. He later became head of Random House Publishing. The couple have two children: a son, born in 1986, and a daughter, born in 1990.
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Christina Brown
After graduating from college in 1974, Brown worked as a freelance journalist and contributed articles concerning various issues in the United States to the noteworthy British publications The Sunday Times, Punch, Sunday Telegraph, and New Statesman. Her concise writing style earned her the 1978 Young Journalist of the Year Award given by Punch magazine. In 1979 Brown was involved with publishing a magazine as well as writing for one. That year, Gary Bogard gave her the job as editor-in-chief of the respected British magazine Tatler, which had been founded in 1709. Bogard had recently purchased Tatler and was determined to make the old publication new and on the cutting edge. His appointment of Brown was a gamble as she had never worked in this capacity before and was relatively new to the magazine industry.
1953: Born. 1971: Attended St. Anne’s at Oxford University. 1974: Graduated from Oxford University. 1979: Became editor-in-chief of Tatler. 1984: Became editor-in-chief of Vanity Fair. 1988: Named Editor of the Year by Advertising Age. 1992: Became editor-in-chief of The New Yorker. 1997: Sold 807,935 issues of The New Yorker in six months.
This hunch paid off and within the next four years, sales of Tatler quadrupled. Brown demonstrated a talent for writing and editing and an ability to generate publicity. Brown realized quickly that free media coverage is more effective than expensive advertising. This shaped her attitude and she would continually give journalists something to write about, not caring what was said about it later. This attitude was to prove very successful for Brown. Brown blended cultivated sass, intelligence, and a tongue-in-cheek attitude that ensured that Tatler would become successful. She also came to the attention of millionaire publisher S. I. Newhouse, Jr., who was head of the Condé Nast magazine empire. Newhouse bought the now widely successful Tatler in 1982 and offered Brown her next job. Newhouse and his brother Donald were also coowners of the large media conglomerate, Advance Publications, and they tried in 1983 to revive an old media property, Vanity Fair magazine. Vanity Fair was founded in 1913 and was considered romantic and sophisticated in its day. It shut down, however, in 1936 due, in large part, to the worldwide economic depression of the 1930s. Although there was a great deal of media fanfare at Newhouse’s decision to bring Vanity Fair out of retirement, the magazine had poor advertising sales and attracted few
readers. Adding to Vanity Fair’s poor showing in the early 1980s were critics who criticized its apparent lack of editorial focus and treated it as an expensive Newhouse joke. In January of 1984 Newhouse offered the job of editor-in-chief of Vanity Fair to Brown. She accepted the position, replacing Vanity Fair’s editor Leo Lerman. She soon set about making changes in the magazine to make it more attractive to readers. She insisted that the magazine have good taste while also whetting the readers appetite for more so that they would purchase the next issue. It took more than a year for Brown’s changes to take effect, but eventually readership soared and the advertising dollars started rolling in. Brown took Vanity Fair’s circulation from 200,000 in 1984 to 750,000 in 1990. Brown discarded Vanity Fair’s previous image of an oldtime conservative magazine that only occasionally covered Hollywood and celebrities. Brown instead used the magazine to cater to the interests and tastes of the yuppie or “me” generation of the young urban professional. She successfully exploited the consumer’s drive for wealth, status, and celebrity. Her version of Vanity Fair became famous for stories about then—Soviet Premier Mikhail Gorbachev and long intellectual pieces. She punctuated these high-brow pieces with fluff stories about movie stars and celebrities. In 1986 Vanity Fair was cited as the “hottest” publication by the magazine trade journal Adweek, and in 1988 Brown was named as Editor of the Year by Advertising Age magazine. Just as she had done at Tatler, Brown generated huge amounts of free publicity through a series of seemingly outrageous acts. She used nude photos of actress Demi Moore on the cover twice, once when she was near the end of a pregnancy in 1991. She featured Claus von Bum-
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Brown showed that she was more than up to the task, and she immediately began to change the old stuffy style of the magazine into one that would inject more irreverence into certain topics in British life, such as the monarchy. Her approach was not based on hard research or experience, but rather a hunch that she played on.
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low clad in leather while he was fighting charges of attempted murder in the death of his wealthy socialite wife. By the time Brown left Vanity Fair in 1992, the circulation was nearly one million, and she found herself at the brink of personal stardom. Because of her success at Vanity Fair, Brown was destined to move on to bigger things. Newhouse was so enamored of Brown’s success that he put her in charge of another of his magazines, The New Yorker, in July of 1992. The New Yorker was a more respected magazine and one some would call an institution in the publishing world, yet its style had become predictable. As might have been expected, Brown brought controversial changes to the magazine changes that are still being evaluated several years later. Newhouse had purchased The New Yorker in 1985 and had put Robert Gottlieb in charge in 1987. But the magazine, founded in 1925, was still floundering in debt and needed a serious rebirth to avoid folding. Newhouse hoped that his appointment of Brown as only the magazine’s fourth editor in its history could save his $168 million investment and make The New Yorker as profitable as Vanity Fair. Newhouse had angered New York’s respected and faithful news readers with his decision to give Brown the job and appoint Graydon Carter, the founder of Spy magazine, to Brown’s position at Vanity Fair. Many of the critics felt that Brown would turn The New Yorker into a trashy tabloid instead of the well-informed publication that they had come to trust. Many also felt that Brown’s previous successes had been due to her readers’ lack of discrimination when it came to their publications. Brown initially worried about her new position as the first woman in charge of the The New Yorker and the staff changes that she knew would come. She realized that The New Yorker was one of the most highly respected literary magazines in the United States, and she stated that she did not want to completely change the magazine, just alter it a bit to make it more successful. After a teary farewell to her Vanity Fair staff, Brown set out to make The New Yorker a more successful publication. Brown started at The New Yorker using the same techniques that made her a success in her other posts. She started the previously unheard of practice of using color on editorial and opinion pages and, in 1995 drew criticism from traditionalists both from within The New Yorker and from beyond its walls when she invited controversial television star Roseanne Arnold to contribute a literary piece on American women. Brown also began the practice of consolidating overhead business costs, such as printing and marketing, with the Condé Nast parent company. It was predicted that in 1998 alone, this practice would save the publication $1 million a month. With these controversial moves, Brown has indeed made The New Yorker a more popular and profitable publication. Circulation of the magazine increased 31 percent from 616,800 issues sold in 1992 to 807,935 issues
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sold in the last six months of 1997 this was an average of 48,655 issues on the newsstand per month, which was the highest newsstand sales since 1975. Brown’s wellpublicized issue featuring the late Princess Diana sold 140,000 copies on the newsstand, making it the highest selling single issue in 30 years. Even though The New Yorker still loses more than $12 million a year, it is substantially less than the $32 million deficit that Brown inherited when she took over the magazine in 1992. Brown still has more work to do in order to make the publication as successful as Vanity Fair, but industry sources predict that The New Yorker will see its first profit by the year 2000.
Social and Economic Impact Interviewed in the Washington Journalism Review in November of 1989, Brown said: “My kind of editing comes very much from the tradition of the eclectic magazine which mixes culture, arts, business all those things with an overriding point of view.” She blends all this and more into The New Yorker to keep it current and attractive to readers. Brown brings an irreverent attitude to stuffy subjects, which can “really make a lot of waves.” In doing so, she garners a lot of attention and media coverage. Brown’s business style, however, is wrapped up in selling magazines using this very same free publicity whenever it is available and then doing outrageous things in her magazine to garner even more of that same free media attention. This circle of free advertising as well as Brown’s tongue-in-cheek style of writing has brought her from a small traditional magazine in England to one of the largest and most respected magazines in the United States, The New Yorker.
Sources of Information Contact at: The New Yorker 350 Madison Ave. New York, NY 10017 Business Phone: (800)365-0635
Bibliography “A New Editor for Vanity Fair.” Newsweek, 16 January 1984. “The Big Time! 8 Who Got Where Only Men Got Before.” Cosmopolitan, May 1994. “How Tina Brown Moves Magazines.” New York Times Magazine, 5 December 1993. Huhn, Mary. “Is New Yorker’s Tina Brown Casting About for a New President?” New York Post, 13 June 1998. Joseph, Regina and John Motavalli. “Tina Brown’s ‘Shock of the New’: Changes Galore at the New Yorker.” Inside Media, 17 February 1993. “Tina Brown.” Encyclopedia of World Biography. Detroit: Gale Research, 1998.
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Helen Gurley Brown Overview Author and editor Helen Gurley Brown rose through the ranks of business from secretary to executive, with many of her achievements coming while she was unmarried and at a time when women were not common as business executives. Through her position as editor of Cosmopolitan magazine and her several books on single life, Brown defined the lifestyles of single people for an entire generation.
(1922-) Cosmopolitan
Personal Life On February 18, 1922 Helen Gurley was born in Green Forest, Arkansas, to Ira and Cleo Gurley. Both schoolteachers, they raised Brown in modest surroundings in Little Rock. Ira Gurley died accidentally when Brown was only ten years old. A few years later, Helen’s sister contracted polio, and the family was forced into an even more austere lifestyle. During this time, she also grew to dislike her home life, which she later described as “ordinary, hillbilly, and poor,” and she sought to escape what she perceived as the crudeness of her neighbors and relatives. Brown attended Texas State College for Women from 1939 to 1941 then moved to Los Angeles to begin a career as a secretary. In 1959, she married David Brown who was a motion picture producer with 20th Century-Fox.
Career Details In 1941 Brown took the first of what was to be a string of 17 secretarial jobs in Los Angeles. This first job
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vertising was remarkable. Yet, she looked to accomplish what she termed “the one big important thing.” In 1962 Helen Gurley Brown took what she had learned as a single working woman and wrote a book that was to change her career. Sex and the Single Girl caused an immediate sensation when published in 1962. It was simultaneously praised and condemned for its honesty and its portrayals of the realities of single life and the sexual activities of young unmarried women. Termed by some critics as “tasteless,” it nevertheless remained on the best-seller lists into 1963, and it obviously provided information and guidance to an audience of young single women who craved it. With this book, Brown’s career both changed and blossomed.
Helen Gurley Brown.
(The Library of Congress.)
was for an announcer at radio station KHJ. While working at the station, she attended Woodbury Business College and studied secretarial skills. Later, Brown characterized both the job and her performance as “dreadful,” but she not only supported herself, she also provided support to her family on her salary of $6 a week. Among the following secretarial jobs were stints with Music Corporation of America (MCA) and the William Morris Agency. Brown learned that working for a glamorous company did not mean there was glamour for the employees or that the work was more rewarding. She later recalled how at one company, the secretaries were not allowed to use the lavish front entry and were required to use a back stairway to gain access to the office. Brown was working for the advertising agency Foote, Cone & Belding in 1948 when she got her first break in the advertising business. Letters that she sent to her boss while he was out of town on business led to an opportunity to write ad copy for the agency. Brown won two of her three Francis Holmes Advertising Copywriting Awards while with Foote, Cone & Belding as she discovered and developed a talent for writing advertising copy. She remained with this agency until 1958 and continued in advertising until 1962. Happily married at age 37 and involved in her career, she had worked, supported herself and struggled with the problems of single life and the issues of women in the work place. At that time, few women had the opportunity to excel in the corporate world, and Brown’s success in ad-
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Brown began receiving fan letters from women asking her advice and addressing topics from her book. Writing a syndicated newspaper column called “Woman Alone” was not enough, and both Brown and her husband thought a market existed where a larger audience could be reached. The Browns worked together developing a plan for a magazine they tentatively named Femme. The couple wrote a prospectus and drew up a format including suggested articles and submitted the package to publishers. After a succession of failures with these submittals, they approached the Hearst Corporation. Hearst saw in the proposal an opportunity to rescue an existing property, and the Browns were given the chance to take over Cosmopolitan. Helen Gurley Brown began what would become the career she is most recognized for in 1965, when she became the editor-in-chief of Cosmopolitan. Under Brown, Cosmopolitan proved to be popular with increasing numbers of women. A rather different type of magazine sales strategy was pursued—almost all sales were via newsstands, and the publisher was spared the problems and expense of subscriptions. Advertising revenues were high, and the magazine was profitable with sales to career-oriented single women. The magazine provided advice and insight to augment their growing tastes and to reinforce their independent lifestyles. Fashion and workplace advice along with articles on relationships struck a chord with readers, and under Brown’s direction circulation increased from 700,000 to 2,800,000. Brown has stated that her husband, David, wrote cover blurbs and approved articles even while maintaining his career as a motion picture producer. However, Brown herself wrote a featured column in each issue entitled “Step into My Parlor,” and her comfortable, sympathetic, and personal style is still a trademark. Additional books by Brown have continued her presence in the marketplace and added to her success as a spokesperson for single and working women: Sex and the Office (1965); The Outrageous Opinions of Helen Gurley Brown (1967); Helen Gurley Brown’s Single Girl’s Cookbook (1969); Sex and the New Single Girl (1970); and
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Having It All (1982). Two of the books, Sex and the New Single Girl and Having It All were updates to her original success, Sex and the Single Girl. In 1993 she published a book targeted at women over the age of 50, The Late Show. In 1996 Bonnie Fuller was named Brown’s successor as editor-in-chief of Cosmopolitan, while Brown retained the responsibilities of editor-in-chief of the magazine’s international publishing operations. She oversaw her final domestic issue in February 1997.
Helen Gurley Brown has had a prolonged and profound influence on the changing sexual mores in modern American society. She not only wrote about an area of great interest and importance, single and working women, she had lived the life she wrote about. Social attitudes were changing in America during the post-World War II era and through the sexually liberating times of the 1960s. Brown’s writings, from Sex and the Single Girl through her columns and leadership at Cosmopolitan, exercised great influence over the thinking of women. Brown also contributed greatly to the growing understanding that work outside the home can be a source of pride and accomplishment, both personally and financially, for women. Although she continued to insist men were an important part of women’s lives, which put her at odds with more radical feminists, Brown did much to contribute to the liberation of women from the traditional role as homemaker. Brown remained childless and advocated the once-radical view that a woman could achieve satisfaction through her own efforts and not only through the joys of child-rearing. Her life is an example of the success a hard-working woman can achieve. An avowed workaholic, Brown achieved much through hard work and dedication. She advanced through several secretarial positions to make opportunities for herself in advertising and parlayed success in writing into an opportunity to be editor-in-chief of a popular national magazine. She espoused the virtues of the working woman but did not turn her back on men, as she showed in her partnership with her husband. Brown has won numerous awards during her career, including three consecutive Francis Holmes Achievement awards for her work in advertising during the 1950s. Among her journalism honors is a Distinguished Achievement Award from the University of Southern California in 1971, an editorial leadership award from the American newspaper Women’s Club of Washington, D.C., in 1972, and a Distinguished Achievement Award from Stanford University in 1977. She was inducted into the Publisher’s Hall of Fame in 1988, and in 1997 was the recipient of a Financial World Career Achievement Award.
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Chronology: Helen Gurley Brown 1922: Born.
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1941: Moved to Los Angeles to begin a career as a secretary. 1948: Became first woman copywriter at Foote, Cone & Belding. 1959: Married David Brown. 1962: Wrote Sex and the Single Girl. 1965: Became editor-in-chief of Cosmopolitan. 1988: Inducted into Publisher’s Hall of Fame. 1993: Published The Late Show. 1997: Oversaw her final issue of Cosmopolitan.
Sources of Information Contact at: Cosmopolitan 224 West 57th St. New York, NY 10019
Bibliography Brown, Helen Gurley. Having It All, New York: Simon & Schuster, 1982. Brown, Helen Gurley. “Having It All.” McCalls, March, 1993. Brown, Helen Gurley. Sex and the Single Girl, New York: Random House, 1962. Brown, Helen Gurley. “What the Women’s Movement Means to Me.” Ms., July, 1985. Falkof, Lucille. Helen Gurley Brown: The Queen of Cosmopolitan, Ada, OK: Garrett Educational Corp., 1992. Kornbluth, Jesse. “The Queen of the Mouseburgers.” New York, 27 September 1982. Mason, Margaret. “Still the Cosmo Girl.” Washington Post, 19 March 1993. Rothenberg, Randall. “The Cosmo Girl at Twenty-Five: She Still Wants It All.” New York Times, 21 April 1990.
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William Cullen Bryant (1794-1878) New York Evening Post
Overview William Cullen Bryant enjoyed one of the longest and most influential careers in American journalism, but the New York Evening Post editor was really a poet at heart and achieved literary fame while still in his 20s. A leading personality in his day, Bryant’s leadership of one of the most widely read populist newspapers in American history was noted for his dedication to liberal politics. His editorials were widely read and reflected trends in American thought that would later gain constitutional protection. Vernon Louis Parrington, in Main Currents in American Thought (a tome written in the 1920s but never completed), called him “the father of nineteenthcentury American journalism as well as the father of nineteenth-century American poetry.”
Personal Life William Cullen Bryant was born into a conservative Massachusetts family of Puritan beliefs—though his father, a physician, had broken from tradition and was of the far more liberal Unitarian faith. Bryant’s grandfather, however, was a strict, tradition-minded farmer of Calvinist faith. Calvinism, founded by a sixteenth-century French theologian, was unique to Protestant sects with its doctrine that souls are born either good or bad. Whatever religious differences plagued the Bryant family, they were united in their devotion to Federalist politics. As the late eighteenthcentury political party of Alexander Hamilton, Federalists believed in the need for a strong centralized government, one that supported industry, wealthy merchants, and landowners; the Federalists were also pro-British.
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The Bryants were fixtures in the western Massachusetts town of Cummington. By all accounts Bryant was a gifted child and began writing poetry at a young age. When he was 13, one of his first poems was published under somewhat sensational circumstances. It was a satirical piece on Thomas Jefferson, who was president at the time. Jefferson had founded a party to oppose Hamilton and the Federalists that later became the Democratic Party. He also declared a ban on trade with England because of political tensions. Bryant’s poem, The Embargo, or Sketches of the Times, skewered the president and the act and was published by his father, then a Massachusetts state legislator. Yet in his adulthood, Bryant leaned increasingly toward liberal politics, and these and other early politicalthemed works were not included in later collections of his work. He enrolled in Williams College in Williamstown, but left after a year. Bryant had wished to attend a larger “name” school, like Yale, but one of his biographers theorized that the Bryant’s could not afford the steep tuition of an Ivy League college. He did, however, begin studying law with an established attorney not far from Cummington, as was the custom in the day for a legal education. In 1815, Bryant was admitted to the bar at the age of 20. When he was 26, Bryant married Francis Fairchild; by then he was already established as both a lawyer and talented American poet. Their first child, Frances, was born in 1822 and another daughter, Julia, arrived almost 10 years later. In 1825 the family moved to New York City when Bryant decided to make writing his primary career. His daughter Frances Bryant would later marry a journalist who worked for her father at the newspaper. From 1844, the family’s base was a house they called Cedarmere, near Roslyn on Long Island’s Hempstead Harbor. It was a place where Bryant could enjoy the rural landscape and take long walks in the forest, one of his favorite pastimes. On his estate he planted numerous exotic trees and plants, some carried back from his extensive travels. The family frequently sailed to Europe, and from his time both abroad and in North America he penned two travelogues. On one sojourn in Italy, his wife became sick there and he treated her with homeopathic remedies, in which he was a firm believer. Bryant’s wife died in 1866. He survived her by another 12 years, and even in his 70s was known for to climb the 10 flights of stairs to his editor’s office in New York. A figure of national renown at the age of 80, on his birthday in 1874, the editor and poet was honored with a Tiffany-made silver vase embellished with details from his life. The object was then placed in the permanent collection of Metropolitan Museum of Art. After a fall in May of 1878, the venerated writer, still helming the Post, suffered a stroke and died on June 12, at the age of 83. His papers are at the New York Public Library. His family home, Cedarmere later became the William Cullen Bryant Library in the 1970s, and his childhood home in Cummington is a National Historic Landmark.
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William Cullen Bryant.
(The Library of Congress.)
Career Details Bryant spent several years as a lawyer beginning in 1816 until his move to New York City. He had a practice first in a village called Plainfield, and later another in Great Barrington. He reportedly disliked the legal profession immensely; he often had to work long hours, and would be troubled when he witnessed injustice in the court system and could not correct wrongs done to those whom he believed innocent. He had never given up his early literary ambitions. In 1811, when he was just 17, he began a long poem that would bring him great acclaim a few years later when he finally revised it and sought a publisher. That poem was “Thanatopsis,” taken from the Greek term for “view of death.” It was a classical language which Bryant had studied, as was the custom of the day. Perhaps the most remarkable feature of “Thanatopsis,” according to the Encyclopedia of World Biography, “is its anti-Christian, stoical view of death.” Exploration of such abstract ideas in literary works was becoming popular in the culture of Western civilization at the time, and death was a common theme for poets of this era in England. Bryant was also greatly influenced by English Romantic poets, especially William Wordsworth and Samuel Taylor Coleridge. “Thanatopsis,” published in 1817, launched Bryant as a new and important American writer. The established U.S. literary figure Washington Irving was so impressed by Bryant’s talents that he helped broker a deal for the work to be published in England, where it met with fa-
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Chronology: William Cullen Bryant 1794: Born. 1808: Published first book, The Embargo. 1811: Began studying law with Elias Howe. 1817: Published famous poem “Thanatopsis.” 1821: Married Frances Fairchild. 1825: Moved to New York and began editing New York Review and Atheneum Magazine. 1829: Became editor of New York Evening Post. 1855: Threw paper’s editorial weight behind the newly formed Republican party.
But it was Bryant’s 50 year career at New York Evening Post that elevated him to not just a literary figure but to a position of influence and authority in American business. The paper had been founded in 1801 by Alexander Hamilton, and Bryant was hired as assistant editor in 1826; three years later he was made editor in chief. As such, he was able to guide the paper into a place in liberal politics; its editorial focus would reflect the great changes of the United States during the mid-nineteenth century. Bryant championed liberal causes and was a firm believer in “laissez-faire,” a doctrine that held an economic system functioned at its best when left alone by government rules and regulations. In his editorials, Bryant spoke up for the fledgling labor union movement and workers’ right to strike, both of which were quite radical ideas in the 1830s and 1840s. He also wrote disapprovingly, though not antagonistically, of the institution of slavery in his Post editorials. Because of this view, he grew dissatisfied with Democratic politics (the Democratic Party was a stronghold in the southern states), and became involved in the founding of the Republican Party in 1855.
1870: Began another career as a public speaker.
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1878: Died.
vorable reception. The first full volume of Bryant’s poetry, Poems, was published in the United States in 1821. Around 1823, he won a contract with the United States Literary Gazette to provide 100 lines of verse per month. Other successes included the publication of his essays in the North American Review and Miscellaneous Journal. When he and his family moved to New York in 1825, his first job outside practicing law was as cofounder of the New York Review and Atheneum. He and his partner could not make the magazine thrive, however, and it folded after just a year. Still, Bryant’s reputation as a man of “letters” was growing. In 1826 he gave a series of memorable lectures at the New York Athenaeum Society, later published in full, and he continued to write poetry. He also published nine volumes in all, including The Fountain and Other Poems in 1842, The White-Footed Deer and Other Poems in 1844, and Thirty Poems in 1864. He penned tales of his journeys, such as Letters of a Traveler; or, Notes of Things Seen in Europe and America published in 1850, and in his advanced years translated two classics of ancient Greek literature, the Iliad 1870, and the Odyssey, 1871-72, which he worked on in his spare time after the death of his wife in order to keep his mind occupied. In this era Bryant also became a sought-after speaker, and delivered eulogies at the funerals of novelist James Fenimore Cooper and Samuel F.B. Morse, a leading figure in the development of telegraph communications.
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Though his literary reputation fell in the years after his death, Bryant was one of the first American poets to achieve international renown. The themes of nature central to his poetry were part of an early literary movement that would later bring other U.S. notables such as Ralph Waldo Emerson and Henry David Thoreau to fame. Bryant was friends with many prominent writers of the day, including Irving and Cooper (The Last of the Mohicans) and both Emerson and Walt Whitman wrote approvingly of Bryant’s literary efforts. The posthumous decline of Bryant’s literary reputation was sometimes pinned to what critics termed a lack of passion in his verse, but Bryant appeared to apply his heart to polital matters. In his editorials, he opposed the expansion of slavery in the American West as the territories entered statehood. This was known as the “Free Soil” movement, and he gave the Free Soil Party of 1847 to 1848 enthusiastic editorial support in the Evening Post. “The federal government represents the free as well as the slave states,” Bryant wrote in one editorial, “and while it does not attempt to abolish slavery in the states where it exists, it must not authorize slavery where it does not exist.” In 1860, the Evening Post endorsed Abraham Lincoln and his Republican candidacy. Bryant had met Lincoln the year before when the Illinois senator arrived to speak in New York City; Bryant escorted him to the rally and introduced him before a crowd of 1,500. In one editorial, Bryant declared: “The Evening Post means to do all the good it can during the coming presidential canvass. It means to elect Lincoln. It means to oust the present most corrupt of administrations, and install an hon-
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est administration in its stead.” When the Civil War began in 1861, Bryant became an advocate for the total abolition of slavery—which he had not espoused prior to this—and called for its end in his paper. During the war years, the paper’s circulation doubled. A poet at heart, Bryant and his transition into journalism reflected the growing importance of newspapers in a still-young democracy. As urban populations increased during the early decades of the nineteenth century, so did access to a free public education, and literacy rates rose. During Bryant’s tenure at the Post, newspapers began to play an expanded role in the political experiences of the average American. Mainstream papers like the Post offered readers a decidedly liberal viewpoint, but in some instances Bryant’s editorial stance brought difficulty to the paper as a business enterprise. The paper sometimes lost lucrative advertisers, as well as subscribers of more conservative opinions, but it was a favorite of New York City’s working classes and was known for its debunking of new economic theories. Throughout his tenure as editor, Bryant stuck to his laissez-faire beliefs and argued against protective tariffs and other indications of government interference. He was also a great critic of speculative investments, which were a new trend in U.S. economic life in the era.
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ment of taste and dignity of character before unequaled in U.S. journalism. The lucidity of his comment and the keenness of his humanitarian criticism set (Bryant) apart from shriller contemporaries, and made him a power for sanity in a scurrilous generation.”
Sources of Information Bibliography Byers, Paula K., and Suzanne M. Bourgoin, eds. Encyclopedia of World Biography. 2nd ed. Detroit: Gale Research, 1998. Dictionary of American Biography. New York: Charles Scribner’s Sons, 1928-1936. Dictionary of Literary Biography. Detroit: Gale Research, Inc., 1985. Dictionary of Literary Biography, Detroit: Gale Research, Inc., 1987. Nevins, Allan. The Evening Post: A Century of Journalism. New York: Boni & Liveright, 1922. Nineteenth Century Literary Criticism, Detroit: Gale Research, Inc., 1984.
Bryant, wrote Parrington in Main Currents in American Thought, “reflected in the Evening Post a refine-
Tomlinson, David. “William Cullen Bryant.” Dictionary of Literary Biography, Detroit: Gale Research, Inc., 1979.
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Warren Buffett (1930-) Berkshire Hathaway Inc.
Overview Warren Buffett is regarded as one of America’s most brilliant investors and was one of its richest men in the late twentieth century. The subject of a cult of personality among satisfied investors, Buffett has been variously dubbed “St. Warren,” the “Wizard of Omaha,” and the “Corn-Fed Capitalist,” among other nicknames. Despite his vast fortune, he is often seen wearing a rumpled suit and lives in Omaha, Nebraska, in the same house he bought in 1958 for $31,500. Outside of his business concerns, Buffett has professed interest in funding a foundation devoted to halting population growth worldwide and to reducing nuclear proliferation.
Personal Life Warren Edward Buffett was born in Omaha, Nebraska, on August 30, 1930, the son of Howard Homan and Leila (Stahl) Buffett. His father was a stockbroker who was later elected to the U.S. House of Representatives. Buffett, quoted in a 1995 Time article, said he had always “wanted to be very, very rich.” As a boy, he was often taken by his father to his workplace, where he had an opportunity to learn the stock market business at a very early age. Before he was even a teenager Buffett was doing such routine duties at his father’s office as chalking in stock prices on the main blackboard in the office and charting the performance of various stocks. In 1942, when Buffett was 12 years old, he and his parents moved to Fredericksburg, Virginia, where they lived while his father served in Congress.
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By the age of 16, Buffett was clearly a prodigy in the area of mathematics and statistics. He enrolled at the University of Pennsylvania, where he focused on mathematics and statistics, and then moved to the University of Nebraska to finish his degree. He graduated at age 20 with a bachelor’s degree, then entered Columbia University’s graduate school of business, where he obtained a master’s degree in business.
Career Details Buffett has claimed that his career started when his father exposed him to the stock market business as a child and taught him the basics of investing. He has declared that the great turning point in his life and career came when he met his mentor in business, Benjamin Graham. In 1954, after having worked at his father’s brokerage business in Omaha, Buffett joined Graham’s Wall Street investment firm, Graham-Newman Corporation. Buffett was already a genius at mathematics and statistical analysis when he met Graham, but Graham had a theory about the investment market that Buffett has used during most of his career. The Graham theory involved what Graham called “value investing.” The core idea was that people picking stocks to invest in should buy shares of stock that are valued cheaper than the company’s worth on paper, in conventional auditing terms. It was a simple theory, but required diligence and ambition to practice. Buffett’s mathematical and statistical talent plus ambition enabled him to excel at finding out what companies were undervalued. He had to ignore everything published about a company, including its annual reports, go back to the “raw data” of the company, and make his own patient analysis, starting from scratch. He personally analyzed every stock in which he invested, and has consistently avoided markets he did not understand or knew little about. During this period Buffett married Susan Thompson, fathered two of his three children, and earned $140,000 in New York before he was 25. In 1956, when Graham shut down his firm on Wall Street, Buffett left New York, returned to Omaha, raised $105,000, and started an investment partnership. By the time Buffett ended the partnership in 1969, it had grown at an annual compounded rate of 29.5 percent and had a value of $105 million. Buffett next turned his focus to Berkshire Hathaway, a Massachusetts textile mill, and bought several additional companies. Although he closed the textile manufacturing business in the mid-1980s, Buffett kept the name for the holding company he continued to head in the late 1990s. During the 1980s Buffet also developed what became known as the “white knight” strategy of investing, where he saved certain businesses from being bought out by competitors. He stepped in to save the business by infusing it with the money it needed to fend off takeovers, but he also demanded in return that his investment pay off well. He arranged to get a preferred
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Warren Buffet.
(AP/Wide World Photos, Inc.)
stock that always carried a healthy dividend, whether the company did well or not. Buffett made a great deal of money by pursuing this strategy. By this point in his career, Buffett had become a multi-billionaire and a kind of celebrity because he was so talented at making money. Many have sought his advice, but he has given interviews only rarely. His lifestyle remained immensely modest, especially for a man known to be one of the richest men in America. In the mid-1990s he still lived at the Omaha home he had bought in 1958 for $31,500, with his girlfriend and former housekeeper, Astrid Menks, 17 years younger than Buffett. His wife, from whom Buffett had long been separated, lived in California; but, if she outlives Buffett, she will take over the Buffett company after his death, since she is the secondlargest shareholder of Berkshire Hathaway. One of Buffett’s most dramatic successes was his brief stint as chairman of the investment firm Salomon Inc., one of the world’s largest investment services. Through Berkshire he had acquired a 12 percent minority interest in the firm in 1987—one of his white knight investments. In 1991 it was revealed that senior staff had engaged in illegal trading of government securities, and there was an apparent attempt to cover up the scandal once Salomon management learned of it. In addition, it grew evident that the company’s finances were perilously dependent on a heavy debt load. The resulting management shake-up brought in Buffett, already a director at Salomon, as the firm’s chairman. Simultaneously, Salomon was on the brink of bankruptcy because the U.S. Treasury Department penalized it with a
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Chronology: Warren Buffett 1930: Born in Omaha, Nebraska. 1954: Joined Benjamin Graham’s investment firm on Wall Street. 1956: Established Buffett Partnership Ltd. in Omaha. 1969: Dissolved successful partnership. 1991: Became interim chairman of Salomon Brothers brokerage firm. 1998: Net worth estimated at $23 billion.
ban on participating in federal securities auctions. The same day the crippling ban was announced, Buffett pleaded successfully with authorities at the Treasury and the Federal Reserve to reverse the ban. This critical victory saved Salomon from financial collapse; and both Buffett’s management decisions and his high esteem in the investment world quickly stabilized Salomon’s market position, which was heading into a free fall until he stepped in. Though he withdrew as chairman less than a year later, Buffett reduced Salomon’s debt and, more importantly, helped restore confidence in Salomon. His investment in Salomon paid off in 1997 when the firm was sold to the Travelers Group for $9 billion. Of that amount, Berkshire Hathaway’s share was worth about $1.9 billion, more than twice his initial investment a decade earlier. Though he has been described as a quiet person with a Midwestern simplicity, Buffett is recognized as a brilliant and sophisticated personality. He has consciously shunned New York and Los Angeles, and yet every time the famous “Oracle of Omaha” has spoken, it is reported that everyone in the financial world listens to him.
Social and Economic Impact Warren Buffett’s investments have held significant sway over a number of large U.S. companies and even whole industries. He has built up a major position in the insurance industry, which accounted for about two-thirds of Berkshire’s 1997 revenues, by purchasing such companies as GEICO Corporation and General Re. Other fully owned subsidiaries include the H.H. Brown Shoe Company, International Dairy Queen, and See’s Candies. Buffett has also purchased long-standing minority stakes
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in American Express, Coca-Cola, the Washington Post, and Gillette. In a surprise 1998 move, however, Buffett invested heavily in silver—capturing over a third of the world market—because he thought it was undervalued. This was an uncharacteristic choice for Buffett because commodity investments are usually regarded as more speculative and short-lived than his conservative longterm approach deems appropriate. At the close of the twentieth century, Buffett was well known as a billionaire capitalist who made his own fortune. He is famous for such eccentricities as wearing rumpled suits and drinking five Cherry Cokes a day. He has declared himself an agnostic, and has arranged that after his death his money is to be used to establish a philanthropic foundation that will work to halt population growth worldwide and to fight nuclear proliferation. Buffett has also said, in the entrepreneurial spirit, that he intends to leave his three children just $5 million apiece out of his more than $10 billion. He explained this decision in a 1988 interview with Esquire: “I think kids should have enough money to be able to do what they want to do, to learn what they want to do, but not enough money to do nothing.” In Berkshire Hathaway’s 1989 annual report, Buffett wrote: “We do not wish to join with managers who lack admirable qualities, no matter how attractive the prospects of their business. We’ve never succeeded in making a good deal with a bad person.” In applying the investment strategy he developed with Graham, Buffett has always done his own company analyses. He is known by this hands-on style, and is perhaps the only billionaire who has always figured his own income taxes. Buffett has been one of the most successful capitalists of the twentieth century. Using his analytical skills, he has invested in other people’s ideas, inventions, and organizations, and through them has amassed great personal wealth. In 1991 a Wall Street Journal reporter described Buffett as “a standard bearer for long-term investing, the perfect antidote to the get-rich-quick schemers of Wall Street.”
Sources of Information Contact at: Berkshire Hathaway Inc. 1440 Kiewit Plz. Omaha, NE 68131 Business Phone: (402)346-1400 URL: http://www.berkshirehathaway.com
Bibliography Loomis, Carol J. “Buffett’s Wild Ride at Salomon.” Fortune, 27 October 1997. Lowenstein, Roger. Buffett: The Making of an American Capitalist. New York: Random House, 1995. Silverman, Gary, and Andrew Osterland. “Buffett’s $22 Billion Hedge.” Business Week, 6 July 1998.
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Daniel Hudson Burnham Overview Daniel Burnham was a chief architect of nineteenthcentury America who helped rebuild Chicago after it burned down in the mid-nineteenth century. He was not a “modernist” but was a master of practical architecture and made early contributions to the development of the skyscraper. Even though his work was influenced by European ideas, his maxim “think big” and his innovations in the new field of urban and regional planning served the early needs of the U.S. industrial revolution.
(1846-1912) Burnham and Root
Personal Life Daniel Hudson Burnham was born on September 4, 1846, in Henderson, New York near New York City. He was the son of Edwin and Elizabeth (Weeks) Burnham. His mother was a homemaker, and his father was a middle-class businessman working as a wholesale merchant of medical supplies. In 1855, Burnham’s family moved to Chicago, Illinois. Burnham’s childhood seemed unremarkable and he was indifferent to the public school he attended in Chicago. But he excelled in one area: freehand drawing. Burnham graduated from high school in 1866, after he had received some tutoring in Bridgewater, Massachusetts from a private tutor. As he grew into his teen years, his interest in architecture and his talent for drawing became increasingly evident to others. When Burnham turned 22 years-old he applied to Harvard University and Yale, but he was not accepted by either of the colleges and he became confused about
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mark. Because of his enthusiasm for the profession and his good drafting skills, Burnham went on in 1872 to a position as draftsman at the firm of Carter, Drake, and Wight. There, Burnham met John Wellborn Root, a fellow draftsman at the firm. Root and Burnham soon became friends and in 1873, when Burnham was only 27 years old, they created a partnership and established their own architectural firm. Root was creative and versatile while Burnham was practical and made sure the business stayed profitable. The men’s preferences in design were complimentary as well. While Root preferred the older Romanesque styles, Burnham favored the later neoclassical styles of architecture. It was a good partnership and appeared at almost the perfect time. In 1871 a huge fire had devastated the city of Chicago. There were many buildings and structures to be re-built and renewed, and between 1873 and 1891, the new firm designed 165 private residences and 75 buildings of various other types.
Daniel Burnham.
(The Library of Congress.)
his future. He spent a year as a clerk in a retail store and then went to Nevada in 1868 for a year to prospect for gold. After returning from Nevada, he ran unsuccessfully for an Illinois state senate seat in 1870. He became dissatisfied with all these false starts in life, and his father, who believed in his talents as a draftsman of some kind, helped him to get an interview with one of Chicago’s leading architects, William Le Baron Jenney. Burnham took a job as an apprentice in Jenney’s architectural firm after interviewing with him. At the age of 30, in 1876, Burnham married Margaret Sherman, the daughter of a wealthy stockyard executive. They had a long marriage and produced three sons and two daughters, all born within the first decade of their marriage. Two sons, Hubert, and Daniel Jr., eventually became architects themselves and joined their father’s firm. Burnham remained active in his career until his death at age 66. He died while on a research study in Heidelberg, Germany, on June 1, 1912 and is buried in Graceland Cemetery in Chicago.
Career Details Burnham found his career rather accidentally, after trying and failing at a variety of kinds of work as a young man. His introduction to the architecture profession, through his job in William Le Baron Jenney’s office, turned him toward the career in which he would make his
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Burnham designed buildings in what was considered the old style, influenced more by European tradition than newer tastes. This style was often cramped and busy, with exterior decorations that echoed ancient Greek and Roman constructions. But Burnham was responsible for some important structural innovations. In 1881, in response to the challenge of space restrictions in the crowded downtown area, he began to build taller buildings. His Montauk Building built in Chicago, (10 stories high) is considered the first real skyscraper. The Montauk Building had fireproofed iron beams and was the first to utilize floating-raft foundations to make it more stable. Yet, it was not quite a modern building. It had masonry walls with cast-iron columns—already almost obsolete—and looked like a European building. The Montauk Building was a great success for Burnham and he followed it up with the 11 story Rookery building in 1886. The Rookery’s floor plan—a hollow rectangle—was copied in other commercial buildings in Chicago. The Rookery still used old-fashioned load-bearing masonry walls, but also employed lighter walls supported at ground level by cast-iron columns with wrought-iron spandrel beams. Between 1889 and 1891, Burnham worked on the design for the Monadnock Building in Chicago. It was 16 stories high and became the tallest building in the world at the time to have exterior load bearing walls. In fact, in was only surpassed in total height by the Masonic Temple Building in Chicago, which had 22 stories. In 1891, Root died unexpectedly and the business was left in Burnham’s hands. By this time, their firm had designed over 200 buildings in Chicago as well as buildings in some 50 other cities. Burnham hoped to continue the company’s successes and changed the name of the firm to Daniel H. Burnham. In 1893, Burnham achieved a kind of triumph, the design and building of the World’s Columbian Exposi-
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tion in Chicago. The giant fair, which commemorated the 400th anniversary of Columbus’s sailing to America, would include buildings and landscaping in an integrated design. Root had originally been named consulting architect for the project with Burnham serving as chief of construction, but after Root’s death, Burnham continued to oversee the project. Working with other leading architects, including famed landscape architect Frederick Law Olmstead, Burnham oversaw some 20,000 workers and a construction budget of over $20 million.
Daniel Hudson Burnham 1846: Born.
In 1893, Burnham received honorary architectural degrees from both Harvard and Yale University, two schools that earlier had denied his entrance as a student. He was elected to be president of both the American Institute of Architects and the Armenian Institute of Architects. He was also given a membership in the exclusive Country Club of New York. In 1896, Burnham changed the name of his design firm yet again to simply D.H. Burnham and Company.
1912: Died.
Burnham’s 1901 Washington D.C. plan was perhaps his most extensive and lasting. In an attempt to reclaim Pierre Charles L’Enfant’s 1791 plan for the city, Burnham reclaimed the Mall and introduced a plan for the construction of the buildings around the Capitol and the White House. He also introduced a series of interconnected parks reportedly inspired by Andre Le Notre’s Baroque design for King Louis XIV’s Versailles Palace in France. Burnham was also commissioned to design a new Union Station for the nation’s capitol in 1903. When it was finished in 1907, it had a central focus on a triple
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The Exposition’s design was deeply classical, influenced by the French architectural school that dominated the Western world, the Ecole des Beaux-Arts of Paris. The Beaux-Arts school incorporated the principles of ensemble, strong axes and axial planning. This kind of architecture, not American in style, relied on the forms of Roman and Greek classicism. Burnham called the Exposition his plaster dream city, but critics called it the “White City” because of his overuse of stucco throughout the project. Though critics complained that Burnham’s creation was imperialistic and too academic, and failed to set a new, more “American” tone, the project made a profit and earned Burnham an international reputation.
Burnham’s success with the Columbian Exposition set the stage for what some consider his most important work, his involvement with the City Beautiful movement, which responded to the problems of expanding urbanization by employing principles of organization and design. Burnham worked on plans for several cities based generally on Napoleon’s master design for the architecture of Paris. Burnham consulted on plans for new Civic Centers for San Francisco and Cleveland and created plans for Detroit and Washington, D.C. He continued work that he had begun in 1897 for Chicago’s lakefront, and, at one point, consulted with William Howard Taft, then Secretary of War, regarding a plan to rebuild and modernize Manila and Baguio in the Philippines.
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1872: Began his career as a draftsman. 1873: Cofounder of Burnham and Root. 1881: Designed The Montauk Building. 1886: Designed The Rookery. 1889: Designed Monadnock Building. 1893: Designed buildings for World’s Columbian Exposition. 1901: Designed new layout for Washington D.C. 1909: Created Plan of Chicago.
arched entrance which led to a mammoth barrel-arched waiting room. Working alongside Edward H. Bennett in 1909, Burnham produced his most famous plan. Called the Plan of Chicago, it was a response to the World’s Columbian Exposition in Chicago and called for the large-scale and organized planning of the city. With orderly groupings of buildings, parks, and transportation arteries, Burnham hoped to save Chicago from, as he wrote later, “chaos incident to rapid growth.” The plan addressed four different areas of urban life: dwelling, work, transportation, and recreation. The plan called for a city and county park system, the construction of wide boulevards radiating outwards from a civic center, a ring system of boulevards throughout the city, bi-level drives alongside the Chicago River, and the preservation of the land along lake Michigan. In response to the plan, the Chicago Plan Committee was created to implement this design. The creation of Humboldt, Garfield and Columbus Parks as well as the Forest Preserve District are all a result of Burnham’s vision. By the time of Burnham’s death in 1912, he had designed or helped to design over 100 major projects throughout the world. But by this time, American architecture had turned in a new direction. The work of architects such as Louis Sullivan and Frank Lloyd Wright brought Modernism to prominence. Through the 1920s and 1930s, this style dominated American architecture and influenced design for the new century.
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Though Burnham’s work has been faulted as too European and too alien from America’s forms, he developed many of the major structural designs incorporated in later buildings. His steel-skeleton building frame, which employed a few major load-bearing supports within masonry walls, made it possible for taller and taller buildings to be made and eventually paved the way for the super skyscrapers that have become a familiar part of the urban landscape. Burnham is also given great credit as one of the first architects in America to call for sweeping and comprehensive city planning, which aimed to make cities more livable by placing commercial areas, housing, and parks in sensible relationships. “Make no little plans,” he said, “for they have no magic to stir men’s blood . . . Make big plans, aim high . . . ”
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Bibliography Hines, Thomas S. Burnham of Chicago: Architect and Planner. New York: Oxford University Press, 1974. Hitchcock, Henry R. Architecture: Nineteenth and Twentieth Centuries. New York: Penguin Books, 1977. Hoffman, Donald. The Architecture of John Root. Baltimore: Johns Hopkins University Press, 1973. Moore, Charles. Daniel H. Burnham, Architect, Planner of Cities. Boston: Houghton Mifflin Co., 1921. Reps, John W. The Making of Urban America: A History of City Planning in the United States. Princeton: Princeton University Press, 1965.
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Adolphus Busch Overview A German immigrant to the United States, Adolphus Busch started his career with a small brewing supply company and went on to found one of the largest and most successful breweries in the United States.
(1839-1913) Anheuser-Busch, Inc.
Personal Life Adolphus Busch was born July 10, 1839, in Mainz, Germany, and was the second youngest of 22 children born to Ulrich Busch and Barbara (Pfeiffer) Busch, Ulrich’s second wife. Ulrich was a prosperous merchant, innkeeper, and landowner and Adolphus was educated in some the finest schools in Europe. He went to the Gymnasium at Mainz, the academy at Darmstadt, and the high schools of Brussels. After finishing school, Busch worked in a brewers’ supply company that was owned by his father and in a mercantile house in Cologne. Busch led a comfortable life in Germany. He was well educated and his family was wealthy, but Busch decided to immigrate in 1857. Accompanying some relatives Busch arrived in New Orleans, traveled up the Mississippi River, and settled in St. Louis, Missouri, where he worked on a steamboat and in the wholesale supply house of William Hainrichschofen. When his father died, Busch used his inheritance to establish a brewers’ supply business, Adolphus Busch & Co., with his brother Ulrich. One of Busch’s customers was Eberhard Anheuser, a soap maker who had acquired the rather unsuccessful Bavarian Brewery by default. On March 7, 1861, brothers Adolphus and Ulrich married
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Busch was a man who was involved in all aspects of his business. For example, he was involved with agriculture—better hops produced a better beer—and helped to create the Crop Improvement Bureau in Chicago. He developed innovative methods to brew, bottle, transport, and advertise his beer. Furthermore he devised the first refrigerated rail cars to keep the beer cold during delivery. While Busch was a brewer of beer, he preferred wine and champagne. He died, when he was 74 years of age, as a result of cirrhosis of the liver, at his residence in Langenschwach, Germany on October 10, 1913, before Prohibition was instituted in the United States. Adolphus Busch’s body was placed in a mausoleum in Bellefontaine Cemetery in St. Louis. His funeral was an extremely extravagant event attended by thousands of loyal employees. The eulogy was given by Charles Nagel, secretary of commerce and labor in the Taft cabinet, and it took 25 trucks to carry all of the flowers sent in his memory.
Career Details Adolphus Busch.
(UPI/Corbis-Bettmann.)
Anheuser’s two daughters, Lilly and Anna, in a double ceremony. Also in 1861, Adolphus enlisted in the Union Army and served his duty during the American Civil War as a corporal. After the war, he returned to his wholesale business. In 1864, he was convinced by his father-in-law, Eberhard Anheuser, to join the management of his brewery. Busch proved to be a good salesman, made improvements in the brewery, and turned the small, struggling brewery into a successful one. In 1867, Busch became an American citizen. During their marriage, Aldophus and his wife, Lilly, had 14 children, nine of whom lived to adulthood. Busch, through his entrepreneurial talents and good business sense, became a very wealthy and generous man. He entertained many celebrities including William Howard Taft, Theodore Roosevelt, and Enrico Caruso. In his lifetime he built all of his children mansions; had several other business ventures; contributed heavily to many institutions, disaster relief causes, and political campaigns. He contributed to the relief funds for the victims of the 1906 earthquake in San Francisco, flood victims of the Dayton, Ohio flood in 1913, and to Harvard and Washington universities. He also contributed to the Louisiana Purchase Exposition in 1904 and gave large sums of money to presidential and congressional candidates who were anti-Prohibition. Busch, along with other brewers, supported William Howard Taft in the 1908 presidential election. The opponent, William Jennings Bryan condemned taverns and bars as places of ill repute.
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Busch worked in his own business and for his father-in-law until 1869, at which time he sold his interest in his brewers’ supply house and bought out William D’Oench’s half ownership of Eberhard Anheuser’s Bavarian Brewery. The company was restructured with Anheuser as president and Busch as secretary. Now a full partner, Busch plunged into his work with enthusiasm and took more responsibility for the day-today operations of the brewery along with selling the beer to other areas of the country. Most of the beer was sold to areas where a large number of Germans had settled. His technical proficiency became apparent when he developed a network of rail side icehouses to keep his brew cool en route to neighboring communities. This demand led to the development of refrigerated rail cars. Busch was an enthusiastic and creative promoter of his beer. He made friendships with tavern owners and merchants along his business routes. His “calling card” was a small jackknife with the E. Anheuser & Co. logo on the handle, and at one end of the knife was a picture of Adolphus Busch that could only be seen if one looked through a peep hole. The knives also doubled as corkscrews since bottled beer at that time was corked rather than capped with metal. The delivery wagons driven around town were fancy green and red wagons pulled by gleaming, high stepping Clydesdale horses. He also offered public tours of the brewery. Busch commissioned the artist, F. Otto Becker, to paint Custer’s Last Fight, which depicts the Little Big Horn Massacre in 1876. In 1896 Busch had reproductions made of this painting, and distributed them to the establishments that served his beer this consequently made that particular battle scene a popular part of Western Americana. Busch also demonstrated a keen understanding of market preferences. Around 1875, he collaborated with
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the St. Louis Restaurateur, Carl Conrad, and developed a new light beer to suit the tastes of those who did not care for the heavier, sweet brews that their company produced. While traveling in Germany, Conrad had tasted a remarkable beer and had brought the recipe back to St. Louis. The new beer, which they named Budweiser, was naturally carbonated due to a European brewing method known as Kraeusening, a process whereby fermentation is induced a second time. Budweiser was an immediate success. But Conrad and Busch had to go to court to keep the name, because Budweiser was already an established brand of beer made in the former Budweis, Bohemia, presently the Czech Republic. When Conrad and Busch applied for a U.S. trademark in 1907, the Bohemian brewery tried to sue Anheuser-Busch. The dispute was settled in 1911 with the agreement that the name Budweiser could only be used in the United States and Latin America. Using a method developed by Louis Pasteur, he discovered a means of bottling the beer to keep it fresh and to retain its carbonation for long periods of time. This enabled the brewery to distribute the beer nationwide. Busch was the first American brewer to pasteurize beer and the first brewer to establish a national brew. He eventually exported the beer to Mexico, Cuba, England, and Singapore. A well known advertising symbol that came from Budweiser beer was the ubiquitous “Budweiser Girl” who appeared on trays, plaques, postcards, and posters. In 1879, the company was renamed the AnheuserBusch Brewing Association, and when Eberhard Anheuser died in 1880, Busch became company president. Carl Conrad, Busch’s Budweiser partner was also the bottler and distributor for Anheuser-Busch until 1883, when he went bankrupt. Busch bought Conrad’s interest thus becoming Budweiser’s exclusive brewer, bottler, and distributor. By 1901, the Anheuser-Busch Company had become the nation’s largest brewery, surpassing its rival, Pabst, with an annual production rate of 1 million barrels of beer. Busch continued as president of the company for 33 years. The brewery expanded, stretching out 70 acres along the Mississippi River. In addition to his brewery, Busch assumed the presidency of the South Side Bank and the Manufacturers Railroad Company; bought coal mines in Illinois; and bought the Louis & O’Fallon Railroad to transport the coal. He founded the Adolphus Busch Glass Manufacturing Company, the St. Louis Refrigerator Car Company, and the Busch Sulzer Brothers Diesel Engine Company, which produced the first diesel engine in 1898. He also had a controlling interest in six hotels, including the Adolphus in Dallas, and five other breweries. In addition to all of this Busch also had interests in some 30 other businesses in the United States and Europe.
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Chronology: Adolphus Busch 1839: Born. 1857: Immigrated to the United States. 1859: Establish Adolphus Busch & Co. 1865: Joined Anheuser & Co. brewery as a salesman. 1867: Became a U.S. citizen. 1875: Introduced pasteurization of beer. 1879: Established Anheuser-Busch Brewers Association. 1880: Became president of Anheuser-Busch.
eled back and forth between his homes in St. Louis, Missouri; Pasadena, California; Cooperstown, New York; and his lodge, which he called “Villa Lilly”, in Langenschwalbach, Germany.
Social and Economic Impact At the time of his death, Busch’s personal wealth was estimated to be $60 million. His heirs still have substantial interests in what has become one of the world’s most successful breweries. Anheuser-Busch is currently the top domestic brewer, surpassing Miller, Stroh, Coors, and Pabst. Internationally the company is also at the top of the list, followed by Heineken, Miller, Kirin, and Kronebourg. The company produces approximately 35 brands of beer, including well-known brands as Budweiser, Michelob, Red Wolf, Busch, and King Cobra Malt Liquor. These beers are only ones sold under the Anheuser-Busch name in the United States. The list does not include beers like Roscoe Red (English), Elephant Red, Rio Cristal, or custom brews for restaurants.
In his final years, Busch left much of the operation of the Brewing Association to his son August. He trav-
The Anheuser-Busch company has the most extensive distribution networks in the industry, bringing beer to its customers through its 900 independent wholesalers and 11 company owned wholesale operations. Its contribution to the American economy can not be discounted: in 1996, Anheuser-Busch spent $534 million on advertising alone. Its brand name labels, like Budweiser, have become synonymous with American popular culture.
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Sources of Information
Anheuser-Busch Historical Archives. St. Louis, Missouri.
Contact at: Anheuser-Busch, Inc. One Busch Pl. St. Louis, MO 63118 Business Phone: (314)577-2000 URL: http://www.anheuser-busch.com
Dictionary of American Biography. New York: Charles Scribner’s Sons, 1944. Fucini, Joseph J. and Suzy Fucini. Entrepreneurs: The Men and Women Behind Famous Brand Names and How They Made It. Boston: G.K. Hall & Co., 1985. VanDoren, Charles, ed. Webster’s American Biographies. Springfield, MA: G & C Merriam Co., 1974.
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Nolan Bushnell Overview Nolan Bushnell is one of the most active entrepreneurs of his time. Nicknamed “King Pong” after the hugely successful table-tennis video game he invented in 1972, Bushnell has founded more than 20 companies, including Pizza Time Theaters and their most famous creation, Chuck E. Cheese. For all of his success in establishing companies, Bushnell had a spotty record of long-term corporate growth. Several of his companies failed and he earned a reputation for losing interest in those that did succeed. Despite this, he remained one of the great creative forces in Silicon Valley’s competitive atmosphere.
(1943-) PlayNet Technologies
Personal Life Nolan Bushnell was born in Ogden, Utah in 1943. His father, a cement contractor, died when Bushnell was 15 years old. Bushnell stepped in to complete his father’s remaining contracts, earning his first exposure to the business world. As a teenager, Bushnell worked part-time in an amusement park, eventually becoming a manager. Bushnell had gotten his creative start several years earlier. As he told interviewer Tenaya Scheinman with The Tech Museum of Innovation, “The spark was ignited in Mrs. Cook’s 3rd grade class when I was assigned to do the unit on electricity and got to play with the science box. I went home and started tinkering and never stopped.” At times Bushnell’s experiments ignited more than a few sparks. In the same interview, he told of the time that he nearly set his family home on fire with a liquid fuel rocket mounted on a roller skate.
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Nolan Bushnell demonstrates the Commodore CDTV Interactive Multimedia Player, which combines the features of a home computer, a video game player, and a CD player. (AP Photo/Mark Lennihan.)
Bushnell attended college at the University of Utah, where he earned an engineering degree in 1968. In college, he played tournament chess and tournament Go, a Japanese strategy game. Go would later play a key role in his professional life. He spent his rare free time playing with computers and was introduced to computer graphics by one of his professors. While he says he was a good high school student, he did not do as well in college. Between his budding business ventures, his job at the amusement park, and his fraternity, Bushnell’s grades suffered. Bushnell married twice and has eight children. He enjoys spending time with his children and he plans to
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spend time alone with each of them in Europe. Bushnell has given each of his children their own computer because he firmly believes in promoting computer literacy.
Career Details Bushnell originally wanted to work for the Disney Company, because he considered it, in his words, “A cool place to work.” Disney was not interested. Instead, he became the games manager with Lagoon Corporation in
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Salt Lake City. After two years, he moved to California and became an engineer in the Advanced Technologies section of Ampex Corporation. His keen interest in games grew when he learned of a game developed at MIT called Spacewar. The game was popular among engineering students, but Bushnell saw larger, commercial possibilities. In 1971 he created his first game, Computer Space. It failed largely because it was too complex. Bushnell told New York Times Magazine, “All my friends loved it. But all my friends were engineers. The beer drinkers in the bars were baffled by it. I decided what was needed was a simpler game.” That “simpler game” would be Pong. He financed his research by leasing pinball machines and through consulting work. But he was unable to sell his idea to a single amusement company. Undaunted, Bushnell decided to form his own company to manufacture the game. With his partners, Ted Dabney and Larry Bryan, and an initial investment of $500, the company was launched under the name Syzygy. That name, however, was already taken and they eventually turned to one of Bushnell’s favorite games, Go, for inspiration. The name they chose, Atari, means “prepare to be attacked” in Japanese—a smart choice considering the astounding success their Pong game would have. Within two years, over 100,000 copies of Pong—an electronic version of table tennis—were sold, primarily for bars and nightclubs. The video game phenomenon was born. But Atari was unable to keep up Pong’s popularity. Demand was so great that competitors quickly produced their own versions of the game, and counterfeit versions dotted the market. Other problems soon surfaced. The company was frequently short of cash, harming its ability to meet demand and to create other games. By 1974, Pong sales began to slide. Atari’s follow up, a race car game called Gran Trak 10, was slow in development and took a long time to gain popular acceptance. In the meantime, the financial woes of the company continued to mount. Bushnell told Time magazine that “The machine was selling for $995 and costing $1,100 to build. We were shipping a $100 bill out the door with every unit.” Bushnell knew that Atari could survive only if it continued to build more and different products. He looked to arcade games and home video games. The company soon plunged into the home game market largely because, as Bushnell told Business Week, “(they) turned out to be ready first.”
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Chronology: Nolan Bushnell 1943: Born. 1971: Debuted “Computer Space” video game. 1972: Founded Atari. 1972: “Pong” released. 1976: Sold Atari to Warner Communications. 1978: Opened Pizza Time Theaters (Chuck E. Cheese). 1981: Founded Catalyst Technologies. 1984: Resigned from Pizza Time. 1996: Joined Aristo International (now PlayNet Technologies).
one crisis after another.” He left the company after a bitter argument over the marketing of Atari’s innovative, new computer system, a “programmable” video set-up that allowed users to change games by inserting different cartridges into the system. Bushnell’s next venture was Pizza Time Theaters. He developed the concept while still at Atari. At an industry show in 1974, he purchased an animal costume for $800. He brought it back to his engineers and asked them to make it sing and talk—his first move into robotics. When development on the new robotic entertainer—named Chuck E. Cheese—was completed, Atari was a part of Warner, who showed little enthusiasm for the project. Only one Pizza Time Theater was allowed to open. Bushnell believed that the idea had tremendous potential, so in 1978, he purchased the rights to the project from Warner and set out on his own.
Once again, demand outstripped Atari’s ability to supply, and Bushnell decided that his only option was to merge Atari with a larger company. In 1976 he sold Atari to Warner Communications for $28 million dollars. Bushnell agreed to stay with the company, but not for long. As he told Tenaya Scheinman, “I was exhausted. Atari was an all-consuming entity. And part of it was this chase for capital, this quest for payroll. So to sell the company was in some ways a relief. Literally I felt like I had lost it all almost every other month. It seemed like
Bushnell wanted his new company to rival McDonald’s and Disneyland and he began to rapidly expand. The restaurants allowed customers to play video games, watch movies, or view a show put on by such robotic entertainers as Madame Oink, Harmony Howlette, or the proto-type Chuck E. Cheese while waiting for their food. In its first year of operation, Pizza Time earned $347,000. By 1982, revenues mounted to more than $99 million. But the good times were about to end. As the video game market collapsed, interest in Bushnell’s restaurants faded. On top of that, the chain earned a reputation for poor food, bad service, and high prices. To stem the tide of financial losses, the robots were reprogrammed to appeal
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to a more adult crowd, but it was too late. Bushnell resigned in 1984 and soon afterwards Pizza Time Theaters filed for bankruptcy. But Bushnell was not out of business. In 1981 he formed Catalyst Technologies, a company that gave financial and other support to start-up companies. It financed a number of ventures, including one called Androbot. Androbot attempted to develop robots for home use, and Bushnell predicted every home would have at least one by the year 2000. For a time, it seemed like Bushnell had gone on to the next “big thing.” As John C. Dvorak wrote in Computer Shopper magazine, “Bushnell was a master of the media, and all the trade magazines were talking about Androbot, particular its TOPO and B.O.B products. The TOPO robot was essentially a remote-control robot that functioned on commands delivered by an Apple II computer. B.O.B. (Brains on Board) was supposed to function as an independent device and bop around the house all by itself.” The enterprise failed. The robots often broke down and were too expensive for home use. Bushnell put the company up for sale in 1985. But Bushnell continued to seek new opportunities. The internet’s growth and possibilities prompted Bushnell to join with Aristo International in 1996. The idea was to develop interactive stands for hotels, bars, and restaurants that would allow patrons to play games (alone or in teams connected across the internet), send email, order concert tickets, or play digital recordings using either coins or charge cards. Aristo changed its name to PlayNet Technologies in 1998, and asked Bushnell to become its chairman. He declined, preferring to remain director of strategic planning.
being the guy with the machete hacking his way through the jungle never to go that way again. And it’s nice to put the team together, get it running, get the structure in place, get finances working, then leave it and sort of pet it every once in a while.” Companies he founded, like Atari and Pizza Time Theaters, both went through hard times after he left them, but they survived under new management. Bushnell even took his children to Pizza Time after he left. As he told Joyce Gemperlein, “They say, you owned this and you sold it? That was really lame!” Bushnell never lost his interest in children or in learning. Early in life, he wanted to be a teacher but his grades and other interests had always prevented that. Instead, he took on a project to reform the education system. His idea was to reinvent the schools, much as he reinvented home entertainment. He told Joyce Gemperlein, “I think that if properly structured, kids can learn at 200 to 300 times the current speed. So that they can go to school for a couple of hours in the morning and the rest of the time they can be working on projects, having fun.” Bushnell believed this technological approach to education would be more important than biotechnology in the next century.
Sources of Information Contact at: PlayNet Technologies One Maritime Plaza, 29th Fl. San Francisco, CA 94111 Business Phone: (415)217-3600
Bibliography Dvorak, John C. “What Ever Happened to . . . Androbot?” Computer Shopper, July 1997.
Social and Economic Impact Nolan Bushnell revolutionized the entertainment industry. With Pong, he brought arcade-style games into the home and paved the way for a number of other companies to design, build, and market video games for personal use. With Pizza Time Theaters, he took the video game concept a step further, combining it with his passion for robotics and food to create an entertainment experience for the entire family. While his early successes launched the video game revolution, Bushnell developed a reputation for losing interest in the companies he founded. As Bushnell told Tenaya Scheinman, “I’ve always got to force myself into completion. I really like
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Gemperlein, Joyce and Scheinman, Tenaya. “The Revolutionaries: An Interview with Nolan Bushnell.” San Jose, CA: The Tech Museum of Innovation, 1997. Available from: http://www.thetech. org/revolutionaries/bushnell. Martin, Richard, “Comebacks: Cooking Up Second Chances for Glory.” Nation’s Restaurant News, 23 September 1996. Contemporary Newsmakers. Detroit: Gale Research, 1985. “Nolan Bushnell.” Gamespot, Inc, 1998. Available from http:// www.gamespot.com. “On Line with Nolan Bushnell.” VARBUSINESS, July 1994. “PlayNet Technologies 10-Q.” Washington, DC: Securities and Exchange Commission, 1997. Available from http://www.sec.gov.
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Ely Callaway, Jr. Overview Ely Reeves Callaway, Jr. became a famous entrepreneur during the ‘Third Act’ of his life. Past age sixty, after having made fortunes in two different businesses, textiles and wine-making, his Third Act included creating The Callaway Golf Company, Inc., and manufacturing perhaps the most famous line of golf clubs in the world: the Big Bertha, made of oversized hickory wood, reinforced with a revolutionary tungsten-titanium rod core. Callaway’s genius for selling good products, using a story line, didn’t falter. He claimed he named his new golf clubs after the famous World War I cannon that could drop a shell on a target six miles away. He said he had re-invented the golf club by using gun-barrel production techniques and new exotic metals. Beginning this company in the seventh decade of his life, by 1994, when he was age seventy-five, Callaway’s golf company had become the largest of all his competitors, with an annual revenue, in 1996, of $678 million.
(1919-) The Callaway Golf Company, Inc.
Personal Life Ely Reeves Callaway, Jr. was born June 3, 1919 in La Grange, Georgia. He came from a background of wealth and influence, with a family history tracing back to fifteenth century England. This allowed Callaway to grow up comfortably in the small community where most of his relatives owned most of the businesses, and Callaway began playing golf at local country clubs at the age of ten. Later, doing well in his education, he went on to graduate in 1939 from Emory University with a baccalaureate in American History.
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curement Agency, in apparel procurement for military troops. Reaching the rank of Major by the age twenty-four, Callaway became the Army’s sole procrement officer for cotton clothing. During war-time, Callaway had learned virtually everything about the cotton apparel industry. In 1945, Callaway left the Army and rose quickly to high positions in the textile industry, based on his wide war-time knowledge of textiles and his many personal contacts built during World War II. He joined the textile firm of Deering, Milliken and Company in Atlanta. Later, he moved to New York City where he accepted a position with Textron. Textron was soon purchased by the world’s largest textiles manufacturer, Burlington Mills and in 1968, Callaway was named as that company’s president and director. He abruptly quit in 1973 when he was not made a full Chief Executive Officer (CEO) at Burlington Mills. He walked away swiftly from Burlington Mills, not looking back, a multi-millionaire by that time, and told INC. Magazine that he had only one bad week or so, “grieving.”
Ely Callaway, Jr.
(AP/Wide World Photos, Inc.)
During his life Callaway was married four times and has three children from his first marriage: Reeves, Nicholas and Lisa. His current wife, Lucinda Villa Callaway, was the only one he married who was over the age of thirty. Callaway is a self-described life-long Democrat in his politics. He eats “only healthful food,” according to Inc. Magazine, and was described by them when interviewed, as a man who was lean, dignified, and aristocratic in bearing. His social activism has been long-standing, with ongoing trusteeship roles with the United Negro College Fund, the New York Council of Boy Scouts, the Menninger Foundation, and Hampshire College.
Career Details From his youth in that small community, Callaway appeared to assume he would succeed in business, and in life. According to one story of him, written in Town and Country magazine, a friend was quoted as saying that: “Ely’s talent . . . was primarily as a human motivater . . . he had a gift for finding the right kind of people and turning their creative talents loose. He also had an uncanny sense of what the public wanted.” In June of 1940 Callaway joined the army as a Reserve Officer, and quickly rose to the rank of a commissioned officer. He remained in the United States during World War II, working with the Army’s Centralized Pro-
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Callaway moved to California soon after he left Burlington Mills, where he had purchased 150 acres of land in the San Diego/Palm Springs area, some years beforehand, which he had started cultivating and bottling wine that went from good to great. The Callaway Vineyard and Winery grew to a world-class enterprise in four short years, and the wine, with his personal connections in New York, was soon being served in such elegant restaurants as the Four Seasons and ‘21’. In 1981, he sold the wine business for a $9 million profit to Hiram Walker Corporation, which has continued to make Callaway wines as he had made it. Still restless for work at the age of 60, Callaway looked for new opportunities. Returning to his favorite pastime, the game of golf, he gradually began, as he told INC. Magazine, to ‘re-invent’ the 250-year-old golf club. He sought to make it more user-friendly, assuming that if the club was easier to swing, with a larger face-surface, that one might play a better game of golf. In Palms Springs, California, in 1983, Callaway found a small company in financial trouble that was making a fine golf club; the club was old-fashioned looking, with a big hickory shaft, with a titanium-metal rod core. Callaway quickly invested $2.5 million, bought out the company, gave it his name, and his great courage of promotion. With some refinements to the club, he came out with, and promoted a new golf club, the Big Bertha, which might be seen as the equivalent of an oversize tennis-racket for golfers. As he did with his wine business, he carefully marketed his upscale golf-clubs, and equipment, to upscale players of the game. He made sure, for instance, that President William Clinton, President George Bush, The British Prince Andrew, and a variety of celebrity golfers, like Sean Connery and Jack Lemmon, as well as most of the important golf-playing CEO’s in America used his clubs and talked about them.
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In a short time, by 1994, his company/corporation was offered publicly on the New York Stock Exchange and had gained world dominance in golf clubs, exceeding Spalding, Wilson, Taylor-Made, and MacGregor. Callaway has continued to pursue Research and Development of his golf products, including an upcoming new line of golf balls, and in 1997, at age seventy-eight, was still on the job everyday. He told INC. Magazine, “In order to be successful, you can’t be afraid to fail: fear of losing is what inhibits most people.”
Chronology: Ely Callaway, Jr. 1919: Born. 1939: Graduates from Emory University.
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1940: Joins the Army.
Callaway was quoted in the July 17, 1995 Los Angeles Times, describing his business style this way: “I’m a merchant, someone who recognized a need for an improved product, then created it. But it must be a consumer product that was demonstrably superior to the competition, and pleasingly different. Then, I marketed the hell out of it.” Quoted once again, from the Los Angeles Times, July 17,1995, Callaway said, of his business strategy: “The funny thing was...there was no grand vision of three careers and big fortunes. I just started out one little step at a time and hoped it worked. Luck was a big piece of it. Not so much good luck but the absence of bad luck.” His strategy was, in his own eyes, part luck and part “marketing the hell out of it.” This strategy has worked as he was quoted as the highest paid executive in the state of California in 1995 with an annual salary of over $1.8 million. When he was involved in textiles, Callaway went to the top and became director of the world’s largest fabric mills; Burlington. As a vintner, Callaway developed a variety of California wines-in an unlikely area of southern California where they continue to be made today, regarded as world class in quality. As the CEO of Callaway Golf Company, Inc., he had improved the quality of an “antique” sports tool, the golf club, and by bringing to the club a high technology challenge, had opened up again a competitive industry in golf-related products.
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1968: Becomes president of Burlington Mills. 1973: Founds The Callaway Vineyard and Winery. 1981: Sells The Callaway Vineyard and Winery. 1983: Promotes new golf club, the Big Bertha. 1994: Gains world dominance in golf club sales. 1994: Entrepreneur of the Year by Inc. Magazine.
Sources of Information Contact at: The Callaway Golf Company, Inc. 2285 Rutherford Rd. Carlsbad, CA 92008 Business Phone: (619)931-1771
Bibliography Dean, Paul. “At the Fore Once Again.” Los Angeles Times, 17 July 1995. Dodson, James. “Iron’s Man.” Town and Country Magazine, May 1994. “Callaway’s Way.” Golf Week, 14 August 1993.
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Andrew Carnegie (1835-1919) Carnegie Steel
Overview The wealthiest man of his time, industrialist Andrew Carnegie is best known today for the monumental philanthropic projects he established after his retirement. Having made millions in the steel industry during the late 1800s, Carnegie dedicated his fortune to the educational and philanthropic causes he considered to be the proper beneficiary of capitalist profit.
Personal Life Carnegie’s early life fostered both his ambition and his radical attitude toward wealth. He was born in Dunfermline, Scotland, in 1835, the oldest child of Margaret and Will Carnegie, a handloom weaver. His parents instilled in Andrew a strict work ethic and a belief that wealth carries with it social responsibilities. When steampowered machines made handlooms obsolete around 1847, weavers in Scotland agitated for economic reforms, but there was little hope of success. At the urging of his socially-ambitious wife, Will Carnegie moved his family to the United States in 1848. They settled in Allegheny, Pennsylvania, near Pittsburgh, where Will Carnegie struggled to support his family. Young Andrew immediately began factory work, earning $1.20 per week as a bobbin boy in a textile mill. Soon he obtained a better job as a messenger in a telegraph office. Andrew memorized addresses and names to speed up his errands and was quickly promoted to telegraph operator. In 1853 he became assistant to Thomas Scott, superintendent of the company’s western division.
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By 1855 when Will Carnegie died, Andrew was the sole financial support for his mother and younger brother, Tom. He was only 20 years old. Although there was no opportunity for formal education, Andrew studied as much as he could at the free public library and learned double-entry bookkeeping at night school. He became an avid reader, a sophisticated lover of music, and a theatergoer with a passion for Shakespeare (he knew the Bard’s work so well he could recite entire scenes from memory). By 1859, the young Carnegie was financially secure enough to move with his mother to the upscale suburb of Homewood. In 1864, Carnegie was drafted into the Union Army, but he paid a replacement soldier $850 to serve for him, a widely accepted practice at the time. Carnegie was greatly influenced by his strongwilled mother, who was proud of her son’s success and paraded in front of her former townspeople when she and Carnegie visited Dunfermline in 1881. Because of Margaret’s disapproval, Carnegie put off marriage to Louise Whitfield, whom he had met in 1870, until after his mother’s death. In 1886 Carnegie came down with typhoid, and suffered a serious relapse when he learned of his brother’s death. A month later, when Margaret died, Carnegie was still so ill that his mother’s coffin was lowered from her bedroom window in order to keep her death a secret from her son. Carnegie married Louise Whitfield in 1887, and in 1897 their daughter Margaret was born. That same year Carnegie bought Skibo Castle in Scotland, where he spent about half of each year until he retired in 1901. In 1916, Carnegie bought Shadowbrook, an estate in Lenox, Massachusetts, where he died in 1919.
Career Details Much of Carnegie’s success came from his extraordinary ability to recognize and exploit the opportunities being created by industrialization. During his 12 years with the Pennsylvania Railroad, he developed the managerial skills and personal relationships that would help him in his later business ventures. He learned how the railroad industry worked and introduced such innovations as keeping the telegraph office open 24 hours a day and burning railroad cars after accidents to clear the tracks quickly. During the Civil War, he organized the military telegraph system for the North and gained additional insights into the industry. Seeing the commercial potential of sleeping cars on trains, Carnegie invested $217.50, which he obtained through a bank loan, in the Woodruff Sleeping Car Company. Within two years, he was receiving an annual return of about $5000, more than three times what he was earning at the railroad. Carnegie also became a silent partner in several small iron mills and factories. By 1863 his annual income was $42,000.
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Chronology: Andrew Carnegie 1835: Born. 1848: Emigrates with family to United States; settles near Pittsburgh. 1856: Invests in railroad sleeping cars. 1861: Invests in oil and other companies. 1865: Retires from railroad; founds Keystone Bridge Company. 1872: Visits Bessemer steel plants in England. 1875: Opens his first steel plant, Edgar Thomson Works, in Braddock, PA. 1881: Assumes control of Frick Coke Company. 1883: Buys Homestead Works steel mill. 1889: Publishes “Gospel of Wealth.” 1899: Forms Carnegie Steel from his several steel companies. 1901: Sells out to Morgan, becoming richest man in the world. 1919: Dies at estate in Lenox, MA.
In 1865, Carnegie retired from the railroad and founded the Keystone Bridge Company, which used iron rather than wood in the construction of bridges. Tom Scott loaned Carnegie half the $80,000 needed for this investment. Two years later, Carnegie founded the Keystone Telegraph Company, which received permission from the Pennsylvania Railroad to string telegraph wires across their poles. This proved so valuable that Keystone merged with the Atlantic Telegraph Company and tripled its investors’ return. Between 1865 and 1870, Carnegie traveled between the United States and England selling U.S. railroad and bridge company bonds. He may have sold as much as $30 million in bonds and made as much as $1 million in commissions. By 1870 Carnegie realized that steel would inevitably replace iron in the expanding market for building products. He withdrew from his other investment activity to concentrate on steel manufacturing. With his own capital, he built his first blast furnace that year and another in 1872. He persuaded some of his Pittsburgh business acquaintances to join him in steel manufacturing and with them formed Carnegie, McCandless, and
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Company (later known as Carnegie Steel). The company employed the innovative Bessemer method, which Carnegie had witnessed on a visit to Bessemer’s steel plants in England in 1872. This process, which forces compressed air through molten iron to burn out excess carbon and other impurities, significantly cut the cost of converting iron into steel. In 1875 Carnegie opened his first steel plant in Braddock, Pennsylvania, naming it after the president of the Pennsylvania Railroad, Edgar Thomson. The plant’s first order, for 2,000 steel rails, was placed by the Pennsylvania Railroad. Carnegie also introduced open-hearth steel production to his plants, which lowered the costs and increased sales and profits. Carnegie consistently invested his profits back into the company to make improvements, cut operating costs, and drive out competition. By 1878 the company was capitalized at $1.3 million and it continued to grow, making Carnegie the dominant steel manufacturer in the country. In the 1880s Carnegie acquired a majority interest in the H. C. Frick Company, which produced coke—a component in the manufacture of steel. Carnegie and Frick made a formidable business team, with Carnegie overseeing expansion, installation of cost controls, and modernization of plants while Frick controlled day-today management. In 1883, Carnegie bought the Homestead Works to produce steel structural members for elevated railways and skyscrapers-products in increasing demand in growing urban centers. Despite a harsh national depression from 1893-1896, the Carnegie Company, following Carnegie’s command to “Take orders and run full,” held prices down, kept skilled workers on the payroll, and earned profits. By 1890, Carnegie’s take-home pay was $25 million per year. A decade later, Carnegie Steel’s annual profits were $40 million. Carnegie had always fought cartels, but by the 1890s he was beginning to encounter increasing competition from newly-formed corporations headed by J. P. Morgan and the Moore Brothers. These corporations wanted to impose stability on the steel industry by controlling prices and by limiting competition through pools and cartels. At first, Carnegie refused to bargain with these corporations, but by 1901 he wished to retire from business and devote himself to family life and philanthropy. J. P. Morgan bought Carnegie’s controlling interest in Carnegie Steel for $500 million and restructured the business to create U.S. Steel Corporation. Carnegie’s personal share in the buyout was $225 million, making him the wealthiest man in the world.
Social and Economic Impact Carnegie played a significant role in building and modernizing American industry. He utilized not only the vast natural resources of the continent that provided the
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raw materials of manufacturing, but also a huge labor pool—new immigrants—eager for employment. Carnegie was quick to appreciate new technology, and although he did not invent his own innovations, he brought to his plants technological improvements that dramatically increased productivity and profits. With no public regulation of business during this era, Carnegie took advantage of the freedom to set hours, wages, and business practices as he saw fit. By emphasizing efficiency of production, he kept costs low and expanded markets for steel products. Steel became a pillar of the American economy, driving manufacturing and providing the materials needed for continued western expansion and rapid urban growth. Carnegie’s business practices also affected the position of struggling workers. In an era that lacked laws that protected workers’ rights, Carnegie was not antiunion. In 1886, he published an article in Forum Magazine defending workers’ right to form a labor union, and the following year he intervened to force his partner, Henry Clay Frick, to settle a strike that Frick had wished to break. But by increasing efficiency in his plants, Carnegie made labor conflicts inevitable because efficient production required fewer workers. In 1892, when the union contract at the Homestead mill expired, the workers organized a strike. Carnegie was on vacation in Scotland and at first directed Frick to honor the strike. When Frick made it clear that he intended to smash the union, Carnegie remained silent. On July 6, 1892, 300 Pinkerton Agents entered the area to break the strike, and a bloody battle ensued. Five strikers and three Pinkertons were killed, and scores were injured on both sides. For the next two months, the plant operated under military protection from the state militia, until the union finally called the strike off. This event soured labor toward Carnegie; his company was to remain nonunion until the mid-1930s. Carnegie’s success at business revolutionized the steel industry and helped the United States become an industrial leader. However, his impact on American society through philanthropy would outlast the industrial age. Carnegie followed the vision he set out in The Gospel of Wealth and dedicated his retirement to the proper distribution of his fortunes for the public good. He strongly supported education and the arts. In 1891 he founded a concert hall in New York City. He generously provided funds to cities interested in building public libraries. Most notably, in 1901 he gave the New York public library $5.2 million to open its first public branches. In total he donated over $50 million to build 2,800 public libraries in the United States and Great Britain. His belief in the free access to books is evident in an excerpt from his address at the dedication of the Carnegie Library of Pittsburgh in 1895: “It is the mind that makes the body rich. There is no class so pitiably wretched as that which possesses money and nothing else. Money can only be the useful drudge of things immeasurably higher than itself . . . My aspirations . . . have
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contributed to the enlightenment and the joys of the mind, to the things of the spirit, to all that tends to bring into the lives of the toilers of Pittsburgh sweetness and light. I hold this the noblest possible use of wealth. The taste for reading is one of the most precious possessions of life, and . . . I should much rather be instrumental in bringing to the working man or woman this taste than mere dollars. It is better than a fortune.” Carnegie also supported higher education and efforts for world peace. In 1898, he advocated for independence for the Philippines, which the United States had purchased from Spain for $20 million after capturing the islands during the Spanish-American War. Carnegie offered to donate that price for the islands to purchase their freedom, but this bid was unsuccessful. Carnegie also established the Carnegie Endowment for International Peace in 1910, and provided funds for the construction of the Central American Court of Justice in Costa Rica, destroyed later that year in an earthquake. Carnegie donated money to universities in his native Scotland, and in 1900 founded the Carnegie Institute of Technology (which later became Carnegie-Mellon University) in Pittsburgh. In 1902 he founded a scientific research institution called the Carnegie Institution in Washington, D.C. and in 1905 he established the Carnegie Foundation for the Advancement of Teaching. Six years later Carnegie allocated $125 million to the Carnegie Corporation of New York for educational advancement through schools, libraries, research, and publication. By the time of his death in 1919 Carnegie had succeeded in distributing over $350 million-in all, 90 percent of his fortune.
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Sources of Information Bibliography The American Experience, 1998. Available from http://www.pbs. org/wgbh/pages/amex/carnegie/index.html Byers, Paula K. and Suzanne M. Bourgoin, eds. Encyclopedia of World Biography, Detroit: Gale Research, 1998. Carnegie, Andrew. The Autobiography of Andrew Carnegie. Boston: Northeastern University Press, 1986 (1920). Carnegie, Andrew. “Address at Dedication of The Carnegie Library of Pittsburgh.” 1998. Available from http://www.clpgh.org/ exhibit/neighborhoods/oakland/oak_n77.html Carnegie Denied: Communities Rejecting Carnegie Library Construction Grants, 1898-1925. Westport, CT: Greenwood Press, 1993. Hoyt, Austin. The Richest Man in the World: Andrew Carnegie. Screenplay, documentary film for The American Experience produced for WGBH-TV, Boston, 1997. Kitman, Marvin. “The Marvin Kitman Sunday Show: Rich Lessons from Carnegie.” Newsday, January 26, 1997. Krause, Paul. The Battle for Homestead, 1880-1892: Politics, Culture, and Steel. Pittsburgh: University of Pittsburgh Press, 1992. Royle, Trevor. The Companion to Scottish Literature. Detroit: Gale Research, 1983. Tompkins, Vincent, ed. American Decades 1900-1909. Detroit: Gale Research, 1996. Wall, Joseph Frazier. Andrew Carnegie. New York: Oxford University Press, 1970. Wall, Joseph Frazier, ed. The Andrew Carnegie Reader. Pittsburgh: University of Pittsburgh Press, 1992.
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Hattie Carnegie (1889-1956) Hattie Carnegie, Inc.
Overview During the 1930s, Hattie Carnegie was one of America’s top fashion designers. She propagated the “ little black dress” for daytime wear, trained a new generation of designers, and made her creations available to the middle class by selling ready-to wear clothes for modest prices.
Personal Life Hattie Carnegie was born Henrietta Kanengeiser, the second of seven children in Vienna in 1889. After a fire destroyed their home in the suburbs of Vienna, her father, Isaac Kanengeiser, took the family to the United States. They moved to the Lower East Side of New York City, where Hattie attended public school. Hattie’s father, an artist and designer, worked in New York’s garment industry, and introduced her to the fashion world. When Hattie was 13, her father died and she was forced to leave school. To help support the family, she started working for Macy’s. However, following her true passion, she designed hats for neighborhood women in her spare time. Soon after, Hattie got a job trimming hats in a millinery workroom and worked as a millinery model. She changed her name from Kanengeiser to Carnegie, in admiration of the wealthy Andrew Carnegie. Carnegie was married three times. After two short marriages in 1918 and 1922, she finally married John Zanft in 1927. Called “an East Side boy himself” in Current Biography 1942, John was “the love of her life since she was thirteen years old.” However, while her husband spent
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most of his time on the west coast working for the movie industry, Carnegie worked mainly in New York and Paris. After her business had grown, Carnegie provided all her brothers and sisters with important positions. One of her sisters, for example, was a director of her company, one brother was secretary and treasurer, while another brother was in charge of the main wholesale department in New York. Hattie Carnegie was a tiny, slender, and very attractive woman. She loved clothes and always dressed in the most current mode, but never wore hats. Carnegie enjoyed giving dinner parties and going out for dinner or dancing, and she had a weakness for gambling. She also collected antique furniture, modern paintings, and old porcelains. Her outstanding work was recognized by two awards: the Neimann-Marcus Award in 1939 and the Coty American Fashion Critics’ Award for “consistent contribution to American elegance” in 1948. Hattie Carnegie died on February 22, 1956 in New York City.
Hattie Carnegie.
Career Details Carnegie started her career as a milliner. In 1909, she started her first business. Encouraged by Rose Roth, a friend and neighbor who was a seamstress, she opened a shop on East Tenth Street called “Carnegie-Ladies Hatter.” Rose made dresses; Hattie designed hats, modeled the rather expensive clothes and took care of customers. The shop’s success enabled Carnegie and Roth to incorporate with $100,000 in capital in 1913 and they moved to West 86th Street, close to fashionable Riverside Drive. The New Yorker stated, “The shop was on a corner of Broadway, with a delicatessen on one side and a Chinese restaurant on the other, and pungent cooking fumes invaded the place as rich women flocked in.” After World War I, Carnegie bought out her partner, founded Hattie Carnegie, Inc., and became its president and major stockholder. The shop soon became popular among followers of fashion and was a tremendous success. In 1919, Hattie Carnegie made her first buying trip to Paris and became devoted to Paris fashion. She moved her business to the fashionable Upper East Side of New York in 1926. By 1929, the company’s sales had reached $3.5 million a year. Throughout the 1920s and 1930s, Carnegie made several trips a year to Paris. She returned with many examples of Paris’ latest fashions and blended French style with comfort, a combination that matched the taste of many fashion-conscious Americans. Carnegie’s designs were described in Who’s Who in Fashion 1988 as “youthful and sophisticated, never faddy or extreme. She was noted for suits with nipped waists and rounded hips, especially becoming to smaller women, embroidered, beaded evening suits, at-home pajamas, long wool din-
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ner dresses and theater suits. Beautiful fabrics and excellent workmanship were hallmarks, anything but the best was abhorrent to her.” Most Americans, however, were not able to afford Carnegie’s original designer clothes. During the Depression, even many rich customers had problems paying their bills. In 1932, her corporation filed a famous lawsuit against New York mayor James J. Walker and his wife for $12,059, the balance due on a $20,059 bill. Adapting to the new market situation, Carnegie launched a less expensive ready-to-wear line, which she first sold in her New York retail shop. Eventually, she introduced a new wholesale line, Spectator Sports, with ready-to-wear copies of Carnegie clothes sold for as little as $50 a piece. In order to make her modestly priced clothes more available to the average consumer, she decided to break from her practice of selling her clothes exclusively at her own shop. However, only one department store in a city was able to buy her creations. Thus, she avoided becoming her own competition and, at the same time, preserved the exclusiveness of Carnegie products. Inspired by the Parisian houses of haute couture, Hattie Carnegie showed her collections to customers four times a year at her wholesale department at 711 Fifth Avenue. The wholesale branch of her business soon became the most profitable one. By the 1940s, Carnegie oversaw a multi-million dollar business and had established herself as one of the country’s top designers. Society beauties as well as famous actresses who wore her clothes in their films were
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them, made Hattie Carnegie one of the most famous and influential fashion designers of her time in the United States. Her creations were widely copied by the designers of popular-priced clothes and, therefore, had an influence over haute couture as well as popular wear.
Chronology: Hattie Carnegie 1889: Born. 1909: First shop opened. 1913: Founded Corporation with Rose Roth. 1919: First buying trip to Paris. 1930s: Introduced first wholesale line Spectator Sports. 1932: Filed lawsuit against New York mayor James L. Walker. 1940: Established as top designer in the United States. 1956: Hattie Carnegie Inc. had over 1000 employees. 1956: Died.
on her customer list. Hattie Carnegie’s firm consisted of the retail shop in New York, two resort shops, two wholesale businesses, and several factories. As her business grew, she added accessories, perfumes, chiffon handkerchiefs, silk hose, and a line of cosmetics, competing with products by Elizabeth Arden and Helena Rubinstein. Hattie Carnegie did not believe in the cult of personality that dominated much of the high-fashion world. She did not care for personal publicity, and believed that no single individual was crucial to the success of her business. Once her head designer, hoping to strike out on his own, left with her entire collection. Within three weeks she had designed and produced a whole new collection for the new season. A collection usually consisted of 100-150 models. Carnegie spent long hours doing the work she loved, but, as stated in Notable American Women, “disliked shop talk and avoided associating with business people. She made no attempt to educate women to fashion, resented ugly customers, and hated fashion lunches, newspaperwomen, and fashion experts. Preferring her employees to be stylish, good looking, and blonde, she was fiercely loyal to those she liked.” By the time of her death in 1956, Carnegie’s business was worth over $8 million.
The “little Carnegie suit” was a basic item in a woman’s wardrobe. She later modified it for the U.S. Army’s Women’s Army Corps uniform. She also created a modernized habit for the Carmelite nuns. Her film work included the clothes for Constance Bennett in the 1932 movie Two Against the World and for Joan Fontaine in the film Born To Be Bad in 1950. Carnegie’s booming firm drew young designers throughout the 1930s, and she showed a great feeling for discovering talent, and trained a generation of fashion designers that determined American style for decades. Among others, Norman Norell, Claire McCardell, Paula Trigere, Pauline De Rothschild, James Galanos, and Jean Louis, learned their craft under her tutelage. According to Who’s Who in Fashion 1988, Hattie Carnegie is said to have been the first American custom designer with a ready-to-wear label. Introducing the practice of selling her creations for modest prices in department stores, she led the foundation of a million dollar fashion industry. In 1956, more than a thousand employees worked for her company. Hattie Carnegie proved to be able to design clothes without being able to sketch, cut, or sew-by explaining her ideas to the people who set them into practice. She also showed that women could not only dress women, but also had all it took to succeed as business leaders.
Sources of Information Bibliography Bauer, Hambla. “Hot Fashions by Hattie.” Collier’s. 16 April 1949. Bondi, Victor, ed. American Decades 1930-1939. Detroit: Gale Research, 1995. Current Biography Yearbook. “1942.” New York: H.W. Wilson Co., 1942. Leavitt, Judith A. American Women Managers and Administrators. Westport, CT: Greenwood Press, 1985. Maloney, Russell. “Hattie Carnegie.” Life, 12 November 1945. “Profiles: Luxury, Inc.” New Yorker, 31 March 1934. Sicherman, Barbara, and Carol Hurd Green, eds. Notable American Women, The Modern Period. Cambridge: Harvard University Press, Belknap Press, 1980.
Social and Economic Impact Her ideas of simple, beautiful clothes which enhance, but do not overpower the woman who wears
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Stegemeyer, Anne. Who’s Who in Fashion. New York: Fairchild Publications, 1988.
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Steve Case Overview Steve Case is one of the pioneers of online services. Through his market-leading America Online, he was actively involved in the transformation of dial-up computer networking services from obscurity to a mass-market, multibillion-dollar industry. When Case launched Quantum Computer Services, the forerunner to AOL, in the mid-1980s, it was largely a text-based information and discussion forum. Advancements in graphical operating systems by the likes of Microsoft provided Case with the foresight to develop a graphical and user-friendly interface for his service, innovations that helped propel AOL to become the world’s largest provider of consumer online services.
(1958-) America Online, Inc.
Personal Life Case lives in Fairfax, Virginia, and is divorced from his wife, Joanne, to whom he was married for 11 years. The couple has three children. He enjoys reading social history and political science. Case was born on August 21, 1958 in Honolulu, Hawaii. His father was a corporate lawyer, his mother a teacher. He has an older brother, Dan, an older sister, Carin, as well as a younger brother named Jeff. Case was an enterprising boy and was involved in a number of ventures with his younger brother throughout the boys’ childhood. When Case was six years old, the two of them opened a juice stand charging customers two cents a cup; many gave them a nickel and told the boys they could keep the change. For Case, it was an
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album of some of the best musical offerings. He also became the lead singer in two rock bands, both musically fashioned after two relatively obscure new-wave groups, The The and The Knack. In 1980 Case graduated with a B.A. from Williams and went to work in the marketing department of Procter & Gamble. He left the company after two years, having realized he was not comfortable working for such a well-established corporation.
Career Details It was in his next job with the Pizza Hut arm of PepsiCo that Case first began to explore the personal computer. He was hired to work in new pizza development, which entailed traveling the country in search of innovative pizza toppings. He devoted his nights on the road to learning about the portable computer. He had bought a Kaypro CP/M personal computer and subscribed to The Source, one of the earliest online services. He was especially intrigued by the chance to talk with people around the world, which the service provided. Case’s fascination with the world accessible by computer was the first step in what would become his lifelong passion. Regarding the pizza company position, however, Case once said in an interview with the Washington Post, “I learned a lot about the big corporation experience, and that was good. But a lot of it was about leveraging business and not about innovating . . . It was all incremental rather than breaking new ground.
Steve Case.
In 1983 Case was introduced to a start-up business, Control Video Corporation, by his older brother, Dan, at an electronics show in Las Vegas. Dan, an investment banker, was excited about the company’s first product, a service that delivered Atari video games to personal computers. Case was offered the job of marketing assistant, only realizing later that he had entered the company as the video gaming industry was dying. Control Video let most of its employees go but retained Jim Kimsey as chief executive officer. Kimsey, a former venture capitalist, retained Case to help him develop new capital.
(Archive Photos, Inc.)
early lesson in high margins in business. Later, the brothers opened a company to sell products through a catalog and door-to-door. The two also shared a newspaper route. While Case was a student at the Punau School, a private college-preparatory school in Honolulu, he wrote album reviews for the school newspaper. Although the position didn’t pay, it did get Case on the mailing lists of several different record companies. He began receiving free concert tickets and promotional albums. Case then attended Williams College in Williamstown, Massachusetts, where he was a political science major. While in school, Case ran the student entertainment committee, which organized campus concerts and produced an
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In 1985 Case and Kimsey began a new company, Quantum Computer Services, Inc., which provided online services for users of Commodore computers, then a leading brand of home computers. Quantum quickly grew, and two years after the company was started, Case worked out an arrangement with Apple Computer, Inc. to provide his online service for Apple’s operating system and developing software for both the Macintosh and the Apple II. Soon, Quantum was signing similar deals with other companies, including Tandy Corporation and IBM, which was then the industry leader. While this was undoubtedly progress, the company’s overhead costs were prohibitively high, eating through the $5 million capital the company had received. In 1991 Quantum was renamed America Online—AOL, for short—and Case
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was appointed CEO, to replace Kimsey, who then became company chairman. AOL stock went public in March 1992, at $1.64 a share. The stock offering garnered $66 million for the company. Case then focused his energies and the increased company revenues on usurping the two established leaders of online services—Prodigy and CompuServe. He developed a strategy for market dominance that included alliances with companies which would benefit AOL, dropping membership prices below those of the major competitors, and shipping out huge quantities of diskettes to potential clients, offering them a free trial period for the service. Membership began to grow, jumping appreciably each month, until by the end of 1993, it had surpassed the 600,000 mark. The company had a difficult time keeping up with such rapid growth, foreshadowing the service problems that would plague it for the next few years. That same year, Case warded off two attempted buyout offers—the first from Microsoft cofounder Paul Allen. Allen, who had already left Microsoft, had purchased a 24.9 interest in AOL and had attempted to secure a seat on its board of directors. The second buyout offer came from Microsoft head, Bill Gates, who would subsequently go on to develop his own online service, bundling it with his company’s other popular software titles. Case continued to explore new marketing strategies and either purchased or forged alliances with companies that would further its foothold in the online services marketplace. These included content agreements with the New York Times, Time, and NBC. He also developed a distinctive, user-friendly framework for his service, which was both intuitive and graphics intensive. By the fall of 1994, Case was beginning to establish a way to link his service with the World Wide Web, an increasingly popular arm of the Internet. Until then, AOL was essentially a closed network, meaning that subscribers could only interact with content provided by AOL, its vendors, or other AOL subscribers, rather than the provider-independent content associated with the Internet. The company first bought Advanced Network Services, Inc., which was experienced in building the fiber optic support needed to access the Internet. The December 1994 acquisition of BookLink Technologies and the following purchase of Global Network Navigator provided the means for AOL customers to browse the Internet with graphic browsing software from BookLink, which competed with Netscape’s Navigator browser.
Chronology: Steve Case 1958: Born. 1980: Graduated with B.A. from Williams College. 1985: Cofounded Quantum Computer Services, Inc. with Jim Kimsey. 1991: Quantum renamed America Online. 1992: Became AOL’s CEO. 1994: Acquired Booklink Technologies. 1994: AOL subscriber count passed 1 million. 1997: AOL subscriber count passed 10 million. 1998: Stepped down as AOL president while remaining chairman and CEO.
AOL, Netscape, which many inside AOL management favored, had given AOL a chilly reception. Presiding over the largest single base of web users, Case was especially wary of signing an agreement with Microsoft, which had recently debuted its Microsoft Network, a competitor to AOL. Thus, in 1996 he pulled off pair of stunning and controversial deals in which he formed a nonexclusive alliance with Netscape to use its browser, but made Microsoft’s Internet Explorer the primary one used with AOL services. While some Netscape executives characterized these actions as “slimy,” these agreements proved favorable to AOL.
As fierce competition heated up between the two leading web browser vendors, Microsoft and Netscape, Case came under significant pressure to choose one of the independent browsers for use on AOL. Until that point AOL subscribers were mostly restricted to using AOL’s proprietary software from BookLink, which lacked the performance and features of the leading browsers. While Microsoft had made heavy overtures to
During this period, AOL continued to grow at an unprecedented rate, outpacing all its competitors in the number of new users. By 1994, AOL had more than 600,000 members; by March of the next year, membership exceeded to 2 million and continued to rise meteorically until, by August 1996, it tripled to more than 6 million. Two months later, Case announced that AOL would begin to charge a flat monthly rate of $19.95 for unlimited access to its service. Prior to the institution of this system, customers were billed a monthly charge of $9.95 for their first five hours, plus $2.95 for every additional hour spent online. Customers complained, however, that under the original rate system, the company was rounding online usage time up to the next minute, rather than basing billing calculations on a per-hour monthly rate. In addition to changing the rate structure, Case offered AOL users a free hour of online time to compensate for the perceived unfairness.
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To manage help manage AOL’s sprawling services, in 1996 Case brought in Bob Pittman, founder of MTV and reputed as a successful brand manager, to improve the company’s customer service and better establish AOL as a consumer brand. This decision was seen as a partial retreat by Case on some of his earlier strategies. Pittman succeeded in stabilizing AOL by reducing subscriber growth to sustainable levels and improving AOL’s customer service reputation. For his efforts, Case rewarded Pittman in 1998 with a promotion to president and chief operating officer of AOL. Under this arrangement Case relinquished his title as president while remaining chairman and CEO.
Sources of Information Contact at: America Online, Inc. 22000 AOL Way Dulles, VA 20116 Business Phone: URL: http://www.aol.com
Social and Economic Impact Case’s important contribution to the information age was his vision of a mass-market online service, a vision that was translated into reality within a decade. Case understood—perhaps better than any of his counterparts at other online service vendors—how to obtain and market unique content that was broadly popular and accessible. His aggressive marketing strategies of mailing out millions of free disks to consumers and offering free intro-
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ductory service helped create the largest service of its kind. More importantly, Case was an adaptive leader in the rapidly changing online services business; he was able to embrace new technologies and new business models as they presented a competitive advantage. The result was a multibillion-dollar powerhouse, headed by a man who just turned 40 in 1998, in the still young online services industry.
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Bibliography “Online with Steve Case.” Broadcasting & Cable, 24 October 1994. “Steve Case.” Current Biography Yearbook, 1996. “AOL CEO Steve Case.” Forbes, 7 October 1996. “America Online’s Case Open to Cable.” Multichannel News, 13 June 1994.
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Stephen Chao Overview Stephen Chao’s career took as many twists and turns as the television shows he created. From his start as a reporter for the National Enquirer to his quick rise and fall at Fox Television, to his recent appointment as copresident of the USA Network, Chao transformed the television industry. Known for creating such shows as America’s Most Wanted, Studs, and Cops, Chao earned a reputation for controversy and unconventional behavior that has riled some while winning the praise of others.
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Personal Life Chao was born into a middle class family in Ann Arbor, Michigan. His maternal grandfather had been a prominent official in pre-revolutionary China and served for a time as that nation’s economic minister to the United States. It’s possible that he influenced his grandson more than he knew. Chao noted in an interview with Sallie Hofmeister of the Los Angeles Times that “My grandfather was endlessly involved in what he called social investigation and spent a lot of time trying to find out whether there was cannibalism in China. I consider myself a social investigator with a National Enquirer curiosity, although I hope I use some editing filters in my work.” Chao’s grandmother contributed to his future creative leanings as well. “My grandmother was this Chinese lady who came to America late in life with a heavy accent—a straight and proper woman who responded to nothing in American culture except the WWF (World Wrestling Federation) and (wrestler) Bobo Brazil. She liked the theater of it.”
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Rejected by the studios and through with the Enquirer, Chao wound up in New York working as a fund raiser for movie producer Dino De Laurentis. It was not what he hoped it would be. But Chao learned that international media mogul Rupert Murdoch was in the market for a Hollywood studio. Chao was soon hired by the mergers and acquisitions department of Murdoch News Service. He was one step closer to fulfilling his goal of working in Hollywood. After two years with Murdoch News Service, Chao got the break he was looking for. Murdoch purchased Fox studios and wanted to expand its reach from movies into television. Chao was asked to become part of the creative team that would make it happen at the newly created Fox Television network.
Stephen Chao.
(AP/Wide World Photos, Inc.)
Chao’s parents divorced when he was eight years old, and along with his mother and siblings, he relocated to New Hampshire in the early 1960s. Chao was an excellent student. He earned a scholarship to the exclusive Phillips Academy in Exeter, New Hampshire, and eventually entered Harvard, where he majored in classical studies. He graduated cum laude in 1977 and went on to earn an MBA from the Harvard Business School after a twoyear stint as a reporter for the National Enquirer. Chao is married to Irina Chao and has two sons.
Career Details Chao developed an interest in movies after leaving Harvard, and tried—unsuccessfully—to land a job with a Hollywood studio. In the meantime, he worked as a reporter for the National Enquirer, covering such topics as celebrity infertility problems, UFO sightings, and funerals. Chao loved the fame his position gave him, and, while the Enquirer was often criticized as a sensational tabloid, Chao believed it was an important social phenomenon. Chao did not give up his goal of working in Hollywood, however. As he told New York magazine in 1993, his interest in the business was not the kind of “Story where I creep into the theater and dream about the nickelodeons.” Instead, Chao “Remembers seeing Road Warrior six times. It was, to me, totally original— visually, emotionally, contrily [sic], everything! I had no idea this could be done on film.”
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Chao’s new job, under Fox president Barry Diller, was to develop innovative, low-cost shows for the startup network. His first attempts were less than successful. Short-lived programs such as The Ron Reagan Show, a talk show hosted by the son of former President Reagan, the children’s show Dr. Science, and the game show King of the Mountain are typical of Chao’s early Fox work. While these shows failed to catch on with viewers, Chao was only just beginning to test the creative waters. It was not always smooth sailing for the new network executive. Chao once got Fox president Barry Diller so angry that Diller threw a videocassette tape across the room, denting the wall. Chao framed the dent and even convinced Diller to autograph it. The two often clashed, but the clashes produced some of the most innovative and controversial television programming on the air. Chao’s first success was America’s Most Wanted, a program featuring dramatic recreations of violent crimes that asked viewers for their assistance in catching the criminals. The show had problems gaining acceptance from Fox executives because it was unlike any other show on television. But it cost so little to produce—two thirds less than typical network shows—and it was so popular that Chao got the recognition he was looking for. Chao’s next success was Cops, a documentary-style program in which a cameraman follows on-duty police officers through some of the more violent neighborhoods in the country. Though some criticized the series for its violence and apparent moral indifference to the persons shown, Chao saw matters differently. He told New York magazine, “To me, there isn’t a lesson. We’re just showing something that is. It’s not coded with music and narration and writing and directing. It’s just edited, in a really simple way. It’s pure, and you derive you’re own lessons.” Following these shows, he developed Studs. Chao’s late-night take on the old “Dating Game” program featured young men and women—both usually beautiful— discussing dating and sexual fantasies in what Chao called “silly” language. While controversial, the program was a huge hit, making more than $20 million a year. Fox chief Rupert Murdoch, however, who was uncom-
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fortable with its format and content, abruptly cancelled the show two years after its debut. Chao’s brash style quickly landed him in trouble— and on the street. Soon after his promotion to president of Fox News in 1992, Chao was among the speakers at a conference for Fox executives and guests in Snowmass, Colorado. Chao spoke on “The Threat to Democratic Capitalism Posed by Modern Culture.” He focused on how television programs tended to be less critical of violence than they were of nudity and sexuality. To punctuate his point, Chao hired a male stripper to perform on stage. Rupert Murdoch, seated in the front row along with his wife, Anna, and former Defense Secretary Dick Cheney, fired Chao almost immediately. Chao then traveled with his family and even worked briefly at a McDonald’s in Redondo Beach, California, before a brief return to the Fox movie division to develop film ideas. In 1993, Chao formed his own production company, Stephen Chao, Inc., to develop movie and television shows. He was soon hired by his former Fox boss, Barry Diller, to consult on the development of Q2, a high-end counterpart to Diller’s successful home shopping channel, QVC. Q2 was scheduled to start broadcasting in 1994, but Diller sold out his interest in QVC before production on Q2 could begin. Chao explored other opportunities as well. In 1995, he began developing a late-night talk show for MCA television called “HelloGoodnight.” The program, considered for launch in 1996, never materialized. Later in 1996, Chao began consulting with a Venezuelan media concern, Cisneros Television Group, to produce up to a dozen channels for its satellite network. But Chao was destined to be reunited with his old mentor and former boss, Barry Diller, once again. In February, 1998, Diller purchased the USA Network and its sister channels, the SciFi Channel and the Home Shopping Network from Universal Studios. Chao was hired as president of programming and marketing, along with Stephen Brenner, president of operations, to replace USA Network founder Kay Koplovitz, who was pushed out by Diller. At USA, Chao was in charge of some of the television shows that touched his family early on, particularly the WWF, one of the network’s highest rated weekly shows. In addition, USA produces a number of its own movies, such as its adaptation of Herman Melville’s Moby Dick, and highly rated shows like La Femme Nikita, Highlander: The Series, Baywatch, and the controversial Jerry Springer Show. Chao believes USA has received a bad rap for its programming. As he told the Los Angeles Times, “Based on its ratings, it couldn’t be doing so badly.”
Chronology: Stephen Chao 1956: Born. 1977: Graduated cum laude from Harvard. 1977: Writer for the National Enquirer. 1983: Joined News Corp. 1992: President of Fox News. 1992: Fired from Fox Network. 1993: Formed Stephen Chao, Inc. 1993: Began development of Q2. 1996: Developed programming for Galaxy Latin America. 1998: Hired as president of USA Network.
Times “I’m not into gratuitous and sleazy stuff. It always comes from a point of view you’ve never seen.” Some, like Barry Diller, call Chao “one of the most interesting people I know,” with “an instinctive, contrarian program sensibility.” Rupert Murdoch, too, held Chao in high regard. On the night he fired Chao, Murdoch afterwards called him his “best lieutenant.” Others, however, are not so complimentary. Critic Gerald Howard wrote in the Nation magazine that Chao, along with other, mostly Ivy League-educated media personalities, was a producer of “Stupid.” “Stupid,” according to Howard, is what happens when “It is much easier and more lucrative to pander to your audience, push their buttons, confirm their prejudices, congratulate them on their limitations,” than to “feel simpatico (sympathy) with their characters and product and audience.” For better or for worse, Chao redefined television programming. Shows like America’s Most Wanted, Cops, and Studs spawned imitators on other networks, and his early successes helped establish Fox as a potent rival to the big three television networks for viewers and advertising dollars.
Stephen Chao has earned substantial praise and criticism for his many creations. Chao told the Los Angeles
Chao’s early success and methods continued to shape his outlook on television—even the sort of shows he wanted his children to watch. Chao contended that most programs were overproduced, lacking the real-life situations and energy that he tried to instill in his own shows. There were some exceptions. He told the Los An-
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geles Times that he admires the NBC program Homicide: Life on the Street because of its simple look and realism, and the highly rated Comedy Central cartoon South Park for its “rare form and pure voice.” He also said “he’d rather his two boys watch the unfiltered version of The Jerry Springer Show (a USA Network production) than the 11 p.m. news.”
Bibliography Freeman, Michael. “Stephen Chao Developing Talk Show for MCA.” Mediaweek, 6 October 1995. Hofmeister, Sallie. “Quirky Programming Whiz Puts Spin on USA Networks.” Los Angeles Times, 1998. Available from http:// www.latimes.com/HOME/NEWS/BUSINESS. Howard, Gerald. “Divide and Deride.” The Nation, 20 December 1993. Lafayette, Jon. “Chao Take Programming Ideas to Another America.” Electronic Media, 4 November 1996.
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Shapiro, Eben. “Tabloid-TV Veteran Chao Named Top USA Networks Programmer.” Wall Street Journal, 20 April 1998.
Contact at: USA Network One HSN Dr. St. Petersburg, FL 33729 Business Phone: (813)572-8585 URL: http://www.usanetwork.com
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Notable Asian Americans. Detroit: Gale Research, 1995. The Asian American Almanac, Detroit: Gale Research, 1995. “Stephen Chao To Source Product and Produce Shows for Q2.” PR Newswire, 2 September 1993.
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Arthur Cinader Overview During the 1980s and 1990s, J. Crew grew into one of the most successful mail-order clothing companies in North America. But there is no real Mr. or Ms. Crew— the name is an invented one. What is not illusion, however, is the rich, playful image the catalog projects and that the images are a direct link to J. Crew’s founding family: the Cinaders. Arthur Cinader founded the company in 1983, and soon afterward daughter Emily Cinader Woods came aboard, eventually rising to the post of chief designer. Rarely does a direct-mail business evolve into what is almost a designer line, but in less than two decades the Cinaders have nearly succeeded in accomplishing just such a feat.
(1927-) J. Crew Group Inc.
Personal Life Arthur Cinader founded J. Crew with assets derived from a decades-old family business. In 1947 Mitchell Cinader, Arthur’s father, founded a catalog called the Popular Club Plan. It offered goods that appealed to households of moderate income and included easy payment plans. The clothes and home furnishings were marketed by sales representatives, called “secretaries”, who worked much in the same way Avon sales people operated—distributing frequent catalogs and taking orders. With the growth of the company, the Cinader family invested elsewhere, and for a time Arthur Cinader managed a bank in New Mexico owned by the family. As a young man, he was known for his irreverent sense of fashion and possessed the resources to indulge it. He met his wife while skiing in Switzerland and during the baby-
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Chronology: Arthur Cinader 1927: Born. 1947: Popular Club Plan founded. c. 1960: Daughter Emily Cinader born. 1983: Founded J. Crew. 1989: First J. Crew store opened. 1990: Sales reached $400 million annually. 1993: Entered European market. 1995: J. Crew mailed 70 million catalogs annually to homes. 1997: Sold company to Texas Pacific Group for $560 million.
boom era they became parents to children Arthur Jr., Maud, Abigail, and Emily. Daughter Emily Cinader grew up to attend the University of Denver, where she earned a degree in marketing in the early 1980s. Around that same time the family sold off some holdings to finance the launch of a catalog-clothing company geared toward the upscale market. All the Cinader offspring became involved in the family business in some capacity: Arthur Jr. held an executive post at the J. Crew plant, Maud became a photographer for catalog, and Abigail modeled, as did Maud’s infant daughter in the mid-1990s.
Career Details In the early 1980s, the number of people buying goods from catalogs was increasing at a steady rate. The Maine firm L. L. Bean was the best-known of the bunch, selling durable outdoor gear to suburbanites; Talbots and Lands End were also popular. Cinader founded J. Crew in 1983 as a lower-priced version of designer Ralph Laurens old-money look, which was wildly popular at the time. Providing classic looking clothing for babyboomers, who were suddenly earning healthy salaries in the economic boom of the decade, would prove lucrative to Lauren, J. Crew, and a number of other retailers. During their first year in business, J. Crew sold $4 million worth of goods.
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The first few catalogs featured gear from other clothiers, such as Boston Traders and Ray Ban. There were only a few actual J. Crew items. That changed with the arrival of Emily Woods, Cinader’s daughter. Beginning as an assistant buyer, she worked her way through various departments in the company and was exceptionally proficient in designing new apparel. Her inspiration was simple, “The premise was to make the kinds of clothes I really wanted to wear but just couldn’t find,” Woods recalled in a Harpers Bazaar interview. “Back then,” she said, “T-shirts all had writing on them or were 50 percent polyester.” The classic, put-together, yet casual look became the backbone of the J. Crew line, and appealed to millions. Within a few years Emily was the company’s chief designer. In the late 1980s, the company offered anywhere from 14 to 18 catalogs per year, and mailed each of those to approximately 3 million households. The J. Crew line appealed to a demographic segment that was urban-dwelling, had some college education, and a household income of around $62,000. Though the clothing line was extremely successful at this point, the company itself did encounter rough patches. It was really three divisions: J. Crew, the Popular Club Plan, and Clifford & Wills, a direct-mail business launched in 1984. All three became The J. Crew Group in 1988. For the 1989 fiscal year, it was estimated that over half the group’s $320 million in sales was derived from the J. Crew catalog and retail operations. In the mid-1980s two top executives left the company and began Tweeds, a successful catalog competitor. In response, J. Crew launched an upscale career line for women called Collection. The line offered much pricier clothing, but did not do as well as expected and the company was forced to issue a major holiday catalog, which it had never done before. The Cinaders next move was to open J. Crew stores, a transition which many direct-mail analysts noted was an extremely risky proposition. Yet the first J. Crew store opened in 1989 at South Street Seaport in New York City and launched a new era for the company. The sleek, well designed stores reflected the J. Crew look and several more were opened around the country over the next few years. With a few minor exceptions, the new venture was a success. Overall catalog sales fell off in the early 1990s, and companies like J. Crew were faced with increased costs as mailing rates rose in the early 1990s. By 1997 there were 47 stores and nearly as many factory outlet stores, a necessary evil in the catalog business. Outlet stores do not feature the same sleek woodand-steel look of the upscale J. Crew stores, and only exist to sell off unsold clothing. Most are located far from urban centers, in the vast, almost-rural outlet mall centers. “I’m not happy if I hear a good customer say that they went shopping at an outlet store when she could have been shopping from the catalog,” Woods told Sara Fiedelholtz in WWD.
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J. Crew’s success has been credited to the Cinader and Woods duo. As Woods told Fiedelholtz, “He and I are a great team. We balance each other really well.” But father and daughter ran a tight ship, and often had difficulty keeping the top executives on board. Cinader oversaw the business and operations end of the company, was extremely knowledgeable about computers, and had a reputation as a workaholic. He was chiefly responsible for the catalog copy which, with its eyecatching layout, broke all the rules in the industry. It had a much fresher look than its competition. “It conveys an image both urban and estate,” explained Diane Cyr in Catalog Age. “Its jewel-toned layouts, single-image pages and imaginatively cropped photos have inspired legions of stylistic imitators.” In the 1990s, J. Crew’s clothing line took on a sexier look as well, which also fit in with the times. Woods was credited with the new look, and her skill in sensing and providing what women like herself want to wear has won her praise from high quarters. With the company’s growth in the 1980s, J. Crew relocated from New Jersey to a hip corner of Manhattan, in Chelsea. “The open, unvarnished space enabled Cinader to move freely from department to department,” wrote Cyr, “creating an atmosphere characterized by some as discussion-oriented and ahead of its time, and by others as controlling and loony bin.” Not surprisingly, Cinader rarely gave interviews to the media, but once admitted to the New York Times, that he liked to conduct informal market research. Cinader said, “I do a lot of skiing and talk to many people on ski lifts. I call this my ski-lift research. When I talk with someone, I will almost always find a J. Crew customer. We never meet a college student who doesn’t know J. Crew very well.”
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Social and Economic Impact J. Crew has won praise for taking the idea of L.L. Bean, combining it with the look of Ralph Lauren, and pricing it affordably for the average-income shopper. Furthermore, the firm has successfully expanded into retail operations, not a simple feat. The company offers not just clothes, but seems to sell its devotees an envied lifestyle. “We did focus groups, and people would say they wanted their lives to be like the J. Crew catalog,” noted Ray Slyper, a former marketing executive for the company, in Catalog Age. Not surprisingly, the J. Crew look has translated well overseas. J. Crew has customers in Europe and thriving stores in Japan. Like their competitors Eddie Bauer and Banana Republic, they also plan to enter the home furnishings field to help create a total J. Crew world for their customers. Arthur Cinader took a small catalog business and turned it into a multi-million dollar fashion phenomenon. He successfully developed a retail arm while maintaining the catalog presence, and became a household name that epitomized quality casual apparel.
Sources of Information Contact at: J. Crew Group Inc. 770 Broadway St. New York, NY 10013 Business Phone: (212)209-2500 URL: http://www.jcrew.com
Bibliography Browne, Alix. “From Main Street to Prince Street.” Harpers Bazaar, November 1996.
In 1997 Cinader and Woods sold off 88 percent of the company in a leveraged buyout by the Texas Pacific Group for $560 million; sales that year had reached $828 million. In the 1990s, the Cinader profits on sales had ranged from $12 million to $14 million. Cinader, now 70 years old, retired but stayed on as a consultant. Woods kept 12 percent of the stock, and began looking for a new operating partner. She took on the title of chair and CEO, and signed a five-year contract with Texas Pacific to run the company.
Cyr, Diane. “King Arthurs Crew.” Catalog Age, January 1997.
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Fiedelholtz, Sara. “Emily Woods: J. Crews Steady Captain.” WWD, 1 September 1993. Kleinfield, N. R. “Even for J. Crew, the Mail-Order Boom Days Are Over.” New York Times, 2 September 1990. Moin, David, and Sidney Rutberg. “The Book on J. Crew.” WWD, 11 December 1997. Rutberg, Sidney. “J. Crew Founders Get Big Bucks in Texas Pacific Deal.” Daily News Record, 12 December 1997.
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Liz Claiborne (1929-) Liz Claiborne, Inc.
Overview Liz Claiborne combined her design talent and managerial skills to build Liz Claiborne. Inc., a billion dollar fashion corporation that specializes in career clothes for working women. Realizing that the increasing numbers of women entering the workforce in the early 1970s would need stylish but affordable wardrobes, Claiborne founded her company in 1976. Her strategy was an instant success, and by 1986 the company broke into the Fortune 500 list of largest industrial companies in the United States. Liz Claiborne, Inc. is the first company on the list to have been founded by a woman.
Personal Life Elisabeth Claiborne, widely known as Liz, was born on March 31, 1929, in Brussels, Belgium. Her parents, Omer Villere and Louise Carol Claiborne, were United States citizens from New Orleans. Omer Villere worked as a banker in Belgium, where Liz spent the first 10 years of her life. Claiborne learned to speak French before learning English and remembers being “dragged around to museums and cathedrals” in Europe by her father, who instilled in her a love of painting and a sophisticated aesthetic taste. Claiborne’s mother taught her to sew at an early age and emphasized the importance of personal appearance. Though the family was happy in Belgium, they chose to return to the United States to escape the imminent Nazi invasion in 1939 and settled in New Orleans. Because her father did not consider formal education es-
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sential for his daughter, Claiborne never graduated from high school. In 1947, at her father’s insistence, she returned to Europe to study painting in art schools in Brussels, Belgium and in Nice, France. Though she knew she would never become a painter, Claiborne appreciated the visual training this experience gave her. “I’m glad I had that training,” she told an interviewer, “because it taught me to see; it taught me color, proportion, and many other things that I don’t think I would have learned in design school.” Claiborne’s Roman Catholic family was strongly opposed to her plans to work in the fashion industry, but the young Claiborne was determined. She entered and won a design contest sponsored by Harper’s Bazaar. She then persuaded her parents to let her move to New York City, where she moved in with an aunt and began looking for work. Claiborne worked for various fashion houses in New York City and continued to develop her design talent. In 1950, she married Ben Schultz, a book designer. They had one child, Alexander G. Schultz. After her son’s birth, Claiborne returned to work, becoming one of the relatively few mothers in the workforce during the 1950s. Claiborne’s first marriage ended in divorce, and on July 5, 1957 she married Arthur Ortenberg, a design executive at the Rhea Manufacturing Company of Milwaukee. Since her husband’s business concerns were not always dependable, Claiborne assumed the role of breadwinner. Though she was eager to start her own business, she could not afford to take that risk until her son and her two stepchildren finished college. Finally, in 1975, Claiborne left her job at Youth Guild, the junior dress division of Jonathan Logan, and launched Liz Claiborne, Inc. the following January. With her husband and friends Leonard Boxer and Jerome Chazen, Claiborne built her company into a fashion empire. After 13 years, they retired from day-to-day operation of the business in June 1989 to concentrate on personal and social interests, including environmental projects and a campaign against domestic violence. Claiborne, who enjoys swimming, running, and photography, has stayed involved with the fashion business by teaching and by guiding new division directors in the corporation. Claiborne was named Designer of the Year in 1976 by the Palciode Hierro, Mexico City and Designer of the Year in 1978 by the Dayton Company of Minneapolis. The Marshall Field Company awarded her its Annual Distinguished In Design award in 1985, the same year that she received the One Company Makes a Difference Award from the Fashion Institute of Technology. In 1986 she received an award from the Council of Fashion Designers. She received a Gordon Grand Fellowship from Yale University in 1989, and a Junior Achievement Award from the National Business Hall of Fame in 1990. The following year Barnard College awarded her the Frederick A. P. Barnard award, and she was named to
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Liz Claiborne.
(Reuters/Mark Peterson/Archive Photos.)
the National Sales Hall of Fame. Claiborne received an honorary doctorate from Rhode Island School of Design in 1991.
Career Details Claiborne began her career doing sketches for Tina Lesser, one of the few sportswear designers at the time. To her surprise, Claiborne was also expected to model for Ms. Lesser, and to wear her hair (which she had just cropped short) in a bun at the back of her head. Claiborne remembers Lesser as an imaginative and demand-
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with production. The company was swamped with orders from the beginning, and by September of that year the company was showing a profit. Sales in the first year exceeded $2 million.
Chronology: Liz Claiborne 1929: Born. 1947: Attended art schools in Europe. 1960: Began work as chief designer for Youth Guild, Jonathan Logan. 1976: Launched Liz Claiborne, Inc. 1980: Named Entrepreneurial Woman of the Year. 1986: Liz Claiborne, Inc. listed in Fortune 500. 1987: Elected chairman of board and chief executive officer. 1988: Opened first First Issue chain store. 1989: Retired from active management of company.
ing boss with very definite ideas about how clothing should be constructed. But she also recognized talent, and Claiborne enjoyed working for her. Claiborne moved on to Ben Rieg, a company that designed more tailored outfits. Next she took a job as Omar Kiam’s assistant at his Seventh Avenue shop and then worked for two years at the Junior Rite Company. After joining the Rhea Manufacturing Company of Chicago (where she stayed for only a year but met her second husband, Arthur Ortenberg), Claiborne worked with Dan Keller of New York from 1955 to 1960. These varied jobs gave Claiborne the breadth of experience she wanted in the early part of her career, and helped to make her known as a top designer of dresses. In 1960 Claiborne joined Youth Guild, the junior dress division of Jonathan Logan. For 15 years she was chief designer for that division, but she grew increasingly frustrated at her inability to persuade management there to develop mix-and-match coordinated sportswear for the new wave of career women. As a working mother, Claiborne knew that career women needed attractive, practical, and affordable wardrobes but had few choices available. Determined to tap this emerging market, Claiborne left Youth Guild in 1975 to found her own company. Claiborne started her company with $50,000 in personal savings and $200,000 from family and friends. She was head designer and president; her husband, with experience in textiles and business administration, was secretary and treasurer; and friend Leonard Boxer helped
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The company specialized in affordable sportswear, such as casual pants, skirts, knickers, tattersall shirts, cowlneck sweaters, ponchos, and jackets. Designs and materials were coordinated so the pieces could be worn together in various combinations. Claiborne was especially pleased that her prices were kept affordable: her sweaters were initially priced at $36, her pants at $45, and her jackets at $80. In the next few years, she expanded her line with tunics, full skirts, and loose-fitting vests, which were appropriate for either home or office. By 1978, sales had skyrocketed to $23 million. Two years later, Claiborne was named Entrepreneurial Woman of the Year, the first from the fashion industry to win this honor. Claiborne continued to build on this success by diversifying. She adding a petite sportswear line in 1981 and a dress division in 1982. The next year, she added a unit for shoes. Though a girls’ division, introduced in 1984, was disappointing and was phased out three years later, other moves proved successful. In 1985, Liz Claiborne, Inc. bought the Kaiser-Roth Corporation, which produced accessories such as scarves, gloves, hats, handbags, and belts. A new “Lizwear” label also appeared that year featuring jeans, and a men’s sportswear line, “Claiborne,” was launched. A perfume line, “Liz Claiborne,” was introduced jointly with Avon Products and was also a great success, although the venture ended in an out-ofcourt settlement in 1988. By 1996, the company’s brand names included Dana Buchman, Crazy Horse, The Villager, Russ Toggs, Lizsport, and Liz Claiborne. Central to Claiborne’s success has been her appreciation of the needs of her typical customer—the “Liz lady.” This customer is not interested in the newest trends, but prefers more classic designs. She is also pressed from time, and does not want to go from store to store in search of the perfect outfit, or to buy clothes that require timeconsuming maintenance. To address these concerns, Claiborne concentrated on color-coordinated separates that make it easy for customers to put together complete outfits without having to leave the store. Marketing skill also played a significant part in Claiborne’s success. She insisted that her designs be displayed in stores in such a way that customers could put together outfits without having to ask for a salesperson’s help. She also listened to store buyers’ concerns and, to keep inventory fresh, developed six lines of clothes a year instead of the traditional four. She hired traveling fashion consultants to help retail staff with displays and employed marketing experts to track industry trends through her unique computerized system, System Updated Retail Feedback. In 1988, Claiborne moved into retailing with the opening of a clothing chain, First Issue, intended to compete with The Limited, The Gap, and Banana Republic.
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By 1985, Liz Claiborne, Inc. reached $500 million in wholesale sales, and in 1986 retail sales reached $1.2 billion, ranking the firm 437th among the top 500 largest industrial companies in the United States, according to Fortune’s annual list. It was the youngest company to make it onto the list, and the first one founded by a woman. By 1989, the company controlled about a third of the $2 billion market in better women’s sportswear and sold its products in 3,500 stores. Claiborne and her husband stepped down from active management in 1989 to focus on environmental and social issues. They remain, however, as members of the board of directors. Claiborne has been a guest lecturer at the Fashion Institute of Technology and the Parsons School of Design, and is a board member of the Council of American Fashion Designers.
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ernment, announced that it no longer would buy clothing made in Burma. Broader social issues are also important to Claiborne. In 1981, the company established the Liz Claiborne Foundation to oversee its charitable activities. These include human services, education, health, arts, and the environment. The Foundation also matches employee contributions to organizations in these categories. The company launched a domestic violence prevention program, Women’s Work, in the early 1990s. This program has conducted research and engaged in ad campaigns to raise awareness about the causes and prevention of family violence. The Foundation also supports the Wilderness Society, the Greater Yellowstone Coalition, and the Nature series on public television.
Sources of Information
Claiborne’s designs revolutionized women’s work attire by offering attractive and affordable alternatives to the conservative “dress-for success” suit (a woman’s version of the conservative men’s business suit). Women appreciated the fact that a Claiborne wardrobe simplified their busy lives; the clothing was comfortable, easy to shop for, and easy to care for. Because the outfits were reasonably priced, women could afford to update their wardrobes each season. So popular were Claiborne’s designs that she became known as “the working woman’s best friend.”
Contact at: Liz Claiborne, Inc. 1441 Broadway New York, NY 10018 URL: http://www.claiborne.com
Claiborne has also addressed concerns within the garment industry as a whole. Though most of her company’s clothing is manufactured overseas, Claiborne and her husband have been sensitive to problems in the U.S. textile industry. Claiborne maintains that it is no longer practical to manufacture clothing in the United States because making apparel is labor intensive, and using such skilled labor in this country is too expensive. She defends the industry’s use of foreign manufacturing, explaining in an article in the Washington Post that, “Sewing machines are the simplest machines to run. It is natural for emerging nations to latch on to this kind of production.” Claiborne and her husband became involved with research projects to modernize outdated textile production in North and South Carolina, where they funded a modest grant to study the effect of new textile technology and to retrain textile workers. In 1994, the Company, concerned about human rights abuses by the Burmese gov-
Feldman, Elaine. “Fashions of a Decade: the 1990s,” Facts on File. New York, 1992.
Who’s Who in America. New Providence, NJ: Marquis Who’s Who, 1996.
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Bibliography Better, Nancy Marx. “The Secret of Liz Claiborne’s Success.” Working Woman, April 1992. Contemporary Newsmakers. Detroit: Gale Research, 1987. Current Biography Yearbook, 1989. New York: H.W. Wilson Co., 1990.
Grigsby, David W. and Michael J. Stahl. Strategic Management Cases. Boston: PWS-Kent, 1992. Liz Claiborne, Inc. Company Profile. Available http://www.efund.com/Liz_Claiborne_Profile.html.
from
Liz Claiborne Women’s Work Program. Available from http://www.prcentral.com/c96lizc.htm. Martin, Richard, ed. Contemporary Fashion. Detroit: St. James Press, 1995. Morgenson, Gretchen. “The Feminization of Seventh Avenue.” Forbes, 11 May 1992. Morris, Michele. “The Wizard of the Working Woman’s Wardrobe.” Working Woman, June 1988.
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Jim Clark (1944-) Netscape Communications Corporation
Overview James H. “Jim” Clark, the founder of two extraordinarily successful Silicon Valley computer software companies, is a classic example of a visionary entrepreneur. While still a professor at Stanford University in 1981, he founded Silicon Graphics, today a billiondollar computer workstation company. In December 1994, Clark cofounded the revolutionary Netscape, which immediately became the Internet’s dominant online browser. In September 1997, he was listed 15th among Forbes’s “Technology’s Richest 100” with an estimated wealth of $597 million.
Personal Life A native of Texas, Jim Clark received a bachelor of science degree in physics in 1970 and a master of science degree in physics in 1971 from Louisiana State University in New Orleans. As a graduate student, he was awarded the Research Society of America’s 1971 Annual Gold Medal. In 1974, he completed a Ph.D. in computer science at the University of Utah. His doctoral thesis, the first implementation of what is today known as “virtual reality,” focused on building special purpose hardware for 3-D graphics applications. In 1995 Clark received an honorary doctorate of science degree from the University of Utah. From 1974 to 1978 Clark was an assistant professor at the University of California at Santa Cruz, and in 1979 he became associate professor at Stanford University. He lectures widely on technology and business develop-
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ments in the computer field at major conferences and universities throughout the world. Clark received the Research Society of America’s Annual Gold Medal in physics in 1970, the Annual Computer Graphics Achievement Award in 1984, and the Arthur Young and Company, and Venture magazine’s Entrepreneur of the Year award in 1988. In the spring of 1996, Clark, who likes to sail and fly planes, announced that he would work with veteran yachtsman Paul Cayard to create a state-of-the-art racing yacht to win back the America’s Cup for the United States at the turn of the century. Clark and his wife Nancy live in Woodside, California, and have two children.
Career Details At Stanford, Clark and six graduate students worked on ways to enliven computer images with threedimensional graphics. When no existing computer companies were interested in the technology the group developed, Clark and his students, using venture capital, started their own computer workstation company, Silicon Graphics, Inc. (SGI) in Mountain View, California. The company’s 3-D graphical systems appealed first to architects and engineers for use in designing buildings, cars, and rocket engines, but soon became essential to filmmakers and animators. Silicon Graphics computers were used, for example, to create the dinosaurs in Jurassic Park and the special effects in countless other films. The workstations also were used by defense and aerospace contractors to train jet pilots and tank personnel. Silicon Graphics thrived and began to move into chip development for video game and interactive television markets, but Clark was frustrated in his attempts to accelerate the company’s plans to make low-cost, highvolume hardware to connect with the burgeoning information highway. In a highly controversial move, Clark replaced his entire management team in 1984. SGI’s profits continued to grow, from $5 million in 1984 to approximately $550 million in 1991. In March 1994, ready to move on, Clark resigned as chairman of the company. For several months following his resignation from SGI, Clark contemplated investing in a number of business ventures. As he studied the computer technology field, he became fascinated with the Internet. He was especially intrigued with NCSA Mosaic, an exceptionally popular World Wide Web browser software prototype that had been developed by a team of student and staff computer programmers at the University of Illinois and distributed free on the Internet. In a now-legendary e-mail message, Clark, 50, contacted Marc Andreesen, Mosaic’s 23-year-old creator and asked if he would be interested in forming a company to create a commercially viable improved version of the Mosaic browser. In April 1994, Clark invested about $3
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Jim Clark.
(Reuters/HO-Netscape/Archive Photos.)
million in the new firm, which began life with three employees with offices in Mountain View. The new company originally was called Mosaic Communications Corporation but, after the University of Illinois contested the use of the name, the fledgling firm was rechristened Netscape Communications. By December 1994, Netscape had released its revolutionary browser, Netscape Navigator. Almost immediately, the new browser became the industry standard. Within only one or two months, Netscape claimed 70 percent of the browser market. It offered users speed, sophisticated graphics, and a special encryption code that secured their credit card transactions on the Web. From the first, the new browser faced virtually no competition. With Netscape’s Navigator freely available to the public via downloading from the Internet, how does the company make a profit? It charges fees to create and maintain web servers for the sophisticated software businesses. The fees range from $1,500 to $50,000 for server versions of Navigator, depending on the complexity of a company’s home page and the range of services provided to its customers. For businesses designed to conduct much of their business on the Internet, Netscape provides databases of online customers and the ability to secure credit card transactions. Netscape also offers users the option of purchasing the software and thereby receiving customer service. The company continues to race to keep ahead of industry giant, Microsoft, which introduced its own
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Chronology: Jim Clark 1944: Born. 1974: Completed Ph.D. in computer science at the University of Utah. 1981: Founded Silicon Graphics, Inc. (SGI). 1994: Resigned from SGI and formed Netscape Communications Corporation. 1995: Netscape stock jumped from $28 to more than $74 a share in one day. 1995: Developed Netscape Navigator, an Internet browser program.
Leaving SGI was a risky move for Clark, who left behind 40,000 shares of stock. His idea to create a company based solely on the Internet was virtually unheard of at the time he started Netscape. As recounted in Industry Week, Clark recalled, “It seemed a little crazy. No one thought you could build a business around the Internet, but my instincts were if there were 25 million people using it, there was a business to be built.” Giving away the software to Netscape Navigator also proved to be a revolutionary idea. “People knew then that I was certifiably nuts—starting this company, hiring a bunch of students, and now giving the software away,” Clark said. From the beginning, Clark has served as chairman of Netscape. His role, as the company established itself as a phenomenal success in well under two years, he has been able to put the management team together. Netscape’s chief executive officer is James Barksdale, whom Clark recruited from McCaw Cellular, AT&T’s wireless services division, to head the company. With Barksdale in charge of day-to-day management, Andreesen can continue to come up with new ideas and Clark can look for new frontiers to conquer.
1995: Stepped down as chief executive of Netscape but remained chairperson of the board. 1996: Founded Healtheon Corporation, an Internetbased health care service.
browser, Internet Explorer, in 1995. Explorer also can be freely downloaded and comes bundled with the Microsoft Windows operating system. Although Netscape remains at the head of the pack, Explorer had pulled almost even by early 1998. Netscape was the first browser to introduce Java, the programming language that animates web sites. It has also expanded its product line to include software that runs inside internal corporate networks. In June 1996, Clark launched another successful company—Healtheon Corporation, which online offers information services to help insurance companies and employers better manage their paperwork. Healtheon reported $13.4 million in sales for 1997, a 21.6 percent growth from the previous year.
Contact at: Netscape Communications Corporation 501 E. Middlefield Rd. Mountain View, CA 94043-4042 Business Phone: (650)254-1900 URL: http://www.healtheon.com
Bibliography Aronoff, Craig E., and John L. Ward. Contemporary Entrepreneurs. Detroit: Omnigraphics, 1992. Bottoms, David. “Jim Clark: The Shooting Star @ Netscape.” Industry Week, 18 December 1995. Current Biography. New York: H. W. Wilson, 1997. Dunlap, Charlotte. “Netscape’s Clark on the NC, Internet and Resellers.” Computer Reseller News, 10 June 1996. Egan, Jack. “Striking It Rich on the Net.” U.S. News & World Report,15 January 1996. Fortune, 10 July 1995. Gilder, George. “The Coming Software Shift.” Forbes, August 1995.
Social and Economic Impact When Netscape made an initial public stock offering of 3.5 million shares on August 9, 1995, an unprecedented stock frenzy ensued. Investors bought the stock in record numbers. Opening at $28 a share, the stock closed at $74, making Netscape’s market value $2.3 billion in just one day. With Netscape’s continuing strong showing on the stock market, Clark, Andreesen, and many of the company’s employees have become very wealthy.
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Girishankar, Saroja. “Once Upon a Time, a Man Unlocked the Web.” Communications Week, 29 January 1996. Kaplan, David A. “Nothing But Net.” Newsweek, 25 December 1995/1 January 1996. “Technology’s Richest 100.” Forbes, September 1997. Who’s Who in America. New Providence, NJ: Marquis Who’s Who, 1995. Who’s Who in Finance and Industry. New Providence, NJ: Marquis Who’s Who, 1993.
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Lilia C. Clemente Overview From the beginning of her career, Clemente has taken the position that global investing offers the best way for investors to reduce risk and enhance returns. Her firm, Clemente Capital, Inc., has offices in Beijing, Manila, Seoul, and New York City. It aggressively seeks attractive companies in more than 30 markets in which to invest. As a global strategist, Clemente plays an active role in Clemente Capital’s investment committee, where investment decisions are made for the firm’s public and private pension fund clients, private individual accounts, and other accounts. She is an ardent feminist who attributes her success to, as she puts it, the three G’s: God, genes, and grunt work. The breakneck pace at which she works has led some critics to refer to her as the “Philippine Tigress,” but she is also known for using her charm rather than abrasiveness to accomplish her goals of pursuing advantageous investments around the world.
(1941-) Clemente Capital, Inc.
Personal Life Lilia Calderon Clemente, a diminutive woman with inexhaustible energy who was described in Asiaweek as the “wonder woman of Wall Street,” was born in Manila, Philippines, on February 21, 1941. Her father, Jose Calderon, was a prominent lawyer who helped draft the country’s 1973 and 1987 constitutions. In 1972, he spent two months in jail due to his opposition to the government of Ferdinand Marcos. Her mother, Belen Farbos Calderon, taught psychology at the University of Philippines, served as governor of the province of Nueva Vis-
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Inc. and a quiet, introverted balance to Clemente’s dynamic whirlwind. Clemente is active in many civic groups and foundations, particularly those with an interest in AsianAmerican affairs. With her husband, she has set up a scholarship fund to help promising Filipino students complete college. She is also a board member of the Securities Industry Association (SIA). Her autobiography, Growing Up In World Street, was published by Japanese publisher Shufonotomo in 1990.
Career Details Clemente began her career by spending three years as an investment analyst and portfolio manager responsible for covering metals, steel, retailing, and consumer industries at CNA Financial Corporation. In 1969, at the age of 28, she was appointed as the director of investment research and assistant treasurer at the Ford Foundation. She was the first woman and youngest officer in the Foundation’s history. For the next seven years, she served as manager of the Foundation’s research staff and spurred the globalization of its $3 billion portfolio by investing $150 million into the Japanese market.
Lilia C. Clemente.
In 1976, at the age of 35, Clemente left the Ford Foundation and, with $25,000 of her own funds, founded Clemente Capital, Inc. The business had one secretary, rented furniture, and operated out of a small office on Park Avenue in New York City. It concentrated initially on economic and business consulting with an emphasis on the Pacific Basin. The firm’s first major success was its contract to provide global investment management services to Mitchell Hutchins, the asset management subsidiary owned by Wall Street giant Paine Webber, Inc. Clemente spearheaded Hutchins’ successful launch into global investing with the Paine Webber Atlas Fund. In 1985, that fund was ranked number one among all global funds. (Courtesy of Lilia C. Clemente.)
caya on the island of Luzon, and was the first woman to hold a seat on the Manila Stock Exchange. The oldest of seven children, Clemente graduated from the University of the Philippines in 1960 with a degree in business administration. At the age of 19 she left for the United States to study economics and international trade at the University of Chicago. She graduated in 1969 with a master’s degree in economics and an advanced business degree. In Manila in 1962, she married Leopoldo Clemente, who had received a master’s degree in business administration from Northwestern University in Chicago. In addition to being partners in life, the two are also business partners. He is the president and chief investment officer of Clemente Capital,
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In 1986, Clemente Capital, Inc. reorganized its business to focus on managing money with a global emphasis and subsequently listed two closed-end mutual funds on the New York Stock Exchange: The Clemente Global Growth Fund in 1987 and The First Philippine Fund in 1989. The Clemente Global Growth Fund focuses on securities in small and medium-sized companies in the United States, Germany, and Japan, and on blue chips in the Philippines, Thailand, and Mexico. This fund has faced many challenges. According to Richard Phalon, in Forbes, early in 1989 Thomas B. Pickens, III, and the Sterling Grace group attempted to take over the fund. Phalon reported that, although it initially appeared that the takeover would be successful, the challengers had not given enough consideration to the strong ties that Clemente had with her Japanese investors. When approached by the Grace-Pickens group, the Japanese made it clear they were opposed to hostile takeovers.
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In April 1996, the board of directors for Clemente Capital, Inc. made Wilmington Trust Company, the eighth-largest personal trust company in the United States, the Global Growth Fund’s strategic partner for domestic investments. The board took action when the fund failed to benefit from the long U.S. bull market and was being buffeted by volatility in emerging markets. A year later, after fundamental adjustments in its portfolio, the fund outperformed its benchmark, the Financial Times Actuaries World Index, for the first quarter of 1997. The fund’s problems were not over, however, in September 1997, with the firm’s total investments at $63 million, Forbes, termed the fund a “consistent laggard” because of its continuing below-average performance, and reported that shareholders had approved a motion urging new management. The First Philippine Fund, by contrast, has enjoyed strong growth and is worth over $100 million. It was created on the eve of the attempted coup against the government of Philippine president Corazon Aquino. Clemente’s foresight had kept most of the fund in U.S. Treasury bonds, and its loss as a result of the attempted coup was only 13 percent. In the first six months of 1991, it invested an estimated $33 million in the Manila stock market. In 1997, The First Philippine Fund was ranked as the number one fund in closed-end fund performance by Lipper Analytical Services and received a four-star rating by Morningstar. The fund, with $126 million in assets in September 1997, invests exclusively in Philippine companies. In 1992, Clemente initiated the Cathay Clemente Holdings, Ltd. Fund, which invests in new Chinese companies. To help business along in China, she established an office of the Manila-based Asian Securities Institute in Beijing.
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Chronology: Lilia C. Clemente 1941: Born. 1960: Graduated from the University of the Philippines. 1962: Married Leopoldo Clemente in Manila. 1969: Graduated from the University of Chicago. 1976: Founded Clemente Capital, Inc. 1987: Founded The Clemente Global Growth Fund. 1989: Founded The First Philippine Fund. 1990: Wrote Growing Up In World Street. 1992: Founded Cathay Clemente Holdings, Ltd. Fund. 1994: Pledged $5 million to upgrade telecommunications in Southern Mindanao.
that Clemente’s company manages, which include the Freedom Global Fund, the First Philippine Fund, the Freedom Global Income Plus Fund, and the Sentinel Global Fund.
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Social and Economic Impact Through her firm grasp of economic realities and her ability to spot emerging markets, Clemente has changed the ways in which other investors see and invest in these often overlooked emerging markets. Her company’s investments in developing countries not only has improved the living standards and economic opportunities in these nations, but it has also brought them closer to the rest of the world, as the global market has expanded past national borders once thought impenetrable. Her small company has reaped the benefits of these investments and she now controls over $450 million. The company oversees staff in more than 15 countries and conducts business in 18 languages.
Contact at: Clemente Capital, Inc. 152 W. 57th St., 25th Fl. New York, NY 10019 Business Phone: (212)765-0700 URL: http://www.clementecapital.com
Bibliography Clemente Capital. Fact Sheets, Biographical Information, September 1997. “Closed-end Fund Survey.” Forbes, 8 September 1997. “Lilia Calderon Clemente.” Heritage, September 1990. Phalon, Richard. “The Japanese Connection.” Forbes, 3 April 1989.
In 1994, Clemente pledged $5 million to help upgrade the telecommunications network of Southern Mindanao in the Philippines. The financing for this investment came from the Philippine Strategic Investment Fund. This is but one of the many dozens of smaller funds
Tiglao, Rigoberto. “Stealthy Bull: Mutual Fund is Biggest Investor on Manila Bourse.” Far Eastern Economic Review, 1 August 1991.
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Zia, Helen, and Susan B. Gall, eds. Notable Asian Americans. Detroit: Gale Research, 1995.
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Bennett R. Cohen (1951-) Ben & Jerry’s Homemade, Inc.
Overview Bennett R. Cohen’s name makes up one-half of what may be the worlds most beloved ice cream brand. Ben & Jerry’s Homemade, Inc. celebrated its 20th anniversary in 1998, and some pundits may note that its longevity comes despite Ben and Jerry themselves—two childhood pals from Long Island who have attempted to bring their laid-back, liberal values to their corporation.
Personal Life Cohen, divorced with one son, was born in the New York City borough of Brooklyn in 1951. He met Ben & Jerry cofounder Jerry Greenfield in gym class in a public school in Merrick, Long Island. Both were admitted outcasts and bonded over their shortcomings as enforced athletes. Cohen graduated from Calhoun High in Merrick in the late 1960s, and enrolled in Colgate University, but left school his sophomore year. He studied instead pottery and other crafts at Skidmore College, and later at an institution called University Without Walls.
Career Details “From the time I was in my teens until I turned 30, I talked to my father about things I planned on doing. He talked me out of them.” Cohen told Marian Christy of the Boston Globe. As a result, Cohen never really decided upon a career goal, and instead took jobs that were interesting learning experiences. “I learned that there are
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Ben Cohen talks to the press in Waterbury, Vermont.
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two kinds of bosses, good and bad, and that I worked harder for the boss who trusted me,” he told Christy. He had numerous, and varied, jobs on his resume: in high school he had driven an ice-cream truck, and during his young adult years he worked in a bakery, drove a taxi, guarded a racetrack, flipped burgers at McDonalds, and was even a staff member in the emergency room of Bellevue Hospital in New York City.
under, they would simply become cross-country truck drivers. From the start, Cohen staffed the counter and took care of the financial side, while Greenfield made the ice cream. They both loved to create new flavors, however. As a kid, Cohen used to mix cookies and candy into his ice cream, and from its earliest days in business Ben & Jerry’s gained a cult following for their delicious and bizarre concoctions.
Cohen’s casual attitude, artistic abilities, and sense of duty eventually led him into a steady job as a crafts teacher at a camp near Saratoga Springs, New York. He had lost touch with his old friend Jerry Greenfield, who had earned a degree from Oberlin College but then met with rejection when he applied to medical school. The pair rekindled their friendship when Greenfield was working in a New York City research laboratory, and decided to open a business together. Cohen had some experience making ice cream at the camp with his students, and he and Greenfield decided that this was a product that almost everybody liked, and did not require expensive equipment to produce.
Their store was extremely popular in Burlington, but Cohen and his partner were admittedly incompetent when it came to finances. After many late nights poring over accounts and receipts, they hired a Burlington bar owner, Fred Chico Lager, to help out. Lager helped the company expand into ice-cream packing operations, and Cohen began delivering the pints to local stores in his Volkswagen station wagon. They opened more stores in New England, and eventually went national with their product and their franchise in the 1980s. Greenfield dropped out of the business for a time when his wife went to college, and by 1985 Cohen was tired of running a very successful company. He tried to sell Ben & Jerry’s Homemade, but had a change of heart, when Greenfield returned to share the burden.
Cohen and Greenfield combined their $8,000 in savings, borrowed another $4,000, took a Penn State University’s correspondence course in ice-cream-making, and began looking for a location. They liked the college town of Burlington, Vermont, and it lacked an ice cream parlor. With these two requirements, they leased an old gas station there and opened Ben & Jerry’s Scoop Shop in May of 1978. They vowed that if their business went
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It was at this point that Cohen and Greenfield decided to make the business work according to their principles, instead of altering their values to suit the profitdriven nature of business. It was a radical idea. When they purchased nuts for their ice creams from South America, or blueberries from Maine, they looked to trade
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Dreyers Grand, offered Cohen and Greenfield a large sum of money to sell Ben & Jerry’s in early 1998, but they declined. The pair still hold 40 percent of voting stock.
Chronology: Bennett R. Cohen 1951: Born. 1963: Met Jerry Greenfield in gym class. 1978: Opened Ben & Jerry’s Scoop Shop in Vermont. 1981: Opened First franchise. 1985: Established Ben & Jerry’s Foundation. 1987: Published Ben & Jerry’s Homemade Ice Cream and Dessert Book. 1992: Opened first store in Russia. 1995: Retired from CEO position 1998: Declined offer buyout with Greenfield.
directly with the indigenous peoples in the area who often harvested such crops, instead of buying from a corporation in the middle who pocketed most of the profit. In 1992, they launched a Partnershop with a Harlem shelter for homeless men; the store was staffed by residents and its earnings went back into the shelter. Cohen has taken the occasional sabbatical. He returned the first time and began the 1 percent for Peace campaign in the 1980s, which urged the U.S. federal government to redirect one percent of its budget to positiveminded projects. After a another year off in 1993, he announced plans to look into beginning a graduate business school based on the Ben & Jerry’s ethos. Cohen resigned as CEO in June of 1994, but remains board chair and still invents new flavors for the famed roster, which includes such experiments as Holy Cannoli! and SMores. Standards in the list remain Chocolate Chip Cookie Dough, Cherry Garcia, and New York Super Fudge Chunk. When he stepped down, the company announced a campaign to replace him they named Yo! I Want to be CEO! Participants were invited to submit in an essay of 100 words or less why they would be the ideal ice-cream company executive. Cohen devotes a great deal of his time to Businesses for Social Responsibility. He is a founding member of this organization, whose aim is to challenge the way companies do business, and show how profits and ethics are not mutually exclusive areas. A major ice-cream purveyor,
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Social and Economic Impact In 1981, Time magazine began a cover story on ice cream with an opening sentence stating that Ben & Jerry’s was the best—in the world. Since then, its cult following has expanded to include not just East-Coast cognoscenti but residents of Israel and the Netherlands; its pints can be purchased in hundreds of thousands of American supermarkets and convenience stores. But its founders have become role models for entrepreneurs interested more in enriching their communities than their bank accounts. Cohen and Greenfield call their strategy values-led capitalism. Since the mid-1980s, the Ben & Jerry’s Foundation has received 7.5 percent of the ice cream company’s pre-tax profits; a nine-member advisory board of employees chooses projects and charities that will receive the largesse. They have done much to publicize concerns about Bovine Growth Hormone (BGH), used in the milk industry, and for many years purchased from a Vermont dairy that did not use the chemical. Ben & Jerry’s employees may indeed be the happiest workers in the state of Vermont (the companys headquarters have remained in Burlington). It is consistently cited as one of the best companies in America for which to work, and offers workers high wages, generous benefits, and three pints of ice cream to take home for every full workday. Though the ice-cream business has witnessed ups and downs in the 1990s, the company has found community service projects for the workers and kept them on the payroll.
Sources of Information Contact at: Ben & Jerry’s Homemade, Inc. 30 Community Dr. South Burlington, VT 05403-6828 Business Phone: (802)651-9600 URL: http://www.benjerry.com
Bibliography Christy, Marian. “Ben & Jerry: Heres the Scoop.” Boston Globe, 26 June 1991. Gershon, George. “The Art of Taking Time Off.” Inc. February 1993. Ben & Jerry’s. 14 July 1998. Available from http://www.benjerry.com
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Colonel Sanders Overview Raised in poverty, Kentucky Fried Chicken founder Harland Sanders—better known as Colonel Sanders— achieved extraordinary success at an age when most people choose to retire. Before that, he had struggled for decades with various small business ventures. Only one had really panned out, and even it ultimately fell victim to fate. Then he combined his cooking skills and marketing savvy to launch a product that figured prominently in the phenomenal growth of fast-food enterprises during the 1960s and beyond. Almost single-handedly, Sanders turned his pressure-cooked, “finger-lickin’ good” chicken, seasoned with a blend of his “11 secret herbs and spices,” into a multimillion-dollar business that revolutionized the American restaurant industry.
(1890-1980) Kentucky Fried Chicken
Personal Life The oldest of three children, Harland Sanders was born on September 9, 1890, on a farm near Henryville, Indiana. His father died when Harland was six, leaving his mother behind to make ends meet with whatever jobs she could find. While she was off working, her children were often home alone for days at a time and had to scrounge around for their own food, which they also prepared themselves. Thus, Sanders was already focused emotionally on food by the age of seven, when he “was excelling in bread and vegetables, and coming along nicely in meat,” as he once told William Whitworth in a New Yorker profile. Sanders was raised according to the strict teachings of conservatism and religious fundamentalism. From an early age he learned self-reliance and developed a love
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Col. Harland Sanders standing in front of a Kentucky Fried Chicken store. (Courtesy of KFC Corporation.)
of work, a suspicion of welfare, and an intense dislike of vice. “Mom didn’t spare the rod if we disobeyed her,” he recalled in the New Yorker. When Sanders was 12, his mother remarried. Because her new husband disliked the children, they were all sent away to live elsewhere. Young Harland went to work as a farmhand in Indiana, earning about $15 a month. He quit several years later and then held a series of menial, low-paying jobs. His formal education ended in the seventh grade, but later in life he obtained two degrees from correspondence schools. Sanders’ first marriage lasted 39 years and produced three children before it ended in divorce. In 1948 he mar-
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ried Claudia Ledington and remained with her until his death in 1980. He was described in the New Yorker profile as a “perfectionist” in matters of business. A firm believer in hard work, he expected the same from his franchise owners and insisted that they maintain the high standards he had developed for his product. Sanders was also known for his quick temper and sometimes crude language. Sanders was given the honorary title of “Colonel” from the governor of Kentucky in 1936 and received the Horatio Alger Award from Norman Vincent Peale in 1965. He established the Harland Sanders Foundation during the 1970s and donated much of his wealth to
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churches, hospitals and institutions such as the Salvation Army and the Boy Scouts. Also in his later years, he adopted 78 orphans from overseas. In 1974, Sanders published a memoir, Life as I Have Known It Has Been Finger Lickin’ Good. Believing his children should earn their own way in the world, he announced plans to leave his entire estate to charity after his death. He died of pneumonia in Louisville, Kentucky, on December 16, 1980.
Chronology: Colonel Sanders 1890: Born. 1929: Opened filling station in Corbin, Kentucky, and was soon providing meals for truckers.
Career Details For most of his life, Sanders worked a variety of low-paying jobs to support himself and his family, including as a painter, streetcar conductor, salesman, and ferryboat operator. He also spent a year in the army and a couple of years with various railroad companies. It was during the time he worked on the railroad that Sanders took a correspondence school course and earned a law degree from Southern University that allowed him to work as a Justice of the Peace in Little Rock, Arkansas. In 1929, Sanders opened a gas station in Corbin, Kentucky. Before long he was providing home-cooked meals to the truck drivers who stopped by to fill up their tanks. His specialties were the Southern-style favorites he had learned from his mother such as ham, fried chicken, fresh vegetables, and biscuits. His meals eventually became so popular that he closed the filling station to open a restaurant he named Sanders’ Cafe. An endorsement by the influential food writer Duncan Hines in his book Adventures in Good Eating encouraged Sanders to expand his cafe to seat nearly 150 people while retaining the homey atmosphere of the original establishment. He also schooled himself in the finer points of running his business by taking an eight-week course in hotel and restaurant management at Cornell University in upstate New York. Fried chicken was a staple on the cafe’s menu, but Sanders was not happy with the typical cooking methods. Pan-frying was time-consuming, and deep-fat frying produced chicken that did not meet his high standards. In 1939, Sanders experimented with the newly invented pressure cooker and came up with a process that produced moist and tasty fried chicken in only eight or nine minutes. He also experimented with seasonings and eventually perfected a blend of 11 herbs and spices that produced the results he wanted. This secret recipe was used on all of the chicken prepared at Sanders’ Cafe and is still used today in Kentucky Fried Chicken franchises. So popular was Sanders’ Cafe that in 1935 Kentucky governor Ruby Laffoon made Sanders an honorary colonel in recognition of his contributions to the state’s cuisine. By 1953 the business was valued at $165,000, and its owner seemed headed for a comfortable retirement. But fate intervened when a new interstate highway
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1939: Experimented with pressure cooker to perfect chicken recipe. 1956: Launched Kentucky Fried Chicken concept by selling chicken recipe to franchisees. 1964: Sold Kentucky Fried Chicken to John Y. Brown, Jr., and Jack Massey. 1970: Resigned from board of directors of Kentucky Fried Chicken. 1980: Died.
diverted traffic away from Sanders’ Cafe and customers no longer sought out the quaint restaurant. Sanders was forced to sell off everything at auction, obtaining only $75,000 for his once-thriving business. After paying off his debts, he had nothing left but a small Social Security pension. But the 66-year-old Sanders was not about to quit. Instead, he worked out a plan. He remembered that several years earlier he had sold his chicken recipe to a restaurant in Utah. Their success had greatly impressed other restaurant owners, who offered to pay Sanders $.04 for every chicken they cooked using his special method. So he decided to expand on this idea. Armed with his pressure cooker and a supply of his secret seasonings, Sanders took to the road and set out to establish a franchise. He cooked his chicken for restaurant owners and then for customers. If they liked it, he offered the restaurant a deal that guaranteed him $.04 for every chicken cooked according to his recipe. Sanders signed up only five franchises in his first two years. But by 1960, just four years after he had launched his plan, more than 200 establishments in the United States and Canada were offering “Kentucky Fried Chicken” to eager customers. Sanders soon stopped traveling to concentrate on managing his growing business. One of the first people to sign on with Sanders was businessman Pete Harman of Utah. He created the marketing strategies that helped the enterprise survive its first few years. The take-out bucket was especially success-
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ful; before it was introduced, the chicken was only available as a menu item for consumption in the restaurant. Harman’s company also came up with the name “Kentucky Fried Chicken” and its famous slogan, “finger lickin’ good.” By this time, Sanders had developed a distinctive look that suggested the genteel Southern life. He wore a white suit and shirt with a black string tie, sported a white goatee, and carried a cane. The Colonel’s image quickly became his company’s trademark as the public began to link his gentlemanly appearance with Kentucky Fried Chicken. Meanwhile, Sanders was actively involved in running his new business from the office building he had constructed behind his home. He did his own bookkeeping, and his wife mixed up and mailed batches of the secret spice mixture to franchisees. By 1963 there were more than 600 Kentucky Fried Chicken outlets. As for the 73- year-old Sanders, he was earning $300,000 a year and supervising 17 employees. But Sanders found such success exhausting. The popularity of his chicken, he remarked to a Newsweek reporter, “was beginning to run right over me and mash me flat.” Although he had previously turned down several offers to buy his business for fear the quality of the food would suffer under new owners, he finally agreed to sell in late 1963. The buyers were Nashville millionaire Jack Massey and his partner, John Y. Brown, Jr., a young, would-be entrepreneur who was eager to apply modern sales and management strategies to Kentucky Fried Chicken. Thus, on January 6, 1964, in a move that Nation’s Restaurant News claims Sanders later regretted, he signed a contract turning over the U.S. part of his business to Massey and Brown. (He retained ownership of Kentucky Fried Chicken in Canada.) Under the terms of their agreement, he received $2 million in addition to a lifetime annual salary of $40,000 for publicity and advisory work. (This amount was later increased to $75,000.) Sanders was also guaranteed a spot on the Kentucky Fried Chicken board of directors until 1970. Under Brown’s leadership, Kentucky Fried Chicken (now known simply as KFC) experienced astronomical growth. Aggressive advertising and marketing campaigns catapulted the business from 600 franchises in 1964 to 3,500 in 1971. Outlets were converted from sit-down restaurants to take-out establishments. At the time it was purchased by Heublein, Inc., in 1971, the company posted sales of $700 million, making it one of the biggest investment successes of the 1960s. R.J. Reynolds Industries bought the company in 1982, and four years later it changed hands once again when PepsiCo Inc. acquired it for $840 million. In 1997 PepsiCo spun off KFC with its two other restaurant chains, Taco Bell and Pizza Hut, to form Tricon Global Restaurants, Inc. As of 1996, there were more than 5,000 KFC franchises in the United States and 4,500 overseas, with worldwide sales exceeding $7.3 billion.
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Social and Economic Impact Harland Sanders’ work ethic, along with his creative approach to doing business, made him one of the pioneers of a new industry. Before he established his chicken franchises, there really was no such thing as fast food in the United States. But Sanders realized that Americans during the 1940s and 1950s were increasingly on the move and needed places to eat while traveling that were clean and convenient with speedy, dependable service and quality food. His accomplishments in fast-food franchising paved the way for similar businesses to grow and thrive to the point where they are now a central part of American life. For example, Dave Thomas, the founder of Wendy’s International, began his career with a Kentucky Fried Chicken franchise in Columbus, Ohio. Sanders employed innovative marketing techniques to expand his business. His very image as a Southern gentleman proved to be an extraordinarily successful sales tool. “Before the Colonel,” noted Thomas, “there was never an image in the food industry. I think the Colonel really provided that. He was really a personality.” Indeed, Sanders appeared in commercials for the company as late as 1979, the year before his death. So effective was his distinctive image that a 1994 advertising campaign used a look-alike actor to impersonate him in a series of new, folksy television spots. Sanders relied on several other brilliant marketing strategies. By calling his product “Kentucky Fried Chicken” instead of merely “fried chicken,” he made it seem special. Furthermore, he added mystery and interest by calling attention to the “11 secret herbs and spices” in his coating recipe. “He came up with a special flavor that was addictive,” observed John Y. Brown. “He was the first trendsetter to have a real differentiation in taste in the field.” Sanders liked to remain personally involved in sales and promotion. Whenever a new franchise opened, he wanted to be there to hand out coupons and speak on local radio and television. Thomas recalled, “The Colonel was right out there with us in rain or snow. There wasn’t anything in the restaurant he wouldn’t do.” Franchise owners appreciated Sanders’ loyalty and interest and repaid him by working hard and making the business grow. Quality was always an issue with Sanders. Employees remember him bursting into kitchens to check up on them and show them how to do things properly. Harman Management chairman Jackie Trujillo, who first met Sanders when she worked as a carhop at a Harman’s in Salt Lake City, said, “He used to visit us often. Service, quality and cleanliness was No. 1. He never backed down from that.” One of his favorite sayings was “if you’ve got time to lean, you’ve got time to clean.” In short, declared Brown, “Nobody can really touch the Colonel when it comes to creating a concept that was
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ahead of its time.” Sanders was a true pioneer in a business who tapped into Americans’ growing desire for mobility and easy living. The fast- food industry he helped create has now become a way of life, not only in the United States but in a substantial part of the rest of the world as well.
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Bibliography Contemporary Authors. Detroit: Gale Research, 1981. Contemporary Authors. Detroit: Gale Research, 1985. Gill, Brendan. “Better Late Than Never.” Sales and Marketing Management, September 1996. Kaelble, Steve. “It Could Have Been Indiana Fried Chicken.” Indiana Business Magazine, November 1996. Kramer, Louise. “Col. Harland Sanders.” Nation’s Restaurant News, February 1996.
Sources of Information
Moritz, Charles, ed. Current Biography Yearbook 1973. New York: H.W. Wilson Co., 1973.
Contact at: Kentucky Fried Chicken 1441 Gardiner Ln. Louisville, KY 40213 Business Phone: (502)874-8300 URL: http://www.triconglobal.com
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Moritz, Charles, ed. Current Biography Yearbook 1981. New York: H.W. Wilson Co., 1981. Ruditsky, Howard. “Leaner Cuisine.” Forbes, 27 March 1995. Whitworth, William. Interview. New Yorker, 14 February 1970.
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Scott Cook (1952-) Intuit Inc.
Overview Scott Cook, along with Tom Proulx, founded Intuit Inc., the company best known for the personal finance software Quicken. Intuit was one of the first companies to develop user-friendly programs with manuals written in “plain English,” and revolutionized online bill-paying and home banking. Intuit has also developed web sites for various financial services, through which customers can compare mortgage rates and buy car insurance.
Personal Life Scott Cook was born in Glendale, California, in 1952. He obtained his bachelor of arts degree in economics and mathematics from the University of Southern California, and then received his MBA from Harvard University. He is on the board of directors for Broderbund Software, the Asia Foundation, and the Intuit Scholarship Foundation, as well as the online bookseller Amazon.com, which he joined in 1997. He is also a member of the Young Presidents Organization, an international association of corporate executives dedicated to promoting education.
Career Details Cook began his career at Proctor & Gamble, a huge manufacturer of household products, where he worked as a brand manager and in other marketing positions. He then went to Bain & Company, a corporate strategy consulting firm, where he managed consulting assignments
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in the banking and technology areas. After watching his wife tediously write out bills one day, Cook figured that there must be a way to use technology to streamline the process. With the marketing savvy he had picked up at Proctor & Gamble, and his knowledge of banking and technology, he set out to find a solution. Teaming up with Tom Proulx, a computer programming student still in college at Stanford University, he began work on a new software program that would allow users to organize their finances by computer. Although about 30 different accounting products had already been introduced for home computers, they took longer to use than doing everything by hand—and they were expensive. Moonlighting while still at his consulting job, Cook fine-tuned his idea, getting feedback from potential customers by conducting surveys and initiating product tests. He discovered that customers did want software for organizing their personal finances, but it had to be easy to use. Cook and Proulx formed the company Intuit, Inc. in 1983, named as a shorthand version of the word “intuitive,” which indicated that their products would be just that. Cook was named president, CEO, and chairman of the board for the new firm. Intuit released the first version of Quicken software in 1984. The program cut in half the time it took the average person to pay bills and balance checkbooks. Cook strengthened Intuit with his strong marketing skills. It was one of the first firms to actively seek market input for software. Intuit hired product developers to watch people—not product testers—use the products in the “real world” of their own homes (this was called the “follow-me-home” program). The company was also a leader in writing simple-to-read software manuals at a time when technical jargon was rampant. After launching Quicken, Intuit later offered a similar accounting program for small businesses, called QuickBooks, which it introduced in 1992. Intuit also merged with Chipsoft, maker of TurboTax, in 1993, which allowed users to prepare their own income tax returns on their home computer. Soon, Intuit was the leading manufacturer of personal financial software. Quicken took a couple of years to fully catch on, but Cook relied on an old technique to sell his new product. Intuit was the first to run television commercials for directly ordering the new product from the company. Cook also placed advertisements in magazines such as PC Magazine and Byte, raising revenues to $33 million by 1990. With sales soaring, Cook decided that Intuit needed savvy businesspeople to help lead its growth. Instead of recruiting consultants, he sought venture capitalists to invest in the firm and join the board. “You get a lot of attention from people when you have a few million bucks of theirs,” Cook noted in Fortune. Four such venture capitalists then joined Intuit, purchasing 20 percent of the company. In 1994, Cook stepped down as president and CEO of Intuit but remained chairman of the board.
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Chronology: Scott Cook 1952: Born. 1983: Cofounded Intuit Inc. 1983: Began serving as Intuit president, CEO, and chairman of the board. 1984: Shipped first release of Quicken software. 1995: Intuit and Microsoft called off expected merger. 1997: Intuit introduced online bazaar of financial services. 1998: Opened Online Financial Exchange. 1998: Became chairman of the Executive Committee of the Board.
By 1995, Intuit and software giant Microsoft were flirting with a merger. Quicken held 70 percent of the personal financial software market in mid-1995, whereas Microsoft Money, the number two package, had only 22 percent. Cook’s vision was to expand into electronic banking, allowing customers to access their accounts 24 hours a day. However, he found out that banks were interested in teaming with Intuit with or without Microsoft, and then the antitrust division of the Justice Department blocked the merger, which would have led to a potentially lengthy trial. Microsoft bowed out and paid Intuit $46.3 million to end the deal. Intuit had been offering Quicken users the option of paying bills electronically since 1990, after forging a deal with CheckFree, but fewer than 10 percent of the customers used the service. In 1994, the company purchased National Payment Clearinghouse (renamed Intuit Services Corporation) as part of its plan to spearhead its own electronic banking service, and later teamed with various institutions to let consumers do their banking online. As of July, 1995, 17 banks in addition to Smith-Barney and American Express had joined Intuit’s program to offer online banking to Quicken users, allowing people to pay their bills online without writing checks, to transfer money, and to keep track of balances. BankNow was a joint venture with the online service provider America Online (AOL). Though Intuit’s online banking operation failed and was sold to CheckFree in September of 1996, Cook continued to pioneer home banking with the introduction in 1998 of Open Financial Exchange (OFX), a computer
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language that became the technical standard in online banking. Microsoft and Checkfree became partners in the venture, which connects home financial software users with their bank computer systems, allowing them to pay bills and make investments. In 1997, Cook also made plans to branch out from software to institute an online variety of financial services on the web. “Just like booksellers and CD stores, Intuit would get a cut of every product sold through its site,” explained Kourosh Karimkhany for Reuters Business Report. “But Intuit’s line of work would be much more lucrative: the commission on a $500,000 life insurance policy is much bigger than the cut on a $10 paperback.” Cook told Karimkhany, “We believe there’s a huge business opportunity in providing the marketplace where buyers can meet sellers of financial services.” Intuit continued to expand its business with its purchase of 19 percent of the search engine Excite, and its establishment of a financial news site, CNNfn, within the CNN web site. In August of 1998 Cook stepped down from his duties as chairman of the board to become chairman of the Executive Committee. He remains active in the firm full-time, and his ideas and guidance continue to be a valuable asset to Intuit.
Sources of Information Contact at: Intuit Inc. 2535 Garcia Ave. Mountain View, CA 94043 Business Phone: (650)944-6000 URL: http://www.intuit.com
Bibliography “Amazon.com Appoints Steve Cook to Its Board of Directors.” Business Wire, 16 January 1997. Clark, Drew. “Intuit Chief: Standards Needed to Give Consumers a Choice.” American Banker, 10 April 1997. Dodge, John. “Cook: Intuit Has a Dream, With or Without Microsoft.” PC Week, 27 March 1995. Dumaine, Brian. “A New Remedy for Growing Pains.” Fortune, 4 April 1994. Epper, Karen. “Scott Cook Takes His Turn Taking Heat from the Banks.” American Banker, 20 May 1996.
Social and Economic Impact Intuit’s introduction of Quicken, TurboTax, QuickBooks, and other software revolutionized the way people manage their personal finances. These products have helped millions of users streamline their home and office bookkeeping, and made it much easier for people to do their own taxes. Its OFX program may revolutionize the way banking services are conducted in the future. After all, it took 15 years for consumers to get comfortable with automatic tellers, or ATM bank machines. With Intuit’s entry into online financial services, the company’s goal is to be a “middleman” offering a broad array of product choices. The site will enable buyers to apply for mortgages, health insurance, life insurance, auto insurance, and home insurance online, making it possible to shop around for these services at all hours. Previously, calls and visits to sales offices had to be done during office hours: precisely when most people were on the job themselves. Intuit, by opening up this area of commerce to online shoppers, is a major player in a new era of convenience and flexibility. At the end of their fiscal year in July of 1997, Intuit had sales of $598.9 million, up 11 percent from 1996, with a net income of $68.3 million. In 1998, the CNN web site (http://cnn.com) cited an Associated Press report that claimed Intuit held 82 percent of the $225 million personal software market, whereas Microsoft only held less than 3 percent. A Business Wire article in June of 1998 also reported that Intuit held 80 percent of small business accounting software, with 2 million people us-
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ing its QuickBooks product. With the past success of Intuit’s product line and the continuing involvement of the visionary Cook, chances are good that the company will continue to grow and stay at the forefront of new services and products in the area of personal finance.
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Hamm, Steve. “The Young & the Fearless.” Business Week, 27 October 1997. “Intuit Announces Two Million Registered QuickBooks Users; Product Line Continues to Maintain Record 80% Market Share.” Business Wire, 16 June 1998. “Intuit Introduces New At-Home Banking Software.” All Things Considered (NPR), 11 June 1996 (radio program transcript). Intuit, Inc. “Corporate Background.” Mountain View, CA: Intuit, Inc., 1998. Available from http://www.intuit.com. Intuit, Inc. “Executive Profiles.” Mountain View, CA: Intuit, Inc., 1998. Available from http://www.intuit.com. “Intuit, Inc.” Hoover’s Online, 16 June 1998. Available from http://www.hoovers.com. Karimkhany, Kourosh. “Intuit to Set Up Online Financial Bazaar.” Reuters Business Report, 7 March 1997. Kim, James. “Microsoft, Intuit Decide Not to Merge.” USA Today, 22 May 1995. Kutler, Jeffrey. “Intuit Chief says IBM Consortium Speaks to His Point.” American Banker, 12 September 1996. Palmer, Jay. “Quickening Pace: Intuit Tries to Parlay Its Best Brand Name into a Thriving Internet Venture.” Barron’s, 8 December 1997. Radigan, Joseph. “Scott Cook Considers His Next Move.” US Banker, November 1996. Streeter, Bill. “A Cook’s Tour of Electronic Commerce.” ABA Banking Journal, October 1995. “Surfing Silcon Valley.” CNN Interactive, 26 February 1998. Available from http://cnn.com.
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Joan Ganz Cooney Overview Joan Ganz Cooney, president of Children’s Television Workshop for more than two decades, was instrumental in transforming children’s television and preschool education in the United States in the late twentieth century. As the originator of Sesame Street, Cooney conceived and developed an acclaimed educational television program that would eventually reach an estimated 235 million viewers each week in more than 85 countries.
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Personal Life Joan Ganz Cooney was born on November 30, 1929, in Phoenix, Arizona, the daughter of Sylvan C. Ganz, a banker, and Pauline R. Ganz. Her father was Jewish and her mother Catholic, and Cooney was raised in her mother’s faith. She attended parochial elementary schools and then continued her education at North Phoenix High School, where she played tennis and participated in dramatics. In 1970, she told a reporter for the Phoenix Arizona Republic that her life had been changed by a high school teacher whose class discussions on issues such as poverty and race relations awakened her to the importance of social activism. Another important influence was Father Kellogg’s Christophers, whose message, Cooney explained, was that “if right thinking people don’t get into mass communications the other kind will.” Cooney attended the Dominican College of San Rafael in California before transferring to the University of Arizona. It was there she graduated cum laude in 1951 with a B.A. degree in education.
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Joan Ganz Cooney surrounded by “Sesame Street” characters.
Cooney has faced many serious personal challenges in her life. When she was 26, her father committed suicide. She has suffered from anorexia, and, in 1975, underwent a radical mastectomy for breast cancer. Her first marriage to Timothy Cooney ended in divorce. Since 1980, she has been married to Peter G. Peterson, former U.S. Secretary of Commerce and former chairman of Lehman Brothers, a New York investment firm. Peterson, also chairman of the Council on Foreign Relations, is chairman of the Blackstone Group, a highly successful investment company, he started in 1985. Cooney and Peterson have homes in Manhattan and Long Island. Together they have established a foundation to support children’s programs.
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(The Bettmann Archive/Newsphotos, Inc.)
Cooney has served on the board of trustees of many organizations, including Educational Broadcasting Corporation, Columbia Presbyterian Medical Center, Metropolitan Life, and Johnson & Johnson. She has also been a member of several notable boards and commissions, including the Council on Foreign Relations, the President’s Commission on an Agenda for the 80s, and the Governors’ Commission on the Year of the Child. In 1995, Cooney was awarded the Presidential Medal of Freedom, the nation’s highest civilian order. In 1990, she was named to the Hall of Fame of the Academy of Television Arts and Sciences and in 1989 received an Emmy Lifetime Achievement Award from the Academy. That same year, at the 40th anniversary of the Christopher
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Awards, Cooney received the James Keller Award. Harvard, Columbia, Princeton, Georgetown, Brown, Boston College, Smith College, and Notre Dame are among the many colleges and universities that have awarded Cooney honorary degrees. She is also the recipient of more than 50 other distinguished honors and awards for Sesame Street.
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Joan Ganz Cooney
After 13 months as a reporter for the Arizona Republican, Cooney moved to New York to become a television publicity writer, first for NBC and later for the dramatic series, United States Steel Hour. She then became a producer of public affairs documentaries and in 1966 received a local Emmy award for her three-hour documentary, Poverty, Anti-Poverty, and the Poor.
1929: Born. 1953: Became reporter for the Arizona Republic. 1955: Publicist, U.S. Steel Hour. 1966: Won local Emmy award for documentary, Poverty, Anti-Poverty, and the Poor.
In 1966, Cooney was asked by the Carnegie Corporation to prepare a report on how television could be better utilized in the education of the very young. Her report, “The Potential Uses of Television in Preschool Education,” was the genesis of Sesame Street. According to The New York Times, Cooney later recalled that the children of America themselves showed her the way to proceed. “When I began to study the potential uses of television for preschool children,” she said, “I was aware of the fact that children all across the United States were singing advertising jingles. I wanted Sesame Street to do the same thing for reading, writing, and arithmetic.”
1968: Cofounded the Children’s Television Workshop (CTW).
Cooney cofounded the Children’s Television Workshop (CTW) in 1968 with $8 million in federal and private funds from the Carnegie, Markle, and Ford Foundations and from the Corporation for Public Broadcasting. (She became president of CTW in 1970, chair and CEO, in 1988 and chair of the executive committee in 1990.) For several months, she directed teams of researchers, writers, teachers, animated cartoonists, and television producers in designing a program that would make learning the letters of the alphabet and the numbers from one to 10 as easy as learning the names of every box of cereal on the grocery shelf. Sesame Street, whose title is taken from the command “Open Sesame,” in Tales from the Arabian Nights went on the air November 10, 1969.
acknowledged goal was to narrow the cognitive gap between children living in impoverished circumstances and their middle-class peers. Middle-class children, however, loved the program as well. With its mix of live action, animation, and puppets, it was the first educational program to reach ratings as high as those on commercial networks.
Reviewers were enthusiastic from the start. Newsday reviewer Barbara Delatiner commented that the program “is an exciting example of what can be accomplished when inventive attention is paid to the care and feeding of young minds . . . And the reviewer for Time found that “What Sesame Street does, blatantly and unashamedly is take full advantage of what children like best about TV . . . .” By December 1969, the program was seen in more than 2 million homes nationwide.
1969: Debut of Sesame Street. 1970: Became President of CTW. 1979: Won “Women of the Decade” award. 1988: Named Chair and CEO of CTW. 1995: Awarded Presidential Medal of Freedom.
Cooney understood that Sesame Street had to be as fast-paced as Saturday-morning cartoons and as easy to remember as commercials. And, while the program was teaching concepts like the letter “B” and basic number skills, it was also making a statement about racial, social, and ethnic diversity. The show’s setting—a crowded Harlem alley—was familiar to inner city children, and presented as a positive environment. Strong AfricanAmerican characters were featured from the beginning; Hispanics Luis and Maria joined the cast in 1972. Variety reviewer Les Brown praised the program’s emphasis on racial integration, and educators appreciated the show’s positive tone. Some areas of the country, though, were not prepared for the program’s liberal message. The state of Mississippi banned Sesame Street at first because of its “highly integrated cast of children.”
At the outset, the target audience for Sesame Street was disadvantaged three-to five-year-olds; the program’s
But Sesame Street went on to become one of the most well-known and loved programs on television. Actor Robert Redford claimed it was one of his favorite shows, and football hero Joe Namath was eager to appear on the program. Lena Horne, Billy Crystal, and nu-
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merous other celebrities regularly guest starred in skits that emphasized humor and problem-solving.
rivalry, managing anger and fear, personal hygiene and health care, and respect for the environment.
Arguably the most memorable characters on the show were the Muppets created by Jim Henson. It would be hard to find many Americans today who are not familiar with Big Bird, Kermit the Frog, Oscar the Grouch, Ernie and Bert, and Cookie Monster, all regular cast members on Sesame Street. Big Bird was even invited to a Christmas party at the White House by First Lady Betty Ford! As the show progressed through the years, it adapted to what children knew from popular culture. Several Muppet skits, for example, spoofed such artists as the Beatles, the Rolling Stones, Bruce Springsteen, punk rockers, and rap singers to teach about letters or numbers. William Honan, in The New York Times, wrote, “What was unique about “Sesame Street” was the way it weaved puppets, animation and live actors into an interracial tapestry that delivered educational messages.”
Studies done since 1970 showed marked improvement in cognitive skills between children who watched Sesame Street and those who did not. It has been documented that poor children, especially, have benefited from watching the show. According to CTW, povertylevel three-to five-year-olds who watched Sesame Street made more than twice the gains in knowledge of the alphabet, counting, and reasoning skills than poor children who were not exposed to the program. Clearly, Cooney’s vision of a “wall-less nursery school” has had a tremendous impact on American society.
Soon after launching Sesame Street, Cooney and the Children’s Television Workshop introduced The Electric Company for older children. Later, CTW produced the popular Ghostwriter series, which featured a multiracial cast of young teens involved in solving mysteries. Another popular program for older children was Square One, a show that focused on math. Like Sesame Street, it used brief skits, music, and humor to teach math concepts like problem solving, pattern recognition, estimation, and even such seemingly difficult concepts as set theory and negative numbers. Over the years, the scope of programming on Sesame Street broadened beyond reading and arithmetic to ethics, emotions, and human relations. During one season, for example, the characters Luis and Maria fell in love and got married. In another season, they had a baby. The show has also featured material on adoption, sibling
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Sources of Information Contact at: Children’s Television Workshop 1 Lincoln Plz. New York City, NY 10023-7129
Bibliography “Children’s Television Workshop.” New York, CTW. Available from http://www.ctw.org/. The Columbia Encyclopedia. New York: Columbia University Press, 1993. Current Biography. H.C. Wilson, New York, 1970. Honan, William. “How Big Bird Came to Count, Education Life.” The New York Times, 2 November 1997. Lystad, Mary, “20 Years on Sesame Street.” Children Today, September-October, 1989. Mills, Hillary. “Pete and Joan.” Vanity Fair, August 1993. Moreau, D., Cliff, J. “Change Agents.” Changing Times, July 1989.
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Camille Cosby Personal Life Camille Olivia Cosby was born in 1945, in Washington D.C., the eldest daughter of Guy and Catherine Hanks. Guy Hanks was a graduate of Southern University in Baton Rouge who went on to earn a master’s degree at Fisk University in Nashville. Her mother, Catherine, graduated from Howard University in Washington D.C.
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After attending parochial schools, Camille Olivia Hanks continued her privileged education at the University of Maryland, where she studied psychology. Although her parents encouraged her to study music at an early age, her interests were inclined towards psychosocial issues related to African Americans. Her academic achievements were momentarily put on hold, however, when she met Bill Cosby on a blind date while in college. The two were wed in 1964 and her attention turned towards helping her husband’s budding career as a comedian, and building what would eventually become the Cosby empire, Cosby Enterprises. The couple had five children together, Erika, Erin, Ennis, Ensa, and Evin. A devastating blow came with the death of their 27-year old only son Ennis who was shot while changing a flat tire alongside a Los Angeles freeway in 1997. This unfortunately followed on the heels of another embarrassing media frenzy when earlier that year, her husband, Bill Cosby, was confronted with a paternity lawsuit from Autumn Jackson, who claimed to be the result of an affair he had years back. It was later proved that he was not the father, although he admitted to having the affair years ago. Camille remained composed, however, during this time when she related to the press a “that-was-then-and-this is-now”
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the education department which studies existing structures and how they can affect change. She realized how profoundly television can impact lives and ideas, especially those of young people. In 1992 she produced a documentary titled, No Dreams Deferred, based on the true story of a husband and wife catering team who ran an after-school program for five youths in Atlanta, Georgia. It’s an inspiring story of a couple investing in their community through helping to improve and give opportunity to young people who see their lives as limited in what they can do. In response to what she saw as negative portrayals of blacks on television and influenced by her own dissertation research while at the University of Massachusetts, she wrote a book titled, Television’s Imageable Influences: The Self Perception of Young African-Americans, published in 1994. In this book, she asks young adults to consider the way in which blacks are portrayed on television and to learn some consciously critical skills while watching television. Reflecting on her own experience, she has said, “As a mother, I am very aware of what children watch and how they are influenced by television, movies, newspapers, and art.”
Camille Cosby.
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type sentiment, stating that they were young and had much more growing to do as a couple at the time the affair occurred.
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When Camille Olivia Hanks married Bill Cosby in 1964, she had dropped out of the University of Maryland to accompany her husband while he traveled to different cities at the start-up of his career. In these early years, she decided to help manage the income after they had a bad experience with a manager who mishandled their money. She later became the chief executive of the company, Cosby Enterprises, which eventually included television commercials, books, comedies, movies, and the television shows, The Cosby Show and A Different World. When asked why she chose to become involved in her husband’s business affairs, she has remarked in interviews that it was a natural decision for a couple that considers itself partners in both marriage and business.
The most notable aspect of Camille Cosby’s life is her dedication to the recycling of opportunity and education that she and her family have benefited from. The projects she chooses all have one commonality: they financially, socially, or spiritually give back to the African American community. Influenced by her own parents attending black colleges, and her own research which indicated a lack of financial support from alumni to those institutions, Camille and husband, Bill Cosby, have made it a priority to lend financial support to black educational institutions. One of the largest donations to a college occurred in 1993 when she and her husband donated $23 million to Spelman College. These funds were used to build the Camille Olivia Hanks Cosby Academic Center, with three chairs in the fine arts, humanities, and social science fields. Other African American colleges/institutions the Cosby’s have donated money to include Fisk University, Meharry and Bethune-Cookman Colleges and Harlem Hospital. Non-institutional support reported by Dr. Cosby includes the sponsorship of 30 students to various colleges and universities.
When Dr. Cosby later returned to school, she studied organizational development, a program that is part of
Dr. Cosby has also written articles supporting her causes. In the December 1997 issue of Essence, called
Although she may be best known for her role as a wife to comedian Bill Cosby and a mother to his children, Dr. Camille has accomplished many things in her academic and professional life. She has earned a Ph.D. in education, owns a production company, has done television and stage work, and has written books and articles.
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Dr. Cosby has also co-produced a Broadway play based on the book, Having Our Say: The Delaney Sisters First 100 Years which received critical acclaim. She is quoted as saying in Jet, in 1995 “What I hope people will get out of this play is that people will feel hopeful instead of hopeless, as we are often made to feel from different forms of media propaganda.”
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Shopping for a Better World, she writes about how African American dollars are better spent at those businesses which reciprocate support to the black community. She says African American dollars should not go to support banks, schools, and other businesses which do not give back to the community and claims that “people who don’t think about their spending habits can end up promoting a culture of disempowerment, helplessness, and hopelessness.” Her obligation to give is steadfast but she prefers to stay out of the public light and only rarely does interviews. Ironically, it is with social causes that she chooses to attract media attention. In a New York Times article by Lena Williams, “Private Woman Pursues a Public Cause,” she explains her mission by stating, “I feel I have an obligation because I have the resources and access to people in the entertainment industry to do some things.” Despite her avoidance of the public limelight, Camille Cosby has been presented with several distinctions by the media. In 1996, she was named one of the “15 most beautiful Black women,” by Ebony magazine, sharing the distinction with Oprah Winfrey, Vanessa Williams, and Janet Jackson. The Ladies Home Journal also acknowledged her achievements by naming her one of the “most fascinating women of 1997,” along with Princess Diana, Ellen DeGeneres, and Mother Theresa. Finally, Camille Cosby was named as one of the winners of the Tenth anniversary Essence Awards in 1997. The award, designed to honor those whose “lives and work are a testament to enduring courage, steadfast love, selfless community commitment and a triumphant spirit,” was shared with her husband, Bill Cosby.
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Chronology: Camille Cosby 1945: Born. 1964: Married William Henry Cosby. 1980: Graduated from Amhurst College with an MA. 1987: Spoke at Howard University commencement. 1989: Awarded an Honorary doctorate, Spelman College. 1992: Awarded National Coalition of 100 Black Women, Candace Award. 1992: Earned Ph.D. in education at University of Massachusetts. 1994: Published Television’s Imageable Influences: The Self Perception of Young African-Americans. 1995: Co-produced Broadway Play, Having Our Say. 1997: Named as Essence Awards Honoree, along with husband Bill Cosby.
Dictionary of Twentieth-Century Culture Vol. 5: African-American Culture. Gale Research: Detroit 1996.
Sources of Information
“The Fifteen Most Beautiful Black Women” Ebony, October 1996.
Contact at: Camille Cosby 34-12 36th St. Astoria, NY 11106 Business Phone:
“The Most Fascinating Women of 1997” Ladies Home Journal, January 1988. The New York Times Biographical Service Vol 25: Ann Arbor, University Microfilms International 1994.
Bibliography “Camille Cosby’s Book Explores Negative Images of Blacks in Media.” Jet, February 1995.
Notable Black American Women, Detroit: Gale Research, 1992. “Shopping For a Better World” Essence, December 1997.
“Camille Cosby Stands by Husband, Bill, Who Admitted He Had a Rendezvous Years Ago” Jet, February 1997.
Tenth Anniversary Essence Awards. 1997 May 1997.
“Catalyst Camille,” American Visions, December-Janaury 1994.
Who’s Who Among African Americans. 1998-1999.
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Casey G. Cowell (1953-) 3Com
Overview Casey G. Cowell made a significant contribution to the growth of the computer industry when he and some friends founded U.S. Robotics modem producers in 1976. The firm was a major player in advancing modem technology, increasing the speed and developing software, which allowed their modems to run on almost any computer. By developing its own technology instead of licensing it, U.S. Robotics was able to keep their costs down, thus capturing a large share of the market and allowing a greater number of users to benefit from the product. After Cowell, as chairman and CEO, led the firm to sales of over $2 billion, U.S. Robotics was acquired in 1997 by 3Com for $7.3 billion.
Personal Life Casey G. Cowell was born around 1953. Not much is known about his early years, except that he tended goal in two national high school hockey championships. He went on to attend the University of Chicago in 1971 and obtained a bachelor’s degree in economics in 1975. In college, he met and became friends with Stephen Muka in a computer programming class. Cowell had a keen interest in business, and the two discussed possible ideas for a venture. However, Cowell decided to enroll in graduate school at the University of Rochester in New York in 1975. The following year, he became disillusioned with school and went back to Chicago. Cowell became an industry leader with his firm, U.S. Robotics, which was later bought out by 3Com. Business
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Week named him one of the top 25 managers in 1995, and Crain’s Chicago Business honored him as executive of the year in 1996. Other awards he has received include the High Technology Advocate and Inventing America’s Future awards from the American Electronics Association; the Illinois High-Tech Entrepreneur of the Year award from KPMG Peat Marwick; and Entrepreneur of the Year from Venture magazine. In addition, the University of Illinois in Chicago gave him the Dean’s Award and elected him to their Entrepreneurship Hall of Fame. Cowell’s range of service, besides as vice chairman of the board for 3Com, includes the board of directors for Northwestern Memorial Hospital Corporation, the Illinois Coalition, and the Chicago Public Library Foundation. He is on the board of trustees for the Illinois Institute of Technology, the Field Museum of Natural History, and the Golden Apple Foundation. In addition, he sits on the boards of May & Speh and System Software Associates, and owns and operates a number of privatelyheld companies.
Career Details
Casey Cowell.
In 1976, after leaving graduate school, Casey Cowell contacted his friend Stephen Muka and got serious about their dream of opening a business. The pair called on friends Paul Collard, Stan Metcalfe, and Tom Rossen, and the five men cofounded U.S. Robotics. It was named after a company in the Isaac Asimov novel I Robot. They set up shop next to a ballroom dance studio in a 400square foot room without any windows, above an army surplus shop on Chicago’s Lincoln Avenue. With little experience, the founders taught themselves how to solder parts and organized delivery and setup of their product. The U.S. Robotics shop originally developed an acoustic coupler, a primitive version of a modem, which allowed computer users to patch into mainframes from home using telephone lines and a television set. Though they ran into technical problems, they continued their research, and eventually started making modems. At first, the device was a clunky black box almost as large as a milk crate that connected to a telephone with clumsylooking rubber pieces, but by the beginning of the 1980s, they had streamlined them to plug right into a phone jack. In the company’s early days, Cowell functioned as the business manager when their initial customers included computer dealers and university computer labs. Meanwhile, the fledgling company suffered financial setbacks while Cowell and his friends moonlighted part-time as computer programmers to pay the bills. Once, they sent a package to a customer C.O.D. but accidentally addressed it back to themselves, and could not gather the cash to retrieve it from UPS. The company took a detour for a bit when they ventured into the business of distributing computer terminals, but found no success in that, either. When personal computers (PCs) took
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(AP Photo/George Riley.)
off in the 1980s, Cowell started selling to manufacturers like IBM, Apple, and the former Commodore. Eager to step up production, Cowell convinced Mesirow Financial, a venture capital firm in Chicago, to invest $1.8 million in U.S. Robotics. The timing was perfect: PC sales boomed from the early 1980s to the early 1990s, and the company supplied private-label modems to the computer makers. Cowell was already considering branching out and establishing U.S. Robotics as its own superior brand name when a sudden industry slowdown made it necessary to make difficult business decisions. He laid off 75 of the company’s 275 workers and approached Mesirow for funding for a new project. Cowell’s idea proved fruitful. Instead of buying software to run their modems, U.S. Robotics began developing it themselves. This made it possible to run the devices on virtually any computer, and it kept costs down, which made their products more competitive. To help focus on this new direction, chairman and CEO Cowell hired a product development whiz, a chief financial officer, and a marketing director. These three newcomers helped replace the original founders of U.S. Robotics; Muka died of complications from Hodgkin’s disease in 1985, and the other three founders had left in 1978 to follow other paths. By 1990, U.S. Robotics had achieved approximately $60 million in sales annually. Cowell set the lofty goal of reaching “5 by 5,” that is, sales of $500 million by 1995. In 1994 he told Gary Samuels of Forbes, “People
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bought out by 3Com, they became part of a giant conglomerate that employed 13,500 people around the world.
Chronology: Casey G. Cowell 1953: Born. 1975: Received B.A. in economics from University of Chicago. 1976: Cofounded U.S. Robotics. 1996: Named Executive of the Year by Crain’s Chicago Business. 1997: U.S. Robotics merged with 3Com.
have been trying to figure out when we are going to stumble. Especially given that so many of our competitors have stumbled.” With a three-tiered effort reaching into business computers, home buyers, and large corporate customers, U.S. Robotics reached sales of almost $1 billion by the target year, nearly double its stated goal. Cowell then set his sights on the $5 billion mark in sales by the year 2000. In 1997, three years before Cowell could realize his new goal, networking giant 3Com bought out the Skokie, Illinois-based U.S. Robotics for $7.3 billion. Since the buyout, Cowell acts as vice chairman for the board of 3Com, but it is not clear if his generous compensation as CEO of U.S. Robotics continues. In May of 1997, the Chicago Tribune reported that Cowell was the highest paid CEO out of the top 100 publicly traded companies in the Chicago area, with annual salary, stock options, and bonuses totaling close to $34 million.
Modems have had a major impact on both business and personal communication in the late twentieth century. They make it possible for computers to connect to each other, allowing people to send data in the form of words, pictures, even video clips, over telephone lines or cable. Businesspeople can share entire databases with an office across the country, and apartment hunters can take virtual walks through model apartments online. People around the globe can hold real-time written conversations in “chat rooms,” or actually speak to one another “faceto-face” by holding video conferences. Thanks to modem technology, a wealth of information and entertainment is available via the World Wide Web, to which more and more people have access each day. Along with being a boon to business, education, and consumer information, modems have also led to an online pornography industry, unscrupulous business practices, and crime. The world continues to struggle with regulating this powerful technology which is in its infancy. However, Cowell sees even more potential in the field of modems that may bring the world closer than ever to the futuristic world depicted in films and television shows of old. He told Crain’s Chicago Business that modems may eventually have household appliances talking to each other: “I can imagine a world in which your alarm clock tells your coffee pot when to start and tells your garage door to open.”
Sources of Information Contact at: 3Com 5400 Bayfront Plz. Santa Clara, CA 95052-8145 Business Phone: (800)638-3266
Bibliography Aragon, Lawrence. “Robotics’ Hat Trick.” PC Week, 2 December 1996. Cahill, Joseph B. “Modem Man: Cowell Keeps on Connecting.” Crain’s Chicago Business, 3 June 1996.
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“CEO Compensation in the Top 100.” Chicago Tribune, 11 May 1997.
Although there are other modem producers, “No company symbolizes the dramatic advances in modem technology more than U.S. Robotics,” according to Alan Stewart of Communications News. “And no executive articulates his vision with more enthusiasm than U.S. Robotics’ President and CEO, Casey Cowell.” Cowell was one of the first to foresee PCs as communications tools, and he worked diligently to increase the speed at which data could travel, thus improving the technology greatly. Under Cowell’s direction, the firm also slashed prices of their home PC modems in half in 1993, from $520 to $260, opening up the market to a much greater number of buyers. By 1997 U.S. Robotics sold 40 percent of all modems in North America. That year, when they were
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“CEO Interview-Casey G. Cowell, U.S. Robotics, Inc.” Wall Street Transcript Digest, 8 February 1993. Inside 3Com. “Casey Cowell.” Santa Clara, CA: 3Com Corporation, 1998. Available from http://www.3com.com. Inside 3Com. “FastFacts.” Santa Clara, CA: 3Com Corporation, 1998. Available from http://www.3com.com. Samuels, Gary. “Modem Mogul.” Forbes, 15 August 1994. Stewart, Alan. “Double Time.” Communications News, March 1997. Vizard, Michael. “Pipe Dreams.” InfoWorld, 3 February 1997. “Why It All Computes at Cowell’s Robotics.” Crain’s Chicago Business, 29 April 1996.
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Jenny Craig Overview
Jenny Craig, Inc.
Jenny Craig is the creator and founder of one of the most successful weight-loss programs ever marketed. Since the 1980s, her Jenny Craig Weight Loss Centres have helped numerous Americans lose unwanted pounds and learn to eat a nutritional diet that can lengthen their life span. In 1997 there were 780 weight-loss centers bearing her name in North America, Australia, and New Zealand. It is the only such company traded on the New York Stock Exchange.
Personal Life Craig was born Genevieve Guidroz in the early 1930s and grew up in New Orleans. Her father, James Guidroz, was a boat captain and part-time carpenter, while mother Gertrude Guidroz grew her own vegetables to help feed a large family of six children, of which Jenny was the youngest. She studied at Southwestern Business School and worked as a dental hygienist for a time, but by the late thirties was married to a building contractor and was the mother of two young daughters, Michelle and Denise. Her second pregnancy was a difficult one, and Craig gained a lot of weight. “I used to look in the mirror and cry,” she recalled in an interview with People magazine in 1990. “I would just cry and say, ‘What did you do to yourself?’” To fix her figure, Craig went on a drastic diet, began attending an exercise class, and within a few months had lost 30 pounds. She then went to work for a health club in the New Orleans area, and was eventually hired
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versity at Fresno, where he went to school in the early 1950s, and as a result its business school was named in his honor.
Chronology: Jenny Craig
The Craigs also own a second home in Aspen, a private jet, and several thoroughbred racehorses. For a time, both Craig daughters from her previous marriage were multi-franchise owners of Jenny Craig Diet Centers. Craig is the grandmother of seven, still keeps to the lowfat diet which launched her weight-loss success, and exercises an hour each day.
1932: Born. 1970: Joined Sid Craig in fitness-center company. 1982: Sold Body Contour chain, netted $3.5 million. 1983: Launched Jenny Craig Weight Loss Centres in Australia. 1985: Opened first franchises in United States. 1990: Oversaw 285 outlets bearing her name. 1991: Initial public offering of stock on the New York Stock Exchange. 1993: FTC charged company with deceptive advertising practices. 1994: Revenues of $403 million annually. 1997: Called for health-insurance providers to classify weight-loss programs as a valid medical reimbursement.
as a staff member. She met future husband Sid Craig in 1970 when he arrived in the New Orleans area to expand a chain of failing fitness centers he had just bought. His chain, Body Contour, was going to be positioned as a competitor with Jenny Craig’s employer. The California entrepreneur had once been a tap-dancing child in the “Our Gang” series in the 1930s, and then went to work as an instructor with the Arthur Murray Dance Studios. He eventually owned several Arthur Murray franchises before getting into the exercise business. Sid Craig and Jenny Bourcq were still married to respective spouses when they met, but during 1970s both unions ended in divorce. Their working relationship evolved into a romantic one, and they wed in 1979. After founding the successful diet program that bears the “Jenny Craig” name, the partnership grew into a lucrative financial one as well. In the 1990s, she held the title of president of Jenny Craig, Inc., while Sid Craig was the company’s CEO and board chair at headquarters in suburban San Diego. They lived in an impressive beachfront home and were collectors of 17th- and 18th-century European art. In 1997, her annual salary was over $885,000. Some of that wealth has funded a health clinic in Mexico for the disadvantaged, and the Craigs once sponsored Australia’s entire Olympic team. Sid and Jenny Craig donated a large sum to California State Uni-
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Career Details When Sid Craig opened the first Body Contour fitness clubs in the New Orleans area in the early 1970s, Jenny Craig went to work for him. She brought her own ideas about diet and physical fitness, which was still a fledgling industry at the time, and Body Contour grew into a $35 million-a-year business. In 1982 the Craigs sold Body Contour to Nutri/System, but there was a “noncompete” clause that prevented either of them from working in the diet or fitness center industry for two years. The clause, however, only applied to the United States, so the Craigs went to Australia and opened the first Jenny Craig Diet Centres there, which were a success. They brought their idea back to American shores in 1985, and opened the first 14 Jenny Craig Weight Loss Centres in the Los Angeles area in 1985. Two years later, they had 46 outlets, and by 1990 the company had grown to number 285. They continued to grow, and took their company public, offering shares on the New York Stock Exchange in October of 1991. To do so, a Wall Street investment bank that saw great potential in their concept of managed weight loss raised $100 million on their behalf to launch the shares. With the success of the offering, the Craigs and children received $108 million; Jenny and Sid Craig still owned about 60 percent of company stock. By 1992, Jenny Craig, Inc. was a $400 million company, its biggest competitor was the aforementioned Nutri/System. Weight Watchers and the Diet Center were also top rivals. There were 621 Jenny Craig outlets in 1993, and that year the company posted $467 million in sales. It was perhaps the height of the company’s success, and thousands of overweight Americans were attracted to the 16-week program, which offered nutritional counseling and prepackaged foods called “Jenny’s Cuisine” at an extra cost for both. The frozen foods, which provided ready-made meals to clients at a cost of around $70 a week, accounted for about 90 percent of company sales; individual counseling sessions cost about $7 each. The average member spent about four months in the program. Yet problems arose as a result of the swift growth of Jenny Craig, Inc. In 1992, there were allegations and
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a court case from shareholders of the company’s stock who claimed the rapid expansion in the early part of the decade was done to camouflage financial woes. “The suit claims that at the time of its October, 1991, public offering, the company knew the market for diet clinics had become saturated but went ahead with expansion plans to boost revenue and create the illusion that Jenny Craig was a prosperous company,” noted Denise Gellene in the Los Angeles Times. The profit the Craigs earned when the stock went public may have caused some of this dissatisfaction. In 1993, the Jenny Craig Weight Loss Centres dropped its initial membership fee from as high as $185 for some plans to just $49 in a bid to attract new clients. It is estimated that the diet market in the United States hovers around 50 million, or just under a fifth of the total population. A few franchisers were unhappy with the new lure, and claimed that in some cases, new clients could not afford the prepackaged foods essential to successful weight loss in the Jenny Craig program. The Craigs bought out many of the franchises that were unprofitable, including some owned by Craig’s daughters and their husbands. The fiscal year 1993 saw further problems with the company’s finances: the stock had been trading at $34 a share in 1992, but had dropped to $15 a year later. In response, the Craigs restructured the company, and brought in experienced executives hired away from other companies, none of whom remained on board for long. By 1994, the company had posted heavy losses, and many centers had closed altogether. Dieting, as Leslie Vreeland wrote in a 1995 Working Woman article, had become “uncool” and cited trends such as a greater selection of low-fat foods on supermarket shelves, and the avowal of television personality Oprah Winfrey never to “diet” again after losing a great deal of weight on a liquid diet and then gaining it back within two years. Vreeland also noted the success of anti-diet guru/infomercial host Susan Powter with her “Stop the Insanity” program. Furthermore, the reputations of programs such as Jenny Craig suffered a blow when a popular consumer magazine asked 19,000 people to rate their membership in and weight-loss success at such centers, and a large percentage of them reported dissatisfaction. Jenny Craig, Inc. made headlines of a different kind in 1995 when a group of men who became known as the “Boston Eight” brought a gender-discrimination suit against the company. The male employees of a Massachusetts Jenny Craig Centre filed suit in Massachusetts Superior Court for what they felt were condoned workplace practices that denigrated them because of their gender. In what came to be called a “reverse sexual harassment,” the men claimed, among other snubs, that they were requested to shovel snow, and were not invited for off-premise socializing with their mostly female co-workers.
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Social and Economic Impact Jenny Craig Weight Loss Centres achieved phenomenal success in the 1990s with its diet program that gave clients counseling as well as an easy-to-use meal plan that saved time in meal preparation. In that decade, it was estimated that about eight million Americans were joining programs such as Jenny Craig, and spending about $1.7 billion a year. After Weight Watchers, Jenny Craig became one of the most recognized brand names of the bunch. Like Weight Watchers, the company spent a great deal of its budget on advertising, and often enlisted celebrities as spokespeople. Entertainment personalities such as Susan Ruttan (once a regular on L.A. Law) Dick Van Patten, and Cindy Williams, star of the 1970s sitcom Laverne & Shirley, have been affiliated with Jenny Craig ad campaigns. One reason for the name-brand identity that Jenny Craig Weight Loss Centres have achieved may be due to the fact that both Craig and the program she designed stress that overweight people need to learn not how to follow a diet, but rather how to eat properly for life. Dieting, Craig has emphasized, should not be an occasional drastic measure. Nutritionists agree, but problems arose with some of the company’s claims and practices. In late 1993, the Federal Trade Commission cited Jenny Craig, Inc. and four other diet programs for false advertising. Investigators asserted the programs made misleading claims about their effectiveness and the percentage of clients who were able to maintain their weight loss once they had left the program. In the spring of 1997, the company agreed to abide by guidelines that required them to offer proof that their customers were able to lose their desired number of pounds in a certain amount of time, and that those pounds remained off over a specific period of time without rejoining the program at an additional cost. Federal agencies, however, were not without their own internal missteps. In 1996, the Food and Drug Administration (FDA) allowed dexfenfluramine and fenfluramine (known by the brand name “Redux” and “fenphen”), the first new prescription drugs for weight loss since the early 1970s, onto the market. Initially, sign-ups and sales at diet programs such as Jenny Craig plummeted, but like some of its competitors, the Centres hired part-time doctors to prescribe the drugs. The drugs were withdrawn from the market in 1997, however, when a Mayo Clinic study linked one of them to heart disease. Concerned about the drug’s side effects already and sensitive to critics that charged the company with becoming a “pill mill,” Jenny Craig Weight Loss Centres had already ceased the use of the drugs two weeks before the announcement. Returning once more to their credo, Jenny Craig, Inc. called for a new strategy to help overweight Americans: in response to the controversy, it urged managed healthcare organizations to adopt new rules that would reimburse members for joining weight-loss and weight-
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management programs such as Jenny Craig. Such healthinsurance providers had reimbursed patients for the prescription diet pills before their side effects came to light. This call for a more health-focused approach to weight management fit in with a new strategy by Jenny Craig, Inc. to position itself as a wellness plan.
“The Follies Come to Boston.” Fortune, 3 April 1995. “FTC Accuses Five Diet Programs of Deceptive Advertising.” FDA Consumer, December 1993. Gellene, Denise. “Jenny Craig Takes a Pounding.” Los Angeles Times, 22 May 1994. Ingersoll, Bruce. “Jenny Craig Settles FTC Charges That Ads Made Deceptive Claims.” Wall Street Journal, 30 May 1997. “Jenny Craig diet centers stop using Fen-Phen,” 11 July 1997. Available from http://www.cnn.com
Sources of Information
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Contact at: Jenny Craig, Inc. 11355 N. Torrey Pines Rd. La Jolla, CA 92037 Business Phone: (619)812-7000 URL: http://www.jennycraig.com
Kroll, Luisa. “Fat Fads.” Forbes, 18 November 1996.
Bibliography Barrett, Amy. “How Can Jenny Craig Keep on Gaining?” Business Week, 12 April 1993.
Sanz, Cynthia, and Leah Feldon Mitchell. “Fitness Tycoon Jenny Craig Turns Weight Losses into Profit by Shaping Her Clients’ Bottom Line.” People, 19 February 1990.
Berman, Phyllis, and Amy Feldman. “Fat City.” Forbes, 17 February 1992.
Vreeland, Leslie. “Lean Times in Fat City.” Working Woman, July 1995.
Newsmakers: The People Behind Today’s Headlines. 1993 Cumulation. Detroit: Gale Research, 1993. “San Diego’s Highest Paid Executives.” Available from http:// www.sddt.com/features/sourcebook/lists/97/highpaid/index.htm
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Mary Cunningham Overview Mary Cunningham gained national media attention through much of her adult life; first through her fast corporate rise and later as the founder of Nurturing Network, an alternative for women considering abortion. Cunningham has a public image as both a spiritual motivator and a manipulative controller, and has long been associated with her husband’s volatile business dealings.
(1951-) The Nurturing Network
Personal Life Mary Cunningham claimed that she realized God was her father on the day of her First Communion. Her birth father was a drinker who abandoned the family when she was five years old. She blamed the incident on herself and resolved to be good for the rest of her life. After her father left the family, Mary’s mother took refuge with a relative who was a priest, Father Bill Nolan, who helped raise Mary and her siblings. Cunningham grew up grounded in the Catholic tradition. Her religious realization on the day of her First Communion would shape what she claimed were her values, and would lead her to found a resource for women considering abortion. A bright woman, she went on to college at Wellesley to major in philosophy and logic. She graduated with high honors. Later she attended Harvard. Cunningham met her future husband, William Agee, for the first time when she was 27, and she had just graduated from Harvard with an MBA. Agee, as CEO of Bendix, was recruiting for the company. He hired her on as an executive assistant. It was the start of
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lic eye. Six months after leaving Bendix, Cunningham obtained a position with a six figure salary at Seagrams. In 1984 Cunningham published Powerplay, a bestselling book about her experiences at Bendix. Though Cunningham and Agee went on to raise two children, live at Cape Cod, and run a small firm, they resurfaced in the public eye when Agee became CEO of Morrison Knudsen Company in Boise, Idaho. Ultimately the move was a disaster for the company and for Cunningham and Agee personally. Boise’s residents did not receive the couple kindly, though Agee had grown up near the town. Much of the resentment stemmed from the fact that Agee’s first wife was well liked in the cosmopolitan, but clannish town, and people objected that Agee had annulled his marriage to her in order to wed Cunningham.
Mary Cunningham.
(AP Photo/Mario Suriani.)
a fast career rise and of later tumult in both their lives. One of the things that they shared in common was the desire to start a family. Amidst personal and professional turbulence in the couple’s life, Cunningham suffered a life changing loss that was, in her opinion, even worse than her father’s abandonment. In 1984 she had a miscarriage in the second trimester of pregnancy. The incident led her to found the Nurturing Network, a resource for women considering abortion.
Career Details After Cunningham finished college and was recruited by Agee in 1979 to work for Bendix, her career skyrocketed. After a year at the company, Agee promoted her to vice president of corporate communications. Three months later she was promoted to vice president for strategic planning. By 1980, resentment was building in the company and rumors flew that the two were romantically involved. The press capitalized on the scandal, reporting on every new turn of events. Cunningham left the company at the height of the scandal, although later she and Agee were blamed for strategically misdirecting the company in a failed attempt to become more high tech. Shortly after, Bendix was sold to Allied-Signal where Agee worked briefly. When Agee left the company both he and Cunningham disappeared from the pub-
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Cunningham and Agee were uncomfortable in the required social roles of upper crust Boise society and lived privately when they could. Their reticence led many to conclude that they were not interested in interacting with anyone else. By this time, Cunningham had founded a charity organization for women considering abortion called The Nurturing Network and was also running the Morrison Knudsen Foundation. Her work left her with little energy for socializing. At one point, she said, “Did I, at the end of the day, enjoy putting on a sparkly dress and greeting employees? No, I’m tired at the end of the day. I’m not the kind of person with painted nails.” Meanwhile, unproven rumors surfaced around town about Cunningham, such as one that claimed the couple donated a $100,000 cross to the local Catholic Church and paid for it out of Morrison Knudsen funds. Cunningham was perceived as a person who controlled her husband and was involved in the company, even though the couple made efforts to appear otherwise. The Nurturing Network was formed after Cunningham miscarried. At this time in her life, she had time to reflect upon the plight of women who lost children in other circumstances, such as abortion. She speculated that many of these women did not have the loving support that she had received. With the beginnings of an idea in her head, she contacted 10 abortion clinics in the United States and asked them to give her phone number to clients who might be willing to discuss their abortion experiences. The women who interviewed with Cunningham claimed that they would have chosen an alternative to abortion if such an alternative had existed for them. In order for some of these women to consider carrying their pregnancies to term, they needed assistance like: leave of absence from jobs, free medical care, adoption resources, counseling, or a safe home. Motivated by this information and also with $300,000 from the sale of a vacation home, Cunningham founded the Nurturing Network in 1986. The organization provided resources and help for women considering terminating pregnancies. By 1994, the Network claimed to have served 4,500 clients. Clients seeking help from
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the network called a toll free number and filled out questionnaires about themselves, their goals, and what difficulties they would encounter if they carried their pregnancy to term. By 1994, The Network claimed that 18,000 potential clients had contacted them for assistance. The organization set up creative collaborations with other groups to provide resources for its clients. Clients who needed a place to stay were linked with one of 700 Nurturing Homes. A participating group of doctors provided free or low cost medical care. Interested colleges and employers made arrangements to accept clients for short term study programs or jobs. In a 1993 48 Hours interview at Nurturing Network, one client expressed gratitude for the services and claimed that she would have killed herself rather than have an abortion. Cunningham remained a central force in the Nurturing Network. She personally counseled clients and urged them to face what might be tough in the short term. In the long term, she advised, the pregnant client would reach fulfillment and personal growth in choosing to bring their child into the world. Cunningham claims that abortion is really the ultimate form of violence, disguised in a slogan called freedom. On the other hand, employees told of a sort of unscrupulousness that pervaded the Network offices. Security devices were largely in effect. Receptionists were instructed to say that Cunningham was in meetings, even when she was across the country. A former client counselor claimed that the number of clients that received assistance was greatly exaggerated and that many clients were, in fact, referred to other agencies. Cunningham and her husband continued to face personal obstacles. She was diagnosed with cancer in 1991 but refused chemotherapy, preferring to pray instead. The cancerous lumps on her neck disappeared soon after. During this time, anonymous Morrison Knudsen employees accused the couple of using company money to live lavishly. The couple’s children were harassed at school. Their Boise home was broken into and they hired bodyguards. After Agee underwent cancer surgery in 1992, a black rose was delivered to his office when he returned to work. It ended up being the final straw for the couple, who packed up and moved to California where, Agee continued to run his business, however, the company lost money in 1992 ($7 million) and several lucrative project possibilities. When some suspected that Agee kept the Board of Directors from knowing the true condition of the company, company executives wrote a letter to the Board, describing their immense dissatisfaction with how Agee was running the company. The letter led to an investigation and later, the Board fired Agee, amidst losses of $310 million in 1994. At this point, Cunningham resigned as director of the company’s non profit foundation.
Chronology: Mary Cunningham 1951: Born. 1953: Graduated magna cum laude from Wellesley College with Phi Beta Kappa key. 1979: Met William Agee, future husband who would partially shape her career. 1983: Suffered miscarriage; began conceptualizing Nurturing Network. 1984: Published New York Times Bestseller Powerplay. 1985: Founded the Nurturing Network. 1991: Diagnosed with cancer, later recovered. 1993: Nurturing Network featured on 48 Hours. 1994: Resigned as director of Morrison-Knudsen Foundation.
volatile politics that accompanied abortion in the United States. The Network employed some people with prochoice views. Generally, 15 percent of Network clientele gave up their newborns for adoption while the remaining 85 percent kept them. Controversy remained regarding connections between Morrison Knudsen and Nurturing Network—questions were posed about whether the Network was relying on financial and staff resources from Morrison Knudsen.
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Cunningham continued her work with Nurturing Network, and managed to successfully circumvent the
Cunningham’s life in the public eye—since meeting Agee for the first time and working as his assistant at Bendix—was very controversial. Opinions were divided on the essence of her true nature. Even her work with Nurturing Network was suspect. After Agee’s dismissal from Morrison Knudsen, a legal investigation was initiated that questioned the connections between the company and Nurturing Network. Many board members for the company, for example, had wives who served on the Board of Nurturing Network—creating concerns about conflicts of interest. As a corporate expert cited in the New York Times “once so many of the directors and their wives had joined with the Agees in a moral crusade— how likely was it that they would challenge Mr. Agee in
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the boardroom?” Cunningham and Agee were also suspected of funneling Morrison-Knudsen Funds into other Catholic charities. Because Cunningham and Agee were so close personally and publicly, decisions they made together impacted them both and particularly shaped public opinion of Cunningham. For example, although the Agees went to great lengths to prove that Mary did not have a hand in the Morrison-Knudsen business, many still believed that a $7,000 portrait of the Agees that hung on company walls was an example of Mary’s influence. Cunningham was seen by some of her peers at Nurturing Network as a deeply spiritual person with a message that the world needs to hear. One person described interacting with Cunningham as an experience that made one feel special and singled out, the total focus of Cunningham’s attention. On the other hand, Network employees who were first impressed by her charisma, later hinted of a manipulative personality. According to these employees, she had a secretive and paranoid management style. Her foes from Morrison Knudsen saw her spirituality as self serving and said she used it as a tool. Her life grabbed the attention of the national media and even
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attracted allies like Gloria Steinem of the National Organization for Women, who protested when Bendix ousted Cunningham. Depending on the interpretation, Cunningham was seen as a champion of unborn rights, a successful corporate icon, or a powerful partner in her husband’s business.
Sources of Information Bibliography Berman, Laura. “The Gospel According to Mary.” Working Woman, August 1995. Hopkins, Jim. “The Agees: Personalities Key to Couple’s Stunning Reversal of Fortune.” Gannett News Service, 11 June 1995. Hopkins, Jim. “Agees Surrounded Selves With High-Tech Security.” Gannett News Service, 20 February 1995. O’Reilly, Brian. “Agee in Exile.” Fortune, 29 May 1995. Vaughn, Ellen Santilli. “For Women, Against Abortion.” Christianity Today, 7 March 1994.
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Arthur Davidson Overview Arthur Davidson, along with William Harley, formed the Harley-Davidson motorcycle company in a converted shed in Milwaukee, Wisconsin in 1903. Today Harley-Davidson is the only remaining motorcycle manufacturer in the United States, and much of the company’s success is due to Arthur Davidson’s early work in setting up an extensive network of dealerships that handled the company’s products exclusively. Over the years, the “hog,” as the bike is affectionately known by its riders, developed a reputation as the preferred transportation of rebels and outlaws, but it has also gradually been transformed into a sporty recreational vehicle for “weekend warriors” who hit the road after a tough week at the office.
(1881?-1950) Harley-Davidson
Personal Life Not much is known about the early life of Arthur Davidson, except that he hailed from Milwaukee, Wisconsin, and was born about 1881. His father was a cabinet maker who helped Davidson, his two brothers, and William S. Harley build the first Harley-Davidson “factory” in a converted shed in the Davidsons’ backyard. Davidson was 20 in 1901 at the time when he and boyhood pal Harley first set about constructing a motorized bicycle. Arthur Davidson was a small-built man with sandy hair. He had an outgoing nature, perfect for his role as the firm’s sales and advertising manager. According to Herbert Wagner in Harley-Davidson 1930-1941: Revolutionary Motorcycles & Those Who Rode Them, “He
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eliminated the need for pedaling, and this caught their interest. Evinrude helped the friends out by giving them De Dion engine drawings from a French factory where he used to work.
Chronology: Arthur Davidson c. 1881: Born. 1901: Began building motorized bicycle with William Harley. 1903: Harley-Davidson Motor Co. founded. 1907: Harley-Davidson incorporated. 1909: Harley-Davidson introduced V-twin engine. 1920: Harley-Davidson became top selling motorcycle in United States with dealers in 67 countries. 1950: Arthur Davidson died in auto accident.
was an out front brassy little guy. A handshaker. He loved people. He could sit down to a stranger on the train and know his life story in five minutes. He loved a good joke and loved telling stories, and he was good at it, too.” Known for his business savvy, Davidson was recruited to serve as a director for various companies, including the Koehring Company, the Kellogg Seed Company, and the Wisconsin Pharmaceutical Company. He was a Milwaukee Boys’ Club board member and was active in the YMCA. Davidson also held many roles with the Boy Scouts Association of America and was awarded the group’s highest honor for distinguished service. An avid outdoorsman, he was a lifetime member of the Izaak Walton League. During the last six years of his life, he was president of the American Motorcyclist Association, shaping much of its policy and helping it to expand. Around this time he also served as president of the Motorcycle and Allied Trades Association, a collection of people affiliated with the motorcycle industry. Davidson and his wife died in a car accident in late 1950.
Career Details Davidson was trained as a pattern maker in a Milwaukee manufacturing firm, where his friend Harley worked as a draftsman. At this shop, they met Ole Evinrude, a German draftsman who would become known for his superior outboard boat motors. Like many young men, Davidson and Harley enjoyed puttering around with building things. Other shops across the United States and Europe were churning out motorized bicycles, which
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Davidson then made the patterns for a small aircooled engine while Harley designed the bicycle. Working in a basement shop with little time or money, they soon realized they needed an experienced mechanic. They called upon Davidson’s brother Walter, a machinist for a railroad in Kansas, to come home to Milwaukee. He was already planning to return for the wedding of another brother, William, and the men had promised him an exciting ride on the new machine. Walter was thoroughly disappointed to discover that his brother wanted him to help build it, but agreed to join the operation. William later signed up as well. With William and Walter Davidson now on board, the four men outgrew their basement and moved to a friend’s workshop, where real tools-such as a lathe and drill press-were available. They soon needed even more room, so the Davidsons’ father fixed up a ten-by-fifteenfoot shed in the backyard as the first factory, with “Harley-Davidson Motor Company” painted on the door. The Harley-Davidson company web site proposes two reasons why Harley’s name comes first: perhaps because he built the actual bicycle, or maybe that, since the Davidsons outnumbered him three to one, they figured it was a gentlemanly gesture. Harley went on to function as chief engineer and treasurer of the company, while Arthur Davidson became secretary and general sales manger. Davidson’s brother Walter held office as company president, and brother William was works manager. Arthur Davidson was instrumental in the company’s staying power throughout the century due to his initiative in setting up a network of dealers that would sell only Harley-Davidson motorcycles. He also helped establish the Harley-Davidson Service School to provide quality mechanics for bike owners. The company firmly backed their products and made sure that dealers’ profits came first. Davidson was known as the financial brain of the firm, and dispensed business advice to dealers who were having money problems. This became especially necessary during the Great Depression. Harley-Davidson survived during these difficult domestic times, in large part because of foreign sales. An unexpected boon to Harley-Davidson was the rise of Henry Ford’s Model T automobile in the mid-1920s, which was cheaper than a motorcycle and put dozens of competing motorcycle companies out of business. Harley-Davidson kept up sales because the U.S. Postal Service and police departments continued purchasing the bikes for business.
Social and Economic Impact In 1903 the Harley-Davidson company produced and sold their first three motorcycles. The next year, in an ex-
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panded shed, they built eight. After yet another addition in 1905, the men moved their factory to Chestnut Street, now called Juneau Avenue, in Milwaukee, where the corporate offices still stand. Their uncle, James McLay, a beekeeper, loaned them money to build the 2,380-squarefoot shop. In 1909 they made 1,149 bikes, including 27 of their trademark V-Twin engine models with a top speed of 60 miles per hour, which failed until the bugs were worked out a couple of years later. By the mid-1910s, Harley-Davidson was the third largest motorcycle manufacturer in the country, and by 1920 held the number one position, with dealers in 67 countries. By 1953, HarleyDavidson was the only remaining American motorcycle company when its main competitor, Indian, closed its doors, and in 1995 it boasted a production of over 105,000, with demand continuing to grow. Harley-Davidson, however, is more than a motorcycle company with a strong brand recognition. Something resembling a cult of personality has developed around these piles of chrome that belies its founders’ intentions. Originally nicknamed the “Silent Gray Fellow,” Harley-Davidson bikes were designed to be quiet, with large mufflers to subdue their noise. They were marketed as practical transportation, even for families, if a sidecar was attached. Later the motorcycles became a favorite of sportsmen when the company began entering their products in races-and often winning. In fact, one of the Harley racers around 1920 reportedly used to do his victory laps with his pet pig sitting with him on the bike, giving rise to the nickname “hog.” The Harley-Davidson web site, though, claims the term is an acronym for the Harley Owner’s Group, the company-sponsored club. In World War I and II the bikes were used to run dispatch on the front lines, and the GIs took it upon themselves to begin chopping off parts-including headlights and fenders-to make the machine go faster. Thus the word “chopper” came to represent a customized Harley. Eventually it was expected that “hog” owners would personalize their bikes, not only by making them into choppers, but also by adding custom paint jobs or fenders and other unique touches.
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book on his experiences called Hell’s Angels: The Strange and Terrible Saga of the Outlaw Motorcycle Gang. After his exposé was published, some of the members beat him senseless. During the 1960s and 1970s, lower-priced Japanese motorcycles, which lacked the stigma of the Harley, gained popularity among recreational bikers. By the 1980s and 1990s, however, the image of the Harley rider began to change. Though the tattoo-and-leather crowd, with their beards, booze, and bad attitudes, still roamed, more and more “yuppie” bikers began to take to the open road. This cadre of mellow executives and family men were, no doubt, intrigued by the “bad boy” element just as much as the appeal of the wind rushing past them as they sped down the highway. Harley-Davidsons could be seen lined up outside hip nightspots in major cities, expensive toys affordable only by the successful. Harley accessory boutiques sprang up in tony shopping districts. The company set up a slick web site, and in 1994 Turner Original Productions produced a special cable program narrated by actor James Caan and featuring celebrities such as David Crosby, Peter Fonda, Wynonna Judd, and a leather-clad Larry Hagman touting their love of the bike and its accompanying mystique. Finally, the HarleyDavidson seemed to be regaining its original intent as a vehicle for genteel sportsmen and women, albeit with a slight edge this time around.
Sources of Information Contact at: Harley-Davidson 3700 W. Juneau Ave. PO Box 653 Milwaukee, WI 53208 Business Phone: (414)342-4680 URL: http://www.harley-davidson.com
Bibliography Bolfert, Thomas C. The Big Book of Harley Davidson: Official Publication, Harley Davidson, Inc., 1991.
In 1947, however, the image of the outlaw biker gained full momentum. An article in Life magazine detailed the horrors of a rebel motorcycle gang who terrorized a town in California. No longer seen as simply sporting enthusiasts, riders were now lumped with those known as “Hell’s Angels,” a group of bikers who took their name from a 1930s Howard Hughes film. Though this proved to be bad publicity for Harley-Davidson, the media latched on and continued to beef up the stereotype, with films like The Wild One portraying the subculture. Unfortunately, the stories surrounding biker gangs—rape, robbery, beatings, looting—were often more truth than fiction. Journalist Hunter S. Thompson in the 1960s infiltrated the ranks of the Hell’s Angels, posing as one of their members, and wrote a full-length
Fucini, Joseph J. and Suzy Fucini. Entrepreneurs. Boston: G. K. Hall & Co., 1985.
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“Harley-Davidson: The American Motorcycle,” television program aired on TBS, Turner Original Productions, 1994. Harley-Davidson History. Milwaukee, WI: Harley-Davidson, 1998. Available from http://www.harley-davidson.com. Johnson, David. “Family Affair: Four Men, One Dream.” Cycle World, September 1993. Thompson, Hunter S. Hell’s Angels: The Strange and Terrible Saga of the Outlaw Motorcycle Gangs, New York: Ballantine Books, 1966. Wagner, Herbert. Harley-Davidson 1930-1941: Revolutionary Motorcycles & Those Who Rode Them, Atglen, PA: Schiffer Publishing Ltd., 1996.
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Suzanne de Passe (1948-) de Passe Productions
Overview As a producer, and a record and film company executive, Suzanne de Passe is recognized as the creative driving force in the Motown industry headed by Berry Gordy. Beginning with Motown’s conception in Detroit, Michigan to its present Los Angeles, California location, de Passe diversified as the business grew from music to motion picture and film winning accolades. De Passe eventually went on to form her own company, de Passe Entertainment.
Personal Life Suzanne Celeste de Passe was born in middle class Harlem, New York in 1948. Her father, a Seagram’s executive and mother, a school teacher, divorced three years later. Subsequently Suzanne’s father remarried providing an encouraging family atmosphere for his daughter, who dreamed of limousines and modeled original clothes for the Harlem elite. She attended illustrious Manhattan high school, and private, integrated New Lincoln School. With writing ambitions, she went on to Syracuse University in 1964, where she placed more emphasis on social life than on her schooling. When asked to leave, she transferred to Manhattan Community College where she majored in English. Later, de Passe married actor, Paul Le Mat, while continuing to experiment with a varied succession of employment from saleswoman to horse riding instructor. The couple is still married and lives in Los Angles.
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Career Details Suzanne de Passe’s serendipitous beginnings included a flair for recognizing talent which she developed early as a talent coordinator at an up-scale Manhattan club, Chettah Disco. There she auditioned and scheduled performers, developing a keen business sense and invaluable experience. In a similar fashion, Suzanne went on to work for the Howard Stein firm, where she obtained the position of talent coordinator. The Motown sound captured her interest, but her inability to schedule those artists proved frustrating. In an article by Robert DeLeon featured in Jet Magazine she stated, “Cindy Birdsong, former member of the Supremes introduced me to Berry Gordy. His limousine didn’t show up to take him for some reason, so I offered him a ride. A friendship blossomed then, and every time he or some other Motown people would come to town, I’d take them around.” The Gordy/de Passe friendship proved to be a fortunate alliance, resulting in a job offer from Gordy in 1968 to join his Motown staff as his creative assistant. There in offices in Gordy’s home in Detroit, Michigan she worked first with artist Smokey Robinson. At its peak, the Motown sound climbed the charts featuring all time greats like Diana Ross and the Supremes. Suzanne participated in new developments discoveries, such as the Jackson Five, the Four Seasons, the Commodores, Lionel Richie, and others. Following the company’s move to Los Angeles, California, de Passe quickly kept pace with phenomenal growth from then director of the West Coast’s creative division to vice-president and later would continue to diversify. Without a doubt the motion picture industry was another of Gordy’s interests and he formed a new division, Motown Productions, to develop more facets of the company. As a newly named President, de Passe shrewdly contracted new talent such as Rick James and Stevie Wonder. De Passe moved away from the recording side of business and put to use her talent as a writer in 1970 when Diana Ross was featured in a T.V. special, “Diana.” Later in 1972, she turned to screen play writing and was quite successful. The critically acclaimed screen play “Lady Sings the Blues”, was written by de Passe and Chris Clark, in which Diana Ross played the famous Billie Holliday in the film. This earned Suzanne a prestigious Academy Award nomination. Television proved to be another venue for de Passe’s magic touch with the famous NBC special, “Motown 25: Yesterday, Today, Forever.” “Callie and Son,” and “Happy Endings” starring Lindsey Wagner, and John Schneider respectfully were de Passe’s productions. De Passe also played a substantial role in the writing and production of other Motown productions, including The Wiz and Mahogany.
Suzanne de Passe.
(Archive Photos, Inc.)
hour miniseries and its sequels, which earned her Golden Globe, Emmy, and Peabody awards. De Passe was also responsible for the sitcoms “Sister,Sister,” which was scheduled for syndication in late 1998 and “Smart Guy.” Numerous accolades included her in Women of the Year, one of 12, by Ms. magazine in 1972, and the Women in Film Crystal Award in 1988. In 1992 Suzanne was inducted into the Legacy of Women in Film and Television, while the following year the Executive Leadership Council present her with the Turner Broadcasting Trumpet Award and the Achievement Award from the Executive Leadership Council. She also joined the Board of Morehouse College as the first woman to serve in their 127 year history. In addition, she remains culturally productive in ballet and opera. Clearly Suzanne de Passe’s contributions to the entertainment industry make her a powerful business leader.
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In 1988 de Passe left Motown and formed her own company, de Passe Entertainment, four years later. Her genius for choosing talent was particularly demonstrated when she bought the rights for the Lonesome Dove eight
There is no question that the Motown sound of which de Passe was a significant contributor, brought people together, having a particularly beneficial effect on existing race relations. In an article by Phil Gallo in Variety, in early 1998, politician Julian Bond was referenced as saying, “If you can’t understand Motown’s effect on youth, then you can’t understand the United States.” As an African American woman, de Passe overcame per-
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Chronology: Suzanne de Passe 1948: Born. 1967: Hired as a talent coordinator. 1968: Became Creative Assistant to President, Motown Productions Los Angeles. 1970: Writer: “Diana” Diana Ross’s solo television special. 1972: Co-authored the screenplay “Lady Sings the Blues.”
In an industry generally dominated by European American males, de Passe’s talents include powerful leadership, communication, and organizational skills along with a determined commitment to produce continuous high quality entertainment. Having to overcome both racial and gender stereotypes, de Passe has remained positive. “You can bark at the moon or you can get things done,” was how she characterized her own working philosophy. Her ability to change and evolve in the industry has been remarkable. Despite starting her own company in 1992, de Passe often speaks about the business strategies and principles she learned from Berry Gordy and from working for Motown. In an interview with BET Tonight in early 1998, de Passe discussed these ideas and how they have affected her business style. She says he taught her that “a business based on principles is more important than a business based on revenue.” She credits much of her success to her direct and honest business style.
1972: Named one of 12 Women of the Year by Ms. Magazine. 1972: Received Academy Award nomination for “Lady Sings the Blues.” 1981: Became president of Motown Productions Los Angeles. 1988: Received the Women in Film Crystal Award. 1992: Became CEO, de Passe Entertainment. 1993: Accepted the Turner Broadcasting Trumpet Award.
Sources of Information Contact at: de Passe Productions 5720 Wilshire Blvd., Ste. 610 Los Angeles, CA 90036
Bibliography Bark, Ed. “Schedule gap angers Motown producer” Dallas Morning News, 20 January 1998. DeLeon, Robert A.”Suzanne de Passe: Woman behind Motown Stars” Jet,12 June 1975.
ceived notions of both gender and race discrimination. Who’s Hot featured de Passe’s response to questions on her experiences producing the Lonesome Dove series, “I find it ironic, that people have such trouble with a black woman wanting to produce a Western. I don’t think Stan Margulies or David Wolper had to answer, ‘Why are you two white guys producing Roots?’...I’m not angry about it-it’s just a fact.”
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Gallo, Phil. “Motown 40: The Music is Forever.” Variety,16 February 1998. “Smokey Robinson and Suzanne de Passe.” BET Tonight, 11 February 1998. Who’s Hot. July 1998. Available from http://www.emmys.org. Who’s Who among African Americans. Marquis: New York, 1998-99. Who’s Who in America Marquis: New York, 1998.
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John Deere Overview The old plows, for centuries made out of iron and wood, were no match for the sticky, heavy clay soils of the Central Plains of America. John Deere invented the modern steel plow to cut through the mud and clay of the American prairie with speed and efficiency. Deere’s farm implements played one of the major roles in the transformation of America’s wild lands into fertile, agriculturally productive farmlands. This inventor and manufacturer enabled the settling of America, and brought to all of America a first wave of farmers who populated and settled the wilderness of the undeveloped lands of the United States, with the help of Deere’s plow
(1804-1886) Deere & Company
Personal Life John Deere was born on the east coast of the United States, in Rutland, Vermont, on February 7, 1804. He was the third son of William and Sarah (Yates) Deere. John grew up in the country and was deeply touched by nature and the land. He attended school in Rutland and acquired an average education for this time period. At age 17 he began to learn the blacksmith trade, beginning a four-year apprenticeship with Captain Benjamin Lawrence in Middlebury, Vermont. He was a good blacksmith and practiced it for the next 12 years, until he was 33. Deere married Damaris Lamb of Granville, Connecticut, in 1827. She died in 1865, and two years later he married her younger sister, Lucinda Lamb.
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John Deere demonstrating his new plow in Molene, Illinois.
Career Details In 1837, John Deere moved to the small prairie community of Grand Detour, Illinois, where he opened a blacksmith shop. It was here that he became aware that the old iron plow he brought with him from Vermont was unsuited to penetrate the hard clay soil of the prairie. Deere set about to invent a new kind of plow to deal with this raw and difficult land, to transform it into suitable agricultural farmland. Using trial-and-error techniques, Deere finally fashioned a curved plow, using both wrought iron and steel from a discarded circular saw blade. The blade was curved to one side, making it unnecessary to stop and push dirt aside by hand. An added
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(Baldwin H. Ward/Corbis-Bettmann.)
benefit of Deere’s new plow was that it could be pulled by horses instead of the oxen that the old plows required. With a steel share and a wrought iron moldboard (the upper part of the plow) of his own design, Deere was able to plow a dozen rows easily, nonstop. By 1839, Deere had made and sold 10 of these new plows, and by 1840 he had 40 satisfied customers. Within a few years his output of plows increased to 1,000 a year. Part of the challenge of creating his new plow was finding high-quality steel. Deere first bought a quantity of steel from England and, after testing it, he negotiated the purchase of steel with Jones and Quigg in Pittsburgh Pennsylvania for the manufacture of steel plate.
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His company was growing rapidly, and Deere decided he needed a better location for his business. In 1847 he sold out to his partner, Leonard Andrus, and moved from the isolated community of Grand Detour to Moline, Illinois, which had much better access to rail and river routes. In addition to better access to shipping transportation for his plows, Moline also offered better power resources for making them. The John Deere Company was officially organized in 1857. Deere produced 10,000 plows during his first year, many of which were carried westward across the prairies by covered wagon. The plow Deere produced became known as the “singing plow” because of the highpitched humming sound it made while sliding through the dirt.
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Chronology: John Deere 1804: Born. 1821: Began blacksmith apprenticeship and career. 1837: Opened a blacksmith shop in Grand Detour, Illinois, and started work on a new plow.
A year later, Deere incorporated his company and became president of it. He also made his 20-year-old son, Charles Deere, his partner. In 1868, 10 years later, the company became Deere and Company. By that time, Deere, then age 64, had greatly diversified and expanded the output of his company. He was now making and selling not only plows, but mechanisms called cultivators, and other mechanisms that automatically baled hay.
1838: Established partnership with Leonard Andrus and produced and sold his first steel plows.
John Deere died in 1886, leaving the business to his son to carry on. The John Deere Company continues to manufacture farm equipment but the company also expanded its operations to include lawn, construction, and forestry equipment.
1868: Incorporated John Deere and Company and became president of the company.
At the company’s 150th anniversary celebration in the 1980s former Deere & Company chairman Robert Hanson attributed the great success of the company to its solid corporate philosophy established by founder John Deere. “He stressed quality and value in his products and services. He stayed close to the customers in order to provide them with products they needed to meet their individual requirements. Above all, he emphasized fair dealings and the principle of mutual advantage for all who came in contact with his company. We’ve never lost sight of this business philosophy.”
Social and Economic Impact It is likely that the settling of the American West and the civilization of the plains came to pass for three reasons: the presence of the train, which was able to transport goods and people across America; the Homestead Act of 1862, which made vast areas of the western plains available to farmers, free—if they promised to cultivate it; and the steel “singing plow” invented and manufactured by John Deere.
1846: Increased production to 1,000 plows annually. 1847: Moved to Moline, Illinois, and established a new company. 1858: Made his son, Charles Deere, a partner in the company.
1886: Died.
the steel plow was invented, it is thought that some farmers gave up on trying to plow the sticky prairie soil and abandoned their farms. Deere’s plow gave the farmers a tool that greatly increased their efficiency and productivity. The number of farmers who could stay in business as well as the number of acres that could be farmed increased dramatically due to Deere’s plow. For example, in 1850, there were 5.9 million acres under cultivation in Iowa and Illinois. By 1870, this number had risen to 28.7 million. Even after John Deere died, the Deere Company continued to be well known for its production of farm machinery and also its generosity. During the Great Depression of the 1930s, the Deere Company helped numerous farmers by extending special lines of credit to needy farmers and forgiving many debts owed by the farmers.
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The invention of the steel plow is often cited by scholars as the primary reason that agriculture came to the arid regions of the United States and other countries of the world. The plow was crucial to the development of agriculture as a major business for the world. Before
Contact at: Deere & Company 1 John Deere Pl. Moline, IL 61265-8098 Business Phone: (309)765-8000 URL: http://www.deere.com
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Bibliography Ardrey, R. L. American Agricultural Implements, 1894.
Clark, Neil M. John Deere, He Gave the World the Steel Plow. Moline: Deere and Co., 1937.
Arnold, Dave. Vintage John Deere. Stillwater, OK: Voyageur Press, 1995.
Garraty, John A. and Jerome l. Sternstein, eds. Encyclopedia of American Biography, New York: HarperCollins, 1996.
Barr, Linda. “John Deere: Blacksmith Helped Cultivate Success for Generations of Americans.” Quad-City Times, 26 February 1995.
Hofstadter, Richard. The United States: The History of a Republic. Englewood Cliffs, NJ: Prentice-Hall, 1967.
Brohel, Wayne, Jr. John Deere’s Company: A History of Deere and Company and Its Times. New York: Doubleday, 1984. Byers, Paula K. and Suzanne M. Bourgoin, eds. Encyclopedia of World Biography. Detroit: Gale Research.
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Ingham, John N. Biographical Dictionary of American Business Leaders. Westport, CT: Greenwood, 1983. Preston, Wheeler. American Biographies. Detroit: Gale Research, 1974. World of Invention. Detroit: Gale Research, 1994.
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Michael Dell Overview Michael Dell started his company, Dell Computer Corporation, when he was a college freshman in 1984. By the early 1990s, the company had exceeded $500 million in annual revenues, and Dell had become the youngest CEO of a Fortune 500 corporation. Although he experienced troubled times in 1993, he developed new corporate strategies, and by 1997 he was predicting that his company would lead the personal computer industry by the year 2000.
(1965-) Dell Computer Corporation
Personal Life Dell was born in Houston, Texas, in February 1965, the son of Dr. Alexander Dell, an orthodontist, and his wife Lorraine, a stockbroker. In October 1989, Dell married Susan Lieberman, a commercial leasing agent. The couple have two children. At one point, Dell would often tell his employees that his daughter’s first words were a plea to beat the competition: “Daddy, kill Compaq. Daddy, kill IBM.” When Michael Dell was only eight years old, he sent off for information on a high-school equivalency diploma, hoping he could avoid putting in a full 12 years in school. His parents, however kept him in school and later sent him to the University of Texas at Austin, hoping he might become a doctor. With his fledgling computer company (which he operated from his dorm room) making $80,000 a month, however, he had other plans. After his freshman year, he told them he wanted to spend the summer working in his business, and if things did not work out with his venture, he would return to school. He never went back.
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companies as IBM and Compaq, to which they added various features. By early 1985 it had 30 employees, and in July 1985 introduced its own model, the Turbo PC. He borrowed money from his family, but soon repaid it as his company grew to annual sales of $30 million. In 1987, PCs Unlimited became Dell Computer and in 1988, Dell began selling stock. Its sales that year reached $159 million, and by 1993, the figure was $2 billion. Then came a period of challenge and a slump in stock prices, prompting Dell to change his strategy. In 1994, the new Dell Latitude XP laptop model was launched and confidence in the company soared. From 1990 to 1997 Dell’s stock has increased by 20,000 percent, from $0.39 to $80.00 a share.
Michael Dell.
(AP/Wide World Photos, Inc.)
If there is such a thing as a born entrepreneur, Dell surely is one. When he was only 12, he made $2,000 through a stamp and baseball card trading enterprise that he operated through the mail. In high school, as a newspaper delivery boy for the Houston Post, he aggressively sought out new subscribers by obtaining mailing lists of newlyweds, then sending them a trial offer of two weeks’ free service, which he then followed up with phone calls. The extremely enterprising young man made over $18,000 this way, which he used to pay cash for a fully loaded BMW—even though he was not yet able to drive. This period in his life is also when Michael Dell discovered computers and found that he enjoyed taking them apart and putting them back together. He soon realized that he could make money by adding components to units and selling them for a profit. Soon he started doing business through magazines, as he had earlier operated his stamp and card trading business. In college, he operated his business out of his dorm room, which irritated his roommates so much that they barricaded his door with piles of his computer equipment.
Career Details Soon after he left the University of Texas in the summer of 1984, Dell incorporated his company, PCs Unlimited, and began operating out of a storefront. The company marketed equipment made by such computer
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Michael Dell has played a great deal on his image as a “whiz kid,” but the 1993 downturn showed the Dell Computer leadership that it was time to adopt a new corporate attitude to replace the brash image that had attended the company’s beginnings. Dell was a billiondollar company, and it had grown big and unwieldy. Before Dell suffered the fate of other pioneers who have lost control of their own companies, he brought in a number of older executives with proven records, reorganized operations, and put his CEO Mort Topfer in charge of running Dell on a day-to-day basis. Dell recognized that his own strengths lay in maintaining an eye on the company’s overall vision, rather than specific details. Among the most successful strategies employed by the Dell Computer Corporation is the direct-sales model, which provides a made-to-order personal computer that is shipped within 36 hours. Customers can place orders by calling a toll-free number or by logging on to the company’s web site, where models can be customized onscreen, priced, and ordered with a credit card. To ensure timely shipping, Dell maintains close relationships with suppliers, some of whom have built new facilities near Dell headquarters outside of Austin, Texas. According to an April 1998 article in InternetWeek, “The combination of direct sales and the Internet have made Dell Computer a fierce competitor that has kept heavyweights like Compaq and IBM scurrying to keep up.” Dell’s sales strategy has been to market to large corporations and computer enthusiasts rather than to firsttime buyers, reasoning that a consumer is a first-time buyer only once. Among its largest customers are Shell Oil, Boeing, and Toyota. Another aspect of the company’s business success stems from the fact it only manufactures units it has already sold. Therefore, it maintains no inventory and is free of storage and other overhead costs associated with maintaining a large warehouse stock.
Social and Economic Impact In 1991 Michael Dell said that he hoped to make his company a billion-dollar-a-year enterprise, a goal he has surpassed significantly. In September 1997 Andrew E. Ser-
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wer asserted in Fortune that “Dell Computer has become the driving force in the PC business.” By fiscal 1998 Dell’s revenues topped $12 billion, according to InternetWeek, which also reported the company’s income at $944 million for the same period. Dell has also announced that he hopes to remain CEO for the next 60 years, and his 1993 reorganization helped to ensure that he would maintain power. Describing the position of Dell Computer in the year 2000, Dell told an InternetWeek interviewer, “We don’t want to be all things to all people. We only have six percent of the PC market share. Some analysts have said that by growing at 40 percent a year for five years, we’ll have 12 percent share. That would be a good position to be in.” He has said that he is not afraid of dire predictions that the personal computer market will be saturated, since his focus is on repeat rather than first-time buyers. The success of Dell Computer has brought numerous awards and distinctions to founder Michael Dell, including an Entrepreneur of the Year citation from Inc. magazine in 1990. In addition, he was named “Man of the Year” by PC magazine in 1992 and “CEO of the Year” by Financial World in 1993. Dell is also the richest man in Texas with earnings of up to $10 million a day. Comparing his own success with that of Dell, whose company is an important Microsoft customer, Bill Gates noted in Fortune, “We have both stuck with our convictions, and learned from our mistakes . . . Michael has the same passion for the industry I do.”
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Chronology: Michael Dell 1965: Born. 1984: Founded Dell Computer. 1988: Took Dell Computer public. 1990: Named “Entrepreneur of the Year” by Inc. magazine. 1992: Became the youngest CEO ever to make the Fortune 500. 1993: CEO of the Year, Financial World magazine.
Bibliography Aronoff, Craig E. and John L. Ward, eds. Contemporary Entrepreneurs. Detroit: Omnigraphics, 1992. InternetWeek, Interview Michael Dell, Chairman and CEO, Dell Computer, 13 April 1998. “Leadership Experts Explain the Secrets.” Forbes, 8 April 1996. “Michael Dell’s Plan for the Rest of the Decade.” Fortune, 9 June 1997.
Sources of Information
Newsmakers 1996, Cumulation. Detroit: Gale, 1996.
Contact at: Dell Computer Corporation 1 Dell Way Round Rock, TX 78682-7000 Business Phone: (512)338-4400 URL: http://www.dell.com
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Palmer, Jay. “Selling to Veterans.” Barron’s, 24 March 1997. Serwer, Andrew E. “Michael Dell Turns the PC World Inside Out.” Fortune, 8 September 1997.
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Fred DeLuca (1947?-) Subway International
Overview Fred DeLuca began the Subway Sandwich chain as a 17 year-old in need of money for college. His company grew from two unsuccessful outlets in suburban Connecticut in 1965, to over 13,000 stores around the world in 1998. Subway sandwiches are available in 64 countries, and it is the second-largest fast-food franchise operation in the world—only McDonalds has more outlets. For several years in the 1990s, it was consistently named the top franchise opportunity in Entrepreneur magazine’s annual ratings issue. DeLuca is known as a hands-on CEO who regularly checks up on Subway stores posing as an average customer.
Personal Life DeLuca was born in the late 1940s in Brooklyn, New York. His father worked in a factory. As a child the family lived in a housing project. De Luca earned money by collecting empty bottles and cashing them in for $.02 each. When he was 10, the family moved to Schenectady, New York, and there he further honed his entrepreneurial skills with a paper route that grew to more than 400 addresses. In his teens, he moved once again with his family to Bridgeport, Connecticut. He later earned a degree from the University of Bridgeport, but was already well on his way to heading a successful fastfood company at the time of his graduation. When Connecticut instituted a personal income tax in 1991, DeLuca moved his wife and son to Florida. His son earned a degree in economics and works for the Sub-
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Fred Deluca holds a Subway submarine sandwich bun.
way chain. Though DeLuca is a billionaire, he keeps to modest lifestyle, driving a seven-year-old car and often flies coach, rather than the more expensive business class. Until 1990, he signed every check issued by the company.
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(AP Photo/STR/Don Heiny.)
use to open a store. Buck, a nuclear physicist, saw potential in DeLuca’s plan: to begin a fast-food venture that provided a healthier, less fattening bill of fare. At the time, burgers and pizza were the standard fast-food menu. DeLuca seized the idea of submarine sandwiches—a novelty food named because the long oblong bun shape.
As a teen, DeLuca wanted to study medicine, and needed money for tuition. He took a job in a hardware store the summer before college, but realized the meager wages would not last long. He asked a friend of his parents, Dr. Peter Buck, for a loan of $1000, which he would
Buck loaned DeLuca the money and he became coowner of the company. The first store opened in 1965 in Bridgeport, Connecticut; DeLuca was still 17 years old. At the end of that summer, he had only $6 left over. This outcome did not discourage Buck and he suggested that they open a second store, for higher visibility. As DeLuca told Fortune it was done to create the image of success. The second store lost money as well. DeLuca and Buck
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Chronology: Fred DeLuca c. 1947: Born. 1965: Opened first submarine shop. 1974: Began franchising Subway name. 1978: Opened 100th store. 1987: Opened 1,000th store. 1989: Subway named number one “franchise opportunity” by Entrepreneur magazine 1991: Relocated to Florida. 1997: Subway sells over $3 billion in food and beverages.
opened a third store. They changed the name from Pete’s Submarines to the catchier name Subway. The venture began making a profit, earning $7,000 its first full year. Buck remains as co-owner in the company with DeLuca. DeLuca did earn his degree from the University of Bridgeport, but found the entrepreneurial life hard to resist. He planned on expanding Subway to at least 30 stores by the end of its first decade in business, but in 1974 was half short of that goal. When he brought a friend on board to help run one of his stores, it gave DeLuca the idea that well-trained owner-operators would be the best suited to build the Subway chain. This led him to start franchising his business. DeLuca hired development agents to sell the franchises. For an investment of about $85,000, husband-andwife teams can own their own store; Subway provides the training. In contrast, the start-up cost to open a McDonalds is about a $1 million. Subway signs a lease for a small commercial space with a landlord, and rents are low since the stores have limited seating. The bread is baked on the premises. Staff costs are also nominal— during busy periods, just two people are needed: one to make the sandwiches, which is not complicated, and one to staff the register. There is no grill and no fryer. In 1978, Subway’s 100th store opened. DeLuca and Buck’s original strategy to increase visibility had become a cornerstone of their long-term plan. “Even when we were small, Fred always thought we should compete with McDonalds,” a top executive, Dick Pilchen, told Nations Restaurant News. “He probably won’t be happy until we surpass McDonalds in size.”
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Subway passed the 1000 store mark in 1987. In 1993 alone, over 1100 units were opened—McDonalds opened just under 800 that same year. DeLuca believes that overall volume sales increase in a region along with the number of Subway shops in that area. DeLuca’s belief caused some concern among franchise owners. Franchisers who, in some cases, had given what amounted to their life savings to the Subway parent company for the right to operate a store, were unhappy when a new Subway outlet opened a few miles away and cut into their revenues. In 1998, Subway had over 10,000 stores in the United States, but faced criticism: there were 160 lawsuits pending against the company in various stages, from franchisers who claimed fraud to landlords suing for unpaid rent. This figure was higher than the combined number of lawsuits pending against seven of Subways biggest competitors. The Federal Trade Commission investigated the company for unfair franchise practices, but the suit was dropped for lack of evidence. Later, another business venture of DeLuca’s, Cajun Joes, faced similar inquiry. DeLuca, and his company respond to criticism by pointing out the nature of the franchise business. In many cases, franchisers are first-time business owners. One of DeLuca’s maxims is: Everybody goes to high school, but not everybody reads the book, according to one of his associates quoted in Nations Restaurant News. Franchisers are provided with a two-week training session, and then provided with guidelines about cleanliness and service—but they don’t always follow them. DeLuca recounted an anecdote about one store he visited with dirty windows, and how he told the owner they needed washing. When he returned a day later, the windows were still dirty. I was really upset, because I knew that would negatively impact their sales, but I couldn’t do anything about it, he told Suzanne Kapner and Peter O. Keegan in Nations Restaurant News. Visiting stores is an integral part of DeLuca’s job. He is known to drive cross-country for a tour of anonymous visits, in which he simply orders a sandwich. Owners or employees rarely recognize him. With over 10,000 outlets in the United States alone, he tries to pack in as many visits as his day permits, and sometimes eats a half-dozen submarines a day—if the sandwich is made properly, I can eat one for every meal and never get sick of them, DeLuca told Carrie Shook of Business First-Columbus.
Social and Economic Impact Subway has grown into the most successful fastfood franchise after the colossal McDonald’s corporation. It has over 13,000 outlets around the world. Despite the legal problems, many praise DeLuca and his handson attitude. “Fred understands franchisees better than most presidents because he started out very poor,” one franchise owner told Nations Restaurant News.” He knows the value of a dollar and the hard work it takes to
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make sandwiches, wash floors, and clean bathrooms. He came from there.”
Behar, Richard. “Why Subway Is The Biggest Problem in Franchising.” Fortune, 16 March 1998.
Mitchell, Russell. “Fred DeLuca: The New Hero of the Sandwich Stand.” Business Week, 8 August 1988.
Contact at: Subway International 325 Bic Dr. Milford, CT 06460 Business Phone: (203)877-4281
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Bibliography Kapner, Suzanne, and Peter O. Keegan. “Fred DeLuca.” Nations Restaurant News, January 1995.
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Shook, Carrie. “Fred DeLuca Goes Underground to Monitor the Mayo.” Business First-Columbus, 29 May 1995.
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Cecil B. DeMille (1881-1959) Motion Picture Producer and Director
Overview Cecil B. DeMille, along with Jesse L. Lasky and Samuel Goldwyn, made Hollywood into the world’s movie-making capital. DeMille was the groundbreaking producer and director who is credited with many technologies and practices every filmmaker today takes for granted. Out of a barn in the quiet Los Angeles suburb of Hollywood in 1913, the future of movies began when DeMille made his first movie, “The Squaw Man.” His epic dramas include two versions, silent and sound, of “The Ten Commandments,” as well as “Samson and Delilah” and “The Greatest Show on Earth.” These films gave him his place in Hollywood history as one of the most flamboyant directors of all time.
Personal Life Cecil Blount DeMille was born on August 12, 1881 in Ashfield, Massachusetts when his parents were on theatre tour, performing one of their own plays. His parents are Henry C. and Mathilde (Samuel) DeMille. The DeMille family was of Dutch ancestry and had been in America since 1658. Mathilde was born in England. The DeMilles were both employed as teachers at John Lockwood’s Academy in Brooklyn, New York, at the time of Cecil’s birth. Henry DeMille had intended to become an Episcopalian minister. However, as DeMille told in a story about his parents shortly before his death “ . . . . My father studied to be an Episcopalian minister—then he met my mother who was a teacher of English at Lockwood’s Academy. She told him he would have a much larger congregation in the theatre than he would in the
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pulpit. In the pulpit he would have a few thousand people, and in the theatre he would have hundreds of thousands. He accepted her advice and became a playwright, and a good one.” Cecil had one older brother, William, and a younger sister, Agnes, who died as a baby. Much of DeMille’s boyhood was spent at homes in New Jersey. The first home was in Echo Lake. The second was built by DeMille’s father in Pompton Lake in 1892. Henry DeMille spent every evening reading to his sons from the Bible. He would read one story from the Old Testament and one story from the New. This early acquaintance with the drama of the Bible affected DeMille throughout his life and his work. DeMille’s father died suddenly from typhus in 1893. Only two months later, Mrs. DeMille opened the Henry C. DeMille School in their home. She raised her sons on her own, adapting to the kindly but stern standard her husband had begun with them. When he was 15, DeMille entered the Pennsylvania Military College in Chester, Pennsylvania. He enjoyed this harsh education, complete with early morning drills, cold baths, and a strict religious tone. At the beginning of the Spanish-American War, DeMille tried to run off and volunteer, but he was too young to be accepted. So instead of going to Spain, he began studying for a career in acting at the American Academy of Dramatic Arts in New York City. He made his acting debut in 1901. On August 16, 1902, DeMille married Constance Adams, an actress with whom he was touring. They had four children: Cecilia, Katherine, John Blount, and Richard. DeMille, even at the peak of his Hollywood career, preferred quiet family evenings at home to glamorous parties. When DeMille was almost 30 years-old, in 1911, he gave up acting. He joined his mother and launched a theatrical agency. With that crucial move, DeMille’s personal life and career would barely be separated again. While filming “The Ten Commandments” in 1956, DeMille suffered his first heart attack. That one did not slow him down for long, but a second heart attack that he suffered in his Hollywood home proved fatal. DeMille died on January 21, 1959.
Career Details DeMille was working as general manager of his mother’s theatrical agency when he met Jesse L. Lasky and Lasky’s brother-in-law, Samuel Goldfish, who later changed his name to Goldwyn. The three men formed a partnership in 1912, known as the Jesse L. Lasky Feature Play Co., with $20,000 in capital. After only one day of learning the basics in the Thomas Edison studios in New York, DeMille headed west to shoot his first movie. “Squaw Man” had been a successful Broadway play, a
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Cecil B. De Mille.
(Archive Photos, Inc.)
melodrama set in Wyoming. He intended to shoot the picture in Flagstaff, Arizona. When the train stopped there, however, it was bleak and rainy, so he decided to stay on the train all the way to Los Angeles. The sunny skies were perfect for lighting. The long season without rain was ideal for working outside, even when shooting indoor scenes. DeMille set up his first studio in a barn at the corner of Vine and Selma. The studio later moved to Marathon Street. It eventually evolved into Paramount Studios, and remained at that location. DeMille was not the first producer to work in Hollywood. Yet the fact that he decided to stay there and continue to create movies made all the difference to the future of movies. His first movie had a budget of $15,000.
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Chronology: Cecil B. DeMille 1881: Born. 1898: Entered American Academy of Dramatic Arts, New York City. 1912: Cofounded Jesse Lasky Feature Play Co. with Lasky and Samuel Goldwyn. 1913: Made first picture, “The Squaw Man.” 1916: Introduced color for first time in “Joan the Woman.” 1923: Made first “Ten Commandments.” 1929: Made his first sound picture, “Dynamite.” 1949: Won Lifetime Achievement Academy Award. 1952: Received Irving G. Thalberg Memorial Award from Academy of Motion Picture Arts and Sciences. 1953: Won Best Director, Golden Globe Awards, for “The Greatest Show on Earth.” 1956: Released second version of “Ten Commandments.” 1959: Died.
It ended up earning a remarkable $225,000. With that success, he bought out his partners Lasky and Goldwyn. After two more successful DeMille films, Lasky moved his entire operation to California in 1914. He worked with Alvin Wyckoff, one of early Hollywood’s most important cameramen. Wyckoff’s invention of new camera lenses that aided shooting under difficult conditions furthered DeMille’s early work. DeMille quickly became known as a welcome middle ground between D.W. Griffith’s serious, intense dramas, and Max Sennet and Hal Roach’s slapstick comedies. He was a hit at the box office with his popular dramas. But DeMille’s status slipped when he made his first epic, “Joan the Woman,” based on the story of Joan of Arc, in 1917. The public was apparently not ready for such a lengthy, serious drama, and the film was roundly criticized. DeMille’s next few years of moviemaking continued to be difficult, as he made one box office flop after another. When he made the movie “The Whispering Chorus” not long after “Joan,” he ventured into a more sophisticated artistic method. The film featured a
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chorus of whispers following the leading man throughout the movie, as he attempted to avoid his debts by faking his own death. While it was recognized to have critical merit, the public scorned it. DeMille seemed determined to give the public what they wanted following these resounding failures. He regained his fame with ordinary people by making social comedies with moral messages. In 1923, having re-established himself as a moneymaker for producers and studios, DeMille set out to make his second epic, “The Ten Commandments,” which cost more to make than any movie up to that time. The final cost was $1.5 million. Adolph Zukor, head of the studio, was upset enough to talk about stopping production. But DeMille did finish the movie, and it was a blockbuster. DeMille made 70 films during his career in Hollywood. While not all of his movies were successful, he brought much more to Hollywood. His many innovations in filmmaking established the norm in the business. In addition to his introduction of color in movies, he was also well known as the person who invented “Rembrandt lighting,” a technique of lighting part of a character’s face for accent, much as a spotlight would on stage. He was also responsible for the first camera “boom” by which the camera could move around a set. In addition, once “talkies” (motion pictures with sound) began, he invented the standard sound “blimp,” the protective cell to keep machinery noises recording onto a sound track. DeMille also wrote over 30 screenplays. DeMille did not often enjoy critical acclaim. Until his “Greatest Show on Earth” won Best Picture at the 1953 Academy Awards, only one of his many films had received an Oscar. That was “Reap the Wild Wind,” in 1940. Anne Bauchens, the first woman editor of a motion picture, won the award for Best Editing. In 1949 he received the Irving G. Thalberg Award for lifetime achievement from the Academy of Motion Pictures for “thirty seven years of brilliant showmanship,” in the words of the Academy. The McCarthy Hearings in the United States Senate on Communist activities signaled an end to the respect DeMille enjoyed in Hollywood. His testimony as a political conservative against Joseph Mankiewicz, then president of the Director’s Guild, brought DeMille many enemies. Other directors, especially John Ford, began to turn away from him following the hearings. DeMille’s side career as the host and narrator of Lux Radio Theater was also ended by the radio union for his political action. He was thereafter barred from the radio air. DeMille made his final movie, “The Ten Commandments,” in 1956. Again, it was blockbuster at the box office, even if it was not his most respected picture. Until later directors such as Steven Spielberg emerged in the 1980s, “The Ten Commandments” remained the most successful commercial film of all time. The movie is shown on the American Broadcasting Company (AMC) network annually at Easter, and continues to reach a wide audience.
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Social and Economic Impact DeMille helped found Hollywood in the early part of the twentieth century and helped make a tiny section of Los Angeles emblematic of American culture known throughout the world. It was DeMille himself who decided to stay in Hollywood and make it the place where movies were made. The economic significance of the motion picture industry in America is almost without parallel when it comes to making fortunes. Hollywood (along with the aerospace industry) was responsible for California becoming the money and entertainment capital of the world. DeMille also produced more efficient films with his technical innovations in camera, sound, and lighting.
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vented by DeMille. It was DeMille, however, who best captured that mood. DeMille influenced a whole century by telling the stories people wanted to hear and see. Andrew Sarris, in his book The American Cinema, said of DeMille, “He may have been the last American director who enjoyed telling a story for its own sake.”
Sources of Information Bibliography Byers, Paula K. and Suzanne M. Bourgoin, eds. Encyclopedia of World Biography. Detroit: Gale Research, 1998.
DeMille’s conservative religious background influenced his movies profoundly. The advice of DeMille’s mother had radically influenced his father’s life and it was DeMille who fully reaped the benefits of that wisdom. His Biblical and moral dramas brought religion to many people. DeMille’s interpretation of the Bible made moviegoers flock to his pictures. The American taste for explicit films with a puritanical undertone was not in-
Hochman, Stanley, ed. A Library of Film Criticism. New York: Frederick Ungar Publishing Co., 1974.
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“Cecil B. DeMille Obituary.” Variety, 28 January 1959. Contemporary Authors. Detroit: Gale Research, 1996. Available from http://galenet.gale.com. Higham, Charles. Cecil B. DeMille. New York: Charles Scriber’s Sons, 1973.
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Richard DeVos (1926-) Amway International
Overview Richard DeVos heads one of the most lucrative enterprises in the world. In 1997, his personal wealth was estimated at $3.2 billion, making him one of the wealthiest Americans of the decade. What is more remarkable is that his Michigan-based Amway Corporation, founded in 1959 with his high school friend Jay Van Andel, brings in about $7 billion a year though a simple formula: selling household products and other goods through a vast network of sales people and distributors, many of whom work part-time.
Personal Life DeVos was born in 1926 in Grand Rapids, Michigan. The southwestern corner of the state had drawn many Dutch immigrants in previous decades, and DeVos, like his next-door neighbor Jay Van Andel, grew up in a close-knit Dutch-American community. Simon DeVos, his father, was an electrician, and the family were devout Christians of the Reform Christian faith. As teens at Grand Rapids Christian High School, DeVos and Van Andel dreamed of becoming business owners. During World War II, they served in the Army Air Corps, and both later graduated from Grand Rapids’ Calvin College. In 1953 DeVos married Helen Van Wesep, and they had four children. Once known as a tireless business traveler for the Amway cause, DeVos underwent triple-bypass heart surgery in 1992, and retired from the day-to-day operations that same year. In 1997, at the age of 71, he had heart-transplant surgery in England.
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Richard DeVos and his wife, Helen, return to a large welcome home party at the Amway hangar at Kent County International Airport in Grand Rapids, Michigan, after receiving a heart transplant in London on June 2, 1997. (AP Photo/Grand Rapids Press, Brad Coville.)
Despite the immense wealth his company brought him, DeVos continued to call the Grand Rapids area home. He is still active in the LaGrave Avenue Christian Reform Church in the city. DeVos is also the owner of the Orlando Magic basketball team and in his more robust days liked to race ocean-going yachts. Secondgeneration DeVos and Van Andel family members have taken over some of the top positions in the company and on its board.
Career Details DeVos and Van Andel saw themselves as entrepreneurs from a young age but had difficulty in finding or creating a solid opportunity. After serving in the Army Air Force, they began a flying school outside of Grand Rapids, Wolverine Air Service. It was unsuccessful, so they then opened a drive-in restaurant. DeVos did the cooking while Van Andel waited on cars. In 1948, they bought a schooner to sail to South America, but neither had much experience and the boat sunk between Cuba and Haiti. Returning home to Grand Rapids once more, they went to work as sales agents for Nutrilite, a California vitamin company. Its products were “directly marketed,” that is, not sold in stores, but purchased by salespeople at a discount from the company and then sold to
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customers. Nutrilite distinguished itself from other direct-marketing companies in that it used what was called a multilevel marketing system. Salespeople received commissions on the products they sold, but could also advance through the ranks by recruiting new salespeople into the company; they then received a commission on the profits of those they brought in. DeVos, often described as a natural salesperson, was successful at selling the Nutrilite line, and both he and Van Andel rose to prominence in the company. Yet differences with executives led them to break out on their own in 1959. Some sources note that Van Andel was asked to take over company presidency in 1957, but declined; other sources credit DeVos and Van Andel with developing key products in the Nutrilite line. Yet another source explains that Amway was founded when DeVos and Van Andel incorporated new products into the Nutrilite system that they were already selling. Amway did eventually add the Nutrilite vitamins and food supplements to its product line. What is not in dispute is the founding of Amway in early 1959 and the modeling of its employee hierarchy on the same multilevel, commission-based idea as Nutrilite. “We call our company Amway because the American way of private ownership and free enterprise is the best way,” DeVos told recruits early on. The company began in the basements of the DeVos and Van Andel
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are also encouraged to buy these tapes to sell to others. Many recruits burn out after a few months, and find that their friends and extended family members shun them after too many sales pitches and recruitment efforts.
Chronology: Richard DeVos 1926: Born. 1944: Enlisted in U.S. Army Air Force. 1953: Married Helen Van Wesep. 1959: Cofounded Amway Corporation. 1969: Company rebounded after fire destroyed plant and offices. 1979: Launched Amway in Japan. 1983: Charged with customs fraud in Canada; paid $25 million fine. 1989: Amway received Environmental Programme Achievement Award from the United Nations. 1992: Retired from Amway. 1997: Underwent heart transplant.
homes in Ada, Michigan, outside of Grand Rapids and is still headquartered in Ada. The first Amway products were household cleaners, including a biodegradable soap called “L.O.C.” DeVos and Van Andel had bought the recipe from a chemist in Detroit. Together, the co-founders created and refined a complex and sometimes controversial corporate structure for Amway. A person enters the sales force after being “sponsored” by a present member. These salespeople can be known for their enthusiastic tactics that often appeal to average-income families struggling to make ends meet. “How would you like to make an extra $1000 a month?” begins the typical Amway recruitment pitch, and new salespeople are encouraged to tape pictures of things that they would like to own such as a summer cottage or a luxury car to their refrigerator to encourage them in meeting their goals. Once a person has purchased a starter kit and a number of Amway household products, they are encouraged to recruit others. What is known in Amway terminology as the “downline” is then created; this is the number of recruits a person has signed up. After a certain number, they become a “distributor” and then get a percentage of every product sold by members on their downline. This sales force keeps in touch with one another via Amvox, a voice-mail system they rent from the company. Amway also sells their sales force motivational tapes, many recorded by DeVos himself. Amway sellers
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Though many top distributors do indeed become rich by selling Amway and recruiting new members, according to a disclaimer required by Federal Trade Commission, the average Amway distributor earns about $88 a month. Such tactics led to investigations by the FTC beginning in the 1970s. Amway was cautioned for its recruitment techniques, but not found guilty of fraud. Canadian authorities were more persistent, and uncovered a scheme detailed in executive memos between DeVos, Van Andel, and other top Amway officers that pointed to a conspiracy to undervalue their Amway goods through a system of dummy invoices and fake transactions. In 1982 Canadian customs officials brought formal criminal charges against DeVos, Van Andel, and two other executives. Between 1965 and 1980, Canada claimed, Amway had underpaid about $23 million in customs duties. In response, Amway declared that Canadian customs officials had long been aware of the company’s practices and they attempted to have the case moved to U.S. courts. They refused to appear in Canada to answer for the charges, saying they were unwilling to give up the constitutional protections that American citizens on American soil enjoyed. In 1983, DeVos and the other executives entered a guilty plea and agreed to pay a $25 million fine. Another FTC investigation found that Amway recruiters had overstated earning potential, and in 1986 the company paid a $100,000 fine. By the 1990s, there was a class-action suit against the company in a Pennsylvania district court that was open to anyone who had been an Amway distributor between 1990 and 1996 and bought its motivational tapes or books. Despite such setbacks, Amway has grown into a hugely successful company. It posted record growth in the 1980s and 1990s, and in 1997 had a sales force of 2.5 million in 80 countries around the world. Asian markets have been especially receptive to the free-enterprise credo of Amway. The company launched operations in Japan in late 1970s, and they later spun off the subsidiaries Amway Japan and Amway Asia Pacific into publicly-held companies with stock offerings on Wall Street. In Japan, it is estimated that almost 1 percent of the population is involved in the Amway network.
Social and Economic Impact From its beginnings, Amway attempted to create and market products that did not harm the environment. Its first product, L.O.C., contained no phosphates or solvents; only in the 1970s did major manufacturers begin trumpeting the biodegradable features of their soaps and cleaning products. As DeVos recalled in Compassionate
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Capitalism, he and Van Andel “grew up fishing, swimming, and playing in . . . lakes and streams” around Grand Rapids, but were dismayed when they realized how polluted the waterways of western Michigan were becoming. In the 1990s, almost all of the Amway products are biodegradable, packaging is usually paper, a soybean derivative is used as carton filler instead of Styrofoam, and no products are tested on animals. For their long commitment to the “green revolution,” Amway was awarded the Environmental Programme Achievement Award from the United Nations in 1989.
sion broadcast costs of the Republican Party’s national convention in San Diego in the summer of 1996. In the spring of 1997, he sent two checks totaling $1 million to pay for debts stemming from the 1996 election. Jill Abramson of the New York Times noted that by 1997, the company had given almost $4 million to the Republican National Committee in just under four years, and “won a lucrative measure to ease international tax rules on its Asian affiliates in the sweeping tax bill passed by Congress last summer. The measure was championed by the Republican congressional leadership.”
The influence of Amway as a corporate philanthropist began in downtown Grand Rapids. In the 1970s, as their company grew successful, DeVos and Van Andel donated millions of dollars to revitalize the declining city center. Today, there is the Amway Grand Plaza Hotel, and the Van Andel Museum Center/Public Museum of Grand Rapids.
Amway’s entry into China, which is still technically a Communist nation, is predicted to be its biggest success yet. In 1995, the company spent $100 million for a recruitment campaign and also constructed a massive plant. To accomplish this presence it was necessary to court the Chinese government, and company officials were so successful in this they even won permission to hold Amway rallies.
DeVos and Van Andel became known for their support of certain conservative issues, such as a stance against a constitutional amendment which would guarantee women’s suffrage. Sometimes they paid for fullpage newspaper ads to get their views across, and by 1980 owned the nation’s largest radio network, Mutual Broadcasting Network. That same year, two Detroit Free Press reporters, Patricia Montemurri and Larry Werner, wrote a series of articles for the paper called “Amway: Profits and Politics,” in which they wrote of “the emergence of Amway as a conservative social movement.” In the series, a prominent business person in Grand Rapids who wished to remain anonymous told Montemurri and Werner that “there isn’t a great deal of difference between what Amway is saying and what (Ronald) Reagan is saying.” At the time, Reagan was campaigning to win the Republican nomination for the presidency and would later that year win that election as well as a second term four years later. The values Reagan spoke of in his campaign speeches hearkened back to a simpler era and appealed to many Americans’ sense of patriotism: America is a great country, capitalism works, and if a person has not achieved material success, it is likely due to their own shortcomings. Such messages had long been a staple of the Amway creed. When the Berlin Wall fell in 1989, and Soviet-style communism in Eastern Europe with it over the next few years, Amway became a presence in those countries and found many eager to join Amway’s free-enterprise road to success. A documentary film that presented a frank look at Amway’s presence in Poland was suppressed by the company from distribution for several months in 1998. Some of the success that Amway people have achieve in Eastern Europe, however, are detailed in DeVos’s 1993 book, Compassionate Capitalism.
Sources of Information Contact at: Amway International 7575 E. Fulton St. Ada, MI 49301-9173 URL: http://www.amway.com
Bibliography Abramson, Jill. “Money Buys a Lot More than Access.” New York Times, 9 November 1997. “Amway: A Savior—Or a Villain?” Detroit Free Press, 18 June 1980. Anstett, Patricia. “DeVos Gets a New Heart.” Detroit News, 4 June 1997. Butterfield, Stephen. Amway: The Cult of Free Enterprise. Boston: South End Press, 1985. DeVos, Rich. Compassionate Capitalism: People Helping People Help Themselves. New York: Dutton, 1993. Grant, Linda. “How Amway’s Two Founders Cleaned Up.” U.S. News & World Report, 31 October, 1994. Guest, Larry. “Rich DeVos on Road to Recovery with New Heart.” Saturday Evening Post, September/October 1997. Kushma, David. “Amway Officials to Boycott Court,” Detroit Free Press, 30 November 1982. McKinsey, Kitty. “The Two Who Built and Run Amway.” Detroit Free Press, 22 August 1982. Montemurri, Patricia and Larry Werner. “A World Where Dreams Are Sold.” Detroit Free Press, 16 June 1980. “Over $3,000,000,000.” Forbes. 14 October 1996. Spolar, Christine. “Polish Film Ignites Debate.”Washington Post, 19 July 1998.
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DeVos is a major contributor to the Republican Party. During the 1980s he was appointed to a national commission on AIDS by President Reagan. In 1994, he donated $2.5 million, and offered to pay for the televi-
Werner and Montemurri. “The 2 Big Men Behind an Even Bigger Company.” Detroit Free Press, 17 June 1980.
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Walt Disney (1901-1966) The Walt Disney Company
Overview Walt Disney was one of the great pioneers of filmmaking and the creator of several classic films, most notably his feature-length animated films such as Snow White and the Seven Dwarfs and Pinocchio. Disney, who grew up almost without a childhood, found a way to amuse himself as an adult by making cartoons and filling them with characters like Mickey Mouse and Donald Duck. Creator of cartoons, live-action movies, theme parks, and television programs for the whole family, Disney introduced wholesome family entertainment on a world scale, and was one of the major entertainment forces of the twentieth century.
Personal Life Walter Elias Disney, known throughout most of his life as Walt Disney, was born on December 5, 1901, in Chicago, Illinois. He had three older brothers and a younger sister. He and one of his older brothers remained especially close throughout Disney’s lifetime and pursued the same business together. Disney’s parents, Elias and Flora Disney, came from farming backgrounds, Elias from Canada and Flora from Ohio. Walt’s father was a strong influence on the entire family. A stern religious fundamentalist, he readily disciplined his children with his belt. He also denied the children toys, games, and sporting equipment associated with childhood, and this experience may have had some impact on Disney’s later passion for the entertainment of children.
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Growing up in the Disney family was further complicated by the father’s pro-union activism and his political support of the socialist presidential candidate, Eugene Debs, as well as his tendency to change jobs frequently. The family was forced to move to both rural and urban areas all over the Midwest, from Chicago to Marceline, Missouri, to Kansas City, Missouri, and back to Chicago. Disney’s father worked in farming, railway shops, carpentry and contracting work, and newspaper distribution. The family was always on the verge of financial collapse, and everyone in the family who could do some kind of work, like deliver newspapers, did. Disney, according to his brother and lifelong business partner Roy, always enjoyed country life. He loved the animals he encountered, some of which may have inspired him to create cartoon animals in his later career in filmmaking. Disney had a difficult time gaining an education because of his family’s constant moving and his need to work to help support the family. When he was 16, though, he was able to join an art class at the Chicago Academy and Fine Arts, where he developed his modest drawing skills. Disney dropped out of high school at age 17 to serve in World War I. He had tried to follow his brother Roy into the Navy but was rejected because he was underage. He was accepted as an ambulance driver for the Red Cross after altering the birthdate on his application. He served in France for a short time and returned to the United States in 1919. After returning from the war, he moved on his own to Kansas City, Missouri, where he worked a variety of jobs as a commercial artist and cartoonist. Disney met Lillian Bounds, one of the employees in his first cartoon-film studio in the early 1920s, and they married on July 13, 1925. The marriage lasted a lifetime, and they produced two daughters. Disney was known as a perfectionist and a demanding man. Some people saw him as self-centered, and he seemed often baffled when people disagreed with him. He was described by friends and coworkers as a driven man, even “a workaholic.” Disney’s personal life was filled with paradoxes. He smoked constantly, yet seemed to dislike this bad habit in others. Politically, he was the total opposite of his father. Disney joined the Republican Party in California and remained a firm political conservative. Though he loved country life, he spent most of his life in cities. A complex man, he suffered two nervous breakdowns in his life, one at age 30, and another a decade later, after half the cartoonists of his company went out on strike against him in a dispute about his labor practices. By 1960, Disney had become a wealthy man, despite many ups and downs in his career. Just as he neared the pinnacle of his career, after having won five Oscars for his production of the movie Mary Poppins, he learned that his lifetime of cigarette smoking was to have consequences. He had surgery for lung cancer in 1966. Though he appeared to be recovering, he had a relapse and died on December 15, 1966.
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Walt Disney.
(The Library of Congress.)
Disney received more than 700 awards for his creative achievements, including an honorary Academy Award in 1939, four Academy Awards in 1954, and the Presidential Medal of Freedom, awarded to him by President Lyndon B. Johnson in 1965. He was also honored with the Freedom Foundation Award later that same year.
Career Details By 1922, Disney had set up his first small cartoonproduction company in Kansas City with Ub Iwerks, whose drawing ability and technical inventiveness were prime factors in Disney’s eventual success. Their business soon failed, though, and Disney took a job with an ad service that made cartoon advertisements to be shown between movies at the local theater. Disney gained a basic understanding of the medium and, anxious to get back out on his own, moved to Hollywood, California, in 1923 and started a business with his brother Roy. Out of his “garage” operation there, Disney filmed a live performance with cartoon figures from Alice in Wonderland. He expanded on this idea with the creation of a series called Alice in Cartoonland. He produced 56 of these cartoons in three years and in 1927 returned to a straight cartoon format with his Oswald the Rabbit series, producing 26 of these cartoons in less than two years. By about 1927, Disney began looking for a new approach to his cartoons and a new character. He came up
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students, using state-of-the-art technology, who made possible the first feature-length cartoon, Snow White and the Seven Dwarfs. Other costly animated features followed, including Pinocchio and Bambi.
Chronology: Walt Disney 1901: Born. 1923: Produced his first cartoon series, “Alice in Cartoonland.” 1928: Created Mickey Mouse. 1937: Produced first great critical and financial success, Snow White and Seven Dwarfs. 1941: Began making training and instructional films for the armed forces. 1954: Appearance of the television show, Disneyland. 1954: Received four Academy Awards. 1955: Opened Disneyland theme park. 1966: Died.
with a mouse character called Mortimer, but his wife Lilly thought the name was too stiff and convinced Disney to go with Mickey instead. Mickey Mouse came to life in 1928, first as a pilot, then as an adventurer, a sort of pirate-character. Late in 1928, after seeing the first sound movie, The Jazz Singer, Disney decided to make the first all-sound, talking-and-music cartoon, with Mickey Mouse starring as “Steamboat Willie.” By 1936, eight years later, critics and fans alike agreed that Mickey Mouse was the most recognized figure in the world. Songs were written about him. Watches had his face on them. He could be found everywhere. Disney was called “a genius.” During this time, Disney studios launched other successful cartoon characters, including Donald Duck and Pluto. Although he had stopped actually drawing the cartoons himself by 1927, and relied on a staff of animators to implement his ideas, Disney himself was the voice of Mickey Mouse in all the cartoons from 1928 to 1946. Disney’s cartoons, both short and full-length features, won many awards. During the 1930s, the Disney cartoons were a phenomenon of worldwide success. This success led to the establishment of immensely profitable, Disney-controlled, sidelines in advertising, publishing, and franchised goods, which helped shape popular tastes for nearly 40 years. Disney expanded his business rapidly, creating new studios and a training school for animators. It was these
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In the 1940s, despite his many successes, Disney produced a series of financial “flops,” including a film now regarded as a classic, the animated feature Fantasia. Fantasia did poorly at the box office, and Disney was devastated. Then half his artists went on strike against him, protesting his dictatorial style. Some say that if it were not for a government contract he obtained to produce service-related training films, Disney might have gone bankrupt by the end of World War II. Luckily, he was able to reexamine his studio operations and pursue other directions successfully. During the 1950s he made a series of live-action feature movies, such as Treasure Island, and his favorite, So Dear To My Heart. With the advent of Seal Island, Disney moved into wildlife films, and expanded production of live-action pictures, which led to many other family films. His elaborate production of Mary Poppins, which won five Academy Awards two years before Disney’s death, was one example of a successful family film that used occasional animation and plenty of music. In 1954, Disney also began to do something revolutionary for the time: he began to produce for television, which had been the traditional “enemy” of the movie business. During the 1950s, Disney joined with American Broadcasting Company TV productions and made a fortune producing Davy Crockett and The Mickey Mouse Club for television exclusively. By the time of his death, Disney had more than 280 television shows to his name. Disney also began to develop his famous Disneyland theme parks, the first opening in 1957 in Anaheim, California. Disney World, in Orlando, Florida, was not completed until after his death, in 1971. Disney’s vision was to interconnect all his many business ventures so that one would help the other; in other words, seeing his work on TV would cause people to want to go to Disneyland, and going to Disneyland would cause people to want to see family-oriented Disney movies. Disney’s dream of creating a city of the future was realized in 1982 with the opening of EPCOT, which stands for Experimental Prototype Community of Tomorrow, a real-life community of the future. Disney theme parks have continued to expand with the opening of Disney-MGM Studios and Animal Kingdom. By the 1960s, Disney had created a diversified empire, founded on the animal icons, like Mickey Mouse, that had first brought him such fame. The Disney empire is noted for its traditional family values, wholesome middle-class productions, and high level of quality control. Today, the Walt Disney Company, with the creation of Touchstone Pictures, has branched out to a broader range of films. Disney also owns Hollywood Records, and even has its own cruise line. It is a multibillion-dollar enterprise with undertakings all over the world.
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Social and Economic Impact The impact of Walt Disney’s career has been felt throughout much of the twentieth century. His creation of wholesome cartoon characters and first-rate animation made Disney what British cartoonist David Low called “the most significant figure in graphic arts since Leonardo.” After Disney’s death, his classic films continue to be shown, the TV Disney Channel broadcasts his work to TV audiences 24 hours a day, and his theme parks in America and elsewhere (including Tokyo and Paris) sell his wholesome vision of America as a mecca. Disney’s impact on childhood entertainment is almost immeasurably great and, at the time of his death, Disney’s business empire was estimated to be worth over $100 million a year. In addition, Disney created a new university, the California Institute of the Arts. Disney once said, “If I can help provide a place to develop the talent of the future, I think I will have accomplished something.” “Walt Disney” continues to be a household name in American homes.
Anderson, Harry. “Staking Their Names on It.” Los Angeles Times, 2 October, 1989. Apple, Max. “Uncle Walt.” Esquire, December 1983. Byers, Paula and Suzanne Bourgoin, eds.Encyclopedia of World Biography. Detroit: Gale Research, 1997. Downs, Robert B., John T. Flanagan, and Harold W. Scott. More Memorable Americans, 1750-1950. Littleton, CO: Libraries Unlimited, 1985. Finch, Christopher. The Art of Walt Disney. New York: Harry N. Abrams, 1973. Garraty, John A. and Mark C. Carnes, eds. Dictionary of American Biography. New York: Charles Scribner’s Sons, 1988. Maltin, Leonard. The Disney Films. New York: Bonanza Books, 1973. Mosely, Leonard. Disney’s World. New York: Stein and Day, 1985. Munsey, Cecil. Disneyana: Walt Disney Collectibles. New York: Hawthorn Books, 1974. Schickel, Richard. The Disney Version. New York: Simon and Schuster, 1985.
Sources of Information
Shaw, John Mackay. Childhood in Poetry. Detroit: Gale Research, 1980.
Contact at: The Walt Disney Company 500 S. Buena Vista St. Burbank, CA 91521 Business Phone: (818)560-1000 URL: http://www.disney.com
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Who Was Who in America. Chicago: Marquis Who’s Who, 1968.
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Donald Douglas (1892-1981) Douglas Aircraft
Overview Donald W. Douglas, Sr. was a designer and entrepreneur who founded what became the Douglas Aircraft Company in 1920. His innovative aircraft designs revolutionized civilian and military aviation. Among his most successful designs was the DC-3, which became the standard for civilian and military air transportation around the world and remains in service more than 60 years after its first flight in 1935. Douglas merged his company with the McDonnell Company in 1967, forming McDonnell Douglas. In 1996, McDonnell Douglas itself was merged with the Boeing Company, creating the world’s largest producer of civilian aircraft.
Personal Life Donald W. Douglas, Sr. was born in Brooklyn, New York in 1892, the second son of William Douglas, a banker, and Dorothy Hagenlocker, a German immigrant. At an early age, he acquired a love for the sea and sailing that would later influence his work as an aircraft engineer. An energetic and bright child, Douglas was once sent home by a grade school teacher for correcting her pronunciation. Later, at Trinity Chapel School, Douglas developed his love for words as the editor of the school magazine and won a number of prizes, including a fivedollar gold piece for his essay on Trinity Church. At age 14, Douglas wrote and published a book of poetry, printing copies on a press in his home. But Douglas soon found another source of inspiration. In 1908, Wilbur and Orville Wright announced the
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trial demonstration of their new biplane, the Flyer, at Fort Meyer, Virginia. A 16-year-old Douglas persuaded his mother to accompany him to Virginia to witness the trials, an experience that would change him forever. In 1909, Douglas was appointed to the U.S. Naval Academy, following the lead of his older brother, Harold. He spent much of his spare time building rubber bandpowered airplane Models and he also tried, unsuccessfully, to build a rocket-powered model. The resulting smoke caused a panic when he launched it from the window of his room. In 1912, he left the Naval Academy because, as a Douglas Aircraft Company release would say years later, he could not “interest his officers in the airplane as a naval weapon.” He immediately transferred to the Massachusetts Institute of Technology (MIT). Finishing after only two years, he became the schools’ first aeronautical engineering graduate. In later years, Douglas served as a member of the 1932 U.S. Olympic Yachting Crew and won the silver medal in sailing (six-meter class). He also garnered a series of prestigious awards for his aviation designs, including the Guggenheim Gold Medal and the Wright Brothers Trophy. Douglas was married twice and had four sons and one daughter.
Chronology: Donald Douglas 1892: Born. 1914: Graduated from MIT after two years. 1920: Founded Davis-Douglas Company. 1924: Douglas World Cruisers become first planes to circle the globe. 1928: Established Douglas Aircraft Company. 1932: Designed DC-2 for TWA. 1935: DC-3 debuted. 1958: DC-8 became company’s first jet-engine passenger plane. 1967: Merger created McDonnell Douglas. 1981: Died.
Career Details Douglas stayed at MIT for an additional year after graduating to work as a research assistant on the first wind tunnel, and also worked briefly for the Connecticut Aircraft Company on the Navy’s first dirigible. In 1915, aviation pioneer Glenn Martin asked the “boy engineer” to join his company, the Glenn L. Martin Company of Los Angeles. Already on staff was a young pilot, William Boeing, who in later years would become the head of Douglas’ chief rival, the Boeing Company. At Martin, Douglas designed his first airplane, a two-seat hydroplane later purchased by the U.S. Army Signal Corps. While Douglas became the company’s chief engineer, he left in 1916 for a civilian position as the chief aeronautical engineer with the Signal Corps. The Signal Corps had acquired several British and French airplanes for study but the Aircraft Production Board wanted only the automobile industry to construct airplanes, not the fledgling aircraft companies Douglas had worked for. An irate Douglas secretly copied all of the airplanes’ designs, gave them to American designers, and left the Signal Corps to return to Martin’s Cleveland plant in 1917, eventually becoming vice president of the company.
structions completely concealed in the teardrop fuselage.” But Douglas had only $600 to work with and he knew he would need capital if he was going to realize his dream. He quickly found it in David Davis, a wealthy sportsman who wanted to become the first person to fly nonstop across the United States. Douglas and Davis formed a partnership to reach their goals, and later that year, the Davis-Douglas Company set up operations in the back room of a Los Angeles barbershop. It was there that Douglas designed the Cloudster, which was to carry Davis across the country and into the record books, or so they thought. The Cloudster was grounded by engine trouble in Texas, but the plane set many new design standards. It was the first aircraft to carry a useful payload greater than its own weight and its streamlined design, efficient instrument panel, and high-power engine also earned national recognition. Douglas convinced the Navy, which years before had shown little interest in Naval Academy cadet Douglas’ aviation interests, that the Cloudster could be adapted as a torpedo bomber. The Navy ordered three copies for $120,000.
By 1920, Douglas was ready to strike out on his own. A 1941 profile of Douglas in the New York Herald captured his vision: “His dream, at the time, was a completely streamlined plane with engines and other ob-
Davis soon dropped out of the company and Douglas turned to Los Angeles Times publisher Harry Chandler, among others, for funds to produce the redesigned Cloudster. The planes were constructed in a former motion picture studio in Santa Monica, California. In 1923, the government placed an order for a plane capable of flying around the world and on April 6, 1924, four Dou-
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glas-designed World Cruisers set out from Seattle, Washington. Two eventually returned, becoming the first aircrafts to circle the globe. This stunning success produced a slew of orders, the first from the government of Norway and a year later, from the U.S. Post Office Department for its new air-mail delivery service. In 1928, on the eve of the Great Depression, the company was reorganized into the Douglas Aircraft Company. The Great Depression posed a number of financial difficulties for American corporations, but Douglas Aircraft survived primarily through its work on military contracts. However, that would change in 1932 when the Boeing Company, a Douglas Aircraft rival, built the world’s first passenger aircraft, the Model 247. The plane was the fastest of its time, and Boeing built 60 for its subsidiary, United Airlines. But Boeing would not allow other airlines to purchase the Model 247 which prompted Transcontinental & Western Airlines (TWA) to ask Douglas to design a bigger, faster version of the Model 247. The result was the world’s most advanced airliner, a twin-engine, all-metal monoplane (singlewing) called the DC-2. The DC-2 was an instant success. TWA ordered 25 copies, but also asked Douglas to design a larger version. Just as the DC-2 had supplanted Boeing’s Model 247, the newly minted DC-3 promptly overshadowed its predecessor. This twin-engine airliner could carry 21 passengers 1,480 miles at 195 miles per hour, and had sleeping berths for cross-country flights. Its wider body and larger wings lowered its operating costs for carriers and it quickly became the mainstay of military and civilian air transportation around the world. Douglas would make more than 10,000 of them by the end of its production run in 1945. A much larger four-engine redesign, the DC4, was produced in 1938. By the beginning of World War II, Douglas airplanes carried 95 percent of the nation’s domestic passenger traffic. As war approached, Douglas began designing fighter-bombers and other attack aircraft for friendly nations, and later, for the United States. Douglas’ SBD (Dauntless) dive bombers were credited with the destruction of four Japanese aircraft carriers at the Battle of Midway in 1942. During the War, Douglas organized the Aircraft War Production Council and served as its president. Peace brought new challenges. Douglas Aircraft reentered the civilian aviation market with its new, propeller-driven DC-6 and DC-7 airliners. In 1950, Selig Altschul wrote in Aviation Week that Douglas Aircraft had “the strongest financial position of any major aircraft builder.” The advantage was short-lived, however, this was the jet age, and Douglas had to scramble to catch up with his competitors’ new technology. The company launched the DC-8 in 1958, and soon after the popular DC-9, but it was too little, too late to keep pace with the competition. Douglas continued to construct a number of military and transport aircraft, and even designed the
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Thor guided missile in 1957, which was redesigned years later to put satellites into orbit. Douglas handed over the reins of his company to his son, Donald Jr., in 1957 but Douglas Aircraft never completely recovered from its late and costly entry into the jet aircraft market. In 1967, creditors forced Douglas Aircraft to merge with the rival McDonnell Aircraft Corporation. Douglas remained on the board of directors of the new McDonnell Douglas Corporation, but his days as an active company leader and designer were over. Douglas died of cancer in Palm Springs, California in 1981.
Social and Economic Impact Douglas had a profound impact on the aviation industry. Not only did his aircraft become the first to circle the globe in 1924, but during World War II, his company built one sixth of the airplanes manufactured in the United States. His DC-3 became the workhorse of air transportation around the world, so much so that 60 years after its maiden flight, more than 2,000 DC-3s are still in service. Part of his lasting fame comes from his belief in the “streamlined” design for aircraft. In the early years of flight, airplane engines, wing supports, landing gear, and pilots, were exposed to the open air. Douglas wanted all of these elements concealed within the fuselage of the craft. That way, the planes would not only be more efficient in flight, using less energy to fly longer and faster than before, but would be pleasing to the eye. Douglas’ designs not only achieved these goals, but paved the way for larger and more powerful aircraft. Douglas also helped launch the careers of other noted aviation engineers, including Jack Northrup and James Kindelberger, who would later head their own aircraft manufacturing companies. But Douglas wasn’t prepared for the rapid change from propeller-driven aircraft to jet- powered planes. The DC-8 passenger airliner, while produced in various versions until 1972 and used as a cargo transport as late as 1995, was a late entry into the market and its development costs were never fully recovered. Douglas often misread the market for aircraft, and while his planes were reliable, sturdy craft, he was unprepared for the leap into jet propulsion. In 1990, his youngest son, James, was laid off from McDonnell Douglas, marking the end of the Douglas family’s involvement with aircraft design and manufacture.
Sources of Information Bibliography Benes, James J. “The Roaring ‘20s and Turbulent ‘30s.” American Machinist, August 1996.
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“Boeing & Douglas: A History of Customer Service.” Seattle, WA: the Boeing Corporation, 1998. Available from http//:www. boeing.com. “Common Heritage - The Early Years.” Seattle, WA: The Boeing Corporation, 1997. Available from http//:www.boeing.com.
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“Donald W. Douglas.”Notable Twentieth Century Scientists. Detroit: Gale Research, 1995. “McDonnell Douglas History - Commercial Aircraft.” Seattle, WA: The Boeing Corporation, 1997. Available from http//:www. boeing.com.
“Donald Wills Douglas.”Current Biography:Who’s News and Why. New York: H. W. Wilson Company, 1950.
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Charles Dow (1851-1902) Dow Jones & Company, Inc.
Overview Charles Henry Dow, cofounder of Dow Jones & Company, Inc. and the first editor of The Wall Street Journal, was an American journalist and financial analyst. He created an index of a dozen leading stocks, mostly railroads, that eventually became the Dow-Jones Averages, the most popular and widely-read of all stock measurements. The Dow Theory, an analysis of stock market behavior that remains valid today, was derived from Dow’s essays in The Wall Street Journal at the turn of the century.
Personal Life Charles Henry Dow was born on November 6, 1851, on his family’s farm in Sterling, Connecticut, the youngest of three sons. His father died when he was only six years old and his mother raised him. Dow’s only formal education took place in a one-room village schoolhouse. Dow left home at the age of 16 in 1867 to work as an apprentice printer and reporter and begin a newspaper career that took him to Springfield, Massachusetts; Providence, Rhode Island; and finally, to New York City in 1879. In 1881, Dow married Lucy M. Russell and her daughter by a previous marriage became Dow’s stepdaughter. A tall, stooping man, Dow was quiet, studious, and hard-working. He was renowned for his mild manner, measured speech, and personal integrity. He died at the age of 51 at his Brooklyn home on December 4, 1902.
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Career Details Dow said he had tried some 20 jobs before landing his first real reporting position at the Springfield, Massachusetts Springfield Daily Republican, at the age of 21. He covered the city beat for the newspaper and quickly advanced to the position of assistant editor under the watchful eye of legendary editor Samuel Bowles III. The Springfield Daily Republican was the most popular provincial newspaper in the country and Bowles was the most respected editor of his time. His tutelage and advice helped many young journalists, including Dow, secure positions at other leading metropolitan publications. In 1875, Dow moved to Providence, Rhode Island where he first became night editor of the Press and Star and then joined the Providence Journal in 1876. At the Providence Journal, he distinguished himself as a writer of significant historical articles such as a history of steamboat transportation that was later reprinted as a book. Another well-received article, also made into a book, was a history of the city of Newport, Rhode Island. Dow’s well-written, carefully-researched articles for the Providence Journal led to an 1878 invitation to join a group of eastern financiers on their way to the boom town of Leadville, Colorado to assess possible investments in silver mines. A huge silver strike in the area had brought thousands of speculators, miners, and gamblers to the area, and Dow wrote a series of articles from Leadville called the “Leadville Letters.” These vividly detailed articles included stories, not only on the mining industry and mining economics but on the fast life in the wide-open mining town as well. On his return from the West in 1880, Dow decided to relocate to New York City. He recognized that his strength as a reporter lay in his ability to research and analyze economic issues, and so he began to look for opportunities in financial journalism. After first taking a job as a business reporter for the New York Mail and Express, he left this position for a job as an editor with the Kiernan News Agency, a firm that wrote and delivered brief news bulletins to banks and brokerage houses as well as individuals. A former colleague and acquaintance in Providence, Edward D. Jones, also joined the Kiernan News Agency as a reporter. In November of 1882, Dow and Jones left the Kiernan News Agency and formed Dow Jones & Company, Inc. as a competitor to the Kiernan News Agency. They were a well-balanced team. Jones was a first-rate financial reporter with excellent sources who could explain technical details succinctly and accurately. Dow’s forte was thoughtful analysis of companies and industries and market trends. They set up a news-bulletin service at 15 Wall Street (next door to the New York Stock Exchange) in a dreary room behind a soda-water establishment. Throughout the day, their boy messengers rushed “flimsies” or “slips”
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Charles Henry Dow.
(UPI/Corbis-Bettmann.)
containing business news and analyses reported and written by the two named partners and silent partner Charles M. Bergstresser to subscribers in banks and brokerage houses throughout the financial district. The flimsies were hand-written in duplicate on thin sheets of paper with an agate stylus. At the end of the firm’s first year in 1883, the partners introduced the Customer’s Afternoon News Letter. This one page report, also handwritten with a stylus on small, thin sheets, summarized the day’s news and financial activities and occasionally included a brief analysis of the stock market or a financial forecast, usually written by Dow himself. This reporting of the financial average for a particular day came to be known later as the Dow-Jones average. By 1884, a small cylinder press had replaced the stylus and both the messenger service and the afternoon publication began to expand. The Customer’s Afternoon News Letter, now printed on a larger press, had grown to two pages by 1885 and had become the precursor to The Wall Street Journal. On July 3, 1884 Dow Jones & Company, Inc. began to publish the average closing price of representative active stocks, including ten railroad and two industrials. The list was determined by Dow from his research to be reliably indicative of market trends. The first issue of The Wall Street Journal appeared on the afternoon of July 8, 1889. The new daily afternoon paper was published by Dow Jones & Company,
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later called the Dow Theory. Two decades after his death, a book containing Dow’s writings was published and, since then, countless newspaper articles, investment letters, stock commentaries and books have continued to reinterpret Dow’s theories in light of modern stock market conditions.
Chronology: Charles Dow 1851: Born. 1867: Left home to begin career. 1872: Began working at the Daily Republican. 1875: Became night editor at Press and Star. 1882: Cofounded Dow Jones & Company, Inc. 1883: Published Customer’s Afternoon News Letter. 1889: Published The Wall Street Journal. 1896: Published first Dow-Jones industrial average. 1902: Sold Dow Jones & Company, Inc. 1902: Died.
Inc. and Dow’s name was on the masthead as editor. The price was two cents a copy, but reduced rates were offered to bankers and brokers, and the paper was delivered free to subscribers to the company’s news bulletin service. Correspondents from London, Boston, Philadelphia, and Chicago regularly wired news stories by telegraph from those cities. An office in Washington, D.C. for The Wall Street Journal was established in 1897. In 1898, Dow Jones & Company, Inc. would publish a morning edition of the The Wall Street Journal. The circulation of The Wall Street Journal was small at first, but the news bulletin service, which had grown to some 1,500 copies daily, was grossing about $300,000 a year by 1899. The small staff was able to get out both the daily newspaper and the news bulletins because of their strong work ethic. The three partners often met at Dow’s home until late at night after evening assignments, and all worked 12-hour days. Dow had immeasurable amounts of energy. He not only managed the editorial side of the newspaper but also the business side of Dow, Jones and Company, Inc. By 1900, The Wall Street Journal was clearly headed for success. Its circulation had reached 10,000 in 1899 for both editions of the newspaper, and Dow sought to expand its readership from Wall Street insiders to the general public. On April 21, 1899, he introduced a regular column called “Review and Outlook,” in which he attempted to educate readers on the stock and bond markets. These essays are today considered stock market classics and form the basis for what was
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Dow wrote clearly and intelligibly to the uninitiated about complex subjects. For example, he compared the market dynamic to a tug-of-war in which the side with the most investors pulled the market either up or down. In another essay urging patience in holding stocks, he explained that investors had to expect to wait before making a profit just as a farmer does before harvesting corn from seed. In addition to running and managing Dow, Jones and Company, Inc., from 1885 to 1891, Dow was also a partner at Goodbody, Glynn and Dow. He was also a member of the New York Stock Exchange where he gained experience handling stock orders on the trade floor. Dow continued to write his influential essays until 1902 although, after 1900, he was in ill health. Jones had left the firm in 1900 to pursue other interests and on March 13, 1902, Dow resigned as director and president of Dow, Jones and Company, Inc. As the company’s majority owner following Jones’ departure, Dow arranged for the sale of Dow Jones & Company, Inc. to Clarence W. Barron, whose descendants continue to have a controlling interest in it. The sale of Dow Jones & Company, Inc. was finalized only two months before Dow’s death.
Social and Economic Impact The Dow-Jones average has remained as one of the most important, useful, and trusted indicators of stock market conditions throughout the world. Today, the same methods used by Dow around the turn of the century are put to use daily in order to indicate financial trends. Dow Jones & Company, Inc. published its first DowJones industrial average on May 26, 1896 which has been kept up to date every day since by The Wall Street Journal. On that day, the market closed at 41 based on Dow’s method, which was based on the stocks of 12 well-known and successful smokestack firms. Dow added up the prices for these companies stocks and then divided that number by twelve. Today, the market regularly exceeds a level of 8,000 based on the same methods used at the turn of the century. Only now, the stock prices are divided by 0.33839549 because of the sheer volume of stocks traded. There are those that do not prefer Dow’s method and think that it is too slow for the modern market place. These detractors feel that Dow’s theories are very useful in analyzing the past but less useful in predicting the fu-
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ture. They suggest that other methods, such as the Standard and Poor’s 500 Index (S&P), are a better indicator of market activity. The S&P started in 1923 and measured each stock differently according to its market success while Dow’s method measured each stock the same regardless of a particular company’s success or failure. In addition, they feel that Dow’s method does not take into account the large number of stocks traded on the market and would leave an investor reading the wrong signals. Dow’s original method was based on the prices of 30 stocks while today, thousands of stocks are regularly traded on a daily basis. Among the many tributes to Dow that appeared in The Wall Street Journal following his death in 1904, was one from his long-time partner and colleague, Edward D. Jones that quite possibly explains why his influence is still felt so long after his death. Jones said: “(Dow) was a ceaseless searcher for facts and the best way to tell and distribute them. His honesty was rugged, his industry was prodigious, his integrity unsullied, and his home life ideal.”
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Sources of Information Contact at: Dow Jones & Company, Inc. 200 Liberty St. New York, NY 10281 Business Phone: 212-416-2000 URL: http://www.dowjones.com
Bibliography Bishop, George W., Jr. Charles Dow and the Dow Theory. New York: Appleton, Century Crofts, Inc., 1960. Bishop, George W., Jr. Charles H. Dow: Economist. Princeton, NJ: Dow Jones Books, 1967. Dow Jones & Company, Inc. “Charles Henry Dow.” The Dow Jones Averages: The Market’s Measure. 1997. Available from http://djia100.dowjones.com/chDow.html. Scharff, Edward E. Worldly Power: The Making of The Wall Street Journal. New York: Beaufort Books Publishers, 1986. Wendt, Lloyd. The Wall Street Journal: The Story of Dow Jones & the Nation’s Business Newspaper. Chicago: Rand McNally & Co., 1982.
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Éleuthère Irénée du Pont (1771-1834) E.I. du Pont de Nemours and Company
Overview Generations of men and women have contributed to the development of E.I. du Pont de Nemours and Company, which grew from a single gunpowder mill on Brandywine Creek to an international giant. But the company’s start, as well as its heart and soul, are attributable to one man, Éleuthère Irénée du Pont, who was shaped by the revolutionary period of France in the late eighteenth century and came to America as a refugee.
Personal Life Éleuthère Irénée du Pont was born in Paris, France, on June 24, 1771, to Pierre Samuel du Pont and Nicole Charlotte Marie Le Dee. In Greek his names signify the ideals of honor, liberty, and peace. Du Pont’s father was a noble, granted his position after having served the corrupt French throne for many years. His mother died when du Pont was 14 years old. Along with his older brother, Victor, du Pont grew up at Bois-des-Fosses, a family estate 60 miles south of Paris, and was schooled by private tutors. The young du Pont was heavily influenced by the momentous politics of his time. He grew up during the harsh and oppressive political atmosphere of France during the days of Louis XIV and the angry mobs of the revolution, who used the guillotine liberally. His final days in France saw the rise to power of Napoleon Bonaparte. Pierre du Pont was politically active, sharing the title of commander of the National Guard with the Marquis de Lafayette. Du Pont aligned himself politically
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with his father who, along with Lafayette, was a conservative who promoted a constitutional monarchy. A good friend of du Pont’s father, Antoine Lavoisier, was chief of the royal powder works and, in 1788, du Pont started to train with him at Essonnes. This is where he gained the basic knowledge that he would eventually use to establish his own business in America. Lavoisier also taught du Pont about the scientific method and instilled in him a lifelong interest in botany and scientific agriculture. In 1791, at the age of 20, du Pont married Sophie Madeleine Dalmas; the two would eventually have seven children. The same year, Lavoisier lost his directorship of the powder works and du Pont had to leave Essonnes. He went to Paris, where he took charge of the printing house his father had established to promote his political point of view. On August 10, 1792, the du Ponts led a 60-man private guard to defend the king’s palace from an assault by radicals dedicated to ending the monarchy. The success of this action did not change the inevitable, however, and the French revolution saw the king and du Pont’s friend and mentor, Antoine Lavoisier, guillotined. Pierre du Pont also was arrested, but was granted his freedom by Robespierre and escaped the guillotine. Du Pont had been attempting to make a living with the publishing house, but it was wrecked by a mob during the revolution. The newspaper he produced was a revolutionary-theme publication, and the times were still precarious. His father’s new newspaper, L’Historien, supported reviving the monarchy and opposed Napoleon. When Napoleon came to power in a coup, both du Pont and his father were imprisoned. Fortunately, they were released, but only upon pledging to leave France. The du Pont family arrived in Newport, Rhode Island, on December 31, 1800, and it was in the United States that Éleuthère du Pont would thrive. Du Pont had a strong interest in agriculture, was active in the American Colonization Society, and became a director of the Bank of the United States in 1822. He died on October 31, 1834, in Philadelphia. Du Pont was succeeded in his business first by his oldest son, Alfred, and then following Alfred’s death by his second son, Henry.
Career Details Shortly after arriving in America, the du Ponts moved to New York. Du Pont’s father had planned to develop land in western Virginia, but was advised to delay his land investments. His father then started a commission business in New York City, but it was not successful. Éleuthère du Pont then happened upon an idea that was much more profitable. On a hunting trip with Colonel Louis de Toussard, an American military offi-
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Éleuthère Irénée Du Pont.
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cer, du Pont discovered that American gunpowder was not only poor in quality but high in price. They made a study of the powder industry in America and concluded that the construction of a powder mill might be a profitable business, since gunpowder was a much needed commodity. The people settling the American frontier required protection from Indians and wild animals. Settlers hunted for meat and skins, and gunpowder was used to clear land to build homes and roads. Du Pont saw a good market for gunpowder, and in 1801 returned to France for three months to secure financial support and machinery and designs for the manufacture of gunpowder. On July 19, 1802, du Pont purchased land on Brandywine Creek near Wilmington, Delaware, the site of America’s first cotton mill. Naming the plant Eleutherian Mills, in honor of freedom, du Pont set about building his first gunpowder factory. He moved his family close to the plant and persisted in building it as quickly as possible despite hardships, the most major of which was lack of capital. Du Pont was forced to take a partner, Peter Bauduy, an established businessman, in order to obtain enough money to start his business. Thus du Pont supplied the technical knowledge and management skills for the plant, while Bauduy, along with du Pont’s father, supplied the capital. The small mill began processing saltpeter for the government in 1803; in the spring of 1804, the first du Pont gunpowder was sold. Thomas Jefferson, then president, promised du Pont that the government would place orders with him, and du Pont became a principal supplier
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able resource. Saltpeter (a white powder ingredient used to make gun powder) was always thoroughly cleaned in de Pont’s mills, no matter what the state of cleanliness of the material when it arrived. Sulfur was not used unless pure and clear in color.
Chronology: Éleuthère Irénée du Pont 1771: Born. 1791: Began training with Lavoisier at powder works. 1791: Took over father’s printing house in Paris. 1800: Emigrated to America. 1802: Founded his own powder works. 1804: Sold first supply of powder. 1812: Became principal supplier of gunpowder to U.S. government. 1815: Bought out partner. 1834: Died.
of gunpowder to the federal government. He also sold large amounts of supplies to the American Fur Company and to South American countries. In the first year of business, du Pont sold $10,000 worth of powder; by 1807 annual sales were up to $43,000. By 1815, du Pont was able to buy out his partner and run the business on his own. Du Pont, always loyal to his family, was also able to make good on debts incurred by his brother and his father when the businesses they had started in America failed. He also started to diversify; in 1811, du Pont, his brother Victor, and Peter Bauduy bought a woolen mill on the Brandywine River. In addition, du Pont helped establish a cotton mill and a tannery. Du Pont spent 32 years as the president of E.I. du Pont de Nemours and Company at the mills on Brandywine Creek and became one of the most innovative and successful industrialists of his day. Du Pont’s company is still in existence as one of the twentieth-century’s largest international conglomerates.
Social and Economic Impact Following the teachings of his mentor, Antoine Lavoisier, and the scientific method he espoused, du Pont established technical, methodological, and ethical principles to which the company adheres to this day. Du Pont gave careful attention to raw material preparation. He used charcoal made from willow trees, because these trees always grew new branches and thus were a renew-
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Du Pont installed a labor-saving device for kerneling of the powder. He always sought means to improve his methods and the quality of his product, regardless of the state of the economy or the success of the business. One hundred and fifty years before they became buzz words in American business, du Pont was pursuing quality, product, and process improvement. Du Pont also began a trend toward what has become known as vertical integration, knowing that a company’s income can be enlarged through diversification and that by growing the grain for his transport horses on company land, he could increase profits. Du Pont was also a man of exemplary ethics. Influenced by the events of the French revolutionary period in which he was raised, as well as by a devout mother, he lived his personal life by a strict code. He also carried this code of ethics into his business and required the company to act accordingly. In March 1818, for example, his mills were ruined by an explosion that killed 40 men. Even though there were no laws to require it and the business practices of the day did not point this way, du Pont took it upon himself to compensate the families of the victims. He pensioned the widows, gave them homes, and took responsibility for the education and medical care of the surviving children. This action and the rebuilding of the plant required additional borrowing by the company, but du Pont’s moral consciousness was his priority. This same sense of morality fostered his belief that quality was a matter of pride, and there would be no compromises made on quality. Du Pont’s impact was much more than the creation of a family business. The traditions espoused by his code of conduct and business honor carry through to this day. His guiding principle was that privilege was inextricably bound to duty. His sense of obligation to his customers was quite different from the norms of business in his time. Many times, he risked his business and his personal fortunes in order to fulfill a pledge or an obligation. His moral consciousness and technological ingenuity were precursors to business precepts of this century. The legacy of du Pont includes a commitment to technological innovations and increased productivity, never at the expense of quality products. Du Pont’s business methods and code, which originated in the turbulence of the French revolution and were honed in the Brandywine Mills, still guide the du Pont Company today. The du Pont family empire spans the globe and has holdings in real estate, arms and defense industries, computers, communications, media, utilities, oil, food industries, banks, aviation, chemicals, rubber, insurance, and many other businesses.
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Du Pont Wrote the Book on Painting. Automotive News, 29 April 1996.
Sources of Information Contact at: E.I. du Pont de Nemours and Company 1007 Market St. Wilmington, DE 19898 Business Phone: (302)774-1000 URL: http://www.dupont.com
Encyclopedia of World Biography. Detroit: Gale Research, 1997.
Bibliography
Preston, Wheeler. American Biographies. Reprint: Detroit: Gale Research, 1974.
Garraty, John A., and Jerome L. Sternstein, eds. Encyclopedia of American Biography, 2nd ed. New York: HarperCollins, 1996. Ingham, John N. Biographical Dictionary of American Business Leaders. Westport, CT: Greenwood Press, 1983.
Dorian, Max. The Du Ponts: From Gunpowder to Nylon. Boston: Little, Brown, 1961.
Who Was Who in America. Chicago: Marquis Who’s Who, 1967.
Dujarric de la Riviére, René. E.I. Du Pont de Nemours. Paris: Librairie des Champs élysées, 1954.
Winkler, John K. The Du Pont Dynasty. New York: Reynal and Hitchcock, 1935.
Du Pont: The Autobiography of an American Enterprise. Wilmington, DE: E.I. Du Pont de Nemours and Co., 1952.
Ziog, Gerald Colby. Du Pont: Behind the Nylon Curtain. Englewood Cliffs, NJ: Prentice Hall, 1974.
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Robert Earl (1952-) Planet Hollywood
Overview Robert Earl initially was responsible for expanding and promoting the Hard Rock Café into international fame. He then moved on to become the founder of Planet Hollywood and many other themed restaurants around the world. From these very trendy businesses, Earl has created a multibillion-dollar enterprise.
Personal Life Robert Ian Earl was born in 1952 and raised in London, England. His father, Robert Earl, Sr., was a British pop singer, comparable (according to Earl) to Tony Bennett. Earl spent much of his childhood on the road with his father and was infatuated with show business from the start. But, as Earl told Nation’s Restaurant News, he “had zero talent,” so he decided that the next best thing to being a performer would be to manage a club or restaurant. Earl graduated from the University of Surrey in 1973 with honors in restaurant and hotel management. While at Surrey, Earl gained his first taste of his future business. The father of one of his friends was organizing a rock festival and, because Earl was studying food preparation, he gave Earl the job of running the concessions. Earl bused 400 fellow students to the site of the festival and paid them to cook for the 250,000 people who showed up during the three-day concert. Earl is married and has two daughters. He and his wife live in a 25,000-square-foot mansion in an exclusive neighborhood in Orlando, Florida.
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Robert Earl presents artist Yoko Ono with a check for money raised from limited edition Hard Rock t-shirt sales with drawings by the late John Lennon. The profits were donated to the Spirit Foundation, a non-profit organization helping to save the planet. (AP Photo/John Bellisimo.)
Career Details Earl ventured into his first business with the opening of The Beefeater, a London dinner show, in 1972. During the 1970s he also founded the Talk of London, Shakespeare’s Tavern, and the Cockney Club. Earl’s target audience was tourists. As he told The Wall Street Journal, “The thought of 50 Americans pulling up in a coach repulsed the average English restaurateur,” but Earl created places they could feel welcome and have a good time, and it paid off.
portant moves in the position was the acquisition of Hard Rock International PLC, a company with rights to all of the Hard Rock Cafés east of the Mississippi (Peter Morton owns the Hard Rocks west of the Mississippi.). The Hard Rock Café originated in London as a distinctly American restaurant with a rock and roll theme. Musicians donated items such as guitars and gold records, and the concept of the Hard Rock as a memorabilia restaurant was established. In addition to food, the Hard Rocks sell souvenirs such as T-shirts, jackets, sunglasses, and golf balls.
In the late 1970s, the Walt Disney Company approached Earl with the idea of taking his theme-dinner idea to its EPCOT Center. Earl declined Disney’s offer but was impressed with Orlando and the potential it could have for his business. He moved to Orlando in 1983, first opening a Shakespeare’s and then other banquet halls, such as Mardi Gras and Wild Bill’s. Earl said in Restaurant News, “I chose to relocate to the U.S. because I found the market better. I found the staff and quality of service here way ahead of Europe. It was inspirational.”
Earl’s new employer, Pleasurama, was subsequently bought by Mecca Leisure PLC; this was followed by a buy-out by The Rank Organization. Earl remained in charge of U.S. operations throughout both acquisitions, and in 1989 he became chief executive of Hard Rock International. By 1993, Earl had increased the number of Hard Rock restaurants from seven to 22 and had raised profits twentyfold. Earl’s real success, though, was in public relations. He convinced rock stars to make appearances at the restaurants and hosted fund-raisers for music-industry charities, giving the Hard Rock Cafés an even more popular image and following.
Four years after moving to Orlando, Earl sold his group of English restaurants, which by then numbered 70, to a company called Pleasurama PLC for $103 million. He became Pleasurama’s chief executive and chief operating officer in the United States. One of his first and most im-
In 1989, movie producer Keith Barish approached Earl about creating a café that would be full of movie memorabilia and would attract movie stars, as well as people hoping to see them. Earl and Barish decided to bring some celebrities in as investors as a way to get the
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Chronology: Robert Earl 1952: Born. 1972: Opened his first dinner theater, The Beefeater. 1983: Moved to Orlando and started new group of restaurants. 1987: Sold English group of restaurants. 1988: Bought into the Hard Rock Café. 1989: Became chief executive of Hard Rock International. 1991: Opened first Planet Hollywood in New York. 1995: Opened first All Star Café.
venture off the ground. They managed to recruit Arnold Schwarzenegger, Bruce Willis, Demi Moore, and Sylvester Stallone, and Planet Hollywood was born. The first Planet Hollywood opened in New York in 1991 with elaborate fanfare and many movie stars in attendance. It was an immediate success. Like the Hard Rock Cafés, Planet Hollywood sells souvenirs, including everything from $3.50 pins to $325 leather jackets. In fact, apparel sales account for about one-third of the annual sales at the average Planet Hollywood restaurant. The cafés are filled with a large variety of movie memorabilia, including the bus from the movie Speed, the rocking chair from Psycho, and the uniform Tom Cruise wore in Top Gun. The Wall Street Journal called the restaurants “equal parts theme park and eatery.” With locations around the world (including London, Hong Kong, and Maui, as well as many other cities), Planet Hollywood continues to enjoy unprecedented success. Earl’s next project was the opening, in 1995, of the Official All Star Café, a sports-themed restaurant that is billed as the most spectacular sports bar in the universe. He recruited sports stars such as Joe Montana and Shaquille O’Neal as attention-catching investors.
Sources of Information Contact at: Planet Hollywood 8669 Commodity Cir. Orlando, FL 32819 Business Phone: (407)363-7827 URL: http://www.planethollywood.com
Bibliography Ball, Aimee Lee. “Mr. Universe.” New York, 15 July 1991. Greenberg, Herb. “Is this Company Really Worth $2.5 Billion? Earth to Planet Hollywood.” Fortune, 23 December 1996. Hays, Jack. “Robert Earl: The King of Planet Hollywood Promises the Stars-And He Delivers.” Nation’s Restaurant News, 9 October 1995. Jefferson, David J. “At Planet Hollywood, the Star of the Show Isn’t Stallone, It’s Earl.” Wall Street Journal, 21 June 1994.
Social and Economic Impact When Earl told Fortune in 1996, “I intend to build an empire,” he already had a good start. The Hard Rock Café in Orlando made $14.5 million in its first year of operation; by 1996 it was generating $50 million a year, making it one of the highest grossing restaurants in the
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world. With the opening of Planet Hollywood and other restaurants in the city, Earl is credited with helping to make Orlando, Florida, the world’s number one tourist destination. Planet Hollywood has been equally profitable. In the late 1990s, the group had sales of $373 million and profits of $48 million. Earl’s part of the ownership was worth $400 million in itself. Earl started a trend in the restaurant business that others have eagerly joined. Since the creation of Planet Hollywood, other themed restaurants like Harley-Davidson Café, Dick Clark’s American Bandstand Grill, and Dive! have sprung up around the country. Themed restaurants now make up one of the fastest growing segments of the casual dining industry. Analyst Paul Westra of Salomon Brothers called Earl “the grandfather of the theme restaurant industry.” Indeed, Earl continues to expand his idea. In the late 1990s he was planning a new musical restaurant, to open in Times Square; a Chefs of the World establishment, which would feature dishes prepared by a variety of world-famous chefs; and an eatery based on Marvel comic books. Part of Earl’s success, he told The Wall Street Journal, is his ability to “appeal to the masses.” For example, he changed the name of his restaurant Shakespeare’s Tavern to King Henry’s Feast, because the former sounded like “too cultural an experience.” Earl says he keeps in tune with his clientele by hanging out at shopping malls. “For 15 bucks a head we take people out of reality,” Earl said in Time. But, despite Earl’s enormous success at creating a unique entertainment experience for his clientele, he remains a restaurateur at heart. As he told Nation’s Restaurant News, “People don’t eat themes— no concept in the world can succeed for long unless it also delivers great food at the right price.”
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“Planet Hollywood Founder Plans Celeb Chef Concept.” Nation’s Restaurant News, 12 February 1996. Roush, Chris. “Dining on a Theme: Celebrity Cafes.” Atlanta Constitution, 17 September 1997. “Time’s 25 Most Influential Americans.” Time, 21 April 1997.
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George Eastman Overview George Eastman and his company are credited with introducing a simple-to-operate, roll-film camera, originally called the Kodak. Eastman made the camera available to virtually all people, enabling them to see the world and themselves in an entirely new way. Eastman built his company into the world’s largest photographic manufacturing establishment and dominated international markets by a continual pioneering of photographic research and development.
(1854-1932) Eastman Kodak Company
Personal Life George Eastman was born on July 12, 1854 in the small town of Waterville, New York. The youngest of three children born to Maria and George W. Eastman, he had two older sisters. Eastman’s father operated a small commercial business college in the nearby city of Rochester, and the family eventually moved there when young Eastman was six years of age. Two years later, the elder George Eastman died suddenly, and the business college closed. Thereafter, Maria Eastman supported the children by renting rooms in their house to boarders. At age 14, Eastman dropped out of school and began to work in an insurance office. He later took a position as a bookkeeper in a bank. Eastman grew into young adulthood as a shy, short, trim, and precise kind of person. He saw himself as a businessman very early in life. He kept daily detailed accounts of his income and expenses and carefully saved
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Eastman, in putting his total focus on photography, had unwittingly made a pivotal career choice, almost overnight. He had already developed many strengths that would help him succeed in nearly any business. He had strong technical and scientific skills, a commitment to capitalist business values, great personal ambition, and a strong desire to be in control of his work life. Before he quit his bank job, he was already using sophisticated marketing and financial plans to raise money to explore his photographic research. By 1884, at the age of 30, Eastman had tried many unsuccessful ways to market camera equipment of his own invention. Then he made improvements to a newlyinvented process of taking a series of pictures on strips of commercially-coated paper film. He also decided that the market for his new film would not be limited to professionals but would include amateur photographers as well, since at the time there were roughly ten amateur photographers for every professional.
George Eastman.
(The Library of Congress.)
his money. He immersed himself in business matters and remained a bachelor throughout his life. Eastman made a great fortune, and by the 1920s, when he was in his 60s, he devoted himself to philanthropic efforts, giving away his fortune to educational, medical, and civic organizations. His love of music led to a generous monetary gift to the University of Rochester, which resulted in the founding of the now world-famous Eastman-Rochester School of Music, the only institution ever named after him. By the age of 78, he had given away most of his fortune. When he sensed in 1932 that his mind and body were failing him, he wrote a simple note, “My work is done,” and took his own life on March 14, 1932.
Career Details While he was still working for the bank in Rochester, New York, Eastman became seriously interested in photography. At that time it was a clumsy, cumbersome, time-consuming pursuit confined to those who had enough patience to deal with the expensive and complex process of taking photographs. Eastman, however deeply enjoyed this activity. Though he had planned to remain a banker, he abruptly quit his job after failing to receive a promotion and decided to devote himself to his hobby of photography.
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Eastman created the trademark “Kodak” both for simplicity and to honor his mother’s maiden name, Kilbourn, by using the letter K. In 1888 Eastman began to market the first cameras that were simple enough to be used by anyone. He patented his creation carefully and equipped the Kodak camera with the first thin celluloid film, something most photographers now take for granted. Employing the sales slogan “You press the button, we do the rest,” he began successfully selling this camera to millions of people worldwide. Since his invention attracted a great deal of competition, Eastman’s strategy was to stay ahead by constantly making improvements on cameras and film so that he was always introducing new and refined products. At the turn of the twentieth century, Eastman sought to control the entire film industry. He bought up companies wherever he could and developed a monopoly on cameras, plate cameras, printing paper, and motion-picture film. Eventually, the U.S. government moved in and convicted him of creating a monopoly in the film business, Eastman found himself backing off on certain aspects of his enterprise to allow for some fair competition. Eastman began to get good results from his own research laboratory, where new products for film were developed. It was in this laboratory where color film processing was developed for commercial use. As a businessman, Eastman also recognized the value of retaining loyal employees. During this “progressive era” in American history, where employee rights were being defined by growing union activities, Eastman created many employee benefit programs. In 1910 he began to establish a profit-sharing program for all employees and in the next decade, created other employee benefits, including health services and retirement funds.
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Social and Economic Impact Eastman spent his entire career as a businessman tangled in legal disputes related to his tendency to monopolize the marketplace and to use other people’s ideas without acknowledging them. One example was when Eastman used the idea of Hannibal Goodwin, an Episcopal minister—to whom he later paid financial redress—to develop his strip-of-film idea, allowing Eastman to place a strip of film on spools that would take multiple photographs with cameras such as the Kodak, the Brownie, and much later, the Instamatic. Eastman revolutionized aspects of our world with his promotion of the simple camera. Kodak was followed by the famous “Brownie” camera. Designed for children, it had pictures of fairies painted on the side. It sold 250,000 cameras in 1900, during its first year of production. The easy-to-use, inexpensive camera was clearly a tremendous contribution to science, art, and popular culture. Millions of people were now able to save treasured moments of their families, of their everyday lives, and of their travels. It is difficult to imagine a world without photography and photographs. It was George Eastman’s passion and devotion to his vision that brought the photograph into the everyday lives of ordinary people. He invented, for all practical purposes, the modern, everyday, easy-to-use, point-and-click camera, and the process for quickly developing the film and providing pictures to the photographer. The so-called ordinary camera has changed the world and how we look at it. The picture, taken as a photograph, has proven to be worth, indeed, a thousand words. Eastman pursued the development of his company as a very deliberate, dedicated businessman. He used every known business strategy to enhance the sales of his products. Eastman remained ahead of his competition, advertised intelligently, created affordable products of good quality, created a loyal work force who shared in his profits, and maintained an up-to-date research and development unit of his company that constantly introduced new and improved products to the marketplace.
Chronology: George Eastman 1854: Born in Waterville, New York. 1888: Began marketing the first easy-to-use cameras for nonprofessionals. 1900: Introduced the “Brownie” camera for children. 1910: Began profit-sharing program for employees. 1928: Marketed first Kodak using color film. 1932: Died.
During the last 20 years of his life, Eastman gave away his money in philanthropic gifts to universities and to medical and civic organizations.
Sources of Information Contact at: Eastman Kodak Company 343 State St. Rochester, NY 14650 Business Phone: (716)724-4000 URL: http://www.kodak.com
Bibliography Ackerman, Carl W. George Eastman. London: Constable and Co., 1930. Chandler, Alfred D. The Visible Hand: The Managerial Revolution in American Business. Cambridge: Harvard University Press, 1977. Collins, Douglas. The Story of Kodak. New York: Harry N. Abrams, 1990.
Overall, the strategy was to place Eastman camera equipment in the hands of the everyday citizen, as well as the professionals. He sought to saturate the world with cameras, even to the point of having a monopoly on the industry. His efforts to capture world markets seem to have succeeded very well.
Wade, John. A Short History of the Camera. Watford: Fountain Press, 1979.
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Taft, Robert. Photography and the American Scene. New York: Dover, 1964.
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Robert J. Eaton (1940-) Chrysler Corp.
Overview When Robert Eaton became head of the Chrysler Corporation in 1992, it marked the start of a singular new era for the automaker. Beset by problems for years, including poorly-built cars and financial mismanagement, Chrysler had been put back on the right course by the colorful, but often tyrannical Lee Iacocca. Eaton, a longtime General Motors executive with a far more reserved demeanor, would later steer Chrysler into the history books himself by engineering a first-of-its-kind merger with German automaker Daimler-Benz.
Personal Life Eaton was born on February 13, 1940, in Buena Vista, Colorado, but moved to the Kansas town of Arkansas City when he was young. His father was a railroad brakeman, and his mother a hairdresser. At the age of nine, he had a paper route that netted him 35 cents a day, and with that savings managed to buy his first car at the age of 11 for $10. He then spent another $15 to put the Chevy on the road. He had his driver’s license at the age of 14, as was common in some states in the 1950s, and through high school and college Eaton worked a number of jobs in order to indulge his love of hot rods and classic roadsters; he also raced motorcycles. These jobs included working as a janitor in a Montgomery Ward department store, and supervising the night shift in a pea cannery. Not surprisingly, Eaton chose to study mechanical engineering at the University of Kansas. He earned a
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bachelor of science in 1963 and only interviewed with one company, since he wanted no other job but one at General Motors’ Chevrolet division. He was hired as an engineer, and drove to Detroit from Kansas in a 1955 Chevrolet. Cornelia Drake became his wife in 1964, and the couple would have two sons. As Chrysler chair, Eaton drives one of the high-performance Dodge Viper sportscars.
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Chronology: Robert J. Eaton 1940: Born.
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1963: Received B.S. from University of Kansas.
Eaton’s first job at GM was at its axle plant in Warren, Michigan, and he soon entered a graduate training program in the company for young engineers. The program introduced them to several different areas of the automaker in preparation for a future management post. “That was the best thing that ever happened to me,” Eaton told Marjorie Sorge in an interview in Automotive Industries. “I got a tremendous exposure to the industry. That had a very significant effect on how I view everything. It was a very positive thing we don’t tend to do as much any more.” As a young engineer, Eaton became involved in the Corvair debacle not long after he moved over to the GM Technical Center, also in Warren. The sportscar had been declared by consumer activist Ralph Nader to be “unsafe at any speed”—the title of an actual book—and GM set out to defend its reputation. Eaton became the demonstration driver in training films for the car, and when there was a Corvair accident, he investigated and staged a runthrough in which he performed all the same maneuvers as the driver had, only at much faster speeds. He was often called upon to testify in court. Eaton advanced to the position of chief engineer in the Chevrolet division in 1975, and a year later to chief engineer in the corporate programs. In 1979 he was named assistant chief of the Oldsmobile division, then GM’s director of reliability and a vice president in 1982; from 1986 to 1988 he oversaw the company’s technical staffs group, and then was given the plum post of president of GM Europe in 1988. When Chrysler was looking for a replacement for the retiring Lee Iacocca, Eaton’s record in running GM’s important European division was brought to the search committee’s attention. He was interviewed for the top job, and accepted it on the condition that he would be both board chair and CEO. Eaton’s arrival back in the States in early 1992 to become head of the world’s number-three automaker surprised many. A top Chrysler executive, Bob Lutz, was thought to be in line for Iacocca’s job. But the directors were eager to begin a new era, and Eaton’s quiet demeanor and low-key personality made him the top choice. In 1996, after Eaton took over the president’s title from Lutz, who was made a vice-chair, industry watchers waited for signs of a rift at the upper levels at Chrysler, the high drama and infighting that has charac-
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1964: Married Cornelia Drake. 1975: Named chief engineer with General Motor’s Chevrolet division. 1979: Named assistant chief of Oldsmobile division. 1982: Named GM vice president. 1988: Appointed president of GM Europe. 1992: Hired by Chrysler as vice chairman. 1993: Named CEO of Chrysler. 1996: Became president of Chrysler. 1998: Engineered merger with Mercedes automaker Daimler-Benz.
terized the industry for decades, but “the two Bobs,” as they are known in Detroit circles, get along famously and often poke fun of one another in meetings.
Social and Economic Impact The fortunes of Chrysler have been the most precarious among the top three American automakers almost since its inception. It is neither the financially sound company that has perched at the top of the Fortune 500 list for years, GM, nor does it possess the strong international presence of Ford. Twice Chrysler has teetered on the verge of bankruptcy: once in the late 1970s, when it received loan guarantees from the U.S. government, and again during a recession in the early 1990s. Eaton came aboard as Chrysler was retooling for a new era and had eradicated many of the engineering, marketing, and financial problems that had led to its near demise. By 1996 it was a very profitable company that had cornered both the minivan market and virtually launched the sportutility vehicle craze with its Jeep Grand Cherokee. It also had a line of well designed mid-sized cars and a high profit-per-vehicle ratio. Under Eaton, Chrysler’s shortcomings in the growing international market were remedied in a May, 1998
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event that made headlines on two continents. A merger was announced with German automaker Daimler-Benz, maker of Mercedes-Benz, that was the first of its kind, and it was a deal in which Eaton played a major role. He would become co-CEO with Daimler-Benz chair Juergen Schrempp for three years when the merger was finalized at the end of 1998. Eaton is also looking to bring Chrysler vehicles to other parts of the world. It opened plants in South America in 1998 that made Grand Cherokees and Neons for that market, and also entered Brazil as a manufacturer. He was also guiding the research and development teams at Chrysler’s state-of-the-art technical center in suburban Detroit to put a viable “CCV” on the market. This “composite concept vehicle” would be an energy efficient cross between a motorcycle and a small passenger car designed for the bicycle-loving urban millions in up-and-coming Asian nations such as India and China. Eaton’s accomplishments at Chrysler, even before the Daimler-Benz deal, led the magazine Automotive Industries to name him Executive of the Year in 1997. That may have come about as the result of his thwarting of a hostile takeover bid by two major shareholders, an investor named Kirk Kerkorian who had teamed with a disgruntled Iacocca. Years away from the usual age of retirement (Eaton turned 58 in 1998), he also hopes to resurrect the idea of the intern and management training program that made such an impact on him early in his
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career. The reporter J. P. Donlon of Chief Executive asked Eaton how he wanted to be remembered in the industry, and Eaton commented upon the periodically precarious financial situation at Chrysler over its last few decades. “I want to be the first chairman of Chrysler who never has to bring this company back from the brink of bankruptcy. I want us to be on the opposite side of that, the most financially stable auto company in the world.”
Sources of Information Contact at: Chrysler Corp. 1000 Chrysler Dr. Auburn Hills, MI 48326 Business Phone: (248)576-5741
Bibliography “At Chrysler: The Bobs’ Management Style Spells Success.” USA Today, 17 June 1998. Donlon, J. P. “Eaton Hits a Few Speed Bumps. Chief Executive, November 1997. Howes, Daniel. “Quiet Competence Eclipsing Mega-Ego at Chrysler.” Detroit News,11 December 1997. Nissen, Todd. “Top Chrysler Execs See Financial Gains from Merger.”Reuters, 6 August 1998. Sorge, Marjorie. “Bob Eaton: 1997 Executive of the Year.” Automotive Industries, February 1997.
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Thomas Edison Overview One of history’s great inventive geniuses, Thomas Alva Edison, secured patents for more than a thousand inventions, most notably the incandescent electric light bulb, the phonograph, and the motion picture projector. His successes were the result of talent, intelligence, determination, and a lot of hard work. He was a classic example of the nineteenth century American success story—a young man who overcame poverty, a physical handicap, and financial setbacks, to become famous and wealthy.
(1847-1931) Inventor
Personal Life Thomas Alva Edison was born in Milan, Ohio, on February 11, 1847, the seventh and youngest child of Samuel and Nancy Edison. The family moved to Port Huron, Michigan, when he was seven years old. Edison spent only three months in primary school—his teacher thought he was mentally inferior. His mother, who was a schoolteacher, pulled him out of school and continued his education at home. With her encouragement, Edison began his lifelong habit of voracious reading. Many of his textbooks included instructions for physics and chemistry experiments and by the age of ten, he had set up a chemistry laboratory in the cellar and was conducting original experiments. Edison’s restless entrepreneurial spirit surfaced at an early age. At 12, he took a job on the Grand Trunk railroad that ran between Port Huron and Detroit selling newspapers, magazines, candy, apples, sandwiches, and
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Thomas Edison performing a lab experiment.
tobacco. Identifying a potential market among the line’s regular passengers, he set up a small printing press in an empty baggage car and produced a small newspaper and sold subscriptions for eight cents a month. He also used the baggage car for a chemistry laboratory. During long daily layovers in Detroit, he read every book he could find. “I didn’t read a few books. I read the library,” he said later in life. As a teenager, Edison became fascinated by the telegraph. Legend has it that when he saved a three-year-old boy from being run over by a rail car in 1862, the grateful father, a skilled telegrapher, offered to teach him the very marketable skill. This offer came at a particularly favorable moment in Edison’s life, since after the age of 12, he had become virtually deaf. He mastered telegraphy quickly, and for the next few years, during the American Civil War, Edison worked as a freelance telegraph operator in towns throughout the Midwest. Edison married twice and was the father of six children. In 1871, Edison married Mary Stilwell with whom he had three children. Mary died of typhoid fever in 1884. Two years later, Edison married Mina Miller, the daughter of an inventor, and had three more children. Edison has been characterized as a workaholic and often worked more than 100 hours a week. He was also known to collect very unusual items and was always on the look out for things that would have some unique property. For example, he compressed some nuts from the rain forest to make phonograph needles and he used Japanese bamboo for a lightbulb filament.
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In recognition of his accomplishments, he was appointed Chevalier of the Legion of Honor of France in 1878 and in 1889, Commander of the Legion of Honor. In 1892, he was awarded the Albert Medal of the Society of Arts of Great Britain. In 1928, he received the Congressional Gold Medal “for development and application of inventions that have revolutionized civilization in the last century.” Thomas Alva Edison died in West Orange, New Jersey on 18 October 1931.
Career Details In 1868, after the war, Edison found employment with Western Union Telegraph Company in Boston, which was the largest telegraphy company in the country. That same year, Edison bought a copy of Michael Faraday’s book, Experimental Researches in Electricity, and performed all of the experiments in the book. At night, instead of sleeping, he experimented with electrical currents. The first invention resulting from these experiments was a device for electronically recording voice votes taken by a legislative body. The patent for this device, for which there was little market, was Edison’s first. Thereafter, he operated as a freelance inventor. In June 1869, Edison was in New York City, desperately poor and looking for work. He had a stroke of luck when a new telegraphic gold-price indicator for the Gold Exchange broke down. He happened to be on hand
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for a job interview and quickly repaired the instrument and was offered a job as general manager of Law’s Gold Indicator Company. Several months after accepting his new job, he joined with Franklin L. Pope and James N. Ashland to form Pope, Edison, and Company. Soon, he received commissions to develop a new stock ticker. The result was the Edison Universal Stock Printer, which, together with several other derivatives of the Morse telegraph, produced the $40,000 he needed to set himself up as a manufacturer in Newark, New Jersey, manufacturing stock tickers and high-speed printing telegraphs. His firm quickly employed fifty consulting engineers and, in the next six years, Edison was granted about two hundred new patents for inventions he and others made there including the mimeograph and improvements to the typewriter and telegraph. In 1876, Edison began construction of a large research laboratory at Menlo Park, New Jersey. He called it an “invention factory.” Here, the “Wizard of Menlo Park” accomplished some of his most important work. It was Edison’s goal to invent something new every ten days and for several years, he exceeded his own expectations and obtained a new patent every five days. In all, Edison had more than 600 patents. In 1877 he invented the phonograph, a primitive instrument in which sound vibrations were transferred by a steel stylus to a cylinder wrapped in tin foil. Despite the enormous popularity for the new toy, which he actively promoted, Edison didn’t envision its commercial potential, and abandoned its development for ten years. Meanwhile, he was working hard on inventing an economical, practical, and durable incandescent lamp. By the late-1870s, Edison had earned the reputation as someone who could do anything, so when he announced that he could greatly improve the incandescent lightbulb, an invention of the English Physicist, Sir Joseph Swan, the stock prices of gaslight companies dropped drastically. On October 21, 1879, Edison first demonstrated in public an incandescent light bulb made with charred cotton thread sealed in a vacuum that could burn for several hours. When the thread was heated within the vacuum, it would glow, without breaking, melting, or evaporating. He patented his idea and promoted his version of the lightbulb. In 1879 Edison grandly demonstrated his lightbulb by lighting up his laboratory and half a mile of streets in Menlo Park. On December 17 1880, he founded the Edison Electric Illuminating Company of New York, which eventually became General Electric.
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Chronology: Thomas Edison 1847: Born. 1859: Started first job on the Grand Trunk Railroad. 1863: Learned telegraphy. 1868: Worked at Western Union. 1869: Invented universal stock ticker. 1876: Built Menlo Park. 1877: Invented phonograph. 1879: Invented modern, practical, light bulb. 1880: Founded Edison Electric Illuminating Company. 1883: Patented the Edison effect. 1887: Built factory at West Orange. 1903: Produced the motion picture The Great Train Robbery. 1913: Produced first talking motion picture.
also discovered, inadvertently, that negatively charged electrons would flow from the filament of the incandescent bulb to positively charged metal—the Edison Effect. In 1885, Edison developed and patented a way to transmit “aerial” signals. In 1887, Edison constructed another large laboratory in West Orange, New Jersey, where 5,000 persons were eventually employed. They produced a variety of new products, including improved phonographs using wax records, mimeographs, alkaline storage batteries, dictating machines, as well as motion picture cameras and projectors.
Edison realized the immense implications of his discovery. He spent the next few years adapting his invention for large-scale use. One problem needed to be solved. He needed to develop a method to generate and distribute electricity. His company began operating the world’s first power station in 1882 on Pearl Street in New York City. It supplied power to four hundred incandescent lamps owned by eighty-five customers. Customers utilized a parallel wiring system which made it possible to turn off one lamp without turning out all the others. He
Like Menlo Park, Edison built the West Orange facility with a chemistry lab and machine shop under one roof and surrounded himself with several assistants. His assistants were experts in areas where Edison was deficient or those who had similar interests. His closest associates included Charles Batchelor, Francis Upton, and Arthur Kennelly. Edison also had a talent for motivating the people that worked with him. He always kept informed about the research of his competitors and often worked on inventions that others had already worked on. Edison, however, had the capability of turning ideas into material products. Probably his best known invention from this period was the kinetoscope, a primitive moving picture cam-
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era and viewer. In 1903 Edison produced The Great Train Robbery, one of the first movies, with this technology. He later developed a prototype “talking picture” in 1913. Unlike many of his friends and contemporaries, such as Henry Ford and Harvey Firestone, Edison was not primarily a businessman. To raise funds, he sold businesses that had begun to manufacture and distribute some of his most potentially lucrative discoveries. The profits he earned from one invention were invested in the next. Edison was the only inventor of his time to maintain a completely equipped and fully staffed laboratory. As he moved from invention to invention, not all of them commercially successful, he repeatedly made and lost fortunes.
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Social and Economic Impact Edison’s inventions have had a profound effect on modern society. No other man has ever been responsible for inventing products with such influence on so many lives around the world. Edison was awarded more patents, 1,093, than anyone else in American history. For all who are curious, Edison is perhaps the quintessential role model. He would literally try something thousands of times and if something did not work, he counted it as a success because at least he would know what did not work. After 8,000 trials while he was developing a storage battery, he remarked, “Well at least we know 8,000 things that don’t work!” And when he was attempting to develop a synthetic rubber, he experimented with over 17,000 botanical sources. While Edison is credited with making our daily lives easier or more entertaining with his inventions, he can also be credited for making our lives safer. In 1914, he developed an electric safety lantern which became a necessity when working in the
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mines. During World War I, Edison contributed over 45 inventions including, navigating equipment, smoke screen machines, an underwater searchlight, and devices for aiming and firing weapons. Edison left millions of pages of notes and drawings that reflect the scope of his genius. He had the focus to sift through billions of possibilities and find one solution. He was ahead of his time when it came to managing people: his style was actually an early form of “brainstorming.” He would certainly fit into the late twentieth century with his “systems” approach. For example, he didn’t just invent a good light bulb, he invented the fuse, the screw socket, and a way to generate and distribute the energy to light the bulb.
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Bibliography Baldwin, Neil. Edison: Inventing the Century. New York: Hyperion, 1995. Conot, Robert. A Streak of Luck. New York: Seaview, 1979 Josephson, Matthew.Edison: A Biography. Reprint Edition. New York: John Wiley & Sons, 1992. McAuliffe, Kathleen. “The Undiscovered World of Thomas Edison.” The Atlantic Monthly, December 1995. Millard, Andre. Edison and the Business of Innovation. Baltimore: The Johns Hopkins University Press, 1990. Notable Twentieth-Century Scientists. Detroit: Gale Research, 1995. Vanderbilt, Byron. Thomas Edison, Chemist. Washington, DC: American Chemical Society, 1971. World of Invention: History’s Most Significant Inventions and the People Behind Them. Detroit: Gale Research, 1994.
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Michael Eisner Overview Entertainment executive Michael Eisner is the chief executive officer of the Walt Disney Company. He began as an usher at NBC and eventually rose to such positions as head of prime time programming at ABC and president of Paramount Pictures before assuming control of Disney in 1984. Considered a great judge of talent and a shrewd businessman in a tough industry, Eisner is also known as a devoted family man.
(1942-) Walt Disney Company
Personal Life Michael Dammann Eisner was born in Mt. Kisco, New York, the son of a well-to-do lawyer, and was raised in luxurious surroundings in his parents’ spacious Park Avenue apartment in New York City. His early life was characterized by discipline and strict etiquette that included wearing a jacket and tie for family dinners. Although raised in wealth, he learned early to treat money seriously. Eisner’s father, Lester, was a Harvard graduate and a lawyer who successfully invested an existing family fortune in New York real estate. Lester Eisner also served as a top housing official in the Eisenhower administration. Eisner and his sister were taught self-discipline early. Among other lessons, they were required to read each day for two hours for every one hour of television they watched. Eisner enjoyed reading “Hardy Boys” mysteries and the works of Jack London, and his television favorites included Hopalong Cassidy, Ozzie and Harriet, and Leave It to Beaver. Entertainment for the
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ner began writing plays. He is known to have completed two plays, one of which was produced by the school’s thespian club. Eisner graduated from Denison in 1964. Eisner and Jane Breckenridge were married in 1967. They have three sons, Breck, Eric, and Anders. Eisner is well known as a family man and prefers pictures of his family in business publications where others will use political shots with public figures. In the critical days leading to his election as chairman of Walt Disney Productions, he delayed meetings because of commitments to his sons. This quality of Eisner’s was likely not lost on those searching for Walt Disney’s replacement.
Career Details After college, Eisner made a trip to Paris, thinking he would be a writer. He returned home, however, in less than two weeks. Back in New York, he went to work at NBC where he took a job as a clerk who kept track of the number of times a commercial aired. He also worked weekends at an NBC radio station, giving out traffic reports. Not long afterward, Eisner moved to CBS, where he inserted commercials into their slots for children’s programs, the Ed Sullivan Show and Jeopardy. Somewhat dissatisfied with his career, Eisner sent out hundreds of resumes, looking for a break in the television business. That break came in 1966 when a young executive named Barry Diller called. Diller was only 24 years old but was already a vice-president at ABC. At the time ABC was a small network, only about ten years old, and with only a couple of dozen affiliates around the country.
Michael Eisner.
(AP/Wide World Photos, Inc.)
Eisners often included Broadway, and Eisner marked every special occasion with a visit to the theater. Eisner attended Lawrenceville School, an expensive New Jersey boarding school, where he was a good student. He tried sports but was largely unsuccessful. He belonged to the Periwig theatrical club and won a lead role in The Caine Mutiny as a senior, but illness forced him to withdraw. After Lawrenceville School, Eisner enrolled in Denison University, a small liberal arts college in Granville, Ohio. His intention was to prepare for a medical career, but by his junior year, he was back in the theater. Shy and not particularly driven to be an actor, Eis-
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Eisner moved to ABC and worked with Diller on ABC’s programming. Together, their innovations included the movie-of-the-week and the miniseries. Eisner genuinely enjoyed even the simple forms of popular programming such as sitcoms and cartoon shows. Thus, when he took over Saturday morning programming in 1969, he did not guess at what would sell, he just looked for what he liked to watch. Eisner’s first push for Saturday morning programming was a cartoon series based on the popular singing group, the Jackson Five. Soon, he added another featuring the singing Osmond Brothers. Within three years, ABC was the top-rated network on Saturday mornings. Within five years, Eisner was put in charge of ABC’s prime time schedule, where he was responsible for such hits as Happy Days and Welcome Back Kotter. Even though the critics complained, the shows were successful and the ratings improved. Eisner understood that the core elements that worked for Saturday morning programming were universal: the importance of the story line, character development, and conflict. He also was responsible for some serious work at ABC such as the miniseries Roots and Rich Man/Poor Man. ABC emerged from Eisner’s time as head of pro-
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gramming as the top-rated network on the air, but Eisner had already left for greener pastures. In 1976 Eisner joined Paramount Pictures, where Diller was the chairman and Eisner became president. Paramount was not a strong company, which is why the parent, Gulf Western, brought in the two successful ABC executives. Paramount had not had a hit movie for several years and had lost money. Within a year, Paramount produced Saturday Night Fever, and a string of successful movies were to follow that included Raiders of the Lost Ark, Bad News Bears, Grease, Heaven Can Wait, and Beverly Hills Cop. Two years after Eisner joined Paramount, the studio led the “big seven” studios with nearly one quarter of national box office proceeds. For six years, Paramount never fell below second in market share. However, two events in 1984 changed Eisner’s career direction in a dramatic way. First, his mentor and supporter at Paramount, Gulf Western’s chairman Charlie Bluhdorn, died. Bluhdorn’s successor, Martin Davis, did not think as highly of Diller and Eisner. Davis has been quoted as complaining that Eisner was not “serious” enough and was “like a kid.” Diller had his problems with Davis, also, and left to become chairman at 20th Century Fox. The second event of 1984 was the culmination of two decades of problems and drift at Walt Disney Productions. Walt Disney had started the company in the late-1920s and after a couple of false starts had found success with the animated character Mickey Mouse. Together with his brother Roy, Disney had built an entertainment giant. Walt Disney’s sudden death in 1966 had deprived the company of not only its chairman, but of its heart and soul. Using Walt’s creative genius and his brother Roy’s business acumen, the company had been successful. Yet, like many family operated businesses, there had been little effort made to groom executives to succeed the founders. The aftermath of Disney’s death was a slowing of growth and, eventually, stagnation in the Disney empire. Attendance dropped in the company’s theme parks, and movie production faltered. Earnings dropped and constant fighting between the “Walt” and “Roy” factions paralyzed the company. While the conflict was visibly between the two arms of the Disney family, the fight was actually between the creative people (Walt) and the administrators (Roy). This fighting actually paralleled conflicts that had existed between the two brothers for years, only now it threatened to destroy their dream.
Chronology: Michael Eisner 1942: Born in Mt. Kisco, New York. 1964: Graduated from Denison University. 1966: Hired by Barry Diller at ABC. 1976: Named president of Paramount Pictures. 1984: Becomes chairman of the Walt Disney Company. 1986: Created international division of Disney. 1996: Disney acquired Captiol Cities company.
A group that became known as the “brain trust” was formed. The members of the trust were Roy Disney, Frank Wells, a consultant to Warner Brothers, and Stanley Gold, a Disney board member who ran Roy’s company, Shamrock Holdings. The three set out to find a new manager for the company who would restore it to a position of strength, if not past glory. Eisner was a leading candidate from the beginning and was seen as articulate, imaginative, enthusiastic, and with values complementary to the company’s family identity. It was thought that Walt Disney himself would have loved him. A protracted battle ensued and ultimately, then-current chief executive Ron Miller, who was Walt Disney’s son-in-law, was fired. Frank Wells was considered a candidate for the top spot, but he recommended Eisner. Finally, with the intervention of major stockholder Sid Bass, a compromise team of Eisner as chairman and CEO and Wells as president was proposed.
Disney of the early 1980s was ripe for corporate raiders and take-overs. In the Wall Street climate of the time, it was not uncommon for companies in Disney’s condition to be taken over by speculators who would then break up the company and sell the parts for huge profits. Several such profiteers were buying up Disney stock or making overtures to the company and its major stockholders. Disney insiders, including Roy Disney’s son, also named Roy, were intent on saving the company.
Stanley Gold, who was point man for the “brain trust,” pushed this team hard. According to Gold, Eisner’s reputation as a creative person and a “big kid” was perfect for the head of Disney. Gold said that the problem with Disney since Walt died was that the place had not been run by “crazies.” It “needed to be run by crazies again,” and Eisner was the man for the job. With the strong businessman Wells as Eisner’s partner, Gold was promoting the same type of team that had built Disney in the first place: Walt (Eisner) as the creative “crazy” that drove the company forward while Roy (Wells) applied the common sense and occasional braking that was necessary to satisfy the bankers and Wall Street. Gold’s efforts, with Sid Bass’s vocal support, proved to be very successful.
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Eisner was appointed chairman and CEO of Walt Disney Productions on September 22, 1984. Wells became president, and the new team was off and running to reestablish the Walt Disney Company as the premier entertainment company in America. New blood was brought into the management team, many from Eisner’s old company, Paramount. The Disney film archives were utilized to their fullest capacity, the theme parks were restored to profitability with attendance again rising annually, the animation division of Disney returned to making featurelength films, and the stock value rose dramatically. Over the first decade of Eisner’s term as chairman and CEO, Disney produced a string of movie hits including Down and Out in Beverly Hills in 1986, Who Framed Roger Rabbit in 1988, The Little Mermaid in 1989, and Beauty and the Beast in 1991. Alladin, the first animated feature to be nominated for an Academy Award for Best Picture, was released in 1992. Disney has produced a major animated feature nearly every year and got back into television with the hit show The Golden Girls and a revised feature, the Disney Sunday Movie. Eisner spearheaded other ventures including a new amusement park, Euro Disney, which opened outside of Paris, although its initial returns were disappointing. Disney also acquired independent film company Miramax to produce more offbeat films, and in 1996, Disney acquired Capital Cities, which owned ABC television and the cable sports network ESPN. Almost 20 years after heading ABC’s prime time programming, Eisner headed the company that owned the network. Under Eisner’s direction, greater emphasis has been placed on the construction and operation of company hotels at the theme parks and a cruise ship line is in operation. Disney now owns a professional hockey team named after a modest Disney movie hit, the Mighty Ducks, and it has acquired the Anaheim Angels baseball team. By 1997, Disney’s annual sales had grown to $21.1 billion. Disney’s share price has grown 19-fold. The success story of Disney now even exceeded that of its creators, Walt and Roy Disney. Eisner had profited handsomely, earning millions in bonuses and stock options. While there has been some criticism of his compensation package and the amount of money he has earned, there is no question about the success of his ventures and the resulting strength of the company.
ent is unquestioned and has served him well, yet there are many stories around the entertainment industry of shrewd deals he has struck to make a movie and attention to detail in the financial end of the business. Eisner understands the need to let the creative juices flow, but he tempers this with the realization that the business must make a profit. In Hollywood, this has turned out to be a very successful formula. Eisner is willing to pay the necessary salaries and fees to make use of top talent in Hollywood. This was a radical departure from the older Disney practice of being quite lean in the compensation department. Eisner understood the need to pay top dollar for the services of the likes of George Lucas, but at the same time, he looks for promising newcomers that will become the next wave of creative talent in Hollywood. The strategy has been to make maximum use of the company’s strengths in name recognition, reputation, and assets while diversifying into other aspects of the entertainment industry. The growing number of hotel rooms under the Disney name, the cruise ship line, and the sports franchises are examples of this expansion into related areas upon which the Disney name can be capitalized.
Sources of Information Contact at: Walt Disney Company 500 South Buena Vista St. Burbank, CA 91521-0001 Business Phone: (818)560-1000 URL: http://www.disney.com
Bibliography “An Interview with Michael D. Eisner” American Academy of Achievement, 17 June 1994. Available from http://www.achievement.org. Grover, Ron. The Disney Touch. Homewood: Richard D. Irwin, Inc., 1991. “Michael D. Eisner: Biography.” American Academy of Achievement, 1998. Available from http://www.achievement.org. “Michael D. Eisner, Entertainment Executive.” American Academy of Achievement, 1998. Availalbe from http://www.achievement.org. Streisand, Betty. “Shareholders Smell a Rat.” U.S. News and World Report, 3 March 1997. Taylor, John. Storming the Magic Kingdom. New York: Alfred A. Knopf, 1987.
Social and Economic Impact Eisner’s style is at once casual and friendly, but he is also hard-working, driven, and tough. His creative tal-
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Who’s Who in America, 47th Edition, New Providence: Marquis Who’s Who, 1992.
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Roger Enrico Overview Roger Enrico, chief executive officer of PepsiCo Inc., is credited with using brand-building to increase sales for the soft drink company and its affiliates. Enrico runs the company with a flair for the dramatic and a keen knack for image-making and profit building.
(1945-) PepsiCo
Personal Life Enrico was born in 1945 in Chilsolm, Minnesota, where his father was a maintenance foreman at an ironore processing plant. When Enrico was in high school, his first job was at a local soft drink bottling plant. At the time, he could never have anticipated how soft drinks would ultimately factor into his future. Enrico was an average student, mostly preoccupied with leaving Minnesota. Offer of a full college scholarship to Babson College in Massachusetts gave him the chance he was looking for. While at college, Enrico ran his fraternity and edited the college yearbook; he graduated in three years. Although he had not given much thought to his future, Enrico realized he enjoyed interacting with people, and working in the area of personnel seemed like a logical career choice. He was hired by General Mills to fill an opening in Minnesota. There, he reunited with his high school sweetheart, Rosemary Margo, whom he later married. What seemed like a good career match turned out to be otherwise. Enrico was bored by the isolation of the personnel division and considered pursuing an MBA. Instead he attempted to join the Navy, but that did not work
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Roger Enrico, right, drinks Pepsi with the president of Lucasfilm Ltd., Gordon Radley, as they announce a $2 billion marketing deal tying PepsiCo Inc. to the “Star Wars” films. A new “Star Wars” film is slated to premier in 1999. (AP Photo/Damian Dovarganes.)
out either, when he failed the Navy’s test for colorblindness. Not wanting to remain stateside, Enrico volunteered for service in Vietnam in 1967. He was stationed in the northern part of South Vietnam and worked transporting fuel. When he returned from Vietnam, Enrico was hired again by General Mills, this time in their brand management division. Although he loved the work, he felt he was passed over for promotions because of his lack of educational credentials. He began sending his resume to headhunters across the country and was offered a job with the Frito-Lay division of PepsiCo in Dallas.
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Initially, Enrico was wary about moving to Dallas because of the lingering memories of the recent assassination of President John F. Kennedy, for whom he had once campaigned. Enrico was able to put that behind him when he recognized that both Dallas and Frito-Lay were on the brink of enormous growth. Enrico and Rosemary have one son, Aaron. The couple enjoys vacationing on Grand Cayman and Enrico is an avid scuba diver. The couple also owns a ranch in Montana.
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While in Turkey in 1990, Enrico suffered a heart attack during a company tour. It was a sobering experience for the executive, prompting him to ultimately give up smoking.
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Roger Enrico
When he first began to work for PepsiCo, Enrico was an associate brand manager for Frito Lay onionflavored snacks, Funyuns. Enrico enjoyed working at Frito Lay, and when he was 31, he was offered the job of president of PepsiCo Foods Japan. Japan was known to be a difficult, and in many ways bewildering market, but Enrico accepted the challenge, as it would be a valuable learning experience. Ultimately, the Japanese venture was unsuccessful, but PepsiCo understood the difficulties and challenges of that market and did hold that experience against Enrico. First, he was reassigned to Brazil and then returned to the company’s marketing division in the United States. The company’s then-president, John Scully, appreciated Enrico’s aggressive marketing views. When Scully left the company to take over Apple Computers, Enrico was appointed to his position. He remained president and chief executive officer of beverages from 1983 to 1986. During that time, he began the Pepsi Challenge, forcing longtime rival Coca-Cola to come up with New Coke. Ultimately, his marketing idea boosted Pepsi sales. In 1986 Enrico’s book, The Other Guy Blinked: How Pepsi Won the Cola Wars, was panned by critics who regarded Enrico as nothing more than an ego-driven executive. The experience made him leery of the media and he now shies away from press interviews. It also created additional tension between the two rival companies. From 1991 to 1993, Enrico worked as chairman and chief executive officer of Frito-Lay and Pepsi Foods International. There, he encouraged the company to push forward with a line of healthy snacks and slashed domestic operations. In 1994, Enrico took over the position he would hold until he was tapped for the CEO job—corporate vice chairman and chief of Worldwide Restaurants, a weak division in this corporate structure. Enrico began streamlining measures and reducing the number of units. The division had a 19 percent profit increase, with savings from operations estimated at more than $200 million. All of this was spearheaded by Enrico.
1945: Born. 1972: Hired at Frito-Lay. 1991: Appointed chairman and chief executive officer of Frito-Lay and Pepsi Foods. 1994: Named corporate vice chairman and chief of Worldwide Restaurants with PepsiCo. 1996: Appointed CEO at PepsiCo.
tion, as he was not sure that he wanted the responsibility that a CEO shoulders. The job, he once said, was nothing he had ever aspired to. Financially, PepsiCo made it worth his while. In 1997 Enrico was given a total compensation package of $2.8 million, which included his $900,000 base salary, plus bonuses. He stated that he planned to donate most of his actual salary to PepsiCo’s employee scholarship fund, which provided educational money for employees earning less than $60,000 a year.
Social and Economic Impact Shortly after Enrico took over the CEO position from his relatively staid predecessor, he went into the ballroom of the Laguna Nigue, California Ritz Carlton escorted by a phalanx of white uniformed Star Wars storm troopers. As trumpets blared, Enrico took the stage and announced a coup: PepsiCo would join with George Lucas to promote the 1997 re-release of the smash science fiction trilogy, “Star Wars.” It was a heady moment for the beverage company accustomed to trailing behind rival Coca-Cola. It was also a moment which embodied Enrico’s style and his energy.
Not surprisingly, Enrico’s efforts had long been noticed. He was tapped to take over as CEO in 1996, when the current head, Wayne Calloway, was diagnosed with prostate cancer. It took Enrico two weeks to decide whether or not he wanted to accept the posi-
In a company that values autonomy, Enrico is well-suited for the CEO position. In January of 1997, Enrico announced he would spin off the PepsiCo restaurant interests into an independent company. The more than 28,000 restaurants in question are Taco Bell, Kentucky Fried Chicken, and Pizza Hut. By doing this, Enrico created a restaurant operation second only to McDonalds. He also elevated the Frito-Lay division of the company, which Enrico has said is like “ . . . the
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Coke of snack foods without a Pepsi.” Wall Street analysts and market watchers had predicted this move once Enrico took over. Still, the announcement sent stock prices up 3.5 percent—this, after a three-yearperiod when the stock had risen only 18 percent over that period of time, compared to a 60 percent increase for rival Coca-Cola. Since his appointment as CEO, onlookers have questioned how long Enrico will last in the job, not because of any failings on his part or on the part of the company, but simply because of his restless need to try something new. One close friend suggested Enrico might become a teacher or ultimately get a job in the entertainment industry. He claims he has every intention of staying with PepsiCo, where he’s been for a quarter of a century.
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Sources of Information Contact at: PepsiCo PepsiCo Worldwide Beverages, 700 Anderson Hill Rd. Purchase, NY 10577 Business Phone: (914)253-2000 URL: http://www.pepsico.com
Bibliography “Enrico Steps into Pepsi Spotlight.” Beverage Industry, April 1996. “PepsiCo’s Enrico: Mustering Brands Beyond Cola Wars Into Star Wars.” Beverage Industry, 20 May 1996. “PepsiCo’s Enrico to Succeed Calloway.” Nation’s Restaurant News, 4 March 1996. Roger Enrico Brandweek, 7 October 1996.
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William Esrey Overview For years, the Sprint Corporation has lagged behind its biggest telephone competitors, MCI and AT&T, but during that time, William Esrey has been steadily working to develop technology, which will outstrip what the other telecommunications companies can offer by the end of the twentieth century.
(1940-) Sprint Corp.
Personal Life William Todd Esrey was born in Philadelphia, Pennsylvania on January 17, 1940, the son of Alexander and Dorothy Esrey. He received his B.A. degree from Denison University in Granville, Ohio, and then went on to graduate with a Master’s degree in Business Administration from Harvard University in 1964. Esrey was married to Julie L. Campbell on June 13, 1964, and they have two sons, William Todd and John Campbell. Esrey is a member of the Million Hills Country Club, the River Club, and the Links Club. He is also a member of the Kansas City Country Club, in Kansas City, where Sprint has its headquarters. In his spare time, Esrey enjoys exercising and helicopter-skiing. In 1997, Esrey sold 62,000 shares or 14 percent of his interest in Sprint so he could purchase a ranch and a home in Vail, Colorado. This came some months after he and several partners bought the $3 million King Creek Ranch in McCoy, Colorado. Esrey is also involved in skiing through his sponsorship of an aerial stunt and mogul skiing competition held in Colorado resorts.
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Sprint is credited with building the first fiber-optic long distance network and was the first company to offer an advanced high-speed data service known as “frame relay” on a nationwide basis. In the early 1990s, Sprint’s profit shares remained flat, as giant AT&T waged an aggressive, expensive campaign to win back customers it had lost to its competitors in the initial flurry of deregulation. While Sprint was experiencing a lull, MCI increased its share by slightly less than 2 percent. This occurred largely because MCI launched its “Friends and Family” program, which encouraged customers to register friends they frequently call for reduced long distance rates to those people. This prompted both Sprint and AT&T to scramble to develop competing programs. Sprint introduced “MOST,” a program aimed at residential customers and advertised by well known company spokeswoman Candice Bergen.
William T. Esrey.
(Courtesy of Sprint Communications.)
Career Details Esrey started his career with AT&T shortly after earning his MBA at Harvard and had become president of a small company subsidiary by the time he was 30 years old. Esrey left the communications field shortly after his appointment in order to try his hand on Wall Street, ultimately rising to the post of managing director at Dillon, Read & Company. By the 1980s, Esrey entered the phone business again, this time as executive vice president of United Telecommunications, Inc. Though the Kansas City based United Telecom was a fledgling business, it was nonetheless profitable. Under Esrey’s guidance, the company dropped all its cellular businesses so it could concentrate its energies and resources on building its long distance service. At that time, cellular service was much more expensive than long distance, and despite the rapid growth in the cellular industry, Esrey knew the company would be unable to successfully compete on both fronts. Although United Telecom was several years behind MCI in the long distance competition, it still gained an enormous amount of business, as companies defected from AT&T in search of reduced costs. From 1986 to 1990, the company’s long distance revenues went from $1.1 billion to $5.1 billion, a growth rate of approximately $1 billion per year. United Telecommunications, Inc. subsequently bought up the controlling shares of Sprint in 1988 from GTE. In 1992, United Telecommunications officially changed its name to Sprint.
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Sprint overlooked the small business market for awhile, earning fewer long distance revenues than those of its rivals. Throughout the early 1990s, however, Esrey was continuing to refine Sprint’s infrastructure, scrambling to stay abreast of the most recent technological innovations, so he could ultimately incorporate the ones he chose into the company’s operating system. By 1996, Esrey had begun talking about the future of Sprint as a “galactic telecommunications company.” In this arena, Sprint was more advanced than any of its competitors, and Esrey was already anticipating the next step. In a September 16,1996 interview with Communications Week, the CEO outlined his vision for the future and discussed Seamless Sprint, which would enable one company to handle all communications, including voice, data, wireless, local and long distance. In that interview, when asked how Sprint compares with its competitors, Esrey answered, “We are blending together our international and wireless capabilities with our expertise in local telephony in 19 states. We’re also blending long distance under what we internally call One Sprint. We’ll call it Seamless Sprint, the single face that we will present to the market.” These advancements would essentially make Sprint a full service communications provider. Esrey was also aware of Sprint’s Internet capabilities, and commented, “. . . our network carries 40 percent of the domestic Internet and 60 percent of the international Internet backbone traffic. We provide the bulk of America Online’s and several Internet access providers’ communications services. We carry one trillion bytes of information a month over the Internet. We plan to increase the capacity dramatically over time.” When asked how he envisions the market shaking out, Esrey replied, “There are different scenarios you could anticipate for the future. We believe there eventually will be relatively few large, galactic telecommunications companies.” In 1997, buyout frenzy reached a peak in the telecommunications industry, with MCI receiving three takeover bids in October of that year. The first company
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to approach MCI was British Telecom, whose bid was surpassed by WorldCom Inc., the fourth largest long distance carrier. Finally, GTE offered its proposal. At the same time, Esrey discounted rumors that Sprint would be the next company to be bought out. In February 1998, it was WorldCom Inc., which beat out competitors and purchased MCI for an astounding $42 billion.
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1940: Born.
For years, Esrey has insisted that the focus of Sprint was not merger but expansion into local markets, which would pave the way for his ultimate single company plan. At the time of the MCI buyout, Esrey commented that his company had every necessary asset to be a world player in telecommunications. “We have assembled them methodically and carefully over the last six years, and we haven’t paid tens of billions of dollars to do so.” This makes the company ripe for a potential buyout, something in which Esrey takes little interest. On June 3, 1998, the Sprint CEO publicly mappedout the company’s future plans, which included the creation of a single network to handle voice, video, data, fax, and cellular. This network, Esrey said, will be in place by the end of the century and ultimately will make the 100-year-old telephone industry obsolete. Sprint’s continued success is also getting the attention of analysts, who have begun to realize that Sprint is poised to provide a unique and ultimately vital service.
1964: Received his MBA from Harvard University. 1964: Joined American Telegraph and Telephone Company. 1969: Named executive vice-president, United Telecommunications, Inc. 1985: Chosen as president, United Telecom Communications. 1992: Became chairman, CEO, Sprint Corp.
Bibliography Andrews, Edmund. “Mr. Tough Guy in Telecommunications,” New York Times Biographical Service. August 1992. Chakravarty, Subrata N. “The Quiet Comer.” Forbes, 23 February 1998 “Sprint CEO, William Esrey.” Communications Week, 16 September 1996. “Statement from William T. Esrey, Sprint Chairman & CEO, In Response to MCI Network Catch-Up Announcement.” PR Newswire, 4 January 1994
Sources of Information Contact at: Sprint Corp. 2330 Shawnee Mission Pky. Kansas City, MS 66205-2205 Business Phone: (913)624-3000 URL: http://www.sprint.com
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Marshall Field (1834-1906) Marshall Field and Company
Overview Marshall Field, a pioneer in the retail industry, founded what grew to become the world’s largest department store. His innovative ideas and readiness to explore new ways of servicing retail customers distinguished Field from so many other merchants. His motto, “The customer is always right,” not only summarized his business philosophy, but also became a creed for all who entered the retail industry. His unwavering focus on customer satisfaction eventually made him a highly successful and respected merchant.
Personal Life Marshall Field was born on August 18, 1834, and was the third of six children on a modest farm near the town of Conway, Massachusetts. His parents, John and Fidelia Nash Field, had roots there that dated back to 1630. Field attended the district school in Conway. While he was not a very good student, he excelled athletically; he was the fastest runner in his school. Early on, he exhibited a keen sense of business in trading jack knives with the other boys. Marshall Field was quiet and usually spent most of his time alone, however, a trait that he carried with him in later years. Field matured to become a man of few words, particularly in the home. When he did talk, it was about business. Field was reportedly addicted to work, as he had been since childhood, a value instilled in him early by his father. If he had any relaxation time, it too was filled with thoughts of improving his business.
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Field’s personal life included hardship and tragedy. He married his first wife, in 1863 at the age of 29. Nannie was the daughter of a wealthy ironworker from Ohio. However, she left him in the late 1880s to live in France by herself. She complained that her husband was so involved in his business that his continuing absence had driven her away and only apart from him could she find relief from her loneliness. Field and his wife never divorced. When Nannie died in Paris in 1896, he began a secret relationship with Delia Spencer, the wife of a friend of his. After Delia’s husband died in 1905, she and Field were married. In November of 1905, his only son, shot himself in the abdomen while preparing for a hunting trip. The elder Field was devastated and, at age 71, came down with pneumonia a month after his son died. He died on January 6, 1906.
Career Details An unexpected closing of the main road that went by the Field farm is what would eventually lead Field to leave farming. Due to the change in property values, John Field sold the family farm and purchased a new piece of property, then turned it over to his son, Chandler, one of Field’s older brothers. The life in farming that Field had come to expect, even if it had not been appealing to him, was now no longer in his future. So he searched for other options, first trying his hand as a clerk at a store. It seemed like an easy job, but at age 15 Field was seen as a miserable failure. The merchant told John Field that his son would never make it in the business world. Marshall was forced to return to his brother’s farm and work as a hired hand. During the next two years working there, Field realized farming was not for him and he longed to be self-employed. At age 17, with his brother Joseph, he took a job in a dry goods store in Pittsfield, Massachusetts. Even into the twentieth century, a dry goods store was the name given to what is now known as a department store that offered a variety of clothing and household goods. This time Marshall knew he had no choice except to stay and work hard at making a career for himself. He remained at the store for five years, living above the store and learning the business. It was said that he was shy, but courteous, and hard working enough to make up for whatever natural talent he might have lacked. After five years, his employer in Pittsfield offered him a partnership, but Field declined. He decided that the best opportunities for making a fortune were in the West. At that time, prior to the Civil War, the West included the territories west of Ohio. Rapid development and population growth offered endless possibilities for any merchant ambitious enough to relocate to uncharted territory.
Marshall Field.
(The Library of Congress.)
was rough, wild, and muddy. Yet, it was a city on the verge of becoming the center of the American Midwest and the hub of travel by rail, land, and water. It was there that Field decided to set up shop. Upon moving to Chicago, Field obtained work as a clerk in a dry goods store called Cooley, Wadsworth and Company. It was the largest store of its kind in Chicago at that time. The small and serious Marshall Field arranged to live and sleep in the store, managing to save half of his small income by living this way. The man who came to be known as “silent Marsh,” because of his retiring social manner, at this time he became obsessed to become a successful businessmen. By age 28, Field had risen to become a full partner in the company. Field’s consistently high level of performance at the store prompted another local entrepreneur, Putler Palmer, to ask that Field and his close partner Levi Leiter start a new business. This would be a new and full-range dry goods store in Chicago. Marshall Field, by the age of 30, had risen from a small store clerk to the co-owner of one of the largest department stores in Chicago in only eight years. In 1867, after two years of partnership, Field had arranged to buy out his partner, Levi Leiter and brought his two younger brothers into the business as partners.
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Field left New England at age 22 and moved to Chicago, which was a young city at the time. The city
The timing for Field’s business ventures would seem all wrong. He started his partnership in the midst of the
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Chronology: Marshall Field 1834: Born. 1856: Moved to Chicago and worked as clerk at Cooley, Wadsworth & Co. 1862: Became full partner with Cooley, Wadsworth & Co. 1863: Married first wife, Nannie Scott. 1864: Joined with partner Levi Leiter to start own store. 1867: Bought out Leiter and brought two younger brothers into business. 1881: Company assumed name, Marshall Field and Company. 1906: Died.
Civil War and calamities in Chicago soon followed. The fire of 1871 and the great financial panic of 1873, which impacted the financial stability of the entire nation, were challenges Field had to endure. He remained undaunted and unyielding to these forces, never veering from his goal of being a successful businessman. He worked day and night to rebuild and to refine his business. His efforts would eventually pay off, as he would ultimately create a giant department store that became world renowned. Field decided to concentrate on retail sales and totally abandoned wholesale aspects of his business. In the meantime, the city was changing every day. A new middle class was emerging with money to spend. He also realized the importance of concentrating on women as his main customers and moved his business to a part of town that was safe and physically accessible to women. As a merchant, Field was responsible for many innovations. He introduced the one-price system, bought and sold for cash, and permitted exchange of goods. The reliability of his store was well known. Field knew how to capitalize on the latest business trends and tailor them to his needs. He adopted the idea of home delivery and offering an interior decoration department. Field established his store as one for people of good taste and employed European buyers, who brought back the finest china and furniture from Europe. His store was to be the standard against which all others would be measured. Field is given credit for re-inventing the motto, “The customer is always
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right.” If an article was returned, for any reason, the customer’s money was returned, as well. He was the first to display merchandise in the front-windows to draw pedestrians inside. He also opened a restaurant in the store and initiated free gift-wrapping for customers. It was also Field who started what some may say as the most significant innovation of all: The Bargain Basement. Because of his efforts, sales grew from $12 million annually in 1868 to $25 million by 1881 and $68 million in 1906. Field’s business earned him millions in his lifetime. He was known to everyone in Chicago, and socialized with the very rich of the city. He had an enormous estate built on Chicago’s prestigious Prairie Avenue. Through it all, Field still held onto the ways of his farming boyhood and had changed little: he was still quiet, socially shy, and known as somewhat reclusive. Interestingly, Field pushed the development of downtown Chicago, so that when he died, half of his fortune, estimated at $100 to $150 million, was in Chicago properties. He wished to make Chicago a great educational and cultural center and gave large sums to various institutions. He helped found the Art Institute, donated the land on which the first building of the University of Chicago was erected, and contributed $1 million for the museum of the World’s Columbian Exposition. This museum became Field’s chief interest; in addition to gifts during his lifetime, his $8 million bequest built the Field (later Chicago) Museum of National History. Even to the present, this museum remains a foremost tourist attraction and significant contribution to the city’s culture. Field refined and created the model department store. It was a complete store with elaborate displays, a variety of products, in-store cosmetics shops, dining areas, and of course the bargain basement concept. His customer-friendly policy, and the simple vastness of his store offering something for everyone, brought him a shopping center with great customer loyalty. This concept was copied by all who opened department stores in the United States and around the world. In the latter part of the twentieth century, Marshall Field was known as a workaholic, never sitting idle for a day. His business style was to work constantly. He loved his employees who cared about business as much as he did, and promoted the ambitious and efficient ones to high ranks in the company. Field ushered in new ideas and initiated whatever seemed to work in other businesses. He took trends and made them work for his store with always an eye to the customer. He created the feeling, without a doubt, that the customer was always right—which had become his company’s most effective business strategy. The bulk of Marshall Field’s estimated fortune of $150 million was put into a trust fund for his grandson, who was 12 years old when his father, Marshall II, fatally shot himself. His grandson, Marshall III, caused society to talk when it became public that he was going to donate his inheritance. He believed that inherited wealth
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should go to help ease social problems. Much of his money went into founding the Chicago Sun newspaper. Field’s legacy would be transformed from one of wealth to one of promoting social justice—something Field could not accomplish in his own lifetime.
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Bibliography Pierce, B. L. “Rise of a Modern City, 1871-1893.” History of Chicago, New York: Alfred A. Knopf, 1957. Tebbel, John. The Marshall Fields. New York: E. P. Dutton & Co., Inc., 1947. Twyman, Robert. Marshall Field and Co., 1852-1906. Philadelphia: University of Pennsylvania Press, 1906.
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Wagenknect, Edward. Chicago. Norman: University of Oklahoma Press, 1964.
Contact at: Marshall Field and Company 777 Nicollet Mall Minneapolis, MN 55402-2055 Business Phone: (612)370-6948 URL: http://www.dhc.com
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Wendt, Lloyd. Chicago, Pictorial History. New York: Bonanza Books, 1958. Wendt, Lloyd. Give the Lady What She Wants. Skokie, IL: Rand McNally & Co., 1952.
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Debbi Fields (1956-) Mrs. Fields’ Cookies, Inc.
Overview Debra J. Fields was able to market the tasty chocolate chip confection she perfected as a teenager into a multi-million dollar-a-year retail business. By the early 1990s, despite some financial setbacks, Fields had become known as the “cookie queen.” The hardworking Fields had retail stores in seven countries and a menu expanding into new areas of food items designed to please an upscale palate.
Personal Life Debra J. Fields, called Debbi, was born Debra Sivyer, on September 18, 1956, in East Oakland, California. The youngest of five daughters born to a Navy welder and his wife, she was raised in middle-class surroundings. Her parents taught her to work for what she wanted. Fields developed a talent and interest in baking. Starting with the classic 1930s Toll House Cookie recipe on the back of the Nestle’s Chocolate Chips bag, Fields began experimenting with the cookie batter through dozens of batches. By the time she was 18, Fields was well known locally for her cookies, which were richer and more doughy than the classic recipe. After high school, Fields took classes at a community college for two years and worked at a variety of jobs. In 1976 she married Randall Fields, a young financial consultant. Randy would often bring batches of his young wife’s cookies into the office and would come home repeating the praise her cookies had received. Even with such glowing praise Fields never
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contemplated her cookie-baking as more than a hobby, until an episode at a dinner party. Asked by an associate of her husband’s what she was going to do with her life, she replied, “Well, I’m trying to get orientated.” The associate immediately tossed the intimidated Fields a dictionary and said, “The word is oriented, not orientated. If you can’t speak the English language, don’t speak at all.” Fields went home in tears. While telling Redbook the story she added, “When people asked me what I did, I’d say, ‘I’m a housewife’ and they’d walk away. I decided right then that I never wanted to feel that way again. Soon after that I started to think about what it was that I loved to do, and I realized I loved to make cookies. Six months later I had a business plan.” With a $50,000 loan from her somewhat skeptical husband, she opened a small gourmet cookie shop in her local downtown food arcade. Called Mrs. Fields Chocolate Chippery, the store opened on August 13, 1977. By noon hardly a customer had entered the shop, and she began to believe her husband’s prediction, that she would not earn $50.00 the first day. Determined, Fields piled a tray with freshly baked cookies and started handing out free samples in the walkway. The food court, busy with lunch-time traffic, provided plenty of takers. After her tray had been emptied and she had returned to her shop, Fields found that she had won over some customers. Going home with $75.00 in sales, she demonstrated that she had the perseverance and resourcefulness to make her business a success. That small shop in Palo Alto, California has since sparked over 600 stores throughout the world. Fields’ other businesses are each named after one of her three daughters: Jenny’s for Kids, which sells children’s clothes; Jessica’s Cookies, a separate cookie company; and a gift shop called Jennessa’s. In 1987 she published her autobiography, One Smart Cookie. She has written a number of cookbooks, including Debbi Fields’ Great American Desserts in 1996.
Career Details From its roots in Mrs. Fields’ Chocolate Chippery, the Mrs. Fields Cookies retail chain was born in 1977. Its first headquarters was in Palo Alto, although the company would follow Fields and her family to Park City, Utah in 1982. Her determination continued, and Mrs. Fields Cookies retail locations expanded first within the San Francisco Bay area, then throughout California.
Debbi Fields speaks at the State of World Forum where people gather from around the world to seek solutions to the problems facing humanity. (AP Photo/George Nikitin.)
cookie combinations, as well as brownies and a frozen cookie treat. Despite growing numbers of store locations, Fields would continue to retain personal control over all cookiebaking operations. She inspected samples of all ingredients and visited individual stores by rotation, introducing herself to employees and checking to see that her own high standards were being followed. She has closed stores for the day because the cookies sold there were not soft and chewy enough. Fields readily admitted to Inc. magazine. “They have to be perfect. There’s no word at Mrs. Fields for ‘its good enough.’ I’ll go in and throw away $600 worth of product. I don’t think about what I’m throwing away, I just assume that there’s been some reason why the people were not taught what the standards of the company are.”
Between 1985 and 1988, the company opened 225 new stores. By the late 1980s the chain had grown to include 425 cookie stores across the United States and abroad, with annual retail sales of over $87 million. Fields expanded her product line, adding oatmealraisin, walnut, coconut-macadamia nut, and other
Because of high standards, Fields did not franchise her locations and soon found herself stretched too thin, both physically and financially. The recessionary national economy during the early 1990s also hit the business hard. By 1993 Fields was forced to give up 80 percent of the company to those lenders that had extended her over $94 million toward expansion of the business. Although she remains the company’s largest shareholder, she has lowered her profile within company management. Still, qualifications of franchisees have been established
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Chronology: Debbi Fields 1956: Born. 1970: Developed cookie baking techniques in her family’s kitchen. 1977: Opened Mrs. Fields Chocolate Chippery in Palo Alto, California. 1980: Became president and CEO of Mrs. Fields Cookies. 1982: Moved her family and business to Utah. 1986: Established Mrs. Fields Children’s Health Foundation. 1987: Published autobiography, titled One Smart Cookie. 1992: Began franchising existing retail store locations. 1993: Wrote off debt by giving her lenders 80 percent of the company’s assets.
In addition to a good-tasting product, industry analysts credited Fields’ overall success to her commitment to quality. She insists on only fresh ingredients and requires that local retailers bake cookies daily. As Fields told an interviewer in Moxie magazine, “The main thing is—if you absolutely know what you’re doing is good, it makes it very easy not to compromise and not to give up; because you know you’re going to make this world a little bit better.” Fields’ unconventional business style, manifested by her close involvement with each of her stores and her view of employees as an extended family, reflects her own high standards and expectations. These standards include a strong element of caring and concern for others, especially her customers. In addition, since her first year of operation, every cookie in each of her stores that was still on the rack after its first two hours out of the oven has been donated to a local charitable organization. Fields took the economic downturn of her business during the early 1990s in stride; she was quoted as telling the Los Angeles Times that cookies would continue to be her life. “I would not give this up for any amount of money.” Fields continues to operate as chairman of the board and is an enthusiastic marketer of the retail stores that bear her name. As she told Redbook, “Sometimes the things that are most devastating are the best things for you. I think you learn more from failures than from success.”
1996: Appeared in Public Television series.
Sources of Information with consideration for her exacting standards: potential owners must put in a minimum of three months’ steady employment at a current retail outlet, although Fields encourages six months. “You have to be a cookie lover,” she told Working Woman. Fields believes that the interaction between employees and customers is key to any business’s success. “When we interview, we put applicants through a threestep test,” she told Supermarket News. Applicants are first judged on their reaction to tasting Mrs. Field’s cookies. Then they are asked to go out on the street and give cookies away. Those that pass the first two steps are then asked to sing “Happy Birthday” in the middle of the store. “We do that because anybody can sing that, and we want people who would do something as outrageous as singing in front of a bunch of strangers,” Fields explained.
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Contact at: Mrs. Fields’ Cookies, Inc. 333 Main St. Park City, UT 84060 Business Phone: (801)463-2000 URL: http://www.mrsfields.com
Bibliography Contemporary Newsmakers. Detroit: Gale Research, 1987. Harper, Roseanne. “Mrs. Fields Shares Sweet Sales Secret.” Supermarket News, 26 June 1995. Moxie, August 1990. Myers, Dee Dee. “The Biggest Career Goof I Ever Made.” Redbook, November 1995. Pogrebin, Robin. “What Went Wrong with Mrs. Fields?”Working Woman, July 1993. Prendergast, Alan. “Learning to Let Go.” Working Woman, January 1992.
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Paul Fireman Overview Paul Barry Fireman accomplished what others considered impossible. He transformed his family’s wholesale sporting goods business into Reebok International, one of the world’s chief contenders in the athletic shoe market. Fireman attended a trade fair in Chicago in 1979 and was impressed by a display of hand-sewn leather sneakers called “Reeboks,” which were made by the world’s oldest athletic shoe company, J.W. Foster & Sons. Six months later, he had convinced the British company to let him distribute the shoes in the United States. Within five years, Fireman’s company, Reebok, U.S.A., bought out all rights to the shoe, and Reebok International was born. Fireman worked to create a market for designer sneakers. By 1987, his company became the leading manufacturer of athletic footwear in the United States, and was second only in the world to Adidas.
(1944-) Reebok International
Personal Life Paul Fireman was born on February 14, 1944, in Cambridge, Massachusetts. He attended Tabor Academy, a private secondary school in Marion, Massachusetts. He enrolled in Boston University but did not stay to obtain his degree. Instead, he went to work for his family’s company, BC Recreational, selling outdoor recreational equipment. He eventually became vice-president, then treasurer of the company. Fireman and his wife, Phyllis, have three children. They live in Newton, Massachusetts, an affluent suburb of Boston. Nearby is the town of Stoughton, where Reebok, International is headquartered.
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J.W. Foster & Sons, which was founded in Britain in 1895, was the fair participant that caught Fireman’s attention. In the 1950s J.W. Foster & Sons started making special, hand-sewn shoes for the world’s best runners. Their shoe was named after a species of African antelope that was well known for its speed. Fireman quickly saw the potential these shoes had in the American marketplace. People were beginning to be conscious of fitness and joggers had become increasingly visible on America’s pavement by the end of the 1970s. He persuaded the shoe manufacturers, already known as Reebok International, to let him distribute their product in the United States.
Paul Fireman holds the specialist book with Reebok’s ticker symbol “RBK” on the trading floor at the New York Stock Exchange. (AP/Wide World Photos, Inc.)
Fireman relaxes by playing golf. He is not considered to be athletic, despite his company’s spotlight in the athletic arena. When he was denied membership in the exclusive Oyster Bay, New York Country Club, he went out and bought his own club. He is described as a person who speaks directly and decisively. Commenting about himself, Fireman once said, “I tend to get right to the point.” Fortune magazine’s list of the 400 richest people in America estimated Fireman’s wealth at $535 million. Fireman said in 1987, after he changed from his usual casual attire of jeans to suits and wing-tip shoes, that he refused to let financial success fail to remind him of who he has always been. In March of 1987, USA Today reported that Fireman claimed, “We moved to a ritzier neighborhood. But I will still go out for the same beer and pizza.”
Career Details Fireman was working in his family business for over 15 years by the time he discovered Reebok shoes. Whatever he did or learned before that moment was all a prelude. His career at the top of the business world began with a trip to a Chicago trade fair.
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Although sales of Reeboks were initially slow, Fireman demonstrated a solid understanding of marketdriven trends. The shoes were initially available at $60 a pair. They were amongst the most expensive athletic shoes on the market during the late-1970s. By 1981, Fireman had run out of money. In a bold move, he raised cash by selling about 60 percent of his new company to Pentland Industries, a London-based industrial holding company, for $75,000. Fireman agreed to a $65,000 annual salary from Pentland and an incentive bonus of 10 percent of pre-tax earnings more than $100,000. Fireman would also run the new company. Fireman’s first major success was his anticipation of the aerobics craze that went along with women’s increased interest in fitness and sports. These consumers had not yet been courted in the way that Fireman began to court them. Fireman used research as the necessary tool to serve the customer that nobody had yet served. In the August 3, 1986 issue of the Los Angeles Times, Fireman said, “All marketing, design, and production are directed toward answering the requests, needs, and fantasies (of customers) versus us trying to tell the consumers what they want.” Fireman took the lead in doing what others would do after him. He went to fitness leaders for advice. This strategy began to make a difference in how America shopped for shoes. Fireman’s “Freestyle” shoe was the first athletic shoe designed specifically for women. Reebok made them soft, lined them with terrycloth, and added delicate colors. Most of all, they made a sturdy shoe that survived the new fitness consciousness that was sweeping through America. Fireman decided to diversify Reebok in the mid 1980s. His goal was to turn the company into a multinational corporation worth $2 billion. The process involved the three steps of acquisitions, internal development, and international expansion. Between 1986 and 1987, Reebok acquired several companies, including Avia, a rival athletic shoemaker; John A. Frye, the prestigious and stylish boot maker; Rockport, a company known for its sporting and casual shoes; and Ellesse, an Italian company known for making expensive athletic shoes and clothing. In 1986, Fireman’s Reebok entered the sportswear market. Due to problematic shipments and inferior im-
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port quality, Reebok missed the spring season altogether that year. Sales registered a mere $39 million, not enough to make much of a statement or realize the profits for which the company had hoped. Again, however, Fireman did not give up. He sought out Douglas Arbetman, formerly a divisional president with Calvin Klein, to head the apparel unit that September. Most of the design and sales staff were replaced. These problems and adjustments in the sportswear division were followed by management restructuring throughout the whole company. At the end of March 1987, Fireman named Joseph LaBonte, formerly president of Twentieth Century Fox studios, as Reebok’s new president and chief operating officer. Fireman also hired Mark Goldston, a former president of Faberge, and Frank O’Connell, former chief of operations for HBO Video. Fireman’s salary kept pace with soaring company profits throughout the 1980s. From 1984 to 1985, his salary jumped from $1.2 million to $5.5 million. Pentland, Reebok’s holding company, cut a new deal with Fireman when his original contract expired in 1986. Fireman would be paid a base salary of $350,000 plus five percent of pretax profits over $20 million. By 1990, this deal brought him, with stock options, an annual salary of $33.3 million. That same year, Pentland decided to sell 30 percent of its Reebok holdings. They followed in April 1991 with the sale of another 19 percent. Pentland announced in November 1991 that they planned to sell all of their remaining Reebok stock. Fireman decided to take a pay cut in 1990 as well. The size of the cut was unprecedented in American corporate history. Effective January 1991, Fireman took a base pay of $1 million, with bonuses totaling no more than $1 million. Fireman agreed to take this cut after he was attacked as the chief executive who had delivered the worst shareholder performance in relation to his own pay. Fireman proved invincible in the face of increasing criticism throughout the 1990s. He continued to invent new products and new advertising campaigns. His best success turned out to be with the teen and preteen age groups, even though he targeted the more desirable 18 to 35 year olds. In 1990, Reebok turned over its advertising to Hill, Holliday, Connors & Cosmopulos, Inc., a Boston-based agency. They hired the famous pop singer and personality Madonna to introduce two new shoes in a series of back-to-school ads. The two shoes introduced were the Double Pump, featuring two air bladders, and the Blacktop, a basketball shoe. With Fireman’s approval, the new advertising campaign adopted a new slogan: “Life is short. Play hard.”
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Chronology: Paul Fireman 1944: Born. 1979: Obtained rights to sell Reebok shoes in the United States. 1981: Sold 60 percent of company to Pentland Industries, London to raise money. 1982: Introduced Reebok Freestyle shoe, the first aerobic shoe marketed. 1984: Fireman and Pentland Industries bought out Reebok from Foster & Sons. 1986: Entered sportswear apparel industry with Reebok line. 1986: Reebok surpassed Nike as top-selling manufacturer of athletic shoes in the United States, second only in the world to Adidas. 1987: Engineered major management restructuring of Reebok. 1988: Launched controversial $35 million “Reeboks lets U.B.U.” advertising campaign. 1988: Initiated Reebok Awards for Human Rights. 1990: Took a pay cut considered the largest in U.S. corporate history. 1996: Named to Footwear News Hall of Fame. 1998: Criticized by Reebok shareholders as company profits lag.
In 1996, Fireman opened his Reebok Sports Club/NY, in New York City, in a further attempt to gain an older clientele and expand his reach in the marketplace. Reebok was also an official licensee for the 1996 Summer Olympics.
val, Nike, suffered great losses through the negative publicity of its underpaid, underage Asian workers. Many colleges boycotted Nike and its products. Despite these setbacks for its number one competitor, Reebok continued to struggle. In an August 18, 1997 article in Fortune magazine, Fireman commented about his company’s change of direction: “We kind of forgot one of the key ingredients of our success-that the product is more important than the celebrity athlete.” Fireman also tried to turn things around by trimming costs, selling off Avia shoes and other company interests. Reebok’s new DMX 2000 series shoes, using DMX and 3D Ultralite technologies, were also expected to capture more consumer profits.
Throughout the-late 1990s, Fireman struggled to hold on to a sizeable share of the market. Reebok’s ri-
In March 1998, the Wall Street Journal reported that Fireman would receive only 56 percent of his annual
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bonus in 1998 due to his failure to meet performance goals. This meant he received only $562,000 out of a possible $1 million bonus. As of late May 1998, however, the sports shoe web page FOOTACTION USA reported that Fireman told shareholders that the company has “the best product line in the industry.” Fireman also announced that he planned a “Try on the Future” tour and would send out vans to major shopping malls so that customers could try on the company’s newest products.
did not hesitate to discontinue business with them. Under Fireman’s direction, Reebok implemented worker standards, known as the Reebok Human Rights Protection Standards. These standards are enforced through a system of education, training, and factory audits. Fireman has honored his customers by doing careful research to understand their needs. He has also worked repeatedly to ensure that the world is a better place. He proved that American capital ventures can survive financially and still serve the public welfare.
Social and Economic Impact Fireman took the lead in an emerging multi-billion dollar athletic shoe industry when such a move was a great risk. He also shocked corporate America by taking the advice of fitness experts and consumers. Less than twenty years after he began, Reebok became a $2 billion company. Fireman’s refusal to step aside, even in the midst of disappointing shareholder profits, proved his determination and hard work. Fireman created a constant challenge to Reebok and to all industry leaders to keep changing to increase consumer satisfaction and profits. Frieman’s greatest contribution to corporate America is his diligent effort in the area of human rights. Amnesty International honored Fireman for his work in this area. Along with Amnesty International, Fireman established the annual Reebok Human Rights Awards for activists under the age of 30 who have made significant achievement for human rights causes. In running his own company, Fireman said, “I didn’t want this to look like, taste like, or smell like an American corporation of the ‘50s, ‘60s, or ‘70s. I thought Reebok should be operated differently.” Fireman is outspoken beyond his own responsibilities to lessen human suffering for workers around the world. He also took all of corporate America to task when he called on corporations to take social responsibility more seriously. When he discovered manufacturer abuse of workers in various Asian countries, he
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Sources of Information Contact at: Reebok International 100 Technology Drive Stoughton, MA 02072-4705 Business Phone: (781) 341-5000 URL: http://www.reebok.com
Bibliography Anderson, Kevin. USA Today, 12 March 1987. “Fireman, Paul.” Current Biography Yearbook. New York: H.W. Wilson Co., 1992. Footaction News. 25 May 1998. Available from: http://www. footaction.com. Golf Digest, 1998. Available from: http://golf.com/golfdigest/profiles/richguys.htm. Groves, Martha. Los Angeles Times, 3 August 1986. “Reebok International Ltd. Company Profile.” Citizens Trust for Corporate Responsibility. Available from: http://www.citizenstrust.ca/personnel.html. Sellers, Patricia. “Reebok Gets a Lift.” Fortune, 18 August 1997. Wall Street Journal. 30 March 1998. Wilner, Richard. “Reebok Chief Says, ‘Hell No, I Won’t Go.’” New York Post, 15 January 1998.
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Harvey S. Firestone Overview Industrialist Harvey Firestone established a rubber tire company with only a little cash and a fairly new patent in the rubber capital of the world, Akron, Ohio. A pioneer in the mass production process, Firestone created a company that became a major force in the industry and at its peak was counted among the “Big Five” tire manufacturers in the United States.
(1868-1938) Firestone Tire & Rubber Company
Personal Life Born December 20, 1868, Harvey Samuel Firestone was raised on a farm in Columbiana, Ohio. His family was descended from immigrants from the Alsatian region of France. Firestone’s early education was in a one-room school house. He graduated from high school, and then completed a business course at a Cleveland college. At the age of 27, Firestone married Idabelle Smith of Jackson, Michigan. The couple had five sons: Harvey S. Jr., Russell Allen, Leonard Kimball, Raymond Christian and Roger Stanley; all of the siblings worked in their father’s business. Firestone was a hard worker, but he enjoyed escaping from the rigors of business from time to time. He lived during an era that produced a number of great innovators. Some became his friends. It was not uncommon for Firestone to take long camping trips to remote regions with automaker Henry Ford, inventor Thomas Edison and naturalist John Burroughs. The foursome particularly enjoyed traveling through the countryside, and always without their families. According to the Akron Beacon
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other dignitaries on hand. The observances lasted two days in Akron; a special viewing was then held in his hometown, Columbiana.
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Harvey Firestone.
(The Library of Congress.)
Journal, these trips “were caravans that included cars and trucks carrying servants, equipment and a fully equipped kitchen. The dining table they hauled with them had room for 20.” On one famous trip, Edison, Ford, Firestone and Firestone’s son, Russell, motored to Plymouth, Vermont, to visit President Calvin Coolidge at his farmhouse. The last trip took place in the summer of 1920, a year before Burroughs died. Ford, Firestone and Edison continued to take the road trips, but did so with their families. Even after Firestone became a wealthy and famous industrialist, he remained rooted in the country, spending much of his free time working on his farm in Columbiana. He was also a staunch Republican and devoted Episcopalian. And he even made time to serve as president of the Ohio Federation of Churches. Firestone’s interest in the rubber tire industry developed while he was working at his uncle’s Columbiana Buggy Company in the early 1890s. During that time, Firestone grew to believe that the future was in rubber wheels and not buggies. His suspicions were confirmed when his uncle’s firm went bankrupt in 1896. In that year he set out to establish his own rubber tire company. He continued to play an active role in the company well past age 65, and served as its chairman until his death on February 6, 1938 at the age of 69. He died in his sleep in his oceanfront retreat in Miami Beach. By the time of the funeral, more than 12,000 people had come to Akron to pay their respects, according to the Akron Beacon Journal. The funeral was well attended, with members of the Ford and Edison families, White House officials, and
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After the bankruptcy of his uncle’s buggy manufacturing firm, Firestone left Ohio and launched a company that sold tires. Three years later, in 1899, Firestone sold that venture to a competitor for more than $40,000 in cash, a sizable profit in those days. Firestone, however, was intrigued by the tire industry and, even more so, the growing automobile industry. The U.S. auto industry was launched in 1896, the year the Duryea brothers built more than one vehicle from the same design. From that point on, other manufacturers were determined to get a piece of this promising business. Firestone pursued tires, and acquired a patent for a method of attaching them. He set his sights on Akron, which was already the hot spot of the tire industry. Interestingly, tire makers were mostly manufacturing solid tires for buggies and pneumatics for bicycles; the U.S. automobile industry was still in its infant stages. Still, Firestone knew he had to be in Akron to become a player in the tire manufacturing field, which he predicted would soon take off with the rising popularity of the automobile. So in 1900 he moved to Akron and, at age 31, organized the Firestone Tire & Rubber Company with $10,000 in cash and a patent for a method of attaching tires to rims. The business was off to a slow start until two major events propelled Firestone to the forefront of the tire industry. First, the firm began to prosper when it began manufacturing its own products in 1903, allowing it to substantially cut costs and boost production. This was key, as the automobile industry was looking to tire makers for improved ways to move its vehicles. Firestone was there to respond to their needs. The second big break came when Firestone, in 1906, received a huge order for 2,000 sets of tires from automaker Henry Ford. Ford was even at that time a major player in an industry brimming with small manufacturers. Ford’s order signaled the start of a long business relationship with Firestone that led to a personal friendship as well. Financially, the order was the boost Firestone needed to jump-start his company. In 1907 the company sold 105,000 tires at a $538,177 profit. But Firestone knew that new advances in technology would keep his company competitive. A year after Ford placed his big tire order, Firestone began offering a “dismountable rim,” which allowed quick replacement of a worn tire to a spare. That was a breakthrough for Firestone, and he aggressively marketed these tires. Firestone was on a roll now, realizing a number of successes as he continued to introduce better and improved tires. His efforts paid off handsomely: company sales rocketed to $15 million in 1913, up from only $100,000 just 12 years earlier.
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Akron Beacon Journal writers Steve Love and David Giffels said this about Firestone: “The blue-eyed, diminutive Firestone—he was 5-foot-6—would spend his mornings walking the grounds of the rambling Harbel Manor, his West Akron estate, now the site of the Georgetown Condominiums and environs. His body was there, walking among the flowers and trees, but his mind was on the rubber company as he thought through his daily plans.” Typically, Firestone arrived at the office around 10 a.m., but had already been busy with work.
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Chronology: Harvey S. Firestone
Firestone was a good ideas man, but had little interest in actually inventing things. He left such technical details to the engineers. One example of this occurred in 1908, when Firestone came up with a concept for a “nonskid” tire with a diagonal tread pattern. “He sketched out the idea on a note pad in his office. The designers made it work, and the company still points to the non-skid tire as one of its proudest developments,” reported the Akron Beacon Journal.
1868: Born.
Throughout the 1920s, Firestone prospered as one of the “Big Five” tire companies, standing in line with Goodyear, Goodrich, U.S. Rubber, and Fisk. Firestone, however, took nothing for granted. The postwar depression of the 1920s prompted Firestone to slash prices and cut wages in an effort to trim costs. He kept wages low during the expansion years of the 1920s and throughout the Depression, which helped the company maintain healthy profits. Surprisingly, Firestone, along with the other tire companies, was able to stall unionization of its manufacturing plants until the 1930s, a move that also kept wages low.
1932: Stepped down as company president; continued as chairman.
Social and Economic Impact Certainly, Firestone was a force in the industry. His innovations were renowned in the rubber tire and automobile industries, and greatly influenced the direction of rubber technology. In 1923 Firestone introduced the balloon tire, which quickly became the standard for most types of motor vehicles. He was also a proponent of using motor driven trucks, extending the American highway system, and the elimination of railroad grade crossings. Making tires was not Firestone’s only concern. Having the materials to build tires was equally important. So when the British government in 1922 implemented the Stevenson Plan, which restricted the production of crude rubber on plantations in British possessions throughout the world, Firestone responded. The Stevenson Plan drove up crude rubber prices, greatly effecting the profits of the tire industry. Firestone, however, refused to be a victim and, joined by his friend Henry Ford, set out to establish an American-controlled supply of crude rubber. In 1924 the two men began developing their own rubber supply in Liberia, in western Africa. By 1926 they had leased rights to a maximum of one million acres. As a result of his huge investment, Firestone became a force
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1892: Sold buggies for buggy manufacturer. 1896: Established first tire company. 1900: Founded Firestone. 1906: Received huge tire order from Henry Ford. 1926: Developed rubber supply in Liberia, with Ford. 1928: Established service center stores.
1938: Died.
in Liberia’s economic fabric. Firestone was quite successful in Liberia, and achieved his goal of an independent rubber supply. Firestone even contributed to that country’s economic and social growth. He improved the Monrovia harbor, loaned the Liberian government several million dollars, and developed a sanitary work and living site for his native employees. Despite these efforts, Firestone was criticized for paying low wages to Liberian workers and for having too much influence in Liberia’s affairs. In the United States, Firestone was busy developing new strategies to keep his company prosperous. In 1928 Firestone began opening a chain of “one-stop master service stores” throughout the United States to supply the public with the company’s tires and gasoline, oil and batteries, and brake and general equipment service. In later years, the service centers included auto supplies, and the name was changed to “auto supply and service stores.” Just 14 years later, there were 650 of these stores in operation across the United States. Moreover, by the late 1930s, Firestone employed more than 45,000 people. He operated 13 plants in the United States and five plants abroad. By 1942, Firestone had the largest rubber plantation operating under single management in the world, employing 30,000 laborers, with 80,000 acres planted. That is just half the story. Firestone had indeed built an empire, and it was hugely profitable. The Great Depression of the 1930s did not diminish the health and strength of this company. During that bleak period, he never suspended dividend payment and even continued
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to show improvements in the business. Near the end of the Depression, in 1937, the company had a capital of $108 million and sales of $157 million, with profits of $9 million. Firestone had an impressive share of the market, as one-quarter of all tires sold in the U.S. wore the Firestone badge. Robert Koch is a retired Firestone vice president believed to be the last person alive to have been hired directly by Firestone himself. He said in the Akron Beacon Journal, “I think the thing that was outstanding about Mr. Firestone was that he had long-term vision,”. And Koch credits Firestone’s conservatism during the Great Depression as the reason for the company weathering that storm. However, Firestone was ultimately not equipped to adapt to changing circumstances. After World War II, industries grew bigger and stronger, and required a certain level of management expertise. Firestone had always run his empire as a closely-held family business. As the company grew, he was unable to make the hard decisions to keep it current and competitive. It soon lost its leadership in tire production to Goodyear, which had better marketing and management abilities. Another troublesome spot: Firestone never diversified beyond tire production. He acquired textile mills and rubber and cotton plantations, but these were all to aid the production of tires. All of the ingredients needed to build his tire empire later backfired and led to its demise. In the
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late 1980s, Japan’s Bridgestone acquired Firestone, which is now part of Nashville-based Bridgestone/Firestone Corp.
Sources of Information Contact at: Firestone Tire & Rubber Company 50 Century Blvd. Nashville, TN 37214 Business Phone: (614)872-5000 URL: http://www.bridgestone-firestone.com
Bibliography Bonn, Joseph. “For Vagabonds: Even Magnates Can Have Fun.” Automotive News, 21 September 1993. Byers, Paula K., and Suzanne M. Bourgoin, eds. Encyclopedia of World Biography, 2nd ed. Detroit: Gale Research, 1998. Fucini, Joseph J., and Suzy Fucini. Entrepreneurs. Boston: G.K. Hall & Co., 1985 Ingham, John N. Biographical Dictionary of American Business Leaders. Westport, CT: Greenwood Press, 1983. Love, Steve and David Giffels. “Risk-Takers Made Akron Rich.” Akron Beacon Journal, 26 January 1996. “Time Capsule.” Time, 1 September 1997. Van Doren, Charles, ed. Webster’s American Biographies. Springfield, MA: G. & Merriam Co., 1979.
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Donald Fisher Overview Donald Fisher, with his wife, Doris, created the popular and ever-expanding chain of Gap clothing stores. The Gap began as a jeans store selling a wide selection of Levi’s, but gradually shifted to feature only its own private label of casual apparel for men, women, children, and infants. Old Navy and Banana Republic are also a part of the Gap empire, which has extended its all-American look to Europe and Japan.
(1928-) The Gap, Inc.
Personal Life Donald George Fisher was born in 1928. He and his wife, Doris Feigenbaum Fisher, have three sons, Robert, William, and John. Fisher graduated in 1950 with a bachelor of science degree from the University of California at Berkeley, where he was a swimmer and a star player on the water polo team. Presidents Ronald Reagan, George Bush, and Bill Clinton have all appointed him to the Advisory Committee of Trade Policy and Negotiations. In 1998, he and his wife pledged $25 million to a foundation which helps the San Francisco area public schools. The foundation planned to hire a for-profit firm, the Edison Project (of which the Fisher’s son John owns four percent) to reform the city’s traditional and charter schools. Fisher has been described as a “tall, professorial man, balding and white-haired” by Sylvia Weiland Nogaki in the Seattle Times.
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lied heavily on Levi’s jeans for its profits, but by 1982, only 30 percent of their stock was Levi’s. In 1991 the Gap announced it would begin carrying only its own brand of merchandise.
Chronology: Donald Fisher 1928: Born. 1950: Entered real estate business with father. 1969: Opened first Gap store with wife, Doris Fisher. 1972: Opened first Gap store outside of California. 1983: Acquired Banana Republic stores. 1986: Opened first GapKids store. 1989: Introduced first BabyGap store. 1976: Began selling The Gap’s own brand exclusively. 1994: Opened first Old Navy store. 1995: Stepped down as CEO of Gap, Inc. 1998: Pledged $25 million to an educational foundation.
Career Details After graduating from college, Fisher entered the real estate business, first with his father in M. Fisher & Son, and later as president of Fisher Property Investment Company. In 1969, a shopping experience altered his fate. When he tried to exchange a pair of blue jeans, he found that most stores did not carry a good selection and were very disorganized. He and his wife, Doris, came up with a solution. In August of 1969, they opened the first Gap store near San Francisco State College, with Fisher acting as chairman and chief executive officer (CEO). The Gap was named after the so-called “generation gap,” and was meant to be a place where college students could try on trousers until they were happy with the fit. The store carried a wide selection of styles and sizes of jeans, and initially also stocked a record department, although they dropped it after five months to concentrate on clothing. The casual styles were a hit with the younger crowd, and soon new stores were opening. By 1972, the Gap had expanded out of California, and in 1974 began producing its own private-label clothing and accessories. Though the Gap began as a jeans retailer, Fisher soon added brightly-colored sportswear to its shelves to pair with the pants and round out the selection. The Gap eventually began producing its own T-shirts and tops, and also added activewear to appeal to older customers and working women. For many years, the company re-
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The Gap’s stock went public in 1976, and since then, business reports have followed the rise and fall of the retailer closely. It has experienced fluctuations in its price, but Fisher has ridden the waves with the company and helped it recover when things looked bleak. In the early 1980s, to improve sales, he expanded the size of the store (previously only 4,000 square feet) in order to broaden the merchandise line and sell more product, adding 50 percent more room to some stores and creating “Super Gaps” (three times the size of a regular store) at other sites. As he told Howard Rudnitsky in Forbes, however, “When you shop in Super Gap or a remodeled Gap, the jeans image will still predominate. All we are doing is widening the assortment of items we already carry.” With 550 Gap stores under his belt, Fisher, in 1983, acquired Banana Republic, a pair of stores in San Francisco known for their popular catalog. He built up a chain of Banana Republics, mainly in downtown business districts of large cities such as New York, Chicago, and Seattle, in addition to some mall spaces. Over the next decade, the company completely revitalized the store’s style, transforming its image from a silly safari style to an upscale casual chic, meant to be versatile enough to wear to the office or out to dinner. According to Banana Republic CEO Jeanne Jackson, there were 295 stores open throughout the country by 1998. Though this growth was healthy, it still left the company with additional room for expansion. The same year Fisher took over Banana Republic, he hired marketing guru Millard (Mickey) Drexler to take over as president of the Gap. Drexler, noted for his outstanding success with the Ann Taylor shops, proved to be a good catch for the Gap. In 1986, after deciding that children needed stylish, casual, and comfortable clothes that would also appeal to their parents, Drexler opened GapKids, based on the same styles that grown-ups were wearing. In 1990, along came BabyGap as a part of GapKids, featuring infant and toddler apparel. Despite the ever-crowding casual market, the business was booming, and Donald and Doris Fisher in 1986 made their debut on the Forbes 400, the magazine’s list of the nation’s 400 richest citizens. Doris Fisher is active in the business as the merchandising consultant, and two of the Fisher’s three sons also have their hands in the firm. The first Gap store outside of the United States opened in the London area in 1987, marking the first of a chain of international sites. In 1994, the Gap opened another division, called Old Navy. Drexler was involved in this as well. Though Gap sales had been outstanding, increasing from $480 million in 1983 to $2.5 billion in 1991, they began to slow in the early 1990s. Fisher’s son Robert told Fortune, “We were hearing from our own employees that the clothes were
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getting too expensive.” In 1993, Drexler took Gap stores that were not selling enough items and converted them into lower-price, down-market outlets, initially called “Gap Warehouses.” But Drexler wanted a more creative name. It came to him as he was strolling in Paris and saw the words “Old Navy” written on the side of a building. The name conjured just the down-to-earth, spartan image that Old Navy offered. Old Navy stores were placed mainly in strip malls or outlet centers instead of regular malls, so as not to compete with the Gap. Apparently Fisher was pleased with Drexel’s leadership, promoting him to CEO in September of 1995. Though sales in the first five months of 1997 lagged, the Gap picked up the pace. A stronger focus on women’s fashion and an upbeat $20 million advertising campaign in 1998 probably helped. Fisher remains chairman of the Gap, Inc.
Social and Economic Impact The Gap stores have become an expected fixture in malls and urban shopping districts around the country and throughout the world. At The Gap, Customers can almost always count on being able to find the right size jeans in a variety of styles at a more reasonable price than designer labels. The Gap’s high-quality, classic designs have remained wardrobe staples for youthful customers, older shoppers, and their children, bridging that “generation gap” that gave rise to the store’s name. The company’s growth, targeting a greater variety of consumers around the world, was awe-inspiring. By the 1990s, The Gap had become a pop-culture icon. In 1994, the store was featured prominently in the hit movie Reality Bites, starring Winona Ryder and Ethan Hawke, hinting that it was becoming an integral part of Americana. Also, Saturday Night Live for a while ran a hilarious skit featuring David Spade, Adam Sandler, and the late Chris Farley in drag portraying the “Gap Girls,” a trio of catty retail salespeople for whom the mall was the center of their world. In addition, on David Letterman’s late night talk show one night, he quipped that one of the signs that the rodent population of New York had surpassed the human population was the new “Gap for Rats” stores popping up on every corner.
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sales for 1997, when other sellers saw an average of three percent. Perhaps the greatest key to the Gap’s success has been Donald and Doris Fisher’s ability to satisfy customers with classic as well as new styles without succumbing to wild fads, and to hire talented people like Drexler to help them along. The 1990s saw a resurgence of khakis encroaching on the jeans market as American’s legwear of choice, and the Gap either followed the trend or helped create it, depending on the viewpoint. Its ad campaigns have generally been simple but effective. In 1993, it began promoting khakis using the images of Gene Kelly, Marilyn Monroe, and Ernest Hemingway. The Gap replaced its “fall into the Gap” jingle with a snazzy set of television spots in 1998, featuring slick direction and the music of Crystal Method (“Khakis rock”), Bill Mason (“Khakis groove”), and Louis Prima (“Khakis swing”), featuring a cadre of young dancers and skateboarders having fun in the loose-fitting pleated pants. The Gap, like other corporations, is involved in “giving back” to the community. Through its Community Relations program, a portion of its pre-tax profits is doled out to charities based on suggestions from employees. According to the company’s web site (http://www.gap.com), in 1995 the Gap donated more than $5 million to groups involved in the arts, the environment, and health and human services.
Sources of Information Contact at: The Gap, Inc. One Harrison St. San Francisco, CA 94105 Business Phone: (650)952-4400
Bibliography Caminiti, Susan. “Competition: Will Old Navy Fill the Gap?” Fortune, 18 March 1996. Forbes, 17 October 1994. “The Forbes 400 Richest People in America.” Forbes, 1996. Available from http://www.forbes.com/richlist. “The Gap.” Hoover’s Online, 1998. Available from http://www. hoover’s.com. The Gap, Inc. Company History. San Francisco, CA: The Gap, Inc. Available from http://www.gap.com/company.
From the late-1980s into the 1990s it seemed as if new Gap stores were appearing at an astonishingly rapid rate. Microsoft Investor (http://investor.msn.com) in 1998 reported that stock prices were up 57 percent. That same year, the Gap boasted over 2,100 stores in the United States, United Kingdom, Canada, France, Germany, and Japan, with sales of more than $4 billion. Sales figures are not broken out among the various divisions of the Gap, but Microsoft Investor reported that overall, the Gap enjoyed a 20 percent growth in retail
Rudnitsky, Howard. “Widening the Gap.” Forbes, 13 September 1982.
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“Gap’s 1st Global Ads Confront Dockers on a Khaki Battlefield.” Advertising Age, April 1998. Available from http://adage.com. George, Melissa. “Gap Founder Steps Down as CEO, Replaced by President.” Reuters Business Report, September 12, 1995. Gibbs, Nancy R. “Falling into the Gap: A Leading Specialty Retailer Takes a Dive on Wall Street.” Time, 5 October 1987.
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“Ruling Banana Republic.” CNNfn (CNN financial network web site), 11 February 1998. Available from http://www.cnnfn.com.
Weiland Nogaki, Sylvia. “Banana Republic Opens to Rave Reviews in Heater.”The Seattle Times, 19 November 1994.
“Time to Go Shopping?” Microsoft Investor, 6 April 1998. Available from http://investor.msn.com.
Who’s Who in America New Providence, NJ: Marquis Who’s Who, 1997.
Toch, Thomas. “Sugar Daddies for Charters.” U.S. News & World Report, 27 April 1998.
Willis, Clint. “Wall Street: Board These Stocks at the Bottom and Soar 14 Percent to 65 Percent.” Money, 1 October 1992.
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Jane Fonda Overview
(1937-)
Jane Fonda was a member of a famous American theatrical family and received many of the industry’s highest awards. Her multi-faceted career has included acting in films and television, starring in and marketing exercise videocassettes, and writing various non-fiction books, including Jane Fonda’s New Pregnancy Workout and Total Birth Program. In the late 1990s she retired from active business to focus on family and social causes.
Personal Life Jane Fonda was born at Doctor’s Hospital in New York City in 1937 to future film star Henry Fonda and Frances Seymour Brokaw Fonda. Her mother, as a confident, wealthy widow, had married Fonda the previous year and along with her six year old daughter Frances (known as Pan) established residence in New York. Two years later Jane’s brother Peter was born, and soon after the family moved to the Brentwood section of Los Angeles. Born into wealth, Fonda’s maternal lineage can be traced back to American Revolutionary leader Samuel Adams and to Jane Seymour, the third queen consort of King Henry VIII. Jane Fonda herself was called “Lady Jane” by her family almost from the time of her birth. The Fonda household accommodated cooks, maids, gardeners, and governesses. During her early childhood Jane’s brother was favored by her mother, leading to the development of a closer bond between Jane and her father. Her father’s film career was successful, but Henry was vocal about the types of roles he had to take in or-
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astronaut who sleeps with every man who rescues her. Because of her status as a spokesperson for feminist causes, critics claimed that sexually exploitive film marred Fonda’s career and undercut her credibility. During the Vietnam War, Fonda met anti-war activist Tom Hayden. Soon after Fonda obtained a divorce from Vadim and married Hayden. Together they protested the war, formed the Indochina Peace Campaign (later forming a film production company with the same name), and attempted to clean up American politics. In 1989 Fonda divorced Hayden, and two years later she married billionaire media mogul Ted Turner, settling into a much more domestic phase of her life.
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Jane Fonda.
(Reuters/Gary Cameron/Archive Photos.)
der to make it in Hollywood. It was this reality that Jane brought with her when she entered the film industry herself years later. In 1949 the Fonda family relocated to Greenwich so Henry could act on Broadway. The following year, when Fonda was 13, her mother committed suicide after learning of her husband’s interest in a much younger woman, Susan Blanchard. Told that her mother died from a sudden heart attack, Fonda only learned the truth a year later from a magazine article. Both she and her brother had difficulty coping with their mother’s death and their father’s quick remarriage. Peter attempted suicide while his father was on his honeymoon with Susan, and later turned to drugs. Fonda developed bulimia and suffered from this condition until she was 35. Fonda attended Brentwood Town and Country School in Los Angeles and then Greenwich Academy in New York for elementary school. She graduated from the female preparatory Emma Willard School in Troy, New York, and then entered Vassar. But Fonda never excelled academically, and she left college after only two years, much to the disappointment of her father. Fonda turned a largely unhappy childhood into a successful life. In 1965 she moved to France to make films. There she met and married Roger Vadim. Vadim directed her in several movies, including Barbarella. Barbarella became both a cult classic and the film which many critics call a blemish on her acting career. In Barbarella, a science-fiction spoof, Fonda plays a beautiful
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Fonda first appeared on stage in 1955 at the Omaha Community Playhouse in a fundraiser for her Aunt Harriet. Fonda’s father was also coaxed into taking a role in the production. He was quite surprised at his daughter’s natural acting ability, although he did not encourage her to enter the acting profession. Fonda, in fact, did not seriously decide on an acting career until four years later, when she began to study acting with Lee Strasburg, director of the Actor’s Studio. While taking her acting lessons, Fonda supported herself by modeling. She did quite well at that, appearing on the covers of Esquire,, Vogue, Ladies Home Journal, Glamour, and McCall’s magazines in 1959. Strasburg taught a technique of method acting that used inner motivation from past experiences to drive each performance. Actors such as Marlon Brando, Paul Newman, and Al Pacino were all schooled by Strasburg in method acting. Henry Fonda had expressed his dislike for the technique, but Jane found success in it. A number of people influenced her acting career, including her godfather, producer Joshua Logan, who signed her to a longterm contract. Immediately he cast her in a major motion picture, Tall Story, and in a Broadway play, There Was a Little Girl. Neither were critical successes. One play and three movies later, Fonda began to be recognized for her talents as an actress. In 1962 she bought her contract from Joshua Logan and began choosing her own roles. Unfortunately, after a string of less noteworthy movies, her career languished. It was not until she met French director Roger Vadim, soon to be her first husband, that her film career improved. In France, Vadim made many movies with Fonda, including Cat Ballou and the screen adaptation of Neil Simon’s Broadway smash Barefoot in the Park. Fonda returned to the United States in 1969 to take a lead role in They Shoot Horses Don’t They?; she received an Academy Award nomination for her performance. Two years later she played a prostitute stalked by a killer in Klute and won an Oscar for best actress.
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It was with her Klute co-star Donald Sutherland that Fonda toured coffeehouses in the United States and later the Far East, in FTA, a satirical antiwar revue. During this time Fonda became known as “Hanoi Jane.” Fonda’s involvement in politics supplanted her work as an actress for a time, but by the mid-1970s she began to divide her time between political work and her career as a performer and producer of films. The first feature film produced by Fonda’s IPC production company was Coming Home. Her performance as the initially dutiful wife of a flag-waving Marine captain who falls in love with a paraplegic war veteran earned Fonda a second Academy Award. Ironically, Jane Fonda earned two Academy Awards before her famous father won one. IPC also produced The China Syndrome, Nine to Five, the television movie The Dollhouse, for which Fonda won an Emmy for outstanding actress in a dramatic special, and On Golden Pond, the movie she filmed with her father and Katharine Hepburn. The plot of On Golden Pond paralleled Fonda and her father’s own relationship in many ways. It was Henry Fonda’s last role before his death and the highest grossing film of 1981. Although Jane Fonda did not win the supporting actress Oscar for which she was nominated, she did accept the Oscar for best actor on behalf of her father, who was too sick to attend the ceremonies. In a very different kind of business move, Fonda established her first exercise studio in 1979. Following the studio came records, books, and videocassettes. Fonda’s own fit and trim body, exposed in a bikini in On Golden Pond proved to be a powerful advertisement as a health craze swept the United States in the early 1980s. In 1981 Jane Fonda’s Workout Book topped charts for best-selling books; Jane Fonda’s Workout Record went double platinum (2 million copies sold); and Jane Fonda’s Workout remains one of the best-selling videocassettes in history. In a shrewd move, Fonda used previously recorded music for which the artists had forgone their royalties. As Fonda’s workout tapes sold millions, no royalties had to be paid. Fonda continued to make controversial movies, including Agnes of God. Based on the equally-controversial Broadway play, Fonda first checked to see if the Roman Catholic Church had taken a position on the content of the play. As she told biographer Christopher Andersen, “I did not want to become embroiled in any Catholic controversy.” The following year she played an alcoholic actress who blacks out and wakes up next to a dead body in The Morning After, which earned her a seventh Academy Award nomination.
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Chronology: Jane Fonda 1937: Born. 1954: First appeared on stage. 1959: Modeled for five magazine covers. 1960: Debuted in film Tall Story. 1971: Won Academy Award for Best Actress in Klute. 1979: Opened Jane Fonda Workout Studio in Beverly Hills. 1982: Released first of 16 exercise videocassettes 1987: Forced to apologize for past political activism by townspeople in Waterbury, CT. 1991: Married Ted Turner on her 54th birthday. 1996: Published cookbook.
In 1996 she published a cookbook, Jane Fonda: Cooking for healthy Living. She also created, with the help of a physiologist, a new series of workout tapes called The Personal Trainer Series. Her goal with the new series was to design a program that anyone could stick with, stating in Good Housekeeping, “Anyone can do 25 minutes.”
Social/Economic Impact Jane Fonda has had an enormous effect on the motion picture industry, has raised a nation’s level of consciousness about a variety of societal and political issues, and has helped create the home video industry. One of the first things she did was overcome the loss of her mother and establish a name for herself in the same field as her father. Her training and talent enabled her to reap awards in the movie industry, and she used the prestige of being an award-winning actress to make the movies she wanted to make.
Fonda starred in a few more films, but in 1996 she confirmed in a Good Housekeeping article that she had left her film career, stating: “After a 35-year career as an actress, I am out of the business. That’s a big change. Work in many ways has defined me.” Although she left behind her acting and producing career, Fonda was far from idle.
While starring in controversial roles, she further stirred up controversy by speaking her mind. Her leftist political views alienated Fonda from many Americans. In fact, while filming the socially conscious film about adult illiteracy Stanley and Iris in 1988, Fonda was met with hostility and resentment and references to “Hanoi Jane” from 16 years earlier. These protests led to her first public apology for her Vietnam-era activities.
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Fonda introduced the word “workout” to a nation and fueled the fitness craze that would continue throughout the 1990s, simultaneously proving to be a keen businesswoman. Fonda moved from radical to respectable in the eyes of the American public, enduring the collapse of two marriages, and acknowledging new-found faith in a greater power than herself. In the early 1980s Jane Fonda was one of the most respected and admired women in United States. Her drive for personal achievement has diminished since her marriage to Ted Turner. Her fitness enterprise was driven by her commitment to exercise, but she eventually scaled back on her original beliefs on exercise duration. She came to believe that attitude was more important to optimal health than thinness. As reported in Good Housekeeping,this shift is reflected in the exercise video released in 1996 “that substitutes shorter, more moderate workouts for the more strenuous exercise she used to promote” for women to stay fit. By 1993 over 10 million exercise tapes had been sold from the Fonda Video Fitness library, and Fonda herself remained healthy and fit, even as she turned 60. She remained politically active, particularly as a board member for the Turner Foundation, which focused on the environment and population growth. Fonda was personally interested in reducing teenage pregnancy through self-esteem role modeling programs. Fonda held many conflicting roles during her varied career. She was a sex symbol feminist, a bulimic
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health instructor, a vocal anti-capitalist, and captain of an exercise empire. Fonda will be remembered for her movies, her activism, and for the inspiration she gave to the fitness movement. But perhaps most inspiring is Fonda’s ability to continue to grow and evolve. This strength led to the many fruitful phases of her life.
Sources of Information Contact at: Jane Fonda P.O. Box 1198 Santa Monica, CA 90212
Bibliography Andersen, Christopher. Citizen Jane: The Turbulent Life of Jane Fonda. New York: Henry Holt and Company, 1990. Byers, Paula K. and Suzanne M. Bourgoin, eds. Encyclopedia of World Biography. Detroit: Gale Research, 1998. Davidson, Bill. Jane Fonda: An Intimate Biography. New York: Dutton, 1990. “Fonda, Jane (Seymour).” Contemporary Authors. Detroit: Gale Research, 1993. Guiles, Fred Lawrence. Jane Fonda: The Actress in Her Time. New York: Doubleday & Company, 1982. Powell, Joanna. “Jane Fonda: A Surprising Talk About Putting Her Husband First, Traditional Family Life, and Shorter Workouts.” Good Housekeeping, 24 February 1996.
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Malcolm Forbes Overview Malcolm Stevenson Forbes was one of the foremost publishers and business moguls in the United States. From 1957 until his death in 1990, he was publisher, editor-in-chief, and sole stockholder of the magazine his father founded. By 1982, Forbes magazine grossed over $10 million annually. He converted the business publication his father had started into one of the most influential magazines in America. His mix of business and pleasure, and the spirited way in which he flaunted his wealth, became a trademark of both his personal and professional life.
(1919-1990) Forbes Business Magazine
Personal Life Malcolm Forbes was born in Brooklyn, New York, on August 19, 1919. He was the third son of B.C. (Bertie Charles) Forbes, a Scottish immigrant and founder of Forbes magazine and Adelaine Stevenson Forbes. He inherited his wealth from his father, who established him at the Fairfield Times newspaper in Lancaster, Ohio, as owner and publisher only days after his graduation from Princeton University in 1941. He went on to publish the Lancaster Tribune in 1942. That same year, Forbes joined the U.S. Army, serving on the European front during World War II. His wartime actions earned him the position of staff sergeant, and earned him the Purple Heart and Bronze Star. In 1946, when he was released from military duty, he joined the staff at Forbes magazine. Forbes married Roberta Remsen Laidlaw in 1946. Their union produced five children: Malcolm S., Jr.,
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Malcolm Forbes.
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Robert Laidlaw, Christopher Charles, Timothy Carter, and Moira Hamilton. Malcolm, Jr. took over the magazine upon his father’s death in 1990 and ran for the presidency of the United States in 1996. In 1985, Malcolm Forbes, Sr. and his wife, Roberta, divorced. As Steve explained in Forbes, his parents, “still loved each other, but could no longer live together.” If only a few could remember Malcolm Forbes’ birth, millions of people knew how old he was when he died. Extensive press coverage of the lavish 70th birthday party he hosted for himself in Morocco in September 1989 ensured that. The list of celebrities read like a who’s who of Hollywood, politicians, and European royalty. Televi-
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sion and newspapers carried the minute details across the world, including the menu and entertainment. In 1983 in People magazine, Arthur Lubow commented, “Not since antitrust spoilsports put the kibosh on the Gilded Age has an American capitalist reveled so openly in the pleasures that money can buy.” What made Forbes endearing to the American public, perhaps, was this sheer enjoyment of life. He was characterized as a man who loved the spotlight. It was said that he shamelessly enjoyed the privileges his money afforded him. Yet, Forbes demonstrated time and again, that he was as ordinary as any average American. In his book, Fact and Comment, he told a story about himself, from 1966,
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that could have struck anyone as familiar. He begins, “The other day I learned something that I guess housewives learn early in life. It was a wallet-walloping experience. Don’t go supermarket shopping when hungry. Recently, a fabulous new A&P opened up near home, and I went down around noon Saturday to pick up two wee, needed items.” As he goes on to tell, he was enticed in every aisle by everything from endive to clams to ice cream and bakery items. “The $2 mission turned into a $49.12 extravaganza,” he says. Even for all of his wealth, he had the ability to be candid in times of folly. He had a sense of humor about himself. Americans appreciated that and showed that appreciation by buying his magazine and reading his books. Forbes was always in pursuit of adventure. He was a balloonist, a motorcyclist, and a sailor who took many trips on his huge yacht, the ‘Highlander.” He was a noted art collector, particularly of Faberge eggs. The Chicago Tribune reported that Robert, Forbes’ second eldest son, eulogized his father by emphasizing his playful nature: “He was so many things to so many of us. Boss, confidante, raconteur, balloonist, columnist, happiest millionaire, leader of the pack, source, mentor, friend, super this, mega that, father, grandfather, father-in-law, uncle, cousin, and sparkling naughty boy.” Malcolm Forbes enjoyed the well-earned nickname of, “the happiest millionaire,” up until the time he died of a sudden heart attack on February 24, 1990. Forbes’ philanthropy was not as well publicized as his spending. He gave millions of dollars each year to charities, and had been at a charity Bridge tournament the day he died. Malcolm Forbes even surprised his 750 staffers a week after his death in one last, grand act of kindness and generosity. In his will he left them all an extra week’s pay and had forgiven all loans, up to $10,000, paid to any company employee. He left control of his empire in the hands of his son, Steve. Malcolm Forbes may have been born with a silver spoon in his mouth, but instead of tarnishing it or losing it, he turned it into gold and made it shine. According to Advertising Age, “He expanded the magazine his father created in 1917 into a publishing powerhouse whether measured in circulation, advertising revenue, or the trepidation with which CEOs awaited stories about their companies.” With a circulation of 735,000, Forbes had doubtless become one of the top business magazines in America. In the early-1960s, the publication’s annual advertising revenues stood at nearly $2 million and by the time of Malcolm Forbes’ death, had risen beyond $150 million. When it comes to citing wealth in the United States, many continue to turn to the magazine’s annual listing of the 400 wealthiest Americans. Forbes also published the magazines, Egg, devoted to collectors; and, American Heritage,a magazine of American history that has been well-respected in the education of American students for decades.
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Chronology: Malcolm Forbes 1919: Born. 1941: Earned his B.A. from the Woodrow Wilson School of Public and International Affairs, Princeton University. 1941: Established as owner and publisher of the Fairfield Times weekly newspaper, Lancaster, Ohio. 1942: Joined U.S. Army and rose to rank of staff sergeant, earning a Bronze Star and a Purple Heart. 1946: Joined Forbes magazine as associate publisher. 1946: Married Roberta Remsen Laidlaw. 1948: Founded Nation’s Heritage a bimonthly historical magazine. 1949: Awarded Freedom Foundation Medal. 1957: Waged an unsuccessful bid for governor of New Jersey. 1957: Became publisher of Forbes magazine. 1985: Divorced Roberta Remsen Laidlaw. 1989: Hosted lavish, widely publicized birthday party for himself in Morocco. 1990: Died.
came Forbes’ trademark. He made a point of knowing the movers and the shakers of the business world that his magazine covered. In later years, when his magazine wanted a company to advertise, he could pick up the telephone and call the chief executive officer of the company directly.
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Forbes’s lavish lifestyle and charismatic aggressiveness were more than personality traits, they were a driving force behind his empire. While business orthodoxy shunned mixing business and pleasure, this mix be-
A savvy businessman by all accounts, Forbes inherited his wealth from his father. As quoted in Forbes, he was fond of saying that he was loaded with “sheer ability, spelled i-n-h-e-r-i-t-a-n-c-e.” Upon joining his father’s magazine after World War II, Forbes took the position of associate publisher. He eventually moved on to the posts of publisher, editor, editor-in-chief, vice-president, and, fi-
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nally, CEO and president. As a politician, Forbes was less than successful. In his bid for Governor of New Jersey in 1957, Forbes said that he was “nosed out by a landslide.”
“He practiced something that most CEOs find very hard to practice,” recalls Steve Forbes, “and that is letting people make mistakes, but in a way that they can learn, rather than be destroyed.”
Social and Economic Impact Malcolm Forbes had a great impact on the success of his family’s namesake magazine, an impact not lost on his family. “My father recognized that although the magazine was very strong editorially, it wasn’t going to sell unless he went out and brought it to people’s attention,” his heir Steve Forbes told Forbes, the magazine he now runs. “He pulled out all the stops...his early marketing activities sound rather mundane today, but they worked for us for a number of years: an advertising campaign in major papers and trade press; luncheons with CEOs at the townhouse adjacent to our offices, that was something he perfected. He also entertained corporate and political chiefs and foreign dignitaries on our boat, the Highlander. In the mid-Sixties,
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when he started collecting Faberge eggs, he linked them with Forbes magazine in an ad campaign as a symbol of quality.”
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Sources of Information Bibliography Columbia Encyclopedia 5th ed., s.v. “Forbes, Malcom.” Forbes, Malcolm S. Fact & Comment. New York: Knopf, 1974. Lubow, Arthur. People, 19 July 1982. “Malcom Forbes: He Practiced What He Preached.” Forbes, 30 April 1990. Pearl, Jayne. “The Forbes Mystique.” Forbes, 22 October, 1990. Time, 19 March 1990.
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Eileen Ford Overview Known as the matriarch of the modeling industry, Eileen Ford founded Ford Models, Inc. with her husband in 1947 and it quickly grew from a small operation to a trend-setting, multimillion-dollar force in the world of fashion and beauty. For more than 50 years the agency was renowned for placing top fashion models on runways and in advertisements around the world.
(1922-) Ford Models, Inc.
Personal Life Eileen Ford first got into the modeling industry when taking summer jobs modeling, while she attended Barnard College. After graduating with a major in psychology, she continued to work in the field and honed her skills working as a photographer’s assistant, catalog stylist, copywriter, and reporter. Through her photography position Eileen met Jerry Ford, a naval officer and ex-football player at Notre Dame. The two married in 1946, the year Eileen turned 24, and launched Ford Models, Inc. together the following year. At the same time, they began to raise a family of three daughters and a son, Lacey, Katie, Jamie, and Bill. Katie and Bill would later join the business. Before founding the company, Eileen Ford did clerical work for Arnold Constable and Company in New York City. Despite the glamour associated with her business, Ford has been described as a plain-dressing—even frumpish—woman who wore little makeup, and she was shorter than the minimum height normally required of her models. She shied away from high-profile events. Her
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Eileen Ford poses with models.
(Archive Photos/Sonia Maskowitz.)
personality was characterized as being strong and blunt, yet Eileen Ford also professed the traditional Protestant middle-class values of her upbringing concerning hard work, family, and social etiquette.
Career Details Ford Models Inc. started as a side job Eileen Ford ran from her home while she was pregnant with her son in 1946. The Fords formally launched the business in 1947, and by the next year they already had signed 30 top models to their New York City agency. First-year billings reached $250,000. Jerry Ford handled the financial side of the business while Eileen concentrated on identifying and signing potential stars. Within a few years, the agency was the biggest of its kind in the world. Eileen Ford was legendary for running a tight ship at her agency. She not only managed the professional lives of her models, who she called “my girls,” but she also attempted to supervise the social lives of the often teenage women. Ford housed many young models either in her home or in quarters above the agency’s offices, practices that are still common today. She also endeavored to enforce curfews at night and teach the young women etiquette, but this heavy-handed approach often kindled resentment from the models. The Spanish model Veronica Blume recalled an instance at age 16 when during a meal she wasn’t sure which fork to use and noticed
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Ford watching her intently. Blume said that Ford wanted the models to be educated and have manners. “It’s like going to school,” Blume recalled. Many models who stayed with Ford avoided her chaperoning by sneaking out at night. But Ford had little hesitation to release—or never sign in the first place—models whose personal lives conflicted with their careers. Ford Models became associated with big modeling talent, and the agency was regarded as the most prestigious in the business. It set trends both in how it conducted its business with models and clients as well as in the kinds of models it brought to stardom. Famous, topdollar models such as Brooke Shields, Elle Macpherson, Christy Turlington, and Lauren Hutton made their mark through the company. Eileen Ford had a remarkable eye for picking new talent and would travel the United States and Europe looking for new models. Once models were recruited, Ford worked vigorously to ensure they had favorable opportunities to showcase their beauty and talents. In part through her efforts modeling became a highly lucrative occupation for top prospects. Ford also had success as an author and published several books that gave beauty and fashion advice and glimpses into the modeling industry. These included Eileen Ford’s Book of Model Beauty, Secret of the Model’s World, A More Beautiful You in 21 Days, Beauty Now and Forever, and Ford’s Crash Course in Looking Great. She also wrote a syndicated fashion column called “Eileen Ford’s Fashion Beauty.”
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The Fords remained part of the agency well into their 70s, but in the early 1990s they began to cede some highlevel responsibilities to others. In 1993 a three-way copresidency was established at Ford Models consisting of Kate Ford and two other senior executives. Although Kate had been working at the agency since 1982, her ascent to the co-presidency was seen by some as nepotism. Other negative publicity also plagued the Fords in this period. In 1995, Eileen Ford reacted angrily to a book by Michael Gross titled Model: The Ugly Business of Beautiful Women. The book claimed that Ford’s husband had an affair with an agency model in the 1950s. The book may have prompted Ford to publish her own interpretation of the modeling industry. Also in 1995, Ford and her husband further withdrew from day-to-day management of the business by appointing their daughter Kate as CEO. Eileen was 73 at the time, but the elder Fords continued to co-chair the board of directors. Kate’s promotion ended the co-presidency and triggered a lawsuit by one of the other copresidents who felt Kate was promoted unjustly. The reshuffling of the management ranks also led to some defections by models who weren’t satisfied with Kate Ford at the agency’s helm. In her later years, Eileen Ford was criticized for growing out of touch with the youth-centered fashion industry—a charge she came to agree with. Ford was accused of selecting models based on a narrow definition of beauty that stereotypically included women of northern European descent with blonde hair and blue eyes, the so-called Swedish look. These complaints were voiced in spite of the Ford agency’s legacy as the first to sign women of color. She admitted that the agency had stagnated and that she was getting too old to have a sense for youth trends and the youth market. In 1997 she said in reference to her daughter’s new position, “We were getting old. What were we going to do, let her be like Prince Charles and wait for us to die? It was her moment. You have to give people a chance.”
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Chronology: Eileen Ford 1922: Born. 1947: Founded Ford Models, Inc. with husband Jerry Ford. 1948: Recruited 30 leading models in New York. 1957: Opened first international affiliate. 1981: Chosen as Woman of the Year in Advertising. 1988: Named Outstanding Woman in the Fashion Industry. 1993: Gave up presidency of the agency to her daughter and two others. 1995: Retired from active management of the agency.
Ford Models, Inc. typically took a 20 percent commission from each modeling contract. Though the standard for beauty constantly changes and featured Ford models have a variety of looks, the company continues to be a leading actor on the American fashion and beauty stage.
Sources of Information Contact at: Ford Models, Inc. 142 Greene St. New York, NY 10012 Business Phone: (212)753-6500 URL: http://www.fordmodels.com
Bibliography Bernstein, Roberta. “Kate Ford: Two Years After Taking Control, Eileen’s Daughter has the Ford Modeling Agency Sitting Pretty.” People, 8 September, 1997.
Eileen Ford’s vision created one of the world’s leading fashion model agencies, with more than $40 million in annual billings during the 1990s. She is credited for bringing dozens of well-known models to the fore of the fashion world, and in the process she had a strong influence over the direction of the modeling business. In the 1990s, top-name Ford models could expect to earn $20,000 a day or sign contracts in the tens of millions.
Harte, Susan. “Model Relationships Eileen Ford.” Atlanta Journal and Constitution, 15 May 1988.
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Chun, Renee. “Eileen Ford Eats Her Enemies for Lunch.” New York, 24 July 1995. Cunningham, Kim. “Fork Lifts.” People, 27 September 1993.
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Henry Ford (1863-1947) Ford Motor Company
Overview Henry Ford launched the era of the automobile and in doing so provided the tools necessary for the mass production of consumer goods. He founded Ford Motor Company, which is still the second largest carmaker in the world. Ford is associated with the creation of the assembly line, which allowed cars and other uniform products to be produced quickly and efficiently. His production of the Model T automobile on an assembly line brought the low-priced automobile within reach of many middle-class Americans.
Personal Life Henry Ford was born in Springwells, Michigan on July 30, 1863. Ford was the eldest of six children born to William, a prosperous farmer, and Mary (Litogot) Ford. Ford was raised on his father’s farm but developed a distaste for the farm lifestyle and, instead, became fascinated by machinery. He began tinkering with farm machinery that he was responsible for operating and without any formal training, became an excellent self-taught mechanic and machinist. While in his late teens, he even designed and built his own engine-based vehicle. He attended school in a one-room schoolhouse in the Dearborn school district in Wayne County, Michigan until the age of 15. Ford’s mother was responsible for his early education, teaching him to read and instilling in him the core values of responsibility, duty, and self-reliance. While running Ford Motor Company, Ford used his enormous wealth and power for social causes. For ex-
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Henry Ford riding a quadricycle in 1896.
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(Courtesy of American Automobile Manufacturers Association.)
ample, he made an ill-fated attempt to end World War I, before the United States was drawn into it. In 1915, he set sail on his “peace ship,” Oskar II, and sailed to Europe to seek an end to hostilities. In 1918, Ford made an unsuccessful bid for U.S. Senate as a Democrat and was defeated by a narrow margin. At the beginning of World War II, Ford initially took a pacifist stance, but following Japan’s attack on Pearl Harbor, he retooled his auto plants quickly to help the U.S. military produce munitions for the war effort.
On April 11, 1888, Ford married Clara J. Bryant and had one child, Edsel, in 1893. Ford suffered strokes in 1938 and 1941, but did not trust his son to run Ford Motor Company single-handedly. Instead he kept most of the control over the company despite his declining health. His son Edsel died of cancer in 1943, and after World War II, Ford installed his grandson, Henry Ford II, as president of the company. Ford died on April 7, 1947 at his home in Dearborn, Michigan.
Ford’s last years were marred by scandals, the worst of which was his support of vehemently anti-Semitic statements made by the Dearborn Independent, a newspaper that he owned.
Ford initially founded the Ford Foundation, one of the world’s largest philanthropic foundations, in 1936 to avoid estate taxes. It has since given over $8 billion in funds to various social causes and organizations. Ford also founded the Henry Ford Hospital in Detroit and the
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From 1884 to 1885, while working long hours in Detroit, Ford also attended business college to learn the skills that he thought would be necessary if he were to sell the machinery that he hoped one day to manufacture.
Chronology: Henry Ford 1863: Born. 1880: Began job at Detroit Dry Dock Company. 1891: Began job at Edison Illumination Company. 1899: Founded Detroit Automobile Company. 1903: Founded Henry Ford Company and Ford Motor Company. 1909: Introduced Model T automobile. 1918: Named son Edsel Ford as president of Ford Motor Company. 1919: Built River Rouge automobile plant. 1927: Stopped production of Model T. 1928: Introduced Model A automobile. 1943: Became president of Ford Motor Company again after Edsel’s death. 1945: Retired from Ford Motor Company.
Ford did not find farming any more attractive as a young husband in his 20s than he had as a teenager. It was during this period that he built his first internal combustion engine, a two-cylinder device he used to power a bicycle. The lure of working on machinery was too strong for Ford and he found himself spending more and more time working at the Edison Illumination Company (later named Detroit Edison Company) in Detroit instead of working on his farm. By 1891, he had left his farm completely and took a job at Edison Illumination, where he earned the impressive salary of $100 per month as an engineer. Ford’s increased income allowed him to fund his experiments with the “horseless carriage.” In 1895, he was promoted to the position of chief engineer for Edison Illumination and met Thomas Alva Edison, who would eventually become one of his closest lifelong friends.
1947: Died.
In 1896, Ford spent his spare time building an automobile that used an internal combustion engine. The car utilized a two-cylinder, four-cycle motor that weighed only 500 pounds. It was mounted on bicycle wheels and had no reverse gear.
Henry Ford Museum and Greenfield Village in Dearborn, dedicated as a living museum to industry and technological innovation.
Because of Ford’s continued tinkering with automobiles, Edison Illumination forced Ford to choose between automobiles and his job. Ford chose automobiles and on August 5, 1899, with the backing of William Murphy, a wealthy Detroit businessman, Ford founded the Detroit Automobile Company. Ford’s first venture was an economic failure after disagreements with Murphy but it gave him the opportunity to concentrate all of his energies on designing and building automobiles.
Career Details In 1879, Ford left Dearborn for nearby Detroit to seek his fame and fortune. There he quickly found a position as an apprentice at the James Flowers and Brothers Machine Shop, a small company that was busily manufacturing valves and fire hydrants for the rapidly growing city. Ford’s job required 12 hours of labor a day, six days a week. Nine months later, Ford left the machine shop in order to work for the Detroit Dry Dock Company, working on steam engines. There he gained his first exposure to a new machine, the internal combustion engine. At the Detroit Dry Dock Company, he earned only $2.50 a week. Because Ford’s room and board in Detroit cost him $3.50 a week, he repaired watches and clocks at night to make up the difference.
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Ford’s father was not happy with his young son’s career choice and offered him 40 acres of timberland adjacent to the family farm. Ford accepted his father’s offer, but also built a top-rated machinist workshop on his new farm, much to his father’s displeasure. It was during this time on his new farm that Ford met his future bride, Clara J. Bryant.
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In 1901, Ford, driving his own car, raced and beat what was then the world’s fastest automobile. This car, the “999,” was later driven to victory many times by the famous Barney Oldfield. The publicity from Ford’s victory grabbed the attention of Detroit coal dealer Alex Y. Malcomson, who offered financial aid to Ford. This allowed Ford to fund his second and third automobilemaking ventures, the Henry Ford Company (later renamed Cadillac) and the Ford Motor Company, formed in 1903 with $28,000. Ford continued to build racers, which provided free publicity and a practical laboratory for refining his ideas. As a result, the Ford Motor Company sold 1700 cars in 1904. After two failed attempts, Ford had launched a hugely successful car company.
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By 1903, 1,500 automobile companies had been started, bringing significant competition to the industry. Part of Ford’s success was due to the highly competent and driven assistants that he surrounded himself with. James S. Couzens, C.H. Wills, and John and Horace Dodge all worked for Ford at this time. In 1903, the Ford Motor Company came out with the Model A (also known as the Fordmobile) and by 1907, profits had exceeded $1.1 million. Ford continued to introduce new models frequently. Each new car was known by another letter of the alphabet up through the letter S. The Model T was introduced in 1909. Ford decided to build only one type of automobile at this time and the Model T (also known as the “Tin Lizzie”) would be that car. This car was reliable, easy to build, and cheaply priced. In its first year, Ford sold 8,000 Model T’s. Over the course of the next three years, Model T sales increased dramatically with 18,000 sold in 1909, 34,000 in 1910, and 78,000 in 1911. In 1916, the year of its greatest production, 730,000 of the automobiles were sold. In 1918, Ford made his son Edsel president of the company and concentrated on his race for the U.S. Senate. He still exercised control over most of the operational aspects of his company, though, and managed to purchase the majority of the company’s stock, making the company a family operation. In 1919, Ford’s River Rouge plant opened in Detroit and became the largest industrial manufacturing facility in the world. The 1920s saw increased growth in the company with over 60 percent of all the automobiles in the United States manufactured by Ford’s company. But by the end of the decade, customers wanted a change, and Ford sales began to lag. In response to consumer demand, other manufacturers were introducing different car models and they were selling better than Ford’s Model T. In 1927, Ford finally stopped production of the Model T. He introduced the new Model A, 18 months later, but the new model was not enough to help Ford claim the top spot from competing car manufacturer, General Motors. Ford never accepted the changes brought about by the Great Depression and his company suffered because of this reluctance. Ford refused to cooperate with President Franklin D. Roosevelt’s new National Recovery Administration, and suffered through numerous labor disputes. During World War II, Ford factories were converted to build bombers and other weapons for the armed forces. In 1943, when Edsel died, Henry Ford came out of retirement and was again president of the company. He retired for the last time in 1945, turning the company over to his grandson, Henry Ford II.
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often credited with inventing the moving assembly line, a system for carrying an item that is being manufactured past a series of stationary workers who each assemble a particular portion of the finished product. Using the moving assembly line, huge numbers of uniform products (such as automobiles, television, computers, toys, etc.) can be made quickly and cheaply. Ford made the first industrial application of this idea for his Model T, thereby revolutionizing manufacturing. In addition, by developing a car for the masses, Ford played a large role in the creation of an American automobile culture. This new culture radically changed the U.S. economy, including the housing, transportation, and tourism industries. A fiercely driven man, Ford exercised great personal control over every aspect of his company. He avoided the use of outside contractors and suppliers, preferring to make and develop his own materials and parts as much as possible. Ford shocked the world by raising his average wage to the unprecedented rate of $5.00 per day in 1914. In return, however, workers were subject to intense scrutiny both on and off the job. Ford required his employees not only to perform their jobs diligently and up to the standards, but to meet his personal ideals of conduct and morality. To enforce his rules, Ford maintained a large security force to watch his employees. This group, headed by Harry Bennett, was particularly important to Ford in his struggle to prevent the unionization of his factories. They were instructed to monitor, harass, and intimidate organizers and potential members of the newly formed United Auto Workers (UAW). Ford Motor Company was the last of the major auto companies to unionize. After many years of court battles and strikes, Ford finally relented and signed a contract with the UAW in 1941. Before Ford developed the Model T, the automobile existed largely as an expensive toy for the wealthy. Ford’s strategy turned the automobile into the transportation of choice for the masses. The Model T had a simple design, included many interchangeable parts, and was produced on the moving assembly line. As a result, the car was reliable, easy to repair, and affordable. After the second year of production, Ford either dropped the price or enhanced the features of the Model T every year, carrying out his stated goal of increasing the Model T’s value annually. The price of the Model T, initially $850 in 1908, dropped to as low as $260 in 1924, while the car’s quality improved.
Henry Ford’s impact on the manufacturing sector of the economy was and continues to be enormous. Ford is
Ford also created his own market for the Model T. In January of 1914, he doubled the pay of the average worker in the Ford plants from $2.50 to $5.00 a day and cut the work day from nine hours to eight. This strategy drew workers from all over the United States and the world. In addition, Ford drastically reduced employee turnover, raised morale, and created a new class of industrial workers who could afford to buy Ford automo-
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biles. Ford regarded low wages as “the cutting of buying power and the curtailment of the home market.” Ford’s strategy for producing the Model T was a huge success. The large degree of standardization in the automobile’s design and manufacturing allowed Ford to produce millions of vehicles. Over 15 million Model T’s were sold over a production run that lasted almost two decades. Ford achieved legendary status, and by 1922 was the richest man in the United States. In addition to his conflicts with organized labor, Ford’s fatherly behavior resulted in many poor business decisions. In 1920 he bought out the other shareholders in the Ford Motor Company and became the sole person in charge. He ignored the advice of his subordinates, chased away many of his best executives and, by 1927, the last year of production of the Model T, his company had been eclipsed by General Motors. General Motors was more successful than the Ford Motor Company in responding to changing consumer needs. The simplicity of Ford’s approach eventually became a major source of his company’s decline. As a boy on his family farm, Ford used machinery to ease his farm chores. Similarly, he saw the automobile as the tool that would end the dreary isolation of the American farmer and allow the inhabitants of the teeming urban slums to move to the outskirts of the great cities where there was plenty of room for new housing developments but no transportation to the factories. Driven by his sense of duty and obligation, Ford was an active philanthropist. His most enduring legacy has
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been the Ford Foundation, one of the largest philanthropic trusts in the world. It was established in 1936 for the purpose of “advancing human welfare.” Initially a local philanthropy, the Ford Foundation has functioned since 1950 as a national and international foundation. Headquartered in New York City, the foundation has issued more than $8 billion in grants and maintains offices throughout the world.
Sources of Information Contact at: Ford Motor Company The American Rd. Dearborn, MI 48121-1899 Business Phone: (313)322-3000 URL: http://www.ford.com
Bibliography Bennett, Harry and Paul Marcus. Ford: We Never Called Him Henry. TOR, 1951. Dahlinger, John. The Secret Life of Henry Ford. Indianapolis: The Bobbs-Merrill Company, Inc., 1978. Nevins, Allan and Hill, F.E. Ford: The Times, the Man, the Company. New York: Scribners, 1954. Rae, John B, ed. Great Lives Observed: Henry Ford. New York: Prentice-Hall, 1969. Wik, Reynold M. Henry Ford and Grass-roots America. Ann Arbor: University of Michigan Press, 1972.
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Benjamin Franklin Overview Of all of the patriots who helped found the United States, Benjamin Franklin is probably the most respected and most revered. Franklin was a self-made man of many talents who prospered in the diverse arenas of politics, science, religion, education, and international diplomacy. As a writer, he is remembered for both his unfinished Autobiography and Poor Richard’s Almanack. As a person, he is remembered for his character, his accomplishments, and his role in creating the United States of America.
(1706-1790) Inventor
Personal Life Franklin was born in Boston in 1706, one of his father’s 17 children, all of whom had a staunch Puritan upbringing. Too poor to attend formal schooling, Franklin virtually educated himself. He not only read about the Enlightenment, but he vowed to use science and the scientific method to improve people’s lives. A scholar, he became fluent in French, Italian, and Spanish, and also studied Latin. Franklin had a common-law marriage with Deborah Read; the two could not have a legally binding ceremony because Read had previously been married. Franklin and Read had two children. Franklin also had an illegitimate son, William, whom Deborah Read raised in the family home. Franklin received recognition from colleges and universities late in life. He was awarded a honorary M.A. from Harvard, a honorary M.A. from Yale, and a honorary M.A. from William and Mary. Franklin was also elected as a fellow to the Royal Society.
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created must thus be good, because evil would be opposite to God’s nature, and thus “evil doth not exist.” Printed when Franklin was only 19, this marked the start of a long and successful writing career. His emphasis on logic over emotion stayed with Franklin until the end of his life He returned to Philadelphia in 1726 to run a newspaper, the Pennsylvania Gazette. Soon he was running his own printing office and in 1732 started printing Poor Richard’s Almanack. This volume was printed annually for the next 25 years. Its theme was praise for thrift and hard work. Franklin wanted to start printing an almanac because; almanacs had proven to be lucrative ventures for other area printers. Poor Richard not only made money for Franklin’s business, it made him known as a writer throughout the colonies. In his essay “On Literary Style,” Franklin advocates that good writing must be smooth, clear, and short.
Benjamin Franklin.
(The Library of Congress.)
During his life, Franklin spent time in Philadelphia, England, and France. Franklin retired in 1748 from active business but he survived financially on income from his businesses for over 20 years after his retirement. He died in 1790 at the age of 84.
Career Details Franklin’s career began as an apprentice to his brother James in the newspaper business in Boston. It was here that Franklin began to print his own writings, anonymously publishing “Silence Dogood” in the New England Courant. “Silence Dogood” was the pseudonym Franklin used to pen his satirical, and thus critical, pieces. Franklin had two opportunities to manage the Courant. The first was when his brother was jailed for printing articles criticizing Massachusetts authorities. The second time James was jailed, Ben Franklin was named as publisher, a move designed to keep the paper printing. This ultimately ruined the brothers’ working relationship, however, and Franklin then moved to Philadelphia in 1723. A year later he went to England and became a master printer. In England Franklin became interested in Deism, a movement which advocated natural religion based on man’s reason rather than revelation, and also emphasized morality. In 1725 he wrote and printed the essay “A Dissertation on Liberty and Necessity, Pleasure and Pain.” Starting from the proposition that God is all-wise, all-good, and all-powerful, Franklin argued that everything
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Franklin formed the Junto, a civic improvement society, in 1727. His philosophy was “men of goodwill, organizing and acting together, could deal effectively with civic concerns.” This is evident by the successes of the Junto, including the establishment of the first public library in America; the formation of a fire company; the founding of a college (which later became the University of Pennsylvania); and the founding of a hospital. In addition to being a civic leader, Franklin dabbled in science. His famous kite experiment, which reportedly took place in June of 1752, proved that lightning is a form of electricity. In addition to his scientific experiments, Franklin is responsible for many inventions, including the Franklin stove, the lightning rod, bifocal lenses, and a harmonica. He charted the Gulf Stream, determined that white clothing does not attract heat as black does, and proposed daylight savings time. Franklin also proposed that the turkey be the national bird, because it was native to the United States, useful, industrious, and courageous. Franklin’s political accomplishments are equally impressive. In 1751 Franklin was elected to the Pennsylvania Assembly—the start of nearly 40 years as a public official. Franklin also revived the dormant Quaker party. Although he originally believed it best for the British Colonies to remain with England, the stubborn stance of King George III eventually pushed Franklin into the arms of the revolutionaries. Franklin even became estranged from his son William, who was a loyalist during the revolution. Franklin helped Thomas Jefferson draft a copy of the Declaration of Independence, and he himself signed it. During the latter stages of the Revolution, Franklin served as minister to France for the United States. His diplomacy proved vital in negotiating the Treaty of Paris to end the war. Following the end of the war, Franklin stayed in France as the American ambassador. He returned to the United States in time to attend the Constitutional Conference, serving as one of the original signers of the Constitution of the United States. In the final year of his life, Franklin introduced a bill to Congress outlawing slavery. This was his last public act.
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Franklin philosophized about his success in his famous Autobiography, extolling the values and importance of hard work, thriftiness, and explaining how any one could develop an exemplary character with practice and perseverance. Above all else, Franklin valued self-improvement; he staunchly believed everyone—no matter what their social position—could benefit from self-improvement.
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Chronology: Benjamin Franklin
Social and Economic Impact
1706: Born.
Benjamin Franklin affected all levels of U.S. society. He used his firmly held beliefs in rationalism to improve the quality of life for all people. All citizens in Philadelphia had access to the library, fire department, and insurance agency. He also served as an example of the value of reasoning. As biographer Esmond Wright states in Franklin of Philadelphia, “for him, problems were for solving by reason and compromise.” He exemplified the beliefs of the Enlightenment, which asked for people to explain and understand their place in the world.
1724: Became master printer in England.
The United States, as a country, is indebted to Franklin for getting France into the Revolutionary War and for negotiating an effective peace treaty. Although France was anxious for England to be humbled, it could not openly afford to aid the U.S. rebels unless success seemed probable. For a year (1777) Franklin worked behind the scenes to hasten war supplies across the Atlantic, to block British diplomacy, and to ingratiate himself with the French foreign minister. Franklin helped get the French army and navy on their way to North America. In Paris at the end of the war Franklin set terms close to those finally agreed to: independence, guaranteed fishing rights, evacuation of British forces, and a western boundary on the Mississippi River.
1776: Assisted in drafting of Declaration of Independence.
Franklin’s economic views matched those of the French Physiocrats, who provided the foundation for the French Revolution. These views were evident at the Constitutional Convention. His concern for the poor was in part responsible for his suggestion of split representation in the legislature of the newly formed United States. His last famous speech at the Constitutional Convention was written by Franklin but delivered by James Wilson. He appealed to the Convention to adopt the Constitution unanimously.
1731: Started Philadelphia free library. 1732: Began printing Poor Richard’s Almanack. 1732: Founded Philadelphia’s first fire department. 1752: Equated lightning with electricity with his famous kite experiment. 1762: Served as deputy postmaster general for North America.
1783: Negotiated Treaty of Paris to end the American Revolutionary War. 1787: Attended the Constitutional Conference. 1790: Died.
The details of Franklin’s writing of his Autobiography are as interesting as any story in Franklin’s life. Autobiography, though only a fragment, is, ironically, Franklin’s longest work. The first part is a private letter to his son William, a letter Franklin never intended to publish. Originally begun in Philadelphia, Franklin continued to work on it while in France. While there, Franklin’s audience shifted from his son to a younger audience. He did not complete much writing in France, and he tabled the entire work until 1788. Franklin added to the work slowly only recording up until the year 1757.
Finally, as a writer, Franklin achieved immeasurable success. He is best known for his Autobiography, which he started in 1771 and never finished. His other book, Poor Richard’s Almanack, was reportedly the only book besides the bible that colonists read. Many of Franklin’s sayings and maxims, such as “Honesty is the best policy” and “God helps those who help themselves” remain in current usage. As stated in the Dictionary of Literary Biography, “Franklin holds forever a firm place in the hearts and minds of Americans who honor good humor, common sense, and wisdom—traits in his writing for which he is best known.”
Benjamin Franklin is honored and revered because of the many successes he achieved throughout his life. The term “the First American,” coined in 1764, originally referred to Franklin, and only later was it transferred to George Washington. Europeans also admired and honored Franklin, perhaps more so than any American before or since. Not everyone admired Franklin, though. Franklin’s contemporary, John Adams, dismissed Franklin as a politician. William Cobbett, a Federalist, called him a “crafty and lecherous.” And later literary giants like Mark Twain and Herman Mellville did not value him or his work. Critics of Franklin today cite his lack of interest in the humanities, his coarseness, and his opportunism as reasons for belittling him. No one
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however, can dismiss him. Benjamin Franklin made his mark on America, and is featured prominently on the $100 bill.
“Benjamin Franklin’s Kite Experiment.” Weatherwise Online, 24 April 1998. Available from http://web2.iac-insite.com. Byers, Paula K. and Suzanne M. Bourgoin, eds. Encyclopedia of World Biography. Detroit: Gale Research, 1998. Franklin, Benjamin. Autobiography. New York: Henry Holt and Company, 1916.
Sources of Information
Wright, Esmond. Franklin of Philadelphia. Cambridge, MA: Belknap Press of Harvard University Press, 1986.
Bibliography “Benjamin Franklin.” Dictionary of Literary Biography Online, 20 April 1998. Available from http://galenet.gale.com.
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Tom Freston Overview Thomas E. Freston rose through the ranks to become chairman and chief executive officer (CEO) of MTV Networks in 1987. In this position, Freston took responsibility for the management of one of the world’s premier suppliers of specialized programming. During Freston’s tenure, MTV Networks grew to encompass five basic cable television programming networks, including MTV, M2, VH1, Nickelodeon/Nick at Nite, and Nick at Nite’s TV Land.
(1945-) MTV Networks
Personal Life Tom Freston was born November 22, 1945 in New York City, where his father worked as a public relations executive. He attended St. Michael’s College in Vermont, where he spent a lot of time on the ski slopes and graduated with his bachelor’s degree in 1967. Two years later, he had completed work on his master’s degree in business administration (MBA) at New York University’s highly regarded Stern School of Business. Freston’s early aspirations included operating an art movie theater or a nightclub. He spent some time in the Caribbean as a bartender before returning to New York to begin his career. On October 18, 1980, Freston married Margaret Badali. Together they had one child, Andrew. He has served on the board of directors of the Rock ‘n’ Roll Hall of Fame and the Smithsonian Commission on Music in America. Known for an unpretentious personal style that MTV executive Judy McGrath once called a “‘can you believe I’m the president’ quality,” Freston cultivates the
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all-music video cable channel. The joint venture between Warner Communications and American Express would eventually become known as Music Television, or MTV. Debuting in 1981, the network originally relied upon an almost exclusively white lineup of British new wave bands and obscure American performers. Nevertheless, photogenic acts like Duran Duran and Culture Club attracted viewers and paved the way for a greater variety of artists to begin making video clips for their own songs. Eventually, MTV branched out to include original programming as well.
Tom Freston.
(Ken Cedeno/Saga/Archive Photos.)
same relaxed style in his employees. When Forbes magazine asked him to describe his corporate dress code, he replied: “No full-frontal nudity.” Freston’s interests include photography, travel, and collecting antique rugs.
Career Details Freston began his career as an account executive with the advertising firm of Benton & Bowles. His portfolio included accounts for Scope mouthwash and the G.I. Joe action figure. He found the corporate bureaucracy restrictive and ineffective, however, and promptly quit. “I had no idea what I was going to do,” he later admitted to Forbes. He spent some time traveling in Africa and Asia before settling in New Delhi, India. While in New Delhi, Freston started up his own textile and clothing business. For the next eight years, shuttling between residences in New Delhi and Kabul, Afghanistan, he manufactured peasant clothes for export back to the United States. There, trendy urbanites loved the chic rags and Freston made a fortune. He could easily have continued this lucrative scheme, but by 1980 the Organization of Petroleum Exporting Countries (OPEC) oil crisis and the Soviet invasion of Afghanistan had made business conditions inhospitable. Fearful that his freshly radicalized workers might turn their anger on him, Freston fled back to the United States. Back in New York, Freston saw an ad in Billboard magazine seeking creative executives to help launch an
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Freston started out in the marketing department, where he helped conceive the immensely successful “I Want My MTV!” campaign that saw stars such as Billy Idol and Sting declaring their desire to have the video channel added to their basic cable package. Freston remained with MTV until 1982, when he left for a twoyear tenure as director of marketing for The Movie Channel, a premium film channel. He returned to MTV Networks in 1983 to become vice president of marketing. During this period MTV Networks launched a second video channel, a light pop alternative called VH1. Freston began a steady ascent that culminated in his being named president and chief executive officer (CEO) in 1987. The year before Freston took control, Viacom had bought MTV Networks for $513 million. The infusion of new capital, coupled with Freston’s energetic leadership, spurred the company on to a decade of unprecedented growth and expansion. When ratings did periodically flatten, Freston was quick to make changes. The most sweeping of these purges came in 1997, when a scathing memo by two 25-year-old production assistants prompted Freston to order a complete overhaul of both programming and presentation.
Social and Economic Impact Under Freston’s leadership, MTV Networks experienced the most significant growth in its history and extended its brands to launch a variety of secondary operations, while at the same time maintaining the company’s reputation as a leader in the television industry. In 1997, MTV Networks provided Viacom with close to $625 million in earnings, about 32 percent of Viacom’s gross earnings. Profits grew 25 percent a year during the 1990s. All of this growth occurred while Viacom’s other assets, Blockbuster Video, the Paramount film studio, and Simon & Schuster Publishing, were struggling to turn a profit. “You cannot overestimate the powerful role the MTV Networks have played at Viacom,” stated CEO Sumner Redstone in Fortune magazine in 1997. The phenomenal growth has allowed the network to expand worldwide. By 1994, globalization had made MTV available to 250 million homes in 58 countries. In fact, there were more subscribers in Europe than in the
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United States. “A key part of our approach has been to localize,” Freston told an audience at a cable industry convention. Accordingly, MTV’s overseas operations, such as MTV Latino, MTV Japan, and MTV Brazil, emphasized local talent unknown in the United States. While remaining committed to “narrowcasting,” Freston has expressed concern about another industry development of the 1990s: pay-per-view. He feared a split in the television viewing audience similar to the one that took place when cable channels first began to displace the broadcast networks. “If we quintuple the number of channels,” Freston told Television Digest in 1994, “there’ll be dilution of ratings.” Freston has employed an unconventional management style that relies on few customary corporate practices. An example of his unique way of dealing with problems is the way he handled the merger of the MTV comedy network HA! with the rival Comedy Channel, owned by HBO. Originally the two networks competed fiercely. Freston even sent employees out in the middle of the night to plaster HA! logos all over the neighborhood of HBO chief executive Michael Fuchs. But neither channel caught fire with viewers, and by 1990 both were sputtering on the brink of collapse. Pride alone might have made other executives reluctant to pool their resources to solve the problem. But Freston and Fuchs got together and agreed that a merger of the two comedy networks was the only way to go. In 1991, they put aside their differences and formed Comedy Central, a joint venture between HBO and Viacom. Programming was consolidated, and a new CEO was brought in to provide oversight. By the end of that year, the subscriber base for the new channel had almost doubled to 22 million viewers. On the programming front, Freston pursued a policy of nurturing creative innovation and, as he phrased it, “putting people first.” Some of the new programming initiatives that began under Freston’s leadership included the popular cartoons Rugrats on Nickelodeon, Daria on MTV, and the VH1 concert series Storytellers. Freston’s decision to emphasize animated programming put him in the forefront of a creative rebirth for the cartoon industry. In 1997, MTV Networks announced that it would invest more than $420 million in original animation over five years for both Nickelodeon and MTV. This major investment would encompass animated television series, animated feature films, and other animated products.
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Chronology: Tom Freston 1945: Born. 1967: Graduated St. Michael’s College. 1969: Awarded MBA from New York University. 1980: Joined MTV as director of marketing. 1981: Launched MTV. 1985: Launched VH1. 1986: Named MTV president of entertainment. 1986: MTV Networks bought by Viacom. 1987: Appointed chairman and chief executive officer of MTV Networks. 1997: Ordered overhaul of MTV programming.
Sources of Information Contact at: MTV Networks 1515 Broadway New York, NY 10036 Business Phone: (212)258-6000 URL: http://www.mtv.com
Bibliography Brown, Les. Les Brown’s Encyclopedia of Television. Detroit: Gale Research, 1992. Clash, James M. “Mr. Hatfield, Meet Mr. McCoy.” Forbes, 30 January 1995. Gunther, Mark. “This Gang Controls Your Kids’ Brains.” Fortune, 27 October 1997. Samet, Jonathan. “PPV To Split Audience.” Television Digest, 1 March 1993. Teubner, Gary. “MTV Networks CEO Thomas Freston Described ‘Globalization’ of MTV to Audience of International Attendees.” Satellite Week, 30 May 1994.
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Alfred Fuller (1885-1973) Fuller Brushes
Overview Alfred C. Fuller, who had a difficult time staying employed, started making brushes in his sister’s basement and selling them door-to-door. In a short time, his brush business became extremely successful. Fuller, essentially, reinvented the brush. His brushes were high quality and designed to fit the specific needs of his customers. He developed an independent workforce who followed his pattern of door-to-door selling. Fuller demanded ethical behavior from his workers and was a role model to other manufacturers for his management techniques.
Personal Life Alfred Carl Fuller, nicknamed Uppie, was born on January 13, 1885, in Nova Scotia, Canada. Some of his ancestors were among the passengers who came to America on the Mayflower. He was the 11th of 12 children born to Leander Joseph Fuller and Phoebe Jane Collins Fuller, and was raised on a farm in Nova Scotia. He, along with his family, was an active member in the Methodist Church. Going to church was absolutely mandatory and Fuller credits his early church experience for instilling his positive outlook on life. Rather than talk about how sin or crime does not pay, he heard about the virtue of modesty, and the rewards of living a clean and righteous life. Fuller was also instilled with a good work ethic early on in his life. His mother was a thrifty homemaker and his father distrusted what he called, “city slickers,” or those he thought tried to get by in life without having to work. Fuller’s father would often look at his hands and
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Alfred C. Fuller displays some of the company’s products.
say “These are your fortune, boy. Be suspicious of anyone who shows you how to make a living without using them.” At a young age, Fuller earned money by picking berries and being paid by the quart. In his autobiography, A Foot in the Door, Fuller remarks that “I think that my later organization of Fuller Brush Men as independent dealers who are business men in their own communities, draw no salary from the company, and earn only the fruits of their won sales, was germinated in a Nova Scotia strawberry patch.” Fuller went to grammar school, and afterwards had no formal training or schooling. In Nova Scotia, children were expected to be self-supporting by the age of 18. In 1903, Fuller left home for Somerville, Massachusetts, where five of his siblings had already settled. Fuller worked, unsuccessfully, at a variety of jobs before he started to sell brushes door to door for William Staples. In 1906, he started his own brush company and moved to Hartford, Connecticut. In 1908, he married Evelyn Ells, who helped Fuller keep his new business thriving. The couple had two children, Howard and Avard, who grew up to become presidents of the Fuller Brush Company. Fuller and his wife, Evelyn, divorced in 1930. Fuller was remarried in 1932 to Mary Primrose Pelton; that marriage lasted for the rest of his life. During his first few years in Hartford, Fuller became interested and involved in the teachings of Mary Baker Eddy, the founder of Christian Science. He credits much of his success in dealing with people from the teachings of Eddy. Fuller believed in altruism and his business was based
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(UPI/Corbis-Bettmann.)
on the principles of charity, help, and community. He was aware of the tremendous responsibility he had and felt that each management decision affected every person in the organization. For that reason, it was important for the business to rely on the guidance of a higher power. “The organization has been shaped and is now permeated with a spirit which, whether consciously or unconsciously, is founded on the Scriptures, and, I believe, is directly motivated by metaphysical influences,” Fuller once said. Fuller became a well respected man in the business world. He received many awards and was asked to be on the boards of several organizations. He died in Hartford, Connecticut on December 4, 1973.
Career Details After Fuller moved to Somerville, Massachusetts, he worked as a gardener, a delivery boy, and in a trolley car barn, but was fired from all these positions. Fuller’s brother, Dwight, had been in the brush business with William Staples who gave Fuller his first job selling brushes door to door. Fuller enjoyed the work and was successful. He became extremely interested in “the brush” and studied its history. He learned that in 1830, the first patent for a brush was issued and the mass production of brushes began. There had only been few improvements made in the manufacturing of brushes up to this time. And those that were made, were manufactured
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Chronology: Alfred Fuller 1885: Born. 1905: First job selling brushes door to door. 1906: Established Somerville Brush Company. 1906: Moved to Hartford, Connecticut and renamed company Capitol Brush Company. 1908: Married Evelyn Ells. 1913: Company became the Fuller Brush Company. 1918: Introduced the Handy Brush, a free gift to customers. 1921: Hired Frank Adams to save the company. 1943: Fuller signed first union contract. 1945: Retired as president of Fuller Brush Company. 1973: Died.
to be obsolete so, Fuller’s creations and innovations were a success waiting to happen. As Fuller went door to door selling brushes, he learned cleaning tips from his customers and listened to their suggestions for making brushes for specific uses. He noted which brushes sold well and which ones did not sell well. Fuller took this information to his employers, who turned a deaf ear. On New Year’s Day, 1906, Fuller set up a workshop in his sister’s basement and began to make his own brushes. It was the start of the Somerville Brush Company. Fuller sought to improve the brushes and to make new shapes and sizes, and they were a success. Staples and his partner, Fred Kelly, were upset by Fuller’s departure and subsequent success, and out of respect for his former employers, Fuller moved his shop to Hartford, Connecticut in April, 1906. Because Hartford was the capital city he renamed his company the Capitol Brush Company. His brushes were a success in Hartford and soon orders became backlogged. Eventually Fuller moved to a larger shop, bought machinery to produce the brushes, and hired someone to help him make and sell them. In 1908, Fuller married Evelyn Ells. Evelyn was very interested in the business and was instrumental in maintaining the success of the Capitol Brush Company. She borrowed his samples, and went door to door herself, consistently outselling him. She often accompanied
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him while he made business calls and insisted on being paid for her time. Even though Fuller recognized Evelyn’s competence and flair for selling his brushes, he never hired women because “in those days, it just wasn’t done.” In 1909, Fuller ran his first want ad for salesmen. The ad appeared in a national journal and the response was tremendous. His business practices however were haphazard, however, and he was not prepared to respond to all the inquiries or supply the potential salesmen with supplies without hiring more people to help. He credits Ruby Perkins, his first secretary, Phil Colturi, and George Marsh with helping him during the company’s expansion. Later, Fuller used the talents of Wallace E. Campbell and the inventor Henry Cave. One man who was extremely helpful in developing a successful workforce was Frank Beveridge who worked with Fuller from 1912 to 1929, when he left to start the Stanley Home Products Company which also sold door to door. In 1913, the Capitol Brush Company became the Fuller Brush Company. Selling door to door is a hard way to make a living. The salesmen were often linked to peddlers and frauds. Fuller always demanded that his salesmen dress nicely and behave in a courteous fashion. In 1918, he made the Handy Brush which was given out as a free gift to households where Fuller Brush men called. After World War I, sales gradually declined to the point where the company was in real trouble. Fuller, along with his financial advisor, Frank Adams, toured all of their divisions in the United States and Canada. They found disorganization and mayhem. Adams overhauled the entire company and saved it from collapse. The Fuller Brush Company survived the Depression years and afterward enjoyed a tremendous growth in sales. During World War II, the company prospered even further, as the demand for brushes was extraordinary. Also during this time, new synthetic materials were available to make the brushes. Fuller introduced new products including a line of cosmetics that were sold by a new workforce— the Fullerettes. Fuller products were so great in number that the company began publishing a catalog of available items. Fuller’s sons also became involved in the business. In 1943, the company signed its first formal contract with a union and afterwards, efficiency and scientific management replaced Alfred’s paternalistic way of management. His son, Howard, was the driving force behind the company’s success after World War II and became president in 1943, when his father became chairman of the board. After Howard’s death in 1959, Avard became president of the company. Alfred Fuller retired in 1968.
Social and Economic Impact The Fuller Brush Company is one example of the types of businesses that developed after the turn of the century. Those that started with a small sum of money,
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innovation, invention, and hard work, and that became extremely successful. It is expected that the company will still be a mainstay in the American marketplace into the 21st century. By the 1990s, Fuller products could be purchased over the Internet. The Fuller Brush Company was one of the first door to door sales companies and its management theories have greatly influenced many other door to door companies such as Stanley Home Products, Tupperware, Avon, and Amway. Alfred Fuller was looked to as a leader in the sales industry for his fair practices, beneficent treatment of employees, and a nononsense way of doing business. There have been numerous jokes and cartoons featuring the Fuller Brush Man in magazines and newspapers. In 1948, the movie The Fuller Brush Man, starring Red Skelton was released and in 1950, the sequel, The Fuller Brush Girl, starring Lucille Ball was released. All
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were a light hearted tribute to a company and a product that, as early as the 1920s, had become a common household product.
Sources of Information Bibliography Current Biography Yearbook. New York: H.W. Wilson Co., 1974. Fuller, Alfred C. A Foot In The Door. New York, McGraw-Hill Book Company, Inc., 1960. Ingram, John N. Biographical Dictionary of American Business Leaders. Westport, CT: Greenwood Press, 1993. VanDoren, Charles. Webster’s American Biographies. Springfield, MA: G. & C. Merriam Co., 1979.
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Nely Galán (1964-) Galán Entertainment
Overview By the time she was 30, Nely Galán had signed production deals with HBO Independent Productions and Fox Television to produce television and film products for the Latino market. She made her broadcasting debut when she was 18 on a Public Broadcasting Service (PBS) news show for teens called Checking It Out. At the age of 22 she was the youngest station manager in the United States at WNJU-TV, New Jersey’s top Spanish-language television station. When she was 25 she created and hosted Bravo, a television talk show originating in Philadelphia that featured Latino guests and was eventually shown on more than 30 different stations. In 1990 she set up her first production company, Tropico Communications. She relocated to the West Coast in 1992 after signing a production deal with HBO, then went to Fox in 1994.
Personal Life Nely Galán was born Nely Alvarez in 1964 (some sources say 1963) in Cuba to Arsenio and Nelida Alvarez. The family moved from Cuba to the United States and settled in Teaneck, New Jersey. Galán attended the Catholic all-girl Academy of the Holy Angels in Demarest, New Jersey, about an hour from her home. In a Vogue interview, she said “I arrived in the United States at age three and grew up wanting both to live up to the old-world expectations of my parents and to fit in with the customs of my new homeland.” Her parents assumed that as much as they had done Nely would
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marry, stay home, and have children. but Galán had another vision for her future. She wanted to be a writer. A “wimpy, quiet kid,” according to her own account, she underwent a change in attitude when she was 15. Having learned English well, she impressed the nun who was her English teacher with a short story she had written, and it was read aloud in class. Later the nun charged her with plagiarism, simply on the grounds that a young girl could not have written such a good story. Galán retaliated by writing another story, this one a satire about a Catholic all-girls school, and sent it off to Seventeen magazine. While the essay was not published, the editors liked the piece and the magazine invited her to be a guest editor. She felt vindicated for the unwarranted accusation of plagiarism and gained a new confidence. Her guest editorship turned into a full-time job hiring models for fashion spreads in the magazine. Her contacts resulted in a job offer from the Elite modeling agency, and the 17-year-old Galán went to Paris to help coordinate talent for fashion shows there. When she was 18, the precocious teenager married Hector Galán, a documentary filmmaker. They were divorced after four years of marriage.
Chronology: Nely Galán 1964: Born. 1967: Emigrated to the United States. 1982: Became host of Checking It Out, a teen news show on PBS. 1989: Created and hosted Bravo, a talk show. 1990: Established Tropico Communications, a television production company. 1992: Signed production deal with HBO Independent Productions and formed Tropix, a production company. 1994: Signed production deal with Fox Television and formed Galán Entertainment, a production company.
Career Details Galán’s broadcast career began when she was 18 years old. She was the host of Checking It Out, a teenoriented news show on PBS. While working for the show, she spent two years traveling throughout the United States, interviewing guests and filming stories. Recognizing the power of television, Galán wanted to become a producer. At the age of 20 she went to work as a documentary producer at the CBS affiliate in Boston. She assisted with the production of Since JFK: The Last 20 Years, which won an Emmy award. Galán returned to New Jersey and was hired as the station manager of WNJU-TV in Teterboro, New Jersey. At the age of 22, she was the youngest station manager in the United States. WNJU was New Jersey’s top Spanish-language station, and Galán was responsible for a $15 million budget and a staff of 100 employees. Galán was hired away from WNJU when CBS made her an offer to anchor a show aired from WCAU-TV in Philadelphia and to host her own talk show called Bravo. Bravo was modeled after Oprah Winfrey’s popular talk show and featured prominent Latino guests. It was seen on more than 30 different television stations.
United States and the 200 million viewers in Latin America. While still working for CBS, Galán heard from an acquaintance, Concepción Lara, who was developing a Spanish-language version of HBO. Lara recommended Galán for a similar spot at ESPN, which wanted to develop a Spanish-language sports network. Although she wasn’t a sports fan, Galán took the work as a learning experience. Galán was soon approached by HBO Independent Productions, and in 1992 she successfully negotiated with HBO to form her own production company, Tropix. Galán ran Tropix from 1992 until September 1994, when she signed a new production contract with Fox Television. During that period she was working on Latino sitcoms and other projects for HBO. One show, Loco Slam, featured Latino stand-up comics and debuted in June 1994. Another project in development was a three-hour English-language anthology about three Latino families: Mexican, Cuban, and Puerto Rican.
Around 1990 movie studios as well as network and cable television companies were becoming more interested in reaching the 27 million Latinos living in the
With Fox, Galán established a new production company, Galán Entertainment. She planned to complete projects she had started at Tropix and to develop new ventures. She produced on-air and promotional graphics for the Fox Latin American Channel. Her video spots won many awards, including the 1994 Gold Award from the Broadcast Designers Association. Other new projects included a Miami-based dance show and two Latino sitcoms. One of the sitcoms, Sabrina, was being developed
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for ABC. It was about a 13 year-old Latina growing up in the United States. The other sitcom was expected to feature a Latina professional, similar to The Mary Tyler Moore Show.
Social and Economic Impact Successful in both the broadcasting and production areas of television, Galán serves as a role model for other Hispanic women. She is respected and admired for her knowledge of both American and Hispanic cultures. In meetings she speaks English and Spanish interchangeably and has a talent for translating ideas into entertainment projects that are meaningful to the Latino market. Galán’s cultural sensitivity is evident by the attention she pays to such projects as a three language anthology about three families, one Mexican, one Puerto Rican and one Cuban. Each segment was written by a native of each country because only then would the cultural shadings be clear. Her influence on a show’s content has enabled her to develop television programs aimed at younger Latinos. Her concern was that traditional Spanish-language networks were directed mainly at older viewers, and that they failed to address younger audiences. She told The New York Times, “The trick for me is to reach masses of people with a message that’s universal but at the same time really sounds like a true Latino voice.” One pro-
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gram aimed at this younger audience is a dance show set in Miami titled “Salsa Til Sunup”, which may appeal to young adults. As someone who speaks English and Spanish and understands both the Anglo and Latino cultures, Galán has the potential to become a key player in the television industry. Her experience is indispensable to movie, network, and cable television companies that are trying to develop shows in English as well as Spanish that will appeal to the ever-growing Latino market.
Sources of Information Bibliography Galán, Nely. “Latin Class.” Vogue, August 1997. Garcia, Guy. “Tropical Tycoon: Nely Galán.” The New York Times Magazine, December 11, 1994. Also in The New York Times Biographical Service, December 1994. “Nely Galán: Writer/Director.” Available from http://www.hisp. com/apr96/14galan.html. Notable Hispanic American Women. Detroit: Gale Research, 1993. Rodriguez, Janel. Nely Galán. Raintree Steck-Vaughn, 1997. Who’s Who among Hispanic Americans. Detroit: Gale Research, 1994.
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George Gallup Overview George Gallup was the founder of the public opinion poll that bears his name. His work was considered to be pioneering in public opinion polling. He invented a scientific statistical technique through which he could sample opinions of a small number of people and derive the general public mood of the population on various issues. His technique was also successfully used for predicting the outcome of presidential elections and other political races. In 1936, when his opinion poll successfully predicted the victory of President Franklin D. Roosevelt, Gallup became the leader in his field.
(1901-1984) American Institute of Public Opinion
Personal Life George Gallup was born the son of George and Nettie Davenport Gallup on November 18, 1901. His father, George Sr., a farmer, had been described as an eccentric schoolteacher who dabbled in the real estate investments of farm and ranch lands. George, Sr. also dreamed of what he called a new kind of logic called “lateral thinking.” He inspired his son to think creatively and was considered a significant influence on Gallup’s eventual approach to his life’s work. Gallup grew up on the plains of Iowa and attended the University of Iowa. This was a difficult time for him. His parents were experiencing financial hardships and they found it difficult to help with college expenses. Gallup continued in his education, however, and was able to get the money he needed from scholarships and work, doing odd jobs around the university.
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for Objective Methods for Measuring Reader Interest in Newspapers,” and clearly forecasted his future career interests. George Gallup was actively involved in his career until the time of his death. He lived comfortably on a 600-acre estate in the affluent community of Princeton, New Jersey. He died on July 26, 1984, at the age of eighty-three while he was travelling in Tschingel, Switzerland, where he suffered a fatal heart attack.
Career Details Gallup became a college professor upon receiving his Ph.D. He was the head of the journalism department at Drake University in Des Moines, Iowa, from 1929 to 1931. He taught at Northwestern University in Evanston, Illinois, from 1931 to 1933, as a professor of journalism and advertising. From 1933 until 1937, while beginning a career at Young & Rubicam Advertising in New York City, he continued to work as a professor of journalism at Columbia University.
George Horace Gallup.
(The Library of Congress.)
As it turned out, it was one of those odd jobs that would end up becoming the basis for his career. During one summer vacation while still in college, Gallup worked for a St. Louis newspaper, The Post-Dispatch, taking surveys door-to-door, asking the readers their feelings about the newspaper. The job was not a pleasant one. It was monotonous and tiring in the midst of the oppressive St. Louis summer heat. He had to ask each household exactly the same questions. All of this made Gallup wonder whether there might not be an easier, more efficient way to get the answers to these kinds of questions and still get accurate results. He determined that this would be his life, his career. Gallup’s training was a mixture of many elements. He was the editor of the campus newspaper at college. He built up the publication from a small college paper to one of general interest that supported itself with advertising. It became the voice of not only campus news, but of the entire town.
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Gallup began his primary career when he accepted a job with the advertising firm of Young & Rubicam, in 1932, at which time the United States was in the midst of the Great Depression. He began to collect information about the public’s moods and he shared the results with Young & Rubicam’s clients. These clients who advertised on radio, and in magazines, were eager to pay for information about what the public wanted. In an era when money was not easily available to most Americans, even those with jobs, such information was crucial to a company’s direction and success. Gallup was a young family man when he joined Young & Rubicam. He had already become convinced that his ideas about “scientific sampling” were enormously important and useful. Many professionals regarded this as radical for the times, and they disputed his accuracy. Gallup did not sway, however, in pursuing his own methods as a way to capture the public’s moods and sentiments. George Gallup created a technique for asking questions of a small random mixture of Americans. He would then use the information to predict how huge populations felt about things, what they believed, what they would buy, and, most of all, how they would vote.
Gallup graduated from the University of Iowa in 1923, with a bachelor of arts degree in journalism. He remained at the college to become a professor of journalism. He also continued his studies and earned a master’s degree in psychology in 1925. At the end of that same year, on December 27, Gallup married Ophelia Smith Miller. They had three children: Alec Miller Gallup, George H. III (who continued as the head of his father’s organization), and Julia Gallup Laughlin.
By 1935, Gallup formed the American Institute of Public Opinion, a private company, where he gathered many and various predictions of public moods and attitudes. He sold the information to the newspapers that subscribed to his service. Gallup also formed the first polling group for the entertainment industry, known as Audience Research, Inc. This provided Hollywood, for instance, with public reaction to anything from movie titles to the popularity of movie stars.
In 1928, Gallup earned a Ph.D. in journalism. His doctoral dissertation was entitled: “A New Technique
Gallup increased his wealth quickly as he conducted polls for advertisers, entertainment executives, and the
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media. However, he achieved his greatest fame when he began to predict the outcome of political races. In 1936, the Gallup organization accurately predicted that Franklin D. Roosevelt would win easily over presidential candidate Alf Landon. What Gallup had learned to do was implement a technique of sampling a small number of the general population that would accurately represent the population at large. This was a vastly different approach from the old “straw poll” whereby people who were asked to respond to questions were not necessarily people who provided a broad, representative spectrum of American opinions. Gallup had invented an ingenious contribution to political forecasting. While polling became the heart of his work, Gallup never strayed too far from his original interests of journalism and education. In his work The Miracle Ahead in 1964, and throughout his life, he emphasized and advocated that the best education system was one which called forth the creative powers of the human brain. He insisted that the best training a mind could have was that which developed skills such as perception, concentration, problem solving and decision making. Gallup believed most in the case history method of teaching, which according to him afforded, “. . . perhaps the best method that mankind has yet found to transmit wisdom as opposed to knowledge.”
Chronology: George Gallup 1901: Born. 1923: Earned his B.A. at the University of Iowa. 1925: Earned his M.S. at the University of Iowa. 1925: Married Ophelia Smith Miller. 1928: Obtained his Ph.D. from the University of Iowa. 1929: Headed Journalism Department, Drake University, Des Moines, Iowa. 1931: Became professor of journalism and advertising, Northwestern University, Evanston, Illinois. 1932: Named director of research, Young & Rubicam Advertising Agency, New York City. 1935: Founded American Institute of Public Opinion, New York City and Princeton, New Jersey. 1939: Founded Audience Research Institute. 1940: Published The Pulse of Democracy: The Public Opinion Poll and How It Works. 1958: Founded Gallup Organization, Inc.
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1984: Died.
George Gallup invented the scientific method of obtaining the ideas and moods from a small group of people and translating their diverse opinions into an indicator of the sentiments of much larger groups. He invented modern polling techniques that brought to the forefront great productive accuracy. The impact of his polls on modern society is difficult to measure. Polls have provided a means, throughout the world, by which pollsters can scientifically examine the needs, the desires, the frustrations, and the satisfactions of large populations. This information, whether used for public or private benefit, has presented the key to understanding an ever-changing American mind, politically and socially. Gallup’s scientific method of gathering public opinion transformed this monumental task into a manageable one. He brought to many industries the answers for questions they had about the American disposition. Through polling, he could determine what Americans wanted, how they felt about political and social issues, and what they felt about products they bought in the grocery store. This information gave businesses the direction they needed to interpret and meet the public’s approval. This translated into financial gain for corporations that fueled a marketdriven economy.
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People doubted the accuracy of the Gallup Poll predictions for many years. Indeed, skeptics remain constant in any similar venture. However, Gallup succeeded with a startling accuracy in the polls which opponents found difficult to deny. He overcame his challenges when he consistently came up with the right answers. Gallup’s belief in people was, perhaps, his most important social contribution. He listened to what the average person had to say, and made it matter in the public arena. As founder of such an organization as Quill & Scroll, the high school journalism honorary society, he told the youth of America that they were important. His numerous awards from business and educational institutions speak to the value society placed on his contributions. Historian Richard Reeves interviewed Gallup in the final years of his life. When Gallup was asked about the effect that polling had on a democracy, his response was candid and assertive: “If government is supposed
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to be based on the will of the people, then somebody ought to go out and find out what the will is. More and more people will be voting on more and more things, officially, and unofficially in polls, on issues as well as candidates. And that’s a pretty good thing. Anything’s good that makes us realize that government is not ‘them.’ We are the government. You either believe in democracy or you don’t.” The life of George Gallup is the story of America and its foundation in democratic ideals. He emerged from a childhood of dreams, into a lifetime career of making even the smallest voice in America heard. His methods and his results might have been questioned but George’s unfailing influence in how America works, votes, and lives, is the legacy that survives him.
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Sources of Information Bibliography Gallup, George. The Gallup Poll of Attitudes Toward Education, 1965-1973. Princeton: Princeton Opinion Press, 1976. Gallup, George. The Miracle Ahead. New York: Harper Bros., 1964. Gallup, George, and John O. Davies. What My People Think. New York: American Institute of Public Opinion Press, 1971. Gallup, George, and Saul F. Rae. The Pulse of Democracy: The Public Opinion Poll and How it Works. New York: Simon & Shuster, 1940. Reeves, Richard. Fifty Who Made a Difference. New York: Villard Books, 1984.
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James Gamble Overview James Norris Gamble was principally responsible for the development of Ivory Soap, one of the most recognizable products in American business history. As a partner in Procter & Gamble, he helped guide the company through a period of rapid growth and innovation. The son of the company’s cofounder, he also innovated in the arena of labor relations by introducing a profit sharing plan in 1887.
(1836-1932) Procter & Gamble
Personal Life James Norris Gamble was born August 9, 1836 in Cincinnati, Ohio. He was the grandson of Irish immigrants who had settled in the “Queen City of the West” in 1819. The son of Elizabeth Ann and James Gamble, the cofounder of the Procter & Gamble soap and candle company, Gamble attended school at Cincinnati’s Chickering Institute. He earned his bachelor’s degree from Kenyon College in 1854 and completed his master’s degree there three years later. Gamble later did postgraduate work in chemistry at the University of Maryland. Gamble married Margaret Penrose, a native of Ireland and the daughter of a British army officer, in April 1862. With her, Gamble had two daughters, Maud and Olivia. He was made an honorary life member of the Cincinnati Chamber of Commerce and the Cincinnati Club. His other affiliations included the Republican Party, the Methodist Episcopal Church, the Masonic order, and Delta Kappa Epsilon. He died in Cincinnati on July 2, 1932.
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Chronology: James Gamble 1836: Born. 1854: Graduated from Kenyon College. 1857: Earned master’s degree from Kenyon College. 1862: Became partner in Procter & Gamble. 1887: Instituted profit sharing. 1890: Elected vice president and director of Procter & Gamble. 1895: Elected mayor of Westwood, Ohio. 1912: Entered semi-retirement. 1924: Donated stadium to University of Cincinnati. 1932: Died.
Career Details James Norris Gamble began his career as a factory worker at a Procter & Gamble plant in Cincinnati. The company had been founded by his father in partnership with William Procter in 1837. Procter was a prosperous candle manufacturer and Gamble was an apprentice soap maker. By coincidence, they married sisters, whose father encouraged the two men to go into business together. In 1837, a year after the birth of Gamble’s son James Norris, the two men began making and selling soap and candles and entered into a formal partnership in October of that year. By the 1850s, the moon and stars had become the company’s unofficial logo. Procter & Gamble sales first exceeded $1 million in 1859. James Norris Gamble was made a partner in his father’s business in 1862. His progress was interrupted only by the clarion call of war. When the U.S. Civil War broke out, Gamble joined the Ohio Infantry and was made a captain of the 8th Regiment. He returned to the company after his service to guide it through its greatest period of growth. During the Civil War, Procter & Gamble was awarded numerous contracts to supply soap and candles to the Union Army. These orders kept the factories constantly busy and established the company’s national reputation, as soldiers returned home from battle with their Procter & Gamble products in tow. As his business influence expanded, Gamble began to contribute in the civic arena as well. In 1869, he be-
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gan a decade-long association with Edward A. Ferguson designed to promote construction of a railroad between Cincinnati and Chattanooga, Tennessee. Their enterprise, known as the Cincinnati Southern Railroad Company, was owned wholly by the city of Cincinnati. Other railroad endeavors to which Gamble lent his influence included the Westwood & Cincinnati Railroad Company, of which he was president and sole proprietor, and the Little Miami Railroad Company. Gamble also enjoyed a successful career in politics. He served as mayor of Westwood, Ohio (later a part of Cincinnati) from 1895 to 1896 and he sat on Cincinnati’s Board of Parks Commissioners in 1898. As a commissioner, he helped plan and implement the city’s park and roadway system. As chairman of the Honest Election Commission from 1905 to 1912, Gamble worked to reform the electoral system in his native city. Through all of his other activities, however, Procter & Gamble business never strayed far from Gamble’s thoughts. In 1888, Gamble took personal control of the construction of the company plant in Ivorydale, Ohio. Designed by the famed industrial architect Solon Beman, the plant incorporated the latest technological advances with a pleasant work environment for employees, a progressive approach at that time. It was severely damaged by a fire in 1884. When Procter & Gamble was incorporated in 1890, Gamble was elected vice-president and director, positions he maintained until his death. In 1912, an aging Gamble stopped participating in Procter & Gamble company business. He devoted himself increasingly to his university and hospital interests until his death in 1932.
Social and Economic Impact Gamble’s most significant breakthrough was his development of Ivory Soap in 1879. A chemist by training, he devised the inexpensive, white soap to compete with high-quality imported soaps that cost more. “So pure it floats,” ran ads for the product, which did in fact float on water. Harley Procter, son of the company co-founder, took the name Ivory out of a Biblical passage, and the rest is history. Ivory Soap went on to become Procter & Gamble’s best-selling product, backed by a national advertising campaign that was the first of its kind anywhere. Ivory’s purity and floating capability became the product’s major selling points, and were touted across America in the weekly newspaper The Independent. Gamble’s other innovations included the development of a telegraphic communication system between the home offices and the company factory two miles away. His helpmate in this enterprise was a young telegraph operator named Thomas Alva Edison. In 1887, with local and national labor unrest threatening the business climate, Gamble took bold steps to address the problem.
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With input from William Cooper Procter, he devised a pioneering profit-sharing program for Procter & Gamble factory workers. The plan allowed workers to participate in the management of the company, guaranteed them at least 48 weeks of employment a year, and provided insurance and pension benefits. In 1890, the company established an analytical lab at Ivorydale to study and improve the soap-making process. It was one of the first product research labs in the United States. Gamble gave generously to charities and other causes. He helped found the Cincinnati Young Men’s Christian Association (YMCA) and was one of the original sponsors of the Freedman’s Aid Society, an agency designed to help emancipated slaves adjust to their new status after the Civil War. In 1924, he donated a stadium to the University of Cincinnati and dedicated it to his late grandson, James G. Nippert. Gamble served on the board of directors of the school and was also a trustee of Ohio Wesleyan University. He set up the Christ Hospital In-
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stitute of Medical Research in 1927 and served on the board of the Ohio Valley Improvement Association. When he died he was the oldest living member of that association. A longtime advocate of a canal for the Ohio River, Gamble lived to see that project completed in 1929.
Sources of Information Bibliography The National Cyclopaedia of American Biography. New York: James T. White & Co., 1955. Reprint. Volumes 1–50. Ann Arbor, MI: University Microfilms, 1967–1971. The World Almanac Biographical Dictionary. New York: World Almanac, 1990. The World Almanac Book of Who. New York: World Almanac, 1980.
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Bill Gates (1955-) Microsoft Corporation
Overview William Henry Gates III became known as “The King of Software” by designing and developing innovative software for the personal computer (PC), helping to make them the universally popular machines they are today. With his high school friend, Paul Allen, Bill Gates co-founded Microsoft Corporation, which he built into a multibillion-dollar company.
Personal Life William Henry Gates III was born October 28, 1955, in Seattle, Washington. His father, William Henry Gates Jr., is a prominent Seattle attorney, and his mother, the late Mary Maxwell, was a school teacher, regent at the University of Washington and chairperson of the United Way International. He married Melinda French Gates, a Microsoft manager, in 1994. Together they have a daughter, Jennifer, born in April of 1996. In his leisure time Gates enjoys reading, playing golf, and bridge. Gates received $2.5 million in advance for his bestseller The Road Ahead. The book covers Gates’s views on the future of the Internet. Gates developed an early interest in computer science in the seventh grade at Seattle’s Lakeside School. There Gates became acquainted with Paul Allen, a teenager with a similar interest in technology who would eventually become one of his business partners. Gates entered Harvard University in 1973 to study pre-law. By 1975, Gates had decided to pursue a career in computer software and dropped out of Harvard.
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Career Details Gates’s early experiences with computers included debugging (or eliminating errors from) programs for the Computer Center Corporation’s PDP-10, helping computerize electric power grids for the Bonneville Power Administration, and—while still in high school—founding with high school friend, Paul Allen, a firm named Traf-O-Data. Their small company earned them $20,000 in fees for analyzing local traffic patterns. While working with the Computer Center’s PDP-10, Gates was responsible for what was probably the first computer virus, which is a program that copies itself into other programs and ruins data. Discovering that the machine was hooked up to a national network of computers called Cybernet, Gates invaded the network and installed a program on the main computer that sent itself to the rest of the network’s computers: Cybernet crashed. When Gates was found out, he was severely reprimanded, causing him to stay away from computers for his entire junior year at Lakeside. In January of 1975 Allen showed Gates a cover story in the magazine Popular Mechanics about a $350 million microcomputer, the Altair, made by a firm Called MITS in New Mexico. When he saw the story, Gates knew he wanted to be in the forefront of computer software design. “What first got me so interested in software development, and eventually led to the founding of Microsoft, was the excitement I felt as a teenager when I realized that computers gave me feedback and information like a puzzle to be studied and solved,” said Bill Gates (http://www.microsoft.com). Gates and Allen first wrote a BASIC interpreter for the Altair computer. BASIC being a simple, interactive computer language designed in the 1960s and “interpreter” program that executes a source program by reading it one line at a time and performing operations immediately. When Gates dropped out of Harvard in 1975, he ended his academic life and began his career in earnest as a software designer and entrepreneur. At this time, he and Allen became cofounders of Microsoft. They wrote programs for the early Apple and Commodore machines and expanded BASIC to run on microcomputers other than the Altair. Gates’s big opportunity arrived in 1980 when IBM approached him to help with their personal computer project, code named Project Chess. Gates created the Microsoft Disk Operating System, or MS-DOS, and its related applications can run on almost any IBM compatible PC. By the early 1990s, Microsoft had sold more than 100 million copies of MS-DOS, making the operating system the all-time leader in software sales.
Bill Gates.
(Courtesy of Mirosoft Corporation.)
terest of his is biotechnology, because of the breakthroughs that have occurred using this technology. He believes that with the Internet, researchers will be able to communicate faster with each other, thus leading to more cures. Finding the best way to treat or prevent illness is important to Gates. He donated $1.5 million in 1998 to the International Aids Vaccine Scientific Blueprint project in the hope of developing a vaccine for Aids. By the end of 1998, Gates was worth around $39 billion, making him the wealthiest self-made man in the entire world. In 1997, Microsoft recorded a net income of $3.4 billion. This made up 41 percent of the profits of the 10 largest publicly traded software companies. This period saw the roll out of Windows 95 and 98, major updates of the world’s preeminent computer operating system, Windows. In the first three days of its release, Windows 98 sold more than 500,000 copies, matching the sales of Windows 95 in its debut. Gates’s competitive drive and fierce desire to win have made him a powerful force in business, but have also consumed much of his personal life. In the six years between 1978 and 1984 he took a total of only two weeks vacation.
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Gates’s other interests encompass medicine and the arts. In 1989 he started a company called Corbis. Corbis owns the rights to 800,000 digitized images. The images are licensed by newspapers and magazines and published by them either in print or electronic form. Another in-
Accompanying Gates’s competitive drive is a fear of losing. A guiding force in Microsoft’s economics is Gates’s insistence that rather than incurring debt, Microsoft should have on hand enough cash to operate for
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Chronology: Bill Gates 1955: Born. 1972: Established Traft-O-Data firm. 1973: Developed BASIC computer program for MITS Altair. 1975: Cofounded Microsoft with Paul Allen. 1984: Sold 2 million copies of MS-DOS. 1987: Unveiled Windows software. 1989: Founded Corbis Corp. 1995: Offered the Windows 95 update. 1995: Published The Road Ahead. 1998: Becomes the world’s wealthiest self-made man.
a year without any revenues. Business associates have argued the point with him and succeeded to a certain extent in acquiring cash for investment in expansion and development; however, as of January 1997, Microsoft had $8 billion in cash and no long-term debt. In 1987 Gates entered the world of computer-driven multimedia when he began promoting CD-ROM technology. Gates envisioned the expansion of his business by combining PCs with the information reservoirs provided by CD-ROM and was soon marketing a number of multimedia products. In addition, Gates invested $1 billion in the cable company Comcast in 1998 in an effort to persuade the cable industry to assist in developing faster connections using cable modems. That same year, Microsoft formed the Cable Broadband Forum with Intel, TCI, and Time Warner to promote cable modems. The company also invested $425 million to guarantee itself a 20 percent equity stake in the cable access venture, Road Runner. Microsoft employs around 20,000 people in 48 countries. A typical Microsoft employee is very intelligent, but may only have little if any experience—much like Gates’s own background. Gates also invites challenge and confrontation to maintain flexibility. As a student of business history, Gates came to believe that it is paramount for corporate executives to be sensitive to change in their industries and that they remain flexible in order to respond to change when necessary and to seize opportunities. In Hard Drive, James Wallace and Jim Erickson quoted Gates as saying, “I can do anything if I put my mind to it.”
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Gates’s strategy has been to leverage Microsoft’s desktop operating system to dominate all software sales—from word processing to spreadsheets. Because most new PCs are equipped with the Windows operating system, Gates can place icons for Microsoft software packages on the desktops when a computer is purchased. Also, Microsoft’s large cash reserves give it an advantage over its competitors. Microsoft can enter a new market or introduce a new package without needing to make a profit from the outset. With these successes have come scrutiny. In April 1995, when Microsoft attempted to make the biggest acquisition in the history of the software industry by purchasing Intuit, a maker of personal-finance software, the antitrust division of the Department of Justice blocked the deal and Microsoft backed off. However, competitors continue to complain that Microsoft uses an existing monopoly to retard the development of new technology. It was the bundling of software, such as Web browsers with Windows 95 and 98 that prompted the Justice Department to file an antitrust lawsuit against the company in 1998. A U.S. Court of Appeals panel ruled that Microsoft was free to bundle its software, but a court date was set for September 1998 to determine the final ruling. Microsoft tripled its sales in the early 1990s with its successful Windows debut. Microsoft Network (MSN) was launched in 1994, Windows 95 was released in August 1995, and Windows 98 made its debut in June 1998. At first, while Microsoft was enjoying these successes, other companies were making inroads in the development of software for the World Wide Web (WWW). But in the fall of 1995, Gates realized that 20 million people were surfing the net without Microsoft software. An aggressive campaign was launched to raise Microsoft’s stake in the Web. Staffing was increased, software was bought, and deals were cut—America Online (AOL) was given an icon in Windows 95 in exchange for using Microsoft’s Internet Explorer as its principal web browser. Windows 97 integrates its Internet Explorer browser and MSN into its Windows operating system, creating an active desktop. In 1998, Microsoft gained a significant hold on Web browsers, the NetAction consumer group reported. It found that four of the largest Internet service providers (ISP) distributed only Microsoft’s Explorer. Microsoft’s influence is spreading to banking, retailing, entertainment, and the news. MSNBC debuted on July 15, 1996. This is a joint venture between Microsoft and General Electric’s NBC, which offers a 24-hour cable-TV-news channel with a companion Web site. Gates envisions the merging of content and software and with this move has positioned Microsoft to be at the forefront. Real estate is another area that Gates became involved with in 1998, when Cliveden PLC of the UK, a luxury hotel and leisure club operator, agreed to be purchased by Destination USA, a group of US investors, of which Gates owns 10 percent.
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Gates also envisions Microsoft as being the number one software provider to China, the world’s largest emerging software market. By training technicians at China’s universities and centers, developing Chinese-language Windows operating systems, providing Chinese government ministries with PCs that use Windows and DOS, and by developing with Chinese researchers interactive TV and speech and handwriting recognition programs, Gates is laying the groundwork for enormous Microsoft sales.
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Bibliography “Citizen Gates.” Economist , 23 November 1996. “The Future of Microsoft.” Economist, 22 May 1993. Manes, Stephen, and Paul Andrews. Gates. New York: Doubleday, 1993. “Microsoft’s Long March.” Business Week, 24 June 1996. Newsweek, 27 November 1995. The New Yorker,10 January 1994. The New York Times, 3 January 1994. Rebello, Kathy. “Inside Microsoft.” Business Week, 15 July 1996.
Sources of Information
Slater, Robert. Portraits in Silcon. Cambridge MA: MIT Press, 1987.
Contact at: Microsoft Corporation 1 Microsoft Way Redmond, WA 98052 Business Phone: (425)882-8080
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Time, 25 December 1995. Wallace, James, and Jim Erickson. Hard Drive. Wiley, 1992.
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Anne Geddes (1956-) Anne Geddes Studio
Overview The work of Anne Geddes, a photographer known for her engaging pictures of babies, has become phenomenally popular in Australia, New Zealand, the United States, and other parts of the world. Geddes’s pictures of chubby babies in various settings, such as gardens, flowerpots, and cabbages have appeared everywhere: in books, calendars, posters, and greeting cards. She and her husband, who is also her business manager, direct three companies established because of her work and are primarily responsible for the rapid growth of Cedco Publishing, a formerly small firm in San Rafael, California.
Personal Life Born in Queensland, Australia in September of 1956, Geddes established herself as an excellent photographer without any formal training in the craft. She had a varied career as a young woman in such fields as fashion, television, and public relations before seriously embarking on a career in photography. She has lived in Hong Kong; Sydney and Melbourne, Australia; and Auckland, New Zealand. Today she lives with her husband Kel and their two daughters in Parnell, a suburb of Auckland.
Career Details As a young woman, Geddes simply decided she wanted to be a photographer and apprenticed herself to
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an experienced one. At first working in her native country, especially in Melbourne, she began to develop the distinctive style which would later make her famous. When her husband’s job took him to Hong Kong, she set up her own business and began photographing babies, children, and whole families. She explained in an interview on her own web site that she simply loved babies and children and also wanted to develop a kind of photography that others had not done. She emphasized the importance of creating one’s own style, with simplicity, in photographic images. “I never saw pictures I thought were real so I set out to do what I thought was real,” said Geddes in a 1996 review. Working exclusively with babies pose some challenges. In a story about Geddes on the American Booksellers’ web site, she indicated that it is easy to use newborns up to four weeks for sleeping pictures; by five months, they are awake too much. Infants six to seven months old sit up, smile, and are cooperative; while older ones tend to crawl or walk away. At any rate, she prefers working with all of her subjects in the mornings to avoid naptimes. She will also include several babies in a photo session. One time she assembled and photographed 123 babies, each nestled in a flowerpot. After moving to New Zealand in 1986 with her family, she established her first real studio near Auckland. She was good at promoting her work, setting up exhibitions wherever she could and soon became well known for her photographic specialty. Moving away from strictly portraiture, she produced the “Cabbage Kids” calendar, which was associated with the Child Protection Trust in New Zealand, and found a ready market for these charming pictures. By 1991, her husband had decided to quit his job as a TV program director to run three companies associated with his wife’s photography. The Especially Kids Company is related to her studio work; Next Generation Enterprises produces calendars and datebooks; and Kel Geddes Management does marketing and promotion. Geddes’s popularity attracted the attention of a national magazine, significantly increasing her clientele and her name recognition. She was invited to join the New Zealand Institute of Professional Photographers in 1990 (NZIPP), an organization which presented her with several awards in 1992. Geddes was the first woman to receive an honorary fellowship from NZIPP for her contributions to photography. These included the “Commercial Photographer of the Year” and “Portrait Wedding Photographer of the Year” awards. In 1997, she was asked to give the keynote speech at the convention of the Professional Photographers of America (PPA) in Las Vegas and was awarded a lifetime membership in that organization.
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Chronology: Anne Geddes 1956: Born. 1986: Moved to New Zealand. 1990: Accepted into New Zealand Institute of Professional Photographers (NZIPP). 1991: Founded Next Generation Enterprises Ltd. 1992: Achieved “Master of Photography” designation from NZIPP. 1993: Won six gold and five silver merits at AGFA/NZIPP competition. 1996: Down in the Garden became top seller among giftbooks. 1997: Awarded honorary fellowship for services to photography in New Zealand by NZIPP. 1997: Given lifetime membership in the Professional Photographers of America. 1997: Cedco Publishing reported 250 percent increase in sales since 1996 because of Geddes’s work.
usual costumes for the babies, portraying them as flowers, caterpillars, butterflies, and the like. One particularly memorable fold-out section features baby “earthworms” in a network of underground tunnels. After two and onehalf years of work on the project, Geddes promoted the book in a nine-city tour across America. Three spin-off books, Down in the Garden Book of Days, Down in the Garden Addresses, and Down in the Garden Birthdays soon followed. Geddes has also become involved with Target, a department store in the United States, in a series of commercials based on her work. According to an article on Geddes’s web site, Kel Geddes said that the campaign focused on Target’s own interest in the family; one particular commercial focused on Target’s charitable contributions.
In 1997, Geddes produced Down in the Garden, which quickly became a bestseller. The book is full of humorous gardening advice and pictures of babies in garden settings. Her stylist, Dawn McGowan, created un-
Geddes has completely departed from her earlier interest in portraiture and is focusing her attention on calendars, greeting cards, and books. Geddes’s work has also appeared in a number of well-known publications, such as Time, People, Life, and PPA Magazine. Geddes intends to produce a book of black-and-white photographs, as well as a figurine collection for Enesco
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(maker of the popular Precious Moments and Cherished Teddies collections).
Social and Economic Impact Since 1996, Cedco Publishing Company, a once rather small firm in California, has substantially grown, largely because it has Geddes as a client. The company reported a 250 percent sales increase between fiscal 1996 and fiscal 1997. Geddes’s first full-length book, Down in the Garden, was the top-selling gift book in the United States in 1996, remaining on the bestseller list for more than a year. Geddes appeared on the Oprah Winfrey show and several other nationally broadcast talk shows to promote the book. By 1998 it was in its 11th printing, and it has been translated into eight languages. Some of the many other Geddes books published by Cedco include Monday’s Child, Shapes, Baby Names Keepsake, Twelve Days of Christmas Book, Woodland Fairy Journal, and several board books for children. In the fall of 1997, Cedco, which also handles licenses for Star Wars, Dilbert, and World Wildlife Fund products, moved to larger offices. According to an article in Publishers Weekly, Paul Kelly, publisher and CEO, asserted that the company, previously known mostly for its calendar collection, expects to be a premium gift illustration book company. The Geddes product line— which includes greeting cards, calendars, stationery, prints, T-shirts, puzzles, and children’s books—appeals to a large variety of people and has literally turned the company around. In 1998, Cedco employed over 50 people. Geddes has contributed to a variety of charities, particularly those involving prevention of child abuse. She was involved in forming the Child Protection Trust in New Zealand, has worked with anti-child abuse causes
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in Australia, Britain and the United States, and donates $.75 from each calendar sold to the KEMPE Foundation in Colorado. “I feel that when you are successful you have a responsibility to give back,” Geddes has repeatedly said. She has given more than $350,000 to child abuse prevention since 1992.
Sources of Information Contact at: Anne Geddes Studio 2 York St., Parnell Auckland, New Zealand Business Phone: 64 9 375 2560 URL: http://www.annegeddes.com
Bibliography Anne Geddes Biography. Anne Geddes Studio web site. Available from http://www.annegeddes.com. “Baby Sitters: Anne Geddes Does Wonders with Minor Models and a Fertile Imagination.” People Weekly, 30 September 1996. Brady, Kim. “The Magical World of Anne Geddes.” Anne Geddes Studio web site. Available from http://www.annegeddes.com. Castellitto, Linda M. “You Must Have Been a Beautiful Baby . . . .” American Booksellers Association Bookweb. Available from http://www.2.bookweb.org/reading/features. “Enesco, Anne Geddes Sign Licensing Pact.” HFN, the Weekly Newspaper for the Home Furnishing Network, 20 April 1998. Fuerstein, Adam. “Marking Off Calendar Success One Day at a Time: Licensing Deal with Hot Photographer Puts Cedco on the Fast Track.” San Francisco Business Times, 31 January 1997. Outerbridge, Laura. “Focus on Small Subjects Reaps Huge Reward.” Insight on the News, 26 June 1995. Publishers Weekly, 21 July 1997. Swanezy, Sue. “An Interview with Anne Geddes.” Anne Geddes Studio web site. Available from http://www.annegeddes.com.
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David Geffen Overview David Geffen is widely regarded as the wealthiest man in the U.S. film industry. A self-styled “boy from Brooklyn” who became a millionaire by the age of 25, the ambitious, energetic music and movie executive established a vast Hollywood-based empire. With Steven Spielberg and Jeffrey Katzenberg, he cofounded Dreamworks, ensuring that he will continue to shape the world entertainment landscape into the next century.
(1943-) DreamWorks
Personal Life David Geffen was born February 21, 1943 in Brooklyn, New York. His parents were Soviet Jews who had emigrated to Brooklyn’s thriving Russian community. Geffen’s father, Abraham, was a pattern maker. His mother, Batya, made and sold women’s undergarments out of a tiny shop. Geffen claims to have learned the basic principles of entrepreneurial skills at his mother’s knee. An avid reader, Geffen was impelled toward an entertainment career by Hollywood Rajah, the life story of movie mogul Louis B. Mayer. “I looked at these moguls and the world they created and figured it would be a fun way to make a living,” he told Forbes magazine. Geffen took up music and drama in high school, where he also developed a reputation for his gregarious personality that would benefit him later in life. By 1998, his personal worth was valued at over $1 billion. Geffen, who is single and openly gay, lives a lavish but unpretentious lifestyle out of a New York City apartment and a beach house in Malibu, California. He collects fine art, but his
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knack for spotting new talent and trends in the entertainment industry. Often on the basis of a single demo tape, Geffen signed up some of the hottest rock and roll acts of the early 1970s, including Linda Ronstadt, Jackson Browne, and The Eagles. Once he signed them, Geffen nurtured the relationship he had established with these artists by treating them fairly and giving them artistic and career advice. When he sold Asylum Records in 1971 to Warner Communications, it was one of the largest deals in the music industry up to that point. Geffen stayed on as Asylum Records president through its merger with the Warner label Elektra in 1973. His major coups during this period were in securing the services of Bob Dylan, Joni Mitchell, and The Band for the new Elektra/Asylum label, which became one of Warner Communications’s most profitable subsidiaries. Geffen had become a major player in the recording industry and was on the lookout for new challenges.
David Geffen.
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major passion remains his work. He reportedly spends the majority of his day on the telephone, making deals and listening to creative pitches.
Career Details Upon graduating from high school in 1960, Geffen headed west, not to California, but to the University of Texas at Austin. He lasted only one semester until he flunked out with poor grades. He worked at a series of odd jobs in New York before landing a position in the mailroom of the William Morris Talent Agency in 1964. There he earned $55 a week sorting letters, but quickly aspired to greater things. “I’m delivering the mail to people’s offices,” he told The New Yorker “and I hear them on the phone, and I think, I can do that. Talk on the phone. This I can do.” Geffen began developing relationships with musical talent. He was made a junior agent a year and a half after joining William Morris Talent Agency and was soon managing the career of the promising singer/songwriter Laura Nyro. That led to contacts with other up-and-coming stars such as Joni Mitchell, Crosby, Stills, Nash, & Young, and Janis Joplin. In 1969, Geffen made his first million by selling out the music publishing operation he had started with Nyro. In 1970, Geffen cofounded Asylum Records with Elliot Roberts, a friend from his days at William Morris. It was at Asylum Records that Geffen cultivated his
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One of those came in 1975, when Warner Communications chief Steve Ross asked Geffen to take on the job of vice chairman of Warner Brothers Pictures. With no experience in the movie business, Geffen leapt at the chance but only had middling success in a year on the job. He felt stifled by the corporate decision-making structure and asked for a less structured portfolio. After a four-year semi-retirement precipitated by a mistaken diagnosis of terminal cancer, Geffen returned to his first love, the music business, in 1980. He founded Geffen Records with capital assistance from Warner and began gobbling up new and established talent. John Lennon, Elton John, and Donna Summer were among the acts who released records on the Geffen imprint. Two years later, again with help from Warner, the Geffen Film Company was launched. The company’s initial release, the 1983 comedy Risky Business was an immense hit with audiences and it helped make a star out of Tom Cruise. During this period, Geffen also expanded his portfolio to include Broadway and off-Broadway theater. He helped bankroll such successful productions as Dreamgirls, Little Shop of Horrors, and the hugely profitable Cats. Geffen re-upped his record deal with Warner in 1984, commanding a 100 percent equity stake in the company. While he still dealt personally with older acts like Neil Young and Cher, Geffen increasingly began to rely on the evaluations of younger executives more in tune with the musical tastes of the 1980s. The policy paid off in the late 1980s with the signing of Guns N’ Roses, a hard rock band from Los Angeles whose first two albums sold more than 14 million copies. In March 1990, at the conclusion of a six-year contract, Geffen sold his recording operation to the Music Corporation of America (MCA) for $6.13 million and $50 million in stock options. Almost immediately, he founded DGC, a new record label he hoped would attract cutting-edge bands. The change in strategy immediately paid dividends as one of DGC’s first acts, Nirvana, scored a breakthrough hit with their 1991 album Nevermind.
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Powered by the explosion of “grunge rock,” DGC continued to be a dominant market force well into the 1990s. Meanwhile, Geffen’s other enterprises were doing almost as well. His movie company produced the hits Interview with the Vampire and Beavis and Butthead Do America. The plays Miss Saigon and M. Butterfly benefited from a New York theater boom. Once again, Geffen sensed a change coming on the entertainment horizon. In 1994, together with director Steven Spielberg and former Disney executive Jeffrey Katzenberg, he cofounded DreamWorks, a movie studio and entertainment production company. The studio’s first release, the epic film Amistad, directed by Spielberg, was released in 1997 to great critical acclaim. With three of the world’s leading lights at the helm, industry analysts were already hailing Dreamworks as a major player in the entertainment industry of the next century.
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Chronology: David Geffen 1943: Born. 1964: Joined William Morris Agency. 1964: Sold music publishing company for $4.5 million. 1970: Founded Asylum Records. 1971: Sold Asylum Records to Warner Communications. 1980: Founded Geffen Records.
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1982: Named Head of Geffen Film Company.
Geffen’s personal worth has been estimated at well over $1 billion. He donates much of his annual salary to the David Geffen Foundation, a charitable organization devoted to his pet causes. These include AIDS research, a crusade he has backed avidly since publicly announcing his homosexuality in the early 1980s. Beyond making financial contributions, Geffen has lobbied Washington tirelessly on behalf of funding AIDS research and gay rights. In 1993, he took out full-page newspaper ads protesting President Clinton’s policy on gays in the military. Acquiring a stake in the DreamWorks studio cost Geffen $33.3 million, the same stake put up by his two partners, Steven Spielberg and Jeffrey Katzenberg. Initially, Geffen was skeptical about getting back into the movie business full-time, but the creative opportunities proved too tempting to resist. “I thought, ‘How can I turn this down?’” Geffen told Los Angeles magazine. “I’m 52 years-old, and if I don’t do this, I will get tired and lazy and bored. But being with these guys will keep me hanging onto a train that is going 300 miles an hour.”
1990: Sold Geffen Records to Music Corporation of America (MCA). 1990: Founded DGC. 1994: Cofounded DreamWorks SKG.
Bibliography Anson, Robert Sam. “Geffen Ungloved,” Los Angeles Magazine, July 1995. “David Geffen.” Current Biography Yearbook. 1992. Friedman, Alan. “Mogul with the Most.” The Financial Times, 22 February 1993. Seabrook, John. “The Many Lives of David Geffen.” The New Yorker, 23 February & 2 March 1998. Sheff, David. “Playboy Interview: David Geffen.” Playboy, September 1994. Who’s Who in America. 1998.
Sources of Information Contact at: DreamWorks 100 Universal City Plz. Universal City, Bungalow 477, CA 91608 Business Phone: (818)733-7000
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Louis V. Gerstner, Jr. (1942-) International Business Machines Corporation (IBM)
Overview Louis V. Gerstner was appointed chairman of the board and chief executive officer (CEO) of IBM in 1993 and since then has brought the computer giant back from the low point the company found itself in during the early 1990s with debts in the billions of dollars. Since those days, Gerstner has taken many steps to trim the company’s waistline and make it an agile company and an industry leader once again.
Personal Life The second of four boys, Louis V. Gerstner was born on March 1, 1942 and grew up in modest circumstances in Mineola, on New York state’s Long Island. His father, Louis Sr., was a night superintendent at a brewery and his mother worked as a real estate agent. Both parents demanded that their children excel at school and all the children would go on to become high-achievers in their later careers. Gerstner attended Chaminade High School, a competitive Catholic high school run by the Marianist order of the Catholic church. Standards at Chaminade were high for both academic performance and behavior. Although most Chaminade students later attended colleges affiliated with the Catholic church, Gerstner chose to accept a scholarship to attend non-sectarian Dartmouth College. At Dartmouth, he was tapped by the elite senior honor society, the Casque and Gauntlet. After graduating from Dartmouth in 1963 with a bachelor’s degree in engineering, Gerstner immediately enrolled at Harvard
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Louis V. Gerstner, Jr.
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Business School. In 1965, Gerstner received his master’s degree in Business Administration from Harvard. Gerstner married Elizabeth Robins Link in 1968 and together they have two children; Louis III and Elizabeth. In his leisure time, Gerstner is a passionate golfer and gardener.
forming Arts, the America-China Society, and the Council on Foreign Relations. He serves as a member of the President’s National Security Telecommunications Advisory Committee and Advisory Committee for Trade Policy and Negotiations. He is also a member of the Board of Regents of the Smithsonian Institution.
Gerstner is a director on the board of Bristol-Myers Squibb Company and has previously served on the boards of American Express Company, AT & T, Caterpillar, Inc. and The New York Times Company. He is a member of The Business Roundtable, serving on its policy committee, and a member of The Business Council. He is also a member of the board of Lincoln Center for the Per-
Gerstner received an honorary doctorate in business administration from Boston College in 1994 and has been awarded honorary doctor of laws degrees from Brown University and Wake Forest University. He has received numerous awards for his work in education, including the Cleveland E. Dodge Medal for Distinguished Service to Education from Teachers College, Columbia University, and the Distinguished Service to Science and Edu-
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vided steadiness and focus . . . and he steered the debtladen company through the collapse of the junk bond market. He never flinched at tough decisions.”
Chronology: Louis V. Gerstner, Jr. 1942: Born. 1963: Graduated from Dartmouth College. 1965: Graduated from Harvard Business School. 1965: Joined McKinsey and Co., Inc. 1970: Became youngest principal at McKinsey and Co., Inc. 1975: Named youngest director at McKinsey and Co., Inc. 1978: Joined American Express Company as an executive vice-president. 1989: Joined RJR Nabisco, Inc. as chairman of the board and CEO. 1993: Joined IBM as chairman of the board and CEO. 1994: Co-authored Reinventing Education: Entrepreneurship in America’s Public Schools.
cation Award from the American Museum of Natural History.
Career Details Gerstner began his career at the management consulting firm of McKinsey and Co., Inc. after graduating from Harvard. During his 13 years at McKinsey, he became the firm’s youngest principal at the age of 28 and one of its youngest directors at the age of 33. Working on McKinsey’s American Express Company (Amex) account, he acted as an adviser to James D. Robinson III, Amex’s new chairman of the board of directors and CEO. In 1978, Gerstner left McKinsey to join Amex as an executive vice president and head of the charge card business. During his ten years with Amex, he became president of the parent company and chairman and CEO of its largest subsidiary, American Express Travel Related Service Company. In 1989, Gerstner joined RJR Nabisco, Inc. as chairman of the board of directors and CEO. At the time, RJR was in disarray following a $25 billion leveraged buyout. In Fortune magazine, Betsy Morris reported, “Gerstner got high marks for crisis management at RJR. He pro-
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In 1993, Gerstner was heavily recruited to take over the struggling International Business Machines Corporation. He was reportedly reluctant to take on the job. But, according to Morris, “The recruiters told Gerstner he had a moral imperative to take the job. He must do it for the good of the country. That worked.” When Gerstner arrived at IBM (known in the industry as “Big Blue” because of the color of its logo and its once dominant market share) on April 1, 1993, he confronted a situation in which declining sales of mainframe computers had resulted in almost $16 billion in losses. The company was in the process of halving its work force from 406,000 in 1986 to 219,000 in 1994, and its debt rate was dropping fast. Within 90 days of joining the computer giant, Gerstner made two critical decisions. The first was to keep the company together and to concentrate on mainframes rather than sell off pieces of the company in order to save money. Secondly, he announced that IBM would again become the industry leader in devising the information technology strategies of big companies by building and running their systems. By 1997, Gerstner eliminated more than 35,000 jobs, cut costs company-wide, returned IBM to profitability and slashed its debt. Wall Street and IBM stockholders appreciated his aggressive cost-cutting and layoffs approach as IBM under Gerstner’s guidance has gained more than $40 billion in market value. Gerstner has challenged many long-held IBM traditions. No longer is a career with IBM a guarantee of lifetime employment as was the case in the past. The company, which was founded in 1888 and initially manufactured things such as time clocks and weight scales, had become bogged down in its own lengthy decision-making processes and internal politics and was a victim of its own perfectionism. Morris quoted Gerstner telling some of his technical people; “You don’t launch products here. They escape.” Gerstner demanded performance from his employees, and he got it. IBM’s new 420,000-square-foot headquarters in Armonk, New York reflects Gerstner’s approach. While his previous offices were cloistered at the end of a long corridor of other offices, his new quarters and those of a few top executives occupy the center wing of a sprawling Z-shaped structure. Most of the remaining IBM headquarters staff work in cubicles with expansive amounts of space on either side. Everyone is within range of Gerstner because “I like to walk the floors,” he told The New York Times. The new building also demonstrates the latest in high technology. “I wanted this building to be a living example of the strategy of the company, which is built around network computing,” Gerstner told The New York Times.
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The compensation package he received in 1993 for agreeing to head IBM was enticing. Gerstner reportedly was paid a $1.5 million salary along with a $1.1 million bonus. He also reportedly received options for 500,000 IBM shares plus a payment of $4.2 million to cover the RJR benefits he had left behind. In November of 1997, Gerstner agreed to stay on at IBM for an additional fourand-a-half years. IBM’s board of eight directors reportedly granted him options for an additional two million shares of stock in addition to the 2.4 million shares Gerstner had received since 1993. These shares were worth an estimated $95 million in 1997.
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million grant program that enables IBM researchers and classroom teachers to address curriculum and other education issues. Through Reinventing Education, IBM has initiated strategic partnerships with ten states and school districts using IBM technology and technical assistance. Gerstner speaks frequently on the quality of education and many other issues dealing with America’s educational system. In November of 1997, he received a public service award from the Advertising Council, a New York-based partnership of non-profit groups and advertising agencies, and warned that technology would not be the “silver bullet” needed to reform what he termed the “grinding underperformance of U.S. schools.” Gerstner said, “Technology can help, but it cannot replace a great teacher’s ability to inspire.”
Social and Economic Impact By all accounts, Gerstner is intense, brilliant, impatient and intimidating. He drives himself and others ruthlessly and has never tolerated fools or time-wasters. He has been called pompous by many and is reportedly remarkably status-conscious. In response to criticisms of his style, Gerstner told Morris; “I’m intense, competitive, focused, blunt, and tough, yes.”
Sources of Information Contact at: International Business Machines Corporation (IBM) New Orchard Road Armonk, NY 10504 Business Phone: (914)765-7382
It says something, however, about Gerstner’s personal magnetism, integrity and loyalty that a group of very able top assistants has stayed with him from his early days while working at American Express.
Bibliography
As he has moved from position to position at the top of America’s greatest companies, Gerstner has been a lifetime advocate for the importance of quality education. He is co-author of Reinventing Education: Entrepreneurship in America’s Public Schools, which was published by Dutton Publishers in 1994.
“IBM’s Gerstner Says Technology Not A Cure-all.” Reuters New Media, 21 November 1997.
He is vice chairman of the New American Schools Development Corporation and, while he was at RJR Nabisco, served as chairman of Next Century Schools. At IBM, he established Reinventing Education, which is a $35
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“The Best Managers.” Business Week, 13 January 1997. “Gerstner Agrees to Be Chief of I.B.M. Until at Least 2002.” The New York Times, 22 November 1997.
International Business Machines Corporation. “Louis V. Gerstner Jr.” Executive Profile, August 1997. Kalish, David E. “IBM, Gerstner Make Package Deal.” Press & Sun-Bulletin, 22 November1997. Morris, Betsy. “Big Blue.” Fortune, 14 April 1997. Zuckerman, Laurence. “House That Lou Built Reflects a New I.B.M.” The New York Times, 17 September 1997.
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Jean Getty (1882-1976) Getty Oil Company
Overview J. Paul Getty, as he preferred to be known, was an oil producer who defined the way that the oil business would operate. He was educated to understand geological data for finding the location of oil. He took a step away from the veterans of the business in that regard. Yet, Getty became the key player in the risks and high stakes of oil production. He entered a new century as a young man when the world was only beginning to get a hint of the powerful role oil would come to play. His skill in business and economics captured the real fortune, however. Getty bought and sold oil leases. He sought out other companies and pursued controlling interests. Eventually, his Getty Oil Company stood among the largest oil producers and distributors in the world.
Personal Life Jean Paul Getty was born on December 15, 1892, in Minneapolis, Minnesota. He was the only child of George Franklin Getty and Sarah Risher Getty. His father was a lawyer by profession but in 1904 he sought out a new career. George Getty moved his wife and son to the Oklahoma territory and began a life in the oil business, forming the Minnehoma Oil Company. J. Paul Getty attended Harvard Military Academy, and then went on to graduate from Polytechnic High School in 1909. Both of these schools were in Los Angeles. Following high school, as was often the tradition of wealthier families of the time, Getty toured Europe. He attended both the University of Southern California
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and the University of California at Berkeley. During the summers Getty worked on his father’s oil rigs. In 1912, he enrolled in Oxford University in England and obtained a degree in economics and political science there in 1914. Much of Getty’s adult life was spent in the public eye. His five marriages, all ending in divorce, became legendary. He married Jeannette Dumont in 1923 and the couple had one son, George Franklin II. After his divorce from Dumont, he married Allene Ashby in 1925. Divorced a year later, Getty and his second wife had no children together. Adolphine Helmle married Getty in 1928, and she gave him a second son, Jean Ronald. His marriage to Ann Rork in 1932 produced two more sons, Jean Paul II, and Gordon Peter. Getty had one more son with his fifth wife, Louisa Lynch, whom he married in 1939. He was Timothy Christopher. Getty outlived two of his sons and at the time of his death, he was survived by three sons, sixteen grandchildren, and one great grandchild. His family relationships were difficult and surrounded by tragedy. The most famous incident occurred in 1973 when his grandson, J. Paul Getty III, was kidnapped in Italy. His cut-off ear was sent to Getty as proof that his grandson was being held. Much speculation circulated at the time that his grandson had been a willing accomplice to this, thus furthering the family horror. He was returned soon after Getty paid the ransom. Getty fascinated everyone. His reputation for extravagance and for stinginess never ceased to be subject matter for news stories. Getty once indicated he had three principal grievances about being rich. They were: 1) People beseeched him for money. 2) People overcharged him or expected him to tip generously. 3) He could never be certain that he was liked for being himself. On the other side of the topic, however, Getty was asked when he reached the age of seventy-three, if being rich was worth it. Of himself and his wealthy counterparts, he said, “Though our rewards may be small, we are, if our society is to remain in its present form, essential to the nation’s prosperity. We provide others with incentives which would not exist were we to disappear.” Getty’s interest in art climbed to the level of his interest in oil, beginning in the 1930s. His extensive collection included European paintings, furniture, Greek and Roman sculptures, and other works of art from all over the world. Two of his most prized pieces were the legendary Ardabil Persian Carpet made on the royal looms of Tabriz in 1535, and Rembrandt’s painting, “Martin Looten.” In 1959 Getty purchased an estate outside London, Sutton Place, which was built in the sixteenth century and sat on seven hundred acres. Getty established his offices there as well. He also had a ranch house estate at Malibu, California. His art was kept in these two residences and the home in Malibu became a permanent gallery when he opened one wing as the J. Paul Getty Museum in 1954. In 1969, Getty began construction on a new museum. Renovations and additions in 1998 con-
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tinued his predominance in the art world, long after his death. Getty provided financially for the museum to continue as the best endowed in the world. Getty died of a heart attack at his English country estate on June 6, 1976, at age eighty-three. He had been in failing health for several months. Getty had hoped to return home to California one more time before his death, but he did not.
Career Details Getty did not begin his career in the oil business officially until he was almost twenty-two, in 1914. However, he believed that his life in the oil business began with his father’s decision to head to Oklahoma when he was twelve. Getty credited his oil empire to his father’s lead, as well as to his own luck and cleverness. In a quote attributed to him in the New York Times following his death, Getty offered an interesting outlook on his success when he said, “In building a large fortune, it pays to be born at the right time . . . If I had been born earlier or later, I would have missed the great business opportunities that existed in World War I and later.” Getty returned to Oklahoma following college and he immediately started buying oil leases in September 1914. His father disagreed with his purchases of what were known as the red-beds, thought to be barren of any oil. Because of this, he bought many leases for very lit-
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Chronology: Jean Getty 1892: Born. 1904: Moved to Oklahoma territory with parents. 1906: Moved with family to Los Angeles, California. 1909: Graduated from Polytechnic High School, Los Angeles. 1914: Received degree in economics and political science, Oxford University, England. 1914: Arrived in Tulsa, Oklahoma to begin career as oil producer. 1916: Struck first successful oil well. Made first million dollars as wildcatter and lease broker. Retired from oil business. 1919: Returned to oil business. 1930: Became president of George Getty Oil Company after the death of his father. 1949: Secured oil rights in Saudi Arabia’s half of the Neutral Zone. 1957: Identified by Fortune magazine as the richest man in America. 1973: Grandson, J. Paul Getty III, kidnapped. 1976: Died.
tle money. These purchases turned out to be investments that paid off richly. In 1916, after he acquired his first million, Getty left the oil business for over two years and he returned to Los Angeles and lived the life of a playboy. He went back to work in 1919, however. Wealth began accumulating quickly for Getty during the 1920s. His genius became apparent when he began buying and selling oil leases with great energy. By the time his father died in 1930, Getty was worth $3 million, a remarkable amount of money in that first year of the Great Depression. Getty’s father left him $500,000 when he died. The elder Getty was impressed by his son’s business sense but he was shocked by his personal life. His son had already divorced three wives. Getty acquired oil leases and companies avidly during the Depression. He bought the Pacific Western Oil Corporation early in the 1930s. This was a holding company with large oil reserves and a big cash balance. Getty
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eventually persuaded his mother that he should gain a controlling interest in the family company, too. In 1949, he continued to negotiate for influence of worldwide oil interests when he secured oil rights in Saudi Arabia’s half of the Neutral Zone, a barren tract of land between Saudi Arabia and Kuwait. Other oil companies were shocked at the concessions he made to King Saud but three years and a $30 million investment later, Getty found his oil deposits. They made him a billionaire, but Getty did not quit. He continued to maneuver patiently and by 1953, he had gained control of the Mission Corporation and its holdings in Tidewater Oil and Skelly Oil Company. These all went toward the building of his empire, atop of which stood his own Getty Oil Company. He maintained an eighty percent interest and control in Getty Oil. In 1967, Getty merged Tidewater and Mission Development into the Getty Oil Company, consolidating assets of more than $3 billion. Getty’s business interests were not only in the oil industry. In 1938, he purchased the Pierre Hotel in New York City and in the late-1950s he built the twenty-two story Getty Building off to the rear of the hotel. This was owned through the Getty Oil Company along with a skyscraper in Los Angeles, an office building in Tulsa, and the Pierre Marques Hotel near Acapulco, Mexico. Getty surprised his friend, Under Secretary of the U.S. Navy, James V. Forrestal, with a telegram the day the United States entered World War II. It read, “I am 49 but in good health, have owned three yachts and am experienced in their care and maintenance. If Navy can use me in any capacity, please advise . . . .” The Navy rejected him. Navy Secretary Forrestal, however, suggested Getty do something with the Spartan Aircraft Company, a Getty holding, in Tulsa. During the war, Spartan manufactured trainers and plane parts under Getty’s personal leadership. After the war, Getty turned the company into a profitable producer of mobile homes. Getty set out to prove that he could keep up with all of the other major oil companies, a feat he accomplished until his death. When he died, he had holdings in oil, an entire fleet of oil tankers, real estate, trailer homes, and hotels. He also had interests in the Minnehoma Insurance Company, the Minnehoma Financial Company and the Spartan Cafeteria Company, all in Oklahoma. Getty not only lived his life and pursued his career but he also spent a great deal of time reflecting on it and writing about it. In books and in several magazine articles for mass-circulation publications such as Playboy, Getty wrote about everything from his and his father’s history in the oil business, to collecting art, to success. His best-known book, My Life and Fortunes, was published in 1963. How to Be Rich, published by Playboy Press in 1965, was composed of a series of articles Getty wrote for, “young executives and college students,” who read Playboy.
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Social and Economic Impact Getty and his fortune remained a phenomenon to the world during his lifetime. If he had not been smart enough to take risks, and to buy up lands and oil leases nobody else wanted, Getty’s name might never have been known. His driving force behind the oil business for most of the twentieth century affected not only oil but also affected government, politics, and Wall Street. He successfully rode his luck at being “born at the right time,” and never saw an end to the opportunities his good fortune afforded him. His son, George, who died in 1973, said of his father, “Mr. Getty is the smartest businessman I know. Coming to see him is like visiting Mount Olympus.” Getty’s love of art will keep his name recognized for, perhaps, centuries to come. The legacy he left through his Getty Art Collection and Museum has touched the world in a way he was never able to do in his personal life. Money might not have bought happiness for Getty during his life but his keen foresight ensured that it might bring joy to others in theirs. Getty agreed with his son, George, in his estimation of his power. However, Getty said, “I’m a bad boss. A
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good boss develops successors. There is nobody to step into my shoes.” Getty represents the power and determination of the American dream.
Sources of Information Bibliography Atkinson, Dan. “Demonstration Dynasty.” The Guardian, 4 November, 1995. Byers, Paula K. and Suzanne M. Bourgion, eds. Encyclopedia of World Biography, 2nd ed. Detroit: Gale Research, 1998. Lowenthal, Lauren. “The First Monument to the Bull Market.” Fortune, 24 November, 1997. O’Neill, Anne-Marie. “Can’t Buy Me Love: Getty’s Billions Brought Fine Art but Spawned a Broken Family.” People Weekly, 13 April, 1998. Whitman, Alden. “J. Paul Getty Obituary.” The New York Times, 7 June 1976. Who Was Who In America. Chicago: Marquis Who’s Who, 1981.
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Roberto Goizueta (1931-1997) Coca-Cola Company
Overview A refugee from Cuba, Roberto Crispulo Goizueta rose through the ranks to become chairman and chief executive officer of the Coca-Cola Company. Credited with transforming the global soft drink manufacturer into one of America’s most admired companies, he became a legend of business management and a very wealthy man.
Personal Life Roberto Crispulo Goizueta was born on November 18, 1931, in Havana, Cuba, the only son of Crispulo D. and Aida (Cantera) Goizueta. Goizueta’s father worked as an architect and owned a construction and hardware business. His mother was the heir to a large sugar plantation in Cuba which she inherited from her father. Goizueta and his sisters grew up amid aristocratic splendor in the mansion built by his maternal grandfather, Marcello Cantero, who had immigrated to Cuba from Spain during the early 1900s. Goizueta was educated at Belen, a private Jesuit-run school in Havana, before spending a year at the prestigious Cheshire Academy, a prepatory school in New Haven, Connecticut. At the Cheshire Academy, the young Goizueta learned to speak English and did well enough in his studies to earn admittance to Yale University in New Haven in 1948. While at Yale, he participated in the school’s soccer and squash program before graduating with a bachelor’s degree in chemical engineering in 1953. Goizueta married Olga Casteleiro on June 14, 1953 following his graduation from Yale. They had three chil-
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dren; Roberto S., Olga, M. and Javier C. In 1969, Goizueta and his wife became naturalized United States citizens. Goizueta was a lifelong heavy cigarette smoker and lived only one month after being diagnosed with lung cancer in September of 1997. When he died on October 18, 1997, at the age of 65, Coca-Cola plants and offices were closed worldwide and thousands attended his memorial service in Atlanta. Goizueta served on the board of Suntrust Banks, the Ford Motor Company, Sonat, and Eastman Kodak. He is credited with reviving several important Atlanta civic and cultural institutions. In 1994, Emory University, whose endowments have been enriched with Coca-Cola stock, named its business school in his honor.
Career Details In 1954, Goizueta moved back to his native Cuba after graduating from Yale and began to think about what he wanted to do with his life. His father had offered him a job within his business, but Goizueta wanted to strike out on his own in a different career. He answered a newspaper advertisement that had been placed by an unidentified company for a bilingual chemical engineer or chemist, and was offered the job. Goizueta’s father allowed him to accept the position only if he also worked for the family’s business on Saturdays. The company turned out to be the Coca-Cola Company, and Goizueta accepted the job and its $500 per month salary on July 4, 1954. “My friends thought I was absolutely crazy,” he told Fortune in 1995. But, within a few years, Goizueta had quickly moved up the corporate ladder to claim the position of chief technical director for Coca-Cola’s five bottling plants in Cuba. Goizueta’s career in Cuba seemed secure, but it soon took an unexpected turn. In January of 1959, communist rebel Fidel Castro led a revolution against the Cuban government, and declared himself premier a month later. Castro threatened to take over all private businesses in Cuba and make them the property of the new communist government. In the midst of this political turmoil, Goizueta and his wife sent their three children to stay with relatives in the United States. Three months later, with both Coca-Cola and his parent’s sugar plantation about to be seized by the new Cuban government, Goizueta and his wife made hasty plans for their own escape. They decided to use the vacation they had planned earlier to Miami, Florida, as an excuse to leave the country in August of 1960. They then stayed on in Florida and were reunited with their children. The Cuban government seized all Coca-Cola’s assets in Cuba two months later.
Roberto Goizueto.
(Reuters/HO/Archive Photos.)
ily had only about $40 and 100 shares of Coca-Cola stock with them when they fled. Goizueta never sold these shares and today, according to Fortune, they are worth $3 million. The family took shelter in a small motel room where a curtain divided the parent’s bed from the children’s sleeping area. “You cannot explain that experience to any person,” Goizueta told Fortune in 1995. “That was ten times more important than anything else in my life. All of a sudden you don’t own anything, except the stock . . . It brings a sense of humility. It builds a feeling of not much regard for material things.” Coca-Cola had continued to employ Goizueta and even provided him with an airport hotel in Miami that he used as an office. He soon set to work and began the climb back up the corporate ladder. In 1961, Coca-Cola moved him to Nassau, Bahamas, to work as area chemist for Coca-Cola’s operations in the Caribbean. In 1963, he became the staff assistant to the senior vice-president for Latin America. In 1964, he was transferred to CocaCola’s headquarters in Atlanta, Georgia, where he received a promotion in 1966 to the job of vice-president in charge of technical research and development for all of Coca-Cola. This promotion made him the youngest person to ever reach that position within Coca-Cola.
Like thousands of others, Goizueta left family wealth and security behind when he fled Cuba. The fam-
In Atlanta, Goizueta performed so well that he caught the eye of 91-year-old Robert W. Woodruff, who had been Coca-Cola’s chairman. Although Woodruff had retired in 1965, he still maintained great presence
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this new system, Goizueta became Coca-Cola’s director, company president, and chief operating officer.
Chronology: Roberto Goizueta 1931: Born. 1953: Graduated from Yale University. 1954: Began work for the Coca-Cola Company in Havana,Cuba. 1960: Fled Cuba. 1963: Became staff assistant to senior vice-president for Latin America. 1964: Transferred to Coca-Cola’s headquarters in Atlanta, Georgia. 1966: Named vice-president of technical research and development for Coca-Cola. 1979: Became one of six vice-chairmen in charge of Coca-Cola. 1980: Became Coca-Cola’s director, company president, and chief operating officer. 1981: Became chairman and chief executive at CocaCola. 1982: Introduced Diet Coke. 1996: Helped bring Olympic Games to Atlanta. 1997: Died.
and influence within the company as its major stockholder and chairman of Coca-Cola’s finance committee. Woodruff and Goizueta became close friends and ate lunch regularly together, and Woodruff began to regard Goizueta as his protégé. Largely because of Woodruff’s influence, Goizueta was given a promotion to the post of senior vice-president in the technical division in 1974. A year later, he was promoted again to the post of executive vice-president in the technical division. In the following years, Goizueta worked supervisory responsibilities for the company’s legal, technical, and externalaffairs divisions. When Coca-Cola’s president, J. Lucian Smith, resigned in 1979, Goizueta was chosen as one of six vicechairmen who reported directly to Coca-Cola’s chairman of the board of directors, J. Paul Austin. All of the six were potential successors to the then-current chairman and chief executive. Less than a year later, this system of management came to an end when four of the vicechairmen were made executive vice-presidents. Under
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Goizueta immediately began to make changes within the company. Perhaps his biggest change was to allow Coca-Cola bottlers to use high-fructose corn syrup in their soft drinks rather than natural sugar. The price of natural sugar had risen dramatically and corn syrup cost about 40 percent less. This decision led to him being considered for his next promotion. After Coca-Cola’s chairman of the board of directors, J. Paul Austin, retired in 1981, Goizueta became chairman of the board of directors and chief executive. He was termed by Fortune as the “consummate longterm strategist” and from the beginning, he set about building a group of first and second-level executives well prepared to take over the company at his death. When Goizueta took over the helm at Coca-Cola, the company was, according to The New York Times, very conservatively managed and headed for trouble. CocaCola was also experiencing a “flat growth” rate that saw only minimal increases in sales from year to year. Goizueta immediately set out to change this. While some of the lack in sales could be attributed to the slow pace of total soft drink sales during these years, a more important reason was Coca-Cola’s largest and most serious competitor, Pepsi-Cola. Pepsi had been posing a serious threat to Coke for over three decades and while Coca-Cola still outsold Pepsi-Cola at soda fountain outlets, Pepsi had been outselling Coke in foodstore sales since 1979. Within a month of taking over at Coca-Cola, Goizueta called a meeting of the company’s top 50 officers and laid out his new plan, explained in the booklet “Strategy For The 80’s.” The plan’s main point called for the reinvestment of a larger portion of Coca-Cola profits to promote growth. True to his long-term planning reputation, Goizueta said in 1982 that “There will be changes, but slow changes, evolutionary, not revolutionary.” Goizueta’s comment to the Times indicated his vision for Coca-Cola: “We’re going to take risks. What always has been will not necessarily always be forever.” First, Goizueta transformed the company by purchasing under-performing bottlers, replacing their management and increasing volume, and then spinning the companies off to a subsidiary. He also revised Coke’s financial strategy, focusing more attention on stockholder returns. According to Fortune, he borrowed billions to buy independent bottlers around the world and then upgraded their distribution systems. In 1982, Goizueta changed Coca-Cola’s slogan from “Have a Coke and a Smile” to the more aggressive “Coke Is It!” He also diversified Coca-Cola’s holdings in a controversial move when he had Coca-Cola purchase Columbia Pictures for $690 million. Goizueta explained the move into the entertainment business by telling the New
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York Times, “Like soft drinks, entertainment is a business where the social dynamics are on your side.” After the studio produced the blockbusters Tootsie and Ghandi in 1982, no one was doubting his move. Coca-Cola later sold Columbia Pictures for $1.55 billion to the Sony Corporation in the late 1980s. Goizueta’s biggest move was his introduction of Diet Coke. For years, Coca-Cola’s low-calorie product had been Tab, but Goizueta was eager to put the CocaCola name and trademark on a diet soft drink. His decision was a wise one; just a year after its introduction, Diet Coke rose to the top of the diet soft drink market and its sales even eclipsed the popular Diet Pepsi. Diet Coke became the most successful consumer-product launch of the 1980s. In 1983, Goizueta supervised the introduction of Coca-Cola’s popular caffeine-free versions of its soft drinks. There was one significant exception, though, to Goizueta’s long list of successful innovations: New Coke. This smoother and sweeter version of the timetested beverage bombed almost as soon as it was introduced in 1985. But, immediately recognizing a major marketing mistake and moving swiftly to reduce the damage, Coca-Cola executives brought back the old secret formula as “Classic Coke.” After the New Coke debacle, Coca-Cola overhauled its marketing efforts and has gained market share against rival Pepsi ever since.
Reviewing his 16-year-tenure as chairman, Fortune credited Goizueta with reformulating “a business that was actually floundering—organizationally, culturally, and financially.” Goizueta was widely acknowledged to have led what many considered an unexpected company comeback to world preeminence in its field. Between 1981 and 1997, the total value of the company’s stock increased from $4.3 billion to more than $152 billion. Shareholders who bought $1,000 worth of Coke stock when Goizueta was named president would have accumulated more than $65,000 from that investment by the time of his death. Goizueta himself benefited hugely from the increased value of the company’s
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stock. In 1991, he received a bonus of nearly $83 million in stock. During his final year on the job, his compensation included $4.88 million in salary and bonuses, plus options, restricted stock, and performance and incentive units. Forbes tallied Goizueta’s worth at $1.3 billion-making him “the wealthiest Hispanic in the United States,” as stated in Newsweek. Coca-Cola also used its clout in aggressive public relations campaigns. The company spent millions of dollars to ensure the 1996 Olympic games would be hosted in Atlanta. This continued a relationship between Coca-Cola and the Olympic Games that dated back to 1928. Goizueta was considered a courtly gentleman with elegant manners and a cerebral management style. He brought Coca-Cola to the top of the world of soft drink manufacturers and the jobs and economic advantages that this provided are immeasurable. But Goizueta, ever humble, described his life in a 1997 U.S. News & World Report interview as simple: “My story boils down to a single, inspiring reality . . . the reality that a young immigrant could come to this company, be given a chance to work hard and apply his skills, and ultimately earn the opportunity to lead not only a large corporation but an institution that actually symbolizes the very essence of America and American ideals.”
Sources of Information
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Bibliography Kaplan, David and Daniel McGinn. “The End of an Era: A Management Legend, Coca-Cola’s Remarkable Roberto Goizueta Succumbs to Lung Cancer.” Newsweek, 27 October, 1997. “Last Thanks from Coke.” Business Week, 3 November, 1997. Morris, Betsy. “The Brand’s the Thing.” Fortune, 4 March, 1996. “One-On-One with Roberto Goizueta.” Goizueta Business Magazine, Spring 1995. Schwartz, Jerry. “Roberto C. Goizueta.” New York Times, 19 October 1997. Sellers, Patricia. “Where Coke Goes From Here.” Fortune, 13 October 1997.
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Christina Gold (1947-) Avon Products Inc.
Overview Christina Gold, who once shunned public speaking, eventually overcame her shyness, which allowed her to rise to Avon’s executive suite. After 19 years and about 20 different jobs with Avon Canada, she was named head of that operation in 1989. In 1993 she became the first female president of Avon’s North American operations, where her problem-solving skills and practical ideas turned the ailing cosmetics company around. Known for its long-time commitment to empowering women, many within and outside the company were stunned in 1997 when Gold and two other women were passed over for the chief executive officer (CEO) position. Gold resigned from Avon in February of 1998.
Personal Life Gold was born Christina Engelsman on September 12, 1947, in the Netherlands, the second of three children. Her father was a Dutch former Olympic gymnast and military officer, and her mother was a Canadian nurse and painter. The family immigrated to Montreal, Canada when Gold was four years old. She was shy and overweight as a teenager and worked at the candy counter of a local theater. Her father was a large influence in her life. Gold told Paul D. Wisenthal in Newsday, “He told me, ‘You have to do your very best and be fair with people’.” She credits her love of people to her mother. After graduating from Beaconsfield High School in 1965, Gold attended Carleton University in Ottawa, Canada, where she met her future husband, Peter M.
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Gold. She received her Bachelor of Arts degree in geography in 1969. A longtime Avon employee and executive until 1998, she is also a director of the Conference Board, Inc. of Canada, and a member of the executive committee of the Conference Board in New York. In addition, she serves on the board of directors of the Direct Selling Association and ITT Industries. Gold was named one of Business Week’s Top 25 Managers in 1996 and received the Woman of Distinction award from Birmingham Southern University. Her interests include painting, skiing, reading, and going to the theater. Since 1970 she has lived outside Montreal and maintained a country retreat on the shore of Lac L’Achigan, about 45 miles north of Montreal in the Laurentian Mountains.
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Chronology: Christina Gold 1947: Born. 1969: Hired as an accountant with Brooke Bond Foods Ltd. 1970: Joined Avon Canada Inc. 1989: Named head of Avon Canada. 1993: Became the first female president of Avon, North America.
Career Details After graduating from college, Gold began her career working at Brooke Bond Foods, Ltd. as an accountant adding up the discount coupons that customers redeemed at the supermarket checkout. She then took a job making $100 a week—a $10 a week increase—at Avon Canada in order to help her husband buy a desk for his newly-opened law office. Because she did a great job in inventory control, she was soon promoted to marketing. Though her future with Avon Canada looked bright, the company absorbed the marketing area into its United States headquarters in New York City. Her husband could not relocate his practice, so Gold took a position in sales promotions, which did not hold the same promise of advancement. The head of human resources, Mun Lavigne, saw Gold’s potential and became her mentor. “I read her performance appraisals,” Lavigne told Claudia H. Deutsch in the New York Times, “and I knew this woman should be moved ahead.” He encouraged her to take a step down in order to get a different kind of management experience and helped her overcome her fear of public speaking. He required her to give a speech to senior management in New York and made her rehearse it repeatedly. Though she was upset with him and threatened to quit, Lavigne kept challenging her. A couple years later, Gold asked to be put in charge of sales in an English-speaking, suburban area of Canada. Lavigne responded by making her head of sales in downtown, French-speaking Montreal. He kept pushing her to improve sales in poor-performing areas, and she continued to show results. “Christina had a feeling for people,” Lavigne told Wisenthal in Newsday. “Although a shy person, she was a great problem-solver, and her co-workers liked and respected her a lot.” Her career kept her moving through the company and, after having held 20 different positions in 19 years, she was named head of Avon Canada in 1989.
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1995: Avon sales soared to $765 million, up from $140 million two years earlier. 1996: Named one of the Top 25 Managers by Business Week. 1998: Resigned from Avon.
While Avon Canada thrived under Gold, its American operations languished, wiping out three presidents in six years, and opening the door to a possible hostile takeover in 1990 by Chartwell Inc. In 1993 Avon chairman James Preston asked Gold to come and revive the ailing operations. This was a critical arm of the Avon empire, as U.S. revenues totaled 35 percent of Avon’s worldwide sales of $4 billion. Without question, the U.S. operations needed a capable leader. But there was so much for Gold to consider. The decision to relocate to Avon’s New York headquarters was not easy. Though she had decided early on not to have any children, she was concerned about what her husband thought about the major change in their lives. “If my husband had said he would not or could not have moved, I wouldn’t have done it,” Gold told Cynthia Rigg in Crain’s New York Business. Though he had an established law practice and had served on their local suburban city council, Gold’s husband told her it would be an adventure. She moved to New York in late 1993 to take the job and he stayed near Montreal until 1995, when he closed his practice to move to New York to attend Columbia University’s graduate law school and explore business opportunities. In her new position, Gold oversaw operations in the United States, Canada, Puerto Rico, and the Dominican Republic. She brought the division’s share up to about 40 percent of Avon’s sales, instituting a number of new ideas to facilitate the improvement. The 400,000-person
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sales force at the time was upset about a new direct-mail catalog, which they believed was the first step toward phasing out their jobs. In all, about 25,000 sales representatives quit. Gold raised morale by reintroducing a rewards catalog for sales representatives (the previous president decided to offer rewards in the form of savings bonds only), and opening up communication so that salespeople could learn from one another. In addition, Gold kick-started sales and raised profits, which had fallen about 30 percent. She got rid of slow-selling gift items, expanded the apparel line, and improved the offering of non-cosmetic products, including games, videos, books, and toys. She entered a partnership with Mattel to add Barbie dolls to the catalog; a big coup. She went out into the field to motivate the sales force. In 1997 when she stepped down as president to become executive vice president of global direct selling development, some thought she may be removing herself from the running to become CEO. Gold disagreed, claiming that she was assuming control of an integral area of the firm. It was an unpleasant surprise for many in 1997 when Gold, along with two other top Avon performers, were overlooked for the CEO position. The job went to Charles Perrin, a former CEO of Duracell International, Inc., the battery maker. Gold resigned in February of 1998.
Social and Economic Impact For many women, Avon products symbolize female fraternity and empowerment. Most women are familiar with the colorful, glossy, digest-sized catalogs shimmering with fresh-faced models wearing the low-cost makeup. Women can conveniently shop for gifts such as jewelry, cologne, knick-knacks, toys, and more recently, clothing and lingerie, through the catalog. They have personal contact with a sales representative, typically someone they know in their community, workplace, and church. The sales representative gets a commission from the sale and delivers the items to clients at their home or office. Like Mary Kay and other home product sales outfits, Avon offers people the opportunity to make money while working outside their home or to supplement an existing income, while working at their own pace. Its corporate vision, is “to be the company that best understands and satisfies the product, service, and self-fulfillment needs of women-globally.” Though the politically incorrect term “Avon lady” is not accurate—there are men on the force as well—the company is still known as one of the preeminent organizations that sell cosmetics among female friends, family, neighbors, and coworkers, with 98 percent of its revenue coming from direct sales. Once known as a mainly door-to-door operation serving women who did not work outside the home, Avon used to use the slogan “Avon
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calling!” accompanied by a “ding-dong” doorbell noise. However, the company has updated its image and in 1996 sold about 50 percent of its goods in the workplace. Gold helped keep the firm on its feet and made sure that the salespeople were satisfied when she took over as president of Avon’s North American operations in 1993. By boosting morale and incentives and making some savvy marketing decisions, Gold beefed up Avon sales to close to $5 billion which also breathed life into its stock. She recruited new Avon representatives— Avon has a total of almost 2.3 million of them in 131 countries—and added popular products to the established cosmetics lines. Though many were upset that neither she nor two other top players, Andrea Jung and Susan Kropf, were handed the CEO rank in 1997, Avon defended its decision. Avon has had a reputation as being friendly to women in its corporate ranks as well as in its general sales force, unlike many big companies. As of 1997, some Fortune 500 industries did not have any women as corporate officers. Tobacco, securities, rubber and plastic, entertainment, hotels, casinos, and resorts showed no female officers, according to a study by Catalyst in the Washington Post. Retail, on the other hand, boasted 37 percent female officers, with diversified financials at 16 percent and publishing and printing at 15 percent. Cosmetics, soap, and computer software each showed that 11 percent of their officers were female. Overall, only 3 percent of top executives at Fortune 500 companies in 1997 were women. Avon is a leader among these firms. It was one of 250 firms that helped form Catalyst, a nonprofit group devoted to promoting economic opportunity among women. It has a good record of promoting women, with four females in its top slots. By 1996, 44 percent of its senior vice presidents were women and more than 25 percent of all vice presidents were women. However, the seven-man, four-woman board decided that their most prominent women, including Gold, who had spent nearly three decades at the firm were not ready to become CEO.
Sources of Information Contact at: Avon Products Inc. 1251 Avenue of the Americas New York, NY 10020-1196 Business Phone: (212)282-5000 URL: http://www.avon.com
Bibliography Avon, Inc. “The Avon Story.” New York: Avon, Inc., 1998. Available from http://www.avon.com. “Christina A. Gold.” White Plains, NY: ITT Industries. Available from http://www.ittnd.com. Deutsch, Claudia. “Relighting the Fires at Avon Products.” New York Times, 3 April 1994.
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Dugan, I. Jeanne. “Why Avon Called a ‘Nonwoman.’” Business Week, 16 March 1998. Gault, Ylonda. “Avon is Calling on Its Women to Fill CEO Post: Corporate Culture, Current Chief’s Lead Place Three Females as Top Candidates.”Crain’s New York Business, 2 June 1997.
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Rigg, Cynthia. “75 Most Influential Women: She Wanted to Buy Her Husband a Desk.” Crain’s New York Business, 25 March 1996, W-32. Wisenthal, Paul D. “Avon Is Her Calling, but Family Comes First.” Newsday, 3 September 1995.
Grimsley, Kristin Downey. “Avon Calling ... On a Man.” Washington Post, 12 December 1997.
Who’s Who in Canadian Business, Toronto: Trans-Canada Press, 1986.
Machan, Dyan. “The Makeover.” Forbes, 2 December 1996.
Who’s Who of American Women, New Providence, NJ: Marquis Who’s Who, 1996.
Morris, Betsy. “If Women Ran the World It Would Look a Lot Like Avon.” Fortune, 21 July 1997.
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Ellen Gordon Tootsie Roll Industries
Overview After working her way up the corporate ladder to president of the company, Ellen Rubin Gordon used modern business strategies to keep Tootsie Roll Industries, Inc. at the top of the international lollipop business, while still maintaining the feel of a “mom and pop” operation.
Personal Life Gordon was born Ellen Rubin, the daughter of William B. and Cele H. Rubin. She attended Vassar College from 1948 to 1950. While at Vassar, she met and married Melvin J. Gordon, who would later become CEO of Tootsie Roll. The two were married on June 25, 1950 and had four daughters—Virginia, Karen, Wendy, and Lisa. After her marriage, Ellen Gordon eventually returned to college. She attended Wellesley and received her B.A. in 1965 from Brandeis University. In 1968, Gordon did graduate work at the Graduate School of Arts and Science at Harvard University, which was the same year she started to work at Tootsie Roll. Gordon has served as President and Board of Director Member of The Committee of 200 and as vice-president and board member of the National Confectioners Association. She has served as director and president of HDI Investment Corporation. She has also sat on the Harvard University Board of Overseers Visiting Committee for the university’s medical and dental schools. She has received a number of honors for her contributions and her work, including the Dean’s Award from the National Candy
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Wholesalers Association in 1978 and the Kettle Award from the candy industry in 1985. When the Gordons are not in Chicago, the headquarters of Tootsie Roll Industries, they reside in Center Harbor, New Hampshire. The Gordons eventually hope to turn the business over to their four daughters and to the company’s senior managers.
Chronology: Ellen Gordon
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1965: Earned B.A. from Brandeis University.
Ellen Gordon’s involvement with Tootsie Roll began in 1922 when the company went public and Gordon’s mother bought some shares of the company stock; she also encouraged all of her relatives to do the same. By the 1930s, she had a controlling interest in the company because of her stock holdings. In 1968 Ellen Gordon went to work for the candy company, starting in the areas of pension planning and product development. Two years later, she had moved into the position of corporate secretary. From there, her rise in the company was steady: vice-president of product development in 1974; senior vice-president in 1976, and president and chief operating officer in 1978. By all accounts, Tootsie Roll is a sweet place to work . . . literally. Employees are encouraged to sample as many of the confections as they would like during the business day, and Gordon is known as a boss who takes a personal interest in her staff and employees. She greets everyone in the company by name. Tootsie Roll was started in 1896 by an Austrian immigrant, Leo Hirshfield, who brought his secret candy recipe to the United States and began selling his hand-rolled chocolates for a penny a piece in a small store in New York. Hirshfield named his chocolate candies after his daughter, nicknamed Tootsie, who was five years old at the time. By the early 1900s the candy was manufactured at a small candy factory. Its name was changed to Sweets Co. of America in 1917, and at that time, the company began to advertise its confection nationally. The company was registered on the New York Stock Exchange by 1922. The Tootsie Pop—a hard lollipop with a chewy Tootsie Roll center—was invented in 1931, and within seven years, the company had moved its operation to Hoboken, New Jersey and began mass production of the candy using conveyor belts. As demand for the candy increased, the company opened a West Coast division, in Los Angeles in 1949. It wasn’t until 1966 that the company changed its name to Tootsie Roll Industries, Inc. At that time, the corporate headquarters were moved to Chicago, and a manufacturing plant was opened there, too.
1968: Attended Harvard University. 1968: Began working at Tootsie Roll Industries. 1970: Promoted to corporate secretary at Tootsie Roll. 1974: Chosen as vice-president, product development at Tootsie Roll. 1976: Named senior vice-president. 1978: Named Tootsie Roll President and CEO.
with the greeting, “Dear Mr. Gordon.” In 1993, Gordon proved her executive mettle when she won her company $1.4 million in state and local tax exemptions and other incentives, in exchange for keeping the business in Chicago. Although Tootsie Roll was worth an estimated $245 million at the time, Gordon managed to obtain a lucrative incentive and benefits package for her more than 800 employees, capitalizing on the fact that the city had suffered a major economic blow the previous year. That move had cost the Windy City 2000 jobs, and officials were willing to negotiate with Gordon to avoid losing another substantial segment of the workforce. As part of the settlement, Gordon asked for a $1.4 million exemption in both city and state taxes over a 15 year period. In addition, she sought a low-interest loan so the company could buy its manufacturing plant, $200,000 in job training funds and tax breaks on machinery and processing equipment. In addition to staying in Chicago, Gordon agreed to add an additional 200 workers to the company payrolls and begin a loan program for workers who wanted to buy houses. The negotiations between Chicago and the candy company were said to have been peaceful; to keep the deal sweet, Gordon reportedly kept chocolates on the table throughout the transaction.
When Gordon was named company president and CEO in 1968, she was one of the first women in the country to head a publicly-traded company. She would often get letters, she once said, addressed to Mr. Ellen Gordon or
By 1995, company sales topped $300 million, with sales of more than 37 million Tootsie Rolls and 16 million Tootsie Pops each day—making Tootsie Roll the largest lollipop producer in the world. Since then, sales have continued to rise, to meet the demands of a sweet-toothed public as well as international sales. Net sales jumped from $264.4 million in the third quarter of 1996 to $289.1 million for that same period in 1997. Also in 1997, stocks rose
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almost 70-percent, and the company had a net profit margin higher than Wrigley’s or Hersheys Foods. Tootsie Roll candies are now sold in Canada and exported to more than 30 other countries, including an office in Hong Kong. In addition to operations in Tennessee, New York, and Massachusetts, the company has a manufacturing plant in Mexico which produces the confection for the Mexican market. Gordon and her husband own nearly half of the firm’s shares, worth approximately $675 million in 1998. In 1996, Tootsie Roll celebrated its 100th birthday with a gala celebration at the corporate headquarters which included a huge party and tour of the manufacturing plant for employees and their families. The mayor of Chicago declared it “Tootsie Roll Day” in the city and the story of the company was broadcast, via satellite, to many national television stations. In all, the company received wellwishes and congratulations from 150 consumers.
Social and Economic Impact There are, in all likelihood, several keys to Gordon’s success with Tootsie Roll. For one thing, she has never tampered with the candy’s original recipe. Tootsie Roll is a quintessential American product, with virtually universal recognition and a rich history. The candy, for instance, was a staple for troops in World War I. Legendary crooner Frank Sinatra always insisted that there be Tootsie Rolls in his hotel room when he traveled. Sammy Davis Jr. would pass the candies out to his audience when he sang, “The Candy Man,” and Jacqueline Kennedy Onassis reputedly kept a bowl of Tootsie Rolls in her office for guests. Gordon has paid attention to her product’s value and has priced traditional Tootsie Rolls in a variety of prices, ranging from a penny, just as it was when Hirshfield sold it a century ago, to 50 cents varieties. The product is sold both in individual pieces and in bags. However, Gordon has not relied solely on Tootsie Rolls for the company’s success. In fact, since the 1970s, she has acquired other promising candy makers. These have included the 1972 acquisition of Mason Division of Candy Corporation of America, which makes Mason Dots and Crow brands. In 1985, Tootsie Roll bought Cellas’ Confection, which makes chocolate-covered cherries. It was the 1988 purchase of Charms Co., a lollipop maker, and the combination of Charms and Tootsie Pops which turned the company into the largest manufacturer of lollipops in the world. In 1993, Tootsie Roll branched out into a somewhat different arena when it bought the chocolate and caramel brands of Warner-Lambert Co., which included Junior Mints, Sugar Daddy, Sugar Babies, and Charleston Chews. So far, the company has concentrated on other candy companies, choosing not to venture into other
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products. That is due, in part, to Tootsie Roll’s success, but also, Gordon once admitted, to what she calls “the magic of candy. It always brings smiles when we tell people what we do.” In the end, it is still the Tootsie Rolls and the Tootsie Pops that lead the company sales, even after 100 years. As Gordon said in a 1996 interview with Food Processing, “. . . the chocolaty chews and the hard candy have remained favorites.” As company president, Gordon has been quick to spot trends, pitching the low-fat content of her products to an increasingly calorie-conscious consumer. She was the first in the confection industry to pick up on what would become a huge marketing trend. In addition, Gordon has never been shy about developing new products. She introduced Caramel Apple Pops in 1996—a mix of sour apple hard candy and milk caramel in a flat pop. This has become very successful, as has the company’s redesigned Sugar Blow Pop. Tootsie Roll was the first to use raspberries, previously popular in drinks, in candies. Its Blue Razzberry Tootsie Pop was voted product of the year in the candy industry. In their other lines, Gordon also proved innovative, introducing a tropical mix in its Mason Dots, which include Jungle Punch, Citrus Safari, Wild Peach Berry, Ape Grape, and Orang-aga-tangy. While Tootsie Rolls still come in their traditional wrapper, Gordon has changed a decades-old ad of an owl and a turtle to animated, high-tech creatures asking the traditional question: “How many licks does it take to get to the center of a Tootsie Roll Pop?” This is meant to appeal to a younger, more technologically savvy audience. Gordon’s management style has been cited by industry watchers as very successful. For one thing, she and her husband emphasize cross-training employees, so workers have a broader understanding of the business and a sense of what goes on in all the other departments. The two attempt to discourage office politics and encourage teamwork, always rewarding creativity. Tootsie Rolls have become a part of American life in much the same way as other household brands. While it can be difficult to sort out fact from myth, it may be that fancy is part of the product appeal. In her Food Processing interview, Gordon told this anecdote: “There’s one story about a man who went into a convenience store and held up the cashier. Along with the money, he took a bag of Tootsie Rolls. He left the store and began eating them, dropping the wrappers one by one. The police were able to follow the wrappers and caught up with him.”
Sources of Information Contact at: Tootsie Roll Industries 7401 S. Cicero Ave. Chicago, IL 60629 Business Phone: (773) 838-3400
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Bibliography “Bigger Breaks for Small Business.” Working Woman, November 1993.
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“On a Roll: Candymakers Ellen and Melvin Gordon, Tootsie Roll’s Leaders Keep Brand On Track in Its 100th Year.” Food Processing, December 1996. Who’s Who of American Women. New Providence, NJ: Marquis Who’s Who, 1996.
Celebrity Register. Detroit: Gale Research, 1990.
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Berry Gordy, Jr. (1929-) Motown Records
Overview Although Berry Gordy, Jr., directed and produced some films in the 1970s, he is best known for his founding of the legendary Motown Records and his production of recordings by such artists as Diana Ross and the Supremes, the Miracles, Gladys Knight and the Pips, the Jackson Five, Stevie Wonder, and many others.
Personal Life Born on November 28, 1929, in Detroit, Michigan, Berry Gordy, Jr., was the seventh of eight children of Berry Gordy, a plasterer, and Bertha Gordy, an insurance agent. He attended Detroit public school, but dropped out of high school in his junior year to pursue a career in boxing. He was a professional featherweight boxer from 1948 to 1950, and won 12 of the 15 Golden Glove matches that he fought, but was forced to give up boxing when he was drafted into the Army to serve in the Korean War. While in the Army, Gordy earned his general equivalency diploma (GED) to gain the equivalent of a full high school education. Upon returning from the war in 1953, Gordy opened his own record store, Three-D Record Mart, in Detroit. The business failed in 1955, and Gordy went to work for Ford Motor Company as an assembly-line worker. He worked there until 1959, when he left the job to become a full-time songwriter. Gordy married Thelma Coleman in 1953; they were divorced in 1959, and he next married Raynoma Liles. In 1962 his second marriage also ended in divorce, as
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did his third marriage to Grace Eton, which lasted from 1990 to 1993. Gordy has seven children: three from his first marriage, two from his second, one with Margaret Norton, and one with Diana Ross. Gordy has received numerous awards, including the Business Achievement Award from the Interracial Council for Business Opportunity (1967), an award for Outstanding Contribution to the Music Industry at the Second Annual American Music Awards (1975), the Whitney Young, Jr., Award from the Los Angeles Urban League (1980), the Black Achievement Award from the Brotherhood Crusade (1988), the National Academy of Recording Arts and Sciences Award (1991), and the Black Radio Exchange Lifetime Achievement Award (1993). In addition, Gordy was named one of the five leading entrepreneurs in the nation by Babson College in 1978 and a Gordon Grand Fellow by Yale University in 1985. He was inducted into the Rock and Roll Hall of Fame in 1988.
Career Details While Gordy was working on the assembly line at Ford, he would write songs in his head to alleviate boredom. Some of his songs were recorded by local artists, but Gordy soon realized that, in order to really make any money in the business, he needed to own the songs. With the encouragement of William “Smokey” Robinson, Jr., Gordy borrowed $700 from his family in 1959 and formed his own recording business. First known as Hitsville, U.S.A. and later as Motown Records, it was located in a row house on Detroit’s West Grand Boulevard. Gordy slept on the second floor and made records on the first. In 1960 Motown released “Shop Around,” written by Smokey Robinson and performed by him and the Miracles. The song sold more than a million copies, earning it a gold record. Gordy’s new company had launched the most successful and influential era in the history of popular music. Motown produced more than 110 number-one hits and countless “top ten” records during the next several years. Many of these songs were performed by artists that Gordy helped bring into the spotlight, including Diana Ross and the Supremes, the Jackson Five, Stevie Wonder, Smokey Robinson and the Miracles, the Four Tops, the Temptations, Gladys Knight and the Pips, and Martha Reeves and the Vandellas. Diana Ross and the Supremes were the most popular Motown group in the 1960s, although the Jackson Five proved to be the most lucrative and Gladys Knight and the Pips won the most Grammy awards.
Berry Gordy, Jr.
(Archive Photos/Lawrence Siskind.)
more than $8.5 million. His second film, also starring Diana Ross, was titled Mahogany; although it was fairly successful at the box office, it did not receive the critical acclaim of the previous film. Gordy continued to produce and direct films throughout the 1970s and 1980s, including Almost Summer (1978), The Wiz (1978), and The Last Dragon (1985). Gordy resigned as president of Motown Records in 1973 and, in 1988, sold the Motown record label to MCA, Inc. for $61 million. He retained control of the music publishing operation and film division, telling Daily Variety that he wanted to “ensure the perpetuation of Motown and its heritage.” Others are helping to preserve this heritage as well. Gordy’s sister, Esther Edwards, had collected Motown memorabilia over the years and donated them all to the Motown Museum, housed in the brick house at 2648 West Grand Boulevard in Detroit where Gordy first began his business. Michael Jackson assisted in the preservation of the items, by donating the $125,000 in profits from his Detroit “Bad” concert in 1990 to the Motown Museum.
In 1970, Gordy moved his company to Hollywood, California. Here he pursued his interest in film producing and directing, and in 1972 produced his first film, Lady Sings the Blues, starring Diana Ross. The movie was nominated for five Academy Awards and grossed
Gordy’s autobiography, To Be Loved: The Music, the Magic, the Memories of Motown, was published by Warner in 1994. In the New York Times Book Review,
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Chronology: Berry Gordy, Jr.
artists like Elvis Presley and the Beatles, Gordy started a new generation of music. His development of the “Motown sound” forced the music industry to stop publishing separate charts for rhythm and blues music and to incorporate all best-selling songs into one list. According to a reporter for Rolling Stone, “If not for Berry Gordy, Jr., most of Motown’s greatest artists would not have had music careers in the first place . . . and popular music, not to mention the business of popular music, would be very different today.”
1929: Born. 1953: Opened first record store.
Sources of Information
1959: Founded Motown Records. 1960: Released Motown’s first gold record. 1972: Produced first motion picture. 1973: Resigned as president of Motown.
Contact at: Motown Records PO Box 25009 Jackson, WY 83001-7000
1988: Sold Motown to MCA.
Bibliography
1988: Inducted into the Rock and Roll Hall of Fame.
Byers, Paula K. and Suzanne Bourgoin, eds. Encyclopedia of World Biography. Detroit: Gale Research, 1997.
1994: Published autobiography.
Contemporary Authors. Detroit: Gale Research, 1996. Hawkins, Walter L. African American Biographies. Jefferson, NC: McFarland, 1992.
Milo Miles called Gordy “an African American cultural hero of historic stature.” This is partly because Gordy almost single-handedly moved so-called “race music” (the term widely used at the time for recorded music sung by black artists), or “rhythm and blues,” into the mainstream of American popular music. With the introduction of the new sound of Motown, which combined classical African American gospel singing with the new rock and roll sound coming from
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Miles, Milo. New York Times Book Review, 27 November 1994. Slonimsky, Nicolas. Baker’s Biographical Dictionary of Musicians, New York: Schirmer Books, 1984. Southern, Eileen. Biographical Dictionary of Afro-American and African Musicians. Westport, CT: Greenwood, 1982. Who’s Who Among African Americans. Detroit: Gale Research, 1996. Who’s Who in America, New Providence, NJ: Marquis Who’s Who, 1998.
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Leon Gorman Overview Leon Arthur Gorman is the president of L.L. Bean, Inc., the world’s largest supplier of outdoor clothing and gear. The company’s business was built on catalog sales and was founded by Gorman’s grandfather, L.L. Bean, almost 100 years ago. But, when Gorman took the helm in 1967, L.L. Bean was ailing and not in the same shape it once was. By carefully reorganizing the company and introducing new marketing strategies, Gorman helped L.L. Bean increase annual receipts to nearly $900 million by the mid-1990s.
(1934-) L.L. Bean, Inc.
Personal Life Born on December 20, 1934 in Nashua, New Hampshire, Leon Arthur Gorman was the youngest of three sons born to John T. and Barbara (Bean) Gorman. His father worked as a corporate executive and his mother was the daughter of Leon Leonard Bean (1872-1967). Leon Leonard Bean founded L.L. Bean, Inc. and developed it into a mail-order clothing empire and established a family fortune. Gorman graduated from Bowdoin College in 1956 with a BA and immediately went to work as a merchandise trainee with Filene’s of Boston. While in Boston, he served as a lieutenant in the U. S. Naval Reserve from 1957 to 1960. Later, he was employed by L.L. Bean in its Freeport, Maine corporate headquarters. On February 1, 1964, Leon A. Gorman married nurse Wendy Goad. The couple have three children; Jeffrey, Ainslie, and Jennifer.
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Leon Gorman standing next to a rack of Maine hunting boots in L.L. Bean’s Freeport, Maine factory. (AP/Wide World Photos, Inc.) Gorman is a director for the Central Maine Power Co. and is on the board of directors for the Pine Tree Council of the Boy Scouts of America. He is a trustee of the Maine Audubon Society and a member of the Portland (Maine) Chamber of Commerce. In 1992, Gorman won the Entrepreneur of the Year Award given by Ernst & Young.
Career Details Founded in 1912 by Leon Leonard Bean, L.L. Bean, Inc. made money selling the “Maine Hunting Shoe” to
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keep the feet of hunters, trappers, and outdoorsmen warm and dry. The business gradually expanded under the watchful eye of its founder to include clothing, hardware, and other outdoor necessities. As Americans sought a good way for the entire family to “get away from it all,” L.L. Bean. Inc.’s profits increased. The company’s strategy was to present a simple, natural, and sentimental view of American life to its customers. The company practiced “old-fashioned” Yankee trapper philosophies which included their 100 percent money-back if not satisfied, guarantee. In 1960 Gorman moved to Freeport to work in the family’s business where he served as the company’s vice
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president and treasurer. When Leon Leonard Bean died in 1967, it seemed the family fortune and the company that he helped create might die with him. According to Sports Illustrated, “(the company) had fallen into a profound snooze.” Of all L.L. Bean’s heirs, only Gorman wanted to take over the family business and he did not have much to work with. Sales had dropped to $3.5 million and profits had dropped to a mere $60,000. Gorman found that employee performance was poor because nearly everyone was of retirement age or older. The products the company sold were outdated and the quality had stumbled. The store in Freeport was shabby and old and needed renovation.
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Chronology: Leon Gorman 1934: Born. 1956: Graduated from Bowdoin College.
L.L. Bean had resisted change while he ran the company, insisting every time a suggestion for improving the store was made, “I’m eating three meals a day now, and I can’t eat four.”
1956: Became merchandise trainee with Filene’s of Boston.
Gorman set out to revamp the company and make it successful once again. He boosted its advertising budget, conducted marketing research, and built up the traditional base in mail-order sales. He spent $12 million on modernization; streamlined the company’s operations; and introduced a good employee retirement policy. He raised benefits and wages to boost morale and attract new employees.
1967: Took over control of L.L. Bean, Inc.
1957: Entered the U. S. Naval Reserve as a lieutenant. 1960: Appointed treasurer of L.L. Bean, Inc. 1985: Boosted L.L. Bean’s sales to the $300 million mark. 1992: Received Entrepreneur of the Year Award from Ernst & Young. 1997: Recognized as a trendsetter by the U.S. Department of Labor for refusing to do work with overseas sweat shops.
Gorman even encouraged employees to test L.L. Bean products themselves while on tax-deductible field trips. Many of L.L. Bean’s employees were avid sportsmen and immediately took Gorman’s advice.
1998: Supervised 180,000 daily catalogue orders and $1 billion in annual sales.
Gorman strove to create a work environment that was as comfortable as the clothing the company sold. Employees were encouraged to give input on how to better run the company and they still received regular and intensive training in L.L. Bean’s corporate culture. The company also started offering after-hour sessions to help the employees with personal development issues and it started a strong tuition reimbursement program.
the nationwide recession and the increases in postage costs, which hurt the mail-order business.
Within one year of implementing both internal and external improvements, annual sales at L.L. Bean, Inc. climbed to $5 million, and by 1975 this figure stood at $30 million. The enormously popular Preppie Handbook by Lisa Birnbach helped to set the tone for 1980s style and it dubbed L.L. Bean a “Mecca” for people who dressed in the “preppie” style. In 1981, sales soared by 42 percent and by 1985, L.L. Bean’s annual catalog and retail store sales passed the $300 million watermark. In addition to the growth in sales, the L.L. Bean store in Freeport, Maine that Gorman had totally renovated upon taking over from his grandfather had grown into the state’s second largest tourist attraction. More than 2 million people visited the store in 1985 and the figure continued to rise, with 3.5 million visitors counted in 1995.
To make up for the slow down in sales, layoffs at L.L. Bean, Inc. followed. This was a serious issue in a company that valued its relationship with its employees. But Gorman went into action quickly, cutting costs in some areas while expanding a few product lines and building up the enormously profitable Japanese market. By the mid-1990s, the company was continuing to grow, though not at the breakneck pace of the 1980s. Gorman has prepared L.L. Bean, Inc. for more modest growth in the late-1990s than what it experienced in the early-1980s. To this end, the company has set up highly favorable severance and early retirement programs for its employees to cut down on payroll costs. Meanwhile, the company’s presence in Japan continues to grow and it regularly receives orders from every corner of the globe.
In the early-1990s, L.L. Bean, Inc.’s sales started to taper off. This was partly attributed to changes in style, though the essence of L.L. Bean’s clothing was that it does not go out of fashion. More likely, the cause was
L. L. Bean, Inc. continues as a family enterprise, even with worldwide operations. It is one of the world’s largest mail-order businesses, with sales approaching $1 billion per year. In 1995, the company reported 4.5 million customer sales annually, and telephone representatives continue to report daily orders of 150,000. By 1998,
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that figure had grown to 180,000 daily orders and over $1 billion a year in annual sales. Expanding sales continue via the company’s Internet web site, (www.llbean.com) and through expanded outlet stores worldwide. The main store in Freeport, Maine has been open for business 24 hours a day and 365 days a year ever since 1951.
Social and Economic Impact L.L. Bean, Inc. was one of the companies listed on the first United States Department of Labor “Trendsetters Report” in January 1997. The report honors companies who refuse to do business with overseas manufacturers that use “sweatshop” labor. “Sweatshop” labor is defined as utilizing the labor of men, women, and even children who work in highly unpleasant environments for very low wages. Most often this type of labor occurs in underdeveloped countries where labor unions or worker’s rights groups are not active. Gorman’s grandfather, L.L. Bean himself, formed the company on simple and solid values. “In running L.L. Bean on a daily basis,” Gorman said, “we have been most successful by applying what my grandfather called his Golden Rule: Sell good merchandise at a reasonable profit, treat your customers like human beings, and
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they’ll always come back for more.” Part of the genius of L.L. Bean, the company and the man, was to make an art of simplicity. This genius has since been carried on profoundly by his grandson.
Sources of Information Contact at: L.L. Bean, Inc. Casco Street Freeport, ME 04033 URL: http://www.llbean.com
Bibliography Geber, Beverly. “Training at L.L. Bean.” Training, October 1988. Gorman, Leon A. L.L. Bean, Inc.: Outdoor Specialties By Mail From Maine. New York: Newcomen Society, 1981. Haapaniemi, Peter. “Up to Speed.” Chief Executive Officer, July/August 1996. Kepos, Paula, ed. International Directory of Company Histories. Detroit: St. James, 1995. Miller, Paul. “A Lean Mean Bean.” Catalog Age, March 1997. Perez, Anabelle. “Trendsetters Lead ‘No Sweat’ Battle.” Sporting Goods Business, 27 January 1997. “Retailing’s Entrepreneurs of the Year.” Chain Store Age Executive, December 1992.
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Jay Gould Overview Jay Gould worked his way from poverty to great wealth in nineteenth-century America by exploiting the worst aspects of laissez-faire capitalism, a doctrine that maintains the economy should be allowed to operate with minimal government interference. He came to prominence at a time when the U.S. business community was largely unformed and virtually unregulated. Bold, cunning, and often unethical in his dealings, Gould developed a reputation as one of the most notorious of the socalled “robber barons,” a derogatory term used to describe the businessmen of his era who were prepared to do just about anything in the quest for personal wealth and power.
(1836-1892) Entreprenuer
Personal Life A native of Roxbury, New York, Jay Gould was born May 27, 1836, on a small farm operated by his parents, John Burr Gould and Mary (More) Gould. Life for the family was difficult, and from an early age Gould resisted the idea of following his father into a profession that he found neither lucrative nor attractive. Thus, at the age of 13, he began working at a series of menial jobs, including stints as a clerk and as a blacksmith. Despite his lack of formal education, Gould achieved a measure of success rather quickly by drawing upon his tremendous personal energy and burning desire to make something of himself. By the age of 18, he had become a land surveyor in New York, Ohio, and Michigan, earning a great deal of money in the process
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the firm, he brought in outside investors who bought out Pratt. Gould then began using the company’s money to speculate on other business ventures (an illegal practice), which immediately earned him the distrust of his new partners. When one of them committed suicide in 1859, chaos erupted and Gould used the opportunity to take over the tannery, touching off a battle for control that eventually ended up in court. While the case dragged on, Gould used the delay to strip the company of many of its assets. In 1860 Gould abruptly abandoned the tannery business (by that time, his money was largely invested elsewhere) and began speculating heavily on small railroad companies. He established himself as a major player in 1867 by becoming a director of the Erie Railroad, one of the largest on the East coast. In doing so, he assumed the role of insider rather than just an investor. This made it easier to gain access to information that allowed him to control more and more of the Erie Railroad.
Jay Gould.
At one point, in an effort to stop fellow speculator Cornelius Vanderbilt from taking over the company, Gould illegally issued 100,000 new shares of stock. This diluted Vanderbilt’s stake of ownership in the railroad and made it far more difficult for him to gain a controlling interest. Gould and two of his partners earned millions of dollars as a result of the scheme, but their dubious methods landed them in trouble with the law and forced them to flee to New Jersey with the company records.
(Archive Photos, Inc.)
and spending little. Within three years, he had saved $5000, a rather large sum for such a young man in midnineteenth-century America. Gould then invested in a leather tannery in Pennsylvania, thus launching his career as a speculator. Gould eventually grew tired of the leather business and left Pennsylvania for New York City. There he met Helen Day Miller, the daughter of a local businessman. The couple married on January 22, 1863, when Gould was 27. Despite his growing reputation for ruthlessness in business affairs, Gould was deeply devoted to his wife and the four children they eventually had together. In fact, throughout the rest of his life he rarely took time off from work except to be with his family and occasionally indulge in his hobbies of reading and gardening. Gould was only in his forties when his health began to deteriorate. He died of tuberculosis at the age of 57 on December 2, 1892, leaving behind $77 million (which represented the bulk of his estate) for his eldest son, George, to manage. Within 25 years, however, George Gould had lost all the money in bad business deals.
Career Details Gould’s first foray into the world of business came in 1858, when he was a mere 22 years old. His method of handling the Pennsylvania leather tannery he invested in with his partner, Zadock Pratt, foreshadowed many of his future strategies. Moving quickly to seize control of
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Gould then headed to Albany, New York, where he bribed state legislators to pass a law that could be applied retroactively to make what he had done to thwart Vanderbilt’s attempted takeover completely legal. After reaching a financial settlement with Vanderbilt, Gould found himself back at the helm of the Erie Railroad, which by that time was burdened with heavy debts. Once again, Gould resorted to underhanded means to enhance his own position. He bribed politicians to gain favorable treatment and spread false rumors to drive up the price of existing railroad stocks so that he could sell his holdings and post a quick profit. He also persisted in fraudulently issuing new shares of stock. Finally, the board of directors of the Erie Railroad grew weary of Gould’s manipulations and ousted him in 1872. While he left the company in much worse shape that it had been when he first appeared on the scene, he had seen his personal fortune increase substantially. Gould then turned his attention to the rapidly expanding rail systems serving the American West. In 1874, he became a director of the Union Pacific Railroad and soon took control of their operations. By issuing false claims about the company’s prospects, Gould drove up the value of its stock and earned an enormous profit when he sold his shares in 1879. He then used part of the money to buy up a number of other smaller railroad companies operating in the region. As of 1881, his holdings included more rail mileage than anyone else in the United States. By that time, Gould had already begun to expand into other areas. In 1879, for example, he bought the New
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York World newspaper, which he did not hesitate to use to advance his own agenda. In its pages, he cast doubt first on the financial well-being of the Western Union Telegraph Company and then on the Manhattan Elevated Rail Company. When their stock prices tumbled, Gould acted quickly to acquire both companies. Though he experienced various ups and downs in business throughout the 1880s, including a brush with bankruptcy around the middle of the decade, Gould always managed to rebound and make up for any losses he had sustained. By 1890, he had rebuilt his railroad empire and presided over a number of other firms.
Chronology: Jay Gould 1836: Born. 1858: Invested in leather tannery in northern Pennsylvania. 1860: Began speculating on small railroad companies.
Social and Economic Impact
1867: Became director of Erie Railroad.
The opportunistic tactics and sometimes criminal abuses of Gould and his fellow speculators during the late nineteenth century eventually prompted the United States government to become involved in overseeing and regulating big business. Until then, challenges to such illegal behaviors were rare. The rules of business were mostly self-imposed, and court action was agonizingly slow. In short, it took the blatantly outrageous activities of someone like Gould to underscore the need for government intervention to prevent any one person or groups of people from dominating a particular business and wielding excessive economic power.
1872: Ousted by Erie Railroad board of directors. 1874: Became a director of Union Pacific Railroad. 1879: Purchased New York World newspaper. 1881: Controlled more rail mileage than anyone else in the United States. 1892: Died.
Encyclopedia Americana, International Ed. “Jay Gould.” Fuller, Robert H. Jubilee Jim: The Life of Colonel James Fisk Jr. New York: Macmillan, 1928.
Sources of Information
Johnson, A. and Dumas Malone, eds. Dictionary of American Biography,”Jay Gould.”
Bibliography Ackerman, Kenneth D. The Gold Ring: Jim Fisk, Jay Gould and Black Friday 1869. New York: Dodd Mead and Co., 1988.
Klein, Maury. The Life and Legend of Jay Gould. Baltimore: The John Hopkins University Press, 1984.
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Katherine Graham (1917-) Washington Post
Overview Katherine Myers Graham is world renowned for her leadership, particularly during her 10 year reign as publisher of the internationally acclaimed Washington Post. During that time, Graham won a United States Supreme Court decision to publish excerpts from the United States government’s classified Pentagon study, known as “The Pentagon Papers.” She also supported investigative reporting of Watergate, resulting in the resignation of then U.S. President Richard Nixon.
Personal Life Katherine Myers was born on June 16, 1917 into a prominent New York City multi-millionaire family of Jewish and German decent. Her father, Eugene Meyer, was a banker who purchased the newspaper, Washington Post as a hobby and mother, Agnes (Ernst) Meyer was an author and philanthropist. Katherine’s education included the elite Madiera School in Greenway, Virginia, where she continued her growing interest in journalism by working on the school paper. Her higher education included a year at Vassar College. There she became uninspired with the traditional education she perceived she was getting and transferred to the University of Chicago, considered radical in the 1930s. During summer vacations, Katherine worked at the Post, but after she received her BA in history, she moved to California and worked as a waterfront reporter for the San Francisco News. She covered a strike on the waterfront, which would later serve as a valuable learning experience. A year later, Katherine followed through on her father’s suggestion to return to Washing-
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ton, where she became part of the editorial staff on the Washington Post. Earning twenty-five dollars a week, she handled the “Letters to the Editor” department and also wrote some 100 editorials. In 1939, Katherine met the love of her life, Philip Graham. Philip, two years Katherine’s junior, was not a stranger to poverty. His family struggled until they achieved a more prosperous lifestyle. His father, Ernest Graham, became a successful dairy farmer, later winning a seat in the Florida state senate. His mother, Florence, was a former school teacher who instilled the love of learning in Philip, encouraging reading throughout his upbringing, while he gained insight into politics from his father. Bright, eager, and with an unaffected, easy-going manner, Philip did extremely well at the University of Florida and went on to Harvard Law School. Because of his intelligence, he was able to become a law clerk, first to Supreme Court justice Stanley Reed and then to Felix Frankfurter. Katherine met him at a party where the aggressive and funny Philip immediately got the attention of the more subdued Katherine. The Dictionary of Literary Biography reported that he told her, “He was going to marry her, and did not want her father’s money.” Instead, they would “. . . move to Florida. He would go into politics and they would be so poor she would have only two dresses.” The couple was married on June 5, 1940. Traditional
