Strange,…. when I was President and CEO of Saati North America, I never thought of myself as a ” Manager “.
I think my aversion to that label dates back to 1956 at Iona College, New Rochelle, NY when I was discussing with some classmates which major to choose. I recall someone mentioning Management, and I recall another classmate saying it didn’t seem intellectually deep enough to him. To him, management seemed nothing more than common sense. I suppose on some subliminal level I agreed, so I decided to follow Adam Smith into Political Economy…..and major in Economics.
Now, as an investor, and no longer a manager, I have a much better idea of what a manager should be, a much higher opinion of the job I did as a manager , and a much lower opinion of some of the CEO managers and their compliant teams whose work I encounter almost everyday in doing bottom up analysis for potential investments.
To dispose of me as a manager, and voir dire my qualifications to express both my opinion of myself and others as managers , I believe I need to relate a little bit of my experience as a manager. What follows is not a resume’ and , for sure, I am not at all interested in having a job.
As of January 1, 1987 I liquidated my interest in the fabric importing company I owned and became an employee of Saati, ( Italy’s largest industrial weaver ). I signed a long term employment contract that gave me unlimited authority and responsibility for the profit of the USA subsidiary, Majestech. To me, unlimited authority meant nothing except use in breaking ties…rare.
If anyone asked me to describe my job , I could easily have said ” motivational engineer / consensus builder “. I was surrounded by in place managers whom I had hired and respected. I saw myself as an outside the box thinker……probably a radical in how companies should operate and interface with their employees, customers, suppliers and shareholders ( in this case , shareholder…Dr Carlo Novarese , President of the world wide Saati Group. ).
I saw my job as selling ideas to the management team and adopting their ideas on how we could create a delineated image of ourselves versus our competition and have a hell of a good time, and lots of laughs, doing it. Every employee, manager or hourly, was to be able to articulate to anyone why our company was different, a great place to work, and why we were a great source for products and implementation ideas.
I had to be able to go to Italy, quarterly, and demonstrate via an annual ” Accomplishment Portfolio ” that we deserved maximum shareholder support in terms of strategy and product development. We did the same with other suppliers and we lost no opportunity to demonstrate to our bankers that we knew how they ran their business and would only bring them bankable transactions.
Every employee of the USA subsidiary participated in a monthly ” Sales Bonus Pool ” based on sales growth and the perception that it wasn’t only our Field Representatives who sold. We considered everyone who had an opposite number at our Swiss, German and Japanese competitors to be in sales. Our mission was to outperform the competition in any area where the customer could draw a positive or negative conclusion about us. This individual and collective effort to impress and delineate was considered a sale and it included the switchboard operators, warehouse employees , accounts receivable employees etc. ..
The monthly sales bonus check for hourly employees could be as high as the monthly lease payment for a BMW 325i. This was in addition to a 401K plan, pension plan, medical plan and 100% tuition refund plan. That’s right, we had full time employees wrapping packages who were in line to receive a liberal arts or accounting degree from one of the local colleges.
By now, you are probably thinking that it was easy to do this because we were selling a product with a highly delineated competitive advantage. Wrong. In fact, we were importing a product which was in reality a set of specs that any of our competitors could probably deliver, and maybe at a much lower price if they set their mind to it. In fact, we were importing a commodity like product. What we did ( as a management team ) was surround it with a portfolio of excellent peripheral products which made it part of a system whose other components we either manufactured or bought on exclusive and favorable terms. We spent time on the factory floor of IBM, Revlon, and Champion Knitwear showing them and others, how to use our portfolio successfully. We had a steady stream of visitors to our ” in house ” lab including ATT and Northern Telcom..
Long story short, the net worth of the USA subsidiary grew at a compound annual rate of 25% plus during the 13 years I had direct control of sales, operations and the budget. Its only now, when looking back and remembering the words of Hall of Fame NFL Coach, Bill Parcells……
” You are what your record says you are “,….. that I allow myself to smile.
All the above is to set the stage for my next post ….How I find public companies with exemplary managements who use their prosperity to push ahead and simultaneously reward employees and shareholders . Those are the companies I want to own.
Richard Maurice Gore