Recently while I was being curious in the library going through old magazines articles I happened to run into a very interersting article written in the September, 1951 issue of Investor's Reader, called "Management: The Power of People". It illustrates the difference between the old-style management methods and the new. It tells about a company that used both, and the amazing results that followed when the new methods were used.
The reason that I want to share this with all of you, it's because in today's world many business still using the old approach and don't realize how much it is really costing them. Here it is:
"In 1931, Christmas at Baltimore's Mccormick & Company was the sad affair it had been for years. Notices were given of a layoff "until about February 1" along with the ironic wish "Merry Christmas and Happy New Year"!
In 1950 the employees of McCormick & Company's Baltimore plant worked pell-mell right up to the day before Christmas, then left for home for a whoop and a holler. And no wonder: in their pockets was two weeks of extra cash bonus and ahead of them a full-paid winter vacation until January 2. The bonus was an addition to three extra weeks extra already paid that year; the vacation was in addition to the regular summer vacation and seven paid holidays.
The contrast between these two situations is the degree of success achieved in less than 20 years by one man and one idea. The man is perspicacious, 55 year-old Charles Perry McCormick, Chairman and President of the "World's largest spice and extracts business'. The idea is "multiple management", an operating system design to insure maximun worker participation and morale to say nothing of providing management with a seedbed of youthful and ambitious executive talent.
The story actually starts way back in 1889, when Charlie's uncle, Willoughby McCormick, started his spice business in a dingy room with two employees. "Uncle Will" was a hard worker and a hard boss. Sales reached $ 3,500,000 in 1932 but employees were listless and despirited. Labor turnover was an expensive 30 per cent a year.
Neohew Charlie ("The Old Man" had no children) started working at the plant in summer 1912, came on full time 1919. He worked as stock boy, runner, an executive assistant in factory an office, and for over ten years as salesman and export sales executive. He also tried to sell Uncle Will some new management ideas but was fired seven times for his trouble (he was also rehired). Came the Great Depression and big losses for McCormick. as was the tenor of the times, the Old Man slashed wages 25 per cent and had another 10 per cent ax in hand when he suddenly died on a business trip in 1932.
Since it did not seem to make much difference who headed the hard-pressed concern, the directors elected young Charlie. The practical prophet decided to use some of his ideas. He called a meeting of all the employees and annouce a 10 per cent raise instead of a cut and a work week shortened from 56 to 46 hours. He also told the workers they had to raise production and cut cost or the whole kit and caboodle might collapse. to help them along he told his atonished employeees they would henceforth share in the profits of the company and take an active part in management.
The active part consisted of a junior board of directors and the beginnings of multiple management. The first board had 17 members (credit clerks, cost accountants, assistant department heads). The assigment was to find ways and means to improve anything they thought needed it. In addition: "write your own constitution and by-laws, elect your own officers and govern yourselves as you wish. The company books are open to you and ask all the questions you like".
To keep things under control, Charlie said all suggestions must be unanimous and subject to approval of the senior board (the stockholder board elected annually).
The idea clicked. Within a few years the junior board had redesigned and modernized the company's packages with a resultant sharp rise in sales; they devised new ways to test stenographers; they introduced faster and better billing machines; they suggested new product lines from pumpkin pies spice to the recently introduced fast-selling cinnamon sugar.
As a good spice man, Charlie likes to say "the proof of the pudding is in the eating". On that basis the junior board has quite a record: of 5,000 suggestions made, over 99 per cent have been adopted by the senior board. Says Charlie: 'I cannot estimate how much these suggestions have meant to this company in increased sales and profits but certainly the benefits far exceeds the cost'. More important, the junior board has bolstered morale and given all ambitious young men a chance to be a company officer and director. The goal is attainable since no less than 13 of the present 17-man senior board were formely junior or factory board members.
'Uncle Will'-the boss who ruled with an iron hand, managed to get sales up to 3.5 million dollars. Which sounds like a pretty good endorsement of the old methods, until you realize the by enlisting the brains as well as the brawn of the workers, Charlie McCormick increase sales volume 15 times to around 50 million dollars a year. "When we started", said Charlie McCormick, "we had a small sales volume, no profits, no dividends, no employee morale, no rest periods, no vacations, no profit sharing and no retirement fund."
What a wonderful concept! isn't it? and it worked in the early 20th century and still applies today. It is very simple, very often we need the "yes", "O.K." or endorsement of another person to get some idea of our own adopted. The best way in the world to get this support is to get the other person to participate in your idea.
Instead of saying, "I wish you would approve this," or, "I wish you would decide in my favor," try this: "If you were me, how would you go about getting this idea across?"
