by Stan Mason
His friend blew out his cheeks in exasperation at the comment. ‘Well anyone would do at the present time, I suppose,’ he went on thoughtfully. ‘You do have business experience, I suppose. The managers are at their wits end at the moment. Are you really serious about applying for the job?’
Ross screwed up his face in deep thought. ‘I have a mind to do it but there would be one thing I’d have to do first. There’s a company called Rollercoaster Inc., a major competitor to Baudelaire. They may be interested in taking it over which would resolve all its problems. If not, I’m your man.’
Meadows went to his office the next morning and laid out his plan to the other managers. ‘This guy’s been in business since he was nine years old. He could provide support, some finance, and a great deal of expertise, but firstly he wants to contact Rollercoaster Inc. to see whether they’re willing to take us over. If they do, most of the company’s troubles are over. Are we ready to give him the chance?’
The other managers concurred hoping that the new man would take them out of limbo. In any case, there was no one else in the field willing to work for practically nothing to restore the fortunes of a dead-end company. That afternoon, Ross entered the portals of the head office of Beaudelaire Inc. and sat in the plush chair of the Chief Executive. He immediately put in a call to Frederick Nelson the Third, the Chairman of Rollercoaster Inc., to ask him whether there was any interest in taking over the company for practically nothing ... simply to repay most of the liabilities of seventy thousand dollars and ensure the continuity of trading and the employment of all the staff. It was an absolute gift that would have been grasped with both hands at any other time. However, the business world was in danger of imploding into a deep depression and the last thing any company wanted to take on were further liabilities.
‘You’ve got some damned neck!’ countered Nelson the Third critically at the top of his voice. ‘Let me tell you something, Ross, we’re not interested in taking over insolvent companies. And that’s my final answer. Now get off the line. I’m busy!’ Without hesitation, he slammed the telephone receiver into the cradle ending the conversation quickly.
Ross was a little put out by the other man’s harsh reaction and it irked him to be spoken to so rudely. It meant that he was now the Chief Executive of an insolvent company with some two hundred and eighty-eight employees... each one of them looking towards him for guidance and salvation. His father was great at telling old Russian sayings. He recalled one which he had heard so many times before. It went: “First law on holes. When you’re in one, stop digging!” Well his pain was self-inflicted; he had certainly stepped into a hole all right.
For two days, absolutely nothing happened. Then on the third day, Ross came to the office with a shoal of papers under his arm. He called a meeting of all the managers and they sat in the Boardroom eagerly waiting to hear their fate. Most of them believed they had been called there to be told they were being made redundant. It seemed the only plausible reason. However, to their surprise, the opposite was true.
‘I’ve called this meeting to appraise you of the plans I have for rebuilding this company to its former glory,’ Ross informed them, ‘and then to establish its rise beyond that.’
Wingate, one of the older managers, raised his eyebrows at the comment. In his opinion, survival was the only matter on the agenda which needed to be addressed. Plans to rebuild the company were something to be considered at a much later date. ‘Isn’t survival the most important thing to discuss at the present time?’ he asked pointedly. ‘I’m certain I speak for most of the managers sitting around this table today. We believe the company’s in serious danger of foundering as a result of the depression caused by the Wall Street crash.’
‘Nonsense!’ spat young Ross arrogantly. ‘We do owe a large amount of money and so does practically every other company in the country but they’re not all going bankrupt and nor are we. Admittedly, there’s a dip in sales at the moment which is being experienced by every other company but all that will change in due course. You must have faith and trust in business opportunity. Nonetheless, there are a number of certain principles I wish to establish at this point which I consider to be extremely important.’
‘Let’s have them then,’ muttered Wingate tiredly. He was highly suspicious that such a young man had taken the appointment of Chief Executive of the company. Now that he had listened to some of his opening remarks, he was certain it had been a grave error. Yet, as far as he was concerned, there was nothing more to be lost. If Baudelaire Inc. was on the verge of bankruptcy and they were all going to lose their jobs, they might as well go down fighting, staring into the face of the inevitable instead of being frightened by it.
‘I’ve set out a four-way test based entirely on the pattern of human relations and honest dealing. I want each one of you, and all the staff, to make sure it’s deeply rooted in your consciousness at all times. It must be the basis of all your business operations in the future.’
Wingate’s face puckered into a frown as he listened to the ranting of the new man. What was he talking about? Patterns of human relations and honest dealing? Surely, he wasn’t a theorist with little practical experience, propounding a new image for the company when it was down on its knees foundering in debt? It would be too much to bear!
‘The four-way test asks four questions as follows,’ Ross went on calmly. ‘Firstly, is it the truth? It has to be true in its totality. Nothing short of it will suffice. Secondly, will it be fair to all concerned? By the term “all concerned” I mean that to include everyone... management, employees, suppliers, customers and even competitors. Thirdly, will it build goodwill for the company and a better friendship for our personnel? And, fourthly, will it be profitable?’
‘Even competitors!’ echoed Wingate, unable to hold his temper any longer. ‘What do you mean by that? We have to fight them on the price all the time let alone any other means by which they think they can get one over on us!’
‘Even competitors,’ repeated Ross slowly. ‘We have to be seen to be absolutely fair in our trading. In addition, I want to maintain the same level of employees rather than reduce their number. This is a tough time for everyone and the company needs to show its resolve in protecting them instead of making them redundant. It’ll be tough for quite some time but loyalty needs to be repaid. Furthermore, I want employees to be regularly paid a share of the profits in addition to their wages. It will help them to work harder by making sure there are profits to be shared. Everyone will be encouraged to make suggestions to improve the company’s business and they must be free to offer criticism of the company’s employee relations.’
‘That’s preposterous!’ scolded Wingate angrily. ‘It’s enough for someone to keep their job these days apart from taking a share of the profits. It’s too much! And, as far as criticism of employee relations, we’ll have every Tom, Dick and Harry on our shoulders all the time. You’re making it easier for malingerers to winge... and get additional profits!’
‘I go even further,’ stated Ross sharply, ignoring the remarks of the elder manager. ‘In buying materials or supplies, I don’t want other firms to have to sell at a loss because they’re in financial difficulties. I noticed yesterday that an order for aluminium bought recently was charged at a price far below any profit-making value. I want this company to renegotiate that contract by which means we shall have to pay a higher price... a reasonable price.’
‘But that’s the rule of business,’ intruded Gwinnear, manager of the Buying Department. ‘We buy at the lowest price possible and sell at the highest. It’s the Golden Rule.’
‘No longer, Mr. Gwinnear,’ retorted Ross smartly. ‘We act fairly and honourably in everything we do.’
‘You’ll not make any profit let alone have it shared among the employees,’ rattled Wingate caustically.
‘We’ll sell our products at a price that’s fair to distrib
utors and consumers and do all we can to avoid hurting our competitors. I’m certain that the high-quality of our products will create a wide demand for them at a price which would not undercut our rivals and that the goods will sell well on their merits. I’d like that to be impressed on every dealer who handles our products.’
‘You’re going to run this company into the ground in a very short time,’ complained Wingate dolefully. ‘This is a period of stress and hardship. You can’t start laying down rules like this and expect to get away with it!’
‘I have it on good authority that we will,’ returned Ross quickly. ‘It’s the panacea for building a strong company.’
‘And who told you that?’ asked the elder manager.
‘My father,’ replied the young Chief Executive. ‘He runs three grocery shops in the city and what he doesn’t know about business can be placed in a thimble and lost. Now I’d like to come on to one of the hardest places to apply the four-way test... that of advertising. The same four questions will apply to every advertising layout produced mainly relating to whether it’s the truth and whether it’s fair to all concerned. Just because the presentation is beautifully illustrated and carries a persuasive text doesn’t mean it gives the right impression, even though it may stick to the literal truth. Now... I open the meeting to you all.’
The Boardroom exploded as questions were fired from every manager in attendance. They ranged from criticism of the four-way test to whether they would still be employed in the company in two months time if trading conditions worsened. Ross handled all of them in a competent manner, outlining in greater detail his intentions at each explanation. He wanted the company to trade on its quality, its fairness to distributors and customers alike, and not offend any of its competitors on price or advertising. To the managers, his views were a little strong to take especially in the climate of harsh economic downturn which affected every family in the country. But Ross was adamant. He had taken his father’s advice and he was the Chief Executive who deemed he had the right formula for success. The managers had come to the meeting expecting to hear a plan which initially involved a huge reduction in staff. They were surprised to find themselves listening to a fundamental plan based on very strange trading principles. As far as the debts of the company were concerned, Ross borrowed some money from his father to keep the company ticking over taking shares in exchange. He continued to work on a principle whereby he accepted a very low-level salary each month... as low as the janitor earned at Head Office... and received the balance in shares of the company.
He adhered to the rules with great vigour, practising exactly what he had preached. When the advertising department were prepared to send out a promotional leaflet pointing out the advantages of a range of the pots and pans produced by Beaudelaire Inc., they entered a few sentences explaining the shortcomings of types of utensils manufactured by other rivals. Ross immediately ordered the circulation of the pamphlet to be stopped and the company went to some expense to recall every one of them which had already been sent out.
‘We don’t need to knock competitors who sell the same type of equipment,’ he explained to some very disappointed advertising staff. ‘We sell our goods on their merits and the public will buy them appreciating the price and quality.’
It was at that point that his father decided to sell his three grocery shops, receiving quite a rewarding offer for them. Once again, the old man had been in the right business at the right time. Subsequently, he was soon quite flush with money and on reaching the age of sixty felt that he had far too much for his needs. One evening, over dinner, he decided to discuss the matter with his son.
‘You know there’s an old Russian saying,’ he began. ‘It goes: If you want someone else to keep your secret, keep it to yourself. How’s your company coming along or is that your precious secret? You haven’t spoken much about it lately.
‘I followed your advice to the last letter, father,’ explained Ross diligently. ‘We adopted the four-way test as you suggested. As expected, it didn’t go down well with the managers however they had no option but to accept it. You see, no one else would have stepped into the breach with an insolvent company. But we’re now starting to make headway and get on our feet. The country’s slowly beginning to move out of depression into a period of recovery. The economy remained in limbo for the last six years but it’s starting to pick up now. I think we have a bright future ahead. It’ll take about another six months before we start going places.’
‘Going places? What does that mean?’ asked his father.
‘We turn the corner, dad,’ came the answer. ‘Not only do we show a fair profit for the first time in six years but our assets are eighty thousand and our liabilities twenty-five thousand. We have three hundred happy staff and everyone wants to be employed by us.’
‘What about the shares in the company?’ asked the old man. ‘At what price do they stand?’
‘They’ve been about a dollar for six years now. No one’s shown any interest in buying them. I can’t blame them.’
‘Tell me, how much is the company worth at present?’
‘At a dollar a share, the market value stands at somewhere in the region of sixty thousand.’
‘As low as that?’ commented the old man. ‘And the company’s going places so you tell me. Well all I can say is that you ought to buy up as many shares as you can in the market up to, say, three dollars a share. And do it quickly.’
‘I take part of my salary in shares,’ commented his son. ‘And I was thinking along those lines myself except that I haven’t the capital at present to do it.’
‘Well now I’ve sold my shops you can use some of my money to do it. If you think this company’s going places in six months time, now’s the time to buy the shares. As many as you can. You can do it with my money and in my name if you like.’
Ross nodded appreciatively. He would have had sufficient capital to buy more shares in the company had he not met Martha Roberts, six months earlier at the company’s annual dance and shortly afterwards asked her to marry him. She was a tall, slender, beautiful woman with lovely auburn hair which hung down to her shoulders, working in the Buying Department and, at the moment they met, it was love at first sight.
Old man Ross was very generous. His son already owned about thirty per cent of the company and buying more shares would not only provide him with a majority shareholding but it would also force the share price to rise. On the following morning, the young Chief Executive contacted the company’s broker asking to buy as many shares available on the market up to three dollars a share. Immediately the order had been placed, the price rose to one dollar fifty cents and then gradually worked its way up to two dollars. Within the next twenty-four hours it reached two dollars fifty cents and then went up to three dollars. The next day, the shares triggered to three dollars and a quarter but, at that point, they stopped rising.
When the broker reported back to him, Ross realised that he owned just over ninety per cent of the company. Investors who had held on to the shares for so long without realising any appreciation whatsoever were delighted to double their money and bail out of the company. Subsequently, when old man Ross heard the news he indicated his pleasure with a loud grunt because the cost to him was far lower than he had imagined.
‘There’s an old Russian saying,’ he told his son. ‘It goes like this: If someone asks you what’s two and two, the answer is to ask him if he’s buying or selling.’
‘Well we own practically the whole company, father,’ he told him. ‘And the share price is going to rise much higher in the future, that’s for sure.’
‘I’m going to transfer the shares into your name,’ retorted the old man generously. ‘It’s my wedding present to you and Martha. Keep adhering to the principles I set for you and you won’t go wrong.’
In 1937, Ross attended the monthly Board meeting as usual an
d began with an old Russian saying. “In terms of price and quality, buy cheap, buy twice.”’ Sadly, the moral of the story failed to have the same impact as when his father told old Russian tales. However, that was the least of his concerns. ‘Where’s Wingate?’ he asked suddenly noticing the absence of his main critic.
‘He’s extremely unwell,’ Gwinnear informed him. ‘I hear through the grapevine that he’s been ill for quite some time but he kept it a secret. Just didn’t want anyone to know.’
Ross was quite alarmed. Throughout the years, his main adversary was Harold Wingate. The manager challenged him, baited him, criticised him day after day ad nauseum. Ross took it all in his stride. America was a democracy and its business practices ran on the lines of laissez faire. In any case, the principles of the company were designed to attract suggestions and criticism from manages and employees alike. Wingate took every opportunity to harangue the Chief Executive each day. If sales were down he complained. If they were up, they were not up high enough for the time of year. He grumbled that there were untapped markets which the company ignored. That the quality of the the products were too high causing the company to spend too much on materials. That the workforce was too large which bit into company profits. The list went on and on yet Ross listened to the manager intently every time and soothed his feathers down with plausible explanations. When the Board meeting was over, he took time off to visit the elder manager at his home. Mrs. Wingate opened the door and the expression on her face told the story.
‘He’s just passed away,’ she informed him sadly. ‘Cancer. He managed to carry on working almost to his final day.’ Ross offered her his condolences after announcing himself. ‘Oh, Mr. Ross,’ she went on. ‘He left a letter for you. One that he wrote just before he died.’ She went into the other room and returned with the item.
When he got back to his office, Ross sat in his chair and tore open the envelope to unfold a single page of writing.