The Hottest Entrepreneur In America

How John McCormack's unique approach to managing people and information produced one of this country's premier growth companies

Tweet

JOHN MCCORMACK IS PERCHED ON the edge of a stuffed chair in his new house outside Houston. He is a great big bear of a man, and right now he looks poised to snatch a fish. In one hand is a remote control device that he keeps pressing to fastforward a videotape on the large-screen television in front of him. Whenever his visitor tries to ask a question, he holds up the other hand and says, "Sh! Sh! Listen to this! Listen to this!"

On the screen, the founder of the Benihana of Tokyo chain of Japanese restaurants is telling his life story. McCormack has just recently gotten hold of the video. You'd think he'd come across another copy of the Magna Charta. "This is great! This is great! Look at this!"

The room is filled with videos, and the house is filled with large-screen televisions, three all told. Indeed, the house is filled with every type of gadget known to modern man, and often more than one of each. The kitchen, for instance, has two dishwashers, two stoves, a huge refrigerator, and two double sinks -- which seems like a lot for people who eat out six nights a week. There are four whirlpool baths, a swimming pool with air-conditioned cabana, a steam bath, and three ice machines. (McCormack says he frequently has house-guests and wants them to "feel at home.")

The living room has a 20-foot-high, floor-to-ceiling fireplace carved out of a slab of Italian marble that he had shipped directly into the port of Houston. The staircase is white oak and glass-sided, rising to a catwalk overlooking the living room. If you don't care to walk, there's an elevator running up to the master-bedroom closet -- a huge room in itself, featuring, among other things, McCormack's 10 pairs of cowboy boots. Then there are the custom-made windows, doors, carpets, and sofas, not to mention the humongous playhouse that alone cost $10,000 to build. And, oh yes, the 12 bathrooms.

The house just won't quit, and neither, it seems, will John McCormack. He is completely wrapped up in the life story of the man from Benihana, and nothing can distract him. This is not, in fact, unusual. He tends to get wrapped up in the things he cares about -- his house, his business, his family, his videos.

You often get the sense, moreover, that they are all somehow connected. It was the business, after all, that allowed him to build the house, and it was he and his wife, Maryanne, who built the business. Today she is president of the company. He is the chairman. He is also head cheerleader -- which is where the videos come in.

By his estimate, McCormack spends $2,000 a year on videos and tapes, mostly of the Zig Ziglar genre. He listens to them for bits of management wisdom. In the early days of the business, he would often play the tapes at meetings of his managers, then stop and ask questions. "It was a way of teaching them how to listen," he says," and of bringing the outside world in." Now, he uses them more to motivate people.

At the moment, however, the one being motivated is John McCormack. "This is great!" he says. "You know, there are only so many times you can tell stories about Walt Disney before people get bored."

If McCormack's own story were ever to be put on videotape, boring is one thing it would not be. A former New York City cop turned Wall Street stockbroker, he started his company with no previous experience running a business, and no formal management training. He had not even attended college. What he knew about the business came secondhand from his wife. Yet, in 10 years, he has created one of America's premier growth companies and -- beyond that -- established a whole new standard of success for his industry. People who study his company come away talking about him as another Ray Kroc. Groups in other industries seek him out as a speaker. And visitors from as far away as Japan come to see how he has done it.

What they find is a company built around a radically different approach to people and information. Without giving up any equity, McCormack has figured out a way to make his employees feel, and act, as if they own the business. He has done this, moreover, without paternalism, without corporate "charity," without violating any sound principles of business. Far from being "soft" on people, McCormack's organization is one in which individuals earn everything they get, even their corporate health benefits. The result is a company that has been able to withstand a brutal recession in its market, growing at a time when competitors have withered or died.

On one level, the principles that guide him are based on little more than common sense. Once you see them at work, you have to wonder why so few companies in any industry follow them. Not that McCormack has some formula that can be copied. He doesn't. But he does have an attitude and an approach that is surprisingly rare. That approach allows him, first, to see opportunities in every part of his business, and then to capitalize on them almost instantaneously with the resources available.

And therein lies the real key to his success -- his use of resources. Indeed, McCormack uses resources that other companies don't even know they have. Not just the people, either. Other growing companies, after all, have inspired employees to new heights of performance. What sets McCormack apart is his ability to reinforce his employees' efforts in an almost infinite variety of ways. In particular, he has taken advantage of the technological advances that allow information to be as powerful, and as accessible, a tool for small companies as it is for large. Along the way, he has raised questions about the very definition of what it is that makes a company strong.

 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8  NEXT 

Bo Burlingham

Burlingham joined Inc. in 1983. An editor at large, he is the author of Small Giants: Companies That Choose to Be Great Instead of Big. The book was a finalist for the Financial Times/Goldman Sachs Business Book of the Year Award in 2006. Burlingham is also the co-author with Norm Brodsky of The Knack; and the co-author with Jack Stack of The Great Game of Business and A Stake in the Outcome.