Sometimes the best management decision you can make is to bring in a new manager.
They had known each other for 25 years -- first as dealer and supplier, then as friends -- and when they socialized, Dick Brown and Victor Pitzi often kicked around the idea of going into business together. It was only table talk, however, until the early 1970s, when it became apparent to Pitzi that Brown was brooding over his future and that of his family's office-design and -furnishings dealership in Boston. Brown, an iron-fisted manager who had always prided himself on his ability to lead an organization, was increasingly talking -- albeit off-handedly -- as if he might need help running M. Brown Inc.
"Dick knew he had to take the company from the one-man-show stage to that of an organization," Pitzi recalls. "He had to find someone to carry the business forward, and he said if I was ever interested, I should let him know." But even before any terms had been suggested, Pitzi had reservations about signing on with Brown. He was aware that two would-be chief executive officers had come and gone in a matter of months, apparently without making any change at M. Brown, and he was sure that at least part of their failure could be attributed to what he saw as Brown's halfhearted commitment to sharing the operating duties of his company. Pitzi made it clear that any qualified successor -- including himself -- would expect autonomy, and probably equity in the company as well. "I told Dick that no matter who he hired, it wouldn't work unless he could relinquish control [to that person], relinquish the reins of the company."
And that is where it sat -- until Pitzi decided to go into his own business, leaving behind a vice-presidency at Herman Miller Inc. in Zeeland, Mich., one of the office-furnishings industry's leading designers and makers of open-office systems. Hearing of the change, Brown renewed his invitation to Pitzi, and offered not only an equal partnership in the business, but also a guarantee that Pitzi would have first option to buy out Brown and two other family stockholders, should they choose to sell. Never before had the Brown family gone to such lengths to show support for a managerial candidate. Pitzi accepted the offer, assuming the presidency of M. Brown in June of 1978. Dick Brown became chairman of the board, but his tenure in that position was brief -- he died of cancer in October 1980.
Only Brown knew why he felt it was so important to bring in managerial assistance, but those who worked with him believe illness played a relatively minor role in his consideration. When negotiating with Pitzi, a then apparently healthy Brown referred to an earlier bout with cancer, "but he also talked in light of the needs of the company," Pitzi says. "He said he knew that, regardless of how long he might live, he was going to need someone who had the administrative abilities to build an organization." Executive vice-president Joe Gardner, who became one of Brown's closest confidantes after joining the company in 1975, adds, "If you want to be anything but an also-ran in this industry, you've got to grow, and we were not growing [any faster than the rate of inflation]. For whatever reason, I think Dick just realized that he couldn't [achieve higher levels of growth] by himself."
Dick Brown was, by all accounts, a difficult man to work or. He was intensely creative, having been among the leaders in promoting open-office design concepts, and he insisted on keeping his hand in every aspect of M. Brown's operation, from showroom to loading dock. But he lacked finesse in dealing with people. "There was a lot of responsibility given, but not a great deal of authority," Gardner recalls. "Dick would expect people to make decisions, then he would mentally beat them up if he disagreed with them. And there was no such thing as channels. He would think nothing of coming down and blasting out somebody who worked for you." Thank-yous were rare, firings and resignations were common, and M. Brown's response to business opportunities often had a lot more to do with managerial whim than strategic planning. Under such conditions, management breadth and depth were fated to remain virtually nil, Gardner says. "It was very difficult to set up an organization, because it was always in the process of being destroyed."
Brown was far from oblivious to the effect his management style was having on the company, according to family stockholders who hold vice-presidencies within the organization. His sister, Charlotte Brown, says, "He was aware of his administrative frailties"; brother-in-law David Young adds that Brown "knew that he had to attract salespeople, that he had to build a quality organization, and that it would take help from the outside."
Still, to nobody's surprise, the two years Brown and Pitzi spent under the same corporate roof were far from conflict free. "These guys were as different as night and day," says Gardner. "Dick always had to let you know who's boss, but Victor didn't particularly care. Dick had to be involved in everything, but Victor has no desire to be involved in everyday operations. Victor believes in teamwork, a certain camaraderie, but Dick couldn't comprehend socializing with employees. So, neither one being a shrinking violet, they clashed. And most of us thought that Dick would win -- because nobody had ever gone up against Dick and won."
This time, however, things were different. With patience and determination, Pitzi set about making his mark on the company. From the outset, he assured all concerned that he had no desire to "clean house" or remake M. Brown in his own image. He was, in fact, quite impressed with the people who had stuck by the company over its 30-year history, and, like Brown, he believed their sales skills and product knowledge could form the foundation of a larger, stronger organization. But the two managers differed on the means to that end. Gardner says Brown was reticent to "risk capital to hire more and better people who could generate sales," while Pitzi generally feels that you have to spend money to make it. Since Pitzi joined the company, the sales force has grown from 7 to 22 people, and support facilities -- such departments as design, installation, and sales support -- have at least tripled in size and responsibility.
"Victor realizes that sales is 90% detail work," says one veteran salesman. "By expanding the sales support personnel, he's made it so we can get out of the office and make another sale. He has also structured things, by having us register our primary and target accounts and by giving us SIC codes to work with [in prospecting for sales within certain industries]." Job descriptions were more clearly delineated, quota and compensation systems were refined, and, although Pitzi is not the type to distribute position papers on the company's long-term goals, he established a policy of communicating that data regularly, either in departmental meetings or on a one-to-one basis. But more than anything else, the sales force found the difference between Brown and Pitzi to be one of style. "Dick was blunt, asking us, 'Why the hell aren't you getting the sales?' But, from the beginning, Victor took a pep-talk approach, telling us the potential was there in the market, and 'shouldn't we be getting our share?"
Through the transition period, Brown remained active in the company -- continuing to work full-time almost until his death -- and his presence made it all the more difficult for Pitzi to teach the sales force and department heads to make their own decisions. "People still thought they had to get Dick's okay on everything," Pitzi says. Brown, meanwhile, did little to discourage employees from touching base with him, and he persisted in offering more than advice on strategic matters -- until Pitzi asked him to adopt a hands-off policy. "I was trying to get things done through other people, instead of by controlling them, and when [Brown] tried to interfere, I made it very clear to him that I wouldn't tolerate it."
Family members voice nothing but admiration for Pitzi's performance. "People now have responsibilities that were never there before," says Charlotte Brown. She points to the company's new middle-management layer, consisting of sales managers, divisional managers, and vice-presidents whose responsibilities fall into such areas as marketing, operations, and finance. Pitzi built that tier by hopscotching upward, creating new positions only when expansion below warranted them, she says, noting that all of these duties had previously been carried on the shoulders of one man. Young characterizes the: change as "going from an 'I' organization to a 'we' organization," and he believes it is that maturation process that accounts for the company's rapid growth since Pitzi's arrival. What was once a $3.5-million company, with 35 employees selling office furnishings out of a single location, is now a $25-million operation -- with 135 employees, four locations, and a product line that reaches far beyond desks and file cabinets to workstations for light-manufacturing and health-care settings.
Still, Pitzi credits Brown with setting the company's successful course -- by giving M. Brown its creative drive, and then having the sense to provide the managerial push it needed. "Until a dealership reaches a certain size, ownership has to be directly involved in sales, as Dick was. Then, size dictates [that the manager] become involved on a more indirect basis. There's always more emphasis put on the guy who's gotten [a company] to that next step than there is on the guy that laid the groundwork. There was a fair nucleus of people and skills at M. Brown to begin with. Dick just didn't identify with it, because I think he recognized that he wasn't the one to take the company to that next level."