"Every time there was a board meeting there was some decision that had to be made. The board wanted to move slowly. Allan always made them feel rushed."
The board, of course, was Allan Gallant's boss.
You've got to give credit where credit is due," says Perry Eaton. "Gallant is a wizard. He brought the company to a market saturation. We have a product mix that is 10 times broader. And the social goals have been met in spades. But there comes a time in every company when a change is appropriate."
The 40-year-old Eaton is as buttoned-down as they come, a soft-spoken former banker at home in a tweed jacket and rep tie. A Koniagmuit, Eaton grew up working the fishing boats near his home on Kodiak Island, and had dreamed of a career as a cannery superintendent. But the politics of post-ANCSA Alaska opened new vistas. Rather than becoming an engineer, he studied finance and went into banking, first as a loan officer in Seattle, later as vice-president of marketing at United Bank Alaska, the nation's largest minority-owned bank. In 1981, he took the top job at CEDC.
Eaton has his ambitions. "There are maybe 300 players in this state," he explains, "and I suppose I'm somewhere in there." Someday, he says, he would like to be the state's first native lieutenant governor -- but for today his job is to ensure that CEDC runs smoothly enough to fulfill its mandate of native-controlled economic development. When Eaton joined CEDC, insiders believed that he was hired to keep a rein on Gallant's enthusiasm. While Gallant never reported directly to him, membership on the AC board was dictated by the CEDC board of directors, and Eaton was their eyes, ears, and native voice at corporate headquarters.
"There is a long history of tension between Perry and Allan," says Humphrey. "Allan is a classic risk seeker, and Perry is a classic risk averter."
In style, Gallant couldn't have been more of an entrepreneur if he owned AC himself. Eighteen separate department heads reported to him directly and deferred to his instructions. Staff members were treated like children, listened to and loved, but kept in their place. Gallant would carry a loyal employee like Tim Frye, later to become director of personnel and training and an employee board member, through years of alcoholism, helping him dry out and keeping his job secure; but he would dismiss an employee like Emerick Kauzlarich as "an old fart," for the crime of challenging Gallant's plans. Overweight and rumpled, loud of voice and quick of tongue, Gallant ran AC like the patriarch of a family business.
In particular, he put his board on notice from the start that "pure community ownership doesn't work." He had seen hundreds of community-owned businesses launched during the era of Lyndon Johnson's War on Poverty, he said, and he had seen hundreds of them die, killed by social and political activists who wouldn't let "an old-style entrepreneur" do his job. "The problem is that a community group has difficulty understanding the difference between ownership and management," Gallant explained. He found the members of his own 12-person board a mixed blessing at best. They were patient equity, looking for long-range change rather than quarter-by-quarter goals. And they gave him eyes and ears in the bush, as when a native board member suggested the benches in store vestibules. But he felt they had no collective investment in AC, and that their style was alien. Most came from the village and regional corporations, natives introduced to such concepts as capital and margin by ANCSA. They had grown up in a world that rewarded caution and prized cooperation, and his highprofile juggling act made them nervous.
He certainly didn't want them to tell him how to run the business. If he wanted to float an overdraft for a mall in Bethel, it was a gamble he thought he could win. If he wanted to spend his time or money spinning off a natural-food supplier, it was because he saw a payoff down the road. If he wanted to create an employee-of-the-month award, then bill the company for the cost of the sublease of his Maui condo, it was all for the greater growth of the company.
"I guess I come from the school that believes you push until you hit the wall," Gallant admits.
"There was conflict from the beginning," Tom Humphrey remembers." The idea of rapid change was the hardest thing for the board to accept. Some of them wanted to keep the status quo, because they felt more comfortable that way."
In part, Gallant was trapped by his own success. The more the company grew, the more he put at risk and the more freedom he felt he needed. But the larger their stake became, the more the board members felt they needed to understand and shape policy decisions. When there was a profit at year's end, why was it always lower than he had promised? Why did they have to spend so much on growth? Why did they have to take almost 6% off the top of each store's gross to pay for his headquarters staff? Did he have to be quite so liberal in his terms with the villages -- wouldn't AC make more money if they gave up a little less in their joint-venture leases, or if they let prices reflect supply and demand more and village needs less?
"I'll run this my way," Gallant would tell them. "If you don't like my way, get someone else to run it for you."
"The board would continually go in to executive session, to talk without Allan," says Humphrey. "We'd usually agree that what he wanted to do was right, we just didn't like the way he presented it. The feeling was always, 'We'll let Allan get away with it one more time."
Gallant thought of the ESOP, approved in 1984 after a three-year battle, as his masterstroke. By convincing the board to sell one-third of the company to AC's employees, he got $2.45 million in new capital to fund his expansion plans. He also got a new voice on his board, a voice that he thought would understand what it took to make AC grow. "I had tried for years to split the ownership," Gallant remembers. "Then I said, let's put an ESOP in. You won't sell it to me. You won't sell it to outsiders. You won't sell it to the village corporations. Let's sell it to the employees.
