Prince was a family business that had suddenly adopted all kinds of new family, and it was not always clear who was minding the kids. A 1959 Boston newspaper headline noted: "Prince Macaroni Co. Still a One-Man Project," but a one-man project with 22 stepchildren and annual revenues of $22 million was a project in some ways imperiled, especially in a $450-million industry that was now down to 125 players and shrinking. Brilliant as he was, Joe knew product and people better than he knew numbers and projections. And for Prince, it was management, not matchsticks, that now demanded his commitment.
The son knew that better than anyone.
IV RAGTIME
My father went through Ellis Island, I went through the U.S. Marines. Nothing I've experienced -- not Andover, not Harvard -- did quite as much to change my perspective [on human behavior]. When I came into the company, it was ragtime down here. There were no systems. There was no management sophistication. There was no "acquisition strategy." There were acquisitions, period -- and these were mostly failing companies that were short on management and long on debt. The worse thing was, nobody ever said no to my father. Board meetings were a bunch of guys sitting around a saloon, waiting to see who'd draw his six-shooter first. I mean, it was real chaos. Here I was coming out of an organization that taught sixth-grade dropouts how to land a mortar round 500 yards away without blowing up their own platoon, and into another one where everyone was underpaid, demoralized, and looking to one guy to issue every order. Having to take a pay cut on top of that was an absolute joke.
(Joe II)
Prepped at Andover and polished at Harvard (he even picked up some business experience managing the fiscal affairs of the Harvard Lampoon), young Joe parlayed an ROTC commission into a captain's rank with the Second Marine Division. Married to college sweetheart Anne Benedetti, however, and with a child of his own to think about, he mustered out and joined the company. His father hugged him and said it was the happiest day of his life. Then he put his kid right where he thought he belonged: at the bottom.
"I owe my son a good home and a good education," the father liked to say. "I never said I owe him a living." The son took a look at the chaos around him and thought, what the hell, only from the bottom can this mess be sorted out anyway. It was the beginning of an unusual working relationship.
The son worked in the Lowell plant (and took accounting and management courses by night) while the father relentlessly pushed Prince forward. Joe did deals from Montreal to Michigan, expanding his pasta empire and the company into such diverse areas as cookies and chemical pumps. From the early '50s on, the company never failed to pay a dividend to its shareholders, some of whom were on hand for 1955's year-end bonanza, a 50-1 stock split.
Still, Prince's real performance was not easily measured. As late as the mid-'60s, the only internal reports were being generated by Sal Cantella, the treasurer (and son of company co-founder Michele Cantella), and they seldom circulated beyond Joe Pellegrino's desk, certainly not beyond the inner circle of family members who constituted a kind of druidic sect within the management hierarchy. For the son, who graduated to the title of plant manager within 18 months, such secrecy seemed outmoded at best and dangerous at worst. Without the raw data, he wondered, how could responsibility be fixed for bad decisions or incentives provided for good ones? Who cared about "doing better" when nobody could point out where you'd gone wrong in the first place? Tending to his own garden first, he established a system of in-plant controls to measure variables like cost per pound and number of pounds produced per manhour; companywide, however, such measurements were simply nonexistent.
"These were nice people who were very loyal to my father," says the son, speaking of the management generation that preceded him, "but they were also people who were highly suspicious of sharing any information with 'outsiders.' That might've worked when the 'outsiders' could be shuttled off into the plant or the sales office, but when they took over the financial side and started opening up the books, it really caused some antagonism here."
Prince had other problems to tackle as well. Many of its acquisitions were small, family-run concerns with antiquated plants, serious debt problems, and slim management pickings; as the son later put it, "The combination of lousy assets, very small brands, and nonexistent management brought no synergy to the party at all." The old guard in Lowell wasn't eager to move away and run these acquisitions, and Joe was reluctant to displace old friends. Drafted on one rescue mission, his son headed for Michigan and promptly took over a dilapidated, money-losing macaroni plant sitting squarely in the middle of Detroit's riot zone; he eventually folded the business into a far more viable acquisition, Vivison Macaroni, thereby creating Prince Macaroni of Michigan Inc., to this day the company's major link in the Midwest.
Returning to Lowell, the son began to challenge some of the old man's assumptions. Like his father a generation before him, he decided to put Prince's money where his own mouth was, to give himself a goal. I can make the company its first $1-million profit ever, said the firm's newly designated executive vice-president, but if I do, I want a free hand to spread that cash around as I see fit. Figuring he had little to lose, the father agreed. Largely on the strength of Joe II's efforts to start packing private-label products, Prince's sales rose from $22 million to $27 million in 1969, with pretax profits soaring to a little more than $1 million; a year later, the same numbers climbed to $29 million and $1.3 million, respectively. Joe II dipped into this earnings pool to reward key executives. For the first time ever, incentive bonuses higher than $1,000 (as high, indeed, as $10,000) were ladled out, a harbinger of things to come.
