Well, a few big-company denizens did come to our first soiree that September, but they were mavericks: Tait Elder and Ken Schoen, from 3M; Ken Stahl, head of Xerox's Skunk Works, whose new products almost singlehandedly kept that company alive during its doldrums; crazy Nancy Badore, a renegade at Ford; Ren McPherson, Dana's former chairman; and a handful of others. But about two-thirds of the attendees were these other people -- Burr; Perdue; Williams; McCoy; Leonard; Vieve and Bill Gore, from W. L. Gore & Associates; Don Vlcek, from Domino's Pizza; Joe Stegmayer and John McConnell Jr., from Worthington Industries; and so on. Not that we had held back on inviting the Fortune 500. They just hadn't shown up.
Nor did the meeting proceed as my partner, Bob Le Duc, and I had planned. We wanted to talk theory. ("Just what is excellence, anyway?") The entrepreneurs wanted action. Leonard would take dozens of pages of notes during the day and then implement half the damn things before dawn. Perdue was on the phone from California to Maryland at 3 a.m. each morning, bellowing orders. (As a direct result of the meeting, Perdue Farms Inc. installed a new, quality-based compensation system for executives and later started a corporate training college.) And our poor Fortune 500 attendees! In their own world, they were the action faction, but here they were constantly taken to task for being insufficiently practical.
Yet somehow I managed not to see what was happening, and I kept not seeing it, even though the patterns didn't change. In the following months and years we continued to wait for the big companies to descend on us, but they never came. Today, after 23 such sessions, our most loyal Skunk Camp customer is Buckman Laboratories -- a $128-million specialty-chemical manufacturer headquartered in Memphis.
On the other hand, I couldn't ignore the evidence about the economy, and the deepening troubles of the giant firms. I read The Wall Street Journal, after all. I also read Business Week's famous "OOPS!" cover article, which reported the sagging fortunes of some of our In Search of Excellence superstars. The magazine didn't get it quite right -- singling out Digital Equipment, Hewlett-Packard, and Walt Disney as prototypical stumblers, for example. (They have all made brilliant comebacks.) But I had to admit there was much truth to the criticisms. We had done our research in 1979, when many of these companies were still living off the fat of past successes achieved in a placid environment. We had badly misjudged the coming instability and the difficulty they would all have in adjusting, from IBM to Kodak to Intel.
My direct contacts with them did nothing to ease my concerns. There was, for example, a 1985 meeting with IBM's national accounts division, the elite corps of salespeople who deal "top to top" with a Sears or a GM. They epitomized the Watson principles of customer-relationship management -- and they were totally unsuited to compete in a world dominated by decentralized computing. In retrospect, it was like attending a buggy-whip manufacturers' convention three years after the first Model T rolled off the line.
Seminars with Fortune 500 managers also filled me with despair. They came. They applauded. They bought my books and tapes. But they were a desolate lot. Though I talked common sense -- telling stories about Stew Leonard, Frank Perdue, Carl Sewell, and the like -- it was not the kind of common sense their companies practiced, and they knew what they were going back to. In an odd way, I found the semi-optimists among them most depressing. They would regale me during the breaks with little success stories. Then they would invariably say something like, "Of course, top management doesn't get it. They just stare."
But the nadir for me was a humid evening in Palm Beach, Fla., in December 1983. Gilbert Kaplan, founder of Institutional Investor magazine, had pulled together a horde of Fortune 500 chieftains and their spouses for his magazine's annual gala. I was the hors d'oeuvre, the opening-night dinner speaker. From the look of the crowd, you would not have guessed these companies had any troubles at all. I've never seen so many diamond necklaces in one place at one time. It was a scene reminiscent of Nero's Rome -- with the Dr. Feelgood of American management as designated fiddler.
I gave my speech, saving time for questions as we had agreed. I had actually been looking forward to exchanging views with the nation's business elite. Unfortunately, no views were forthcoming: there was total silence. Finally, one brave woman jingled a diamond-bedecked hand in the air and said, "Well, we all certainly believe all this. But how do we get our workers to start acting right?" I don't recall what I mumbled in response. Game, set, match. Take it away, Tokyo. I was stunned.
Fortunately, I had a seminar in Tampa the next morning, where I was joined by Don Estridge, then the leader of IBM's personal-computer group, and Wayne Calloway, soon to become chairman of PepsiCo. Estridge told stories about the team of castoffs that had developed the PC. Calloway talked of the $500 mother-to-son investments that had launched both Frito-Lay and Taco Bell. As I listened to them, the gloom of the previous evening began to wear off.
