Riley was upset. "I was hoping to have a positive influence on people's lives," he says. "And I could see we weren't moving in that direction." People were just scurrying for their bonuses. Nobody seemed to have the good of the company in mind. There was no teamwork -- even, as it soon became clear, at the top.
One day in the spring of last year Riley and his top three executives met to discuss a new deferred-compensation program for them. In the agreement he asked them to sign, there was a clause that said the deal would become void if they should get fired. Epstein objected to the language of the agreement.
Riley was hurt. He felt Epstein didn't trust him. The argument spilled over into the next day, a Saturday. In an early-morning phone conversation, each apologized for the misunderstanding.
"What is it, Hank?" Riley asked. "Don't you trust me?"
There was a moment of silence on the other end of the line.
In that moment Walter Riley realized how much he hated what he was doing. He had never wanted to ask an employee to trust him. He wanted it to be natural. He was always pushing people right to the line, struggling to get what he needed from them. "A master manipulator," he calls himself. Even if he bribed them with incentives, sooner or later they would rebel by cheating the system or leaving the company or refusing to make an extra effort. "I realized we were not a great company," he says.
* * *
Riley had always equated great with big. That was because he had vowed not to create the same kind of company his father had run. But now he was realizing that G.O.D. was more like Seigle's than he cared to believe. And Riley's role was not that different from his father's: often mistrusting, never satisfied. He had never wanted to be a businessman in the sense his father had been. "I like trucking," he says, "but what I really like is people. I had a vision of a place where people found a lot of compelling reasons to be the best they could be." Rather, they seemed to have compelling reasons to deceive him.
He didn't like the way he felt from day to day. "There's a feeling that I wanted to have," he says. "It's a feeling I'll get when I know that I'm inspiring people and being a role model for lots of people." He did not have that feeling when he begged for Epstein's trust after so many years nor when one of his finest dock supervisors quit after being graded a B.
But as he discussed these problems with his managers, Riley was oddly subdued. Somewhere inside, he blamed himself. He had showered his workers with incentives, assuming they'd shirk their responsibilities otherwise. "As all this happened, a small voice in my head said: 'What did you expect?' " he recalls. "I felt like I couldn't blame them. I felt I could have better results if I acted with more consideration."
That meant not imposing his own goals on the company, not craving growth for its own sake, not pushing so hard to reach $200 million. "I realized that if that was the most important thing, I could do it," he says. "But I'd give a lot of frustration to a lot of people, including myself."
"It wouldn't be worth it to get there this way," he adds. "It was painful because I didn't have any other way. I didn't have any other tools."
It is at this point, of course, that Riley had a choice. He could have decided that there was no escaping the pattern of entrepreneurial myth -- which posits that the company builder whose furious ambition is required to start a business cannot become the manager who nurtures that business once it has grown. He could have decided to do what so many founders in his position have done before. He could have sold out.
Instead, Riley decided to change. Or at least to try to. If he didn't have any tools other than his old autocratic carrots and sticks, then he would find some new ones. He would attempt to become the kind of manager who could lead his company up the next set of steps -- which meant that he had to change his company, too.
Riley had remade Seigle's Express, and then G.O.D., several times single-handedly, shutting out others around him. This time would be much different. To rearrange his company's internal organs, he was going to have to open it up. To keep himself committed -- no more philosophies of the week -- he knew he ultimately needed to involve ev-erybody, to feel as if going back to his old ways would let them all down. "Even if tomorrow Walter found something better than what we're doing," Epstein says, "he realizes we've made a commitment to our people that this is the direction we're going in. If we told them that we'd discovered something better, they would believe nothing from us again."
Riley began by trying to organize his top people into a team. Last August, after attending a seminar given by well-known quality consultant W. Edwards Deming, he invited Epstein, Crawford, and Irwin to do the same. Then they all went rafting together and soared in a hot-air balloon, where they vowed to set G.O.D. aloft. "We decided to turn over the whole company," Riley says.
His attraction to Deming's theories is hardly mysterious. Deming encourages managers to think about the systems they provide for employees, rather than pointing a finger at individuals. Riley had always thought about systems for customers; behind G.O.D.'s success was its original and superior overnight-delivery system. Inside the company, though, "I always focused on individuals and individual accomplishment," he says.
No more. Riley even asked an outsider, William Latzko, to work with G.O.D. as a consultant, attending what have become twice-monthly management meetings. Latzko, a college professor, studied with Deming. At their first meeting Latzko demonstrated how disjointed the company was by asking each of the executives one simple question: Why is G.O.D. in business? He got four very different answers.
Afterward Latzko insisted that the four of them write up a statement of corporate purpose and values. Up till now, he pointed out, the company had provided employees with only short-term goals. So they set aside one four-hour block to get it done. About 20 rough drafts and as many meetings later, they were still at work. Should their mission include specific growth goals? Should they restrict themselves to providing overnight delivery? And what would be the best order to put the goals in? They kept calling Latzko back in, showing him new drafts. "The process forced us to think through our own priorities," Riley says. "We each have compromises in it. We realized we had to be a team to provide any kind of environment for the others." The top-ranked value? G.O.D. would provide "an environment for its people that promotes joy at work, achievement of personal goals, and an opportunity to share in the prosperity of the company."
