Vacations, sick days, work schedules -- those are fuzzy issues at Morningstar. "Rather than having an elaborate scheme of expected work hours, maximum time off and so forth," it says under "Time Off" in the Employee Handbook, "we prefer to give people the freedom to decide what is appropriate in their particular circumstance."
Yes, well. Of course, what happens when you have a policy like that is most people end up working more than they would otherwise, not less, especially when the boss never seems to take a vacation. That may be why last Christmas everybody in the office chipped in to buy Mansueto a week at Vic Braden Tennis College, in San Diego, for several thousand dollars. They stole his date book, found an empty week, and wrote Vic Braden in. "We had to," says Sutton. "He's one of those people who wouldn't do it for himself. That's what makes him so likable."
* * *
Mansueto is such a nice guy that no one has ever seen him get angry. OK, once. It was years ago. A hard disk crashed, the backup hadn't been done properly, and Morningstar was out a week's worth of data entry. Everybody else was in convulsions, "turning purple and screaming and cursing," as Rekenthaler puts it. And Mansueto? "Joe was standing there saying, 'Rats. Oh, rats."
Is he too nice? That's a reasonable question. For as Morningstar enters its second decade, Mansueto is facing a host of unprecedented challenges. Of the many factors that fueled Morningstar's phenomenal growth, two -- a monopoly in its market niche and ever-rising stock prices -- no longer apply. Last November Value Line Inc., a cash-rich public company best known for analyzing individual stocks, launched a copycat mutual-fund service. In February the stock market peaked; most mutual-fund investors have been losing money ever since. MMF's circulation is down 10% from its early-1994 peak. Morningstar Japan, which covered Japanese stocks, proved so disappointing Mansueto discontinued it this past summer. The upshot is that 1994 sales are expected to rise only about 30% to 35%, to about $30 million. "That's not bad by itself," says Michaels, "but compared with other years, it's shocking."
Morningstar's future is in Mansueto's hands, that much is obvious. One thing he hasn't delegated is control of the company. And in the past, time and again, Mansueto has responded to challenges aggressively, in a way that would seem to belie his mild manner.
"Joe's always got the pedal to the floor," says Rekenthaler. "Joe's always thinking growth. He was the one who was pushing three years ago to have our product on CD-ROM, when nobody knew what a CD-ROM was. Joe was the one doubling our space in the Monadnock building in 1989. As far as I can remember, our business had been flat for 18 months. We were looking at each other, saying, 'My goodness, this is crazy.' He wanted to plan for growth no one else saw. That really is where Joe is indispensable."
There were always safer ways to go. Mansueto might have used MMF, the flagship product, to generate a torrent of cash flow, abandoned product development, done a public offering, paid off the shareholders, and gone home rich a long time ago. "That never even entered the picture," says Gillis, a member of the strategy committee. "From day one he's taken the cash and invested it in the company."
Toward what end? There's a grid Mansueto will draw for you. One axis is for modes of delivery: annual, monthly, and biweekly publications; floppy disks; CD-ROMs. The other axis is for databases: mutual funds (open and closed); variable annuities; ADRs (American depository receipts, or foreign stocks traded on U.S. exchanges); foreign stocks. The goal, Mansueto explains, is to expand the database axis to include coverage of U.S. stocks, putting Morningstar in direct competition not only with Value Line but also with Moody's and Standard & Poor's, and finally, to establish Morningstar as "the world's leading provider of financial information."
"I really think in business you get rewarded for boldness," Mansueto says. "There's a saying by Goethe, 'Whatever you think you can do or dream you can do, begin it. Boldness has a genius, a power and a magic about it.' If you can do something bold, all of a sudden you're on a different plane. It's important to keep doing that. That's the fun of doing this."
TOP 10 THINGS JOE MANSUETO IS LEAST LIKELY TO SAY
By Joe Sutton, CFO, Morningstar
10 "Let's go to Taco Bell for dinner. I hear they have free pop refills!"
9 "I have a black-tie affair this weekend. I'm so excited!"
8 "My subscription to People is late again!"
7 "I think I'm going to spend the afternoon working on my tan."
6 "I'm knocking off early today to catch the end of the O.J. Simpson trial."
5 "Before we launch this product, we need to do extensive market research."
4 "I think [insert employee] is doing a terrible job!"
3 "Let's rename the company -- Mansueto Analytical Services!"
2 "I think Jean does a great job with Value Line."
1 "You're fired!"
