A look at the two winners of the 1994 Master EOY titles, their companies, and the runner-up.
Master Award winners Dick Egan of EMC and Ely Callaway, now of Callaway Golf, couldn't be more different. But the ways their stories affect us couldn't be more the same
Master Entrepreneur of the Year
An individual who has maintained company-building and management excellence over the years
Callaway Golf, Carlsbad, Calif.
Founded in 1982
$254.6 million in 1993 revenues
$42.8 million in 1993 profits
EMC, Hopkinton, Mass.
Manufacturer of mainframe storage devices
Founded in 1979
$782.6 million in 1993 revenues
$127.1 million in 1993 profits
Charles M. Leighton
CML Group, Acton, Mass.
Owner of specialty retailers and sporting-goods manufacturers
Founded in 1969
$645.5 million in 1993 revenues
$96.5 million in 1993 profits
Here's Ely Callaway of Callaway Golf, formerly of Callaway Vineyard & Winery, past president of Burlington Industries, holding court at the golfers' trade show in Anaheim, Calif., a gray-haired lion (75 years old!), the folds that crisscross his face like the hideously complex rigging on a 200-year-old ship of the line. He's perched, ankles crossed, on a black-canvas director's chair, country-club formal in khakis, a blue blazer, and a yellow tie for color, accepting his due from the masses -- suppliers from Tokyo; retailers from Hong Kong, Singapore, Las Vegas, and New York City ("your stuff is like gold in the store"); and ordinary mortals from all over who ask nothing more than to shake his hand. "I'd wish you luck," one says, "but you've already used your portion." Maybe, maybe not . . . but, yes, this is a very lucky old man, still working, still listened to (now more than ever), a secular shaman whose age -- far from being a sad fact -- is at least half the point.
And here, two days later, at the opposite end of the continent, is Dick Egan, chairman of EMC Corp., on the go in his big black Cadillac, in and out of red-brick office buildings on the fringes of Hopkinton, Mass., stopping here to make a sales presentation to Morgan Stanley, there to scout locations for a ribbon-cutting ceremony the governor has promised to attend. He chain-smokes Salems, pausing to make his points and catch his breath, all red-faced and chubby-cheeked.
"It's IBM, Stupid!" says the sign propped against the window back in Egan's office. The metal desk in the office is a remnant from Egan's days as a manufacturers' rep peddling office furniture, before EMC had captured from IBM enough of the market for mainframe storage devices to put EMC on the Fortune 500 and Egan himself on the Forbes 400. And on the bulletin board behind the desk is a black-and-white snapshot: four men in tuxedos, one of them Egan, one of them Louis Gerstner, chairman of IBM. "That's a ceremony at Boston College where they gave him an honorary doctorate degree," Egan explains. "I contribute to BC, I got a lot of friends there. I knew he wasn't an alumnus, I knew he hadn't given them a dime, and I was fucking bullshit!" That's a knife stuck in the picture, right through Gerstner's heart; and while Egan tells the story he leans on it, drives it in another eighth of an inch, and gives it a little twist.
Ely Callaway and Dick Egan, cowinners this year in the Master Entrepreneur of the Year category, are two fabulously wealthy, extraordinarily successful businessmen, but they're also something more than that. Call them American archetypes: Callaway, the child of privilege and breeding who had something to start with (quite a lot, really) but wanted more and pursued it, and kept pursuing it, like an American pioneer who, say, walked away from his sturdy log home and productive farm in Wisconsin for the promise of still more riches and more freedom somewhere farther west. And Egan, not exactly an immigrant (his father was born in the States) but a lot like one in temperament, forever reaching for something he's missing, fundamentally alone, driven to succeed -- to lift himself up -- by anger and fear.
The judges liked them both -- or, rather, each judge had his or her own strong personal favorite. Achieving a consensus proved impossible; the group might as well have been trying to agree on chocolate or vanilla ice cream. Three times they voted, and three times they split, right down the middle. Neither camp would budge.
"Callaway is wholly inspirational," was one judge's view. "Talk about texture and depth -- here's a guy who takes his hobbies and makes them star businesses. Wine and golf. This guy is the epitome of a master -- someone who inspires. He gives you that feeling of hope."
"You talk about inspiring," said another. "Egan comes from a blue-collar background; he struggled personally. It's a real rags-to-riches story. Starts this company in a market that isn't growing and does phenomenally well. He's very impressive on many, many counts."
We have, then, two winners, one utterly unlike the other in nearly every detail, yet each with the same undeniable power to elicit a passionate response from the rest of us. Listening to the two stories, we feel, along with the judges, awe and fascination.
What draws us to them?* * *
Ely Reeves Callaway Jr. comes from the Callaways of La Grange, Ga. La Grange is a Deep South place, a little piney-woods town 60 miles southwest of Atlanta, near the Alabama line. Abner Callaway, Ely's grandfather, was a Baptist preacher who owned 40 slaves (or maybe just 20, Ely admits later, amending his story). All that the family had, it lost with the war, and afterward Fuller Callaway, Ely's uncle, started over again, accumulating wealth in "the typical way a Southerner got something," says Ely: farming first (enough to eat, plus cotton for cash), then dry goods (Callaway's Mammoth Department Store), then a bank (La Grange National Bank), then cotton mills (Callaway Mills). "He was the original Sam Walton," Ely says proudly. Practically the whole town worked for Ely's uncle, including Ely's father. When the time came, the father's advice to his only son -- fresh from Emory University, where he had studied history and had been president of his class -- was this: "Don't go to work for the family."
So Ely (rhymes with feely) began instead at the Trust Co. of Georgia, as a runner in the factoring department. But it was June 1940, and rather than let events dictate his future, Ely, wanting somehow to do his duty without interrupting his private progress in business and in life, took an army-reserve correspondence course and six weeks later received his commission. The army sent him to Philadelphia, to the quartermaster depot, the apparel-procurement division. "Pure luck," Callaway says, denying that family influence played any role. "I didn't want to go get shot at. I didn't do anything to avoid it, but I wasn't dying to go out and be a hero."
After his year was up Callaway could have gone home -- 22 of the 25 junior officers he started with did -- but he chose to stay. For by then he was fast gathering responsibility: he was the head man in charge of cotton clothing, a major at 24, the boss of two lawyers and 70 civilians. He was also a friend to Levi Strauss, Hart Schaffner & Marx, and the Arrow Shirt Co. as the buyer of some 70% of the total production of the U.S. cotton-apparel industry. When the war ended, Callaway turned down offers from several manufacturers and went to work instead for a supplier -- Deering, Milliken & Co. -- figuring, shrewdly, "the best thing I can do is get a job selling to the people I've been dealing with."
So began Act I of Callaway's brilliant career, in textiles. He rose quickly at Deering, Milliken. Maybe too quickly. Roger Milliken fired him in 1954 after he ran afoul of Milliken's brother-in-law, Dick Stroud. (That was a "real emotional blow," Callaway says. "I felt bad for about a week.") He landed on his feet, of course, at Textron, under chairman Royal Little, where he oversaw the merger of American Woolen, in Lowell, Mass., and Robbins Mills, a modern southern upstart. It was a huge job -- shutting down American's cavernous, antiquated mills, salvaging what equipment and trademarks still had value, and transferring operations to the South. After he succeeded, and after Textron sold Callaway's division to Burlington Industries, Callaway went along, too.
He was married now, with three children, a true New Yorker with a big house in a leafy Connecticut suburb and an apartment in the city -- making his own way in the family line of work, yes, but not in the family business, and that was the key. In 1968, the same year Callaway Mills passed from family hands (to Deering, Milliken), Ely ascended to be the president of Burlington, "the biggest textile company on earth, that the planet has ever known," says Callaway, his voice rising in pitch and volume. "By double!" He was 48 years old.
And all that, it turns out, was a prelude. Two acts would follow, and the drama would build. Callaway's goal at Burlington was the chairmanship -- nothing less would do -- and when he was passed over, in 1973, he quit. He walked away from corporate heaven, fled the East Coast, and moved to California to make wine. It's impossible to imagine Callaway doing anything rash, and the decision to leave Burlington was anything but. He had told the board members years earlier that he'd leave if they ever gave the top job to somebody else; he even told them about the land he had bought and the grapes he was planting, just in case.
And so Callaway became a wine maker in Temecula, Calif., which these days calls itself a wine region. (The vineyards vie for space in the valley with clumps of orange-tiled adobe subdivisions that call themselves Chardonnay Hills and Vintage Hills.) But 21 years ago it was by no means an obvious place to plant grapes, sitting as it does in the middle of a desert triangle formed by Los Angeles, San Diego, and Palm Springs. Callaway was first. He gambled big-time, with his own money. ("I want to keep my friends," he says, explaining the principle.) The risk paid off spectacularly in 1981, when he sold his vineyard to Hiram Walker for $14 million. And so the curtain fell on Act II.
Callaway, by then past 60, was entitled to take it easy, maybe play more golf -- he'd been a tournament champion in his youth. And so he did, until one day shortly after cashing out, he came across a hickory-shaft club with a steel core. He liked it so much he bought its four-month-old manufacturer from the founders, who had run out of money and were looking for help, and put his own name on it. Act III. Callaway sold golf clubs the same way he sold wine: with a story. With the wine, it had been the genealogy of the grape, the slant of the slope, the caressing breeze that carried cooling moisture from the ocean. Now it was gun-barrel production techniques, exotic metals, and an oversized driver named for Big Bertha, the World War I monster cannon that could drop a shell on Paris from six miles out. Today Callaway Golf -- not Spalding, Wilson, or MacGregor -- is the industry sales leader, with revenues of $255 million in 1993 (up from $132 million in 1992 and $22 million in 1990) and a 17% after-tax profit margin. In February 1992 Callaway took the company public, and since then, through the third quarter of 1994, the stock price has risen sevenfold. The total value of shares outstanding has come to exceed $1 billion, of which $86 million (including options) is in Callaway's personal account.
"He considered himself very fortunate in all that happened to him in his life." That's what it will say on Callaway's gravestone; he's already put it in writing. He's not talking about good luck -- of the kind that brings gifts that maybe a person doesn't deserve -- but an absence of bad luck, the killing kind that derails hope and undermines industry. "Most people have quite a bit of bad luck," he says simply. Then, building to a falsetto crescendo, "I don't think I've had any bad luck."* * *
Dick Egan grew up in a three-decker (middle floor) on Minot Street, in St. Brendan's Parish in Dorchester, in what was then (in the 1940s) Boston's Irish ghetto. He had his own room, and so did his sister, but his parents slept in the dining room. The family therefore ate meals in the kitchen, at a wobbly table that made Egan feel ashamed as a small boy. When he finally got a job at a cobbler's shop ("I started as a shoeshine boy, then I worked on women's heels, then I went to men's heels, and eventually I did soles"), the first thing he bought with his own money was a present for his mother and father: a chrome dinette set with padded vinyl upholstery. The second thing he bought, for himself, was a radio. "I loved that goddamn radio," he says.
Egan's father worked as a meatcutter at Cifrino's supermarket, right behind the house. Paul Cifrino was also the landlord, and when he chose to erect a maintenance building next to the supermarket, he took away the Egans' backyard. Egan had lots of jobs while he was growing up, one after another, sometimes overlapping, until, he says, "work became a habit." He delivered newspapers. The route was huge, traversing three parishes, and every day after he finished, he stood on the corner of Adams Street and Gallivan Boulevard, in front of the Eire Pub, and sold the extras. He fixed cars. He was a bundle boy at Cifrino's and later a cashier, and later, briefly, a meatcutter like his father. ("They start you off with chickens, then you go to pork, then you go to steaks, and the hardest job is boning a chuck.") At home there were always chores: every night, he filled the furnace in the basement with coal; he carried kerosene upstairs to the kitchen stove. ("You had to flip it fast so it wouldn't spill.") But the chore he detested most -- even more than fetching his father from the barroom on Friday afternoons -- was delivering the rent money to the supermarket on the first of every month.
He did it because his mother made him, but he hated it, hated the long climb up the stairs to Cifrino's office, hated the condescending way the staff looked him over once he got there, hated most of all how scrawny and insignificant he was made to feel. Like a "dead-end kid," he says, "like you see in some of those old movies." Egan never forgot that feeling. Years later, after he'd become a millionaire many times over, he tried to buy the supermarket from Cifrino's son (ostensibly to help a friend in the catering business). He went there himself to make his offer, found Paul Jr. sitting in the same palatial office above the store where the elder Cifrino once sat, told him who he was (Cifrino had no idea) and what he wanted -- and was refused. "I hope the place blows up with you in it," were Egan's parting words. "Take it with you to the grave."
Egan had two models as he grew up: failure, embodied by his father, who was a drunk, a marginal provider, really "a disappointment" is how Egan sums him up; and success, in the person of his grandfather, his father's father, an Irish immigrant who somehow cracked the Brahmin world of Boston finance, who managed investments for a living. Egan's grandfather lived in a big house in a fancy suburb and had a summer place in Pembroke where Egan made "a lot of classy friends." Once, when one of those friends gave him a lift back to town, Egan insisted on getting out of the car at the corner and told his friend he'd walk home. "I wonder why I remember that. I guess it's because the whole 22 miles from Pembroke to Dorchester I kept thinking about it and worrying about it."
Egan never did solve the family riddle; he doesn't understand to this day why his father never went to college, where he lost his footing, or really how, in the end, he managed to fall so far behind his own father's hard-won position on the social ladder. Egan's father was a warning, a living preview of disaster, in the same camp with the ditchdiggers by the side of the road that his mother was always pointing out. "Gee," she'd say, "I wonder why he didn't go to college."
Egan graduated from Boston Technical High School in 1954, enlisted in the marines, and caught the end of the Korean War. (A helicopter crew chief, he once helped pull a pilot from the water.) Eventually, he enrolled in Boston's Northeastern University on the GI bill. In his freshman year he married his sweetheart from the neighborhood and started a family right away. He chose as his major electrical engineering (because he was good in math and because, when he was preparing for his college boards, he had read a magazine article that showed "electricals made more money than mechanicals, who made more money than civils"), and made it through in five years on the work-study program. College was not fun for Egan; the stakes were way too high. "If I didn't make it, I'd be on the poles or in the holes, you know? I'd be working for Edison or the telephone company. I went through college scared out of my wits the whole time, scared to death I'd flunk out."
Afterward he interviewed with a dozen computer companies. Not with IBM, though. Egan had a thing about IBM even then, ever since three of his buddies from Northeastern went to Poughkeepsie one weekend to take an IBM employment test and raised hell the night before at the hotel ("drinking beer," says Egan, "watching King Kong on the late show"). Told by the Blue Suits who reprimanded them that perhaps they weren't IBM material after all, they took the test anyway, the story goes, and got the three highest scores in the group, at which point the Blue Suits smiled and offered them jobs. "My friends," Egan says proudly, "took their hats off coat hooks one, two, and three, put them on their heads, and said, 'IBM, va fa'n culo!"
Egan got the job he wanted most, at Honeywell, and enrolled concurrently at MIT, where he helped develop a guidance system that was later deployed in the Apollo moon shot. That gave him technical credentials, although he failed to complete his graduate degree; after he left Honeywell for a sales job at Lockheed, he never returned to the lab. There followed stints at Cambridge Memory Systems (later Cambex), which he helped found as vice-president for sales and marketing; Intel, where he engineered the turnaround of a laggard division and came away with "a fair amount of dough," most of it bonus money; and Cambex again, which had faltered in his absence but which he helped revive. Then, in 1979, with the capital he'd been hoarding, and with help from Roger Marino (a classmate from Northeastern, the M in EMC) and an unnamed Mr. C (who dropped out after they'd registered the name), Egan went into business for himself.
EMC, when it started, was a company with no product or defined market. Egan and Marino got going on the idea that they could do as well working for themselves as they could for somebody else -- or better -- and that was the extent of their business plan. "I knew we'd eventually be designing, developing, manufacturing, and selling something," Egan says. But what? Office furniture. Sure, they felt funny selling desks -- two guys with their experience, and with degrees in electrical engineering -- but it helped the cash flow, and most important, it got them where they wanted to be: inside New England's high-tech industry, in contact with purchasing managers and engineers. It was while Egan was paying a sales call one day at the University of Rhode Island, trying to sell a DEC-compatible memory system made by Intel, that he found out what the university's lab really needed was more memory, at a better price, for its Prime Computer systems. "We figured out how to do it," Egan says, "and hit the market with that, and we were off and running."
DEC-, Wang-, and IBM-compatible products followed, and in 1990 EMC introduced the technology for which it is best known today, the bundling of arrays of disks to handle the massive storage and rapid-retrieval demands of IBM- mainframe users. EMC went public in 1987, survived two down years tied to a product glitch (later traced to face powder from Japanese assembly-line workers), and has lately soared. Sales more than doubled in 1993, to $783 million, while net income quadrupled, to $127 million. Egan's EMC stock alone is worth nearly half a billion dollars.
"There's got to be a they before there's a we," says Egan, paraphrasing somebody, he's not sure whom. There has always been a "they" -- Cifrino and his son, the classy friends on the Cape, IBM -- always someone for Egan to set himself against, someone to fight and unseat. Rich as he is, Egan now burns as hot as ever. He stokes the fire in his employees by making bets against them, by giving them big odds on meeting a product deadline or on solving an engineering riddle and then putting up his own money and demanding they do the same. He hopes like hell he'll lose, because then, of course, the company wins, and Egan gets to play the tough guy in front of the troops and pay the winners in cash. He likes to show up unannounced, with all the money in $20 bills, stuffed into a briefcase. The last time he lost, he paid out $80,000. "I've got a lot of money," he says. "Money's not a problem."
And the "we"? That's his company and his family, which in many cases are one and the same. He has three sons and one daughter, all of whom have worked for EMC at one time or another, all of whom, he says proudly, are millionaires. Two sons run the family capital-investment firm (real estate, mainly), Carruth Capital, named after the finest street on Egan's paper route in Dorchester. The other son is EMC's vice-president of sales and marketing. Egan's wife, Maureen Fitzgerald, is EMC's second-largest shareholder. His sister works in corporate communications. His brother-in-law is the chief financial officer. All over the company -- in telephone marketing, in facilities management, and among the engineers -- are Egans and Fitzgeralds, no apologies necessary. ("He's a good man," Egan says as he passes a young man in the hall. "He also happens to be the father of two of my grandchildren.")
And who's on the board? "Ha-ha-ha! Me, my wife, my son, and my brother-in-law." Plus four others, but they hardly count. "Let me settle the board thing with you," he says. "I want only one thing from the board: compliance. Directors can make only one of two statements. It's either 'I agree' or 'I resign."* * *
Callaway came from money; Egan was poor. Callaway was coddled by an illustrious family that traces its roots to 15th-century England; Egan was on his own, ashamed of his father and his family's place in the community. Callaway played golf at the country club as a boy; Egan played baseball and basketball in leagues sponsored by the Catholic Youth Organization. Callaway went away to a fancy college and studied a subject that interested him; Egan went to a commuter college and studied a subject he hoped would pay off. Callaway did his service Stateside, out of harm's way, in a post that launched him on his career; Egan rode a helicopter during the Korean War, mainly so that Uncle Sam would help him pay for college. Callaway left home after college and never looked back; Egan can't seem to put Dorchester behind him. Callaway's are glamour products -- golf clubs and fine wines; Egan's are commodities -- office furniture and computer storage devices. Callaway has been married four times, and his current wife is the only one who was over 30 when he married her; Egan has stayed married for 39 years. Callaway's children are on their own, scattered around the world, and none has ever worked for him. ("You can't mix business and family," he says.) Egan has a son who lives next door to him in Hopkinton, and he hands out jobs like family chores. ("If you've got kids as good as mine, I'll hire 'em," says Egan.) Callaway voted for Clinton; Egan voted for Bush. Callaway is lean, dignified, handsome; Egan is none of those things. Callaway eats only healthful food, half a turkey sandwich and tomato soup for lunch; Egan likes bacon on his hamburger. Callaway is calm, confident, of regal bearing; Egan is nervous, angry, an alley fighter. Callaway says that in order to be successful, you can't be afraid to fail: "Fear of losing is what inhibits most people and keeps them from being entrepreneurs." Egan says the opposite, that fear of failure is what drives him: "I worry about losing. I worry about failing."
They're flawed -- they share that much. Though we applaud their deeds, would any of us trade lives with either one? How many would choose, for instance, to shoulder Egan's rage, or to cope with the pain and upheaval implied by Callaway's three failed marriages?
And yet we're drawn to them. Like the crowds surrounding Callaway in Anaheim, men and women from around the world, waiting for a handshake, a word, hoping for a moment of concord with a master. Like the judges, stars themselves on a national stage, captivated by the steep, lifting arc of Egan's journey. Like the visitor meeting them for the first time, startled by the vivid empathy each inspires.
They don't show us how to live, but they do enliven us, each with his own dramatic (and dramatically different) expression of what a human being might accomplish -- provided one conquers doubt, banishes ambivalence, sets aside competing claims, and attends mainly to one task. When we look through their eyes, the world is a bigger place. A place where we might dream, and having realized our dreams, dream again.