The Remote Control CEO

Tweet

The Risk of Having to Be Charismatic

Barely into their thirties, many of Applegate's employees grew up with the company. Most don't know what a traditional corporate job looks like, and maybe that's why it doesn't seem to faze them that their CEO and two of his top three managers work remotely. Sundholm started at Applegate in 1999 but moved to Detroit in 2002 so that he and his wife could be closer to her family. Kuykendall has never worked on-site. When she speaks on the phone with McDonnell, she keeps notes from their conversations. After they talk, she often e-mails him to make sure they're on the same page.

Chief of operations Rob O'Donnell, the third leg of McDonnell's management team, comes into the office every day. He's been with the company 11 years and he's developed a knack for taking McDonnell's abstract ideas and transforming them into database tools. He's a nuts-and-bolts operations guy who used to oversee just about every department until Kuykendall and Sundholm were hired. "I had a hard time giving up the idea that I was running everything, but the company's growth put a lot of pressure on me," he says. "For the longest time, most of us were in jobs that were over our heads. Now we've crossed the line and we need people who know what they're doing."

Part of the professionalization process has been a $350,000 investment in the corporate offices. Up until last fall, his employees worked out of a building that many described as "a dungeon." But it dawned on McDonnell that while his brand had earned a certain cachet in the marketplace--clean, wholesome, trustworthy, natural--his employees were working in dismal conditions. "I realized that a good brand with a lousy internal projection is not successful," he says. And so he threw himself into an internal branding effort. He leased 9,000 square feet of space in a modern six-story office building and rebuilt it with 70 workstations, complete with rolling screens, canopies, and noise-reduction technology. Around the periphery, he built rooms to reflect specific themes: one with a ship motif to remind employees that "we're all little boats on a big sea"; another with vivid kids' paintings of giant hot dogs and farm scenes; another with four headless, limbless mannequins dressed in farm clothing to represent "the people who bust their butts on the farm." There's also a meditation room, filled with large floor pillows and decorated with Buddhist wall hangings called thankas.

While employees seem grateful, they're still making sense of the changes. "There's a connection between the design and what the company does," says supply-chain manager Mark Wojciechowicz. "It's about the food, doing things right, and the environment." Still, the meditation room, for example, is a puzzle for some. "No one uses this room," says one employee.

For McDonnell, the new office is a physical manifestation of what he believes Applegate's culture should feel like. "The culture is everywhere," he says. "It's in the carpet, the desks, the walls. And if it's not, then it's only in the CEO internally and then it's a distraction. You run the risk of having to be charismatic."

Steve has some rough edges. He can be tough to be around. If he's at the company on some days he might do more harm than good.

My Job Has Vaporized no one would confuse McDonnell with Herb Kelleher. He's not a coach or an entertainer or a paternal presence. "Steve has some rough edges," says Vogt. "He can be tough to be around. If he's at the company on some days, he might do more harm than good, and he knows that. How may CEOs have that self-awareness?"

If McDonnell ever forgets his limitations, he can rely on his therapist and a wife who "kicks my ass when I need it" and a cadre of CEO pals to keep him on track. Last summer, for instance, he traveled to Boulder, Colo., to meet with Mo Siegel, founder of Celestial Seasonings; Mark Retzloff and Barney Feinblum, both formerly with Horizon Organic Dairy; and Anthony Zolezzi, co-founder of Pet Promise, a natural pet food company. He wanted to discuss his own evolution from founder to CEO. His friends told McDonnell to beef up his management team and to consider parting with some of his equity as an incentive to key employees. And they confirmed his instinct that Applegate has the potential to be a much bigger presence in the marketplace. But they were also a bit in awe--not one of them had managed to retain a controlling interest in their companies when they reached Applegate's size.

And so McDonnell is doing things often done by CEOs of companies half Applegate's size: professionalizing; putting in management systems; figuring out his own role. "The job that I've done for 18 years has vaporized," he says, as he paces around his home office, pausing to gaze out the window at the farmland beyond his property. The thought of his own obsolescence seems to make him wistful and excited at the same time: It's what he intended all along.

Related Content

How to Run Your Company in Your Pajamas

Stephen McDonnell's tips on how to be an at-home CEO.

Donna Fenn's book Alpha Dogs: How Your Small Business Can Become a Leader of the Pack will be published by Collins in December.

 PREV  1 | 2 | 3 | 4 

Donna Fenn is the author of Upstarts! How Gen Y Entrepreneurs are Rocking the World of Business and 8 Ways You Can Profit From Their Success (McGraw-Hill, 2009), about ways Gen Y is changing the entrepreneurial landscape. @donnafenn