Create Jobs, Eliminate Waste, Preserve Value

De Munnik started spinning. Preserving the shape and patina of each pattern, he assembled the pieces into tables, clocks, sculptures, and wall hangings of fabulous beasts he called Machinas. "They kind of build themselves once you start playing with the parts," says De Munnik, leading me around an otherworldly gallery suffused with low light and ambient music. "You see a wing, then you see a face, then a leg. Or you can do it the other way. I decided I wanted a Jurassic turtle and went looking for the shapes and parts."

The works of art, many priced in the thousands of dollars, don't have an obvious market in Beloit, but Hendricks expects interest from corporate buyers and affluent consumers once word gets out. Bank of America (NYSE:BAC) bought five pieces this year--a nod, Hendricks says, to its industrial customers. "If we made enough of these we could haul them out on a semi," says Hendricks, gesturing around the vast atticlike space where hundreds of thousands of forms await transformation. "We could take them to San Antonio, Santa Fe, Rodeo Drive, Merchandise Mart in Chicago. Those people have money and would appreciate the uniqueness.

"Even if we only got $50 apiece for them, 50 times 500,000 is $25 million," says Hendricks. "That would have taken the Beloit Corp. out of bankruptcy."

I love the pattern story because it richly illustrates another of Hendricks's favorite themes: You can tell what people value by what they discard. That belief is ingrained not only in the business, but also in the Hendricks clan. Perched on a stool at Skip's Friendly Village, Diane Hendricks tells me about her first date with Ken, during which he accosted a departing restaurant patron to request the uneaten half of his sandwich. Diane, who is an executive vice president at ABC and president of her own insurance company, then leans down the bar to ask three strangers if they want her leftover pizza.

On his visits to distributorships, Hendricks is forever astonished at how much waste he sees. Many businesses fail, he believes, because management doesn't value the right things. "Maybe somebody nicked a little bit of roof edging in a warehouse, and they say, 'Ahhh, it's scrap. Throw it away," says Hendricks. "Well that's $30 or $40, and at a 20 percent margin you've got to sell that five times before you're back to breaking even. You've got customers who are building a shed or something and they'll pay 80 percent for that."

To hammer home his point, Hendricks often drags bemused managers out to their own scrap heaps. If the day is windy, he'll pluck a $20 bill from his wallet and let a gust carry it away. Invariably the manager takes off after it. "He's running down the block to get it, and when he comes back I'll say, 'Was that pretty hard?'" says Hendricks. "And he'll say, 'Yeah.' And I'll say, 'Just take this out of the trash and sell it to somebody and you've made $20.'"

If wasting building material is a crime in Hendricks's eyes, wasting people is a sin. Repeatedly he rails against "sick" cultures that don't nurture employees, or that simply discard workers as Beloit Corp. did. ABC, by contrast, invests $15 million each year (.5 percent of sales) in training and employee development and returns 51 percent of after-tax net income to the work force in bonuses. Close to half of the company's managers making an average of $100,000 or more started out as roof loaders, warehouse workers, or truck drivers.

Hendricks's anger over wasting people extends beyond business to society. Any injustice to the common man rankles. At a rally for a county sheriff's candidate he lambastes (to loud applause) political forces impeding his plan to expand services at a halfway house that he created from a vacant nursing home. "Why wouldn't you give these people every chance to make it?" he argues in frustration. Back at ABC, he rises suddenly from his chair and urges me out into the hall to view a print titled "Last Stop Before Home." The drawing depicts a flag-draped coffin deserted on a bench at a train depot. Hendricks is a rock-ribbed Republican and supporter of the Iraq War; his cheeks mottle as he laments public ingratitude for the sacrifices of soldiers.

It's as though he worries money will tarnish his regular-joe creds. So he is humble but not modest. He boasts that he has two company jets and then boasts harder that he rarely uses them.

Hendricks gets emotional one other time in our two days of conversations. He is showing me around the Pits, his nickname for the game preserve on which he lives. Constructed on the site of the gravel pit that rebuilt Chicago after the Great Fire, the Pits comprises 200 acres of land and 100 acres of water enclosed by an eight-foot chain-link fence. Although the grounds are roomy enough to host large functions--every week the Hendrickses invite 150 employees or community members to enjoy a cookout, fishing, or winter sports--the house itself is modest.

 PREV  1 | 2 | 3 | 4 | 5 | 6  NEXT