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HOW I DID IT

How I Did It: Phil Hanes
 

The long and happy career of a southern rag tycoon.
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Phil Hanes started life as a pampered rich kid. But he quickly learned how to win people's trust and get big things done. He worked his way up the family business, Hanes Dye and Finishing, oversaw its desegregation push, and became CEO in 1964. The company was sold in 1993 for $65 million. The charismatic Hanes has long been a serious champion of the arts, urban renewal, and land conservation. In 2006, at age 80, he wrote his first book, How to Get Anyone to Do Anything. Now, with his 5,000-name-strong PalmPilot at the ready, Hanes still has plenty of persuading left in him. "I just love people," he says.

As told to Andrew Park

I grew up in a fairly well-to-do family, and I guess I was spoiled. I had a miserable time at camp and at prep school, where they didn't like spoiled kids. I got the hell beaten out of me at both places. Finally, one day I'd had enough. I started learning how to make friends with people.

From that, I became a networker. When I got to the University of North Carolina, the more friends I made, the faster I got around. But for lots of reasons I never picked up a book. I made three Fs and eight Ds, and they asked me not to come back. So I had to go to Yale, where my uncle was on the board of trustees. At Yale I got gentleman's Cs.

When I was 16, I decided I wanted to own a restaurant. My parents said to go up to the hotel in Roaring Gap. The man who ran the thing said if you want to run a restaurant, you've got to do every job in the kitchen. I found out why the dishwasher is one of the most important people in the kitchen. He sees what comes back on the plates. The next summer, I was a soda jerk and a waiter and then kitchen manager.

When I graduated from Yale, in 1949, I went straight into the family business. Dyeing pants pockets was our biggest business. In a good year we'd run 100 million yards of material, enough for 200 million pairs of trousers. We were the biggest maker of pants pockets in America. My father said, "You behave yourself and I'll let you be president someday."

He sent me down to Springs Cotton Mills, another big textile company, with an intensive training course for rising executives. I had to run every single machine in the entire plant, everything from unbaling the cotton all the way up through inspecting the finished sheets. I had to work all three shifts, and I had to work in little towns like Lancaster, South Carolina, which had one grocery store, one filling station, one drugstore, and one movie house. Believe me, that was an experience.

When I came back to Winston-Salem, I had to do every job in the office. I did everything but sweep the floor. Then I was a salesman on the road. I got to be a vice president. A few years later I got to be president and, in 1964, CEO.

One of my uncles started Hanes Hosiery, and another started P.H. Hanes Knitting. They merged in 1965 to form Hanes Corporation. They asked us to join them, but we said no. We wanted to be independent. We were in the rag and bag business -- dyeing and finishing cloth for other companies. You don't make money doing fancy little prints and things. But running pants pockets at 200 yards a minute, you can make some money. You're making it on an eighth of a cent a yard.

Any of the employees could walk into my office with a problem. But they seldom did, because I went out in the plant and they'd catch me right there. Usually the problems were matters of communication. One foreman wouldn't let a guy have a trash can because it cluttered the aisle. And that trash can became a symbol of everything. So I sat down with the foreman, and we got an oblong trash can, and that solved the problem.

Every week I'd have at least one meeting with up to 12 guys in the plant. I'd go around the whole plant and I'd show them what we make. Our profit margin was 4 percent. I said, "The reason we're successful is we keep investing in new machinery. It's very expensive. That's bought with profits."

One day, this man we'd just hired said, "Mr. Hanes, I don't believe a single word you have said." He turned out to be a union plant. I said, "OK; well, you get five or six others, and we'll sit down together and see what the problem is." We met at a nightclub downtown during their shift. I had two pitchers of beer set down. I said, "OK, men; let's get at it." And we sat there and drank beer. And by the end, everybody was smiling, and the union plant ended up becoming the superintendent of the third shift. If you've got a leader, you want him to be your leader.

We had black water fountains and white water fountains. We had two locker rooms. In the cafeteria the whites ate first; the blacks ate second. I knew we were going to have to get them together. So I waited until the hottest day of August. And a horrible thing happened. All of the white water fountains went out of order. And the whites had to drink out of the black water fountains. And it was hot as hell. What do you think they did? We took the signs off, and when we installed new fountains, we never put them back.

Then I said, "The black locker room is just far too crowded, far too small." So we built this great big locker room, put in beautiful tiles, fluorescent lights, air conditioning. We said, "We've got more space than we need. Anybody that wants to can move in there." It filled up like that.

We never ever laid anyone off. Whenever business went to hell, we used that time to clean up the plant, repaint, repair machinery, install new machinery. We just lost a little money during that time.

I decided that I would give up the CEO position when I turned 50, in 1976. So I completely reorganized the company. I put in people smarter than I was, meaner than I was, and they took it over. Our president was a real son of a bitch. I never liked him. But like has nothing to do with business. He did a beautiful job.

I let my nephew and this president take over. I was chairman of the board and the second-biggest stockholder. In 1993, they sold the business to Leggett & Platt (NYSE:LEG), a maker of furniture and carpet cushioning products, for $65 million.

The same year I went to work for the company, Winston-Salem was starting an arts council, and it needed men on the board, especially businessmen. I was asked to join. My family had always done civic work. If the hospital had asked me to come work for it, I would have said yes. What did I know about cancer and tuberculosis? I knew more about the arts.

I took art appreciation at Yale. It was one of the hardest courses I ever took. But I learned a lot, and I fell in love with American art. The first painting I bought was a Gilbert Stuart double portrait. I paid $5,000 for it in 1950. I was fresh out of college. The latest value on it is over $1 million.

It took guts to be involved in the arts. One day, the president of the chamber of commerce said, "When are you going to get tired of playing with all those sissy boys and garden-club ladies and come up here and play with us he-men?" That irritated the hell out of me. I said before I die the arts council will be more powerful than the chamber of commerce.

I found out that all national arts organizations want to have a Southerner on the board, but nobody in the South ever thought about going beyond his or her city or state. And so I just held up my hand.

In 1965, President Johnson appointed me to the National Council on the Arts. We were sworn in at the White House. I was the only Southerner and the only businessman. Later, at council meetings, sitting around the table were John Steinbeck, Helen Hayes, Duke Ellington, Leonard Bernstein, Harper Lee, every major artist.

We're in an age of design and creativity. Creative thought is incredibly important in building a company today. The arts are the purest source of creativity. That's why if you want to meet the power structure of the world, go into the arts. When people get power and money, the first thing they gravitate to is the arts.

Lawrence Ferlinghetti, the Beat Generation poet, is a great friend of mine. In 1963, I was visiting him in San Francisco, and he told me to go up to Haight and Ashbury streets. He said, "You will see something that's going to change the face of society." So I went up there. I had a crewcut. This black man walked up to me and said, "Say, man, where'd you get that way-out hairdo?" I said, "Stud, don't you recognize an antique Afro when you see one?" He said, "Man, you come on in here; I'm going to buy you a soda pop."

In Haight-Ashbury, I saw that what makes a city is a wide diversity of people. I remembered that when I decided that I was going to work on revitalizing downtown Winston-Salem. When I became the commissioner of cultural affairs, in 2000, the first thing I said was, "I'm sure we've got some hippies in our downtown." The first place I went was a nightclub in a dingy old cinder-block welding garage. A self-respecting person would not go in there. But inside it was vibrant. A great mix of people. We got low-interest loan money to help fix it up. Now it's beautiful. Everybody will tell you it's the place to be.

The downtown is the heart of the city. It symbolizes whether the city is worth a damn or not. If a city doesn't have fun and games and arts downtown, a show place, it's not a success.

I love my city. I think we now have done a good job, but we're not by any means through.

My wife and I were picnicking up on top of a mountain waterfall in the late 1950s, and this couple who'd built a shanty up there dumped two garbage cans full of trash in it. I said they shouldn't do that. They said, "You're on our cousin's land. You don't like it, get off." So I found out who their cousin was, and I bought the waterfall and the mountain -- 80 acres. I paid about the same price you'd pay for a Cadillac; I think it was $10,000.

I bought 1,100 acres of land around that mountain over about 10 years. I gave it to the state of North Carolina in 1976. It is the largest park in the state. I saved 9,000 acres around Mount Mitchell, the tallest peak east of the Mississippi. And my wife and I saved over 10 miles and 30,000 acres along the New River.

I have a 98th percentile energy level. I have to be doing something. I'm 82, and the idea of retiring is beyond belief. I think every day's more exciting. I wouldn't go back a year.

The way that I have achieved what I have achieved is through people. I just love people. The old saying is "It's who you know, not what you know," and I believe that to be so. I have about 5,000 names in my PalmPilot, and I can connect people all over the world. And through those contacts I've been able to do amazing things.

Last updated: Jul 1, 2008




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