This week I had the astonishing privilege of sitting down for a one hour, face-to-face conversation with the CEO of one of the largest companies in the world. I lucked into the appointment through a friend of a friend, but I still can’t get over the generosity of a man who has so much on his plate yet was willing to share time with me. It was an incredible gift.
The first thing that hit me, almost from the second I met him, was a wave of restored faith in corporate America. I walked into the interview with a list of questions that I hoped were important enough to prey on the time of a world-class CEO. But, the meeting didn’t open with the question I expected, which was, “What can I do for you?” Instead, I was disarmed by his genuine warmth and interest as he leaned forward in his seat and said, “Tell me about your company.”
I was surprised to realize that he seemed to have come to the meeting with the same excitement and anticipation that I did. It was a gratifying revelation to find someone whose decisions affect the jobs of thousands of people and whose annual sales are about 200 times more than Lehman’s and yet who is just as caring, humble and, well, “human”, as the next guy. But, building up trust in corporate America was not why I came. I came to learn. So, what did I learn?
Run it like a public company
He was forcefully direct in establishing one of the pillars of success for any privately-held company. “You have to run it like a public company.” He himself had never worked anywhere other than in publicly-held corporations. But, he grew up watching his father run a very successful family-owned business. So, he’s seen both types of companies from the inside.
He told me that nothing is more effective or more strengthening than forcing yourself to honor high standards of transparency and responsibility, even when it’s not required. That means no company car or other “owner-only” benefits coupled with widespread and generous sharing of information. These things are often hard for family businesses to accept. I’ve heard lots of family business owners say, “It’s none of THEIR business.” Depending on the situation, “their” may mean employees, neighbors or the IRS. No matter what is meant, though, keeping information secret is seldom the ethical or even the smart thing to do.
How does Lehman’s score on the “run it like a public company” standard?
In the last 10 years, we’ve gone from sharing nothing to sharing full financial statements with every top manager. All employees see an overview of our financials (admittedly, without many hard numbers). It’s scary for owners to open their books like this. But, so far, I’ve seen nothing but good come out of it. People make better decisions when they have the information they need.
We are also working to build “public company” responsibility. For starters, we have a legal board of outsiders who have the power to fire me or any other family member. And, there are no “owner-only” benefits; every benefit is dictated by corporate policy alone.
“It’s results that count.”
Although he didn’t say it to me, I’ve heard that he sometimes tells others the importance of results using a Biblical warning, “You reap what you sow.” He was proud to point out that his company has consistently beaten its peer group by any financial measure. And, he went out of his way to make sure I knew that this applied equally well to any of the prior CEO’s in the history of his company.
In non-public, family-owned companies, relationships often matter more than ability. In fact, many would say that the priority given to relationships is what makes family businesses strong. I personally believe that we exist to have relationships. It’s the way we are made. But, when it comes to work, our family embraces the concept that qualifications count more than relationships. We hire based on qualifications, not relationships. We promote based on qualifications, not relationships. In fact, we have a written policy in place which was signed by every member of my family acknowledging our commitment to these principles.
I like to think of it as “acting with your head even while feeling with your heart.”
Values Matter
His final point was to have some central values. The way he described them, I envisioned them as the beams that hold up a barn. Those beams cannot be unstable, under-sized or placed on a weak foundation. They must be owned and cared for by every employee.
He told me he spends most of his time communicating their values and their vision for the future. He said, with force, “It’s a full-court press.” The company’s values should be committed to in writing. He said he expects every employee to carry a copy of those written values with them every day. The corporate values should be woven into every meeting and every communication in some form.
At Lehman’s we’re getting this concept. We’ve documented our key values. We talk about them often. But, we probably need to do even more. At a recent employee meeting, I found that most employees still could not recite them from memory.
What are our values? It’s nice of you to ask. But, although I’m sure anyone at Lehman’s will talk with you about them, we’ve made it a part of our policy not to print or distribute them. Why? Because we believe we should be living those values actively with honor and consistency, not hanging them on the wall in a dusty picture frame where they receive little more than lip service! We want to demonstrate our values by how we live, not by how we talk.
How do you think we are doing?
I walked into that meeting with a deep-seated admiration for the CEO and for the company he helps run. My hope is that you have the same admiration for Lehman’s and for the folks that work here. If you don’t, please let me know. I’d like to set it right.
Galen Lehman, President, Lehman’s
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PS – Sorry I can’t share the name of the person I met with. I’m sure he wouldn’t mind. But, I didn’t formally ask his permission if I could publish this account.
Mr. Lehman: This was a very re-assuring column that you wrote but I believe it is the exception, rather than the norm. Corporate greed remains rampant in our society. Just one example..Weekly I am getting more and more changes to the terms and conditions of my credit cards and I only have a few, have cleared all my balances off, and have cancelled some as well. Yet, the banks continue to impose onerous terms on the consumer. Also, did you know, that whenever a consumer applies for credit or shops for a loan, a couple of points are deducted from their credit score? Lets say someone is buying a new car. If they apply for 3 loans to try to get the best interest rate, they will significantly lower their credit score. This just is not common sense. Consumers should be able to shop for good interest rates on loans without penalty.