Business forum: Knowing the business from bottom to top

In November 1955, I was interviewed for a position in IBM's field service organization. I cannot say I made a good impression, but when I asked what brand name of tools the company used, I got the job anyway. I went on to work for IBM at five locations, three branch offices, one factory and the New York headquarters.

The two people interviewing me, Luke Radke and Denny Earley, were real pros. Both enjoyed long and fruitful careers with IBM, and they easily conveyed IBM's professionalism of that era.

In those days, almost all IBM employees started out in sales, service, or perhaps on the factory floor. Training was extensive. The company's customer engineer schools were rigorous and taught not only technical subjects but customer relations, financial awareness, work simplification, proper decorum and corporate goals and objectives.

Promotion was entirely from within. Hence, it was virtually certain that your manager had, at one time, wrestled with problems similar to your own. It was an excellent system that generally produced capable and responsible managers.

Traits such as capability and responsibility take time to develop and are often formed by constant exposure to customers, employees and other constituents. These exposures, rather than education or credentials, create the foundation for managerial effectiveness.

Good CEOs and managers see their jobs as stewards of their companies, custodians of its position in history and the place of employment for the community's citizens.

I wonder if this foundation is crumbling.

Do the executives of major banks understand the predicaments of credit card and mortgage customers? Do airline executives know, firsthand, what mechanics, flight attendants or ticket agents do? How many of the country's top executives have actually had first-line jobs in the production of their corporation's revenue?

Are today's executives in touch? In some cases, they are. Robert Lane joined John Deere in 1982 and has held positions in Deere's operations in Latin America, Australia, East Asia and the United States.

Keith Busse, CEO of highly successful Steel Dynamics, worked his way up, too. A former steelworker and then a plant manager, he knows the business. Steel Dynamics' stock price has increased by a factor of 12 in five years.

At UPS, another successful company, 85 percent of management employees are promoted from nonmanagement positions.

Last week, I attended the retirement party of Bruce Hertzke of Winnebago Industries, a company that has a long history of appreciating employees and the community. Bruce is retiring 39 years after he started work on the assembly line. His wife is a paramedic.

In a telling portrayal of values, Bruce remarked, "She thinks just as much of her job as I do of my job."

High gas prices and bank turmoil have not been kind to the motor home industry, but Winnebago is still profitable, with no debt and plenty of cash.

Maybe companies such as the old IBM, Deere, Steel Dynamics, Nucor, Winnebago and many others know something that some bankers, airline executives and other executives seem not to know. Education, capability and credentials are only of some importance in creating effective managers. Character and empathy for customers, employees, suppliers and the general community all matter more.

This ongoing exposure to important constituents provides a desirable foundation for effective executives. Their accumulated knowledge of the needs of others helps the effective executive to realize that he or she is not special. All people are important.

In other cases though, it does not look like executives are in touch.

I was both shocked and amused lately when I read that some banks are increasing their fees on credit cards because they are losing money on mortgages. I sincerely hope that St. Peter does not employ similarly exotic logic in meting out justice when we are individually called to account. It would seem unfair for people to go to hell because of a shortage of paying customers there.

Perhaps though, some of the problems we face are related to how we select, educate, train, nurture and revere our leaders.

It is interesting to examine where the emphasis is placed in annual reports. J.P. Morgan Chase & Co. has a 192-page annual report with no pictures of employees, products or customers, only lavish portraits of executives. That company's stock lost much of its value this past year.

Nucor, Deere and Steel Dynamics' reports all feature products, production facilities and many employees. These companies more graphically illustrate their mission, values and culture.

Nucor, whose stock rose about 40 percent this past year, has for many years listed the names of company employees on the cover of its annual report.

Meanwhile, the stock plunged 45 percent at that firm so famous for its ultra-high executive compensation, UnitedHealth Group Inc.

Perhaps someday we will get back to a system where executives earn their way to the top by actually doing some of the jobs that need to be done. Perhaps we will all learn that leadership is rooted in meaningful experiences relating directly to the company's business.

Perhaps we will again realize that all people think a lot of their jobs.