peter browning (A)
...ker with unexpected medical bills, or their insistence, in a bad financial year, on borrowing the money for Christmas bonuses. In exchange for hard work and commitment, employees received good salaries, job security, and the feeling that they were part of a “winner.” In an area as heavily unionized as Chicago, these rewards were potent enough to keep White Cap nearly union-free. Only the lithographers—a small and relatively autonomous group—were unionized. White Cap was rife with rituals, ceremonies, and traditions. In the early days of the company, Mrs. W.P. White would prepare and serve lunch every day for the company employees in the Goose Island facility. Over the years, White Cap continued to provide a free family-style hot lunch for all salaried employees and free soup, beverage, and ice cream for the hourly workers. A press department manager, a White Capper for 28 years, explained: For work in a manufacturing setting, you couldn’t do better than White Cap. White Cap isn’t the real world; when the economy is hurting, White Cap isn’t. White Cap always lived up to the ideal that “our people are important to us.” They sponsored a huge family picnic every year for all White Cappers and friends. When they first instituted the second shift in the factory, they lined up cabs to take late workers home after their shift. They sponsored golf outings and a softball team. People generally felt that nothing’s going to happen to us as long as we’ve got a White there. But in 1982, Bob White stepped down and turned the management over to Art Lawson, who became vice president and executive officer. Lawson, 63 years old, was a veteran White Capper, and many saw him as simply a proxy for the Whites. Even Lawson would say that he saw himself as a caretaker manager, maintaining things as they had always been. At about this time, price competition began to heat up in the closure industry. White Cap had been the market leader for over 50 years, but customers were beginning to take the Total System for granted. There were by then five significant manufacturers in the national marketplace and 70 worldwide who offered the twist-off cap. Competitors like National Can Company were beginning to slash prices, aware that the very advantage White Cap had maintained in the market (i.e., its R&D and full service) made it difficult for it to compete effectively with drastic price cutting. Just at this time, plastic containers—requiring plastic closures—began to be available (see Exhibit 1). In 1982 the Food and Drug Administration had approved the use of a particular plastic substance as an appropriate oxygen-barrier for food containers. Subsequently, the American Can Company’s Gamma bottle, a squeezable plastic container, was adopted by the Heinz Company for its ketchup and by Hunt for its barbecue sauce. (White Cap had held 100% of the ketchup business worldwide.) Welch’s jams and jellies also adopted this new technology, and the reasons were typical: Welch’s expects the new packaging to help revitalize a relatively flat product category, having conducted research indicating that their customers are willing to pay more for the convenience of the squeezable plastic bottle.[2] Another major White Cap account had announced plans to introduce a new juice line in plastic containers for the spring of 1986, as well. Without a competitive plastic closure, White Cap would continue to lose customers. Senior White Cap management, however, had been reluctant to allow R&D to commercialize plastics developments because such plastics threats in the past had never materialized. In 1984, two years after Bob White had left, Peter Browning was named vice president and operating officer, reporting to Art Lawson. He took over a division with $175 million in gross sales, 1,450 employees (of whom 480 were salaried), 12 sales offices, and 4 plants (2 in Chicago, Illinois, 1 in Hayward, California, and 1 in Hazleton, Pennsylvania). Peter Browning’s Background I’m Peter Browning and I’m 43 years of age. I have four children—three girls, 20, 16, and 12, and a seven-year-old son. My undergraduate degree is in history, and while at White Cap, I earned my MBA through the Executive Program at the University of Chicago. I have been with Continental for 20 years. This was Peter Browning’s characteristic opening each time he presented himself and his ideas to a new audience. On first impression, Browning appeared enthusiastic, charming, and intellectually and socially curious. Various employees and managers described him alternately as “Mr. Energy,” “ambitious,” “direct,” “the most powerful boss I’ve had,” “the quintessential politician, shaking hands and kissing babies.” His speeches to management and staff were peppered with inspirational aphorisms and historical, often military, metaphors, repeated as refrains and rallying cries. In spring 1985 the Continental Group arranged for each of the nine divisional managers to be interviewed by industrial psychologists. The psychologist’s report on Browning stated: His intellectual ability is in the very superior range. . . . He is a hard-driving individual for whom success in an organization is extremely important. . . . Further, he is completely open in communicating the strategy he has conceived, the goals he has chosen, and the ongoing success of the organization against those goals. He cares about people, is sensitive to them, and makes every effort to motivate them. . . . His own values and beliefs are so strong and well-defined that his primary means of motivation is the instilling of enthusiasm and energy in others to think and believe as he does. By and large he is successful at this, but there are those who have to be motivated from their own values and beliefs, which may be different but which may nonetheless lead to productive action. These people are apt to be confused, overwhelmed, and left behind by his style.[3] Browning’s career began with White Cap and Continental Can in 1964 when he took a position as sales representative in Detroit. He continued in marketing with White Cap for nine years and then in other Continental divisions until 1979. At that time, he returned to Chicago to become vice president and general manager of Continental’s Bondware Division. Once in the area again, Browning was able to touch base with old contacts from White Cap and to observe firsthand the challenges they faced. At Bondware (producers of waxed paper cups for hot and cold beverages and food), Browning took over a business that had lost $24 million in five years (1975 to 1979) and that Continental could not even sell. Browning adopted a drastic and accelerated change program, employing what he called “radical surgery” to reduce employees by half (from 1,200 to 600), to eliminate an entire product line, to close four out of six manufacturing sites, and to turn the business around in five years. Browning Is Reassigned Early in 1984, Browning received his reassignment orders from the executive officers of the Continental Group (Stamford, Connecticut). They wanted definite changes in the way the White Cap Division did business, and they believed Browning—fresh from his success with Bondware and a veteran of White Cap himself—was surely the person to make those changes. Continental’s executive officers had several major concerns about White Cap. First of all, they saw a competitive onslaught brewing that they believed White Cap’s managers did not recognize. They believed the business instincts of White Cap’s management had been dulled by a tradition of uncontested market leadership. The majority of White Cap’s managers had been with the firm for over 25 years, and most of them had little intention of moving beyond White Cap, or even beyond their current positions. They were accustomed to Bob White’s multilayered, formal, and restrained management style—a style that inhibited cross-communication and that one manager dubbed “management without confrontation.” Some of them were startled, even offended, by the price-slashing tactics practiced by White Cap’s most recent competitors, and they spoke wistfully of an earlier, more “gentlemanly” market style. Continental’s executive officers were also concerned that White Cap’s long-time success, coupled with the benevolent paternalism of the White family management, had led to a padded administrative staff. They instructed Browning to communicate a sense of impending crisis and urgency to the White Cap staff, even as he reduced the salary and administrative costs which Continental perceived as inflated. Furthermore, he was to do all this without threatening White Cap’s image in the marketplace or its tradition of employee loyalty. Browning recognized that corporate attitudes toward White Cap were colored by a history of less than open and cooperative relations with Bob White: Bob White engendered and preserved the image of White Cap as an enigma, a mystery. He had an obsession with keeping Continental at arm’s length, and he used the leverage of his stock and his years of experience to preserve his independence from corporate headquarters. After all, Bob never wanted to leave White Cap or go further. This kind of mystery, coupled with White Cap’s continued success, engendered doubts and envy and misconceptions at the corporate level. A former Continental Group manager elaborated: White Cap has always been seen as a prima donna by the Continental Group. I’m not convinced that there aren’t some in Connecticut who might want to see White Cap stumble. They have always looked at the salary and administrative costs at 13% of net sales, compared with a 3%-4% ratio in other divisions, and concluded that White Cap was fat. Perhaps the demand for cost cuts was fueled by the fact that the Continental Group was going through its own period of “radical surgery” at this time. Since 1984 when Peter Kiewit Sons acquired the company, corporate headquarters had “sold off $1.6 billion worth of insurance, paper products businesses, gas pipelines, and oil and gas reserves” and had cut corporate staff from 500 to 40.[4] The corporate climate was calling for swift, effective action. Taking Charge In the first month of his new position, Browning turned his attention to three issues. To begin with, he felt he had to make some gesture or take some stand with regard to Bob White. White was very much a...