Document jBO624yOMnqRq4byDxoZD2EzO

MANAGEMENT Glidden goes for less width but more depth During the regime of the late Adrian Joyce, its diversification was often unprofitably indiscriminate. New team-management is now consolidating Chmn.-Pres. Dwight P. Joyce took company over from his father, Adrian (portrait on wall). Running contrary to management trends has become a habit for Cleve land's big Glidden Co. In the 1920s, while most of U. S. industry was busily seeking deeper penetration of existing markets, Glidden was diver sifying broadly. Now, in a period when diversification has been very much the fashion, Glidden is going the opposite direction--consolidat ing its position in industries where it already is established. However, there's no question that it's still a diversified company. Long thought of as a paint manufacturer, Glidden now gets only 40% of its $237.8-million income from paint. The foods group--chiefly edible oils, plus spices and condiments--is the largest in sales, with $98.5-mil- lion in fiscal 1962. Coatings and re sins, the present name for the paint group, provided $95.2-million in sales. The chemical group was the most profitable; its $40-million pro duced 36% of Glidden's $6.7-miiiion net income last year.--------- New approach. Under Chmn.- Pres. Dwight P. Joyce (cover and pictures), Glidden has been trans formed from a highly centralized company with interests in many in dustries into a well-ordered complex of operations in varied but comple mentary businesses. For Glidden, frowth now comes from within these elds rather than from wholly new ventures. Joyce has eliminated a host of op erations, some of which were unre lated to the main business and others which had become unprofit able. He also has delegated a great deal of authority to a management team, instead or concentrating it in his own office. Changed pattern. With all these moves, Dwight Joyce has led Glid den away from the patterns set by his father, Adrian D. Joyce--a prod uct of the 19th Century who built and ran the company for the most part by himself. To Adrian Joyce, who died in 1954, die company was his life and, in return, was his to do with as he chose. A tall, straight-backed man, Joyce had a starchy dignity. He established a polity of not "ming ling with the help, ' and to Adrian Joyce, the "help" extended through directors, all of whom called him "Mr. Joyce." For many years under his direction, Glidden s general of fice had no coffee breaks, and smok ing was prohibited. Dwight Joyce is a more modem type of executive. He is the boss, but he accepts decisions from lower levels of management. And while he doesn't mingle with die "help" either, many of his associates call him by his first name. Dwight Joyce also believes in separating business from pleasure; he devotes his afterhours life to family, social, and civic activities and to his favorite hobby --flying his own plane. At 62, he still gets in 200 to 250 hours' flying time annually.-.......... - Thus, die transition from Adrian to Dwight Joyce was not only from father to son but--as one executive puts it--"from the corporate entre preneur management of Adrian Joyce to the corporate manager approach of Dwight P. Joyce." And along with this change came a decentralization in decision mak ing. As Robert D. Homer, vice-pres ident for the international group, explains it: ^Fifteen years ago, the second and third level of management looked at a problem and thought, `How would Adrian Joyce do this?' Today, the man looks at a problem from his own standpoint and thinks, 'What should I do?"' I. House that Joyce built Given Adrian Joyce's one-man ap proach to management, it is no sur prise that Glidden once was known "the house that Joyce built"-- N1897 1 ' ' ning. of course, the elder Joyce. uni it 'vs <lu,fe aJwuse-. , ... Tiider one roof, empire-builder irj in Joyce had accumulated ,1 .itits naval stores, chemicals, food products, mining operations, a yeget .1,1,- oil and animal feed business, ' fishery, and some metal refining '''on his own- All this began in 1<H7. when Adrian Joyce, who had lu lmd build Sherwin-Williams Co. No. 1 company in the paint indus try decided he wanted his own busim sS. Resigning as general sales manager and as a director of Sherwin-Williams, he formed a syndicate that took over the little ($2-million muitia! sales) Glidden Co. Joyce, then 45, didn't have the hind's for the $2.5-million purchase, so fie mortgaged his personal pos sessions and put the stock in escrow. |i was redeemed from the banks over the years by payments from earn ings.' (Since stock was freely dis persed for acquisitions, the Joyce family now owns less than than 2% of the Glidden stock.) Glidden was profitable almost from the start. Earnings generally exceeded 20% on invested capital, t sing die original paint and varnish works as a jumping-off point, Adrian lover early began to indulge his beiiel that it is better to be a factor in many industries than dominant in one. Capital created by paint profits was used to diversify the company greatly in a relatively short time. Stages of grbwth. At first, growth was within the paint industry, through the early 1920s, Joyce rap idly acquired paint plants in various parts of the country, giving him a complex that today is second only to Sherwin-Williams in trade sales, the biggest part of the paint indus try (excluding such industrial uses as auto finishes). Then, in an attempt to become more self-sufficient in other aspects of paint manufacture, Joyce also acquired linseed crushing plants and can-making operations. From there, Joyce spread his growing empire--almost explosively --into foods, oils, and chemicals. Chain reaction. Sometimes one ac quisition led simply to another. For example, Glidden entered the food business indirectly because Joyce felt he wasn't getting full use from the company's modern linseed oil crushing plant in St. Louis. Since the flax season lasted only six months, Joyce cast about for an other product that could be crushed on the same equipment. The answer was copra, which yields coconut oil. However, in order to sell coconut oil, used as the base for shortening and margarine, Glidden would have to butt heads with full-line food processors such as General Foods Corp. So Adrian Joyce, playing his entrepreneur role to the fullest, de cided to start his own food business through acquisitions. From 1920, when copra-crushin; operations began, Glidden acquire seven food companies, giving it en try to the margarine business and other foods. The topper came in 1929, when E. R. Durkee & Co. was purchased. This provided Glidden with a full line of products in Flash Welding assures an extra measure of safety in TM Alloy Slings Electric flash-welding creates posi tive, slag and oxide-free welds. Add Taylor's controlled heat-treating and you're assured of stress-free links that possess a high resistance to bending, gouging, abrasion--links that are capable of withstanding high impact loading, and heat conditions up to 700 F. Special analysis alloy steel... controlled heat-treating... patented Tayco Hooks... Sam ma Ray and X-ray testing, plus Taylor's re spected Certificate of Test are addi tional factors that keep chain life upchain costs down I Call your nearby distributor or write for literature. 8. 6. TAYLOR CHAIN CO., tnc. General Office*: Hammond, Indiana Plante: Hammond, Ind. i. Pittsburoh, Pa. Cable Address: TAYCHAIN, Hammond, ind. Chain Is our specialty.,, not our sldtllnal H,.. ,!. n.aflement `s personified by staff meeting of (left to right) Dr. William A. I,,v '^-research director; Alexander D. Duncan, senior vice-president; i'l.illi i ' Maxey>. vice-chairman and vice-president (finance); William G. \ u . .w -*K| mi,rStrative vice-president and treasurer, and Paul W. Neidhardt, 1 resident for the coatings and resins group. BUSINESS w e e k March 30.1963 OLD32792 MANAGEMENT 61 GLD32793 Why over 10,000 fleets Insure with The Travelers Gulf Oil Corporation, Republic Steel Corporation, General Mills, Inc., Canada Dry Corporation--more fleets insure with The Travelers than with any other insurance company. Why? Because insurance costs reflect your safety record. If your record is good, you pay a lower rate. Because whether your safety record is good or not, Travelers safety specialists can help you improve it. They review your accident reports regularly--look for trouble areas so you can correct them. They tell you where your claim dollars are going and wby. Because when your accident record improves, your rate goes down. Because there are Travelers claim people nearby, wherever you may have accidents. 4498 of them cover the country. Nobody settles more quickly or fairly. Whether your fleet_is large or small, chances are you can save insur ance dollars under the Travelers umbrella. Call your Travelers agent or your insurance broker. The TRAVELERS INSURANCE Companies CONNECTICUT 62 MANAGEMENT itnagbsli,shaenddo--ncaummauoeusitngi'ms,posrtaaiandt--;diIlri.,,. Matter Of whim. Not all the acqni. sitions were so logical. Dwight J,, t. claims his father liked to make dt- almost as much as he enjoved r,i.' ning the existing parts of this com pany., And there is some evidence tl, ,i Adnain Toyce sometimes \vluvl<,| and dealed just for the sheer iK of it. ' A popular story has it that m,, , while riding on a train from Clew land to Chicago, Joyce met a who had a type-metal business ,,, Hammond, Ind. By the time he u,,i off in Chicago, Joyce had bought the business, though it was unprofit able at the time and had no logical place in Glidden. The board of directors approved this purchase, but there was on. time, in a similar case, when th.-v reared back and said no to "\h Joyce." Undaunted, Joyce kept tlpurchased company as a person.il venture, made it profitable, and later, when the board found it more attractive, sold it to Glidden at a profit. A taut ship. Such recalcitrance the part of Adrian Joyce's board was exceptional, however. Generallv. Joyce told die board what he warned done and it acquiesced. Under him board meetings often adjourned after only a half hour; under sun Dwight, they frequently last all dav The members of Aarian Joyce's board were picked by Joyce himself And, at least once, when a member was at odds with Joyce, he was asked to--and did--step off. Tight control continued thrum!'* the management ranks. There " nothing that could be called in day's sense a management team. Di visional executives reported direct i> to Adrian Joyce. H. Change of command However, in the 1940s, the aging Joyce began to let go of the reins, and a slow transition began. In 194.. when his father was 75, Dwight Joyce, then 47, moved up from vicepresident of the paint division to president of Glidden. Nevertheless the elder Joyce remained as chair man of the board and chief eseenti" officer until his death in 1954. Spread thin. The company ' profitable when Dwight Joyce came president, but the "house *w. Joyce built" was not really m order. Capital was thinly over many different operation' in conflict with each other. "Father never wanted t" I _________ BUSINESS WEEK M** 30` **** 'Any company must be willing to shift its investments to make money'... Story on page 60 LATROBE MAKES AEROSPACE ALLOYS BY THE DROP What an exacting way to make steel... drop by drop! But this is how aerospace alloys are produced in the vacuum melting furnaces at Latrobe Steel Company. The finished product--Vac Arc* steel--possesses the superior properties needed for critical design applications in jets, missiles, rockets and other Space Age products. Currently celebrating our 50th anniversary, Latrobe has long been known for quality tool and die steels. Now we are also recognized as a leading producer of vacuum melted spe cialty steels and superalloys. LATROBE SsTEEL COMPANY LATROBE, PENNSYLVANIA 64 MANAGEMENT GLD32794 down the flag on anything," Dwid.i Joyce says. Besides, die original manage,,,,.,,, group was dying off, after a 15-Vl,, period when no new men had hr.-, trained for executive responsibility' False economy. One problem. Dwight Joyce sees it, was, "\\> penny;wise and pound-foolish in tl,<1930s* Mindful of stock prices, Adrian Joyce had jealously guarded the divi dend By stringent cost-cutting and occasional reductions of personnel the company had been kept profit' able. But, says Dwight Joyce. *`\V. cut from the payrolls a number <>! promising young men who were not immediately valuable." Then, too, there was little oppor tunity during World War II to in vest either in plant and equipment or in manpower. Says B. W. Mavey, vice-chairman of the board and viee- Sresident (finance): "At the end of le war, physical plant was bad. and there was no new blood coming into the organization." New broom. Under Dwight Joy< >\ the company entered a period o! personnel development and of re assessment of properties. Young men were moved into key spots, ami Dwight also began to exercise bis belief in team management and dele gation of responsibility. One of tbe men given authority was Paul W. Neidhardt, vice-presi dent, coatings and resins group. "I> explains: "In the old days. Adrian Joyce decided whether we did or did not have too much inventory in me paint division. Now this is done one level below me." III. Contracting and expanding At the same time, the compam began die process of consolidation- just when many other were beginning to diversifymany Glidden divisions were Pn* ducing sales but little profit -< 1 incongruous interests as nsn > hies, sex hormones, animal and i*M try feeds, and safflower seed "* ' reexamined and disposed of. Maxey says: "The disposition work was a job to be done M' ., did it. Any company must le ' ing to shift its investments t<> ,IJ- m<OuTof margarine. The first !- __uiertf March 30* synoneytorjimplies value--invesjaigateiBergstrom (safety paper. lt|s ^versatile, .attractive, fcmooth.xrisp. It rigidly guards ^against mechanical or chemfh`calterasure:'?Use*it-more. A j{Bergstrom .-representative .will Wisit^yoiKon'request. :Or, write ^oriconiplete information. fl EBGSTROM 0rT.^MEOIA Send me information on Bnrffttrom SAFETY PAPERS. I am alto InttrasUd in; P Private Dasifln Safety Papor* D THOR Offset Papers O ODtrt Office Papert O IBSEN Sock Paper* NAME TITLE COMPANY CiTY STATE 66 MANAGEMENT GL032795 product line to go was the marga rine business. Not only was mar garine a highly competitive, lowprofit product but, in selling table margarine, Glidden actually was competing with the companies that bought its edible oils. Many poten tial oil customers hesitated to buy from Glidden while the company was also making the end product. When margarine was sold, edible oils became a bigger operation. To day, the edible oil business is more profitable than the combined marga rine and oil business used to be, Maxey says. Out of other fields. The biggest disposal was the soybean business. Gliaden originally had entered it to obtain a source of oil for paints. But by this time, soybeans had be come a standard commodity, and the operation was alien to Glidden's main products, requiring more cap ital and time than Glidden was preiared to invest. The division was rst leased, then sold to Central Soya Co., Inc., for $8-million. Glidden also disposed of animal feed, type metal, lead and zinc pig ments, naval stores, salad products, copra crushing, linseed oil crushing, mining, and turpentine operations. In all, the company eliminated operations involving investment of $44-million, but which generated ire-tax profit of only $1.3-million on '70-million of sales. What appeared to be a shrinkage of business thus turned out to be a planned shift of investment. IV. Rebuilding by plan During this period, from 1948 to I960, sales and profits remained static. Management explained its moves to stockholders, arguing that it was necessary to forgo present profits to insure greater earnings in the future. Capital made available by sale of operations was used partly for re construction and modernization. The big rebuilding period ended in 1960 with several updated paint plants in operation, plus a new grocery prod ucts plant and a new plant for the processing of titanium dioxide, a chemical used in whitening agents. Planned growth. Glidden today is trying to follow a plan for growth. Dwight Joyce explains: "Father o; erated by expediency, with no cli delineated plan. He was a believer in serendipity--start after one goal, find another/' Dwight Joyce feels the past has Eorov<'ed that the company needs a nating plans and capabili- ties and charting the company's (| sired growth path. It leave? no r,,n,V for random acquisition. "Acquisition is nn<. method," Maxey says. "But rnor>tf wwoanntt to make a- tb. adt acqui"s *(l,<1! Any proposed acquisition ,,,, L wdh our present company oner hons from a marketing, tcclmi.w nnfirfllmcr Clffi?te'made lishment of log.,aTM. clearly go along with its a,als late 1961, Glidden purchased- through the exchange of $10-,,,illl((11 wrath of convertible preferred stock --Pemico Corp., a leading produce of porcelain enamel frits, a material for making glazes and enamel coal ings. This move not only broadened the company s coatings and client, icals business but also gave Glidden research capabilities that both par alleled and augmented its own. Another acquisition was Olm-v i\ Carpenter, Inc., which gave the gro eery products division a line l canned processed onions and jx>tatoes, which can be sold conveni ently through Glidden's existing grocery marketing organization. The company is thinking of jHishing these products into the institutional field, using the marketing setup of the edible oils division. And overseas. Glidden also has begun making investments in Ku rope, broadening its markets in c\ change for the exporting of technical and capital resources. Until 1960, the only business Glidden did in Europe was through licensees. Since then, it has acquired a one-third interest in a West German paint manufac turer and a majority interest in aw Italian paint producer. Now it ' building a Pemeo division plant Belgium. Maxey says Glidden hopes to add to its overseas operations at least once a year. "We are convinced that the company will be stronger if portion of its income is from off shore operations," he explains. Teamwork. Joyce is continuing In* concept of team management- ^ J delegate more to die people report to me," he says. "Men have do the job themselves. My '* , made decisions. I try to but don't overrule them if they d see it my way." Joyce had 17 men reporting di rectly to him when he took company but has cut this do' six or seven. He says: Now n > * consists of two important fun . --making basic policy decision- - future planning. When I do I've done my job." End b u s in e s s w e e k mh s* ****