Essays: Milton Moskowitz

Corporate history? Who needs it? Corporate histories? Who reads them? Why business people never look back.

Do business people have any use for history? The answer, increasingly, is no. A resounding no. It pains me to come to this conclusion but the evidence is all about us that executives and managers care not a whit about what happened in the past. Their eyes are focused on the future: tomorrow, next week, next month, next quarter and—at the most—next year. They are not studying what the company experienced five years ago to find lessons on what to do today. They clearly do not believe there are any useful lessons to be learned by such an exercise. I suppose that's why you can scour the curricula offered by graduate business schools and rarely find a history course. The reasons for this neglect are not difficult to find. Business is a pragmatic, not an intellectual, adventure. Ideology is not something business people are comfortable with, although once successful they do sometimes look around for ideas and stories that impart a higher mission to their life's work than just making money. That's when they start commissioning histories of the company. I have always been a sucker for these corporate histories, laboring under the illusion that such knowledge would help me to understand why a company does what it does. I work in a book-lined office where four shelves of a very tall bookcase are filled with company histories. And there are six boxes stuffed with more company histories squirreled away in nearby closets. I began collecting these books, most of them authorized biographies, some 30 years ago when I was writing a syndicated newspaper column three times a week. This column purported to explain the workings of business to lay people—that is, to people who were not involved in the management of companies. I thought a little history would go a long way to capturing the spirit or culture of a particular company. That was also the perspective of my first book, Everybody's Business: An Irreverent Guide to Corporate America, which profiled, in everyday language, 317 large U.S. companies. The historical component was a major facet of that work, as it was of the book that I published in 1988, The Global Marketplace, which profiled 102 of the largest companies based outside the U.S. (You may wonder: why 102? Answer: I miscounted the companies one day, and having done 102, I was not in the mood to excise two of them.) There's not even the remotest possibility that these corporate histories will one day become collector's items in the rare book world. They are, for the most part, poorly written, fawning accounts of how the company got started and grew to become one of the pillars of its industry. They are often adorned with lifeless photographs of the leaders of the company down through the ages. Some of these are even amusing to behold. But it's not exactly what you would call literature. Take, for example, Oil Man: The Story of Frank Phillips and the Birth of Phillips Petroleum, wherein we learn that in 1913 Frank took a 120-day trip around the world, summing up his impressions in a letter to his father: "We saw many wonderful sights and strange people, but after all doesn't Bartlesville, Oklahoma, afford equally interesting things for the world traveler? We have oil and gas wells which to those who are not familiar with them should be an unusual attraction. We have the frontier life and the Indian history which, when openly explained to the traveler from abroad, should create an impression which he could carry home with him and prove equally thrilling as any information which he might obtain from any foreign country.' We also learn that the founder of Phillips Petroleum hated to eat in dark restaurants. He would always say to the maitre d': "What's the matter, can't you pay your light bill?' Then there's Twelve Full Ounces, a history of the early years of Pepsi-Cola. It ends in 1959 with the death of CEO Alfred Steele. "A great leader had gone,' wrote the author, Milward Martin, who was head of the company's legal department. "To fill the void, not merely in the company's operations but in its heart, created by the loss of Alfred Steele would have been impossible, but the vacancy on the board could be filled, and there was one clear-cut choice, his widow. Already closely allied with the company through her husband, Miss [Joan] Crawford was widely known throughout the company and loved by those who knew her, and on May 6, 1959, she was elected a Director of the company. It has proved a most happy choice. Never a lady to rest on her laurels, Miss Crawford has thrown herself with all her great vitality into the company's publicity and sales-promotional activities both at home and abroad, and is one of the company's most treasured and highly valued assets.' Tough to top that kind of writing. Corporate histories do not have to be dull, and I am fond of a number of lively ones in my collection. One of the best is The Big Drink, published by Random House in 1960. It's a delightful history of the Coca-Cola Company by E. J. Kahn, a New Yorker writer who expanded a profile of the company he did for the magazine into a book. This is a fun read, full of the lore of this beverage and free of cant and hyperbole. "People have mixed Coca-Cola with practically everything edible or potable,' wrote Kahn. "Children like it doctored with chocolate, lemon, vanilla, cherry or lime syrup, or—on the false assumption that the combination will give them a jag—aspirin or spirits of ammonia. During prohibition, Coke proved invaluable for killing the taste of corn whiskey; ginger ale was helpless against the stuff.' And Kahn took into account the foreign hostility to this American drink: "A left-wing Italian newspaper reported that —only a few people succeed, when first drinking Coca-Cola, in getting rid of that unpleasant impression of sucking the leg of a recently massaged athlete.'' A neo-fascist paper in Milan described Coke as "halfway between the sweetish taste of coconut and the taste of a damp rag for cleaning floors.' A corporate history does not have to be dud simply because it was sponsored by the company. It depends on the writer. One of the best of this genre is Out of the Cracker Barrel, a 1969 history of Nabisco written by William Cahn. He does an excellent job of describing how Adolphus W. Green, a Chicago lawyer, combined 48 local bakeries across the country into the National Biscuit Company at the turn of the 20th century. In 1906, Green moved the company's headquarters from Chicago to New York, where he had built on the lower West Side the world's largest baking center, a plant stretching from 14th to 16th Streets and from 10th to 11th Avenues. Cahn deftly described the scene there: "When the wind was right, seamen and stevedores coming off the North River docks could sniff appetizing smells of Vanilla Wafers and Marshmallow Fancies. On other days, the aroma of Animal Crackers and Fig Newton Cakes contrasted sharply with the smells emanating from taverns along Ninth Avenue. —An air of innocence,' one writer put it, —clings to the National Biscuit Company, as it must to any business where grown men concern themselves with a ginger snap named Zuzu.'' You can see I enjoy good writing, and I have learned a great deal about companies from reading these books. They can be entertaining. But let's get down to the nitty-gritty: How does such historical information help a manager make money today? How does such information help a consumer to choose which products to buy? And how does his-tory help an investor decide whether to buy shares in a company? Nabisco is a good example. During its heyday in the first 80 years of the 20th century, it was one of the most admired companies in the business world. It pioneered in the packaging and advertising of cookies and crackers. Many of its products—Oreo cookies and Ritz crackers among them—became staples of the American household. Nabisco also had a penchant for naming its products after towns in or near its bakeries, hence the cookies and crackers called Brighton, Boston Family, Cambridge Salts, Beacon Hill, Shrewsbury, Fig Newtons, Melrose—all named for towns in the greater Boston area. But this glorious history did not shield the company from the predators who have run amuck during the past 20 years. In 1981, Nabisco merged with another food company, Standard Brands (Planters Nuts, Blue Bonnet margarine, Royal puddings). Ross Johnson, the head of Standard Brands, which was the smaller company, emerged as the CEO of the new Nabisco. Four years later Johnson merged Nabisco into R. J. Reynolds, one of the world's leading cigarette producers. And four years later, Johnson tried to buy the company in a leveraged buyout on terms that were so outrageously unfair to shareholders that he landed on the cover of Time alongside the headline, "A Game of Greed.' The investment banker Kohlberg Kravis Roberts then came along and bought the company for $25 billion, chucking out Johnson. This sordid episode was deliciously recounted in Barbarians at the Gate, a book by Bryan Burrough and John Helyar that turned out to be a best-seller. Here was a real corporate history, and if you put it next to Out of the Cracker Barrel you wouldn't believe that they were both about the same company. In 1995, the food part of the combination, Nabisco Holdings, was separ-ated out from the tobacco business and gained a listing on the New York Stock Exchange. And now, as you no doubt have heard, the company is being acquired by the No. 1 operator in the tobacco industry, Philip Morris, which plans to merge Nabisco's operations into its Kraft unit to create the world's second largest food business behind Switzerland's Nestle. Nabisco, in short, has been stripped of its corporate identity. And a book like Out of the Cracker Barrel has become a relic of a past that no one cares about. I am afraid I appear too negative. But what am I going to do with all these books that no one reads, not even the people in the companies which are celebrated? Another one of the books in my library is a wonderful history of the Ford Motor Company, Ford: The Men and the Machine, written by the British author Robert Lacey and published by Little, Brown and Company in 1986. In his epilogue, Lacey describes how he sat in the office of Henry Ford II in 1984 as he was preparing to leave the company founded by his grandfather. Ford, Lacey reports, was methodically feeding document after document into a paper shredder, not only his personal papers but the medical records of his grandparents. Seeing history being destroyed before his eyes, Lacey asked Ford why he was doing that. Ford answered: "What I've done in my life is nobody's business.' Of course history has even less meaning to the new generation of dot-comers, young companies in business for such a short time that they have absolutely no memory. Many of the founders of these companies don't even look forward to a long history. On the contrary, some start these enterprises with the express purpose of "flipping' them—selling them off to other companies so that they can then flee with their newly acquired wealth. These companies are, as some commentators have pointed out, "built to flip,' polar opposite of the companies featured in Built to Last, a 1994 book by James C. Collins and Jerry I. Porras that celebrates outfits like 3M, IBM, Merck, Hewlett-Packard, Nordstrom and Johnson & Johnson that have had visionary cultures which enabled them to survive for many decades, indeed some for more than a century. In its issue of last March, the magazine Fast Company, bible of new age capitalism, played the "New Economy'companies against these corporate graybeards. One of the featured flippers was Gary Sutton, who has run nine different companies in the past 20 years—and sold off six of them. He is currently CEO of San Diego-based @backup. Here is Sutton's straightforward defense of flipping companies:

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