M&M’s Family Humility

M&M’s Family Humility

It is not the kind of life one might imagine for a family whose net worth is $60 billion – the fifth largest in the world. But then again, there is much about the M&M family and its corporation that is unimaginable. At M&M, all employees are called ‘associates.’

There are no perks here – no corporate office suites, no company cars, no reserved parking spaces, no executive washrooms and nobody flies first class.

Direct Communication: There are no private offices either. Offices are eliminated and desks are arranged in a wagon wheel fashion, with the higher-ranking executives in the center, to facilitate communication between individuals and functional areas.

The management structure encourages direct communication. If you need something, you walk over to the boss and ask for it.

Independence: The employees are empowered to be more independent. They take more responsibility and train with more patience. Employees thrive. Once they get a job, they stay. The turnover rate is a low 5%. Some families can claim three generations of employees.

You Don’t Get Ahead Of The Game Because You’re Connected

The clock reads 6:40am. John Mars, at 56, comes to the office, pulls out his time card marked J F Mars, and does what few chief executives in America would ever dream of doing.

He punches in. The billionaire grandson of the company founder punches his time card every morning. Every employee, from the president down, is eligible for a 10% bonus for being on time.

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Hiring: Values vs. Talent

Who Are The Koch Brothers?

David and Charles Koch are one of the richest family in America with net worth of $100 billion.

Hiring: Values vs. Talent
“We hire first based on values. We won’t go for the smartest guys in the room. If forced to choose between virtue and talent, choose virtue. Talented people with bad values will do far more damage than virtuous people with lesser talents. It’s fine to make lots of money, but how you do it matters. The biggest mistake I’ve made in business is hiring and promoting executives who only paid lip service. That got us into several bad deals – and drove out people who shared our values.”

How to identify good employees: “When we hire someone, in order to figure out if the candidate shares our values and integrity, we put him in situations.

For example, we have someone he thinks is unimportant take him to the cafeteria and see how he treats people there.”

You Don’t Get Ahead Of The Game Because You’re Connected

At Koch industries, even Charles Koch gets evaluated. Any employee at Koch could earn more than his boss.

The employees are challenged to act as though they are running their own businesses.

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Amazon’s Long Term Thinking

Long Term Thinking

Amazon’s initial business plan was unusual. The company didn’t expect to make a profit for four to five years. This “slow” growth caused stockholders to complain that the company was not reaching profitability fast enough to justify their investment or even survive in the long term.

The company finally turned its first profit in 2001. Although it was a small profit, it proved to skeptics that Bezos’ unconventional business model could succeed.

The Type of People Amazon Hires

We’ve collected a large group of like-minded people. Folks who find our approach energizing and meaningful.”
The willingness to pursue a long-term vision was critical to the rise and persistence of Amazon.com.

When you have something that you know is true, even over the long term, you can afford to put a lot of energy into it.

A 10,000 Year Watch

Jeff Bezos is also helping to lead an effort to build a clock that will tick for 10,000 years. “It’s a special clock, designed to be a symbol, an icon for long-term thinking.”

He spent as much as $40 million to build it because he wanted to show the importance of long term thinking.

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What You Lose When You Don’t Focus

What You Lose When You Don’t Focus

Not only was the coffee sub-par, but the stores had begun offering more and more diverse non-coffee related products. They added CDs, then books, then DVDs to their store kiosks. It turned out that movie studios would actually pay Starbucks to promote their new releases; so Starbucks got involved in the movie business.

Schultz stated it bluntly: “The business deals looked great on our profit and loss statements. It would be a while before I recognized that Starbucks’ amplified foray into entertainment, while it had its upside, was another sign of hubris born of a sense of invincibility.” The last straw was when Schultz entered a store to see a pile of stuffed animals on display.
When he questioned the manager, he was told simply that the animals had a big gross margin.

As Schultz explains it, “Starbucks had begun to fail itself.” The stock had dropped by 42 percent and many of the stores were failing, some due to cannibalization by neighboring Starbucks stores. Its growth was reducing the Starbucks experience. Schultz recognized and acknowledged his part in creating the problem.

One night, he sat down with pen and paper and began composing a letter with his concerns and a solution to get back to the core of the business. He had his secretary type it up and e-mail it to the Starbucks board and management, with the subject “The Commoditization of the Starbucks Experience.”

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Encouraging Criticism

Who Are The Koch Brothers?

David and Charles Koch are one of the richest family in America with net worth of $100 billion.

Encouraging Criticism

“I find it very productive when somebody challenges me; even if they’re wrong, that challenge causes me to think, “Well, I didn’t explain it clearly, or maybe I don’t fully understand it.” I love it. I say, “Here’s an idea of something we ought to do and here’s how I think we ought to do it.” On the last one, I got six different attacks.

If you’re a leader at any level and your people aren’t challenging you, you’ve got to change that or you can’t be a leader here because you’re not going to be using ideas, you’re not going to have innovation, you’re not going to fully develop your people.”

Crowdsourcing for Best Ideas

“We try to constantly gather all the relevant information. Then we share knowledge internally. We have something called the Discovery Board. We meet once a month, and everyone brings up a problem or an idea, and the rest of us challenge it.”

Respect the Opinion of the Simple Guy

“We try to model our company on the concept of crowdsourcing for best ideas. Nobody has the best ideas. You challenge at every level. People come to us with their ideas. We don’t tell them, “Are you kidding?” It doesn’t work that way, and that violates my principles.

We’re trying to find the truth. How do we make people’s lives better unless we find the truth of what works and what doesn’t?

I’ve always believed in the saying that “there is no limit to what you can accomplish if you don’t care who gets the credit.”

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No hierarchy no entitlement

The clock reads 6:40am. John Mars at 56, comes to the office, pulls out his time card, marked J F Mars, and does what few chief executives in America would even dream of doing: he punches in. The billionaire grandson of the company founder, punched his time card every morning. Every employee, from the president down, is eligible for a 10% bonus for being on time.

M&M Believes in Partnership.

Partnering with a European pet food supplier, Forrest Mars created Whiskers cat food, which continues to sell billions of products to this day. He also created the world-famous Uncle Ben’s Rice. Forrest Mars turned a regional candy maker into a world-wide food empire. In the beginning of M&M, he partnered with Hershey to create M&M.

The Marketing the Pushed M&M off the Ground

Using his cosmic name as inspiration, he called it a “Milky Way.” Within a year, M&M’s sales jumped grossing about $800,000 (about $11 million today).

M&M quickly launched into orbit. They moved their headquarters to near Chicago and, just five years after introducing the Milky Way, they were making $20 million in gross revenue (about $273 million today).

How did M&M Start?

M&M’s have a very fascinating history. When Frank Mars was little, he battled polio which left him disabled the rest of his life. He was rather immobile as a kid, so he spent a lot of time watching his mother bake and cook, including watching her go through the difficult and tedious process of making fresh chocolates. He got so into candy, that he began creating and selling his own candy while still in high school. By the time, he graduated, he had a pretty successful career selling candy wholesale to stores in the Minneapolis area.

Great Place to Work

Over the years, M&M has been named as a Great Place to Work in more than 20 countries. Work for a business that reflects your personal values. When you feel truly connected to what you are doing and find meaning and purpose in your work, you will feel a far greater sense of achievement, and it will redefine what it means to go to work each day.

M&M’s Family Humility.

It is not the kind of life one might imagine for a family whose net worth is, $60 billion – the fifth largest in the world. But then, there is much about the Mars family and its corporation that is unimaginable. At M&M all employees are called ‘associates.’ There are no perks here – no corporate office suites, no company cars, no reserved parking spaces, no executive washrooms, nobody flies first class.

Direct Communication: There are no private offices, either. Offices are eliminated and desks are arranged in a wagon wheel fashion, with the higher-ranking executives in the center, to facilitate communication between individuals and functional areas.

The management structure encourages direct communication. If you need something, you walk over to the boss and ask for it.

Independence: The employees are empowered to be more independent. They take more responsibility and train with more patience. Employees thrive. Once they get a job, they stay: Turnover is a low 5%. Some families can claim three generations of employees.

“Our goal is to create a working environment that attracts, retains and engages great talent that will help us deliver growth we are proud of as a business. It is transforming how business is done both internally and externally.”

M&M’s First Innovation.

Forrest Mars Sr. had witnessed troops eating chocolate that was encased in a hard candy shell. He noticed that the chocolate was managing to avoid entirely melting in the hot temperatures, and he decided he wanted to perfect the idea into a perfect candy. He approached a man named Murrie who worked as an executive for Hershey’s and struck up a partnership – incidentally their two names are what the two M’s stand for.

With World War II starting Mars saw an opportunity and started selling the candy exclusively for use in soldier rations for the duration of the war. The troops found it very convenient as it was easily packaged in small tubes, and didn’t melt easily in the heat, making it easy to preserve and transport in the thick of troop movements. Eventually the war ended and all the veterans were already big fans of the product. The veterans introduced it to their family and friends, M&M’s became the runaway success.

The Struggle in the Beginning.

The Hershey Bar was holding the market; the competition was fierce. So, it wasn’t a huge surprise when Frank’s wholesale business went under. Frank, never a man to get too down, tried again, he moved to Seattle, Washington to go back into the candy business. He failed again and the creditors were after him. He moved to Tacoma and again struggled. Frank had only $400 to his name. But despite his constant struggles with candy, he continued to try. Every morning at 3am, together with his wife, they were making and selling chocolate. It was tough. But the invention of the Milky Way changed all of that. Frank started using nougat in his candies.

Encouraging Entrepreneurship in Youth.

He has also given to the Youth Entrepreneurs Kansas, an organization that teaches business skills to at-risk youth in Kansas schools. This program of 25 years or so ago teaches inner-city kids primarily the principles and techniques of principled entrepreneurship. And it’s so gratifying. These kids some of them tough neighborhoods — shootings, drugs, I mean all sorts of problems; they’re not doing well, they don’t see any point in doing this and when they learn there’s a point, not everybody, but a significant portion, it transforms their lives.

And they say, “Oh, I see a purpose,” and they go from failing to making straight A’s. At graduation when some of these kids get up and talk about what it’s done for them, it’s amazing. But it’s not just the classroom. We get a local entrepreneur to mentor them and help them and make sure they’re getting not only the techniques but the values of principled entrepreneurship.

 

The Importance of Innovation.

We believe innovation comes from recombining existing technology and different perspectives in innovative ways. You look at software and what it’s doing, with Uber and Airbnb — we’ve gotten in that area in information technology to create smart products and smart processes here, to make our plants safer.

Innovation doesn’t come from one big thing, it comes from a piece at a time, from combining existing technology. Innovation is essential for helping Americans Improve their lives.

Why is it important to Encourage Failure.

At Koch Industries failure isn’t penalized, unless an employee overlooked some necessary detail or put self-interest ahead of the corporation.

Employees are given “decision rights” according to their demonstrated ability to make choices. Inability to admit mistakes shows that someone doesn’t’ have humility and integrity.

Most innovations come from trial and error. It’s not just trial and success; The error is there for a purpose. I say to our people, “If you think you’re experimenting and you never have any failures, you’re not really experimenting.” You’re not trying anything new. We went through quite a period where what I was doing was hurting the company. Then we finally came up with an approach that really started to pay off.

Push Students Out of Comfort Zone.

And this is a problem with universities. It shouldn’t be a place of comfort. It should be a place of discomfort because you want to open these kids of whatever prejudices or preconceptions they have when they come. You’re trying to get them to think and develop.

How many of the kids who go through there are transformed? And what I mean by “transformed” is accomplish more than they ever thought possible and are able to lead fulfilling lives? Did they fully develop their abilities to make a contribution and get satisfaction out of it?

A lot of these institutions are being run for the benefit of the bureaucracy and the teachers rather than the students. The schools and universities should be primarily focused on how do I help each individual fully develop his or her capabilities and understand what they’re good at, what they can be successful at, and teach them the values and principles that will enable them to make a contribution and be successful.

The Importance of Personalized Education.

I didn’t think I was good at anything, didn’t do well in school. In the third grade, I was going to a public school, the teacher was putting math problems on the board. I asked myself why is she putting those up when the answers are obvious. Then I saw it wasn’t obvious to anybody else in the class. So I said, “Hey, I’m good at something.”

What’s not done well at education is helping kids find, as I discovered for myself, what I was good at. I was very lucky to find out that at an early age, which set my direction in life.

My desire for our educational efforts is to have every university apply a Republic of Science and expose students to all different ideas, not just one.

Universities are not doing a good job at that. Anytime student says something different he is shut down. We’re trying to give students the opportunity to be exposed to a full range of ideas so they can think and decide for themselves. There’s no point of view that is right for all situations and all times. And even if it’s superior to the others, you can enrich it by drawing on others or thinking: “Why is that wrong and how do I improve my approach? How do I come up with a better approach?”