McCormick finds traditional ways help it today

April 03, 1991|By PHILIP MOELLER | PHILIP MOELLER,SUN BUSINESS EDITOR

When McCormick & Co. opens its new headquarters building at Loveton in northern Baltimore County this August, visitors might notice an old piece of stone set above the entrance to the new building.

The stone, inscribed with the words "The two-for-one spirit," was saved from the lobby of McCormick's famous Tea Room when its old plant and headquarters at Light Street at the Inner Harbor was torn down.

It was saved because Charles P. "Buzz" McCormick Jr., chairman and chief executive officer, wants that stone to be a tangible reminder of the cultural values that drive what may be Baltimore's best-known business.

Mr. McCormick remembers the stone well because his dad had it installed in the late 1930s, when he ran the show. These are not trivial memories when the business carries your family name, when your tie clasp reads "C. P. McC" and when you have been acutely aware of who you are for half a century.

The motto refers to an employer's version of the Golden Rule, he explained. "The company will think twice for the employee and once for itself if the employee will think twice for the company and once for herself or himself.

"It's a farce if you don't believe in it," Mr. McCormick volunteered. "I believe in it."

Buzz McCormick believes in a lot of other cornball stuff that his forebears hatched in the Depression years of the 1930s. These beliefs have been translated into a total quality management program throughout the company and, Mr. McCormick believes, into a renewal of the people-oriented philosophy that fueled the company's success in its earlier years.

"We've always believed that the people doing the job know more about it than anyone else," he said. "That's easy to say, but the total quality management program that we've put together makes it possible to do that."

The TQM program, as it's known, was instituted in 1987 and will eventually involve all of McCormick's 7,600 employees. They will have the responsibility and opportunity to improve company operations by forming small teams that meet regularly and focus on specific ways to improve McCormick products, save money and work smarter.

The concept is familiar to McCormick employees because it was predated by roughly 60 years by the company's "multiple management" boards -- groups of lower-level managers who meet regularly to discuss their areas of business. There are now 12 to 15 such boards throughout the corporation, and they've played an essential role in transmitting McCormick's values and identifying potential leaders of the company.

Multiple management reflects the company's philosophy, Mr. McCormick said, "and that's the belief in the untapped potential of people. The [multiple management] board system is one of many ways to get at it." It's also strengthened management's credibility, which must be present for attitudinal programs to be effective.

Mr. McCormick thinks that employees believe the company is sincere about its beliefs and TQM. "They know we believe in it, and that it's not something that we'll walk away from in a year."

These views would make McCormick hopelessly old-fashioned except for one major judgmental conclusion (mine) and one major fact.

The conclusion: Much of McCormick's management and human-relations philosophy could have been lifted from the present-day success stories of Japanese companies (there's even a company song).

This is not a place populated by slick MBAs and buffeted by whatever trend strikes the CEO's fancy.

The fact: This corny stuff has paid off, and paid off big. McCormick has outperformed every large publicly traded company in Baltimore in recent years, with the possible exception of the high-flying retail company, Merry-Go-Round. At a time of relatively slow growth, the TQM effort is providing the kinds of cost-shaving that can really boost margins and enhance the bottom line.

This financial success is particularly gratifying to Buzz McCormick, who was viewed in some circles as "a nice guy, but . . ." when he assumed the top position in 1987.

Now, with his own retirement only two years away, the 63-year-old CEO looks more and more like not only a corporate survivor but a big winner. Gone is the "caretaker" label that had him pegged as an interim CEO. Mr. McCormick has been involved with major shifts at the company and seems perfectly at ease with his role, his decisions and his ability to help the company thrive.

The company's financial record during the past three years,which Mr.McCormick stressed at the annual shareholders meeting two weeks ago, includes:

* Tripled earnings per share.

* Return on equity of more than 20 percent in 1990, compared with 11 percent three years earlier, with the higher profitability excluding McCormick's prescient 1989 sale of its commercial real estate division for more than half a billion dollars.

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