LOOKING BACK ON TOBACCO ROAD PART V

THE COOKIE SALESMAN

I was happy in my investment work at RJR. It was interesting and an opportunity to meet many of the top people in the investment world.

But in 1985, RJR made another acquisition – Nabisco Brands. The giant cookie and cracker company seemed a natural fit. However, a clash of cultures, all too common in mergers, brought disaster. At RJR, we had no clue about the Nabisco culture so alien to our own, until too late.[i]

Shortly after arriving in Winston-Salem, Nabisco CEO Ross Johnson, now the COO of the combined company, spoke in Winston-Salem to a management group from Nabisco and RJR. Some of his comments sounded like inside jokes to his Nabisco people, about his disdain for the local community and the RJR team. This caused me some concern.

It got worse. I met Ross and Laurie Johnson for the only time, just before he became CEO. We were going to the June 1986 board meeting in New York on an RJR jet - only the Johnsons, the corporate Secretary, and me. It was easy to see that to this couple I was a “country bumpkin.” (Later it was obvious that they saw all RJR employees and our hometown as bumpkins.) But this bumpkin had an intuitive flash - the Johnsons would never be happy in Winston-Salem.

A few weeks later, my 47^th birthday, my wife called me at work and jokingly said, “You apparently are now somebody important in RJR. A birthday card from Ty Wilson just came in the mail.” Signing my birthday card may have been Ty’s last act as CEO.  Two hours after Judy called, a notice circulated through the company that Ross had replaced Ty as CEO. I still have Ty’s birthday card; a reminder of how unexpected events can disrupt the best plans.

That evening, I said to Judy, “We have had a good run here for 21 years, but I have an uneasy feeling about where things are headed. It’s time to move on.” In my mind, I left that day. I resigned a few weeks later.

66 days before that birthday, we had sold our home in the country and bought a home only a mile from my office. The plan was to retire there after another 18 years at RJR. We looked forward to living in that house the rest of our lives. In the 38 years since, I have lived in New York, Georgia, and North Carolina in 8 different residences. So much for “long-range” planning.

Once again, good fortune, fate, luck, or whatever you choose to call it was with me, I took a job in New York. Before resigning, I listed in one column the reasons for staying at RJR; in another column went the reasons to leave. They balanced.

I later learned that my reasons for staying were irrelevant. In New York, a young man I had known from the pension industry visited my office in Manhattan. He had been a manager at the IBM pension fund, and the new RJR leaders recruited him to fill my position. He said that they had interviewed him before I resigned. He had felt awkward about the situation, but he had nothing to do with the decision to fire me. He had asked them if they considered Gene Hoots for the job, and they asked who that was. His interviewer from RJR didn’t know who held the job. He explained that Gene Hoots was the incumbent. That was the last person they wanted.

Returning to Winston-Salem in 1988, I did some consulting. Then the RJR buyout created an opportunity for a partner and me to start CornerCap Investment Counsel on March 1, 1989.  It is work I have loved from day one – though it wasn’t always easy.  It was my life for 32 years, and a good one. 

EPILOGUE

People commented on how smart I had been to resign. It wasn’t smarts; it was dumb luck. I reflect on how life’s road twists and turns in ways we can never foresee.  Without the people in my story, some close and some far distant, I would never have been in the investment business. These people played a part in bringing me to where I am on Tobacco Road 52 years later, and I am grateful to them all. My heart warms with memories of people I have met on the long trip. I pray that journeying with me, even for a little while, was meaningful for them too.

[i] Since the RJR experience, I have become keenly aware that the right organizational culture is critical. And partly because I did not build the right culture in the firm I was supposed to be leading. Culture played a pivotal role in the destruction and rebirth of RJR. In future posts, we will discuss the impossible-to-believe culture that Ross Johnson fostered. Then we discuss some nuggets I gleaned from three people who navigated the difficult years of RJR’s dark age after the leveraged buyout and the renaissance that followed. Bridging three cultures over two decades, they are excellent story tellers about what worked culturally, and what did not.