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The Mormon Way of Doing Business
How Nine Western Boys Reached the Top of Corporate America
By Jeff Benedict
Grand Central PublishingCopyright © 2012 Jeff Benedict
All rights reserved.
ON A MISSION
"In business situations we get well prepared and we go in undaunted. I don't know if this is unique to the Mormon culture. But we are individuals who have a mission and are absolutely undaunted by it."
—Dave Checketts, former CEO of Madison Square Garden Corp.
"People do a better job if they respect the leader of the company. I learned that on my mission—the value of people and how to truly appreciate them."
—David Neeleman, founder and CEO of JetBlue Airlines
Many JetBlue passengers have had the experience of boarding a plane, finding a seat, and looking up before takeoff to discover a middle-aged man standing at the head of the cabin, wearing a flight attendant's apron and a name tag. "Hi, my name is David Neeleman. And I'm the CEO of JetBlue. I'm here to serve you today and I'm looking forward to meeting each of you before we land."
For the remainder of the flight, Neeleman goes up and down the aisle, distributing snacks, collecting garbage, and making a point to meet every passenger. He also writes down their comments on a small notepad. Although the passengers are complete strangers to Neeleman, he quickly establishes a rapport with them. When the flight lands, Neeleman thanks passengers for flying JetBlue and then works with the flight crew to clean the plane and prepare it for its next flight.
No other airline has a CEO who works as a flight attendant just so he can serve his customers and get to know them and their needs better. No other airline has a CEO who works shoulder to shoulder with flight crews in order to appreciate their job better. Neeleman does both no less than once a month and sometimes as often as once a week. For this, he is praised for his business acumen, his devotion to his company, and for maintaining a fingertip feel for the direct needs and desires of his customers and employees.
Each time he works a roundtrip flight, Neeleman performs about ten hours of direct customer service and employee interaction. It's no surprise that the annual national Airline Quality Ratings study, which is based on Transportation Department statistics, routinely ranks JetBlue number one in customer service. "There are so many things you can do as a CEO to set an example," said Neeleman. "If the CEO is down there helping employees tag bags and clean airplanes, employees feel better about going to work. People will go the extra mile for you. They know I'm not sitting in some part of the airplane where I don't want to be talked to. Instead, I hang out with crew members."
Direct service to customers and working in the trenches alongside employees may be unusual concepts for a CEO or business manager. That's simply not the way business is done in corporate America. Neeleman didn't learn this unique approach in business school or by reading some cutting-edge textbook on how to be a successful leader. He developed these habits at a very young age, long before he had any thought of creating an airline.
At nineteen, Neeleman served a full-time mission for the Mormon Church. Upon graduating from high school, all young men in the Mormon Church are encouraged to spend two years as missionaries, which entails teaching the gospel of Jesus Christ to strangers and performing service for the poor, the elderly, and the needy. During this time missionaries must completely forgo schooling, employment, entertainment, and dating in order to fully devote all their energy and time to service. They receive no financial compensation, and they are expected to finance as much of their missionary expenses as possible. As teenagers, Mormon youth are encouraged to begin saving for their missions. The Church supplements whatever remaining costs can't be afforded by the missionary or his parents.
"On my mission I learned so many valuable lessons," Neeleman said. "The mission gave me this opportunity to serve and really appreciate people for their contribution."
While on a mission, missionaries are not permitted to return home on holidays or for vacations. Phone calls to friends back home are prohibited. Calls to family are limited to specific holidays. This same opportunity is afforded to young women in the Mormon Church. But just as the Church strongly encourages its young men to serve missions, it strongly encourages its young women to obtain college degrees.
In 2004 the Mormon Church had over 56,000 missionaries serving full-time missions in over 120 nations and island states. Virtually all of the Mormon business executives in this book served full-time missions before starting their business careers. David Neeleman was assigned to Brazil. After spending roughly two months learning Portuguese at the Church's language training center for missionaries in Provo, Utah, Neeleman spent the remainder of his two-year commitment living among poverty-stricken people in Brazil. The conditions were starkly different from the community he grew up in outside Salt Lake City.
On a daily basis Neeleman would put on a white shirt and tie, along with a name tag, and enter the neighborhoods and homes of Brazilians. Speaking their language, Neeleman would introduce himself by saying something along the lines of: "Hello, my name is Elder Neeleman and I'm a representative for the Church of Jesus Christ of Latter-day Saints." Then he would talk to them about the gospel of Jesus Christ and answer their questions.
This experience had a profound impact on the way Neeleman runs JetBlue. "My missionary experience obliterated class distinction for me," said Neeleman. "I learned to treat everyone the same. If anything, I have a disdain for the upper class and people who think they are better than others."
Neeleman's perspective is evident in JetBlue's business approach. There is no first-class section on JetBlue planes. All seats are sold at the same price. All passengers receive the same treatment and are referred to as "customers."
Evidence of Neeleman's approach is also found in the way he runs the corporation. All employees are referred to as "crew members" and wear badges with their name and photograph. Neeleman wears a crew-member ID badge at all times, too. Neeleman has no preferred parking space at the office. Nor do any other executives. When he flies on JetBlue planes, he sits in the jump seat with his crew. There is no corporate plane.
The most unusual aspect of Neeleman's leadership style is his compensation package, particularly in today's climate of inflated CEO salaries. Long before CEOs came under fire for excessive salaries, Peter Drucker predicted: "In the next economic downturn, there will be an outbreak of bitterness and contempt for these super corporate chieftains who pay themselves millions. In every major economic downturn in U.S. history, the villains have been the heroes during the preceding book."
Neeleman is an anomaly here. His annual salary is only $200,000 per year, plus an average of between $70,000 and $90,000 per year in bonuses. He donates his entire salary to a fund for his employees. Financially independent from the success of his previous business ventures, Neeleman is able to operate this way. "A fish stinks from the head," said Neeleman. "There are so many things a CEO can do to set an example. CEOs are just seen as money grubbers—they want to build the company on the backs of their people. The value they ascribe to themselves is so wildly greater than anyone else in the company that there's this king-type notion."
Before serving a mission, Neeleman didn't plan to create an airline. In fact, as a teenager he had no idea what he wanted to do. He struggled through school. "I was in turmoil," Neeleman said. "I spent most of my early school days with my head out the window. I didn't have any confidence in my ability to do well scholastically. I couldn't write memos. I couldn't spell very well. I never read books. I had a lot of anxiety about it because I didn't know what a guy could do who couldn't read or write or spell, and who had a hard time focusing."
Neeleman later discovered that he has attention deficit disorder (ADD). This hurt his performance in school. It did not, however, prevent him from serving a full-time mission. The Mormon Church will accept any young person into missionary service as long as he meets the age and personal worthiness requirements. "I didn't have focus," said Neeleman. "For a guy like me with a learning disability, I had never been disciplined enough to focus on things. The mission taught me discipline and gave me the opportunity to serve and really appreciate people."
The Mormon Church sends its young people on missions to convert people to Christ. But the practical result of the Church's missionary program is that many Mormon youth who serve missions become firmly grounded in their religion at a young age and develop a strong sense of focus and purpose before starting college, marriage, or their careers. "My mission really saved me," said Neeleman. "It was the first time in my life that I ever felt like I had some talent of some kind."
The Mormon mission experience also brought life to Neeleman's natural abilities and personal strengths, all of which are evident in his leadership approach at JetBlue. "Being a CEO is being a people person," said Neeleman. "If an employee knows that the CEO donates his salary to them—and that employee then sees the CEO helping him or her tag bags or clean airplanes, those employees will go the extra mile for me in return. They know there's not some limo waiting to pick me up and that I'm not sitting in some part of the airplane where I don't want to be talked to.
"You have to lead people. They have to buy into your vision and respect you in a way that they want to perform for you. People do a better job if they respect the leader of the company. I learned that on my mission—the value of people and how to truly appreciate them."
OBEDIENCE LEADS TO SUCCESS
Mormon missionaries are expected to abide by strict rules governing personal conduct. They rise early in the morning, observe a nighttime curfew, adhere to a dress and grooming code, are prohibited from watching television, and are expected to reserve time each day for personal study. Obedience and hard work, they are taught, are the keys to a missionary's success. Those keys can lead to business success, too.
Before being named CEO of Dell, Kevin Rollins developed a reputation within the company for being a logistics and operational genius. Those abilities have a lot to do with why Michael Dell initially hired Rollins. Since moving into the CEO spot, Rollins has instilled his penchant for discipline throughout the company through his management style. Many of his personal habits that impact the way he approaches management were refined while serving a mission for the Mormon Church.
"Since I was nineteen," said Rollins, "I've gotten up at five-thirty essentially every morning, unless I'm sick. Since age nineteen I've gone to bed early. So there's a discipline of how to act. A mission teaches you to get up, get going, and do things. I also learned on a mission that if you just work really hard you'll get good results. But if you're smart and work really hard, you'll get superb results."
Adjusting to the rigors and self-discipline expected of Mormon missionaries was not that difficult for Rollins. From the time Rollins was in third grade, his father would enter his room each summer morning before 6:00 A.M. and wake him and his older brother by turning on the light. Rollins' father would then say: "Here's what you have to do today."
Blurry-eyed, Rollins and his brother would sit up in their beds and listen as their father outlined a list of chores: weeding flower beds, working in the strawberry patch, or performing work in their yard, which encompassed over an acre. "There was a constant task," said Rollins. "Yard work was just a staple. He expected us to perform."
Rollins' father was a civil engineering professor at Brigham Young University, and he had his own engineering firm. He would leave for work very early each morning and put in long hours at his office. When he returned home after work each day, he would gather Kevin and his brother and inspect their work. "He'd go out and look in the yard or wherever our assignment was," said Rollins. "He expected things to look perfect."
By the time Rollins reached high school, his father's assignments at home increased in scope and would sometimes take days or weeks to complete. For instance, one summer his father instructed Kevin and his brother to build a walkway. But his was no ordinary walkway. Rollins' childhood home was situated on a lot that had a large, steep hill that ran down the property behind the house. Rollins' father, a skilled carpenter and cement mason, decided he wanted a walkway constructed from the top of the hill to the bottom. Before construction could begin, however, the hill had to be cleared of brush and rock. The entire task—from preparation to construction—fell to Rollins and his brother. "It was tough," said Rollins. "We had to cut a walkway down that hill, then through the brush and through the soil and rock. It taught me the value of doing something every day, sticking to task orientation, which I have inherent in my management style today."
On his mission, Rollins developed other daily habits, such as studying the scriptures. As a result, he still makes time to read for personal enrichment on a daily basis. On a mission he dutifully followed the Church's instructions to proselyte, a practice that typically entails knocking on doors. Although this is not the most fruitful method of convincing people to join the Mormon Church, Rollins followed this course out of his desire to be obedient. "I believe that whether or not you are actually doing things that lead to success, through obedience you will get success," said Rollins. "There's a jump that occurs just through doing it. So I'm a big proponent of discipline, activity, never say die, really hard work, and never admitting defeat. A lot of that is mission based."
The never-say-die, hard-work approach to missionary service had a carry-over effect to Rollins' business aspirations. Rollins served his mission in Alberta, Canada, in the early 1970s. While there he noticed a very successful soft-drink franchise. After his mission he decided to set up a soft-drink franchise of his own in Utah. He had no knowledge of the industry or what it would take to create a beverage company. At age twenty-one he enrolled in business courses at Brigham Young University and married his wife, Debbie. With financing from his father, Rollins opened the Pop Shoppe, a soft-drink distributorship.
Debbie quit school immediately to work full time at the business. "We started selling our beverage before we got our plant up and running," Debbie Rollins said.
Kevin purchased bottling equipment, arranged for trucking and shipping throughout the state, and built a bottling plant. Since he was a full-time student at BYU, he had the plant constructed near the campus, enabling him to race home from school at lunchtime each day to check on operations at the bottling plant. If equipment was down, Kevin would hurry to the plant and fix it in order to keep the operation moving.
"He wouldn't even change his clothes," Debbie recalled. "He would just dive into the grease and fix whatever wasn't working. He didn't even know anything about equipment. But he had this sense of what needed to be done and he did it."
Within a year, Debbie Rollins was pregnant with their first child and Kevin was pitching his product to grocery stores in an attempt to expand sales. Little by little he convinced more and more stores until his soft drink was being distributed throughout the state of Utah. To accommodate demand, he had to create a distribution plan for delivery and contract with trucking companies to move his product. "If something needed to be done, Kevin just did it," said Debbie. "If he didn't know how, he figured it out."
Excerpted from The Mormon Way of Doing Business by Jeff Benedict. Copyright © 2012 Jeff Benedict. Excerpted by permission of Grand Central Publishing.
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