Barbarians at the Gate by Bryan Burrough, John Helyar Page A
Authors: Bryan Burrough, John Helyar
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his workers to churn out America’s snacks from dawn to dusk, in brutally hot and often hazardous bakeries, he also felt responsible for providing them nutritious meals. “In our New York plant,” he wrote in a report to shareholders, “an employee can obtain a dinner consisting of hot meat, potatoes, bread and butter, and coffee or tea for 11 cents.”
Green died in 1917, and with him went much of Nabisco’s innovative spirit. His successor, a lawyer named Roy Tomlinson, was less interested in biscuits than the bottom line. Profits quadrupled through the 1920s, but Nabisco was coasting on the enormous success of its early productsand on its sales force. When it needed new products, it bought them, including Shredded Wheat in 1928 and Milk Bone dog biscuits in 1931.
Then, in the midst of the Depression, Nabisco’s bakers came up with something novel. For years they had been trying to develop buttery crackers like those of some of their competitors. The result, covered with a thin coating of coconut oil and sprinkled with salt, was a completely new kind of cracker. They called it Ritz, and it became America’s most popular cracker almost overnight. Within a year, Nabisco had baked 5 million of them. Within three years, it was baking 29 million of them a day, and Ritz became the bestselling cracker in the world.
But again the company rested on its laurels. For the next decade Nabisco drifted, paying its dividends, keeping out of debt, and baking the same cookies and crackers it had for years. Eventually profits dropped, its bakeries aged, and so did its management. By the mid-1940s, the average age of Nabisco’s top executives was sixty-three; they were known as “the nine old men.” Only when Tomlinson retired, after twenty-eight years, did the company stir again.
Yet another lawyer, general counsel George Coppers, was installed by the board as chief executive in 1945. Coppers had taken weekend management courses at the Harvard Business School and set about reshaping Nabisco with what he had learned. He cleared out the nine old men and brought in a wave of new young ones. Over a twelve-year period he spent $200 million to modernize the bakeries, real money in those days. All the funds came from profits: Perish the thought of debt at good, conservative Nabisco. Coppers allotted huge budgets to research and advertising, dragging down profits but creating a foundation for the future. By the time it built its last new cookie and cracker plant, in Fair Lawn, New Jersey, in 1958, Nabisco had cut its costs, improved its quality, and heaved its way into the latter part of the twentieth century. By 1960, the year Coppers died, Dun’s Review recognized Nabisco as one of the twenty best-managed companies in the country.
One of Coppers’s bright young men, an Idaho Mormon named Lee Bickmore, now took the helm. Bickmore began his Nabisco career as a shipping clerk in Pocatello and went on to become a salesman, pushing Ritz and Oreos in obscure corners of Utah, Wyoming, and Idaho. It was only when he wrote an earnest letter to New York headquarters, full of suggestions about training and techniques for salesmen, that he gained notice.
As president, Bickmore expanded Nabisco into foreign markets: Australia in 1960, England and New Zealand in 1962, Germany in 1964, and Italy, Spain, and Central America in 1965. He spent so much time on overseas travel he became known as “The Flying President.” Bickmore also diversified, moving into frozen foods and making Nabisco the largest shower-curtain maker in the world. He took on a carpeting business and a toy business. He bought a company called J. B. Williams, which made personal-care products such as Aqua Velva shaving lotion and Geritol.
It all bombed—the foreign operations, the shower curtains, the toys, everything. To make up for the losses, Bickmore squeezed Nabisco’s cookie and cracker divisions for every penny of profit. He squeezed so hard, in fact, that they began
Green died in 1917, and with him went much of Nabisco’s innovative spirit. His successor, a lawyer named Roy Tomlinson, was less interested in biscuits than the bottom line. Profits quadrupled through the 1920s, but Nabisco was coasting on the enormous success of its early productsand on its sales force. When it needed new products, it bought them, including Shredded Wheat in 1928 and Milk Bone dog biscuits in 1931.
Then, in the midst of the Depression, Nabisco’s bakers came up with something novel. For years they had been trying to develop buttery crackers like those of some of their competitors. The result, covered with a thin coating of coconut oil and sprinkled with salt, was a completely new kind of cracker. They called it Ritz, and it became America’s most popular cracker almost overnight. Within a year, Nabisco had baked 5 million of them. Within three years, it was baking 29 million of them a day, and Ritz became the bestselling cracker in the world.
But again the company rested on its laurels. For the next decade Nabisco drifted, paying its dividends, keeping out of debt, and baking the same cookies and crackers it had for years. Eventually profits dropped, its bakeries aged, and so did its management. By the mid-1940s, the average age of Nabisco’s top executives was sixty-three; they were known as “the nine old men.” Only when Tomlinson retired, after twenty-eight years, did the company stir again.
Yet another lawyer, general counsel George Coppers, was installed by the board as chief executive in 1945. Coppers had taken weekend management courses at the Harvard Business School and set about reshaping Nabisco with what he had learned. He cleared out the nine old men and brought in a wave of new young ones. Over a twelve-year period he spent $200 million to modernize the bakeries, real money in those days. All the funds came from profits: Perish the thought of debt at good, conservative Nabisco. Coppers allotted huge budgets to research and advertising, dragging down profits but creating a foundation for the future. By the time it built its last new cookie and cracker plant, in Fair Lawn, New Jersey, in 1958, Nabisco had cut its costs, improved its quality, and heaved its way into the latter part of the twentieth century. By 1960, the year Coppers died, Dun’s Review recognized Nabisco as one of the twenty best-managed companies in the country.
One of Coppers’s bright young men, an Idaho Mormon named Lee Bickmore, now took the helm. Bickmore began his Nabisco career as a shipping clerk in Pocatello and went on to become a salesman, pushing Ritz and Oreos in obscure corners of Utah, Wyoming, and Idaho. It was only when he wrote an earnest letter to New York headquarters, full of suggestions about training and techniques for salesmen, that he gained notice.
As president, Bickmore expanded Nabisco into foreign markets: Australia in 1960, England and New Zealand in 1962, Germany in 1964, and Italy, Spain, and Central America in 1965. He spent so much time on overseas travel he became known as “The Flying President.” Bickmore also diversified, moving into frozen foods and making Nabisco the largest shower-curtain maker in the world. He took on a carpeting business and a toy business. He bought a company called J. B. Williams, which made personal-care products such as Aqua Velva shaving lotion and Geritol.
It all bombed—the foreign operations, the shower curtains, the toys, everything. To make up for the losses, Bickmore squeezed Nabisco’s cookie and cracker divisions for every penny of profit. He squeezed so hard, in fact, that they began
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