The path tois typically a long string of tough decisions, chance meetings, lucky breaks, and risky maneuvers. We asked three big-time execs to retrace their steps — and stumbles — to the top.
Jim Koch, Founder, Boston Beer Company, Brewer of Samuel Adams
Koch earns an undergraduate degree in government from Harvard. Stays in Cambridge to enroll in a joint JD/MBA program . . . but drops out after first year.
“I was 24. I felt like I shouldn’t be making career decisions. I hadn’t seen enough of the world.”
Earns roughly $700 a month teaching Outward Bound courses and mountain climbing.
“I met a lot of really fanatical climbers, and I realized I didn’t want to be one of them because I didn’t want to be dead. And I was right. A bunch of them are dead now.”
Returns to Harvard, where he earns a JD/MBA.
“Nearly killed me.”
Joins Boston Consulting Group as a manufacturing consultant. Clients include Jack Welch during his early days at General Electric.
“I’d love to tell you that I learned a whole lot from him, but he was just a good manager. Very demanding. Consulting taught me that anyone can fool himself into thinking that he has a viable business, but the product won’t succeed unless it’s one of two things: cheaper or better.”
Browsing the beer aisle at a Boston liquor store, Koch can’t find anything he likes. Decides to go home and brew his own. Using his great-great-grandfather’s recipe, makes first batch in kitchen.
Founds Boston Beer Company. Entire operation consists of Koch and his former Boston Consulting Group secretary.
“It was a crazy idea, but I didn’t want to be a consultant all my life, and the idea of brewing a new beer was that wonderful intersection of something I was passionate about and something I knew I could make a business out of. I walked out of the BCG office on the 33rd floor overlooking Boston Harbor, and by the time I got to the street, I’d become a beer.”
Considers naming beer after his ancestor, the esteemed brewmaster Louis Koch. But a friend points out that people might mispronounce it.
“It could be pronounced in an obscene way, which probably wouldn’t be good for a product.”
Goes with “Samuel Adams” instead.
No distributor will take a chance on Sam Adams. Koch sells it himself from bar to bar.
Samuel Adams Boston Lager wins the Consumer Preference Poll — the top prize — at the Great American Beer Festival for the first of three straight years. Koch celebrates by hiring a deliveryman.
“We got this guy Dean to drive the truck, so I didn’t have to do that myself anymore.”
Koch becomes the company’s spokesman in a blitz of now-famous radio ads.
Koch receives numerous buyout offers.
“Whenever I asked myself what I would do with all that money, the answer was always, ‘Gee, I’d buy a brewery.’ But then I’d realize I already had a brewery.”
Sales surpass $185 million for second consecutive year.
J.D. Power III, Founder and CEO, J.D. Power & Associates
Power graduates from College of the Holy Cross at age 22 and joins the Coast Guard as a deck officer.
“The Korean War was going on, and I figured I might as well be doing something worthwhile. The Coast Guard was a small outfit compared to behemoths like the Army or Navy, so I knew I’d have more responsibility. ”
Working on icebreakers in the Arctic Ocean, Power learns from his colleagues in the Officer Candidate School course about a degree called the Master’s in Business Administration.
Turned down by Harvard Business School, but accepted to Wharton.
Hired by the Ford Motor Company as a financial analyst.
“Today you probably learn more at a small company, but in those days you went with the largest companies because they had the best training programs.”
Quits Ford when it refuses to transfer him to marketing department.
“Mythought I couldn’t keep a job, but I felt I had peaked at the company and wasn’t expanding my experience.”
Works as a senior project director for Marplan, a market research division of McCann-Erickson with clients like GM. Later grows disillusioned with the methods used to gather customer feedback.
“Big companies had so many filters that everything would be massaged before it went up to the CEO. They tortured the data until it confessed.”
Moves to Los Angeles, where he becomes director of corporate development for McCulloch Corp., a chainsaw manufacturer that catered to lumberjacks in the Northwest. Identifies a new market for the company: homeowners.
“I changed McCulloch’s whole marketing strategy.”
Although they have three young children, Power’s wife realizes her husband wants to stake his claim and encourages him. Power starts J.D. Power & Associates from his kitchen table. The “associates” are two employees and his wife. The company performs independent research and then sells the results.
“My idea was to own the data, so you had independence and the ability to control what you were doing.”
A former Marplan colleague tells Power about a Japanese car company called Toyota that’s trying to penetrate the U.S. market. Power wangles lunch with a manager.
“After lunch he introduced me to Tatsuro Toyoda [grandson of the company's founder, who would later become president]. It was the easiest sale I ever made.”
J.D. Power & Associates does a survey on a new Mazda featuring one of the first rotary engines. Interviews the first 1,000 buyers by mail and gets a 50 percent response. A follow-up report uncovers a defect: An O-ring burns out after 35,000 miles. Fourteen manufacturers buy the report.
Power gets a call from a Wall Street Journal reporter. Someone has leaked the O-ring survey to the press. Reporter wants to know more about the company.
“I wrote the first press release of my life, found someone in my building who had a telex machine, and gave them $5 to send it out. The next day our name was on the front page of the Journal, and 48 hours later we’re in nearly every newspaper in the world.”
J.D. Power & Associates introduces its Customer Satisfaction Index, an annual ranking of companies in a variety of industries.
Power and his wife are watching commercials during the Super Bowl. Following words appear on-screen: “According to J.D. Power & Associates, Subaru is second only to Mercedes in customer satisfaction.” Power nearly falls off his Barcalounger. Monday morning he gets an angry call from Mercedes. Realizes there is a lucrative business in licensing his awards to leading manufacturers for use in advertising.
The company is growing at a rate of 20 percent each year. It is constantly introducing new initiatives like the Power Information Network, which provides auto manufacturers with real-time transaction data from individual dealerships. “We were often perceived as being the bad guys in Detroit. That’s changed, and it’s gratifying.”
J.D. Power & Associates, which made $104.3 million in 2000, now employs 600 people around the world.
Janet Hanson, Founder and President, Milestone Capital Management; Founder, 85 Broads
Hanson, 21, graduates from Wheaton College and gets a job in the pro shop at St. Andrews Golf Club in tony Hastings-on-Hudson, New York. A member tells her, “Janet, you’re too smart for this. I want you to come and work for us.” Member is the late Dan Crowley, then number two at McGraw-Hill.
Crowley urges Hanson to enroll at Columbia Business School. One semester, she interns in Goldman Sachs’s research department and begs to sit in on training sessions for fixed-income sales division. Permission granted. “As long as I never opened my mouth. I realized that this was what I was born to do.”
Earns MBA and joins Goldman full-time. Quickly becomes a top producer in fixed-income sales.
“I was working with the smartest people on the planet, people like Jon Corzine. We were inventing securities. It was the Wild West. I was the happiest I’d ever been.”
Becomes first woman in Goldman’s history to be named a sales manager.
Burned out by long hours, she quits the firm despite being on fast track to becoming partner.
“I was sort of collapsing inside, so I excused myself from the building.”
Works part-time as a consultant, remarries and has two children. Only drawback to suburban idyll: The isolation and lack of intellectual stimulation drive her “completely berserk.”
Then co-head of the fixed-income division and future CEO Jon Corzine asks her to return to Goldman. She does, in marketing, as a VP in the asset management division. But the job doesn’t play to her strengths.
“I had been in fixed-income sales. This just wasn’t challenging.”
Hanson jumps ship again. Founds Milestone Capital Management. Launching company and paying legal fees to get prospectus through the SEC adds up to $1 million in expenses.
“It was really bad. We had totaled the car and we hadn’t even left the starting line.”
Hanson calls former Goldman colleague Phyllis Esposito, then a senior managing director at Bear Stearns. Esposito suggests a strategic alliance. Noting that Milestone could provide Bear with a money market fund capability, Esposito arranges for a presentation to top management.
“Two hours later they said, ‘Let’s do it.’ You want to talk about the power of networking? Without Phyllis and Bear Stearns, we’re dead in the water.”
Hanson founds an organization called 85 Broads, a network of former and current Goldman Sachs women. (The firm’s global headquarters is located at 85 Broad Street in Manhattan.) The network encourages members to share career advice and leverage skills. Membership quickly balloons to more than 1,200.
“It’s not about having a glass of wine and bullshitting. It’s about getting stuff done.”
Milestone now manages $3 billion for a list of clients that includes several Fortune 25 companies. Hanson devotes more and more time to 85 Broads.
“This is what you can do if you’re free. I can create anything I want on any given day.”