Myers as an artist and musician who had consulted with businesses through the Myers Institute for Creative Studies; Ray as a social psychologist and business professor who started bringing creativity into classes in the early sixties. We had each repeatedly observed that without the involvement of some very deep personal sources of creativity, idea-generating techniques used alone could produce confusion - or at best, short-term gains. As with the proverbial Chinese meal, an hour later and you’re hungry again.

Shortly after the modern Starbucks was founded in 1987, this story was the heart of Schultz’s presentation to the Starbucks board of directors, along with his recommendation to establish full medical benefits and stock option ownership for all employees as long as they worked twenty hours a week. While the board initially dismissed the idea as unaffordable, especially for an early-stage company, Schultz’s ability to use both analytical and emotional reasoning won the day. He argued that such a program would pay for itself in three years if it reduced by half the high employee turnover common to the specialty retailing and food service industry. And he pulled on the heartstrings of the directors by talking about the kind of company that he wanted to build, one that he wished his father could have worked for. In the end the board approved the proposal, and the Starbucks Bean Stalk program was born. To this day the program (which incidentally was so successful in reducing employee turnover that it paid for itself in one year) is at the core of the company’s culture and organizational strategy.

He was a superb business executive. And he did it through practicing the points covered in this chapter: operational excellence, putting people first, being decisive, communicating well, knowing how to get the most out of even the most challenging people, focusing on product excellence, and treating people well when they are let go.

SUB-CAPABILITY NO.3: CREDIBILITY EQUITY

Sherman and Franklin made a huge impact late in life partly by drawing upon storehouses of credibility they’d built over decades. It wasn’t just Franklin’s words at the end of the Constitutional Convention that held sway, but also that these words came from Franklin. It wasn’t just that Sherman articulated a strong argument to preserve the actual text of the Constitution and use the amendment mechanism to include the Bill of Rights, but also that the argument came from Sherman.

For acquisition, he shared, “We would look at almost anything that came up within the industry for sale, and we had four factors that drove our decisions. One, we would only buy number one or two share brands in their category. We did not believe we could take a dying brand and turn it around. Two, we wanted to buy businesses that had higher gross margin than out company average, so would help our gross margin. Three, we looked for asset-light companies. We didn’t want to buy a company with lots of factories or ones for which we’d have to build new factories. We preferred to bring operations into our own facilities. And four, we went for products that had some sort of advantage versus the competition that we could leverage with our marketing, sales, and operations muscle to make better.” That formula guided the well-measured acquisition of numerous leading brands during his tenure, including Spinbrush, OxiClean, Orajel, Batiste, and Vitafusion. These were businesses that his own business leaders had the expertise to run, and he folded them into Church & Dwight’s existing operations. Focusing on employees with R&D expertise, they kept, on average, only 10 percent of employees, many of whom joined the team at headquarters. “We doubled the size of the company,” he reported, without adding substantially to the number of employees.