Thinning the Herd

Ross Laid Groundwork

One example of Ross’ cunning in preparing for a reorganization involved an RJR Vice President. This executive and I occasionally had coffee before the workday at World Headquarters. One morning, out of the blue, he said to me “Ross will be taking over this company, and the sooner the better.” I didn’t see how this was possible – Tylee was nowhere near retirement, and I assumed that Ross and Tylee had struck an agreement about how long Ty would remain.

Ty was a relatively young man and didn’t seem in a hurry to retire. (It later became obvious that Ty also thought they had an agreement.) I asked my breakfast friend when he thought Ross would take over, and he said, “Very soon.”  I later learned that Ross had assured this man that he would be part of the “new team,” while telling others that the man would be first out the door when he became CEO. My friend was gone three days after the management change. Ross deserved credit for decisiveness. He made personnel changes with dispatch.

Goodbye to RJR

My own departure from RJR was part of the process, although it was some time before I realized it. The day Ross became CEO was memorable for me, my forty-seventh birthday. My wife called me that morning 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 because two hours after Judy called, a notice circulated through the company that Ross was replacing Ty. I still have that card, a reminder of how unexpected events can disrupt the best plans. Only sixty-six days before, we had sold our home in the country and moved to the city only a mile from my office. The plan was to retire thereafter another eighteen years at RJR. We looked forward to living in that house the rest of our lives. In the thirty-four years since I have lived in New York and Georgia and in seven different residences. So much for “long-range” planning.

That evening I said to Judy, “We have had a good run here for twenty-one years, but I have an uneasy feeling about where things are headed. It’s a good time to move on.” In my mind I left the day Ross took over and resigned a few weeks later, settling in New York.

Afterward, people commented on how smart I had been to resign. It wasn’t smarts; it was dumb luck. Before leaving, I did what career coaches suggest. In one column I listed all the reasons for staying at RJR. In another column went all the reasons to leave. They roughly balanced out. I later learned that all the reasons for staying had been irrelevant. Once in New York, I got some information that wasn’t available when I made my comparative list. Bob Schulz visited my office in Manhattan. We had known each other through the pension industry. Bob had been a manager at the IBM pension fund, and the new RJR leaders recruited him to fill my position. He told me that he was glad I found a job because the RJR people had interviewed him before I resigned. He felt badly about the situation, but of course 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. Bob explained that Gene Hoots was the incumbent, and that was the last person they wanted.

Years after leaving RJR, I learned that after Schulz came to RJR, he said that the executive recruiters had done a blind search; the recruiter did not know that RJR was the client.  Bob was amused by the fact that Gene Hoots’ name was first on their list for the open position.  Schulz was second.

There were a few warning signals that led me to resign. First was Ross’ uncomplimentary comments about Winston-Salem.

I got another impression of the Nabisco management style from the way they ran its pension fund. Their investment philosophy clashed with what I did at RJR. We had a stable group of outside advisory firms and made minimal changes, slow to both hire and fire. Nabisco people told me that they operated the same way. Yet their record showed that Nabisco had a high turnover with their investment advisors. This was a small detail, unimportant to many people, but it mattered that they would misrepresent themselves to me.

However, a single incident was the real “red flag” about the people with whom RJR had just cast its lot. It was my one personal, brief exposure to Ross as we flew to the directors’ meeting in July 1986 in New York.

The “RJR Air Force,” was carrying directors and staff to the fateful board meeting where the tobacco people told the board about their smokeless cigarette. By chance, one of the jets was carrying only Ross and Laurie Johnson, corporate secretary John Bacon, and me.

That brief flight left a strong impression. John and I sat deferentially in the back of the plane. Ross came back and chatted with us for a couple of minutes. Later, it would be apparent that he had a line of clichés he used with people like us. But Laurie Johnson had a nice conversation with the two of us. She was dressed very expensively and stylishly wearing white boots decorated with stones. I was no judge of women’s clothes but still figured the boots cost a small fortune for the average person in Winston-Salem. Later I couldn’t get those boots out of my mind. They symbolized how hard it would be for her to fit into Winston-Salem, even though she said she was looking forward to living there.

Whether she was sincere was irrelevant. It was a safe bet that the women who controlled the Winston-Salem social structure were never going to accept her, no matter what she did. Her lifestyle – hob-knobbing with celebrities like Kathie Lee and Frank Gifford – was so alien to the city power structure that Ross and she might have come from another planet. And given the comments Ross had already made, implying that the city was an economic and cultural backwater, it struck me that the World Headquarters would be leaving for a bigger, more sophisticated location before long. I guessed that Ross would move the corporate offices to New York City. Later we learned that had been his first choice, but the board of directors vetoed the move.

Once again in my life, good fortune, fate, luck, divine guidance, or whatever you choose to call it was with me. I was a “country boy” – in fact, I was another “bucolic country bumpkin” to the Johnsons. That was easy to see. But even bumpkins can have occasional flashes of common sense. And it took about five minutes for me to realize that Ross and Laurie Johnson were never going to be happy in Winston-Salem. So, I resigned when he became CEO. It was some months later that I learned that he was planning to fire me well before I quit. So even though I agonized over leaving, the decision would have been made for me within three months anyway.