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The CEOs Casey’s Impact on Big Brown’s Leaders
In 1962 Jim Casey stepped aside and turned the day-to-day operation of UPS to some long time colleagues, naming George Dempster Smith the company’s chief executive officer. Up to the present, that office has been held by an additional seven others, all career UPS employees, and all also serving as chairman of the board. Their backgrounds, ideals, and company contributions are a testimony to the enduring set of business ethics, integrity, and corporate culture established by Jim Casey. Every one of them has, at one time or another, mentioned Jim as a personal inspiration. CEOs adhering to age-old company refrains like “Not promising more than you can deliver” actually hurt the company’s stock price several times after it went public. UPS leaders were not accustomed to sugar coating reality in quarterly reports for the fickle denizens of Wall Street. The CEOs can be proud of their tenures and all have continued to recognize that UPS is Jim Casey’s company and Jim Casey is UPS. George D. Smith 1962-1972 In a letter dated March 29, 1962 Jim Casey wrote: “…I began many years ago to transfer my executive responsibilities to George D. Smith. In recent years he has been our chief executive in nearly every way except as to title. So now it is time to him to have the title, too. It has been decided that he will be Chairman of the Board of Directors, a member of the Executive Committee and Chief Executive of our Company.” Just over two years after UPS set up operations in Los Angeles, a frail, bespectacled young accounting student working for the outside accounting firm of E.L. Barette and Company came to help set up the books. He never left. Recognized by Casey and McCabe for his outstanding skills, Smith was hired by UPS. He introduced cost accounting, created innovative production systems, and established the use of operations research. Smith was born in a small Nebraska farming town and moved with his family to Los Angeles at the age of 16. A graduate of Los Angeles Polytechnic High School, George D. Smith initially became the accountant and auditor for what was then known as the Los Angeles division. He literally grew with the company, increasing his job responsibilities as the company expanded. In February 1928, Jim Casey and Evert McCabe entrusted George Smith to become general manager of UPS in Southern California, freeing them up to work on continued expansion. In May, 1929, George became the company’s financial manager, and was named one of five functional managers under a new form of UPS management. Smith went to New York with Casey and McCabe in 1929 to work on the ill-fated merger and stayed in the east the rest of his career. In 1930 George Smith became vice president and general manager of UPS. The financial skills and knowledge of George Smith reflected his character as well as that of his company. He was prudent, careful, detailed, and far-sighted. But surprisingly, George Smith was perhaps best remembered for his people skills, another good fit with a company that tried to reflect a ‘bottom up” philosophy. In 1956 Smith said, “It should be noted that it is considered desirable to have authority for decisions and actions as far down the line as possible.” George Smith continued the thinking of Jim Casey in that a good manager must listen to the people below him, give credit where it is due, and develop a team atmosphere. In his opening address at he 1969 management conference, he said, “We have men of many and varied talents, backgrounds, capabilities and experiences. It is our aim to draw on this reservoir of capabilities to the fullest extent possible….While furthering UPS interests, we hope the personal interests and objectives of our people are also being served.” While George Smith moved to the new national headquarters in New York in 1930, he always maintained a home in Los Angeles. When he died on February 29, 1972 after 47 years of dedicated service, his funeral services were held in Los Angeles at Forest Lawn, and Jim Casey gave a touching tribute. Paul Oberkotter 1972-1973 Paul Oberkotter was born in southern California on January 26, 1905 and joined UPS in 1925 as a bookkeeper and clerk. He took accounting courses at night and passed the California CPA exam. Paul became Los Angeles office manager in January 1928, soon taking on additional duties, becoming district controller, and later, the treasurer of the UPS Pacific Coast companies. After moving with the company to New York in 1930, Paul participated in the start of UPS service in Philadelphia in 1938. He then assumed national regulatory, legal, and other responsibilities and became a UPS director in 1943. From 1952 on, Paul was the company’s spokesman in most of the governmental hearings leading to the acquisition of additional UPS operating rights. He testified numerous times in hearings before the Interstate Commerce Commission and other regulatory agencies. He was UPS president from 1962 until early 1972. Following the death of George Smith in early 1972, Paul Oberkotter was named CEO while continuing to serve as president. The board of directors shortly after elected Paul Oberkotter to serve as chairman of the board, a position he held until November 1973. He was chairman of the executive committee until 1980. Paul retired from active employment on February 16, 1985, his 60th anniversary with UPS, but continued to serve as a director for an additional six years. After the deaths of Jim Casey and Harold Oberkotter in 1983 and 1982, Paul alone became a roving company ambassador, the visible link between Jim Casey and the current employees, as he toured UPS operations around the country. Paul Oberkotter died in Philadelphia on March 16, 1998. Having accumulated numerous UPS shares, he and his wife Louise had established the Oberkotter Foundation in Philadelphia. Much of the foundation’s munificence is spearheaded for Alzheimer’s disease, deafness, and diabetes research. The Oberkotter Foundation donated $1.5 million to Tulane University for gene therapy research. It also gave another approximate $1.5 million to Montana’s McLaughlin Research Institute for research against Alzheimer’s disease and hearing loss. The foundation also established over 15 schools around the country where deaf children are taught to listen and talk. Harold Oberkotter 1973-1980 When 20-year-old Paul Oberkotter joined UPS, his 15-year-old brother Harold also went to work, at UPS subsidiary Red Arrow Messenger Service as a bicycle messenger. A few months later, he became a typist and clerk. He studied accounting at night and soon became the chief UPS accountant in Los Angeles. Harold went to New York in 1930 to take over financial plans put in place by George Smith and Paul Oberkotter, and became the first New York district controller. He gradually assumed greater responsibilities for other UPS districts and became the company’s first national controller. He became a vice president and chief financial officer in 1962. In 1972, when Paul was elected chairman of the board and CEO, Harold was named to a new position, vice chairman of the board. He continued to serve as the company’s chief administrative officer and became CEO and chairman of the board in late 1973, serving as chairman until 1980 and as chairman of the executive committee until his death in 1982. He retired from active employment in 1981. Harold was an efficient administrator. He organized the growing company by developing new corporate departments, such as accounting, auditing, finance, insurance, real estate, systems and taxes. Harold was at the helm when the final link of delivering and picking up packages to and from every address in the United States became a reality. The partnership concept at UPS fit well with Harold’s management style. He took great pride in the fact that all management employees, not just the highest ranking, shared in the pre-tax profits of UPS. A life-long number cruncher, he also had no problem with the parsimonious nature of the company, such as himself and other top management people sharing clerical help. Harold died in 1982 at his Greenwich, Connecticut home at the age of 72. His wife Miriam preceded him in death. Their daughter, Dr. Elaine Oberkotter Harmon, made a dedication of the Harold and Miriam Oberkotter Center for Health and Wellness at Pennsylvania’s Cedar Crest College in 2004. She, her brother and sister, and their children have long been active in philanthropic causes. George Lamb 1980-1984 George C. Lamb Jr. joined UPS in 1952 as a shop clerk in Cincinnati, logging addresses. He attended the University of Virginia and the University of Cincinnati. He was trained as an attorney and was studying to pass the Ohio Bar Exam. Even though he passed the bar, he liked what he saw at UPS and never left. George Lamb quickly rose in management, becoming manager of both the industrial engineering and personnel departments. In 1956 he became the Cincinnati district manager, and South Illinois district manager in 1961. In 1964 he became Midwest region feeder control manager and was on the planning team for the opening of the southeast, becoming the first Southeast region manager in 1966, later also named to manage the Midwest region. George Lamb joined the corporate offices in 1972 as operations manager, guiding the company through some of the most tremendous growth in its history. He was elected to an enlarged board of directors in 1972, named vice president in 1974 and vice chairman in 1978. He became chairman and CEO in 1980 and chairman of the executive committee in 1982. Before deregulation changed much of the industry, George Lanb supervised getting the necessary common carrier approvals to operate, and played a major role in getting the domestic network in place. He pioneered the company’s initial overnight air delivery operation and its expansion overseas. George stepped down as CEO in 1984 and retired in 1985, yet continued to serve as a director for five more years. While George Lamb served in WW II as an Army Air Corps gunner, he would not fly in airplanes and took the train wherever he went. Pacific Region manager Vern Cormie asked me, on several occasions, to pick up, or drop off George at various southern California railroad terminals. George Lamb left a lasting impression on UPS and the company’s employees. His sense of integrity was without compromise. He often mentioned the ethical behavior that was a management philosophy at UPS. George Lamb described it as “fairness…concern for others,” and “insistence on quality.” “Those principles lead directly to integrity,” he said, “the most important. UPS ethical standards made a company whose well being is clearly in the public interest and people are respected for their performance, character, and honesty.” George Lamb died of cancer at Duke University Medical Center in 2001 of cancer at the age of 75. His widow, Elizabeth “Pat” Lamb and their two sons and two daughters, created the George C. Lamb Jr. University Professorship at Duke University. It is intended for a scholar who would unite graduate business studies and ethics. Jack Rogers 1984 – 1989
John W. (Jack) Rogers came to UPS in 1957 following his graduation from Miami University in Ohio with a degree in business administration. He began as a trainee in Cincinnati night loading and later delivering packages. He worked in industrial engineering, personnel, and hub and delivery operations before being promoted to division manager in Chicago. Jack was later operations manager in Wisconsin and became the first Georgia district manager when Southeast service opened in 1966. In 1972 he was appointed West region manager, and in 1974, Northeast region manager. In 1976, Jack was assigned to corporate operations responsible for four regions. In January 1978, Jack became national operations manager, and later that year was elected a director and vice president. During Jack’s tenure, the company greatly expanded its air and international service, and stressed the “people” aspects of the company. At the UPS management conference in 1987, on the company’s 80th anniversary, Jack Rogers gave a conference talk that reviewed how the company measured up against the principles and philosophies of Jim Casey. On treating people fairly, he said, “”We sincerely would like to be known as a company where all of our people feel this is the best place to work in the world. “….those of us who feel strongly that all people should be treated with fairness and dignity, no matter what the situation is, are determined to push ahead for the atmosphere we know is so necessary for success in this people business of ours.” To the possible dismay of some business executives who are keen on social protocol, Jack Rogers was always “one of the guys.” He liked a good bottle of beer, a cigar, poker, and the company of his colleagues. Jack Rogers was a leader of high integrity and sense of business ethics. He once said, “None of us could be proud of our business achievements if results were obtained in anything but an ‘above board’ manner.” Jack stepped down as chairman in November 1989 and retired from active employment at the end of the year. He continued to serve as a director for an additional six years. Kent C. “Oz” Nelson 1989-1997
“Oz” Nelson was given his nickname by a classmate when the Ozzy and Harriet Nelson show was popular and it stuck. He was Oz to everyone. Two days after his 1959 graduation from Ball State University in Indiana with a degree in business administration, Oz joined UPS. He became a sales and customer service representative in Kokomo and advanced to customer service manager in Indiana. He later became customer service manager for the Midwest region. He joined the national offices in 1973 and was on the team that implemented service into West Germany in 1976. In 1978 Oz was named national customer service manager and was also assigned to develop the marketing department. Oz was elected senior vice president in 1983 and was Finance group manager and chief financial officer from 1984 to 1987. He became executive vice president in 1986 and vice chairman in February 1989. In November of that year he succeeded Jack Rogers as chairman and CEO. Oz Nelson was a popular CEO and as down to earth as his predecessor. He was especially proud of UPS’s commitment to promote from within and to hire and promote women and minorities. He later commented, “The employees own a large part of the company, so everyone has a stake in the business. And, it’s a very personal company. We never use titles within the organization, and most people worked their way up from the front lines. Everyone was on a first name basis, and it’s still like that today.” His strong belief in the employee ownership led to an employee stock purchase program. He continued to emphasize technology, customer service, and being a good corporate citizen. Regarding the business ethics at UPS, Oz said, “You have a moral compass: everybody does. When making decisions, I have found it best to always make the decision that could be printed on the front page of a newspaper and that you’d never be ashamed of.” Oz Nelson was UPS CEO until 1997 when he retired from the company. He stayed on the board for an additional six years and has served on numerous other boards and has remained active in a number of civic pursuits. Oz has served as national director of the United Way, became chair of the Center for Disease Control and Prevention (CDC) foundation board of directors, served as chairman of the Annie E. Casey Foundation and is on the board of trustees for The Carter Center, working with former President Jimmy Carter. James P. “Jim” Kelly 1997-2001
Jim Kelly was a New Jersey delivery driver for two years (1964-1966) before he went into management. Prior to UPS he served in the U.S. Navy. He went to night school and during the time he progressed at UPS, he graduated from Rutgers University with a degree in management. He was promoted from supervisor to manager in 1968, became a package division manager and labor relations manager in New Jersey and became Atlantic district manager in 1979. He was labor relations manager in the Pacific region and North Central region manager in 1985. He became corporate labor relations manager before being named U.S. operations manager in 1990, joining the board of directors in 1991. In June 1992, Jim became chief operating officer, and two years later became executive vice president. Jim Kelly became chief executive officer and chairman of the board in 1997. While best known for taking the company public in 1999, Jim Kelly was a leader in service quality and innovations. He led the company in expanding its global imprint and positioned it to become a total supply chain solutions provider. Jim said, “UPS will become the world leader in integrating information technology and transportation as a means of enabling global trade. We see ourselves as an advocate for our customers and a stakeholder in their successes.” A humble, modest man, rugged-looking Jim is imposing in stature, reminding one of a former athlete. Jim Kelly retired in January 2002, but continues to serve on the board. He also serves on the board of directors of BellSouth, Hewitt Associates, and Dana Corporation. He is a member of the board of trustees for the Annie E. Casey Foundation. Michael L. Eskew 2002--present
Mike Eskew, an Indiana native, worked in his dad’s surveying business all the way through high school for 50 cents an hour. He then graduated from Purdue University with a degree in industrial engineering. He also completed the advanced management program at Wharton School of Business. He joined UPS in 1972 as an industrial engineer in Indiana. He became department manager, and assumed increasingly important roles, including Northwest region industrial engineering manager and spent time with UPS operations in Germany and with UPS Airlines. In 1994, Mike was named corporate vice president for industrial engineering and two years later became group vice president for all engineering. Named to the board of directors in 1998, he became executive vice president and later vice chairman. He became CEO and chairman of the board in January, 2002. Under his leadership, UPS has expanded its capabilities into new lines of business that complement the company’s global package delivery operations. UPS is developing increasingly sophisticated solutions for its customers by synchronizing the movement of goods, information and funds. In the company’s 2004 annual report, in reference to the UPS culture, Eskew said, “…The UPS culture is based on the owner/management philosophy through which over 30,000 active management employees have significant investments in UPS stock. A large percentage of our full-time management employees also maintain ownership positions in UPS. This breeds a decision-making mentality that’s long term in focus, centered on achieving strong returns on invested capital, and a work ethic that’s characterized by dedication. Having ‘skin in the game’ is a great motivator to align employee interests with public shareowners’ interests.” Mike Eskew is a trustee of both The UPS Foundation and the Annie E. Casey Foundation, and serves on the boards of directors at 3M Corporation and IBM. He was appointed to the President’s Export Council and in 2004 was elected chairman of the U.S.-China Business Council. Mike Eskew told author Marc Gunther that he “…approaches labor negotiations with the idea of giving people as much as the company can afford.” During the interview, the author also noted Eskew “… must have referred to (Jim) Casey at least two dozen times.” Following the lead of Jim Casey and previous CEOs, Mike Eskew looks to his fellow UPSers for support and leadership. In his constant travels to UPS locations, Mike always makes time to meet with UPS hourly people first hand, answer questions, and listen. He usually attends a small focus group meeting or two, personally gives a Prework Communication Meeting (PCM), and mingles with his fellow UPSers. “To lead effectively, he said, “I need to know what’s on people’s minds.” Eskew summed up
his involvement as a player in a “people” Jim Casey, the pioneer The culture established by Jim Casey has remained intact for 100 years. The small man, a product of the Wild West with big ideas and big dreams, made a tremendous impact. He was truly larger than life. Over the past century, the business emphasis has shifted a few times, but the ideals of integrity and fair play have been maintained by a succession of leaders. It appears that the people who make up “Big Brown” are already preserving their futures, and that of the next 100 years. An enigma Jim Casey was an enigma. He was honest, neat, hard working, inquisitive, inspirational, detailed, forward thinking, determined, and fair. He was also frugal and simple. He could live simply and give away a fortune. He never had children, nor was he particularly comfortable around them, yet most of his philanthropy went to disadvantaged children. He was caring and giving, and occasionally emotional. I’ll never forget one emotional incident. In 1979, I was working liaison with a Los Angeles hotel and the UPS Board of Directors who were holding their quarterly meeting there. I was in the hallway when the meeting ended and the board members emerged. Jim came out with tears in his eyes; he hugged a board member and choked with emotion, said, “It’s a sad day for all of us.” “Ohmygosh,” I thought. “What happened in there? Did we go broke or something?” No. I quickly learned that two members of the Board had announced their impending retirements. Jim, 92 years old, was caught up in the sentiment of losing two valued colleagues. What a man, I thought, as I watched him walk slowly down the hallway. It was the last time I ever saw him, but just knowing him made my life better. For the better part of a century Jim Casey and United Parcel Service were interchangeable. He made the company and the company reflected him and his character. The lives of many people, not just employees in brown, were enriched because of James E. Casey. One man did make a difference. |