On Topic: Leadership

March 18, 2010

In the midst of not only a busy business schedule but also the search for a new major league manager, Chairman of the McLane Group and Chairman and Chief Executive Officer of the Houston Astros Baseball Club Drayton McLane Jr., BBA '58, made time in late October to speak to a group of fellow Baylor alumni gathered for the monthly Baylor Business Network of Austin meeting. His speech on leadership is reprised on the following pages.

Change is hard to do. I live in Temple, and our office is on the west side of town, and I live about a mile and a half from the office. I try every morning when I go to work to go a different way, and that's hard to do in a small town. I go to work, and I leave home about 6:30 in the morning, and I'll have friends who will say, "I saw you about 6:40 on the east side of town. What were you doing?" And I said, "I was on my way to work." They think I'm crazy, but I just wander all over town.

We get so trapped. We get so comfortable. We really have deprived ourselves of a lot of the joy that's in new ideas, uncomfortable ones. The hardest single thing to do in life is to change. So I challenge you as you are pushing your businesses along--change is there, and opportunity is there.

We had a lot of customers at McLane Company. They were mainly supermarkets and convenience stores, but one of our customers was Wal-Mart. They were our third largest customer at that time, and I'd gotten to know Sam Walton very well and David Glass and spent a lot of time with them. We really had a great business relationship with them. And one day, I can still remember it, it was in September of 1990.

Have I said that we get caught up in our own stuff? In 1990, Sam Walton called me, which was not unusual. He always had some idea or was mad about something. (You ever have customers get upset with you sometimes when you're not doing it just the way they want to?) He called and said, "You gonna be in in the morning?" I said, "Absolutely." And he said, "Well pick me up at the airport at 8 o'clock in the morning. I've got a big idea for you." He said, "I'm going to bring David Glass." David was the president and CEO of Wal-Mart and the operational side. Sam was the flamboyant ideas guy; David ran the company.

He said, "David and I are gonna be there, and we've got a big idea for you. Be ready for it." I said, "Great," because we had made some proposals to get a big chunk of new business from them, and I thought, "This is gonna be the day." So I picked them up at the airport and we had lots to talk about. Sam said, "Let's go in your office and sit down." I said, "Great." We went in there, and he said, "Now Drayton, I know you, and I understand your personality. I want you to hear me out before you have anything to say." I said, "OK."

And he said, "I want to buy McLane Company." Well, my grandfather had started it in 1894, and in 1921 when my dad had gotten out of college he went into the business, and then in 1959 when I got out of college I went into the business. Our family owned it, and we took a lot of pride and satisfaction--all the wrong ideas, but it sounded good. So I jumped up immediately, and I said, "McLane Company is not for sale, Sam." And he said, "I knew you were gonna act that way." He said, "Sit back down and listen to my story."

And I said, "OK." He said, "David and I got a big idea." This was September of 1990. He said, "We wanna take that 135,000-square-foot Wal-Mart and split it apart, and drop in a 55,000-square-foot supermarket right in the middle of it and have about a 220,000-square-foot store. We're going to call it a Supercenter and have everything people want. We're gonna open it 24 hours a day, 7 days a week."

I jumped up again. I said, "Sam, I don't think people will want a store that big. I don't think they wanna buy groceries at 2 o'clock in the morning, and I don't think they want it open seven days a week." He said, "I didn't ask you for your opinion." He said, "I've got a big idea for it." I said OK and sat back down again. He said, "I want to buy McLane Company. You do all of our food and perishable foods, and we don't understand that [market segment]. But we're going to build these big Supercenters, and food is going to be a big part of that. We want to buy McLane Company and make it a separate division of Wal-Mart. You'll still be the CEO of that, and you'll be the vice chairman of Wal-Mart, and you'll sell all the food to the Wal-Mart stores."

What do you think I said? I said, "Sam, I have no interest in that whatsoever." So we talked on for a while, and I took them back to the airport. They were important customers, so I had to be kind of congenial and friendly to them. I went home that night, and just as I walked in the door, my wife Elizabeth said to me, "What's this big deal Sam's got?" I said, "What are you talking about?" She said, "Oh, he called me a couple of hours ago, and said 'Drayton didn't hear a word I had to say today. I've got a big idea. Talk to him about it.'" Well, Sam or David would call me almost every day for several months, and I would have to go to Bentonville and kind of pacify them and move on.

About three months went by, and my father at that time was 92 years old. He was not active at all in the day-to-day operations of the business, but he came down almost every day and stayed there two or three hours. My dad had been my partner for 27 years, and we had a great relationship. After about three months, one day I realized that I hadn't told my dad about the idea that Sam had. So I went in to see my dad, and I said, "Dad, Sam and David have a big idea, and I don't think it's a good idea. I don't think it's good for us, but I wanna tell you about it." So, I told my dad about it.

As soon as I finished telling him their idea, he looked up at me and said, "Son, I think you oughta consider that." I was stunned. Here's a guy who's 92 years old, spent 60 to 70 years in a business, and he said, "It's unbelievable what the two companies could accomplish together." He said, "There's just so big that you can make a private business." He said, "It's your decision, but I think you oughta consider it."

Now why did it take a 92-year-old person to tell a guy in his early 50s what he should have seen the day they said it? And I got to thinking about what my dad said. I talked to our senior executives, and in two days I decided that it was probably the right thing to do. It just shows how you don't need all the lawyers. You don't need all the investment bankers. I sat in the office with David Glass and Sam Walton and in 30 minutes did a deal.

Today, Wal-Mart is the largest corporation in the history of the world. No other corporation in sales is even close. They're going to do $385 billion this year. They've got 1.7 million employees. And McLane Company, as an autonomous division, is going to do $47 million this year in selling all types of food products to supermarkets, convenience stores and fast food restaurants. It shows that change can be a vital part of our life, but we get so comfortable, so routine, that we miss a big part of change.

I've just found over a lot of years trying to look at different things that change is a big, big part of what we need to do as adults and business leaders. Now you better be careful. I bought a Major League Baseball team and hadn't been to three major league games in my entire life. So you can kind of jump into something and you're wondering "Now how in the heck did I get involved in this?" But if you're that entrepreneur, that risk taker, and you analyze that, it's amazing what you can do with the right attitude, integrity, and the ability to communicate with people, and really, really move that business or the things that you do forward.

Just before we end, we all learn when we're around people who have something to offer. After I got out of Baylor, I was 21, and I went to Michigan State to one of the early, early MBA programs, and they did not have a computer there either in 1958. Still had a slide rule, though. I went there for a graduate program, and I was young, naïve, immature--anybody remember any of those days?--and ready for something new. I went there, and there were 72 in our class, a two-year program. The dean of the business school was Dr. Kenneth Wilson; he was one of the most intelligent persons to really communicate big ideas and big thoughts.

Just a few days before we were ready to graduate in June of the second year, he called us 72 students into the room and said, "I've just got something I think I need to communicate with you all." He said, "You all have been here for two years. You've studied. You've done everything required to get your MBA degree, but I'm not sure we've taught you anything that's gonna make any difference in your life." And I think we were all just stunned. We worked hard. All of those hundreds of case studies, all of those theories, all of the ideas, all of the formulas you had to remember, and he said, "I'm not sure there's anything we've taught you that's gonna make a difference." But he said, "I'd like to give you four ideas that can change your life."

So this was in June of 1959, and the first idea he said is, "Dare to dream. It's free." And this was really before computers, but do we really use the ability to dream and imagine? Everything's so practical. We go to the Internet. We get everything we've ever wanted to know about.

The Houston Astros have been a major league franchise since 1962. Until 2005, they'd never been to the World Series, and we've never won the World Series. They're starting the World Series this week, and when it's over and has been won, commissioner Bud Selig is gonna hand them a trophy about this big [gestures] to the winner. Well, I visualize every morning when I hop up that the commissioner has given the Houston Astros the World Series trophy, so we're going to work at it every day. Dare to dream. It's free.

The second idea he said is, "Operate out of your imagination, not your memory." His idea was, what's clogged in our minds? Our mistakes, our errors, what we've done wrong. In 1952, I was in high school in Cameron, and I can still remember when I was a sophomore in high school asking the prettiest girl in the class to go to the movies with me. What do you think she told me? "No." Well, I can tell you where I was standing in that school, what I had on, what she had on, and how embarrassed I was.

His second idea is operate out of your imagination. Be creative. He said, "What we've taught you to say--forget about the memory. Blot all that stuff out."

The third one he said is, "Seek adversity. The lines are shorter." He said, "95 percent of the people take the easy way out." I remember at Baylor, I did my best work avoiding 8 o'clock classes. Do students still do that? I didn't have any. I manipulated. He said, "Seek adversity. The lines are shorter." He said, "Figure out where everybody else is, and go the opposite direction. That's where the gold is. That's where the fun is. That's where the excitement is." Seek adversities. Buy a baseball team.

The last one he said was, "Walk with elephants." He said to visualize that you're in Africa and there are two really big peaks. And just before you get to the top of the peaks, there's a swinging cable bridge that goes between the two peaks. A flea and an elephant went across this cable bridge. As they went across it, they bounced up and down violently, and then when they got to the other side, the flea said to the elephant, "We sure shook things up a bit." His thought was, like my mother said, pick the right people. You can shake things up.

And that's what's fun about coming to one of these Baylor Network events and associating and getting to know a lot of you is that you can shake things up. We can shake things up for each other and hundreds and thousands of other people.

BBN-Austin is just one of many Baylor Network gatherings that occur regularly nationwide. The Baylor Business Network has chapters in Austin, Dallas, Denver, Fort Worth, Houston, San Antonio, Waco and New York City, and other Network groups (the Baylor Sports Network, Baylor Women's Network, Baylor Young Grads' Network, Global Network and Baylor Parents League) also meet to bring together Bears of all ages with similar interests for networking, fellowship and to support their alma mater. For more information, visit www.baylor.edu/network or call 866-281-9444.