Stanley Gault

As any experienced reporter will tell you, the last two minutes of an interview often reveal more about the true character of a person than anything that has been said earlier. The person being interviewed is relaxed and knows that it is time to say goodbye. The interview with Goodyear Chairman and CEO Stanley Gault ended with a story that may well explain the real secret to his astonishing success in business. Here it is, straight from the chairman’s vivid memory:

“When I was 12 years old, I was working for my uncle during the summer. He ran an appliance store and sold General Electric refrigerators. He was a professional and I always looked up to him. I started out sweeping the floor and doing odd jobs. He would teach me how to sell these appliances, so that I could talk to customers while he was busy.

I sold my first refrigerator when I was 12 years old. I even remember the model number, the GE NC 8. It sold for about $200. That summer I made up my mind that some day I would run General Electric.”

During Gault’s 35-year career with General Electric he became the head of the major appliance business. Under his leadership the company’s key division became number one in the industry. Says Gault, “During that period we pushed Admiral out, we pushed Westinghouse out, and we dethroned Frigidaire, which always had been bigger than GE, and we did it profitably. We produced a better product and we did a better job selling it.”

GAULT’S SALES JOB AT GE

Stanley Gault started his career with General Electric at the service desk taking telephone orders from dealers. Part of his job was to get the dealer to place larger orders and take advantage of specials, and to act as a connecting link between the dealer and the company.

GAULT: Many people think that the name of the game is to load the dealer with inventory before anybody else and hope that they’ll move the merchandise out the door. But I was always interested in assisting the dealer to sell the merchandise and make a profit. I helped write advertising copy and laid out newspaper ads, I wrote radio commercials for them and set up cooking demonstrations in their stores and organized country fairs.

Many times I went out on home sales calls with dealer salespeople – particularly to sell washers, which were difficult to sell. We set up the appointments, demonstrated the washers, and closed the sales. I learned very early on that the closer you stay to your customer, the more you sell.

THE REALIGNMENT OF GOODYEAR

When Stanley Gault arrived at Goodyear in 1991, he was the company’s first CEO who had not come up through the ranks. The numbers on the company’s books looked bleak.

After taking stock of the situation, Gault developed a clear list of objectives that everyone could understand to start the turnaround of Goodyear. Top priority items included: reduce debt, increase sales, improve cash flow, increase earnings per share, become No. 1 in quality, reduce cost, provide superior customer service, increase market share, maintain product development leadership, expand global sales, become an outstanding corporate citizen, maximize human resources and enhance shareholder value.

In less than a year, Gault reduced Goodyear’s debt by over $1 billion. The company’s worldwide tire sales went up by 16 percent, which translated into a $66.3 million profit in the first three months of 1992. Wall Street’s confidence in Goodyear continued to rise steadily.

GAULT: We looked at every aspect of our business and tried to improve it. To let the entire country know that we were serious about changing and improving, we even changed the appearance of the Goodyear blimp. We took down the old billboards and replaced them, improved the Goodyear signature on the racing tires and let our dealers and associates within the company know that we were committed to putting the ‘Go’ back into Goodyear.

AT GOODYEAR EVERYBODY SELLS

When Chairman Gault writes a letter, he often includes a P.S. that says, “Because I am deeply concerned about you and your family, please check your tires. If they are not Goodyear, please be sure to get a set by this weekend.”

Every time Gault addresses an audience, including stockholder meetings, he urges people to check their tires and replace them with a set of new Goodyear tires. Whenever Gault travels, he does not hesitate to talk to cab drivers, airline pilots or waiters about what Goodyear tires can do for them.

After a chance meeting with the chairman of Ameritech, he got to talk to Ameritech’s chief pilot who was so impressed by Gault’s description of the new Aquatred tire that he went out and bought two sets, one for himself and another one for his wife’s car. This spring, Gault flew to Detroit where the driver of the airport limo told him that he owned a utility vehicle. Gault promptly sold him on the benefits of Goodyear’s new Wrangler GSA tire. People close to Gault say that since he started his job he has personally sold hundreds of tires.

GAULT: Selling isn’t just the role of sales and marketing people. I feel that communicating the benefits of our product is everybody’s job in a company.

GAULT’S IDEAS SET THE PACE

When Gault explains his business philosophies, he clearly defines his terms. He calls employees his “associates,” he refers to his relationships with the financial community as “partnerships,” he treats the press as if they were his customers. In his office, the door is never shut. He insists on being accessible to his associates in order to be able to stay in touch with the realities of the business.

GAULT: Success builds on success. But success sometimes means taking a bitter medicine. I was obligated to sell two bitter pills. One was the cost-cutting plan in which we cut $350 million out of the three-year budget, and the other was to reduce our workforce by 7,200 people. That’s a lot of paychecks, but we had to look for new ways to do the job better with fewer people. We restructured and consolidated, we eliminated duplication and offered early retirement incentives. It was a tough process, but we emerged stronger and better.

You may have noticed the plaque in our hallway that says, “Quality is the key to customer satisfaction.” I am known as a zealot on quality and I won’t tolerate shoddy merchandise. I expect our products to be the best in the industry. Not just today, but consistently.

GAULT’S bold moves

To increase sales through Goodyear’s independent dealer network and its own 1,000 company-owned stores, Gault centralized the sales organization, flattened the hierarchy and stepped up local and national advertising.

Since many dealers have traditionally relied on auto service for profits, Gault introduced more incentives to dealers to encourage them to focus more on the tire business. But Gault’s boldest move was to sell Goodyear tires through large retail chains.

In addition to innovative thinking about distribution, Gault describes his management style as “very involved.” He wants to know what is going on in every part of the company and is known to read every report that crosses his desk. Yet he is most concerned with what is going on in the marketplace. He is often seen in parking lots, at dealerships, at racing events, talking to people about tires. His main concern is to make sure that Goodyear customers get what they want.

GAULT: I recently received a letter from a doctor who planned to travel to Chicago with his family in their Dodge van. Somebody at a traffic light told him that his tire was low so he drove to a Goodyear dealer. According to the letter, the dealer told him that he couldn’t do anything for him for two hours and suggested that he come back on Monday. The doctor went down the street to a competitive dealer who was also busy, but within an hour they fixed his tire and sent him on his way.

The letter included copies of invoices from the Goodyear dealer who had previously done a lot of service work for him. To me, providing poor service is like selling a poor quality product. So I picked up the phone and called the customer. I told him, “Every customer is important to Goodyear. I am calling you to apologize for the way you were treated and to tell you that what you have experienced is against our operating principles, our policies and procedures. And I want to know what we can do to make it right.”

The doctor said, “I was very unhappy about this when I wrote this letter. I have Goodyear tires on two of my cars and I have been very satisfied with your product. I won’t go back to that store, but the fact that you took the time to call me shows that you care and I will give you my promise that my next set of tires will be Goodyear.” n

GAULT’S FIVE STEPS TO ONGOING IMPROVEMENT

1.Always research what people say they need, want and expect. Continue the research even when your product is the market leader.

2. Better questions lead to better results. When I worked for GE, we asked ourselves, how could we make a better dishwasher? We asked consumers questions about the noise, the water consumption, the wear and tear, the capacity etc. We asked, what if it were bigger, smaller, made with different materials? We found what people wanted and produced it, offered a 10-year guarantee, reduced the noise level and water consumption and ended up becoming the market leader.

3. After you have developed a prototype of your new product, always verify your assumptions and test your new product. Make sure that it meets your customers’ requirements and satisfies their needs.

4.Always be open to alternatives. Anticipate future customer demand. When you ask, “Now what about this?” you will cause your customers to think more constructively and openly. For example, this simple question helped us at GE to come up with the idea of offering the ice maker on the refrigerator.

5. Always check your survey results. Often people tend to agree with you just to please you, or sometimes people don’t have an opinion or they really don’t know the subject well enough to give you a good opinion. After we had developed a way to add the ice maker in front of the refrigerator I got very concerned that the competition would come up with their

own design and we’d lose our advantage. In the process we found that there was a need for crushed ice and we immediately designed a new mechanism to give our customers a choice between cubes and crushed ice.

Stan Gault ON PROFESSIONALISM IN SELLING

Professionalism is a never ending process. I define a sales professional as someone who is committed to continued success. Professionalism takes time, ongoing reading, study and training. Selling skills need constant improvement because times change, products change, markets change, competitors change and sales approaches change.

Dealing with the Recession: Any time you have a slowdown in the economy, you are forced to do things differently. You have to expand your efforts, you have to be more thorough and you have to be more professional. I don’t think that we will see rapid growth in this country for a long, long time to come. We are not going to have four or five percent growth years in the ’90s. Therefore, we’ll be in a hard-sell ball game indefinitely.

The Keys to Sales Success: You have to know your product, your territory and your markets. Next, you have to know your competition. Finally, you have to be supported by high-quality, competitive pricing, superior service, customer-oriented features and a good working relationship with your entire organization. We are all interdependent and our future depends on good salespeople.

Dealing with Adversity: Good salespeople don’t tire easily. They are tough physically, mentally and emotionally. In my earlier days at GE I went out door-to-door selling with a small vacuum cleaner that sold for $39.95 over my shoulder.

You would close about one or two calls a day and make about 20 calls a day. And if you got doors slammed in your face seven times in a row, then by 11 o’clock in the morning you would tend to get discouraged. But you had to remind yourself that the sun is shining somewhere and move on and knock on the next door, make your demonstration and close the sale. Adversity educates you. It makes you ask better questions. It helps you improve your methods and techniques.

Dealing with Disappointments: A lot of people think that the greatest disappointment to me was not being elected chairman of General Electric. That’s not true. I have always been very ambitious and highly competitive and always had a high energy level. I had to go to work early in life and had to pay my own way. It didn’t hurt me.

Looking back, I have had three great careers and I have had great experiences within every one of those and the only disappointment that I have is that so few people in America will be able to enjoy some of these opportunities within their lifetimes.