”You only get one trip around this track of life. There are no mulligans... let's make it as good as it can be” – T. Gary Rogers
Alan: Welcome back I'm here today with Gary Rogers, and Gary's been a long time resident the Bay Area. And also has had many successful ventures, probably the most noted for Dreyer's Ice Cream and Gary welcome to today's show.
Gary: Thank you it's great to be here.
Alan: So Gary for the listeners, can you give your background and things that you've done to bring you up to today?
Gary: Okay well I was born in California, grew up here, grew up in Marin County before it was "Marin County" It was a very rural agricultural dairy area when I was growing up there. You know went the public schools, wound up at the University of California as an engineering student, graduated there after a lot of different activities. I wound up doing 2 years in the army, in those days we all had to do ROTC, you had the choice of either being drafted or getting your commission if you took 4 years of ROTC so I did the latter- found that to be a really good experience. Went onto the Harvard Business School which was really a right turn for me, I certainly hadn't expected it. That too was just an amazing experience, I was scared stiff. I'll tell a quick little story here,. A friend of mine had me as an usher at his wedding and as an usher gift, he'd given me a silver cross pen which I thought was a really cool deal. So when I went to Harvard Business School of course we all wear coats and ties and I had my silver cross pen and I was ready to take notes, well my first class, I looked to the right- gold. I looked to the left- gold I looked up behind me in this amphitheater classroom- gold. And I went home and I told my wife, "you know honey, we just aren't going to make it here, this is too much". But I survived I actually wound up what they call a Baker Scholar in the top 5 percent of my class. Went onto McKinsey and company which was the place that every that everybody wanted to work in those days- I think still is a great place for business school graduates. And then wound up founding a restaurant company of all things and the short story there is we opened 5 restaurants and went broke. I think that's something every successful businessman ought to do, I really had to pick myself up off the ground with you know no money, I had four kids at home all under the age of 7. I really didn't want to go back to work for anybody else because I'd had the joy of having my own company even though we failed. And I wound up buying Dreyer's Ice Cream with $1,000,000 of other people's money. And the we built Dreyers into the largest ice cream company in the United States. Sold Nestle for $3.2 billion. And that was 10 years ago, actually 12 years ago because I stayed on for 2 years and ran Dreyers for Nestle after they owned it. And then since then I've done a wide variety of things I've sat on many many boards up. I was chairman of Levi Strauss for a number of years, I was chairman of Safeway for a number years, I was chairman of the San Francisco Federal Reserve Bank for 2 years, was on the board for six, but interestingly I was there in the financial crisis. So Janet Yellen was my president. I can say that the most powerful person in the world who I think the fed chairman is- the most powerful person in the world worked for me- it's kind of fun. Still I think I'm on 6 boards, currently 3 for profit boards and 3 more philanthropic boards. I'm very involved in the Oakland community. And have a wonderful family of 4 boys and 11 grandchildren and life is good. I'm about to be 75 and I can smile at what's happened as I've gone down the trail, and I'm still very, much enjoying life.
Alan: It's an amazing life and Gary I just know Gary after all these great accomplishments you've christened all us with your family and your grand kids and they I think that gives us perspective on life.
Gary: The older you get the more you realize that's really what it's all about.
Alan: Well Gary I want to roll back and spend a little bit of time going to your Dreyer's experience, most people go to the grocery store and they see that brand every week and still a very prominent however I'm running up against a break right now. I'm visiting here today with Gary Rogers he's a long time entrepreneur, resident of the San Francisco Bay Area- philanthropist and then after we come back from the break we'll talk about Dreyers.
Alan: We'll be right back after these messages.
Alan: Welcome back I'm visiting here today with Gary Rogers and Gary has been a long time entrepreneur, philanthropist and resident of the Bay Area community and Gary in the first segment we talked how you had ventures before but one of the most notable ventures that you did was at a purchasing Dreyer's Ice Cream in 1976. The company was founded in 1928. So what did you do different? It was a relatively small regional company at the time but how did you how did you take that from what it was to what it became?
Gary: Well I think my answer is mostly about people, but we also did some things right strategically. When I bought the company of the the owner at that time took me out behind the plant and he showed me 7-8 beat up 20 year old ice cream trucks. And of course my instincts as a Harvard Business School grad and McKinsey consultant and all that was, we'll sell the trucks. I knew that all the big grocers operated ice cream warehouses and almost all the ice cream drizzled through the warehouse and channeled themselves to handle the distribution of the stock in the stores and that was my idea to get this company on track. But this owner said to me, "Gary whatever you do, don't sell the trucks". And I'd just going broke in the restaurant business and so I thought maybe it wouldn't be smart to take the primary advice that the former owner had given me and just ignore it right out of the blocks. So we started off with what they called a direct store delivery. And that became probably our key strategic element. And what we found was that there were a lot of reasons why handling the ice cream yourself right to the cabinet- just briefly, these grocery employees are always overworked. The ice cream tends to site in the aisle when they'e stocking it at 2 in the morning. Ours was a premium ice cream- you know what happens to ice cream if it melts before it gets back into the freezer. And then by then by having a relationship with the store level people, our salesman could gradually get more space. They could say, "well Häagen-Dazs didn't fill their cabinet today, let us fill it for you" or you know "there's a little space down here that really isn't used properly," at store level you could do a tremendous amount of selling and the previous company they had called it ice cream drivers. We called them ice cream salesman. Just that little change made a huge difference and we treat we turned out to be the most overstocked ice cream- we had more shelf space relative to our sales than anybody else in the industry and that proved to be a really key element or strategy. It also facilitates something called scan based trading where instead of having the store clerk come out when we showed up with their truck and count the ice cream as we brought it into the store, and handle it invoice and all that sort of thing, we were able to have the grocer incur his obligation to us- the ice cream would be put in the store on a basis where it was still our ice cream, it wasn't the store's ice cream, it was on consignment. And when the ice cream went over the scanner, the grocer incurred the obligation to us at the same time they took money from his customer. And they really liked that. And they would pay us the following Monday for all the ice cream that had gone over their scanner the preceding week. Well, what that did, in addition to being a much more efficient way of handling in the ice cream and the transaction through the store, it gave us the knowledge of what the store had sold. We always knew what it had bought from us, but now by knowing what it had sold we knew by definition exactly what the inventory was in the store at all times. Know day by day. And so we could router trucks the way UPS does, if a store didn't need service we'd just pass it by and that made it much more efficient. But the really different than we did is we developed a culture that was probably the biggest element in our success. And we we were very careful who we hired. If you came to work for us, you probably would go through 6 or 7 really intensive interviews. And it was very hard to get on board, but once you were an employee, you were trusted. If you came to work for us, we would give you a business card with your name on the front and whatever your title was, you turn it over it over it would say "Company Philosophy, Use your own best judgment at all times." And we practiced that. We had something we called the upside down organization which meant as CEO I was at the bottom where the pyramid was sharp and it was digging into the ground and we had this philosophy that the people that really made for the success of the company were the people who made the Ice Cream, who delivered the ice cream, the people who sold the ice cream... And we tried to sort of invert the way the whole organizational works so that the people who did the real work got the credit. And that had a huge transformative impact on the company. We also trusted our people beyond any company I've seen. I mean we felt that the person who was on the front line, the person who had the responsibility for the issue will probably have a better perspective on it than anybody else in the company. So if you work for me and you came to me with a suggestion I would hear you out I would give you my honest opinion of what I thought to the pros and cons were, but at the end of that conversation but I would say, "Alan you decide". Now that seems like a fairly simple thing, but having worked in companies I know that the subordinate always expects the superior to make the decision at the end of a conversation like that. And if you think about that, if you're good employee, you're a good soldier, you go off and you try to make that decision effective but if it doesn't work you know and you say to yourself, well Gary made the decision I didn't. But if I say to you, you decide, it takes that all away and now you're responsible for the decision, you're also responsible for the outcome. And so I've come to believe that you decide are the 2 most powerful words in the English language. My wife my kids are so tired of having me say, "you decide" when there's a family decision to be made but it is amazing, amazingly effective. So that's just one example, I'd give you a lot of other examples of the kind of things we did but our people were so loyal and so committed and they knew they were trusted, it was okay to fail, we encouraged failure and now it was a terribly powerful force.
Alan: I'm visiting here today with Gary Rogers and Gary is most noted for his role at Dreyer's Ice Cream. Gary you've done a lot of other things, but I'm running up against a break, so after we get back I want to talk about your exit from Dreyer's or your sale to Nestles and then what you've done post Dreyer's. We'll be right back after these messages.
Alan: Welcome back I'm visiting here today with Gary Rogers and Gary we were talking about your role at Dreyer's, acquiring the company with a partner in 1976, building it into a name brand in the store and then eventually selling out in 2001. I'd like to spend a few minutes talking about what what led up to the exit, and then post Dreyers did you go on to do?
Gary: Well the story of Nestle and Dreyer's was a long one because we had just barely acquired Dreyer's when the president of Nestle USA- the USA division of this huge- at that time $60 billion food company- give me a call and he wanted to come see me. And from that day forward almost every month, until we finally sold them a piece of the company he was there. You see Nestle and Unilever were worldwide competitors in ice cream. If you added up all the ice cream businesses around the world, Unilever had just a slight lead on Nestle. And the acquisition of Dreyer's even when it was small, by Nestle would've put them in first place. So that's the way these big companies work- right. They really were eager to acquire Dreyer's. And they made it clear. They never were never really tough, I mean they they just kept making the argument over over over. And when the CEO of Nestle calls you, you've got to answer alright. So finally after I don't know how many years, we agreed to sell Nestle 18 percent of Dreyer's. It was part of my defensive strategy, because by selling them 18 percent, they agreed to a 10 year stand still so that meant that for 10 years this pressure that I'd been under. To sell the rest of the company would go away and it did. They honored that 10 year contract. And I thought 10 years was a long long time, but for Nestle who thinks and centuries- 10 years was a stake hold position. For me it was a defensive decision. But that 10 years went by very quickly, when the 9 year point came by, the CEO of Nestle started to land on my couch again and we wound up agreeing to an extraordinarily attractive offer for my shareholders. You know when you're a public company you've gotta think in terms of what's in the best interests of the shareholders. And so this company that we acquired for $1 million 25 years before, we were able to sell for $3.2 billion. And the IRR was something like 42 percent for 25 years, so it was an extraordinarily successful financial transaction. But it also achieved Nestle's goal of being the
largest ice cream company in the world.
Alan: So after this there's this exit, you found some time to do other things and what did you go on to do?
Gary: Why it took actually the transaction for complicated reasons- it was 3 years before it closed. It was agreed to, it wasn't subject to performance but so there were 3 years until it closed and then we have some complications with the fair trade commission the terms of deeming us a monopolist in certain respects, we had to work through that. So it was really for years before we got the transaction closed and then Nestle asked me to keep running the company which. I had thought about I said, there is no way that you would agree to my conditions. And he said- the CEO of Nestle said, well what are they? And I told him what they were, and he said, well of course we can't agree to that, and I said, I told you. He called me a week later he said we'll do it. So for 2 years I ran the company, but by then it was 2007 or 2008 it was it was time to move on so I did and I've done a wide variety of things since them. I was the first non family chairman of Levi Strauss. The chairman of Levi Strauss when I was in college was Walter Haas. Walter Haas senior and he wrote me a letter that I know had a big influence on getting me into the Harvard Business School. Well as life would have it- serendipity is amazing- I found myself sitting in his chair at his desk with his title as chairman of Levi Strauss. Who would of thought. But then I went on for other complicated reasons I was on the Safeway board and they elevated me to chairman at a time of transition and I was there as we Safeway for $10.7 billion to a combination of Cerebus & Albertson's. That was quite a story in it of itself. And I was chairman of the San Francisco Fed which was an amazing experience because Janet Yellen was my president when I was chairman. And there I was working with the former chairman of the big Fed as they call it back in Washington, and that was just an incredible experience, and I've had wonderful experiences with these board positions one of which for example the Stanislaus food products which is a tomato processor of now an olive processor out in Stockton, California. And I've been on that board for 28 years and it's just been a joy. It's just so much fun I've got a great relationship with other people on the board and with the CEO there working through the problems of that medium size company, it's been fascinating. I'm also on the board of Shorenstein Realty which takes me into a whole different world of very sophisticated very large largely office building transactions from that very successful real estate fund company. And I can go on but I don't get stressed I'm always got more to do than I can do, and I believe that the joy of life is in the doing- it's in the journey, it's in the struggle and I'm just very pleased with the way life has worked out for me.
Alan: Now Gary, you've done a lot of different things, but how do you find balance in life as you're going through the journey?
Gary: You know I haven't it found that difficult, I think people over stress how difficult it is. I mean I've got a huge family- 11 grandchildren, I've got four boys, they're all married they're all happy they're all doing good things. And all this business activity that I've begun to describe, here but in addition to that I counted up the number of pins in my map the other day and outside of the United States, right basically I've been everywhere with my Dreyer's, we had a sales office and every city in the country. I have 280 pins in my map which means 280 separate cities. Okay I've been to the North Pole- I don't mean the arctic, I mean the North Pole. I've been to the South Pole, I don't mean the Antartic, I mean the South Pole. When I did that, there'd only been 50 people who had been to both the north and south poles. I've been to every single Aman hotel. I'm just a junkie for that hotel chain- Aman resorts. And have they 30 hotels now, I've been to every single 1 of them all over the world. My wife and I have been able to find a balance, we have a wonderful family, everybody gets along, we've got wonderful daughters in law, we have 11 grandchildren somehow it just worked out.
Alan: Gary I'm running up against a break but I'd like to hold you over for one more segment if I could. I'm visiting here today with Gary Rodgers and we'll be right back after these messages.
Alan: Welcome back I'm visiting here today with with Gary Rodgers and Gary it's been an amazing show listening to all the stories and what you've been able to do over your life, I understand you even wrote a book called the spirit of adventure.
Alan: So knowing what you know today day and having this wealth of experience and successes, experiencing failures along the way, what message would you give to the up and coming generation today?
Gary: I think the first thing I'd say is. Don't over plan. I have a theory that if you get the days right, then the weeks. If you get the weeks right, the months will be right, If you get the months right, the years will be right and so forth. So I take a hot tub every night, only for like 10 minutes and I think of only 2 things in that hot tub. Number one how did today go, what did I do. tonight I'll be thinking about his interview that we've just done. And then I think about tomorrow. What's on for tomorrow, whom I'm gonna meet, what do I want to cover. And it isn't being self critical, it's just being thoughtful and prepared. My theory is you only get one trip around this track of life. There are no Mulligans. I mean we are never gonna do this interview again, let's make it as good as it can be. And who are you going to have lunch with tomorrow, and what can you learn from that person- I mean that kind of attitude. That also stems from a belief that- life is really about serendipity. It's very hard to plan. Lot's of time you young people have a 5 year plan or whatever, those plans almost never work out. There's just too much just randomness and serendipity of life. But what one has to do- you know the Boy Scouts have a motto, it's "Be Prepared" Louis Pasteur said it a little more elegantly, he said fortune favors only the prepared mind. And so what I find is really important. Is to be able to cope with opportunity that comes your way. We all much more opportunity than you think we see. And some people are prepared through schooling or experience or just instinct to turn those opportunities into things that are of value to them and others aren't. You know when I look back at my life, most of the "successes" I'd had, I didn't think about, I didn't plan They just kinda happened but I was able to deal with the opportunity when it came along. I mean Dreyer's grand ice can for example, I went into the Dreyer's office to talk to them about whether they had a franchise program for ice cream dip shops. And I happened to be introduced to the then owner and CEO of Dreyer's. And he just happened to be finishing a phone call that I could tell was very important and he hung up the phone. He had tears in his eyes. And I offered excuse myself and he said "no, no, let me tell you what just happened. That was my bank. They turned me down for a loan I desperately need to keep this company going." So, what do you say to someone like that? I'd just come off of an experience, I'm broke... What do you say to somebody like that? Well I knew enough to say, "have you ever considered selling the company?" Most people wouldn't do that. They'd offer to get him another banker or to help him find some equity or whatever, but I just blurted out the words that changed my life. "Have you ever considered selling the company?" and he said, "no not till just now." Two days later I had an option to buy his company for $1 million. He asked me, "so how you gonna pay me?" I said, "I'll give you a check." I didn't lie to him, I didn't tell him it wouldn't be my check. And I did give him a check for $1 million. So that's a good example of the attitude that one should take. And then follow your passions. You should never spend a day of this life board or doing something that you find distasteful or you really don't want to do or doesn't lead to something worth while for you. I'm not saying that every day, every week or your life is going to be fantastic, but I've learned that every decade of my life has been better than the preceding ones. When I was a teenager, I thought 'how could like be better than this, driving around on my hot rod with my girl friends.' I'm not my seventies, I've never had so much fun okay. So that's the short version of my philosophy.
Alan: I love it, very inspiring, and also helping to get perspective. Take the risk, enjoy the journey.
Gary: That's right enjoy the journey go for the gusto.
Alan: We've been visiting here today with Gary Rogers and that thanks for being with us today Gary.
Gary: It's been for my pleasure, it's been lots of fun.