An Architect of an Enduring Design
By Mitchell Schechter -- Foodservice Equipment & Supplies, 9/26/2007 10:52:00 PM
 Bob Don stands above the floor of the warehouse he helped to design in N. Riverside. Photos by Jack Grossman |
A problem is a deviation from what ought to be," Bob Don remarked recently to a visitor, sitting on a shaded porch overlooking the Intercoastal Waterway in Ft. Lauderdale, Fla. "So, if you don't know how things should be, within a business or a family, then you won't realize it when you do have a situation that needs correcting."
Don, FE&S' 2004 Hall of Fame inductee, very likely possesses the best known patronymic in all of the foodservice E&S industry. His family (including four uncles and a father who founded Edward Don & Company in 1921) and his company have occupied center-stage during nearly all of Bob Don's life. Now, two years after retiring as CEO, having spent 38 years in various leadership roles at the nation's largest E&S dealership, his experience provides a broad perspective on their entwined histories.
Bob Don was born in 1936 in the Hyde Park neighborhood of Chicago, the only child of Sam and Esther Don, and a member of a large and boisterous family that owned what was then a struggling janitorial, bar and soda fountain supply business. The adult Dons often gathered in those days with their families for weekend picnics and Bob "grew up listening and learning about everyone's roles and problems."
This awareness and early understanding of responsibilities and conflicts both within the company and among those who ran the business essentially directed Bob Don's role during his entire career with the organization that Edward Don, his brothers and sisters had established. It's hard to recollect the business conditions the Don family encountered during the 1920s, but in selling to a barely emergent, nearly unorganized hotel, tavern and soda shop market, this enterprising brood had several (hitherto unknown) advantages.
First, eldest brother Reuben (who never officially joined the company) worked as a vice president for the Spiegel firm in Chicago, then one of the foremost practitioners of catalog-retail sales in the country. "Reuben gave his brothers the knowledge to produce their own multi-line catalogs, which were then completely unknown in the industry," Don advised. "Customers in those days were used to searching out suppliers that had the products they wanted, but we were able to call on them with salespeople who could bring our entire store to them in one simple book."
The Dons' pioneering use of catalogs and commitment to street sales were further augmented by the skills and experience of Edward Don himself. Before founding his eponymous company, Edward, along with brother Kelly, had worked for Albert Pick & Co., then the leading hotel supplies company in the Midwest. Equally important, Edward served in the Army's Logistics Command during World War II.
During his adult life he had learned organizational procedures and structures, becoming expert at mass distribution systems and teaching himself industrial engineering. With this background, Edward was able to organize his family's business during the post-WWII period to achieve previously unheard of efficiencies and market penetration. "Thanks to Edward, we were doing next-day deliveries in the '20s. He was also the first one to give salespeople cars early on, when they were their proudest possessions," Don commented. "This helped our sales force travel outside the established metropolitan areas, with their catalogs, and we found there was no substantial competition, so our sales range and customer base expanded very quickly."
As a child, Don could often be found in the warehouse at the company's LaSalle Street headquarters performing small chores for his father, the firm's buyer. However, his most vivid memory is of the founders' weekly Saturday morning "partners" meetings. "They'd all go into an office, Edward, Kelly, my father Sam, David and Mike, the youngest who opened up our first remote location in Florida, and they'd go to separate corners and they'd scream at each other," he observed ruefully. "Edward was the decision-maker, and he could usually brow-beat the others into following his lead, but those exchanges of opinion and criticism of each other's 'bad' ideas were long, loud and famously vociferous." Perhaps because of these ongoing conflicts, perhaps because of his independent mind and curiosity about the wider world, Bob Don formed no early plans to enter his family's steadily growing company. "I had no idea what I was going to do with my life when I was in high school," he recounted. "I was a difficult student to manage, someone who teachers pushed ahead to get rid of, so I graduated from high school at 16."
Due to his father's willingness to send him to any college that could be reached and returned from for less than $100 in airfare, Don chose to enroll at the University of Colorado in Boulder in 1953. "I had no clue," he noted with a laugh. "As I was boarding the plane to leave for college, I turned to my dad and asked, 'What do I do when I get there?' My dad replied, 'We need engineers in the business.' So, I signed up for the School of Engineering and quickly proved that I was not their brightest student."
Nonetheless, Don persevered, though he availed himself liberally of the Rockies' ski trails and Boulder's nightlife, and he graduated from UC in 1957. Military service was then compulsory for young American males, and Don spent the next two years as a Second Lieutenant stationed at Ft. Knox in Kentucky. In addition to his military duties, he took flying lessons and earned a private pilot's license and spent much time in the post's library, where he encountered the writings of Oliver Wendell Holmes, the illustrious jurist. "That's when the thought occurred to me that I could become a lawyer," Don said. Carrying forward the notion with customary alacrity, Don applied to and was accepted at the University of Chicago's Law School, from which he graduated in 1962. Shortly thereafter, he married Charlotte Cohen, and the couple began a family that ultimately included daughter Abby and sons Steve and Adam. (Abby today is a software interface designer, while Adam is a sales manager at Edward Don's southern California branch and Steve is the company's president and CEO.)
One month before his daughter was born, Don went to work for the Chicago law firm of Overton, Marks and Schwartz, which specialized in civil rights litigation. "I progressed from writing briefs to handling cases in criminal courts; it was an incredibly broadening experience," Don remarked. "I also went on calls to prospective clients, which taught me how to sell services." After two years in the legal trenches, Don was approached by his uncle Kelly, then running Edward Don's sales force, with a job offer. "He offered me a 50% larger salary and incentives for performance if I would take a sales supervisor's position with the company," he related. "I accepted, with reluctance, telling myself I'd just do the job until something else came along." As it had from its inception, Edward Don & Company maintained a large street sales force in 1964, the year Bob joined the firm. He worked with sales managers who oversaw the street staff, conducted training courses and opened new territories. "It was very different than legal work and I found it hard, but I also knew that I had found a career path," he noted.
 As a sales executive, a younger Don (left) addressed his colleagues. Edward Don & Company's original Chicago warehouse (above) and truck fleet supported next-day deliveries to customers. Photos courtesy of Edward Don & Company |
During the mid-'60s, Edward Don was already recording some $50 million in annual sales, and was growing rapidly with the booming U.S. restaurant and foodservice industry. This was also a period when two generations of Dons were involved in corporate management. Though Edward had died in 1955, the surviving brothers, sisters and in-laws had brought many of their children into the company, and competing ownership claims and turf wars were rife. "Today, when we do an academic model of a family business, we use three circles - one each for family, ownership and management. Because each component is driven by different values and objectives, wherever the circles overlap there is potential for conflict and crises," Don explained. "In the Edward Don & Company in which I grew up, all the circles overlapped, totally. This meant that there were ongoing power struggles and that the primary rule of governance was primogeniture, which made for a very inefficient and autocratic structure."
One example of the company's imperious management style occurred in 1967, when Bob (and his young family) was ordered to Philadelphia, to help run that location's sales force. "I didn't want to go, but it was an invaluable experience because I learned two things," Don said. "I began to understand how the business succeeded - by buying better than our competitors and listening more closely to our customers, tenets which I've upheld ever since. But I also confirmed that whatever I proposed by way of changes and improvements was going to be countermanded by the old guys in Chicago. I didn't see my job to be telling them just what they wanted to hear, so after about two years in Philadelphia I took action."
This step took the form of Don's unauthorized return to Chicago. "I walked into Kelly's office one afternoon and said, 'I'm back.' Kelly jumped up, said, 'You can't work here, there's no job for you.' I said, 'You'll find one. I'm back. Deal with it.'"
Faced with Bob's determination, his uncles and father decided to give him his greatest responsibility to date: the development of the company's new headquarters in North Riverside, Ill. "I had no idea how to create a 300,000-square-foot warehouse, showroom and office complex," Don admitted, "but I worked with our architects, contractor and computer consultant to plan a facility that would let us carry on our existing business more efficiently in the future. It was a huge undertaking, and I had all kinds of input from my uncles and cousins, but in the end we opened a fully functioning new location on time in 1970. That was probably my greatest accomplishment and one of the highlights of my career."
Another milestone for Don occurred in 1975, when he began a two-year term as FEDA president. His tenure in the post was marked by spirited statements on behalf of dealer-based distribution and development of new member training programs in sales and relationship building.
Backed by its new advanced warehouse and the company's first computer system, Edward Don grew steadily during the 1970s, reaching more than $150 million in annual sales by 1979. That was also the year in which Don took on the challenge of becoming the company's chairman and CEO. For many years, the company's sales increases had been driven by the double-digit annual growth of the foodservice industry at large. During the early 1980s, this rate of growth began to diminish. Nevertheless, Edward Don & Company continued to achieve significant top-line increases, even opening locations in Atlanta and Memphis, Tenn. During this time however, several family members withdrew their investments in the firm.
By mid-1986 (after 1985's results had produced a third consecutive year of diminishing profitability), the Don cousins decided that they needed to sell the business. Bob emerged as the likely buyer, but this move was to prove among the most difficult of his career for two reasons: He had to borrow enough money to buy out all the rest of his family's holdings; and he chose to take on this weighty debt just as the foodservice industry was entering a downturn.
"I had decided that the company was never going to reach anything like its full potential unless we found a way to end the conflicts caused by family members' differing needs and agendas. We had to establish a single line of management authority and become unified in our goals," he said.
 In 2002, Bob Don (with, left to right, son Adam, wife Charlotte, son Steve and daughter Abby) received an award for "outstanding achievement" from his co-workers. |
Equally important, when Don had applied for financing for his leveraged buyout, he'd been required to present a strategic plan that outlined how the company would become more financially efficient and generate enough additional revenue to repay its new loans. His plan, Don recalled, contained three goals. "First, I knew we had to right-size the company; we'd spent years throwing money at problems and adding bodies, which had bloated the organization and reduced our profitability," he remarked. "Second, it was past time for us to focus our sales on what I saw as the 'new marketplace,' the chains and multi-unit operations that were driving the growth of the industry. That meant we had to stop investing in marginal street-sales territories and start hiring people capable of calling on national accounts. Our third goal," he continued, "was to begin operating more effectively, because as vital as the new marketplace accounts were to us, we knew they'd return lower margins."
Though Don's plan for the company was clear and market-driven, he would struggle to implement it successfully across his giant organization during coming years, as he had to refocus both managers and staff on learning from and listening to their customers, rather than internal organizational concerns. Nonetheless, by 1987, as the firm was not making money regularly, Don decided that more aggressive action had to be undertaken. He first initiated a three-phase force reduction that cut the organization's head-count by a third, to 1,200. This was accompanied by the closing of marginal sales territories, an increase in national accounts staffing and the replacement of much of the company's top management team. Interestingly, Don closed no locations for, as he pointed out, "Two things earn respect in our industry - mass and momentum - and you have to have them both. I knew that if we cut our mass, we'd forfeit the respect of our business partners." Though Don stressed that he spent the next two years touring the company's branches and meeting with clients to explain his changes and "essentially going without sleep," the radical alterations he had implemented did, at last, restore Edward Don's momentum. By 1988, the firm was once more breaking even. In 1989, when sales topped $200 million, Edward Don & Company returned to profitability, opened its first contract division and acquired Rose Restaurant Supply of Kansas City, Mo. During the early '90s, a second-generation computer system was brought online and Edward Don bought Montgomery Green, a design house, giving it a first-rate engineering staff based in the Carolinas and helping to drive annual sales to $225 million.
In 1993, the turnaround at Edward Don was recognized by FE&S, which bestowed its Dealer of the Year award on the com-pany. Don stated that he felt the acknowledgement was a tribute to the "many hundreds of people who contributed their abilities and effort to our recovery. It was a company award for our team, not for me personally."
Though Edward Don's improved performance could not have been accomplished without the contributions of all of its personnel, only Bob Don could have created the company's next key resource. In 1995, Don drafted a document called "A View From 2001," in which he posed the question "What kind of company will we be as we move into the 21st Century?"
"I also argued that we had to put our focus on doing things right the first time, making it easy for others to do business with us, and ensuring that customers received the highest value, suppliers had dedicated representation and employees could benefit from meaningful career opportunities," he emphasized. "In addition, I insisted that we had to become the technology leader by 2000. This forecast, I believe, helped to lay out a plan that, with some tweaks and adjustments, we've been able to follow ever since."
Knowing that greater annual growth was essential if the com-pany was to hold its market-leading position after the Millennium, in 1996 Don also hired a new CFO, Jim Jones, who (in his judgment) has been "one of the best additions we've ever made." Jones' professional abilities have provided Steve Don with a strong finance-oriented colleague with whom to work as he ascended the company ranks into top management after joining the firm in 1992. Under Bob Don's direction, Jones, Steve and other key executives worked during the second half of the '90s to achieve three goals - grow top-line sales by 10% annually, maintain a peaceful and productive work environment, and plan an orderly leadership succession from father to son.
 During a recent visit to Edward Don & Company's headquarters, Bob looked over a new design project with son Steve, the firm's current president and CEO. |
"After the difficulties we experienced transitioning from the founders to the second generation, I was determined that my hand-over to Steve would be well-planned and amicable," Don related. "Of course, what I found out was that letting go of leadership is the hardest thing you ever do. Fortunately, I realized that if you let go, there will be a successful transition and you will have happy colleagues and a happy business. If you don't let go, well, then you're going to send your company right down the tubes."
Don credited much of his ability to understand and implement the delicate nuances of family succession (which took effect at Edward Don in January 2002) to preparatory work he and Steve had done at Loyola University's Family Business Institute in Chicago. "I became seriously involved with the institute after Steve joined the company. We received invaluable feedback in their workshops and I've served on their board for the past five years," he said.
This degree of involvement with organizations outside of his business has also been a hallmark of Don's career, going back decades to his first work with Chicago's Jewish Family & Community Services agency, which he has served as president and board member. Don has also served on the boards of Kendall College, The American Institute of Wine & Food and Chicago's Meals on Wheels, as well as two for-profit companies.
Still chairman of Edward Don's board, Bob stays in touch with the company he did so much to design by reviewing key operating reports daily and chairing its compensation committee. In pursuit of personal interests, Don is teaching himself to speak Spanish, to trade puts and calls, and to improve his sailing skills by participating in ocean races in his favorite corners of the Caribbean. "One of the things I've always believed," he told his visitor as their meeting drew to a close, "is that ours is a business governed by certain basic truths. One is that you have to understand each organization you want to do business with from its own perspective. You have to ask, what are each customer's objectives? What are their problems or needs? What are they trying to accomplish and which services will they find valuable? Only when we apply all our efforts to provide answers to those sorts of questions can we serve all our constituents — customers, suppliers and colleagues — to the best of our abilities."
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