The Mormon Way of Doing Business

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AUTHOR'S NOTE

I am a Mormon. That's something I've never said in print. Nor has it ever been necessary or appropriate, since I have not previously written about religion. This book is not a religious one either. It is a business book about success and how to succeed well. But every CEO in the book is Mormon. The book examines how their religious beliefs and personal habits influence the way they do business. The fact that I am also a Mormon requires disclosure and has a lot to do with why I was asked to write the book.

Over Thanksgiving in 2004 I received a call from an old friend at Warner Books, executive editor and vice president Rick Wolff. He invited me to be on his Sunday radio talk show to promote my previous book. I try not to let business crowd into my Sundays, the one day I like to reserve for my family. This led to a conversation about Mormons and business practices. I shared that the dean of the Harvard Business School and several of its faculty members are Mormons. Wolff was surprised. Then I mentioned that the CEOs and senior executives at more than a dozen of America's top companies were also Mormons. Wolff knew about Bill Marriott and Mitt Romney. He asked what other major companies had Mormon CEOs or top executives.

I rattled off some: JetBlue Airways Corp., Dell Inc., Deloitte & Touche USA, American Express, Madison Square Garden Corp., Black & Decker Corp., Continental Grain Co., Times Mirror Co., and Harvard Business School.

"Are you kidding me?" asked Wolff. The notion that Mormons presided over corporations and institutions that are industry leaders in airlines, computers, accounting and auditing, financial services, credit cards, entertainment, tools, media, food and grain production, and business education had him intrigued.

He asked if all these CEOs are devout in their religion.

I told him I wasn't sure about that. A devout Mormon is someone who, among other things, pays tithing (10 percent on all earnings) to the Church; keeps the Sabbath day holy (doesn't work on Sundays); abstains from coffee, alcohol, and tobacco products; and maintains the strictest standards of marital fidelity. Also, a devout Mormon is expected to give something that many of us covet—time—by serving in an ecclesiastical position in the Church without compensation. Since the Mormon Church has no paid clergy, all Church positions—bishops, Sunday school teachers, elders, and priests—are filled by Church members who respond to calls to serve by committing between five and twenty-five hours per week to the Church on top of their professional and family obligations.

With a few exceptions, most of these executives were strangers to me. Besides their corporate titles, about the only other thing I knew about them was that they had served as bishops or in some other leadership capacity in the Mormon Church. A bishop presides over a congregation of up to 500 members and has responsibility for those members' temporal and spiritual welfare, as well as oversight of the Church's finances, assets, and properties within a congregation's geographical boundaries.

That was enough for Wolff. Thirty minutes after it began, our conversation ended with Wolff saying he had an idea. He asked me to e-mail him the names of each Mormon CEO and the respective company he runs.

I did. Two days later I was offered a book contract by Warner Books to write The Mormon Way of Doing Business.

Without negotiation, I accepted.

At a time when regulators and prosecutors are exposing widespread greed and corruption on Wall Street and high-profile CEOs are being indicted for fraud and conspiracy and fired for everything from looting their own companies to extramarital affairs with employees, my editor wanted to know what it is about these Mormon CEOs that makes them different. How do they manage their time? What and how much do they delegate? How do they negotiate? How do they treat employees, business partners, and competitors? How do they handle ethical dilemmas? What is the secret to sustaining healthy marital and family relations while maintaining their competitive edge in the relentless corporate environment that expects a 24/7 work pace? Do they truly give 10 percent of their earnings to the Church, and if so, why? What drives them? And how do they handle power, personal wealth, and control over vast corporate resources?

There are plenty of exceptional non-Mormon CEOs who have achieved great personal and professional success while holding true to their values and maintaining the highest standards of ethics and integrity. But this book is an examination of an unusually successful group of Mormon business executives who have remained true to their values.

They are: David Neeleman, founder and CEO of JetBlue Airways; Kevin Rollins, CEO of Dell; Jim Quigley, CEO of Deloitte & Touche USA; Dave Checketts, former CEO of Madison Square Garden Corporation; Gary Crittenden, CFO at American Express; Rod Hawes, founder and former CEO of Life Re Corporation, the world's largest independent life reinsurance company; Kim Clark, dean of the Harvard Business School; and Clayton Christensen, a leading Harvard Business School professor and consultant to Intel, Eli Lilly, and Kodak.

This book is not an exposé on these men, their companies, or the Mormon Church. Rather, the book examines what makes these executives tick and reveals their habits and secrets to success. At the outset, I composed a series of uniform questions aimed at discovering each executive's background, character traits, personal habits, and business practices. Next I wrote a personal letter to each executive, detailing the scope of the project and seeking his cooperation. I mailed the letters directly to their homes rather than their offices.

Each leader responded directly or through his executive assistant. I dealt with no public relations specialists, agents, lawyers, or other go-between person. And all responded swiftly.

My letter to JetBlue CEO and founder David Neeleman went to his Connecticut home on March 7, 2005. Days later I received a phone call from his executive assistant, Carol Archer, inviting me to come to JetBlue's headquarters in Queens, New York, on April 7 at three-thirty in the afternoon for a one-hour interview with Neeleman.

When I arrived I was ushered into a small waiting room. A few minutes later a man walked past the open door, stopped, backed up, and looked in. "Are you Jeff?" he asked.

"Yes," I said.

"Hi," he said, extending his hand. "I'm David Neeleman."

We shook hands and he led me to his office. He took a call from a U.S. senator, rushed through a deli sandwich and cold cup of soup, and asked me a few things about myself. By the time I started the interview it was nearly four o'clock.

Out of respect for his schedule, I concluded the interview promptly at four-thirty with this final question: If not money, power, or fame, what drives you?

"A lot of what drives me is an inferiority complex," he said. Then he added two more motivators: "Being a good example and doing things right."

The notion of Neeleman having an inferiority complex puzzled me. At the time of this interview, JetBlue had more than $1 billion in annual revenue, enjoyed ratings as the number-one airline for service and customer satisfaction, had been profitable for an unheard-of eighteen consecutive quarters, and was growing in leaps and bounds at a time when four major airlines had either filed or were considering bankruptcy. He didn't explain his view of himself until months later in a subsequent interview.

In our first meeting he did outline why doing things right is so important to him. As a result of JetBlue emerging as the airline industry's darling, Neeleman naturally obtained great notoriety as its founder and leader. With notoriety came scrutiny and publicity. Two distinguishing personal attributes received particular attention: He is a Mormon and he has nine children.

Neeleman told me that the fact that his customers, his employees, his business partners, and his competitors know he's a Mormon motivates him to work extra hard at being fair, honest, and trustworthy, and leading by example. "I believe the Mormon Church is one of the most misunderstood organizations on the planet," Neeleman said. "Yet we are held to a higher standard. I have to be an example and live my life in the business world the way people believe I should."

All the CEOs I interviewed for this book expressed a sense of responsibility to conduct themselves in a manner that would never bring disrespect or shame to the Church they belong to. But no one was more spirited in his comments than Neeleman. "If people can see me not just as the CEO of JetBlue, but as someone who cares deeply about others and is a faithful member of the Church of Jesus Christ, I feel driven to do that," Neeleman said. "I'm very well aware that when other people in business have problems come up, their religion doesn't come up or attach to the problem. I think we should be honored to be held to a higher standard. I'm not perfect. But I try to live my life the same whether I'm at work or at home or wherever."

After the interview, Neeleman unexpectedly kept me another half hour to talk off the record. Then he took a phone call from a writer at Forbes magazine. By the time he hung up it was nearly five-thirty and I had missed my train to Wall Street, where I was scheduled to meet a friend who had agreed to drive me back to my car in Connecticut.

Neeleman asked where my car was parked. At a train station in Westport, I told him, roughly ninety minutes from Neeleman's office.

"I'll just drive you there," said Neeleman, who lives near Westport.

Over the next three hours I learned far more by watching Neeleman than I would ever get from talking to him. From five-thirty to six-thirty he conducted two punchy internal meetings, took phone calls, and approved a press release after deleting language that he felt gave him too much credit. He also joked with his staff and got caught taking candy from a bowl in his executive assistant's office.

He left his office at six-thirty and headed for the elevator. As it stopped on lower floors and other employees got in, he read their employee ID badges, addressed them by first name, and asked genuine questions about their workday. The employees gave him honest answers.

When we reached the basement floor, Neeleman exited into the employee parking lot with other JetBlue employees and found his SUV. He has no reserved parking space and no personal driver. I hopped in the passenger seat after he cleared it of papers, a few empty beverage containers, and numerous books on CD. As a CEO and father of nine, he has no time to read. He uses his commute time—a little over an hour each way to and from work—to listen to books on tape. The book CDs I saw were either about the Founding Fathers or inspirational and religious, and they included mostly non-Mormon authors and titles.

Just before we reached Westport he took a cell phone call from one of his daughters. It was seven-thirty and she was at home and needed to be at her dance lesson at seven forty-five. Mrs. Neeleman was at a church function, where she has a leadership responsibility. Despite having nine children, the Neelemans do not employ a nanny. When I asked Neeleman why not—he can certainly afford a team of them—he said simply: "It's good to have Dad around."

Neeleman promised his daughter he would be right there. He apologized to me, made a U-turn, and headed for home, telling me I was going to have to go with him because his children needed him. Ten minutes later we pulled into his circular driveway, stopping the SUV in front of the house. First, the curtains in the front room parted and a couple of tiny faces appeared in the window. Then the front door flew open and a pack of young children rushed out, shouting "Dad!" as they piled into Neeleman's lap before he could exit. Some of the older children climbed into the backseat, and moments later we were off again.

Over the next thirty minutes Neeleman shuttled kids to dance lessons and other community activities, and picked up some of his other children at various athletic practice fields and after-school activities. In between cell phone calls and conversation with me, he quizzed his kids about their day. By the time he got me to my car at the Westport train station it was 8:30 P.M., five and a half hours after my arrival at his office.

Ultimately, each of the executives I approached was forthcoming about lifestyle, motivations, and his approach to leadership and business. They put only one request to me: Don't write a book about us that is self-congratulatory or self-righteous. Otherwise, they put no restrictions or qualifications on what I could ask them, and none asked to review questions in advance.

Over a one-year span I conducted over thirty interviews with these corporate leaders. Almost all interviews were tape-recorded. Besides interviewing each of these executives in his corporate office and in other business settings, I interviewed and observed all but one of them in their homes. I also conducted over fifteen interviews with these executives' wives, most of which were also tape-recorded.

Additionally, I sent and received more than fifty e-mail communications from these CEOs and their wives containing answers to specific follow-up questions. I also interviewed the executive assistants for some of these CEOs.

Through this process I discovered some telling patterns and insightful similarities among the eight Mormon business leaders. I also found some stark differences.

Seven of the eight are lifelong members of the Mormon Church, all born or raised in Utah, primarily in small rural towns. Only one, Rod Hawes, who grew up in a rural Idaho community, converted to Mormonism as a young adult.

Almost all of them had ancestors who crossed the Plains as Mormon pioneers in the 1800s.

With two exceptions, the fathers of these executives had occupations that generated no notoriety and only modest income. They include a forester, a farmer, a paint store manager, a highway department road grader, a cattle herder, a schoolteacher, a civil engineer, and a mobile home salesman. Each of them said his father taught by example the value of hard work.

All eight men credited their mothers with having a profound influence on their success in business. A few of them had working mothers—three as schoolteachers and one as a store clerk. All eight said their mothers were heavily invested in them, instilling self-confidence, determination, and a core value set that has triggered a hard-charging, focused approach to business coupled with a high emphasis on personal integrity.

Six of the eight served a full-time mission for the Mormon Church at age nineteen or thereabouts.

Despite deep Utah roots, all of them chose to leave Utah to pursue their business ambitions, and none of them consider Utah home today, preferring the fast, big-city pace of New York, Chicago, and Boston. Five of the eight executives live within three miles of each other in New Canaan, Connecticut, and belong to the same congregation.

None of them work on Sundays except when unusual circumstances require their attention. Most of them try to do minimal business on Saturdays, too.

All of them hold significant church leadership responsibilities and spend on average ten to fifteen hours per week on those assignments.

None of them has been divorced.

Isolated, none of these facts explain the extraordinary business and financial success of these men. Nonetheless, when viewed in the aggregate, these links in heritage, upbringing, lifestyle, and priorities go a long way toward providing a context to the way they do business and the way they view the world and themselves. While all of these men were quick to point out their personal limitations and imperfections, all of them have nonetheless managed to excel as fathers and husbands, business executives, and church leaders. The fact that they've managed to balance these three areas has a lot to do with the observance of simple personal rules and personal habits.

"The true definition or true defining situation for a person is what they do when they are alone and don't have to do anything else," Dell's CEO Kevin Rollins told me. "What do they do? Do they do frivolous things? That's when you define what you are."

By visiting these executives in their homes, I saw how they spend their discretionary time and observed firsthand what Rollins meant. I came away convinced that the private character and habits of a CEO have an undeniable effect on how that person conducts his business affairs with employees, colleagues, partners, and competitors. My first visit to the home of Harvard Business School dean Kim Clark offers an illustration.

The first time I interviewed Clark he invited me to spend the night at his home outside Boston, a two-hour drive from my Connecticut home. The only time his schedule had for an interview was a one-hour early-morning slot before he went directly to the airport. I arrived the night before, just in time to retire to bed. When I arrived he set me up in a guest room and told me that if I needed anything he would be in his study working on a book. Intrigued, I asked him what he was writing about. He explained it was not something he started for publication, but instead a book for his children and grandchildren. Since age nineteen, Clark has devoted approximately an hour per day to reading and studying the scriptures—the Bible and the Book of Mormon. Over his lifetime, he has spent thousands of hours reading those two books. Now, he devotes an hour each morning (and sometimes time in the evenings) to composing a book about what he has learned, a book that only his children may read. His purpose is neither to make money nor to preach, but only to leave behind a legacy for his posterity.

I was still thinking about that when I awoke the following morning and went down to the kitchen at the appointed time for my interview. There I found Clark wearing dress slacks and a white shirt and tie. Over them he had on a kitchen apron. He was washing dishes and preparing breakfast for me and one of his seven children, a son who was living at home.

When he finished cleaning up the kitchen, he removed his apron, served me breakfast, and sat down for the interview. I noted that the public would be surprised to see the leader of the country's top business school, a man who presides over a $1 billion endowment and sits on the boards of other top American companies, wearing a kitchen apron, doing dishes, and serving a journalist breakfast. "I grew up in a home where we were not only expected to make our bed, do the dishes, do our chores, and go to Church and say our prayers," Clark said, "but we were expected to be a leader and do it well. This has had a significant influence on how I think about the world and what I do and how I do it."

Then Clark told me a story about his childhood. He said that every day before he left for school his mother would grab him by the lapels and say: "Remember who you are." Then she would send him out the door to school.

While running the nation's top business school, Clark never forgot his mother's plea. "There's nothing we do here that's not important," he said. "We are educating people who are going to be leaders in the world."

He takes his job at HBS very seriously. But Clark doesn't take himself and the prestige that comes with his position too seriously. "I've figured out that this doesn't have much to do with me," he said. "It has to do with the position. In a position like dean of HBS, there are lots of opportunities where people will say things when they are really applying it to your position and the institution. If you are not careful you start imagining that they are talking about you personally. You can get yourself convinced that you are becoming something really quite special.

"So I work really hard at reminding myself every day who I am."

Clark spent his entire career at Harvard Business School. All seven of his children were born during the first ten years of his career. During that time period, he established a rigid pattern of coming home from the office each night at dinnertime and leaving work behind. He realized early on that if he was happy and fulfilled at home, he would be more productive and effective at work. The trick was keeping up with his peers and competitors who were logging far more hours at the office.

"In business, the number of hours a person puts in is not a good indicator of output and performance," Clark said. "What really matters is being able to create high-quality time and very high-quality production."

Achieving this balance, Clark said, required him to form personal rules at work that were "countercultural." His rules or some subtle variations are followed by all the executives in this book. They are countercultural business rules, and they form the basis for The Mormon Way of Doing Business.

CHAPTER 1

ON A MISSION

Many JetBlue passengers have had the experience of boarding a plane, finding a seat, and looking up before takeoff to discover a middle-aged man standing at the head of the cabin, wearing a flight attendant's apron and a name tag. "Hi, my name is David Neeleman. And I'm the CEO of JetBlue. I'm here to serve you today and I'm looking forward to meeting each of you before we land."

For the remainder of the flight, Neeleman goes up and down the aisle, distributing snacks, collecting garbage, and making a point to meet every passenger. He also writes down their comments on a small notepad. Although the passengers are complete strangers to Neeleman, he quickly establishes a rapport with them. When the flight lands, Neeleman thanks passengers for flying JetBlue and then works with the flight crew to clean the plane and prepare it for its next flight.

No other airline has a CEO who works as a flight attendant just so he can serve his customers and get to know them and their needs better. No other airline has a CEO who works shoulder to shoulder with flight crews in order to appreciate their job better. Neeleman does both no less than once a month and sometimes as often as once a week. For this, he is praised for his business acumen, his devotion to his company, and for maintaining a fingertip feel for the direct needs and desires of his customers and employees.

SERVICE MATTERS

Each time he works a roundtrip flight, Neeleman performs about ten hours of direct customer service and employee interaction. It's no surprise that the annual national Airline Quality Ratings study, which is based on Transportation Department statistics, routinely ranks JetBlue number one in customer service. "There are so many things you can do as a CEO to set an example," said Neeleman. "If the CEO is down there helping employees tag bags and clean airplanes, employees feel better about going to work. People will go the extra mile for you. They know I'm not sitting in some part of the airplane where I don't want to be talked to. Instead, I hang out with crew members."

Direct service to customers and working in the trenches alongside employees may be unusual concepts for a CEO or business manager. That's simply not the way business is done in corporate America. Neeleman didn't learn this unique approach in business school or by reading some cutting-edge textbook on how to be a successful leader. He developed these habits at a very young age, long before he had any thought of creating an airline.

At nineteen, Neeleman served a full-time mission for the Mormon Church. Upon graduating from high school, all young men in the Mormon Church are encouraged to spend two years as missionaries, which entails teaching the gospel of Jesus Christ to strangers and performing service for the poor, the elderly, and the needy. During this time missionaries must completely forgo schooling, employment, entertainment, and dating in order to fully devote all their energy and time to service. They receive no financial compensation, and they are expected to finance as much of their missionary expenses as possible. As teenagers, Mormon youth are encouraged to begin saving for their missions. The Church supplements whatever remaining costs can't be afforded by the missionary or his parents.

"On my mission I learned so many valuable lessons," Neeleman said. "The mission gave me this opportunity to serve and really appreciate people for their contribution."

While on a mission, missionaries are not permitted to return home on holidays or for vacations. Phone calls to friends back home are prohibited. Calls to family are limited to specific holidays. This same opportunity is afforded to young women in the Mormon Church. But just as the Church strongly encourages its young men to serve missions, it strongly encourages its young women to obtain college degrees.

In 2004 the Mormon Church had over 56,000 missionaries serving full-time missions in over 120 nations and island states. Virtually all of the Mormon business executives in this book served full-time missions before starting their business careers. David Neeleman was assigned to Brazil. After spending roughly two months learning Portuguese at the Church's language training center for missionaries in Provo, Utah, Neeleman spent the remainder of his two-year commitment living among poverty-stricken people in Brazil. The conditions were starkly different from the community he grew up in outside Salt Lake City.

On a daily basis Neeleman would put on a white shirt and tie, along with a name tag, and enter the neighborhoods and homes of Brazilians. Speaking their language, Neeleman would introduce himself by saying something along the lines of: "Hello, my name is Elder Neeleman and I'm a representative for the Church of Jesus Christ of Latter-day Saints." Then he would talk to them about the gospel of Jesus Christ and answer their questions.

This experience had a profound impact on the way Neeleman runs JetBlue. "My missionary experience obliterated class distinction for me," said Neeleman. "I learned to treat everyone the same. If anything, I have a disdain for the upper class and people who think they are better than others."

Neeleman's perspective is evident in JetBlue's business approach. There is no first-class section on JetBlue planes. All seats are sold at the same price. All passengers receive the same treatment and are referred to as "customers."

Evidence of Neeleman's approach is also found in the way he runs the corporation. All employees are referred to as "crew members" and wear badges with their name and photograph. Neeleman wears a crew-member ID badge at all times, too. Neeleman has no preferred parking space at the office. Nor do any other executives. When he flies on JetBlue planes, he sits in the jump seat with his crew. There is no corporate plane.