PURE GOLD: CORPORATE CULTURE—YOU DON'T SPEAK FRENCH AMONG FRIENDS.

During the recent excitement about the outlays of huge bonuses for poor performances, important political figures—conspicuously President Obama—have talked about changing the "corporate culture."

Having spent 40 years in a corporation, mostly in middle management, I see the culture issue from a different viewpoint—on the receiving end of top management decisions. From that vantage point, our new president may be overly optimistic.

My initial dealings with the corporate culture occurred shortly after I was hired at Fairchild Publications, primarily a publisher of business newspapers, and found myself in the middle of a union drive by the Newspaper Guild.

Our board chair was not typical of the aloof, fancy-office CEOs we have been reading about lately. He sat at a desk in one of our city rooms, joined only by one secretary. He wrote friendly notes to staffers and frequently walked through the work areas chatting with editors and reporters.

The attempt to unionize resulted in a few changes. Management sent a letter to all employees, attempting to reinforce the familial atmosphere that existed between top management and staffers.

A real zinger in that letter was a sentence that suggested the union would endanger freedom of the press and, in defense of that Constitutional right, management might be forced to shut down the business.

At the same time, several colleagues of mine who supported management were dispatched to talk to those employees who might be vulnerable. I was on that list since I was new on the job. An ad salesman visited me and suggested I should be particularly careful since I had such a limited history with the company.

I voted for the union anyway, but we lost. Most editorial people were pro-union but clerks and secretaries were not. A few reporters were won over by the management letter. I remember one in particular who boasted of his strong liberal beliefs, but said he had to think of the welfare of his two young children.

***

After 15 years as a reporter, editor and columnist, I moved to middle management to run the company's book division which was essentially a vanity press operation which had lost money for about 20 years; it had survived only because its manager had two other profit-making operations, and top management hadn't seemed interested in a profitable book division—until now.

I discovered early on what the problem was. I was victim of a Catch-22. Book production was a major cost for the division. There was type-setting, a one-time cost; and paper, binding and printing. Unfortunately, I had no control over production costs, which were in the province of a Purchasing Department which bought materials for the entire company, including the book division which it knew nothing about.

I had a suspicion we were being over-charged. Then I got lucky. A friend of mine from Columbia had become a book production broker.

I drew up identical sets of specifications on four reprints, which would require prices on paper, printing and binding. I sent the specs to Purchasing and to my friend. My friend's prices were at least 50 percent lower than what the in-house department intended to charge me.

Shortly thereafter, I received a call from the vice-president in charge of Purchasing. I went to his office, and he said: "Ed,  you're an energetic fellow and I like you, but you're interfering with one of my divisions and if you don't stop I'm going to kick your ass out of here!"

The culture called for protecting your departments even when they performed badly.

I figured my days were numbered, so I took a chance and wrote a letter to the board chairman, a member of the ruling family who had once sat next to me as a reporter. I gave him the full story.

Next thing I knew I was called into the treasurer's office, along with the Purchasing manager and my broker. The treasurer had put up with this incompetence for several years but he was "shocked" to learn Purchasing did not ask for bids on production projects but had kept one set of suppliers for many years.

A few weeks later, the book division was given responsibility for its own production costs. We began to make money and I held the position for 25 years.

***

Possibly the most complicated cultural activity occurred in the granting of bonuses to middle management—very different from the wild give-aways at AIG and elsewhere. My immediate supervisor at one point was an art director who rarely interfered in my operation, except on the bonus issue.

Each year he would develop a formula which always required big improvements over the previous year. I had no input in the process.

One year I did very well and the bonus was more than my immediate superior had bargained for. It seemed almost as if I were taking money out of his pocket. He thought the bonus might upset top management and get him into trouble so he asked if I would be "a good sport" and take a modified bonus. It had been his formula. I said thanks but no thanks.

That same year I visited the divisional vice-president and said some of my editors had been very helpful and could some of my bonus money go to them. He got very angry. "That's Commie talk!' he blustered. "We don't give bonuses to staffers." So I made out my personal checks and gave them to the deserving.

My favorite bonus experience occurred on a not very good year in the book division. The company said they might give me a token bonus and invited me to meet with no less than three vice-presidents, none of whom knew much about my operation.

Then I got into trouble. One of them made an irrelevant statement and I stupidly called that a "non sequitur." There was silence in the room. Then one of them said: "Ed, you're among friends here, You don't speak French among friends." I banked on them not knowing the word. "That's a publishing term. At book conventions, people are always asking 'how's your non sequitur?'" They gave me the bonus.

***

A cultural characteristic of our treasurer was to constantly keep middle managers off balance.

We prepared our annual budget in the fall and generally in mid-February, he would call and ask how I would do for the first quarter. It turned out to be a no-win exercise for me.

If i guessed we would go three percent over budget and we only went one percent higher, he would call to tell me I didn't make my figures. If I told him we'd go one percent over budget and we went three percent over, he'd call to tell me I low-balled the corporation.

There were times, also, when I though corporate culture could be especially cold-blooded. For a while I was given a failing operation which sold mailing lists. One day, my vice-president told me to bring the staff into my conference room. He went around the room shaking hands with each employee and congratulating them on their good work. When they left the room, he said to me: "Get rid of two of them." I didn't have the stomach for it, so he did it. That's one reason he was vice-president and I wasn't.

He was very aggressive and sometimes pushed the envelope too far. One year he decided to work with me on the budget in my apartment, which was a block from our office. When we finished, he said he wanted to interview someone for a salesman's job and could he use the apartment. I said I had to check with my wife whose response was: "Are you crazy?" I told him it wouldn't work out.

He had two other qualities that were irksome. When he became my boss he wanted me to know he had no prejudices. "I even married a Catholic," he said as reassurance. Then, when I asked for a raise for one of my editors, he said: "Okay, but tell her she's now getting a man's salary."

I did have good relations with one vice president who never misled me and remained supportive until he left the firm. He was a strong Republican but it didn't hurt our relationship. When he was leaving he called me to his office to tell me he had enjoyed working with me. As I walked to the door he smiled and said: "By the way, you were right about Nixon."