The Gospel According to Blanchard

By Todd Henneman

Jun. 6, 2005

K en Blanchard mingles with luminaries like the Rev. Robert Schuller, Tony Robbins and Hall of Fame football coach Don Shula. He earns as much as $70,000 on the lecture circuit and has leveraged his first best-seller, The One Minute Manager, into dozens of spinoff titles spreading his mantras of good management around the world.

    But visit the Ken Blanchard Cos., his leadership-training company in an office park 30 miles northeast of San Diego, and the basic tenets of his management style are readily apparent: Lead like Jesus, and hire family.

    A life-size statue of Moses greets visitors at the front door of international headquarters; another life-size statue, of Jesus washing Peter’s feet, graces the yard in the back. Inside Ken’s office, a Bible and a smaller version of the Jesus and Peter statue are displayed on a circular conference table. A nativity scene and a sculpture of the Last Supper prominently adorn a bookcase. A framed Bible verse of Jeremiah 29:11 hangs above Blanchard’s no-frills desk.

    A look at the Blanchard business gospel tells much about a culture that embraces religion and is fueled by nepotism. The term nepotism gets an undeserved bad rap, says Adam Bellow, author of In Praise of Nepotism and son of novelist Saul Bellow. Relatives tend to work harder for less money, are loyal and have a personal stake in the company’s success, he says.

    “Very often a second-generation heir, someone who inherits the business, has a very strong desire to prove their worth,” Bellow says. “It motivates them to work harder, put in longer hours and think creatively.”

    At 66, Ken Blanchard has relinquished control of much of his firm to son Scott, 39, vice president of client delivery; daughter Debbie, 37, vice president of sales; and brother-in-law Tom McKee, 46, president and CEO.

    The One Minute Manager says that managing his own company hasn’t been his top priority for years.

    In the past, he ceded day-to-day decisions to Marjorie, his wife of almost 45 years. The couple met as students at Cornell University in the early 1960s and have been business partners since the company was founded in 1978.

    “I realized early that God didn’t put me here to manage anybody,” says Blanchard, author of Lead Like Jesus and of best-sellers including Raving Fans, Gung Ho! and Whale Done! He credits God for the runaway success of his 1982 mega-best-seller, which brought him international celebrity, launched a library of titles from The One Minute Manager Gets Fit to The One Minute Manager Meets the Monkey, and propelled his training business.

    “The phenomenon of the business was Ken’s success with The One Minute Manager,” says Rick Tait, who worked as a trainer for Blanchard from 1985 to 1992. “It gave him notoriety. It made him a household name. He is the brand.”

“There is a dark underbelly to the Blanchard regime. When you peel away the onion, they actually can be very unethical people to work with.”
–Bob Nelson, former vice president
at the firm

    Tait praises members of Team Blanchard for being loyal to their employees, and says that the main downside to their hiring practices is the possible lack of an outside perspective. He says his time at the Blanchard company was a “a wonderful experience” and “the opportunity of a lifetime.”

    Not everyone sings the Blanchards’ praises. Rewards-and-recognition guru Bob Nelson didn’t leave his job with the company happily. Nelson, a former vice president at the firm, says that Ken Blanchard pressured him into helping son Scott Blanchard write college papers and to get off academic probation at Cornell University.

    Ken denies the allegation, and says, “I send out my love and prayers to Bob.”

    Nelson, author of 1001 Ways to Reward Employees, left the Blanchard organization in1997 after a decade with the company and filed a since-settled lawsuit over product royalties. He also accuses Ken of not writing his own material.

    “There is a dark underbelly to the Blanchard regime,” Nelson says. “When you peel away the onion, they actually can be very unethical people to work with.”

    Scott says the question about his college papers is “going back to 1986,” and adds, “Bob worked for my father. I’m not going to dignify that question with a response.”

    Further, Ken says, “We take relationships with past employees very seriously, and our values help us sleep well at night.” Marjorie characterizes Nelson as a disgruntled former employee.

    Despite the falling-out, the new edition of Nelson’s book carries a flowery foreword by Ken Blanchard, who commends it as a “treasure trove of ideas.”

    At the Ken Blanchard Cos., about half of the company’s 260 full-time employees are relatives or good friends of one another, Scott says. The western regional sales manager, for example, is one of Ken and Marjorie Blanchard’s nephews.

    Scott contends that hiring friends and family has bred loyalty. Turnover is only about 5 percent, he says, and seven founding company members, most now in their 60s, are still working at the firm.

    Outsiders, however, say that family ties create awkward situations. In one case, two women describe the same Blanchard executive as her husband; one is the man’s first wife, and the other his new girlfriend.

    “We break all the rules,” Ken says. “We have couples working together. We have mothers and daughters. Sometimes a man might report to his wife.

    “Our rule in hiring is that if somebody you hire comes through the front door and you don’t feel a chemical difference in your body because you’re excited to see them, then why did you hire them?”

    Apparently the emphasis on Christian references and family togetherness makes good business sense. Last year, revenue was $44 million. Though that’s only a fraction of the fragmented $100 billion training industry, the Blanchard enterprise continues to grow in the midsize niche shared with such organizations as Development Dimensions International and the Center for Creative Leadership.

    Consulting company Accenture ranks Ken Blanchard as the 35th best-known leadership guru, two spots below General Electric Co.’s Jack Welch and 12 spots above computer tycoon Michael Dell.

    While many competitors remain regional, the Blanchards have offices from Boston to Seattle and wholly owned subsidiaries in Toronto and London.

Extended family
    All of this success, the family says, is based on the company’s values: relationships, success, learning and, most important, ethics. “There’s no right way to do something that’s wrong,” says Scott, who recently published Leverage Your Best, Ditch the Rest, which he co-authored with fiancée and co-worker Madeleine Homan.

    Employees describe the company as a relationship-driven workplace where the owners make employees feel like family. “There’s no difference,” says Drea Zigarmi, co-author of Leadership and the One Minute Manager. “I don’t know what it’s like to be a non-Blanchard.”

    The Blanchards and CEO McKee, Marjorie’s brother, own the company. The Family Council, composed of the five owners, convenes quarterly. It provides a venue for the family to discuss business and personal matters, ranging from their real estate holdings to Thanksgiving.

    “Our intention from the beginning was to make sure we were in dialogue together as owners and family members to make sure that our family dynamics were not going to get in the way,” Scott says. “It’s very difficult to have an effective relationship inside of an adult family. When you mix the business into that, it’s really, really difficult.”

    The man whose management lessons have influenced huge numbers of executives lost interest in working inside corporate America while attending Cornell. During his junior year, he applied for a summer sales program with a chemical company but wasn’t chosen.

    “I kissed off the business world at that point,” Ken says. “I said, ‘If they’re that stupid, why would I want to do that?’ “

    Even today he is not on his company’s executive team, and he describes his role as rainmaker. His official title is chief spiritual officer.

    It was the success of The One Minute Manager, self-published in 1981 and nationally released by William Morrow in 1982, that spawned his Christian faith, he says. When a close friend asked him why he thought the book was so successful, Ken responded, “I think somehow God is involved.”

    To this day, he distributes a morning message to employees through the voice mail system that tells employees for whom to pray, praises unsung heroes and conveys some thought linked to the company’s values and vision. References to God and Jesus punctuate some of Ken’s more recent books, especially when he addresses the topic of ego, which he says stands for Edging God Out.

    But his spiritual leanings haven’t always been embraced professionally. “We started having internal people and clients complaining about it,” Blanchard trainer Susan Fowler says of Ken’s desire to share his religious beliefs. “Ken’s learned to express his excitement over his own faith without making other people feel like he’s imposing it on them.”

    Ken is co-founder of the Center for FaithWalk Leadership, a nonprofit organization that strives to encourage leaders to adopt Jesus as their role model.

    The center’s board of directors includes David “Mac” McQuiston, vice president of the conservative Christian group Focus on the Family, which has organized boycotts against companies such as Procter & Gamble because of their support of nondiscrimination policies, including safeguards for gay workers.

    Ken says the FaithWalk group doesn’t delve into social issues. “People have called us and asked what is our stance on abortion, gay rights, etc.,” he says. “We say, ‘No. We’re in the lead-like-Jesus business.’ “

    Despite the biblical references and Christian statuary, Scott is quick to say that religion is kept separate from the family business. “We are not a Christian company,” he says flatly.

    By his own account, Ken’s penchant for writing in parables is an outgrowth of his love of storytelling and affection for books like Jonathan Livingston Seagull.

    “The nice thing about parable writing is that people reading drop their evaluative side,” Ken says. “I always kid about how many people read In Search of Excellence–the number of people who read it versus those who bought it. We decided to write our books one chapter long because the research shows that less than 10 percent of nonfiction books are read past the first chapter.”

    Warren Bennis, distinguished professor at the USC Marshall School of Business and author of Becoming a Leader, says Ken’s contribution is “taking the richness of theoretical concepts and translating them into practical ideas useful to the general public.”

    Onstage and off, the self-described “auditory learner” illustrates his thoughts through personal stories. During a recent speech to a group of entrepreneurs at the University of San Diego, Ken explained his philosophy of leadership humility by recounting his daughter’s appointment to vice president of sales in 2001.

    “Debbie’s only experience selling was working a couple summers for Nordstrom, and (all of a sudden) she had 55 salespeople,” he recounted.

    “Her first meeting with salespeople, what did she say? ‘If I told you that I knew what I am doing, we could all have a really good laugh. But what I really know what to do is how to work with our family.’ Everyone rallied around Debbie to teach her about the business because she was there for them and was willing to admit she needed help.”

“A values-based company”
    In her simple executive office, Marjorie Blanchard displays a prized picture taken in 2003 with Pope John Paul II. “I just love this photo,” she says. “I think I look like an angel and he looks like God.”

    Marjorie, who goes by Margie and is Presbyterian, met Ken at the end of her junior year at Cornell. After graduating from college she attended the University of Massachusetts Amherst, where she earned a doctorate in communication disorders.

    She initially served as company president and, after briefly having an outsider in the job, returned to the role for 10 years beginning in 1987, a time when revenues hovered around $6 million.

    “We were actually making a good organization using our own ideas but doing it trial and error and getting a tremendous appreciation for the difficulties organizations have when they go through change, when they grow too quickly, when they aren’t growing fast enough,” she says.

    She sees Dale Carnegie as a role model for the work she and Ken do.

    “His body of work stood for something,” she says of the author of How to Win Friends and Influence People. “It lasted even after he was gone. I think our body of work, hopefully, will stand for something.”

    She and Ken hired her younger brother, Tom McKee, as an operations manager. He’s now the man at the top. Her firstborn, Scott, joined the family business at age 28, then left to attend graduate school. In 1999, he started, which was subsequently folded into the Ken Blanchard Cos.

    Now a single dad with two young boys, Scott is vice president of client delivery and has also tapped his guru pedigree by writing books and entering the speaker circuit.

    When asked what advice he’s given Scott about business, Ken says this: “Remember you’re going to be a better Scott than you are Ken.”

    Scott, an engaging, confident coach and speaker, says that all good companies have three “success factors,” though they are expressed in very different ways.

    “One, we have a clear vision in the leadership development business,” Scott says. “Two, we have a unique culture–as every company should have. We are a strong values-based company. And three, we value fairness and integrity. Our low turnover is the strongest testament to our company values.”

    As vice president of sales, his younger sister Debbie is in charge of 45 associates and seven managers.

    “At first I was surprised at that choice because Debbie hasn’t got a lot of sales management experience, but she is brilliant in that role,” says Pat Zigarmi, vice president of business development.

    Debbie’s husband, Humberto Medina, also is part of the company’s leadership, handling on-site consulting projects and partnerships.

    The Blanchards don’t cultivate talent only from their own family. They believe that some of their best employees can be found among the families and friends of staff. New hires tend to be attracted to Ken’s ideas, Margie says.

    “There’s a self-selection, first of all, in terms of people who even want to work here,” Margie says. “They already are believers when they come.”

    Employees can earn a bonus if someone they recommend is hired and passes a probationary period, and some longtime employees speak hopefully of their children finding careers with the Blanchards.

    “Many, many of our hires come through relationships with our employees,” Scott says. “We take nepotism to a bigger level.”

    One of the Blanchards’ basic tenets of workforce management is to share company success with employees. The firm’s gain-sharing takes a percentage of the operating income, places it in a pool and divides it equally among employees.

    Those who develop training products can receive royalties. And Ken’s co-authors receive royalties from their books.

    A philanthropic program through the Blanchard Foundation allows each employee to select a charity to receive donations, linked to employee’s salaries. Foundation donations in 2003 ranged from $58 in books for a hospice’s silent auction to more than $56,000 to Cornell, according to its IRS filings.

    The Blanchards also avoided layoffs after the Sept. 11 terrorist attacks. The company had grown a minimum of 10 percent and as much as 30 percent until 2001, Scott says. Then sales revenue fell 6 percent in 2001 and 3 percent the next year.

    Owners took 25 percent to 30 percent salary cuts, and employees gave up 5 percent to 10 percent. Contributions to 401(k) programs were frozen. But no one was laid off, and the cuts eventually were restored.

    This year, as a reward for the sacrifices and hard work, the company took its 260 employees to Hawaii.

    “It was 20 on a scale of 10 on how well it was received and how well it went off,” McKee says.

    Despite issues with former employees, longtime members of the extended Blanchard clan say the company’s entrepreneurial culture, selling power and values kept them loyal.

    “Because it’s run by this family that we’ve become very intimate with, even though they make some bone-headed decisions sometimes, we’ve gotten to know their hearts,” says Fowler, co-author of Self Leadership and the One Minute Manager. “We’ve gotten to know who they are as people. And you realize that they have really good intentions.

    “As long as you see those good intentions and you realize that the hearts of people you are working with are really pure and good and well-intentioned, you can put up with a whole lot of crap.”

Workforce Management, June 2005, pp. 42-48Subscribe Now!

Todd Henneman is a writer based in Los Angeles.

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