Ben and Jerry's Ice Cream: Leading with Values
Ben and Jerry's Ice Cream, long viewed as one of the most socially active, countercultural companies in America, faces increasing competition in the premium ice cream market, where they remain a high-cost, inefficient producer paying high wages and using expensive, chemical-free milk. Coupled with a new emphasis on international expansion, the firm must continue to generate sufficient profits to keep its investors happy. Can this "quasi-corporate Woodstock" continue to flourish and remain true to its founding values? (1)


From Humble Beginnings
Ben & Jerry's Homemade, Inc. has often been viewed as an ideal working environment from the employees' perspective. Jerry Greenfield, cofounder and a director of the company, was fond of saying of the work the company does, "If it's not fun, why do it?" But not too long ago both Greenfield and Ben Cohen, cofounder and company CEO, became concerned that running the company was no longer fun. Greenfield had already withdrawn from management of the company when Cohen announced, in the summer of 1994, that the company would be looking for a new CEO. Greenfield's departure raised the question of what impact the change at the top would have on the culture and style of the working environment at Ben and Jerry's.
Greenfield and Cohen had decided at the outset that their company would be different-this would be a company where the employees would be treated well. As such, they hoped that the company would be more likely to provide a product that would meet its customers' needs in terms of quality and cost. The founders set up a human resources department that was designed to help develop and foster an environment consistent with the desire to provide a good place for people to work. Kathy Chaplin, Personnel Operations Manager, stated: "We make decisions based on what's really best for our workers, not on the dollar amount. We ask ourselves 'How is it going to improve employees lives.'" (2) One way to achieve this end was to provide an open system of communications within the company. Employees were encouraged and expected to provide annual evaluations of their supervisors, and the personnel department set up training sessions to help employees understand both the purpose and process of these evaluations.

Employees were also involved in the development of the benefits package available at Ben & Jerry's. For example, when some employees noted that there was a lack of day-care opportunities near the company's main facilities, company management agreed to help set up such an operation. But instead of doing so from the top-down, the company created a worker committee to decide just how the day-care facility should be set up and operated. Chaplin noted that while this process of employee involvement was more work for her department and the company as a whole, the results were worth it. She noted, "I think people feel good that they have some say about what they're getting." (3)

Management then set workers up in teams that were charged with designing their own work procedures. This process was extended to include team input into the design of the new distribution center and manufacturing facilities the company needed to bring on line during the early 1990s to meet increased customer demand. The open communications and shared decision making were viewed by management as key factors in reducing the cost of building and equipping the new facilities. It was believed that the ideas provided by the worker teams would also lower the operating costs of the facilities once they were on line.

The concept of team building and decision making also extended to the hiring process. New hire prospects first had to be interviewed by the people the prospective employee would be working with. If the new person was replacing a departing employee, even that person would be part of the interviewing team. The team members would have a major say in determining who would be added to their group. In this way, as Greenfield noted, "the new person would be surrounded by people who would have a vested interest in his or her success." (4)

Greenfield credits several of these extensions of the human relations management process to Chuck Lacy, President of Ben & Jerry's. Lacy was brought in to help in the transition during Greenfield's gradual withdrawal from active management of the company. Greenfield stated that Lacy brought a "sense of how to treat people and make it a part of our daily work." (5) This concept was extended to all aspects of the human relations process, including establishing a friendly work environment. This involved adding music to the production area. The music was piped in from one of three local radio stations, and the choice of stations was rotated on a continual basis. The process also involved expanding the benefits program to include a flexible spending program that allowed employees to pick and choose among various alternatives based on their specific needs and wants. An employee might even choose to elect out of the health-care program if his or her spouse were already covered by an equal or better program in another company. The money saved from this election could then be applied to other benefits, such as child care. Dave Barash, former Director of Human Relations and current Director of Social Ventures, noted that "the role of the HR people in this company is to act as coaches and resource people to give people the tools they need and to teach them how to use them." (6)

In 1995, Ben Cohen announced the appointment of Robert Holland, Jr. as the new company CEO. Holland had come not from the general call for applicants but from an executive search firm hired by Ben & Jerry's to recruit top management prospects. Ben & Jerry's had already abandoned its policy of limiting the top manager's salary to no more than seven times that of the average total compensation (including benefits) of the lowest level employee, in anticipation of hiring a new CEO. Despite the apparent consistency between Holland's and those of the company's founders, some were concerned whether he would, or could, allow the independence that had been encouraged to date to continue, especially given the simultaneous announcement that the company would incur its first quarterly loss since going public.

A New CEO
On Thursday, January 2, 1997, Ben & Jerry's issued a news release announcing the selection of their new CEO. Ben Cohen, co-founder and Chairman of Ben & Jerry's, announced the selection of Perry D. Odak as Chief Executive Officer.
Odak comes to Ben & Jerry's with 25 years of senior management experience in a variety of consumer product and retailing businesses. Among these businesses is Armour-Dial, a Fortune 500 company. Mr. Odak started his career in the food division of Armour-Dial and went on to become Senior Vice President of Worldwide Operations for all divisions. At Jovan, Inc., an innovative fragrance and cosmetic company, he was part of the start-up and served as General Manager in charge of marketing sales and distribution. Other companies in which Perry Odak worked are; Atari, where he was President of the Consumer Product Group and responsible for new product development; Dellwood Foods, where he completed a successful buy-out and merger with Tuscan Dairy; and most recently U.S. Repeating Arms Co. (Winchester) and Browning, a manufacturer of outdoor and recreation sporting goods, where he was part of the companies' senior maangement teams.

Cohen notes, "We feel incredibly lucky to have found a person of Perry's caliber to lead our company at this time. Perry has proven business skills, an eye for both the top and bottom line and extensive experience in consumer product businesses." "As someone who has worked with consumer brands for most of my professional life," said Odak," I am really excited about the chance to work with so fine a brand - and company - as Ben & Jerry's. There is a lot to do here and I view the tasks at hand as being great opportunities both for Ben & Jerry's and for me."

Can Odak continue Ben and Jerry's unique emphasis on values and apply more traditional business concepts? While he envisions that the company's social mission will remain intact, "we've had to bring some new balance to that and focus on making the economic side of the company stronger." (7)

Endnotes
Hammonds, Keith. "Commentary: A Portfolio with a Heart Still Needs a Brain", http://www.businessweek.com/1998/04/b3562128.htm: 100.
Laabs, Jennifer. "Ben and Jerry's Caring Capitalism", Personnel Journal, November 1992: 54.
Ibid.
Sonenclar, Robert J. "Ben and Jerry's: Management with a Human Flavor", Hemisphere, March 1993: 26.
Ibid.
Laabs, op. cit., p. 54.
Hammonds, op. cit., p. 100..

Ben and Jerry's Ice Cream: Leading with Values: Questions

1. What HRM policies does Ben & Jerry's employ to gain acceptance and commitment of improved quality within the work force?

2. What recruiting and staffing innovations does Ben & Jerry' a use to improve employee morale and motivation?
3. What reactions might occur as the founders turn over operation control to a new CEO from outside the company?