15 Hampshire Street
This Newcomen address, dealing with the history of The Kendall Company and on occasion of its 50th Anniversary (1903-1953), was delivered at the "1953 Massachusetts Dinner" of The Newcomen Society of England, held at Boston, Massachusetts, U.S.A., on Thursday, March 26, 1953. Mr. Henry P. Kendall, the guest of honor, was introduced by Dr. Claude M. Fuess, Headmaster-emeritus, Phillips Academy, Andover; Member of the New England Committee, in American Newcomen. The dinner was presided over by Dr. Karl T. Compton, Chairman of the Massachusetts Institute of Technology, Cambridge; Chairman of the New England Committee, in The Newcomen Society of England.
"The Kendall Company," 50 Years of Yankee Enterprise! (1903-1953) An Address at Boston
For a moment let me travel back in memory to a day in 1903 when as a young man I had been called in to look at a decrepit little plant in Walpole, not far from Boston - a plant with 75 employees scattered through several old buildings where a few antiquated machines were running. The business was insolvent, saddled with debt, and apparently on its last legs.
Today, fifty years later, The Kendall Company operates thirteen plants in six States and others in Canada, Cuba, and Mexico, has about 8,000 employees, and does a $100,000,000 business.
How did this come about within the span of fifty years? What were the underlying factors, the driving forces, in the rise of this New England industry from humble and unpromising beginnings?
The story in detail, Mr. Chairman, would fill a book. In this Newcomen address I shall only try to give a brief first-hand summary of what seem to me significant high spots. If in doing this I make some unavoidable use of the personal pronoun, please bear in mind what we all know, that while every team has to have a leader, the joint efforts of all are what pile up the gains and winning points. No one who has ever played football, as I did at Amherst, could ever forget that. Such business success as I may have had has been the joint result of my own efforts and the support and cooperation of able and loyal associates, in the business and outside of it, who have stood by me down the years from that distant day in 1903.
The rundown old plant in Walpole was that of the Lewis Batting Company, better known locally as the Shoddy Mill. It was making a little absorbent cotton and also cotton batts, stair pads, and carpet linings. An analysis of costs showed a loss on everything except the crudely-made absorbent cotton. The manufacturing processes were quaint. The cotton, for example, was dried on chicken wire over boxed-in steam coils through which air was blown.
We disposed of the old lines except the cotton, revamped the plant by putting in some second-hand machinery, added gauze as a new item, hired a salesman, and went into the absorbent cotton and gauze business in competition with bigger and stronger rivals. We changed our name to Lewis Manufacturing Company, and, by the time the First World War broke out, we had established a niche for ourselves.
Then came a period of tremendous pressure from the U.S. Government and the Red Cross on the surgical dressing industry. I went to Washington and helped to organize a committee of the industry to deal with the problem and work out contracts with the Government and Red Cross which met their needs. To provide our share, we made extensive additions to buildings and machinery at Walpole.
To enlarge our capacity further, in 1915 we bought the Slatersville Finishing Company at Slatersville, Rhode Island. I also had decided - and this was one of the most important of my early decisions - that instead of buying our grey goods in the open market, we should own our own cotton mills, buy raw cotton in the bale, weave it ourselves, bleach and finish it in our northern plants, and sell it to users through our own salesmen - an integrated operation. In 1916, we took the first step in this program by buying the first of our cotton mills, the Wateree Mill at Camden, South Carolina, followed in 1918 by the purchase of the Addison Mill at Edgefield, South Carolina.
At the close of the war the Government and Red Cross threw on the market tremendous quantities of surplus surgical dressings, the bottom dropped out of prices and earnings, and our business entered one of its most critical periods. Only the strenuous efforts of our organization and unwavering support from our banks enabled us to weather the storm.
By 1924, growth had been resumed. That year we bought another cotton mill and merged our five plants into a new corporation, Kendall Mills, Inc. During the remainder of the 1920's we added two more cotton mills in the south, followed by four more in the 1930's, two of which were later sold.
We also increased our output by modernizing equipment and by doubling the size of our Oakland Mill in 1950. Today we operate approximately 300,000 spindles and 6,800 looms.
Meanwhile we also were growing in other directions. Our most important addition in new fields was Bauer & Black of Chicago, acquired in 1928. In that year we changed our name to The Kendall Company. Later acquisitions were the Bike Web Manufacturing Company of South Bend, Indiana, in 1929, another finishing plant at Griswoldville, Massachusetts, in 1932, and the Burson Knitting Company of Rockford, Illinois, in 1948. In 1950, we built a new Canadian plant near Toronto. Our plant in Mexico City was built in 1947.
How did it come about that we needed these plants, and what did we did with them after we got them? The answer to this question leads us back to some ideas underlying the development of the business.
Early realization of the importance of evolving new products and improving existing products led us into the development of research laboratories. Our search for new products and new uses for old products has gone on unceasingly from that day to this, in all parts of our business. Today, well-staffed and adequately-equipped research laboratories are found in all our divisions.
In addition to product research, we have continuously studied manufacturing techniques and improvements in machinery, equipment and plant layouts, purchasing methods, and sales programs.
What has all this done for us? One outstanding result is the fact that a large proportion of our present business consists of products that either did not exist in their present form or did not exist at all 10, 15, or 20 years ago.
Here are just a few examples of what research has done for us, out of a multitude that might be mentioned if there were Tim:
Twenty years ago gauze diapers were unheard of. Mothers used whatever cloth they happened to have, or bought Birdseye, a heavy and somewhat uncomfortable material. Our research men got the idea that gauze would make better diapers than any other material. They developed a special weave. They turned the product over to our market research specialists. Tests showed acceptance by mothers. Effective advertising and promotion campaigns were devised. The result? We were ready for the expanding baby crop with a superior, nationally-accepted product, the "Curity" gauze diaper. Today we are struggling to keep abreast of demand, operating thousands of spindles and hundred of looms in our southern mills on a full three-shift schedule, the year round, producing diaper cloth which we finish in our northern finishing plants.
Another example: Several years ago our Bauer & Black Research Department decided that basic improvements could be made in the small finger bandages produced by us and others. Extensive research, not only on the product but on the machinery for manufacturing it and the sales techniques for selling it, led to the introduction of our "Curad" plastic bandage, in 1951. Millions are now being made, sold, and used every week.
Our Research Department at Walpole worked for years on the development of a non-woven fabric which would have new qualities and new uses. Today a separate plant at Walpole is manufacturing various forms of "Webril" for new markets and new applications.
One of our early sales objectives was to develop specialized uses, products, and markets for surgical gauze and cheesecloth. One early result was the marketing of attractively packaged 5 and 10-yard bolts of cheesecloth adapted to counter display and effective advertising.
Later we cooperated with the American College of Surgeons and some of the leading hospitals in developing a line of ready-made gauze dressings adapted to many surgical uses. Hospital gauze was customarily sold in 100-yard bolts. The nurses cut the bolts into dressings. Bolt gauze now has largely been replaced by ready-made dressings pioneered by us and made on automatic machinery first developed by us.
The work of our research departments in developing new products and new uses for old products has been supplemented by continuous market research.
From the beginning we determined to build up our sales organizations with high-grade men, carefully selected, who are given systematic training in the home office and in the plants before they are put into the field under competent home office direction. For over 30 years we have brought our field men together in annual sales conferences and regional meetings, at which sales problems, policies, and future programs are thoroughly discussed. Our branch managers and home office executives have come up through the ranks, and have developed the kind of initiative, imagination, and drive that creative selling requires.
The sales-mindedness of our organization, its belief in our products, and its enthusiasm in selling them have been large factors in putting us where we are.
Certain forces or principles underlie the development of any structure, be it a business or a personality. What were the more important forces and principles which have shaped our development?
In all we have done, we have tried to apply imagination, courage, and unwillingness to accept anything as necessarily final or perfect. To an important degree this has been due to the profound influence of Frederick W. Taylor, the father of Scientific Management, upon my early business life.
I read Taylor's book and was deeply impressed by it. After correspondence I went to Philadelphia to see him and he had me visit a small plant where his principles were being applied.
Taylor's fundamental thesis, as you will recall, was that there is one best way to do things and that this way can be found by analyzing in detail what is actually being done and then reshuffling the elements of the job to evolve a new technique which will eliminate waste of time, energy, and materials.
Taylor never believed that the status quo is necessarily right or best. On the contrary, he put a question mark against what is. What is MAY be right, but it may not. The mere fact that something is being done in a certain way, that it may have been done that way for a long time, or that a lot of people think it is the best way to do it and don't want things to change, is no proof at all that this present way is best. Let's find out, Taylor said, and if there is a better way, let's adopt it.
You can forget everything Taylor wrote about the details of his technique, and if you remember that one basic tenet you have an invaluable industrial asset. I always have remembered it and have tried always to impress this viewpoint upon my associates. I believe it has been a significant factor in our progress.
The evolution of organization and management in our company has been marked by a series of stages.
In the beginning I had to be a sort of executive-of-all-work, but as soon as we had the money to do it, we began to build up a supporting organization of promising young men.
In a research survey made to determine what makes executives tick, the conclusion was that "the most important attribute of any executive is his willingness to delegate his authority along with his responsibility." I decided early that I couldn't build a large business by trying to do everything myself or know everything myself. I delegated responsibility to our young executives and gave them authority to act. By 1918, the foundation for a strong supporting organization had been laid, and I had begun to free myself increasingly from operating details.
Thenceforth I devoted much of my time and energy to forward thinking and planning, basic financing, the acquisition and development of plants, the selection of key personnel, and to cooperating with my associates in the development and business-building programs and policies.
Our present form of organization dates from 1929, shortly after we acquired Bauer & Black. The number of plants and the size and diversity of the business had so increased that it then became clear that we needed a greater degree of decentralization of management, involving large delegation of local responsibilities coupled with centralized correlation and control.
We now have three operating divisions. Each has a complete line and staff organization, headed by a Divisional Vice-President, covering all segments of a self-contained business except financing, which is handled centrally.
Our seven cotton mills are included in the Kendall Mills Grey Cloth Division. Each mill is in charge of a mill manager. The central executive office of the division is at Charlotte, North Carolina. Cotton buying for all mills is controlled centrally, through a buying office in the South. Most of the division's product goes to our northern finishing plants, but its sheetings and some of its other products are distributed through its New York Sales Office.
Our Kendall Mills Finishing Division includes our three northern finishing plants. Its head office is at Walpole, Massachusetts. A specialized sales organization, with branches in various cities, sells the division's products.
The division makes and sells a variety of textiles, going to many fields of trade, including industrial applications. It also manufactures surgical gauze, ready-made dressings and other products distributed through our Bauer & Black Division.
Our Bauer & Black Division includes our plants at Chicago and at Rockford, Illinois, and at South Bend, Indiana. It is responsible also for our operations in Canada, Mexico, and Cuba, as well as for our export business. The division has a large sales organization. Products include gauze, absorbent cotton, ready-made dressings, adhesives, and other products for hospitals, elastic goods in various forms, plastic tapes for industrial and other uses, "Curads," "Blue Jay" foot products, and a wide range of other items.
How did all of this come about from a financial standpoint? How do you start with no money, and come up finally with something like The Kendall Company?
When I was given the job of trying to salvage the Lewis Batting Company, its account was at The First National Bank of Boston, of which Daniel G. Wing then was President. The Lewis Batting Company had borrowed there, and Mr. Wing knew something about my work at the Plimpton Press in Norwood, which also had an account at his bank.
After I had been working on the Lewis problem for a time, I went to Mr. Wing, told him I was in charge, and handed him a balance sheet that I had prepared. I said: "Here is the first true balance sheet you have ever had from this company." He looked at it and said: "Why, this company is completely insolvent." I said: "I know it is, but I think I can pull it out." "Well," he said, "what do you want?" "I'd like a line of credit of $30,000 and no questions asked," was my reply. He looked at me hard for a few minutes and then said: "All right, you can have it."
That was the beginning of mutually valuable relationships with The First National Bank and other banks and banking houses that have extended down through the years, and have had much to do with the progress and success of our company. One rule we have always followed - tell your bankers the whole story at all times. In return they have given us unwavering support, and have come forward with voluntary help in tight places.
Indispensable as this banking support has been, we could not have done what we have without consistently devoting a good part of our earnings to plant expansion and improvement, research and other constructive uses.
Early in my business life the meaning of obsolescence was borne in upon me. I saw that the only permanent thing in the industrial world is change. It became clear to me that machines could sometimes run long after their profitable economic life had ended. As the world goes forward, obsolescence applies not only to what you can see, like buildings and machinery, but also to intangibles like ways of doing things, methods and procedures, and points of view.
So we have tried unceasingly to make buildings and machinery more efficient, and to find ways to better our methods, save labor, reduce costs, and improve products. This requires imagination, open-mindedness, courage, confidence in the future, and willingness to spend money to make money.
In the seven postwar Years 1946-1952 inclusive, we put back into our plants out of earnings approximately $20,000,000 in capital outgoes, exclusive of maintenance costs, research and advertising and development programs. We did this with no new public financing and with no borrowing except short-term bank loans to finance seasonal cotton buying.
It always has seemed to me that quality of personnel and the spirit of the organization are even more important than bricks and mortar, money or products. The essence of The Kendall Company and of all it has done is in its people.
A defined philosophy of people runs through our history. As we see it, an office or factory is not just a place to work for a living. It is, rather, an important part of the whole life of every worker.
So we have tried to provide not only good surrounding and good equipment for our workers, but we have shared with them our belief in the importance and worth of every job and its significance in the chain of production.
This philosophy has led us into pioneering developments that now have become standard practice in the more progressive companies and industries.
From the beginning, we discarded the traditional system of having employees "hired and fired" indiscriminately by plant superintendents. We began organizing employees' departments, headed by trained personnel. We had nurses and first-aid rooms in our plants when these were a rarity. We always have believed in clean, safe, orderly plants. We have spent important sums to keep our mill villages well painted and in good repair. We have encouraged and supported churches, schools, and community activities. More recently we have sold our village houses to our employees in some of our communities, fostering the personal pride which comes with home ownership.
This concern for our employees in not based on paternalism. We always have believed that it is just sound management and good citizenship. As a result we feel that an unusual spirit of friendliness and cooperation prevails in our company and makes it a good place to work.
The selection and training of key people always has seemed to me one of the most vital of executive responsibilities. The outcome of our efforts in that field is our experienced, competent, hard-hitting organization. To insure its continued strength in the future, we watch for outstanding talent in our own ranks and steadily add as trainees picked young men from the colleges, business schools, and technical schools. We push them along as fast as they are ready for added responsibilities and suitable avenues of promotion and development can be opened up for them.
I always have believed in young men and what they can do. Our motto here is still what it always has been - get the right kind of young men around you, train them, given them responsibility, check results, and you won't have to worry too much about what will happen after you are gone.
Those of us who have grown up in New England and live in New England have a heritage of great worth. It may be true that New England lacks some natural resources and currently suffers some geographical disadvantages. It has, however, one great offsetting advantage- the quality, intelligence, and skills of its people. They have made New England businesses great in the past; they will make them great in the future.
I believe success is likely to attend soundly-managed businesses, wherever located, founded on honest work, worth and useful products, fair prices, and fair dealing with suppliers, customers, employees, and the community - businesses whose executives show initiative, teamwork, courage, open-mindedness, and resourcefulness in adapting their operation to the needs and conditions of the present, while foreseeing and planning for the possibilities of the future.
The World of 1953 is obviously very different from the World of 1903. How different, you all know. The 50-year span has seen panics, depressions, booms, inflation, deflation, wars and the aftermath of wars, and advances in science, in production, and in all sorts of techniques unimaginable in 1903.
Of necessity the future is a closed book, to be opened only page by page. I shall not fear these pages as one by one they come into view. The Country is growing apace. Needs are expanding with its growth. There will always be a place, an important place, for those who can meet these needs.
I hope I shall be pardoned if I close on a note of what seems to me justifiable pride in the growth and accomplishments of The Kendall Company during its first half century - pride in the contributions of its men and women to the development of the philosophy, policies, methods, and practices of a traditionally conservative industry. All of us in the company are happy, too, in the fact that so many of our products have become a part of the fabric of American life.
It happened in New England! It can happen again. It will happen again - and again -