James Bodman Featured

8:00pm EDT September 25, 2007

Since introducing its hot dogs at the World’s Columbian Exposition in 1893, Vienna Beef Ltd. has called Chicago home. And if James Bodman has his way, that isn’t about to change any time soon. Vienna’s chairman and CEO is committed to keeping his company true to its roots in what some consider the hot dog capital of the world and providing an income for 450 area families. Vienna, whose growth has somewhat mirrored that of Chicago itself, now offers condiments, soups, deli meats and pickles along with its famous dogs, and last year, the company produced more than 250 million hot dogs and recorded sales of about $105 million. Smart Business spoke with Bodman about the importance of change, how mistakes can help improve future decisions and why he empowers talented people and gets out of their way.

Keep your ego in check. I tend to hire people who are more talented than I am. I befriend them, I give them goals and I leave them alone. That’s difficult for some leaders to do. We all have some insecurities in life; I just don’t happen to have that particular one. I’ve had problems with managers in our own business that don’t pass on that philosophy, and they are afraid to go out and hire good people because they think they’re going to take their jobs.

Have trust in the fact that you can hire somebody who you think is better than you are. The man who runs our plant is better at it than I am. The guy who is our chief operating officer is better at it than I am. The guy who is our chief financial officer is new and learning the trade, and I’m kind of helping him along, but he is dramatically smarter than I am. He will be better at doing this than I could ever be.

Expect and accept mistakes. If you walked through this office and equated the quality of folk working here with the size of the business, you would be very taken aback. We have some enormously talented people.

Of the six or seven folks that I put into the close cadre of my leaders, any one of them could be the CEO of this company. These people love knowing that they can work for a company that is very athletic. They can make decisions and see the results of their decisions right away, and generally know that they’re not going to get their hair cut if they make the wrong decision. What they get is a smile in the hallway and the knowledge that they’ve got a million people standing behind them, and they’ll make a better decision the next time.

It’s like having a private in the Army shooting at the enemy. If he misses, you don’t go call him a schmuck because he won’t shoot again. You want him to feel free.

You want people to have the confidence knowing that a lot of the decisions that they make and a lot of the actions they take are going to be wrong. They have to have the confidence to continue doing it.

At the end of the day, you’ve got to support them, and when they make a mistake you’ve got to let them know that it’s OK, that you expect mistakes and that it’s good to have a mistake out of the way because that just increases the probability of the next decision not being a mistake.

Maintain focus on customer needs and embrace change. Sixty percent of our revenues today come from products that didn’t exist 20 years ago. If we don’t keep changing everything that we make and offering tastes and packaging that are more acclimated to the marketplace, we would go broke in a New York minute.

If we ran this company the way it was structured 40 years ago, we would no longer be in business. We derived 40 percent of our revenue from pickled corned beef, which is an easy-to-make, ethnically demanded product. You find it in the Irish bars and the old Jewish delis and Polish neighborhoods. Today, it represents 5 percent of our revenue, and the margins are small.

You have to keep moving away from things. You have to add value. You have to give the things to your customers that they are demanding that are parallel to what your abilities are. Too many companies get caught in the old-fashioned way.

I’m 66 years old. You know how I spent yesterday morning? I spent yesterday morning walking around with our salesman. We visited 10 hot dog stands in The Loop in downtown Chicago. I talked to them, and I listened to what they had to say.

Five of them bought from us, and five of them didn’t buy from us. There are now three of them that don’t buy from us. I go out and I talk to people. I listen to what customers have to say, and I make a solid practice of listening to our salesmen because they’re saying to us what the customer is saying.

Reward effort. If you put the right people in the marketplace and they give it effort, in the long run, they are going to succeed. It’s much like being the manager of a baseball team.

He’s got a guy playing out in left field who’s very talented, who’s trying very hard but who has had a bad spring. Things aren’t going well, and the press and everybody in the world is yelling at him to bench the guy. Just let him go. Give him some time to perform.

I’m willing to accept faults, and I’m willing to encourage people who maybe aren’t given all the talents in the world, and I’m willing to recognize and reward effort.

Too many people are fixed in the need to empirically drive income and promotions for their employees and rewarding aggression and performance as opposed to effort.

HOW TO REACH: Vienna Beef Ltd., (773) 278-7800 or www.viennabeef.com