George Siemon isn't just in the business of organic milk. As the CEO of Organic Valley, he has shepherded the company to its own organic brand of leadership and corporate culture. In 1988, Siemon was a dairy farmer who started a cooperative with a few neighbors in the Kickapoo Valley of Wisconsin. That venture grew into Organic Valley, a 550-employee company with $530 million in sales last year. The company has gotten big, but not exactly corporate. Siemon is more likely to cite homespun wisdom about driving draft horses more than management theories on driving growth.
Kermit Pattison: How would you describe leadership in the Organic Valley corporate culture?
George Siemon: We've always had a group process and tremendous amount of group mind in our history. We've definitely been a committee type of business and we certainly have more meetings than other companies. One of my favorite axioms is "none of us are as smart as all of us
If you operate on consensus, how do you encourage individual initiative and entrepreneurship?
We need to run a business. If you have to make a decision, go ahead and make it. Don't feel limited. But come back and let's talk about it. You always support the decisions people made. They don't have to feel scared about getting their head bitten off. You have to stand behind your employees.
What do you look for in a team leader?
Facilitating conversations and consensus building—how to lead a good discussion. Once you get there, you've already gone down the path of being a good people manager. Prioritizing is really important. Business has a million distractions. You need to stick to what matters most and not feed on the stressful things. You don't want to have a leader who judges their productivity by how up they are on emails. And you can never forget work ethic. You want some one who can plug in and be dedicated
How does your company approach innovation?
There are two parts. One is product innovation, and the other, the really big one, is the human innovation. On the innovation of products, since we're in white milk business and trying to sell food as close to nature as possible, a lot of our innovations have just been trying to reduce ingredients. We're trying to go the opposite direction as the food scientists, which is loading up ingredients.
But after that, I think the success of our business, and all businesses, comes from relationships. What is innovative about the way you manage people? One of the big things I've been working on lately in my mind is team management. Individual managers are necessary but sometimes they get in way. One example is my meat team. I lost my general manager so I put the whole team in charge. Rather than have chaos or confusion, I got a bunch of young people who are hungry to prove themselves. It's exciting to see their entrepreneurial spirit coming alive in their ownership of the business. They're all engaged. You ask a question and they all know the answer. There's no finger pointing. They're all in it together.
Who's your favorite management theorist?
I'm not too keen on all that. I certainly try to read books, but I just can't come away with one right now. I'm an intuitive person and a relationship person. Honestly, I read these books and I go, 'wow, we're already doing that.' Common sense has been my driving force. When I started in business, one of the dairy companies had the golden rule in the back of their cards and it always struck me how the golden rule is a very positive axiom, a proverb, to live by. It's certainly motivated me in my life: what is fair? What is the right thing? What would I want some one else to do to me?
A lot of today's management theories will be passé 10 years from now but the golden rule and common sense won't be.
Nope. We'll bet on that one. But I do love the word change. We started out as a local food system delivering food to Minneapolis and Chicago and we had to change to become a national player in a very corporate-dominated marketplace. As I get further along, it's gotten more and more about managing change rather than just letting change happen. Change is a very interesting
I study words. I'm a dictionary person—I've got eight books on words on my desk. I looked up "change" recently and it surprised me that it comes from the word for kind of crooked. Kind of crooked really got me fascinated. Change happens in a crooked way: because you make one decision, this other big change happened. You don't know you're making change when you make that first decision, which therefore means you've got to be pretty aware of the decisions you're making because they might take you places you don't expect to go. I've been thinking: What decisions are we making today that we don't realize where they're going to take us? I find the dictionary to be great guide in life. If you get confused, look up a word.
Is leadership the art of managing change?
The Eastern philosophy of Lao Tzu has been a great influence to me. It says the best leader is the one who gets people to say, "We did this ourselves." There's a school of thought: How do you do something over here that gets you a result over there? Change is not straightforward. If you want to more productive employees, maybe you give them a benefit that helps them be inspired or build community. If your objective is a higher productive workforce, it may not come from the whip. It may come from something else.
What's an example how you've put that into practice at Organic Valley?
We have quite a wellness program here. It's something we did because its part of our DNA, but we definitely got our health insurance lowered because we have such a strong wellness program. There's a real sense of friendship that develops in all the people who walk together. They're out in my parking lot walking circles all the time and they're smiling and laughing. It's a double gain: it's not just making the employees healthier but somehow it helps in the bigger picture.
How have you gotten along with the MBAs you've hired?
Not too well. You hit the bullseye on that one. It's amazing how many of them get too frustrated. Sometimes people came in and felt we're just too chaotic, not enough planning, not enough of this or that. It was too theoretical and just too much in some box. We have a joke around here—what box? We've always not been bound by some of the traditional perspectives. I've gone through MBAs and I try real hard every time I have them. I got a couple of them in here now and some of them are my most frustrating employees. I don't think I have an ego about they have an MBA and I don't. It's just my reality.
You've been the only CEO in the history of Organic Valley. Why do they keep you around?
Mostly because I'm verbal and I'm able to facilitate discussions. That's my biggest skill set. I'm still involved in the business, but I've been very fortunate to have great people who have been with the company for a long time, do a great job and give me the luxury to look out for the bigger picture. I'm now becoming more of a vision keeper or a culture keeper.
What's your role as vision keeper?
It's primarily the issue of how you build entrepreneurship into a big business. How do you take care of the human side of the equation, the relationships? What's unique about my job is I have 1,600 farmers on one side, 550 employees on the other side, 700 shareholders, and many customers and consumers. It all boils down to how do you maintain this culture and take care of people? It's easy to count beans, but managing people, managing relationships and designing systems so they encourage and reward entrepreneurship—I don't think you could write a formula up about those things. You could read all the books you want and they're all good input, but sooner or later you have to look at your organic situation and say, what can we do here?
So what can Organic Valley teach the business world about leadership?
Oh, we're not very much of a braggart so I'd probably just as well say "not much." But let me think about it ... well, the value of partnership, a win-win attitude and the value of taking the word organic to a broader construct. To me, organics is bigger than the food world. It's about a philosophy, making the parts work as a whole and holistic thinking. You can't have anybody losing in a deal without it sooner or later coming back to bite you. It kind of goes back to our golden rule.