Back in 2011, Jim Beam Brands went public. I had the privilege of going to the floor of the New York Stock Exchange with our CEO, Matt Shattock, and other executives to celebrate. We also changed our name to Beam Inc. that day. Pretty simple, pretty straightforward. One word that says it all.
As you can imagine, it was a proud day for us and it got me thinking. As I’ve said two or three hundred times in this book, we’re an old company, one of the oldest in America. Not many companies have a history like ours. Long, consistent. Not many companies have had one family involved from the start.
So, as I said, I did a little thinking about the reason for our longevity, pondered why we’ve outlasted dozens of competitors—hell, dozens of industries (the horse and buggy, the telegraph, eight-tracks, VCRs)—and in the process, I put together a short list of things that have contributed to our success. If you’re already working in a company or thinking of building one that lasts, you may want to read up. (Look at me now: bad student turned teacher.) Most of these observations and thoughts are pretty basic, really more common sense than anything. You probably won’t find many of them in a management course at Harvard. But that’s how we like to operate at Beam. Direct. To the point. I think that approach works best for most things in business and in life, so here it goes, What Fred Noe Knows:
1. Discipline and focus: I think I’ll start here because when you talk about my family, you have to talk about focus. Throughout the years, we’ve maintained a single-mindedness about us that has kept us on the right track. From the start, when Jacob carted that pot still over the Wilderness Road into Kentucky and set up shop, he knew what he wanted to do and he stuck with it. Eyes on the prize. I’m sure he got sidetracked from time to time, I’m sure obstacles arose and unforeseen challenges surfaced, but regardless, he stayed true to the task at hand, and never lost sight of the goal: make the best whiskey.
I think focus—setting one goal and never deviating from it, having it serve as your guiding light through good times and bad—is more than just important for a company and for a brand, it’s essential. Everything you do has to relate back to it. So make sure you have a goal, just one now, and go out after it. And every day, make sure you’re making progress toward it. At the end of the day, when you’re turning out the lights, ask yourself: Did we move a little closer to it? Did we get anything done today that we didn’t yesterday? And it’s important to remember not to get discouraged. Progress comes slow but then it can come fast. It took us generations to get to where we are now. So keep your focus and don’t get distracted. Success doesn’t come overnight. If you do something long enough like we have, eventually, you’ll reach that goal. Then it’s time to set a new one.
2. Innovation: I kind of covered this in the last chapter, but it’s so important that I’ll add to it. No matter what business you’re in, change is critical. I’ve seen this close up. After years and years—hell, after generations really—the distilling industry is changing. There’s lots of small microdistilleries popping up around the country making all kinds of new, different, and in some cases even good whiskey and spirits. They’re even making bourbon in New York. The next Jim Beam might be out there for all I know. My point is that you’ve not only got to keep up, you have to anticipate what’s coming down the pike. Keep your eyes and ears open to new opportunity, keep your mouth shut, and take good notes. Listen and learn. I already told you what happened to the bourbon industry in the 1970s: we got caught flat-footed, put our head in the sand, and when things started to change, we weren’t ready. It showed on our bottom line, and we ended up paying a steep price.
We’ve learned our lesson since, though, and we’re into innovating now. Research and development. Red Stag and Devil’s Cut are proof positive that we’re committed to new thinking. In fact, we’re so committed to it that we built a state-of-the-art Global Innovation Center on the grounds of the Clermont distillery. This is where science and craft meet. This is where good ideas come from, ideas that are going to make a difference in our future and in our industry. So always be thinking about what’s next. I guarantee you, your competitors are.
One more thing in regards to innovation: don’t be afraid to fail while you’re trying to get creative and launch something new. Over the years, we’ve made mistakes; all our products haven’t been home runs. Years ago, we came out with a tequila that had chiles in it. A novelty. This was going to change the game, make us a player in the category. Well, that product bombed like the New Coke, and it’s just a memory now. We’ve had other strikeouts too—a micro-bourbon (never was sure what that was) that had micro-sales comes to mind. Regardless, we kept plugging away. So don’t be discouraged; get off the ground, dust yourself off, and keep looking for the next best thing. After more than 200 years, we still are.
3. Humility and remembering your roots: Keep it real, brother. Never get too impressed with your own success. Never think you know all the answers, can solve all the problems. Never think you can’t get better. Most importantly, remember where you came from. Remember your roots. I think that’s something we’ve done pretty well at Beam over the generations. It started with our family; overall we’re a pretty modest bunch. Jim Beam was a reserved man, and for the most part my uncles and cousins were and are a pretty laid-back bunch. Okay, Booker might have been one big exception, but he never lost sight of what was important and for most of his long career, he was just a working man who put his job and our bourbon first. He never asked for the limelight, it came to him. I think that attitude permeates the company. At least I’d like to think it does. No matter how big we’ve gotten, no matter how many countries we’re sold in now, no matter how many products we have and sell, at our core we’re still that little family-run business starting out in the foothills on Hardin Creek. Just a Kentucky company doing what we do best, doing what we know. Staying humble can be easier said than done, but getting a big head and starting to believe your own hype leads to complacency, which leads to sloppiness, which leads to mistakes. We’ve outlasted a lot of competitors and companies because we’ve never taken anything for granted. Got to work for it, got to get better, every day.
4. Consistency: My last point kind of leads into this point. If there’s one thing that distinguishes Beam from everyone else, it’s our consistency. Over the generations, we’ve mastered a few things, learned to do them right, and every day we go out and do them. Bourbon making is a process; you can’t take shortcuts, can’t do one thing one day, one thing the next. Got to do the same thing: every day, every week, every year. So, regardless of what industry you’re in, perfect your process, and once you get it right, go out there and do it again and again and again. Be the Master Distiller of your own business, perfect your craft, then share that knowledge with your team and make sure they all understand how important it all is. Make sure they understand that being consistent in what you do is what will separate you from everyone else.
5. Teamwork: This might sound a little clichéd, but you need everyone pulling together if you’re going to get anywhere. At Beam, we’ve tried to all get (and stay) on the same page; it’s a priority. Over the years, we’ve made an effort to ensure that everyone understands where we’re going and how we’re going to get there. And we’ve made sure that everyone has a role, from the people in marketing and the sales team out in the field, to the men rolling barrels off a truck. It’s all important, it all matters, it all makes a difference. Everyone has to contribute and everyone has to help each other out. Despite our name, we didn’t get to where we are because of one man or one family. We got there because of the efforts of thousands of people and dozens of families over hundreds of years. It’s been a collective thing. So make sure that your team all understands what the goal is and the strategy you’ll use to get there. Then go out there and get it done.
6. Creating a family: The people who work for you are more than just employees; they’ve got problems, hopes, dreams, kids, and parents. In other words, they’re people, so you’ve got to make an effort to understand them and their lives. I think we’ve done a solid job of doing just that at Beam. We’ve had people working at our distilleries for years, if not decades. Generations of fathers and sons, even mothers and daughters, more than one husband and wife. There’s a reason for that: we’ve tried to treat them all with respect, we’ve tried to help them out when we can. We’ve been firm at times, but hopefully always fair. Once people know that you care about them, once they feel like they have your respect, they’ll be happy, and a happy team is a productive team. It hasn’t always been perfect for us, we’ve had issues over the years, but just like a family, we’ve worked it out, stayed together, solved the problems. Our company started as a family-run business, and we’ve made an effort to keep that feeling, maintain that environment.
Family. It’s kind of the essence of Beam. It’s worked for us, and it can work for you too.
7. Pride and passion: You’ve got to have both of these if you’re going to make it. You have to believe in yourself, your product, and your company. You have to believe that you’re different, better. And you’ve got to stand up tall and let your work speak for itself. Be proud of and passionate about what you do. Strive to be the best. More than anything, I think our pride in our bourbon and our passion in making it have sustained us over the years. Our name was, and still is, on the bottle. We simply could not fail. We simply could not be second best.
I’ll be honest, sometimes when I’m driving down the highway in Kentucky and see one of our trucks with the name “BEAM” written on the side in big, bold letters, I get a lump in my throat, even after all these years. Pride and passion are what they call intangibles. They don’t show up in quarterly sales reports, don’t show up on any bottom line. But they’re both critical, and infectious. If you’ve got it, chances are someone else on your team will catch it, and chances are it will spread. So keep that head raised high and believe in your work—it will make a difference, maybe even a big one. I know it has for us.
8. Quality: I told you most of these were common sense, but you’d be surprised how many companies don’t put an emphasis on this, especially nowadays in our “I want it now” culture, when speed and instant gratification are important. There’s always a temptation to cut corners, to find ways to water something down to make it cheaper, or to revise the process that has worked for you to make it a little faster. We’re a centuries-old company and we’ve lasted because we’ve always resisted those temptations. To be sure now, we’ve innovated, we’ve added technology, updated things. We don’t make whiskey like they did 100 years ago. But we’ve never skimped on the quality. We know what’s important, that what’s inside the bottle is what matters.
There have been times when we could have rushed things. A few years back we basically ran out of Knob Creek, one of our Small Batch Bourbons and a big-time seller. Aged nine years at 100 proof. We could have made adjustments, mixed some of our remaining stock with our whiskies, stretched things, or bottled some younger whiskey, but we didn’t. The result was a shortage in the marketplace that probably cost us some money, but we didn’t rush the process or the whiskey. When it was ready, we got it back out there. Doing anything else would have compromised our quality. That’s not something we do here. And you shouldn’t either.
9. Know your customers: One more common sense point, but it’s important: the customer is king. Repeat after me. There’s no reason to go into business if you don’t have consumers who will buy what you’re selling, so you’ve got to take care of them. I think we’ve always done a good job of connecting with the people who buy our products. I’ve mentioned before that besides making bourbon, the Beams are good at selling it. A lot of that is plain old hard work and relationship building: getting out there and shaking hands, thanking the people, building friendships with the bartenders, the distributors, the restaurant and bar owners, and the general consumers. We don’t take anyone for granted, never have. We’ve always made an effort to let them know we appreciate their loyalty. And we have loyal customers, about as loyal as you can get. People who are engaged with our brand, people who feel part of the Beam family.
Case in point: Not that long ago, we ran a little Facebook promotion. I said if we got more than one million Facebook fans in three months, I would do something bold. (Full disclosure: It was the marketing department’s idea, and I went along with it because I didn’t think we’d reach the mark, so I thought, what the hell, I’ll play along.) Well, I underestimated our customers, underestimated them big time. They got into it and we blew by that mark—we added thousands of fans in no time. So, to show my appreciation, and to keep my part of the bargain, I went out and got myself a tattoo of the Jim Beam logo on my arm. It was my first tattoo and it was a big deal because I hate needles, but it was the least I could do, and a deal is a deal. And our customers loved it. I got e-mails from hundreds of them saying they appreciated the effort, appreciated that I kept my word. I also got pictures of other people with Jim Beam tattoos. (Some had gotten them in strange places. . . .) Apparently I wasn’t the first one with the idea. So it was all good. I had some fun, but more important, I showed our customers my gratitude. Without them, I’m not sure where I would be. (I’ll tell you one thing, I wouldn’t be writing a book.) So, stay close to your customers, engage them in your business, and show them you understand them, that you care. I’m not saying you have to go out and get a tattoo, but that might help.
10. Have a succession plan: A key reason for our longevity has been our natural succession process. For years we were a family-run business, so passing the mantle was pretty straightforward—the head job was passed down from generation to generation, father to son, or uncle to nephew. In some cases, it was a no-brainer—Jim Beam only had one son, Jere, so that was that. I know that won’t and can’t work in most other businesses. That’s why you need a plan, need to put some thought into it. Early on, you should identify someone who’s eventually going to fill the leadership role and begin grooming him or her. Jacob did that with David and David did that with David M., and so forth down the line. They had a lot of kids, so they had a lot of choices and they chose carefully. (This is all on the distilling side, now; we’re not talking about the corporate structure of Beam Inc.)
We already have our eye on my son, Freddie. He’s a man now, a college graduate, and he’s expressed a keen interest in joining the company. He hasn’t yet, and nothing’s going to be promised or given to him just because of his bloodline. Also, there won’t be any pressure on him to join. Like Booker did with me, it will be his decision. If we open the door, it will be up to him to walk through it. I personally think he has the goods; he’s a better student than I was and seems more focused on his future. I’m a little biased, though. I guess time will tell. Regardless, the important thing is that we’re already thinking about it, already laying plans so when the time comes, we’ll make the right decision, a decision that won’t disrupt our business and will keep it moving forward on the right track.
Okay, so there you have it: What Fred Noe Knows about Business. Like I said, no theories about supply and demand, no consumer preference studies, no predictions about trends in the marketplace. Probably won’t see this chapter reprinted in the Harvard Business Review. But I do know our company, and I do know what built and helped us last. So some advice for you to consider, honest and straightforward, just like my family and just like our bourbons. Use it at your own discretion!