Learning to take responsibility

By Edgar M. Bronfman

As a young man, Edgar Bronfman detected an off-taste in an entire batch of whiskey at the Seagram bottling plant in Ville LaSalle, Canada. He shut down the plant, let the 1,000 workers go home, and told the plant manager, "There will be no more VO bottled until I can correct the formula."

Bronfman, who eventually succeeded his father, Samuel, as head of Seagram, led the family liquor company for more than 35 years before relinquishing the CEO job to Edgar Jr. in 1994. In his new biography, "Good Spirits," SeagramÕs chairman recalls the crisis at Ville LaSalle and how he dealt with it. The excerpt below contains important lessons for successors at companies large and small in taking responsibility, learning about the product, and winning the loyalty of employees.

—The Editors.

At the end of the summer of 1951, I began working full time for Seagram. I knew I needed to learn something about account ing, so I started as a clerk in the Montreal office on the accounts-payable ledger while also taking a correspondence course on the subject. Harry Cox, the comptroller of the Canadian companies, was a great help in the basics of double-entry bookkeeping. But I was now 22, and a little accounting went a long way. After learning the rudiments of the system, I suggested to Father that I become more acquainted with the product. He heartily agreed, so I commuted to Ville LaSalle, where our original plant was located, to study the arts of manufacturing and blending. Even at that age, I was resolute in my feeling that if I was going to run the company one day, I had to know the product inside and out. I had a fervent desire to learn the process from step one, and the knowledge I was to gain would prove invaluable. The importance of understanding the product is something I cannot overemphasize—it is one of the foundations of becoming a successful businessman.

I had spent part of one summer working at the distillery, so I knew something about production. My job was working in the control lab and checking each phase of the operation. We even tested the grain coming into the distillery to make sure that it was the right humidity—no more that 14 percent moisture was allowed. When the grain (mostly corn) was ground, it was put into a large container, where it was boiled. This converted the starch to sugar. Then the yeast could convert the mash into alcohol, carbon dioxide, and what we call spent mash. Our job was to monitor each procedure until the "beer"—the name generally given to the resultant product—went into the primary still. After each fermenter was dropped (meaning that its contents were transferred into a waiting tank before being sent to the primary still), an employee would descend into the fermenter, scrub out the remains, hose it down, then lime it to kill all bacteria before the next fermentation could begin. During the summer when I worked in the control laboratory, I would descend into the fermenter to clean out the remains of the spent mash. I did so because I was curious about the conditions. Knowing that carbon dioxide was heavier than air, I was concerned about breathing and sweating. It wasn’t at all difficult to breathe, although it was hot.

I began working under Roy Martin, our chief blender. Roy was a wonderful man. Tall and thin, he had wavy hair and enthusiastic, gleaming eyes. Long before Father bought Seagram, Roy, then in his early teens, had started with the company in Waterloo, Ontario, as an office boy-accountant.

As chief blender, Roy was probably the most underpaid person in the history of the firm. I can’t remember his salary, but he was the most vital guy in the whole organization—the one who planned everything, from production to inventory. While much of blending is accounting and inventory planning, the rest is a keen sense of taste and a good imagination, and Roy had both.

Considering the importance of the job he was doing, Roy’s staff was tiny. He not only made every blend for every product we produced in Canada (including Seagram’s VO, Crown Royal, and all the other whiskeys sold in Canada and abroad), but he was also in charge of inventory control, which was one of the keys to our profitability, then as now.

I learned an unbelievable amount about production from Roy. Indeed, on that subject, he taught me more than Father did, though in a sense he was Father’s disciple.

One of Roy’s invaluable lessons was to impress on me the importance of inventory control. When we’d look at a bad production sample—and we’d look at every one—he’d teach me to ask the next question: "Okay, this isn’t good—why?" Sometimes we’d find a bad sample of a mature whiskey. What could possibly have happened? It could have been the result of a barrel left outside and possibly some rain had gotten in it, forming acetic acid. So we decided to put all our barrels under the roof. Sam Bronfman had put the words "Make finer whiskeys—make them taste better" into Joseph E. Seagram’s litany, and we took them seriously.

I spent a good deal of time learning how to approve the quality of new production before it was barreled. This is extremely difficult because you have to know what a distillate will taste like four years or more down the line, and the only way you learn that is from experience. Fortunately, we had samples of old distillates on hand, and Roy taught me to compare them with the aged product.

It is difficult to describe flavors in words. Pick up a glass of your favorite whiskey and try to explain exactly how it tastes. Blenders therefore created a language of their own, and if I heard Roy say "fruity" or "musty" or "rough," I came to understand what he meant.

Perhaps the most important thing Roy taught me was the importance of the dignity of work. He was so proud of VO and how it tasted, proud to have that kind of job and do it well. That’s something I carry with me to this day.

We traveled together a great deal. I remember when we bought a company named United Distillers, which had a brand called Hardwood. We were desperate for inventory, and they had it. Roy and I went out there to taste it so that we could determine what was usable and what we had to redistill. By the time we were through, we had tasted every single barrel in the whole inventory. It was a turning point for me, because we were working as equals—there wasn’t time to ask Roy what he thought of each sample.

Though I was learning from the best, it didn’t take me long to initiate a major change at Ville LaSalle. In order to check the uniformity of our blends, women were relieved from duty on the bottling line and asked to test the new samples. They were given three diluted shots to taste (and spit out): one of the current production, one of the proposed blend, and one of the standard. In theory, 50 percent would agree on one match and 50 percent on the other, indicating that there was no difference between the three samples. This was called the psychometric system.

I didn’t trust this method and proposed a change. Under the new system, blenders would taste the new blend and compare it to the standard, thus determining whether they were consistent. Roy agreed, and from that time on product uniformity became the responsibility of the quality-control department.

Roy decided which whiskeys each of the distilleries would produce, and how much. I soon became deeply involved in his work, and together we planned to increase the size of the inventory, because we felt that both VO and Crown Royal would grow if we had the stock to back them up.

One evening, I went to Father and told him that I knew what I wanted for my birthday. He looked up over his glasses, just the way Arthur Schatz photographed him for Fortune magazine. I answered his unspoken question: "A new warehouse."

When I explained why we needed more space so that we could expand our inventories, he was delighted that I was already so involved in the business. "A good son asks for such a birthday present," he told Mother.

Interestingly enough, I didn’t have to provide him with spreadsheets or the 1950s equivalent. He probably knew the figures anyway. Nevertheless, I presented enough to be convincing. Inventory has to be based on sales projections, plus about 3 percent annual evaporation. I based my case on increasing sales, and proved to be right.

I stayed at Ville LaSalle for over three years. Not only was I learning, but Roy was so shorthanded that my help was truly needed.

The fact that I was the boss’s son never presented a problem. Indeed, I was even asked to join the union when I was working at the plant. What I discovered is that people treat you the way you want to be treated. If you’re friendly and humble, you’ll be accepted. If you stick your nose in the air and constantly remind others of who you are, you’ll be kept at arm’s length. It’s up to you.

In my case, the rarefied upbringing at 15 Belvedere Road had fostered a desire in me to be a regular guy. Father was forever telling me how special I was—in other words, that I wasn’t normal. He meant well, but no kid likes to be taken out of his peer group. This was something I remembered when it came time for me to raise my own family.

Moreover, from an early age I had seen how Father was treated with fawning respect by everybody around him, and didn’t like it. He had great power over their lives, and he used it to his advantage. He knew that if he flew into a rage against his employees, they weren’t in a position to fight back. From day one at Ville LaSalle, I made sure not to throw my weight around. The fact was, I loved the people at the plant, and I felt accepted by them.

I also loved the challenge of work. One day I walked into the blending room and saw that Roy was not well. After consulting with a doctor, I proposed to Father that Roy take some paid time off.

Who will do the blending while Roy is away? Father asked.

"I will," I said.

"Can you do it as well as Roy?"

"No, sir," I said, "not when he is well. But when he is sick, yes, sir."

Soon after Roy and his wife left for Florida, I found myself saddled with a major problem. In the course of normal checking, I discovered that the taste was off in the last blend of Seagram’s VO that Roy had made. At first I thought it might have been a slight mistake in the dumping of barrels, so I requested that another dump be made into a separate tank. That, too, was a bit off, and I realized that the formula itself was at fault.

I was in a bind. We were dealing with a finite quantity of whiskey. There was no way I could toss out the batch and start again: this was all the six-year old whiskey we had on hand at the time. To make matters worse, it was October, our heaviest shipping month because of Christmas, and the pressure to get the product out would be enormous. But I had been trained by both Father and Roy that quality preceded everything.

Somehow I had to add something to make the batch taste right. I made up my mind to shut the bottling hall and let the 1,000 line workers go home. It was not my concern how the union would react; I simply told the plant manager that there would be no more VO to bottle until I could correct the formula.

But first I decided to call Father. Maybe he would rush home from New York and help me. On the contrary, he simply approved my decision and stayed exactly where he was while I struggled to resolve the dilemma.

Four days later, after working until I could hardly taste anything at all, I finally found the answer. By adding a quarter of a percent of a Maryland rye whiskey and a half percent of a Kentucky bourbon to the batch, it finally tasted to me like the VO of old. The bottling hall reopened, and VO flowed once again.

Looking back, it was a gutsy play on Father’s part. True, he didn’t know the inventory like I did, so it would have been a waste of everyone’s time for him to come to Ville LaSalle and pitch in. And he couldn’t tell me to ship anyway; that was not the Seagram tradition. On the other hand, he could have sent someone from New York or Louisville—after all, I was a kid. But he chose not to and to let me handle the situation, chalking up whatever it might have cost to the education of the prince.

My fascination with production ran deep, and I gradually took over responsibility for all Canadian production.

I had a surprisingly easy time gaining this responsibility. It gradually dawned on me that as a rule people do not like responsibility. They are perfectly willing to let someone else assume it, as long as they don’t feel threatened.

I traveled across Canada, evaluating each distillery to see if we could increase efficiency and improve quality. At our plant in Waterloo, Ontario, I discovered that we stored some used barrels out in the open. As I had discovered with Roy, when barrels are left in the rain, acetic acid can easily develop and later ruin any whiskey put in those containers. If one bad barrel slips into a blend, it can ruin the entire batch. Initially, I arranged for temporary covering; then I had structures built to shield the barrels from the elements.

On one trip, when tasting current distillates at the New Westminster plant in British Columbia, I noticed a pronounced "off" smell in a sample that had been rejected. No one seemed to know what was causing the difficulty, but I thought I knew where the problem lay. I had the plant manager and the distiller come with me to the "yeast room." There yeast is grown prior to being put into the fermenter, where sugar is converted into alcohol and carbon dioxide. Sure enough, one of the yeast tubs had a sour smell. It had gone bad.

This period provided me with important insight into the conflicting demands of production management and quality control. The former is concerned with volume, while the latter is interested only in quality. This is why quality control must report to the CEO, not to production management. At Seagram it was ever so. To this day, I will raise Cain if I taste something amiss in one of our products. Everyone throughout the organization knows and respects this.