Dethroning the King (8 page)

“It was a disaster—an absolute disaster,” said Bill Finnie. “The union people absolutely hated management in general and August in particular, and it was reciprocated. So August did not start off on day one on the right foot.” Finnie spent the first six hours of every day cleaning soggy beechwood chips out of the brewery's giant metal tanks, crawling into them through a two-foot hole while grasping a toilet plunger and a rake. Then he and the other mid-level executives would spend four or five hours at their desks in the office. One of his subordinates, a graduate of the notoriously cerebral Massachusetts Institute of Technology, suffered that summer from a general lack of handiness and physical coordination. “He drove a forklift, and I think he had some pretty serious accidents,” Finnie said. “It was pretty ugly. But at lunch, they'd bring us really fresh beer in gallon milk jugs, and it was the best-tasting beer you've ever had in your entire life.” The company ultimately paid each of the white-collar workers a $1,000 bonus for their loyalty.

The union, to which August III had once belonged when he worked at the brewery, finally caved and agreed to the original pay package he had proposed. His hard stance made for the longest strike in company history, and it also proved the costliest. Production sank by half, and Anheuser-Busch's U.S. market share dropped from 23.4 percent in 1975 to 19 percent the next year. Miller, meanwhile, picked up speed and topped Schlitz as the nation's number two beer.

August III set out with a vengeance the moment the strike was over—not to punch Miller back into place with a nosebleed but to kill it. There was no questioning his level of determination. It was more a matter of execution. To rally his troops, and to provide them with a constant remainder of the height of the stakes, he had “ASU,” which stood for his new motto, “A Sense of Urgency,” printed on hats and T-shirts and engraved on pads of company paper that he then abundantly scattered around the Anheuser-Busch executive suites. One former ad agency staffer said he still got the chills decades later when recalling the inscribed notepads.

—Chief executive of a rival brewer

 

 

 

A
ugust III didn't lower himself gently onto Anheuser-Busch's throne. After seizing control by force, he used it as a battle station, commanding his troops like a general at war. It was at this time, newly into his administration and with a bunch of challenges looming, that his peculiar personality and gruff management style hit full force. They weren't for the faint of heart.

The Third enraptured subordinates with his power, his unyielding drive to win, and the intensity and accuracy of his business instincts and ethics. But many of those same colleagues were also repelled by how brutally cold and judgmental he could be and by his bizarre relationship with his son, which left them fumbling to describe the mix of terror and admiration their boss simultaneously inspired.

“He was scary smart, and scary period,” said Steve Kopcha, a former ad agency executive and copywriter of some of Anheuser-Busch's best-known commercials. “You just did not want to be around when he was angry. He's got these piercing blue eyes—I mean, he's scary. You could not con this guy at all. I had a lot of respect for August III.”

One of The Third's former mentees called him a “cold son of a bitch” for kicking Gussie to the curb and for skipping the funerals of longtime employees, and then added that he was “really one of my heroes.”

“He was a control freak of the first order,” said a former advertising agency executive. “He demanded complete, abject loyalty, almost like a monarch would in the old days.”

“He was a complete control freak,” agreed Mike Roarty, with no hint of malice. “He marched to his own drummer.” Roarty's wife, Lee, perched at his side, started ticking through a list of August's peculiarities—his claustrophobia, his fear of elevators, and his dislike of crowds—before Mike added: “In the 1980s, much of the innovation that came out of the company was dictated by August III. You can't deny his contribution.”

That point yields little disagreement. During the years August III ran Anheuser-Busch, he
was
Anheuser-Busch. His life, in turn, was almost singularly defined by his work at the company. And he structured it so that his subordinates' lives could revolve around the office as well. The campus around Anheuser's headquarters downtown sported enough cushy amenities to eliminate most of the excuses an executive might use to leave the site: a health club, a fancy corporate dining room, and even a barbershop. Many insiders avoided these sites at all costs to keep from being cornered by The Third on the treadmill or while waiting in line for a breakfast table. But 60- to 70-hour workweeks were the norm even for those who ate their eggs at home—and usually with a few extra hours put in at night or on weekends. An Anheuser employee was never really “off duty.”

“If you worked for August, you could expect calls any time day or night,” said Charlie Claggett. “I remember once, there was something like thirteen inches of snow on the ground and we were supposed to be out at Spirit of St. Louis Airport at 8:00 A.M. The city was shut down, but it never occurred to any of us that that meeting wasn't going to happen. It was not even an issue. We knew it would start at eight, and if you weren't there, it would start without you.”

Christmas and New Year's weren't immune, since The Third issued performance reviews around that time. In keeping with his extraordinary talent for being everywhere at once, he personally reviewed somewhere between 30 and 50 of his top executives each year. At their allotted times, the officers would filter one by one into the waiting area outside the conference room next to his office and then take their seats, clammy and sweating, as they waited their turn. Every 10 minutes or so, the conference room's current occupant would stumble out, wearing a facial expression that indicated how his review had gone, and the next person in line would step gingerly inside.

“You'd be in the bullpen waiting, and if they had issues with a particular person, it would take more than ten or fifteen minutes and things would get backed up,” said an executive who underwent the process for many years. “You'd end up with three or four guys sitting in the bullpen, looking at each other like ‘How do you think yours is going to go this year?' It was just weird.”

The procedure, and the nerve-wracking anticipation that led up to it, made for some tense Decembers. But it also gave top staffers a few minutes of The Third's personal attention, and the troops further down in Anheuser's ranks always waited expectantly for word from their bosses on what August thought.

“Some people came out of there and it was beyond bad,” the executive said. “But you'd get it straight from the top, good or bad.”

The Third tended to concentrate his demands within his sales and marketing staff and the company's advertising agencies, which, with their ability to touch tens of millions of American consumers, were the lifeblood of the company's success. Marketers bore the brunt of the pressure around Christmas and New Year's, which always fell just a month before the make-or-break advertising spectacle of the Super Bowl.

“I felt bad for some of the marketing guys, because they really did get a lot of scrutiny,” said a top executive from another part of the company. But no one was immune when The Third wanted something. He had been known to pick up the phone and call Henry Kissinger with requests.

In an attempt to inject The Third with some holiday spirit one year, a few executives from ad agency DDB Needham in Chicago hatched a plan. The Third had been flying them down to St. Louis every Friday for months in the early 1990s to hear new advertising pitches, and they were stuck traveling to meet with him in the company's airplane hangar just days before Christmas. To lighten The Third's mood, they decided to hire a trio of carolers—two women and a man dressed in full Dickensian garb—to hop on Anheuser-Busch's private jet for the trip to Missouri.

Once the group had settled on the plane, John Greening, DDB's worldwide account director for Anheuser-Busch, turned to address the carolers. “Listen, this guy has a 30-second attention span, so I want you to sing 30 seconds of three different songs and that'll be it,” he said. The carolers nodded and contentedly nestled back into the jet's comfortable seats, wondering how they had gotten so lucky. Once the plane taxied to a stop at the company's hangar in St. Louis, Greening hurriedly shoved the singers into a closet.

“Let's get to work!” The Third said in a booming voice as he strode in moments later. After a few joking protestations about being dragged down to St. Louis just before Christmas, the DDB staffers told August III they had brought him a gift. Out from the closet popped the carolers, who launched into the first 30 seconds ' worth of “Silent Night” as they had been instructed. As the trio quickly inhaled before moving into the next song, The Third sensed an opening and politely but firmly cut them off.

“That's great,” he said. “Now let's get to work.”

August III commanded a combination of arms-length admiration, respect, and terror from many of his underlings. As one former staffer in the company's marketing department liked to tell his colleagues, he had only two moods: pissed off and suspicious. It was tough to decide which was better.

He was adept at putting people on the spot—he actually seemed to relish it. He had an eye for detail and facts and he was usually right, which was incredibly intimidating. When he fixes his stare on executives, “their biggest concern is that he knows more than they do, even though the topic is in their area of expertise,” former chief financial officer Jerry Ritter told
BusinessWeek
.

“If you weren't as well-versed in his business as he was, you didn't stand a chance,” said Charlie Claggett. “You couldn't bullshit the guy. He was on top of everything. There wasn't a single, tiny aspect of the business he didn't know. You had to do your homework. If you didn't, or you were insincere, he could sniff you out and snuff you out. There was always this element of fear that permeated the place.”

August III had a reputation for asking pointed, probing questions during meetings and presentations, targeting not just the person presenting the material but even the younger staffers who cowered in chairs along the wall.

“My mom always used to tell me this—the guy never asked a question that he didn't know the answer to already,” said Walter C. “Buddy” Reisinger Jr., a former Anheuser-Busch staffer whose mother married into the extended Busch family. “But if he asked you a question, he really wants to know what you think, and you have 120 percent of that guy's attention. While he is talking to you, you own him. He is so focused.”

“If you saw any A-B presentation slide, it'd have 4,000 numbers jammed on it,” Reisinger said. “It violates every PowerPoint presentation rule. You could have 300 numbers on this thing, and he would say ‘Uh, that cost per barrel for Bud Light at the Cartersville plant . . . Jimmy, didn't you show me something last week that was a tenth of a cent off?' It's frightening. He could do that time after time on anything, anywhere, and you're just trying to survive. The guy was ‘on' 24 -7.”

That sort of atmosphere, where The Third's commanding knowledge of the business piqued the jangling nerves of his staffers, clearly led some of them to trip up. There was nothing to fear in making a mistake, The Third preached. Making the same mistake twice, however, was another story. His patience for underperformance usually didn't stretch that far.

He formed a policy committee of 9 or 10 top executives within the company, which was later expanded into the strategy committee, and governed discussions using the Socratic method. Staffers were required to present and back up their own views on key issues, and were often formally pitted against each other in staged “dialectics,” with one team devoting weeks to preparing a “pro” view while the other evaluated the “cons.”

“He's demanding,” said one former strategy committee member. “He asked a lot of questions, he was intense, focused. Anybody who told you it wasn't a little intimidating every time they got up would be lying to you. And anybody who told you they got used to it would be lying to you. But at a point, you look forward to it because of the intensity and the challenge.”

That challenge wasn't always overcome. The Third's rebukes were harsh and, occasionally, career-ending. He fired plenty of staffers over the years. Most left the company or, if they worked for an ad agency, were assigned by their bosses to other accounts or regional offices. “If you didn't do your work well, there was somebody else in line who could take your place. They had a lot of bench strength,” said an executive who climbed to Anheuser's uppermost ranks.