Episode 860 - The Clear Bottle Leader: Henry J. Heinz and the Business of Trust

0:04 Helping leaders motivate their people to a higher level of performance through strong human relations, team building, and goal achieving. This is the 7-Minute Leadership Podcast with your host, Paul Falavolito.

0:22 Hello, everyone, and welcome to the 7-Minute Leadership Podcast. It's episode 860. There are certain products that are so familiar we barely think about the company behind them. You see the bottle and immediately know what it is. Heinz Ketchup. The shape, the label, the number 57. And for me, there's something even better about this story. It started right here in my hometown in western Pennsylvania, long before Heinz became one of the most recognizable food brands in the world.

1:00 There was a young guy named Henry John Hines growing vegetables near Pittsburgh and trying to figure out how to sell them. And the leadership lesson behind what he eventually built is incredible because Henry Hines didn't build his company around ketchup. He built it around trust. Hines started his business in 1869 when he was 25 years old. His first product was wasn't ketchup, it was horseradish made from his mother's recipe. Now, this is where the story gets interesting.

1:39 Food manufacturing in the 1800s was nothing like it is today. There were fewer regulations, questionable ingredients, and some manufacturers used dark or opaque containers that made it difficult for customers to see what they were buying. Henry Hines went the other direction. He put his horseradish in clear bottles. Think about the leadership message behind that. You could see the product.

2:08 Nothing hidden, nothing covered up. The bottle basically said, look for yourself. That's confidence, and leaders can learn something from that. If you're proud of the organization you're running, people should be able to look inside. Look at your standards. Look at your culture. how your employees are treated, how customers are treated, and look at what happens when nobody important is visiting. Great organizations shouldn't need a brown bottle hiding what's inside. And here's where Henry Hines' story becomes even more interesting. His first company failed. The Panic of 1873 devastated businesses across the country. Hines' company eventually collapsed, and according to Pittsburgh's Hines History Center, he was even arrested

3:04 after creditors filed fraud charges against him. Imagine that moment. You started building something. Your name is attached to it. The business collapses. Creditors are coming after you. Your reputation is taking a beating. A lot of people would have disappeared. Henry Hines came back. In 1876, with help from his brother John and cousin Frederick, a new company launched. In that same year, tomato ketchup was added to the product line.

3:38 That's the Heinz leadership story I want you to remember. We love studying successful companies after they've become successful. We look at the factory. We look at the famous brand. We look at the global distributions. We look at the bottle sitting on millions of restaurant tables. What we don't see is the moment when the whole thing almost disappeared.

4:01 Leadership isn't proven when everything you touch works. Sometimes it's proven by what you do after something doesn't. Heinz rebuilt. And as the company grew, something else started happening. Henry Heinz became obsessed with quality and cleanliness. At a time when Food production could be questionable. Heinz wanted customers to trust what carried his name. That eventually went beyond his own company. He became a supporter of the Pure Food and Drug Act of 1906, one of America's major early consumer protection laws. Think about the confidence required to support stronger standards for your own industry. Weak operators fear standards because standards expose them. Strong operators welcome standards because standards

4:55 separate them from everybody cutting corners. That's leadership. If you're running a company today, ask yourself this question. Would stronger standards hurt you or help you? Would greater transparency make your organization nervous? Would you be comfortable letting customers see how the sausage is made, literally or figuratively? Henry Hines understood something more than a century ago that some leaders still struggle to understand today. Trust is a competitive advantage.

5:31 Then there was the way he treated employees. And remember, we're talking about the late 1800s and early 1900s. His Pittsburgh operation included employee dining rooms, a library, dressing rooms, a hospital, a gymnasium, a rooftop restaurant. garden and educational opportunities. Employees had showers, private lockers, and laundered uniforms. This wasn't happening because somebody in human resources sent out an employee engagement survey. This was Henry Hines understanding that the people making the product were part of the product. You cannot advertise quality to the customer while creating misery for the employee. Eventually, Those two worlds collide. Your people carry your standards into every customer interaction. And Heinz understood that employees who were

6:27 respected were more capable of producing work the company could proudly put its name on. And then came one of the greatest marketing decisions in business history. 57 varieties. And here's the funny part. There weren't 57 varieties. By 1896... Hines was already selling more than 60 products. He reportedly saw an advertisement for a shoe company promoting 21 styles of shoes, and he became fascinated with the concept. He landed on 57. More than a century later, we're still talking about it. That's another lesson for leaders. Complexity doesn't always communicate. Simple does. Heinz had dozens of products. He could have built an advertisement explaining every one of them. Instead, two numbers became part of the identity of the company.

7:23 57.

7:24 Simple. Memorable. Repeatable. There is a lesson in there for every leader listening to this podcast. Can your people explain what matters in your organization without pulling out a binder? Can they explain your mission? Can they explain your standards? Can they tell somebody what your organization stands for? If it takes a 46-slide PowerPoint to explain your culture, you've already lost half the room. People remember simple ideas. Henry Hines understood that. And by the time he died in 1919, the company he had rebuilt after failure had approximately 6,500 employees and 25 factories. Think about that journey for a minute.

8:14 A garden near Pittsburgh, horseradish, clear bottles, business failure, a comeback, ketchup, 57 varieties, thousands of employees, worldwide recognition. And more than 150 years after he started the company, we're still saying his name every time we reach for that bottle. That's legacy. And I think Henry Hines leaves leaders with one question worth thinking about today. What's your clear bottle? What is the thing inside your organization that you're willing to put on display because you're that confident in it? Maybe it's your customer service. Maybe it's how you train people. Maybe it's your quality standards. Maybe it's how you handle mistakes.

9:05 Maybe it's your own internal leadership skills. development program, whatever it is, there should be something about your organization that you're willing to put in clear glass and say, take a look. Because leadership eventually becomes visible. You can hide weak leadership for a while. You can hide a bad culture for a while. You can even hide poor standards for a while. Eventually somebody sees what's inside the bottle.

9:34 Henry Hines decided from the beginning that he wanted people to see it. And that decision helped build one of the most recognizable brands in the world. So today, think about your organization like Henry Hines thought about that first bottle of horseradish. If everyone could see inside, would you be proud? of what they found? Lead in a way that makes transparency easy and build something that you're proud to put your name on. And when failure comes, remember the guy from Pittsburgh who lost his first company, got back up and built an empire. This has been the 7-Minute Leadership Podcast, and I thank you for listening.