Aaron Feuerstein Essays - Business, Economy, Professional Studies

Aaron Feuerstein In this paper I will discuss Aaron Feuerstein, the third-generation president and CEO of Malden Mills Industries, Inc., who leads the Lawrence, Massachusetts business with his fathers and grandfathers values: kindness, justice and charity. He does this through his charismatic leadership and vision, which binds his employees together into realizing and achieving the same goal. I will show exactly what makes him a leader in the modern business setting and explain why a leaders vision is important in defining a true innovator, effective manager and charismatic leader. Feuerstein and Malden Mills had a history of taking care of its employees. Workers salaries average $12.50 an hour compared with the textile industrys average of $9.50. And in the 1950s, when other New England textile manufacturers fled to the South for cheaper labor, Malden Mills stayed. Although Feuersteins hands-on management style has always been admired by his employees, what set him apart as a true leader was a near disaster in the winter of 1996. While celebrating his 70th birthday, Feuerstein received word that his 130 year old family owned textile company in Lawrence, Massachusetts was burning to the ground. Three of its manufacturing factories that produce the popular high-end outdoor apparel knits, Polartec? and Polarfleece?, were reduced to charred metal and brick. While watching the fire, Feuerstein decided that he must come up with a plan to not only save his company from financial ruin, but decide the fate of over 3,100 employees that would soon be without a job. He ch ose to rebuild the plant in Lawrence. He also decided that if he was to continue providing a quality product to consumers, he would have to take care of the skilled laborers who made the product. Feuerstein kept more than 1,000 jobless employees at full pay and medical benefits for three months until the factories were up and running again. What kept Feuersteins company at the top was his strong managing skills. A top management position requires motivation to achieve, but this motivation may be directed to achieving personal, rather than organization goals. Feuerstein believed the role to top management should be to manage and the most important resource they must manage is the people that work at all levels of an organization. Their role should not be to rule, but to lead. Feuerstein also understood that employees form the foundation of any organization, and that all of them have unique strengths that can help in achieving the companies goals. In return, employees will feel useful and are placed in a position to self-actualize or attain one's potential. When Feuerstein was asked what sets him apart from other CEO's, he responded: The fundamental difference is that I consider our workers an asset. Not an expense. I have a responsibility to the worker, both blue-collar and white-collar, I have an equal responsibility to the community. It would have been unconscionable to put 3000 people on the streets and deliver a deathblow to the cities of Lawrence and Methuen. Maybe on paper our company is worthless to Wall Street, but I can tell you it's worth more. We're doing fine. Other CEOs feel I'm sort of a stupid guy who doesn't know what to do with his excess money, he says. The quality of Polartec is what I'm selling. By treating the people the way I'd want them to treat me, they make that quality. When you do the right thing, you'l1 probably end up more profitable than if you did wrong. Feuerstein did not throw his money away. It was a well reasoned and sound leadership decision to invest millions in Malden Mills most critical asset, its workers. The contrast between this Feuerstein and the currently celebrated CEOs making 30, 60 or 100 million dollars a year by eliminating jobs and moving plants is simply astounding. How much are you willing to wager that every company that closed a plant in recent years to boost stock prices has a vision statement with words like we value and respect our employees as our most important asset? How many of the laid off employees do you suppose believe that? Perhaps the most important characteristic that transformational leaders possess is their ability to create a vision that binds