Saturday, April 25, 2015

Rat hair in the chocolate

Rick Forman started in retail in 1977 with a $80 stake from his father -- enough to buy shirts to sell at flea markets. Now he runs Forman Mills, a big retail chain with 2,700 employees and $275 million in sales. "Someone said to me, `You are not in the schmata business now. You are in the people business."' And that's where the rat hair comes in.

Rat hair in the chocolate

Founder, CEO of Forman Mills Rick Forman outside the store on Route 130 in Pennsauken. The business began as flea market kiosks before the first store opened in 1981. Today there are 31.<br />
Founder, CEO of Forman Mills Rick Forman outside the store on Route 130 in Pennsauken. The business began as flea market kiosks before the first store opened in 1981. Today there are 31. TOM GRALISH / Staff Photographer

Rick Forman started in retail in 1977 with a $80 stake from his father -- enough to buy shirts to sell at flea markets. Now he runs Forman Mills, a big retail chain with 2,700 employees and $275 million in sales. "Someone said to me, `You are not in the schmata business now. You are in the people business.'" And that's where the rat hair comes in, Forman explained during our  Leadership Agenda interview published in Monday's Philadelphia Inquirer.

Schmata is a variation of the Yiddish word for rag and is used to describe a cheap, raggedy piece of clothing. But Forman's point is that running a business becomes more about running the business -- real estate, IT, human resources -- than about the actual product and the immediate contact with the customer, which is what he enjoyed when he started out in flea markets.

As an executive, he came to understand that he was in the people business, particularly when it came to employees, "motivating them and listening to them," he said. "Putting up with a lot. You have to bite your tongue or something. You are not in total control. You have to motivate, you have to be a leader."

What surprised you, I asked.

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"It’s almost like being a psychiatrist, you see, -- I guess what happened to me. I came in naive and trusting in general – vendor, employees. You think everyone is the same and you think they think the same way you do. But because we are dealing with so many people. You see all the personalities and all the good things and bad things and manipulations, so you have to really learn how to deal with that and keep moving on – even through the good and bad. Nothing is perfect, so you have to teach yourself that.

"Maybe a little rat hair in the chocolate is OK," he said.

I was only half-listening, but that woke me up. What???? He went on to explain that government regulations allow a certain amount of impurities in foods, but that those foods are still edible. (He didn't exactly explain it like that. I'm paraphrasing. But to move forward in life and business, he said, you need to accept that not everything is perfect.)   

He also misses the immediacy of the flea market business.

"It was almost like construction in a sense," he said. "I was hands on back then, so the sweat and the toil and the talking is like --- it’s like one-on-one. I would nail it like a construction guy."

He'd make the sale "and here’s the money, but now I don’t see it anymore.  I almost want to bring in a brief case full of cash – you know legal,  where I just dump it out." Whether it's receiving cash from customers or paying cash to suppliers, it's all amorphous and theoretical, he said. "It’s like Monopoly money now," handled by others.

Is it difficult to delegate, I asked him.

"Yeah," he said. "Everyone says how great we have done. In my mind, we have done great, but we could be could be a multi-billion dollar business if I were able to delegate better and bring in more professional management."

Sounds good in theory, I said to him, but would you still enjoy your business?

"I probably would have sold it." 

Inquirer Staff Writer
About this blog

Jobbing covers the workplace – employment, unemployment, management, unions, legal issues, labor economics, benefits, work-life balance, workforce development, trends and profiles.

Jane M. Von Bergen writes about workplace issues for the Inquirer.

Married to a photographer she met at her college newspaper, Von Bergen has been a reporter since fourth grade, covering education, government, retailing, courts, marketing and business. “I love the specific detail that tells the story,” she says.

Reach Jane M. at jvonbergen@phillynews.com.

Jane M. Von Bergen Inquirer Staff Writer