Welcome to Johnsonville
How Ralph Stayer built his humble family business into the nation's largest sausage producer.
It was senior year at the University of Notre Dame, and a young Ralph Stayer strolled through campus, eager to learn his final marks, freshly mounted on classroom walls.
He entered his physics lab to find his professor waiting.
“He pulled me aside and said, ‘Ralph, I’ve arranged to get you a fellowship in physics,’” remembers Stayer, a finance major who’d taken the science class as an elective. “And I said, ‘Thank you, but I’m going to go home and make sausage with my dad.’ He looked at me like I had four eyes.”
Stayer had gone to Notre Dame with a singular purpose: to return to small-town Wisconsin and work alongside his dad, Ralph F. Stayer, at the family business, Johnsonville Sausage. Ralph and his sister, Launa, grew up in a white clapboard house adjacent to the factory, and he spent his summers working with a seven-person crew, cranking some 8,000 pounds or more per week. It’s believed that America got its affinity for bratwurst from the elder Stayer, whose secret recipes turned sausage from an obligatory use of scrap meat into the centerpiece of holiday cookouts.
“It was never a decision. I was always going to do it. It never occurred to me to do anything else,” Stayer continues. “I wanted to go into business with my dad.”
Factory work—sausage factory work—seems hardly the road to fame and fortune, but with his father’s blessing, the young Stayer spun off the business from its humble production and retail operation into the nation’s biggest producer of sausage. Johnsonville Sausage is available in 50 states and 40 countries and sells seasonally at a few hundred McDonald’s restaurants and some 20 NFL stadiums. The Stayer family ranked No. 164 on Forbes’ 2014 list of America’s richest families with $1.2 billion.
But Ralph Stayer is not interested in talking about wealth and corporate success. Not in the usual context, anyway. No, Stayer wants to talk about the morality behind big business—or at least the morality that can exist when executives shift their focus from growing wealth to growing souls.
“It’s actually immoral for me to build a business where I’m just using people to make money. My job is to help them develop their talents to the best of their abilities,” Stayer says. “Rather than using the people to build the business, my job was to use the business to build the people.”
This isn’t exactly a new message from Stayer, who in 1990 penned an essay How I Learned to Let My People Lead for the Harvard Business Review, which told Stayer’s story of how he shifted decision-making and accountability from himself to his workers. That essay—one of HBR’s most downloaded articles—morphed into his 1994 best-seller Flight of the Buffalo: Soaring to Excellence, Learning to Let Employees Lead, with James A. Belasco.
What has evolved in more recent years is Stayer’s level of comfort talking about corporate leadership in a faith-based context. Never shy about his faith—Johnsonville’s mission statement speaks of developing one’s “God-given talents”—Stayer wasn’t overt about mixing corporation and creed. But about eight years ago he broke the ice and asked his 14 top executives whether God infiltrated their workdays.
“I told them how I had always worried about it,” Stayer says. “And then I asked them, ‘Do any of you here ever wonder about whether you are serving God at work?’ And 14 hands went up. Every one of them.”
That’s his motivation for talking to Gulfshore Business one afternoon at the Port Royal Club near the home he shares with his wife, Shelly. Newly retired and spending most of his time in Naples, Stayer wants to empower other executives to shift their own paradigms, find their own purposes and reconsider what it really means to lead.
“Call me Ralph,” he insists, striding across the club’s comfortable sitting room overlooking the pool deck and, beyond that, the Gulf. “We’re all in this together.”
He’s a slim figure, with palpable energy. A colleague called him “intense,” and you can imagine him being so—one doesn’t build an empire of any sort without drive and ambition—but on this afternoon, anyway, he carries himself with relaxed ease. “Passionate” might be a better descriptor. Stayer is convinced a divine master plan inspired his corporate leadership and is guiding him to do something even bigger.
“I think that’s why I’m here,” he says, voice ringing with conviction. “God has a plan.”
The Stayer family’s story is the quintessential rags-to-riches, up-from-bootstraps kind of tale.
“My parents were born with absolutely nothing,” Stayer says. Alice and Ralph F. scrimped until they amassed $11,000 to purchase the little sausage shop in Johnsonville, Wisconsin. (The company later moved to Sheboygan Falls.)
“My mother had a dream that they were going to be successful. They were dirt-poor, they didn’t know where their next meal was coming from, and they were not going to live like that,” he adds.
The elder Stayer was hard to please—at least when it came to his namesake, according to Shelly Stayer’s account of her husband and father-in-law’s relationship, told in her 2014 book The Weight of a Father’s Shadow. And yet, filial loyalty—and love—defines Stayer’s perspective on both parents.
“One of the great joys, one of my great happinesses, is that my parents got to live long enough to see us become the No. 1 brand in Hong Kong, the No. 1 brand in Singapore, seeing our labels out there with all those funny characters on them ... from this little butcher shop, from this thing they started,” he says.
In addition to the butcher shop in Johnsonville, the Stayers operated a few small retail shops. It was enough for a comfortable living, but the newly college-educated Ralph C. saw lots of potential for growth. His father let loose the reins.
“At a very early age, my dad let me make decisions, important decisions that affected the business. Most people in companies don’t get to do that until they’re near the top, and then most of them couldn’t pull a trigger if they had to,” Stayer says.
Just three years out of college, Stayer spun off a manufacturing division and set a course for the company’s future.
“I didn’t have any visions like this,” he says of the giant Johnsonville came to be. “I just wanted to make a little more sausage next year than I did this year and I wanted to get into more stores. And then all of a sudden, it was more cities and then states and then countries.”
Alice Stayer offers samples of Johnsonville products.
By the mid-1980s, Johnsonville hummed along nicely. It had solidified its markethold; its profit margins were healthy; it was well-respected within Wisconsin and gaining popularity outside of it.
And Stayer was miserable. The company was good; it was by no means great. Competitors large and small loomed. Stayer was well-fed financially and hungry spiritually.
He wrote in Harvard Business Review:
Our people didn’t seem to care. Every day I came to work and saw people so bored by their jobs that they made thoughtless, dumb mistakes. They mislabeled products or added the wrong seasonings or failed to mix them into the sausage properly. Someone drove the prongs of a forklift right through a newly built wall. Someone else ruined a big batch of fresh sausage by spraying it with water while cleaning the work area. These were accidents. No one was deliberately wasting money, time and materials; it was just that people took no responsibility for their work. They showed up in the morning, did halfheartedly what they were told to do and then went home.
How do you get the guy on the sausage line excited about coming to work?
The answer came by way of a lecture by communications professor and leadership expert Lee Thayer.
“I went up to him afterward and said, ‘Can you help me fix my people? I’ve been trying, but they just don’t seem to care.’ He said, ‘Well, that depends. … It depends on what part of the problem you’re willing to admit that you are.’”
Thayer added something else: “You can’t fix it, Ralph. You can only create something new. Let’s spend our time talking about in the best of all possible worlds, what would you like it to become?”
Tom Peters, leadership guru, co-author of In Search of Excellence, producer of the widely circulated Leadership Alliance training video, immortalized on film what Johnsonville did become:
“(Johnsonville is) as far as we’ve seen any plant anywhere go in terms of handing workers the reins,” Peters pronounces in the video, which features Stayer and three other executives whose management styles broke new ground.
Stayer had found his answer: To make employees care, they had to own their jobs.
I had been Johnsonville Sausage, assisted by some hired hands who, to my annoyance, lacked commitment. But why should they make a commitment to Johnsonville? They had no stake in the company and no power to make decisions or control their own work. If I wanted to improve results, I had to increase their involvement in the business, Stayer recounted.
Stayer demolished the top-down leadership structure in favor of a team-based approach that empowered teams of employees to set goals, make decisions, determine schedules and budgets—and even hire, fire and determine merit-pay raises, his way of ensuring cohesive, compatible, high-achieving work groups.
He created a profit-sharing formula so employees (renamed “members”) directly benefited when the company flourished—and directly felt the loss when operations slipped.
The transformation took many years and suffered many setbacks, but as mindsets changed, productivity and profits swelled.
“It was a pioneering move,” says University of Wisconsin Chancellor Mark Mone, who previously was the associate dean for executive education. The Leadership Alliance video, Mone says, helped spread Stayer’s message and influence well beyond Johnsonville.
“The power in his message that has become so universal is sometimes senior management thinks it has all the answers, but sometimes the answers come from the shop floor,” he says.
By corporate standards, Johnsonville’s growing profits signaled success. By spiritual ones, money was no yardstick.
“For years I struggled as the business got better and better and I had more and more money,” Stayer says. “I started to think I should just sell the business and give it all away and go on a mission in Africa. I really had guilt feelings for a long time—it’s one of those things you get from growing up Catholic.”
A Biblical parable offered inspiration—and justification that corporate earnings could serve a noble purpose.
Stayer reflected on the Biblical tale of “The Talents,” which tells of a master who entrusts three slaves with portions of his wealth. Two of the slaves invest and double their portions; the third buries it for safekeeping. The master heaps praise upon the two for using their skills to grow the wealth (a metaphor for talent); he berates the third for doing nothing with his.
The “Johnsonville Way” extends well beyond management style. At its core, Johnsonville is about self-improvement. Everyone has a five-year plan facilitated by a member-development department. Raises are earned when a new skill is acquired.
“If you just want to punch a clock, it’s not a place for you,” says Johnsonville President Bill Morgan, a 29-year member. “He’s intense. He will find ways to make the individuals get the best out of themselves. Ralph would believe in me more than I believed in myself.”
Morgan, who started in sales, progressed through the ranks to vice president, assuming responsibilities for departments with which he had no experience.
“I didn’t know anything about manufacturing. He said, ‘I guess you’re gonna have to learn it.’ He puts people in positions that forced them to stretch and learn.”
The Leadership Alliance video highlights a high school dropout who learned to manage budgets and scheduling and a secretary who pitched an idea of catalog sales—and ultimately churned $1 million in new revenue. Stayer’s second wife, Shelly, has been growing increasingly active in the business, and he’s followed her lead on initiatives including the establishment of an innovation center in Chicago, a new retail store in Naples and new products.
It’s all about personal growth, he says.
“They can look back and say I’m a different person than I was 10 years ago. There’s no more joy in the world in that.”
Newly retired CEO Ralph C. Stayer and his wife, Shelly, at their retail store in Naples.
The theme of talent development runs through other aspects of his life. Stayer has funded the Boys & Girls Clubs in his native Wisconsin. He insists that the children who benefit know they are being “subsidized” for the betterment of their futures.
“Every charity I’m involved in, I ask, ‘What are you doing to help people learn about the evils of dependency and what their responsibilities are and to help them understand that this isn’t free, that the government isn’t just sending money here?’” he says.
It’s the reason Stayer threw money behind Wisconsin Gov. Scott Walker in a 2012 recall election, spurred by voters angry over Walker’s termination of union collective bargaining rights.
Protestors set up alternatives to the annual Johnsonville-sponsored World’s Largest Brat Festival in 2011; some bloggers urged shoppers to boycott Johnsonville products.
Stayer today is unflinching in his decision to back Walker—and in being politically active in causes he believes in.
“It’s immoral to see what’s happening and not do what you can. We have a dependency culture growing in this country,” he says. “When people become dependent, they are condemning themselves to a second-class life. Second-class housing. Second-class food. Second-class education. ... They’re not using their talents.”
Walker, he believes, strengthened institutions like public schools, weeding out ineffective teachers so children received stronger foundations.
Stayer is not yet sure if he’ll back Walker if the governor runs for president—he says he needs to see more. What he would like to see overall in politics is the establishment of a state-by-state “dependency index” measuring entitlement programs, those who fund them and those who take from them.
“I’d like to take that—if I were a governor—and task every one of my agencies to tell me what you’re going to do to move that number. ... What are we doing to give people the skills to get jobs? Are we giving them unemployment? Are we giving them welfare? Or are we actually taking them to get trained, to attract businesses, to make a state a haven for business, for innovation? What we want is an innovation culture, a creativity culture.”
Back in 1990, stayer wrote about working to eliminate his job as he handed increased authority over to increasingly competent, free-thinking workers.
This April, he did. Stayer gave the reins of Johnsonville to Nick Meriggioli, formerly of Oscar Mayer. Now, he is looking for his next mission.
“I have a bigger and better job—a more important one,” he says. “God’s been getting me ready for something bigger.”
He may have found it, in the form of a chance meeting with a neighbor, John Garippa, who is equally passionate about Christianity.
Divine intervention, Stayer believes.
Stayer says the two have been talking about creating new ways to share their faith. Garippa runs the John Garippa Foundation, a Christian organization dedicated to spreading the gospel.
Stayer believes his experience at Johnsonville, the work of building souls, is what prepared him for a new mission. “It was all part of my learning and part of who I am and what I am,” he says. “(Helping others) becomes a way of life and of thinking. It becomes part of who we are.”
Stayer wants to offer a different perspective and new interpretations on Christian teachings, like this one:
“So I’m sitting in church one day, and the priest is giving one more sermon about how the rich are going to hell and the poor are going to heaven. ... I walk out of church and say, ‘Father, once, just once, I’d like to hear a priest give a sermon where Paul says that God gave different talents to different people and isn’t it wonderful that he gives some people the talent and the ability to create capital and create product and create a business so they employ lots of other people in a way that is fitting so that those people can raise families and those people can live a good life, and those people can contribute to your church so you get a salary and you can have your church here. Just once I’d like to hear that. He said, ‘I never thought of it like that.’ ... That’s just one small thing. It’s just different.”
Ralph C. Stayer with a statue of Christ at his Port Royal home.
Johnsonville will always remain a family business, Stayer says. In addition to Shelly’s involvement, three of his seven children (four from his first marriage, three of Shelly’s whom he helped raise) work for Johnsonville; his son heads the growing international division.
“I didn’t build Johnsonville. Hundreds of people, tremendously talented, put it together and created all this. For me to cash in—the minute that happened the whole Johnsonville Way would be destroyed ... and they’d try to milk it for shareholders and all we’ve built would be gone, and that would be a sin.”
If other business leaders learn anything from his experiences, Stayer hopes it is this: Think strategically and then create a structure that will achieve those goals; determine your role and the contribution you want to make in the lives of others.
“For me, the best of all worlds is when I die, I’m going to go up there and God’s going to say, ‘Well done, my good and faithful servant.’ That’s all I want to hear. I don’t want to hear, ‘Man you made a lot of money.’” GB
This story was originally published in Gulfshore Life magazine.