Herbert Taylor's claim
to business fame rests on his creation of the 4-Way
Test and his use of that code of ethics as a tool
to turn around a struggling cookware company. Those
events are still widely remembered because a major
international service organization, Rotary International,
subsequently adopted The Four-Way Test and made it
a prominent part of that organization's culture.
Taylor also represents one of many models of public
service in the business world. In his case the model
consists of organizing one's business in such a way
as to allow the owner to spend most of his time on
civic and charitable activities. Taylor first managed
the cookware company back to solid profitability.
Then he delegated day-to-day management of the company
to others while he concentrated his efforts on Christian
youth work and Rotary International.
BACKGROUND
Taylor was born in Pickford, Michigan
in 1893. His father was active in lumber, banking
and telephone companies in the area and uncles ran
the local dry goods, hardware, grocery and shoe stores.
Both of Tylor's parents were devout Christians. He,
himself, went through the motions of worshipping at
the local Methodist church until the age of 17. Then
an evangelist came to town and at the last service
Herbert Taylor become convinced, stepped forward,
and accepted Jesus Christ as his personal Savior and
Lord.
Pickford did not have a high school, so Taylor was
sent to Sault Sainte Marie 25 miles away. While going
to high school there he lived in a boarding house
and worked first as a Western Union messenger boy
and later as a telegraph operator.
Completing high school, Taylor enrolled in Northwestern
University. He received a bachelor's degree from Northwestern
in 1917. He then took a job with the YMCA in France.
Soon thereafter the United States declared war on
Germany and Taylor enlisted in the U.S. Naval Reserve.
The Navy assigned him to a base in Brest, France,
where he administered the distribution of food and
clothing to Navy units.
SUCCESS IN THE CORPORATE WORLD
As a result of contacts made in France,
Taylor was offered two jobs after the war. One was
with the Sinclair Oil Company. The other was with
the YMCA in New York. Taylor's inclination was to
take the YMCA job because he loved working with youth.
But first he consulted bank executive George Perkins
whom he had met in France during the war. Perkins
advised him to follow a three-part plan. First, he
should take the job with Sinclair where, Perkins predicted,
he would be a success. Second, he should use the skills
learned at Sinclair to start his own business. Third,
once that business was running smoothly, he should
devote most of his time to youth projects.
Taylor decided to follow Perkins' advice. He took
the Sinclair job with the intention of working on
youth projects in his spare time and with a long run
goal of devoting his full time effort to youth after
first achieving outstanding business success.
Sinclair sent Taylor to Paul's Valley, Oklahoma to
work as timekeeper and assistant to the manager of
a pipeline station. A year later the first oil was
discovered in the county. A strong market for oil
leases developed and Taylor decided to become an oil
field lease broker. Resigning from Sinclair he opened
an insurance and real estate business specializing
in oil field leases.
That business was very successful. It not only provided
a generous income but also allowed him the freedom
to schedule a significant amount of civic activity.
He became active in his church, the chamber of commerce,
Boy Scouts, Hi-Y and Rotary.
Prior to moving to Oklahoma Taylor had married Gloria
Forbrich. He promised her that after spending a few
years in Oklahoma they would move back to Chicago.
In order to keep that promise he accepted a job with
the Jewel Tea Company in 1924. The president of Jewel,
Maurice Karker, had commanded Taylor in the Navy and
held out the promise of rapid advancement for Taylor
at Jewel. Taylor started as an office manager. By
1929 he was a member of the board of directors. In
1930 he was named executive vice president and was
in line to become president.
AN INDEPENDENT BUSINESSMAN
Then fate intervened. In 1932 an executive
from the Continental National Bank in Chicago asked
Jewel to loan Taylor to the Club Aluminum Company
on a one-half time basis. Club Aluminum was on the
verge of bankruptcy. The bankers were convinced that
the only way to avoid that would be to bring in a
proven top level executive and Taylor fit that definition.
Jewel agreed to the request.
After settling the law suits pending against the company,
Taylor concluded that Club Aluminum was $ 400,000
in debt with no possibility that the existing level
of sales could service short run debt payments. The
Creditors Committee advised Taylor to file for bankruptcy.
Jewel Tea concluded that the situation was hopeless
and asked Taylor to return full-time to Jewel. But
Taylor could not turn his back on the 250 Club Aluminum
employees. After much praying he decided to give up
his $ 33,000 per year job with Jewel and become president
of Club Aluminum at a salary of $ 6,000 per year.
In order to give the company some more time to accomplish
the turnaround he borrowed $ 6,100 using his Jewel
stock as collateral and put that money into Club Aluminum.
THE FOUR-WAY TEST
When Herbert Taylor took over Club Aluminum the situation
was so desperate that he believed himself to be the
only person who thought there was hope. In developing
his plan of action he gave first priority to changing
the ethical climate in the company. As he explained
many years later ( Taylor, pp. 40-41):
"The first job was to set policies
for the company that would reflect the high ethics
and morals God would want in any business. If the
people who worked for Club Aluminum were to think
right, I knew they would do right. What we needed
was a simple, easily remembered guide to right conduct
- a sort of ethical yardstick- which all of us in
the company could memorize and apply to what we
thought, said and did.
I searched through many books for the answer to
our need, but the right phrases eluded me, so I
did what I often do when I have a problem I can't
answer myself: I turn to the One who has all the
answers. I leaned over my desk, rested my head in
my hands and prayed. After a few moments, I looked
up and reached for a white paper card. Then I wrote
down the twenty-four words that had come to me:
1. Is it the truth? 2. Is it fair to all concerned?
3. Will it build goodwill and better friendships?
4. Will it be beneficial to all concerned?
I called it "The Four-Way Test" of the things we
think, say or do."
For several months he applied the
new test to various problems such as the company's
misleading advertising. In those cases where company
practice failed the test he made the necessary changes.
That process convinced him that he had discovered
the ethical decision-making guide he felt was critical
to the company's recovery.
But there was one more test which the Four-Way Test
had to pass. It had to be acceptable to persons of
different religious beliefs. And so he discussed this
issue with his four department heads - one a Roman
Catholic, another a Christian Scientist, the third
a Jew and the fourth a Presbyterian. They convinced
Herbert Taylor that the test would be consistent with
the beliefs of all employees. And so it was made a
highly visible company policy.
The Four-Way Test was regularly applied as Taylor
moved forward with his plans to operate the company
more efficiently and to market more effectively. In
his autobiography, for example, he tells of using
the test to discourage salespersons from selling dealers
more merchandise than the dealers could profitably
sell; of using the test to resolve vendor disputes
in a win-win fashion; and of making sure that creditors
were paid in full.
When Herbert Taylor became president of the Rotary
Club of Chicago in 1938 he introduced The Four-Way
Test to the Rotary World. The test proved to be an
ideal tool which Rotary clubs could use to promote
high ethical standards in business and the professions.
In 1952 Taylor gave permission to Rotary International
to promote the Test worldwide. Then, in 1954-55 Herbert
Taylor became president of Rotary International and
he used his presidency as an opportunity to travel
around the world promoting the use of the Test. In
1954 he also gifted the copyright for The Four-Way
Test to Rotary International.
In the meantime, Club Aluminum returned to profitability.
The company was able to pay off its $ 400,000 debt
within five years. Over one million dollars in dividends
were paid over the following fifteen years. And net
worth climbed to $ 1.75 million over the same period.
COMMUNITY SERVICE
Herbert Taylor had an ulterior motive for leaving
Jewel to serve Club Aluminum and for investing heavily
in Club Aluminum so that he would have ownership control.
As he explains in his autobiography (Taylor, p. 45):
"(T)he second part of God's plan
for me was to get into a business where I could
control the company and could influence the setting
of policies that would enable me to have time for
Christian work.
Now, I was able to get away from the business part-time.
The Four-Way Test had been created; and, although
I couldn't predict the great scope of success that
my business eventually realized … it was time to
introduce me to the work that would, eventually,
claim my full time. I arranged for my salary to
be reduced to cover only the time I worked for the
company and started to work on Christian character-building
projects for youth."
Taylor's initial community service
was the establishment of a small store front mission
in Chicago. The mission offered a Sunday School for
youth. It soon became apparent that at least fifty percent
of the youth in the area around the mission were not
getting religious instruction. Taylor became convinced
that this was a nationwide problem and that he could
do something about it.
In 1940 Herbert Taylor established the Christian Workers
Foundation, endowing it with 25 percent of the Club
Aluminum Company's stock and a personal commitment of
more than one-half of his time. He then set out to find
or form non-denominational groups that could "provide
Christian witness to the children."
One of the resultant ventures was support of the Inter-Varsity
Christian Fellowship (IVCF). This was a British organization
which was virtually absent from the United States. Its
purpose was to take the message of Christianity to college
youth. Herbert Taylor provided the money and leadership
to bring the program to the United States and then expand
its reach. By 1968 IVCF had chapters or activities on
over 700 college campuses.
A second venture was the Young Life program. Aimed at
the high school student, this program was the original
idea of a Dallas seminary student. Taylor offered to
provide the venture capital to put the idea into practice.
By 1967 Young Life clubs were found in high schools
in forty states and more than 10,000 students a year
were attending its Christian leadership camps.
A third venture was the Christian Service Brigade (for
boys) and Pioneer Girls. Organized by a Wheaton College
student, these organizations sought to bring Christ
into the lives of junior high school students. The method
was to organize interesting clubs which met at local
churches. Taylor's role was to provide financial help.
By 1967 about 60,000 boys were members of a Christian
Service Brigade and a similar number of girls were in
Pioneer Girls.
At the grade school level Taylor helped organize national
support for the Child Evangelism Fellowship. This organization
brought Christ's message to over 900,000 children under
eleven years of age in 1966.
CONCLUSION
In 1975 Herbert Taylor suffered a stroke which severely
impaired his ability to speak,read and write. In 1978
he died. He was survived by The Four-Way Test thanks
to the fact that Rotary International had taken over
its promotion. The company where it all began, Club
Aluminum, also survived. But it forgot its heritage.
Bought by Standex International, it was moved to Jacksonville,
Arkansas in 1978. Three years later when the American
National Business Hall of Fame contacted the company
for information about Herbert Taylor and the Four-Way
Test, a spokesperson for the company said she had
no knowledge of either.
REFERENCES
1. Heidebrecht, Paul. God's Man in the Marketplace.
Downers Grove, Illinois: Intervarsity Press, 1990.
2. Taylor, Herbert J. The Herbert J. Taylor Story.
Downers Grove, Illinois: Intervarsity Press, 1968.
*Copyright 2002. The American National Business Hall
of Fame. All rights reserved. No portion of ANBHF
may be duplicated, redistributed or manipulated without
the expressed permission of the ANBHF.
|
