Kenneth Lay should
have met A.E. Staley
Publisher's Note: This story was first written and published when the
Enron scandal first broke:
the wake of the Enron scandal, a recent headline in the St. Louis
Post-Dispatch jumped out at me. 'Ken
Lay remembered as the smartest boy in school' it proclaimed.
It proceeded to explain just how local citizens in the small
Missouri town where the former Chairman of Enron had attended school had
excelled in academics and was a natural leader.
might be expected, all of the people interviewed who had know Lay before
the Enron failure recalled him as a fine young man whose only goal was
I read the story, I could not help but think of A.E. Staley, dead since
1948. It was a shame that
Ken Lay never met A.E. Staley . Don't
feel bad if you have never heard of A.E. Staley.
It is ironic that he is not considered an example of one of the
most forward-thinking business leaders of the 20th Century.
Lay was the apple of his teachers' eyes, Augustus Eugene Staley was
considered an oaf by his teachers. Apparently he was large even as a
youth near the turn of the century in North Carolina,
One of his teachers told him he was too stupid to succeed in
anything and suggested that he use his size to enter manual labor.
a result, Staley dropped out of school in the sixth grade
Staley's path soon led to
the streets of Baltimore, where he took a job selling corn starch to
local groceries. He was a hard worker, and also was blessed with an
ability to see beyond the immediate.
It occurred to him that he could make more money by selling the
starch under his own label, so he began working from his meager
apartment at night to repackage corn starch that he had bought wholesale
into bags bearing his name.
hard work led to success, but it wasn't long before he realized that if
he were to make his company grow, he needed a source of supply nearer to
the commodity that made the product possible--corn.
was able to convince some investors to back his plan to buy a defunct
corn processing plant in Decatur, IL, where he would produce his own
product. In this ability to attract investment, there is a similarity between Staley and Lay.
it appears that Enron was
built on inflated figures and contacts with powerful policy-makers in
Washington, DC and state capitols, and finally upon the broken dreams
and aspirations of the people who worked for it.
Staley was to rely upon hard work and foresight to build a
company that made lasting contributions to the American way of life.
company, which bore his last name, did not have unions, A.E. Staley
promoted the formation of a Fellowship Club around 1918-1919, consisting
of leaders elected by their fellow employees to represent their concerns
to company management
initiated an employee publication in 1919, The Staley Journal, to ensure
that employees were kept up to date on company news
initiated profit-sharing in the 1919-20 time frame for all employees.
Significantly, employees were kept informed of the trend of
company sales and earnings (although admittedly not specific numbers for
the privately held company), and, when sales looked like they were
dropping, A.E. Staley personally advised employees in a mailing of
company prospects. He urged employees to put savings away in
anticipation of a business downturn.
Enron management, however, not
only told employees to invest more in the soon-to-be beleaguered Enron
stock, but many of those same managers were apparently profiting from
was the father of the now Chicago Bears and significant in the founding
of the National Football League. He
hired a young engineer from the University of Illinois, George Halas,
to start a football team for the enjoyment of employees.
When business soured in the early 1920s, Staley actually gave the
team to Halas along with $3,000 in cash so he could make the move to
Chicago. Halas later
recalled that 'Mr. Staley', as he and others called him, said that he
(Mr. Staley) expressed his regret at not being able to continue to
sponsor the team and did not want to leave Halas and team members in the
When Staley realized
that his corn processing plant needed a continuous reliable water
supply, he worked with the government to build Lake Decatur, the first
man-made lake of its kind in the country.
Today, it still provides recreation and a water supply for the
community of approximately 80,000 people
one of his biggest contributions, Staley believed that an little-known commodity called soybeans could provide new and valuable products. The only problem was that farmers did not grow them.
So, A. E. Staley took a sample of soybeans and conducted a train
whistle stop tour throughout Central Illinois in 1922 to show farmers what a
soybean looked like. He
signed contracts on the spot, promising to purchase whatever beans the
farmers would grow. Enron
does not have a whistle-stop experience, but has a new familiarity with
the Great Depression came along, A.E. Staley was distressed over the
fact that many of his employees had not saved for the proverbial rainy
day. He solution was to
spearhead the development of an employee credit union.
Enron, on the other hand, urged employees to continue to invest
in Enron stock.
During the Depression,
A.E. Staley was faced with the prospect of cutting his work force.
Not only did he not do so, he actually reduced the number of
hours people worked, kept their rates at the same level and thereby
saved the jobs of his employees at a great personal and corporate
expense. Although it still
has thousands of employees, Enron has let huge numbers of people go.
the company formed by A.E. Staley was to eventually fall
victim to market forces and changing times. After A.E. Staley's
death, the old styles of highly personal, family-owned businesses seemed
too controlling to many people. Today,
the magnificent office building that was a Decatur landmark and the
pride of A.E. Staley, has employees only on the bottom few floors. Sadly, the circle drive that once invited visitors and
suppliers to its front entrance, is blocked by a locked gate and all
visitors much check in as a security point, the result of the city's
troubled labor history.
even Staley's leadership position in the agribusiness industry and in
its home town has been taken over by a former competitor, ADM, which has
purchased the soy operations started by A.E. Staley and has moved its
headquarters to the shores of the lake made possible by 'Mr. Staley.'
the contributions made by this oafish boy, who was called dumb by his
teachers remains as a living monument and affects people around the
nation for the better every day. Ken
Lay's legacy is still being determined, but one can't help but feel that
is a shame to see the loss caused to so many by the smartest boy in
school and what he could have learned from a sixth-grade dropout.
(Daniel Hines is a
former public relations manager with A.E. Staley Mfg. Co.)