Paul Holmes 05 Jul 2001 // 11:00PM GMT
A stone's throw from the San Francisco waterfront, Levi Strauss Plaza looks more like a college campus than a corporate headquarters. In the square outside the red brick building a Latin jazz band is playing on a makeshift stage, while young people in jeans and tee-shirts sit around eating lunch or reading or swaying to the rhythm.
Inside the lobby, two giant walls display Hispanic art. At the front desk, there are leaflets promoting the United Way and a couple of conspicuously friendly attendants, who direct visitors to the appropriate floor but who do not issue the security passes most major companies insist on.
"We don't need them," John Onoda explains. "We just assume that anyone wearing a suit and tie is a visitor."
Onoda is director of corporate communications for Levi Strauss, a job that may be one of the most rewarding in the public relations business and one he has held for almost three years, having moved to San Francisco from a senior position with McDonald's. He is dressed in casual pants and an open-neck shirt. He wore a tie on his first day, he says, but the chairman made him take it off.
The unconventional Levi Strauss dress code is the most immediately apparent manifestation of a unique corporate culture, but the culture goes much deeper than casual attire and unlike that of, for example, Ben & Jerry's (to which Levi Strauss has occasionally been compared), has its roots not in the '60s but in the company's nineteenth century origins and the paternalistic management attitude of founder Levi Strauss.
That management style has been carried on with remarkable consistency by members of the Strauss family, the most recent of whom is great-great-grand nephew Robert Haas, the current chairman, a former Peace Corps volunteer who apparently dreams of becoming a Chaucerian scholar and whose management style is defined by anecdotes such as one which had him not only consenting to gay activists handing out AIDS education leaflets inside the corporate headquarters, but volunteering to join them.
Explaining Levi Strauss's traditions, John Onoda falls back on similar anecdotes. Levi Strauss became one of the first companies to integrate its workplaces in the south when a plant manager, frustrated at a reluctance to break down traditional barriers, picked out a black cleaning woman and taught her to use a sewing machine.
"These are stories everyone in the company knows," says Onoda. "All our employees are aware of our traditions, and they hold us to a higher standard than other companies. That places a tremendous responsibility upon management, but it makes for a strong culture, one that survives individual CEOs. Bob Haas has said that if a CEO ever came along who tried to go against Levi Strauss's values, he hopes the whole company would rise up and prevent him from doing so." That makes the Levi Strauss corporate culture sound a little like the business equivalent of gaia—the ecological theory that the earth's organisms will one day rise up to stop man despoiling the planet. Onoda acknowledges the analogy, smiling. "We are very much a west coast company," he admits.
In his office—as in almost every Levi Strauss office—hangs a copy of the company's mission statement, developed five years ago: "The mission of Levi Strauss is to sustain profitable and responsible commercial success by marketing jeans and selected casual apparel under the Levi's brand," it says. "We must balance goals of superior profitability and return on investment, leadership market positions and superior products and service.
"We will conduct our business ethically and demonstrate leadership in satisfying our responsibilities to our communities and to society. Our work environment will be safe and productive and characterized by fair treatment, teamwork, open communications, personal accountability and opportunities for growth and development."
The mission statement is followed by something slightly less conventional, an Aspiration Statement. This explains that "we all want a company that our people are proud of and committed to, where all employees have an opportunity to contribute, learn, grow and advance based on merit" and that "we want our people to feel respected, treated fairly, listened to and involved."
It suggests six areas on which the company should focus to achieve this mission, such soft concepts as "new behaviors"; "diversity"; "recognition"; "ethical management practices"; "communications"; and "empowerment"—concepts described in a recent Economist article as "psychobabble" but which Bob Haas and his management team clearly take seriously.
Haas has made a priority out of changing the way the corporate culture and the selling of jeans relate to one another. In the past, he says, Levi Strauss separated the "hard stuff"—getting the product out of the door—from the "soft stuff" such as values and aspirations. He now wants to combine the two, creating a seamless organization where the empowerment of employees builds a platform for long-term success.
"What we've learned is that the soft stuff and the hard stuff are becoming increasingly intertwined," says Haas. "A company's values-—what it stands for, what it's people believe in—are crucial to its competitive success. Values drive the business."
That, in part, accounts for the elevated importance of the public relations function at Levi Strauss. Five years ago, the company did little in the way of proactive PR. It allowed its good deeds to speak for themselves, or go unrecognized. It knew what it stood for but often did not communicate that knowledge to employees.
"There's a story about a family that adopts a little boy," says Howard Kalt, principal of San Francisco PR agency Kalt Rosen, which has worked with Levi Strauss on several projects over the past couple of years. "They take the little boy home and they give him everything, but he never says a word, never speaks.
"Then one morning when he is 18 years old he comes down to breakfast and they give him his cereal and after taking a mouthful he looks up and says: `It's cold' and they're amazed because he can talk and they ask him why he never said anything before and he says: `Everything was always all right before.' That's Levi Strauss."
There were, indeed, external forces driving the company towards a more open public relations stance. There were issues of workplace diversity, particularly in the company's Texas plants, which employed large numbers of Hispanics; there was the potential impact of the Mexico free trade talks on the apparel business; there were issues like AIDS, on which Levi Strauss has taken a leadership position, and the environment.
Says Dave Samson, one of the company's communications managers: "Consumer activists are getting more sophisticated in their understanding of business, in the ways in which they can bring pressure to bear and influence the public. We have been picketed over issues on which we have not even taken a position. We have said nothing on free trade with Mexico, but we have still had people try to link us with the issue, because we are a name."
John Onoda acknowledges that business is under much closer scrutiny today than ever before, both from consumer activists and from the media, and that such scrutiny influenced Levi Strauss in bringing in public relations professionals from the outside, but he says Robert Haas's personal commitment to a greater level of communication was the key factor.
"The changes were driven internally, by Bob Haas and [CEO] Tom Tusher," he says. "They saw an opportunity, rather than a threat."
If Levi Strauss discovered the advantages of proactive public relations relatively late in life, however, it certainly embraced the public relations philosophy wholeheartedly once it did, structuring a PR department that could serve as a model for almost all American companies.
At Levi Strauss, public relations is more fully integrated into the management decision making process than at any other company this magazine has ever profiled. Each of Levi Strauss's communications managers reports to the president of one of the company's seven divisions, and most of the PR budget comes out of these divisional budgets, which means that the department must sell division management on the value of each project.
Moreover, the communications managers are involved in the formulation of divisional and corporate business plans and actually write those plans, and then produce their own public relations plans which shadow the business plans and show how PR relates to them and can help management achieve them.
"Having to sell management on every project means that we have to look at the business plan, at the issues facing the company, and we have to relate everything we do to those issues, we have to show that we are helping the company achieve its business goals," David Samson explains.
"We are judged not on how many press clippings we get, but on how what we do helps management achieve its goals."
Both Samson and John Onoda believe that this structure has helped them to educate more of senior management about the value of effective communication, and encouraged senior management to keep them informed about the company's broader business goals. The result is the commitment of senior management to making public relations an integral part of the decision-making process. And that commitment comes straight from the top.
"We see Bob Haas once or twice a day when he is in the office," says John Onoda. "He just drops into my office to see what is going on. Having a chairman who is supportive of the function makes all the difference, especially if he is a visionary and if he is well-respected as a leader of the business."
Haas, meanwhile, realizes that communication is a two-way process and says he believes the company should be engaged in "an on-going global town meeting" with ideas feeding in from every level and layer of the international company.
"In some ways we are trying to eliminate our own jobs," says Onoda. "We are trying to achieve a culture in which communication is part of every managers' job, of employees' jobs at every level, and not just of the communications department. Our role, really, is training and program design. We are not the communicators, we simply facilitate the communications of others."
Indeed, the company's policy of empowerment—a word Onoda and Samson use perhaps three dozen times in a two-hour conversation—extends to communications. Levi Strauss appears to genuinely believe the oft-repeated ideal that every employee works for the public relations department, and is as responsible for the corporation's reputation as he or she is for helping to produce quality products and services. Onoda says the company has used secretaries and sewing machine operators as well as senior management as spokespeople on diversity issues and homophobia, as well as on corporate values. The message is often more credible coming from within the rank and file of the company rather than exclusively from management.
Thus, the public relations department has focused much of its attention to date on internal communications systems, creating newsletters for various divisions and managing a growing number of task forces and working groups that are made up of employees at every level of the company.
"We want to make sure that every employee has the information necessary to do his or her job as effectively as possible," says Samson. In this way, internal communications seeks to achieve the traditional public relations goal of turning every employee into a goodwill ambassador for the company.
The training programs the communications department supervises are integrated with the company's own "core curriculum" of training: a one-week leadership program that teaches values and teamwork, a four day seminar on diversity that includes sensitivity training on sexism, racism, ageism and sexual preferences, and a two-day ethics workshop.
"If you are talking about management commitment to being a certain kind of company, there is no other major American corporation I know of where the chairman of the board goes off-site for two weeks a year to talk about values and ethics," says Onoda.
Communications manager David Samson recalls his own job interview as an example of how deep-rooted the commitment to values is: "The first time I was called in, they talked about my qualifications for the job. But the second and third interviews dealt with Levi Strauss's values, and whether I would fit in.
"I was interviewed not only by senior management, but also by the people I would be working with, including the secretaries, to see whether I would fit in. We find that we can establish people's technical capability to do a job very quickly, but that values are more important."
Those standards continue on the job. Every year each employee is evaluated by both superiors and subordinates on his or her commitment to diversity and ethical behavior, with this evaluation counting towards one-third of bonus and pay increases.
"In the world in which we operate, empowerment is essential, because you must have speed and flexibility" says John Onoda. "But in order to help people make the right decisions, they have to know what the values of the company are. They must know that whatever the immediate financial benefits, we are not going to do business in South Africa, or apply different standards to employees and customers in Third World countries.
"We believe that if you bring strong values to bear on decisions, you will end up making better business decisions for the long term."
In addition to the internal communications effort, the public relations department has begun to focus external corporate communications more carefully. While the department does not handle product publicity—something for which Levi Strauss has always been well-regarded—it does have responsibility for corporate publicity, though the main challenge has not been generating interest, but making sure the stories that appear are more closely related to strategic goals.
"Because we are a major company in this market, and because we have been so successful, there is no shortage of interest," says David Samson. "But we have set some priorities, including stories that depict Levi Strauss as a leader in technology, and stories that have to do with our management philosophies and values, and we have started to see more stories like that appear."
The company has also emphasized its commitment to diversity in its media relations efforts, in an attempt to become the employer of choice for women and minority executives. "There's no point in waiting until we run out of white males before we recognize the value of diversity in senior management," says Onoda.
Significantly, however, the success of public relations is not measured in terms of media coverage, but rather by the extent to which it contributes to each division achieving its strategic business plan.
"That sounds like a highly subjective criterion for success," says Onoda. "In a way it is. But it is the only measurement that means anything, and it calls for us to justify everything we do, all the time. Believe me, the CEOs of each division here know what public relations does for them, and if they didn't believe we were effective we would not be getting a piece of their budgets."
The challenge, Onoda admits, will come if times get hard. It is relatively easy to operate as a company committed to principles of fairness and openness when business is booming, as it has been for Levi Strauss. But when business falls off, significant layoffs become necessary, and the financial picture is less rosy, will management still be inclined to share information and power with employees?
Onoda believes the culture at Levi Strauss has grown so strong, has become so integral to its operations that the answer is yes, that employees would not allow a change. At the same time, it's a theory he hopes he never has to prove.
And maybe he won't. Levi Strauss is a new kind of company, a massive multinational organization that thinks of itself as a family and functions that way at every level. It is a company better equipped to cope both emotionally and operationally with the vagaries of the world economy than most.