Conversation with Reid Plastics’ Joe Rokus
CEO of Reid Plastics
Joe Rokus is Chairman and CEO of Reid Plastics, one of the largest plastic bottle manufacturers in North America, and Vice-Chair of Consolidated Container Corporation, as well as Chairman and CEO of Berkly Industries. Begun as a family-owned firm shortly after WWII, Reid Plastics had approximately $1 million in sales when Mr. Rokus and his wife took over the company. Under his leadership Reid expanded from one location to over 60 locations largely through a series of acquisitions. It is now a dominant company in its industry. In 1999 Reid merged with Suiza Foods Packaging Group to become Consolidated Container Corporation. In 2000, Mr. Rokus and his wife formed Rokus Capital LLC. In partnership with Century Park Capital Partners, Rokus Capital purchased Berkly Industries and through Berkly, Omni Plastics. Berkly serves the medical, wireless, computer and retail markets with custom molded plastics.
Despite his many business interests, Mr. Rokus still finds time for volunteer work, including serving on the Board of Regents of Pepperdine University. He is a business leader who has been consciously considering how his spiritual life intersects with his business life. Our interview with him focuses on these areas of his business practice
GBR: You have spoken about how you have put spirituality to work in managing your companies. At the same time, I have heard you refer to destructive organizational behavior as a form of terrorism. As you know, an article appeared in the last issue of GBR about bullying in the workplace. How do you handle situations like this in your companies?
JR: If someone is deliberately trying to destroy what we are trying to do — is going behind the scenes and unplugging computers at night, whatever — that is an act of terrorism, and we just don’t tolerate it — or the person. A terrorist is someone that we feel cannot be changed, so we would immediately move him or her out of the company, at whatever expense. If this means that we have to buy out a contract, we do that. We want to move on and build the culture and we are not going to let that bad apple destroy what we are trying to do.
GBR: What if the behavior is more subtle than unplugging computers?
JR: If you are not challenging them, then it is your fault. That is the bottom line. If you are not challenging them you are saying, “This is the culture we want to accept.” If you are already tolerating it, you have a big problem. I would make the decision that we are going to fix this situation, get the person help, tell him or her that verbal abuse (or whatever form the behavior takes) is not acceptable, or let him or her go. Give the appropriate warnings, and if the behavior does not change, that person is out. You certainly wouldn’t accept it if there was sexual harassment, so why would you tolerate verbal abuse or other forms of more subtle harassment?
GBR: What about the person who is not the CEO of the company. What would you say to that person if this kind of environment had become the dominant culture?
JR: I would leave. If you cannot prevail, and it is bothering you to stay, then you should leave and move on. Suppose I worked for a bunch of thieves and I knew they were constantly stealing. Even if I was making more money than I ever made before — if I was going home every night, thinking, “Hey, they stole that money from that poor person. They took all the money she had. Yeah, they gave me 10% of it, but I still feel lousy about it,” — I couldn’t live with that. If someone is a bully, and you don’t speak up and challenge him or her, it is the same kind of thing. I go back to scripture. Jesus spoke up and confronted people when he needed to. If someone is being abusive, you can try to get him to stop it, but if the person won’t change, you have got to stand up and say “Hey, I can’t live with this. I’m out of here.”
GBR: From that last comment it seems apparent that you believe that your spiritual life should inform how you conduct yourself at work. To follow up on that, what handful of values define your leadership, and what is source of those?
JR: Let me begin with the source. The source for me would be the scriptures – both Old and New Testament. These give me God’s word on how to live my life. And then another source is watching others around me in the Christian community, seeing how they live and what values are exemplified by those I admire most. A good example would be my mother. She taught these values to me, and she also lived them.
The first value that I think is very important would be the fact that we are all created in God’s image. Because of that, we are all created as equals. The New Testament says “You are neither male nor female, Jew nor Greek, bond or free. There is no “I’m better than you.” There is no place for ego. I may have a different role. I may be CEO, but I am no better a human being than the custodian. So the question becomes, do I leave my desk messy for the custodian to come in and clean up just because that is his job? Or, do I put the stuff in the two receptacles underneath my desk one for recyclables and one for trash.And, I want to leave it as clean as I should out of respect for those individuals who come in take care of things. I don’t work for my customers, I work for God. That means I am going to do the job to the best of my ability because God is my ultimate judge or my ultimate boss. And that is the message that I want to give to everyone who works for me. You don’t work for me. You work for yourself and your relationship with God. You may not put your whole heart and soul into it for me, but you certainly can do it because you have pride in yourself and you want to do the best job you can because you are serving a God who gave everything for you. This is the fundamental value that I would say drives me in the human relations side of the business. Respect for each person.
Clearly there are other values as well: integrity, fair play, honesty. For example, don’t cheat your workers. If they work for a day, pay them for a fair day’s wage. Don’t short change your customers. Do the right thing, but do it for the right reason. I would say that a lot of American businesses that are successful follow these principles, but they do it with the expectation that they will get more loyalty and business in return. If you are doing it only to gain the bottom line, then I think that over time you will be caught in a situation where you can’t get extra value any more, and all of the sudden your tires –or whatever the product might be — are not as good as they were before, The temptation is to say “They passed the minimum standard . . . .” or, “We were within the minimum percentage of allowable defects . . .” Yeah, but you knew that some of that product would fail. For instance, we make plastic bottles. One of our specs says that they should be one and a half pounds, and another says they cannot be any thinner than .025 inches. If we ran our bottles at one and a half pounds but they were .020 inches instead of .025 inches, we would be cheating our customers. There could be a thin spot, and that could break and create a problem for somebody down the line. And that would be wrong.
So, again, you do the right thing for the right reason. If you do it consistently enough, your marketplace will perceive they are getting value in dealing with you. They are getting fairness in dealing with you. But, if you do only for the bottom line, ultimately you will cop out. If you are doing because you are serving God, and he is your boss, not the customer, then you will do all the right things. Quality becomes a real easy thing. Is it right? Yeah, then ship it. If it is wrong, then don’t ship it.
GBR: How you get alignment within your organization with those values?
JR: Well, it is important to select the right people to begin with – hopefully right out of the chute. When I am personally involved in the selection process, I try to spend time getting to know that person – to know his or her “heart and soul.” I think I’m a pretty fair judge of character. But you can’t select every one of them, so if you have people who may not automatically hold your values, you try to get them to buy into the situation.
You can’t win in business as an individual too often. Most businesses now are set up so that either everyone wins the Super Bowl or nobody does. There are a few examples in athletics where you can be the MVP of the league and get big bucks even if your team doesn’t win, but if you are really focused on what the big prize is — winning the Super Bowl or the World Series — it takes everyone on the team, including the trainer and the water boy, to get there. Everyone has to pull. We either all win, or we all lose. Most executives are creating plans that say that. It forces people to work together.
We had a situation not long ago when we hired someone that I thought would do a really great job because I had sensed his heart and dedication when I was talking with him. Some of the others weren’t really sure. But this guy turned out to be very good. He was there several evenings — even all night at a crunch time — doing work that kept a deal going. Because of what he contributed, the deal went through, and all of these others got bonuses. That’s an example of selecting for the right characteristics. On the other hand, if Charlie here has great character but just can’t keep up in terms of the job, you get him training and coaching and try to see if he can catch up and do a good job. If that doesn’t work, you look for some other job in the company where he could be useful and function well. If he still cannot make it, you may have to exit him from the organization. You don’t want to keep banging heads with people who are trying to work with him when it isn’t working. But you start by saying to yourself, “Joe, what can you do to help Charlie be the best he can be?”
GBR: That kind of dedication you were talking about — working all night — may help the company, at least in the short run, but how does that fit in with your concern for employees as human beings?
JR: We have two things that we do to make sure that the employees don’t abuse themselves or their families. We require that they take their vacation — take the time. They can’t opt for money instead. But we also create an environment in which everybody is a front line decision-maker. Everybody has to make his or her own decisions. This person that I’m talking about is a salaried employee. He makes his own hours. So, just as he would be there to get the job done, it is also his responsibility to take the additional time off to balance that out. And we encourage that. But he has his own freedom and responsibility. It is not a requirement that he be there for long hours. If he doesn’t come in, he doesn’t come in. We aren’t going to push him to do that. It is his own personal character that says “I said it would get the product out today. I’m going to stay here to get the job done because I made that commitment.” Now, it is the same type of person that we want to say, “You know what, I made a commitment to my wife 20 years ago, so I am not going to miss my daughter’s birthday; I am not going to miss my son’s tennis match. I’m going to do those things too.” When you hire that type of person, he or she is going to be committed to the business responsibilities, but also be equally committed to family responsibilities. The person who only emphasizes half of that — who just wants to climb the corporate ladder — will soon burn out. You can’t fake it.
GBR: What do you do when you are dealing with countries and cultures where your values and the American legal system are not the norm, — for instance, countries where it is expected that you will bribe some people to get your product into the country, etc.
JR: Let me give you just one example. We had an opportunity to put a factory in Indonesia, but the first thing we would have had to do was pay someone $50,000. We just said, “Sorry. We aren’t going to pay anyone $50,000.” We still shipped product in. Our product had to stand the test of whether it was good enough that they would still buy it if they had to follow the American practices. And they did for a period of time, maybe three or four years — until they could get someone who paid the bribe to build a factory there. But our position was, “No, we are not going to do that. We are not going to put a factory in your country where we are going to be subject to practices that would not be accepted in the United States.” And we refused to do it.
If you have the Book as your guideline, it says “Render unto Caesar the things that are Caesar’s, and unto God the things that are God’s.” It also says that if you are a Christian, it doesn’t matter what government you are under, you follow the laws because God established those governments. So if our laws in America say you can’t use bribery, break our anti-trust laws, try to create a monopoly, or cheat, then I can’t do it anyplace else either. Besides that, if you get caught, it is really bad, and the fear of punishment is a good incentive for some people. But the real incentive is, do you want to live by the Book? If yes, then you are going to have to follow the Book in every situation. And we have tried to do that. The situation in Indonesia is a perfect example. I believe it is wrong to go into a country and avoid their custom duties by saying that your product is only worth a dollar when you ship it in, when it is really worth $20. Their government got cheated. The US government got cheated. You are not following the rule of the land.
I still give American businesses pretty good marks for doing the right thing. Maybe it is more out of fear of punishment than because they want to do it God’s way, but whatever the reason, American businesses tend to stay pretty legitimate in the outside world.
GBR: Is globalization spreading the kind of values of our legal system to other places? Are they beginning to follow our business practices?
JR: I don’t think so. Our legal system was based on the Judaeo-Christian teachings. Many other cultures don’t have that basis, and it makes a difference. A lot of companies hire lawyers to help them follow the letter of the law while still finding a loophole to let them do what they want to do. If the law is written in a way that the loophole is written into it, then, as a business person you have to make the decision as to whether you are going to use the loophole or not. In some cases we have found it not to be a moral judgment one way or the other, and so have followed that opening in the law to get our product in. In other cases, the loophole was such that we felt it crossed ethical lines. We just wouldn’t do it.
GBR: Today we often hear about “value-based leadership” It sort of comes out like water out of a sprinkler. We sit in the audience and nod, but half the time we probably really don’t know what the person means by it because it is used so loosely. Can you give us your definition of what that term means to you when you hear it?
JR: I question what it means to many people. For myself, I have defined what my values are: the Judaeo-Christian values. When others talk about ‘value-based,” are they talking about these values or the values of a society that puts “me” first? The real values are the ones that we model for our children and that are publicized in the media — It is ok to cheat if you don’t get caught; winning is everything; look out for Number 1, because if you don’t look out for yourself, you can’t expect anyone else to do it, that sort of thing. The whole idea of being a servant leader was not talked about much until maybe the last four or five years. That is why I wanted to ask you what you meant by values. I question what we mean by it when we talk about it in our business seminars and such.
GBR: How hopeful are you that the kinds of values that you are talking about – that you have in your own organization — can become common place in American business?
JR: I am an optimist, not a pessimist. At the end of the day, God will win.
GBR: We thank you.
To read more about how to relate spirituality to work issues, go to Putting Spirituality to Work by Dr. Kerns in this issue of GBR.
About the Author(s)
Charles D. Kerns, PhD, MBA, is a professor of applied behavioral science at the Graziadio School of Business and Management. He has more than 30 years of business, management, and consulting experience. Through his private consulting firm, Corperformance, he has implemented performance management programs and systems to help companies from many industries maximize their results. Since 1980, he has taught in almost every program in the Graziadio School, first as an adjunct faculty member, then, since 2000, as a member of the full-time faculty. He has also served as the associate dean for Academic Affairs. Dr. Kerns holds a Diplomate, ABPP, in both Industrial-Organizational Psychology and Organizational-Business Consulting Psychology.