Business

Ralph Lazarus

RALPH LAZARUS

(1914 - 1988)

 

      He had an affable manner, a ready smile; but for a quarter of a century Ralph Lazarus was a dominant figure in the world of retailing, a significant participant in national activities and a strong force in the Cincinnati community.

 

      He was devoted to his family, his community, his company and his country and he served all four with energy, zeal and a high degree of competence.

 

      "He was a very thoughtful man," reports Dean Fite, former top P & G executive and an active participant in the Cincinnati leadership group. "One of the best business persons I have ever known. I never saw a man who could get to the meat of a problem as he did; he was extraordinarily able to zero in on what was important."

 

      It was inevitable that Ralph should become a parr of the family-owned F&R Lazarus Department Store in Columbus, at first as a summer employee and then in 1935 fulltime, upon graduation from Dartmouth College.

 

      He started literally at the bottom. In a Cincinnati Enquirer article (June 20, 1988) he recalls those earliest days. "I can remember standing on a soap box behind the counter trying to sell men's handkerchiefs," he said. "In those days they shipped bed sheets in cartons that were eight feet square. When they were unpacked it was difficult to remove the sheets from the bottom of the carton. So they'd get the crate about half unpacked, and they'd pick me up and hold me by the legs while I'd pass the sheets to them."

 

      He advanced through various positions at the Columbus store, reaching vice president in 1947 and executive vice-president in 1950. He was named executive vice-president of the parent company, Federated Department Stores in Cincinnati a year later, became president in 1957, then chairman from 1967 to 1981. He was Chairman Em~ritus at the time of his death on June 19, 1988.

 

      When Federated Department Stores was formed by the union of three great retailing families - the Lazarus, Bloorningdales and Filenes - it was to spread the risk geographically, to provide a hedge against local downturns. Fred Lazarus, Jr., Ralph's predecessor and father, continued the diversification by embracing the south. But Ralph added a whole new dimension. Other forms of retailing were added: foods, with Ralphs Grocery, which soon became the largest part of the Federated operation; discount stores, with Gold Circle. And the geographic expansion continued: Federated became the largest department store chain in the Sun Belt. 

 

     He "aggressively expanded Federated's gro\Vth" in three ways, according to Howard Goldfeder, who managed Bloomingdale's and later succeeded Ralph as Federated's president: by expanding existing Divisions (means 'store' or group of stores under one management head), by acquiring new Divisions, and by broadening the scope of operations beyond just those of a department store.

 

      "The Company grew dramatically under his tenure," says Phyllis Sewell, Ralph's executive vice-president. "He was president in an era when branches proliferated, shopping malls became popular, suburbs were growing in importance." Emphasis shifted from single locations to multiple locations, a regional operation. This added, Sewell points out, many more complications to management, demanded a new organizational structure.

 

      Ralph recognized' early the importance of the 'Sun Belt'. Expansion in this area was "one of his main thrusts," according to Sewell, and she points to the acquisitions of Ralphs in Houston, Bullock's in Los Angeles and Rich's in Atlanta.

 

      The acquisitions were financed principally with the Company's stock. But Federated was a primary company, with a triple-A rating and with stock selling at a good multiple. Some borrowing was done to finance new branches.

 

      Acquisitions had to meet certain requirements, adds Goldfeder. They must be quality businesses; they must have a family tradition, and they must have a position in the community, a perception of being something more than simply local retailers. Ralph had an interest in and curiosity about all forms of retailing; he wanted Federated to be a strong corporate base to support and enhance a broader scope of activity. Fundamentally conservative, he was willing to take some risks; but he believed in maintaining a strong balance sheet.

 

      Decentralization was a Federated watchword from the first (the name itself is significant - a federation of stores). "Federated originally was a holding company," Sewell says, "and in many ways it still operates with that philosophy." Ralph controlled the treasury, capital expenditures and overall basic policy, and watched over the whole enterprise. But "the Central Office was always secondary to the Divisions." It was there to support, to supply expertise in functions the Divisions could not. support - such as consumer research, "narrow specialties". Such services "the Division could elect to use or not use, at their choice."

 

      Ralph would meet with each Division manager at least twice a year for a six-months planning session, to establish priorities for the coming season. Here the emphasis was largely on principles rather than details. He tended to focus on three major priorities: a strong organization; a clear concept of the business; and an appropriate understructure. Given these, "he'd pretty much leave the Divisions on their own."

 

      When a Division was new or not going well he would visit it, reach agreement with the local management on what was needed, and give support to the resulting program. His emphasis was on those who were less successful; if a division manager was producing proper sales and profits, he ran his own show.

 

      He placed great value on the importance that people could make in the business, according to Goldfeder. "He was careful and skilled in the selection of people to run the business, then gave them a great deal of leeway."

 

      An example of his willingness to go along with local management was Bloomingdale's. Bloomingdale's tried to disassociate itself from Federated in the public mind, wanted to stand alone as a clear entity. Ralph understood this, saw that it might bring strength to the Division and therefore to the entire company . . . and he cooperated with it.

 

      This management policy became more and more difficult as increased competition put new pressures on the business. Striking a balance between control and the independence of the individual stores was a challenge, and by meeting it as successfully as he did Ralph became regarded by the business community as "an exceptionally able business strategist."


      One of Ralph's important contributions, according to Phyllis Sewell, was his focus on the customer. The merchandise had been largely dictated by the designers and manufacturers; "we bought what they sold." Starting in the '50's, Ralph sought to learn what features of a particular item made it appealing to the customer; then he would seek other products with that same feature. He attempted "to think from the customer's point of view."


      Ralph often used an inverted pyramid chart: an upside down pyramid with the customers at the top. He did not originate this concept; it was probably created by Fred, Jr. but he emphasized it. Federated did far more research than most retailers, according to Sewell
- economic, consumer, marketing; studies of opportunities in various lines, growing markets. Much of this was done by interviewing customers in the store.

 

      The company was run almost like a family. When you signed up with Federated, one of his colleagues stated, and Ralph knew you (and he knew an extraordinary number of his people) you became part of his family. Certain attitudes and behaviour were expected of you; and he felt you had a right to expect certain things of him. Tim McEnroe, head of public relations under Ralph, comments, "He had the ability to speak comfortably with any person, male or female, business or social, clerk or president; never did he talk down to anyone." "He didn't give only time," a friend has said; "he gave quality time."

 

      Did Ralph enjoy his work? "Very much so," says Sewell. He had a relaxed manner, appeared to be easy-going; "a broad smile lit up his face;" he walked in a somewhat jaunty manner.

 

     Some of his colleagues felt he had about him a sort of "paternal royalty." He was born to having the things he needed and expected, was, in effect, "to the manner born." He was always called "Mr. Ralph" within the Company. He did not "wander the halls", was not "big at going out and talking to the little people." He tended to have a number of people handling assignments as he thought of them, rather than following a pre-set, agreed-upon plan. He was not a 'workaholic'; he had some health problems, had had a lung removed in his early years, and he was concerned. "He bent over backwards to protect himself," Goldfeder says. He was generally late in arriving at the office, his manner was relaxed. When a subject needed his full participation, he stayed with it and gave it his full energy. But generally speaking he was "not a driver".

 

      The fact that he was not concerned with details, spent most of his time emphasizing underlying principles, philosophy, made it possible for him not to "put in intense hours," Sewell feels. He believed in strong management; but once agreement had been reached on strategy, he left implementation to others.

 

      There was in his office an old antique table around which he would gather his senior staff members (he would never sit at the head of it) to explore their views on a matter. The discussion was free and often highly vocal. When the meeting was over, Ralph would make his decision. If a person key to the subject had not been present, he would call him on the phone. A frequent question was, "How does so-and-so feel about it?"

 

      "Ralph was not detail-oriented, he was people-oriented," says Goldfeder. He was less driven by facts, statistics, than by his gut response to the subject. And, adds Goldfeder, his instincts were very good. He was a slow reader; one couldn't give him a 35-page report and expect a decision; he would have someone come into his office, present the subject, discuss it, and answer questions.

 

      His impact on the Cincinnati community was great. He served on the boards of United Way, Cincinnati Symphony Orchestra, and the Cincinnati Committee for Economic Development and was active with other local organizations. But it was his role as a leader of the business community that made him preeminent.

 

      Perhaps his single most important impact was in the creation of the CBC. Ralph Lazarus shared with Edward G. Harness, then President of Procter & Gamble, a great concern over the state of local education. They felt strongly that something should be done about it, and that the business community was the one to do it. They became co-founders in 1977 of the Cincinnati Business Committee, in effect reviving the CDC which for the 20 years ending in 1967 had brought to bear on community problems the top business leadership of Cincinnati. (For a history of the CDC and the factors behind the formation of the CBC, see the paper on the subject in this Oral History collection).


   The CBC established some clear policies: 1) it should be made up only of

Chief Executive Officers, with no substitutions accepted; 2) these individuals were to give it their personal time and company support; and 3) it would concern itself with only three subject areas - education, City government, and downtown development. It was not to be diverted to other problems, such as the airport, or tourism, or bringing new business to Cincinnati. Each member would be a member of a Task Force on one of the three subjects, and would be asked to concern himself only with that one area.

 

      The CBC was, and continues to be, a major force in determining the direction in which Cincinnati development takes place, and has a vital impact on important City matters.

 

      Because of his interest in reinforcing the stability and strength of the city of Cincinnati, Ralph was largely responsible for the downtown location of the Federated headquarters building. Furthermore, he wanted to "do something distinctive for the community," did not want the building to be just another box. "The Federated Building was his baby," says Sewell.


      In his corporate role, he felt strongly that the various Federated Divisions should show the same kind of concern for the local community that he himself showed. He insisted that the managers of the Division in each city be active participants in matters of local importance, partly to enhance the image of the stores but also because he had a strong feeling that the well-being of the community was important to the success of the local Division. An example given by Goldfeder: in Dallas, Jack Miller, manager of Foley's, the Federated store, headed a committee to integrate the public schools; the program developed was notably successful, served as a pattern for several other communities.

 

      Ralph saw the Company and its divisions playing a much more important and aggressive role on the national scene as well. He personally was a member of the Business Round Table and the Business Council, and appeared several times before Congressional committees, contributing his point of view and his expertise on matters of importance to the nation.

 

      The interest in quality education which led to formation of the CBC was with Ralph a primary one. He was always in the forefront of school levy campaigns; Federated was one of the pioneers in the program whereby companies adopt local schools - and through Federated divisions he helped spread the project to other cities. Before the Head-Start concept was developed, he was pushing the need for a program directed at the pre-schoolers. Shortly before his death he and his wife established a one million dollar endowment fund to advance the educational opportunities of Cincinnati's disadvantaged children.

      In 1982 he was honored as "A Great Living Cincinnatian". He was elected to the Commercial Club in 1964 and served as a member of the executive committee, as vice president, and, in 1977-78, as president. He was a member also of The Commonwealth Club.

 

      On the national scene he was a past president of the United Community Funds and Councils of America, a member of the National Advisory Board of the Peace Corps, a member of the National Citizens Committee for International Cooperation, vice-chairman of the Health Committee of the Ford Foundation, past chairman of the National Public Advisory Committee on Regional Economic Development, V.S. Chamber of Commerce, and vice chairman of the Citizens Committee for Postal Reform. Always a Dartmouth supporter, he was for many years on the board of trustees of that college.

 

      He served on the boards of Chase Manhattan Bank, General Electric Company and Scott Paper Company. W.L. ("Jake") Lingle, top Procter & Gamble executive who served on a board with him, said "He had an inquiring mind. He kept probing until he came to an acceptable answer. He was never a passive member of a board; when he felt he had contributed what he could, he resigned - and went on to something else."

 

      "The priorities at Federated are first your family, second your country and third your job," he would tell his people. Tim McEnroe said that "he worked at getting people involved in the community; it was hard to advance in the company if one was deficient in public service." The same attitude was applied to other companies also: in his role of business leadership he pressed small companies as well as large to bear their share of community responsibility.

 

      But family came first. A portrait painting of his father, Fred, Jr., was on the wall of Ralph's office. In front of it was a table, with a small vase on it. Every morning, on entering the office, Ralph would put a fresh white rose in the vase. 'Family' reached into the past, as well as the present.

 

      His widow, the former Gladys Kleeman, reported that when he took on his responsibilities with Federated, it was clear that much travel would be involved. He pledged then, when they moved from Columbus to Cincinnati in 1952 with their four children; that he would travel all week if he had to; but the weekends he would spend at home. They accepted few social engagements, gave their time completely to the children. If work had to be done, it was deferred until the children were in bed - "even if it meant the lights burning till 2 AM." Their home on Catawba Valley Drive, Hyde Park, soon included a tennis court, a swimming pool, a Badminton court and eventually a trampoline. His sons recall the discipline at the table, the insistence on old-fashioned good behavior - but also the high-spirited romping in the swimming pool. Standards were maintained, but the family was unusually close.

 

      The Lazarus family was more than the usual family. It embraced the brothers and their offspring - and it embraced the store. "The head of the business," Ralph's brother, Maurice said, "was always the head of the family." The structure resembled the patriarchal family of Biblical times.

 

      Ralph Lazarus thoroughly enjoyed sports activities, but, as a friend put it, his athletic grace fell far short of Olympic standards. He was "the world's worst golfer," the friend reports fondly, "but it took him out of doors, with friends, and he loved it." Sailing was another hobby. . . but his friends marvelled at his disregard for the navigational laws of nature.

 

      "Ralph Lazarus touched and brightened thousands of lives in the course of his career- as an innovative and imaginative retailer, as a generous benefactor, as a solid and purposeful citizen," The Cincinnati Enquirer wrote in an editorial at the time of his death. "His long and productive career set a standard that should move other Cincinnatians to regard privilege as an opportunity to serve, to lead and to achieve."

 

(With permission of the author.)

 


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