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An IR Exclusive: Part One 'It's All About People' – Engage Hearts, Minds L.L. Bean Exec Tells Mountain Resort GMs

By Craig Altschul
October 04, 2007

Where better for the chat than at an island retreat a couple miles offshore from L.L. Bean's Maine campus? Peixotto was the invited guest of CNL, the newest mover and shaker in the ski acquisition and ownership realm. He joined the casual atmosphere of the first evening of CNL's first gathering of its ski resort general managers and key company resource people in September. The Industry Report was present with both CNL's and Peixotto's permission.

"I'm one of your industry's stakeholders," Peixotto told the group. "My family is at our home at Sugarloaf nearly every winter weekend and often during the off-season. (CNL acquired Sugarloaf in August.) Your success is important to me in terms of my family's recreation and in property values." He would have much more to say about this "stakeholder" issue, but he established his common credentials early.

Peixotto is part of a four-person management group of the family-held business. He is responsible for distribution logistics, customer satisfaction, call centers, human resources, and more. He has been with Bean for 25 years.

The winter recreation industry and the huge retailer have many things in common. "It's all about people at the end of the day," he said. "We both have to engage the hearts and minds of our employees and our consumers. We have to help people enjoy the outdoors."

The principles, practices, work environment, treatment of employees, and well-beyond-the-call-of-duty customer service have been a constant with L.L. Bean virtually since the founding in 1912. That philosophy has taken L.L. Bean from a one-man operation almost a century ago to a company earning $1.8 billion today, with 3,800 year-round employees, a number that swells to more than 11,000 during the pre-holiday season. (That seasonal swelling is another parallel to the ski industry.)

"Some things change with the times. But, the values held by L.L. were simple and deeply engrained. He was raised to believe in them. Those values are that nature is something to be revered. Family ties are a priority. Being neighborly is a matter of course. 'Do unto others' is not just a saying, but a way of life," Peixotto said. "Those values are as much a part of the company culture today as they were at the beginning."

Back to the stakeholder concept. This one had the GMs writing notes fast.

"Leon Gorman took over as president of the company following the death of his grandfather in 1967," Peixotto explained. (Gorman has since retired.) "Leon expanded on the philosophy that there is more to business than business. He felt we had to provide maximum value to every one of our stakeholders.

"The fact is that, to this day, we do not make an important decision at L.L. Bean without first reviewing the effect that decision might have on each of our stakeholder groups."

Peixotto told the GMs and CNL executives that those stakeholder groups included customers; employees; stockholders ("in our case the Bean and Gorman families"); vendors ("who are treated like partners"); the community ("by being responsible corporate citizens"); and the natural environment itself ("without which we can't meet any of our stakeholder desires").

He said the company does not treat any single group of stakeholders as more important than another. "This isn't jargon," he said. "That's exactly how we run our business."

There are threats to all of these stakeholder groups. He believes L.L. Bean (and the mountain resort industry, for that matter) are in a unique position to reverse those threats. One example: adult and child obesity.

"It starts with our personnel," he said. "We're doing a lot to encourage healthy living by our employees and their families. We have fitness rooms and equipment in every one of our facilities with incentive programs tied to them. Our medical screening and follow-up programs can mean as much as $1,000 off health insurance to employees for successful change and maintenance. Now, 85 percent of our employees take part. Spouses are included. We've lowered the prices on fruits and vegetables in our employee cafeterias and raised prices on less healthy foods."

Northstar's John Rice asked how the challenge of impacting seasonal employees lives at mountain resorts could be achieved. "You can make a positive impact on them. Show them that hitting the bar at 5 p.m. isn't their only activity model. They are working in a healthy environment, so find ways to engage them in after work," Peixotto responded.

Part Two of this story will run in our Oct. 22 issue. The name L.L. Bean is synonymous with customer service. We can learn a great deal just by paraphrasing L.L's "golden rule." Don't miss that, plus Piexotto's candid advice on the messages we are sending to the family market.

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