Chairman of the board, Levi Strauss & Company
Born: 1942, in San Francisco, California.
Education: University of California, Berkeley, BS, 1964; Harvard Graduate School of Business, MBA, 1968.
Family: Son of Walter Haas Jr. (chief executive officer, Levi Strauss & Company); married Colleen (maiden name unknown; lawyer), 1974; children: one.
Career: Peace Corps, 1964–1966, volunteer in Ivory Coast; White House, 1968–1969, fellow; McKinsey & Company, 1969–1972, associate; Levi Strauss & Company, 1973–1984, manager; 1984–1999, chief executive officer and chairman of the board; 1999–, chairman of the board.
Awards: Berkeley Citation, University of California, Berkeley, 1970; International Quality of Life Award, Auburn University, 1997; Ron Brown Award for Corporate Leadership, President of the United States, 1998.
Address: Levi Strauss & Company, 1155 Battery Street, San Francisco, California 94111; http://www.levistrauss.com.
■ In 1984 Robert Douglas Haas began a great experiment in corporate governance by expanding on the ethical traditions of Levi Strauss & Company. During the Great Depression of the 1930s, Walter Haas Sr., risking bankruptcy, refused to lay off idled employees. Instead he created work projects such as laying wooden floors in the company's factory in San Francisco. Walter Haas Jr. insisted on running integrated factories in the American South, giving equal treatment to all races during the era of segregation. During his tenure as leader at Levi Strauss, Robert Haas mandated ethical principles. He tried to create a corporate culture in which tens of thousands of employees around the world were treated fairly and well.
Robert Haas was an intellectual given to Chaucerian scholarship, and he was shy and ill at ease when working in large groups. He majored in English at the University of California, Berkeley, and was class valedictorian. In his graduation speech, Haas warned of alienation among students, faculty, and administrators, anticipating the free speech movement that would break out the following year. Haas volunteered for the Peace Corps and worked in a remote Ivory Coast village from 1964 to 1966. He was officially a teacher of English as a second language but while in Africa began a healthcare program still in existence in 2004. After earning the degree of master of business administration from Harvard Graduate School of Business in 1968, Haas won a position as a White House fellow, working in the Department of Housing and Urban Development under presidents Lyndon B. Johnson and Richard M. Nixon.
In 1969 Haas accepted a job at the San Francisco Bay Area management consulting firm McKinsey & Company, a place he found exciting because of the variety of projects he worked on. In early 1973 Haas joined the family business, working in various management positions. In those years coworkers gave him the nickname Z.D., for "zero defects," because of his demanding leadership. Haas was disturbed by what he saw happening among Levi Strauss employees, who seemed to be progressively alienated from the company that had once earned loyalty through corporate benevolence. Haas tempered his management style to be more willing to listen to others. In the early 1980s Levi Strauss foundered; it had alienated retailers with arrogant behavior and its workers with uncommunicative management. When he was made CEO in April 1984, Haas was determined to set the company on its own unique ethical course.
Over the course of a year and a half Levis Strauss had closed 14 American factories and nine foreign ones. From 1980 to 1984 net income had dropped 80 percent, and 15,000 workers had been laid off. Haas's first move was to engineer a leveraged buyout whereby he and his relatives purchased enough stock to privatize the company in 1985. During the 1970s Levi Strauss had bought many smaller companies that marketed suits, shoes, purses, and other clothing and accessories. Haas chose to focus on the Jeans Company division that manufactured the famous Levi's jeans label, and he sold most of the companies that did not focus on the manufacturing of pants. In 1986 the company introduced the Dockers line of cotton pants, which proved very popular. By 1990, 80 percent of American men owned at least one pair of Dockers.
Haas chose 1987 to introduce what became known as the "Levi Strauss Aspirations Statement," a long document that outlined how company employees were to behave. It boiled down to three areas: diversity, ethics, and leadership. All areas entailed the pursuit of "aspirational goals," and Haas required that all employees, including Haas himself, attend classes that promoted cooperative work toward aspirational goals. At first little happened. Then, in 1989, Haas introduced an appraisal system in which all pay raises, promotions, and bonuses were determined by how well an employee was rated by others in areas that included aspirational goals. The vagueness of the terms "diversity" and "aspirational" would eventually create chaos, but in the early 1990s Haas appeared to be a corporate genius.
Haas reorganized all Levi Strauss workplaces around what was called the Japanese model, in which workers formed cooperative groups for setting goals. In 1992 the company had $5.6 billion in revenue, up from $2.6 billion in 1979. Furthermore, Haas's efforts to create a workplace where justice prevailed was winning the company worldwide brand-name recognition. In 1993 Haas's managers wrestled with the ethics of doing business in China, trying to find ways to prevent workers from being oppressed by the Communist Party in the workplace. Levi Strauss eventually decided not to do business in China and to begin a three-year phasing out of operations in the country because of China's poor civil rights record. This action won Levi Strauss praise but also threatened to cut off its Chinese market of one billion people.
In 1996 Haas engineered his second leveraged buyout of stock, giving his uncle Peter Haas Sr.; cousin Peter Haas Jr.; a distant relative, Warren Hellmann; and Robert himself sole control of the company. Securities and Exchange Commission filings during the buyout process revealed that during Robert Haas's tenure as leader since 1984, the company's stock value had increased 105-fold, to $265 a share. By then Levi Strauss & Company was the wealthiest apparel manufacturer in the world, foreign sales outstripping American sales.
By 1997 it was evident that something was seriously wrong. On November 3, 1997, Levi Strauss laid off 18,000 employees while closing 11 American factories. This action followed the layoffs of one thousand white-collar workers. Retailers were angry over long delays in fulfillment of orders and turned to other manufacturers. The J. C. Penney Company began to manufacture jeans itself. Decision making at Levi Strauss was slow or stopped altogether because middle managers believed everyone had to agree on every decision. Competitors were manufacturing jeans in foreign countries without adhering to Levi Strauss's ethical concerns and were underpricing the company's American-made jeans. In 1999 Haas removed himself as CEO and hired Philip Marineau, president and CEO of Pepsi-Cola North America, to be president and CEO of Levi Strauss. By early 2004 Levi Strauss had closed its last American factory, in Oakland, California, and had moved all of its jeans manufacturing abroad.
See also entries on Levi Strauss & Company and McKinsey & Company, Inc. in International Directory of Company Histories .
Impoco, Jim, "Working for Mr. Clean Jeans," U.S. News & World Report , August 2, 1993, pp. 49–50.
Schoenberger, Karl, Levi's Children: Coming to Terms with Human Rights in the Global Marketplace , New York: Atlantic Monthly Press, 2000.
Sherman, Stratford, "Levi's as Ye Sew, So Shall Ye Reap," Fortune.com , May 12, 1997, http://www.fortune.com/fortune/articles/0,15114,378487,00.html .
—Kirk H. Beetz