Deans Columns

January 28, 2013 12:06 am

Stepping into the unknown

Thomas Bata, 'shoemaker to the world'©AFP

Thomas Bata warned that capitalism was becoming too 'greedy'

When Thomas Bata died aged 93 in 2008, he had not only rebuilt the shoemaking business that his father started in 1894 in what was then the Austro-Hungarian empire. He had also turned it into the world’s leading footwear retailer and manufacturer, with 30,000-plus employees at production facilities in more than 30 countries. It is not only what he did, however, but how he did it that should inspire any manager.

To begin with, Tom decided to “go global” when the world seemed bent on going the opposite way. He moved to Canada to establish a Bata presence after the Nazis invaded Czechoslovakia in 1939. From Canada, he witnessed the 1945 nationalisation and confiscation of the headquarters of the business his family had already built into an international powerhouse. Unable to return to a country now under the influence of ­Stalin’s Soviet Union, Tom rebuilt the business from a new base in a town near Toronto that still bears his name.

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Under his leadership, the company continued the tradition started by his father of expanding into markets around the globe: Asia, Latin America, the Middle East and Africa. Tom went to corners of the world where no one else wanted to go, sometimes against great odds, and often in less-than-favourable circumstances. But he went there first, stuck it out for the long haul, and built a powerful brand that has galvanised loyalty among generations of customers and employees. It is estimated that his company sold more than 20bn pairs of shoes over the course of his lifetime.

In large part, Tom achieved this by serving customers at the bottom and middle of the societal pyramid long before the notion became popular.

For him, making and selling quality, affordable products to people on the lowest rungs of the economic ladder was one of the company’s core tenets. He was not just selling to customers – he was creating new customers.

Tom liked to tell the story about the time the company was eyeing expansion into Africa. He dispatched one of the senior members of his management team to get the lie of the land. After a week or so, the manager reported to Tom: “Why on earth would we go to Africa? No one wears shoes.” Tom replied: “That’s exactly why we’re going there!” This pioneering preoccupation with expanding the customer base went hand-in-hand with his company’s focus on expanding into emerging markets. In both respects, he was clearly ahead of the curve.

But Tom not only cared about his customers. In his view, and in his own words: “the real role of business is to give a service by making and selling products that satisfy the want and needs of society, and in doing so to be a caring organisation in partnership with community and government.” I do not know of any business text taught in any business school that better describes what business ought to be.

Putting these ideas into action won Tom and his company the enduring respect and loyalty of their employees, suppliers, customers and other ­stakeholders.

To commemorate this business philosophy, his family created the Thomas J. Bata Lecture Series on Responsible Capitalism. It is a fitting tribute to a man who believed that business is a public trust and that corporations ought to contribute to the ­wellbeing of the communities in which they operate. The lecture series alternates between the Schulich School at York University in Toronto, and the Tomas Bata University in Zlin, the small town in the Czech Republic where the Bata business empire was born. Ratan Tata, the Indian industrialist who is a like-minded business pioneer and long-time Bata family friend, delivered the first lecture.

Tom was a friend, a mentor and a trusted adviser, the former head of my school’s international advisory council. The last time I saw him before he died was at a business luncheon. He was 92. He still had an iron handshake – the grip of a 10th-generation shoemaker – and an infectious optimism. While he died just months before the economic meltdown that transformed the world of business, Tom had warned a few years earlier, in a magazine interview, that capitalism was becoming too “greedy”, “too self-confident”. His predictions proved accurate, but more importantly, in the aftermath of the crisis, the business philosophies that Tom Bata pioneered and put into practice have gained newfound currency and relevance.

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Dezsö Horváth is dean and Tanna H. Schulich Chair in Strategic Management of the Schulich School of Business, York University, Toronto

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