People making a difference: Steve Korman
With the US mired in a deep recession, this CEO is challenging fellow business leaders to resist layoffs.
Courtesy of David M Warren/The Philadelphia Inquirer
"We hug every day," he says, and you believe him. Mr. Korman is also best friends with his first wife, though he's been remarried 16 years. As a kid he was best friends with his grandfather. A longtime city dweller, he's now out in the suburbs, the better to be near his eight grandchildren. This is just the tip of the Steve Korman ("it's Steve") friendship iceberg.
His wide embrace encircles pretty much everyone. When he hears of poor kids needing drums for their dance group, he buys them. When a parent needs Christmas money, he plays Santa. He's a Republican who loves President Obama. He has fed the homeless for two decades, has fought for the unfairly accused, and admits that he cries easily.
He even has props for basketball coach Jay Wright as we speak on the day Mr. Wright's Villanova team faces Korman's favorite, Duke, in the NCAA tournament. "He gets it," he says of Wright â€“ Korman shorthand for those he thinks put people first.
No wonder, then, that Korman recoiled earlier this year when he heard Pfizer Inc. CEO Jeffrey Kindler on CNBC explaining that despite the company's $16 billion profit, it planned to cut 8,000 jobs to boost that profit to $20 billion.
"It was just so cold," Korman says, though in true Korman form, he adds, "I'm sure [Mr.] Kindler didn't mean it to sound that way." But then he returns to his point: "These are not widgets we're talking about.... These are not jobs. These are people, families.... Where are you going to go to find a job these days?"
So, as a Pfizer shareholder, Korman wrote to Kindler and to the CEOs of other companies in which he held stock. He placed ads in The New York Times and The Philadelphia Inquirer. His message? Stop the "herd mentality" when it comes to mass layoffs. Forgo some short-term profits and stock value and keep people working. The appeal landed Korman on CNBC himself. His campaign has been the subject of print and Internet reports, and he has gotten thousands of appreciative responses. Some, like one from the CEO of the Philadelphia Zoo, planned to adopt his advice. Others, like the reply from Kindler, were less specific.
As mass layoffs continue, Korman has called on Mr. Obama to consult regularly with the nation's top 50 CEOs for guidance on how he can help businesses keep people working. In fact, Korman would like to meet Obama himself. He believes that when the president criticized business travel earlier this year, he imperiled the livelihoods of huge numbers of people working in travel, which Korman says dwarfs the auto industry in terms of jobs.
The letter-writing campaign, and its up-with-people approach, are "pure Steve Korman," says Steve Klein, a friend since fourth grade. "His point was that maybe we don't need to make the last dollar."
Richard Keaveny, CEO of MANNA, a nonprofit agency in Philadelphia that delivers special nutrition to the seriously ill and whose advisory board Korman chairs, agrees. "He is the eternal optimist. He sees the best in people at all times," Mr. Keaveny says. "And he is a down-to-the-basics kind of guy. He knows everyone needs food, clothing, shelter, a job, and a purpose."
Sister Mary Scullion, the cofounder of Project H.O.M.E., with whom Korman and his family work to help the poor and homeless in Philadelphia, agrees. "Steve understands that [having] a job is just so essential to your quality of life," she explains.
A graduate of Penn State University, Korman is CEO of a 500-employee, fourth-generation, privately owned hotel, residential, and commercial real estate firm begun by his grandfather, which he now runs with his three sons.
Slender, wearing a baby blue sweater, with his white hair brushed back, he sits at the conference table of his suburban corporate headquarters, overlooking the ribbons of highway that offer quick access to the company's properties up and down the East Coast.
Korman doesn't want it to be thought that he is against firing people. That's fine if they're not performing or if the company is in danger of going under. "All I'm asking [CEOs] to do is think," he says. Keeping good people makes good business sense. Talent is then on board and ready to go when business conditions improve.
Without company loyalty to workers, even workers who may have survived cuts once or twice sense the company is saying "you're not important to us," Korman says. "We really are our brother's keeper." Public corporations have less leeway, he acknowledges. Wall Street wants to see quarterly profits, often at the expense of long-term corporate health. But Korman is convinced that if CEOs will only explain that what is good for employees is good for business, investors will sign on. "It's smart communication that wins the day," he says.
Find niches where people in downsizing departments can ride out the storm, he advises. Urge everyone to think of new ways of selling. Your half-full glass might even spill over and water the entire garden.
After all, it was his last-ditch inspiration in an earlier downturn that inadvertently launched a new industry. Stuck with a struggling property, Korman furnished the units and made the building into a novelty, serving people who needed more than a hotel room but less than a permanent home. The now-familiar "extended-stay" concept was born.
"Bad times can create great results," says Korman, the people person and optimist. â€˘