Tom Chappell of Tom's of Maine on Getting it Right (Again) the Second Time With Rambler's Way
About eight years ago, I met with Tom Chappell in his Kennebunk, Maine office just as he was ramping his newest company, Ramblers Way. This venture is Chappell’s second start-up, the first being Tom’s of Maine, which Chappell and his wife Katie, built into a natural consumer products company that sold to Colgate-Palmolive in 2006 for $100 million. Ramblers Way, a manufacturer and retailer of finely-woven wool clothing is a very different business for Chappell, but for this second time around the startup game, he is borrowing heavily from the lessons he learned from the first.
In 1968, Tom Chappell left a job at a Philadelphia law firm and moved with his wife to Maine, both driven by a strong desire to pursue a more entrepreneurial career. They wanted to build a company that, was successful, in Tom’s words, “at integrating the concept of social responsibility, financial responsibility and environmental accountability and delighting the customer all at the same time.” While these themes are heard more commonly in today’s business circles, Chappell explains that in the year of his company’s founding, this was all quite unusual. “In 1970, you didn’t put these things together,” he says. “You worked for a non-profit or for the government if you cared about the environment.”
Tom’s of Maine began producing natural personal care products such as laundry detergents, soaps, and toothpastes, and consumers responded. Tom knew he was on to something and to accelerate the growth of the business, he followed his board’s advice to “professionalize” his team. “Along came the MBA’s and people with consumer packaged goods experience and with them came a different value system and I didn’t realize it,” Chappell says. “For the next five years we drove sales at a high rate and drove down our cost of goods to an even lower level than we thought we could. We had grown, we were making money, but we didn’t create a single new product in four years. I was feeling empty, and that’s when I decided to attend Harvard Divinity School and sort of found myself and regained what I had lost intellectually. I went back and reclaimed the business, not by decimating the place but by saying, ‘Look, this is Kate’s and my place and what’s missing here is a set of values that we are intending but are not articulating, and we are doing things that are not aligned with those values.”
Chappell recruited one of his Harvard professors to facilitate a weekend workshop with his board of directors to develop a statement of beliefs for the company. The Tom’s of Maine board was a fairly-traditional group of corporate CEO’s and management consultants, but they embraced the process, which included discussions of the teachings of Kant, Jonathan Edwards and Samuel Coleridge. They emerged from the weekend with a list of ten standard beliefs, which was later refined with feedback from Chappell’s management team and an editing committee, and the resulting statement held all the way through to the time the company was sold to Colgate-Palmolive.
Looking back, Tom Chappell sees that as he recruited more “professional” managers, he also “imported a value system that was all about maximization and bottom line,” and his time at divinity school and weekend board retreat marked an important turning point. “It was the first time we had put in writing what people would have guessed were Kate’s and my values…and it was at that moment that I started to reclaim the business of growth, profit, and values.”
With this experience behind them, when the Chappells set out to create Ramblers Way, the first thing they did was put together their statement of beliefs. They review this document with all potential new hires and if they aren’t on board, they don’t get the job. Tom also made sure that his wool suppliers understood the kind of company they were getting involved with before he would take them on. “I put our statement of beliefs in a PowerPoint presentation and when I went out to talk to ranchers in Montana about wool, I put it on and said, ‘Here’s what we believe, here’s our destiny, here’s what we need.’ At first they just looked at me and were stunned, and then they said, ‘Yeah, we’re with you.’”
In the time since Tom and I spoke, the company has significantly expanded its product line and has opened four retail outlets in Maine and New Hampshire, with three more planned in Greenwich, Connecticut, New York City and Cambridge, Massachusetts. While it’s too early to say whether Ramblers Way will match the business success achieved by Tom’s of Maine, Tom and team haven careful steps to be sure they set out on a course with the entire company – management, employees and suppliers - aligned to a shared set of foundational values.
I remember when our two kids were little - about six and four years old - a pre-school teacher told my wife and me that our jobs as parents were essentially complete. She agreed with the theory that effective parenting is heavily front-loaded; that what you do in the first several years sets your children on their way and the die is cast. That seemed a little extreme at the time and with our two “kids” now in their twenties I like to think that I was helpful as a father for at least some of the ensuing years! But I do think there's some logic to the notion and that it also applies to creating (or parenting) a new enterprise. The foundational years are essential and the best time to establish values and live out what will become the creation stories as the business matures. Tom Chappell learned this later in the game at Tom's of Maine, but made sure to get things right from the starting blocks at Rambler's Way.