The Graveyard Whistlers

Maritz Inc., the St. Louis giant nobody knows, the company that created the gold retirement watch and other corporate incentives, faces the future with a frozen smile

The tiny Maritz jewelry company went bankrupt during the Depression. Then it got religion. Three decades later, it was building a city on a hill.

Set high on the Fenton bluffs, the corporate headquarters of Maritz Inc. would eventually straddle I-44. Its bland concrete-striped buildings throbbed with the combined energy of Dale Carnegie, B.F. Skinner and Disney as giants of the automotive, banking and telecom industries eagerly poured millions into the religion of noncash incentives.

America's workers might beg for raises and bonuses, but Maritz knew that what they really wanted were "trophies": rewards they could brag about, exotic trips to remind them of their status and achievements.

Rick Sealock
Rick Sealock

The epiphany came when two Maritz brothers started selling their dad's gold watches as service awards and the gold company watch became a national icon. By the '50s, the company watch was one page in a thick catalog of what later employees would dub "trash and trinkets."

Maritz's warehouse looked like Santa's, chock-full of fancy TVs, Coach bags and sports gear selected to remind recipients of their status and accomplishments. Clean-cut, smiling acolytes learned to design communications that "sizzled," incentive plans that instantly motivated the desired behavior.

The word spread across five continents. Soon Maritz was the 157th largest private company on Forbes' list, with offices and partners throughout Europe and in Latin America, Australia and Asia. Clients' names were never revealed, although local buzz linked Maritz with Edward Jones, A.G. Edwards, Anheuser-Busch, Southwestern Bell, the St. Louis Post-Dispatch and, for a time, Monsanto.

Maritz's secret formulas stayed in Fenton, where the alchemists often worked past midnight perfecting the dogma of enthusiasm. Stuff was a powerful symbol for them, a potion capable of focusing confused workers' minds, steeling their resolve, affirming their place in the world and their ultimate value to the company. Stuff glorified the work, and it transformed surly distributors and sales reps into happy team players.

The corporation also practiced what it preached. Maritz managers gave out merchandise-award points like Halloween candy, and there were parties and picnics and bouts of overtime as convivial as college cramming sessions. When spouses suspected an affair -- what boss called at 1 a.m. to go over sales strategies? -- employees earnestly explained their mission.

Then the world changed.

The days of corporate luxe are drawing to a close, and managers are tightening their budgets. Auto manufacturers negotiate incentive plans the way they buy sheet metal. Wal-Mart and Sam's Club have glutted the market with merchandise that was supposed to be special. The Internet spews data, making Maritz's customized research, on-site travel agents and trademarked polls -- "In a landmark international survey by Maritz AmeriPoll, researchers found that 52 percent of Europeans have consumed at least one beer in the past month" -- look silly.

Since 1998, Maritz's core business -- secret incentive packages custom-designed to fire up workers, sales reps and distributors at 29 of the world's 50 largest corporations -- has been losing serious money. So have their smaller competitors; in recessions, incentives look like luxuries. Maritz is better positioned than most because it offers so many other services and its travel business is so lucrative. But long before the terror of Sept. 11, companies were substituting peanut butter for lobster and switching their VIP junkets from Borneo or Milan to Las Vegas or Miami.

Even Maritz loyalists are getting nervous.

They eat lunch in the company cafeteria, looking through a wall of windows at a gray windswept terrace that overlooks a ravine. No one brings up the days when the cafeteria was subsidized by Maritz -- $2 for a steak lunch -- and the company picnic lasted all day and night, bubbling with Dionysian excess. Instead, they say how easy it is to find a parking space since the 5 percent layoffs last spring. Twining damp fingers, they note how peaceful the old campus is now that Maritz is buying all these new companies elsewhere. They talk in a rush about the corporation's brave new high-tech future.

They don't mention studies showing that external rewards can lessen creativity. Or management theories that look at the whole person, addressing individual needs far too varied and subtle to be met in a merchandise catalog. Or the movement to engage workers in the work itself, allowing them to help shape the corporation's future. The hottest new workers, the information-technology specialists, couldn't care less about European juicers or trips to Cancun. They want autonomy, flexibility, resources, full information and a share in decision-making.

Maritz is desperate for such workers. Since the Y2K scare, it's been pouring money into disaster-proof state-of-the-art information systems, hiring programmers and Web-site designers and even "ethical hackers" to test the systems.

But bringing tech experts into a place as company-identified as Maritz is like introducing Trappist monks at a Baptist social. Their worldview doesn't match the Maritz ethos, and neither do their values. The chief information officer says what "incents" them is different. But the rest of the corporation hasn't seemed to notice.

Maritz already has 870 info-tech specialists on its full-time staff, with a bounty out for more. Yet the influx hasn't changed the old goodies-for-behavior philosophy one bit.

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