Corporations: Sweeping the World

In a hundred nations, the name Hoover suggests not J. Edgar or Herbert but a vacuum cleaner, and some people use it as a verb as well as a noun. Ohio’s 55-year-old Hoover Co., the world’s oldest and biggest vacuum-cleaner maker, nowadays is concerned with more than merely cleaning carpets. While vacuums will bring half of this year’s expected worldwide sales of $200 million (up 21% from last year), Hoover plants from Australia to Wales have also begun to turn out electric can openers, hair dryers, heaters, washing machines, floor polishers. Driving this diversification is President-Chairman Herbert William Hoover Jr., 45, who believes that calculated expansion will create profit almost automatically. “If we concentrate on growth,” he likes to say, “money will take care of itself.” So far this year, domestic earnings alone are running 5% ahead of last year’s $9 million.

Down with Committees. One of the last remaining U.S. businessmen to head a huge company that carries his family name, “H. W.” Hoover is unique and outspoken in many ways. He abhors management by committee; on his desk is a picture of a camel and the familiar gag caption that it is a horse designed by a committee. He insists that his executives stay out of the stock market (says Hoover: “If they’re absorbed in gaining wealth, they’re not giving their best thinking to the company”). He forbids corporate borrowing (“You get captured by financial obligations rather than enthusiasm to go ahead”). He doesn’t want to be bothered with financial details (“I don’t understand a profit-and-loss statement, and I don’t want to see one. I just want a simple bar chart. If it’s up, fine. If it’s down, somebody gets chewed”).

The Hoover Co. was founded by H. W. Hoover’s strong-minded grandfather, who ran a saddle and harness factory in North Canton, Ohio. Despite his comfortable position in saddlery, the elder Hoover foresaw the obsolescence of the horse collar, began experimenting first with horseless-carriage accessories, then with “electric suction sweepers.” Vacuum cleaners were by no means new; the first U.S. suction cleaner had been patented in 1869, and seven other models were on the market when the Hoover family began. But the Hoover Co. added an agitation bar to beat the dust out of rugs, leading to a famous old advertising slogan, “It beats as it sweeps as it cleans.” Grandfather also pioneered in advertising nationally, offering ten-day free trials and building a door-to-door sales force. That force eventually numbered 6,000 salesmen, who first tossed dirt and grass on the carpets of astonished housewives and then neatly vacuumed up.

Slip & Shake-Up. Hoover slumped after World War II. Door-to-door salesmanship had been set back by tighter licensing laws and the growth of apartments that forbade soliciting, and the company was unprepared for change. In 1946 young H. W. Hoover threatened to quit the company, stayed on only after his father surrendered control to him. He shook up the shop, brought in younger men, put new emphasis on overseas operations, lined up 30,000 dealers around the world. Under him sales have quadrupled. Hoover figures that 70% of U.S. housewives have about all the appliances they need. But he reads those simple bar charts of the coming of age of all the World War II babies, sees them about to marry and multiply, and to be in need of a little Hoover in their homes.