Born to Lead

CEOs Neil & Ron DeFeo taking charge. Setting course. Saving big business.



photograph by william taufic

in a world where kids ran around after school and wouldn’t come home till supper, there was always one “cool” house. The boys all knew about this house. Borderline schemes were always getting cooked up in the basement there and something insanely cool was always about to happen.

In Mount Vernon, New York, in the late ’50s, that raffish house of characters was without question the DeFeo home, where trumpets and trombones were always blaring. Trouble? The four DeFeo boys rigged a buzzer on the basement door to warn them about any approaching folks. The basement was where the boys built a 100,000-volt Tesla coil that, once fired up, would make every television set in the neighborhood go haywire. How could the other boys not want to spend every last minute of free time in such a place? “Our friends were constantly coming and going,” Ron DeFeo recalls.

 

And what happens to the sons who grow up in such a happy house? They just might become imbued with the feeling of being ringleaders. There is easy laughter in their presence, and fellows naturally look up to them for the next plan. If you want to become a titan of business, you could do worse than getting your start in a household like the DeFeos.

The four boys did grow to become heads of businesses. Three became important CEOs. Two were taken away from Earth way too abruptly.

Today, if you swing by the Wilton offices of the newly formed Sun Products Corporation, purveyor of such laundry brands as All, Wisk and Snuggle, and talk to the CEO, Neil DeFeo, you will instantly hear the same easy laughter and gregarious cheer of the boys in the basement. The same balmy memories are shared by his brother Ron, CEO of Terex Corporation, maker of heavy construction equipment, at its world headquarters just off Greens Farms Road. They will talk about Noah and Mary DeFeo, who were “a couple of saints,” to hear them tell it.

Noah had a great sense of humor but a stronger work ethic, and spent a hard-working life managing an A&P store. “My dad said, ‘You want to buy something, then go to work.’ ” From their mother came the attitude that “we could accomplish anything,” recalls Ron as he breaks into an affectionate laugh. “Mom said, ‘Nothing’s too good for you and that’s just what you’re going to get!’ ”

In other words, they had to earn it. Meanwhile, Mom had their backs. When her middle sons, the twins Neil and Phil, were in seventh grade, Mary met with their guidance counselor who said, “OK, Mrs. DeFeo, your boys are doing fine, but, of course, you’re Italian, so they’ll be going into the vocational program.” Mary DeFeo told the counselor in no uncertain terms that her boys were taking the college-prep path. Neil also remembers when an English teacher gave him an A on a paper but took the trouble to add that it was the first time he had ever given one to an Italian.

Neil says he never internalized such slights. “It just struck me as odd that people would think that way. We were brought up to believe that we could do anything.”

“My mom and day had no concept of what a CEO was,” adds Ron, the youngest brother. “What was important to them was to be happy and to be self-sufficient.”

Neil says, “I started at ten as a newspaper delivery boy. But I had two routes, not one. Even then, I was always go-go, do-it-all.” Later, he cleaned houses, unloaded trucks, waited tables and worked part-time at the A&P starting at age sixteen and continuing through college.

His father, with his love of jazz, got the boys going on instruments, and the house was usually swaying with big-band tunes and Dixieland. The oldest boy, Noah, Jr., had the most talent, but Neil made the most money, hauling his trombone to weddings and parties. One jazz gig during his college days led to his first visit to a country club. “I couldn’t believe that anyone lived like that. There were tables overflowing with food.” Even more impressive was a fountain centerpiece overflowing with Manhattan cocktails. “I got a water glass and helped myself,” he says with a laugh.

It was his first taste of that lifestyle, and he knew it wouldn’t be his last, even if he had to work harder than anybody else in that room to get there.

Neil worked his way through Manhattan College playing trombone with his band, Your Father’s Mustache. He also was in the Ed Sullivan Show warm-up band from 1965 to 1967. He was so good that after graduation he had two job offers: (1) play horn in Jackie Gleason’s orchestra; (2) take a job with Procter & Gamble. Given that life in Gleason universe was probably a nonstop banquet of champagne and showgirls, it says something for the man that he chose the soap racket.

“I just felt like I had a better future in business,” says Neil. Eventually his brothers Phil and Ron would join him there, too. Neil would spend twenty-five years at P&G, rising to become the company’s managing director for worldwide strategic planning.

The spark The parents create the foundation, but sometimes the jolting spark to a new horizon can come from an enterprising child who influences the rest. In the DeFeos, that dynamic force was the oldest brother, Noah, Jr.

“He had grand dreams and visions,” remembers Ron. “He was determined that he was going to live his life his way. He paved the way. He was probably the most capable of all of us.”

Noah, Jr., was the first DeFeo brother to show entrepreneurial spirit. After graduating from Iona College (which Phil and Ron also attended), he opened a pet shop in Greenwich. “He realized there were tremendous profit margins in the pet business,” Neil says. “You buy a puppy for $30, and sell it for $300. He wanted to build a chain.” Envisioning a chain of stores similar to PetSmart, he got a second store going in Ossining, with his brothers Phil and Ron helping out, and Neil supporting it. They were all just in their early twenties. Ron cleaned the occasional cage but was still a teenager.

The dream, alas, didn’t come true. “He was running late for a train,” Ron recalls. “It was pulling out of the station. He tried to grab the handle and missed.” He fell under a commuter train and was killed.

“When Noah died, it was like a gong going off, reminding me that life is short,” Neil says. “So, if you’ve got something good to say, say it. If you’ve got something good to do, do it. You may not get the chance again.”

Phil, disheartened, abandoned the shops. Phil had always had a special tightness with his identical twin, Neil, and so joined him
at P&G. Ron, the baby of the family, had always had a special relationship with Noah, Jr. (“He was my buddy”) and pulled himself together and eventually headed for the larger corporate world at P&G.

Be a first-hander “Ayn Rand was right. You can either be a first-hander or a second-hander,” Neil says, referring to The Fountainhead, Rand’s romantic paean to rugged individualists. “It’s about getting involved in the fray, and being bloodied by it, but in the process realizing what life is all about,” he says. “Or you can stand back and watch and be a second-hander.” Not surprisingly, Ron and Neil both identify themselves as first-handers.

After ten years of working for other people at Procter & Gamble, Ron was ready to leave. “There could only be one CEO at P&G and Neil was ahead of me,” he says. “I needed to spread my wings. I wanted a place where I could make my own difference. That’s so important to CEOs. They have self-confidence.”

Neil had spent twenty-five years at the company himself, and he also needed to make a stronger mark. “Eventually, you realize that your own happiness is about making that change. It’s not just about collecting a bigger paycheck; it’s about the point in your life when you no longer want to work for someone else. You know what you want to do and you don’t want to be second-guessed by anybody,” he says.

Not every career turn was enchanted. “I have failed at lots of things over the years,” Neil says, a laugh erupting. That includes a rocky tenure as the head of U.S. operations for Clorox, his first job after leaving P&G in 1993. “Clorox fired me because I wasn’t politically sensitive. I wasn’t sensitive to the employees. I wanted to make changes faster than the organization could digest them. I didn’t understand the relationships that were there already. I didn’t understand the history of the organization. When you enter a successful organization like Clorox, you make a mistake if you fail to honor the employees’ success. You have to recognize that they have been successful before you can move on.”

The big lesson? “When you enter a new organization,” Neil maintains, “it’s more important to listen than to talk. You listen until people know you have heard them. There are consequences for moving too fast and for moving too slowly. This is directly related to how sick the organization is. The sicker the organization, the quicker you can move, because the people already see the obvious need for it.”

He put that wisdom to work in 2004 when he took over as CEO of Playtex (now a division of Energizer). At the time, the Westport corporation was close to bankruptcy. The company had tried to sell itself at $6 per share but hadn’t closed the deal. Three years after Neil took over, it sold for $18.30 per share. To commemorate the victory, Neil commissioned a Steuben crystal sculpture and gave copies to his fellow executives as gifts. It depicts King Arthur’s mythical sword, Excalibur, in the stone and bears the words, “We pulled it out.”

“When I started at Playtex, the company had been for sale for a couple of years. There was no energy in the organization. We injected energy into it and made it something someone wanted to buy. We defined what winning would be for us— we set a specific objective—and we accomplished it. We won.”

Face reality Ron also knows what it means to try to fix a broken company. He thinks back to his first day with Terex in 1992. “They asked if I wanted the good news or the bad news. The good news was, ‘You’re here.’ The bad news was, ‘If you don’t do X, Y and Z, we’re going to file for bankruptcy.’ ” Ron was the first DeFeo to become a CEO, but the company’s situation was so bad, “the rest of my family thought I was nuts to take the job. Our stock was selling on a four-letter word: H-O-P-E.”

Terex’s culture was very traditional at that time. “People thought things had to be done a certain way,” explains Ron, who moved quickly to shake things up. “At first, our goal was pure survival. We had to make sure we had enough cash to meet the company’s obligations. We got out of certain product lines that weren’t profitable and concentrated on businesses that could be profitable. We closed offices and consolidated locations. It was tough. But we found a way to work our way out of it. I used to say, the Grim Reaper was in my office. Then he moved down the hall. Eventually, he moved out of the building.”

Within a few years, Ron had streamlined the company from a profitless operation with $800 million in revenues to a smaller, more successful $300 million corporation with 2,000 employees. “Business isn’t about good news. It’s about bad news and figuring out what to do with that bad news.” Ron is facing a whole new set of challenges now in the current economic conditions. He points out that Terex made about $70 million in net profits in 2008, but that was after taking away about $290 million in a goodwill write-down. Still, he had to pilot the company through the inevitable cutbacks of 2009. A year ago, he was forced into laying off thousands of people, shutting factories, and freezing the salaries of the top 1,000 employees. “I refused the $1.2 million bonus that our compensation committee wanted to award me.”

A lot of Ron’s energy this year has been focused on finding ways to turn this crisis around—not just for Terex but for the whole country. In March Ron cohosted a conference on infrastructure in Washington along with former congressman Chris Shays. “It’s time for some major vision and will,” he says, adding that building a solid infrastructure should be President Obama’s top priority. “I’m all for education and health care and energy,” Ron says. “But in order to fund those programs, we need to do the things that fund economic prosperity. Our society needs the ability to move goods and services around efficiently.”

He has proposed specific infrastructure projects for the government to tackle. He would like to see a high-speed train running the sixty-four miles from midtown Manhattan to Stewart Airport in Newburgh, New York, as a way to relieve the congestion at New York’s other airports. He also proposes a high-speed freight corridor connecting the ports of Long Beach, California, and Wilmington, North Carolina, arguing that it would make the Panama Canal obsolete. “People laugh at ideas like this,” Ron says. “But people laughed when they heard about the Erie Canal too. We need people to laugh at ideas again, because that means we’re pushing the envelope.”

Neil takes similar view, believing that the health-care drive and the new environmental actions are just “populist” ideals. He thinks the stimulus billions should be plowed into projects that will kick off construction jobs.

Ron echoes this: “In my view, Roosevelt built dams, Eisenhower built roads and our generation is fixing potholes.” Like every other hard-goods manufacturer in the U.S., Ron has to face the looming specter of what he calls “China, Inc.” He wants to sell his gigantic earthmovers and cranes in China, but faces restrictions. Still, Ron goes there often and sits on the advisory board at Peking University. “China has a stimulus program that’s working, and it will eventually end in democratization. We are so democratic here, nothing gets done.”

Do what’s right The winter holidays are tough now. In November 2007, at sixty-one, Phil collapsed in a New York hotel. Neil’s voice deepens and slows as he talks about it, but he does want to relate the importance of the man who passed away. Being identical all through life, they’d pulled hundreds of pranks on people and shared a million laughs. “When you’re an identical twin you just don’t have to say things—because they’re understood. Communication is so powerful that the meaning of things never has to be stated, it’s just known.

“Phil died of natural causes, a heart condition. It’s a terrible thing because, you have to understand, the definition of an identical twin is that you were once the same person. Because it’s a monozygote, and then the cell splits. It’s genetically the same. The connection throughout life is like none other. Talking to my brother was like looking in the mirror. And the family values would always come out. Phil would always say, ‘Do what’s right. People matter. Enjoy life.’ He was a wonderful guy.

“He ran the Pacific Stock Exchange and was very successful, but he knew the name of every parking lot attendant. He’d talk to them, treat them as equals. And we all believe in that. Success is transitory. But people are the elixir of life.

“He was a real fun-loving, sweet guy, and a great musician, but he was never that focused on education. My mother had to drag him in to register for college,” Neil says. It was only after his brother Noah’s death that Phil became serious about work. He spent several years working as the operations manager of a manufacturing plant with his brothers at P&G, then moved into the financial industry, working at Bankers Trust and Fidelity as the head of operations. He was senior VP for the “back room,” which is where the actual shares being traded get processed. All this led Phil to his position as president and CEO of the Pacific Exchange, a regional stock exchange in San Francisco that is now part of the New York Stock Exchange.

Just a few months before Phil died, Neil hired a yacht for a two-week Mediterranean cruise with his brothers and their families. He made sure to have an electric piano on board. “When you come with my family,” Ron says, “you come with music.” Neil keeps a black-and-white photograph from that vacation on his piano at home. It shows his twin on the keyboard and himself on the trombone. They’re in full musical flight, with a beautiful vista of ocean and the coast of Corsica behind them. He says, “It was unbelievably cool.

“Life is an unpredictable journey. You have no control over when you enter it or when you leave it. But you have control over what you do while you’re here. Having fun is the joy of life, and a positive attitude is contagious.” Mary and Noah are long gone now, but the DeFeos all know where everyone is. Phil’s widow, Ann, and daughters Kim and Sarah join the other DeFeos for the family dinner at Neil’s home in Westport. Neil and Sandy DeFeo’s oldest daughters, Julia and Lauren, work in business, and their youngest daughter Elizabeth is studying marketing and Spanish; Ron and his wife, Andrea, also live in Westport, and their sons Alex, a financial analyst, and Eric, who is studying chemical engineering, are home often.

Both Neil and Ron are committed to local and global nonprofits. Neil sits on the board at Manhattan College and works with several organizations, including the International Crisis Group, which strives for peace in Darfur and other global hot spots. His wife, Sandy, is well known around town for her work with the nonprofits Near and Far Aid, the Discovery Museum, Family Services of Woodfield, and the Westport Country Playhouse, where she is president of the Board of Trustees. Ron works with Bridgeport Hospital and sits on the board of Iona College. In 2004 he endowed the school with its largest scholarship fund ever, in the name of Noah, Jr., the brother who didn’t get a chance to reach his potential.

“It’s the footsteps that we leave in the sand that matter,” Neil says, “not the having and getting, but the doing and giving.”

The dinner will be long and lovely, the piano will be ringing out and songs will be sung. The kids will look around and see what it takes to be a ringleader, and how to gather the troops, and how to find an encouraging bit of cheer. This evening’s meal is about being together as a family. “Too much to eat,” Ron sighs, “too much to drink…a few cigars out on the porch.” A deep bite out of life.

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