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When asked about Sea Smoke Cellars’ outstanding performance both as a wine and a business, Bob Davids said, “If the environment is right, then we do the product right and we make a ton of money and have a blast. You can’t force making money and having a blast.” He added, “In this culture, there is zero tension. And there is absolute trust. Katie trusts Kris to make the wine. I trust Don to handle the barrels. Kris trusts Katie to do all the right selling and make all the right decisions. Everybody trusts everybody to do their job.”18 Remembering the episode with Katie and the used barrels, we noted with satisfaction Bob’s trust of the new assistant winemaker—Don—to handle the barrels, which is one and the same with trust in Don’s ownership of the company’s world-class-wine vision. The winemaker, Kris Curran, also connected freedom to world-class performance: “We could have the best fruit in the world. But if you’re working in miserable conditions, you’re not going to make great wine. It’s culture, it’s conditions, it’s being able to make certain decisions on your own and have that freedom in order to express your art, your craft, and your passion.”19 Perhaps it’s the first time in wine history that freedom has been linked so directly to wine greatness. But then, it’s the first time in history that a winery—which made the best new wine in the United States in 2006, according to Food & Wine—made Wine Spectator’s list of the hundred best wines in the world in its first year of its existence and then for four years straight—including in 2003, when Victor decided to drop $1.8 million worth of grapes. That vintage, in fact, came out particularly well—Wine Spectator ranked it number fifty in the world, Sea Smoke’s best-rated vintage. So far.

Unlike many of their counterparts in traditional companies, the liberating leaders don’t believe that world-class performance can be forced. It results from the right environment—a free one. But the first years of building a free environment are not easy. Not all leaders who launch a liberation campaign succeed. How the successful ones accomplish it, and—because they can’t do it alone—how they convince others to join the liberation campaign, is recounted in the next chapter.

6

WHAT’S YOUR (PEOPLE’S) PROBLEM?

Building an Environment That

Treats People As Equals

All human beings are born free and equal in dignity and rights. They are endowed with reason and conscience and should act towards one another in a spirit of brotherhood.

—ARTICLE 1 OF THE UNIVERSAL DECLARATION OF HUMAN RIGHTS, UNITED NATIONS, 1948

TODAY, TELLURIDE, COLORADO, is a picturesque mountain resort, but in the early 1900s it was a gritty mining town, wracked by the labor strife that was all too common at the time. A plaque on the main street attests to this violent past, describing a deadly clash between striking miners and strikebreakers.

Such times are a distant memory in the modern Telluride in which Rich Teerlink, the retired CEO of Harley-Davidson, makes his home several months a year. But the lesson, for him, is fresh. “Look,” he said, as we drove through town, “when management treats people like dirt, they sometimes go to extremes.”1

Teerlink knows something about management-labor relations. When he joined Harley-Davidson in 1981, it was floundering, bleeding market share and on the verge of bankruptcy. By the time he stepped aside in 1999, it was back on top, earning more in profits than it had total revenue when he came on board. Its market capitalization surpassed that of GM, even before the car maker’s twenty-first-century woes. Like GM, Harley’s workforce was organized. But unlike those mine owners and workers a century ago, Teerlink and his workforce found a way to turn the motorcycle maker around together. This fact goes a long way toward explaining Teerlink’s surprising sympathy with the miners commemorated on that Telluride plaque. He knows from personal experience that when labor-management relations go sour, management often deserves at least a share of the blame. He also knows