M as in Money

PHARMACEUTICALS

"We do not choose to be a common company," says Ewing Marion Kauffman, 51, founder, president and principal stockholder of Kansas City-based Marion Laboratories, Inc. "It is our right to be uncommon if we can." Uncommon is hardly the word for Kauffman's pharmaceutical firm, which was founded on poker winnings, grew by selling ground oyster shells, and has made wealthy people out of typists and maintenance men who bought stock for around 66¢ a share when the company was young. They have since seen their shares increase to $64.50.

Kauffman's oyster shells, compounded into a product called Os-Cal and recommended for pregnant women with circulatory problems, have been joined by 20 other ethical drugs. For the 15-year-old company, sales last year came to $10,400,000 and Marion Laboratories was the 41st largest among some 900 U.S. drug companies. What really pleases Kauffman, however, is that his company ranked first in terms of its increase in sales and earnings and its return (44.2%) on stockholder's equity. Beyond that, Marion's net profit of 18.1% was nearly double the average for the industry.

"I Know I'm Good." Few men can match Kauffman's confidence as a salesman. Says he: "I'm good and I know I'm good." Son of an unsuccessful Missouri farmer who later did poorly selling insurance, Kauffman was a youthful moneymaker while selling fish and eggs door to door. He increased his income by such exploits as a Ping-Pong game in which he spotted an opponent 19 points but won the game—and the other boy's automobile. After four years of Navy service in World War II, in the course of which he won $78,000 playing poker, Kauffman went back to Kansas City and began selling drugs. When his commissions and territory were cut back because he was outearning the president of the company for which he worked, Kauffman rebelled. "I was so disgusted," he recalls, "that I quit. But I knew I could sell drugs."

With the last $4,300 of his Navy winnings, Kauffman founded his own company, sold vitamin tablets and liver shots from the basement of his home. As sales increased, Kauffman also sold seven friends on investing in his struggling firm; each $1,000 of their original investment today is worth $1,250,000.

A Few Incentives. "Nobody works for Marion who isn't productive," says Kauffman. His salesmen, young and mostly recruited from small colleges, are expected to see 20% more doctors and pharmacists a week than competing salesmen and to increase their sales consistently. Those who pass these tests are rewarded with air-conditioned cars, color television sets, shotguns and longer vacations. Ultimately, the most productive salesmen are admitted to membership in the "M Club." They get an Oldsmobile instead of a Chevrolet or Ford as a company car, take double vacations and stay in hotel suites instead of rooms.