Synanon Industries

Ted Dibble Remembers

In the early months of 1965, no one oversees three ragtag sales teams — one in San Diego, one in Santa Monica, and one in San Francisco. {Each team is a “carload” of five reps.} Three groggy, overworked office workers in Santa Monica cope with incoming orders.

I’m 29 years old and clean about two and a half years. With instructions to “put it together and build it up”, Dederich gives me the job as General Manager of Synanon Industries.

I dig up a decomposed metal desk, a flickering lamp, and a creaky swivel chair and plop them down amid 35 other desks in the general office in Santa Monica.

A business illiterate, I don’t know an invoice from a purchase order or the difference between “shipped” and “delivered”. But I DO know the culture of Synanon. And I feel an innate gift for politics. Instinctively, I seem to grasp when to speak up and when to shut up, when to kiss ass and when to kick ass.

Bagging more sales reps is Job 1. I spring into this task by scanning “pop sheets” (personnel rosters). I now have a list of names.

At the next Board of Directors meeting, I pitch my plan and pass out my list. As Dederich nods his head, the directors snap to attention and salute.

Naturally, I don’t get everyone on the list; but I get most of them. Each territory now has fifteen sales reps, instead of five and three cars instead of one. In total, we expand from fifteen to forty-five.

Located a few desks across from me is a bright and educated Frank Adams who works in Synanon’s Accounting department. In the course of one of our talks, Frank roughs out various ways of keeping score of booked orders.

Dollar volume provides only a partial picture. For example, as San Francisco might have more reps than San Diego, we need an even-handed way of measuring one team’s results against another’s.

The answer is apparent and simple. Everything is averaged. For instance, we calculate the” Average amount per salesman day” for each rep. The average amount per sales man day for each territory. We now have an equitable way of comparing one rep against another and one territory against another — and a report that’s hard to quibble with.

Mimeographed sales reports are sent to Chuck, all directors, sales managers, and every Synanon big shot we can think of.

Among the directors, competition for Dederich’s favor is ferocious. For example, Jack Hurst, the Director of Santa Monica, MUST look better than Dan Garrett, the Director of San Francisco. So these reports are just one more way to win Chuck’s approval. Thus, a director must be sure that his sales team not only has first-rate people and newer model cars but that top producing sales reps get recognition and good housing. A director is obsessed with one thought: “Who’s up? Who’s down?” — “Who’s in? Who’s out?”

So two simple moves invigorate the embryo: [1] expanding the sales force. [2] circulating the reports.

Knowing that addicts thrive on digression, I fire up out-of-town sales trips. (As Synanon squeezed the eagle out of every buck, approval for the first trip exhausted all my lobbying energy).

“Operation Northwest Territory” dispatches a van of six, bug-eyed reps to Portland. Their average amount per salesman day triple. Similar results come out of trips to Seattle, Phoenix, and Chicago.

At the same time we juice up sales—the “front wheel of the bicycle”— we make certain that the office—the “back wheel” —is properly staffed.

Booked orders must be credit checked, purchase orders typed and imprint proofed. A supplier invoice should match a purchase order. Our customer should receive an accurate invoice.

To pay our bills, daily attention is paid to our bank balance. I personally review our accounts receivable aging (the amount of money owed us and how long it is overdue). To see that every “slow pay” customer is hunted down, I breathe down the necks of our collectors.

The people to do all this are addicts like me, with no business experience and static in their heads. We suffer heart-stopping imprint mistakes. A Rohr Aircraft order of 10,000 pencils ships with the wrong phone number! Credit is casually okayed for barber shops and service stations without listed telephone numbers!

Amid hair curlers and lipstick tubes, I uncover orders crumpled and stuffed in desk drawers. This horror results in large, marked wire baskets,—“to be credit checked”, “to be typed” “to be proofread” and so on. I lay down a no-exceptions rule: “Other than personal items, nothing in desk drawers.

In time, these calamities let up and the office begins to run smoothly——smoothly enough to handle the cascade of orders coming in from the expanded sales force.

Synanon Industries is a going concern.

The Genesis of Synanon Industries

Milt and Ida Cooper are successful business partners and generous donors to the Synanon House in San Diego. Initially, they conceive of Synanon Industries as job training for unskilled addicts.

Wisely sizing up the people they had to work with, the Coopers kick off with simple products and price sheets.

Ida Cooper teaches me business basics. She also tutors all fifteen people in the office—and would not let up until she was sure that her student got it. Tenacious is too weak a word to describe her style.

Ida creates the first Synanon Industries logo and conceives, writes, and designs every printed form and promotional piece. She puts in place banking, credit, and collections, order processing, proofreading, invoicing, accounts receivable and payable, filing, record keeping, reporting, and accounting. There would have been no “back wheel” (and therefore no business) if not for Ida.

Milt teaches me the care and feeding of suppliers, product selection, and pricing. For example, with no pocket calculators at the time, Milt gives me a “pricing book”. Each page has a net cost running vertically down one column and horizontal rows showing a selling price for a specific mark-up percent. As we quote on a large order or introduce a new product into the line, this simple tool proves invaluable,

“You don’t have to know very much. If you have a business question, there is somebody who knows about it or a book or article written about it.” This one tip from Milt stays with me my entire working life. 22 years later, Anna and I want to start our own business. I don’t know very much, but I DO know somebody who does. I call Ida Cooper——but I’ll save that story for another letter.

Epilogue

In that one year——in 1966 dollars——Synanon Industries went from forty thousand to a million dollars in sales. Due to hundreds of uncelebrated heroes, sales grew year by year and twenty years later, they climbed to thirty million.

In 1967, after two and a half years as General Manager, I’m promoted to be the Director of San Diego. John Peterson, a sales manager, gets my former job. I’m dumbfounded to learn that Chuck did not call——even as a courtesy——either Milt or Ida about the change.

This callous and heartless treatment of Milt and Ida should have been foreboding to me. Sadly, I don’t know how I excused it, but I did. As time went by, this dark side of Dederich took over completely. Years later, absolutely corrupted by absolute power, Chuck made a series of decisions that eventually destroyed Synanon.