From Apartheid to Fortune 500: The Rules of a Business Leader’s Success

(SeaPRwire) –   Stanley Bergman’s upbringing in South Africa was marked by contradictions. Born in Port Elizabeth to Jewish parents who had escaped Nazi Germany in 1936, he was raised in a home that denounced racism. However, he attended a segregated school due to apartheid. He returned to the working-class suburb of South End, which he described as a “totally functional multicultural environment,” until 1963 when the government designated it a “whites-only” area, forcibly relocating residents based on race and eventually demolishing the neighborhood. Shortly after earning his accounting degree, Bergman and his wife Marion, a physician who had worked in the Black township of Soweto, relocated to London and then to New York a year later.

He was 26 years old. He carried with him a leadership philosophy that would define his career and his 36-year tenure as CEO of Henry Schein, which concluded earlier this month. (Fred Lowery assumed the CEO role on March 2, with Bergman remaining as chairman.) Bergman transformed the company from a regional dental supplier with $225 million in revenue into a global distributor of dental and medical supplies generating $13.2 billion annually, ranking 333rd on the Fortune 500 list. He attributes this growth not only to acquisitions and innovation but also to a commitment to social impact and philanthropy.

What initially attracted him to the Long Island-based company as CFO in 1980 was observing the founders’ treatment of their employees.

“They believed in aligning business with social values,” he stated regarding the Schein family, who established the business in 1932. “It began with Henry. He went to Florida and brought back Smuckers jelly for everyone in the company, which had about 150 employees. At Christmas, everyone received a case of wine, and at Thanksgiving, a turkey. His wife Esther managed the finances. They worked alongside their employees and were very active in philanthropy.”

Jay Schein, Henry’s son, who took over as CEO in 1980, expanded upon this ethos in ways that were both visible and sometimes costly. During the escalating HIV/AIDS crisis in the 1980s, Jay directed the company to publish an infection control handbook for dentists. At the 1986 American Dental Association convention, their message was “Sterilize as if your life depends on it,” which led to their expulsion from the event. “They accused us of sensationalism,” Bergman recalled. A few years later, dentist David Acer was accused of infecting several patients by neglecting safety protocols as he battled AIDS. Henry Schein had been correct, and sales subsequently increased.

Henry Schein joined the Fortune 500 in 2004, debuting at number 487. The company has been recognized on Fortune’s World’s Most Admired Companies list for 21 consecutive years. As Bergman transitions from his CEO role, he shared some of his key lessons:

Prioritize character over credentials. As a new CEO, Bergman received advice from a mentor at Abbott when assembling his team. “He asked, ‘Who’s your best people person?’ I replied, ‘Jimmy the accountant, but he knows nothing about the dental business.’ His response was, ‘He’ll learn. He’ll build a team,’” Bergman recounted. His deal lawyer became head of strategy, and a warehouse manager was appointed head of HR. Bergman hired based on values and soft skills, confident that they could acquire industry knowledge on the job. “It’s all about teamwork.” In periods of rapid change, specialized knowledge can become obsolete, unlike character and the capacity to learn.

Diversify and delegate. “I always surrounded myself with people who held different viewpoints. Our CFO is the most conservative individual, while our head of strategy is the most liberal. The success of Henry Schein stemmed from enabling these opposing sides to collaborate,” he explained. “The most crucial aspect is fostering teamwork. I never intervened to break a deadlock. I would encourage individuals to communicate with each other, resolve the issue, and present me with a plan, stating that they never needed my approval. If both parties agreed, they could proceed.”

Invest in successful ventures and form partnerships for growth. In addition to decentralizing distribution centers, Bergman recognized the necessity of global expansion for growth. He began by simplifying the company’s offerings: “There were approximately 900 dental software systems available, so we decided to select one and establish it as the leader.” He then expanded through joint ventures, completing dozens of deals with individuals who possessed local market expertise. “We acquired expertise through joint ventures, retained those entrepreneurs, and then built platforms around their businesses.”

Define your business by your customers. “The only path to success in this environment is not through price, but through value: How can you assist a practitioner in delivering superior oral care while simultaneously helping them run a more efficient practice?” Bergman stated. The types of products they manufacture and services they offer, along with their delivery methods, will evolve as customer needs change. “Henry Schein will not be in the same business we are today.”

Contribute to society. “We have five key stakeholders: our suppliers, our customers, our team, our investors, and our commitment to society. If you can bring all five together—which is not always easy to achieve alignment—I believe it’s a formula for success,” he said. The commitment to society is vital for serving the other four. An example is Henry Schein’s ‘Give Kids a Smile’ initiative with the ADA Foundation, launched in 2003, which mobilizes 6,500 dentists and 30,000 volunteers to provide free oral health screenings to over 300,000 children annually.

Henry Schein’s sales team organizes the events, engages with dentists, visits dental schools, and cultivates relationships. They collaborate with more than 100 NGO partners globally on issues of access, policy, innovation, sustainability, and empowering Henry Schein’s over 25,000 employees. This effort helps answer a question Bergman poses to his leaders for their teams: “Can they fulfill their professional aspirations in an environment where they feel they are contributing to society?”

Ensure a smooth transition. Approximately 18 months before announcing his retirement, Bergman decided to halt further expansion and concentrate on integrating existing operations. “We could have continued to develop new areas,” he said. “At one point, I decided it was time to stop adding new initiatives and focus on consolidating what we had.” He wanted his successor to have the autonomy to implement their vision within a smoothly operating business, rather than having to integrate acquisitions they might not favor or complete projects they hadn’t initiated. Bergman also understood the importance of not personally selecting his successor. “The board conducted an independent selection process, and we were very fortunate to find Fred, whom I consider a rare find,” he remarked, referring to Lowery’s experience overseeing Thermo Fisher Scientific’s substantial healthcare distribution business. “We are both in the ice cream business, just with different flavors.”

Judging by Lowery’s own family foundation and his public statements over the years, he likely shares a similar leadership philosophy. As Lowery stated in a 2020 commencement address at his alma mater, Tennessee Tech University: “Whoever helps the most people wins.”