"Big Bertha and Me"

After mastering the textile and fine wine industries, Ely Callaway '40C has become the driving force in golf

By John D. Thomas

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It was the shot heard 'round the golf world. In 1990, Callaway Golf developed a revolutionary new driver with an enhanced sweet spot that allowed duffers to step up to the tee and whack the dimpled pill with an authority and control they never had before. Tradition in the golf business dictated that new clubs be named after weapons, and according to the company's founder, Ely Callaway, "Instead of just calling it `The Cannon,' I remembered from my reference books on World War I artillery this giant cannon on a railroad car called Big Bertha. And I said, We're going to call it Big Bertha."

For various reasons, many people, including investors, were less than enthused with his choice of moniker. No one, however, had a problem with the explosive impact Big Bertha had on the golf club market. In 1991, the year the driver was introduced, Callaway Golf sales neared $55 million, more than double the previous year. According to a 1994 article in Town and Country, "The Big Bertha driver did for golf what the oversize racket had done for tennis." Today, Callaway Golf is the world's largest golf club manufacturer, with net sales of approximately $650 million, and the new and improved Great Big Bertha is the most used driver on the five major professional golf tours.

The seventy-seven-year-old Callaway, who earned his bachelor's degree in history from Emory in 1940 and was awarded an Emory Medal in 1990 and an honorary doctor of humane letters degree in 1996, says the secret to his success lies in a rather simple formula. The way to win in business, he advises, is to create a product that is "demonstrably superior and pleasingly different from the competition in some significant ways." Using that rule as his guide, Callaway was able to rise to the highest levels of the textile industry and conquer the fine wine market before taking up the golf business. "Most people would settle for any one of Callaway's careers," wrote Entrepreneur magazine in a 1994 profile.

"Ely Callaway has without rival attacked a highly fragmented industry, the golf club industry, and brought not only organization, creativity, and imagination but also has set the standards for excellence," says Jeffrey Sonnenfeld, director of the Center for Leadership and Career Studies in the Goizueta Business School. "Callaway furthermore has shown the ability for triumph and quality contributions in a wide array of venues that follow his interests across industries and across communities. He serves as a model of responsible corporate citizenship." And according to a 1994 profile in Golf Digest, "In his sixty-plus years in business, Callaway's reputation for honesty, ethics, and generosity is unblemished."

Callaway first put his theory of business to work when he was only ten years old growing up in LaGrange. Using money he earned selling and delivering The Literary Digest, he leased an acre of land and hired someone to plant J.H. Hale peach trees on it. Callaway ended up making nearly seven hundred dollars on the venture. "My father thought they were probably the easiest to raise successfully and also very palatable versus any other peaches," explains Callaway in a deep, mannered, Southern tone from his office in Carlsbad, California, just north of San Diego. Large photographs of Presidents Bush, Ford, and Clinton playing with Callaway Golf clubs hang on a wall in his office.

Around that time in LaGrange, Callaway also took up golf. One inspiration was his mother's cousin, links legend and 1929 Emory law school graduate Bobby Jones, with whom he would become close friends. Callaway would develop into an excellent golfer, winning LaGrange's Highland Country Club championship from 1936 to 1939. A photograph of the club sign listing its golf champions holds a place of honor on the wall behind his desk.

In 1936, Callaway began his studies at Emory. Even though his family was heavily involved in the textile business through Callaway Mills and wanted him to pursue an engineering degree, he set his sights on a liberal arts education. While at Emory, Callaway was elected president of his senior class, worked as business manager for The Campus, and was a member of Omicron Delta Kappa leadership fraternity.

Callaway graduated in 1940 and, with war imminent, earned a reserve officer's commission through a correspondence course. Upon completion, he reported to Fort McPherson for assignment. There he encountered an irony. He had attended Emory to avoid going into the textile business, but once the Army discovered his family history, they decided he and fabrics were a good fit.

Callaway was dispatched to Philadelphia, where the Army housed its centralized procurement facility for all textiles and apparel. Although his obligation of a year of service was completed in October 1941, war loomed even more ominously in the near future, and he decided to reenlist. About two months later, after the bombing of Pearl Harbor on December 7, business in his office picked up considerably.

"All of a sudden we were buying hundreds of millions of items of apparel and all of the fabrics," he says. "[By 1945,] we had about twenty-five thousand people working there administering contracts all over the United States. I was spending at the rate of something like $700 million a year under just my jurisdiction, with my name on every contract. So you learn business real quick." Because of his performance, Callaway was promoted to major at the age twenty-four, making him the youngest person to attain that rank in the Quartermaster Corps.

The business experience and extensive contacts Callaway gained in the Army brought him a number of offers from various mills and clothing makers after he was discharged. He took a job in Atlanta with Deering, Milliken and Company and established their Southeastern sales office, selling fabrics to apparel manufacturers in the region. "Most of whom I'd been doing business with for five years," adds Callaway.

Three years later, he moved to New York City to take charge of running the company's woolen and worsted mills. In 1954, he left Milliken and spent eighteen months at Textron as a vice president before his division was purchased by Burlington, and, as Callaway says, "I went with the deal." Callaway would spend the next seventeen years at Burlington, the largest textile manufacturer in the world, and would serve as president of Burlington Industries from 1968 to 1973.

Callaway's greatest professional success in the textile business came in helping to develop polyester blends. "I was one of the leaders of the move toward the fundamental new fabrics, Dacron blended first with wool and then with cotton," he explains. "It started at Milliken and increased tremendously at Burlington. My first real success was a blend of wool and Dacron, which went into men's suitings and became very famous. It led the way for all the other fabrics to be adopted as blends instead of 100 percent."

Callaway was also heavily involved in minority issues throughout his career, including more than four decades of work with the United Negro College Fund (UNCF). He says his efforts in behalf of minority causes have their roots in his childhood. "I was in a position to see how poorly and how badly black people were treated," he says, "how they were deprived of civil rights and deprived of justice in the courts and deprived of education. And I saw all of that and I thought, What a tragedy to happen to a people, particularly in the land of the free and the home of the brave. So I got a little feeling for them and that led to my working very much with the United Negro College Fund."

In 1970, Callaway was chairman of the National UNCF Corporate Campaign. According to well-known Washington, D.C., attorney Vernon Jordan, who was the UNCF's executive director at the time, not even extreme illness got in the way of Callaway's dedication to the cause. Just before addressing a major fundraising lunch in Atlanta, he became terribly sick.

"In excruciating pain, he rushed to the emergency room of a local hospital," recounts Jordan. "Surgery was immediately necessary. During the preparation for surgery, Ely arranged to tape his speech to the luncheon. To a hushed, respectful, and appreciative audience, Ely, eloquently and dramatically, made his case for support of UNCF. We raised the largest amount in the history of UNCF that year--$10 million."

Callaway's career in textiles came to an end in 1973 when he was not offered the chairmanship at Burlington. He opted to retire and move to the town of Temecula in Southern California, where four years earlier he had planted a 140-acre vineyard as something to fall back on. Conventional wisdom said that producing fine wines in Southern California was a lost cause, but Callaway had researched the venture thoroughly. Scientists at the University of California at Davis had told him that the soil and climate on his land were optimal, and when his wines turned out to be very good, Callaway says the unconventional location became "an automatic publicity factory."

Callaway Wines turned out to be so good, in fact, that the vineyard's 1974 White Riesling was chosen as the only wine served at a Bicentennial luncheon for Queen Elizabeth II at the Waldorf Astoria in Manhattan on July 9, 1976. After the luncheon, which Callaway and his wife attended, a member of the organizing committee approached the winemaker and told him that the queen had enjoyed the vintage so much that she had asked for a second glass.

"By that time there were ten people from the press standing around listening," recalls Callaway. "So we made every paper in the United States the next day--`Unknown wine served to Queen, asked for second glass.' "

Rumors had circulated that the Callaway wine was chosen for the event because Callaway himself had either paid the selection committee a million dollars or used his considerable political influence to intervene. He says all that griping was just, well, sour grapes. "The key that everybody misses is that the wine got attention and was selected because it was a superior product that was totally different from any other wine in the world," he says. "I didn't have any influence with anybody, and we didn't buy it." Wine writer Philip Reich backed up that contention in a 1976 article. "The experience of tasting Callaway wines," he wrote, "is not like that of other California wines."

In 1981, Callaway sold his vineyard to Hiram, Walker & Sons Ltd. and made a profit of nearly $9 million. His greatest entrepreneurial success was yet to come. The following year while playing golf at The Vintage Club in Indian Wells, California, he stopped in the pro shop to do a little shopping. There he saw a hickory-shafted wedge and putter that appeared to be beautiful relics (after 1930, the manufacture of golf club shafts shifted from wood to steel). The clubs, which featured a steel shaft inside the hickory, were anything but antiques, and after playing with them Callaway thought, "the feel was absolutely different from anything else ever in golf."

Two weeks later, Callaway bought Hickory Stick, U.S.A., the struggling company that manufactured those clubs. During the next few years, the business grew and new products were developed. But it was the introduction of the Big Bertha driver in 1991 that put Callaway Golf over the top. And just as in his forays into fabrics and wines, the key to the club's success was that his product was different from anything on the market.

"We changed attitudes by the creation of a truly superior product that was pleasingly different," he says. "The attitude before Big Bertha was that, for most golfers in the world, the driver was the most feared, least-liked club in the bag. Now it's the most popular. Everybody loves it. That doesn't mean they're perfect every time, but they like to use the driver because it is so easy, relatively, to use." The club has had such a profound impact on Callaway's life that he's named his upcoming autobiography Big Bertha and Me.

Callaway says he has no thoughts of retiring. Actually, he's starting a new venture. Recently, he resigned as CEO of Callaway Golf to begin a new division called Callaway Golf Balls. "One of the areas that we're not in that has a big growth potential is golf balls," he explains. "And we have such a powerful name--anything we put our name on in golf, people at least look at seriously. So our job is to create a golf ball that fits our formula--demonstrably superior to the competition and pleasingly different from competition in some significant ways. And that's what we'll do."

Top photo courtesy Callaway Golf

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