The Marion Years | 1946-1967

Milestones and pivotal moments from Ewing Kauffman’s employment as a pharmaceutical salesman to receiving the Horatio Alger Award.

Ewing Kauffman leaves a sales job to start his own venture and he never looks back. He has an engaging manner, charm, and gleaming blue eyes. He emerges as a legendary pharmaceutical salesman, challenges a motivated team of associates, and becomes the epitome of American entrepreneurship.

Ewing answers an ad for a pharmaceutical salesman because he can’t resist the challenge of taking the aptitude test for the job. He joins Lincoln Laboratories headquartered in Decatur, Illinois, in 1947. He works on a 20 percent commission on all sales, with no salary, no expense account, no car, and no benefits. His energy, knowledge of the products he is selling, and his easy rapport with people make him an extraordinary salesman. His success helps him provide for his family.

Kauffman’s sales commissions with Lincoln Labs amount to more than the salary of the president of the company. As a result, they reduce his commission rate. The following year his determination and extraordinary skill as salesman again earn him an exceptionally large salary and the company responds by cutting his sales territory. This treatment sours Kauffman’s relationship with his employer. He makes plans to strike out on his own and vows that he would never penalize an associate of his for doing a good job.

On June 1, 1950, Ewing Kauffman’s chapter in the great American success story is written when he opens Marion Laboratories for business. He dips into his nest egg for an initial investment of $5,000 to launch his venture and uses his middle name for the company so customers won’t know they are dealing with a one-man operation. The 33-year-old entrepreneur makes sales calls to physicians’ offices during the day and fills orders from the basement of his home at 6705 Locust Street into the night. In its first year in business, Marion’s income from sales totals $39,000 and the company turns a modest $1,000 profit.

Kauffman starts his business selling a range of tablets and individual injectables that he buys in bulk from a large pharmaceutical supplier in St. Louis. He sells to three large accounts in Kansas City and to rural physicians in surrounding towns. “I would count the tablets out and put them in bottles of one hundred, five hundred, or a thousand. I would label them with my own ‘Manufactured for Marion Laboratories’ label and put them in a box.” Within a year, the company outgrows Kauffman’s home office and moves to a former storefront at 4216 Troost Avenue.

A business rooted in hard work and a set of steadfast principles.

Two of Marion’s initial products are Vicam, a thumb-nail-sized high potency vitamin, and Os-Cal, a high-calcium supplement made from oyster shells prescribed to pregnant women that becomes the company’s first signature product. Kauffman talks to doctors and pours over medical journals to spot trends in treatments and add to the Marion Labs product mix.

Marion Labs becomes known for its clever ideas and innovative approaches to promote its line of drugs. Salesmen carry zany promotional items including a miniature stick of dynamite to pitch Nitro-Bid. To promote Os-Cal, Marion hosts receptions at drug trade shows featuring free beer and raw oysters on the half shell. They hire an accordion player to provide entertainment and invite everyone attending the medical conventions, including representatives from competing drug companies, to join the beer and oyster party.

Kauffman is steadfast about sticking to two principles to guide the philosophy and culture of Marion Labs:

Share the rewards with those who produce.
Treat others as you wish to be treated.

In 1956, Kauffman introduces a generous profit-sharing plan to all associates, a major departure from standard practice in the pharmaceutical industry. As the company prospers, Marion provides salesmen with a 1957 Chevrolet with a stick shift, radio and heater, but no air conditioning. By the early 1960s, most Marion associates have become stockholders. By 1963, all managers are driving air-conditioned Cadillacs. Kauffman maintains that Marion Labs is built on promises, including the promise he makes to his associates during lean years that they would share in the rewards when the company prospers.

Kauffman draws support from a loyal and loving circle of friends and associates.

Kauffman frees his time to make sales calls and direct all sales operations by moving Charlie Hughes from sales to serve as office manager and oversee administrative operations. The company builds a new facility at 29th and Grand. The 8,000 square foot space is spacious enough to house 65 Marion associates and the company’s first private offices and conference room, with enough room left over to lease space to a wholesale grocer.

By June 1959, Marion achieves annual sales of one million dollars. In April 1960, the company moves to new headquarters, a fitting way to mark the company’s remarkable first decade.

Tragedy strikes the Kauffman family when, after suffering from chronic health issues, Marguerite dies unexpectedly just before Christmas in 1960. Grief-stricken, Kauffman pours himself into the demands of managing a growing and increasingly complex organization. His drive to provide for his family, which had always been important to him, becomes all-consuming.

On September 11, 1961, it begins to rain in Kansas City. The downpour continues for three days in the wake of Hurricane Carla, one of the most severe tropical storms ever recorded in the United States. Although the Blue River is a quarter mile from the headquarters of Marion Labs, Ewing Kauffman is concerned to see water rising and reports of flash flooding. He begins calling on Marion associates. They respond by renting moving vans, filling sandbags to stem the rising river, and organizing a team to find warehouse space to store and ship for Marion products.

Marion associates box up products, load trucks, move records to the top of filing cabinets, and use pulleys to hoist heavy equipment off the floor. Floodwaters rise to three and a half feet and don’t recede for two days, but thanks to the resourcefulness and quick action of the Marion team, the company continues to process, fill, and ship orders from makeshift facilities without missing a beat.

Marion introduces its first blockbuster drug, Pavabid, a time-released medication that relaxes blood vessels and aids blood flow to the brain for neurology patients. In 1962 company net sales are almost $3 million. Four years later, they are $8 million. By the end of fiscal year 1970, net sales top $30 million, with Pavabid accounting for 45% of Marion’s sales.

Kauffman finds a life partner and raises the bar for associates.

Ewing Kauffman and Muriel McBrien are married on February 28, 1962, in the chapel of the Village Presbyterian Church in Prairie Village, Kansas. They had met a year earlier poolside at the Deauville Hotel in Miami, Florida, where Ewing is attending a meeting of family physicians and Muriel went to convalesce after a serious automobile accident. After a long-distance courtship between Muriel’s home in Toronto, Canada, and Ewing’s home in Kansas City, the couple announces their engagement. They set up their first home at 10111 Wenonga Lane in Leawood, Kansas. Together they become one of Kansas City’s most vibrant, influential and visionary couples.

Mr. K establishes the M Club as a way to recognize exceptional salesmen who did not aspire to management positions. The honor is reserved to the top 8% of the sales force. Each member of the elite club receives a number of perks and privileges to recognize and reward their performance, including a diamond ring that even Mr. K is not entitled to wear.

To improve sales and employee motivation, Marion Labs develops a generous compensation and benefits package along with a bonus program that includes all associates from the manufacturing plant’s assembly lines to the executive suite. The Marion Spirit Suggestion Program rewards associates for suggestions that contribute to productivity through cost savings and increased efficiencies.

Mr. K believes that showing appreciation is a powerful motivator for performance. He routinely seeks out associates and rewards them for a job well done. He is known for walking through the plant and greeting worker after worker by name. In the evenings, he calls salespeople on the road to see how their day had gone and gauge customer satisfaction. Company-wide “Marion on the Move” meetings, which are part pep rally and part quarterly earnings update, are instituted to keep associates informed about company activities and focused on company goals. Kauffman also takes time to write letters of praise and congratulations to associates’ parents, spouses and children acknowledging the contributions the associate is making to the success of the company. The culture breeds a unity of purpose and intense loyalty among Marion associates.

Mighty Marion goes from the basement of a home to the floor of the stock exchange.

Ewing Kauffman’s Marion Labs goes public on August 19, 1965, with single shares available to the general public for $21. The first bid for Marion stock is $28 dollars per share and the price continues to rise. Associates who believed in Kauffman in the early years and bought shares of the company for $1 or $3 reap the financial benefits of Marion Laboratories becoming a publicly traded company.

Overnight the profit-sharing plan multiplies and hundreds of Marion associates, including those who work on the production line, become millionaires. The public sale of stock also produces the infusion of cash Kauffman needs to accelerate a long-term growth plan that includes expanding a motivated sales organization, identifying new products for the Marion catalog, and planning and building bigger facilities.

As his associates celebrate the rewards of their work and his vision to grow the company becomes real, Kauffman calls the day his greatest thrill in business. Marion Labs begins trading on the New York Stock Exchange under the ticker symbol MKC on February 25, 1969.

Marion becomes the most widely held stock in the Kansas City area. The company records five consecutive years of record sales and earnings. Sales gain by an average of 41.4 percent annually. Earnings grow by an average of 50.3 percent a year. Marion’s sales force is the most productive in the industry. Over the next 15 years, the Marion stock splits 12 times and trades at $156 per share.

Marion Labs becomes the most productive force in the industry.

The success of Ewing Kauffman’s business allows him to pursue other hobbies that could satisfy his competitive nature. In 1966 he ventures into sports ownership when he buys two racehorses from television personality Desi Arnaz. In 21 months his stable grows to 24 horses and wins purses totaling $357,000.

Ewing Kauffman travels to New York to receive the Horatio Alger Award given to Americans who rose from modest beginnings to success in their careers. Kauffman and his fellow honorees, including heart surgeon Michael DeBakey and orchestra leader Lawrence Welk received their awards from Norman Vincent Peale at the Waldorf-Astoria Hotel on May 25, 1967.