Last week Martha Stewart was indicted.
This was coming for a long time. It reminded me of the way those of us in Carolina hurricane country watch storms develop. First they're way over there by Africa, then they get closer, then they hit Florida or an island or two and we see video of the damage. Then the storms come up the coast toward us.
Martha's storm started way back on December 27, 2001 when she unloaded nearly 4000 shares of ImClone stock. Her timing was great. Just one day later the news came out that the FDA wasn't going to approve the company's cancer drug and the stock tanked.
That would have been just another savvy move by a savvy businessperson except that Martha was on ImClone's board and had insider knowledge. She claims that the sale was made based on a stop-loss order that had been placed long before, but there's no evidence to support that and there are cell phone calls between Martha and her broker, and Martha and ImClone's president on the very day of the sale.
Since then Martha's troubles have been a staple of the business news. And her troubles appear to have had an impact on her Martha Stewart brand that adorns her television show and magazine and a bevy of products.
Robert Passikof's company, Brand Keys, charts the strengths of various brands including Stewart's. In the beginning there wasn't much impact. Then, in July 2002 when evidence of Martha's cell phone calls to her broker and ImClone CEO Sam Waksal came to light, the brand's strength dropped.
It dropped again in October when it appeared there was no evidence of the stop-loss order. Then, when the pending indictments hit the news, the brand's strength dropped again, down into the weak range. Shares of her company, Martha Stewart Omnimedia , have been affected, too. In the last year they've lost almost half their value.
So now the question that's being asked is whether Martha Stewart's company can survive. What exactly is going to become of her empire? Part of the problem with posing that question and answering it is that lots of people don't seem to like Martha very much.
Check out the media accounts of Martha and her troubles. There's almost always a derisive, alliterative two word phrase used to describe her. She's called the "Doyen of Domesticity" or the "Queen of Clean" or "Princess of Perfection."
Normally we love the folks who rise from humble beginnings to success. That's certainly Martha's story. She was born Martha Kostyra in New Jersey in 1941. Her mother was a school teacher. Her father, a salesman.
She got good grades that won her a partial scholarship to Barnard. She modeled to earn money to meet expenses. Even though she married after her sophomore year, she completed her degree and kept working. She quit modeling in 1965 when her daughter was born.
In 1967 she went back to work, this time as a stockbroker. Her husband, Andrew Stewart was doing well in publishing. When the 1973 recession hit Martha quit the brokerage and she and Andrew moved to Westport, Connecticut where they renovated an 1805 farmhouse where she still lives. You can see that house on her show.
In Westport she started a catering business called The Uncatered Affair. The idea was to cook the food for dinner parties for people who wanted to pretend they had done the work themselves. She also started writing articles for the New York Times and House Beautiful.
Her first book, Entertaining, came out in 1982. It was followed by more books, videotapes, and even dinner music CDs. Kitchen and gardening tips soon expanded to just about every category around the house. There was a television special and regular appearances on the Today show. Then there was her own show.
It was called Martha Stewart Living and it was a smash. Eventually she bought back her name from the network and set up her own company, Martha Stewart Omnimedia. The company went public in 1999, moving Martha's personal wealth above the one billion mark.
While all this was going on articles started appearing about her marriage which had ended some time before. There were more articles, painting a picture of an arrogant women with ferocious temper tantrums. There were unauthorized biographies (no authorized biography has yet appeared) and a television documentary based on one of them.
The Smiling Martha of the TV show seemed to have a dark side, an alter-ego, Snarling Martha. And even when she's smiling folks still get uneasy. Martha Stewart's smile never quite makes it to her eyes. It's the smile of a salesperson or politician. The lips may be saying, "I care" but the eyes are saying, "How can I get the most out of this?"
And then there's the perfection thing. This is a woman who talks about doing things perfectly. When her company had its Initial Public Offering, Martha designed the stock certificates herself. She also served breakfast for 3000 at the New York Stock Exchange with a menu of scones, croissants, and egg-and-herb-filled brioches. It makes people crazy.
It also draws attention away from the real value that Martha adds for her viewers, readers and customers. First, she makes it easy for them to make quality choices without having to do a lot of homework. They can follow Martha's suggestions or buy her sheets or paint so that everything matches.
They can strive for perfection, too, and that striving is ennobling. Somehow, over the last several decades, we've come to devalue all those things that get done around the house. We've especially devalued the women who choose to be housewives. But Martha Stewart has a simple message that resonates with them: "Strive to do your work perfectly and that work becomes a noble effort."
This is not a new idea. You'll find it in books like, Chop Wood, Carry Water, which says the same thing from a Buddhist perspective. You hear it in my own religious tradition when we refer to "work as praise" and you can see it on the plaques that hang in many Christian kitchens: "Godly service done here daily."
That's what may ultimately save Martha Stewart and her company. The folks who concentrate on Snarling Martha and the ones who love dragging the successful through the mud won't change their minds. But they never bought Martha's products and magazines anyway.
The people who watch her shows and read her magazines and buy her products are more than just customers. They're more, even, than fans. They're followers.
They'll read and buy because Martha and her products help them live their lives better. Not only that, she helps them feel better about themselves and that's a very powerful thing.
Will her empire survive? It will certainly survive the indictment and the current nastiness. But that's not the only challenge. It's just the most obvious one right now.
What the company will not survive is the loss of Martha Stewart. We're not talking about Martha the executive here, we're talking about Martha the creator and writer and personality. The company can find another CEO. What it will never find is someone who can deliver the value to her followers that Martha does.
What Martha Stewart the person needs to do, so that Martha Stewart the brand can survive this indictment and ultimately her own death, is to step back. Like Walt Disney she needs to move from guiding founder to creative force. Ironically, this indictment may help her do just that.
Walt was lucky. He could go be creative about the products because there was his brother Roy Disney to handle the back office and the business details.
Martha needs to find her own Roy Disney to handle the back office and business details. Her current troubles may force her to find that person and that could be the best thing for her, her company, and her followers.
