Inside USD

Driven to Succeed: J.D. Power Shares His Story with Students

Monday, April 7, 2014

“Highest in customer satisfaction, according to J.D. Power and Associates.”

It’s hard to remember when that mark of distinction for automobiles, financial services and other goods and services wasn’t a household name.

Last Thursday USD students hoping to make their names in the business world got to hear the story of J.D. Power’s rise to the top of the marketing and consumer opinion industry. And they learned that it began nearly 50 years ago on a kitchen table in the Los Angeles suburb of Calabasas.

Lanky and easy-going at 83, J.D. Power (pictured center) is sometimes compared to the actor Jimmy Stewart. Like the character Stewart played in “Mr. Smith Goes to Washington,” Power is known for his determination and fearlessness. In a talk led by USD School of Business Administration Dean David Pyke, Power talked about his courage to defy post-World War II-notions of consumer marketing and unwillingness to take no for an answer from potential clients. Much of the story is chronicled in a new book, Power: How J.D. Power III Became the Auto Industry’s Adviser, Confessor and Eyewitness to History.

Just a few years out of the Wharton Business School at the University of Pennsylvania with his MBA in the early 1960s , Power was already beginning to challenge conventional notions of the marketing and consumer opinion by big automakers and other manufacturers. Buoyed by their role in supplying the machinery to win World War II and  the post-war economic boon, they cared little about what consumers actually thought, thinking they knew best. But Power, doing market research for the McCulloch Corp., a chainsaw manufacturer, discovered there was untapped consumer demand for the product that was being mostly sold to industry. The corporation hired him away from the advertising company for which he was working but Power wasn’t very fulfilled. Companies like McCulloch “had a lot of good ideas but didn’t act fast enough,” he recalled.

A short time later in 1968, Power met with a colleague from Wharton who was out in California to start a new satellite venture, saying he’d feel “trapped” to stay in his current, conventional job. Intrigued, Power went home to talk it over with his wife, Julie, and the next morning J.D. Power and Associates was born. What would become one of the most prestigious marketing information companies in the world, with operations in North America, Europe and the Asia Pacific, began on the family’s kitchen table. Husband and wife would pour over the consumer data that was plotted by hand on oversized graph paper. The family’s four children, including James “Jamey” D. Power IV, a 1985 USD graduate and member of the university’s board of trustees who joined his father for the talk, would help out by attaching quarters to the surveys sent to consumers, as an incentive to fill them out.

Breaking into the big time wasn’t easy but Power was undaunted. A tip from an old colleague led him to an Asian auto company that had failed but was making a second try at the U.S. market. The U.S. advertising manager of the firm with the then funny-sounding name “Toyota” wouldn’t speak to Power. So on one of his trips to the office, Power began chatting up the Japanese manager of Toyota’s forklift truck producer who also worked on the site. He was actually interested in listening to Power and soon enough, Power found himself presenting a briefing, along with an unsigned contract to a Toyota executive who signed it unseen. “It was the easiest sale of my life,” Power recalled with a laugh.

The story clearly inspired the crowd of nearly 300 in the Joan B. Kroc Institute for Peace & Justice. “It’s exciting to see that no matter where you’re coming from, the possibilities are limitless,” said finance major Colby Edson ’15.

Power, who retired and sold the company in 2005 to what is now McGraw Hill Financial, also stressed how important it was for the company’s long-term success to tell clients and consumers the truth, even if it caused friction in the short term. Much of the firm’s initial national prominence came in 1973 when the Wall Street Journal reported Mazda’s Wankel engine problems, based on data from one of the first J.D. Power independently funded surveys.

The experiences, reminiscent of the current problems General Motors and Toyota are experiencing, prompted questions from students about ethics and corporate social responsibility.

“We had many experiences – weekly – of telling a client something they didn’t want to hear,” recalled Jamey Power, (pictured left), a former senior vice president and strategic advisor at the company. “We always tried to approach it from ‘how does a customer look at it?’ and that’s as true as it can get.”

The elder Power added that the three values the company stressed were “independence, integrity and impact. You can have independence and integrity but if it doesn’t have impact, it doesn’t work,” he said. “We weren’t afraid to tell it like it is.”

– Liz Harman

Photo credit: Joe Bertocchini

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