(Ken Melrose in 1991 photo/Minneapolis Star-Tribune)
Described as a smart, self-effacing CEO, Melrose is credited with leading the Bloomington, Minn.-based company out of near-bankruptcy, through boom-and-bust cycles and onto a diversification path that brought sustained growth and prosperity. He promoted the “servant leadership” concept that shared credit and profits with employees, and was a prominent philanthropist who donated much of his wealth to health, scholarship and charitable causes.
Kendrick “Ken” B. Melrose, the former Chairman and Chief Executive Officer of The Toro Company, died on Sunday, May, 3, 2020, at the age of 79 of Alzheimer’s disease.
Melrose took control of Toro Co. in the early 1980s and over a quarter-century turned it into a market leader in outdoor equipment, embracing a new style of leadership along the way, the Minneapolis Star Tribune reported.
Described as a smart, self-effacing CEO, Melrose led the Bloomington, Minn.-based company out of near-bankruptcy, through boom-and-bust cycles influenced by weather and onto a diversification path that brought sustained growth and prosperity, the Star Tribune reported.
He joined Toro’s marketing department in 1970, was named President in 1981 and made CEO in 1983. He promoted a concept called “servant leadership” that shared credit and profits with employees, the Star Tribune reported.
Since his retirement in 2005, Melrose donated most of his wealth to health, scholarship and charitable causes, the Star Tribune reported.
“The most important thing to him was serving others at Toro and through philanthropy,” Kaye O’Leary, Melrose’s longtime partner, told the Star Tribune. “He was remarkably grateful for and humbled by the success that he and others created at Toro.”
Before Melrose became its leader, Toro had blown attempts in the 1970s to diversify beyond lawn mowers and snowblowers, the Star Tribune reported.
“Under Ken’s leadership, Toro survived and then thrived, as he built a culture of employee engagement long before it was fashionable,” Mike Hoffman, who succeeded Melrose as CEO and recently retired from the company, told the Star Tribune.
Melrose’s predecessor was planning a new headquarters for Toro, the Star-Tribune reported. But when he became CEO, Melrose canceled the new headquarters and also sold the company’s corporate jet.
“He built a values-based culture that continues today,” Hoffman said. “He put his office in the middle of the building surrounded by the people he served. No great window views.”
In 1995, Melrose wrote a book called “Making the Grass Greener on Your Side: A CEO’s Journey to Leading by Serving.”
In another business book, he wrote, “Servant leadership is … being the water carrier for those who pledge to get their jobs done. It’s taking responsibility when things go wrong and giving credit to others when things go right.”
At Toro, Melrose created an employee stock-ownership plan to give everyone who worked at the firm a stake in its success, the Star Tribune reported.
He oversaw the company’s acquisition of the Wheel Horse products division from American Motors Corp. in 1986 and the Lawn-Boy unit of Outboard Marine Corp. in 1989. In the 1990s, Melrose drove Toro into the professional outdoor-maintenance market with the purchase of several firms in irrigation and related products.
During his tenure, Toro company sales grew from $247 million to $1.7 billion.
“He also was supersmart, thoughtful, witty, fun to be with and an incredible mentor and friend,” Hoffman told the Star Tribune.
Melrose didn’t shy from sensitive topics, including executive compensation, as he and Toro gained success, the Star Tribunereported. He would occasionally spend a day working in a Toro plant.
His earnings peaked at $12 million in 2001, mostly through the gain in the value of appreciated stock he acquired through options in the early 1990s, including $500,000 he gave up in cash for stock. He bet on long-term performance and criticized excessive pay to top executives, the Star-Tribune reported.
“It’s getting out of balance, the money some are making, while employees get 3% raises,” Melrose said in 2002. “Boards and companies need to be more accountable to employees.”
In a Star Tribune article published in that year, Joe Boll, then a manufacturing engineer with 32 years at Toro, was quoted as saying, “Compared with many CEOs, Ken deserves [his pay]. He turned the company around. He stuck it out. He’s in the plants.”
In a statement released by the company, Rick Olson, Toro’s current Chaiman and Chief Executive Officer, said: “Ken was a great man, and the epitome of an exceptional leader. The culture he instilled continues as a positive influence and will guide The Toro Company long into the future.”
Melrose was a strong advocate for Toro’s philanthropic and industry support, and played an instrumental role in forming the company’s partnership with The First Tee in 1998. Committed to giving back to employees, he established The Kendrick B. Melrose Family Foundation Scholarship Program in 2002 for dependents of company employees, which has since supported 189 students with scholarships. He also helped to establish the Melrose/Hoffman Employee Critical Need Fund in 2005 to assist employees experiencing economic hardship.
“Ken was passionate about supporting the industries we serve and helping our customers succeed,” Olson continued. The impact of his generous philanthropic initiatives will continue to positively affect many in our industry and our communities.”
In retirement, Melrose founded Leading by Serving, LLC. In this role, he wrote and travelled extensively promoting the principles of Servant Leadership in both public and private organizations.
A champion for ethics and servant leadership, Melrose chaired the Board of Directors for the Center for Ethical Business Cultures at the University of St. Thomas Opus College of Business, held the University’s Holloran Endowed Professorship, and was a popular lecturer among students. He was also driven to give back through a wide range of philanthropic efforts supporting employee, industry, health care, education, and many other interests.
In 2019, the Star Tribune reported, Melrose gave $18.7 million to the Park Nicollet Foundation to expand Melrose Center, a group of HealthPartners clinics that focus on eating disorders, the Star Tribune reported. He also put millions into a scholarship fund for Toro employees and an employee-emergency fund.
“We owe much to Ken’s principled leadership, and his legacy cannot be overstated,” said Olson. “He was a rare transformational leader who saw the best in people and knew how to inspire them to work together and exceed their own expectations in order to achieve great things.”
Melrose was born on July 31, 1940 in Orlando, Fla. He attended Boone High School in Orlando before going on to Choate Rosemary Hall, a college-prep institution, in Wallingford, Conn.. He graduated with honors from Princeton University in 1962, where he majored in mathematics and electrical engineering and ran on the track team.
Melrose received a master’s degree from the Sloan School of Management at the Massachusetts Institute of Technology, and later earned a master’s in business administration from the University of Chicago.
His leisurely pastimes included whitewater rafting, golf, and hiking, and in a return to his collegiate sports interests, he was proud to have completed a Boston Marathon.
Survivors include his children, Rob Melrose (Paige Rogers), Lia Melrose (Jeff Thorpe), Kendra Melrose (Roshan Bharwaney); grandchildren, Charlotte Melrose and Sebastian Melrose; and his partner, Kaye O’Leary.
In lieu of flowers, memorials are preferred to the Orlando Public Library, Dorothy Lumley Melrose Center, 101 E. Central Blvd., Orlando, FL 32801