by Robin Gerber
Despite his strange ways, Ryan was an in-house genius, exactly what Elliot had in mind when he created the department. “I remember going to Jack about making a knitting machine for girls,” Tom Kalinske, then a production manager, said. “He drew very fast, and it took him about thirty seconds to invent Knit Magic and Sew Magic.” Another young manager, Fred Held, remembered Ryan as “the pied piper of inventors who got the most out of his team. They did not care if he took the credit.” The New York Times called him “Mattel’s real secret weapon.”
Derek Gable worked for Ryan in preliminary design and remembered the toy business as “fascinating, fast-moving, and intriguing. There was such a thirst for innovation, and thousands of new ideas every year. Ruth and Elliot let people make mistakes. It was so much fun.” Creativity was part of the fun, as were stock options, profit sharing, retirement contributions, and Ruth’s willingness to move and promote people based on their interest and talent. She called the team she put together in the 1960s her “young tigers,” and the ever-growing company gave them room to roam and experiment. Brilliant eccentrics like Ryan added to the charged atmosphere. And since toys were at the center of everything, the tigers, and often everyone else, got to play.
Gable had an idea one day about drag racing, an increasingly popular pastime. He devised a toy car with a string attached so that it could be turned into a drag racer. Another designer had the same idea, but he used a flywheel. Elliot said, “Let’s have a race.” Later that week all the departments assembled to cheer on their favorites.
Ryan pushed for such competitions. Children and the R & D staff were also invited to play with new toys, under strict vows of secrecy. Their feedback was carefully noted. When groups of five-to six-year-olds were testing Baby First Step, an eighteen-inch mechanical doll that walked and danced in place, the doll’s panties kept falling down. “I wonder why they don’t sew them to the dress,” one little girl said to her friend. Her recommendation became reality. “Our best toys are the ones the engineers can’t leave alone,” Ryan told a reporter. In 1962 he bragged to Time magazine, “We’re right out on the frontier of technology.” He was also quick to polish his reputation with the press. Ryan would eventually claim credit for inventing Barbie, much to Ruth’s annoyance.
But Ryan had more than the success of Barbie to hang his laurels on. In 1960 Mattel had introduced another unique smash hit, the Chatty Cathy talking doll. Elliot had again conceived the idea for a revolutionary sound mechanism. He tasked the engineering staff to come up with a device that did not require batteries or winding up. He wanted to add to the play value by keeping the doll’s speech unpredictable, and he suggested they think about a pull-string. The resulting doll was twenty inches tall, a round-faced toddler with a three-inch vinyl turntable-type record in her stomach operated by a pull-string at the back of her neck. She could say eleven phrases, spoken by voice actress June Foray, which rotated randomly from “Tell me a story,” to “Will you play with me?” to “I love you.” She came with a storybook and sold for ten dollars, a relatively low price at the time. Like Barbie, Cathy had outfits that could be bought separately, and like the Uke-A-Doodle, Cathy’s pull-string voice mechanism was used for other hugely successful Mattel toys, including the educational See ’n Say preschool toys.
One of Ruth’s core business principles was insistence on superior quality control. “She was relentless in terms of product quality,” Frank Sesto said. “She understood that she had to go to quality control people directly to find out the truth. She would find me on the floor and say, ‘Take me to the line and show me what’s going on.’” With Chatty Cathy, Sesto had to deliver bad news. Even though the doll was successful, he had found a quality problem that would require shutting down the line for a month. Hundreds of thousands of dollars would be lost. Ruth did not hesitate. She would not ship a product that did not meet company standards.
Cedric Iwasaki, an engineer in the quality control department, recalled one incident. He had worked on the standards for Barbie’s legs to ensure that parts with impurities or water marks were rejected. He was overseeing the quality control inspectors as they watched the rotocasting of Barbie’s legs. Plastisol had to be injected into molds, and the legs were popped out at the end of the process. Ruth came along the line, surprising Iwasaki, who had yet to meet the big boss. She began thumbing through a box of legs, and then said, “Uh-uh, these aren’t good enough. Shut down the line.” Iwasaki rushed over. He knew that the gospel of production was to avoid shutting down the line at all cost. “What’s wrong?” he asked. “Look at these dirt marks,” Ruth replied. Iwasaki protested that the legs met the specifications. “Well then, change the specifications,” she replied.
Quality control extended beyond the shop floor. Ruth told a reporter, “We spend a fortune on quality control and every toy is guaranteed. Our rate of return on defective goods is less than one-half of one percent. We repair and return anything turned into us.” Toys had to pass a thirty-inch drop test on concrete, with each toy dropped six to ten times from different angles. They were put into a “torture chamber” for forty-eight hours that simulated the motion and temperature of a freight train.
The introduction of Ken came after thousands of letters entreating Mattel to give Barbie a boyfriend. The first Ken dolls, named for Ruth’s son, hit stores in 1961, again facing naysaying buyers, who did not believe boy dolls would sell. But Ruth remembered that Barbara had played with paper girl and boy dolls. Maybe the success of Barbie could overcome the history of poor sales for boy dolls. First another anatomical minefield would have to be crossed.
Ruth felt the design team lacked “the guts” to give the Ken doll even the suggestion of male sex organs. She saw herself as ahead of her time, arguing that there should at least be a bulge that would suggest realism. Charlotte Johnson, Barbie’s clothing designer, agreed with Ruth. Despite ordering prototypes with varying degrees of bulge in the crotch, the male designers resisted all but the barest hint of a penis. Underwear was painted on the nearly flat surface of Ken’s genital area and buttocks. As Ruth predicted, he looked unrealistic in the zebra-stripe bathing suit that was his first piece of clothing. Ruth’s son, Ken, who was fifteen at the time, resented the flat-crotched doll that bore his name. Ruth did not blame him, knowing that it embarrassed him.
What Ruth did not know was that Ken felt something deeper than self-consciousness. He felt shame and anger. Deep conflicts about his sexuality, which would come to light later in his life, no doubt fueled his reaction.
For the research and design department, however, the main issue about Ken’s anatomy had nothing to do with emotions. They just thought about whether his physique would help or hurt the company. On that point, Ruth was willing to acquiesce. “They decided it was better for Mattel if he was neutered, and that was the end of it,” remembered Marvin Barab.
As the Barbie line expanded, first with Ken, then with relatives and friends, like Midge and Skipper, sales went into the stratosphere. The Wall Street Journal called Barbie a “cult” and “something approaching an industry.” Ruth called the phenomenon “the Barbie complex.” Licensees and subsidiaries of Mattel had been contracted around the world to make clothes and accessories for the Barbie line, to publish a fan magazine, and to make child-size clothes with the Barbie brand. Ruth built the brand through more and more aggressive television advertising, raising her budget by a million dollars a year in the early 1960s. She knew her money was well spent. Ninety-three percent of girls aged five to twelve recognized the Barbie name. None of her competitors could boast that level of brand recognition. The results showed. Mattel’s revenues were $26 million in 1963, cementing its place as the largest toy company in the world. Two years later its revenues had soared to more than $100 million and three years later, to $180 million.
Ruth felt confident that she had earned her place and her salary. She said, “Anyone can manage the upside cycle of hit toys. The secret is managing a product down its life cycle properly.�
� She made product sales forecasting and inventory control Mattel’s top priority. She proved that a company with one to two hundred unique products each year could still be managed just as professionally as one where the brand’s entire yearly responsibility was a new deluxe size of detergent. Her “retail detail” people went into stores, arranging company displays, checking in with buyers, and seeing how Mattel toys were selling. She built and guarded the resources given to R & D, even in lean years, and recognized the importance of thinking internationally both in manufacturing and in sales. Mattel aggressively diversified operations around the world. They acquired Dee & Cee Toy Company in Canada in 1962 and, later, the Hong Kong Industrial Company.
Mattel’s extraordinary success through the sixties gave employees and shareholders spectacular returns on their shares of company stock. There were occasional setbacks, however, and calamities. A labor strike slowed sales for the first quarter of 1964. The opening of new factories in Los Angeles, Canada, and New Jersey, and a new headquarters in Hawthorne also drained revenue that year. The New Jersey factory was a bad idea, with communications problems dooming the bicoastal experiment in production. It had to be shut and sold two years later. Earnings were disappointing, and when handlebars on the new V-RROOM! bicycles began collapsing, so did the stock price, dropping three dollars in 1965. As Ruth predicted, the stock price bounced back the next year. Still, some analysts grumbled that Ruth and Elliot were not up to the task of running such a large company. Shareholders, though, were happy. Mattel joined the Fortune 500 in 1965, and Ruth’s business life continued to seem charmed. She said she was getting her “kicks” from her growing power. “You don’t need things that people turn to like drugs and soul-searching,” she said. “All that stuff is for people who are not having the kind of trips I was having. I was having power trips that were headier than any conceivable artificial stimulant could be.”
As Toy Fair was set to start in 1968, the Wall Street Journal predicted another year of bright prospects for the toy industry. There were “more kids, a flock of new products, greater affluence, improved marketing techniques and a somewhat tighter rein on expenses.” Ruth had assumed the title of president from Elliot the year before, and he became chairman and chief executive officer. As the Journal suggested, Ruth assured investors that despite advertising expenditures growing from $11.5 million to $12.7 million, “our budget is only slightly more than increased costs.” She was relying more heavily than ever on the idea of driving demand through a hard sell of the Mattel brand. Ever since the first Mickey Mouse Club commercials sent the Burp Gun into stratospheric sales, Ruth had been building advertising and sales promotion. She loved that side of the business, and had always been the one who did the talking for Mattel and oversaw the advertising budget. In 1968 a record fourteen million dollars had been budgeted for television program sponsorships, newspaper and comic book ads, and large magazine ads in Life, Good Housekeeping, Parents, and Jack and Jill, which would reach one hundred million people. “We expect the effect of the combined activities to create an unprecedented demand for Mattel products,” Jack Jones, the vice president for advertising, told the New York Times. His comment was not exaggerated. “No matter what we touched,” Ruth said, “it turned to gold.”
Ruth also announced an innovative marketing program. A new Barbie, flexible at the waist and knees, had been engineered by Ryan. Girls who had older models of Barbie dolls could trade them in for the new model for $1.50. As with every Barbie initiative, the demand far outstripped expectations. Girls swarmed stores, wanting to swap their old dolls for the new one, which had a hot pink two-piece bathing suit with a white plastic flower on the bottom. It was another banner year for Mattel and for Ruth. When the Los Angeles Times announced its annual awards, Ruth was named as one of its twelve Women of the Year.
As Ruth and Elliot looked forward to the 1970s, Mattel’s trajectory seemed unstoppable. A 1967 Shearson, Hammill & Company research memo predicted that by 1970 sales would be $175 million. The Handlers were still in their early fifties. Their children were grown and out of the house. Ruth no longer had to worry about how her success might be affecting them.
Nothing had diminished Ruth’s competitive drive or Elliot’s creative desire. “It was more important for us to be successful than rich,” Elliot remembered. “We enjoyed the fact that people liked the toys. We wanted to be successful in the marketplace, to be accepted. We did not want to get stagnant. We wanted to grow.”
Joe Whittaker, who had cut his teeth on the G.I. Joe competition, recalled, “In the 1960s we could do no wrong. Perhaps that led to being willing to take more chances. Because Mattel was so successful, Ruth and Elliot felt comfortable to take chances. I think they needed to take chances…to carry out their dreams, to wrench an entire field of endeavor into the modern era.” A toy buyer for a large Chicago-based department store chain summed up the thinking of the industry at the end of the 1960s: “Mattel is energetic, deep-thinking, and far and away above the field in product development. I simply can’t see its downfall.”
Chapter 12
Hot Wheels and Hot Deals
The world of the young is the world of Mattel.
Early in 1968 a large ballroom in a New York City hotel was outfitted with a stage and theater lighting, ready for the performers’ arrival. Mattel’s marketing department would put on a private show for toy dealers and wholesalers, for jobbers and retailers, then repeat the presentation at Toy Fair, which would open a few days later. Fifty percent of sales for toy companies came from toys that did not exist the year before, and every company faced the challenge of creating a pitch to make its toys stand out.
Mattel’s shows were legendary. Certain members of the marketing and sales departments became star performers. The ad agency Carson/Roberts helped write scripts and song lyrics. Professional lighting and costumes were designed. The highest-quality sound equipment was used. Production values rivaled Broadway theater. A young, ambitious professional, like Lou Miraula, could make his career on the Mattel stage or end it.
Miraula remembered his first stage show trip. He carried the sample bags, following Ruth, Elliot, and his boss, Cliff Jacobs, traveling first class to New York. “I was overwhelmed by this,” he said. A big suite at the Tuscany Hotel had been reserved for a private show for Mattel’s big national clients: Sears, Kresge, J. C. Penney, and W. T. Grant stores. Miraula had his first turn onstage, showing off the 1960 version of Barbie with her new wardrobe. “I parroted what I’d seen Cliff do. He was very entertaining. Ruth was in the room, and this presentation launched me. I was funny and got the buyers excited enough to say yes.” Miraula was also the kind of young man Ruth adored, the handsome ones she called “her boys.” Miraula was slim and dark, with chiseled good looks. Throughout the 1960s his star rose.
In 1968 he stood onstage before two hundred sales representatives. Dressed in a black turtleneck and black pants, he stayed as still as a mannequin as a spotlight came up in the darkened ballroom to illuminate the doll he held out in front of him in a moment of dramatic pause. Then the strains of the Nutcracker Suite began, and Miraula began to show what Dancerina, Mattel’s new twenty-four-inch, battery-operated dancing doll could do.
The doll had blond hair, topped by a pink tiara that hid a knob to balance the doll and to push or pull, depending on what moves a child wanted her to make. She wore a matching tutu and tights. Her toes were permanently pointed, and she could turn in either direction and dance in place. With a showman’s flair, Miraula demonstrated her charm. Boyd Browne, who acknowledged that Miraula was the master at these presentations, said, “You would never, ever, ever sit a doll down. You would talk to a doll and rub her head, pull her skirt down, kiss it on the cheek, and try to bring it to life. No other toy company was doing it like we were. They would bring a doll out by the neck and just sit it down.” Ruth would have none of that.
When Miraula and Dancerina finished, the lights came up and the crowd gave him a standing ovation. Ruth rushed
onto the stage and threw her arms around him. She loved the flamboyance of these shows and the effect they had on buyers. Every toy had a story ready for the stage. The Cowboy Ge-tar was the impetus for a show about the Wild West with hardworking cowboys sitting around a campfire and singing, accompanying themselves on their guitars. Ruth emphasized “romancing” every toy, even early ones like the jack-in-the-box. Mattel shows drove the orders that kept warehouse inventory from piling up. Ruth knew that toy companies with too much inventory went out of business.
By the end of the 1960s, Ruth was pushing her team harder than ever. She loved being the leader, much as she claimed to defer to Elliot. She took most responsibility for hiring management staff. She participated in meetings across departments, pushing, inquiring, goading, and motivating. Employees who loved her got tears in their eyes talking about her decades later. Those who hated her sputtered to find the worst invectives to describe her behavior. But no one was neutral about Ruth, and she was hardest on herself. “My standards are my toughest problems because for me they’re higher than for anyone else. But I burn people out by my high standards. Monday morning the most incompetent [employees] of the moment will be gone.”
Those who made it at Mattel thrived on the pressure. “The business was fast, exciting, romantic,” remembered Rita Rao, who worked in market research. “They were wonderful days for all of us. There was lots of travel, and people were young, hormones were raging. There were lots of love affairs, which Ruth found amusing. She loved the gossip.” Perhaps Ruth lived vicariously. All evidence points to her and Elliot being faithful and in love, but she was bawdy and outrageous enough to revel in other people’s tangled sex lives. She also loved her coterie of male followers. “Ruth was just gorgeous. She’d come by with a group of handsome men all under forty, and they were just following her and jockeying to get close to her, and she’d be walking in front, leading them. She was big-breasted but tiny otherwise, and she always looked tiptop,” remembered Pat Schauer. “She could be mothering to them, too, straightening their ties or picking a piece of lint off their shirt. But she ran the show.” By the end of the sixties, running the show at Mattel was like riding a rocket. It had taken twenty years to get to one hundred million dollars in gross sales. It took just three more years, until 1969, to reach two hundred million.
