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The Dark Side Entrepreneurship

Article in Harvard business review · January 1985

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160

The dark Sometimes the sam.e


creative energy that drives
side of an entrepreneur has its
entrepreneurship source in destructive intemal
needs that can ruin a
career or a company
Manfred ER. Kets de Viies

Most entrepreneurs, like ior patterns that these peo- John White, president and CEO of a
many other people, have ple often have in common well-known company in the office equipment indus-
the normal amount of diffi- and how they affect their try, was wondering if he should acquire a small elec-
culty dealing with others, companies. For venture tronics component business. Since the company's
with the ups and downs of capitalists and corporate products would be a valuable addition to his office
a career, and with the suc- CEOs looking to acquire
an entrepreneurial com-
equipment line, White had been quite eager to pursue
cesses or failures of a com-
pany. Most entrepreneurs pany, he describes some the matter. In considering this possibility, White kept
have their internal visions pitfalls in working with going over in his mind the kind of arrangements he
in tune with reality so that these entrepreneurs and of- should make with the electronics company's founder
they act in the real world fers a strategy that works. and owner, Lee Thompson. During their discussions of
in a way that other people the buyout, Thompson had indicated that he was pre-
can understand. For some Mr. Kets de Vries is profes- pared to stay on after selling his company. Although
entrepreneurs, however, sor of management at White recognized Thompson's contrihution to making
things are not so easy. For INSEAD. Fontainebleau. the company a big success, he wondered how a contin-
these people, the high de- France. A psychoanalyst, uing association would work out. Would Thompson fit
gree of energy necessary to he has spent many years in with the parent company? How would Thompson
achieve a dream has de- studying the inner work-
sires and needs behind it deal with being a subordinate? Would Thompson, used
ings of managers and their to having things his way, follow directions and accept
that if let loose can wreak organizations. He has
havoc in an organization. White as a boss?
written numerous books
that examine companies John White's concems are not outland-
For instance, an entrepre- through a psychoanalytic ish. Some entrepreneurs find it hard to accept another
neur's attention to detail lens, the most recent of company's way of doing things and can create a work-
that is a virtue in the start- which is The Neurotic ing atmosphere that makes adaptation very difficult.
up phase can be truly crip- Organization (v/ritten with One should not, however, see such hehavior as the
pling if he or she continues Danny Miller; published norm. Many entrepreneurs are well equipped to deal
to exert such control when by lossey-Bass. 1984). This
is his second article for
with different company environments.
the organization grows. What are entrepreneurs like? What dis-
Theperson who can't let go HBR. the first being "Man-
the reins even when faced agers Can Drive Their Sub- tinguishes them from other businesspeople? Although
vi/ith the company's demise ordinates Mad," which ap- as a group they are not easy to get a handle on, some
must have a need that is peared in our July-August characteristics seem to be common to all of them.
greater than the desire to 1979issue. Entrepreneurs seem to be achievement
see the company succeed. oriented, like to take responsibility for decisions, and
Illustration by dislike repetitive, routine work. Creative entrepre-
In this article, the author, Sally Wern Comport. neurs possess high levels of energy and great degrees of
who has studied and perseverance and imagination, which, combined with
talked to many entrepre- willingness to take moderate, calculated risks enable
neurs who found them-
selves out of control at the
helm, describes the behav- Editor's note: All references arc listed at
the end of the article
Entrepreneurship 161

them to transform what often hegan as a very simple, need for control. Occasionally, their preoccupation
ill-defined idea into something concrete. Entrepre- with control affects their ability to take direction or
neurs also can instill highly contagious enthusiasm in give it appropriately and has serious implications for
an organization. They convey a sense of purpose and, how they get along with others. Some entrepreneurs
hy doing so, convince others that they are where the are strikingly ambivalent when an issue of control
action is. Whatever it is-seductiveness, gamesman- surfaces - they are filled with fantasies of grandiosity,
ship, or charisma-entrepreneurs somehow know how influence, power, and authority, yet also feel helpless.
to lead an organization and give it momentum. They seem to fear that their grandiose desires will get
Along with their mystique, however, out of control and place them ultimately at the mercy
entrepreneurs can have personality quirks that make of others.
them hard people to work with. For example, their bias Consequently, some entrepreneurs
toward action, which makes them act rather thought- I have studied bave serious difficulty addressing issues
lessly, sometimes can have dire consequences for the of dominance and submission and are suspicious about
organization. Moreover, some entrepreneurs I have authority This attitude contrasts greatly with that of
known have had great difficulty taking direction. managers. While managers seem able to identify in a
As Derek du Toit, an entrepreneur, ad- positive and constructive way with authority figures,
mits, "The entrepreneur who starts his own business using tbem as role models, many of the entrepreneurs
generally does so because he is a difficult employee. He I have observed lack the manager's fluidity in changing
does not take kindly to suggestions or orders from oth- from a superior to a subordinate role. Instead, they
er people and aspires most of all to run his own shop.... often experience structure as stifling. They find it very
His idiosyncrasies do not hurt anybody so long as the difficult to work with others in structured situations
husiness is small, hut once the business gets larger, unless, of course, they created the structure and the
requiring the support and active cooperation of more work is done on their terms.
people, he is at risk if he does not change his approach. Larry Malcolm, a successful entrepre-
It has been correctly stated that the higgest burden a neur in the sporting goods industry, is a typical exam-
growing company faces is having a full-blooded entre- ple. In my discussions with him, he talked about his
preneur as its owner."' inability to work for others. After he dropped out of
Du Toit raises questions about what you college, Malcolm started work as a sporting goods
should look out for if you are considering taking an salesperson for a department store. He liked the experi-
entrepreneur on board, working for one, or encouraging ence (sports had always been his great enthusiasm), but
new ventures. What can cause problems? Are there pit- a fight with tbe department head over the "right" way
falls to avoid? If so, what are the options in such situa- of displaying merchandise prematurely ended his stay.
tions? What provisions can you make to accommodate He then found a clerical position in an apparel com-
the typical entrepreneur? Do entrepreneurs have more pany that manufactured active wear. Although he
personal problems than other people? In short, what is managed to stay on longer at this iob, he disliked tbe
the dark side of entrepreneurship? working environment, felt stifled, and, finally, quit.
In his third job, he didn't fare much
better. But by this time, Malcolm began to realize that
working for others was not his forte. Not knowing
what to do and wanting time to think about the future,
Entrepreneur's theater he took his savings and made an extensive trip to
Europe. At a sporting goods fair in Germany, he met a
designer whose work he liked, and on the basis of tbe
In answering these questions, let's keep man's designs, managed to get a few orders from a
in mind that entrepreneurs are not a homogeneous department store and a number of small retail opera-
group. They come in all sizes, each with his or her own tions when he retumed to the States. All of a sudden,
characteristics.' I am discussing here owner-managers Malcolm found himself running his own business.
I have worked with whose personalities were responsi- Larry Malcolm's story is not unusual.
ble for their own or their companies' failures. [See the Many entrepreneurs seem to be driven hy a magnifi-
insert entitled "The Research Base.") cent obsession, some idea, concept, or theme that
haunts them and that eventually determines what
kind of business tbey choose to be in. Malcolm's great
passion was sports, and everything related to it. It par-
Need for control tially explains his talent for finding more functional as
well as attractive designs. Tbis focused interest is not
A significant theme in the life and per- the only factor, bowever. Listening to entrepreneurs'
sonality of many entrepreneurs I have known is the case histories, I have found many situations where it
162 Harvard Business Review November-December 1985

dangered. Buyers of entrepreneurial companies started


by such people should be prepared to inherit a medio-
The research base cre management group.

My research is based on extensive observations of


and interviews with 38 entrepreneurs operating in a
wide range of industries. Most of these entrepre-
neurs were based in the United States or Canada. Sense of distrust
My usual entry into their companies was as an
expert in strategic human resource management Closely related to the need for control is
with a special interest in entrepreneurship and fam-
ily business. Sometimes management asked for my a proclivity toward suspicion of others. What makes
help because it saw my clinicai background as use- some of the entrepreneurs I have known stand out as
fui in untangling complex family and business situa- extreme examples has heen their strong distrust for the
tions. In a few cases. I had a purely therapeutic
"contract" with the entrepreneur. To the extent that world around them. They live in fear of being victim-
I dealt with dramatic" cases, my sample is biased. ized. They want to be ready should disaster strike.
Paradoxically, quite a few I have worked with feel best
when their fortunes are at their lowest. When at the
top of the success wave, they imagine themselves in-
was also-like Malcolm's-people's inability to submit curring the envy of others.
to authority and accept organizational rules that drove So not to tempt the wrath of the gods,
them to become entrepreneurs. when people ask them how things are, they respond by
Many entrepreneurs are misfits who saying that business is only "so-so" or "not too bad."
need to create their own environment.' Offering the But if their fortunes tum and they are close to bank-
deference a subordinate usually owes a superior often ruptcy, it is as if they have paid the price, done their
suffocates this type of person. They tell themselves penance for having been successful. Because it produces
that they don't want to be at the mercy of others. Even a sense of relief, their predicament can have a positive
if they move away from old controlling influences, effect. With the alleviation of anxiety, they have the
these concerns linger on. Many of the entrepreneurs energy to start anew, which they do with enthusiasm
I have been studying are preoccupied with the threat and a sense of purpose.
of subjection to some extemal control or infringement People who are "sick" in this way are
on their will. When such people are suddenly placed in continually scanning the environment for something
a subordinate position, power conflicts are inevitable. to confirm their suspicions. This behavior pattem
People who are overly concemed about does, of course, have its constructive side: it makes the
being in control also have little tolerance for subordi- entrepreneur alert to competitors', suppliers', custom-
nates who think for themselves. In organizations, this ers', or govemment moves that affect the industry.
desire for control can lead to extreme behavior, for Anticipating the actions of others protects them from
instance, an owner-manager needing to be informed being taken unaware. But such vigilance can also lead
about even the most minute operation of the company. them to lose any sense of proportion. Focusing on cer-
To illustrate, every moming one entrepreneur responsi- tain trouble spots and ignoring others, entrepreneurs
ble for a $20 million consum^er product operation like this may blow up trivial things and lose sight of
habitually opened not only his own personal mail but the reality of the situation.
also all mail directed to the company. In addition, he When a strong sense of distrust assisted
had to approve all requisitions, no matter how small. by a need for control takes over, the consequences for
He said it gave him a "feel" for the overall functioning the organization are serious: sycophants set the tone,
of the organization. people stop acting independently, and political games-
Once that may have been the case. But manship is rampant. Such entrepreneurs can interpret
excessive concem with detail that may be appropriate harmless acts as threats to their control and see them
in the start-up phase of a company will increasingly as warranting destructive counteractions. Understand-
hecome a burden to the organization as it stifles the in- ably, such thinking doesn't lead to sound head office-
formation flow, hampers decision making, and inhibits subsidiary relationships.
the attraction and retainment of capable managers. In In one case, headquarters sent a consul-
this entrepreneur's situation, although his subordinates tant to help the chief executive of a newly acquired
admired many of his qualities, they deeply resented company to assess profitability by product line and de-
being infantilized. Good performers did not stay. velop and implement a strategic plan. When the con-
Moreover, because true accountability sultant arrived, the ex-owner didn't even let him look
was lacking, information needed for decision making at the financial statements on the ground |as he ex-
did not circulate. As a result, sales and profits pla- plained to headquarters) that the consultant might use
teaued and the future growth of the enterprise was en- the information to help the competition. At another
Entrepreneurship 163

time, when his machines were idle and he had to lay ever-narrowing trail leading to the top of a mountain.
off employees, this same person refused to sell goods-in- But helow the top, a gate blocked the road. To move
process to a noncompeting business. He argued that he past it, the man would have to risk sliding down.
had once heen humed when a competitor used his If one looks at these dreams as symhol-
goods-in-process to manufacture a line of products ic, albeit in a simplified way, one sees some wishes and
that competed with his own, and he was not going to fears standing out. One of the more noticeahle charac-
let it happen again. teristics of hoth dreams is their grandiosity; they
In another case, the vice president of hu- involve high positions-balconies and mountains-the
man resources of a conglomerate was surprised to dis- way to hoth viewed as fraught with many dangers. We
cover that the former owner of a subsidiary had televi- want to ask, why does he want to go there at all? Whom
sion cameras monitoring the front and hack entries of is he trying to impress? What are the dangers? How do
hoth his plant and his office huilding. To allay his fears women figure in all of it? What makes him scream, and
that employees were stealing from him, the manager what causes the feelings of suffocation? What is hehind
kept two split-screen consoles on his desk that he his hyperactivity?
watched'constantly. Perhaps one way of looking at the need
The problem one has countering such for applause is to see it as a reaction against feeling
distorted forms of reasoning and action is that behind insignificant, of being a nothing. Some entrepreneurs
the fear and suspicion always lies some reality. If one I have known hear an inner voice that tells them they
looks hard enough, one will always find somewhere will never amount to anything. But regardless of who
some confirmation of the entrepreneur's suspicions- put this idea into their minds, these people are not re-
someone stealing something. Unfortunately, the per- tiring types who take such rebuke passively; they are
son who manages this way forgets the price the com- the defiant ones who deal with it creatively through
pany pays in deteriorating morale, low employee sat- action. They possess enough inner strength to prove
isfaction, and declining productivity. the voice wrong and show the world that they amount
to something. They will ride to the top in spite of all
the dangers; they will get the applause; they will find a
way to master their fears.
Desire for applause A manifestation of this need is the
interest some entrepreneurs show in huilding monu-
The common heroic myth begins with ments as symbols of their achievements. Sometimes
the hero's humble hirth, his rapid rise to prominence the monument is an imposing office huilding or pro-
and power, his conquest of the forces of evil, his vulner- duction facility; sometimes it is a product that takes
ability to the sin of pride, and, finally, his fall through on symbolic significance. For example, hecause he
hetrayal or heroic sacrifice. The basic symbolic themes wanted to show people in the section of town where
here - of hirth, conquest, pride, hetrayal, and death - are he grew up that he had amounted to something, one
relevant to all of us. And as we have seen, with a Greek entrepreneur built an imposing head office and new
chorus in the hackground applauding their achieve- factory. The contrast between his huilding and the
ments hut warning them ahout pride, some entrepre- decrepit surroundings was striking. That this action
neurs act out the same myth. jeopardized the company's financial position-it was
The myth helps us see why quite a few during a period of economic decline and all advisers
entrepreneurs live under a great amount of tension. advocated offshore production-made the decision
They feel they're living on the edge, that their success more bizarre.
will not last (their need for control and their sense of Given these strong needs, it's reasonahle
distrust are syniptomatic of this anxiety) hut they also to ask if it is possible to hamess such drives. Can such
have an overriding concern to be heard and recognized, entrepreneurs relinquish their need to invest in certain
to he seen as heroes. Some entrepreneurs need to show organizational symbols? Can they live under the con-
others that they amount to something, that they can- straints of corporate budgets, expense controls, and
not he ignored. long-range plans? Can they play second fiddle?
A very gifted entrepreneur, who was ex-
periencing great stress while working out how fast to
expand his business, described to me a dream he had
repeatedly In the dream, he would he standing on a hal- The defenses we use
cony, looking down, to see a group of women smiling
admiringly up at him. This scene would soon fade and People's personalities are largely deter-
the admirers would tum into harpies. Feeling suffo- mined hy the way they balance their views of the
cated, he would wake up screaming. He also recalled world with extemal reality. A personality consists of
dreams of himself as a swaggering cowboy climhing an the enduring, pervasive behavior pattems that com-
164 Harvard Business Review November-December 1985
Entrepreneurship 165

plex, deeply embedded psychological characteristics monly adopt to see themselves as blameless. If used to
create. Although each of us may behave differently, one the extreme, though, this way of managing stress
thing we all have are defenses that help us deal with becomes a dysfunctional personality characteristic.
the stresses and strains of daily life. The relationships People who act this way experience
we develop with others are colored by the kinds of little sense of personal responsibility. They distance
defenses we use. themselves from the problem and deny and rationalize
People who are in trouble psychologi- away whatever responsibility they may have had. They
cally (who have difficulty balancing their intemal and refuse to see what tbey don't like to see and blame oth-
external lives) often resort to "splitting" as a way of ers. In an organization, this kind of thinking contrib-
coping. Splitting is a tendency to see everything as utes to political infighting, to denial of responsibility,
either ideal (all good) or persecutory (all bad). The way and to insularity and factions.
these people see themselves as well as others becomes One entrepreneur who had sold his
so dramatically oversimplified that they fail to appreci- company, but remained in charge, refused to accept re-
ate the complexity and ambiguity inherent in human ports that sales were dropping rapidly and a number of
relationships. They tend to see things in extremes creditors were ready to pull the plug on the company.
when dealing with other people. While people with Instead of recognizing that the downturn resulted from
unbalanced personalities idealize some people and put mismanagement on his own factory floor and in his
them on a pedestal, they vilify others. The attitudinal design department^ he denied his own responsibility
pendulum shifts all too easily. in the matter and blamed any adverse indications on
Let's look at an example. One entrepre- the govemment or on customers' malice. He also kept
neur I studied made a point of hiring young MBAs just arguing that the new product line had miraculous po-
out of school. He would marvel at their mastery of tential, and nobody in the company was bold enough
the latest management techniques and hold the new to contradict his statements. Instead, his subordinates
executives up as examples for his other employees. He continually reassured each other that the president's
would tell them that these were the kinds of managers opinion must be correct. Despite a hands-off policy,
he needed. Inevitably, his lavish praise would stir up head office management eventually had to intervene
enormous resentment among the rest of the staff (with and end prematurely the entrepreneur's employment
the predictable spiteful consequences). But also, just as contract. It took many years of effort to get the com-
inevitably, the president's infatuation with his latest pany back into the black.
recruit would soon exhaust itself and disappointment Finally, quite a few entrepreneurs I have
would set in. No new recruit could live up to his exag- worked with are inclined to turn the passive into the
gerated expectations, and eventually, like other MBAs active, a characteristic that relates to their difficulty
before, he or she would leave. controlling their impulses and managing anxiety and
When this same man sold his company, depression. Such entrepreneurs defend against anxiety
he was at first quite enamored of the acquiring compa- (evidenced by their restlessness and irritabihty) by
ny's CEO. He would praise his new boss's accomplish- turning to action as an antidote.
ments to all. It would give him great pleasure to dwell As these entrepreneurs try to steer be-
on certain incidents illustrating the CEO's achieve- tween their fear of success and fear of failure and won-
ments. But as with all the others, this infatuation did der if success will last, or whether- not consciously—
not last long. A request from headquarters for more in- they will suffer the dreaded fate of the mythical hero,
formation about a new advertising campaign was the they finally can't stand the tension. The work worry
turning point. The ex-owner interpreted the request as creates is far too anxiety provoking, so they flee into
a vote of no confidence, as an attempt to find fault with action, even if it is impulsive and thoughtless, without
his actions, and even as part of a plan to get rid of him. considering facts. I'm not saying that waiting out
He had had similar reactions to other requests from events has no attraction for them, only that they may
headquarters. Almost ovemight in his eyes, the CEO fear so strongly that being passive would make them
changed from hero to chief villain. Eventually, because overdependent and, ultimately, controlled by others,
the entrepreneur withlield information, the CEO had that they have to act counterdependently
no choice but to make his fears come true, and he let Most of us work continually to keep a
him go. balance between dependency needs and the wish to do
We all have a tendency to externalize things on our own- to be independent. Some entrepre-
intemal problems: we "project" our discomforts and neurs seem to have a particularly rough time main-
fears onto others. When we attribute a threat we feel to taining this balance and preserving a stable image of
someone else or to an event, it becomes more manage- themselves. Instead, they teeter-totter and are prone to
able. But if this tendency becomes exaggerated and the deep mood swings. When things are going well, every-
predominant reaction to stressful circumstances, it can thing is terrific. But when the bubble bursts and some-
be problematic. Scapegoating is a method people com- thing goes wrong, the pendulum often shifts complete-
166 Harvard Business Review November-December 1985

ly in the otber direction. Then everything is terrible, about the working arrangements and operational pro-
the situation is hopeless, and bankruptcy is just around cedures each would accept. While the entrepreneur ex-
the comer. pressed his concem about preserving his independence,
One entrepreneur I got to know com- the president described the information he would need
pared himself at one point to the mythological King from any subsidiary to make him feel comfortable.
Midas, implying that everything he touched tumed to They also agreed that the entrepreneur could call on
gold. He would describe at great length how fantasti- the president any time for assistance.
cally successful and profitable his company was. In After the acquisition, the president kept
this state of mind, letting himself see only what he his promise to let the entrepreneur run his own show;
wanted to see and using all the defensive pattems he kept interference from headquarters at a minimum.
1 have just described, he didn't bother to read sales and The arrangement about assistance tumed out to be
financial reports. If anyone questioned him about that, critical. The president soon found out that the entre-
he would say that his reporting system was just fine; preneur was using him regularly as a sounding board,
everything was terrific. Only news from the head office which he did not mind since it enabled him, in an
controller pointing out that the company had suffered atmosphere of mutual tmst, to bring a healthy dose of
a loss during the last quarter aroused him, finally, from reality to the entrepreneur's occasionally high-flying
his self-deceptive state. Needless to say, he didn't take schemes. This loose-tight arrangement tumed out to
the report with equanimity; his mood plunged. He be very successful. The new acquisition became one of
feared that he was over his head and that his operation the most profitable in the conglomerate's portfolio of
was finished. It took some time to pull himself companies.
together. Unfortunately, though, as we've seen,
acquisitions don't always have happy endings. The per-
sonality quirks I have described can make collabora-
tion very trying. The last case provides a clue, however,
to how executives and venture capitalists can work
Turning on the light with these imaginative, but sometimes difficult, peo-
ple. The challenge is to develop a relationship based on
mutual trust that will allow the executive and the
I have described some of the dark side of entrepreneur to talk openly and regularly and that will
entrepreneurship. The cases I've outlined here are ex- enable the latter to test ideas against reality.
treme, though; most of the relationships between en- To facilitate this process, venture capi-
trepreneurs and their acquirers do not deteriorate that talists and chief executives should respect the entre-
much. For one thing, many countervailing forces- preneur's needs for independence and design control
institutions, government, banks, and a person's health and information systems accordingly. Living with such
and good judgment-prevent excesses. Most entrepre- an arrangement is not easy. Given the erratic way some
neurs'sense of reality prevents things from getting out entrepreneurs run their companies, a loosely coupled
of hand. relationship with headquarters may prove problem-
Entrepreneurs do not necessarily have atic. Such an approach will demand that executives at
more personal problems than other people, nor do they the head office maintain a proper balance between
inevitably have personality disorders. What one can monitoring performance and letting go of control. One
extract from the previous comments, however, is that way to ensure the autonomy of acquired companies is
entrepreneurs have their own unique ways of dealing to keep the headquarters staff lean to prevent excessive
with the stresses and strains of daily life. In saying this, interference.
I want to emphasize that the boundaries between very Top managers should heed a few other
creative and aberrant behavior can be blurry; normal precautions before taking an entrepreneur on board.
and irrational behavior are not discrete categories on a Before buying an entrepreneurial company, pay close
scale. The mix of creative and irrational is what makes attention to the quality of manageme-nt that will come
entrepreneurs tick and accounts for their many posi- with the deal. Ask if the personnel pool of the com-
tive contributions. Entrepreneurs create new indus- pany you'll acquire can be trained and developed. Or
tries and jobs and stimulate the economy. Their vision- are you facing such a mediocre management that it
ary qualities and leadership abilities enable those will he very difficult to build a team that will fit the ac-
around them to transcend petty concerns and attain quiring company's culture? Does a situation of trained
great achievements. incapacity and "decidophobia" exist that will make it
In one case I know, the president of a impossible for the acquired management group to
conglomerate worked hard to build a relationship move the company forward if the entrepreneur departs?
based on mutual trust with the entrepreneur running a Executives should also consider how
company he was considering acquiring. The two talked well the entrepreneurial company's culture will fit the
Entrepreneurship 167

acquiring company's. Is "the way of doing things" at


the head office very different from that of the acquired
company? How similar are the basic values in the two The light side
organizations, for example, about issues like accepted
hehavior, structure, and goals? (Naturally, I am not "So you are going to start the dry goods business?"
thinking here of a dramatic transformation but of a [John Wanamaker was asked, as reported in a
gradual shift.) Corporate executives should he equally newspaper.]
"Yes!"
open to change; cultural adjustment works hoth ways. "What is your idea, Mr. Wanamaker, in doing it?"
In any case, executives need to consider whether the "To do in ladies' goods just what we have done with
cultural differences are so great that a clash is inevita- men's goods-first in getting clothing for the people
at reasonable prices; then in reducing the prices of
ble. Moreover, if conflicts occur, will they he drawn shoes; then in lowering the cost of hats. All these
out? are men's and children's goods. Now, then, we pro-
pose to turn our attention to women's goods, hoping
Given the wealth of product and market to bring about beneficial results."
knowledge entrepreneurs usually have, separating "But this is not in your line?"
them from their companies should he the last option. "Why not, who has a patent on merchandising? We
never questioned the right of dry goods stores that
In those instances where it hecomes quickly obvious began to sell clothing, nor would we doubt the pro-
that an entrepreneur's need for autonomy overshadows priety of dealing in any article that we pleased. If we
everything else, it may he advisable to have the were just starting in business, who would consider
founder stay on for a short transition period only. And it proper to question what business we chose to
follow?"
hecause, as a rule, acquiring companies do feel the need "But you have a large business already."
to impose their cultures on subsidiaries, entrepreneur- "So we have, and we worked 16 years for it, and with
owners most often do leave. the large property we now have we can do a great
deal more business with no more expense for rent,
Whatever executives or venture capital- taxes, gas, and only the addition of needed clerk
ists finally decide to do, they should keep in mind that hire. This is a great advantage for introducing a new
department."
entrepreneurs' personality quirks may have heen re- "What is the tendency of large establishments?"
sponsihle for their drive and energy and are important 'Well, the moment fhe doors of the new dry goods
factors in making them so successful. Thus instead of department open the prices will go down through-
out the city."
fighting these idiosyncracies, managers should regard "Why do you suppose thaf?"
developing them as a challenge. "Because the more compefifion, the better if is for a
connmunify-the better the people are served..."
"What effect will this have on other storekeepers?"
"That is not fhe question; the real question to be con-
sidered is whether the people will be served by it or
References not- it is not the few that are to be thought of, but
the many....The new store must have an excellent
effect on the city business, [just as] two roads serve
1 DwckEduToit. 3 See Orvis E Collins and the city befter than one would. By Its unifonnly mod-
"Confessions of a Successful David G. Moore, erate prices it will compel low prices everywhere; it
Enutprencut," The Organizalian Makers:
will stimulate everyone to do their best fo serve their
HBR Novcmbcr-Deccmhei 1980, p. 44. A Study of tndependeni Entrnpreneuis
(New Ywk:
patrons; it will attract, by its mammoth sfock and its
2 Set, (or example. Meredith, 19701, and conveniences, crowds of people from the country,
Norman R. Smilh, my article, who buy all kinds of goods of our neighbors, the fur-
Tbe Entrepieneui and His Firm: "The Entrepreneurial Personality: niture, glassware and stove stores, harness, grocery
The Relationship Between A Person at the Crossroads," and other stores: it will bring money to Philadelphia
Type of Man and Type of Company loumal af Management Studies, fhat otherwise would not come here; if will give
|Eus[ L^nsinfL Mich . vol. 14, no. 1,1977, p. ,W. employment to hundreds of people, many of whom
Michigan State Univcraiiy, 1967)/ would otherwise be idle."
hktbcfi A. Wainc-rand
Irwin M. Rubin,
"Motivation of Research and
From
DcvL-lopmcnt Entrcptcneurs; "John Wanamaker, 1838-1922,"
LlfiLTminant.'i oi Company Success," in CasBbook in American
Imnna! i>l Applied f'sychohgy, Business History (ed. by
N S.B. Gras and Henrietta M.
lunt 1969, Issue 3, Part 1, p. 178; and Larson). AppleTon-Century-
]cihn A Hornaday, Ccofls. Inc.. New Yoth, 1939. p.
483 (abridged) Reprmted with
"Research Ahotil Living Ihe permission o) Irvinglon
Entrepreneurs," Publishers. Inc., New York.
in Encyclopedia of Entrepreneurship,
ed. Calvin A. Kent,
Donald L, Sexton, and
Karl H. Vesper
|En«lewcmdChffs,N.|,:
l'tentice-Hall.l982),p.2D.
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