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July 11, 1994 02:00 AM

WHY FEW FIRMS OUTLIVE FOUNDER

Leon A. Danco
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    Men who found businesses are the green berets *in our army of economic men. They fight their battles over all kinds of terrain-in basement foxholes, garages or the back of a truck. Entrepreneurs swim in white water rapids with the full knowledge that there's nobody around who's going to throw them lines or even a few words of encouragement.

    These founders aren't headquarters types. They don't work out of operations manuals-and they couldn't if they tried, because most of their time is spent struggling to stay alive against overwhelming odds. What they learn, they don't learn through training or in school. They learn by surviving. If it works, they figure, use it again.

    They keep afloat thanks to guts, tenacity and a vast misunderstanding about just how big the risks really are. We should be interested in these early struggles because when-and if-these entrepreneurs win, they become ``business owners,'' the economic core of our society. Yet, too often, those businesses don't survive their founders. The question we must ask is, why? The answer is that the successful business owner is too heroic for his own good.

    Over the years, I've been called upon to help thousands of successful ``entrepreneurs.'' I'm a business owner myself. I know firsthand just how cantankerous such business owners can be.

    Trouble is, tough isn't what the successful business owner needs to be-not if the business is going to survive him.

    What he needs is to be open, communicative and receptive to the ideas of others. He needs to be able to delegate and be a teacher. But these are precisely the qualities ``toughness'' won't allow.

    The hairy-chested business owner got to be the way he is because of the hell he went through to become a winner. This makes it understandable. But he stays the way he is because he tends to forget what those experiences really were. He begins to believe his own war stories. This is why a little honest reminiscence can be an owner-manager's best medicine.

    During the time that the entrepreneur was bearing the blazing standard of free enterprise up the steep hill called ``success,'' what he was mostly doing was getting knocked around, stumbling, panting and just struggling to stay alive.

    What little he knew about business and management at that point in his career would barely have filled the shoe box he kept his records in.

    While he was building his dream, the only fuel he had to run on was a mixture of unwarranted confidence and blind hope.

    Given all this, we have to ask an important question: Why do certain business founders succeed? Don't try to ask the winners themselves. Sober, most of them haven't the slightest idea.

    I suspect that the conception and raising of a successful business is as much a semi-miraculous event as it is an achievement of the founder.

    I'm convinced there's more than just talent involved in success, but success tends to make believers out of us-believers in ourselves and disbelievers in luck, good fortune and blind chance.

    Sure, the entrepreneur has to have prodigious abilities just to survive, but his genius tends to be 90 percent sweat applied to 50 percent luck.

    The successful business founder has to have an absolute singleness of purpose-almost a tunnel vision-to survive the early days.

    Years later, this singleness of purpose becomes translated into ``raw courage'' or ``guts'' or vision. But the reality is that the business founder just didn't have time to think about what actually was happening or could happen to him.

    Like most heroes, he saw something that needed doing, so he did it. By the time that the founder got smart enough to get scared, it was too late to turn around. So he made it. Later, he told himself he knew it would work out all along.

    This fantasy would be harmless if it didn't encourage the founder to become overimpressed with his own experience. He eventually confuses survival with talent and then he becomes divine.

    This means his managers can't get through to him. This means his advisers finally give up trying and merely settle for collecting their retainers. This means his successors are taught only to ``learn to do it the way I did,'' presumably because whatever he did worked. He's throwing grenades at his own foxhole.

    If more of us could remember the real world from whence we came, we'd find it easier to do what's needed to get where we want to go-to a secure future with a business that can survive us.

    Mr. Danco is CEO and founder of The Center for Family Business, a national consulting practice in Cleveland that deals with the growth and continuity of the family-owned business.

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    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Tire Business would love to hear from you. Email your letter to Editor Don Detore at [email protected].

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