All companies today want to stay or become entrepreneurial.
But what are the attributes of the entrepreneur? The most convincing list by far was assembled by Geoffrey A.Timmons in an article published by the Harvard Business Review in 1979. He found that entrepreneurs required the following nine qualities:
1. A high level of drive and energy
2. Enough self-confidence to take carefully calculated, moderate risks
3. A clear idea of money as a way of keeping score, and as a means of generating more money still
4. The ability to get others to work with you and for you productively
5. High but realistic achievable goals
6. The belief that you can control your own destiny
7. Readiness to learn from your own mistakes and failures
8. A long-term vision of the future of your business
9. Intense competitive urge, with self-imposed standards
How do these attributes stack up against the actual careers of great business founders? We found nine entrepreneurs whose key success factors fitted the nine: but all nine men were bound together by a common tie. They were deeply, thoroughly and permanently committed to the enterprise in which they passionately believed – and all the nine attributes represent facets of this commitment.
Miguel Torres showed enormous drive and energy as he created an empire from a small family wine company in Penedes. He took control aged 23, and never wavered from his aim of making Torres synonymous with Penedes, and Penedes the match of any wine-making region in Spain. In 1940 he began rebuilding the family bodega, changing from bulk-selling to promoting the Torres brand, using now-famous names like Sangre de Toro, Vina Sol and Coronas.
In the 1960s, Torres took the equally important step of planting non-traditional grapes (starting with Cabernet Sauvignon and Chardonnay) and using modern wine-making techniques. His expansion created Spain's largest independent wine business, and very possibly the world's biggest producer of fine branded wines, selling 17 million bottles annually – and seven million more of brandy. The firm remained under the founder's autocratic hand until his death at 82 in 1991.
His commitment was total: witness a wartime journey to America, when U-boats prowled the beloved Atlantic, to sell his products – and learn brand marketing. Post-war, he piled wine into a battered old car and crossed the Pyrenees to establish further markets outside Spain. To fulfill his ambitions, he bought vineyards endlessly, in huge quantities, while simultaneously, and, just as tirelessly, perfecting production techniques.
Torres believed that the best way past obstacles was straight through. He often trampled over regulations, and had no use for bureaucrats: witness one parting shot at a group from Brussels 'If you achieve half that you promise I will be pleased.' The intense personal drive of this diminutive man couldn't allow any Torres wines to sell under somebody else's label. In his 85 markets worldwide, his refrain was always the same – 'First they must taste my wine'. His labels were his principal means of promotion, and dynamic enthusiasm was his main management technique. It works wonders.
Torres owed much to his oenologist son, Miguel, just as Bill Hewlett owed much to David Packard. It exemplifies all the self-confidence required to take carefully calculated, moderate risks. Cautious risk-taking expanded the company to 1993 sales of $20.3 billion, profits of $1.2 billion and assets of $16.7 billion – or 31 million times the pair's start-up capital.
Even Dave Packard didn't have a clearer idea of money as a way of keeping score, and of generating more money, than William Morris. Yet Morris was no financial genius, nor, for that matter, a skilled mechanic or brilliant engineer. He started his first bicycle workshop in 1893, aged only 16, with capital of £4, and seven years later took on both motor bikes and a financial backer. That partnership broke up; the next, intended to expand Morris's new line in cars, went bankrupt.
Starting again, Morris rapidly built his reputation and business in car repairs: by 1943 The Morris Garages was also Oxford sales agent for several makes. Their unreliability and high repair costs gave Morris his great idea: producing cars that would beat the competition on both counts, with no extras on top of the basic price – £165 for the first Morris Oxford. That launched Morris (later Lord Nuffield) on his way to becoming Britain's leading car maker.
He cemented that position post-war, first with the Morris Minor, the all-time national best-seller, and second by merging with Austin. Morris had an infinite capacity for taking financial pains. In the 1921 slump his acute understanding of the relationship between volume and cost saved the day, and the firm. With output down from 276 to 74 cars a month, Morris cut the Cowley's price by nearly a quarter, despite protests that profits would collapse to £15 a car: sales soared from 74 to 361, and profit to £50.
The repeated price cuts (he created a 1931 sensation by launching a car at £100) were based on meticulous costing, supervised personally. He also insisted on having a detailed financial report every Friday, coupling this rigid score-keeping with an equally tight control over capital employed. Yet he believed devotedly in ploughback as the engine of growth, and never doubted the crucial importance of his financial policies in creating his success. He wrote in 1924 that 'I owe very much – more than I can tell – to sticking to them.'
It took Gottlieb Duttweiler even longer than Morris to find his commercial feet and to demonstrate his great ability to get others to work with you and for you productively.
Born in Zurich in 1888, the 37-year-old Duttweiler founded Migros in 1925. His idea was to undercut the food retailing oligopoly by working on halved, 10% margins. 'I could only have revolutionised the food business through finding a clever partner – the Swiss housewife. I put forward an ultimatum: either she took part in a new, simpler sales system, and then we both could win, or she could cling to her old habits, and I would shut up shop'. The Migros motto, 'more goods and less hassle', worked like a charm.
Before opening stores, Migros sold from street corners. The housewife-partner had to turn up at the right time at the right street corner for one of Dutti's vans: and to buy a limited range, starting with only six items (rice, sugar, pasta, coconut oil, coffee and soap), all unbranded. To simplify pricing, he sold his packages at unvarying price points. If market prices rose, he simply adjusted the weight downwards, and vice versa.
Duttweiler thus pioneered many common features of today's supermarkets, from own-brands to discounts for bulk purchases. He died in 1962, still in absolute command, having converted Migros into a cooperative 20 years before by giving away shares to his customers. Dutti commanded loyalty from his staff as strong as that of his customers.
'There is nothing so deeply contenting for employers', he said, 'as the sense of harmony with co-workers: there is also no better pledge for the success of working together'.
The 'realistic achievable goals' of Marcel Dassault were literally sky high – an aeronautical engineer, he became Europe's premier aerospace tycoon. Unhappy with the propeller of a plane on which they were working, Dassault and Henry Potez began making their own: the 'Eclair' was a success, and the partners promptly designed their first plane, a two-seater fighter. Peace forced his retirement, but when government interest in military aviation returned, so did Dassault.
A stream of planes followed; air-ambulances, fighters, bombers and transports. In 1936, when the industry was nationalised, Bloch pocketed 17 million francs, and went back to making propellers. After France's defeat, this business was seized by the Vichy government, and Bloch spent several months in Buchenwald. He was liberated in 1945, aged 53, and proceeded to design personally the military aircraft which made him one of France's richest men.
In 1986, the year of his death, the Dassault-Breguet group won almost half of all overseas orders awarded by the French aviation industry: that year it delivered 4 billion francs worth of military aircraft, nearly double the 1985 total. Dassault's enormous wealth, and his intimate relations with the State, made him a figure of constant controversy. He used journalism to advance his interests, founding Jours de France and taking it to a 4 million circulation. His ambitions, like his planes, flew high in everything he touched.
Like his heroes, Edison and Ford, Dassault combined technical genius with powerful business instincts and disdain for the 'impossible' – like enjoying development costs, on one estimate, only a sixth of American figures. He consolidated this advantage by extensive sub-contracting to minimise his dependence on production. He gleefully recounted the many times when his aircraft (nearly always) beat the prototypes produced by nationalised competitiors. So long as he made the machines the military wanted, Dassault could present the State with the offers he loved: 'those it couldn't refuse'.
Akio Morita showed his belief that he could control his own destiny early in Sony's history. It had created the first transistor radio, which Morita took to the US. The Bulova Watch company came up with an order for 100,000 units, worth several times Sony's capital, on one important condition. The radios had to carry Bulova's name. Morita wouldn't agree. The Bulova man was astounded:
'Our company is a famous brand name that has taken over fifty years to establish. Nobody has ever heard of your brand name.' Morita replied, 'Fifty years ago your brand name must have been just as unknown as our name is today. I am now taking the first step for the next fifty years of my company. Fifty years from now I promise you that our name will be just as famous as your company name is today.' Three decades on, Bulova is just another watch brand: the Sony brand spells high enough quality and reputation to attract premium prices and underpin assets which now total $41.7 billion.
Morita, born in 1921, founded the business in 1946 with Masaru Ibuka, backed by only a few hundred dollars of family capital. The first significant product was an American-inspired tape recorder. In the 1950s, however, Ibuka found the newly invented transistor at Western Electric, and immediately licensed the new technology for a down-payment of $25,000. The first pocket transistor radio, launched by Sony in 1957, started the company on its upward trajectory.
By 1990, it was the world's 51st largest company, thanks to breakthroughs like the Walkman, the video cassette recorder, 8mm video and many others. Ibuka supplied the technical brilliance and Morita the marketing genius: he thus, Sony chose as company and brand name because 'that way we would not have to pay double the advertising cost to make both well-known.' And Morita has always called the Bulova decison the best he ever made.
Camillo Olivetti had many opportunities to learn from his own mistakes and failures. Even in 1930 the firm, founded in 1908, was relatively small, employing 700 people to produce some 13,000 typewriters. His untrained employees and tiny capital were typical for an Italy with no mechanical engineering tradition. He also had to battle against severe external difficulties, in both war and peace.
Very prudent in his finances and expansion, Camillo Olivetti (according to his son Adriano) was basically a good engineer – 'intelligent and tenacious.' That alone wasn't enough to combat the Americans who then dominated the industry. Olivetti was distinguished from the pack by his aesthetic ambitions. Not only did his advertising set new European standards; so did the airy layout of the Ivrea factories and, above all, the product design.
The M1, devised after an American visit, took three years to develop: Olivetti claimed that it stood out 'for the unified taste of its design, which is ahead of all previous exampes'. In fact, many mistakes were made. Olivetti himself admitted that 'we are still obviously in an early phase of technology: the mechanisms on view are still numerous and they are more juxtaposed than co-ordinated'.
However, Olivetti always used the failings of one design as the springboard for the improvement of the next. Trial leading to error leading to success also advanced the advertising from 'ingenuous and often bombastic language, with the relationship between image and copy still uncertain, to briliant posters, using well-known artists to emphasise speed and the new social status of the typist'. Leadership in office machinery stemmed from learning, in one description, 'to survive the bleak moments without jeopardising the future of the company, but each time consolidating its position, thanks to a willpower and clarity of objectives that never flag'. Camillo spent his last years designing and building new machines with a group of his old workers, dying in 1943.
Ruben Rausing's long-term vision of the future of his business extended beyond the grave: as a last-wish injunction to his heirs, the inventor of the Tetra Pak insisted that they should not diversify the core business he had created beyond packaging beverages and other liquid food. Rausing had invented his tetrahedron-shaped container in the 1950s, solving a major technical problem: how to package liquids like milk aseptically so that they could be shelved for long periods without refrigeration.
Major publicly-owned corporations shy away from reliance on one product. But Rausing, keeping his business entirely private, saw that his invention had the potential for enormous growth. Tetra Pak became the world's largest paper packaging business, with revenues of $5 billion from 109 countries. This enormous geographic spread followed naturally from the insistence on sticking to the single product. To expand, Rausing and his sons (Gad and Hans) had no option but to take the geographical route and expand vigorously outside Sweden.
In markets like Spain, Italy and Japan, the taste for milk pasteurised under very high temperatures created huge volume for a product facing virtually no competition: in America, where the milk market proved unsuitable, fruit juices provided rapid growth. With such large volume, the efficient concentration on one basic product also means very low production costs and very high margins. On one estimate, it cost Tetra Pak only 6-7 cent to make cartons that sold for 10 cents in numbers exceeding 60 billion a year.
In its single-mindedness, the company has turned aside business from detergent, shampoo and other non-food firms. But in 1990 the multi-billionaire heirs paid £1.5 billion for the Alfa Laval dairy and food-processing equipment company. A third of the cost came from their own cash. That's the reward for having a long-term vision – and sticking to it.
The German engineer Robert Bosch was no less intent than the Rausings on realising a long-term vision and on achieving near-monopoly status; in the age of fuel injection, one of his successors could boast that for European car-makers their 'only alternative to Bosch is Bosch.' That flowed from an intense competitive urge, which was accompanied by self-imposed standards so high that they still deeply influence his successors.
As Bosch wrote in 1919, 'it has always been an intolerable thought to me that someone should inspect one of my products and find it inferior. I have therefore always tried to ensure that only such work goes out as is superior in all respects.' Born in 1861, Bosch opened his 'Workshop for Precision and Electro-Mechanics' aged 25. His big breakthrough came in the early 1900s, when his technician developed the high-voltage magneto ignition which, combined with the first Bosch spark-plug, initiated a new era of internal combustion engines.
His competitive urge took him by 1918 into manufacture of all the electrical equipment for cars, from electric starters to lighting systems. He believed 'from my experience that nothing can be harder than for a company to continue and remain progressive without competition,' That thought spurred his drive for ever higher standards: 'You can only compete against efficiency with efficiency', which was demanded from his suppliers as well as his staff.
The latter benefited from Bosch's humanitarian social ideas: he introduced the eight-hour work-day and the five-day week as early as 1906. He also vested control of the business (now the world's 59th largest, with sales of $19.6 billion) in a Foundation dedicated to public and social purposes. His rigorous standards led Bosch to anticipate many of the key features of total quality management, including supplier partnership. As he said, 'A good supplier is more important for me than a bad customer.'
The power of the nine attributes is evident from all nine careers, which, of course, don't exemplify only one apiece. The attributes form a cohesive pattern whose separate elements require each other – and all of them can be developed by determined, committed individuals and companies. In fact, that's the test of commitment. If you are deficient on any of the nine counts, will you work to remedy the weakness and turn it into a strength?
There's an equally important follow-up. Will you sustain that commitment over time? Look at the careers of the nine, and notice how many of them strove until middle age to achieve major success – and then intensified the drive thereafter. Commitment over time is the Tenth Attribute. Without it, you'll never make the most of the brilliant Nine.