The Hottest Entrepreneur In America Is The "smart Team" At Compaq Computer

Companies like Compaq are emerging from the high-tech shakeout stronger than ever. Their secret: avoiding the one-man shown. Is there a lesson here for the rest of us?

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In the beginning, there was the team. Bill Murto, Jim Harris, and Rod Canion were all senior managers at Texas Instruments Inc., in Houston. Each had been bitten by the entrepreneurial bug. Together they decided to strike out on their own.

Aside from that, little else was clear. Not the financing. Not the timing. Not even the type of business they would go into. As they gathered in the sweltering Houston summer of 1981, they considered starting a Mexican restaurant, a company to produce hard disks for microcomputers, and a business built around a beeping device to help find a misplaced briefcase or car keys. In the end, they decided to develop a portable personal computer compatible with the IBM PC.

The Compaq computer turned out to be well designed and well executed, a market sensation that generated $111 million in sales in its first year of operation. It was the hottest performance by a start-up in the history of American business, and success has since been piled on success. Compaq Computer Corp. has gone on to become the world's second-largest manufacturer of personal computers for business, with anticipated 1985 sales of nearly half a billion dollars. And, even more remarkable, profit margins have kept pace with growth.

Compaq's is the sort of story of which high-technology myths are made. But unlike many start-ups that have made countless fortunes in Silicon Valley and elsewhere, this one was different. There were no flashes of genius, no technical break-throughs. If anything, say Compaq's founders, their story is something of a paean to dullness, a lesson in how a strong core of experienced executives managed their way to the top of high tech.

"I'm not a superstar with all the vision, just a guy who moderates the consensus among a pretty bright bunch of people," explains president Rod Canion in his austere office amidst the pine forests of suburban Houston. "Our way has been to work as a team to find out the market needs and execute our product. If people say, 'Ho hum' and that we need more pizzazz, I think they miss the point."

Canion's point is that entrepreneurial success is far less dependent these days on the brilliant insights and force of personality of hard-charging chief executive officers. A growing number of companies are organizing themselves around a "smart team" of experienced, savvy managers who substitute collegiality for hierarchy and keep their focus on a single goal: building a company that's going to last.

The term "smart team" may have originated with management consultants Steven M. Panzer and Robert P. Kelley Jr. With venture capital tight, competition fierce, and product life cycles shrinking to spans of months instead of years, Panzer and Kelley argue that high-tech entrepreneurs have to adapt their management styles to a more demanding environment -- one in which there is precious little room for error. Entrepreneurs must learn to invest their managers with a collective responsibility for even the most crucial business decisions. And managers have to learn to look beyond the narrow confines of disciplines to the broad concerns of the company as a whole.

"It's a new ball game out there," says Panzar. "The roles of CEOs are changing. They can't just be order givers. Instead, they are becoming coordinators, whose main task is to tap the potential of their teams. That's become the key factor for success."

High-tech entrepreneurs seem to agree. In a study of 90 West Coast companies conducted in 1984 by the Southern California Technology Executives' Network (SoCalTen), CEOs were asked for their number-one priority in running their businesses. Fully two-thirds cited the development of a strong management team.

Nothing prompts this concern for team management so much as the realization that in the recent shakeout in the microelectronics industry, the victims have included some of high tech's most celebrated and charismatic entrepreneurs (see box, "A Rogues' Gallery of California Swashbucklers," page 55). "The era of the swashbuckler is over," proclaims management consultant William G. Ouchi. "No longer can you have an engineer in control of a body of technology and have no competitors to worry about. You can't sell something now if you don't sell it well or make it well. The era of the Steven Jobses -- the guys who thought of themselves as antiorganization -- is ending."

In some ways, the era of the awashbuckler was a reflection of the technology itself. The microprocessor -- the "computer on a chip" -- came along in the late 1970s, and fundamentally altered the nature of the computer industry. Where in the past, entry in the industry was limited largely to those companies, such as IBM, Digital Equipment, and Prime, capable of building big-ticket items like mainframes or minicomputers, microcomputers afforded entrepreneurs the opportunity to launch companies in their garages, with only a good idea and a few thousand dollars in savings. Each week brought fresh news of a successful start-up that lent credence to the notion that technological leadership and a flair for marketing could make up for deficiencies down the line in such mundane areas as inventory management and quality control. Computer swashbuckler Adam Osborne was even heard to declare blithely that IBM Corp. would soon "cease to be a significant force" in the small-business computer market.

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