The Est Factor

Behind the rise and fall of ComputerLand's Bill Millard was a corporate culture that became a corporate cult.

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HISTORY WILL RECORD THAT COMPUTERLAND WAS ONE OF THE hottest franchise start-ups in the history of American enterprise. During its first seven years, it was doubling in size every year, with sales climbing from $1 million in its first seven months to $770 million in fiscal 1983. ComputerLand did not simply ride the market into the age of the personal computer; by making a range of personal computers available to individuals and small businesses, its burgeoning chain of retail outlets was instrumental in creating that market as well. Even in the early days, there was plenty of capital, an abundance of suppliers, and lots of good press. What competition there was was far behind.

By the summer of 1983, however, when Bill Millard, ComputerLand Corp.'s founder, stepped to the podium at the annual conference of the company's 500-odd franchisees, there were signs that something was not right. In the past, these conferences had been boisterous affairs, given to optimistic sales figures, spontaneous beer busts, and wild tales of fortunes made overnight in the computer retail trade. But this year, standing in the ballroom of San Francisco's plush Fairmont Hotel, Millard was ill at ease. His hands gripped the podium tightly, his eyes scanned his text as if what he really wanted to say just wasn't there. "You can trust me," he told his audience as he announced a sweeping reorganization that would, for the first time, put him in charge of the day-to-day operations of ComputerLand's booming worldwide operation. "I will die rather than fail you."

Two years later, Millard had failed. A California court had just ordered a $141-million damage award against Millard and ComputerLand and ordered Millard to hand over 20% of the company stock, much of it to a competitor. Simultaneously, the largest and most successful franchisees were threatening a mutiny. To stave off the total collapse of the company, Millard was forced in late 1985 to give up his title and his seat on the board of directors. Day-to-day control passed to a former associate whom he had once eased out. Reluctantly, he even agreed to take the company public.

How did such a successful start-up end up in such a predicament? And how did Bill Millard come to gamble his successful new company in a legal contest that even some of his lawyers thought he would lose? As with so many companies, the answers have to do with the perils of rapid growth, the hazards of franchising, and the declining fortunes of the personal-computer market. But at ComputerLand, as we quickly discovered, there was another crucial factor: the popular human-potential movement known as est. Est was the corporate culture that became a corporate cult at ComputerLand, an attitude of confidence and self-reliance that soon gave way to inflexibility and pride. In the case of Bill Millard and his associates, est so thoroughly blurred their vision and warped their focus that the bottom line eventually slipped from view.

William H. Millard first made his mark in the computer world with a software program called "Faster." To those who knew him, it seemed an apt moniker.

He started out as a ditchdigger, a truck driver, and a welder's helper. Then, in 1958, he landed a job as a field representative for Pacific Finance Corp., where he was introduced to electronic data processing. In 1961, Alameda County, Calif., made him its chief of data processing, where he conceived and managed the development of the world's first computerized police information network. He later replicated the project for the city and county of San Francisco, where his opinions were sought by computer delegations from cities around the world. By 1969, his own software firm, Systems Dynamics Inc., was up and running.

Millard's pace was furious, relying on horsepower more than brainpower to propel his career. "I had no ticket," boasted this son of a railroad clerk: no college degree, no family money, no family network to get him started. "The absence of all those things was what I needed in order to never rest, never relax," Millard once said. And his energy was truly contagious. "I saw him as a fantastic, charming, and inspirational leader who cared about people," recalls Seymour Rubinstein, who worked briefly at Systems Dynamics, and later went on to found MicroPro International Corp. "He was, in my mind's eye, the picture of what a business leader should be."

Systems Dynamics's venture capitalists didn't see it quite that way. In their view, Millard had drastically underestimated the marketing effort that "Faster" would require, and failed to keep them apprised of the company's worsening cash position. At a climactic meeting, the angry investors told Millard they were tired of his promises. They demanded faster profits, faster sales, faster results. "The image I had was of being flagellated, of [having to] stand up against the wall and take the beating for something that was beyond my control," is how Millard remembers the meeting.

Within a few months, Systems Dynamics had failed and Millard had learned what he would consider the first great lesson of business and of life: never, ever give up control of your own destiny.

It was around this time that Millard struck up an acquaintance with a onetime used-car salesman from Philadelphia, Jack Rosenberg, who had begun making a name for himself as Werner Erhard. Handsome, intense, and articulate, Erhard had developed a popular brand of consciousness-raising originally dubbed Erhard Seminars Training, or est. The training was a loose synthesis of Eastern philosophies, Dale Carnegie "positive thinking," and pop psychology. New trainees underwent psychologically cauterizing weekends in chilled auditoriums, with little food, drink, or rest -- all the better to jolt them into new perspectives. Erhard preached that it was mind, not education, social class, or even talent that determined who would be the elect in the new world of enlightened businesspeople. If Millard would only learn to "take responsibility for his whole life," Erhard told him, he would become the creator of his own circumstances. It was just the message that Millard, the once-failed entrepreneur, needed and wanted to hear.

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