Chairman Of The Bored

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I'm a crossword nut, so let me pose this question in the form of a puzzle problem. You've got a seven-letter space to fill, and the clue is "improbable condition for an entrepreneur."

If you answered "success," put down your epncil and go directly to accounting school. That kind of cynicism we don't need. "Privacy" isn't right either, and although "shyness" and "modesty" fit the general format, neither word happens to be the one I'm looking for.

The correct answer is "boredom." That's right. B-O-R-E-D-O-M. As in weariness, tedium, and ennui. And I don't mean the boredom of working up profit-and-loss statements. I mean the kind of boredom that has a chief executive officer leaving his office early and seriously contemplating premature retirement, both of which I was doing just 18 months ago.

Surprised? Or maybe you're thinking to yourself, this guy Reed must be soft in the head. Anyone who's ever managed a fast-growth company knows that boredom isn't an improbable condition for an entrepreneur -- it's an impossible one.

That's what I thought, too, especially during the early days of Boston Acoustics Inc. When Andy Petite and I launched the company, in 1979, boredom was about the furthest thing from our minds. Both of us had worked for KLH Research & Development Corp. and then for Advent Corp., one of the first U.S. manufacturers of high-quality, low-cost home stereo speakers -- Andy in new-product development, I in finance and marketing. And having grown up with the industry, we pretty much knew how not to run a company. Still, the initial learning curve was steep.

Actually, from the moment Andy and I joined forces, the amount of continued mental and physical pressure was greater than anything I'd ever experienced. In all my other jobs, I went to work every day, did my work, did it well, got promoted, did that work well, and so on. There was a sameness to the routine that must resemble 99% of the jobs in America.

Starting my own company was completely different. Suddenly I had to learn purchasing, production, credit, sales, marketing, the whole bit. It was a crash course I couldn't afford to fail. Not only was Boston Acoustics successful from the word go -- we averaged a 77% compound annual growth rate over our first five years -- but there was no moment in my typical working day when I wasn't frantically conceptualizing at least three steps ahead. Moreover, the untypical days were, if anything, even more trying. One February day, I personally unloaded several hundred speaker cabinets from the back of a delivery truck. In a blizzard. In my street shoes. Aah, the pampered life of the fast-growth CEO.

What motivated me back then? Plenty. The sheer thrill of starting a business, of course. But even better than that was the satisfaction of sticking it to my former employer.

I had been fired from Advent, you see, even though sales grew from less than $2 million to more than $35 million in the eight years under my governance. Why I was fired I can only guess -- "poor forecasting," I was told -- but it took me a good six months to get over the bitterness. I felt orphaned by a company that had once felt like family, and revenge can be a powerful motive. Advent had been horribly mismanaged during the later years of my tenure, screwed up by people with no feel for marketing, new-product development, or quality control. When I cofounded Boston Acoustics, I was damned sure I'd show them how the business could be done right. In fact, we did better. Our company made a profit, theirs did not. Ours grew rapidly, theirs was shrinking. When the dust settled, Advent had all but disappeared -- rescued from bankruptcy by an outside acquirer. We were still there. So, to be sure, were other worthy competitors -- Bose, Polk Audio, JBL -- but I didn't have the same feelings of bitterness and disappointment toward them that I did for Advent.

Once that challenge was gone, Frank Reed hit the wall. My partner did not, largely because he continued to be involved in getting new ideas off the drawing board. But I did. True, there were some legitimate business reasons behind my growing restlessness. For one, we'd been uncannily successful at attracting and hiring good people to fill the slots our growing corporate structure was creating; the more of these capable people there were around, the less there was for me to do. And though Andy was still occupied with the R&D effort, I went from having my hand in every detail of the business to having to butt in on somebody else to do anything at all. A happy problem, certainly, but a problem nonetheless.

Also, the industry itself was maturing. I didn't realize it at the time, but a lot of the distributors and retailers I'd been doing business with for 20 years were no longer running their own companies. A younger crowd -- in some cases, the children of my old peers -- was coming in, and they didn't necessarily want to be associated with their fathers' buddies. This generation wanted to develop its own set of business contacts; while they might have thought the world of me, or of the company's product line, they weren't going to pick up the phone and call me to do the deal.

For all these reasons, somewhere in there I noticed a change. I'd leave the office at 3 p.m., and no one seemed to miss me. I'd go home at noon -- no one missed me. Reviewing numbers at the end of each month, like any good CEO, I'd wait for the red flags to pop up -- and none would appear. It began to occur to me that I'd designed myself out of a job.

There were red flags elsewhere, however, for the boredom I experienced at the office was slopping over into other areas of my life. Leisure time was an alien concept to me: I had no burning itch to take up golf or anything like that. Crossword puzzles and bridge were two of my passions, but hey, they weren't second careers. And don't even ask me about daytime television. I spent one afternoon watching soap operas. Talk about brain death. A woman I know, an otherwise sane and normal person, confessed to me that she actually tapes these shows during the day so she can watch them at home later. Frankly, I'd prefer to watch my lawn come up.

Anyway, trapped at home with not much to do, I'd find myself delegating basic household decisions to my wife. Now anyone who knows Frank Reed will tell you he's not the kind of shrinking violet who spots a problem with the pool filter and tells his wife, "The guy'll be here Friday, Dot -- you take care ot it." If I see something wrong, I'll chew the appropriate villain out myself. But boredom is an insidious disease. It affects everything, from the way you dress in the morning to the way you treat your family and friends. And it made me laid-back in a way that no 54-year-old hard-driven CEO would ever expect to be.

I remember one telling comment from a friend of mine. We were contemplating a public offering -- more about that in a moment -- and I was trying to get him interested in purchasing some shares. "How the hell can you ask me to buy stock in your company," he said, "when you're sitting here? Go to work, Frank."

After at least a year of this, I finally figured I had two ways to go. Either retire from the business completely, and I mean completely, or figure out some way to get totally reinvolved. I had no intentions of "retiring" and then going out and starting another company. If one of my children needed some fatherly advice on how to get a start-up going, that was one thing. But I wasn't going to take on another launch of my own. And semiretirement had no appeal for me. I'd already been through that, in a sense, and believe me, it was the worst of both worlds.

Getting totally reinvolved had other implications. Basically, it came down to planning a public offering for Boston Acoustics, which, I want to emphasize, was not simply a strategy for keeping Frank Reed at the office. More important, going public was a way to ensure both the financial security of my family and the future growth potential of the company.

It turned out to be the right strategy in a lot of other ways too. Not only did the company acquire the capital to grow, but I also became immediately rejuvenated -- at least mentally. There wasn't much choice. Things were helter-skelter for about four months, leading up to and after the IPO. A road show for potential company investors had to be planned and executed. Financial forecasts that had previously been for internal consumption only -- forecasts that could always be revised as our fiscal year progressed -- now had to be prepared for outside eyes. Consequently, I spent a lot more time with the financial people, particularly Greg Andrews, my vice-president of finance.

Not all of this was fun and games for me. Had I known then what I know now -- that managing a publicly held company requires a degree of tact and public-relations skills far beyond what the private-company CEO has to deal with -- I might not have made the same choice. I'm like the proverbial bull in the china shop. Every negotiation I ever went into was done openly and bluntly, on the theory that there's no sense making a couple of hours' worth of polite conversation when a single sentence will do. You just can't behave that way when you're dealing with shareholders, though, as I've had to constantly remind myself.

Still, the bottom line was that there was much more interaction between me, the company, and our two classes of customer: the one who buys our product, and the one who buys our stock. My days at the office were full again. In the excitement of rediscovering my role with Boston Acoustics, I became a new man.

I was also, unfortunately, flirting with physical disaster. In 1987, I suffered the first of what turned out to be three heart attacks. Where the psychological stress left off and the physical problems began, I don't know. I am currently facing major heart surgery. The odds are good that I'll walk away from the operating table an even more rejuvenated man. But with surgery of this kind, you can never know for sure.

I do know one thing, though. For some personality types like mine, boredom can be about the worst disease of all. I've been there, so I know it's possible to get through it. Just don't sit back and wait for the obvious clues.