Identity Crisis

Tom's of Maine CEO goes through a period of disillusionment as his company becomes more professionalized.

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His company had taken off. But Tom Chappell lost track of who he was and why he was going to work each day

Over the years we've met many a founder who has made all the right moves in 'professionalizing' his company, only to wind up wondering whether he still has a role. Alienated from his own creation, a founder may choose to sell out rather than deal with the crisis. Not so Tom Chappell, whose story will engage anyone who's ever felt burned out on the job. -- T.R.

At 42, Tom Chappell had it made, and he was miserable -- frustrated, autocratic, and blue. His cars were new and imported, his house was old and stately, his boat was big, his kids were going to good private schools, and his marriage was solid. He looked great, fit and trim. Newspapers wrote stories about him and his company. They called him a success, and yet he asked, as in the Peggy Lee song, is that all there is?

Success? He didn't feel like a success. He sure wasn't having any fun at the company, where no one was doing things the way he wanted them done and where no one understood the business the way he understood it. He wasn't even sure anymore that his decisions were right. The less certain he grew of his own judgment, of course, the more he insisted on having his way. But he couldn't help wondering: maybe the managers he had hired for their business-school educations and consumer-brands experience really did know better than he.

Odd, wasn't it, that running the business had seemed so much simpler and so much more fun 15 years earlier. Back then, he and Kate, his wife and cofounder, had little money, no market, not even much of a product. But they had had ideas, desire, and confidence. By 1985 Chappell had run short of all three.

You may have heard of Chappell's company, Tom's of Maine Inc. During the fiscal year that ended last June, it manufactured and sold $8.1 million worth of all-natural personal-care products -- deodorants, shaving soaps, toothpaste, mouthwash, and so on.

It hadn't started out with either the name or the products. In 1968 Chappell quit a promising sales job in Philadelphia with Aetna Life Insurance Co. He and Kate wanted to make some money, but they were also concerned with environmental issues and they wanted to live in Maine. So they started a business that would reflect those concerns.

They called the company Kennebunk Chemical Center, after the town they settled in. Its first product, Chappell's own creation, was a nonpolluting cleaner for dairy equipment. The second was a phosphate-free liquid laundry detergent, ClearLake, which Chappell sold first along his dairy route and later through supermarkets. Environmentally commendable, ClearLake didn't clean awfully well.

For a couple of years the company stumbled along looking for a niche. Then Chappell met Paul Hawken. Hawken's Erewhon chain of natural-food stores was finding a receptive market -- and no one, Hawken claimed, was making a decent soap for the natural-food customer. Maybe Chappell should try. He did. Naming it was a problem. Why not just Tom's, Kate suggested finally -- Tom's Natural Soap. Hawken put it on Erewhon shelves, and it sold. Hello, niche. Natural- and health-food stores needed other personal-care products for their shelves. Kate and Tom and their pickup crew in Kennebunk developed them, wrapped them in funky packages, and expanded their distribution. The brand evolved over time into Tom's of Maine; so, eventually, did the company name.

By 1981 Chappell virtually owned the personal-care sections of health- and natural-food stores across the United States. Annual sales had climbed to more than $1.5 million.

That was the good news. The bad news was that consolidation was under way in the health-food retailing industry. To continue to grow, Tom's of Maine would need another market or product line. Since the company already knew personal-care products, Chappell reasoned, shouldn't it first look for someplace else to sell them? Probably there were people who didn't shop at health-food stores who would nonetheless buy a natural product. But to reach that customer, Tom's of Maine would have to get its products onto supermarket and drugstore shelves. It would have to learn trade promotion and consumer advertising. It would have to expand production. It would have to . . . well, it would have to become a different company.

With this new challenge and fresh determination, Chappell set out to make it so. He raised $75,000 in new equity capital -- taking care, however, that he and Kate retained a majority of the stock. With his new minority shareholders and some outside advisers, he created a board. He wrote a business plan. But a real business needed professionals in charge -- trained, experienced people like John Eldredge, a graduate of Dartmouth's Amos Tuck School of Business Administration and a veteran of General Mills.

So 1983 marked a turning point for Tom's of Maine. Eldredge arrived; so too, unnoticed at first, did the beginnings of Chappell's disaffection. If you've founded a business, maybe you know what happened. The better things got for the company, the worse they got for the founder.

Over the next five years Tom Chappell got lost. Three things happened to him. First, he tried to compete with the professionals he had hired to help him. Second, he became obsessed with the business of business. He grew so intent on what he was doing that he completely lost track of why. Third, he became Tom's of Maine. The idealistic visionary who had founded the company had by 1985 turned into a narrowly focused autocrat who drove it -- with little thought of destination and no purpose beyond meeting the next strategic goal.

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