The Trouble with Harry

At high-flying Muni Financial Services, Harry Clark did everything he could for his people -- he empowered them, rewarded them, and gave them a sense of mission that extended well beyond the bottom line. So how come they let him down?

Meet Harry Clark. You know the type.

Clark is the founder, owner (with his wife, Linda), and chief executive of Muni Financial Services (MFS), a hot little company in an industry he more or less invented seven years ago, when he was 26 years old.

Clark's story -- its theme, at least -- ought to be familiar to you, dear reader. Once he was just another eager-puppy M.B.A. at a small government consulting firm in Irvine, Calif. While there he helped create a software package that was supposed to help cities, counties, and special districts administer bond issues. The problem with putting software in the hands of municipal managers, Clark came to believe, was that "all we were doing was giving them the ability to screw things up more efficiently." Because he is who he is ("one of Harry's strengths is blowing boundaries and limitations away and doing it anyway," a colleague says), Clark went one step further, imagining a business that would take care of everything: plot the districts, collect the payments, go after the deadbeats, year after year, in and out of decades, for as long as the bonds were out there.

Consulting firms live or die on consistency of revenues. That was the beauty of Clark's new venture. Here he was "dialing for dollars" out of a barn behind his house, signing his clients to 25-year contracts. Business was good. He quit the barn and eventually moved into (and then bought, and then remodeled with marble tile and mythical statuary) a concrete-and-glass office building at the foot of a steep canyon road in picturesque Temecula, Calif., one hour northeast of San Diego. From 1989 through 1993 MFS's sales grew by more than 900% -- fast enough for the company to make the Inc. 500 list. Revenues in 1994 topped $4 million.

Success in business and the life it brings mean a lot to Clark. He has in spades what the psychological testers who have examined him call "capacity for status," and he willingly admits as much. He wants you to notice the Rolex on his wrist and his well-cut sport coats, to admire his big house and be amazed at his collection of 11 antique cars. Clark is a rich man -- getting richer all the time. He takes pleasure in that -- simple, ingenuous pleasure. And that says a lot about the kind of guy he is.

But there's more to this man than the Packards parked in his garage. In life, as in business, Clark is guided by a sense of purpose, he says. Like the Philadelphia Quakers of old, he insists he wouldn't be satisfied just to be doing well; he wants to do good. He wants to make working at MFS a "meaningful experience," for him and for the 40 souls in his employ.

"A lot of business owners, all they care about is running the business," Clark says -- or rather, seems to ask. His voice is high-pitched and his phrases build, modestly, to inflection points. "They don't even think about the values and principles and environment that their employees are in. They're doing it as a transaction. Well, for me this isn't a transaction. It's a lifestyle. It's a belief. It's a community." That says a lot about the kind of guy Clark is, too.

And so, too, finally, does Clark's sense of his role in the community he has created. "My nature isn't to be the leader," he says, just "an influential member of the club." That's how it was back at Cal State Long Beach, apparently, where Clark was a varsity heavyweight wrestler. "I'd always be one of the stars and one of the responsible members but never the team captain. I've never had an interest in anything like that. There are people who always do that kind of stuff, and then there are people, like me, who just want to be important. They don't want to be The One."

Last June Clark did something many entrepreneurs like him only dream about. He went on sabbatical. Three months he was gone, really gone -- touring New England by minivan, lounging at the family cabin in Big Bear Lake, Calif., backpacking in Alaska. "Never talked shop," he says. "Never saw financials. Didn't know if we were close to going out of business. I knew nothing."

It was not an impulsive act. Clark values separation. He takes three-day weekends frequently and weeklong vacations regularly. Distance from work helps clarify his thinking, he says, and pays off in ideas. All directors at MFS are entitled to a three-month sabbatical after six years on the job; managers get six weeks. That's been the company policy from the start. Clark, having been around the longest, was the first to qualify. Not to have taken his, he says, would have sent the wrong signal.

So Clark disappeared, left his company at the height of the busy summer levy season, left it, moreover, in the hands of an outsider he'd brought on board only months before: Tom Walker, a former hotel executive with ITT Sheraton, new to municipal finance and so unlike Clark in every particular as to be almost his mirror opposite.

It was an interesting experiment, brave even, a kind of test. "I've got good people," Clark says. "I had absolute faith that they knew what they were doing. I hoped I could remove myself and have things go on. I like to think I'm not needed."

Not so, says Carla Stalling, an MFS associate director and a longtime Harry watcher. "Harry says he doesn't want to be in control. He's not telling the truth."

Tom Walker arrived at MFS on Valentine's Day -- "an auspicious start," he would say later. The company by now was four years and two buildings removed from Clark's barn, and the staff had grown sevenfold. Employees worked in offices or cubicles rather than all together in one big room. They sent their colleagues voice mail instead of tapping them on the shoulder. They didn't wear shorts and T-shirts as they had in the barn, which had been impossible to keep cool. But behind the facade of corporate anonymity was a peculiar, almost clannish operation, shaped by Clark in his own image.

It's hard to pinpoint the origin of Clark's notion of the ideal workplace. He'll tell you that the year he spent as a college student in Denmark, where he was exposed to socialism for the first time, was influential. That and all the human-resources courses he took in college. Straight out of school, in his first job at a Big Six accounting firm in San Diego, Clark designed a two-way employee-supervisor evaluation form that became a national model for the firm's review process. But the epiphany, he says, followed his brief, bitter experience with party politics. Clark was a member of the board of Democratic Associates of Orange County. He resigned after other board members refused to lower dues for senior citizens, which struck him as contrary to the party's ideals.