A look at how various entrepreneurs who have left large companies are coping with life as small-business people.
There are two ways to replicate the professional pluses of working in a large company. The first is to hire 10,000 people. Here's the other
Last February, Bill Macon walked into a St. LouisÑarea boardroom, loaded with charts and graphs and fully prepared to present his laboriously crafted five-year strategic plan. He felt a familiar twinge of anxiety and excitement. Had he underestimated his company's return on capital? Were his profitability projections overoptimistic? Was his growth forecast simply too aggressive? Hardly being a newcomer to the process, he knew enough to anticipate a highly charged atmosphere that was both "confrontational and thought provoking at the same time," as he puts it. When he had done such presentations in the past, the chairman was only too prepared to poke holes in them.
Thankfully, there wouldn't be any chairman at this meeting. Nor would there be any savage superiors, for that matter, or even irritable investors. No, the crowd he would be facing consisted solely of fellow entrepreneurs. But he knew they were going to be brutally tough on him. In fact, he would be disappointed if they weren't. After all, that was why he had brought them together in the first place.
Unusual as such a situation may sound -- one entrepreneur drafting a group of others to knock the stuffing out of his plans -- it's actually part of an increasingly common phenomenon. Like many entrepreneurs who have exited big organizations, Macon was working hard to re-create one of the beloved benefits he'd left behind: the rigorous system of strategic planning he had learned at Emerson Electric, a $10-billion manufacturer of electrical products . By tutoring a group of his peers in Emerson's planning methods, he hoped to revive for himself the part of the process he missed most since he'd bought his own company, Macon Electric Coil , three years earlier: the challenging exchange of ideas and, perhaps most important, the security that comes with knowing that if your plan is half-baked, someone will convincingly call you on it. It didn't work that way inside his own $2-million business. "I have 35 employees," says Macon, "and I've never had a bad idea when I've made a presentation to them."
Naturally, not every entrepreneur who leaves a big organization yearns for the kind of drubbing -- constructive, of course -- he or she received regularly from squads of superiors. But most of those entrepreneurs, whether they left voluntarily or otherwise, will admit to missing something. Not that they can always be specific about the trade-off they've made. Ask them and they'll invariably lump it all under the rubric of "resources," which encompasses everything from gourmet coffee to awesome Internet access. But scrutinize the businesses they build and a simple truth pops out: you never know how much big organizations have to offer until you leave one.
Which is why Macon and other corporate refugees like him are finding innovative ways to replicate both the tangible and the intangible benefits they had learned to take for granted in their previous posts: the access to experts and colleagues, the prestige of being associated with a household name or industry leader, the loftier sense of mission that can get lost in the day-to-day duties of company building. In doing so, those company builders are reshaping their businesses, forming new kinds of alliances -- both inside and outside their companies -- and reaping the kinds of rewards that they feared they had left behind with the cushy salaries and fancy benefits packages. How? Here's a sampling:
Access to expertise: the Circuit Board. Shortly after he started an executive outplacement firm, 10 years ago, David Corbett was commiserating with a friend who owned a 12-employee printing-distribution business. "We had lost the networks and the expertise afforded by large companies," says Corbett, whose $3-million -plus company, New Directions Inc., is based in Boston. "We both felt we needed peers representing different areas of business expertise to share ideas with." With that utterance, Corbett planted the seed for the Circuit Board, a group of five CEOs in the Boston area, all of whom run companies with fewer than 20 employees and all but one of whom are from corporate backgrounds. Robert Schmidt, a drapery manufacturer, offered expertise in operations, and George Bixby, a manufacturer's rep, contributed advice in dealing with international suppliers. Corbett brought marketing finesse, while Don Aikman, whose company manufactures putty, specialized in distributor relationships. Dale Lattanzio, a print distributor, rounded out the group with his aptitude for sales.
Corbett wasn't looking just for the kind of casual coffeepot camaraderie he had found in the corridors of such previous employers as Johnson & Johnson and Korn/Ferry International. Like most entrepreneurs, early on Corbett had joined a number of local groups, in which he "met people who led me to clients," he says. But with the Circuit Board, he sought more than an occasional night of trading business cards. What he wanted to re-create, he says, was the feeling of having an army of specialists whose smarts he could tap. "We had experts for packaging, pricing, advertising," he says of his big-company employers. "We even had finance people that specialized in advising product managers. There was a whole team of people around to help." But at New Directions, he was supposed to have all the answers, and there was little room for error. "In a big company you can make a lot of mistakes and it really doesn't have an effect," he says. "In your own business, if you make a few mistakes, you might not make payroll."
The way Corbett and his fellow entrepreneurs envisioned it , the Circuit Board would serve as an informal advisory board for each of its members, meeting every two months to focus on one business and wrapping up the evening with dinner. As the name implied, members would go "out on the circuit," visiting the companies, meeting employees and managers, and observing operations in full swing. "It was important for us to live it, not just talk about it," explains Corbett. Moreover, members would impose upon themselves the disciplines they had learned in the corporate world. "Each of us had to come to the Circuit Board meetings with a plan," says Corbett. "We had to set goals and objectives and measure our performance against those goals. We wanted accountability."
Having four experts scrutinize and advise their businesses has paid off for each member. Bixby asked the Circuit Board to interview his son-in-law to help him determine his qualifications for coming into the business. Aikman was coached to raise his prices and saw his revenues increase significantly without, as he had feared, losing customers. The group also suggested that Schmidt consider acquiring a cash-generating business in his industry to increase his cash flow. For his part, Corbett received sound advice on negotiating with landlords and suppliers, which helped him get a tighter grip on overhead expenses. "In some areas I was probably able to save 10% to 15%," he says. "There is a great deal of satisfaction in knowing that we've succeeded because we're all invested in one another -- it's a business and a social alliance."
