The Wall

Now the crew at Magellan's is remaking how the company does nearly everything, as the founders end their habit of doing nearly everything. Is it working? "I see John and Gloria giving up control, and that surprises me," says Lynn Staneff, the corporate-sales manager who was the 10th employee hired at Magellan's. The process, she says, "started before Bob, but it was starts and stops. To set this course in motion called for someone. Bob has saved us a huge amount of aggravation and mistakes."

Can Manning also help save John and Gloria from the "founder's trap" that Adizes wrote about and that McManus swore to avoid? It seems he already has. The couple gets out more now, taking extra time off when they go to trade shows, playing tennis. As McManus readies the first edition of a cruise catalog, Gloria sees the two of them taking off in a sailboat, something they haven't done since 1988. They're next in line for a slip at the marina. Earlier this year, they finally worked up the courage to nearly double their salaries. Forty-hour weeks and weekends off? Not yet. "Gloria and I decided that for now the number of hours we work isn't as important as loving work again," says McManus.

The trio has happily concurred that what John and Gloria enjoy doing are the very things needed to grow the company, now at $11 million in sales. "Gloria has always wanted to design a line of clothing. That'll keep her young, and it's also good for Magellan's," says Manning. "John is happy when he can get out in the industry. He loves talking about travel, and he's good at it. Every time he appears anywhere, in print, on TV, or on the radio, catalog orders go up."

But it's more than doing what they love that will keep the McManuses young at heart. They know they're building a company with real value, because no longer does everything depend on them. "We're building systems they can manage indirectly," says Manning. "An infrastructure the company can rest on so it doesn't rest on them anymore." And that's how any company owner gains real leverage.

No one here is going it alone. Not the McManuses. Not Manning. "Look, I feel like I've been in school here for three months," Manning said in early May. At the time, his desk was not five feet away from McManus's. "I learn every time someone asks John a question, because he shares it with me."

What a difference a year makes. In July of last year, the McManuses were lost souls who arrived on Lanny Goodman's doorstep. Today they're confident about the steps they've taken, even if the results are still unfolding. They feel sure that the best is yet to come. "I think this can be a $100-million company in five years," says Manning. "With profits of 3% to 4%, you can live on that." The McManuses don't disagree. But without help, John McManus concedes, "I don't think I could have gotten another million."

Did the McManuses have to hit the wall to change? Manning, who in June moved his family into their new Santa Barbara home, has his own theory about that. He views Magellan's as his best and last assignment. "I don't think I could have joined any earlier," he has said several times. "I sensed before that they weren't ready to disengage. It's almost like they had to hit rock bottom."

Looking back, McManus says he was haunted by this thought: "What a shame to leave the company with so little to show for it because you didn't set up the management." The time invested "bringing Bob up to speed," McManus reflects, will pay multiple dividends down the road--not just in terms of a great workplace for everyone and a shorter workweek for the McManuses, but in terms of building a company with substantial value in the marketplace as well. Ironically, as the McManuses convert their years of sweat equity into real equity, they don't see themselves selling the company anytime soon.

"Not anymore," says McManus.

Susan Greco is the articles editor at Inc.

Ichak Adizes: Advice for scaling the wall
Find a good mentor now. Owning a company "is like having a baby--you need a grandmother to talk to." Whatever you do... "Don't hire a second-in-command when you're feeling down or desperate." Adizes is best known for... Corporate Lifecycles, the 1988 book--recently revised--that bravely sought to explain "how and why corporations grow and die and what to do about it." What The Organization Man did for corporate executives in the 1950s, Corporate Lifecycles does for today's entrepreneurs. Adizes not only understands your pain but also explains the underlying "sociological" causes. What's normal behavior for a company at one stage of development, he writes, is destructive at the next.

Lanny Goodman: Advice for scaling the wall
Don't suddenly "empower" your staff to make decisions. "That's chaos. They have to have the skills and the experience." Whatever you do... "Know that other people have been through this. When you feel like you're hitting the wall, it's a very lonely time." Goodman is best known for... The four "simple" questions he poses to entrepreneurs: What do I need and want out of life? How can my company help me accomplish that? What would such a company look like? And how do we get it to look like that? Those questions drive the process that Goodman--who's owned several small businesses himself--leads his CEO clients through, a process that's intentionally self-centered, often spiritual, and amazingly concrete.

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