All that is human must retrograde if it does not advance.” The historian Edward Gibbon was referring to imperial Rome when he penned that aphorism, but the sentiment applies with particular force in the case of entrepreneurs.
One of their chief characteristics is a restlessness, a sense of urgency, a desire for action, a compulsion to grow. And when this impetuous spirit dies out, then, usually, the entrepreneur is ready to leave the stage, while the empire he or she founded is probably on the slide.
The world of commerce is too dynamic for any business simply to stand still. Innovation and change are always the order of the day — whether entrepreneurs like it or not.
Of course, stability has much to recommend it: you can plan ahead with more certainty, and sit back and enjoy the fruits of your labours without worry, but technological, social and competitor progress is such that indolence and relaxation can never really be part of the package. Customer expectations are constantly rising; costs are on the march; regulations are ever more of a challenge; and rivals are encroaching all the time. Only the enterprising survive.
No owner should neglect their business, because it will go wrong when not rigorously supervised. Every company has a tendency, as if by natural law, to permit costs to escalate — more staff are hired, suppliers put up their prices, and random expenses proliferate like weeds when unchecked.
For a business to succeed, there is a requirement for eternal vigilance. Someone needs to interrogate the management accounts every month — questioning the bills, monitoring the margins. I know plenty of proprietors who insist on approving each payment — and occasionally disputing items, perhaps more as a symbolic gesture. This is proof that they continue to watch the pennies. A persistent tension between costs, revenues, prices and margins lies at the heart of all companies that endure.
Of course, perpetual growth is impossible, which is why almost all businesses have a limited lifespan. Eventually, the original energy and purpose fades, and more ambitious contenders seize the momentum and snatch opportunities.
I tend to avoid involvement in big businesses because most are complacent, lulled into a false sense of security by ample revenues and balance sheets. And, as a consequence, often they are vulnerable. Just as the Romans believed their empire would last for ever, so the stodgy board members and management in charge of giant businesses think their organisations are impregnable.
Fortunately, they are not — a healthy society needs endless infusions of fresh talent and new ideas, which usually emerge from outside the smug and suffocating oligopolies. So the barbarians storm the incumbents in their fortresses, usurping their technology, taking their customers and stealing their crowns and jewels.
I recently read an eccentric but charming volume called His Master’s Voice, by William Cavendish. It tells the story of Sir Joseph Lockwood, chairman of EMI in its heyday, when it became a music giant, thanks to the Beatles, and funded development of the CT scanner — one of the most important medical devices of modern times.
Lockwood retired in 1974, and subsequently EMI suffered a slow and shameful deterioration until it was finally broken up in 2012 — a corporate tragedy, and a case study of how businesses grow too large, and then lose their way.
Most entrepreneurs have low boredom thresholds — it is a part of their character to constantly seek challenges. In markets, they disrupt the status quo. In their own organisations, they typically occupy the role of troublemaker-in-chief — pushing employees to do more, always wanting to expand faster, hungry to acquire and so forth.
On many occasions I have debated with founder partners the merits of non-stop diversification, and the risks of the business attempting to run before it can walk. Of course, such passionate behaviour is what created the business in the first place. And the opposite of impatience is often stagnation.
All the high-achieving entrepreneurs I’ve met have been in a hurry. They feel a need to control their own destiny, rather than let external events determine their fate. They generally launch products too early, invest more money than their business can justify, and have impossibly bold dreams. But they also know, as Hippocrates said, that “life is short, the art long, opportunity fleeting, experience treacherous, judgment difficult”.
So they press on regardless, understanding that chances pass this way but once, and that the devil takes the hindmost.