Giant Firms Are Dinosaurs, Entrepreneurial Guru Says
Large companies have lost their creative spirit
BOSTON — BIG companies are going out of business, they just don't know it,'' says Wilson Harrell, former publisher of Inc. magazine, a Boston-based business publication targeted at small company executives. ``Downsizing is just an incidental step along their way to going out of business. It's a death spiral.''
Many analysts attest that corporate restructuring is the result of recent cyclical trends in the economy. In a Monitor interview, Mr. Harrell contends that the disintegration of today's corporate structure started years ago and has little, if anything, to do with the economy.
Currently a columnist for Success magazine, Harrell is author of a new book, ``For Entrepreneurs Only: Success Strategies for Anyone Starting or Growing a Business,'' (Career Press).
``The downsizing, the restructuring, the reengineering is not go- ing on in corporate America today be- cause of what happened last year or two years ago,'' he says. ``It started 10 years ago.''
What happened? Corporations zapped their own ``entrepreneurial spirit,'' Harrell says - meaning that the risk-takers and creative thinkers left to start up on their own.
To survive, Harrell explains that corporations must reintroduce entrepreneurial spirit into their management systems. ``[Companies have] got to go through a drastic regurgitation of the kind of management system that they're using,'' he says. ``And they've got to find a way to instill entrepreneurship in those companies.''
In the entrepreneurial arena, Harrell is considered the guru of the '90s. He is a member of the Entrepreneurial Hall of Fame for lifetime achievement and is known as the entrepreneur who bought Formula 409 spray cleaner for $30,000 and sold it to Clorox six years later for $7.5 million.
In addition, Harrell founded the Council of Growing Companies, a nationwide organization composed exclusively of chief executives who run fast-growing companies.
Why is entrepreneurial spirit heading for extinction in today's corporations? Harrell points directly at Wall Street. ``Our whole stupid business universe revolves around money; and it's dead wrong,'' Harrell writes in his book. ``Entrepreneurship doesn't exist in large corporations because there's greed at the top.''
Fortune 500 companies ``worship'' Wall Street, Harrell says, and ``Wall Street marketmakers don't care if you hurt the company,'' provided that the company continues to turn a profit.
These Fortune 500 companies continue to downsize, Harrell says, because ``it has now been accepted by Wall Street as a positive thing to do.''
``If you want entrepreneurship in your company, then you've got to look away from Wall Street,'' he says.
Large corporations can survive in the long term ``if they can really find ways to create entrepreneurial units at the lowest level,'' Harrell concedes. Unlike Fortune 500 companies, entrepre- neurs put their people, products, and customers first, he adds.
General Motors, for example, will eventually go out of business in its present form, Harrell predicts. But if the automaker is ``clever enough to let entrepreneurs do everything except the final marketing ... if they'll outsource everything they possible can, including manufacturing, yes, they may exist, but it won't be General Motors.''
Another reason big corporations could be going the way of the dinosaur is because they are ignoring the fast-growing entrepreneurial market. Big corporations continue to concentrate 90 percent to 95 percent of their total marketing allowance in the large-company sector, he says, which is disappearing. Yet they ignore the entrepreneurial sector of fast-growing companies.
Since 1987, Harrell says an entrepreneurial revolution has been under way in America, where corporate downsizing creates new markets for entrepreneurs. ``I am not despondent as I look ahead, I am ecstatic over what I think is going to happen,'' he says. ``Because every recession, every downsizing, every reengineering is another way of saying `entrepreneurial opportunities.' ''