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My First Research Efforts

In 1948, I wrote a paper on entrepreneurship as a graduate project for an elderly and respected economics professor, John Garver, from whom I was taking an Economic History course. I had focused on Schumpeter's entrepreneur and particularly on his concept of intuition, which I felt was at the heart and soul of entrepreneurial behavior.  I likened the state of knowledge regarding intuition as akin to the alchemists understanding of phlogiston to be the ingredient of heat and light in fire:  That some day we would find answers, just as modern chemists had determined fire to be a process of exothermic oxidation.  Garver's graduate reader graded the paper a "C".  But when I got the paper back, Garver had changed the grade to "B+", with a note to come and see him.  It was to be the most in–depth discussion I would ever have with any professor throughout my graduate program. We talked for hours.  He was fascinated with my obsession regarding entrepreneurship.  He worried about its acceptance, academically—"Schumpeter is not regarded as a great economist by economists—too psychological".  As I left, he had one parting shot, "Your paper is actually an 'A' paper.  I gave you the 'B+' because you write like a reporter.  If you keep that up, you'll start to think like one."  (I've never changed.)  He also said he'd showed the paper to Andy Papandreau, a relatively new, young assistant professor from Harvard, whom he thought might be interested in what I'd written.  I had Andy as a professor in a completely unrelated class.  The next day he talked to me after class, said he'd enjoyed my paper, and loaned me Barnard's The Function of the Executive  (1938) and Simon's Administrative Behavior (1945).   He suggested that these authors would give me added perspective on entrepreneurship and intuition.    Andy had been strongly influenced by both Schumpeter and Barnard at Harvard, and had written his dissertation on entrepreneurship (Papandreau, 1943).  He was a big help to me on my dissertation—and a member of my dissertation committee.  (He's the same Andreas Papandreau who later became Prime Minister of Greece through the last couple of decades until his death in 1995.)

My dissertation was on restructuring in industry.  I'd hoped to find other contemporary entrepreneurs in the process.  I studied the revamping of The Ford Motor Company, after the senile elder Henry Ford was forced out, and Henry II brought in Ernest Breech from General Motors, as executive vice–president, and Charles (Tex) Thornton and his "whiz kids" as a package, directly from the Army Services Corps, to help with strategy and control.  Also included in my study were International Harvester Company in the realignment directed by Fowler McCormick, grandson of the founder, Cyrus McCormick; and General Mills diversification efforts directed by Charles Bell.

The dissertation uncovered no contemporary entrepreneurs.  None of the people I had targeted were in any way change agents.  Ernst Breech had brought in a supporting cadre from General Motors and they superimposed the GM structure on Ford.  It helped turn Ford around, but eventually had to be revamped by others.  The massive River Rouge totally integrated compound could not be divisionalized in the way of GM.  They did not recognize the mismatch.  Charles Thornton did not last long at all.  He clashed with Breech on strategy and left.  (Turns out that he was the entrepreneurial talent—Howard Hughes hired him to help set up his electronics division. After gaining operating experience under Hughes, Thornton bought Litton Industries and led it into an unprecedented growth and profit run.  Both Hughes and Thornton spawned many more entrepreneurs.)  All the other Whiz Kids made it to responsible positions — two rising to the presidency:  Arjay Miller was one, he later ended up as Dean of the Graduate School of Business at Stanford after an undistinguished reign;  Robert McNamara had preceded him but resigned after a few days in the office to be Kennedy's Secretary of Defense, where he distinguished himself by trying to run a war through management by objective with body count as the measure of progress.  Not entrepreneurial!

The same was true at International Harvester.   Fowler McCormick turned out to have vision, but no zest for action.  The Board of Directors forced him to move on.  His mission was left dangling; restructuring went no further.  International Harvester was to collapse, eventually.  At General Mills, Charles Bell tried a diversified expansion for expansion's sake—into appliances and chemicals as well as their grocery products, flour and feeds.  Yet there were no major efforts to recruit expertise in these areas.  The Board of Directors ordered a pull-back to their basic business.

While I had found no contemporary entrepreneurs, it was clear that each firm's founder—Henry Ford, Cyrus McCormick, Harry Bullis—was very Hughes–like in their continuous efforts to up–grade their respective firms.  My attention turned to historical figures, as well as contemporaries, in my undaunted search for more entrepreneurs and what made them tick.  

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