Disciplined Approach

Disciplined Approach

MANAGING by Francis X. Gilpin | Associate Editor

Gary M. Harpst got out of the technology business just in time. As the tech boom collapsed in 2000, Harpst and his partners sold a 20-year-old computer software company for $107 million in cash, stock and assumed debt to a larger competitor, which got swallowed up by Microsoft Corp. within a year.

The 56-year-old Ohio resident has since branched into another line. Harpst is franchising business-consulting services. Is his timing as good in 2006?

Harpst recently came to Tampa to find out. He addressed a small group of business owners invited to a free lunch at the Centre Club to hear about his latest company, Six Disciplines Corp., which is launching a local franchise.

Any serious business consultant has to write a book. But Harpst, the author of "Six Disciplines for Excellence: Building Small Businesses That Learn, Lead and Last," doesn't act like he is carrying sacred tablets down from the mountaintop.

"Most people tell me there is not a whole lot new in this book," Harpst says. "That's by design."

Harpst says most business self-help books fail business owners by emphasizing grand ideas over realistic ways to implement them. "We're 80% execution-oriented," he says, "rather than 80% concept."

There are common practices that everybody seems to embrace, according to Harpst. "If you follow those disciplines, you will have a stronger business," he says. "The hard part is doing something about them."

Not that Harpst is an insatiable reader of business management books. As a first-time author, he thought it would be wise to pick up a how-to-write-a-book book. The first piece of advice was read every other book that has been written on your subject. An Internet search yielded a count of 3.5 million business books.

"I threw that book on writing books away because I wasn't even willing to follow the first step," he says.

Early adapter

Harpst does believe in a systematic approach to running a business, his own six-step program.

His Tampa partner, Sean Burke, touts Harpst's business success with Solomon Software Inc. as evidence that the Six Disciplines founder's message should be heeded.

Harpst grew up around Findlay, Ohio, and earned a business degree at Ohio State University in 1972 before working on mainframe computers for his hometown's biggest employer, Marathon Oil Corp.

A devout Mennonite, Harpst formed a company called TLB Inc. in 1980 with a couple of fellow worshippers from his church. TLB, which stood for The Lord's Business, became Solomon Software. The company was among the first to adapt mainframe accounting programs to microcomputers in the early days, when Apple and Radio Shack models reigned, before the introduction of IBM's PC.

Annual sales skyrocketed to $60 million in the early 1990s when Solomon delivered reliable accounting software that worked on Microsoft's Windows operating system. Solomon's international marketing was run out of an office in Naples.

Harpst and his partners considered taking Solomon public in 1997, but they instead sold out to Great Plains Software Inc. three years later. Harpst told the Toledo Blade newspaper that he wasn't willing to continue growing the business as fast as market conditions demanded.

Solomon posted an operating loss of $1.7 million on revenue of $57.3 million for the last fiscal year before the sale, according to regulatory filings. The company spent huge sums on research and development, $31 million during the final three years.

Harpst's pre-tax take from the Great Plains sale was probably at least $20 million, according to a Review analysis of the filings.

Hometown hero

Within a few years of acquiring Great Plains, Microsoft closed a Findlay facility. Harpst founded a new software development company to employ the local tech workers fired by Microsoft.

His other project has been Six Disciplines.

Following the Great Plains sale, Harpst used the down time to think about what he had seen work at thousands of small businesses where Solomon installed software, according to Burke, his Six Disciplines disciple in Tampa.

Although Six Disciplines sells software as part of its consulting business, Burke says Harpst doesn't consider it critical to business success. "What he found was software was good at making companies efficient," says Burke, "but not necessarily better."

Harpst thinks it is more important to hire a variety of personalities - "business builder profiles," he calls them - for an executive team.

Burke says Harpst sees four basic profiles: captains, collaborators, commanders and crusaders. Each has strengths and weaknesses in a business environment that tend to dovetail with those of the other archetypes. Getting a balance of the profiles on an executive team is a good way to cover all six of his disciplines, Harpst says.

"Find the complementary skill sets for the team," Burke says. A captain generally works well with a commander, for example. A captain will step back from the process from time to time to reassess its usefulness. In the meantime, the commander makes sure the process – whatever it is – is being followed.

The ideal outcome is managers and employees who will manage themselves.

Harpst has had his managers come to him to complain: "I can't do my job because Vendor X isn't doing their job." Harpst says he replies: "Do you want me to manage that or do you want to manage it? Somebody has to manage it. If I manage it, then I'm not going to pay you to manage it."

That is how a company's success will outlive its founder. "It's the way you build an organization that will last and not be dependent on just the superstar," he says. "That's a whole different level of excellence."

The Six Disciplines

1. Decide What's Important: Renew mission, strategic position, values and vision; then agree on what to stop doing.

2. Set Goals That Lead: Define measures, targets and initiatives; then engage your team.

3. Align Systems: Identify misalignments; then align processes, policies, measures, technologies and people.

4. Work the Plan: Prioritize daily and monitor measures.

5. Innovate Purposefully: Brainstorm, do quick return-on-investment analysis, champion your ideas and recognize contributions.

6. Step Back: Review external trends and internal performance; recap strengths, weaknesses, opportunities and threats.

Source: "Six Disciplines for Excellence," by Gary Harpst