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Robert B. Goergen, WG'62
"Kaizen" is a Japanese word that Bob
Goergen, WG'62, likes to use to explain
his approach to business. He came
across the word—denoting "gradual
change"—when reading about Japanese
management practices.
"I use it to differentiate between great leaps forward and
thoughtful, gradual changes where your likelihood of success
is much higher," he explains.
Goergen, chairman and CEO of Blyth Inc. and the namesake
of Wharton's Goergen Entrepreneurial Management
Program, has built a remarkable career on this concept.
Indeed, prudent risk-taking helped Goergen transform Blyth
from a small candle maker ($2.8 million in sales) into one of
the nation's largest home-accessories companies ($1.7 billion
in sales).
A 1962 graduate of Wharton's MBA program, Goergen had
an entrepreneur's eye for calculated risk from the start. As
a rookie at the advertising agency McCann-Erikson, he was
asked to fill in for the manager of the Coca-Cola account,
who had fallen ill. The opportunity didn't escape Goergen,
who managed to update the company's marketing campaign
by hiring the Supremes to sing the Coca-Cola theme—a
replacement for the aging sound of the Limeliters.
Then followed a stint as a management consultant at
McKinsey & Co. Goergen says he enjoyed his assignments,
his clients and a generous salary, but he eventually concluded
that McKinsey didn't fit his long-term goals even though
he had become a partner.
"What I considered freedom wasn't high income, but net
worth," he says. "So I began thinking about doing venture
capital. I took a huge pay cut to start at the bottom at
Donaldson Lufkin & Jenrette, with the Sprout Group, its private
equity group. I went from partner's perks to basically
starting over."
The move paid off. While highly successful at Sprout
(he became the Managing Partner) Goergen also found himself
in a position where he was able to make what he calls
"hobby investments"—that is, deals that were too small to
interest Sprout.
In 1976, he came across a Brooklyn, NY, firm called Valley
Candle Co. Goergen and three friends put up a total of
$50,000. He then raised $300,000 more from other friends
and family members. That enabled the partners to persuade
Chemical Bank to lend them $650,000 more. They bought
Valley for $1 million.
Within a year, Goergen heard that another candle company—Candle
Corp. of America in Chicago—was for sale.
This time, the price was $3.3 million. Goergen again called
on his network. But to get a large enough loan, he had to
pledge his personal assets, too. If the loan was called and
the company couldn't pay, Goergen would have to pony up.
After a somewhat bumpy start, though, Goergen decided
to step up his involvement in managing the company. "I saw
the $3 million guarantee possibly getting called, and my
friends had invested in this company, and I didn't want to let
them down," he recalls. So in 1978, he quit his Managing
Partner job and became a full-time candle maker. Again, it
was the right move: today, Blyth Inc. has about $1.7 billion
in annual sales.
Similar to the active role he has played in his company,
Goergen has not only given back financially to the
Wharton School. As Chairman of the Wharton Entrepreneurial
Programs Advisory Board and as member of the Wharton
School's Board of Overseers, he is actively engaged in the
progress of new School programs and research.
And to this day, Goergen continues to play a key role
in Blyth's acquisitions. "I always get involved, checking on
values and the strategic fit. And I really kick the tires on the
management team."
–Excerpted from the Wharton Entrepreneurial Programs' GET IT STARTED e-newsletter
http://www.wep.wharton.upenn.edu/getitstarted/
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