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Double Your Profits in Two Years or Less

63 min read

The Lever and the Invisible Wall

In 1927 Willard Marriot and his wife started a small drive in restaurant in Washington DC selling Mexican food. Together they cooked, served the food, handled the cash register, mopped the floors and earned a neat profit from their business. The next year they opened a second restaurant, each of them managing one of the locations. Even after the crash of 1929, their business continued to grow. By 1932 they were operating six restaurants in the capital. Bill appointed store managers for each location and jockeyed back and forth between them to ensure they were all well-managed. When Bill approached his lawyer to negotiate purchase of property for a seventh, the lawyer cautioned him: “Bill, with six locations you are already working 18 hours a day running around like crazy. What are you going to do when you have twenty? I’ve seen too many entrepreneurs grow themselves out of business. Stop while you are ahead.” Bill took the lawyer’s advice seriously, but that did not stop him from expanding right through the Great Depression. By 1937 he was operating twenty restaurants on the East Coast. When the first commercial flights began that year from Washington, he started a subsidiary to provide onboard food service to airlines. By the early 1950s Marriot was operating more than 200 restaurants along with the largest airline catering business in the USA. Then it expanded to operate cafeterias for the US government, schools and corporations. Undaunted and still aspiring for more, Marriot ventured into the hotel business. When we met Willard and his son Bill in 1984 they were in the planning to launch a new chain of more than 250 budget Courtyard Hotels across the USA in a single year. By then Marriott had grown to become a $3.4 billion corporation with more than 20,000 employees. The key driver for Marriott’s growth was the unlimited power of organization.

As Archimedes said of the fulcrum and lever two thousand years ago, given the right organization you can move the whole world. More recently, Amazon, Apple, Facebook, Google, and Über have shown that it is true. Organization is a tremendous power. The entire society is founded on it. Without it we would have no language to communicate, railways or airlines, markets and money for exchange, banks, insurance, educational system, scientific research, government or Internet. Organization is ubiquitous but it is invisible. Its power is felt though its form cannot be seen. Many corporations suffer from organizational sclerosis, hardening of the structure into isolated compartmentalized departments encumbered by rigid, bureaucratic procedures. Like the human circulatory system, all organizations are vulnerable to disease, but there is simply no way that human beings can live, grow and prosper without them. One of the secrets is to know what type and how much organization is needed at each stage in each area and at every level of the business. Organizations are like a plumbing system for water distribution. If the pipes are too small, they impede the volume and speed of flow. If they are too big, they do not generate sufficient pressure for transmission and all the momentum is frittered away as friction. Entrepreneurial businesses grow and mature by a process of transition from personal management to impersonal organization carefully balanced and blended to keep alive the spark of human aspiration, energy and initiative at the core of each activity.

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