The Dreamer, The Accountant And The Fink

Someone once said that, to be successful, a business needs a dreamer, an accountant and a fink. I was recently reminded of that wonderful insight by the unlikely involvement of my brother Pierre in an ethical brawl with one of the world’s most powerful corporations.

Pierre supervises a group of some sixty chat-room animators for that software giant’s Internet subsidiary. Recently, he and his team became incensed at the ease with which pedophile networks were penetrating that corporation’s Web sites to advertise their dangerous material. Having complained and asked for help in vain, the entire group submitted its resignation.

I don’t know the semi-retired founder of this firm but, in addition to his business brilliance, he is well known for his activities in favor of children. It is hard to believe that, had he been aware of what was going on, he would have tolerated it. My guess is that he would have crushed the intrusion, but not merely on compliance or even ethical grounds: his first reaction might have been aesthetic. Creating a company is like creating a work of art: the author cannot stand to let it be disfigured by a stain – regardless of short-term business considerations.

Obviously, to classify corporate leaders into dreamers, accountants and finks is caricatural. But it summarizes fairly well the combination of talents necessary to succeed. The “dreamer” usually has the vision of how a business can succeed by being radically different. But he needs the “accountant” to bring projects down to earth, quantify costs and filter an excessive outpour of ideas. And they both need the “fink” to implement unpleasant but necessary decisions, and haggle with the “finks” at other organizations.

Nevertheless, the dreamer is the hardest to replace because he is the one who gives the enterprise a soul. His vision transcends the daily problems or even the normal scope of corporate strategy, to focus on essential corporate values. The accountant and the fink may humor him or even ape him, but they seldom feel as deeply as he does that these values are a matter of life or death for the business. Yet, it is this knowledge that allows the dreamer to sense the right path where it is not apparent to minds brilliant only in a business sense.

Once the dreamer has retired, however, corporate guidance is left to the accountant and the fink -- think about that for a minute!

My brother has fallen into a situation where the dreamer has half-retired and his firm’s traditional values may be eroding. I hope common sense and decency will nevertheless prevail. But the problem is much wider.

I recently wrote a paper for the French Society of Financial Analysts, entitled “Post mortem for the Al Dunlap era”. Until the recent spat of scandals culminating in the Enron and Tyco affairs, “chainsaw Al” Dunlap was considered the ultimate corporate “fink”. The former CEO of now-defunct Sunbeam Corporation actually nurtured that image with such quips as:  “If it’s a friend you need, buy a dog!”  Presumably as a result of this estimable attitude, students at leading business schools elected him (shortly before his demise) the most admired CEO in America.

The Cultural Revolution that American business underwent in the 1980s – which allowed it to survive and come back roaring into the 1990s – was eventually corrupted by people like Al Dunlap. Novel methods for creating efficiencies (by reducing cycle times, for example) progressively gave way back to the more traditional cost cutting and lay-offs. As the limits of these more traditional methods became apparent, more and larger mergers were needed by the era’s “restructuring artists” to squeeze out some more duplicate costs and to hide the sad truth that they had no idea how to grow a business.

The real bubble of the 1990s was not so much in technology as in investment banking and restructuring: it was a bull market in accountants and finks. Of course, there were a few real dreamers very early in the bubble. But the only dream of most of those who followed was to raise easy money from gullible investors.

For corporate America, the challenge of the 2000s will be to re-invent growth. But this is unlikely to happen at old growth companies once they have lost their dreamer and their soul. So, for investors like us, the challenge will be to discover the new dreamers, and make sure that they are seconded by a good accountant and an honest fink.

June 22, 2002
^© Tocqueville Asset Management L.P.