The Idea of Entrepreneurship – And How to Destroy It

You are probably familiar with the feeling of having a compelling idea burning inside. You are in flames. Strong urge or flow is moving you towards enthusiastic actions with the feel of joy and high hopes for the future. Do you recognize this moment?

If you do, you also might have noticed that many times it is difficult to jump over the bar of corporate barriers and the so-called management processes. Far too often this spirit gushing from true entrepreneurship is being killed by the processes originally built with good intentions to foster innovations. De facto is that there are much more good intentions and good people in the universe trying to do their best than there are good ways to conduct.

Understanding this single fact makes the difference between passionate entrepreneurial leadership and what has become the standard in today's conglomerates.

An outstanding example and a journey inside this kind of spirit is the story of Swedish AB Urfabriken. Most of us recognize this company better from the world famous fishing tackle than fine pocket watches and taximeters where the company originally started from.

AB Urfabriken (ABU)

ABU was founded by Carl August Borgström in 1921 in the southern part of Sweden by the beautiful Mörrum River in a small town called Svängsta. ABU evolved from the first Swedish watch manufacturer into building – one of the first – taximeters.

As the market for taximeters collapsed in the advent of World War II, Carl August's son Göte and his pioneering entrepreneurial deeds turned the company’s business to develop the world leading fishing tackle instead. After Göte build the foundations, his son Lennart Borgström led ABU for two decades. We have a lot to learn from this journey full of examples of joy of work with phenomenal forerunning practices in customer service, leadership and marketing.

ABU bought cottages and fishing boats for employees to borrow

The story of ABU is also a sad confession on how the then perverse inheritance tax in Sweden forced ABU to become part of the Wallenberg conglomerate, and how their mismanagement destroyed most of Lennart's ahead-of-time thinking, and almost killed his company.

But before ABU went into nosedive, it made its way against all odds to be the number one in the quality fishing tackle market. What made this small company distinctive from the others? And what can we learn for the future of what they did?

Joy of work

There was a strong belief in ABU’s management that people are not fully effective if they don't love their work, so there were numerous, characteristic ways how ABU ensured their people enjoyed their work.

ABU's genuine interest was to make their workers fishermen because good fisherman will not build lousy fishing equipment. For this purpose ABU bought cottages and fishing boats for employees to borrow.

No effort was saved in pursuit of letting people to feel proud of their craftsmanship. There was no need for gigantic production philosophies and lean programs to deliver first class products.

Health and occupational safety was taken on the highest level. A doctor was hired to the board of directors with the title “People’s Director”. ABU also had a psychologist to help workers to develop their skills into direction they wanted to go with their careers.

ABU believed that better informed workers are also more effective and happier co-workers. This is why randomly chosen 15 employee groups from different departments joined Lennart for a monthly lunch meetings where they were told everything from financial status to planned new releases and marketing campaigns.

This all seemed to work well but when ABU was sold to the conglomerate headed by professional managers, they systematically removed these practices, and nearly destroyed the whole company.

Courage and persistence

ABU realized the importance of the consumer in the distribution chain very early. Based on the idea the consumer being the only truly loyal part in distribution chain, they bet their efforts on marketing, quality and customer service never seen before. ABU reached 80% market share in the United States and even bigger stake in the rest of the world.

The story of ABU was not just as easy as pie. For example, the taximeter business died because of the war, a patent claim forced ABU to redesign the Abumatic reel, and products got copied by Japanese company Daiwa. Uncompromising persistence took the company through the hard times and it always turned difficulties into new strengths. Among its competition ABU was clearly the most responsive to change.

Leadership

Lennart Borgström’s philosophy can be crystallized in this free quote including great wisdom for all of us to think about:

"On the river we are all equal"

Honesty in business, integrity, and candidness played the lead violin in the ABU orchestra.

When Lennart moved to the United States with his family to run ABU Garcia, he showed what this meant in practice. The Garcia headquarters was a luxurious place and the officers drove Cadillacs as company cars. Lennart bought the cheapest station wagon model and announced that the others may keep their Cadillacs but the company would not pay for leasing of anything more expensive than his own model. The Caddies disappeared as fast as greased lightning.

Among its competition ABU was clearly the most responsive to change

Company democracy was a central idea for Lennart in an attempt to provide employees good leadership. In the beginning achieving this target was easier but when the company grew bigger the resistance grew as well. As a reflection to what is also happening today, Lennart’s attempts in giving people more authority in decision-making was suddenly blocked, not by his workers, but by more and more centralized and politically oriented trade unions.

Memories for life and reflections into the future

The owner loves his company. He has high hopes and big wishes for the future. But the owner does not spend months to attempt to clarify strategies. Nor does he talk much about action plans and target settings. His target is the journey itself. His targets are concrete, they are reasonable and in his control. Budgetary planning and spending nights with a fortune teller are not in his box of lures.

What sometimes is forgotten in bigger corporations is the idea of entrepreneurship, which is then suffocated by all kinds of nonsense. Too often being a professional makes you forget that you are better off with a strong vision and no action plan than you are with a brilliant action plan without a vision.

We are standing at a turning point. The future expects us not to solve problems the way they were created. I am welcoming the future by lighting a torch of entrepreneurship.

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This post was inspired by having a chance to spend an afternoon with Lennart Borgström due to a pleasant coincidence.

For more about the history of Abu Garcia, watch the For life: The Story of ABU Garcia documentary on YouTube: https://youtu.be/aSVjYBSrL68