Benevolent Dictators
Posted By Randy Jones on July 6, 2009
Over this Independence Day weekend, I was thinking about how one of our defining traits as Americans is our strong emphasis on the individual. I’ve written about the benefits of partnering with someone who complements your perfect pitch so that you can be free to play to your strengths. Dennis Albaugh, the richest man in Des Moines, Iowa, told me, “I have always hired people who are smarter than I am.” I heard this refrain from virtually every RMIT I interviewed: selecting the right team, the right employees, and the best advisers is essential to their success. But make no mistake—there can only be one king.
There’s an inherent tension in the third commandment that all would-be RMITs have to resolve—it requires a delicate balancing act to maintain control while letting smart, talented partners and employees do their best work. Some, like Albaugh, forgo having any partners at all: “I hate partners,” he told me. “Every time I have had partners, I have found that I have spent my time trying to figure out how to get out of the partnership.” Others, like real estate developer Jorge Pérez, the richest man in Miami, and his partner in The Related Group, Stephen Ross, divide the empire in two. “Steve is my best friend and my mentor,” Pérez told me, and they’ve found a way to work together by working separately. Ross runs Related in New York, and Pérez manages the company in Miami. Their individual approaches work well in their respective fiefdoms: Ross is a hard-charging New Yorker; Pérez brings a more Latin business style to Miami. By dividing, they conquered, and together they have built the nation’s largest builder of multifamily housing.
Jim Oelschlager, the richest man in Akron, Ohio, and the owner of investment management firm Oak Associates, is affectionately referred to by his associates as “the benevolent dictator.” Oelschlager told me, “Democracy works well in government, but not in businesses. Consensus management doesn’t work.” No matter how in sync your employees are with you, someone has to make the decisions, and RMITs will always want to call the shots. While this might smack of the despotism of centuries past—“L’État, c’est moi,” as Louis XIV put it—it is actually a triumph of our form of democracy. In America, we all have the opportunity to be a king—at least, of our own business.
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