Managing The Terrier Syndrome

Jim Blasingame

A man's gotta know his limitations.

Those are the now famous Hollywood words of Clint Eastwood's detective character, Harry Callahan, aka Dirty Harry. He was talking about not letting your ego write a check your ability can't cash.

Small business owners could take a lesson from Inspector Callahan. But the reason we have trouble heeding the Inspector's advice is because small business owners have what I call the Terrier Syndrome.

You know what a terrier is:  those fierce little dogs bred to hunt. And not just hunt, but go-to-ground, in pitch-dark holes, and drag out an indignant and protesting badger, groundhog or fox.

Today terriers are more likely to be lap dogs than anything else. But even though it's been many generations since terriers have gone-to-ground, these mighty mites still have no fear. Some things run deep.

The Terrier Syndrome in a small business owner can produce good things: courage, tenacity, determination, and competitiveness.

But sometimes it produces things that are not so good: narrow vision, single-mindedness, and intransigence.

One of the keys to small business success, and indeed survival, may just be in knowing how to manage these two sides of the Terrier Syndrome.

You Da Dog!
If you're a small business owner with even one drop of entrepreneurial blood in you, by definition, you have the Terrier Syndrome. Like a five-pound terrier pulling a 15-pound badger out of a burrow, you have probably made something happen that no business your size should have been able to pull off.

But what about those times you want, or need to accomplish something, but you truly aren't big enough? Like bidding on a contract that is beyond the limits of your capital funding ability. Or perhaps you have an opportunity to provide service and product to a large customer, but you can't ramp up your resources quick enough to meet a deadline.

What do you do? Do you let your German Shepherd mouth overload your terrier backside? I have, and I don't recommend it.

Or do you invite another terrier to join you? Maybe you even approach a German Shepard -- with the mouth and the hindquarters to back it up -- about working together.

In the animal kingdom this is called hunting in packs. In the marketplace it's called developing strategic alliances. At least that's what I call it.

You Say Tomato, I Say Tomahto
I like to use strategic alliances as a handy broad-brush term to identify a philosophy and business approach those of us with the Terrier Syndrome need to always be thinking about. But my friend and Brain Trust member, Andrew Sherman, who is an attorney, has a more strict definition. In his newest book, Raising Capital (Kiplinger), Andrew says that a strategic alliance is just one form of hunting in packs.

Here is Andrew's short list of different forms of business relationships that can be good alternatives to hunting alone:

• Joint venture
• Strategic alliance
• Co-branding
• Licensing

These terms not only identify organizational and legal structures, but also the philosophical approaches to working with another person or company. For us terriers, the challenge is not in how to put a relationship together, but rather in admitting that we need the help, and then internalizing the concept so that we can successfully initiate, participate in creating, and function in one of these relationships.

Chapter 13 of Andrew's book delivers the best tour of the different forms of "strategic alliances" I've ever seen. Below is a list from Andrew's book of eight reasons why a terrier might consider creating one of the relationships listed above in order to work with another terrier or a bigger dog:

• Develop a new market
• Develop a new product
• Develop and share technology
• Combine complimentary technology
• Pool resources
• Acquire capital
• Execute a contract
• Access a network

Get Everybody On The Same Page
Andrew would be disappointed if I failed to mention the key structural issues any strategic alliance must address in order to have a good legal and organizational foundation. Here is part of Andrew's list, followed by my thoughts:

Term: Typically, alliances are relationships that have a specified life -- a predetermined beginning and end. Don't worry. If necessary, the parties can extend any contract by mutually agreeing to do so.

Strategic objective: All parties must be clear about the specific purpose for the relationship. Always put it in writing. Even the simplest deals.

Legal agreements and structure: Some relationships might need to be legal entities, like a new corporation founded and owned by the parties, as in the case of a joint venture. And some might be based on a contract, like Andrew's strict definition of a strategic alliance. Either way, make it formal, and make sure everyone agrees about how it's supposed to work.

Extent of commitment: Regardless of the type of relationship, clearly identify the level of commitment each party must make, and make sure there are no misunderstandings.

Capital and resources: Every alliance relationship is different. You might have the trucks, and your partner might have the people. Or each party may kick in equal amounts of everything. To some degree, this is just math, but it's got to be math everyone understands and agrees with.

There are many other considerations you will need to deal with up front, like what happens in a worst case scenario, plus taxes, distributions, and final dissolution, to name a few. But those are details the attorneys and accountants can advise you on. As I said earlier, the real challenge for terriers is just thinking about the idea of teaming up with someone else to accomplish a project you couldn't, or shouldn't try on your own.

Joining forces with another person or organization to accomplish a specific objective won't make you any less of an entrepreneur. In fact, when I think about the creativity and vision it takes to put a strategic alliance or joint venture together, I would call that world-class entrepreneurialism.

Write this on a rock... Terriers and small business owners often act bigger and meaner than they are. Sometimes this is good, and sometimes it's not. Always remember that the Terrier Syndrome runs deep, and must be managed. As Dirty Harry would say, "A man's gotta know his limitations."

Jim Blasingame
Small Business Expert and host of The Small Business Advocate Show
©2008 All Rights Reserved

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