rocnext cover; entrepreneurs see things differently

Democrat and Chronicle Sunday, January 13, 2013

It started with a simple handshake in1853 between John Jacob Bausch andhis friend Henry Lomb. Lomb loanedBausch $60 to start an optics companywith the promise that if it grew theywould become full partners.

This handshake gave birth to Bausch+ Lomb, a great American businesssuccess story until the early 1990s,when the company was derailed byreckless ambition. Warren Buffett oncesaid that if you demand your exec-utives “make their numbers,” theyeventually will “make up their num-bers.” That happened at B+L and that iswhen the vision, and spirit, of Messrs.Bausch and Lomb left the company.

Now there’s word the company isbeing shopped, with the assistance ofGoldman Sachs. Considering the cur-rent chairman and CEO of B+L weresuccessfully involved in selling thelarge pharmaceutical company Scher-ing Plough to Merck in 2009 for $41

billion, a sale is likely to happen, whichdoes not bode well for Rochester. I haveno criticism of these executives as theycarry out a plan that private equityfirm Warburg Pincus implementedwhen it took the company private inOctober 2007.

So what went wrong and what canwe learn? After rereading press re-ports and SEC filings from themid-1990s through October 2007, anunsettling but familiar story lineemerged. Professional managers moreconcerned by what they might get ver-sus what the company might eventuallybecome led the company over the cliff.

When managers don’t share the foun-ders’ passion and vision and act accord-ingly, a corporate cancer begins tometastasize. This deadly culture pre-sents itself in overstating revenue,accounting irregularities causing therestatement of financial results, aboard asleep at the switch and a hand-ful of reported lesser transgressions,punctuated with a keen ability to ratio-nalize failure. From 1993 to the sale inOctober 2007, B+L touched them all.

Typically, successful company foun-ders are forged in the crucible of sur-vival, including its hardships, scarcity,and a deeply rooted appreciation forworkers that they view as colleagues.Their company is an extension of, or is,their family, and they still make thedifficult decisions. Their greatest satis-faction comes from seeing others suc-ceed — in many circumstances beyondwhat the individual worker believedwas possible. The company trappings

of success are understated with defer-ence given to the public shareholders.They worry about obsolescence andhave a burning desire for innovation.“Professional managers” void of a foun-ders’ DNA have brought many a greatcompany to its knees.

So 140 years of success was erodedand Bausch + Lomb became a privateequity play. We can only hope, thoughunlikely, that the bids are not attrac-tive, and Warburg Pincus takes thecompany public again, with steward-ship inspired by the vision of Messrs.Bausch and Lomb.

If not, I am afraid the loss to Roches-ter, and B+L employees, could be sig-nificant, including a 10 percent to 15percent reduction in redundant posi-tions, loss of community financial sup-port and the loss of a Fortune 500 com-pany headquarters — all marked by arose-colored tombstone downtown oncecalled the Bausch + Lomb building.

Back in the mid-1990s, when Mark Gentile was starting his software business, potential investors reminded him that

many startups fail. They asked about his backup plan. » “Naively, I said, ‘Failure is not an option.’ And everyone kind of

chuckled,” said Gentile, who sold his company, Odyssey Software Inc., to California-based Symantec Corp. last year. »

His attitude epitomized the confidence and spirit that permeates the world of entrepreneurship, where men and wom-

en risk everything to pursue their dream. They have a drive and a decisive ability that separates them from the rest of

us 9-to-5ers, according to experts. » Gentile’s feeling that he didn’t need a Plan B was ingrained. » “It was part of that

outlook that there’s always solutions to any problem. It’s that kind of outlook that allowed me to navigate the tricky

waters of starting and growing a business and not becoming one of the statistics,” said Gentile, now a senior technical

director for Symantec in the same Henrietta office where he worked before the sale. » The sale price was not disclosed.

See ENTREPRENEURS, Page 5E

Bennett J. Loudon staff writer

Mark Gentile

Possible B+L sale not good news for Rochester