The Art of Business: Lessons from the Acquisition of Larson Company
One period in my career is a shining example of how Art and Business can integrate seamlessly within an elegantly powerful marriage. In 1987, I finally found an opportunity to buy a company that blended my passion for art and design with my interest in business. My private equity group bought Tucson-based Larson Company. Then I took over as its President and CEO.
From this life-changing experience, I learned there are 3 types of CEOs and their associated leadership and management styles:
Formal Structure— A CEO who follows the practices and traditional guidance typically taught in university business schools.
Entrepreneur— A CEO who breaks the rules, ignoring a formal structure that constrains their flexibility to pivot quickly when they believe circumstances require a new direction.
Artist— A CEO who looks at a business as a blank canvas, then paints a creative vision willing to work with a variety of seemingly unrelated resources to reach the CEO's desired results.
As an Artist who managed private equity investments, I’ve always seen future M&A opportunities as a blank canvas with endless possibilities, as opposed to a company's current performance. Many times, company leaders simply lack strategic vision or how to best leverage their trusted brand and reputation with key influencers in a dynamic industry. CPAs, attorneys, and the other two types of CEOs tend to look at balance sheets and historical performance. Not saying those aren't important. But by themselves, they are not enough to paint a vision for a highly successful company. My M&A "canvas" criteria would always include company reputation, brand awareness, proven successes of past products and services, talent of employees, market opportunities, barriers to entry for competitors, competitive environment, scalability, and margins. While most of these items don't appear on a company's balance sheet, they can be worth much more than any tangible assets. Larson Company met ALL my criteria. So, I purchased it in 1987. In a few short years, we became a major competitive force and recognized leader globally in our industry.
Larson Company designed and built naturalistic habitats for Museums. But the Company was best known for its habitats in the Zoo and Aquarium market. Merv Larson, its Founder, was the former Curator of The Desert Sonoran Museum in Tucson Arizona. He's credited with providing zoo and aquarium experiences that evolved the Public and Private sectors Environments Industry. Larson developed a design/build process for replicating natural habitats using environmentally sensitive materials with such exacting detail that the animals, Mother Nature, and Zoo and Aquarium visitors could not tell the difference from nature itself.
Larson proved that, by taking animals outside of confined cages to an environment that mirrored their home, it improved their physical health, increased their lifespan, allowed them to breed more successfully, and they became more animated in natural captivity. As a result of this approach, he attracted visitors worldwide to see cage-free animals roaming about in their natural environment. His Desert Sonoran Museum became one of the highest attendance zoological exhibits in the world.
At the time of my Larson company purchase, I inherited very complex challenges. In the dead of Winter, we found ourselves in the final phase of the NYC Central Park Zoo Project horribly behind schedule and over budget. I needed to accelerate our production schedule, which was impacted by adverse weather. I also had to resolve conflicts with the local union while simultaneously delivering a world-class project that met Zoo owners’ and curators’ expectations for on-time and on-budget. Clearly, this was more than I bargained for. But the challenging experience did deliver a compressed education for what was to come in my future.
Within 2 years, we built our Larson Company Tucson team from 25 artists, sculptures, manufacturing technicians, and construction workers to 430 worldclass artisans and expanded design and manufacturing operations in the United States, Japan, Mexico, and the Middle East.
Notable Larson projects included building the largest aquarium in the world in Osaka, Japan, environment features for Wild Kingdom, for Disney Orlando, and for The Mirage Hotel and Casino in Las Vegas. We later expanded into the communication industry with our unique capability for disguising cell towers to look like trees. This creative offering allowed major phone carriers to gain zoning rights for building out their grid.
In 1991, I needed to increase our company's bonding capacity to secure major projects and gain an edge over our competition. My shareholders agreed to sell control of Larson to an international real estate developer, led by a Forbes family interest. Post sale, I stayed on for 5 years as President and CEO of our Larson business until I sold my stock to start my own private equity firm. My art degree and design sensibility combined with the lessons I learned in business were clearly the drivers of Larson’s global success.
