Lessons from The Godfather
  
Mark Sutcliffe 
The Ottawa Citizen 


January 10, 2004
 

 

 
During a very relaxing holiday break, I watched The Godfather trilogy for the first time in many years and came to realize that the saga of Don Vito Corleone is a great business story filled with powerful lessons for the entrepreneur. With a backdrop of corporate trials for executives such as Martha Stewart and Dennis Kozlowski, it might seem like an easy comparison to connect business with crime. But the business lessons of The Godfather have nothing to do with the underworld; they are all, to use a term from the movie, "legit.''

In fact, leaving aside the fact that his operations were illegal and his methods included murder, Don Corleone is a model CEO. I know. That's a bit like saying, other than the accounting improprieties, Enron was a good company. But don't be distracted by his industry; Don Corleone is actually a man of deeply held principles who runs a strong and sophisticated business. And we can all learn from him.

It's not personal, it's business

This is the overriding principle of The Godfather. In the competitive world of business, it's easy to take things personally. The actions of competitors can be viewed as personal attacks, especially when they try to take away your customers or employees. But it isn't personal; it's strictly business. The best chief executives respond with smart business decisions, not retaliatory attacks. And they are prepared to partner with past rivals if it makes business sense. After Corel bought WordPerfect, chief executive Michael Cowpland talked with bravado about ending Microsoft's domination of the word-processing market. That didn't stop Microsoft from making a later investment in Corel. As Michael Corleone says, "Never hate your enemies. It affects your judgment.''

Behind every successful CEO is a strong consigliere

Don Corleone relies on his most trusted adviser, his consigliere, or counsellor, Tom Hagen, the way top CEOs rely on a chief operating officer or corporate counsel. Ron Zambonini of Cognos (who is Scottish, not Italian, by the way) is Ottawa's most admired chief executive, but he doesn't do it all himself. Look at the team of senior executives he has built around him. And good leaders realize that hearing a different perspective is critical; far from being a clone of the Don, Tom Hagen isn't even Sicilian.

Know how to delegate

Don Corleone avoids the classic entrepreneur's pitfall of trying to do everything himself and instead devotes himself almost entirely to strategy, assessing risk, managing important relationships and even succession planning. The Corleone family business is a network of independent operations with managers who work with a lot of autonomy provided they contribute regular profits to headquarters and are ready to pitch in resources in times of crisis. It's basically a franchise model.

Power is in relationships

What value does Don Corleone bring to his business? The intricate network of relationships he has built. Even his competitors are willing to give him a share of their profits in exchange for access to his network. Relationships are more valuable to a business than the best entrepreneurial idea. Superficially, the Don's network has been built on fear, but dig a little deeper and you find his empire is built on relationships of loyalty, respect and service.

Know how and when to diversify

The central storyline of the original Godfather movie is the debate over whether the Corleone family should diversify into a new line of business, narcotics. If they don't, the consigliere argues, their competitors will grow rapidly and eventually put them out of business. But if they do, they will go against the Don's principles and risk distraction from their core operations. After a painful and costly struggle, he finds a compromise that allows him to participate only on his own terms. The wisest chief executives find ways to participate in new industries without being over-committed to them.

Don't lose your humility

In the novel on which the movies were based, author Mario Puzo writes that Vito Corleone knows "there comes a time when the most humble of men, if he keeps his eyes open, can take his revenge on the most powerful.'' Because of this, he never loses his humility. It's a lesson that some chief executives such as Conrad Black don't learn until it's too late, when shareholders or regulators take revenge on their arrogance.

Some of the more memorable quotes in The Godfather are used as business metaphors for negotiating ("I'm going to make him an offer he can't refuse.''), risk management ("Keep your friends close, keep your enemies closer.''), loyalty ("Never take sides against your family in public.''), or even life balance ("We don't discuss business at the table.'') But perhaps one of the most powerful lessons of The Godfather is that a business can take on a life of its own beyond your control. If you're not careful, you can end up saying, as Michael Corleone did, "Every time I try to get out, they keep pulling me back in.''

Mark Sutcliffe is a longtime Ottawa entrepreneur, business journalist and broadcaster who can be heard weekdays on 580 CFRA. He can be reached at marksutcliffe@sympatico.ca .

© The Ottawa Citizen 2004