Risk Free Entrepreneurship by Mitt Romney

Louis Menand, the fine student of American Literature and Culture, [see especially his Pulitzer winning The Metaphysical Club: A Story of Ideas in America]  has an interesting piece in the current New Yorker, using Michael Kranish and Scott Helman’s biography “The Real Romney” (HarperCollins), and Mitt Romney’s own campaign book, “No Apology: The Case for American Greatness” to take a look at the current front runner for the Republican nomination.

There are many nuggets of interest, including a short course on theories of management.  One that leaped out at me was  the telling of Romney’s actual experience of the risks of entrepreneurship and the “creative destruction” he is fond of citing as necessary.  He was asked by his boss, Bill Bain, at  Bain & Company, to head up Bain Capital, premised on a new business model.  Romney said no.

It sounded too risky, he said. Bain (who was Kranish and Helman’s source for this account) replied that if the business didn’t work out he would guarantee Romney his old job back at Bain & Company, at the old salary plus any raises he would have earned. Romney was worried, though, that if the new business failed it might damage his reputation. Bain promised that if Bain Capital didn’t work out he would provide Romney with a cover story—something about his value as a consultant being too great to lose. So Romney finally took the job. As Bain told Kranish and Helman, Romney was facing “no professional or financial risk.”

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