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SMALL BUSINESS STRATEGIES | MANAGING GROWTH: FEATURED
SPEAKER

It Bears Repeating

If You Want to Copy His Success, Kinko's Founder Says, Cultivate a Healthy Paranoia and Perspective

October 14, 1998|CYNDIA ZWAHLEN | SPECIAL TO THE TIMES

The free-thinking, individual management style that has characterized Paul Orfalea since he started Kinko's behind a taco shop in 1970 has been put to the test in the 18 months since he abandoned the Ventura company's longtime decentralized structure and sold a 30% stake to investment bankers.

Orfalea's challenge has been to convince his 23,000 co-workers at 900 branches worldwide that the change would provide the operating efficiency and funds the photocopying and document management company needed to survive and thrive. Orfalea will talk about how he met that challenge, and his formula for success--don't take yourself too seriously--at The Times' Small Business Strategies Conference this weekend.

Here are excerpts from a recent interview in which Orfalea talked about managing change, demographic trends and how to succeed at keeping your perspective.

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Question: How are things going now that you have centralized operations?

Answer: It seems like we are implementing and doing the right things for our stores. We've implemented a better binding process, better cash register systems, higher-speed color copiers. The whole company is embarking on networking the business so we can send documents and file documents for our customers around the world. I don't think we could have pulled this off, this mutual accountability, this mutual work between stores, without being one big company. Now the big opportunity is to make money together, rather than working as individuals.

Q: How did the employees react to the change?

A: There were a lot of conspiracy theories going around.

Q: What was your role in managing the rumors?

A: In organizations, "change" is a real dirty word. People go to work wanting consistency, stability. When you rock those boats, I found it to be the hardest challenge I had. My biggest job really is to try to implement change in this organization. And I think leaders at times have to be at odds with their organizations.

Q: That has been your experience?

A: Yes. "Complacency" is probably the dirtiest word, and you have to fight it every day.

Q: Is more foreign expansion part of your strategy?

A: Yes. In Japan, for example, we are doing really well. This downsizing and restructuring of Japan is analogous to America. When we started our business here, there were only 7 million Americans working out of their homes. Now it's something like 48 million. This year we doubled our stores to 33 in Japan. And there are plans for more. We are also in China and Korea. We are doubling our stores in Australia and in England.

Q: So the economic turmoil in Asia is good news?

A: It's wonderful. It really is. It really is great for us, because when they start restructuring you see more small business and entrepreneurs.

Q: What do you think has been the key to your personal success?

A: Not taking yourself too seriously.

Q: How do you make sure you don't do that?

A: Surround yourself with people who can do it better.

Q: You get interviewed a lot. What questions don't you get asked that you wish somebody would ask you?

A: I think you should ask about healthy paranoia.

Q: What about healthy paranoia?

A: I think it's important. There is always somebody across the street to look out for. The biggest competitor you are going to have is somebody you don't see. It's important to not take yourself too seriously and to keep your eyes open. The idea is to be way ahead of your competition. Healthy paranoia will help you get there.

Q: What trends would you advise entrepreneurs to watch?

A: Surprise, surprise, we're having another baby boom generation. We are going to have a lot of old people and a lot of young people and fewer and fewer people in the work force. My biggest advice to folks is to read the census data and realize what's going on in demographic changes in America and the world.

Q: What misconceptions do budding entrepreneurs have about being a success?

A: I think you have to examine yourself. If you like the predictability of having a job, if you are the kind of person who can't handle ambiguity, don't go into business for yourself. You don't have the psychological makeup to handle it. You'll have a heart attack trying to handle it.

And you never can do it perfectly. If you are overly obsessive, overly perfectionist, you'll have a real rough time having a balanced life. Your business is an instrument to make you happier. I think a lot of people mistakenly get their identity from their business, and mistakenly confuse who they are vis a vis their business. I think there are distinct parts of your life: your work, your love and your play.

Q: Have you been successful at keeping a balanced life?

A: It's very easy. The only thing I've ever done well [is business]. I wasn't very good at athletics. I was very bad in school. I can't write. The business is the only thing I've done well, and it's very important that you keep in mind, to remember that I'm Paul, and that's as important as Kinko's. There is a big price to pay if you have success and lose yourself in the process.

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Paul Orfalea will give a keynote address at 8:15 a.m. Saturday at The Times' Small Business Strategies Conference at the Los Angeles Convention Center.

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