Win Small, Consolidate, Then Leap Geometrically

"He accomplished this by winning small, on a narrow front, then expanding laterally and consolidating his position, then moving up to a new level of play to win bigger and repeat the process. All along"

"With thoughts of law school behind him, Desmarais repeated his turnaround success on a larger scale. Then the momentum of his success drove him down the path of buying undervalued, under- performing companies and turning them around, making them prof¬ itable. Each time he succeeded, he would retrench, consolidate his position and roll up his fortunes again, always increasing the size of his holdings by geometric leaps and bounds rather than in short, arithmetic steps. Whenever he expanded the scale of his operations, Desmarais also had to decide if he was going to expand the scope of his ambitions. Simply to repeat success on a similar scale didn’t appeal to him. This is adequate for the individual who undertakes a venture purely for the monetary rewards, but for the person who has become addicted to winning, each subsequent success must provide a bigger charge, a greater reward, a more fulsome benefit, to justify the effort. Therefore, he had consciously to decide to continue playing and, if the decision was to play on and expand the scope of his ambition, the physical bounds of the strategy had to expand. Because the op¬ portunities within the business he understood were limited in Sudbury, when the opportunity arose, he expanded the geographical area within which he operated to include Ottawa, then Quebec City, then the provinces of Quebec and Ontario. When he reached the limits of the business he knew, he found other pursuits and expanded the vision. The tactical doctrine1 he employed had to grow accordingly, but it became, increasingly, the concern of the people he recruited, the managerial talent that could attend to the details of business so that he could nurture the vision of the empire — the grand strategy. This infrastructure of valuable human resources provided him with the support services he needed to achieve his vision; it had to be made up of employees or partners capable of subordinating their ambitions to Paul Desmarais’s, or believing they could achieve their ambitions by helping Desmarais achieve his."

"By the time he acquired Trans-Canada Corporation Fund, Des¬ marais had position. His companies and employees dealt directly with clients; he was the dealmaker. The tccf acquisition put him in the offensive position. He had accumulated the resources and was big enough to go head-to-head with a major corporation, but he didn’t have to. He occupied a beautiful situation. Canada’s corporate world in the 1960s was, essentially, ossified and backward-thinking, led by old-line “old-boys” who weren’t professional business people. They resisted change and were unable or unwilling to accept that Canadian society and culture had changed since the 1930s. To a young man who had prepared himself to be a professional and successful owner-operator on a large scale, they were sitting targets. Desmarais didn’t even have to adopt costly offensive measures. By using guerrilla and flanking tactics, even though he was in an offensive position, by not risking too much of what he had already earned, by moving quickly and planning well ahead, he appeared unpredictable to those he challenged. This enabled him to infiltrate the established corporate world, and claim from it the bits he wanted."