Beware the folly of hubris in business

Sir Richard Heygate, 60, worked at McKinsey for nearly 20 years before founding Sophron Partners in 1995, a London-based company which consults on customer management technology. It now turns over £10m a year.

Sir Richard Heygate, 60, worked at McKinsey for nearly 20 years before founding Sophron Partners in 1995, a London-based company which consults on customer management technology. It now turns over £10m a year.

My biggest mistake came down to classic hubris, and the fact that I spread my wings too far. It happened about two months ago.

For the last few years at Sophron we have developed an extremely nice business, offering the kind of expertise which stands at the heart of the best new business-to-consumer internet operations.

Because of our success, people began to ask us to build new businesses for them. We helped Ford build an online business and thought we were really clever. We then met some entrepreneurs who had a great idea for an online information business, an idea that we thought would outpace Scoot and Jeeves.

We thought it would be a winner and we got involved far too deeply. The idea really began to take us over and we stopped concentrating on our core business. The worst thing was two of my best people became almost totally immersed in it.

The business itself was a fascinating thing, but it became consuming and caused much anguish. I made the decision to go back to the entrepreneurs and say: "You've got to run this yourselves."

What made me realise we had overstretched ourselves was that another opportunity presented itself, to form an alliance and become an incubator instead. But the people I needed had disappeared into setting up this new business. I said to them: "Look, guys, you have to decide what you're going to do. If you want to run a business, fine, but I don't want this to be part of what we're doing."

There were some arguments and it was an agony, because Sophron had been a very happy business and we'd never had a big hierarchical management structure. We didn't have the mechanism for debates but instead we had something intensely personal. I really thought that this situation might break us to pieces.

It was my fault; I had known of a company which went bust when the chairman spread his wings too far. Our very name, Sophron, means "practical application of wisdom". I think the temptation was that we have a lot of the secrets of online business-to-consumer commerce, which are going to make money for people. The stupid mistake was to do it ourselves, when we didn't have the operational or management skills.

In Roman times, when someone had a triumph, he always had a slave to tap him on the shoulder and warn him about hubris. Fortunately we have managed to turn around and have realised in enough time that we were making a mistake.