Farnam Street helps you make better decisions, innovate, and avoid stupidity.

With over 400,000 monthly readers and more than 93,000 subscribers to our popular weekly digest, we've become an online intellectual hub.

Sometimes it’s just business

Looking under the hood it is the rare entrepreneur who resolves the ethical conflicts of wartime in a way that we today find satisfactory.

Malcolm Gladwell reviews Ugly Beauty

The details of just how Schueller managed to wriggle out of legal trouble are sordid. Bénouville turns out to have barely known Schueller. He was, it seems, doing a favor for three friends: François Dalle, who ran L’Oréal after Schueller’s death; André Bettencourt, who married Schueller’s daughter and became one of the richest men in the world; and François Mitterrand, who worked for L’Oréal in the last days of the war and ended up as the President of France. But there is no denying the cynical brilliance of Schueller’s strategy. As they would say on Wall Street, he hedged the war to perfection. When the market turned in 1942, he shorted Germany and went long on France, and the awkward fact about Schueller’s behavior is that this ability to deal with unexpected obstacles is what we normally celebrate in entrepreneurs. The entrepreneur is someone obsessed with his creation, who applies the full force of his intellect to protect and sustain it. That’s why Alexander Graham Bell didn’t give up on the telephone, and why Hewlett and Packard kept plugging away in their garage in Silicon Valley. We like this about them. Here is Brandon describing what happened to Schueller when he first embarked on his hair-dye project. Having quit his job, and with just eight hundred francs to his name, he surrendered to the compulsion of invention:

The two-room apartment on rue d’Alger cost 400 francs a year, which since he had also to eat and buy materials gave him a little less than two years. The dining room became his office, the bedroom his lab. He lived alone, cooked for himself, and slept in a little camp bed until it was crowded out by laboratory equipment. . . . “When I think back to those days, I can’t imagine how I got through them,” he reflected forty years later.

So why should we be surprised that Schueller would cross a moral line in the service of that same obsession? Schueller’s daughter, Liliane Bettencourt, later tried to excuse her father’s wartime behavior by saying that he was a “pathological optimist who hadn’t the first idea about politics, and who always managed to be in the wrong place.” Brandon is skeptical of that explanation. But it is not entirely wrong. The kind of people who retreat to their two-room apartments or cluttered garages and emerge, two years later, with a better mousetrap are pathological optimists, and seldom have the first idea about politics. Schueller wasn’t for France; he wasn’t for Germany. Schueller was for Schueller. An engineer who worked at L’Oréal said it best: “I think M. Schueller is too much of an opportunist to risk engaging himself absolutely in favor of anyone.”

Gladwell Continues

One of the classic stories in the entrepreneurial canon involves the founder of Ikea, Ingvar Kamprad. In the early days of the company, other Swedish furniture manufacturers had been boycotting Kamprad, protesting what they considered his predatory pricing. His business was in a crisis: he could fill only a fraction of his orders. So Kamprad went to Poland, where manufacturing costs were half those in Sweden. There he struck a series of deals that eventually established Ikea as Europe’s premier low-cost furniture company, and vaulted it from obscurity into one of the biggest retailers in the world. Here is the entrepreneur at work: brilliantly resolving an obstacle to his own advantage. But the official Ikea history hardly considers the implications of when Kamprad made that trip to Poland. It was 1961. The Berlin Wall was about to go up. The Cold War was at its peak. Poland, like the other Soviet-bloc countries, was in the grips of a repressive regime. “Their visit lasted a week and can still be tracked almost step by step by step in the documents the Polish secret police drew up,” the journalist Bertil Torekull breezily writes, in the corporate biography he crafted with Ingvar Kamprad. And how did Kamprad set up shop? “At first we did a bit of advance smuggling,” Kamprad recounts to Torekull. “Illegally, we took tools such as files, spare parts for machines, and even carbon paper for ancient typewriters. . . . We bought nose and mouth protectors when we saw the dreadful environment, and we took a whole lot of secondhand machines from a firm in Jönköping [in Sweden] and installed them in Poland instead.” Because the Ikea history was written in 1998—long after the fall of Communism, when Poland had become a healthy democracy and the unpleasantness of the Soviet bloc had begun to recede into history, Kamprad’s trip to Poland has been treated as a kind of heroic pilgrimage. But what Kamprad did in 1961—cozy up to a police state, break the law—is not radically different from what Schueller did in 1940. Kamprad didn’t get too worked up about the moral consequences of collaborating with the Soviet bloc because he wasn’t interested in moral consequences. He was an entrepreneur trying to save his business. He was too much of an opportunist to risk engaging himself absolutely in favor of anyone. Kamprad was for Kamprad.

Continue Reading

Interested? Buy the book Ugly Beauty: : Helena Rubinstein, L’Oréal, and the Blemished History of Looking Good.

Malcolm Gladwell is a staff writer at the New Yorker and the author of The Tipping Point: How Little Things Make a Big Difference, Blink, Outliers and most recently, What the Dog Saw.

Shop at Amazon.com and support Farnam Street