Growing Pains

Top-Down Transformation

Jones isn't the only person at THQ who is struggling to make the kinds of sacrifices that are required by a new sort of professionalism. Making the transformation has become everyone's mission. It has taken place again and again, one person at a time, over the past five years.

The change began with Brian Farrell, who joined THQ in 1991, the year after it was founded, as its chief financial officer. He took the company through several harrowing years of losses -- fighting for corporate survival, bringing the company through the valleys with high-risk financing from the banks and out into the bright light of its first huge success. Then, in 1995, as THQ's growth spurt began, Farrell was appointed CEO. What had once been a small and simple organizational village was becoming before his eyes a complex corporate metropolis.

"In the past, we knew who was getting married, whose kids were going to which schools," Farrell says. "It was an intimate sort of environment. But you have to get bigger, add more systems, institute more controls. A larger company can't feel the way it did when it had 30 people. Rather than fight change, you try to manage it."

In 1998, when Farrell realized that he didn't know how to manage that change, he hired someone who could. Jeff Lapin, 44, had run a number of different corporations, including House of Blues and Starwood Hotels & Resorts Worldwide Inc., a hotel ownership and management company. He has brought a wealth of tools and wisdom from his experience at those larger companies to his role as vice chairman of THQ. For Farrell, the adjustment has been simple and, in some ways, a relief. He has stopped managing and has started leading. He travels relentlessly now -- meeting with shareholders, stock analysts, and business partners, as well as creating alliances, goodwill, and a public image that nurtures the company's growth. Lapin stays at THQ's home office, running things with expert skill.

Yet Farrell hasn't disappeared into his travel itinerary. He still wanders the halls of THQ when he's there -- talking, encouraging, touching base with workers. He's still the leader, both inside and outside the company's walls. By his own behavior, by his own renunciation of old patterns and habits, the CEO has established a model for everyone else to follow: Narrow your span of control. Delegate. Give up cherished behavior. Let go of everything that you can't know or that you can't do. Do only what you can do best.

It's not hard to tell why Farrell's people love him -- why they want to see him and his smile appear in a doorway. He is affable and soft-spoken, a CEO with integrity in his blue eyes. On his office wall, he has a drawing of the church in Interlaken, Switzerland where he and his wife were married with only their parents as witnesses -- a human touch that speaks eloquently about the understated human tone that he sets for the company.

When Farrell realized that THQ had grown beyond his capacity to manage it the old way, he hired Lapin, who'd been on the company's board of directors since 1995. The two men were good friends. Lapin had run many companies, but he'd never taken a job as second-in-command. He was independently wealthy and saw it as a personal challenge to come aboard and to see if he could make things work. The styles of the two men were instantly compatible. Farrell could remain soft-spoken and be the nice guy with the creative vision, and Lapin could play the role of "man in black," the one who teaches people how to narrow spans of control, how to hire key professionals, and how to put in place professional reporting systems and work processes. He came in and smote what had been a scrappy, quirky little street-fighter of a company -- and that company began to behave itself.

"With Jeff, we have more professional communication with employees, more meetings, more information flow," Farrell says. "We maintain discipline. We tell people to set out a plan, make a good one, and execute on it. Make the date. Make the date. Make the date. We tend to have fewer people doing the same task, and we ask those people to do more."

Lapin, Farrell's alter ego, sits in his own office, looking like the embodiment of the CEO's dark side. He wears a black shirt, which he leaves unbuttoned, wide open at the collar to show his chest hair. Lapin has hazel eyes and curly black hair: He has practically the same driver's license description as Jones -- but with a dark tan and a sensuous face, a playboy's face, the face of a Hollywood agent (even though he manages his company more as a Jesuit would). Jones summarizes Lapin in a few sentences: "A man who doesn't pull any punches. He's the bottom line. Need the truth? He's the man to go to."