The Hardest Thing for an Entrepreneur to Learn

Steven Tanger joined Tanger Factory Outlet Centers  (NYSE: SKT  ) , founded by his father in 1981, as the company's fourth employee. The company had grown to 13 outlet centers by 1992, and the following year became the first outlet center developer to be listed on the New York Stock Exchange as a publicly traded REIT, under ticker symbol SKT. Tanger has been president and CEO since 2009, and the company's portfolio, growing steadily, now includes more than 40 outlet centers across the U.S. and in Canada.

Tanger has watched his father's company grow from a tiny start-up to a multibillion-dollar success story. In this video segment he recalls what it was like to have a hand in every aspect of the company, and what it's like now to delegate responsibility for so much of it.

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Tom Gardner: Out of curiosity, what is your area of greatest enjoyment in all of this? For example, are you involved in the design? Are you reviewing the design? Or are you more interested in the location choices and the financial profile of the overall business? I'm sure you're excited and enthusiastic about every area, but do you have a particular area, right now in the work that you're doing, that you find most interesting?

Steve Tanger: Tom, I joined the company as the fourth employee. It was my father and I, and a secretary, and a bookkeeper so, out of necessity, each of us did everything. We did the marketing, we did the leasing, we did the land development, we did the finance, the operations... so I'm trained in all aspects of it, as most entrepreneurs are when they start a small business. You have to get your hands dirty, and you love what you do. And I still love what I do.

It took us from 1981 to 1990 to hire our 10th employee, so we grew the business slowly, very conservatively financed. Today, we have about 150 employees in our office in North Carolina, and probably a total of 500, if you include all the Tanger people on site in our 43 shopping centers.

But I oversee the very talented people that we've hired. My mantra is "Hire very smart, very talented people, and get out of their way and let them do their job." I'm not...

Gardner: Mr. Micromanager.

Tanger: No. I think the hardest thing for an entrepreneur to learn is to give up control. Because entrepreneurs are used to hands-on, micromanaging everything, and thinking -- and sometimes rightfully so, and sometimes not -- they can do everything better than everybody else.

But we've hired extremely talented people. We have a robust succession planning program, starting with myself. We review it twice a year. Every employee is put into a nine-box grid, and we track them, we educate, we self-promote.

It's important, I think, for the shareholders to know that no one person is bigger than the enterprise. Our enterprise value now, including debt, is probably $4.7-$4.8 billion -- and that's starting from a dream, with nothing.

We want to be sure that our stakeholders, who have shown confidence in our management team by investing with us, and making us stewards of their hard-earned money, we want to be sure that the enterprise survives.

I'm asked from time to time, what happens if I get hit by a bus? My answer is, "Well, I no longer cross the street!" But if something were to happen to me, the company would survive and prosper.


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