Georges Doriot

Georges Frédéric Doriot (/dɔːrˈiːoʊ/ dor-EE-oh; September 24, 1899 – June 2, 1987) was a French-American investor, military leader, and business educator. As president of the first institutional venture capital fund, Doriot has been described as the "father of venture capital."^[1][2]

An émigré from France, Doriot became a professor of Industrial Management at Harvard Business School after dropping out of its MBA program. Doriot's lecture course in leadership was heavily subscribed and taken by many future business executives.

During World War II, President Roosevelt asked Doriot to became a U.S. citizen and aid military planning. He became director of the U.S. Army Quartermaster's Military Planning Division, where he oversaw the development the new materials, vehicles, apparel, and field rations. He focused Army research programs on new technologies for the comfort and safety of the Army's general infantry. He was promoted to brigadier general and awarded the Distinguished Service Medal, as well as foreign military honors. His proposal for a consolidated Army materials research programs became a charter for Massachusetts' Quartermaster Research Laboratory.

In 1946, he co-founded American Research & Development Corporation (ARD) with Karl Compton and Ralph Flanders. A public company intended to stimulate the American economy by spawning new industries, ARD was the first venture capital fund not tied to a family office. After a slow start, ARD was the first to back computer manufacturer Digital Equipment Corporation, providing a 7,000-fold return to its investors.^[3]

In 1955, he proposed the founding of INSEAD, now one of Europe's top-ranked business schools.^[4]

Doriot was born in Paris, France on September 24, 1899, to Berthe Camille Baehler and Auguste Doriot, the motorist, engineer, factory manager, and later, dealer and car manufacturer (owner of D.F.P.). At the time of his son's birth, Auguste had established a close relationship with Armand Peugeot, and Georges was born in the Peugeot house in the 17th arrondissement.^[5]

Doriot joined French army in artillery in 1917, then returned to Paris when World War I ended and graduated from University of Paris in 1920.^[6] At his father's advice, he emigrated to America in 1921 intending to study factory administration at the Massachusetts Institute of Technology.^[7] A family friend had penned a letter of introduction to A. Lawrence Lowell, the president of a nearby university unknown to the Doriots.^[8] Lowell met Doriot on his arrival in Boston and advised that he should instead enroll in his university's new management school.^[9]

Doriot took a year of survey courses for an MBA at the new Harvard Business School, but dropped out for a career at Kuhn, Loeb & Co. on Wall Street.^[10] However, in 1925 he returned to work the school's administration as an assistant dean.^[11] After criticizing the school's course on factory production, Doriot was asked to teach it.^[12] He was later promoted to associate professor.^[13]

Ahead of the fall of France, Doriot approached the French embassy in Washington about supporting France's war effort. When advised he could serve as a limo driver to the ambassador, he walked out.^[14] However, his expertise in manufacturing was sought by U.S. Army leaders. William J. Donovan arranged a meeting with President Franklin Roosevelt, who appealed for his help improving U.S. military readiness despite his French citizenship.^[15] Doriot became a naturalized U.S. citizen in January 1940, qualifying him for U.S. military service.^[15]

In the spring of 1941, Doriot's former student Edmund Gregory, the newly appointed Army Quartermaster General approached his teacher about a military post. Doriot became lieutenant colonel in the Quartermaster Corps and was placed in charge of expediting Army procurement.^[16] Initially, he prevailed successfully on Detroit automakers to retool factories for Army trucks.^[17]

When Japan captured the Malayan rubber supply in late 1941, Doriot shifted his attention on a dire need for rubber in the military fleet.^[18] His February 1942 memo outlined the basis of the U.S. rubber rationing program and initiated a federal research program into synthetic alternatives announced by President Roosevelt.^[18] Modern synthetic rubbers, now the majority of U.S. rubber output, trace back to these research investments.^[19]

In July 1942, the Quartermaster Corps created a new Military Planning Division with Doriot presiding over its research functions. Doriot's research focused on improving GIs' comfort and durability in combat. Innovations overseen by Doriot included water-repellant fabrics, long-lived boots, insulated fatigues, and insecticides.^[20] In October 1943, Doriot was made Planning Division director, overseeing a 500-person research contracting organization that grew to 2,000 civilians handling several billion dollars in contracts.^[21] In that capacity, he managed all procurement research for the U.S. Army, from trucks to uniforms to rations. These programs included the nutrition science and food production to introduce the Army's letter-graded rations from "A-rations" to "K-rations".^[22] Doriot was appointed Brigadier General in February 1945, a rare achievement among Quartermaster Corps officers.^[23]

The Quartermaster Corp gave General Doriot's name to one top-secret research program: the development of plastic-plated body armor known as "Doron".^[24] Initiated in 1943, the program responded to metal shortages, but also gave soldiers lightweight protection from ballistics. Dow Chemical manufactured laminated plates of fiberglass and plastic and were tested by firing live ammunition at a soldier, who volunteered to accelerate their use in combat.^[25] Doron-lined body armor debuted in the Battle of Okinawa and were later used for pilots' flak jackets into the Korean War.^[26]

Doriot was discharged in May 1946, having collaborated with hundreds of manufacturers and universities on research and procurement.^[27] For his service, Doriot was awarded Distinguished Service Medal.^[27] He was later honored as a Commander of the British Empire and with the French Legion of Honor. During the Army's post-war reorganization, Doriot spearheaded a proposal to consolidate the Quartermaster General's research programs at a single facility in the Boston area.^[28] After several years of wrangling, the Department of Defense founded the Quartermaster Research Laboratory in Natick, Massachusetts.^[29]

As a professor at Harvard Business School, Georges F. Doriot was known for his rigorous and authoritative teaching style. His "Manufacturing" course, though ostensibly about production processes, covered a wide range of topics related to business management and strategy. Doriot's classes were primarily lecture-based, with little discussion, reflecting his belief in the importance of discipline and long-term strategic thinking. His educational philosophy emphasized the development of character and leadership, which he viewed as crucial for success in both business and life.

The course, which ran from 1926 until Doriot's compulsory retirement in 1966, enrolled some 7,000 students.^[30] Among the “Doriot Men" were some of the era's highest-profile Business School graduates: Philip Caldwell (Ford Motor Co.), John Diebold (the Diebold Group), Ralph Hoagland (CVS), Dan Lufkin (Donaldson, Lufkin & Jenrette), and James D. Robinson III (American Express).^[31]

Doriot early attempt to reconnect with education in France was his founding of CPA – Centre de Perfectionnement aux Affaires in 1930. This later became part of HEC Paris in 2002, then rebranded as the HEC Paris executive MBA, de facto one of the oldest executive MBAs in the world.

After World War II, Doriot's experience with both world wars drove his determination to bridge chronically hostile countries and build lasting peace in Europe. He envisioned a business school that would unite leaders from different countries, including the former hostiles, to rebuild economies and promote lasting peace. To ensure that, his vision for the school includes citizenship limits and language of instruction to be in either French, English or German to ensure cross-culture collaboration.^[32]

In 1955, Doriot presented this idea to the Paris Chamber of Commerce, whose presidents, Jean Marcou and Philippe Dennis, not only funded the venture but also became first presidents of the school. Doriot's vision gained international backing, including from U.S. President Dwight D. Eisenhower, who supported INSEAD's role in reconstructing Europe.^[33] Doriot selected Claude Janssen and Olivier Giscard d'Estaing, his former students at Harvard, as his co-founders. Janssen, well-connected in European business circles, had experience in finance, while Giscard d'Estaing, younger brother of the future French president, Valéry Giscard d'Estaing, brought a political network.^[34]

INSEAD, initially as "Institut Européen d'Administration des Affaires" (lit. 'European Institute of Business Administration'), was established in 1957 and initially operated out of the Château de Fontainebleau, before relocating to its current Europe Campus in 1967.^[35] The first MBA class began on September 12, 1959, with 57 students.

In December 1946, after his release from Army service, Doriot became president of American Research and Development Corporation (ARD), a position he held for twenty-five years.^[36][37] ARD had been incorporated that June by a group including Ralph Flanders, president of the Federal Reserve Bank of Boston, and Karl Compton, president of MIT, who had originally recruited Doriot to chair a New England Council subcommittee on venture capital in 1939.^[38] The firm was the first venture capital enterprise to raise capital from institutional investors rather than family wealth.^[39][40]

Doriot's investment philosophy emphasized founders over their ideas. "An average idea in the hands of an able man is worth much more than an outstanding idea in the possession of a person with only average ability," he wrote in ARD's 1949 annual report.^[41] He believed venture capital's purpose was "not one of 'making money' but rather financing 'noble' ideas," and treated portfolio companies as "members of the family," reluctant to sell them.^[42][43] ARD required board representation in its investments and provided management guidance alongside capital, what became known as the "Doriot style."^[44]

ARD's defining success was its 1957 investment of $70,000 in Digital Equipment Corporation, founded by Kenneth Olsen and Harlan Anderson after established computer companies rejected their proposal to build cheaper alternatives to IBM mainframes.^[45] DEC developed the minicomputer and became Massachusetts' largest employer and America's second-largest computer manufacturer.^[46] By 1971, ARD's stake was valued at $355 million.^[46] The investment demonstrated that backing technology startups could generate extraordinary returns; over ARD's lifetime, the firm achieved annualized returns of 14.7 percent, more than half attributable to DEC alone.^[47]

Doriot proved unwilling to delegate authority or plan his succession. When ARD's board established a "Committee on 70" to manage leadership transition, Doriot evaded the process.^[48] With no succession plan after years of deliberation, the board accepted a merger with Textron in 1972. Doriot remained chairman of the ARD subsidiary until 1974; the division made few new investments and disbanded in 1976.^[49][50]

Doriot died of lung cancer on June 2, 1987 in Boston, Massachusetts.^[30]

The Doriot Climatic Chambers at the U.S. Army Soldier Systems Center, Natick, Massachusetts were named in his honor in 1994. (During his time in the US Army, Doriot had written and spoken about the need for an "Institute of Man" for the testing of soldiers and their equipment at environmental extremes. The DCCs are seen as a partial fulfillment of that vision.)

The Doriot School of Capital was created in his name by the so-called Zeitgeist University, Geneva, Switzerland and Mexico City, Mexico Campus in 2020 with the goal of educating leaders and building companies.

• History of private equity and venture capital
• Private equity
• Leveraged buyout

• Georges F. Doriot research papers at Baker Library Special Collections, Harvard Business School
• Georges F. Doriot American Research and Development papers at Baker Library Special Collections, Harvard Business School
• Georges F. Doriot papers at Baker Library Special Collections, Harvard Business School

• George F. Doriot papers at Baker Library Special Collections, Harvard Business School