'You have a purpose in life.' - H. Douglas Cook, entrepreneur who took over Mountain Shadows, Inc., a residential care facility for the developmentally disabled

Nation's Business, Sept, 1995 by Michael Barrier

For most business people, the bottom line is, essentially, an abstraction. For H. Douglas Cook, it's a human being--his 23-year-old son, Brian, who has cerebral palsy. It's because of Brian that Doug Cook is the principal owner of Mountain Shadows, Inc., in Escondido, Calif.

By the time Brian Cook was 18 months old, his parents knew that he had suffered irreversible brain damage. In 1986, when Brian was 15, they placed him at Mountain Shadows, a residential facility for the developmentally disabled.

Then Mountain Shadows' management ran into licensing problems, and, early in 1990, the owners approached Cook about selling to him.

"My background is as an entrepreneur," says Cook, 47, "and I said, 'Sure, I can do that.' I thought it would take me six or nine months--at most, a year--to put this together. Then I would continue with my life, and this place would be operated by professionals."

By the end of 1991, though, Cook had not been able to put the necessary financing together. He finally bought Mountain Shadows through a 100 percent leveraged buyout.

His task now, Cook says, is "to build a corporation that can survive anything that happens." And to do that, he must juggle conflicting demands of a severity that most entrepreneurs never experience.

The 105 residents range in age from 7 to 63, and almost all are in wheelchairs. Mountain Shadows is, accordingly, a very labor-intensive operation, with 170 employees, and Cook tries not to interfere with their work. "I don't have the professional expertise" to oversee the care of the residents, he says. "I try to stay out of the way of the administrators."

When he took over, Cook's strategy had two key elements. Within Mountain Shadows itself, he introduced a more open management style that recognized the importance of the employees (and reduced turnover dramatically). He also envisioned an expansion to other facilities, as owner or as manager with option to purchase, to give the corporation a more solid financial base.

The idea was to acquire failing facilities cheaply, make them profitable, and then sell them (preferably to their administrators, through leveraged buyouts)--and so far it's working. Mountain Shadows now owns one facility for the elderly and manages another. The corporation cannot extend itself very far, Cook says, but it must do so, "or I don't see a big future."

Cook marvels at the twists of fate that have placed him at the head of Mountain Shadows.

"If you had put 100 different business choices on the table four or five years ago," Cook says, "the last one I would have picked up is this business. But now that I'm here, and I see the opportunities that are before me with this corporation, I work late, I'm up early, I'm excited."

His life is very different in other ways from what it used to be. "I was an alcoholic," Cook says. "I would end up wrecking a business because I was not paying attention to the things that needed paying attention to." He quit drinking almost 10 years ago. "The lucky part for me," he says of his alcoholism, "was that I didn't lose my family."

In effect, Cook now has the chance to build the kind of company he might have built years ago, while gaining the added satisfaction that Brian's presence brings.

Brian's mental development is limited to that of perhaps an 8-year-old, Cook says. "People talk about how regrettable it is, but when I think about Brian, if I had a magic pill and I could change him, I wouldn't know what to change him into. Because he's really cool; he's a wonderful guy. Whenever I have a tough time or I'm depressed, I just need to spend time with Brian or one of the other residents, and my problems go away.

"I feel that you have a purpose in life," he says, "and I feel that my purpose is this business."