Essays and Transcripts

Succession Planning
By: Alexa Lemzy, Text Magic

Succession planning is not just for major corporations. In fact, it could be argued that small businesses and startups need a succession plan even more than big businesses.That’s because many startups often rely on the vision or talent of an individual or small group of individuals. When any of them decides to leave the business, the potential to face instability and turbulence is huge. In order not to rely on the individual but rather the idea and talent they brought with them, it’s important to establish a code for how to continue should that person leaves the business. Succession plans not only help ensure a smooth transition of leadership, they also help provide incentives and stimulation for employees who are looking to work their way up the ladder. 62% of employees say that their engagement levels would improve significantly if their company had a succession plan. When developing a succession plan for your company or startup, consider these tips:

Develop a thorough employee review system

A performance review system is key to helping management identify potential leaders and budding talents. It also gives a record of an individual’s progress over time and allows all senior members the ability to review and discuss the potential to cull a successor internally.

Groom promotable employees for leadership positions

Recognition and awards for excellent work can help stimulate an employees’ sense of satisfaction and fidelity to the company. Establishing mentoring programs with senior members, including them in important meetings and providing incentives for them to remain with the company can help secure optimal candidates to fill leadership slots down the line.

That being said, it’s important to be realistic about the candidate’s readiness as well. Don’t make the mistake of confusing someone’s potential with their ability to fill a role tomorrow. Keep tabs on candidates’ proven skills so you can easily identify which ones they’re lacking to perform competently in a new position and implement a professional development plan to get them where you need them to be.

Involve all key players in the process

The decision should never be left up to one person. All members should have voices in decisions about new candidates and their required competencies. That’s because no company is immune from their top leaders leaving. By involving many key stakeholders in the process, you ensure a more cohesive and lasting stability that comes from the top down.

Create training literature to define roles and competencies for each position

Providing your employees with the tools they need to excel in their post and grow into the next one can facilitate in-company succession. This will stimulate younger hires who are professionally ambitious to acquire the skills needed to reach the next rung.

This type of incentive is particularly important to junior level employees. In fact, more than 90% of workers aged 18-34 report that work for a company and has a well-defined succession plan would increase their engagement at work.

Don’t just focus on executive positions

Startups are particularly prone to folding under transitions. Think broadly about the ripple effects of each role in your company and identify key posts whose absence could provide stumbling blocks to your survival. From roles such as marketing director to grants or fundraising specialist, consider your plan to replace positions that aren’t necessarily in the executive nucleus.

A succession plan helps you dream big

Those involved in a startup often work long hours for little pay for a dream they want to make a reality. Putting together a succession plan not only helps inspire employees to work hard to reach more advanced levels within the company, it also inspires the executive members to imagine a prosperous future.

Don’t plan to leave it to the kids

In Silicon Valley’s tech startup culture, the idea of handing over business leadership to children has withered and died. CEO of Atlanta Tech Village David Cummings explains that:

“My take is very different even from something as traditional as a law firm or small business. A generation for me could be five or ten years - certainly not a human generation. So the whole concept of handing a tech business down to a son or daughter is obsolete.”

Part of that has to do with the rapid evolution of both technology and business models as he explains that when his children come of age, “The actual business may not even exist in a relevant fashion.”

Succession plans help a business define its goals and professional necessities. It also helps provide incentives for up and coming professionals and helps new companies envision their futures. Don’t neglect to develop one for your startup.

Alexa Lemzy is the customer service expert and blog author at TextMagic. She mainly covers topics like business growth, mobile marketing, and customer retention in her articles. If you have a question, reach out to Alexa on Twitter.


NJBIZ

January 10, 2011

Focus on entrepreneurship to bolster state’s economy

The economic impact of Silicon Valley — caused by advances in computing technology, along with the Internet — has totaled almost $100 trillion. Even more stunning is that the impact came from the work of about 1,000 brilliant and passionate entrepreneurs. A good portion of them were Asian immigrants, mostly Indians, according to Gallup President James Clifton, during a recent speech I attended.

I wondered how New Jersey could replicate some of the success of Silicon Valley and nurture our own entrepreneurial immigrants (not only our brilliant base of Indians, but those from the Middle East, Eastern Europe, East Asia and South America, as well). We already see the positive effects of their entrepreneurial companies in a 2010 review of the 50 fastest-growing New Jersey businesses, as ranked by NJBIZ, which showed a good portion of the companies to be Asian-owned.

Below are three initiatives that would bolster New Jersey’s weak economy in 2011 and beyond.
• Nurture our immigrant entrepreneurs. New Jersey should create a mobile cluster to complement tech and biotech startup industries. The convergence to mobile presents a large set of opportunities. New ventures can easily cluster around Verizon, as well as AT&T and Alcatel-Lucent, to a lesser degree. Long-established (NJTC, BioNJ, R&D Council, incubators, entrepreneurship centers, etc.) and new support organizations (Choose New Jersey, Innovation New Jersey) can help nurture these industries. It’s a matter of collaboration among all our resources, from academia to industry, with a supporting role from government.

• Strengthen urban communities through entrepreneurship. The 10 largest New Jersey cities represent about 14 percent of our state’s population. Minorities are the majority of residents in these communities, but they don’t represent a proportional share of the small businesses. There are several nonprofits and incubators in these areas that do the important work and have a track record of success in helping entrepreneurs get off the ground and sustain their growth.

While considerable state funding has dried up due to our budget crisis, there are still things that the state can do to help our cities. State government and its agencies can attract and leverage the grants provided by large corporations, including Community Reinvestment Act funds allocated by financial institutions. Through concerted and collaborative efforts, the state can access federal grants that are directed to urban areas. Lastly, as highlighted by the Mark Zuckerberg gift to Newark schools, a campaign to attract philanthropists, led by leaders like Mayor Cory Booker, can yield impressive results.

Spurring homegrown entrepreneurship in the cities — complemented by aggressive incentives packages for out-of-state entrepreneurs and companies to start or relocate their businesses — will go a long way to revitalizing these communities, increasing employment and increasing tax revenues.

• Leverage Gov. Chris Christie’s popularity. Whether or not you agree with the governor’s policies, he has indisputably put New Jersey back into the spotlight, and he has done so in a mostly positive way. The business community is more optimistic that taxes and regulations will be reduced to make the state more business-friendly. To date, the governor has shown success in retaining New Jersey-based companies, and has attracted out-of-state businesses to relocate here.

While being friendly to big corporations makes good sense, we hope the governor and his team are more friendly and supportive to the small- and midsize-business community. Considerable research has shown that job growth and the strengthening of communities across the state comes from these types of businesses.

The state should take advantage of the momentum created by the governor to showcase New Jersey as not only the state to visit, but also the place to do business in 2011 and beyond. With a detailed plan of action, support from the business community, and laser-like focus from the governor and his staff, New Jersey can take measurable strides in creating the country’s next hot spot for entrepreneurs and innovators.

James Barrood is executive director of the Rothman Institute, part of the Silberman College of Business at Fairleigh Dickinson.
 


The Record

February 2010

A Winning Strategy for New Jersey
By Jim Barrood and Brian Moran 

ON AUG. 29, 2005, Hurricane Katrina decimated the city of New Orleans. Two weeks later, the Saints started their football season. After an emotional win in the first week, they stumbled to a 3-13 record. Their football stadium was in need of great repair, thousands of lives were lost and much of the city was destroyed or under water.

Rumors circulated that the team would move to San Antonio and leave New Orleans behind. In the team’s woeful 38-year history, 2005 was as bad as anyone could ever have imagined.

Fast forward 55 months. Two weeks ago, the Saints won their first Super Bowl championship. After being knocked down to their knees, the Saints brought in new coaches and players who were committed to turning the team around.

In just four seasons, Sean Payton, Drew Brees and the rest of the New Orleans Saints brought the team and city to the top of the mountain. They proved that the impossible is indeed possible.

Three key ingredients

In analyzing their Lazarus-like achievement, we believe there are three key ingredients to their success that New Jersey should make part of its own game plan:

1) New Jersey can rise again

Governor Christie must lay out a strategic plan that takes our great state from the brink of bankruptcy back to prosperity. He must create a BHAG; a Big, Hairy, Audacious Goal.

In their 1996 article, “Building Your Company’s Vision,” Jim Collins and Jerry Porras wrote about the importance of a company having a BHAG. A true BHAG is clear and compelling, serves as a unifying focal point of effort, and acts as a clear catalyst for team spirit. It has a clear finish line, so the organization can know when it has achieved the goal; people like to shoot for finish lines.

Governor Christie, New Jersey needs a BHAG.

2) New Jersey needs a solid, revenue-generating offense

The Saints have an explosive offense. They could generate points, almost at will, against their opponents this year. New Jersey needs to create a similar type of offense.

Our go-to players are entrepreneurs with fast-growing businesses that will do most of the hiring and buying in our state this year. New Jersey needs to feed the entrepreneurial engines to make the state productive again.

We also need to keep our companies in the state. Let’s make New Jersey more business-friendly and provide smart incentives for these companies to add jobs. A number of programs already exist that should be enhanced and supported rather than cut.

Increase marketing of our tourism industry (one of the few remaining growth industries) both nationally and globally. When relatives of our rich and diverse communities come to visit, they should have several options aside from hopping the train to New York City.

There is no reason why New Jersey can’t be a leader in leveraging social media to promote our state — not only fortourism purposes, but also to attract growth businesses from other states. Our creative community is among the finest on the planet. Let’s put them to work on a new advisory committee.

The path back to prosperity is a much easier one when everyone is working together, in unison, on a common goal. Remember, many hands make light work.

3) In the end, it’s defense that wins championships.

How did the Saints win the Super Bowl this year? The game-changing moment came when Saints defender Tracy Porter intercepted Peyton Manning’s pass and returned it for a decisive touchdown.

New Jersey needs to apply the same defensive pressure to its annual budget. We need to reduce the debt. Governor Christie must reign in runaway spending. Nobody wins if the state does a great job in creating revenue-generating programs, but gives it all back with increased spending at a time when we simply don’t have the money.

If we score 49 points, but allow the other team to score 50 points, we still lose.

New Jersey needs to handily win the next few years to overcome our mountain of debt, struggling economy and high unemployment rate.

Interceptions

Similarly, we should aggressively intercept (and poach) more companies from other states and as they move here from abroad.

Again, current programs need to be expanded. Our successes need to be highlighted, not unlike the top 10 plays we see on ESPN every week.

Success begets success. It also improves morale, two things the state could use in excess quantities right now.

If Christie can demonstrate that he has the vision, the leadership in place and the ability to generate substantial revenue for the state while being a hawk on spending, there could be a big victory in New Jersey’s future.

Our mountaintop moment awaits us.


Courier-News/Home News

August 2009
Lessons from the Great Depression

Just the other day, I asked my dad what is was like during the Great Depression. As a youngster during those years, he recalled the many unemployed people who came to his father's general store in New Brunswick begging for food. His father, an immigrant peddler who grew his business into a store, was compassionate and obliged as much as possible; it was hard enough in good times to support his family of 11 children.

Fortunately, my grandparents had a large garden and raised chickens and rabbits, so they were self-sufficient. When I pressed my father on how it was for the family during that very difficult downturn compared to earlier times, he said he could barely detect a difference. After all, his family never really had any luxuries before the Depression—not even a decent radio.

In the midst of this recession, I believe there is an opportunity to teach some important lessons to the next generation—lessons passed on from those who lived through the Great Depression.

The most important concept drilled into my siblings and me was the importance of being frugal, budgeting wisely and saving for a rainy day. My father still nags about spending too much on virtually everything and leads by example, cutting coupons and stocking up on goods when the price is right. Our basement and garage were always packed with paper and canned goods. Going food shopping with your kids and challenging them to find the best deals using coupons makes good sense.

The next time you go to a restaurant with the family, give the final bill to your children and tell them that if they cook a meal themselves, they can make money: Essentially, they can keep whatever is the balance between the cost of the restaurant meal and the cost of the food bought for the meal they cook. A breakfast of pancakes or eggs would be an easy start.

My father has also always been a big fan of garage sales. I was reminded of this tradition this past fall when we stopped at a church rummage sale and I picked up baby books, a new stuffed animal and part of my Halloween costume, saving (earning) at least $75 and recycling at the same time. Sales are a good opportunity for you to teach price negotiation. The more entrepreneurially oriented youngster can research and buy valuable items and resell them on eBay. Furthermore, the interaction with folks from different backgrounds is enriching and offers valuable insights. Encourage your children to ask questions about unique items and listen to the rich stories behind them.

Lastly, saving money by planting a garden teaches several things. It not only gives a family the opportunity to work together, but it offers a way for children to nurture the plants and take responsibility. Have your child calculate the value of the produce grown by comparing it to organic vegetables sold at the grocery store.

Second, my father retains the compassionate values his family instilled in him, particularly those memories of helping others during the Depression. Next holiday season, set an example and forgo your gift. Give the amount you would have spent to charity. Last year, I gave the money I would have spent on a long-anticipated flat-screen TV to food banks and UNICEF. Perhaps your child can choose one of his recent holiday or birthday gifts and donate it to the Salvation Army or similar charity.

Raising money for charities via bake sales and the like is a great way to learn basic business skills, too. Of course, volunteering at soup kitchens or conducting a clothes drive are excellent options as well. What’s important is to remind your child of how and what she is doing and how you are both helping those who are far more negatively affected by this downturn.

Lastly, during these difficult times, buy goods and services from small businesses. Small businesses are the backbone of our communities, offering excellent services and contributing to local charities and institutions. If they go under, there will be less competition, a smaller tax base and more vacancies, which will hurt the community's social and economic fabric.

Have your children ask questions of the business owners: How did they build their business and what challenges did they overcome? Especially interesting are stories from immigrant entrepreneurs and veterans. Instilling curiosity in our young people is a critical responsibility that will help them be more successful whatever their career path. Have them retell the family what they learned over lunch or dinner.

The benefits of these efforts will last much longer than this recession. Not only will your children better understand the plight of those less fortunate, the challenges of small and family businesses, and the richness of immigrant experiences, but they will earn lifelong business and life skills. Last, but not least, their sense of entitlement—a growing problem in today’s world—will get a much-needed reality check.


Courier-News/Home News
August 2009

Why Our Schools Need Some ‘Disruptive Innovation’

In a recent informal poll that I conducted with my co-workers at Fairleigh Dickinson University, the most popular quality by far that they want their kids to have is a good personality. Their other choices ranked in the following order: confidence, intelligence, curiosity and attractive looks.

From my perspective, I hope our 18 month-old daughter is very curious, because I think this is the most important quality she can have during her school years and beyond.

I’m biased because curiosity is an important part of being creative and innovative, not only because we teach this in our programs for management teams, but also because we just launched an online certificate program for high schoolers that teaches creativity and innovation skills. My parents instilled in me the importance of always asking questions—and I do, sometimes to an embarrassing fault.

My preference was confirmed in an excellent, recently published book by Harvard Business School’s Clayton Christensen, one of the leading innovation authors and consultants. In “Disrupting Class: How Disruptive Innovation Will Change the Way the World Learns,” he notes the work of Todd Risley and Betty Hart, whose research shows that the first 36 months of a person’s life greatly affects his or her intellectual capacity and curiosity.

Their research shows that, irrespective of socioeconomic or cultural backgrounds, ”talkative” parents positively affect their child’s educational success and achievement. They explain that one-on-one “extra talk” or “language dancing” is the key to better cognitive development.

This is “deliberate, uncompromised personal conversation. ... It is talking about ‘what if’s’, ‘do you remember when,’ ‘wouldn’t it be better if’ and so on. These often take the form of questions that invite infants to think deeply about what is happening around them.”

Christensen writes about how all students learn differently and that schools need to modify their approach to instruction. In short, they need to develop student-centric approaches that effectively leverage computers and online learning programs as well as student-to-student teaching and mentoring opportunities. Ultimately, one of the benefits of this transformation will be increased one-on-one teaching, mentoring and coaching by teachers.

Because this would be such a dramatic change to the public K-12 educational system, Christensen offers his classic theory of “disruptive innovation” as the best way for school systems to implement these strategies and succeed in educating all of America’s children. Strong leadership and independence from outside meddling is needed to allow the innovation efforts to flourish and avoid being quashed in the hyper-political, bureaucratic public school system.

Christensen notes that as budgetary pressures build and resources become more limited, schools will have no choice but to use technology more effectively than in the past so that educators and parents can ensure that students reach their academic achievement goals.

Whether from ivory towers or the front porch, we see steep challenges in preparing our young people for college, work life and beyond. Until we collectively accept that a crisis is upon us and make the difficult decisions now to invest smartly and allow disruptive innovation to succeed in our schools, I’m afraid these curious minds will not achieve their goals and meet—or surpass—our expectations.


Inside Business
August 2009

Boomers Ask Entrepreneurs: Will You Still Love Us When We're 64?

When I get older losing my hair,
Many years from now.
Will you still be sending me a valentine
Birthday greetings, bottle of wine?


The Beatles first asked the question about products and services for seniors back in the 1960s with their song When I’m 64. They certainly were ahead of their time. According to McKinsey Quarterly, by 2015 the Baby Boomer generation will account for 40 percent of U.S. consumption, everything from electronics and home furnishings to restaurants and, of course, health care. This consumer group will yield extensive purchasing power. What are the opportunities for businesses and how can they prepare?

Focus on Fun. Baby Boomers are not your grandfather’s senior citizens. They are active and want the exercise and nutritional supplements that will keep them moving. From dance programs to sports junkets to adventure travel, entrepreneurs that can package life-enriching experiences in a way that engages boomers and makes them feel young will prosper. In some sense, this is a form of matchmaking. Forming new social groups and networks that stimulate boomers will be most successful. Naturally, couples matchmaking will continue to grow as ‘youthful’, non-married folks seek partners.

Doing the garden, digging the weeds,
Who could ask for more.
Will you still need me, will you still feed me,
When I'm sixty-four.


Tap into Hobbies. Speaking of gardening, there has been resurgence in this hobby among boomers who desire organic and locally-grown produce as well as ways to pinch pennies during the recession.  The return to gardening has been capitalized on by gardening stores both large and small, as well as a new breed of gardening consultants catering to the well-heeled boomers.  The popularity of gardening and other related hobbies are anticipated to grow as boomers enter retirement.

Activities that allow boomers to connect to their youth have great potential. One example of this is scrapbooking services that are designed to recall and memorialize wonderful experiences from the recent and not so recent past. Other hobbies of potential are those which connect boomers to young people/children. With more and more boomers continuing to become grandparents (the average age of boomers who are grandparents is 53), entrepreneurs are also helping boomers connect with their grandkids in the form of fun activities ranging from zoo/park visits to pottery and bear-building activities.

Caring for Others.“Still feed me…” By some estimates one in three boomers are caring for someone, whether it is their parent(s) or partners. As boomers age, the prevalence of care giving will likely accelerate with a variety of recipients including spouses, partners, friends and/or relatives. Businesses that provide service for care-givers, from concierge services to nursing assistance to elderly care advisors of all stripes, will see tremendous growth. Those entrepreneurs who provide top quality and reliable services will be able to enjoy and maintain healthy profit margins. This will also be an opportunity for creative services; think not only masseuses, but mobile psychic readers, storytellers, clowns and musicians as well, who help to make things fun for both those being cared for and the care givers.

Leverage Better Design. Smart businesses that focus on design for this generation will be able to charge a premium for their products or services. From kitchen utensils to phones to sporting equipment to bikes and cars, those products that are designed for ease of use will sell far better and at a premium. Good design is not only the province of companies like Apple, but small companies can also offer intuitive services at little cost. This better design can be in the form of low cost web-based businesses which have become increasingly popular with web-savvy boomers.

So what do business owners have to say to their aging customers? Boomers await your reply.

Give me your answer, fill in a form
Mine for evermore
Will you still need me, will you still feed me,
When I'm sixty-four.


NJBIZ

November 3, 2008

Protecting Ourselves from Innovation

A few years ago, I wrote about the need for the United States to be more innovative, lest it become like stodgy Old Europe. Increasingly, however, I wish we were more like Europe, particularly with respect to regulating products and services and protecting the consumer.

Eleven months ago, I became a father. With this newfound responsibility, I find that my outlook on innovation and regulation is changing. Today, I am very suspicious of all products and foods that my daughter comes in contact with.

I first learned about Biphenyl A, a chemical commonly present in plastic, last fall. We took some precautions, but in the end had some faith in the marketplace. More recent reports point to possible long-term side effects from this chemical, including brain damage, cancer and miscarriage. Canada pulled all products with BPA from their shelves; Europe had set limits in January 2007.

Earlier this month, USA Today reported that members of Congress are stepping in to ask the U.S. Food and Drug Administration why the agency declared BPA a safe chemical, when scientific studies have suggested otherwise. An advisory panel was scheduled to release a review of the FDA report last week. Attorneys general from New Jersey, Connecticut and Delaware have asked 11 companies to stop using BPA in baby bottles and formula cans.

Last spring, I watched a show on PBS that investigated phthalates in plastic products, including toys. The reporters found that European regulators had banned the plastic after studies found that exposure could adversely affect reproductive development in infants.

It is interesting and troubling that Asian factories that make toys have two lines — one for Europe, in which they do not use this chemical, and another for the United States and other less restrictive regions. Thanks to the broadcast, we now check every toy we buy for toxicity at HealthyToys.org.

The mortgage mess and larger financial crisis is hurting many Americans and dragging down the global economy in a perfectly frightening storm. The disaster is commonly blamed on financial innovations, such as the securitization of mortgages, by those Wall Street wizards. Clearly, the problems that are occurring now are a result of poor regulation.

While consumers love innovative products, we also need and deserve consumer protection provided by the government. There is a dark side to innovation, and we have seen it in the past few years. This is why a stronger regulatory body that borrows the European precautionary principle is needed. In the long run, however, consumers must have faith in our products and services. If we do not take action now, then we will choose European products over our own, at greater cost on a personal and macro level.

We must err on the side of safety, even though our government must be careful not to restrict innovation, lest our research efforts simply move to Asia and proceed at a far more rapid pace.

James Barrood is executive director of the Rothman Institute, part of the Silberman College of Business at Fairleigh Dickinson. www.fdu.edu/rothman He also hosts the Voices of Innovation podcasts at www.njbiz.com/voi.

The Providence Journal

July 5, 2008

Rising prices can make you healthier

Entrepreneurial thinkers are always looking for opportunities, even when times are tough and economic conditions are not optimal. With rising prices in food and oil, I have been trying to assess opportunities. I’m not a trader, so I have focused on possible health benefits.

Fight rising wheat and rice prices. Now is the chance to reduce the amount of carbs you take in by 25-50 percent and lose some weight. Simply cut back on bread, pasta, rice and other starches as well as processed foods and substitute vegetables.

Skirt higher restaurant prices. Several studies note that we all should simply eat less, especially with the obesity crisis here in America. Try eating 20 percent less. Eating slower should help achieve this, so the experts say. Skip the appetizer and dessert. Save money and consume less calories. Of course, sharing a dessert is a nice compromise. Do continue to patronize local restaurants and for that matter, all small businesses, most of which are struggling to survive. For if they go out of business in this downturn, you and the larger community will suffer in the end.

Eat more plants. Michael Pollan champions this in his latest, excellent book, In Defense of Food. Most nutritionists recommend eating more vegetables and fruits as a way to reduce the amount of meat we eat. This will also save money as the price of meat rises in the near term as forecasters predict. Of course, for those who need their meat, why not go hunting or fishing and get some fresh air and exercise? If you are successful, you can ensure a diet that is not only organically fed, but wild as well.

Plant a garden. Save money and eat organic by planting a garden; it’s not too late. Additionally, it will give you a greater connection with nature and provide real down-to-earth satisfaction. This is a true entrepreneurial opportunity for those with green thumbs to become garden consultants.

Save gasoline, save money. Start by car pooling at least one day a week. And rather than gossip or commiserate, discuss meaty topics by agreement with your fellow commuters and feed your brain. If possible ride a bike to work or to the store or when running errands. Work from home at least one day a week and re-engage with your kids. You might surprise your spouse by doing more household chores.

Reduce electricity use. Install solar panels if possible – renting is now a more affordable option and you can benefit from the rapid improvements in solar technology. A cheaper option would be to use ceiling and/or portable fans instead of air conditioning. Circulating and breathing more fresh air in your house is also a healthier option, according to many experts. Use compact fluorescent lights as much as possible until LED lights become affordable.

Naturally, run clothes and dish washing machines at night. Sleep outside in a tent for a week or two this summer. Pull the plug on the TV and computer during weekends to disconnect and remind yourself of how to have fun, play sports, explore the outdoors and enjoy board games.

Opportunities are everywhere — and now is the time to leverage negative economic forces for healthy gain. Hopefully, new habits will emerge that could pay huge dividends in the near and long term.

James C. Barrood is executive director of the Rothman Institute of Entrepreneurial Studies at Fairleigh Dickinson University's Silberman College of Business.


NJBIZ

May 12, 2008

Start Putting Innovative Ideas to Work

Several weeks ago, I received a press release announcing the renewal of a unique partnership between Procter & Gamble and InnoCentive. The joint venture is designed to leverage the bright ideas and inventions of others, promote collaboration and dramatically increase P&G’s pipeline of new product innovations.

Concurrent with the press release, I read a business article about the increased use of contests such as the X PRIZE to solve major technical problems like affordable space travel, high mileage, cleaner automobiles and other seemingly impossible challenges. By leveraging the Internet, we can use contests more effectively to engage people.

For more than 10 years, we have effectively used contests at Fairleigh Dickinson University, including: business plan contests, undergraduate

entrepreneur competitions, high school business idea contests, and a new internal innovation challenge for students and employees. We’ve had good fun and good success.

Yet, turning internal ideas into new programs is difficult. A culture that nurtures creativity and allows employees to take measured risks and learn from failure is critical. In addition, champions with good leadership and interpersonal skills must encourage collaboration and keep teams focused throughout the process. Such success is especially challenging at an academic institution. I asked a top innovation consultant if he knew of any attempt to build a robust innovation process/culture at a university. He replied, “We tried to work with Harvard but were stymied with the pushback and the bureaucracy.”

Contests are healthy initiatives for a business of any size, especially during difficult economic times. Using the Internet as a platform means submission, evaluation and development of ideas has never been easier. But here’s the problem: how do you put a well-developed innovation process in place? How can you capitalize on the winning ideas or solutions? Typically, the process starts with an ideation element that gathers all ideas. Next, an evaluation process matches criteria needed to be met. Then in the commercialization phase, testing is done prior to launch of the new product/service.

If you have a great idea or business venture, I suggest contacting groups like the Venture Association of New Jersey. They have run successful Elevator Pitch competitions, which bring together entrepreneurs who tell their ideas to a group of investors in two minutes. Winners are ranked and a few typically get funding commitments by day’s end. This year’s competition is set for May 22.

Or, if you are interested in launching a contest or competition at your organization, I encourage you to visit www.innocentive.com to see how they evaluate and reward bright ideas and solutions. Participate and you can win up to $1,000,000.

On that note, stay tuned for a new Rothman Institute event where we will challenge the community to bring their exciting innovations to reality.

James Barrood is executive director of the Rothman Institute of Entrepreneurial Studies, part of the Silberman College of Business at Fairleigh Dickinson in Madison.


NJBIZ

March 31, 2008

Delivering Better Innovation Processes

Prior to the birth of our first child in November, I was keenly interested in how the birthing process had improved. In the 21st century, had it evolved into a process that was both comfortable and wonderful?

The hospital tour was pretty impressive. They recommended we register early so we would be all set when the big day came. But at arrival time, we had to register again, and again. Where were the electronic interfaces, the kind commonly hailed as the technology that would make hospitals more efficient, more cost-effective and less prone to error?

Before the delivery, the nurses were wonderful, offering reassurance and guidance as they helped us to understand my wife’s pain. It was a long and painful labor until the epidural. After decades of use, I expected state-of-the-art technology. So my heart dropped when the device would not work properly. The anesthesiologist needed to replace the machine and seemingly rigged it as we went along. Fortunately, the birth went well, with the doctors doing a great job. We’re still not sure the epidural machine worked as it should.

After our daughter was born, my wife was in serious pain. While the nurses were helpful at first, they were at times nonchalant and apathetic. Perhaps I was expecting too much. I assumed we would have consistent, attentive patient service.

When I think about the service and cost, I am stunned at the hospital’s performance. The procedure was nearly equivalent in cost to a luxury car; our insurance carrier ultimately paid about half. Why am I so surprised to find that some hospitals operate their maternity wards as profit centers rather than care centers? I’ve since written the CEO and referred him to customer-service experts.

Though I was troubled by the lack of innovation in process at the hospital, I was pleased with the product innovations relating to baby care. Many make parenting easier, are well designed and ergonomic. Some include high-tech diapers, baby tubs—with basket—that help hold the slippery little ones, and the sophisticated interactive musical and talking games.

As for other products, why is there no micro refrigerator/bottle warmer combination? This seems so obvious to a sleepy parent. Where is the lullaby book with built-in micro iPod/speaker that can remind us of the musical rhythms with the push of a button? I’m personally working on this one.

It appears that many home-product manufacturers have applied customer-focused innovation processes while the hospital sector, for the most part, has not. Hopefully, the hospital industry will start taking steps toward process innovation and improvement, for the sake of safety and profit—and in some cases to ensure their survival.

James Barrood is executive director of the Rothman Institute of Entrepreneurial Studies, part of the Silberman College of Business at Fairleigh Dickinson


NJBIZ

January 7, 2008

Embrace Entrepreneurial Immigrants

Our competitive edge is under attack from the global competition. But in New Jersey we have a secret weapon that is often underappreciated and misunderstood: the entrepreneurial and innovative immigrant. On Dec. 10, I testified to the governor’s Blue Ribbon Advisory Panel on Immigrant Policy. My contribution focused on how important it is to develop strategies that leverage our current and future immigrants so that we can retain our competitiveness. Here are some of the points I stressed.

Our last remaining advantage is our innovation and entrepreneurial strength. Because of New Jersey’s very smart and diverse population, our state is uniquely positioned. But we are at a disadvantage when it comes to global dynamics and federal policies. These policies restrict immigration and create a less than welcoming environment.

Research shows that entrepreneurial immigrants instill a business spirit in their children that continues for generations, mostly in the form of family businesses that are the economic engine of our state and indeed the world economy (more than 70 percent of all businesses are family firms). Just as my immigrant grandfather built a successful family business, so have several of his 11 kids.

Immigrants also further innovation at New Jersey’s larger companies. A cousin of mine who came to the state about 30 years ago became a top inventor at one of our health care corporations; his focus was on refining the vascular stent used to alleviate constricted and diseased arteries.

Being open to ideas is critical. Similarly, welcoming immigrants is important. We need to create as open an environment as possible in New Jersey. Rather than simply tolerate one another, we must engage and embrace immigrants and the diverse backgrounds they bring to our great state.

Developing ideas involves collaboration. Similarly, our immigrants must be well-educated and have all opportunities open to them.

Reaching out to immigrants to celebrate their successful integration and hard work is critical. But with collaboration between support groups, religious organizations and state agencies, this can be accomplished.

In fact, the only reason this state’s population has grown, according to a recent Rutgers University report, is because immigrants have chosen to live here. Imagine the budget crises and the decreased competitiveness of our corporations if they had not come. Furthermore, one of the reasons our foreclosure rate is lower than the rest of the nation is likely because of the financial stability of our many immigrant homeowners.

With leadership and some creative benchmarking, New Jersey can leverage and celebrate our brilliant blend of immigrants on a path to greater economic, social and cultural strength. By building on the skills that immigrants bring to us, we can lead the rest of the nation and set an example. While there are considerable challenges relating to immigration policy, there are also outstanding opportunities.

James Barrood, executive director of the Rothman Institute of Entrepreneurial Studies, part of the Silberman College of Business at Fairleigh Dickinson.


NJBIZ

October 15, 2007

Learning from Thomas Edison

I was delighted to hear that a Glen Rock teenager had hacked the iPhone in record time. I had read about George Hotz in Forbes magazine, which highlighted him as junior innovator for winning a $20,000 prize sponsored by Intel for a simulated-reality machine.

But when one of our state's teenagers was in the news around the world, where were we? Couldn't we have leveraged the millions of dollars worth of publicity and spun a creative ad campaign boasting about our brilliant young people and noting how we nurture the next generation of Thomas Edisons?

In my July 30 column I complained about the lack of an integrated marketing plan for the state that could take advantage of the free publicity generated by our Rutgers sports teams and the headlines they produced last season.

Whenever a comprehensive marketing program does emerge, I hope the state will capitalize on our local legend - the greatest innovator of all time, Thomas Alva Edison. When I lecture on innovation, I highlight Edison's entrepreneurial mindset, his ability to envision the business model before inventing everything from the phonograph to his amazing 1,093 patented ideas. As he succinctly noted, "Anything that won't sell, I don't want to invent. Its sale is proof of utility, and utility is success." I talk about some of Edison's principles because they are so relevant to successful innovation today. Consider these examples:

Leadership. Often derided as an eccentric recluse, Edison was an exemplary team leader. He built strong relationships with a diverse team of skilled inventors from all backgrounds. Try to envision how diverse a group Edison could lead if he were alive today. Research has shown that diverse groups produce better innovations.

Learning from failure. Edison built trust among his workers. He empowered them to experiment, launch new efforts and to learn from failure. A fundamental tenet of the innovation process is the learning benefits of failure: "I have not failed," Edison said. "I've just found 10,000 ways that won't work."

Collaboration. Throughout the innovation process, Edison formed partnerships with other groups, funders and companies. He formed more than 100 collaborations that enabled him to commercialize his inventions. One of the most successful is still in business after 118 years: General Electric.

Publicity. Edison is mistakenly known for inventing the incandescent light bulb, rather than refining it, because of the press conference he held to announce it. He touted his brilliant electric power-generation and distribution system invention and was very successful in promoting the phonograph.

We are launching programs to teach our young people about this side of Edison so we can nurture, celebrate and publicize more George Hotzes, and ultimately strengthen the state's future work force. I encourage everyone to view the neat video we recently shot at Edison's Menlo Park factory. Do you know that perhaps his most popular invention is a word we use many times each day?

James Barrood, executive director of the Rothman Institute of Entrepreneurial Studies, part of the Silberman College of Business at Fairleigh Dickinson.


NJBIZ

July 30, 2007

Why don’t we HEAR the good news about our state?

In mid-July, CNBC revealed the results of its survey, “America’s Top States for Business.” New Jersey ranked first for quality of life, second for technology and innovation and fifth for both education and access to capital. Add to this the interest in Rutgers and the state following last year’s fairy tale football season and the very successful women’s basketball season, along with Inc. magazine’s ranking us as the second most innovative state in the country.

With all this success and great publicity, why isn’t the state leveraging this good news?

Where are the commercials and advertisements promoting the advantages for businesses to move to the state, including our talented workers who are some of the smartest in the country, our proximity to New York City and Philadelphia, our good infrastructure and our culture of innovation?

The state has great brands, including companies, institutions and personalities, but they are rarely connected or aligned with the state or the brand of New Jersey. We are doing ourselves a disservice by not leveraging these brands to benefit the state as a whole. In addition, why aren’t we promoting our excellent tourism assets? People plan their vacations as early as the end of the football season and during the basketball season.

It is inconceivable that we do not have a decent multimedia and integrated campaign promoting the state, given the fact that 25 to 40 percent of all creative professionals in the advertising industry are in the metropolitan area.

Consistent messaging builds a brand and our leaders must realize that New Jersey is a brand that needs to be managed in good times and bad. The state has hardly enjoyed a positive national image and is far too often fodder for punch lines about our Turnpike and Parkway exits, our chemical smells and our scandals. All the more reason to focus on the task of building and promoting a strong, positive brand that will benefit the entire state and its people.

With a state budget of more than $30 billion, we should have launched a multimillion dollar marketing campaign a long time ago. And even without one in place, we should have been agile enough to have produced and run campaigns during the recent college football and women’s basketball seasons.

Even during the uproar over the idiotic and racist remarks by Don Imus, a creative team might have pulled a few all-nighters and launched an animated online game in which the basketball players chased the shock jock all around the state. We should learn from our missed opportunities and, more important, plan for the future. An integrated short- and long-term marketing strategy will be crucial to attracting businesses and tourists and enabling us to capitalize fully on our high national rankings, the success of our sports teams and other unexpected publicity bonanzas.

The state has enjoyed a brief period of positive news recently. Let’s move quickly to build on it.

James Barrood is executive director of the Rothman Institute of Entrepreneurial Studies, part of the Silberman College of Business at Fairleigh Dickinson.


NJBIZ

May 14, 2007

Businesses Must Do More Innovating

Some good and bad news for New Jersey innovators. The good: New Jersey was recently listed in Inc. magazine as the second most innovative state in the country when considering education of work force; number of startups and growth firms; level of R&D spending; venture capital and patent activity; digital infrastructure and access to capital markets. The bad news: Other states are gunning for leadership in this area, and we will only stay ahead by, you guessed it, greater innovation.

The beauty of innovation is that businesses and nonprofits can take steps to build a manageable innovation process and creative culture. It involves the introduction of new ideas, products, services and practices that add value and offer competitive advantages. This was discussed in two recent seminars presented by Fairleigh Dickinson University’s Rothman Institute of Entrepreneurial Studies. One seminar focused on corporate-design professionals; the other was for the business community at large. Speakers from both programs expressed similar themes that are worth highlighting.

First, managers should focus on their customers (with few exceptions). Managers must conduct research and focus groups with customers to better understand their needs and nascent desires. Then they must prioritize these needs throughout the idea-evaluation process and refine the best solutions with customer input during the development and commercialization process.

Second, managers must reward innovative efforts. Even small incentives like giving employees gift cards for neat ideas help change the mindset. Naturally, with larger, more successful initiatives, greater rewards and equity ownership (when possible) should be allocated. Also, supervisors must learn from failures without penalizing those involved.

Third, managers need to lead a culture of innovation within the organization. Without oversight and management, chaos and confusion will occur. Managers must educate employees on how the innovation process works and how the criteria are aligned with business goals so they do not become discouraged if their ideas do not become a reality. Also, one should be open to outside ideas that can be brought in-house, modified and repositioned as products or services that can yield new profits.

New Jersey can maintain its high innovation status if business and nonprofit communities fully understand and implement these practices. Innovation is not only product-related, it encompasses finance, process, offerings and delivery. All professionals can likely improve upon one or more of these types of innovation within their organization.

It will be the high-growth companies that are open to collaboration, outside ideas and talent that will ensure this great state’s economic vitality. There has been hype surrounding the phrase “innovate or die.” New Jersey has many advantages—most importantly its people—and we must continue to leverage them. However, a much larger percentage of them must become innovators, lest the brain drain continue and, while we may not ‘die,’ shrinkage will likely be our fate.

James Barrood is executive director of the Rothman Institute of Entrepreneurial Studies, part of the Silberman College of Business at Fairleigh Dickinson

 


NJBIZ

February 26, 2007

How to Fix Our Broken Voting System

In last year’s New Jersey elections, one subject of bipartisan concern was voting insecurity. Would the electronic voting machines work? Would they be hacked? Would there be a paper trail? Given the media scrutiny of malfunctions, lost votes and possible hacking, it’s no surprise that 85 percent of U.S. voters think we should get rid of electronic voting, according to a Lou Dobbs poll last summer.

Today we are already seeing campaign launches for the 2008 presidential race. Most candidates are opting out of the federal matching-funds program, and some analysts forecast that the total spending for the 2008 national elections will easily top $1 billion, or $200 million more than in 2004.

It is unbelievable that the richest and most technologically advanced country on Earth cannot implement a secure and accurate voting system. In the interest of doing so, here are some options to help fix the broken voting system—at all levels.

Outsource voting machines to a reputable computer company like Apple, Hewlett-Packard or IBM, and mandate a paper trail. A recent Star-Ledger article described New Jersey’s purchase of 10,000 "uncertified" and easily "riggable" electronic voting machines that leave no paper trails.

This is unacceptable. Let’s also consider Internet voting; we already have e-filing for taxes.

Public financing. As much as I respect wealthy politicians like Gov. Jon Corzine who don’t need lobbyists’ money and can vote their conscience, the outrageously high cost of campaigns dissuades many potentially good candidates from running. Mandatory public financing would be a very effective solution.

Mandatory voting. The United States ranks an abysmal 139th out of 172 countries in the number of eligible citizens who vote. Only 48 percent of voters registered in New Jersey voted last November. Mandatory voting, with a fine of $200 for noncompliance, would almost certainly ensure 90 percent-plus participation. The revenue from fines could help to publicly finance candidates and/or ensure the secure and accurate tabulation of votes.

Term limits. In a 2004 Star-Ledger poll, nearly 80 percent said that at least some corruption is the norm in New Jersey state politics. Term limits would provide an increased turnover of political leaders and mitigate the incumbent advantage.

For the sake of our state and country, and for the benefit of our business communities, we must solve our election problems and renew confidence in our political system. All citizens—including the large but often invisible number of small-business owners—need to have their voices heard. No one deserves to be marginalized.

By overcoming these challenges, we can move forward and support our politicians as they tackle the monumental challenges facing us. I would be interested in hearing your thoughts about this. Please send an e-mail and let me know which solutions listed above make the most sense to you, or send your own ideas to me at barrood@fdu.edu.

James Barrood is executive director of the Rothman Institute of Entrepreneurial Studies, part of the Silberman College of Business at Fairleigh Dickinson


NJBIZ

November 30, 2006

The Keys to Immigrant Success

The 27th U.S. Hispanic Chamber of Commerce Convention in Philadelphia this fall featured great workshops, excellent speakers and an impressive attendance of more than 2,500 people. I found the recognition of the entrepreneurial impact of immigrants from the Dominican Republic particularly intriguing. I didn’t realize how much this group has excelled in our national business community.

Dominicans have done extremely well in the grocery business, opening many bodegas and supermarkets in the past two decades. They own more than 400 supermarkets in  New York City, with total annual sales of $2 billion, and are expanding into states throughout the region. In addition, more than 20 percent of Dominicans have earned at least a bachelor’s degree, compared with 13.1 percent for all other Hispanic groups combined, according to a 2004 report by the Migration Policy Institute.

Research on immigrant groups and entrepreneurial activity over the past century show several groups rising above the rest with their business success. The groups include the Cubans, European Jews, Koreans, Lebanese and Taiwanese.

A closer look reveals three interesting and common characteristics:

1.      The groups emigrated to the United States because of persecution or to escape violence and wars and/or for greater economic opportunity.

2.      They created or joined a close-knit, relatively small community in order to help one another by providing workers and growth capital.

3.      They all possessed incredible determination and the ability to adapt and assimilate. They gave back via service and financial support to the community.

Each immigrant group shared an impressive work ethic and was willing to start from the bottom, even if members came from a higher social class in their native countries. They understood the importance of an education and, regardless of whether they were able to further educate themselves, they made sure their children excelled and took full advantage of our higher-education system.

Which groups will be next to rise to the top of the entrepreneurial and business summit? Those with higher levels of education will have an advantage, particularly in the technology sectors. However, I wouldn¹t discount the groups that excel in trade, services and retail.

I intend to keep an eye on the Dominicans, as well as the Colombians.

What group or region in India will excel? Many would bet on those from the technology rich Bangalore area; others might choose those from Gujarat or Punjab. Might the Pakistanis flourish? From the Middle East, will it be the Palestinians or perhaps the Iraqis? Many might mention the Ukrainians, who have done well in recent years. How will recent arrivals from Nigeria, Sierra Leone and other West African countries fare?  Will the Chinese or Vietnamese lead the way?

I am interested in hearing your views on which groups will thrive and help to propel our economy during the 21st century. E-mail your thoughts to barrood@fdu.edu.

James Barrood is executive director of the Rothman Institute of Entrepreneurial Studies, part of the Silberman College of Business at Fairleigh Dickinson

 


NJBIZ

September 18, 2006

Sharp Design Equals Strong Sales

Who would have thought design innovation would be found in the most industrial of products, one that has two large concrete wheels and helps build our heavily trafficked Garden State infrastructure?

I commute to our college in Madison via Route 287. Lately, repaving projects have been underway. Each day as I’ve looked at the equipment on the median, I could not help but notice the sleek, sharp design of a simple paving machine. Assuming it must be European, I was pleasantly surprised to learn, after inquiring at the Della Pello Paving company, that the manufacturer was Ingersoll-Rand in Montvale.
 
While sharp-looking machines like these industrial pavers are largely ignored by the general public, design is playing an ever more important role in the marketplace. A growing number of consumers are demanding well- designed products and services. Companies that understand this will gain a competitive edge. In years past, Europeans have been the leaders, but now a growing majority of companies from China to New Jersey get it.
 
In the past, good design has been the province of high-end, premium-priced products, from companies that include Porsche, Bang & Olufsen and Apple. These brands and others have created loyal customers who continue to be delighted with the wonderful form plus function that is engineered into each product. And the companies offering these products have been rewarded with handsome profit margins.
 
More recently, good design has been used to differentiate similar products from one another. Target has done this with a line of household products designed by Princeton architect Michael Graves and others. Earlier this year, the store released a brilliantly designed prescription bottle that is easy to open. Target’s branding campaign, from beautiful commercials to cleanly designed advertising circulars, has increased sales.
 
Automotive companies like BMW, Infiniti and Chrysler have leveraged bold design into sales success. Because most cars are similar underneath the sheet metal, good design is important to distinguishing a vehicle from the hundreds of other models available. This will be one of the topics BMW CEO Tom Purves, will discuss in his Nov. 14 innovation lecture at Fairleigh Dickinson University.
 
Today, because of product commoditization and cutthroat global competition in consumer and business products and services, good design is no longer a luxury. Both retail and business/industrial consumers expect good form and excellent functionality in all products, from the inexpensive to the luxurious.
 
Consumers benefit as companies innovate to bring out better designs. From ergonomic household products to sleek cell phones to intuitive Websites to user-friendly devices—including, of course, mundane industrial pavers—our design expectations have risen. For businesses, it can be costly to integrate good design into products and services, but if this is done well and consistently, it can be a key factor in winning market share and developing customer loyalty.
 
James Barrood is executive director of the Rothman Institute of Entrepreneurial Studies, part of the Silberman College of Business at Fairleigh Dickinson

NJBIZ

July 3, 2006

Demystifying Business with China

The media keeps sending warning signs of the emergence of China as an economic power. However, businesses should be aware of the competitive challenges as well as the trade opportunities. Outlined in this article are a few insights from a recent Rothman Institute seminar (viewable at www.fdu.edu/rothman) on how businesses could export successfully to China.

Shortly after the event, I was on my way to Beijing and Shanghai with a group of candidates in the Global Master of Business Administration degree program offered by Fairleigh Dickinson University’s Silberman College of Business.

Things have changed dramatically since my last visit 18 years ago. Today, there are far more cars, more consumerism/capitalism, and a built-out infrastructure including thousands of tall buildings with many more under construction.

With the information from the seminar and our two-week stay, I was able to get a better grasp of how to successfully do business in China.Management should consider the following tips:

Planning All businesses that enter new markets know they need to conduct good research to ensure there is a market for their products/services. It is also important to note other competitors, both global and increasingly, domestic.

After a market is determined, entrepreneurs must tackle marketing, distribution and logistical areas; legal issues including intellectual property rights, financing and accounting matters including payment issues; the bureaucracy and maze of regulations, human resources, local protectionism and corruption. There are many consultants, banking and legal firms that are China-savvy. One should also seek good assistance from our government via the Chinese Business Information Center (www.export.gov/china), run by the U.S. Commercial Service that has offices in Newark and Trenton.

Understanding Take the time to read about China’s very rich, 5,000-plus-year history. All too often, we are simply too busy to take the time to learn about another culture. Ignorance then leads to acceptance of typically negative stereotypes; in the East, cultural understanding positively affects business success. Furthermore, try to learn the language, or at least a few key phrases.

Patience When I asked one of our alumni what was the biggest business mistake that Americans make, he said it was overconfidence in their ability to succeed. While China is quickly learning Western business approaches, it is important to understand that their concept of time is circular, rather than linear, and that the Chinese have a long-term mindset.

China represents many opportunities and challenges. Naturally, there are serious competitive threats that we are all too familiar with. But global competition can produce positive effects. We have risen to the challenge in the past and must do so again. With careful planning, companies can be successful in doing business in China.


James Barrood is executive director of the Rothman Institute of Entrepreneurial Studies, part of the Silberman College of Business at Fairleigh Dickinson


Garden State Women Magazine

Summer 2006

Get Started, Get Help…Do it!

On a recent flight to Arizona, I watched a charming movie called ‘In Her Shoes’. It made me think about a colleague, a friend, my sister, and an aunt, all of whom are involved in or considering entrepreneurial ventures.

The film is a wake-up call to all those budding entrepreneurs looking for opportunities in the services area. Even with all the commiseration about the terrifically high costs of living and doing business in New Jersey, I’m excited about the tremendous entrepreneurial opportunities in the state, particularly in the services area.

In the movie, the main character, an Ivy League educated lawyer, quits her successful job to start a dog-walking business. Coincidentally, I have a colleague who runs a lucrative part-time dog walking and sitting operation to supplement her academic salary. Part time operations, be they dog care, Internet-related ventures like eBay (7 million+ entrepreneurial sellers and growing), or other service/retail like jobs are becoming more common. Folks are looking for way to make ends meet, keep up with the Joneses and save for a child’s education or retirement.

I have an Ivy League-educated friend who is considering leaving her 70-80 hour job at a law firm for a sane schedule and her own business. She’s been pondering out loud to me for some time now about how she wants to be a wedding planner, but is afraid to ‘get started’.

Shirley MacLaine’s character in the movie works at an assisted living community as a supervisor, event coordinator and mail deliverer. As I watched her, I thought of my aunts who help out at similar facilities. While they work as volunteers, it is clear that this is a growing market that recent retirees can serve to earn extra money. Retirement communities throughout New Jersey serve a financially healthy and active group of individuals. Services that make their lives safer, more convenient, stimulating and fun are all growth industries.

Cameron Diaz’ character begins a job at the same assisted living development. After a few weeks, she discovers a new, fun and profitable opportunity in serving as a personal shopper for a number of women. This reminded me of a recurring conversation I have with my sister, encouraging her to tap this wealthy, graying demographic segment by offering her custom scrap booking and calligraphy skills.

So, what’s the next step?

Get started!  Aspiring entrepreneurs, including those presently employed, recently downsized or retired, as well as new graduates, should consider the substantial business potential in the state. There are many untapped opportunities to fulfill the needs and nascent desires of one of the wealthiest demographics in the nation. Once you consider the possibilities and the potential customers, you will see that the first step towards your own business is to commit to taking the first step. Don’t be fearful of losing your savings; most service businesses can be started out of your home on a shoestring – from under $1,000 to less than $10,000.

Get help!  After you identify your passion, do research (your local librarian can help you leverage the vast, free resources now available) into what you think might be a good business venture that fits your skills. Then jot down your life and business goals, and make a plan. With this knowledge and a tentative timeline, seek professional help and guidance. Entrepreneurial support organizations across the state (Small Business Development Centers, university outreach programs, SCORE, NJAWBO and economic development organizations) are designed to assist you in your entrepreneurial pursuit at no or low cost. Leverage them and your chances for success rise substantially.

Do it! This is a line recently made popular by Ben Stiller in one of his comedy routines. It’s funny how often I repeat the line to aspiring entrepreneurs. Make a schedule. Set aside the time and energy to focus on your entrepreneurial pursuit. Stop procrastinating! Do it!

If you have a friend, relative or colleague who is pondering a new venture, do him or her a favor and forward this article, highlighting the words, “Get started! Get help! Do it!” Then follow up every two months to check their progress. Through your encouragement and support, you can make a difference by helping them achieve their entrepreneurial dream. Some day you may be in similar shoes and need that extra push to start you on your entrepreneurial journey: Get Started! Get Help! Do it!

James Barrood is executive director of the Rothman Institute of Entrepreneurial Studies, part of the Silberman College of Business at Fairleigh Dickinson in Madison.


NJBIZ

April 23, 2006

Taking Steps to Stay Competitive

Two weeks ago, three smart and innovative thinkers spoke to New Jersey audiences. First, the Rothman Institute hosted Clayton Christensen, the world-renowned Harvard professor, author and consultant. He spoke on disruptive innovation. On the same day, Michael Porter, another famous Harvard prof, discussed with Opportunity Newark officials and business leaders the right strategy to redevelop that challenged city. Two days later, New York Times columnist and author Thomas Friedman spoke about the effects of the "flattening" of our globalized world at a New Jersey Technology Council event.

Based on these events, I have outlined three areas on which New Jersey needs to focus so it can prosper in an increasingly competitive global business environment: education, community and collaboration.

Education Starting with K-12, New Jersey needs to increase not only math and science initiatives, but also integrate problem-based learning and entrepreneurial thinking into the curriculum. Students will need to adapt in our ever-changing world because they will change jobs more than a dozen times in their lifetimes. We must build capacity in our higher education system to stem the terrible brain drain of our finest young people. In addition, all college students should be exposed to creativity, innovation and entrepreneurship in their studies. Mandatory courses in communication, collaboration and cultural skills will serve our graduates well as they interact in a more diverse, dynamic and virtual work environment.

Community At a recent NJ Entrepreneurial Support Organizations Summit hosted by the Institute, attendees confirmed that while we do have the resources to help new and current small businesses, we need to coordinate and communicate more effectively. Possible next steps include creating a fresh, continuously updated Website to serve the needs of all businesses seeking help. Moreover, business owners from diverse immigrant and ethnic communities have not been supported at optimal levels. Inclusion of these hard-working groups is essential to the growth of business in the state as they are starting businesses faster than the average rate.

Collaboration On a positive note, we are seeing more of industry collaborating with the excellent universities around the state. New Jersey must encourage and support this important trend. Corporations, realizing they must innovate but needing to cut R&D costs, now view open or networked innovation, which relies on the resources and invention of others, as the solution. While large companies can and will go global to innovate, we must make it turnkey for them to partner with our universities.

Only with a strong educational system and vibrant, supportive entrepreneurial, business and nonprofit communities that collaborate extensively will this great state prosper.

James C. Barrood, Executive Director, Rothman Institute of Entrepreneurial Studies, Silberman College of Business, Fairleigh Dickinson University



NJBIZ

January 23, 2006

Video Gamers Make Fine Employees

Just when you thought video and computer games do nothing but numb the mind, some positive aspects of gaming have been uncovered in current research and news articles.

These findings could actually be good news for employers.

According to the Entertainment Software Association, approximately 50 percent of Americans currently play video and PC games. In a closer look, more than 60% of gamers are over 18, almost 45% are between 18 and 49 and 40% are female. The average age of the most frequent game buyer is 37. While the gaming culture has resulted in negative effects on some users, it also offers advantages and opportunities for the current and future workforce as well as entrepreneurs.

Research conducted by Henry Jenkins of the Massachusetts Institute of Technology revealed advantages for employers.

First, players are more confident about making fast decisions with limited information and can adjust to dynamic conditions and process unclear and incomplete information quicker.

Another researcher/author, James Gee, describes gamers as active problem solvers.

In an increasingly competitive global marketplace, the ability to make good, quick decisions with less than optimal data gives a competitive edge.

Second, a growing number of games are played online, usually involving teams or group play, some with hundreds of players. This evolution has created a cadre of players who have developed extensive collaboration skills having learned to work with different and changing partners, most of whom they have never met and will likely never meet. Global play may help traditionally ethnocentric American gamers better understand other cultures.

For employers, games could help identify how well prospective employees work together or behave as team players. Customized games designed to replicate the challenges facing work groups might more accurately assess a candidate’s teamwork and interpersonal skills.

In the near future, we can expect creative games to replace some information manuals and training programs to better educate employees, particularly those stretched across the globe. Consistent information distribution and training would lead to a better understanding and retention of material.

Games could also be an effective vehicle to teach employees ethics and ethical behavior, particularly about foreign countries where norms vary widely.

An interesting new ‘venture’ has developed in the multibillion dollar gaming industry with a virtual marketplace that provides gamers the option to buy experience, or game mastery, quickly and conveniently online. Gamers in China earn money for their skills (estimated at 100,000+ workers) by selling their progress online. This has become a vibrant marketplace and, ethical issues aside, has allowed our overscheduled teens and very liquid adults to save time in exchange for money.

Should we be concerned that the entrepreneurs who have started these businesses are Chinese? Yes, this is just one more sign of how innovation and new venture creation is moving outside the US. Furthermore, with the advanced technology/broadband capabilities of Pacific Rim countries, the likely future scenario of cell phone gaming and the related opportunities created by it, will likely be exploited by that region’s fast growing entrepreneurial class rather than American innovators.

At the Rothman Institute, we are taking baby steps into the world of gaming. We are developing a new and challenging online product for current and prospective Fairleigh Dickinson students, as well as alumni.

James C. Barrood,Executive Director, Rothman Institute of Entrepreneurial Studies, Silberman College of Business, Fairleigh Dickinson University


Sunday Star-Ledger

November 20, 2005

Innovation will Strengthen State

Dear Gov.-Elect:
You came to politics from a successful career on Wall Street, so many business leaders in this state are excited about your tenure. As you are well aware, entrepreneurship and innovation are critical to the future success of the Garden State and the nation. As the head of an entrepreneurship center in Madison, I want to share my wish list with you:

1. Pay for innovation
New Jersey must support research and development, especially in our vital pharmaceutical, biotechnology and telecommunications industries. Collaboration between state government and the private sector is critical. Academia and industry must work together more closely and the state needs to make that happen.
How? The state should create additional tax benefits, matching contributions and endowments to encourage donations for research and development programs at our universities. These incentives, along with additional state funding, will help maintain one of our few remaining competitive advantages.
The New Jersey Economic Development Authority has made considerable progress along these lines by funding entrepreneurial ventures and providing incentives to support growth companies, but the authority needs more support from the governor. Regional innovation zones must be expanded, and we should even consider interstate zones if they help make our industries stronger.
We are no longer competing only with other states, but with increasingly sophisticated global players. It’s important that we encourage stem cell, energy and nanotechnology research efforts. The Edison Innovation Fund you support is a good plan, if generously funded.

2. Strengthen the infrastructure
Bite the bullet and double the gas tax and do whatever it takes to maintain our roads and bridges, expand roadways and provide mass transit alternatives where possible. While it will take political courage, this small tax increase (one-third of which will be paid by out-of-state drivers) will have a huge impact on our economy and help reduce the billions of dollars in productivity we lose while sitting in traffic.

3. Take the lead
You should personally support entrepreneurs and innovation in the state. Our greatest asset is the smart, creative talent pool in companies and nonprofits, both small and large. In addition to increasing support for the successful Business Employment Incentive Program, make the calls to those considering plans to relocate here as well as those threatening to leave.
It may seem like a small thing, but don’t forget to thank business leaders for their hard work, particularly the ethnic entrepreneurs who often are overlooked. At a time when these highly educated scientists, researchers and business people are being lured by nations with less-restrictive immigration policies, not to mention their own fast-developing native countries, family and community can be the deciding factor in their decision to move and remain here. In fact, don’t just thank them, but embrace these folks - they will lead this state’s business success.

4. Build our education system
It’s tragic that our state has been unable to stem the brain drain of our finest young students to universities outside the state. Lack of affordable access to higher education due to limited capacity is a crisis, and it needs to be addressed with a capital plan to build new higher education facilities. But it’s not just a matter of bricks and mortar. We also need to help young students learn the basics of entrepreneurship and tap into their creative potential.
Our youth will change jobs about a dozen times before they retire, and It’s highly likely they will work in a small business, nonprofit or their own venture at some point. Start early and encourage small business internships for high school students. At the K-12 level, the governor should offer incentives to spur more math and science instruction and also support problem-based learning and entrepreneurship curricula so all students can develop creative thinking and innovation skills.
We have all the ingredients here in the Garden State. With a little nurturing and support, Gov.-elect Corzine, we can go a long way.

James C. Barrood, Executive Director, Rothman Institute of Entrepreneurial Studies, Silberman College of Business, Fairleigh Dickinson University


NJBIZ

October 24, 2005

Willie Wonka and the Workforce

After enjoying Tim Burton¹s film of the charming Roald Dahl novel “Charlie and the Chocolate Factory,” one scene stuck in my mind. Willie Wonka, responding to Charlie Bucket's reluctance to leave his family to live and work at the factory, asserts that restrictive parents and family hinder creativity.

As the head of an entrepreneurship center, I extended my thinking to the business sphere and the necessity for all businesses to be more creative, innovative and entrepreneurial. I saw the analogous relationship between restrictive parents and risk-averse managers. Managers, like parents, with their myopic focus on micromanaging and meeting short-term targets, tend to repress the creative ideas brainstormed by employees.

If only companies could be less like restrictive parents who smother creativity. If only managers could encourage free thinking, foster creativity and nurture new ideas without punishing employees who take risks and sometimes fail. The result would be stronger, more profitable companies that could face the formidable challenges ahead.

The most successful American firms look much like Wonka’s enterprise, outsourcing jobs to inexpensive, hard working and obedient Oompa Loompa-like workers around the globe. The downside is that, unlike the acquiescent cocoa bean-loving Oompa Lloompas, the companies we outsource labor to are extremely ambitious and determined to achieve our standard of living.

For now, U.S. companies can rely on high-cost domestic workers to develop and market new products. Our ability to be leading innovators and entrepreneurs is our competitive edge. But U.S. employers are now outsourcing even these functions to well-educated foreign workers who will soon become our competitors as innovators.

We must keep ahead of this possibility by being more like Charlie and the Buckets. Our displaced workers need to be re-educated and retrained, much as Charlie’s father was rehired to fix the robot that had replaced him. And our kids must study harder, expand their skills and become committed to lifelong learning to supply our companies with the employees needed to maintain our innovative and entrepreneurial edge.

Our political leaders must also tackle these challenges. They can begin by addressing the K-12 educational system, which Microsoft’s Bill Gates calls “obsolete.”  They can provide affordable access to college and ensure that the educational system places greater emphasis on the sciences and technology and on entrepreneurship.

How can parents help? Simply put, encourage your kids to be imaginative, don¹t suppress their creative desires. Don’t so over-program your kids that they have no time to express themselves like the “Chocolate Factory’s” Violet Beauregarde, the overscheduled, hypercompetitive karate champion whose mother lives vicariously through her. Over-scheduling is endemic today. I’m afraid kids don’t have time to be themselves and allow their innate creativity to flourish.

And what about Veruca Salt, the spoiled princess whose wealthy father caters to her every need?  Entitled kids become underachieving college students who find it difficult to adapt and make decisions on their own. Today we see “helicopter parents” helping their kids with school work and complaining to professors and administrators when a good grade is not attained. The resulting sense of entitlement carries over to the workplace, where it stifles initiative.

Mike Teavee, the TV and video game addict who knows it all, typifies a growing number of boys and even girls. The boob tube, when not used correctly, fosters short attention spans. Violent TV and video-game behavior can reduce sensitivity to real-life violence and have lasting, negative effects on learning capacity and workplace behavior.

And then there’s Charlie. He’s optimistic, open-minded, curious well-mannered and hard working. These traits will serve him well as he works with Wonka and builds strong relationships with the increasingly savvy Oompa Loompas to create and market new candies.

It is the Charlies of the next generation who will be the most successful in life and in work. Charlie will be the reason the U.S. remains the leader in global business. We have a huge head start with our leadership position, our culture of diversity and our entrepreneurial spirit. All of us-business and political leaders, parents and kids-must meet the challenge to maintain our competitive edge, lest we lose out to the increasingly creative and entrepreneurial Oompa Loompas.

James C. Barrood, Executive Director, Rothman Institute of Entrepreneurial Studies, Silberman College of Business, Fairleigh Dickinson University


NJBIZ

May 30, 2005

The Road to Becoming Second Rate

Recent spring-cleaning revealed a long-lost game. Almost 20 years ago, while traveling near the Great Wall in China, I came across a unique paddle-like badminton game called ‘ThrowPandaBat.’  Upon returning home I played the game with friends and pondered the market opportunity. Ignoring market research, I called the Chinese export office in Manhattan and ordered 100 games. While my memory is vague, I do remember the difficulty in dealing with bureaucrats and the long shipping time, red tape, etc. Several months and headaches later I picked up the games from Port Elizabeth and tried to sell them at a local flea market, where they found few buyers.

Fast forward to today. China is now the second-largest exporter to the U.S., with many of its goods going to mass merchandisers like Wal-Mart. China’s low labor costs make its exports attractive to multinational corporations and entrepreneurs alike. From farming to manufacturing to IT services to customer support, countries like China and India continue to export increasingly sophisticated products and services.

From an economic and entrepreneurial perspective, this should not cause much anxiety. Our standard of living has risen, our costs are lower and our productivity has continued to increase.

But the influx of foreign goods may also translate into fewer U.S. jobs.

In our flexible economy, both the newly unemployed and those just entering the workforce need to be trained and educated for new jobs in the knowledge economy. This training and education is currently a concern and soon will be a crisis. Without it, we as a nation will not be able to compete in the world of tomorrow.

The warning signs are everywhere. First, fewer students are finishing high school and attending college, and even fewer are studying math and science. As Bill Gates recently noted, our high schools are obsolete and are not properly educating today’s young people.

Second, far fewer bright foreign students, primarily from Asia, are studying and remaining in the U.S. A reverse brain-drain is occurring thanks to our restrictive immigration policies and the expanding opportunities in students’ home countries.

Finally, and most troubling, is the looming migration of research and development from the U.S. to China and India to take advantage of their low-cost economic climates. Ring the alarm bells.

We clearly must confront these challenges. We must make education a priority at both the state and federal levels, benchmarking the best practices in the world to restructure K-12 systems and make college much more accessible. We must strongly encourage the study of science and technology and stimulate entrepreneurship and innovation. And we need to attract and retain the best and brightest foreign students who now prefer Canada, Australia and Europe.

A good starting point for promoting entrepreneurship and innovation can be found in recommendations in the recently released National Innovation Initiative discussed at a Rothman Institute/New Jersey Technology Council seminar last month.

These recommendations include creating a national innovation strategy to train and support the next generation workforce and retrain current workers.

They further call for increasing federal R&D spending and creating tax incentives for innovation zones that nurture risk-taking and long-term investment. The White House must also do its part to rebuild the country¹s manufacturing capacity, develop a 21st century healthcare infrastructure and streamline regulations that affect technology.

If we do not properly address the challenges ahead we will lose our innovation edge. It will then be impossible to regain our lead and our economy will start to look and perform like ‘Old Europe,’ sans the generous benefits that European workers and retirees enjoy.

In 20 years, this will leave our retirees with no choice but to be entrepreneurial, and another opportunity will present itself: selling souvenirs and tourist services to the throngs of Asian vacationers who will be enjoying their higher standard of living. Maybe then I’ll be able to unload those ThrowPandaBat games I picked up some two decades ago.

James C. Barrood, Executive Director, Rothman Institute of Entrepreneurial Studies, Silberman College of Business, Fairleigh Dickinson University


NJBIZ

January 3, 2005

It’s no coincidence that entrepreneurs won both ‘Apprentice’ slots

Like millions of television viewers, I have been enjoying “The Apprentice,” Donald Trump¹s reality show. Cheering on victor Kelly Perdew was all the more satisfying since I was able to collect on bets from friends and colleagues.

The show caused me to ponder what had led to Perdew's success. I realized that like Bill Rancic, the winner in the first season's show, Perdew epitomized entrepreneurship. Both contestants understood the power of drive, passion and a commitment to growth.

As director of the Rothman Institute of Entrepreneurial Studies at Fairleigh Dickinson University, I know this is a topic that interests us all. Whether you are part of a small startup or a division of a giant corporation, entrepreneurship is the engine that drives economic growth.

Both winning competitors possessed the skills of good project managers and business leaders. One can debate the contrived nature of the show, with its editing to heighten drama and suspense; but most viewers would agree that the management skills, creativity and determination displayed by Kelly and Bill helped them rise above the rest.

These skills came largely from the experience they gained as business owners. They learned by necessity how to multitask, manage others, resolve conflicts, cater to clients, think creatively, remain focused and give a 120% effort. Moreover, their confidence, maturity, likeability and integrity were additional qualities that helped bring them success.

Through his TV show, Trump has found two new employees who will add much value to his organization as he expands his real estate empire and brand. If this show enhances the perception of entrepreneurs and the knowledge and skills they can bring to large organizations, we should be delighted. For while most companies like to talk about being more entrepreneurial and innovative, they still find it hard to add new hires with entrepreneurial backgrounds. Companies fear hiring talent that doesn’t fit, or losing entrepreneurial employees who may leave to start their own businesses.

But only by leveraging the entrepreneurial skills of employees can businesses and corporations keep their competitive edge. Innovation and entrepreneurship will be increasingly important as we compete against countries like China and India. Soon our only true advantage may be a corporate and organizational culture that lets creativity thrive.

And whether your business has grown from a brainchild built in a garage, or is the product of teams of corporate ‘intrapreneurs,’ the study of entrepreneurship will enhance it.

James C. Barrood, Executive Director, Rothman Institute of Entrepreneurial Studies, Silberman College of Business, Fairleigh Dickinson University


Maintaining Focus: Entrepreneurship Education, Research and Service   –   Karl Vesper, Ph.D. 
 

Karl Vesper HALFOver the last three decades the term "entrepreneurship" has changed its connotation from pejorative to positive. With that change have come blurring of meaning and the potential for misdirection of resources needed to advance the field of entrepreneurship.  

As a high school student in the '40s I remember being taught about robber barons whose greed brutalized workers and corrupted governments. As an undergraduate in the '50s I remember being assigned in my English classes to read Babbit and Death of A Salesman, where people who took initiative in business were associated with exploitation and rapacity. Throughout the years I learned from Hollywood movies that when a character said, "Well, I'm a businessman," a low life was being introduced.

In the late '70s at seminars for R&D managers of large corporations I was invited to discuss entrepreneurship because of its association with innovation. When I would ask participants for synonyms to that term the answers they nominated for the flip chart included such terms as "money grubbing," "disloyal," "disruptive," "selfish," "deceptive," "exploitative" and "unscrupulous." Coincidentally in the '60s and '70s, big corporations were on the rise, the number of independent firms, as indicated by the number of Schedule C's filed with IRS, was declining, and prominent economists were saying that the day of the lone inventor reaping large success was gone forever. Entrepreneurs were not heroes.

But things changed. These trends reversed, and the term "entrepreneur" took on a different set of connotations. The number of Schedule C's filed reached bottom in 1969. Magazines such as Inc., Venture, In Business and Entrepreneur were introduced and found a market. R&D managers began to nominate for the same flip charts such synonyms for the word "entrepreneurship" as "creative," "productive," "helpful," "innovative," "admirable," "contributive," "constructive," "bold" and even "vital." 

Not only did R&D managers come to view the subject differently, but scholars began increasingly to relish the possibilities for teaching and research. Scholarship in the field has become not only more acceptable, but in some quarters essential. The number of universities with at least one course in entrepreneurship rose from a dozen in 1970 to over 400 at present, and over one-fourth of that number have introduced series of courses, concentrations, majors, programs or centers in the subject.

Benefits for which entrepreneurship has become known include producing innovations, creating jobs, adding industrial flexibility and offering greater opportunity for individual expression and the pursuit of professional happiness. Each of these, it is important to note, comes strongly from creating new independent enterprises, as opposed to managing existing large firms. They have come from the kind of entrepreneur Webster's dictionary defines as "a person who organizes and manages a business undertaking, assuming a risk for the sake of a profit," as opposed to the manager of somebody else's business.

With the trend of favorable connotations for entrepreneurship has come expanded use of the adjective "entrepreneurial" as a term of praise. Webster's use of the term for characterizing individuals who undertake risk for the sake of profit has been increasingly stretched to include managers who operate with initiative, employees who do so, owners of small companies, and individuals who inherit businesses from parents who were the real entrepreneurs who created those businesses. Thus, the term "entrepreneur" gets expanded from the notion of organizing new companies, which strongly add the benefits noted above, to include management of existing firms, which are not noted for doing so.

Some attributes of an independent entrepreneur, such as high motivation, can certainly be useful in many other settings, including management of existing firms. If entrepreneurial behavior can help those firms become more innovative, more responsive to markets and more highly motivated to produce much with little, as must independent entrepreneurs, then the study of entrepreneurship may be useful to both managers and other employees of established firms, whether large or small.

The fact that established firms have in the past found it difficult to move quickly in new directions when their circumstances change does not mean that doing so is impossible. It may only mean that there should be more investigation of how entrepreneurship works and experimentation with its application in larger firms to learn how it can best be adopted there. Employees and managers should perhaps study and experiment more with entrepreneurship, while scholars and consultants investigate how it works and how companies might best attempt to exploit its potential.

But study of independent new business creation also ought not to be forgotten in this process. Two attributes of existing organizations tend to introduce risk that it might. First, established companies typically have more money to spend than do independent entrepreneurs. Their funds come to schools through research grants, executive program tuitions, and sometimes large corporate endowments. Funds can come to scholars indirectly from these same channels and directly through consulting engagements. To counterbalance these distractions from start-ups, alumni and individual donors to schools can be alert to the risk and work to mitigate it both through the direction they give as advisors to the academic community and through careful attention to the wording of their bequests.

The second attribute making existing organizations more alluring to scholars than start-ups is that they remain in place and change slowly. That makes them easier to study than are entrepreneurs in the process of creating new companies. In this regard, small companies are even more appealing than large ones, because they are more widespread and vastly more numerous, both characteristics which make conventional scholarly research in business, with its current emphasis on statistical methodology, more convenient. To cope with this threat to the study of independent new business creation, strong leadership which sees beyond current fashion is needed on the part of academic administrators and those who advise them. Not that they should throw the research conventions du jour to the wind. But they should seek to keep them from unduly stifling case research and potential new methods of investigation of how entrepreneurs operate now, how they might be able to operate better in the future and how the way they work can best benefit the economy.

Constructive stimulation of established firms may become a valuable contribution of entrepreneurial studies. In this process the term “entrepreneurship” may gain even more positive connotations. But attention to the creation of new firms ought also to retain a high priority.
 

Biography

Karl H. Vesper, BSME, MSME, Ph.D., Stanford Engineering School, MBA Harvard Business School, is a professor of Business Administration, Mechanical Engineering and Marine Studies at the University of Washington in Seattle. He is a nationally recognized chronicler of the growth of entrepreneurship education in U.S. higher education.

His books include New Venture Experience, Vector Books, 1996, New Venture Mechanics, Prentice-Hall, 1993; The Washington Entrepreneur’s Guide, University Press, 1993; and New Venture Strategies, Prentice-Hall, 1990.

From 1982 to 1985 Dr. Vesper served as Chairman of the Management and Organization Department at the University of Washington, where he has been on the faculty since 1969. He has held endowed professorships as a visitor at Baylor University, Babson College and the University of Calgary. As the first Babson Professor or Entrepreneurship he suggested and helped start the Babson Center for Entrepreneurial Studies, started the Babson Entrepreneurship Research Conference and edited the first ten volumes of Frontiers of Entrepreneurship Research, the proceedings of that conference.


Challenges Facing Family Businesses in the 21st Century   –   Nancy Upton Ph.D. 
 

Nancy Upton HALFFamily firms are not only the bedrock of the American economy; they are also our "Energizer bunnies."  A few statistics, and the implications we can draw from them, demonstrate both points. The majority of all sole proprietorships and about 70% of corporations are family owned or controlled. It is commonly held that these firms supply about half of our jobs and GDP.  

Other data leads me to believe that the majority of fast-growth businesses are family owned and controlled. Inc.magazine reported that 42% of the Inc 500 (fast-growth firms) were family businesses. When approximately 1000 fast-growth national and regional winners of the Ernst & Young Entrepreneur of the Year Program were asked, "What are your long-term goals?" almost 1/3 cited family ownership and family management. It is fast-growth firms that are providing the majority of all net new jobs and are primarily responsible for the economic boom we are experiencing.  

Family firms that wish to continue family ownership and management to subsequent generations enjoy the same challenges facing every business in the U S, i.e., consolidation, global competition, government regulations and rapidly changing markets. They also face the additional challenges of managing family relationships within the business system. Universities are responding to the needs of family firms to understand the dynamics of the family and business systems by providing seminars or forums that offer insights into sibling rivalry, generational transfer and strategic planning.  

Several trends are creating challenges for family firms. One of these is the increasing number of women in leadership and ownership of family firms. Since 1972 women have started firms at anywhere from five-times to twice the rate of men. There are now eight million women-owned companies employing more people than Fortune 500 companies globally and generating nearly $2.3 trillion annually in sales.  

As women both assume and transfer control of family firms, we will have to question the advice we give concerning management, leadership and succession planning. Most of our prescriptions are based on either anecdotal or empirical evidence gleaned from businesses started after World War II by men. We will need to test our assumptions. A second trend of great import is the shift toward co-presidents. In a recent Arthur Andersen/ MassMutual survey, 24% of family firms are considering co-presidents. Managing and developing these sibling or cousin teams will be a challenge for current leadership.  

However, I believe that change is the greatest challenge facing family firms that wish to continue ownership into the next generation and that strive to grow.Families and businesses have opposing views of change, presenting a fundamental conflict for a family firm. The family system resists change and ambiguity. It strives for homeostasis, i.e., balance through maintaining the status quo. The family system minimizes conflict and abhors ambiguity. However, change is inevitable. Families must change in response to external circumstances and internal life cycle changes. If the family is flexible, with consistent, predictable leadership, it will respond to change in adaptive ways. However, the change may be slow.

Rapid-growth companies embrace change. Today change is characterized as stealth-like, destroying marketplaces overnight. Change is so rapid that most industries are experiencing decreasing product life cycles with some as low as six months. Industries dominated by family businesses are being revolutionized by technological advances. Travel and insurance agencies and automobile dealerships are already seeing erosion of sales as the Internet disrupts traditional distribution channels. For example, it is estimated that half of all automobile dealerships will close over the next decade as online sales soar.

In business, creativity flows from ambiguity and innovation is bred by conflict. Success is reached by doing the opposite of conventional business wisdom. For example, according to Reengineering Management author James Champy, for a leader to create an organizational culture that embraces change, he or she will have to give up command-and-control. Entrepreneurs have a need to control and the thought of shifting control to their managers can be scary. However, it can be very effective. Example?  Family-owned Koch Industries has grown to $30 billion in sales by defying conventional command and control dogma and practicing "market-based management" which eschews budgets, central planning, and fixed job descriptions. Charles Koch attributes success to values required for long-term success. Specifically he cites humility, integrity, respect for others, and a passion for learning and producing.   If there is a secret to successfully embracing change it is through first embracing core values.

In Built to Last: Successful Habits of Visionary Companies, authors Collins and Porras found that core values, those essential and enduring, "non-compromisable" basic tenets, provide guidance for the truly outstanding businesses. Each of the firms studied was able to identify between three and six fundamental values. Interestingly, of the 18 firms they studied, four are family firms and four are still guided by the founding family values. They cite Thomas J. Watson, Jr. describing IBM's core values as "bone deep" in his father. Values that drive the business are clear to the founding generation, but have they been communicated to the next?  Family firms that have a vision that reflects core ideology will have an advantage in the marketplace. However, with no clear mission, the family firms will repeat the past rather than invent the future.

The rudder a family may use to embrace change is the clear articulation and communication of core values. The values can be articulated through a vision statement and communicated through mission, objectives and strategy. Family businesses will then see that the challenges presented by rapid change become opportunities when viewed through the lens of the family's core values.
 
 

Biography

Nancy Upton holds the Ben Williams Chair in Entrepreneurship at Baylor University. She founded the Institute for Family Business at Baylor in 1988, and was Director of the John F. Baugh Center for Entrepreneurship from 1994 until 1997.  

She received her MBA and Ph.D. from Baylor University. Her publications are in the areas of family business transition and succession and entrepreneurship. She is the author of Transferring Family Business Management for the Small Business Administration, Successful Experiences of Center Directors for the Kauffman Foundation and co-author of Entrepreneurship: Creativity and Growth.

In 1996 Dr. Upton received Baylor’s Outstanding Professor Award, the Leavey Award for Excellence in Private Enterprise Education from the Freedom Foundation and the Southwestern Dean’s Achievement Award for Program Innovation in family business. In 1995, the United States Association of Small Business and Entrepreneurship recognized her as the Entrepreneurship Educator of the Year.  

The Kauffman Foundation has acknowledged her contributions to the field of family business by awarding her Top Ten Finalist Entrepreneurship Educator of the Year. Dr. Upton teaches entrepreneurship and family business management courses at the graduate and undergraduate levels at Baylor. Prior to joining the faculty at Baylor, Nancy spent ten years in business.


Entrepreneurship – The Third Wave and the New Millennium  –   Rieva Lesonsky 
 

Rieva Lesonsky HALFBack when I started at Entrepreneur magazine, not very many many people called themselves entrepreneurs. In fact, most folks didn’t even know what an entrepreneur was. Today, as we head into the new millennium entrepreneurs are hot; in fact, they’re hotter than ever.

The 1990's were deemed the  “Decade of the Entrepreneur.” At the time, that seemed fairly heady. But today at Entrepreneur, we believe we’re heading into the century of the entrepreneur.

Who’s taking us there?  Who are today's entrepreneurial leaders?  The business climate has changed so remarkably in the past decade that I mark entrepreneurship in waves. The first wave was rather anonymous. No one wanted to be an entrepreneur; few even knew one. In fact in the old days, a couple of studies showed that entrepreneurs shared characteristics with juvenile delinquents: they can’t get along with others, they’re not team players, they don’t follow orders.

The second wave started around 1988, just after the stock market crash. As educated, smart people found themselves out of corporations due to mergers and downsizing, many became entrepreneurs, not necessarily by choice, but often by default. And with the second wave, we saw the face of the entrepreneur literally start to change.  

In 1978 women owned less than 4 percent of American businesses; today they own about 33 percent of the nation’s nearly 26 million businesses. In the second wave women have increased their number of businesses 78 percent and their revenues 236 percent! 

Numbers for other minority business owners aren’t as current, but we know that from 1987 to 1992, African-American-owned enterprises increased 46 percent, businesses owned by Asian-Americans and Native Americans grew 61 percent, and Hispanic-owned companies skyrocketed 83 percent!  

The newest entrepreneurial face on the block is a young one. This third wave of entrepreneurs consists of all those under 35. A few years ago a Gallup poll revealed that of Americans aged 35 to 54, 46 percent owned or wanted to start a business. Of those aged 18 to 34, 64 percent yearned to be entrepreneurs.

More recently, some studies show that 30 percent of new entrepreneurs are 35 or younger. If you narrow the field to high-tech companies, figures show that over a third are launched by those under 30. Some have said, and I agree, that Generation X, or Generation Entrepreneur, “Gen E,” as we call them, is the most entrepreneurial in our history.  

Today, small businesses are responsible for about 54 percent of all US sales, account for nearly 50 percent of our GDP, and employ more than half of all Americans. So with all this good news, you'd think entrepreneurs would be riding the crest of the wave eagerly and easily starting and growing businesses. But that is certainly not the case.  

As we head toward the millennium, there are important issues entrepreneurs need to face in order to grow their businesses. Things are not as clear-cut as they used to be, and there’s been a difference of opinion lately between some in the government and small business owners. Health care reform is an example. When health care reform first became an issue, small business owners were among the first to cry out, “We can’t afford to offer health benefits to our employees.” And they won . . . or did they?  

It's similar to what happened a few years ago with the minimum wage debate. Small business owners again said “no,” but this time they lost. And even though several months ago the Senate rejected another increase in the minimum wage, the issue is far from dead.  

Why did small business owners prevail on health care and lose on the minimum wage?  Because we are now a nation at nearly full employment. Since 1993 we have shifted from an employer’s to an employee’s market. And for today’s business owners that makes a big difference.  

In order to grow a business you need motivated, productive employees to help. How easy is it to attract these kinds of folks if they’re offered minimum wages and no benefits?  Virtually impossible. A survey a few years ago showed a vast majority of Americans would turn down a job with higher wages for one that offered health benefits. In other words, in order to be competitive, companies must offer competitive benefits.  

I believe that as we approach the new millennium, we’ll see more entrepreneurs and small business people who believe, as I do, that what’s good for people is not automatically bad for business.

I also believe we are in the midst of a radical shift in how we do business. According to an exclusive survey Dun & Bradstreet did for Entrepreneur last year, most small business owners take a reactive approach to sales. And while that may have worked in the old days, and by that I mean three years ago, it simply won’t work anymore. Entrepreneurs need to be more pro-active, particularly when it comes to sales and marketing. The key to marketing success in the new millennium will be relationship marketing – that is, developing unbreakable relationships with existing customers and then getting them to help you attract new clients.  

Customers who know how important they are to a business owner will remember that business every time. Entrepreneurs often forget the simplest rule of all – the Golden Rule. Stand in the customers’ shoes. What do you think of your company? Would you come back? Would you be a loyal customer of your business? 

Another key to thriving in the millennium will be the Internet. I am distressed every time I read about the relatively small participation of entrepreneurs online. Businesses that are not online will not grow. That is not to say the only businesses to survive will be online ones. But consumers are increasingly reliant on the Web to help them make decisions about where and with whom to do business. Companies without, at minimum, an online presence, will not thrive. The Web, I believe, is in the process of revolutionizing retail. “E-tail” may well be the death of retail as we know it.  

At Entrepreneur we believe that virtually every entrepreneur needs a web site, if not to actually sell products, then to promote their non-Web businesses. The world can’t beat a path to your door if it doesn’t know you exist.  

Yes, entrepreneurial businesses have undergone significant changes in the 90’s. And we will undoubtedly see more as we hit the 21st century. But one thing about entrepreneurs remains constant: their motivation. What do entrepreneurs have that other folks don’t?  Well, to paraphrase George Bernard Shaw, others see things and say, “Why?” while entrepreneurs dream things that never were and say “Why not?”  
 
 

Biography

Rieva Lesonsky is vice president/editorial director of Entrepreneur magazine. She holds a BA in Journalism from the prestigious journalism program at the University of Missouri. During her 16-year association with Entrepreneur, Ms. Lesonsky has served in various editorial and management capacities. Prior to joining Entrepreneur, her career included research positions for a major Los Angeles publishing corporation, as well as Doubleday & Company in New York City. Ms. Lesonsky has served on the Small Business Administration’s National Advisory Council since 1994 and has been honored by the SBA as a Small Business Media Advocate and a Woman in Business Advocate.  

For the past three years she has been named one of the Top 100 Most Influential Journalists by Business News Reporter. A nationally recognized speaker and expert on small business and entrepreneurship, Ms. Lesonsky has appeared on numerous national radio and television programs, including “Good Morning America,” “The Oprah Winfrey Show,”  “Business News Network,” and WOR Radio Network’s “Smart Money” with the Dolans.