The Entrepreneurial Mind

Many of you know about the Four P's that make up a marketing strategy -- product, price, promotion, and place.

Those of you who read this blog regularly or have had me in class also know about the Three M's used in assessing opportunities in entrepreneurship -- market, margin, and me (or mission for social and corporate ventures).

In our new book, Bringing Your Business to Life, Mike Naughton and I introduce the Two V's that together help make a "good entrepreneur" -- vocation and virtue.

Entrepreneurs who understand their work as vocation seek to not only serve themselves through their venture, but to also serve a greater purpose.

The entrepreneur has to define the success of his business beyond financial, technical and market achievements to moral and spiritual principles that reveal the business as a gift to others. This may initially sound a bit too moralistic and idealistic. We have found, however, that when entrepreneurs describe their success and satisfaction of their company with a broader criteria than merely financial gain, they are on the way to setting a foundation to building a company that is faithful to their deeper commitments. Some of the criteria include

- creating jobs in which employees can find security;
- generating and distributing wealth for their investors and their employees;
- developing a highly positive culture that attracts workers who see the business as a good place to work;
- maintaining low rates of employee turnover and high employee satisfaction;
- providing needed services and products with great quality, and so forth.

No matter what path leads us to become entrepreneurs, the only way we can be fully human in our work is if we see our work as an opportunity to give our talents to others in service to the good of society and to God.

Virtue includes those habits that define how we approach our work as entrepreneurs.

When a person works, he affects the inner landscape of his character. The issue is not whether he changes himself, but how he changes himself. And the key to understanding the significant revealing of his personhood is not found in the amount of revenues he has generated, or levels of promotions, or the percentage of market share he has captured. Rather, the moral and spiritual character of an entrepreneur or businessperson will be captured in the responsible relationships he has forged with others in the actions of running his business. More specifically, this can be shaped by the opportunities he pursues, who he chooses to do business with, who he hires, decisions he makes about products and markets, decisions about whether and how fast to grow, the corporate culture he builds, and his engagement with the community as a leader and/or citizen.

Posted by Jeff Cornwall at 06:51 AM | Permalink | Comments (2)

When people use the term lifestyle business they usually are referring to something small and even part-time. Academics and policy folks will often say the term lifestyle business with a hint of indifference, boredom, or even condescension. This is not a business that interests them very much if it is not designed to scale up and grow.

I would argue that every business is a lifestyle business.

Why? Because the business we create will dictate our lifestyle.

We can choose the lifestyle our business creates deliberately, basing it on our goals, aspirations and values.

Our lifestyle may be one of integrating our business with our passion to change the world. We call this a social venture. Our lifestyle in this venture would be one of sacrificing our own income and wealth potential in exchange for making the world a better place.

Our lifestyle may be one that has the flexibility to spend the time we want to with our family, our church, our community, our hobbies, travel, or what ever.

Our lifestyle may be one that keeps things simple. We are willing to trade off the growth potential in a venture for the peace of mind of having no employees to worry about or to provide for.

Our lifestyle may be one of fame and fortune -- of work ahead of everything else. So we look for opportunities that provide wide open markets with significant growth potential.

Be deliberate in planning a business that reflects the lifestyle you want. And understand the trade-offs that come with the choices you make -- there are always trade-offs.

High growth ventures offer high rewards of income and wealth. But, they also come with the risks associated by pursing such ventures. Your income is more at risk, certainly in the short-run. Your family will likely see you less. Your hobbies and interests will take a back seat.

The decision to keep your business small can offer the ability to control your time and make it more flexible for other parts of your life. But, your income potential will be more limited and you will have to be content with passing on opportunities to add on more products, move into other geographic locations, or maximize our share of the market.

The key thing is to recognize that every business has an affect on your lifestyle. Be honest with yourself. Know what lifestyle you truly want and then engineer that lifestyle into the business you build.

Posted by Jeff Cornwall at 06:32 AM | Permalink | Comments (1)

Our book on entrepreneurship and virtue, Bringing Your Business to Life (co-authored with Mike Naughton), is now available for pre-order at Amazon.com.

Here is what a few folks have had to say about our new book:

If you want to be one of the truly great entrepreneurs you need to read this book. Jeffrey Cornwall and Michael Naughton have done a masterful job of illuminating a side of business we all should be thinking about.

Bo Burlingham, Editor-at-Large, Inc. magazine

Bringing Your Business to Life gives us essential tools we can use to build entrepreneurial ventures - and entrepreneurial lives - that matter and make a difference.

John Wark, Consultant and Former Software CEO

Professors Cornwall and Naughton utilize real life experiences to demonstrate that entrepreneurship is a virtuous profession. Using basic Christian principles, the authors explore the issues facing entrepreneurs during all stages of their venture and challenge the myth that entrepreneurs have to act in unethical ways to survive. This is a must read for anyone starting a new business and a great primer for a class in entrepreneurial ethics.

Jeffrey S. Hornsby, Ph.D., SPHR
Kansas State University

While reading Bringing Your Business to Life I found multiple opportunities to apply the Four Virtues to my life and to the ventures that I'm presently involved with. It is practical, insightful, and relevant for entrepreneurs who desire to better understand the social, spiritual, and economic impact we can have through our for-profit and non-profit endeavors.

Corey Cleek, General Editor, Devotional Ventures

Jeff Cornwall and Michael Naughton have created a compelling argument for the integration of ethical and moral behavior and entrepreneurship. They dispel the myth that the “Ethical Entrepreneur” is an oxymoron rather they offer strong evidence that success and entrepreneurship are not mutually exclusive. Bringing Your Business to Life offers a vehicle for more cross campus collaboration by introducing liberal arts concepts into the phenomena known as the entrepreneur and entrepreneurship.

George T. Solomon, D.B.A.
Director, Center for Entrepreneurial Excellence
The George Washington University

Bringing Your Business to Life is a prescription for success in life as well as in business. It is a great synopsis of how financial and spiritual well-being can intersect in doing well by doing good. It reveals that it is not only what we do as a chosen profession but moreover who we are as a person that will dictate where we go in life. Bringing Your Business to Life is good medicine for good business. In fact, it reminds us that doing the right thing and putting faith into action is the best medicine for a great life.

Ron Loeppke, MD, MPH, FACPM, FACOEM

Posted by Jeff Cornwall at 05:23 AM | Permalink | Comments (1)

I encourage you to read Susan Brown's wonderful essay that challenges how we define success in our lives.

My generation has lost touch with what it means to be content. We equate contentment with home or bank account size. Are we content? I suppose we could ask the psychiatrists and counselors we regularly visit. Alternatively, maybe look at divorce statistics or observe declining church roles while noting increasing doctor visits for stress-related ailments. Maybe interview local pharmacists who increasingly fill prescriptions for sleep and stress disorders or ask a financial analyst to explain the reason behind the increasing debt ratios.

I wish I had clear-cut answers as to why our generation has taken a 180-degree turn from prior generations. Success is good, but a problem occurs when enough is not enough. Our nation is heading down a destructive road unless our values change. Bigger government is not the answer. A diamond's size does not make a lasting relationship. True beauty is not superficial. House size, career title or bank balance does not equal contentment.

Posted by Jeff Cornwall at 07:28 AM | Permalink

In my Tennessean column this week I write about the importance of defining our lives by more than what we do for a living.

We seem to create folk heroes out of entrepreneurs who expend Herculean efforts to achieve success in their businesses.

And while this is good to a point, if entrepreneurial success comes at the expense of our marriages, our families, our faith, and our friendships, it is a hollow victory.

Posted by Jeff Cornwall at 07:09 AM | Permalink | Comments (1)

My co-author Mike Naughton likes to remind people in his talks around the world about faith and work that "If we don't get leisure right, we can't get work right."

The immediate conclusion that many people jump to at this point is that they need leisure time to recharge for work, or to rest so they can gain that competitive edge. Our leisure time from taking this view is simply instrumental to helping us build a business or advance in our careers. But, this is absolutely not what he means by his statement. Mike has argued that when we look to non-work and leisure time in terms of "balance" or in terms of "recharging", we are missing the point.

What Mike is saying is that we need to pursue an integrated life. One in which our work and leisure are both guided by the same faith and passion -- toward the same ends. How we pursue our leisure time and how we pursue our work both help create who we become -- in terms of our character and in terms of our virtuousness. Both leisure and work have a purpose and give meaning to our lives -- one does not simply support the other.

The Wall Street Journal today reports on a new study that seems to offer empirical support for Mike's point:

For the study, the five professors surveyed some 4,000 Americans, asking what they did the previous day and then quizzing them in detail about three randomly selected events from the day. Those surveyed were asked to rate the three episodes based on feelings such as pain, happiness, stress and sadness. All this was used to calculate what percentage of time people spent in an unpleasant state....

The standout cluster was what the authors label "engaging leisure and spiritual activities," things like visiting friends, exercising, attending church, listening to music, fishing, reading a book, sitting in a cafe or going to a party. When we spend time on our favorite of these activities, we're typically happy, engrossed and not especially stressed.

So don't view your weekend as a time to vegetate and to simply recharge for the week. Pursue meaning and purpose in all that you do in your life.

Posted by Jeff Cornwall at 05:42 AM | Permalink

The single clenched fist lifted and ready,
Or the open hand held out and waiting.
Choose:
For we meet by one or the other.
(Carl Sandburg)

NicheGeek.com offers a wonderful example of the latter choice from the Middle East:

About five years ago, Stef Wertheimer came across Gamila Hiar, a Druze woman with no formal education who had learned the ancient art of making soap from wild herbs and olive oil as a child. At the time, Hiar was supplementing her family's income, producing about 500 soap bars a week, from a corner in a room underneath her house in Pqi'in, a village in the Galilee region of northern Israel.

Hiar, now 68, ended up at Tefen Industrial Park, a bold philanthropic enterprise located about eight miles from the Lebanese border. Wertheimer, the founder of Iscar Metalworking, established Tefen in 1985 in order to encourage entrepreneurship in one of Israel's most undeveloped and low-income regions, with a population split largely between Arabs and Jews.

(Thanks to Ben Cunningham for passing this along).

Posted by Jeff Cornwall at 05:13 AM | Permalink

The Wealth Page Blog wrote a post based on my column on the need for entrepreneurs to seek wise counsel.

Posted by Jeff Cornwall at 06:25 AM | Permalink

The topic of my column this week in the Tennessean is the importance of seeking wise counsel throughout the development and growth of an entrepreneurial venture.

Entrepreneurship can be a lonely vocation. It can seem like you are alone when it comes to wrestling with the worries, fears, and uncertainties that are a normal part of owning your own business.

However, such isolation should not be considered an inevitable part of the entrepreneurial experience.

Throughout the life of a business, the entrepreneur should consistently seek advice from people with experience and expertise.

Posted by Jeff Cornwall at 08:40 AM | Permalink

Free markets are neither inherently good, nor are they inherently evil. Entrepreneurial activity is not in and of itself a moral act. The ends that the entrepreneur pursues and how they pursue those ends defines the morality of their entrepreneurial efforts.

There are entrepreneurs who use their gifts and talents to build businesses that provide economic, social, and cultural benefits.

But there are also entrepreneurs who although they may build personal income and wealth, they do so in the pursuit of ends that can actually end up being destructive to society. In our soon to be released book, Mike Naughton and I describe this type of entrepreneur as follows:

But the most enduring counterfeit of prudence are those who confuse being prudent with being cunning. They can be highly efficient, technically competent and have a great sense of timing, but their purpose is only for themselves. To have technical skill without good ends can unleash a powerfully destructive force in society.

Sarah Brown sent along a story from Time that may fall into this category:

...40% to 50% of first marriages still break up. In the spirit of American ingenuity that can find a way to make a buck out of even the worst situations, a cottage industry has sprung up to help people cope with and often celebrate this passage from one part of their lives to the next. "Once divorce gets so common, the human approach is to treat it like another aspect of life," says sociologist David Popenoe, co-director of the National Marriage Project at Rutgers.

Please know that I do not pretend to know what is in the hearts and minds of the entrepreneurs who have launched businesses in this newly discovered market niche. But, I think that most of us can agree that the break-down of families has been a less than positive force in our society over the past thirty years.

What do these entrepreneurs sell? Here are a few examples from the article in Time:

Business for products aimed at the newly divorced, from greeting cards and postbreakup getaway packages to custom-made cakes and joke gifts like wedding-ring coffins, is booming. New Orleans resident Renee Savant bought a hearse, thinking she would rent it out for over-the-hill-birthday celebrations. But since she began her service last October, the hottest demand has come from clients who want to ride around as they and friends celebrate the death of their marriages. "I would never in a million years have thought the fad would be divorce parties," says Savant.

Posted by Jeff Cornwall at 10:08 AM | Permalink | Comments (4)

Sam Davidson of CoolPeopleCare sent me a link to a blog post that offers "10 Morning Rituals For The Healthy Entrepreneur". While these can feel a bit hokey at first, it is important to engage in this type of routine. It can be a key element for creating temperance in our lives. Work can so easily become all consuming, especially for the entrepreneur.

Reading this reminds me of the routines that I value that I have let slip a bit lately....

- Quiet reflection or prayer sitting on my back porch early in the morning with my first cup of hot coffee.

- Taking my daily walk with my wife (and our dogs, of course).

- Attending morning mass on the way to work.

Lent is right around the corner. I think I will commit to bringing these things back into my daily routine rather than try to find something to "give up" for Lent.

Posted by Jeff Cornwall at 10:29 AM | Permalink | Comments (1)

In the discussions between our Belmont entrepreneurs and the ideablob.com team last evening, the topic centered on the value of getting multiple perspectives when facing a decision -- of seeking wise counsel from people with experience and expertise. Seeking counsel is one of the practices that Mike Naughton and I talk about in relation to the virtue of prudence in our book about being a good entrepreneur titled Bringing Your Business to Life (due out later this spring). Prudent entrepreneurs are good stewards of the resources available to them for their businesses, including investment and other start-up capital, employees' labor, customer trust, and so forth.

Seeking counsel is never more is never more important than when considering whether to launch a new business and how to best position it for market entry. Aspiring entrepreneurs should not seek out only those who act as cheerleaders to their dreams. Find people with expertise and experience who are willing to bluntly tell you the flaws and weaknesses in your plans. My students call this being "Cornwalled" when I offer my honest assessment of their ideas and plans. I always encourage them to seek more perspectives than mine. More than once I have failed to see the wisdom of a new business idea!

One of the things I like about ideablob.com is that it is creating a forum that dramatically widens your circle of people who can offer counsel on new ideas. Many of the people who frequent the site are passionate about entrepreneurship.

Seek wise counsel on your ideas from several people with different backgrounds. Listen to their counsel -- never argue. Reflect on all of what you here and look for common threads that you can use to make your idea stronger. It will improve the odds that your idea is really a good business opportunity, that you will position it properly when you launch, and that you will realize the success that you dream of.

Posted by Jeff Cornwall at 05:54 AM | Permalink

Entrepreneurship on steroids. That is what I call entrepreneurs who are consumed with raising as much money as they can, as fast as they can. When we confuse the means (raising capital and securing other needed resources) with the ends (building a sustainable business), we see entrepreneurship run amuck.

The goal of entrepreneurship is not simply to find the next big thing to lure venture capital or make a mad dash to a public offering. It is to create a venture that creates income and wealth for the entrepreneur and allows the entrepreneur to pursue other goals in life through this economic activity, be it creating more jobs in a better place to work, offering a better product to the customer, or making the world a little better place. The goal of entrepreneurship should be to build a good business -- with legs -- that will help build this entrepreneurial economy.

So on this theme I offer you one of the funniest, albeit somewhat depressing due its truth, videos I have seen in a long time: Here Comes Another Bubble v1.1 - The Richter Scale via YouTube.

(Thanks to Bruce Schierstedt for passing along this gem!)

Posted by Jeff Cornwall at 05:47 AM | Permalink | Comments (2)

In my days as an entrepreneur I would often joke with my entrepreneur friends that we should start a "3:00 a.m. Club". It seems that most of us were always awake worrying about something or other in our businesses in the middle of the night. I seemed to wake up right about 3:00 a.m. with spreadsheets in my head (just to date myself a bit, they were Lotus 1-2-3 spreadsheets).

Well, someone has now come up with a term for this particular entrepreneurial affliction -- "sleepworking."

According to the 2nd Annual Staples National Small-Business Survey, more than half of small-business professionals said that work has actually become part of their dreams. Fifty-one percent of those surveyed said that they “sleepwork” (i.e. dream about work), and nearly 70 percent of those “sleepworkers” report they wake up and put their “work dreams” to action.

The survey also revealed that 98 percent of U.S. small-business owners and managers are working during their time off -- including nights, weekends and vacations -- and nearly 54 percent expect to work even harder in 2008. This is not good news. I am on a personal quest to find a verb that describes entrepreneurship so we can stop defining ourselves only by what we do in our work (see this recent post for my rant on this issue).

Other results from this survey also give us something to think about:

- The car remains a favorite place to work, with 72 percent saying they make business calls while driving and nearly 40 percent saying they get their best ideas behind the wheel. I think I get stuck behind these people every morning on my way to the University.

- Slightly more than 38 percent cannot remember the last time they took a vacation. If this bothers you at all, please see this essay on why a good vacation is so important and how you might really make one happen.

- If given a choice, nearly 52 percent said they would accept comparable business results in 2008 if they could have twice as much free time. There is hope!! But wait... 48 percent said they would work even more hours if they could double their company’s sales. Fifty-two percent make New Year's resolutions for their business. Of those, 58 percent said they resolve to increase business, while only 21 percent said they want more time off.

Folks... I love entrepreneurship and free enterprise as much as anyone, but not ahead of my family and my health.

Here is a New Year's Resolution for all entrepreneurs. Slow down, just a bit. Enjoy your successes in business, but never at the expense of your health, family, faith, and friends.

Posted by Jeff Cornwall at 05:02 AM | Permalink | Comments (1)

Entrepreneurs today are not only the builders of our new economy, but also have the potential to help rebuild our society and culture. Here is one simple example of how entrepreneurs can be true community-builders sent to me by Ben Cunningham. From Deleware Online (via Crave Online):

[Pedro] Toala was paralyzed in June 2006, when kids tipped over the portable toilet he was using in a Wilmington city park. His spine broke when he fell....

[M]ost of [his] split-level house was inaccessible to a man in a wheelchair. He could not eat dinner with his family or go into the backyard with his son. Just getting in through the front door was difficult.

Early this year, Cher Przelomski and The Planning Factory, a special events company, decided to investigate how they could help the Toala family as a way of celebrating the firm's 25th anniversary. The group first tried to interest producers of ABC-TV's "Extreme Makeover: Home Edition." When ABC officials declined, Przelomski and her colleagues organized their own version.

About 70 contractors and 60 volunteers responded to revamp the entire home and make it not only more accessible, but more beautiful, energy efficient and functional. Pettinaro Relocation provided a furnished apartment for the Toalas to live in until the work was complete.

The family was able to move back into their remodeled home in time for Christmas.

Posted by Jeff Cornwall at 12:29 PM | Permalink

Sam Davidson has a nice follow-up piece to my post the other day on passion at his blog site CoolPeopleCare. He offers a thoughtful four step process that takes you from dreams to passion, from passion to plans, from plans to action, and from action back to dreams.

Posted by Jeff Cornwall at 11:24 AM | Permalink

Sam Davidson has a nice follow-up piece to my post the other day on passion at his blog site CoolPeopleCare. He offers a thoughtful four step process that takes you from dreams to passion, from passion to plans, from plans to action, and from action back to dreams.

Posted by Jeff Cornwall at 11:24 AM | Permalink

I have had several conversations over the past couple of weeks about the role of passion in new entrepreneurial ventures. Indeed, a good business model is never enough to carry you through the adversity and tough times that entrepreneurs almost always will face in their new ventures. And the career literature is full of the term passion these days. Experts encourage people to seek a career path that "ignites their passion" and helps give their life meaning.

I agree that passion is an important element in choosing the right venture to pursue. For those regular visitors to this site, this part of the "me" part of assessing opportunities that I often write about.

But I have some concern that many are taking the importance of passion and meaning too far -- to an almost unhealthy extreme. If unchecked, seeking meaning for your life from your business can lead to the kind of workaholism that many had hoped to avoid with an entrepreneurial career.

All of this discussion reminds me of a post I wrote a while back that might be worth another look....

What do farmers do? They farm. What do designers do? They design. What do managers do? They manage. What do entrepreneurs do? Well, they.....

Those who start and build businesses engage in a career that has no simple verb to describe what we do. Entrepreneur is a noun. Entrepreneurship is a noun. Entrepreneurism, a newer form of the term, is a noun. Entrepreneurial is an adjective. But, as you remember from 8th grade, adjectives simply describe nouns.

Entrepreneur comes from an Old French word (a fact that I still find hard to accept) entreprendre, which means to undertake. So it started as a verb, but now is a noun. As a side note, I am glad we did not take the literal translation of the French term to refer to those who start businesses. Otherwise all of us who are entrepreneurs would be known as undertakers instead.

So why is Professor Cornwall going into a long, and rather seemingly trivial diatribe? Am I finally becoming the doddering old academic we see mumbling to himself, shuffling across campus?

I assure you there is a point to all of this.

I have been watching the crusty old journalist (another profession that is not a verb), Dan Rather, go ungraciously and rather defiantly off into the sunset of his life. His career as a journalist is clearly behind him, but he won't give it up. And then it came to me. His understanding of who he is is defined only by what he does for a living. He defines who he is as a person by the career he has pursued. Without his career he has very little else. Without it he is lost as he has nothing else in his life that has any real meaning.

We have seen others fail at retirement. Lee Iacocca could not stay retired as a corporate executive (noun). Magic Johnson and Michael Jordan could not stay retired as athletes (noun). For all of them, what they did for their work defined who they were as people.

Careers can do this to us. If we are not careful, they can consume all that we are. And what gets lost? Our families, our friendships, and even our souls.

If we are to become all that we were put on this Earth to do, we have to temper the temptation to become consumed by our work. We need to resist becoming the noun of what we do for a living.

Work hard at being a spouse. Work hard at being a parent. Work hard at worshiping God. Work hard at being a friend. Work hard at being a good citizen in your community. And yes, work hard at your vocation. None of these alone can fulfill our humanness.

One of the risks of using nouns to describe what we do in our work is that it can reinforce the tendency we all have to get carried away with our work. I loved starting a growing businesses (most of the time, at least). I love teaching and writing. It is indeed a blessing to love what one does for a living and joy the hard work that goes along with it. But, with every virtue there is a vice looming in the background. Although hard work is a good thing, it can be taken to excess and become a vice if it keeps us from all the other things we should be doing with our lives.

American society does not make this any easier. I am reminded of the lyric from a jazz record from the 1980s that said, "Everything in moderation, and moderation is the first to go." We have become a culture of excess.

This is particularly true for the entrepreneur. We seem to create folk heroes out of entrepreneurs who expend Herculean efforts to achieve success in their businesses. And while this is good to a point, if entrepreneurial success comes at the expense of our marriage, our families, our faith, and our friendships, it is a hollow victory. If all we have at the end of our lives is our wealth, if that is all we leave behind, that is not a life well lived. As the old saying goes, "you never see a hearse with a luggage rack."

So here is what I am going to commit to: I will help to find us a verb to describe what entrepreneurs do. It has to be catchy, like the term entrepreneurship, so that people will actually use it. And if they do, maybe that will be one small step toward no longer defining those who start businesses only in terms of that activity. We can be, and should be, so much more.

Posted by Jeff Cornwall at 06:07 AM | Permalink | Comments (5)

We stress the importance of engineering personal goals and aspirations into entrepreneurs' business models. This includes both financial goals (income and wealth) and personal non-financial goals.

A profile of an entrepreneur at Career Journal shows how one entrepreneur found the balance she was seeking between work and family.

In a culture obsessed with profit and growth, how do you curb the growth of a successful start-up to preserve time with your spouse and new baby?

For Brenda Thompson, who started the business of her dreams only months before having her first baby, the answer is to ignore the siren song of expansion and keep the business small. Her story shows how taking the long view can pay off.

The interview with Thompson is worth a careful reflection by any start-up entrepreneur. She is honest about the upside and the downside of the career path she has chosen.

(Thanks to John Russell for passing this along).

Posted by Jeff Cornwall at 06:22 AM | Permalink | Comments (1)

If you have spent any time in Nashville you have probably heard of the Bluebird Cafe, the iconic music club founded by Amy Kurland back in 1982.

After twenty-five years, Amy decided it was time to exit her business. From the Tennessean:

Amy Kurland, who started The Bluebird in 1982 as a gourmet restaurant, is selling the now-legendary club to the Nashville Songwriters Association International. The group promises not to change a thing.

"I wanted to retire, but I didn't want The Bluebird to go away,"' said Kurland, 52.

Amy could have sold the club for a lot more money than she did. But, money was not the only kind of wealth that Amy created in her business. She measured her success as much in terms of her ability to create a venue to help launch the careers of struggling songwriters and musicians as she did by the income and wealth that her business generated for her.

Instead of selling to the highest bidder, she sold to a group that would forever keep her vision alive. That is clearly the act of a good entrepreneur.

The list of now famous artists who got their start at Bluebird is unprecedented in the music industry: Faith Hill, Trisha Yearwood, Garth Brooks, Josh Turner.... the list goes on and on.

My first experience with the Bluebird Cafe came while I was being recruited to work at Belmont University. The Dean took me to the Bluebird to give me a taste of what Nashville had to offer. Immediately I was taken back to my college days in the 1970s. Ann and I loved to listen to coffeehouse musicians -- singer songwriters just like the Bluebird hosted night after night. (A note of trivia: I tried my hand as a coffeehouse musician a time or two in those days). I was hooked.

We now get season passes every year to go to Bluebird on the Mountain. Bluebird teamed with Vanderbilt University to offer a monthly Bluebird songwriters night under the stars on top of the nob (that is what we call big hills that are not quite mountains here in Tennessee) where Vanderbilt has their observatory. It runs from spring through fall.

Thanks, Amy. Thanks for having the courage to start Bluebird, and thanks for having the courage to insure it will stay the Bluebird now that you are moving on in your life.

Posted by Jeff Cornwall at 07:24 AM | Permalink | Comments (1)

We are finding more and more young women being drawn into entrepreneurship as a way to gain more control over the balance between family and careers. This article at the Wall Street Journal shows that is it not just the Moms who are seeking this type of lifestyle balance.

Interviews with men who stayed home with their children for several years, and are now looking back on it, paint a different picture. While much attention has been paid to at-home mothers who opt out of the corporate rat race for good, many at-home dads are quietly doing the same thing -- finding flexible alternative work. And while the adjustment can be rough, some of these men discover at-home parenting marks a permanent turning point toward better life balance.

Posted by Jeff Cornwall at 04:30 PM | Permalink | Comments (1)

Amy Lynch has an interesting post at her site about Generation Y workers (or as I call them the Entrepreneurial Generation). She is a consultant on Generation Y -- yes, it seems we need consultants on this generation....

From her site:

Millennials grew up during an era of extreme informality. Polite behavior and face-to-face skills are not a given with this group. Even when they want to be polite, be a valuable employee or provide customer service, they may not know how. Furthermore, they grew up communicating by computer, so they may miss the nuances of your body language or tone of voice that could tell them when they're doing something that isn't up to standard.

So the question is, how do you distinguish Millennials who have no interest in or incentive to work (and whom you cannot continue to employ, at least not at this stage of their lives) from those who are simply behaving Gen-Yishly and need coaching rather than firing?

(Thanks to my colleague -- and fellow Kentucky Wildcat fan -- Lori LaBleu for passing this along).

Posted by Jeff Cornwall at 03:54 PM | Permalink

We had the pleasure to welcome Dr. Michael Morris and Dr. Arthur Brooks (both from Syracuse University) to our campus yesterday. It was part of the kick-off for our new major in Social Entrepreneurship here at Belmont that is scheduled to begin next fall.

Arthur Brooks may be a familiar name to many of you. His latest book, Who Really Cares: The Surprising Truth About Compassionate Conservatism, has gotten a lot of attention in the press. He gave a morning talk titled Giving in an Entrepreneurial Culture based on the research behind this book. Here are some highlights from his talk:

- Americans gave $295 billion in 2006, with 75% of this amount coming from private individuals

- 75% of American families give to charity and 50% volunteer their time

- Per capita, Americans give 3.7 times more than the French, 7.1 times more than the Germans, and 14.3 times more than Italians

- His research suggests that Americans give more because they are rich, but also that in giving more we become richer. He estimates that for every dollar Americans give they become 3.75 dollars richer.

- Givers are much happier than non-givers. It seems that there are physiological responses to being charitable that result from giving. In fact, we are hard-wired to give to others and when we do give it makes us happier, healthier and richer.

He summarized his findings by dispelling the four common myths about giving:

Myth #1: Giving makes us poorer

Giving is not the zero sum that so many assume. Those who give become richer over time.

Myth #2: People are naturally selfish

As mentioned above, we seem to be hard-wired to give. It is not natural for humans to be selfish. Rather, it is natural to give to others.

Myth #3: Giving is a luxury

The working poor give the highest percentage of their income of all income brackets. Second come the rich. The stingiest are the upper middle class.

Myth #4: An entrepreneurial nation can afford to forgo service

In fact service is part of what seems to have built our entrepreneurial culture and economy. One of my favorite essays on this was the 1998 article by George Gilder, The Soul of Silicon.

There has been quite a bit of controversy over who Dr. Brooks found actually gives the most. It seems that conservative Americans give much more than liberal Americans. The myth that conservative capitalists are greedy could not be any further from the truth.

I will write another post before the end of the week on the talk on social entrepreneurship that Drs. Morris and Brooks gave to our campus.

Posted by Jeff Cornwall at 06:11 AM | Permalink | Comments (2)

For those of you in the Middle Tennessee area, I will be giving a talk today on the new book that I co-authored with Mike Naughton, Bringing Your Business to Life: The Four Virtues that Will Help You Build a Better Business--and a Better Life, which is part of our Good Entrepreneur Project. The book is scheduled to be released next summer.

I will be talking at Christ Church Cathedral in downtown Nashville at 6:30 p.m.

Posted by Jeff Cornwall at 07:51 AM | Permalink

There is a perception that that small businesses pay much less and are as good to their employees as are large corporations. The latest data from the SBA tells us that the low pay is not exactly true -- small business pay is up to 90% of that paid by large businesses. And the just released list of top small businesses to work in from the Wall Street Journal and the non-profit Winning Workplaces shows that they are at least as good to their employees.

While each company is very different, we encountered some common themes: These small businesses tend to let employees at all levels make key decisions, and they groom their future leaders from within. They offer generous traditional and untraditional benefits (how about a six-week sabbatical?). And they constantly hunt for new ways to improve the employee experience or engage employees.

And many share a sizable slice of their profits with employees, teaching them to read company financial statements so they grasp how their job is connected to the success of the organization.

These small businesses set a high standard that any small business owner should aspire to achieve. The article offers compelling profiles for each small business on this list. These offer a road map to help entrepreneurs build truly good cultures for their employees.

If you think your business or one that you come in contact with should be on this list, you can nominate them for the 2008 list here.

Posted by Jeff Cornwall at 05:32 AM | Permalink

My column this week in the Tennessean encourages entrepreneurs to translate their ethics and values into concrete actions in their businesses.

While business ethics is getting much more attention in the press, in the boardroom and in the classroom, I am concerned that our definition of business ethics is sliding into a legalistic world of rules compliance.

Whether it's in everyday life or in the business world, we have to be careful not to boil morality down to a simple list of don''s that serves as a checklist of how to be ethical.

Business ethics should so much more than a list of rules to follow. It should be a much broader set of standards of how we treat one another..

Posted by Jeff Cornwall at 05:27 AM | Permalink | Comments (1)

I had the pleasure of giving a guest lecture today based on our new book, The Good Entrepreneur (co-authored with Michael Naughton from the University of St. Thomas). It is so affirming that today's students are looking for more out of their business than simply cash. Don't get me wrong -- they want to be financially successful! But they also want so much more out of their lives and view an entrepreneurial career as a path to reach all of their goals in life.

In our discussion today we talked about the question: "Who is the good entrepreneur?"

Traditional entrepreneurial virtues have been thought of in terms like ambition, ingenuity, diligence, perseverance, tenacity, and self-discipline. While these virtues are necessary for building a financially healthy and successful venture, they ignore the fundamental purpose that leads many people to become entrepreneurs.

When we survey entrepreneurs and ask them how they define success in their businesses they will include things like building a certain type of culture in their businesses and creating good jobs for people in the same breath as building profits and wealth. Building a culture that reflects our intention of how we want to treat employees, customers, and other stakeholders in a way that is consistent with our core values requires that we broaden how we define entrepreneurial virtues. It does not mean that the traditional virtues listed above are unimportant or irrelevant -- quite the contrary. They are necessary to create a financially successful business. But they are not sufficient to create what we call a truly good company.

Being a good entrepreneur challenges us to think about the virtues that define our character. Character forms with each act and each decision we make in our business. It is formed by the opportunities we choose to pursue, who we choose as business partners, who we hire, our product and market decisions, and how we engage our local communities. Every business decision or action we take, no matter how small, can shape this character.

The executives at Enron did not wake up one morning and suddenly decide to cheat their employees and shareholders. In all probability their actions were the culmination of a career of actions and choices that shaped who they became as people, which dictated how they would act when it came to the big decisions that led to that company's demise.

We choose to look at entrepreneurship in our book from the classic cardinal virtues of prudence, justice, courage and temperance.

Prudence refers to being good stewards of the resources we pull together from others to build the business. We understand the obligation we have to those who give us their money, their labor, their business, and ultimately their trust. The good entrepreneur does not take that trust lightly.

Justice refers to treating people fairly. For example, if our employees help us create profits and wealth, it is just to find ways to share that with them be it through compensation, profit sharing, phantom stock, stock options and so forth.

Courage doing what is right in spite of the added risks and challenges that this path in life creates.

Temperance is understanding that we are more than entrepreneurs. We are spouses, parents, friends and citizens. We need to take actions that lead us to be good in all that we do. That may mean that we temper our ambitions to make sure we have time for family and friends.

So who is the good entrepreneur?

The good entrepreneur is intelligent and technically competent. She is a good steward of the resources and gifts she has available. She is prudent.

The good entrepreneur builds strong relationships in his family, with employees in his business, and in the broader society. He does this by being just.

The good entrepreneur overcomes obstacles in building her company, but does so without ever compromising what she knows to be truly right. She does this with courage.

The good entrepreneur moderates his work ethic with rest. He does this through temperance.

I will be writing more on all of this as our book comes closer to being released next year by Regal Books.

Posted by Jeff Cornwall at 10:13 AM | Permalink | Comments (6)

There is a book that I have been meaning to read that I saw reviewed in our local paper here in Nashville. I have not had a chance to read this book yet, and usually I don't write about a book until I have read it. But, the concept behind this one caught my attention. The book's title is RUT Management: Discovering Adventure in the Routine of Life. It was written my local writer Mark Cornelius. Here is the abstract from Amazon:

The Answer's Been Right in Front of You the Whole Time! Most of us travel well-worn paths with the expressed mission of breaking out of the RUT. It seems to be the right thing to do on the surface; who wants to think of themselves as being in such a routine that they can not, should not, dare not veer off the trail? And You Thought "Escape" Was Your Only Option! Not another self-help book, RUT Management is a fun but truthful look at the very human tendency to pursue distraction rather than maintaining the focused pursuit of long-term goals and dreams. This work addresses the constant conflict between "convention" and "change" in our lives. It examines RUT development, RUT anatomy, RUT relationships, and RUT management as tools for navigating the path through RUTs, and for DISCOVERING ADVENTURE IN THE ROUTINE OF LIFE.

When I was a full-time entrepreneur, my life often seemed like constant chaos. One thing that stands out in my mind from this period was how precious certain routines in my life were to me.

The weekly trip to the riding stable with my daughter. My daughter and I sang or whistled the same silly songs every time we drove through the country on the way to her riding lesson. I stood at the same place along the same fence during every lesson, and marveled that such a little girl could control such a gigantic animal.

Going to church with my family. Our son was the one who made sure we went to church every week -- even when we were on vacation. Whether we were in the mountains in North Carolina, or in the middle of Florida, come the weekend, he would always ask the question -- Where are we going to go to church? I have to admit that it occasionally crossed my mind to skip church, especially on vacation, but I was always snapped back to the reality of the importance of this routine in our family life together.

Eating dinner at the table. This was the routine that my wife created for our family. We began every evening meal with a prayer -- the same prayer every time. And then the conversation would always begin with the same question from me -- What was fun today? The kids would then tell us about the little things and the big things that happened in their lives.

Friday pizza with my partners. Every Friday at lunch, my two partners and I closed the door to the conference room and shared pizza. The staff knew not to disturb us. Did we plot grand strategies for the future course of our business? Every once in a while we would. But mostly, we shared each others' company, traded funny stories, and talked about our families. It was the one time each week that the three of us always would share the fellowship of a meal.

I could not agree more with the premise of this book -- get in a rut!

Posted by Jeff Cornwall at 06:10 AM | Permalink | Comments (4)

My column this week at the Tennessean is on rest and vacation:

Rest. Entrepreneurs can never seem to get enough of it. Vacations. Not a word that is in many entrepreneurs' vocabularies.

According to a study just released by American Express Small Business Monitor, about two-thirds of small business owners find it stressful balancing their personal and business lives. Yet true rest and real vacations are essential not only for the entrepreneur's personal health but for the health of the business.

So how do you build a business that allows you to create balance in your life?

You can find the entire column here at the Tennessean.

Posted by Jeff Cornwall at 05:50 AM | Permalink | Comments (3)

According to the latest release of the results from OPEN from American Express Small Business Monitor, which is a semi-annual survey of small business owners, entrepreneurs are struggling with finding balance in their lives.

- While business owners recognize the importance of "down-time" in their lives and most are satisfied with the amount of leisure time they have (81%), most report that carving out this time does not come without stress. Two-thirds of business owners (64%) find it stressful balancing their personal life and their business. Women business owners are more stressed by work/life balance than their male counterparts (71% vs. 62%).

- Two-thirds of business owners (67%) report they find themselves making sacrifices in order to be an entrepreneur. Among those who feel they are making sacrifices, family (52%) and friends (42%) are areas where they make the most sacrifices, followed by personal finances (36%) and health (35%). Male business owners are more likely to find themselves making sacrifices in their personal lives in order to be an entrepreneur when compared to women (73% vs. 65%).

- As business owners find themselves trying to achieve balance, they identify flexibility as the most essential entrepreneurial attribute. One-third of business owners (34%) identify flexibility as the most essential aspect of being an entrepreneur. Following at a distance is working well under pressure (24%) and knowing the market (18%).

- Taking their own advice on the importance of flexibility, two-thirds of business owners (64%) report making personal time for themselves during the business day. Men are slightly more likely than women to make personal time for themselves (66% vs. 60%). Although entrepreneurs realize the importance of taking time for themselves during the business day, nearly half (45%) consider taking time off from work to pursue a leisure activity a 'guilty
pleasure'. Female business owners are more than four times more likely than their male counterparts (18% vs. 4%) to consider ignoring an email as a "guilty pleasure".

- There may indeed be a connection between exercise and business success. Fifty-nine percent of small business owners report exercising several times a week with nearly one-quarter (24%) exercising every day. Nearly three-in-ten (29%) business owners with companies over $1 million in revenues say they exercise every day.

- The vast majority of entrepreneurs have the support of their significant other. Most entrepreneurs (89%) report a happy marriage or relationship with their spouse or significant other. Of those who report having a happy marriage, a similar number (81%) believe being an entrepreneur contributes to their happy marriage/relationship.

- Entrepreneurs are not only concerned with their own well-being. When making business decisions, eight-in-ten business owners (80%) take into consideration how their decision will affect their employees and their livelihood. In terms of offering employee benefits, nearly seven-in-ten employers (69%) believe it is important to offer healthcare coverage to their employees.

- Growth is a priority for a large majority of business owners. Over the next six months, seven in ten (71%) small business owners report planning to grow their businesses in a variety of ways. While most in this group (50%) plan to grow by selling more of the same product or service, one in five (22%) will introduce new products or services, and 14% will branch out into new markets or increase investments in their business (11%).

- For many, business is a family affair, and six in ten entrepreneurs (61%) who are parents would like their children to join their business. It will be interesting to see how many of these children agree!

Posted by Jeff Cornwall at 05:34 AM | Permalink | Comments (2)

When John Paul II was Pope, many misunderstood his position on capitalism. It was not that he was against free enterprise -- quite the contrary. He saw the liberating aspects of property ownership. What he did do was to challenge us to use this freedom in ways that promoted a better society and a better world. He reminded us that we are stewards of the gifts we have at our disposal in our businesses.

It seems that the same confusion is now happening with Pope Benedict. But as Fr. Sirico points out in this essay from the Wall Street Journal Europe, this Pope is giving the same message as his predecessor. Free enterprise and entrepreneurship yields liberty for societies. How we conduct ourselves in our businesses and how we manage the fruits of our success are issues related to our ultimate salvation.

Posted by Jeff Cornwall at 07:33 AM | Permalink | Comments (1)

For those of you who are interested in exploring the integration of your faith into your business I have a recommendation of an excellent book. Devotional Ventures, edited by Corey Cleek, is an inspiring read. It includes 60 entries by business people of all walks, including -- to my surprise -- my good friend Barry Landis.

Posted by Jeff Cornwall at 06:19 PM | Permalink

BusinessWeek Online has a story that profiles 18 women who have left high-power corporate jobs to join the ranks of start-up entrepreneurs. The reason -- "Only 2 of the 18 women on our list mentioned making more money as their primary motivation."

Building a different kind of organizational culture seemed to be a major driving force for many of these women. While still striving for high performance, these new entrepreneurs want to create a more collaborative and team-driven culture. It appears that they also want to create cultures that are more supportive of employees.

Cecelia McCloy, the 52-year-old co-founder of Integrated Science Solutions, a Walnut Creek (Calif.) science and engineering firm with $9 million in sales, says she specifically set out to create a company that was friendly to families. Her employees also get eight hours of paid time off per year to participate in civic or charitable activities -- say, to volunteer in their children's classroom. Last year, about 20 of her 75 employees took advantage of the option. And every month, she asks managers to give her information on employees who did something exceptional for customers or their colleagues. McCloy then writes a thank-you note to those folks.

From our own research for our new book, we have found that these types of goals are also shared by many male entrepreneurs. It is heartening to see entrepreneurs of both genders pursuing such rich and well-ordered definitions of success in their businesses.

(Thanks to Ben Cunningham for passing this along).

Posted by Jeff Cornwall at 05:41 AM | Permalink | Comments (2)

While Business Ethics is getting much more attention in the press, in the Board room, and in the classroom, I am concerned that our definition of business ethics is sliding into a legalistic world of rules compliance. I was reminded of this today at morning Mass. The priest was talking about the story of Jesus breaking the rules of the scribes about the Sabbath, through his acts of healing and teaching about the greater good.

We have to be careful not to boil morality, whether it be in everyday life or in business, down to a simple list of don'ts that serves as a checklist of how to be ethical.

Business ethics should so much more than a list of rules to follow. It should be a much broader set of standards of how we treat each other. It is the pursuit of being good in how we treat our employees, our customers, our investors, our families, our suppliers, and so forth. That cannot be boiled down to a simple checklist. Being ethical, being good, is having integrity in all that we do. It requires courage to do what is right toward others, no matter how hard it might be at certain times in our lives.

Posted by Jeff Cornwall at 08:12 AM | Permalink

There is an interesting guest column at Inc.com on religion and work written by Alan Wolfe, Director of the Boisi Center for Religion and American Public Life at Boston College. Wolfe writes the following:

Workplaces are not public in a legal sense and, because they are not, courts will generally allow companies room to find their own ways of accommodating the rights of believers. But workplaces are public in a social sense; they are composed of groups of people, and the larger the groups grow, the more likely there will exist religious differences among them. There is an implicit bargain here for private companies to accept. Make room for diversity and tolerance, and few will object to religious expression in the workplace. Confine the right to expression only to select groups, however, or use one faith to browbeat others, and those others will rightly object. The choice is up to each company.

I believe that Wolfe has missed an important part of this issue by looking at this only from the position of the individual employee and to define it only in terms of evangelization toward a specific religion. There are many privately owned businesses in which the owners have used the core values of their faith to shape how they start and grow their companies. They build their values into the policies and practices, and into the culture of their companies, that govern everyday activity in their businesses.

These entrepreneurs are not doing this to convert their employees nor to make their firms an extension of some particular church. They do this because their faith is based on integrity. What is good and what is right does not change once they walk into the door of their businesses. And they find ways to integrate this into how they run their companies. It shows up in compensation systems, job design, employee ownership programs, policies governing customer relations -- the list goes on and on. It is not a matter of using their businesses to save others souls, but to act in ways that assure that their own souls do not become compromised by how they act in their business.

The specific religion that these entrepreneurs practice becomes inconsequential, as does the religious tradition of their employees. My experience and the results of the interviews we have conducted for our forthcoming book suggest that because the focus is on how the entrepreneurs' faith and values guide their actions, these businesses become good places that are valued by employees of all faiths. They are companies that treat all employees with dignity, fairness, and respect, that treat their customers well, and that have a truly good culture.

Posted by Jeff Cornwall at 08:57 AM | Permalink

An entrepreneur's vision should communicate what her business can become. It paints a clear and compelling picture for employees, investors, suppliers, and other stakeholders of what they are buying into at a time when the business has little or nothing to show. But to be complete, this vision should describe more than the product the business will make and market it will serve. It should also paint a picture of how the entrepreneur intends to conduct herself as she starts and grows her business.

The entrepreneur's values should also be reflected in her vision for the business. How will she conduct herself as she starts and builds her business? How does she want to treat her employees? How does she want those employees to treat the customer? What are the principles that will shape how her employees act in her business?

The values she brings to her business should be the same values that guide her life outside her business. This is what creates true integrity in her life. Each action in her business will shape her character. The opportunities she pursues, who she chooses to do business with, who she hires, how she treats each stakeholder of her business, all develop her character just as much as her actions in her family and in her community.

So her vision will not only guide her business strategically, but also guide the development of its culture. And it will also help shape who she becomes as a person.

Posted by Jeff Cornwall at 07:53 AM | Permalink | Comments (1)

There are three key questions that every entrepreneur should ask while assessing to see if an idea is a real business opportunity. Is there really a market? Is there enough margin to make the business feasible? Is this business really for me in terms of my passion and my experience? Answering these questions is a process that entrepreneurs should go through with every idea they are seriously considering for a new business. As I have written earlier, answering these questions is a step long before pen is put to paper to write a business plan or a dime of money is raised. My students sometimes refer to this as answering the "3 M's".

There is also a fourth "M" that should be assessed, That is the morality of the business idea. Now what is moral is a tricky issue. But if we are going to be serious about running an ethical business, shouldn't it begin at the very first steps of the start-up? But what makes a business moral?

The morality of a new business relates to two issues. First, do we have a vision to build a good business? Do we intend to business that creates a good culture for its employees? Do we intend intend to treat our external stakeholders, such as customers, suppliers and investors, with integrity and honesty?

The second part of building a good business from the very beginning relates to product or service that we offer to the market. Does our business idea make a positive contribution to society? I am not saying, for example, that only entrepreneurs who make new medical devices that save millions of people's lives is the only type of moral businesses. That is not the point. Rather, do we have a vision to offer a product or service that in some way will make peoples lives a little bit better, even if in some small and insignificant way.

In many ways the issue here comes down to intent. The same business concept can be moral when implemented by one entrepreneur and not moral when started by another. Let me offer an example, but please know that I am not suggesting that I know the intent of either of these entrepreneurs nor pretend to know what is in their hearts and minds, for that is where this ultimately rests.

These examples come from a recent story in US News on genetic screening for the potential to come down with severe genetically related diseases. On the surface this sounds like a pretty good thing to offer to the market. Some of the companies offer this service in a way that clearly is intended to first and foremost help their customers. They only offer tests that are scientifically validated and do so with one-on-one genetic counseling as part of the service. Some other companies in this story offer tests that are of questionable validity and reliability and provide the results with vague and, according to the US News story, potentially misleading written explanation of the results. Again I do not pretend to judge what either entrepreneur intended here, but in looking at their actions and how they implemented the same basic concept, one can infer some possible differences in their visions for this same business concept.

A few years ago I was team-teaching this concept with my co-author Mike Naughton from the U of St. Thomas. One of our students asked us if his family business was a good business, a moral business. After all, their business simply planted bushes and tress along state and county highways. What did that really contribute to society, he asked? But Mike assured him that indeed this business could be good, as long as their vision included good intentions for their customers, their market and their community. The student said that they took pride in making people's long and often tedious commutes a bit more pleasant and enjoyable.

"Then that is indeed a good business," Mike assured him.

Posted by Jeff Cornwall at 05:20 AM | Permalink

The generation whose leading edge is just coming into the work force, the ones that many of us call the Entrepreneurial Generation, are sick and tired of the simultaneous bragging and whining that we Baby Boomers constantly offer up when talking about our work and careers. They are the children of the tale end of the Baby Boomers -- and they are angry and they want to make changes in our culture.

One of my students offered this comment to a post I wrote on Character last summer:

There are many things that help forge our character and values. My generation, from what I've seen, is really focused on keeping family first, even before career. Some say that this is because we watched so many baby boomers screw this whole family thing up. My take on it is that because the baby boomers sometimes grew up wanting, they determined in their minds that their families would want for nothing. Unfortunately, my generation has all they want, but grew up with workaholic parents who were absent in their lives. I believe we're searching to find that balance between family and career.

Penelope Trunk, who writes a blog called Brazen Careerist, offered her take yesterday on a Harvard study on "extreme careerists" (who are most often Baby Boomers):

I cringe every time I read an interview with a "Successful Mom" who works a 70 hour week and can miraculously balance her kids and husband's 70-hour week as well. All of this womens magazine [stuff] is self-reported, and what mom or dad is going to stand up and say they are destroying the kids by working long hours?...

Here's what the Harvard Business Review article should have said: The long-standing practice of baby boomers to have dual-career families with no one home for the kids is bad for the kids, even if the parents are enjoying themselves. Fortunately, the post-boomer generations recognize the problem and plan to not repeat it.

And if you think her words sting, make sure to read the comments that follow her post!

Cal Thomas' quote on the mess we Baby Boomers have left the generations that follow us are worth repeating:

My generation has been obsessed with making money and acquiring things in place of investing necessary time on marriage and children. The message the kids get is that if marriage is mostly about accumulating wealth and acquiring stuff, they can do that without getting married.

Family trees are beginning to resemble kudzu...

Other countries and cultures around the world are not the only people ready to rebel against today's American culture -- so too are the young adults who are inheriting it.

Posted by Jeff Cornwall at 06:14 AM | Permalink | Comments (6)

Since we are about to enter a day of complete gluttony, followed by a day of consumerism gone mad, I thought it might be good to reflect again on the original intent behind the Thanksgiving holiday:

"Whereas it is the duty of all nations to acknowledge the providence of Almighty God, to obey His will, to be grateful for His benefits, and humbly to implore His protection and favor; and Whereas both Houses of Congress have, by their joint committee, requested me to recommend to the people of the United States a day of public thanksgiving and prayer, to be observed by acknowledging with grateful hearts the many and signal favors of Almighty God, especially by affording them an opportunity peaceably to establish a form of government for their safety and happiness:

"Given under my hand, at the city of New York, the 3rd day of October, A.D. 1789."

George Washington

Posted by Jeff Cornwall at 07:17 AM | Permalink

My father passed along a news clip about a study called the Bank of America Study of High Net-Worth Philanthropy that compares the giving patterns of entrepreneurs versus those who inherited their wealth. High net-worth is defined in this study as someone having at least $200,000 in income or $1,000,000 in net assets. The conclusion: high net-worth entrepreneurs give on average $232,206 compared with heirs and heiresses who give an average of $109,745. For those of you not ready for mental math this morning, that is over twice as much! The study is long on facts and statistics, and short on any analysis, so I'll take a stab at it.

Most entrepreneurs I know who have had financial success still pinch themselves once in a while to make sure their successes really happened to them. They often use words like "blessed", "lucky", and "fortunate" to describe their success. The days of sweating payroll are still fresh in their minds. They remember how many times they came within days of failure. They remember all of those sleepless nights.

Most entrepreneurs I know understand that they did not make their business a success in a vacuum. It took the hard work of employees who also took a risk by joining their fledgling business. It took investors who took a risk in their idea. It took bankers who believed in their cash flow and their character. And many see God's hand at work in their fortune, understanding that they are but stewards of what they have been given.

Most entrepreneurs I know viewed success, from the very beginning of their business, to mean much more than profit, a paycheck and "the big payday." Many talk about the ability to give back if they able to be successful. I do an exercise with aspiring entrepreneurs in which I ask them what they would do if they won the lottery tomorrow. For many, philanthropy is at the top of their list.

I will not even try to judge what is in the hearts of those who inherit their wealth. I will say for many of them, it is a fixed and limited sum. What they get from their inheritance is all they have. Entrepreneurs, on the other hand, build their wealth from a process that they can repeat over and over again.

In this age when out economy is being transformed by entrepreneurs, what a wonderful opportunity to look more and more to them to take on the burdens of our society. What a wonderful opportunity to rethink our broken system of governmental redistribution of wealth that is doomed to entropy, rather than the boundless potential of entrepreneurial wealth created and freely shared.

Posted by Jeff Cornwall at 05:29 AM | Permalink | Comments (3)

In case you don't follow college football, there is an amazing story building this season. Rutgers University, a team that for years and years was lucky to win a few games, is undefeated and knocking at the door of a national championship. OK, the odds of the championship are a long-shot at best, but from someone teaching at a small Division I school, this kind of story warms my heart.

It seems that Rutger's success is also warming the bank account of at least one small business owner in New Brunswick, New Jersey. From the Philedelphia Inquirer:

Yesterday afternoon, fans hungry for Scarlet Knights merchandise packed into Scarlet Fever, a popular shop on Somerset Street, where owner Steve Ostergren juggled two ringing phones. The store, teeming with jerseys and sweatshirts and flags, had bare patches where customers had grabbed up gear as fast as workers could unpack it.

"This is the busiest we've been in 18 years," Ostergren said. "It's unbelievable."

Ostergren, a Rutgers alumnus, was thrilled.

So is Ostergren trying to profiteer from the sudden surge in demand for all things that are red and have a big "R" on them? Not in the least. In fact, in an interview with Wall Street Journal Radio this morning he said that he had not only kept his prices in line, but had actually added large quantities of a couple of tee shirts for students that are priced at only $5.

He knows that it is these same customers who will keep him in business in the years to come -- even if the football team falls back into its losing ways. If he treats his customers fairly now, they will remember him later.

By the way -- don't even bother to try and buy anything from Ostergren's web site. His store is so busy that he has temporarily suspended sales via the web.

Posted by Jeff Cornwall at 05:14 AM | Permalink | Comments (1)

Greg Mankiw's Blog has a summary of the New York Times review of a new book on family business Dynatsties: Fortunes and Misfortunes of the World's Great Family Businesses, by David S. Landes. The book profiles a handful of family businesses, some famous and some not as well known.

While it is interesting to note that "family" businesses in the Fortune 500 (no longer private family businesses, but still family controlled) outperform their "professionally managed" counterparts, their recognition of the power of a truly good corporate culture is what is most intriguing to me. From the New York Times:

There's also much to be said for family "stewardship" -- the sense that you have been entrusted with a multigenerational inheritance, not just a company. The Northeastern grocery chain Wegmans is now run by a fourth generation of family managers. Regularly voted one of the best American employers, it is known for the range and quality of its goods, its beautifully appointed stores and its knowledgeable and friendly staff. The buyout experts who snapped up grocery chains through the 1980's and 90's, firing workers and cutting benefits, would not have understood what the Wegmans are about.

The link to Greg Mankiw's Blog came from Ben Cunningham, who raised the interesting point in his e-mail to me about what these businesses can teach us about the estate tax. These families not only build good companies, but profitable ones, as well. Is it not in the public interest to try and support these businesses rather than try to tear them apart through the burdens of the estate tax?

Posted by Jeff Cornwall at 12:58 PM | Permalink

A common practice in writing business plans is to offer three scenarios: most-likely, best case and worst case.

When I see worst cases presented in most business plans, they are almost always not the worst case scenario. They are most often a less optimistic variation of what the entrepreneur thinks will actually happen. The real worst case should be this: if things don't go as planned and the deal fails, what is the outcome for investors and lenders?

Entrepreneurs seem to operate under the assumption that if they don't plan for failure, it can't happen. If they don't ever address the real worst case, investors and lenders won't think about it.

I get push back on thinking and planning for worst case from my students. "Don't you think my idea is any good?" That is not the issue here. Even good ideas can fail, as most opportunities come from a dynamic, changing environment.

All of this came to mind after a conversation yesterday with my father. We were talking about a potential deal, and he made the statement that he wants "protection" in a deal. That was an interesting word to me. After all, we aren't a bank that can get a personal guarantee on debt. Any investment would be at risk.

But, he meant something else. He simply looks at every deal and imagines what it will look like if it goes bad. What can he hope to take away from it? He thinks this way because his generation saw the ultimate worst case -- they lived through the depression. It is not that he is risk averse as a result -- to the contrary. Rather, he is always soberly realistic that deals go bad, and we should understand where that will leave everyone involved. That is a perspective that we seem to be losing in our society.

Failure is real, and it can happen to even the best among us. So plan for it. Just in case it does happen, and hopefully the odds of that are slim if you have done your homework, you will be ready to move on to the next opportunity. You will have created a deal in which you have actually planned the worst case and have created a business where the worst case is not the end of the world for you -- just for that deal.

And just so you don't go in the wrong direction with this, your outcome in the worst case should not be to declare bankruptcy for the deal. That is a reputational scar you do not want in your background as an entrepreneur if you can avoid it. To plan for bankruptcy is in my opinion, unethical. Once in a while it unavoidable, but that should not be the predetermined plan.

Don't be in denial about the worst case. Understand it. Plan for it. Make it an outcome you can move on from.

Posted by Jeff Cornwall at 09:14 AM | Permalink | Comments (2)

Married couples are now a minority in America, according to a recent article in the New York Times.

Reflecting on this, columnist Cal Thomas puts at least some of the blame where it belongs -- on those of us who are the Baby Boomers:

My generation has been obsessed with making money and acquiring things in place of investing necessary time on marriage and children. The message the kids get is that if marriage is mostly about accumulating wealth and acquiring stuff, they can do that without getting married.

Family trees are beginning to resemble kudzu....

The Entrepreneurial Generation (those 25 and under) places the blame in the same place (see Michelle's comment on this post as an example of how they feel). They want to try to work hard on both their careers and their families. For the sake of both our culture and of this great country, let's hope they get it right...

Posted by Jeff Cornwall at 08:35 AM | Permalink | Comments (2)

The results from a new study on cheating among MBA students conducted by the Center for Academic Integrity at Duke University is quite disheartening. From Bloomberg.com:

The study found 56 percent of MBA students acknowledged cheating....The study offered two main explanations for the cheating: the pressure-cooker atmosphere of business school leaves many students willing to compete by any means available, and corporate scandals have distorted the standards of many business students.

So what these students are telling us is that the "ends justify the means" and "I might as well get started cheating now, because that is what I will need to do in corporate America."

Another study found that more than 70% of undergraduate business students admit to cheating.

Corporate America has helped to corrupt our culture with all of its scandals. My only hope is that the entrepreneurial generation will create a new breed of American business leaders that seeks to do well in business without sacrificing their integrity. That is why we need to infuse not just legalistic ethics, but morality and values into business education.

Posted by Jeff Cornwall at 07:36 AM | Permalink

I have made some recent posts about the new book I am writing with Mike Naughton from the University of St. Thomas. It comes out of the work we did developing a class that examined the process of starting and building a business from the perspective of Christian social teaching. The class won a national award (as an entrepreneurship class) and resulted in the two of us writing several scholarly pieces related to our work together. Too often traditional approaches to business ethics are from a legalistic or a morally relativistic perspective. We believe that morality should guide our ethical decisions.

Our book brings the message of how faith can inform, guide and ground the formation and development of new ventures, to the entrepreneurs who are leading today's entrepreneurial economy. We offer entrepreneurs both a moral perspective and practical tools that they can use in their businesses. We organize the book around the four cardinal virtues from Aquinas: Justice, Prudence, Courage, and Temperance.

Justice can come to life through innovative compensation, benefit, and profit-sharing programs. What we accomplish in our businesses is only because of the support and efforts of many other people who deserve a share of our successes. Prudence is practiced by being intentionally careful stewards of the gifts we have to work with -- our talents, other people's money, the labor of our workers, and so forth. Courage is not just the intestinal fortitude to start the business, but staying true to our vision and values to build a better place to work and become a profitable business. Temperance is understanding our wholeness as people. As I wrote a few weeks ago, there is a risk in viewing your career as a noun.

We want to find a business publisher for this book, but there seems to be an uneasiness with overtly bringing God and faith into how we do our work as entrepreneurs. I have heard this uneasiness, this uncomfortableness, in the voices of some of the editors as we have explained our book.

This agnosticism also applies to how others think we should live our lives in today's culture. The jounalist Fred Barnes recently told a story about a famous liberal who came face to face with the reality that many want God out of our culture:

Back in the early 1990s when I was still at The New Republic, I was invited to a dinner in Washington with Mario Cuomo. He was then governor of New York, and had invited several reporters to dinner because he was thinking about running for president. At one point that night he mentioned that he sent his children to Catholic schools in New York because he wanted them to be taught about a God-centered universe. This was in the context of expressing his whole-hearted support for public schools. But from the reaction, you would have thought he had said that one day a week he would bring out the snakes in his office and make policy decisions based on where they bit him. He was subsequently pummeled with stories about how improper it was for him, one, to send his kids to religious schools, and two, to talk about it. (Imprimis, Hillsdale College).

Our values and our faith should inform our actions because all that we do, be it in our families, our businesses, or our communities, shape our character. I know we will soon find a good publisher, but it is sad that in our culture we have become so quick to compartmentalize God and faith from everyday life.

Posted by Jeff Cornwall at 05:13 AM | Permalink | Comments (3)

Every virtue has two ditches that take it beyond virtue and into vice: one ditch is deficiency and the other one is excess. Courage, which is a commonly used virtue for entrepreneurs, is no exception.

Take for example Andre Agassi. What a wonderful career he has had in tennis, winning eight major tournaments that included a career grand slam.

This past weekend he played his last US Open. The word courage seemed to come up every five minutes on TV and in every story written about his efforts this year. For those of you who are not tennis or even sports fans, Agassi played this last year with a severely injured back. But, he played on, in spite of his father publicly stating that he should not.

He was touted as a hero. "Give Agassi credit, he retired swinging", was one headline.

While he has shown great courage in the past with his comebacks, playing through injuries, and with his incredible work ethic, this weekend Agassi went beyond courage and into the vice of recklessness. Even the commentators who marveled at his "courage," would say in the next breath that this last tournament could cause serious permanent physical injury.

So why did he go on? It was not the money -- he and his wife have more than they can spend. It was not to win another major -- even Agassi knew he could not win again in a major.

Sadly, I think society has convinced many of us that being Herculean even when there is no hope of success is somehow noble and good. But this is not true. Every virtue, even courage has limits.

There are good lessons here for the entrepreneur. When taken too far, risk taking can become reckless. Staying with a deal or sticking with a major decision even when it is clear that the best course of action is to move on is not courage, it is recklessness. Taking risk just for the sake of taking risk is not courage, it is recklessness.

Courage has two ditches. And Andre Agassi strayed off the road of courage into the ditch of recklessness.

Posted by Jeff Cornwall at 06:14 AM | Permalink

So many entrepreneurs, and if fact so many professionals, think that what they do during their working hours has no impact on who they are outside of work. They believe they can lead a divided life, treating people one way in their work and another in their personal life.

The truth is, however, that every act, every decision we make, in some way shapes our character. If we act a certain way once, we are more likely to do it again. This is true for good behaviors as well as bad behaviors. If we lie to customers as part of our everyday business, we are more likely to lie to our employees. And if we lie at work, we are more likely to lie to our families and friends.

Virtue is nothing more than a habit. And so are vices. The more we act in a particular way the more it becomes ingrained in who we are -- it becomes part of our character.

In the fast paced world of starting and growing a business we often have to make snap decisions and act quickly to take care of a parade of challenges and crises that seem to endlessly pass by. We can lose site of the consequences of these acts and decisions. And they happen so often and so quickly that it is easy to disconnect our daily decisions and actions from our core values -- of what we believe in our heart is really right and wrong.

But each time we do this is shapes our character in some small but significant way.

All the decisions we make contribute to our character formation. Here is a short quote from the new book I am finishing up on with my co-author Mike Naughton:

So when an entrepreneur works, he affects the inner landscape of his character. The issue is not whether he changes himself, but how he changes himself. And the key to understanding the significant revealing of the entrepreneur's personhood is not found in the amount of revenues he has generated, or the percentage of market share he has captured. Rather, the moral and spiritual character of the entrepreneur will be captured in the responsible relationships he has forged with others in the actions of running his business. More specifically, this can be shaped by the opportunities he pursues, who he chooses to do business with, who he hires, decisions he makes about products and markets, decisions about whether and how fast to grow, the corporate culture he builds, and his engagement with the community as a leader and/or citizen.

It is important to take time and reflect on who we are becoming through our work. If we are not careful, we might not like who we see in the mirror.

Posted by Jeff Cornwall at 07:28 AM | Permalink | Comments (8)

I was going through the press clippings that my Dad sends me via snail-mail every few days (now you know where I get my Luddite tendencies from) and came an article that highlights a business not far from where I grew up in Wisconsin.

Badger Mining, a family owned business, was named the best place to work in the US by the Society for Human Resource Management. Badger Mining, headquartered in Berlin (pronounced BER-lin since WWII), manufactures aggregates out of silica, limestone, etc.

Here is their mission statement:

Our mission is to become the quality leader in the industrial minerals industry with a team of people committed to excellence and a passion for satisfying our customers. We will allocate all our resources by having self-directed work teams identify, evaluate, and develop our most profitable opportunities, with controlled growth and the highest quality standards. We are committed to environmental responsibility, safety, health, and integrity while providing a rewarding and enjoyable place to work.

They have been able to develop a very profitable business that has been around for twenty-seven years, while treating their employees and other stakeholders with respect:

- They were lauded in the award for their open communications, which includes communication from dissenting points of view. Employees said they felt free to discuss any decision with the person who made that decision no matter what position they hold in the business.

- Flexible work hours allow employees, or associates as they are known at Badger Mining, to attend family events.

- They have an "impeccable safety record" that got them an additional award from the U.S. Department of Labor's Mine Safety and Health Administration (MSHA) and the Industrial Minerals Association - North America

- They share 20% of profits with those who generate their profits, their employees, every quarter.

- They offer full insurance for the entire family, and if your family waives their coverage, you get the cash -- $8,000.

- They offer four $5,000 college scholarships, one to a student located in each of their four operating locations.

- Badger has been recognized for their land stewardship and conservation efforts.

This is a small business that has put their values into practice in how they run their business. They clearly manage their operations with integrity.

Posted by Jeff Cornwall at 12:35 PM | Permalink | Comments (1)

What do farmers do? They farm. What do designers do? They design. What do managers do? They manage. What do entrepreneurs do? Well, they.....

Those who start and build businesses engage in a career that has no simple verb to describe what we do. Entrepreneur is a noun. Entrepreneurship is a noun. Entrepreneurism, a newer form of the term, is a noun. Entrepreneurial is an adjective. But, as you remember from 8th grade, adjectives simply describe nouns.

Entrepreneur comes from an Old French word (a fact that I still find hard to accept) entreprendre, which means to undertake. So it started as a verb, but now is a noun. As a side note, I am glad we did not take the literal translation of the French term to refer to those who start businesses. Otherwise all of us who are entrepreneurs would be known as undertakers instead.

So why is Professor Cornwall going into a long, and rather seemingly trivial diatribe? Am I finally becoming the doddering old academic we see mumbling to himself, shuffling across campus?

I assure you there is a point to all of this.

I have been watching the crusty old journalist (another profession that is not a verb), Dan Rather, go ungraciously and rather defiantly off into the sunset of his life. His career as a journalist is clearly behind him, but he won't give it up. And then it came to me. His understanding of who he is is defined only by what he does for a living. He defines who he is as a person by the career he has pursued. Without his career he has very little else. Without it he is lost as he has nothing else in his life that has any real meaning.

We have seen others fail at retirement. Lee Iacocca could not stay retired as a corporate executive (noun). Magic Johnson and Michael Jordan could not stay retired as athletes (noun). For all of them, what they did for their work defined who they were as people.

Careers can do this to us. If we are not careful, they can consume all that we are. And what gets lost? Our families, our friendships, and even our souls.

If we are to become all that we were put on this Earth to do, we have to temper the temptation to become consumed by our work. We need to resist becoming the noun of what we do for a living.

Work hard at being a spouse. Work hard at being a parent. Work hard at worshiping God. Work hard at being a friend. Work hard at being a good citizen in your community. And yes, work hard at your vocation. None of these alone can fulfill our humanness.

One of the risks of using nouns to describe what we do in our work is that it can reinforce the tendency we all have to get carried away with our work. I loved starting a growing businesses (most of the time, at least). I love teaching and writing. It is indeed a blessing to love what one does for a living and joy the hard work that goes along with it. But, with every virtue there is a vice looming in the background. Although hard work is a good thing, it can be taken to excess and become a vice if it keeps us from all the other things we should be doing with our lives.

American society does not make this any easier. I am reminded of the lyric from a jazz record from the 1980s that said, "Everything in moderation, and moderation is the first to go." We have become a culture of excess.

This is particularly true for the entrepreneur. We seem to create folk heroes out of entrepreneurs who expend Herculean efforts to achieve success in their businesses. And while this is good to a point, if entrepreneurial success comes at the expense of our marriage, our families, our faith, and our friendships, it is a hollow victory. If all we have at the end of our lives is our wealth, if that is all we leave behind, that is not a life well lived. As the old saying goes, "you never see a hearse with a luggage rack."

So here is what I am going to commit to: I will help to find us a verb to describe what entrepreneurs do. It has to be catchy, like the term entrepreneurship, so that people will actually use it. And if they do, maybe that will be one small step toward no longer defining those who start businesses only in terms of that activity. We can be, and should be, so much more.

Posted by Jeff Cornwall at 06:49 PM | Permalink | Comments (6)

One key aspect of effective marketing for entrepreneurs is to learn how their customers think. By learning how to "think like your customer" you have a better chance of developing accurate revenue forecasts and more effective marketing plans. Every good bootstrapper has mastered the art of getting into their customers' heads and using this knowledge to get the most bang for their precious marketing dollars.

But, an article at StartupJournal reminds us of another important lesson. What customers say is not always reflective of what they really believe and how they will actually behave. Customers may say things to us that are based on what they think is socially acceptable and politically correct. But, they do not always act on what they say.

In the StartupJournal piece we find out that all of the talk by consumers about being environmentally sensitive and aware does not always lead to a decision to buy.

Running an environmentally friendly business can be a good way to distinguish yourself from competition in your area and create a niche, and that's especially true with today's growing concern about global warming. But be careful of assuming that just because you're "green," consumers will naturally be willing to throw more greenbacks your direction.

After all, look at how many failed attempts McDonald's has had when trying to react to the stated preference from consumers for healthier foods. Time after time, even though they offer "healthy choices," we go back to our Big Macs and fries -- albeit maybe with a Diet Coke. We say we want healthy food, but when we pull up to the drive-thru what we really order is what tastes really good at a reasonable cost. And what still tastes best to us is fried and fatty.

If you want to have a "green" business or offer healthier foods, do so because you think it is the right thing to do, and not because you think it is trendy and will increase your profits. Equating ethics and social responsibility with better business performance misses the point and rarely holds true over the long term. We should never do what we think to be the right thing because we get some reward (at least not some earth reward). We should do the right thing simply because it is the right thing to do. And know that you will still need to compete on what customers really look for: value, convenience, service, quality, special features, and so forth.

Posted by Jeff Cornwall at 05:34 AM | Permalink | Comments (7) | TrackBacks (1)

Impact Lab summarizes a study that appears in the June issue of Family Business Review in which the author finds that family businesses experience better financial performance than non-family firms.

Professor Jim Lee said family firms tend to experience higher employment and revenue growth and are, overall, more profitable than non-family businesses. He says his study suggests the average profit margin for family firms was 10 percent, 2 percent higher than non-family companies.

Most of us think of family businesses as being Mom, Dad, sister Sally, and cousin Fred. Prof. Lee looked at a very different type of "family business." His sample was Fortune 500 businesses that still have the founding family having a significant presence in the company. I know, I know, this is a blog about entrepreneurship, not corporate America. But, the study does raise an interesting issue that is relevant for all businesses from small to gigantic.

I wondered why these businesses would have better performance. Were they smarter business people? Not likely. Were they in certain types of businesses that performed better? No, because he controlled for those other variables.

Then I started thinking about the chapter I just sent to my co-author earlier this week. It was about the virtue of prudence in entrepreneurship. We argue that prudent entrepreneurs are those who understand that their role as a business leader is one of stewardship. From a theological position, we are all stewards continuing God's creation here on earth. From a more pragmatic perspective, we are stewards of the resources we have pulled together from a variety of sources: money from investors and/or lenders, labor from our workers, time away from our families, space from a landlord, materials from our vendors, and so forth. As entrepreneurs, all of these folks trust us to use the resources given to us wisely and effectively.

You will often hear entrepreneurs talk about the heavy responsibility they feel when an investor hands them a check. It is no longer just the entrepreneur's money to lose, but now someone else has said, "I trust you to use this money to build a successful venture."

By being good stewards, by being prudent, we think twice about how we use this precious resource that we have been given to build our business. We think long and hard about whether what we are spending will really build sales and profits. Good stewards are good bootstrappers. We look to be effective, but by spending the least amount of money that we can.

In today's public corporation there is not just a separation of ownership and management, there is a total disconnect. We see CEOs from public companies spending money like drunken sailors. If fact, some might argue that they are spending money like politicians in Washington! A million dollars here, a billion dollars there. But who's counting? My co-author Mike Naughton talks about the disconnectedness between capital and communities in today's culture as a contributing factor to this absence of stewardship and prudent actions in business.

But, maybe in the public firms in this study, where there is still a large presence of the family still associated with the business, there is a stronger sense of stewardship. Money is not some commodity that comes flowing in from people they will never meet nor be personally responsible or accountable to: it is still in large part the family's money they are spending.

This study at least hints that good stewardship in business is not only a morally good act, but financially good, as well.

Posted by Jeff Cornwall at 06:51 AM | Permalink | Comments (1)

I am getting ready to take a little vacation. In an article at Inc.com, Ivy Sea recommends that we should treat our vacations like sabbaticals.

Sabbaticals in today's world refer to an extended time completely away from one's normal work. At a university, this is usually either a semester, or in some cases, an entire year. In the corporate world, we hear of executives taking exotic sabbaticals. Some companies (Timberland and Men's Warehouse, for example) even have a form of sabbatical in their company benefits. For an entrepreneur (or a recovering entrepreneur now teaching entrepreneurship), the thought of an extended time away from our business or work is unimaginable, impractical, or even impossible.

Sabbatical comes from the word Sabbath. If we look at the Biblical roots of the Sabbath, we see that it means the day of rest. But the intention was to not only rest the body and the mind, but also to refresh our souls.

If we look at our time off as simply a day to recharge our batteries to get ready to rejoin the battle, we are missing the point. It becomes simply a day to be physically removed from our workplace, but never completely mentally (or in today's world electronically) away from our work. For so many of us, vacations blur with our work. We are never more than a cell phone or an e-mail away. People never think twice about intruding on our time off. Our minds never fully get rest, and our souls, well, we plan to deal with that in a meaningful way in some distant future.

So if we can't take extended time away, and our time away never really seems to be time away, how do we really get a sabbatical from our business or our work?

Ivy Sea's article from Inc.com offers some insights:

Use the term sabbatical

Words can be very powerful. If we call our two weeks away a sabbatical rather than a vacation, it clearly tells others and reminds ourselves that this is much more than just a physical time away from our work.

Be clear about your goals and intentions

If we go in without a plan, old habits will prevail and it will just be another time away from the office. Commit to actions that will help rest your mind and your body, and refresh your soul. but, set modest goals so as not to recreate the often frantic nature of work. A simple plan is often best.

Prepare your business

This can be one of the more difficult steps for an entrepreneur. It means that you must not only delegate the authority for people to act while you are gone, but to make sure they have the knowledge and confidence to keep things moving ahead without you. A lot can happen even in a week, so make sure that your employees are ready for whatever they will face. Don't fall into the trap of frantically getting it all done yourself before and/or after your time away.

Prepare your self

Determine what you need to do to shift your thinking from vacation to sabbatical. Without this mindset management, it'll be difficult to achieve the goals that you've set.

That is why our worship services on Sunday start with prayer. It is a time to get our minds and our souls ready. For your sabbatical you should do the same: prepare your mind and your soul to be refreshed.

I will be back in about a week. We are off to the Land of Cheese. I hope that my time off will be, at least in part, a short sabbatical and not just a vacation.

Posted by Jeff Cornwall at 07:02 AM | Permalink

One of my regular visitors asked me to write a post on multi-level marketing (MLM). His question: Is it a legitimate business?

Multi-level marketing is a system where people make money by getting other people to become "distributors" for a product. While some money may be made by actually selling the product, most money is made by creating layers and layers of people who are distributors working under your distributorship. You make the most money by the inventory and fees these folks pay as they sign up. The deeper the layers go beneath you, the more you can make. Some have called this a pyramid. Laws have been passed to limit the pyramid-ness of these businesses, but as always, businesses adapt to the new restrictions.

In a strict sense I guess you could say your distributorship is a business. It takes in money and spends money, and often the distributor incorporates to capture this activity.

In my definition of what makes up an entrepreneurial business, I think this is not a legitimate business.

First, it does not create real economic value. In this sense, it is not unlike the dot.com's. Their only purpose was to raise money and cash in before that system fell apart. If you get in early you may be OK, but the late comers rarely do very well.

Second, for most of the participants it does not create wealth or even income in any significant way. I know there are exceptions, and even a few MLM companies that have found models that seem to last. But so many have come and gone, leaving people with garages full of product that will never sell.

Third, although each distributor is called "an entrepreneur" in many MLM models, they never have the chance to grow a real business that satisfies real customers by selling them a product over time that has value as their primary source of revenues. They also add no economic good through building employment. The distributorships never grow, evolve, and take form like a traditional business can and usually does.

OK, I know I have just opened a Pandora's Box with post, but you asked.....

Posted by Jeff Cornwall at 05:16 AM | Permalink | Comments (1)

There are many really good business opportunities that never make it past paper. Would-be entrepreneurs agonize over every detail of their plan to the point that it never gets off the ground, or they miss their window of opportunity.

One of the virtues that Mike Naughton and I are writing about in our new book The Good Entrepreneur is prudence, which entails being good stewards of the resources we have at our disposal. Entrepreneurs who agonize over getting started are often concerned with being good stewards of their own resources they plan to put into their business and of the resources they will get from friends, family, other investors, and creditors.

But there are two critical errors that one can make when looking at how the entrepreneur manages their resources. One error is being careless, reckless and wasteful with resources. In this case the entrepreneur spends money without thought often on things that will do little to create sales and grow the business. For example, they lease expensive space or build huge and opulent buildings, they pay themselves huge salaries, or they hire more staff all that the business cannot support. They burn the investment on things that will not create a sustainable business within the time that their seed resources will carry them.

However, another error is to not ever put those resources to use. It is like the parable in the Bible of the man who buried the money that was entrusted to him, never putting it to use.

StartupJournal has a case study of Gary Doan and his innovative design for a network router that illustrates this error.

He proudly showed it off at trade shows and to industry reps. Amid the late 1990s tech craze, he raised some $19 million from investors over a couple of years. "We got feedback from all sorts of places, what it should look like and how it should be different," he recalls. His 70 engineers on staff continued to refine it with every new review. "It most definitely took too long to get out the door."

I tell entrepreneurs that they often have to be comfortable with a plan that is 80-90% ready. The time it takes to perfect the plan is often time that will keep them from ever getting their business started. Here are some things to keep in mind if you are having trouble "pulling the trigger" to launch your business:

- Your business will most likely not look anything like your plan within six to twelve months. Your plan is a living document, not a blueprint that prescribes every step in detail for the entire life of your new venture. You will learn with each step along the way and that learning should inform and shape your planning as you go.

- You are most likely entering a dynamic market. That is usually what creates the opportunity you are pursuing in the first place. Be ready for what Peter Vaill call the permanent whitewater that you are about to enter. The assumptions you make today in your plan will likely look very different in a few months as your market evolves.

- You can never eliminate all risk and uncertainty, no matter how long you plan. That is part of the game. There will be surprises around every turn. Your success will be determined in how flexible and nimble you are in adjusting to all of these surprises. You cannot plan it all away no matter how hard you try. Entrepreneurship will always have some risk. Plan for as much as you can, and then forge ahead.

Posted by Jeff Cornwall at 06:57 AM | Permalink | TrackBacks (3)

Jason offers his thoughts on my post from Monday about success at A Thought Over Coffee.

Posted by Jeff Cornwall at 07:50 AM | Permalink

It is often assumed by the uninformed that the only reason for becoming an entrepreneur is to make a lot of money. While making money is clearly a fundamental goal for entrepreneurs, profit is not the only metric they use to measure their success. Just ask any entrepreneur how their business is going and you will begin to see the richness of how they measure their successes.

For some entrepreneurs, success is measured by the jobs they create. When I was asked about our business, the number of employees we had grown to was always at least part of my answer. My partners and I took pride in creating good jobs in an industry that was not always kind to its workers.

For others success is measured by the satisfaction of their customers. A famous local coffee shop owner here in Nashville, known as "Bongo Bob," takes great pride in creating coffee shops that have a sense of community for his customers. The number of "regulars" who come into his stores indicates to him that he is doing well in his business.

Reell Precision Manufacturing, located up in Minne-so-cold, measures success in terms of creating "an environment that fosters human development and provides for the common good". Their policies reflect this commitment and they find ways to asses whether they are reaching this goal.

Clearly financial success is fundamentally important for all entrepreneurs. We need to make a living and most want to create wealth. But, profits can be viewed as a natural outcome of pursuing what each of these entrepreneurs view as their real success.

Posted by Jeff Cornwall at 07:47 AM | Permalink

I wrote the other day about the importance of having a clear and compelling vision. Part of that vision should spell out the values and principles that will guide your business and define its culture. However, too often we see entrepreneurs who are long on rhetoric about their values, but fall short when it comes to putting those values into action day-to-day in how they run their business.

Our values should drive our specific actions toward each of these stakeholders:

- Toward partners, investors, family members

- Toward those who provide debt financing

- Toward employees

- Toward customers

- Toward vendors and other resource providers

- Toward competitors and industry

- Toward the community and society

You need to commit to specific actions and policies for each principle and stakeholder that are important to you based on your values.

For example, it is not enough to say that we are going to be open and honest. We should develop specific policies on who we are going to provide information, how much we will provide, and in what form we will provide it. We cannot realistically be open and honest about every aspect of the business to anyone and everyone. There is some information that employees just do not need to know and should not know. So define what this value really means and how you will put it into operation in your business.

As another example, saying you value your employees and want to create a family atmosphere in your business is a lofty principle. How are you going to bring this to life in your business each and every day is the challenge. You need to commit to specific actions and policies or the odds are that this principle will remain words on paper.

Posted by Jeff Cornwall at 05:28 AM | Permalink

I have seen a sharp increase in the percentage of young women entering our entrepreneurship programs. For those young adults between 18-25, family and parenthood are critical elements of how they plan to view their success in life. Many of them believe that they can create a better balance between their family and professional aspirations through entrepreneurship. Many young mothers are looking to home-based businesses to achieve the an ideal balance.

Any home-based business creates challenges in setting up boundaries between work and family. StartupJournal has a feature on a young mother who has found some simple rules to help make this balance work:

- Teaching the kids to respect the office and work time.

I like to call this the "Beaver Cleaver's Dad Rule." On the old Leave it to Beaver TV show Beaver's Dad, Ward Cleaver, had this formal office in their home. The kids knew to only go in their when invited, and if they were invited it was usually because they were in trouble.

- Keeping office stuff in the office.

This rule applies to both the parent and the kids. The stay-at-home-parent needs to have clear boundaries between their "work place" and the rest of the home. The kids need to learn that all of the cool stuff in their parent's office is not for their latest art project.

- Controlling the phone.

One of the cute things most three year olds do is to try to answer the phone. They learn by imitating their parents. When there is also a business phone in the home, this cute trick can lead to embarrassing moments. Using a dedicated cell phone for the business line that only the working parent controls is one way to help get around this issue.

- Maintaining a schedule.

Set clear hours for "going to work," even if it is only in the next room.

- Managing client perceptions.

Eventually the kids will make enough noise to be heard over the phone. Let customers know that "home" is where you work up front.

- Staying motivated.

It is easy to get distracted when working at home. Playing with your spouse and the kids can sound like a lot more fun than the project you are working on. But, remember that your business is important for the family. It helps to pay the bills.

Posted by Jeff Cornwall at 06:26 AM | Permalink

When the Kelo Decision came down from the Supreme Court this past year, the battle front over private property rights shifted to the state and local level.

In a move to shore up private property rights throughout Michigan, voters will have the chance to decide on limitations on the use of eminent domain by state and local governments in that state. From CrainsDetroit.com:

Governments condemning private property would have to demonstrate by "clear and convincing evidence" that the taking is for a public use. That's a higher standard than the "preponderance" of evidence required for a general condemnation of private property.

Similar state-wide initiatives are also moving ahead in other states, including Missouri.

We are also seeing local governments battle over the proper use of eminent domain, such as this example from Rolla, Missouri.

But, even with limitations on the books, we must always remember that we are dealing with politicians with these matters. For example, Florida has limitations on the use of eminent domain already in place. It can only be used if it can be demonstrated that the property is a slum or a blight. However, in battle over water front property at Riviera Beach we can see that one man's blight is another man's home and neighborhood. If politicians and developers want property bad enough, there is always a consultant who can craft a study to meet the state's definition of blight.

The battle over property rights created by the Kelo Decision will not be won simply with legislation, although such actions are important. This is also a moral issue. We have built this country on the fundamental premise that government is in place to serve the people. The Kelo Decision tips the balance on this. Governments can now decide who will serve them best.

Samuel Gregg captures this in his essay found at Acton.org:

St. Thomas Aquinas once wrote that private property was a great bulwark against undue expansion of state authority, precisely because my ownership of a property means that I, rather than government officials, make most of the decisions about how to use it. Kelo's expansion of eminent domain undermines this very basic protection against excessive government power.

We need to fight the battle for property rights at the state a local level, but lawyers and lobbyists can find wiggle room in any laws that are passed. We also need to begin a public dialogue on what kind of country we really want to become. Free enterprise and property rights is the foundation that helped to make this country great. The Kelo decision was a major shift of power from the individual citizen to the state.

Posted by Jeff Cornwall at 06:18 AM | Permalink

I had a conversation last night with one of our student entrepreneurs. She was learning the hard way about the roller coaster ride of entrepreneurship. After experiencing one her best weeks ever last week, she was faced with perhaps her greatest challenge yet this week. I told her that this is what entrepreneurship is like. It is not the straight line of growth we predict in our financial forecasts or the realization of each milestone with the clockwork precision that our business plans envision.

Some describe it as being like a prize fighter. To make money you have to work really hard knowing that every once in a while you will get your brains knocked out. To me it is like my golf game. It is mostly just trying to move ahead by dealing with some good shots and some bad shots, some lucky bounces and some unlucky ones, and trying to do all of this without losing my soul.

Courage is the entrepreneurial virtue that keeps us level-headed during the highs and keeps us moving forward during the lows.

Fortune Small Business offers the inspirational tales demonstrating the courage of four small business owners who are rebuilding their lives and their businesses in the wake of last fall's hurricanes.

Jason Perry, Out of the Box Web Productions, New Orleans, LA

Within days of Katrina, Perry faced a serious cash crunch. All through that giddy August, he had been borrowing heavily to buy the equipment to service his new client. He had purchased a phone system and two servers and had leased new computers from Apple and Dell. For all he knew, Katrina had wiped out all his equipment, and he had no idea how he'd make his lease payments.

Donald Ridings, ABS Computers & Satellites, Gulfport, MS

On the morning Katrina hit, Donald Ridings and his wife, Helen, started driving. They had a plan that was both vague and crystal clear: to get far away from Gulfport. The couple own an old New Jersey Transit bus that they've converted into an RV, complete with a bedroom, a kitchen, and hot and cold running water. They simply got on I-10 and headed east. "We had no clue where we were going," says Ridings.

Austin Tindol, Gulf Coast Glycol, Gulfport, MS

The mood was giddy on Aug. 26 as Austin Tindol held a ribbon-cutting ceremony in Gulfport. It had taken 18 months to launch Gulf Coast Glycol, an outfit that recycles used antifreeze into reusable antifreeze. Tindol raised a glass of champagne, toasting (their)...a new family business....Within hours, an ominous note had crept in. Weather reports indicated that a hurricane was heading toward the Gulf Coast.

George Brumat, Snug Harbor Bar, New Orleans, LA

When Katrina hit, Brumat took cover in his third-story apartment about a block from the club....Soon the couch was rumbling and bouncing, says Brumat, and the walls were swaying in the 150-mph winds. Looking out the window, he witnessed "roofing tiles flying like sparrows and tall magnolias going down."

These are just four examples from the thousands of small business owners in the Gulf region who are not giving up on their visions and their dreams. Although they have all suffered through the ultimate low point as entrepreneurs, they are all rebuilding their businesses.

These are the real entrepreneurial heroes. Keep them in your prayers.

Posted by Jeff Cornwall at 06:20 AM | Permalink

Our favorite coffee-shop-to-be continues to have challenges in their start-up. Jason offers the lessons he has learned thus far in this post. It seems that every developer dreams of having a Starbucks in their building, which makes getting a fair lease difficult, at best, for small businesses like Jason's.

The key virtue for a start-up entrepreneur is courage.

Courage to stick to your vision.

Courage to be true to your word and to your principles.

Courage to do the right thing, even if it takes you down a more difficult path.

Jason is showing us true courage in his start-up efforts. No matter what the end, he is already a success.

Posted by Jeff Cornwall at 07:19 AM | Permalink

We hear all of the horror stories about lottery winners who end up broke and miserable. Large windfalls of money can be difficult to manage if we are not prepared. I see some entrepreneurs face similar challenges as their businesses suddenly create drastic increases in monthly cash to the owner or windfalls of wealth from a sale.

I met with a former student who is facing the possibility of winning one of life's lotteries with his business. A sudden opportunity is creating the possibility of significant profits over a very short time. But, he seems to have his head on straight. He is already planning to use this influx of capital to help build his business.

So why are some people better able to handle situations like this? I believe most of them were brought up with an understanding of how to manage money. I also believe that they were raised with values that were not as materialistic as others. To them money is not the end, but rather a by-product of working hard and living a good life.

Scott Burns (free registration required for this site) suggests that we look to a popular book, Getting Rich in America, for some answers on how to put wealth in its proper perspective.

Here are the eight rules from that book and my thoughts on them (for what they are worth):

1. Think of America as the land of choices.

Each choice we make can affect our character. What kind of business we do we choose to start? Who do we choose as our business partners? How will we treat our customers and our suppliers? How will running our business have an impact on our family? Virtues are simply habits we form by doing what is right.

2. Take the power of compound interest seriously.

Start saving when you are young. A dollar saved when you are twenty will be worth so much more when you retire than a dollar you save when you are fifty. As I wrote about recently, many baby boomers did not learn that lesson and are trying now to make up for lost time.

3. Resist temptation.

As may father always says, "Pigs get fat and hogs get slaughtered." Don't spend money until you have it, and don't waste it on things that cost a lot but have very little value. Be frugal.

4. Get a good education.

If you are an entrepreneur, learning about the process of entrepreneurship will almost double your odds of success. But beyond that and more importantly, a good education will make you a more interesting person and a better citizen.

5. Get married and stay married.

Amen.

6. Take care of yourself.

I began to have some health issues as our business grew very rapidly and we began to look at options to sell. Stress takes its toll on you. My brother says I aged in entrepreneur years during that time, which he says are about like dog years.

7. Take prudent risks.

Successful entrepreneurs are not gamblers, but they will take risks that are well thought through and well planned for.

8. Strive for balance.

If you follow rule #5 you will only be married once. You only have one chance to be a good parent. Good friends take work.

You can and you should be so much more than an entrepreneur in your life.

Posted by Jeff Cornwall at 06:04 AM | Permalink

John Sage, the co-founder of Pura Vida Coffee, spent the day at Belmont University yesterday. John has created a for profit coffee company with a mission that mandates they donate all of their profits back to help the children of the countries that supply their coffee.

Pura Vida is 100% charitably owned. All of our resources go to help at-risk children in coffee-growing countries who suffer from the damaging effects of poverty.

An interesting business model to say the least! They offer any investors only the possibility of a modest financial return (at best) capped at about a T-Bill rate. They believe that the good that they can do through the capitalistic system more than makes up for any shortfall in profit returns to their investors.

Posted by Jeff Cornwall at 06:32 AM | Permalink

Here are a couple of examples that show the good in people in the aftermath of Katrina:

Business owners in Montgomery, AL are helping to defray the costs of all of the refugees that have come to their city from the gulf coast.

From Inc.com:

Spared the physical trauma of hurricane, Montgomery's business community is helping bear the cost of hosting Katrina's victims who have come in need of medicine, health care, shelter, and jobs. Anna Buckalew of the Montgomery Chamber of Commerce expects this labor of love to last for several months as federal agencies sort out recovery and rebuilding of Gulf cities affected by Katrina.

Colleges and universities are helping to find temporary places for the 100,000 college students displaced by the storm to continue their studies.

From USA Today:

The school of public health at Atlanta's Emory University has arranged for 30 international graduate students from Tulane's school of public health to attend classes temporarily. Jesuit universities, including Connecticut's Fairfield University, the University of San Francisco and Seattle University, are taking students from New Orleans' Loyola, also a Jesuit school. The University of Richmond said it will accept about 20 undergraduates and several law students tuition-free for the fall semester.

We are hearing so much about the bad acts of people in New Orleans. I hope that over time it is the good acts like these that we will remember from these difficult times.

Posted by Jeff Cornwall at 08:53 AM | Permalink | TrackBacks (1)

During my week off we went to a couple of movies (Four Brothers and Red Eye -- both were worth seeing). While we were making our way to the show, I was struck by some unethical selling practices at our local multiplex.

First, when you walk up to buy popcorn, they try to sell you a "value pack." Now we have been trained by fast food to understand this to really mean it is a value. I look frantically up at the prices to see what the value price is, but I can't see any listing. It must be the newest, latest deal. After all, at a fast food joint a value meal might save you fifty cents when compared to buying the sandwich, fries and drink separately. You think, "What the heck. I might as well get the whole deal for a little more money."

But not at our theater. We soon find out that their "value" pack, a popcorn and a drink for example, costs exactly the same as buying each separately. There is no value in their value pack!

Second, once we said no thanks to their value offering, we then asked for a medium popcorn. At this point the young person behind the counter holds up a medium bag limply with a rather disappointed look on his face and says, "This is the medium bag. Are you sure it is going to be big enough?" Read between the lines, "You idiot! Why would you waste your money on this puny bag?"

Now out theater is part of a large, multi-state chain. So I bit my tongue, at the strong encouragement of my wife, and moved on to the show. I wasn't going to change the practices of the theater by yelling at the high school kid behind the counter.

So instead, let me offer these simple suggestions to all the entrepreneurs who read this site on some basic ethical principles that may keep you from becoming a company like the one the owns our local multiplex:

- Don't mislead your customers.
- Don't lie to your customers.
- Don't treat your customers like they are idiots.

Posted by Jeff Cornwall at 07:01 AM | Permalink

I will be taking a week off for a little summer break. Please visit some of my favorite sites listed on the right column of my site. If you are new to my site, please feel free to take this chance to go a root around in my archives. I will be back on August 22nd.

StartupJournal offers some additional statistics (from an American Express survey) to those I posted on Wednesday about entrepreneurs on vacation.

This new survey tells us that although we may physically take time off, we may not really be mentally taking time off. And that can take its toll over time, as we all need time to rest. In the past, I have written about this importance of taking time off (here, here, here, and here), as hard as that can be for entrepreneurs.

It may be too much to ask to simply work at full speed for 51 weeks and then try to stop for one week of vacation. Learn how to take time off in small bites. Find something that you can do once a day or even just once a week that takes you mentally away from your business.

In learning how to rest, many people much wiser than me tell us that it is essential to find a way to find true silence in your life. Take a little time each day to pray, meditate, contemplate or whatever your personal preference. But don't always use words; take time for true silence.

The fruit of SILENCE is Prayer
The fruit of PRAYER is Faith
The fruit of FAITH is Love
The fruit of LOVE is Service
The fruit of SERVICE is Peace
(Mother Teresa of Calcutta).

Posted by Jeff Cornwall at 07:38 AM | Permalink

Inc.com has a story that just made me shake my head.

About two-thirds of small business owners are satisfied with how they have balanced their personal lives and work schedules, despite the fact that they work an average 52 hours a week, according to a new survey released by the Wells Fargo/Gallop Small Business Index.

The survey also found that over half of small business owners work six days a week, with more than 20% working all seven. Fourteen percent of surveyed small business owners reported taking zero vacation days in a year, and almost 40% of those who do take personal time off said that they still answer work-related phone calls and email while on vacation.

Nonetheless, 67% of small business owners said they were satisfied with their personal life-work balance and almost 90% said they were satisfied with being a small business owner in general.

I've been there and I know what they are going through. During the first couple of years of your business you often can't take much time off. Even if you do, you are thinking about the business. You are running on adrenalin, excitement, and fear. And even with all of this, it is still fun.

But, at some point what was necessity can become a bad habit. And that is the dark side of entrepreneurship. When the business can take over your life and cost you much more than you ever anticipated: your family, your friends, and your health.

Here are a few thoughts on how to avoid the dark side:

- Keep control of your business and your life, even in the early stages.

- Set goals for your life as well as your business in your business plan. Life goals are as important as financial goals over the long run.

- Engineer time for the other things. It may that you make it home for dinner every night, have a date with your spouse once a week, or never miss your kid's games or concerts. You may need to go back to work afterward, but take the time.

- Make sure any breaks you take are both physical and mental. That will be hard at first. My wife and I tried to meet for lunch when I was building my business. The first few times I know my head was not there. But, I worked at it and eventually learned how to get away mentally. Believe me, it took hard work.

- Set goals for separation. I met an entrepreneur who had been able to build up to six weeks of vacation a year. And she was trying to add a week a year! She became one of my role models. I tried to learn from her how to build a business that could run itself when I was away.

- When life gives you a break, take it. When we sold our business I immediately was mentally working on the next deal. But, my wife tugged my sleeve and said "take a break and make sure what you really want to do next." At first it drove me crazy. I was used to running in overdrive. However, that break gave me time to reflect and contemplate where I should go next. And surprisingly to me, it was not the next deal, but into teaching.

Entrepreneurship is in my blood. But so is being a husband, a father, a friend, and now a teacher. Learning how to sort out all of the conflicting demands takes hard, conscious work. It never just happens.

Posted by Jeff Cornwall at 10:29 AM | Permalink | TrackBacks (1)

We had an interesting debate in my MBA class about the role of culture in hiring and firing employees in a small business. While the case for using culture in hiring is fairly straight forward, it is the issue of termination that seems to make some uncomfortable.

The culture in a small business starts with the values of the owners. Each decision she makes, each action she takes shapes the culture of her business. Over time her values will become part of the shared understanding of "how business is done around here."

But as a business grows, the people who join the business bring their own values and behaviors that they have learned in other companies. We found in our health care business that many very technically competent employees just did not fit in our company because their way of working had been shaped and formed by one of the large national health care companies. Many of them never could adapt to our distinctly different culture.

Human resource experts tell us that culture should be a major factor in hiring employees. Even state employment agencies often strongly recommend culture as a criterion. They assure us that it is not a matter of discrimination, but trying to find people who will fit the culture and stay with the business. For state employment folks this is important as they are trying to keep unemployment down. If too many people end up in businesses where they do not fit, it leads to increased turnover and unemployment.

We tried several creative ways to find out if someone would fit in our culture. We had a very decentralized structure that was not dominated by our physicians. We had to make sure that we hired physicians and staff that fit into this culture. We would have them sit in treatment meetings and meet formally and informally with many of our staff. We would talk to our front line staff about each possible hire, and it was that group who often had veto power. Several prospective employees were not hired because they did not treat our receptionist with respect.

Firing employees because they do not fit in a culture is where many, especially those in a corporate environment, get uncomfortable. They seem to hope that eventually these employees will just realize that they do not fit in and leave on their own accord. But, in a small business we do not have the luxury of keeping any excess employees.

Performance in a small business is more than just doing one's job. The culture of the business is still a work in progress, and the business owner must be diligent to make sure that it is evolving the way they want it to. Just because a salesman meets his quota is not enough to keep his job. If he does so in ways that undermine the way the owner wants to build relationships with customers that can be just as important a criterion for continued employment as selling product.

It may be a soft criteria and it may seem subjective to an outsider. But, an entrepreneur knows how she wants her business to run and she has an obligation to make the tough decisions to make sure that the culture develops in a way that is consistent with her values, her ethics and her vision.

Posted by Jeff Cornwall at 05:20 AM | Permalink | Comments (1) | TrackBacks (4)

The Williamson County insert in the Sunday Tennessean ran a story about a group of young entrepreneurs gone bad.

They had started a business installing audiovisual systems in people's homes in the Nashville suburb of Brentwood. As an entrepreneurship professor I love to hear about young folks exploring the world of entrepreneurship. I developed a couple of small businesses when I was young and I know that is part of the reason I caught my life-long passion for entrepreneurship.

However, it seems these young boys were after more than a little experience and spare cash. They got greedy. The profits they made from their work were not enough.

"The alleged robbery happened last week while the owner of a Belle Meade home where the company had done work in the past was out of town, according to Brentwood Police.

"The teens entered the client's garage and stole a new Mercedes-Benz that was delivered while the homeowner was away. The suspects allegedly returned a second night, broke into the house and took more than $100,000 worth of property including jewelry, plasma televisions, computers and other personal items."

While I encourage young entrepreneurs to dream about the financial gains they can make as entrepreneurs, it is critical to ground their ambitions, the skills they develop, and the lessons they learn in values.

Entrepreneurs have no corporate code of ethics or even basic rules to follow in their work unless they develop them on their own. That is why it is so very important to understand how to integrate a sense of right and wrong, fair and unfair, just and unjust into your business from the very beginning. You set the rules and you enforce them.

I try to help my students understand the importance of this and how it can be accomplished in every class I teach. Sadly, it seems clear that these kids never got this lesson.

Posted by Jeff Cornwall at 06:41 AM | Permalink

There are many groups still fighting the recent changes in the bankruptcy laws, including (no surprise) several law schools. So how are they continuing the fight for their cause? Why by confusion through statistics, of course.

While the percentage of small businesses failing may be dropping, the number of failures is increasing. Given the fact that the number of business start-ups per year has grown from 200,000 in the mid-1900s to over 3.2 million today, it is no surprise that the number of bankruptcies is up. And given the improvement in preparation that many entrepreneurs are now able to receive in the form of training, education, counseling and support materials it also is not surprising that success rates are up.

However, that is not even the point. Bankruptcy is a social issue as well as a legal issue. Business failure is traumatic and unfortunate. But, how the owners approach their obligations after a failure speaks volumes about their character. The increasingly casual attitude so many have toward financial obligations signals the deterioration of a key part of our culture and our social contracts we share with each other. A free culture is built upon the collective characters of its citizens. When we abdicate more and more of what was once the domain of our character to the law, we drift away from our freedom.

A free society is built upon trust. The lawyers do not create the increases in litigation and bankruptcies. They are just those who come behind our parade and clean up the mess we leave behind. If our society is sound and just there will be less for the lawyers to scoop up. When we defer to lawyers and the government and do not take responsibility for our own messes, we enter the spiraling decline we now see in our society and our culture. Legislation, litigation and the courts should never be the foundation of culture. That should be the stuff of our character and our shared values.

Our freedoms are vanishing. And through our actions, and more importantly our inactions, we are hastening this process.

Posted by Jeff Cornwall at 07:35 AM | Permalink | TrackBacks (1)

I found an interesting perspective on the ethical challenges faced by entrepreneurs in an opinion piece by Jack Roseman published in the Pittsburg Post-Gazette.com.

"(W)e give up our principles in painless little slices. Each lapse doesn't seem so bad. It's only in retrospect that we see how slippery the slope really was.

"My theory is that the more you make, the greedier you become."

My co-author Mike Naughton says that this becomes the problem when we view wealth as the singular, ultimate goal in a business rather than as an important outcome of the pursuit of good and moral ends. Wealth is not a bad thing; quite the contrary. The ability to pursue wealth is essential in a free society. But to view wealth as the only outcome of our entrepreneurial activities can cause us to eventually corrupt our souls: with each decision, with each non-decision, with each action, and with each inaction.

Posted by Jeff Cornwall at 06:05 AM | Permalink | TrackBacks (2)

I have written several posts about the ability and the responsibility of entrepreneurs to integrate their values into the businesses that they build.

My daughter Maggie suggested I look at what a mortgage company out of Georgia, HomeBanc Mortgage Company, is doing to integrate their values and their faiths into their company. She heard about this business this past week while attending a large retreat for Fellowship of Christian Athletes (she plays volleyball and will be transferring to Belmont this fall). HomeBanc Mortgage sponsored the entire weekend for these students.

HomeBanc Mortgage is a company that recently went private through a leveraged buyout from its former parent company. Their vision statement, their statement of values, and their faith-based statement all set the tone for the values that shape how this company will be run and how all that work there will do their work. Their statement of ethics gives specific expectations of how management and other employees should integrate their shared values into how they do their work.

Many get nervous when we speak of integrating faith and work, and indeed some companies have become too prescriptive about what faith people should follow. While predominantly Christian, HomeBanc Mortgage takes great strides to be inclusive:

"As a faith-based company, HomeBanc Mortgage Corporation believes that associates should not have to check their spirituality at the door. We recognize that spirituality is deeply personal - we do not seek to impose any particular faith or doctrine upon any associate. We welcome people of all different beliefs into our family, treating each associate with dignity and respect. Regardless of our differences, we all share the common commitment to putting the needs of others ahead of our own. By serving others with the heart of a servant, we strive to enrich and fulfill the lives of our associates, our customers and our communities."

Posted by Jeff Cornwall at 06:01 AM | Permalink

"Cardinal Ratzinger has not contradicted John Paul II's...teachings on economics, which found great merit in the market economy and even condemned European-style welfare states." This what Fr. Sirico sees from the papacy of Pope Benedict XVI. Read his complete essay here.

Posted by Jeff Cornwall at 05:47 AM | Permalink

When I ask a room full of young entrepreneurs about their goals, some envision a life full of starting and growing businesses. Others tell me that they want to achieve business success early in life and then retire young. To them, entrepreneurship is simply instrumental to other plans they have for their lives.

Wilson Ng at Business-Driven Life ponders the question of early success in business and what it means for the rest of his life. He worries about peaking too early, as he is certain he would miss the excitement that entrepreneurship brings to his life.

When I was active as an entrepreneur I would often think about the next deal to chase. Like Wilson, I enjoyed the excitement of starting and growing a business, and we had many opportunities to do just that.

Then about nine years ago we sold most of our businesses. I was ready to find the next opportunity. But, my wife pulled on my sleeve and encouraged me to slow down. She suggested that I take some time to think about what I really wanted for the next phase of my life. At first it was hard for me, as I had lots of opportunities to examine and possible deals to pursue. But she is wise, and I listened to her advice. I took my time and really examined what I wanted to do next.

With time I realized that I wanted to spend more time with my family. I realized that there were other things for me to do besides another business start-up. I realized that I missed college teaching. I had never taken the time to think about all of this in the heat and excitement of building a business. But, once we sold our business I could take time to reflect and discern: and my wife made sure that I did.

Entrepreneurship is a wonderful path in life. I will always be grateful for the opportunities and challenges it offered me. But, I realized that it was not all that I was called to do in life.

When life offers you a chance to pause and reflect, take advantage of it. You may jump on to the next deal and you can do so knowing it is where you need to be. But, you may realize it is time for a new chapter.

Even though my days as an active entrepreneur are probably over, I truly believe that my best days are yet to come. Success takes many forms.

Posted by Jeff Cornwall at 06:40 AM | Permalink | TrackBacks (1)

I have written quite a bit on the dramatic fall-off of IPOs among entrepreneurial ventures due in large part to Sarbanes-Oxley. Fortune Small Business has a story on this in their April issue.

"A combination of Sarbanes-Oxley's steep compliance costs, Wall Street's neglect of small caps regardless of their performance, and heightened investor distrust has turned running a public company into a far less appealing proposition. The number of private firms selling out (instead of plying the IPO seas) is near an all-time high. And many public-company CEOs are yearning for privacy: The number of public companies fleeing the stock market hit record levels during the past two years."

Where this will lead us is anybody's guess. One outcome that I hope for is that this growth in privately held firms will allow more CEOs to take ethics and values more seriously in how they grow and build their firms.

One stumbling block for public companies being more ethical has been the responsibility to the public financial markets to maximize returns. Those CEOs who do not, particularly in small cap companies can find themselves out of work if they miss quarterly financial expectations of the market.

Private businesses are in a better position to look at a broader array of criteria for what defines success, be it job creation, work environment and so forth. Entrepreneurs and the other shareholders define the rules and can set their own definitions for effectiveness in their companies. Profits remain the primary goal, but private companies can place this goal within a context of ethical and moral considerations that address other stakeholders and broader considerations.

Unintended consequences do not have to be all bad.

Posted by Jeff Cornwall at 05:28 AM | Permalink

Thomas Merton is one of my favorite writers, so when Prof. Harry Hollis passed this quote along to me I had to share it here:

There is a pervasive form of contemporary violence (and that is) activism and overwork....The rush and pressure of modern life are a form of violence.

The frenzy of our activism neutralizes our work for peace. It destroys our inner capacity for peace. It destroys the fruitfulness of our won work, because it kills the root of inner wisdom which makes work fruitful. (Thomas Merton)

Posted by Jeff Cornwall at 05:25 AM | Permalink

An article at Knowledge@Emory raises an interesting possibility. They question whether the newly passed Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 may dampen our entrepreneurial economy. Why? Because so many entrepreneurs use personal credit cards and second mortgages on their homes to finance start-ups. For these entrepreneurs, easy bankruptcy provides a safety net if things don't go right.

When I teach entrepreneurs and potential entrepreneurs I try to push them to think about start-ups in a prudent and responsible way. Success and failure will both have consequences, so they need to think things through very carefully. I am much less concerned with how many of them start-up a business as I am with how many of them still are operating their businesses three, five, even ten years from when I have them in class. Those businesses that do last over time are my measure of the success of what I do, not the volume of those who do any old start-up.

I want them a little afraid at their start-up. I want them a little nervous. I want them a little worried about what happens if they fail. Entrepreneurs who rush in blindly like marauding pirates have not learned the lessons we try to teach them in our classes.

When thinking about how easy bankruptcy has become, I recognize what a different time and place that I grew up in. When I was young bankruptcy brought a certain shame if it was self-inflicted. Certainly some folks ended up at this point through events outside of their control, and for them we all felt pity. But, if someone was reckless in jumping head first into a business deal that was full of risk with only a small chance of success, there was not pity except for his family who had to endure the consequences of his failure and the resulting bankruptcy. Some spent years slowly and quietly paying of debts from deals gone sour just so they could avoid the stigma of self-inflicted bankruptcy. They were good people who understood that they had a responsibility to fulfill. The Corporate wall of protection was rarely used as a shield from personal responsibility for a business that failed.

Now just like marriage, we encourage people to jump into business with the knowledge that there is an easy way out. We don't get along? No problem, we can just get a quick divorce. Business doesn't make it? No problem, bankruptcy can protect us from most of the consequences.

To me this now means that socialistic thinking has crept into two of the most important foundations of this society: marriage and private enterprise. We now can jump into a marriage or a business deal knowing that there is an easy exit, limited consequences, and a great big government with all kinds of programs and laws to protect us and make it all better.

If Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 causes folks to think twice about their business idea, that to me is a good thing. If one of their main exit strategies is a quick and easy bankruptcy, then I want them to either rethink their plan or start over. Or if they are one of my students, plan to take the class again next semester.

(Thanks to Jennie Bowman for passing this article along to me).

Posted by Jeff Cornwall at 05:55 AM | Permalink | TrackBacks (3)

Fr. Robert Sirico of the Acton Institute offers his poignant reflection on Pope John Paul II.

"One of the marks of John Paul's greatness was his rejection of ideological categories and limitations and his ability to hold complex thoughts together as a result. For him, there was no contradiction between celebrating the vocation of business leaders, as he does so innovatively in his 1991 encyclical Centesimus Annus, while upholding and defending the rights and dignity of simple peasants. In his view, both positions flowed, not from some poll he took, but from the intrinsic dignity and eternal destiny of the human person: a being at once unique, unrepeatable and immortal."

Posted by Jeff Cornwall at 02:50 PM | Permalink

As a Catholic and as a capitalist, Pope John Paul II's Centesimus Annus, more than any other document, has helped me to integrate my religious faith and my belief in free markets. And yet, nothing has challenged my thinking more on what it takes to pursue free enterprise within a moral context than this same document.

As George Weigel said in an interview with Religion and Liberty:

"Centesimus Annus is, with Leo XIII's Rerum Novarum (1891) and Pius XI's Quadragesimo Anno (1931), one of the three great texts of modern Catholic social teaching. But Centesimus Annus did more than recapitulate the teaching of John Paul II's predecessors; it also set the social doctrine of the Church on a new path by its endorsement of the 'free economy,' its empirical sensitivity on questions of economic development, and its insistence that a vibrant, publicly-assertive moral-cultural order is essential to the functioning of the free economy and the democratic political community. Catholics, and indeed everyone interested in the relationship between moral truth and the free society, will be wrestling with Centesimus Annus for at least a century."

Pope John Paul II recognized in Centesimus Annus the importance the entrepreneurial process in building a strong economy.

"A person who produces something other than for his own use generally does so in order that others may use it after they have paid a just price, mutually agreed upon through free bargaining. It is precisely the ability to foresee both the needs of others and the combinations of productive factors most adapted to satisfying those needs that constitutes another important source of wealth in modern society. Besides, many goods cannot be adequately produced through the work of an isolated individual; they require the cooperation of many people in working towards a common goal. Organizing such a productive effort, planning its duration in time, making sure that it corresponds in a positive way to the demands which it must satisfy, and taking the necessary risks -- all this too is a source of wealth in today's society. In this way, the role of disciplined and creative human work and, as an essential part of that work, initiative and entrepreneurial ability becomes increasingly evident and decisive."

However, Pope John Paul II threw a bright light on the false choice between a blind belief in free markets versus the notion that only government can effectively manage the economy for the common good. Pope John Paul II understood the power of freedom, including economic freedom, but also challenged us to understand the critical importance of a moral culture to give our freedoms meaning and purpose.

As I have written at this site time and time again, the more we keep government out of the details of business the better. Markets work. However, that is only part of the equation. To assure that the social contract of market capitalism survives requires prudent, just, and moral actions on the part of its stewards. Otherwise we are at risk of society backing out of this contract and ultimately we risk the loss of many of our freedoms. As William Simon describes it, we must focus on both "doing well and doing good."

Pope John Paul II has gone home. But, let us continue to pray that his legacy will last for many generations to come here on Earth.

Posted by Jeff Cornwall at 06:29 AM | Permalink

Today I am guest hosting at BusinessPundit. Please visit my post on executing your values in the day-to-day activities of your business at Rob's site.

Posted by Jeff Cornwall at 05:18 AM | Permalink

Slate magazine has released its list of 60 top philanthropists. And according to National Dialogue on Entrepreneurship, once again many have entrepreneurial roots.

"The 2004 list shows that most of the big givers are active or former entrepreneurs. Overall, it was a good year for philanthropy as the combined contributions of the Slate 60 reached $10.1 billion, smashing last year's total of $5.9 billion. Bill and Melinda Gates always rank high on the list; they top this year's Slate 60 with $3.4 billion pledged to their foundation last year."

Posted by Jeff Cornwall at 05:26 AM | Permalink

Anita at Small Business Trends and I have been offering our thoughts on the virtue of being an entrepreneur. Here is her latest offering.

Posted by Jeff Cornwall at 05:21 AM | Permalink

One of the most facinating parts of entrepreneurship to me is how differently each entrepreneur views what success means for their business. It is so more complex than most on the outside will ever understand. A Business Driven Life offers a wonderful reflection on this topic in his post from Saturday, February 19, 2005.

Posted by Jeff Cornwall at 06:38 AM | Permalink | TrackBacks (1)

Anita at Small Business Trends offers her thoughts on the piece I wrote earlier this week on Fr. Sirico's talk on our campus on "The Entrepreneurial Vocation."

Posted by Jeff Cornwall at 06:10 AM | Permalink

This past week we had the great pleasure to Welcome Fr. Robert Sirico of the Acton Institute to our campus at Belmont University.

Fr. Sirico spoke about how the entrepreneur, endowed with particular natural talents, is the primary agent of economic progress in the modern world, and that even though a free society is highly dependent upon the entrepreneur for its material existence, the vocation of business is relatively under appreciated within the religious community.

"Instead of praising the entrepreneur as a person of ideas, an economic innovator, or a provider of capital, the average priest or minister thinks of people in business as carrying extra guilt. Why is that?" Rev. Sirico has said. The consequences of a divorce between the world of business and the world of faith is potentially disastrous for both worlds, he says.

Posted by Jeff Cornwall at 07:55 AM | Permalink | TrackBacks (3)

When I teach about entrepreneurship, I stress the importance of starting with one's aspirations and goals. For more and more people, these aspirations go well beyond financial goals they hope to achieve through their new business. Lifestyle and family issues are increasingly being identified as key issues as new entrepreneurs plan their businesses.

For many of the young women I work with, planning for a business that allows them to be active mothers for their children is a fundamental goal for their entrepreneurial careers. An article in today's Tennessean highlights this trend.

"You can't swing a diaper bag on a playground without it landing firmly at the foot of a woman running, or thinking about running, her own business - whether that business be knitting blankets to sell at a craft fair, selling cookware at home parties, or nailing down advertisers for a franchise entertainment coupon book that grosses six figures."

There is a popular website that offers support and ideas for women looking to integrate entrepreneurship and motherhood called MompreneursOnline. (Caution: Some opportunistic person associated with this site made sure that they trademarked "Mompreneur"....).

Posted by Jeff Cornwall at 06:32 AM | Permalink

Entrepreneur.com recently offered a guide to the myriad of technology that can link you and your employees to your business twenty four hours a day, seven days a week, and around the globe.

"From home offices to hotel rooms, technology is the wind beneath your business wings, the premium gasoline in your work tank, the foundation of your building-you get the idea. Slews of laptops, wireless solutions, remote software and cell phones await your use."

True. But, technology can also become the chains and shackles that make many entrepreneurs feel like slaves to their businesses. The very freedom that such technology can create also leads to resentment, burn-out, and fatigue in many entrepreneurs. For many, the only escape is when the flight attendant closes the airplane door for take-off. Alas, even that escape may soon be taken away if cell phones are allowed for use on commercial flights.

I would like to offer some possible "connection free" zones that entrepreneurs can create to restore a little sanity to this high-speed world:

-Church
-Your daughter's dance recital
-The bathroom
-The golf course
-Your son's choir concert
-Dinner our with your wife
-Family reunions
-Movie theaters
-The tennis court
-The dentist's office
-Family vacations
-Walking the dog
-Public rest rooms
-College campus visits with your teenagers
-Family dinner

Connectivity is an amazing tool that can allow businesses to grow more effectively. You can keep better communication and coordination with branch offices, traveling staff, customers and suppliers.

But, give yourself some time for family, for rest, and for leisure. Disconnect from the connected world. You, and your business, will be healthier.

Posted by Jeff Cornwall at 06:38 AM | Permalink | TrackBacks (1)

Paul Orfalea, Founder of Kinko's, spoke at the USASBE conference I attended this past weekend. Here is his definition of success:

"Success in life is having kids who want to come back to visit you when they've grown up."

Posted by Jeff Cornwall at 12:11 PM | Permalink

I have been spending more and more of my blogging time cleaning up SPAM attacks. Even with improved software it keeps coming. Pornography, Viagra, Texas hold 'em, more pornography...the unwanted posts and trackbacks just keeps coming and coming. Why? Can there possibly be enough people out there who want access to such material to make it worth all of the trouble the spammers go through to get access to sites like this one? Clearly it must pay, as seen in this posting from Fresh Inc.

"...Virginia recently led the way in the nation's first prosecution of a spammer, a North Carolina man named Jeremy Jaynes. Bail for Jaynes was set at $1 million dollars. Why? Apparently, Jaynes' spamming business was quite lucrative. Prosecutors suspect he's been "squirreling away" parts of his $24 million fortune in foreign bank accounts, and is too great a flight risk, according to a November 9 AP story. Though Jaynes' faces up to nine years in prison, I wonder if this type of prison time will deter others. The lure of making millions by peddling junk products, pornography, and other dubious materials is probably worth the risk to many unscrupulous characters."

It is a sad reflection on the state of American culture that pornography so dominates the Internet. In a 1996 interview in Religion and Liberty, Kay Coles James liked the decline of our culture to a disease.

"America at its core has an identity, a culture that represents who we are as a nation. I see that culture as sick and dying. That is true because those institutions in our culture that historically provided a shield for us against the pathologies of our communities are breaking down. These pathologies-violence, pornography, child abuse, chemical addiction-have existed in world culture since the very beginning of time. But what has allowed us as a nation to fight off those particular pathologies is that we had a very strong immune system-things like strong families, strong faith, strong institutions, a moral base, a strong sense of virtue. As a result of our immune system now being broken down, we are susceptible to these viruses. So the way we need to address this problem is to build up those institutions that have made us be able to resist the pathologies."

Maybe the moral overtone of our recent election was a small step toward inoculating America from the pathologies that are attacking its culture. We can only hope.

Posted by Jeff Cornwall at 05:01 AM | Permalink

Several entrepreneurs are finding success in giving many families what they want: entertainment with positive messages. StartupJournal highlights several companies that offer either positive contributions to pop culture or filters to clean up content that is less than family rated.

"'The market was telling us that if parents could buy products and be 100% guaranteed that they weren't going to be surprised with the content, they'd be very interested,' says Rich Siporin, vice president of sales and marketing of Langhorne, Pa.-based eGames."

For someone who lives in an entertainment town, this comes as good news, indeed. But, the common wisdom is that such G-rated content will not sell. So what is eGames experience in this market niche?

"In fiscal 2004, ended June 30, eGames' sales rose 11% to $8 million, and profit increased 9%, to $1.7 million, from a year earlier."

Posted by Jeff Cornwall at 05:43 AM | Permalink | TrackBacks (1)

I got into an interesting discussion yesterday with a friend of mine about whether outsourcing and globalization were good or bad. He wasn't sure which side of the political debate about this he stood on, but seemed to be sure that at some point he would need to pick a side. The truth is that this should not be viewed as a simple debate of the morality of outsourcing and globalization, as they are both morally neutral economic tools. The morality comes from how they are used and toward what ends.

For example, assume we are looking at a small manufacturing business that has been making a profit acceptable for the owner for several years. He has been proud of the jobs he provides and has been an active member of his community. The prospects look good for the future of his business. However, a consultant comes in and as part of his recommendations points out that if the entrepreneur were to outsource the manufacturing of his business to Mexico, he could easily triple his profitability. I would argue that in this case such an outsourcing decision, while within his rights in a free market, would be ethically questionable. He had defined his own success as much more than his profits, which met his personal goals, and outsourcing would ignore the employees and community who helped him reach his success in the first place.

Harbus Online (from the Harvard Business School) offers an example of and ethically good application of outsourcing. They tell the story of Digital Divide Data, which operates a digitization business in Cambodia.

"To outsourcing experts and globalization critics, DDD is simply one more company looking to take advantage of cost arbitrage between the world's haves and have-nots. But...DDD represents a new breed of international social enterprise that melds the merits of the private sector with the morality of non-profits."

What makes DDD different?

"'Profits generated from data entry services are funneled into scholarships, healthcare and continued training,' Tim notes. 'The problem with most non-profit organizations is that they require annual grant funding. At DDD we aim for a double bottom line - the first is to be operationally self-sustainable, which funds the second, the direct, tangible improvement of disadvantaged people's lives and the communities they live in.'"

To those who try to define outsourcing as being inherently evil, DDD would be just another company taking away jobs. How sad that a company that is pursuing good ends using good means would be cast within such a net.

Does this mean that we should pass legislation to define "good" or "bad" outsourcing as many are demanding these days. I would argue that we should not. However, does this mean that business should then blindly engage in outsourcing and globalization without considering the moral consequences? Of course not. In fact, if business behaves this way, with total disregard of the moral and ethical consequences of such decisions, they are just asking for government to eventually step in.

The choice is not simply one of free markets or government controls. There is a third dimension made up of moral and ethical criteria that should be shaped by our culture. Sadly, we seem to keep trying to insulate our culture from the moral virtues which should be at its core. In business, just as in government, we have moved to defining ethics in a purely legalistic manner. That is a sure ticket to more government involvement in the day-to-day aspects of our economic lives. The challenge is to integrate our shared moral traditions into our business decision making rather than simply default to government bureaucrats and lawyers.

Thanks to Paul Chenoweth for passing along the Harvard article.

Posted by Jeff Cornwall at 06:09 AM | Permalink | TrackBacks (1)

I recently wrote about the importance of self-assessment and self-reflection. One of the important outcomes of this process is to keep all of the important things in your life and your goals all in balance. This article from StartupJournal offers four practical tips to help keep your business from becoming all consuming.

1. Define what is important in life.

4. Delegate, then delegate some more.

Posted by Jeff Cornwall at 06:30 AM | Permalink

A couple of students in one of my entrepreneurship classes this fall have had surprising outcomes from their foray into this topic. Through the process of self-assessment and self-reflection they realized that entrepreneurship is just not the path they want to take in life after all. And this is good.

I never view my job as being a cheerleader. Certainly I will give them encouragement when appropriate, but my goal is never to create the most entrepreneurs I can. Rather, it is to create the highest number of successful entrepreneurs I can. And if their hearts and heads are not suited for this journey, then it is good that they find out before they start a business. It is surprising how many entrepreneurs don't think about these issues and end up feeling trapped and unhappy.

Beyond understanding if entrepreneurship is the right path, self-assessment helps entrepreneurs better define the ideal size and scope of the business before it even begins, by integrating their personal financial, family and other personal goals into the mix.

I even find that successful entrepreneurs with multi-million dollar companies benefit from self-assessment and self-reflection. Often they have lost track of their own goals and aspirations as the business takes on a life of its own. Many talk about becoming servants of the business rather than the business serving their needs.

Here are some of the questions that I encourage all potential and all active entrepreneurs to think about from time to time.

What gets you excited, gives you energy, and motivates you to excel?
What do you like to do with your time?
What drains energy from you in your work and in your personal relationships?
How do you measure success in your personal life?
What do you consider success in your business/career?
What are your specific goals for your personal life?
What are your goals for your business/career, including income, wealth, recognition and impact on your community?
What do you want to be doing in one year? In five years? In ten years? At retirement?

I feel very strongly that examining one's core values is essential in planning a business and consciously developing its culture as it grows. I ask entrepreneurs to list their core personal values that they intend to bring to their business (for example, treating people fairly, giving something back to the community, etc.). Where does each of these core values come from (religious faith, family, etc.)? Why is each of these important to them? How will they put them into active day-to-day?

Here are some more questions that I have folks who are planning to become entrepreneurs reflect on before getting too far into their planning.

What are the major reasons you want to start a business?
How many hours are you willing and able to put into your new venture?
How would you describe your tolerance for uncertainty and risk?
Do you easily trust other people working with you on a common activity? Why or why not?
How much financial risk are you willing to take with your new venture (personal assets, personal debt, etc.)?
Assume you decide not to start your business. A short time later, you see that someone has started the same business and is doing well. How would you feel? Why?
What are the non-financial risks for you in starting a new business?
How do you react to failure?
How do you react in times of personal stress? How do you deal with stress in your life?
How much income do you need with your current lifestyle?
How long could you survive without a paycheck?
How much money do you have available to start your business?
Which of your personal assets would you be willing to borrow against, or sell, to start your business?
Whose support (non-financial) is important for you to have before starting your business (family, spouse, etc.)?

Posted by Jeff Cornwall at 07:25 AM | Permalink | TrackBacks (1)

One of the more inspirational student entrepreneurs I have worked with in recent years was a woman (due to confidentiality I cannot use her name) who had come back to school to support a very personal cause.

One of her children was hearing impaired. In her own research into the possible causes and treatments for hearing impairment in young children, she learned that in many situations the outcome for the child could be significantly improved with very early screening, preferable while they were still infants. And while in many larger hospitals such screening was routine, smaller community hospitals rarely screened for hearing loss in infants.

She took it upon herself to use her previous medical training to begin a service of going to regional hospitals throughout the upper mid-west to offer hearing screening for infants. About the same time, she also decided to finish her bachelor degree. That is where we met.

She enrolled in one of my entrepreneurship courses to learn how to manage this small business. Her original model was one of making sure the fees she charged were enough to cover her basic costs. She had no real intent of even drawing a salary for herself, as her husband was a successful contractor. She just wanted to do good work for others.

The class she was in was a special section I set up for students who had actual businesses up and running. The other students began to challenge her on her assumption that she would never personally be able to make a salary from this venture. We all worked with her on her pricing models, on the efficiency of her routes, how to fill up trips with more hospitals, and how to leverage a part-time clerical employee to increase her billable hours.

Her business is now providing infant hearing screening throughout the upper mid-west, and while still making the services affordable to maximize the families she serves, she is also drawing a reasonable salary for her time and expertise.

I love to see entrepreneurs do well while doing good work. Inc.com's blog site has a similar story about a woman who actually made it to their Inc 500 list making and selling prosthetists. Read more about her story here.

Posted by Jeff Cornwall at 06:54 AM | Permalink

Entrepreneur.com tells of three entrepreneurs who measure success by more than their bottom line. In their commitment to make a difference in their communities they are examples of truly "good entrepreneurs".

"The role of businesses in civic responsibility--actively working in communities for positive change--blows past charity donations and in-house recycling programs as businesses take an aggressive, hands-on approach to making change happen in their communities. Despite the tarnished image some business leaders have sustained in recent years, there are shining examples of those who work to build successful communities as well as successful businesses."

The first was Kowalski's Markets in Woodbury, MN.

"The Kowalskis had an opportunity to flex their civic muscle when they purchased four store locations in 2002. One of the stores was located in Minneapolis' Camden neighborhood, a lower- to middle-class community unlike their typical upscale customer demographic. Rather than sell the property, the Kowalskis decided they had an obligation to provide a neighborhood grocery store to that community since the former tenant had failed to do so, and the civic experiment began."

James Tufenkian uses his carpet business to make a difference in Armenia, his ancestral homeland.

"(H)e brought several Tibetan craftsmen and revived ancient Armenian carpet weaving through his business, which now employs more than 2,000 people in Armenia and nearly 10,000 in Nepal. Tufenkian also started the Tufenkian Foundation, with about 15 different programs to benefit Armenian society; Armenian Forests, a nongovernmental organization to stop deforestation; and Tufenkian Heritage Hotels, with three locations open so far, to drive tourism to Armenia."

Michelle Rathman is the owner of a St. Charles, Illinois-based marketing/PR firm.

"Her mother abandoned her and her three sisters when Rathman was 4 years old. Rathman left her home and her abusive, alcoholic father and lived on the streets at a young age....(S)he shares her story with inner-city youths. She provides insight and advice in hopes of enabling them to make good choices."

Posted by Jeff Cornwall at 06:20 AM | Permalink

The current trend of young people embracing free enterprise and yearning to become entrepreneurs when they grow up seems to be part of an even bigger social shift. Tech Central Station has posted an article written by James K. Glassman reporting on a study on "the mood of American youth". (Glassman's commentary has been published in many newspapers throughout the country over the past week or two).

"Violence, drug use and teen sex have declined. Kids are becoming more conservative politically and socially. They want to get married and have large families. And, get this, they adore their parents.

"'In the history of polling, we've never seen tweens and teens get along with their parents this well,' says William Strauss, referring to kids born since 1982. Strauss is author, with Neil Howe, of 'Millenials Rising: The Next Great Generation.'"

What is behind this radical shift? Glassman quotes an article by Kay S. Hymowitz, in which she believes that is has four root causes:

"1) a 'rewrite of the boomer years,' with young people reacting critically to the world of sexual experimentation and family breakup and 'earnestly knitting up their unraveled culture,' 2) the trauma of 9/11, which has made kids more patriotic and turned them inward toward the comfort of family, 3) the information economy, which has given young people greater faith in their own chances to succeed, especially through self-reliance and entrepreneurship, and 4) immigration, which has produced what she calls a 'fervent work ethic, which can raise the bar for slacker American kids, as any higher schooler with more than three Asian students in his algebra class can attest.'"

I was talking with one of my colleagues just this past week about how different the young people we see in college are compared to those of just five years ago. They are more serious and more diligent. They are more self-reliant and ready to learn for the sake of learning. And they have a very different meaning of success. It includes more balance between economic measures of success and the successes achieved through becoming a spouse and a parent.

Although Democrats should be shaking in their boots about how this could change things for the next decade or so, traditional Republicans cannot take these young people for granted either. They do not trust institutions that abuse power, whether it be governments or large corporations. But they do embrace the system of free enterprise and they long to build stronger families that will last. The Republican shift back toward moderation may not resonate with this group for very long.

Maybe I've been understating things when I've talked about the entrepreneurial economy today. It may be that this is a cultural shift that goes well beyond simple economics. Maybe the entrepreneurial economy is but just one part of a fundamental change that may alter America as radically as did the 1960s generation.

Posted by Jeff Cornwall at 08:16 AM | Permalink | TrackBacks (3)

Market power is something that can be easily abused by larger corporations often at the expense of smaller businesses. There are several examples from the software industry discussed in this article from Wired News.

Posted by Jeff Cornwall at 11:53 AM | Permalink

I am usually the eternal optimist. I guess that goes with the entrepreneurial territory. But, while I am upbeat about the positive power of free markets, I do worry both about collective greed and about markets without soul that seem to be more and more evident these days.

This economic system of ours is based on a fundamental social contract. If the system no longer creates jobs and supports local economies, we run the risk that socialism may pick up speed and private ownership may begin to wane as government takes control and even ownership of many of the means of production. On the other hand, it is not beyond the realm of my imagination to visualize a time when our moral fabric becomes so tattered that rather than living in a land where religion and morals serve as our fundamental guides within a land of free choice, forces may move to impose certain morality through the power of government and quickly take away many of the freedoms we now celebrate. Although it may seem hard to fathom either of these scenarios, both are real.

Why do I worry? First, the size of our government and its scope have expanded at an alarming rate for the past sixty years. As one pundit recently put it, we now have the choice between a steady walk toward socialism with the Republicans versus and full sprint with the Democrats. Much of this seems to be based on a growing materialism and collective greed that has infested our culture. Now don't get me wrong. I am a die hard free market capitalist. But, owning stuff is not the ultimate purpose in life. It makes the journey enjoyable, but it is not the end we should be seeking in our lives. We are merely stewards of all the stuff we are creating in this world, and should never forget the responsibility that places on us. And a government that promises more and more stuff for all, and more and more protection from any of life?s risks, is preying on our collective greed. It threatens to slowly, like the frog in the pot water that never realized the heat had been turned on the stove until it was too late, take away our economic freedoms.

Second, I worry that our culture has become so weak that we now have a market economy with no soul. Some of you may have noticed that my blog site (and I am in no way alone in this problem) has been the subject of repeated SPAM attacks. The latest assault on this site has been from pornographic web "entrepreneurs". Now as a free market kind of guy, I should understand that free market capitalism can be a bit messy at times, but hey, this is a world of supply and demand. Right? Just as owning stuff should not be the ultimate end for the individual, there is the need for a collective understanding on what goods and services create real benefit for our country and our culture. Now one way to control this is through the government stepping in. That just never works. It creates more centralized power, and we all know where that leads us. I don't want to live in a land like we saw in Afganistan before we liberated that country. Culture, which is fundamentally shaped by our shared morality, is the much better choice. Sadly, we seem to have forgotten the importance of culture in shaping all that we do including commerce.

Why is ninety percent of the Internet traffic involved with pornography? I think it has much more to do with the current state of our culture than any shortcoming on the part of our government to intervene. I am just a lowly blogger. It blows my mind to imagine that the modest traffic that comes through my site would even be attractive to the pornography industry as large as it is. But, it is so large and so pervasive that even the little tiny niche of the Internet that I inhabit is part of their ever expanding domain.

In a recent essay, Jordan Ballor suggests that the power of conversion can change all of this. That is, if more people embrace a morality that views things such as pornography as evil, it will eventually end. I hope he is right, because the alternatives are frightening, indeed.

Posted by Jeff Cornwall at 08:05 AM | Permalink | TrackBacks (1)

I have written from time to time about the need to look beyond the government controls versus free markets debate. Culture is an even more powerful force that can provide a context for our economic system that grounds it within a moral foundation. Here is an interview with Peter L. Berger on this topic that is fascinating. Prof. Berger is director of the Institute for the Study of Economic Culture and professor of sociology at Boston University. It was posted at the Acton Institute's web site.

Berger states the following:

"I think cases exist where there are tensions that individuals who are in positions of responsibility have to work through. That is the subject matter of business ethics, which is a complicated and I think worthwhile undertaking. But there is a primitive business ideology that being good, being morally virtuous, will always lead to economic success. That is simply not true. The life of Jesus of Nazareth if nothing else would indicate that he did not start a successful corporation.

"So I think the relationship is not that easy. It does not mean on the other hand, that in order to succeed in business one has to be a brutal, immortal person. No. But there is a tension there. I don?t think there are any easily formulated general rules on how to resolve that tension, but I know many religious people in the business world who will struggle with this and sometimes come up with creative solutions."

Posted by Jeff Cornwall at 07:43 PM | Permalink

It is encouraging to see that this year's Entrepreneur magazine Hot 100 companies includes many companies that have integrated strong values into their company cultures.

"At a time when each day's headlines seem to bring new corporate scandals to light, it's heartening to know that being "good guys" has paid off for our Hot 100 companies. We were impressed by the number of entrepreneurs in this year's listing who credited their success to their employees and spoke passionately about the importance of treating customers and staff well. Proving they not only talk the talk, but walk the walk, the number of companies offering employee benefits such as health insurance, 401(k) plans and stock options increased this year."

Posted by Jeff Cornwall at 09:40 PM | Permalink

John Wamsley passionately believes in two things: the need to preserve native species in his homeland of Australia and the power of free enterprise. I stumbled across his story one day while I was reading a National Geographic story about him and the company he founded called Earth Sanctuaries, LTD.

Wamsley did not believe that government and charitable conservation was working. So he raised money in a public offering to create a company that would make a profit in the process of securing areas that would be free of non-native species, such as feral cats, rabbits, and so forth. He also created various means of revenue generation to create his business, including a ecotourism, lodging, a snack bar, selling non-threatened plants and animals, and so forth.

The start-up was tough, as many are, and Wamsley got some real life lessons about the power of markets to make or break your dreams as seen in the 2002 interview from abc.net:

?The Government conservation doesn't work, and charitable conservation doesn't work, and in fact, I still believe that it is the only hope our wildlife has, the only hope our environment has, is to commercialise it but there's a long way to go and Earth Sanctuaries is the first experiment of this type and it hasn't failed yet.

?I mean, I don't give up that easy.

?But it's hard and it's going to be harder before we get there.?

By 2003 it became clear that changes had to be made if Earth Sanctuaries was to survive. Wamsley was a better conservationist than business person, so he hired professional management. The company is projected to breakeven in 2004, while still expanding its conservations efforts by buying more land to set up protected preserves.

The examples of non-profits trying to pretend to be entrepreneurs is everywhere, but this is one of the only examples I have even seen of a man with a vision that is usually assumed to be the domain of the subsidized non-profits trying to make it in the market of free enterprise.

I found examples on the web of media writers being critical of his efforts, ready to count him out at every stumble. But entrepreneurs do, and always will stumble. But, Wamsley already has succeeded. He has created many new areas that will conserve Australian species, created many new jobs, and shown that capitalism can be an effective mechanism to achieve conservation. In spite of his many early setbacks, he has been an effective entrepreneur and may yet also succeed in terms of his financial goals.

Posted by Jeff Cornwall at 01:28 PM | Permalink

Barry Moltz (his book visited here on a recent blog book tour) talks about the struggles of ethical decision making for small businesses in this on-line article he published at his web site. Barry is always honest, and this piece gives a realistic picture of the struggles entrepreneurs face in their day-to-day work. Often without others to bounce situations off of or corporate codes of conduct to guide you, entrepreneurs must muddle along through what can be very difficult situations. The best I can suggest is to first have a clear set of standards. Write them down and think about how they apply in daily situations. Once that is developed (it should never be considered "done", but a work in progress), reflect on it often and use it to not only evaluate decisions you are currently facing, but decisions you have already made. Remember that each ethical situation you face shapes your character in some small but significant way. Virtue is a habit that is developed over many of such decisions and actions.

Posted by Jeff Cornwall at 01:06 PM | Permalink

The Belmont Center for Business Ethics and our Entrepreneurship Center will be jointly hosting a conference on April 1, 2004 from 7:30 - 11:00 a.m. The conference title is "Integrating Faith and Work: Building your Business on a Solid Moral Foundation". Our keynote speaker is one of my favorite people, Dr. Michael Naughton. This address will be followed by a panel of entrepreneurs discussing how their values have influenced their business practices.

This should be an amazing event, so I hope any of you who are local can attend. Contact gannb -at- mail. belmont.edu for more details on how to register. The cost is only $30 and includes a continental breakfast.

Posted by Jeff Cornwall at 01:52 PM | Permalink

The NFIB site has an article which gives a good overview of the importance of stakeholder relationships for small businesses. The author stresses the importance of building integrity into every relationship a business develops as a critical part of building strong customer trust. A strong reputation takes hard work and time to build with customers. This article gives a nice outline of how small businesses can build a venture on a foundation of integrity.

Posted by Jeff Cornwall at 01:30 PM | Permalink

Professor Bainbridge makes an interesting post in light of our discussion at this site on the differences between publicly held and privately owned businesses. While I have argued that entrepreneurs can, and should, integrate their values into their businesses, Professor Bainbridge argues that a public corporation is not a moral actor and cannot be held responsible as an entity.

Posted by Jeff Cornwall at 01:20 PM | Permalink

I highly recommend a published essay by Father Robert Sirico entitled "The Entrepreneurial Vocation". It is available on-line and only costs $7 with shipping. It is a provocative, inspiring, and compelling essay.

Posted by Jeff Cornwall at 07:23 PM | Permalink

BusinessPundit has an interesting commentary on corporate social responsibility in reaction to an essay in the Economist entitled ?The Two Faced Capitalism?. But this commentary addresses only half of the equation.

Continue reading "Half right" »

Posted by Jeff Cornwall at 01:39 PM | Permalink

As the trial of Martha Stewart gets underway, it might be wise to look beyond the surface a bit. Yes, this is can be viewed as a story of greed, elitism, class warfare gone mad, jealousy, or simply corporate corruption. All of these spins have already been put on Martha?s case.

Continue reading "Martha?s cautionary tale" »

Posted by Jeff Cornwall at 12:35 PM | Permalink | TrackBacks (4)

"I could never start my own business. I cannot tolerate that kind of risk. After all, entrepreneurs are nothing more than gamblers who are willing to bet it all on a hunch of a business idea." Many people view entrepreneurship this way. To them entrepreneurship is as nothing more than a crap shoot. However, when we study financially successful entrepreneurs a very different picture emerges.

Continue reading "The "Entrepreneurs are Gamblers" Myth" »

Posted by Jeff Cornwall at 02:05 PM | Permalink | TrackBacks (2)

In an earlier entry, I highlighted the on-going debate regarding the role of the market versus the state in defining ethics in business. ProfessorBainbridge.com offers an interesting perspective from the Catholic Social Tradition on this debate.

Continue reading "Ethics Watchdog: The Market, Government, or....Part II" »

Posted by Jeff Cornwall at 02:23 PM | Permalink | Comments (4)

Laura Dunham's research on the importance of building social networks supports the importance of shared ethics in building these social networks. It is interesting that such social networks lead to improved performance for entrepreneurs. But, it is even more interesting that Dunham's work supports the notion of community development through shared values as this may help integrate entrepreneurship as a mechanism for building and strengthening communities. Clearly of interest for those who adhere to communitarianism or entrepreneurship as a means for economic development.

Posted by Jeff Cornwall at 02:22 PM | Permalink

Inc. magazine has an intriguing feature that highlights the meaning of success for 12 entrepreneurs.

Posted by Jeff Cornwall at 07:13 PM | Permalink

A study sponsored by MassMutual and the Raymond Institute on women in family-owned businesses reports that women CEO's of family businesses give a higher proportion of their company resources to charity than their male counterparts. Much of their giving is targeted on community and educational charities.

Posted by Jeff Cornwall at 02:56 PM | Permalink | Comments (1)

The debate is still raging about how to improve the ethical climate in American business. Now that the shock of Enron, etc., etc., has passed the debate is still framed as one of two choices. Choice one, let the markets regulate ethics as honesty will pay off in the long run. Choice two, only government can force ethical behaviors on the market. A recent article in Entrepreneur magazine captures this age old debate. However, there is a third force that seems to get put further and further onto the back-burner: culture.

Continue reading "Ethics Watchdog: The Market, Government, or...." »

Posted by Jeff Cornwall at 11:58 PM | Permalink | Comments (2)

Entrepreneurship can be a powerful tool to help improve economic conditions within disadvantaged communities. This web site offers a wealth of information on programs and research related to this important topic.

Posted by Jeff Cornwall at 11:47 PM | Permalink