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?

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…

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.

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.

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.

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.

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.

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.

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.