A Really Cool Blogging Moment

Writing this blog has truly been a gift.  It has introduced me to amazing people and opened up all kinds of fascinating conversations. 

I just got done with one of those moments.

As a member of the Forbes blogging network I was invited to submit a question for a conference call with Steve Forbes.  The conference call was around his new book, How Capitalism Will Save Us.  To  my delight, my question was the first one they asked him.  Here is the essence of what I asked:

In your book How Capitalism Will Save Us you argue that capitalism is a moral system. 

A free market and a free society are necessary, but not sufficient, to create a moral society.  I am concerned that we might abdicate our responsibility as individual actors within that system if we are not careful.  We cannot simply say capitalism is moral and therefore gives me cover to act in immoral ways. 

Wouldn’t it be better to say that capitalism is the best system that allows moral men and women to freely act in a moral way and the most transparent system to let us all know when they do not?

Forbes replied that he believes that “capitalism is a moral system, but one that must be informed by values, the rule of law, and faith in the future.”  If the participants in the free market system “do not act morally, the system will break down.”

Then the cool stuff started.  It was not just a “sit on the phone and listen” teleconference — it was truly interactive.  He answered two more submitted questions, but each time we entered into a dialogue and were able to follow-up.

His views on current policy out of Washington were predictably negative.  But he has a relatively positive outlook for the future.

Forbes said that if Washington does not get economic policy right very soon, you will begin to see political ramification that will lead to fundamental changes in economic policy.  He attributes this to technology.  Communication happens so fast that discontent spreads much more quickly than in the past.  He cited the rapid grassroots spread of the Tea Parties.

“The world has changed,” he said.

To which I said, “Indeed, we have a magazine publisher talking on the phone with a bunch of bloggers.”

His reply:  “Who knows.  I may be working for one of you someday soon.”

Developing Moral Leaders

Anyone who is a regular reader knows that I am a staunch advocate for free markets and individual liberty.  However, building a successful economy and society based on these principles is dependent on a common recognition of the individual moral responsibilities which hold it all together.

As an entrepreneurship professor, I try to challenge our students to understand the moral and ethical responsibilities that they will face as they start and grow their ventures. 

Unfortunately, the research of Thomas A. Wright, the Jon Wefald Leadership Chair in Business Administration at Kansas State University, shows a gap between the character traits that business students say make a good business leader and the traits they describe having themselves.

Wright suggests that there is a significant moral decline in higher education, including in schools of business. He said it is critical for students to learn about the importance of character and ethical behavior before entering the workplace.
 
And when entrepreneurs and other business leaders abdicate their responsibilities to act in ethically and morally government, particularly the more activist, socialist government now in power, will be quick to intervene and use regulatory powers to dictate the behaviors of business leaders.

“As business professors in an increasingly ‘just show me the money’
business school environment, we all share responsibility for this moral
decline,” Wright said. 
 
Wright has found that MBA students list social intelligence as being one of the top two strengths necessary to be an effective manager. However, this strength was among the least common strengths self-reported by these same students.

“Obviously, if the development of character is important, many of our students are entering the workplace woefully lacking in a number of the prerequisites necessary for success,” Wright said.
 
Many students rated honesty as one of their top five strengths. However, in another study, Wright found that 88 percent of the students reported that they have cheated in school, with many students reporting they had cheated 100 or more times.

“Students report that they lack viable, positive adult role models – individuals who can walk the talk,” Wright said.

Indicative of a morally relativistic perspective, the majority of students sampled said it solely depended on the situation whether a person should lie, cheat or steal, Wright said.
 
“It’s a common belief that as long as our behavior is seen as being instrumental in our pursuit of personal and material success while not hindering our personal choice preferences, we are willing to accept a modicum of lying, cheating and stealing behavior from both ourselves and our leaders as a cost of doing business,” Wright said. “Alternatively, a character-based leader will not lie, cheat or steal, nor will he or she tolerate those who do.”
 
He said students who cheat in school are not only more likely to cheat in graduate and professional school, but they also are more likely to engage in unethical business practices. This provides all the more reason for why higher education institutions should include ethical and character development in their pedagogy, Wright said.

Wright is correct.  Virtue is a habit.  Our behaviors over time are what shape our character.  The executives at Enron did not wake up one day and say, “I’m going to lie and cheat our shareholders and employees.”  As Mike Naughton and I have argued, their actions were most likely the culmination of a long series of deceitful acts.
 
“It’s important to help students develop the awareness and skills necessary to make morally based choices through the development of character strengths,” Wright said. “Our collective failure to practice strengths of character, such as perseverance and self control, has led us to the brink of both moral and financial ruin. Massive governmental takeovers are not the answer, but the development of individual character may well be a viable solution. As faculty members, the ethical and strength of character development of our students should be made an integral part of our stated mission in higher education.”

Amen!

The Changing Face of Entrepreneurship

Here is my column from the weekend as it ran in the Tennessean:

A couple of recent studies shed some light on the direction of entrepreneurship in our economy for the upcoming year and beyond.

The latest study issued by the Global Entrepreneurship Monitor, recently released by Babson College, gives a very interesting snapshot of the face of today’s American entrepreneurs.

The GEM study found that total entrepreneurial activity actually increased in the U.S. in 2008 from the year before.

In a different study funded by Microsoft, the findings were that most of these new entrepreneurs are either accidental ones or at least folks who had never aspired to become entrepreneurs before the current recession. The study found that about 70 percent of the respondents who are first-time entrepreneurs left their jobs to start businesses in the midst of the current recession.

Even though we know many of today’s entrepreneurs came to start their ventures because of the economy, they are still seeking to make something out of opportunities they have observed rather than just starting a business to make ends meet.

The GEM study found that 87 percent of U.S. entrepreneurs started their business because of a business opportunity while only 13 percent started their business simply out of necessity or desperation. However, even though these entrepreneurs say they see opportunity, they also see an increased risk of failure.

One finding that caught me somewhat by surprise was that the typical entrepreneur is getting older. The GEM study found that baby boomers are becoming more entrepreneurial, while the millennial generation and those in Generation X are becoming less likely to start a venture.

The results indicate a marked reduction of around 9 percent in entrepreneurial activity for individuals 18 to 44, while those 45 and up had an increase in entrepreneurial activity of almost 10 percent this past year.

The study did not differentiate those of the millennial generation from those of Generation X.

My anecdotal observation from the business program at Belmont University and from other similar programs is that the millennials seem to be fairly steady in their rate of business startups. We see signs of increased entrepreneurial activities from them in the coming years. But Generation Xers seem to be hunkering down, trying to make ends meet through traditional employment.

In a finding that sent chills down my spine, the study found that the size of the ventures entrepreneurs are thinking about is changing. From 2007 to 2008, the number of jobs entrepreneurs expected to create from their startups decreased among the smaller firms.

That’s not a good sign of long-term employment growth in our ailing economy.

Manufacturing is down

The GEM results indicate a continuation of the trend away from a manufacturing economy in the U.S. There are fewer new businesses in innovative, transformational industries that could create renewed long-term growth in our economy compared with other countries around the globe. This is another bad sign for the long-term economic outlook in the U.S.

Finally, in terms of financing, people are looking more and more to friends, family and other private funding to fund their new ventures. The number of people investing in someone else’s business increased, as did the amount they financed. However, those numbers are countered by a precipitous decline in Small Business Administration lending.

It is the private sector — not the government — that is keeping the entrepreneurial engine running in our economy.

Little Progress on the Small Business Jobs Front

According to the November SurePayroll Small Business Scorecard small-business hiring is up in November from October, bringing us to a 2.6 percent increase year-to-date (based on aggregated data from 25,000 small businesses).

Unfortunately, any increase is not a sustainable and permanent uptick in jobs.  The increase is due to a continued reliance on independent contractors for the majority of new jobs.  These are temporary jobs with no benefits or long-term stability.

Small-business salaries continue to decline, with a national year-to-date drop of eight percent. On average, the small business employee earned nine percent less year-to-date in ’09 than during the same time period in ’08.

Family Business Succession

The odds of successful family business succession goes down with each generation.  There are challenges with even making it to even the second generation of family business ownership, and by the third the odds become rather steep against successful succession.

The key is succession planning.  Dave Specht, an adjunct instructor at the University of Nebraska, has a very practical and entertaining overview of the challenges of succession and some of the ways to overcome them in a new article published in Family Business Magazine.  From the article:

Family business owners are re mark able people, yet the sobering truth is that they are mortal human beings.  When it comes to preparing for the inevitable–business continuity planning–there are four reasonably predictable ways that most business owners’ attitudes can be characterized. Their thoughts and behaviors are represented here by four superheroes: Captain Immortal, Dr. Shhhh, Oblivious Man and Ms. Reality.

Tight Times in Silicon Valley

It is a whole new world in Silicon Valley.  The place where venture equity seemed to grow on trees has discovered, of all things, bootstrapping.  Serving up barbecue to friends to get them to write code and working out of incubators that operate at night so folks can keep their day jobs are just a few of the bootstrapping start-up techniques being seen in Silicon Valley these days.

John Wark sent along a story from siliconvalley.com that describes how
the same crowd that a few years ago seemed to get VC funding for just
showing up at a meeting, is now having to scrape by like the rest of us.

Interesting times, indeed…..

++++++++++++++++++++++++++++++++++++++

By the way, speaking of bootstrapping, I’ll be speaking to the Nashville group of entrepreneurs called Better Bootstrap tonight.

The USASBE 2010 Conference: A Preview

What:     Free webinar overview of upcoming USASBE 2010 Conference in Nashville (United States Association of Small Business and Entrepreneurship)
 
When:   Wednesday, December 2 at 3 pm (U.S. eastern standard time)
 
Who:     Michael Morris, Bill Jackson, Jeff Cornwall, Rebecca White, Mark Weaver, Becky Gann
 
Why:     Find out what is happening at the conference, when, and who will be there

Click here to REGISTER now!

*Space is limited to first 100 registrants so complete your registration early to secure a place.

The USASBE Annual Conference is one of the largest gatherings of entrepreneurship scholars, educators and supporters in the world.  This year’s conference will be held January 14-17, 2010 in Nashville.  January 14th is dedicated to pre-conferences, with the main program on January 15, 16, and 17th. As a special service to members, we have organized a free webinar to go introduce those planning on attending, or thinking about attending to an overview of the Conference.
 
In the webinar, we will cover:

  • The overall Conference Program for 2010
  • The keynoters and pillar session speakers
  • The nine Pre-conference Sessions, what they are about, and how to register
  • The Developmental Papers Track and how it will work
  • The Doctoral Consortium
  • The National Awards Program and Research Awards
  • The Career Center
  • Cool things to do or see in Nashville
  • …and more

Those attending the webinar will learn what is happening day by day at the conference, and when. They will be able to ask questions and interact with the speakers.  We hope you will join us!
 
Dial-In Audio:
To access the MeetingOne Audio for this conference call, please use one of the following options;
1.    Enter the Webinar Conference Room using the provided URL on December 2nd. Upon your log-in, the webinar system will immediately prompt you to enter a telephone number in order to call you directly.
2.    Dial the following access number 888-835-7883 once you have entered the webinar.

The Impact of Social Media on Small Businesses

Ross Dawson has a post at MyVenturePad on the impact of social media on small and medium enterprises.  It is based on an SME Technology Summit held in Sydney, Australia.  Here is a summary of the key areas that social media is helping small businesses gain market share that were identified at the summit:

1. Findability

2. Customer communication

3. Productivity

4. Collaboration

5. Outsourcing

6. Online revenue

The Original Intent of Thanksgiving

What is Thanksgiving?  It has become a day to be with family, overeat just a bit on turkey, watch football, and plan strategies for Black Friday shopping. 

Each year I share the original proclamation for our American
Thanksgiving holiday to remind us of the original intent for this national holiday — to give thanks to God for our many blessings.  It is my own contribution to helping us remember the original intents of our founding fathers.

Even in difficult times we have so much to be
thankful for.  But, we should never take for granted the blessings that have been handed down to us through the generations. 

“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:

“Now, therefore, I do recommend and assign Thursday, the 26th day of
November next, to be devoted by the people of these States to the
service of that great and glorious Being who is the beneficent author
of all the good that was, that is, or that will be; that we may then
all unite in rendering unto Him our sincere and humble thanks for His
kind care and protection of the people of this country previous to
their becoming a nation; for the signal and manifold mercies and the
favorable interpositions of His providence in the course and conclusion
of the late war; for the great degree of tranquility, union, and plenty
which we have since enjoyed; for the peaceable and rational manner in
which we have been enable to establish constitutions of government for
our safety and happiness, and particularly the national one now lately
instituted for the civil and religious liberty with which we are
blessed, and the means we have of acquiring and diffusing useful
knowledge; and, in general, for all the great and various favors which
He has been pleased to confer upon us.

“And also that we may then unite in most humbly offering our prayers
and supplications to the great Lord and Ruler of Nations and beseech
Him to pardon our national and other transgressions; to enable us all,
whether in public or private stations, to perform our several and
relative duties properly and punctually; to render our National
Government a blessing to all the people by constantly being a
Government of wise, just, and constitutional laws, discreetly and
faithfully executed and obeyed; to protect and guide all sovereigns and
nations (especially such as have shown kindness to us), and to bless
them with good governments, peace, and concord; to promote the
knowledge and practice of true religion and virtue, and the increase of
science among them and us; and, generally to grant unto all mankind
such a degree of temporal prosperity as He alone knows to be best.

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

George Washington