Archive for the ‘entrepreneur’ Category

In praise of average performers

Friday, January 29th, 2010

It dawned on me this morning that they’re all gone. Someone must have come for them in the middle of the night, but they’re no longer there. The nice old-fashioned executive assistant who gave you hell when you asked to see her boss, then became downright maternal if you groveled a bit. Gone. The middle manager who complained about being overworked, yet came in at 9 am and left at 5:30 pm on the dot to catch his train, but somehow found the time to organize the March Madness pool and keep the books for the department. Also gone. And then there was the kid. She wasn’t quite sure why she worked there, but it paid the rent and they all thought she’d one day get excited about some business thing and go somewhere. Also gone.

American businesses have stopped growing because all the people have gone. The modern-day American enterprise is like Garrison Keillor’s Lake Wobegon: everybody in it is above average. We’ve become so good at weeding out middle- and low-performers that only the best have survived. As a result, US businesses are highly productive. But there’s no backfill for these high-performers. They’re so darn busy they can’t take on anything remotely growth-oriented. They have a job to do. And although they’re financially rewarded, most of them are miserable, crumbling under the demand for their time on task forces for development projects.

We’re killing the high-performers. The executive assistant used to protect the calendar. The middle manager could deal with some requests for information from his boss or other departments. And the young kid could every now and then get excited enough to do a worthy piece of development work that helped the cause. None of it was earth-shattering, but it did help our high-performer. No more. Now, our high-performer puts that work in his or her suitcase every night. And you want her to be on an innovation task force? Go participate with some customers in a co-creation effort?

The scarce resource for innovation work used to be money for external help. Now, it’s the people inside. “The only thing we’d consider is a project that would help us rationalize our initiatives and give some time back to our people,” I’m often told.  When the launching of a growth project is conditioned by a bureaucratic allocation of time exercise, you know you have a problem. Sadly, this is the reality of many US businesses.

Yet this seems to be a uniquely American phenomenon. Businesses in emerging countries are full of people experimenting with new models at the margin of the existing enterprise, even in traditional industries. Even European companies, perhaps because the social and regulatory environment doesn’t allow them to push out low performers so readily, have kept more resources to explore new ways of doing business. Average performers are not the right people to do creative innovation work, but they are the support mechanism for the high-performers who do.

There are also social consequences to this ruthless pruning of the American corporate tree. In its never-ending quest for productivity, American business has externalized the cost of caring for the less gifted or less motivated part of the population. There’s no longer room in business for the young college graduate who’s not yet figured out what to do with her life, the middle manager who’ll never be a star but could do a decent job at a middle-income level, or the end-of-career expert who could never figure out how to sell or manage. Let the system deal with their unemployment, their healthcare needs and the sociological consequences of their demise.

We used to have a basic solidarity. High-performers with a good education and high intellectual aptitude used to create jobs for others. Not everybody was geared for the fast track. It was OK to be a career middle manager, a factory worker or a secretary. The implicit contract was that the fast-tracker would manage a department of middle managers and have a secretary. Plants were meant to absorb people with good manual dexterity and good work ethics, but not necessarily the greatest conceptual abilities. Today, the fast-tracker is asked to weed out the middle managers and do his own clerical work through technology. As for manufacturing jobs, they’ve largely migrated to lower-cost countries. Who’s to fulfill the social role that used to be played by business?

Of course, businesses are not charitable institutions. They do need the best talent to compete, which fosters a Darwinian logic, at least to some extent. But embracing diversity is also creating jobs for those who don’t have the ability to create them for themselves. We cannot only be a nation of solo entrepreneurs. Some people need the help of others. It is easy to understand that for handicapped people, or members of ethnic or religious minorities. Why not extend that to people of average gifts or motivation?

In America, our businesses have become too efficient to innovate. We’re dying completely healed.

An accidental entrepreneur

Sunday, October 11th, 2009

“All human beings are entrepreneurs” Muhammad Yunus, recipient of the 2006 Nobel Peace Prize,  likes to say. One of his campaigns involves trying to convince beggars to become door-to-door salesmen by lending them between 10 and 15 US dollars to buy their initial inventory of fruit, vegetables or toys for kids. As he puts it, he tries to get them to phase out their “begging division” and grow their “sales division”.

We should teach entrepreneurship somewhere between writing, reading and arithmetic. Just like the Three Musketeers were in fact four, entrepreneurship could be the fourth of the 3 Rs.

I discovered entrepreneurship much too late in life. I just didn’t know there was such a thing. There were no business people in my family, let alone entrepreneurs. All were teachers or government employees. None of them, as far as I know, had ever thought of starting a company. Growing up, I would‘ve been unable to list the major employers in my home town, nor did I understand that the wealth of my neighbors had anything to do with private companies creating employment opportunities for them.

I did have two small window on the real world, though. My father was a curious man. While grading school papers in front of a window overlooking the street, he analyzed trucks climbing with difficulty the steep hill in front of our house, noticing which companies they belonged to and trying to identify their points of origin and destination. With no frame of reference – there was no Internet then – the speculation was limited to enigmatic questions such as: “I wonder who needs a truckload of steel tubes from Wuppertal, Germany”.

I was also tipped to the relevance of business on prosperity by geography. Growing up as a French baby boomer living close to the German border, I became aware of the fact that the Vosges region where I lived was poorer than the Black Forest region on the other side of the Rhine. Black Forest houses were freshly painted and had flowers at their windows, while most French homes were in blatant need of renovation. I progressively discovered that the midsized companies of the mechanical industry in the Black Forest were growing, while the textile and paper mills of my French region were progressively shutting down.

After the randomness of the French educational system directed me to business studies, I moved to the United States and spent many years working for others, perpetually trying to reassure family members back in France that the financial risk wasn’t too great, the amount of work not excessive and the rewards worth the journey. The further jump into entrepreneurship came in the form of a couple of mentors dragging me into my future by my rear-end. I was operating as a faculty-in-residence inside a midsized consulting firm, when my two mentors kicked me out of the nest and gave me some capital to go out and recruit some people of my own. This marked the beginning of my entrepreneurial career.

I am not exactly Bill Gates or Steve Jobs, but I have been able to provide opportunities for many young (or older) people over the years, a fact I find as gratifying as the economic rewards most people associate with entrepreneurship. I often reflect on how lucky I was that my two mentors not only pushed me into it, but also gave me the initial capital to get started.

My only regret is that I started too late. I wish my middle school had told me about entrepreneurship as a natural human state. I wish I had know about Mohammad Yunus then. We’re all entrepreneurs, indeed.

Do the French have a word for “entrepreneur”?

Thursday, September 3rd, 2009


President George W. Bush reputedly told Tony Blair one day that “the French don’t even have a word for entrepreneur.” Not only was he etymologically confused, he may have been downright wrong. The French have created a lot of successful global businesses over the last 40 years, although these businesses do not fit the classic Anglo-Saxon entrepreneurial model. The French believe in the power of government funding to launch and sustain global enterprises. As a French-born, University of Chicago-educated boy, this success has generated a personal schizophrenia between the natural interventionism of my origin and the laissez-faire convictions acquired from my alma mater. As a result, I have slept badly for most of my adult life. 

In the grand, centrally controlled tradition of Napoleon, French political leaders believe state governments can and should play a role in business. In fact, Jacques Attali, an influential advisor to most recent Presidents of France, from the socialist François Mitterand to the conservative Nicolas Sarkozy, advocates that France’s competitive advantage over the last 40 years has been its ability to centrally fund major infrastructural developments. Success stories have included Airbus, the French-led, European consortium of aircraft manufacturers taking on Boeing in civil aviation; the French national utility EDF establishing a strong global position in nuclear energy; and the national railroad company SNCF and its supplier Alsthom jointly learning to build and operate TGVs, the French high-speed train. To add insult to injury, Attali contends that the U.S. has begun a gradual decline because of its capitalistic excesses – “similar to the Roman empire in its decadent phase”, he adds for good measure – pointing out that the center of the economic world is now leaving the U.S. to continue its eastward shift toward China. 

It is difficult to argue that the U.S. free market model is thriving, particularly at a time where the U.S. economic policy under the Obama administration has become vastly interventionist to support banks and automotive companies, and is trying to establish a government healthcare mandate. It is equally hard to deny that the stock of China is rising compared to the U.S. So maybe we let the French win this one for now and grant that they indeed have a word for “entrepreneur,” which is “l’état entrepreneur.”

The ultimate economic model, though, remains to be crafted. There is an undeniable global appetite for tightening the social compact between citizens, including in the more traditionally free-for-all U.S. market. At the same time, government organizations still suffer from relative inefficiency, including at Airbus, SNCF and EDF. The future may lie in a new form of technology-enabled, bottom-up democracy where politicians co-create the economic agenda with their citizens. We have seen evidence of co-creation seeping slowly into politics, with the campaigns of Howard Dean and Barack Obama in the U.S. (and some Republicans rapidly catching up), and the presidential campaign of Ségolène Royal in France (and more recently Nicolas Sarkozy). The Hong Kong administration and the government of Andhra Pradesh in India have offered advance glimpses of this future, technology-rich form of government, where the social contract is built piece-by-piece by citizens at the local level, rather than mandated from the top, fostering a more efficient use of resources and preventing the excesses of raw capitalism. We should encourage citizens to build this economic agenda with their local businesses. There is already a powerful local food trend. Why not a strong local business trend? 

Only then – when co-creation of the economic agenda by citizens at the local level becomes the “third way”– will I get to sleep, finally at peace in this Franco-American reconciliation of economic models.

The music of authentic teachers

Thursday, August 13th, 2009

I have a theory about teachers: talented teachers become corrupt over time. They start with a genuine desire to help students discover new things, then fall in love with themselves. Students’ learning yields to the professor’s ego and his or her needs to be admired and complimented. Before long, the class is about the teacher, no longer about the students. It moves from education to show business.

I ought to know. I live surrounded by star business school teachers who wow students every day, gather large crowds at international events, and charge a minimum of $15,000 per appearance, sometimes going up to $50,000 or even $100,000. When they reach that level, most professors are no longer interested in the learning of their adoring crowds but focus instead on lifting their shows to the top of the (earnings) charts. As in show business, authenticity gets replaced by staged performance. Star professors become the Rolling Stones, still incredibly fun after all these years, but you know Mick and Keith don’t give a hoot about you anymore.

My cynicism about business school teachers notwithstanding, I recently signed up for a class at Babson College, my first one as a genuine student in 30-some years. The class was run by Babson President Len Schlesinger (in partnership with Charlie Kiefer). I expected to see Robert Plant, the aging singer of Led Zeppelin, and looked forward to his acoustic rendition of “Stairway to Heaven.” Instead, I discovered a vanguard artist creating a whole movement around him, and reinventing the music business to boot.

I had known Len a long time ago, but had lost track of him until someone recently told me we might have overlapping interests. The class I took (titled “Entrepreneurial Thoughts and Actions,” I think) is best described as a co-created experiment on co-creation. It costs close to nothing by the standards of executive education events involving professors of Schlesinger’s caliber ($275). It has no handouts worth talking about (hence my hesitation about even the name of the class). The other students were an egalitarian mish-mash of idealistic Babson students, experienced entrepreneurs, managers of nonprofit agencies, and business types interested in innovation. The students are meant not only to help debug the material but also become nodes in the co-development of the ideas.

The core of the class is provided by the two teachers, of course. In deference to Len’s and Charlie’s work, I will not divulge the content of the workshop, except to say that it is a gig on entrepreneurship offering powerful melodic lines with a free-form rhythm section. The rest is up to you.

The most daring types are invited to come on stage and riff with the boys (women were particularly good at it). Len has integrated new research that he quotes with the enthusiasm of Sting discovering Indian music (in his case, Saras Sarasvathy at the University of Virginia). The key they play in is so disruptive to what you hear from the traditional literature on entrepreneurship, with its analytical, funding-oriented bias, that you may feel like Glenn Miller at a Phish concert.

Their stuff is about the entrepreneurs themselves, rather than the power of their vision. Entrepreneurs, they claim, are like John and Paul in the early ’60s, figuring out that they like each other (at least at the beginning) and discovering what kind of music they want to play to earn a little money. For the first time, I saw someone describing the entrepreneurs whom I know, happily making up stuff with self-selected partners for the sheer fun of it.

The remarkable thing about Schlesinger is that you still get the rock star in full voice (and humor). He’s hyperkinetic and will get you to air-guitar along his Aerosmith-like riffs (although love is indeed sometimes hard on his knees). But he’ll interrupt his solo any time he sees somebody grappling with something he said. He’ll hum with you till you learn, adding one voice at a time to the already vast chorus of his co-creators, simply because he cares. He also said I could come back to the next workshop and he’d charge me only $25.

At that price, I think I’ll dust off my Fender Stratocaster from the attic and see if I can help him introduce a little more beat into his free jazz.