Posts Tagged corporate social responsibility
In 1990, Robert Walsh, a Montreal engineer, launched Forensic Technologies inventing the Integrated Ballistic Identification System (IBIS), a crime-fighting tool so popular CSI and Jeopardy have featured it on television. Although Walsh had no knowledge of guns, his invention has become a sophisticated crime-fighting tool that fingerprints bullets and casings from guns by digitizing microscopic information about them. The company landed its first federal contract in 1994 in Washington and has gone global with sales in over 60 countries. Forensic Technologies has its technology installed in over 200 locations in the United States (Chapin, Righton, & Gallant, 2011).
Although Walsh founded the company in his native Canada, he noted the United States emerged as a natural place for this technology because of exploding gun crime. Forensic Technology’s vice president and general manager, René Bélanger, said expansion of the company did not come without challenges because doing business from one country to the next is quite different. Bélanger added a company has to pursue its target and know where it wants to go. Bélanger said a company has to tie to the segment of the market it wants to target to achieve success. Forensic Technology learned this lesson after trying to diversify its product offering, which did not go so well. Forensic Technology today boasts an IBIS hub at Interpol in Lyon, France as it targets the world (Chapin et al., 2011).
International entrepreneurs have to define their target market and go after it with a vengeance. Doing business across the globe is a complex task and a company has to know its customers. Do you have a business that you want to go global? Have you defined your market? If you do and have not defined your market you need to learn more.
Chapin, A., Righton, B., & Gallant, P. (2011). International success stories Canadian Business, 84(10), 52-54. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&db=ent&AN=61074191&site=ehost-live
business plans, competitive advantage, corporate social responsibility, creativity, entrepreneur, entrepreneurial education, entrepreneurial experience, entrepreneurial leadership, entrepreneurial learning, entrepreneurial passion, flat organizational structure, good leadership skills, innovation, International entrepreneurship, leadership, managing innovation, organizational culture, organizational trust, risk management, small business financing, start-ups, uncertainty, vision
For the last several years politicians have tagged the economic idea of Made in America as a protectionist philosophy. The truth is manufacturing at home and exporting to countries overseas improves the American economy. Net exports (over imports) is what the economy needs to grow. Although importing can produce cheaper goods and services, quality problems and service has declined as a result. For example, lead in toys and brake problems in automobiles have resulted in recalls. Foreign manufacturers have stolen American intellectual property. The list goes on.
One small business has defied the protectionist name calling and built a successful business producing digital radiology equipment. Radlink, Inc. is a California-based company with 22 employees manufacturing its product in the United States and selling to China, Latin America, and the Middle East (“Small and medium…,” 2011).
Radlink calls on Dr. Peter J. Julien, the director of thoracic imagining at Cedars-Sinai Medical Center in Los Angeles to provide expertise in reading x-rays and transmitting the results using the company’s state-of-the-art equipment. Thomas T. Hacking, Radlink’s chairman and chief executive officer, explained how Radlink’s digital equipment saves “time, money, and space,” (p. 772) while providing high-quality digital images needed for surgical accuracy (“Small and medium…,” 2011).
Small business is the engine for domestic manufacturing and Radlink sets an excellent example for other companies wanting to reclaim the Made in America economic virtue. Do you want your company to help lead the United States back to economic prosperity? Do you want to learn more?
Small and medium business technology alliance; SMBTA highlights an American small business success story. (2011). Investment Weekly News, 772. Retrieved from http://search.proquest.com/docview/908910659?accountid=35812
change agent, competitive advantage, corporate social responsibility, creativity, entrepreneur, entrepreneurial experience, entrepreneurial leadership, entrepreneurial learning, entrepreneurial passion, innovation, leadership, social capital, start-ups, vision
Stephen Lagerfeld (2010) described his father’s work as a spirit transcending economics. As his father traveled to work each day he shook his head in pity at the “poor tied-and-jacketed drones” (p. 1) heading in the opposite direction. Although Lagerfeld’s father did not enjoy the security of stable employment, he had his own nursery business, which spawned several other ventures and employed more than 50 people. Lagerfeld said employing other people moved his father the most. Lagerfeld portrayed entrepreneurship as “the pursuit of happiness” (p.1) through autonomy and self-creation. Money is nice, but the entrepreneurial spirit overshadows all else.
Although Lagerfeld’s father almost lost everything during the recession in the early 1970s, he managed to escape with a decent retirement until his death. Lagerfeld’s father did not mind having to work six days a week and many hours without the same security of the drones to find happiness. Lagerfeld’s father’s greatest joy came from the entrepreneurial spirit and his independence and self-expression (Lagerfeld, 2010).
Entrepreneurs often traverse in an opposite direction and rebel from traditional work. Entrepreneurs are the engine of creation and employment. Entrepreneurs enjoy the challenge more than the money. Capitalism relies on the entrepreneur to get through the rough times and rejuvenate the economy.
Does your spirit move you? If you have the spirit we can help you. Learn more.
Lagerfeld, S. (2010). The spirit moves us. [Brief article editorial]. The Wilson Quarterly, 34(2), 4.
business plans, cash flow, competitive advantage, corporate social responsibility, creativity, disadvantaged entrepreneurs, entrepreneur, entrepreneurial education, entrepreneurial experience, entrepreneurial leadership, entrepreneurial learning, entrepreneurial passion, good leadership skills, innovation, organizational culture, start-ups, value people, vision
The story of Tariq Farid provides some insight on the qualities one needs to become a successful entrepreneur. Tariq is a Pakistani American who emigrated to the United States at age 11 with his family. By the age of 17 Tariq owned a flower shop with the support and encouragement of his family. Two years later Tariq successfully operated four stores. Making a better experience for his customers thrust Tariq’s drive that led to him to create point of sale software for the floral industry. Tariq later founded and led NetSolace, Inc., which provides franchise management solution software. In 1999, Tariq’s thirst for starting new businesses propelled him to start Edible Arrangements®, a franchise organization providing fruit bouquets, which grew to over 1,100 stores worldwide (Crowley, 2012).
Tariq developed his leadership style from the values instilled by his family while growing up. These values included honesty, integrity, and passion. Tariq believed in preserving these values and always returns to these basic values. For example, Tariq responded to an interview explaining how his drive comes from keeping honest with the consumer and himself. Tariq said he believe a true entrepreneur has a focus not so much on making money, but on keeping a social consciousness and providing for long-term profitability. According to Tariq the successful entrepreneur strives to do better and take care of the customer. Passion is the main motivation of the true entrepreneur not making money (Crowley, 2012).
Another striking characteristic of the successful entrepreneur is to embrace change because people enjoy new and unique products. Tariq believes in rethinking everything to stay on cusp. Tariq likes to employ people who embrace new ideas and who serve as change agents to customize products to people’s evolving needs (Crowley, 2012).
One other idea Tariq’s parents instilled in him is to work hard and go after the American dream. Success does not come easy. A person must work hard to become successful. Tariq realized he must work hard to confront risks and overcome them. Successful entrepreneurs must pay their dues and embrace a willingness to make mistakes (Crowley, 2012).
In short, genuine entrepreneurs are ” leaders who lead with purpose, values, and integrity; leaders who build enduring organizations, motivate their employees to provide superior customer service, and create long-term value for shareholders” (Crowley, 2012; George & Sims, 2003, p. 3). Tariq Farid provides an example of an authentic entrepreneurial leader. Do you have what it takes to become an authentic entrepreneurial leader? Do you want to learn more?
Crowley, K. (2012). CEO perspective: Entrepreneurship with a point of view. South Asian Journal of Global Business Research, 1(2), 177-182. doi: 10.1108/20454451211252714
George, W., & Sims, P. (2003). Authentic Leadership: Rediscovering the Secrets to Creating Lasting Value. San Francisco, CA: Jossey-Bass.
business plans, change agent, competitive advantage, conflict management, corporate social responsibility, creativity, disadvantaged entrepreneurs, entrepreneur, entrepreneurial education, entrepreneurial experience, entrepreneurial leadership, entrepreneurial learning, entrepreneurial passion, good leadership skills, innovation, networking, organizational culture, organizational trust, reputation, risk management, servant leadership, start-ups, value people, vision
As the song goes the bankruptcy of the Hostess Brands, Inc. brings to mind how many companies today rest on their laurels. Many companies have forgotten how to compete because rapid growth has gotten in the way. Kalson (2012) noted how the Hostess company blamed the company’s problems on its unions and dispelled the idea bad corporate decisions, financial shenanigans, outdated strategy, and inept management could have caused the problems.
The Hostess brand emerged from a troubled history at Continental Bakeries. Interstate Bakeries later bought Continental pursuing its strategy of growth by acquisition and mergers. Interstate had a history of run ins with its workers and focused on rapid growth instead of its products and people. For example, in 1982 Interstate Bakeries raided an over funded pension fund to pay off debt on its inefficient plants (“Hostess Brands, Inc.,” 2012).
The Continental merger brought new enzyme technology to the company allowing its products to have a longer shelf life, lowering delivery costs, and improving profitability. Continental like Interstate engaged in an acquisition strategy. Similarly, the company had disputes with its workers and in 2000 lost a suit in San Francisco brought by 19 black workers claiming racial discrimination (“Hostess Brands, Inc.,” 2012).
Again in 2004 the government probed the company’s worker’s compensation reserves and problems with a new financial system the company installed. In 2004 the company filed for bankruptcy still under investigation for how it set its worker’s compensation reserves. In 2009 the company emerged from bankruptcy and relocated to Kansas City only to file for bankruptcy again in 2012 (“Hostess Brands, Inc.,” 2012).
The lesson learned is growth through acquisitions often is a poor strategy leading to financial difficulty if not managed carefully. An entrepreneur would do better by focusing on products and people to grow organically. Entrepreneurs should learn from the Hostess story, acquisitions and mergers often leads to discord between workers and management, and financial problems. Duplication of duties is costly without a plan to remove these costs. A company’s business strategy can become blurred, and the company can lose its focus on its vision and how it best serves its customers.
Kalson (2012) noted how Hostess sold its soul to private equity firms, hedge funds, and investors while amassing over $1 billion dollars of debt. Acquisitions seemingly erase the competition, but can also serve as the deathbed of a company. Entrepreneurs should think about losing their Twinkies before entering such a strategy.
Entrepreneurs should understand both sides of this strategy before committing to it. If you want to know more about the pros and cons of different strategies contact us to learn more.
Hostess Brands, Inc. (2012). Hoovers Academic. Retrieved from http://subscriber.hoovers.com.ezproxy.apollolibrary.com/H/company360/history.html?companyId=15324000000000
Kalson, S. (2012). When all else fails, blame the union hostess gives the twinkie defense a whole new meaning Pittsburgh Post – Gazette. Retrieved from http://search.proquest.com/docview/1220357399?accountid=35812
acquisitions and mergers, bank loans, business plans, competitive advantage, conflict management, corporate social responsibility, entrepreneur, entrepreneurial education, entrepreneurial experience, entrepreneurial learning, good leadership skills, managing innovation, organizational culture, organizational trust, reputation, risk management, small business financing, start-ups, uncertainty, value people, venture capital, vision
During the height of the Great Recession of 2008-2009, Lehman Trikes formed a strategic alliance with Harley-Davidson. Lehman Trikes, a small publicly held company on the TSX Canadian Venture Exchange, lead the industry in making three-wheeled motorcycles in Spearfish, South Dakota. Harley-Davidson announced it selected Lehman Trikes as its exclusive supplier of its Tri-glide three-wheel motorcycle. Before signing the alliance, Lehman made the three-wheeled motorcycles in the aftermarket. Harley legitimized the three-wheel motorcycle with its announcement bringing it into the established motorcycle market (Looney & Ryerson, 2011).
By the end of the summer of 2010, Harley-Davidson faced difficult times losing half its business. Harley-Davidson did not renew the agreement signed with Lehman Trikes. Harley kept the rights to the Tri-glide brand and granted no residual rights to Lehman Trikes, but in its original agreement clearly laid out its non-renewal rights and terms. Although Lehman feared Harley might not renew the contract, it understood the risks when it signed the original agreement (Looney & Ryerson, 2011).
Do you believe the alliance between Lehman Trikes and Harley-Davidson met both companies’ goals? Do you believe the alliance had successful results? What benefits did the companies achieve because of the alliance? What risks did the companies face by signing the alliance? Did the alliance benefit Lehman Trikes, the smaller company? Do you believe Harley exercised its rights in a fair and transparent manner? Knowing that ending the agreement would limit its supply of the Tri-glide, did the strategy benefit Harley-Davidson? Did Lehman Trikes have a viable business model or could it have strengthened its model?
Let us know what you think? Do you want to know more about forming strategic alliances? Learn more.
Looney, D. C., & Ryerson, A. (2011). Lehman Trikes: A story within a story 17, 35-39. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&db=ent&AN=69927663&site=ehost-live
brands, business plans, change agent, collaboration, competitive advantage, conflict management, corporate social responsibility, entrepreneur, entrepreneurial education, entrepreneurial experience, entrepreneurial leadership, entrepreneurial learning, entrepreneurial passion, good leadership skills, innovation, managing innovation, networking, organizational culture, organizational trust, reputation, risk management, uncertainty, vision
Gibb and Schwartz (1999) argued groupthink paralyzes companies creating a culture that dismisses all social issues as unsuitable for management consideration. Gibb on and Schwartz claimed the best employees in the future will not tolerate a stifling top-down culture because better educated and networked employees will demand more participation. Chen, Lawson, Gordon, and McIntosh (1996) argued good decisions come from leaders who encourage an open decision-making process. Maharaj (2008) argued strict adherence to rules masks open decision-making and evaluation of alternatives and corporate boards should seek diverse skills and avoid groupthink. A well-rounded board leads to improved decision-making that considers its members knowledge and skills instead of perpetuating the good old boys club.
Solomon (2006) challenged the idea that dissent is undesirable and rational deliberation and consensus results in group decision-making. Neck and Manz (1994) explained “teamthink” as an alternative to groupthink as characterized by highly cohesive and conforming groups. “Teamthink” offers encouragement of divergent views, open idea expression, recognizing threats and limitations, valuing unique members’ views, and discussion of doubts. Neck and Manz argued self-managing teams can promote these values to encourage better decision making.
I believe companies still encourage groupthink at top echelons of an organization, but promote “teamthink” at lower levels. I believe this allows an organization to create a double standard to preserve top-down management culture, while promoting improved production from lower levels. The idea is that ultimately “the buck stops here” at the C-level. Does this double standard help or hinder building trust to make the right decisions?
Gibb and Schwartz (1999) suggested without improved participation good employees will leave a company they do not trust and seek employment elsewhere where they can use their education and experience. What do you think? Please leave a comment with your thoughts. If you need help organizing your company more productively I encourage you to learn more.
Chen, Z., Lawson, R. B., Gordon, L. R., & McIntosh, B. (1996). Groupthink: Deciding with the leader and the devil. The Psychological Record, 46(4), 581-581. Retrieved from http://search.proquest.com/docview/212668876?accountid=35812
Gibb, B., & Schwartz, P. (1999). When good companies do bad things. New York: John Wiley & Sons.
Maharaj, R. (2008). Corporate governance, groupthink and bullies in the boardroom. International Journal of Disclosure and Governance, 5(1), 68-92. Retrieved from http://search.proquest.com/docview/196323941?accountid=35812 http://linksource.ebsco.com/linking.aspx?genre=article&issn=17413591&volume=5&issue=1&date=2008-02-01&spage=68&title=International+Journal+of+Disclosure+and+Governance&atitle=Corporate+governance%2C+groupthink+and+bullies+in+the+boardroom&au=Maharaj%2C+Rookmin&isbn=&jtitle=International+Journal+of+Disclosure+and+Governance&btitle=
Neck, C. P., & Manz, C. C. (1994). From groupthink to teamthink: Toward the creation of constructive thought patterns in self-managing work teams. Human Relations, 47(8), 929-929. Retrieved from http://search.proquest.com/docview/231490747?accountid=35812
Solomon, M. (2006). Groupthink versus the wisdom of crowds: The social epistemology of deliberation and dissent. The Southern Journal of Philosophy, 44, 28-42. Retrieved from http://search.proquest.com/docview/218152905?accountid=35812
business plans, change agent, collaboration, competitive advantage, conflict management, corporate social responsibility, creativity, entrepreneur, entrepreneurial education, entrepreneurial experience, entrepreneurial leadership, entrepreneurial learning, flat organizational structure, groupthink, organizational change, organizational culture, organizational structure, organizational trust, risk management, value people, vision
Former Southwest Airlines CEO, Herb Kelleher, gained a competitive advantage over competitors like United, Delta, and Northwest by treating the airline’s employees with dignity and respect. The airlines all had unionized workers, but Kelleher believed Southwest had to dignify its customers by treating its workers right. Kelleher issued 20% of Southwest’s stock to employees to increase their motivation to treat customers well. During Kelleher’s time at the company, United, Delta, and Northwest all experienced damaging strikes by their unions, while Southwest remained profitable. The strikes caused thousands of passengers to miss their flights driving these airlines into bankruptcy (Jones, 2007).
Managing complex relations with pilots, cabin crews, and mechanics affected customer satisfaction for Southwest Airlines (Jones, 2007). Happy workers resulted in happy customers. Southwest Airlines remains one of the most profitable airlines today. Many companies in the airline and other industries today fail to value the importance of building and managing relations with workers.
In my personal experience, I have found managing employee relations can improve performance. I turned around a financially troubled university with a heavily unionized workforce by paying attention to the value of the workers and forging improved relations with them. I fail to grasp why many organizations have such a hard time understanding that happy employees produce happy customers. Happy customers breed new customers and grows the organization.
I would like to hear your thoughts on why building improved relations with workers has become so difficult today. I argue customers and workers are equally if not more important than shareholders. Please let me know your comments or let me know if you want to learn more.
Jones, G. R. (2007). Organizational theory, design, and change (5th ed.). Upper Saddle River, NJ: Prentice Hall.
business plans, competitive advantage, conflict management, corporate social responsibility, employee incentives, employee relations, entrepreneur, entrepreneurial education, entrepreneurial experience, entrepreneurial leadership, entrepreneurial learning, good leadership skills, organizational trust, Small business ethics, stakeholder relations, value people, vision
Before the financial meltdown of 2008, small firms in the United States in 2007 comprised 99.7 percent of all employer firms. These firms employed slightly more than half of all private industry workers, and paid 44 percent of private business payroll. Small firms produced 64 percent of net new jobs for 15 years before this time. Small firms created over half the private nonfarm gross domestic product, and hired better than 40 percent of high-tech jobs for scientists, engineers, and computer programmers. Further, small businesses made up 97.3 percent of all exporters producing 30.2 percent of known export values in 2007. Small businesses accounted for 52 percent of home-based businesses and 2 percent of franchises (Kolbe, 2007; Yallapragada & Bhuiyan, 2011).
A growing part of entrepreneurship comes from social entrepreneurship. Shockley and Frank (2010) distinguished social entrepreneurship from commercial entrepreneurship as consisting of a community orientation that forgoes private incentive for public benefit. Shockley and Frank connect the economic entrepreneurship theories of Joseph Schumpeter and Israel Kirzner to Western literature, namely Virgil’s Aeneid. The three main parts of Virgil’s (2006) Aeneid deal with using the mind to discover, developing a duty to community interests, and believing in the fate of the actor to avoid uncertainty or “unknown probabilities” (Knight, 1921; Shockley & Frank, 2010, p. 777).
Social entrepreneurship fills societal needs not met by commercial entrepreneurship and stresses discovery, community, and the fate to overcome unknown conditions. Commercial entrepreneurship is not exclusive of social responsibility, but in modern society has focused on the interests of enlarging profits for the benefit of capitalist investors. This motive is not to say entrepreneurs have no interest in societal interests as surely some entrepreneurs champion such issues before profits, but many companies put profits first after a founder finds a successful model. Social entrepreneurs can discover solutions to societal needs in either or both the public or private domain.
Schumpeter (1934/2002) argued new combinations affect the flow of capital and causes temporary disequilibrium aiding in economic development. Schumpeter (1994) put “creative destruction” at the center of entrepreneurship. Schumpeter explained how “creative destruction” leads to the demise of the entrepreneur and a temporary socialistic state to deal with new unmet needs because the entrepreneur becomes a capitalist and ceases to work as an entrepreneur. Shockley and Frank (2010) referred to Schumpeter’s works as foundational and timeless finding these same ideas in Virgil’s Aeneid.
Similarly, Kirzner (1973) put “entrepreneurial discovery” (p. 39) at the center of entrepreneurial theory. Kirzner argued the entrepreneur’s role is to stay alert to unnoticed opportunities and relies on unpredictable behavior akin to the fate in Virgil’s Aeneid. Both Schumpeter and Kirzner distinguish the entrepreneur from the capitalist because the entrepreneur risks no investment in discovery(Shockley & Frank, 2010).
The point of this literature is that both the role of the entrepreneur and capitalist are necessary in a market economy. Today, the role of the entrepreneur has succumbed to the capitalist and caused discovery to slow for the sake of promoting the profit motives of the capitalist, but the capitalist cannot grow without discovery. Capitalists choose not to meet societal needs. The temporary state to overcome the problem rests in Schumpeter’s notion of “creative destruction” where socialism takes over until the entrepreneur can return to the flow of the equilibrium process (Schumpeter,1994).
I see little effort today to recognize the entrepreneur’s role to resolve this problem despite the significant contributions entrepreneurs made before the financial meltdown of 2008. Some people have played down the role of restoring equilibrium and have extended the problem by suspending a capitalistic economy indefinitely. I see social entrepreneurship as a step to restoring discovery needed to return the flow to the equilibrium process.
I would like to hear your thoughts about how to restore capitalism by re-emphasizing entrepreneurship’s role and ending the state of “creative destruction” in which the United States economy currently resides. Learn more.
Kirzner, I. M. (1973). Competition and entrepreneurship. Chicago, IL: The University of Chicago Press.
Knight, F. H. (1921). Risk, uncertainty, and profit (2002 Reprint ed.). Washington, DC: Beard Books.
Kolbe, K. (2007). How important are small businesses to the United States’ economy. Office of Advocacy, Funded Research, United States Department of Commerce, Bureau of the Census and International Trade Administration.
Schumpeter, J. A. (1934/2002). The Theory of Economic Development: An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle. New Brunswick, New Jersey: Transaction Publishers.
Schumpeter, J. A. (1994). Capitalism, socialism, and democracy (5th ed.). London and New York: Routledge.
Shockley, G. E., & Frank, P. M. (2010). Virgil’s Aeneas as the quintessential social entrepreneur: Juxtaposing selections from epic poetry and entrepreneurship theory to teach social entrepreneurship. Journal of Small Business and Entrepreneurship, 23, 769-784. doi: 2281649991; 58798731; 54851; JSBE; INNNJSBE0000605310
Virgil. (2006). Selections from Virgil’s Aeneid. In S. Lombardo (Ed.), The Essential Aeneid. Indianapolis, Ind. & Cambridge, UK: Hackett Publishing Co., Inc.
Yallapragada, R. R., & Bhuiyan, M. (2011). Small business entrepreneurships In The United States. Journal of Applied Business Research, 27(6), 117-122. doi: 2519801721; 65758121; 12637; JRH; INODJRH0007536491
capitalism, conflict management, corporate social responsibility, creativity, discovery, economy, entrepreneur, entrepreneurial experience, entrepreneurial leadership, entrepreneurial learning, entrepreneurial passion, good leadership skills, innovation, managing innovation, market economy, organizational culture, organizational trust, reputation, risk management, social capital, social entrepreneurship, start-ups, uncertainty, vision
The Dyson vacuum cleaner story is an interesting case study about a man taking on the established vacuum cleaner industry by believing in a superior product. Dyson believed in making the world better through ingenuity and took on the giants. Dyson took on the role of the consummate protagonist (Carruthers, 2007).
Dyson grew up in a family in which he had little direction and he developed a distaste for conventional institutions. Dyson’s parents knew of his rebellious side and wanted him to take up teaching, become a doctor, or become a professional. Dyson gained an understanding of industrial product design through the art school he attended in London (Carruthers, 2007). Entrepreneurs typically have a disdain for the way conventional businesses do things and have it in their DNA to reject conventional wisdom. Rebellion is an integral part of the entrepreneur’s mold.
Entranced with the idea of improving the vacuum cleaner, Dyson began his adventure by stripping down the Hoover Junior to understand its poor performance. Dyson introduced the cyclone and clamber in developing his prototype. At first, Dyson had no fear, but balked when low-income, a big overdraft occurred, and he faced the uncertainty. Dyson experienced several brushes with bankruptcy (Carruthers, 2007). Entrepreneurs have to learn how to deal with their fear and overcome it by moving on. Keeping an eye on the opportunity trumps the original fear, but the entrepreneur faces failure each time he encounters a hurdle and has to deal with it in a positive way. Risk-taking is scary even to the most accomplished entrepreneur.
Jeremy Frey had mentored Dyson and provided the original funding for his venture. Dyson met Frey at college, and the millionaire and founder of Rotork served as an innovative person with whom he could identify. Dyson spent three years working on thousands of prototypes and testing them. Dyson found industry unwilling to accept or license his ideas, but Japan did eventually license the Apex and G-Force products. Dyson relied on inventing and marketing himself instead of the conventions of big business and its marketing tricks (Carruthers, 2007). Entrepreneurs are bold people who reject established mediums and want to improve on them, but fighting with the enemy has its risks.
Dyson decided rather than to license his work to produce the product himself. Self-manufacturing the products, obligated Dyson to raise capital by borrowing against his property putting his family at risk. Dyson decided to take this path and export directly to the to the United States (Carruthers, 2007). This experience shows entrepreneurs have to look danger square in the eye and have the confidence to deal with it.
The last challenge for Dyson is to bring the product to the United States, the world’s largest market, where he must beat Hoover, Amway, and Black and Decker. Although Dyson set up manufacturing in Asia, he must confront the Big Three on their own turf in the United States. To bring the product to the United States, Dyson has to distastefully import the product from Asia and play by the rules. Dyson successfully captured enough of the United States market, but faced intense competitive pressure from his rivals. Hoover infringed on Dyson’s patent rights and Dyson filed suit to protect his business. Despite the challenge, Dyson wins the battle and confirms his success (Carruthers, 2007). Entrepreneurs often want to create the rules they play by, but sometimes have to conform to win the larger battle. The Dyson story shows how entrepreneurs can persist and improve existing products. David beat Goliath!
What have you learned from the Dyson story? Please let us know your thoughts. If you need help getting started I urge you to seek our help now. Learn more.
Carruthers, I. (2007). Chapter 5: The Entrepreneur’s Story Great brand stories Dyson: The domestic engineer: How Dyson changed the meaning of cleaning (pp. 85-99). London: Marshall Cavendish Limited.
business plans, cash flow, change agent, competitive advantage, conflict management, controlled chaos, corporate social responsibility, creativity, entrepreneur, entrepreneurial education, entrepreneurial leadership, entrepreneurial learning, entrepreneurial passion, good leadership skills, managing innovation, risk management, small business financing, start-ups, uncertainty, vision