Posts Tagged innovation

Human Capital: Are Employees a Small Business’s Most Valuable Asset?


I have heard the words “employees are our most valuable asset” many times, but have rarely seen accountants embrace the idea of capitalizing human capital as an asset on the balance sheet. The theory goes that companies expense wages as employees earn them. If employees are an asset I believe the part of workers’ employment cost that adds value to the organization should appear on the balance sheet.

Although accounting rules forbid capitalizing human capital, they only recognize human capital on the income statement. Despite this oversight, many call accounting the language of business. At least one article admitted the problem and recommended alternatives for capitalizing human capital. Chen and Ku (2004) concluded, “The succession of the human intellect over machines and equipment in the contribution to industrial value makes a financial statement that relegates human capital expenditure to expenses inadequate if not obsolete” (p. 129). If accounting is the language of business why is the value of its most valuable asset excluded from the balance sheet?

This disparity leads one to believe companies’ accounting standards look at employees not as an asset, but as a liabilities. For example, in finance the main goal of the firm is to maximize shareholder wealth and accounting rules treat human capital as a period cost (expense) instead of an asset. In recent years many companies have reconsidered the view shareholders are the only stakeholders in a firm, and have expanded stakeholders to include customers, suppliers, and employees. Even with the coming of triple bottom-line reporting I have not seen accounting rule-making bodies espouse the capitalizing human capital (Elkington, 1994; Slaper & Hall, 2011).

Similarly, Reimers-Hild, Fritz, and King (2007) described human capital as a continuous investment leading to increased earning power. Reimers-Hild et al. further described human capital as responsible for innovation, creativity, and keeping pace with change.  Chen and Ku (2004) developed a theoretical classification framework that would capitalize certain formation and acquisition costs in early stages of development, learning costs in middle stages of development, and replacement costs in final stages. Chen and Ku argued for disclosing these costs as investments if the costs are unique and add value.

Do you believe employees are your greatest asset? I would like to hear your thoughts. Should your greatest asset show on the balance sheet? Please let leave your comments? Click here if you want to understand more about accounting for human capital.

References

Chen, H. M., & Ku, J. M. (2004). The role of human capital cost in accounting. Journal of Intellectual Capital, 5(1), 116-130. doi: 10.1108/14691930410512950

Elkington, J. (1994). Towards the sustainable corporation: Win-win-win business strategies for sustainable development. California Management Review, 36(2), 90-100. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=9410213932&site=ehost-live

Reimers-Hild, C. I., Fritz, S. M., & King, J. W. (2007). Entrepreneurial Career Development: Using Human Capital, Social Capital, and Distance Education to Achieve Success. Advancing Women in Leadership, 24, 1-N_A.

Slaper, T. F., & Hall, T. J. (2011). The triple bottom line: What is it and how does it work? Indiana Business Review, 86(1), 4-8. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=66506015&site=ehost-live

Advertisements

, , , , , , , , , , , , , , , , ,

2 Comments

Lessons in Small Business Organizational Change


About 10 years ago the owner of Bimba Manufacturing Company located in Monee, Illinois decided to sell 90% of his stock to employees through an employee stock ownership plan (ESOP). The company produced aluminum cylinders and had two classes of employees. These classes included the managers who made policies and workers who obeyed the policies and performed the work. Under the ESOP instead of workers just obeying the orders of the managers, the company formed cross-functional teams to address problems and improve quality. The teams decided to meet regularly with customers to consider their needs and improve working relations (Jones, 2004).

The ESOP plan changed the workforce orientation improving working relations, accentuating excellence, and leading to a high quality products. Each cross-functional team hired its own workers and socialized together creating a cooperative new culture in the company. Employees effectively relearned their jobs by actively listening and interacting with each other instead of focusing on managers and workers. Managers acted more like advisers and workers gained a more cooperative spirit. Because of this organizational change the company increased sales 70% and the workforce grew 59% (Jones, 2004).

Although when first starting a business an owner can design a hierarchical organization for expedience, the firm stands to improve performance by reconsidering the organizational form. In my experience, hierarchical organizations in a small business can stymie the growth of the organization. I have personally experienced the difference and realized the benefits of redesigning the organizational form.

A more nimble team orientation can improve performance and cross-functional communication. The organization can respond better to the companies’ customers and better address their needs. The case of Bimba Manufacturing offers a good lesson in organizational change designed to improve worker and customer relations.

Have you reconsidered the organizational design in your firm? I would like to hear your ideas about changes that can benefit the organizational design in your firm. If you need help I urge you to act now and we can start to help you. Learn more.

References

Jones, G. R. (2004). Organizational theory, design, and change (4th ed.). Upper Saddle River, NJ: Prentice Hall.

 

 

, , , , , , , , , , , , , , , , , , , ,

Leave a comment

How Small Businesses Can Acquire Competitive Advantage: VRINE


Companies can achieve superior performance and gain competitive advantage by using the VRINE model emphasizing value, rarity, inimitability, non-substitutability, and exploitability. These five factors influence a firm’s resources and capabilities to compete and achieve superior performance (Carpenter & Sanders, 2009).

First, a resource must add value to meet demand in the market. The ability to compete by itself does not offer an advantage, but can produce a normal profit. The value added assumes the firm can control costs and the product or services offer potential to consumers. Second, scarce (rare) resources can add competitive advantage at least temporarily. Until competitors can normalize this competitive advantage, the firm can achieve above normal profits. Third, if the products or services added are incapable of reproduction by competitors, the firm can achieve a sustainable competitive advantage earning above normal profits for an extended period. These products or services are such that competitors cannot imitate or substitute for them. Last, a firm has to have the capability to exploit the above four characteristics to achieve competitive advantage. The ability to exploiting these resources allows the firm to achieve improved financial performance than if it can only control them (Carpenter & Sanders, 2009).

Small businesses looking to achieve competitive advantage should employ the VRINE model and ask if it can meet these characteristics. The model shows how a firm can sustain superior financial performance by developing resources that meet the VRINE characteristics.

How does your firm do? Does it meet the VRINE model’s characteristics? Learn more.

References

Carpenter, M., & Sanders, W. G. (2009). Strategic Management: A Dynamic Perspective Concepts and Cases (Second ed.). Upper Saddle River, NJ: Prentice-Hall.

, , , , , , ,

Leave a comment

The Role of Entrepreneurship in Restoring the Economy


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.

References

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

, , , , , , , , , , , , , , , , , , , , , , ,

1 Comment

Entrepreneurs Connect Where Others Fear to Tread


Entrepreneurs have the unique ability to connect with consumers and find out what they need. Big companies usually brand their products and use already proven models to produce profitable lines of business. These companies do little to connect with the consumers they aim to serve once they find a working model, but the entrepreneur is in a unique position to see what works for consumers and what does not. The entrepreneur continually reaches out to consumers to note changes and find ways to serve them (Rae, 2004).

Bruder (2010) offered several accounts of entrepreneurs who wanted to reach out to consumers and develop their stories to personalize their products and show consumers why they benefit them. Bruder explained such accounts humanize the products to customers and show them why their products will solve their problems. Big companies often overlook the human touch and personal connection with consumers. Rae (2005) developed a model showing entrepreneurs learn their businesses from contact with consumers through personal and social connections, recognizing opportunities from cultural exchanges, and engaging with consumers. Entrepreneurs have more intricate relations with consumers and can better address their needs by learning and gaining experience from such dealings.

Thilmany and Loughlin (2010) suggested entrepreneurs should never stop learning and finding ways to improve their products. Experience with consumers helps the entrepreneur understand flaws in the competition and shows commitment to solving problems consumers face with existing products. Conversely, big businesses work their model until it matures and starts to falter before exploring flaws giving the entrepreneur an edge because of the closeness to the consumer.

Rae (2004) explained savvy entrepreneurs should spend more time working on the business than in the business. Opportunities come from learning what works and what does not. Working on the business spreads and minimizes risk, attracts and retains employees, and improves developing innovations. Working on the business helps build customer relations, develop managers and teams, and develop new markets.

Do you as a small business owner go where others fear to tread? Please let us know your thoughts, or if you want help I encourage you to contact us now to learn more.

References

Bruder, J. (2010). Turning business owners into stars of their own stories, New York Times, pp. B.8-B.8. Retrieved from http://search.proquest.com/docview/757765326?accountid=35812http://linksource.ebsco.com/linking.aspx?genre=article&issn=03624331&volume=&issue=&date=2010-10-14&spage=B.8&title=New+York+Times&atitle=Turning+Business+Owners+Into+Stars+of+Their+Own+Stories%3A+%5BBusiness%2FFinancial+Desk%5D&au=Bruder%2C+Jessica&isbn=&jtitle=New+York+Times&btitle=

Rae, D. (2004). Practical theories from entrepreneurs’ stories: Discursive approaches to entrepreneurial learning. Journal of Small Business and Enterprise Development, 11(2), 195-202. doi: 10.1108/14626000410537137

Rae, D. (2005). Entrepreneurial learning: A narrative-based conceptual model. Journal of Small Business and Enterprise Development, 12(3), 323-335. doi: 10.1108/14626000510612259

Thilmany, J., & Loughlin, S. (2010). Taking care of business: Entrepreneurs share their success stories. Biomedical Instrumentation & Technology, 44(6), 472-473. doi: 2229159061; 56859991; 68217; BMIT; 21142509; INODBMIT0006941046

, , , , , , , , , , , , , , , , , , ,

Leave a comment

Does Your Business Need an Attitude Adjustment?


Think about why some companies succeed despite their characterization as risky. For example, one of the most risky businesses people think of is to start a restaurant. The failure rate for restaurants is high, but those that succeed have some special qualities. A good business needs to adapt to what people want.

I am originally from Chicago and I distinctly remember a restaurant chain that became very successful because of its ability to provide what people want. If you have ever heard of Lettuce Entertain You Enterprises, Inc. you may have a good idea what I mean. Richard Melman with Jerry Orzoff  started Lettuce Entertain You in 1971 with $17,000. Melman wanted to start an upbeat restaurant directed at young singles interested in rock music, casual clothing, and healthy food. R. J. Grunts became the company’s first eatery in Lincoln Park followed by Fritz That’s It! in Evanston and Great Flying Food Show in 1974. In 1975 Lettuce Entertain you introduced Jonathan Livingston Seafood and Lawrence of Oregano opened in 1976. Lettuce Entertain You mastered the avante garde casual restaurant business with its unique themes (Anonymous, 2012).

A good business needs to anticipate what customers want like Melman did with Lettuce Entertain You. Traditional restaurant startups do not typically think about what will make a restaurant stand out to a certain crowd and will take a more conservative route. A good entrepreneur has an open mind and anticipates providing a service or product customers will want. Lettuce Entertainment did not stop with the off-beat casual idea, but opened more restaurants with more  ambience like the Pump Room on Chicago’s Gold Coast and Ambria in partnership with renowned French chef Gabino Sotelino. Later Melman introduced several other themes by opening a series of other restaurants (Anonymous, 2012). My personal favorite is Tucchetti’s.

An open mind is important to becoming a successful entrepreneur. This notion reminds me of a TED talk by psychologist Jonathan Haidt I viewed not too long ago. Haidt explained five key differences between conservatives and liberals (Haidt, 2008). Entrepreneurs with closed minds often do not succeed because they fail to anticipate what consumers want. Lettuce Entertain You showed how new themes can entice people.

Think about your business! Does your business need an attitude adjustment? Lettuce Entertain You provides a good example of how an open mind can open doors for a new business and keep customers happy. If you want to start a new business I urge you to start now to explore how to keep an open mind by working with us. Learn more.

References

Anonymous. (2012). Lettuce Entertain You Restaurants. Lettuce tell you our history, from http://www.leye.com/about-us/history

Haidt, J. (2008). Jonathan Haidt: The moral roots of liberals and conservatives. Retrieved from http://www.ted.com/talks/jonathan_haidt_on_the_moral_mind.html?quote=339

, , , , , , , , , , , , , , , , ,

Leave a comment

Evidence Social Entrepreneurship is on the Rise


I have expressed the view previously the next great wave of entrepreneurship will come from social entrepreneurs. I found evidence the rise of social entrepreneurship is on the horizon in an article I found in this week’s Bloomberg Businessweek.  The article is about a firm headed by Chamath Palihapitiya called Social+Capital Fund. Palihapitiya is a former Facebook executive, who left about a year ago to launch the new venture capital firm (Bennett, 2012).

Palihapitiya believes properly placed venture capital can solve the world’s biggest problems left from gaps caused by the shrinking scientific ambitions of government, foundations, and other global organizations (Bennett, 2012). Politicians demonize government handling of social problems leaving  social entrepreneurs as the suitable outlet for dealing with these problems. Universities have dwindling funds devoted to research and can no longer deal with social problems.  Bennett explained how Kauffman Foundation, an independent organization, has failed to produce results in dealing with issues it funded over the last 20 years. Palihapitiya believes private equity or as he puts it “purpose-driven money” is the answer to solving such problems (Bennett, 2012).

Social+Capital has amassed an army of technologists and entrepreneurs to find and build products aligned with solving problems in the health care, education, and the financial services industry. These people include Reid Hoffman (LinkedIn), Sean Parker (Napster and Facebook), Kevin Rose (Digg), and Joe Hewitt (Mozilla and Facebook). Several companies funded by Social+Capital have already started to deal with social problems in these industries. The idea is for these companies to make money while solving societal problems. Palihapitiya’s idea is to find brilliant people of the Steve Jobs variety and invest in them to develop solutions to societal problems (Bennett, 2012).

Palihapitiya admitted inequities in the global economic system precipitated his idea to find brilliant leaders to solve societal problems by making money (Bennett, 2012). Between 1987 and 1997 nonprofit organizations grew to 1.2 million or by 31% (The new nonprofit almanac & desk reference., 2002; Noruzi, Westover, & Rahimi, 2010). These numbers show a growing need exists for social entrepreneurs to solve societal problems. Palihapitiya has started his firm to fund innovation solutions and allow entrepreneurs to make money, while solving such problems.

Social entrepreneurs will play a major role in the global economy. Innovative solutions from social entrepreneurs will create great value by addressing societal needs. I encourage prospective entrepreneurs to start now to take advantage of this opportunity. We can help you get started and I encourage you to learn more.

References

Bennett, D. (2012, July 30 – August 5). The league of extraordinarily rich gentlemen. Bloomberg Businessweek, 54-56.

The new nonprofit almanac & desk reference. (2002). San Francisco: Jossey-Bass.

Noruzi, M. R., Westover, J. H., & Rahimi, G. R. (2010). An exploration of social entrepreneurship in the entrepreneurship era. Asian Social Science, 6(6), 3-10. doi: 2233824571; 56997641; 137930; SSCS; INNNSSCS0000567695

 

, , , , , , , , , , , , , , , , , , , , ,

Leave a comment

Small Business 101: Lessons Learned from the Dog


 

One of the most important ways for entrepreneurs to learn is to watch others, and what better way than to learn than from watching the pets we love. I have learned so much from my dog, a yellow Labrador retriever, and I want to share some of the tricks I learned from her. Abby is my most loyal and obedient partner and I value the lessons she has taught me. I hope you can learn from what she taught me.

One of the first tasks an entrepreneur needs to learn is how to hunt when hungry. Abby has the distinct ability to sense when she needs a meal. She knows how to hunt and find food to satisfy her appetite. An entrepreneur is hungry often when first starting out and must also find a way to hunt to satisfy the urge to eat. Too often I find entrepreneurs taking hunting for granted mistakenly believing hunting is not an important task, but I find hunting is one of the most basic primal tasks an entrepreneur has. Good entrepreneurs learn to hunt early and often because they  need to eat to prolong their existence. Hunt if you want to survive.

Abby also taught me to keep digging. An entrepreneur’s work is never done and to find what one needs one must always keep digging and not let obstacles stand in the way. If a fence or roadblock exists dig under it and find the way to what you need. An entrepreneur never knows what he or she might find, but keep digging and the treasure will come. Dig to find your way.

Another trick I learned from Abby is to keep my sights high. You never know what might drop from the sky. I have seen Abby look at the squirrels on the fence or in the trees and one misstep causes them to drop to the ground in striking distance. I have seen the same result when Abby kept an eye on the birds that did not leave themselves enough room to climb back up and dropped to the ground. Entrepreneurs should keep their sights high as no one knows if something good will drop in their lap. Keep up your head and salvage what drops from the sky.

On a related note, I also learned from Abby to make my presence known. Abby lets me know she is there and if something falls from my grasp she is there to reclaim it. Squatters rights matters! The entrepreneur can also claim something that falls from a competitor or supplier’s grasp and use it to make life better. Claim the prize by making your presence known.

Once Abby claims a prize she also never lets go. Once the squatter’s rights rule takes effect, entrepreneurs need to hold on to what they have gained presuming it has value.  If the entrepreneur fails to protect the prize the same can happen to the entrepreneur that happened to the competitor or supplier. Never let go if you want to keep the prize.

Similarly, Abby taught me to keep an eye on the prize. If you have not yet gained the prize this step is most important because once you take your eye off the prize, the more apt you are to lose it. Entrepreneurs need to stay focused and continually look for what they are after. If you want a prize bad enough you have to keep your focus. Never let your eye off the prize.

Once Abby finds a prize, she taught me not to waste anything. Waste violates the survival rule as the entrepreneur should always set aside enough for down times. Squander what you find and do not use as it can come in handy when business is down. Never waste what you have, but keep it for when you fall on hard times.

Another trick I learned from Abby is to have a sixth sense and keep prepared. When someone comes to the door Abby is on her way before anyone knocks or rings the bell. Good entrepreneurs need to prepare for the unknown and have a sixth sense. Anticipation puts you in front of others. So prepare yourself by having a sixth sense and anticipating what is to come.

Abby has another natural knack that I learned that has to do with networking. Abby keeps abreast of the trends and setting by networking with her peers. Entrepreneurs need to scan the environment to find their niche and identify new opportunities.  Sniff out opportunities by looking at what peers do!

One other find from Abby’s behavior is to play the game by your own rules. If Abby has the opportunity to define how to play the game she does and lets others play by her terms. Entrepreneurs need to define the rules by which to play the game or risk letting someone else control how they play. Define the rules to benefit how you play and do not rely on someone else to set them for you.

With what I learned from Abby, I have conferred on her the doctor of fine bones degree. I think she has earned her degree and can teach others many good lessons about entrepreneurship. I hope you have found her teachings informative. I continue to learn from Dr. Abby and you can too. I encourage you to act now and learn more.

, , , , , , , , , , , , , , , , , , ,

Leave a comment

America’s First Entrepreneur and Founder


“Content makes poor men rich; discontent makes rich men poor” (Franklin, n. d.).

Ben Franklin is America’s true founder and first entrepreneur and his story can teach us many lessons. Franklin exemplified the supreme risk taker because he signed the Declaration of Independence with 55 other men who risked their lives to forge America’s future. Franklin educated himself by reading and had a reputation as a contrarian, humorist, and adventurer. Franklin used his will to build a successful business and a nation the world would envy (Otto, 2011).

Although Franklin started his life in poverty, he died in great wealth and had a passion for his Christian religion and a movement called the Great Awakening. This movement believed in the welfare of the people and had a contempt for cruelty and corruption. Because of his religious beliefs, Franklin thought politicians should serve the country without pay (Otto, 2011). Franklin also stressed the importance of creditors supporting inexperienced entrepreneurs to foster  representation and build a national culture. Franklin believed in public projects benefiting the nation  and appealed to working-class people (Baker, 2000; Mulford, 1999).

In 1729 after working for his brother James for a few years, at age 17, Franklin bought the Pennsylvania Gazette.  Franklin began publishing the Poor Richard’s Almanac in 1932, which became the most popular publication in America. Apart from his publishing career, Franklin founded the first proprietary library as part of the Academy of Pennsylvania, which later transformed itself into the University of Pennsylvania.  Franklin also helped develop the postal system and became the first postmaster. Beside this accomplishment, Franklin invented bifocal eye glasses, mapped the Gulf Stream off the East Coast, and provided evidence lightning is electricity by inventing the lightening rod (Otto, 2011).

Besides his inventive prowess, Franklin served in the Continental Congress and became the oldest member to sign the Constitution. Only six people signed both the Declaration of Independence and the Constitution, and Franklin is one of these people. Franklin had an instrumental hand in uniting the founding fathers to sign the Constitution despite some who did not fully support it (Otto, 2011). Entrepreneurs unite people with a common vision and Franklin personified this role.

Ben Franklin saw the greatest vision through in the history of this country and deserves credit for his remarkable accomplishments. Because of his vision, the United States became a great country and a haven for people to gain and respect individual liberty, freedom of expression, and have a government representative of the people (Otto, 2011).  Now is a good time to reflect on the vision of America’s founder. Franklin united the country through his vision and entrepreneurs should have a special place in America because of it. Yet, today entrepreneurs do not have the same esteem despite their role in creating economic growth and jobs.

I want to hear your thoughts on what this country can do to regain Franklin’s vision and return entrepreneurs to the prominence they deserve. Post your comments here.

References

Baker, J. J. (2000). Benjamin Franklin’s autobiography and the credibility of personality. Early American Literature, 35(3), 274-293. doi: 64935335; 1281372; 14371; PEAL

Franklin, B. (n. d.). Greatest Benjamin Franklin Quotes. Great Quotes – Powerful Minds. Retrieved from http://www.great-quotes-powerful-minds.com/benjamin-franklin-quotes.html

Mulford, C. (1999). Figuring Benjamin Franklin in American cultural memory. The New England Quarterly, 72(3), 415-443. doi: 45962354; 1065448; 29070; NEQUA7; PNEQ; 04514915; 99454974

Otto, L. (2011). Benjamin Franklin: America’s original entrepreneur. Leadership & Organizational Management Journal, 2011(4), 132-149. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&db=ent&AN=73204254&site=ehost-live

 

, , , , , , , , , , , , , , , , , , , , , , , , ,

Leave a comment

Have You Had A Frontal Lobotomy Yet?


Often I hear the advice the way to improve products and services is to keep all the costs involved to a minimum. Although keeping costs low is a good way to achieve enough of a margin to make a product or service viable, cost cutting can create other problems. For example, the product or service can have less value to the customer or consumer and cause them to select other more desirable products and services. In short, cutting all costs indiscriminately often is counterproductive.

Just yesterday I listened to a video interview of Steve Jobs and he embraced the idea the main goal is to produce products that customers want and need. Jobs commented that when he came back to Apple when it had experienced financial difficulty many of the corporate managers had a hard time understanding the idea of creating value customers want and need. The approach of Apple corporate managers focused more on cost cutting and less on creating value.

Jobs highlighted the idea that one-size-fits-all approaches do not work as well as more reasoned approaches that consider what customers want and need. Jobs said his philosophy to the turnaround of Apple came from thinking like a small company. Jobs found many good people still existed in the company even after he left. What made these people stay is their belief in the product despite the push by management to cut costs at every chance.

Creative people need space to create value and can substitute parts instead of cutting costs at every opportunity. Jobs explained Apple created the I-pod using substitution instead of cost cutting at every turn. Substitution allows creative people to consider consumers needs and wants instead of putting out a product that has less value to them. Job’s philosophy to work like a small company relies on the communications between company employees and consumers unlike big companies focusing strictly on product margins.

My advice is not to let anyone tell you to leave your brains at the door. Cost cutting is desirable when used correctly, but can also have adverse effects. Think of customers and consumers first before demanding cost cuts. Cost cutting is not an end-all solution. Have you had a frontal lobotomy yet? What does your company tell you?

I want to hear your comments. If you want some other ideas I encourage you to get help now. Learn more.

, , , , , , , , , , , , , , , , , , , , , , , ,

Leave a comment