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!

My column from the Tennessean this week:

So why do entrepreneurs start businesses, anyway? Certainly, a fundamental reason is to make a living and build a nest egg.

But entrepreneurs can be driven by something much more than that. They can become obsessed by the challenge and thrill of “the deal.” Once they make it past the start-up period, some will try to take their businesses as far as the market will let them. To them, success is measured not by their ability to provide for their family, but by how large they can build their business.

Still others become serial entrepreneurs — starting business after business over the course of their careers. But there is a risk for entrepreneurs who are driven to build their businesses even larger, or who can’t wait to start that next deal. They can become almost addicted to the deal-making process; they can become what I call an “entre-holic.”

While building businesses that provide for our families and that create good jobs for others is a noble act, some entrepreneurs can easily lose balance in their lives.

The pursuit of the deal can begin to crowd out the other things in life. Entrepreneurs need to keep in mind that we all are more than what we do in our work, more than just business owners. We are spouses, parents, friends and citizens.

Life requires balance

Entrepreneurs need to take actions that lead them to be good at all that they are called to do in their lives. That may mean that they temper their ambitions to make sure they have time for all the other things that are important.

Finding balance can be quite elusive for those of us who love to pursue opportunity. I have wrestled with “entre-holism” for much of my working life. Like many entrepreneurs, I am addicted to opportunity-seeking.

This never was clearer to me than when we sold our health-care company. After the sale, I was immediately ready to seize that next opportunity. I had the plan. I had the funding.

Luckily, I also have a very wise wife. She said to me: “You are in time out. No deals for six months.” She recognized what I did not — that I had let the pursuit of the deal consume me. It defined who I was and left no room for all of those other things that we are called to be in our lives — a parent, a spouse, a friend.

My “time out” forced me to really spend time discerning what I should do next. And eventually I realized it was not that next deal.

Now, I need to be clear that entre-holism is a disease of relapse. Even as an academic, a professor at a university, I find myself slipping and thinking of pursuing too many opportunities rather than leading a life of moderation. Just this past year I had three book projects going all at once.

Why? Because each project seemed too good to pass up.

But once again my wife was there to rescue me. When New Year’s rolled around, she gave me my resolution for 2009. “You will only read books in 2009.”

Hi.  My name is Jeff.  I am an entre-holic.

As I talk to business groups about our book, Bringing Your Business to Life, I find myself spending much of my time talking about the virtue of temperance. 

In the world of entrepreneurs, temperance is an understanding that we are more than what we do in work — more than just entrepreneurs. We are
spouses, parents, friends and citizens. We need to take actions that
lead us to be good in all that we do. That may mean that we temper our
ambitions to make sure we have time for family and friends.

Temperance is hard for entrepreneurs.  It is finding that balance in life that is so elusive for most of us who love to pursue opportunity.

I have wrestled with temperance most of my working life.  I am addicted to opportunity seeking.  I am addicted to deals.

This never was clearer to me than the time after we sold our company. I was ready for seize that next opportunity.  I was ready to move on to the next deal right away.  I had the plan.  I had the funding. 

Luckily for me I have a very wise purchase topamax wife.  She said to me, “Your are in time out.  No deals for six months.” 

She recognized what I did not — that I had let the “pursuit of the deal” consume me.  It defined who I was and left no room for all of those other things that we are called to be in our lives — a parent, a spouse, a friend.

My “time out” forced me to slow down.  It forced me really spend time to discern what I should do next.  And eventually I realized it was not that next deal.

Now I need to be clear that entre-holism is a disease of relapse.  Even as an academic I find myself slipping — of pursuing too many opportunities rather then leading a life of moderation.  Just this past year I had three book projects going — and all at once.  Why?  Because all of them seemed too good to pass up.

But once again my wife was there to rescue me.  When New Years rolled around she gave me my resolution for 2009  — “You will only read books in 2009!”

Hi.  My name is Jeff.  I’m an entre-holic. 

The Hitachi Foundation and the Boston College Center for Corporate Citizenship recently released a report titled “Weathering the Storm: The State of Corporate Citizenship in 2009.” The survey results show that due to the recession businesses have had to rethink – both good and bad – their approach to corporate citizenship.

The survey sample included 756 executives, 36% of whom were at small businesses
(1-99 employees), 24% at medium (100-999), and 40% at large companies
(1000 + employees).  The survey found that large companies are responding to the recession much differently than small companies. For example, large companies significantly increased their investments and involvement in citizenship activities – but they were also more likely to lay people off. Small firms kept true to their emphasis on treating employees well by minimizing layoffs. But they significantly decreased attention to other aspects of citizenship, such as volunteering or philanthropy.

Some additional highlights of the survey:

• Despite upheaval in the economy, a majority of U.S. companies are not making major changes in their corporate citizenship practices. Of those who made changes 38% reduced philanthropy/giving, 27% increased layoffs, and 19% reduced R&D for sustainable products.
• Most U.S. senior executives believe business should be more involved than it is today in addressing major public issues including health care, product safety, education, and climate change. Surveyed in June, just as the national debate on health care began to intensify, some 65 percent said business should increase its involvement in this issue.
• Based on current economic conditions, 15% of companies are increasing R&D for new sustainable products; 11% are increasing corporate citizenship marketing and communications; and 10% are increasing local and/or domestic sourcing or manufacturing.
• Only 34 percent of executives who responded to the survey say greater regulatory oversight by the federal government is an important part of solving the current economic crisis and creating a more stable economy.

If you have not seen the Jeff Bezos video at youtube, you need to.  He
boils down what he has learned from Amazon into eight simple principles. (Thanks to MyVenturePad for passing this along).

This week’s question for Forbes magazine’s America’s Most Promising Companies initiative is as follows:

What is the single
most important element of any business partnership?

You will most likely spend more time with your business partners than
with anyone else – even your family.  And it will be a relationship
that can be even more complicated to get out of than a marriage. Who you choose to be business partners with should be given as much consideration in a deal as what products you make or what markets you enter into. 

Dysfunctional partnerships are a major source of business failure. They suck energy and time away from building the business. They can often lead to the break-up of perfectly good businesses.

That being said, I think that if I have to pick one element as the most important it would be that you and your partner(s) share the same values, aspirations, and vision for the new venture.  This requires a careful and thoughtful discussion of critical business issues BEFORE the business is ever launched.

Work with your attorney to create a shareholder agreement before you officially incorporate. Just as marriages can fall apart on the honeymoon, business partnerships can fall apart before the first sale is ever made. 

Here is just a sample of some of the issues you should discuss with potential business partners:
•    Do you share the same vision for the business? 
•    Do you share the same aspirations for the business in terms of its size?
•    Are you all going to make the same level of commitment of time to the business?
•    What are your work habits and work ethic?
•    How much time off to you plan to take each day, each week, each year?
•    How much money will you put into the business? And how much do you expect to get out of it?
•    Who will be the President of the company? What roles will the other partners play?
•    How strong is everyone’s credit rating? Can all partners help to guarantee a loan, if necessary?
•    What if one of you gets married and the new spouse gets a job offer in another city? Would you move away?
•    How will employees, customers, suppliers, etc. all be treated?

Business partnerships can be a successful experience for everyone involved.  But it takes open and honest communication and careful planning.

Dear Brett,

First, as a loyal Packer fan let me thank you for the great memories — the Monday night miracle after the death of your father, the Super Bowl games, the last minute come from behind victories like the one my brother and I watched together in Houston.

But, now that you have decided to retire from football — at least that is what you are telling us today — let me offer you a little unsolicited advice.  Learn to define who you are beyond just what you have done for a living.

It was a lesson my wife helped me learn after we sold our business.  She put me in time out — no deals for at least six months — which forced me to really stop and ponder who I was beyond what I did for a living.  It helped me remember that I was more than just an entrepreneur.

We should not let ourselves understand who we are only by what we do for a living.  Don’t simply define who you are as a person by your career as an NFL quarterback.  Don’t get me wrong — that must be a really cool job!  However, do not let yourself define who you are too narrowly.  

It seems to me as an outside observer that you may be a bit lost.  I worry that you may have fallen into the trap where nothing else in his life has any real meaning without that career to define yourself.

I have warned entrepreneurs that they should not define who they are only by the noun of what they do for a living.  Although they may start and grow businesses, defining themselves as only an entrepreneur seems to crowd out so many other important parts of their lives.  

We have seen evidence of the danger of defining who you are by what you do in your work from others who have also failed their attempts at retirement. Lee Iacocca could not stay retired as a corporate executive.  Dan Rather could not stay away from the teleprompter after he retired from the evening news.  And just like you, Magic Johnson and Michael Jordan could not stay retired as athletes. For all of them, it appeared that they may have let what they did for their work define who they were as people.

Careers can do this to us. If we are not careful, they can consume all that we are. And what gets lost as a result?  Our families, our friendships, and even our souls.

If we are to become all that we were put on this Earth to do, we have to temper the temptation to become consumed by our work. We need to resist becoming the noun of what we do for a living.

So Brett, work hard at being a good husband. Work hard at being a good parent. Work hard at worshiping God if you are so inclined. Work hard at being a good friend to those who know the real you — not just the guy who wears #4. Work hard at being a good citizen in your community. Remember that none of these alone can fulfill our humanness.

One of the risks of using nouns to describe what we do in our work is that it can reinforce the tendency we all have to get carried away with our work. I loved starting a growing businesses (most of the time, at least). I love teaching and writing. It is indeed a blessing to love what one does for a living and joy the hard work that goes along with it. But, I need to be more than just an entrepreneur or a teacher.  With every virtue there is a vice looming in the background. Although hard work is a good thing, it can be taken to excess and become a vice if it keeps us from all the other things we should be doing with our lives.

American society does not make this any easier. I am reminded of the lyric from a jazz record from the 1980s that said, “Everything in moderation, and moderation is the first to go.” We have become a culture of excess.

This is particularly true for the entrepreneurs out there who read this blog. We seem to create folk heroes out of entrepreneurs who expend Herculean efforts to achieve success in their businesses. And while this is good to a point, if entrepreneurial success comes at the expense of our marriage, our families, our faith, and our friendships, it is a hollow victory. If all we have at the end of our lives is our wealth, if that is all we leave behind, that is not a life well lived. As the old saying goes, “you never see a hearse with a luggage rack.”

I hope you find fulfillment in the rest of your life on the Earth.  After all, the actuaries tell us that as someone about to turn forty, you have lived less than half of your expected life.  And whatever it is you decide to do next, always keep room in your life for all the things that really matter.

Best regards,

Dr.C.