Recently in Ethics and Values Category

I have written often about the challenges for entrepreneurs of finding balance between the strong, often conflicting pulls from family and from their business.

Toddi Gutner offers three case studies on entrepreneurs who have worked at finding this balance in a recent piece at Business on Main.

One entrepreneur uses mobile technology, one has built a team, and one has become a master at the art of time management.  You can read more here.

I wrote a post back in October about a program that is encouraging small businesses to hire released inmates who have participated in an educational program.

Fox News picked up on my post and contacted us about running a story on the program I wrote about.  They ran a story that highlights inmates who have had success with this program.  Well worth a view, which can see here.

I tell my students that through our program we can help them manage the forty percent of business failure that has its roots in their pre-venture activities.  We can teach them how to better assess opportunities and how to design, test, and pivot their business models.

We can also help them manage the forty percent of business failure that results from businesses that are not prepared for the challenges and pains that result from growth.  We tell them over and over, "The leading cause of business failure is success.  Success is only good when you are prepared for what it brings."

But, we really can't do much to help them with the other twenty percent of failure that comes from events beyond their control -- hurricanes, floods, recessions, and so forth.  Insurance and remembering that Cash is King can serve to buffer against the unpredictable, but sometimes stuff just happens and even such preparation is just not enough to pull them through.

When I was in New York this week to celebrate small business champions, just a few days after the anniversary of 9/11, I thought a lot about all of the small businesses that did not make it through the aftermath of that horrible event.

But some did.

Sure insurance, government assistance, and cash in the bank can help to some extent, but they can only take you so far.

However, a few entrepreneurs do make it through the events that are unpredictable and completely uncontrollable that cause the other twenty percent of business failures.  For those few entrepreneurs who do survive, what helps them make it through is often the same things that got them through the tough times experienced during their original start-up -- determination, passion, grit, hard work, faith, family.

Business on Main has an inspiring story of one small business that has survived 9/11, in spite of being completely dependent on their location next to the World Trade Center.  It is a story that shows what the entrepreneurial spirit is really all about.  You can view it here.

"Culture is one of the most precious things a company has," said Herb Kelleher, Founder, Southwest Airlines.  "So you must work harder on it than anything else."

For the entrepreneurial business, its culture begins from day one.  The culture is a reflection of the values the entrepreneur brings into the business.

Culture is important for an entrepreneurial venture because it is the mechanism that institutionalizes the values of its founders.  Culture serves to socialize new employees.  It helps them understand how they should treat the customers, how they should treat each other, how they should act in their jobs, and how to generally fit in and be successful within the business.

If managed properly, culture also improves the performance of the business.  Culture is an important part of the overall strategy of the business and helps ensure a growing organization will continue to meet the expectations of customers that were established by the entrepreneur during the early start-up of the venture.

For many businesses their success has been built on the entrepreneurial nature of the business.  Since it is important to keep the entrepreneurial nature of the business, as that is what has gotten the business this far, it is important to create a culture of entrepreneurship.

"Building a culture that encourages autonomy, risk-taking, and entrepreneurial behavior is challenging," said Jennifer Prosek, CEO of CJP Communications and the author of Army of Entrepreneurs: Create an Engaged and Empowered Workforce for Exceptional Business Growth.  "For companies that want to out-think and out-pace the competition, an entrepreneurial culture isn't optional: it's an absolute necessity."

According to Prosek, the key to unleashing that creative energy is to create an entrepreneurial culture based on four pillars.

1. Authenticity -- Demonstrate your sincerity by being enthusiastic about entrepreneurial strategies and actions pursued by the business.
2. Commitment to People - "An entrepreneurial culture is based on the idea that each individual can be a powerful force for change in the organization," said Prosek.  Support the professional development of your staff, celebrate exceptional work, and don't forget to have fun.
3. Commitment to the Business -- Align an individual's interests with those of the business. "At my firm, we have a program called Commission for Life™," explains Prosek, "Which encourages new-business generation: Anyone who books a meeting that results in a new client gets 5 percent of the revenue for the life of the business."
4. Continuous Effort -- The work of building a company's culture never ends.  

Sustaining an entrepreneurial culture starts with who you hire.  It is essential to carefully screen prospective employees to ensure that they will fit within your culture.  An entrepreneurial culture is also sustained by your reward system, by the autonomy and respect you give to your employees, and by consistent communication about your ongoing entrepreneurial vision for the company.

Creating an entrepreneurial culture creates a business that will continue to grow by adapting to change and by actively pursuing new opportunities in the market.

It is very common for entrepreneurs to take on partners.

They may be co-founders of the company, key personnel who are given an ownership stake as part of compensation, family and friends who offer some startup support or outside investors.

In any of these circumstances, these people become owners of the business.

And the foundation of working with a group of owners should be a sound legal agreement among all the owners.

This agreement should lay out the basic rights and responsibilities among partners as it pertains to the business they own together, such as what decisions are required to be voted on, what happens when a partner leaves or passes away, and what information those who run the business must provide to the partners.

The best time to set up a partnership agreement is when you first start the business. At this point in time, there is little to squabble over. The business exists only on paper, so finding a fair way to deal with an exiting partner seems much easier.

But such a document only lays out the minimum requirements. There should also be an ethical set of standards that goes beyond the basic legal requirements.

This is particularly true for those in the partnership who have ownership control by holding a majority of the shares.

The heart of working successfully with partners of any kind is communication.

Many partnership agreements establish the minimum requirement of providing everyone with annual financial summaries and holding an annual formal meeting. While this meets the legal requirements of most agreements, it falls short of commonly accepted ethical standards.

Communication with fellow owners should be frequent and predictable. Common practice is that the managing partner should ensure that every owner gets a monthly set of financial statements. It is also good practice to include a narrative summary of business activity over the past month.

If there are partners in the business who are not actively involved in running the company, quarterly or monthly meetings are a good way to keep everyone informed. These also allow for discussion of important issues.

Communication with partners should always be completely honest, open and proactive. The managing partner should view his or her role as a steward of the company for all of the ownership.

With that comes the responsibility of keeping everyone informed of major accomplishments and significant problems or crises. This type of communication shouldn't wait for the monthly report.

Partners should always be among the very first to know about such things.

Communication should be comprehensive. While monthly reporting may provide a fairly succinct summary, at least once a year partners should be given a thorough overview of the business' past, present and future.

Too often partnerships that are guided solely by the legal requirements of their formal agreements tend to end up in a legal mess trying to resolve conflicts and disagreements.

Entrepreneurs who view themselves as stewards for the other owners -- and who follow a higher standard of communicating -- are better able to resolve issues among themselves or avoid such problems altogether due to a strong sense of trust.

Many entrepreneurs talk about integrating their values into the vision for a new business. But some take it one step further and actually build a business model based on their values.

Green Truck Moving Co. is a Nashville-based startup that is integrating the founders' commitment to the environment and the community into the mission of their company.

The founders have implemented environmental practices that include using more eco-friendly fuel in their trucks, recycling and reusing moving materials, operating a virtually paperless business and using recycled materials. "While not all consumers are typically inclined to buy solely off a company's values -- say eco-friendliness -- it is important to make consumers understand the potential impact it could have in their own community," said co-founder and Belmont University MBA student Emmanuel Reed.

"We feel our values will help us grow our business, because it is not just a selling point. We have to walk the talk and have our values drive and inspire the people within our organization."

They also commit to plant two trees after each move they perform for their customers.

As the business expands, they have plans to go even further in pursuit of environmental values. Green Truck Moving is developing rentable, reusable containers made of recycled material to replace traditional moving boxes.

Another example of integrating values and vision is a new business called Mattress Works.

This startup, founded by a group of Belmont students, exists to provide employment opportunities for the homeless and to divert waste from landfills through deconstructing and recycling used mattresses.

"We developed Mattress Works out of our passion to encourage environmental sustainability and create social change in the community," said co-founder Emily Hollingsworth.

Mattress Works has secured used mattress suppliers and scrap buyers for two trial runs. It has processed about 160 mattresses between the two pilot operations. This served as proof of concept, which allowed it to test the viability of the business model and identify any weak spots.

After working out some kinks, the founders are moving forward with Mattresses Unlimited as their first supplier, and they are negotiating a contract with a second supplier.

"Our end goal is to transfer the ownership of the venture to a homeless man who has been trained as part of the Mattress Works team, embodying our belief in the power of entrepreneurship to facilitate change in the lives of others," Hollingsworth said.

Hollingsworth is leading a team of students presenting Mattress Works at the Texas Christian University Values and Vision competition this week.

For a growing number of entrepreneurs, starting a business is more than just a vehicle to making money. Entrepreneurship is a path to pursue their values through the vision they create for a business.

Over the past couple of decades we have seen a steady increase in the number of women becoming entrepreneurs. At Belmont University, for example, 45 percent of students studying entrepreneurship are women.

Across the country, women now make up more than 40 percent of all entrepreneurs as well.

While the number of women choosing an entrepreneurial career path is approaching that of their male counterparts, the factors that motivate or drive female entrepreneurs are often quite different.

Erin Albert, who is both an entrepreneur and a teacher of entrepreneurs, explores the question of what motivates female entrepreneurs in her newly published book, Single. Women. Entrepreneurs.

"Women, especially Generations X and Y, want to make their business and personal lives and aspirations work more in harmony," Albert said. Because of this, they choose to limit the size of their businesses and not pursue outside funding from investors or loans to fuel more growth.

This approach to entrepreneurship is referred to as pursuing "a lifestyle business."

However, every business should be viewed as a lifestyle business. If you choose a business deliberately based on your goals, aspirations and values, you can create a business that is an intentional reflection of the lifestyle you'd like to live.

Albert's research suggests that this is exactly what a growing number of women are choosing to do.

Many female entrepreneurs -- and, in fact, a growing number of young male entrepreneurs -- deliberately limit the growth of their businesses to allow themselves time to pursue interests beyond the office. They want to spend time with their family, church or in their community, or pursue other personal interests such as hobbies or travel.

For example, a former Belmont student I'm familiar with started a business that had potential for significant growth. She easily could have added employees and moved into other markets.

But she had no interest in expanding beyond the scope of a business that she could take care of by herself. She didn't ever want to add employees or face the complexities that arise when an owner expands payroll. Success to her was meeting her basic lifestyle needs through the income she could generate while keeping her life a simple one.

Some entrepreneurs choose an entrepreneurial lifestyle of pursuing high growth and chasing after high returns. While high-growth ventures offer the potential of more income and wealth, this choice comes with its own lifestyle choices. The owners' families will likely see much less of them, and any other outside interests will certainly take a back seat.

The key thing is to recognize that every business you start will have an effect on your lifestyle. Be honest with yourself. Know what lifestyle you truly want, and then engineer that lifestyle into the business model you pursue.

James Barood with the Rothman Institute of Entrepreneurship at Fairleigh Dickinson University's Silberman College of Business offers some rather harsh words for family business patriarchs in a column at Business Insider:

There are millions of Hosni Mubaraks. Most lead family businesses, not nations. Mubarak ruled over 80 million people, while these business founders may preside over dozens, hundreds, or even thousands. Collectively, though, they may hurt as many millions as Mubarak did - and in many of the same ways.

Ouch!  Read on to see how professor Barood compares these family business founders to Mubarak.

I hear a lot of concern that professionalism is dead or at least dying in the workplace as this new generation of workers has been entering the workforce. 

Those of us preparing college students for their careers face it almost everyday as professors - students who seem to lack the professional skills and even basic social skills that they will need to succeed in business.  We have students who text message as we talk to them in our offices, who wear their hats on backwards, who sleep in class, who check Facebook during lectures, and even some who answer a cell phone call during class. 

Our natural tendency is to throw our hands in the air in frustration and hope it does not get even worse before the time comes for us to retire.  After all, this is the always connected, constantly wired generation.  This is their culture.

But some of the management faculty at Bradley University began discussing how to deal with the numerous behavioral problems and even rudeness in their classes and when communicating in person, via email, or phone. 

Jennifer Robin, who teaches Organizational Behavior, developed a system of professionalism points, designed to replace participation points in class.  Professionalism points suggest appropriate behavior that will be useful in the future. 

Eden Blair, who teaches Entrepreneurship at Bradley, has adopted this system.  She shared her experiences with using this approach to addressing student behavior:

•    "'Professionalism' has different meanings in different classes.  Thus, Jen could incorporate leadership theories associated with appropriate behavior in her class.  I have students treat me and their classmates as future venture capitalists or new venture team members in my entrepreneurship classes, as future stakeholders/alliance members in my social entrepreneurship class, etc.  In my creativity class, we discuss how multitasking is really a series of continuous distractions, provide theories in class how damaging that is to brain structures associated with creativity and the ability to be creative.  Thus, playing on your phone during a creativity class isn't just rude, it also has an impact on a student's ability to create.  My entrepreneurship students go to entrepreneur networking events in town and we discuss what behavior they saw was appropriate and what wasn't.   What does it say about an entrepreneur who can't take an earpiece out of his ear the entire time of an event?  Does that make him look busy and important or a complete tool (my students' phrase)?"

•    "Treat students like adults.  I do not care if they miss class, but they need to accept the consequences of it, excused or unexcused.  I will not discuss what they miss and tell them that they should never ask me if they "missed anything important."  They need to contact me ASAP if they are missing class and should ask politely for me to reschedule an exam, not expect that I will do it.  I am under no obligation to do so.  Students who act appropriately and as adults are far more likely to get what they ask for."

•    "Teach students that small acts go a long way.  Greeting me and their fellow students when they come into class, writing polite emails in the correct manner, being a good team member are all important."

•    "Explain the long term consequences for unprofessional behavior.  Falling asleep in class may not seem a big deal now, but it will when you need a reference to a grad school where I have a buddy or for a job with a local entrepreneur.  A lack of punctuality makes me and fellow students less likely to help you in the future."

•    "When you can't beat them, join them.  I do allow students to have computers and phones in the room and try to utilize them in class.  I teach students how to look up company websites and figure out what the site suggests about the current and future success.  We then discuss whether students would fund the organization.  Since I can't get the students to read, this at least allows for discussion.  I have students text into a poll to help promote a discussion (polleverywhere.com)."

•    "Enlist students' help when crafting professional behavior.  When they state what behavior is appropriate and inappropriate, it is easier to chastise them when they act inappropriately."

To those of you in academia, the faculty at Bradley are in the early stages of developing this system, so they welcome any ideas or comments.  Eden Blair can be contacted at esblair@bumail.bradley.edu

But I know they would also welcome thoughts from the rest of you who are dealing with these issues with young workers in your businesses.  I am sure they would welcome your thoughts, as well.  I also think that some of the ideas they are developing must also morph into orientation and training ideas in businesses to help address the behavioral challenges I hear from many of you when dealing with your young workers.