Next month begins an exciting time for business students at Monmouth College when 20 + entrepreneurs from all major industries travel to campus to speak about how they began their careers and businesses. Chris Byers, Owner of Advanced Rehab in Bloomington will speak on February 2nd and Mike Luna, a very successful McDonald’s franchise owner will be on campus on February 7th. See you then!
The benefits of free trade and globalization have been a mystery to most Americans. Last spring, Monmouth College polled 500 registered voters in 8 Midwestern states and found a widespread antipathy towards globalization:
But, the economic debate among presidential hopefuls often centers around the benefits of global trade and protectionism to save jobs. Protectionism to save jobs can only work in the short-run and makes America less competitive. We cannot hold back globalization with undermining America’s role in the world economy.
Obviously, those of us who see government interfering and inhibiting business expansion play a vital role in convincing the doubters of benefits of greater free trade policy.
The job is difficult but doable. The argument centers on what drives job creation. When a plant closes in Illinois the average citizen blames global trade. The results of the Monmouth poll confirm this hypothesis. Midwesterners have an immediate and visceral reaction to a company’s drive to cut costs. Yet all Americans enjoy the benefits of globalization in the form of lower prices and job growth when companies expand their business and export activity. We forget the average American enjoys one of the highest standards of living in the world. Middle class Americans are part of the top 1% when you consider standard of living in the rest of the world. The problem is the benefits of globalization are not immediate and less visible to the average US citizen.
Leaders of business, education, government and other key stakeholders need to be more proactive in pointing out these benefits. I encourage policy makers and business leaders to share the promise of future global opportunities and highlight our competitiveness rather than focus on areas where we are less competitive.
For example, US technology and life science companies lead the world. Four of the top ten agricultural exporting regions are located in the US. We have the best foundation for commercial activity in the world with intellectual property protection, bankruptcy laws, and transparent political system of rules and regulations. As a result, Americans can monetize their assets to a greater extent than almost any other people.
Our system is not perfect, but much of the imperfection comes from over regulation and demands for fairness, not flaws in our systems supporting free trade. Much of the fault for the mortgage crisis came from policy makers arguing for more government support of home ownership for those not financially qualified to obtain mortgage loans.
Globalization has other benefits. We must expand educational and cultural exchanges. Why? These educational opportunities enhance our understanding of those we sell to and encourage the free movement of people as an entrepreneurial force for growth. We can’t be competitive unless we “stay in the game”.
Union leaders and many liberal policy makers argue the US has lost more than other countries since the advent of more open trade and globalization. But, our nation possesses some of the most valuable resources in the world: an industrious people, a strong entrepreneurial spirit, and the world’s leading institutions of higher learning.
Let’s redefine the term globalization and free trade as “positives”, the critical ingredients to remaining the best economy in the world.
I have received many comments and questions since the annoucement was made public regarding my new position at Jacksonville University. I will not be moving into my my capacity until July 1st. But, I wanted to provide a few of the answers to the most common questions as to why after 11 years, I decided to leave Monmonth College:
What first attracted me to the Dean’s position at the Davis College of Business (DCOB)?
After 11 years working as a business faculty member, department chair, and college vice president, I was looking for a new challenge. The Dean’s position is a great opportunity for me to help grow the JU brand and expand the international reach of the DCOB.
Twenty years ago, the DCOB leadership developed an excellent Flex/Evening MBA program and attracted some of Jacksonville’s best and brightest aspiring business leaders and entrepreneurs. The challenge in 2012 is to enhance the current program and attract Jacksonville’s rising generation of managers and entrepreneurs and create linkages to international exchanges.
What do I mean by “attractive and relevant”?
That means adapting our program to the needs and aspirations of today’s business leaders. It is not enough to prepare students for their next job. We know what management consultants, current auditors, or loan officers do today. The challenge is to provide a program that is relevant enough to qualify for the next promotion and prepare the candidate for a lifetime of success. Today we use Google for searches and Microsoft Office for many business oriented tasks. What happens when the accounting software changes or the current tax code goes away? Who can adapt to these changes and make lemonade from the lemons?
We have to teach the best ways to utilize spreadsheets or manage investor expectations while preparing our graduates to solve problems or take advantage of opportunities unknown to all of us today. If you would have asked someone if Apple would be the dominant entertainment company ten years ago, everyone would have laughed. No one is laughing today. With i-phones, i-pads, Apple TV, and i-tunes representing a huge percentage of royalties to music artists, Apple is on the verge of becoming what Hollywood was in the 40’s and 50’s.
What is the expected ROI on a degree from the DCOB?
I am not sure yet. But I am confident they have provided a solid product. My job will be to make sure the perceived and real value of our degree grows. The most important factor is student success. But it is not easily measured. Another way to measure the quality of the business program is to look at the quality of the individual faculty and its curriculum. That is one concrete way any prospect can compare one business program to another. It’s why accreditation matters. With the DCOB they maintain the highest accreditation with the Association of American Colleges & Schools of Business (AACSB). AACSB is the gold standard in a business education. To obtain the accreditation, the school must meet stringent standards such as best practices in teaching, research, and career preparation. It is expensive to maintain a topflight program, JU has made that investment and University of Phoenix and other high profile business programs have not. Only 15% of American business programs are AACSB accredited. So JU is in an elite group.
Given the investment in time, effort, and tuition required to complete a Masters or even your undergraduate business degree, the return on investment (ROI) must be both immediate and long-lasting. Even with financial aid, that’s a $50-100,000 question that every prospect asks. It has to make sense. That requires a robust curriculum with faculty trainers that offer both depth and breadth. It’s one thing to obtain the skills that are immediately valuable for say an accounting graduate to begin conducting internal audits of financial performance, yet another to make value judgments in the area of business ethics. We can’t lose sight of the life-long dividends a quality business program provides. Events in the world can change our perspective. With business ethics I believe there are some absolutes, but the rules determine the outcomes.
The DCOB program must be compelling intellectually, socially (enjoyable and rewarding from the networking perspective), and provide a substantial return on investment. By substantial, I mean the ROI must be ten to twenty times the original investment. In terms of incremental dollars, it means that a graduate should expect to earn over one million dollars more than if they did not seek an MBA. For undergraduates it means at least $500,000 more than if they did not graduate from an equivalent business program
What makes being the Dean such a great challenge?
Business education is a mature product and with so many other evening and online programs there are few barriers in the way of any school starting a business program. It appears to happen every day. Despite the growing number of competitors, the Jacksonville University can become the best business program in the region if we can meet the challenge of continuous improvement and innovation. We need to get out into the business community and learn about the current problems and challenges. We must adapt our curriculum and coursework as necessary.
In business, change is necessary and we are running a business. It also requires a champion. My plan is support those champions that fight against the nay sayers—those that say we shouldn’t try or accept the status quo or mediocrity. There are many that will say change is not worth it. I do not want to change for change sake –but adapting to the demands of the market is a matter of survival. We can’t afford to simply focus on our traditional competitors in Central and Northern Florida or even those in the South East region. It’s an international market and we are just as likely to lose an international business student to University of South Carolina as Fudan University in Shanghai.
Why should we care?
In business, we need to have a great answer for the question, “why should I care?” and “how are you better than _____?” As Dean, I want to have a great answer for that question. Right now, all I could tell you is that the proper ingredients are in place. Prior leaders took bold steps by hiring excellent young faculty, while maintaining a quorum of the best senior faculty. Good examples of the outstanding young faculty are Dr. Matrecia James in Management or the more senior leadership from Drs. “Mo” Sepehri in International Business and Bob Boylan in Finance & Accounting.These faculty have not only succeeded in driving student engagement and success, they have helped build a successful program. It is on that foundation that we succeed or fail. I plan to help the DCOB succeed while competing at higher levels not though possible.
Let’s look for those prospects and alumni friends that are as ambitious as we are—then we must convince them to join us in this goal.
Another goal is to enhance the reputation of the brand. The JU brand should translate to the “gold seal” of business confidence in our region and beyond. If the prospect is starting their second career or profession, or pursuing advanced study, it is a “given” to include the DCOB on their short list. But it is not enough to provide excellence and satisfaction in their pursuit of their degree. Competing programs can do the same thing. We must improve in and out of the classroom and delight and amaze our students.
I emphasize learning beyond the classroom because it fosters leadership skills, practical experience and social responsibility. A dedicated faculty and staff should provide “bridges” to these experiences. In order to “win” more students and friends, we must be known for providing unparalleled personal and career guidance to our students, while engaging JU alumni and the community to support our students through scholarships, internships and career networking opportunities.
Ambition is the common denominator
While on campus I interviewed a number of JU students. I found it was ambition that drives the successful JU students. The common denominator was ambition to succeed, whether it was a music student or communication student. It was particularly acute with the MBA student I spoke with.
Their passion and smarts will propel them towards a rewarding career. Why? It is our desire as humans to do more than survive–we want to prosper and thrive. From my experience as an entrepreneur, it’s those aspirations that are the single greatest motivators towards success in a business program. Despite those yearnings to prosper and make a difference, graduates face some great barriers: high unemployment, taxes, commercial restraints by government, and limited time and capital. If it was easy to win at business, all business educators would be out of business.
As faculty we face challenges too. Publish in a leading journal, win a teaching award or grant. Obtain a consulting contract. Sometimes it feels as if success is just too difficult or beyond our grasp. Let me assure you that it is not. It is my goal to find more resources so that the DCOB faculty’s good work can be showcased. We can accomplish great work and bring honor to JU at the sametime.
At most successful companies, the top sales people are “well taken care off” from a compensation standpoint. Successful entrepreneurs learn early on that great sales producers become the “goose that lays golden eggs” when properly incentive-“vized”. In my interactions with hundreds of companies over the last thirty years, I learned a few things about the “DNA” that drives the best organization’s sales compensation philosophy. Organizational structure is certainly one aspect of success in sales, but there are many issues to consider. I have learned the most in my sales and business development career from what does not work.
Below are nine summary principles that produce excellent results:
1. As an entrepreneur you cannot ignore the sales function and your key sales people. Make it a daily priority to stay on top of who is selling and buying your product.
2. Salesmen amplify the best or the worst attributes of your company’s reputation. Hire with an eye on ambition, high aspirations, and drive rather than academic patina.
3. Logistics and sales are inextricably tied (UPS or pizza delivery are good examples). Don’t think your logistical or customer support operations can be separated from your sales efforts. The best companies find a way to tie everything together to deliver a superior product on time.
4. If the key “rain-maker” is you, set a good example of consultative selling by taking the time to understand the customer’s need or problem rather than pushing your “canned product solution”
5. Subtle or major changes in your method of sales compensation have a profound impact on overall profitability.
6.. Try to practice open book accounting and transparency in your compensation practices
7. Levels of compensation are the salesperson’s method of keeping score and evaluating their own performance vi-a-vis everyone around them.
8. Keep your sales organization as “flat” as possible
9. Tie your compensation structure to your business fundamentals and “what really drives your business”
At Monmouth College, we admit 20-30% of students who are “undecided” about their major. We currently have more than 200 business majors who do not know what specific aspect of business they will focus on either. Frankly, I am not concerned despite the high cost of education that a student focuses on international business or entrepreneurism, my specialties, or finance and accounting. I am more concerned that colleges make it practically impossible to come to college undecided or change majors and graduate in four years. That is one of the biggest secrets in higher education today.
It is practically impossible to finish in four years unless you make a plan and stick to it religiously. That sounds good but in practice, but the college years are times of discovery and those revelations often change the path a students is pursuing. Great schools provide a general education platform that is flexible and broad. But the major area of study is where there is little to no flexibility. Specific sequencing can make it practically impossible to complete the undergraduate degree in four years. Examples are engineering, education, some “hard sciences”.
If prospects choose a quality college with excellent programs like those at Monmouth, and study topics that interest them, they will graduate on time. Their passion and smarts will propel them towards a rewarding career too. Why? It is our desire as humans to do more than survive–we want to prosper and thrive. Those aspirations are the most powerful motivators towards success in any business. Despite those yearnings to prosper and make a difference, graduates face some great barriers: high unemployment, taxes, commercial restraints by government, and limited time and capital. It is not easy to win at business.
Plus from research we discovered the average American is forced or elects to change jobs at least seven times over a 40 year career. That is why a broad based education lays the foundation for business success. Learning a little about a lot of things can pay off. That is the philosophy of the political economy and commerce department at Monmouth College.
Additionally, the pace of change in the global economy is rapid. The New York Times Columnist Thomas Friedman said that “getting an education today is like training for the Olympics without knowing what sport you will end up competing in”. Undecided majors that learn from the best faculty and seek learning from the best books and theories will be able to translate that knowledge into problem solving capabilities and entrepreneurial success. I just met with a former student yesterday who is starting a sports marketing agency. He was not a marketing major. But he has smarts, passion, and drive on his side. I would not bet against him. Even undecided majors can be a big success, when the college or program remains flexible.
I often tell my students that management’s philosophy can make or break a business. A good example is the decision to practice open book accounting. The recent settlement between the NBA Owners and the players union focused on the split of revenues from basketball operations. The players have claimed 57% of net revenues since 2003 when the last collective bargaining agreement was signed. Most teams/owners claimed they could not make enough to cover this level of profit sharing so they locked out players on July 1st of this year. The league has been closed for business for the last five months. http://www.washingtonpost.com/blogs/wizards-insider/post/nba-lockout-owners-players-reach-tentative-agreement/2011/11/26/gIQA5EeRyN_blog.html
Entrepreneurs succeed in a large measure according to how well they recruit and retain talent. One reason employees leave a position for another is higher compensation or the “potential” to make more through stock options or profit-sharing. Without profit sharing, players claim the NBA owners are making millions and stingy with player’s salaries. Owners complain that players high expectations and demands drive them into the red.
In order for profit sharing to work as part of an employee’s compensation, the workers or employees must agree to take a portion of the total net revenues whether they go up or go down. In some ways, the employees that accept profit-sharing become part-owners because their compensation contains a fixed and variable amount tied to the success and profitability of the venture.
Accepting a profit-share and opening the books are both conscious decisions that increase the potential for team oriented goals and decisions that impact all contributors to the success of the business or venture. The risk is misunderstandings and combative relations when a cohesive strategy is not agreed upon.
Employees or in this case, the NBA players union had access to the financial data for each club and from league operations since 2003. At a minimum the players wanted to see the franchisee’s income statement and balance sheet, but that information does not provide the “granularity” to determine what products are losing money and those that are extremely profitable.
In the ideal situation, a profitability analysis is provided along with a list of highly compensated managers. This requires a high level of trust between the owners of the business, its management, and the employees. This level of trust opens management up to criticism because under open book accounting, management’s compensation, major expenses, and income statements can be accessed and scrutinized by the employees or their union representatives.
On the other hand, management shares the real costs of doing business which is often hidden in public accounting reports. Employees often have the misperception that the company or certain profits are much more profitable than they really are. For the season to begin the NBA owners required a reduction to 49% in the player’s profit-share. There was certainly more “give and take” to the final agreement, but we do not have those details yet.
For NBA players and owners, the 2012 season will be the one when all stakeholders decided to “share the pie”. For the NFL, the players and owners believe they can grow the pie and benefit all parties. It has been one key ingredient in the NFL’s success and sets the standard for all of professional sports.
I recently read an article praising the Oberlin College community for embracing a site that promotes the use of profanity in describing Oberlin as a great place to go to college. As a marketing professional in higher ed, I was surprised to see praise and compliments for a student or alumni site that promotes this site as innovative and creative.
In my review, I find both the site and the article praising the site as cheap. It uses some of the most vile profanity I have seen officially connected to any institution to gain attention and social media posts. Using this level of profanity is akin to using sex as an attention getting device. It is a short cut to gaining attention, but like the Go-Daddy.com ads, it only keeps your attention for the shock value, and lacks the substance and creative content that would hold the audience’s attention in the absence of the obscenities.As the CMO of the college associated with this site, I would be embarrassed.
As advice to entrepreneurs vying for attention, don’t steep to this type of marketing and social media because the long-term damage to your brand’s reputation could be irreversible.
One of the marketing mysteries for most entrepreneurs is the evolution of their brand. How can I build brand equity? What can I do to leverage the power of my brand? How can I encourage more brand loyalty?
A brand is both intellectual property and a living, evolving asset that can be monetized. It differentiates one product from another when they are competing in a category of goods or services. Greater brand awareness can translate into more sales, but this is not a given. It is not a magical, mysterious process though.
The brand building process requires investment capital and a strategy. It begins with an understanding of the loyalty continuum. Understanding the importance of each step in the process does not result in brand equity, but knowledge and superior execution of tactics related to each step culminates in loyalty.
What are the steps in the continuum?
1. Generating brand awareness-a brand that is not known is usually not considered or ignored by buyers unless it competes strickly on price
2. Consideration frame-differentiate and enhance the image of your brand and it will be considered a “viable choice” in a short list of brands for that category. An example might be three or four car models you would consider if you had to spend $30,000 on a new sedan.
3. Trial-whether it is a test drive or trial size of perfume, buyers want to try on or experience your product before they buy. How can you facilitate trial and incent more individuals in your target market to “try it on”
4. Repeat/frequency-once buyers have purchased your brand, buyer’s remorse is the enemy of loyalty. You must reenforce the buyers decision and provide reasons and products they will want to purchase again and again. This behavior is habit forming and is closely tied to creating loyal customers
5. Loyalty-loyalty is the holy grail for brands because these buyers will accept no substitues and pay more for your brand’s version of quality. Apple is a master of moving people from trial to loyalty. See Alex Morgan’s comment to my blog on the Perfection Trap
Many entreprepreneurs fall victim to what I call “the perfection trap”. What is the perfection trap? Working really hard and spending all of your resources in rehashing or reformulating a product that is 95% market ready. My advice to most entrepreneurs is to launch before you have it perfect. Then fix the bugs or problems during an in market test. Call it a “beta” product or product 1.0 but don’t get trapped in seeking perfection; never able to satisfy your customers basic needs. The “getting everything perfect problem” varies by industry but my experience in academia has taught me that what we think is perfect isn’t usually as close as we think. What our client thinks is perfect is not easily discernible without an experiment or test market.
Why can’t we just ask our client what she wants? Because she will “not know it until she sees it” or may not know what she really wants until she has to open her wallet and choose it over everything else she desperately needs to buy. There is no replacement for a test run with real customers that have to spend their own money on your product. You can’t control most external factors or trends that will impact the success of your product either, so let go–incremental improvement is more proven to drive entrepreneurial success than “hitting a home run on your first at bat”.
When I was doing marketing consulting I worked for a venture that suffered from the perfection trap. The CEO thought his tireless demands for perfection would create the perfect teen spending card based on the Visa platform. Despite some good technology and marketing we experienced a failure to launch.
Let me try an illustrate my point outside the realm of business. My daughter told me about a friend who has frequent headaches. She manages her pain using powerful drugs. The problem is the drug’s side-effects can be as damaging as the headache pain. This is analogous to getting it perfect. She feels perfectly well when on the drugs but comes down hard after its effect wears off. Most importantly, to achieve perfection she sacrifices her sensitivity to the outside world. Feeling a little ache or pain or even a headache periodically keeps you away from the debilitating side-effects of drug use. You feel the outside world rather than constantly balancing the facade you call perfection. It hurts to hear you did not “get it perfect” or even close to right, but that customer feedback is the key to continuous improvement and future product success.
Usually, entrepreneurs learn more from consumer or client feedback when the product has been “run through a few laps” by expert practitioners. In Japan, many companies are founded and launched based on an angel investor or corporate benefactors believing there is a market niche where no competitor is adding much value or they see companies in businesses they do not want to be in to satisfy customer demands. These business are ideal spinoffs for would be entrepreneurs who are “willing to make it pretty good for now, and better in the future.” Don’t spend thousands of dollars and three additional months getting some thing that is 95% there, perfect. You likely to find that your efforts stymied growth, deflated morale, and increased your risk because of the lack of in market data testing.
The silver market is described as those who are reaching retirement age now or already 60+ years old. They are referred to fondly as “baby boomers” or consumers born before 1960. In the United States, Europe, and Japan, these senior citizens are growing at an alarming rate comprising almost 20% of those nation’s population (Kohlbacher, 2008). This demographic shift creates a challenge to marketers, and societal issues for government policy makers to grapple with. For example, many families are providing home care and financial support over much longer periods for their parents and grandparents when compared to the generation in the work force after World War II. In both the US and Japan, the social security and private programs (funded by retirement plans, pensions, and 401 K’s) were originally designed, for workers who would retire at 55 or 60 and die before age 70. Today, that is not the reality. This market is changing due in part to longer life spans and better health care maintenance and access. Understanding the consumer mind set and dreams and expectations of older consumers can lead to great business opportunities. The senior market is now positioned to grow dramatically in product categories where services are not widely available or product selection is limited. Examples of a growth market are home health care, retirement travel, health care suppliments, prescription drugs, and financial services . The Japanese practice was children take care for their aging parents in the multi-generational home. This practice conflicts with the modern convention that a worker changes jobs and locations 6-7 times over their career. It is more and more difficult for modern families to acquire or “free-up” the space and time to care for their aging parents (Kohlbacher, 2008). Therefore, the opportunity to develop and maintain successful assisted living facilities or home health care could be part of a new business plan. There are too many opportunities to define all of them. The opportunities to market to older Americans offers a great opportunity to any entrepreneur willing to venture into services driven by senior demand.
