Entrepreneurship and Innovation Today

Quote of the Day-Startup Capital

"New companies usually fail not because they don't have enough start-up capital but rather because they aren't careful enough with the capital they do have. "

Norm Brodsky | Columnist | Inc.

Dragon's Den Angels give advise to entrepreneurs

In this Month's issue of Profit Magazine we have an exclusive Q&A interview with the hard-nosed investors of CBC-TV's Dragons' Den, who identify what too many entrepreneurs get wrong-and why they have trouble getting it right

Abstract (Summary)

In an interview, The Herjavec Group CEO Robert Herjavec, Venture Communications president Arlene Dickinson, Boston Pizza International chairman Jim Treliving, North Coast Capital LLC managing partner Kevin O'Leary, and La Senza Corp president & COO Laurence Lewin identify what too many entrepreneurs get wrong -- and why they have trouble getting it right. 

They are asked a few questions:

• What's the best business mistake you ever made?
• Whats the fastest way to turn you off a pitch?
• Complete the following sentence: You can tell I'm interested in your opportunity when...
• What's the most common fundraising flaw you see in entrepreneurs?
• What element is most commonly missing from entrepreneurs' pitches?
• Which Dragon would you least like to present to?
• What's the best business lesson you can share with aspiring entrepreneurs?
• What's the key to startup success?

In summary,

• Herjavec says the best business mistake he ever made was extending credit to a customer without doing a proper credit check.  The deal was very large and they ended up not getting paid.  The common fundraising flaw he sees in entrepreneurs is overconfidence, bordering on arrogance. 
• Dickinson says not spending more time looking at how traditional agencies are structured is the best business mistake she ever made. 
• Treliving says the key to startup success is making sure you do your books well, and have your accounting in line. 
• While Lewin says the fastest way to turn him off a pitch is being arrogant.

See Dragon attack Kim Shiffman.  Profit.  Toronto: Oct 2007.  Vol.  26, Iss.  4; pg.  60, 4 pgs

Smart GM bacteria make gasoline- renewable petroleum

One of my students in my Innovation & Entrepreneurship course at the University of Toronto posted the following comments about energy costs.

Andrew says

.... as a defensive measure, North American entrepreneurs should look in the areas that will cause economic pain - specifically the cost of energy.  If new sources of fuel could be invented - then airlines, trucking, automotive, and most transportation would be good industries for other entrepreneurs. Canada will always need transportation to keep it's pieces connected.  Energy is the only way this can be achieved. 

There are opportunities everywhere.  You just need to sit and think about it."

LS9 a company based in  San Carlos, CA, in the USA came out of stealth mode earlier this year and announced that they are designing genetically engineered or genetically modified bacteria (e-coli) to naturally manufacture petroleum, or what the founders, geneticist George Church, of Harvard Medical School, and plant biologist Chris Somerville, of  Stanford University, call "renewable petroleum."

See LS9 (a classic example of a Clayton Christensen disruptive technology) and a background story in MIT’s Technology Review

( my regular blog readers will know that researches already have determined that anaerobic bacteria produce natural gas using coal veins as input.)

also see  Growing Biofuels-from waste to fuel

...

© 2005-2007 

Walter Derzko -"Changing the world, one idea at a time"©

Walter Derzko teaches at the Certificate Program on Innovation and Entrepreneurship at the University of Toronto, School of Continuing Studies, which starts in the Fall of 2007

Expert, Consultant and Keynote Speaker on Emerging Smart Technologies, Innovation, Entrepreneurship, Strategic Foresight, Business Development, Lateral Creative Thinking and author of an upcoming book on the Smart Economy "

The Smart Technology Blog: The Smart Economy -- Read, enjoy, explore, speculate, comment !!

To arrange for an in house presentation or briefing on smart technology see here

To explore the opportunities and threats of any new smart technology in your industry - Contact Me or explore how we can work together

• ".....Strategy without action is a day-dream; action without strategy is a nightmare"-old Japanese proverb
• ".......Ours is the age that is proud of machines that think and suspicious of men who try to." -- H. Mumford Jones
• ".......Without changing our patterns of thought, we will not be able to solve the problems we created with our current pattern of thought."  --A. Einstein
• ".......Change is difficult, but complacency and stagnation are surefire showstoppers..." --Walter Derzko"
• .......Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it's the only thing that ever has."  -- Margaret Mead
• ".......Small minds discuss people; Average minds discuss events; Great minds discuss ideas; --Anon

P. S. if this is your first visit to my blog, please go to our Welcome page

ModeMapping

All business textbooks tell entrepreneurs to observe customers to look for problems that can be turned into opportunity windows. But there aren't that many tools or software programs to help you spot patterns.

Business Week profiles a tool called Mode Mapping, -- a new, smart software tool developed by Stuart Karten Design in Marina del Ray, Calif.  It won a 2006 IDEA Silver Award in research.

It’s a visualization tool that tracks the state of mind of various consumers over time so designers can see patterns, by using a colorcoding system of categorizing these states of mind, or “modes.” How does Mode Mapping work? Designers identify and then color code patterns of consumer behavior to look for shared experiences — and then use these observations to suggest innovative new solutions that will appeal to customers. This creates a topography of sorts of consumer activities as well as how they are thinking and feeling during those activities.

See Business Week Blog >> [...]

What Industries to avoid? Lessons from Canadian billionaire Seymour Schulich

Last night I went to hear Canadian billionaire Seymour Schulich speak about his new book called Get Smarter-Life & Business Lessons at the Indigo Entrepreneur Series.

I read through about half of the book in one sitting last night (296 pages with 49 chapters) ( BTW,each chapter is only 3-4 pages of condensed wisdom).

In chapter 4 --"Jobs to seek and those to avoid", Schulich suggests that entrepreneurs work for someone before venturing into business themselves to get that much-needed experience.

He suggests finding work in industries with high profit margins and says to avoid the following (....but without providing any relevant comparative data):

• airlines
• auto parts
• retailing
• biotechnology ( I would disagree here...the industry has a 22-23% profit margin on average .....wd... see chart & story on Biotech below)
• grocery stores
• wholesaling
• machinery manufacturing
• paper and forest products
• auto manufacturing
• restaurants
• appliance manufacturing
• trucking
• any manufacturing competing with China ( ..and India I assume too)
• telecom services

Well that seems to be more then 95% of all Canadian business...I'm assuming that he would give the same advise to entrepreneurs wishing to enter these business sectors too.

He did advise to stay out of any field that India and China is likely to dominate. In the resource sector he recommended diamonds, oil, coal and platinum, all resources that Chindia (China & India) lack or need to buy.

He adds in the book:

"Don't misunderstand me. You may be able to find fulfillment and a rewarding career in the above...[..]...but you are more likely to find satisfaction and superior financial rewards in industries with superior economics."

He didn't mention anything about Nanotechnology in his book or his talk, which could easily become Canada's new resource sector. I'd be interested in what he has to say to Rotman business students and what advise he gives to researchers at MaRS dd at the University of Toronto when he speaks to these groups this term.

Here's an recent industry profit margin chart for several US Industries.

The issue of asymmetrical growth in Specialised Biotechnology Firms in the USA and the UK - UQAM

"There are over 5,000 Specialised Biotechnology Firms (SBFs) in the world, out of which at least 1500 are in the USA, 400 in Canada, and a similar number in the UK.

Within this group of SBFs rapid growth is concentrated in some 10 per cent of the firms. This paper compares the growth patterns of SBFs in the USA and the UK, and with the previous results for Canada. These three countries represent nearly 50 per cent of SBFs in the world. By combining several different databases, the paper reveals the determining factors of SBF growth in the two leading countries. Using correlation and logistic regressions for each country, we found that five factors (patents, the targeting of human health products and processes, the support of venture capital, R&D and marketing corporate alliances, and the search for world markets) explain most of the growth of these firms. "

Source: Int. J. Biotechnology, Vol. 9, No. 1, 2007

Get full paper here >>[...]

© 2005-2007

Walter Derzko -"Changing the world, one idea at a time"©

Walter Derzko teaches at the Certificate Program on Innovation and Entrepreneurship at the University of Toronto, School of Continuing Studies, which starts in the Fall of 2007

Expert, Consultant and Keynote Speaker on Emerging Smart Technologies, Innovation, Entrepreneurship, Strategic Foresight, Business Development, Lateral Creative Thinking and author of an upcoming book on the Smart Economy "

The Smart Technology Blog: The Smart Economy -- Read, enjoy, explore, speculate, comment !!

To arrange for an in house presentation or briefing on smart technology see here

To explore the opportunities and threats of any new smart technology in your industry - Contact Me or explore how we can work together

• ".....Strategy without action is a day-dream; action without strategy is a nightmare"-old Japanese proverb
• ".......Ours is the age that is proud of machines that think and suspicious of men who try to." -- H. Mumford Jones
• ".......Without changing our patterns of thought, we will not be able to solve the problems we created with our current pattern of thought."  --A. Einstein
• ".......Change is difficult, but complacency and stagnation are surefire showstoppers..." --Walter Derzko"
• .......Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it's the only thing that ever has."  -- Margaret Mead
• ".......Small minds discuss people; Average minds discuss events; Great minds discuss ideas; --Anon

P. S. if this is your first visit to my blog, please go to our Welcome page

Last night I went to hear Canadian billionaire Seymour Schulich speak about his new book called Get Smarter-Life & Business Lessons at the Indigo Entrepreneur Series.

I read through about half of the book in one sitting last night (296 pages with 49 chapters) ( BTW,each chapter is only 3-4 pages of condensed wisdom).

In chapter 4 --"Jobs to seek and those to avoid", Schulich suggests that entrepreneurs work for someone before venturing into business themselves to get that much-needed experience.

He suggests finding work in industries with high profit margins and says to avoid the following (....but without providing any relevant comparative data):

• airlines
• auto parts
• retailing
• biotechnology ( I would disagree here...the industry has a 22-23% profit margin on average .....wd... see chart & story on Biotech below)
• grocery stores
• wholesaling
• machinery manufacturing
• paper and forest products
• auto manufacturing
• restaurants
• appliance manufacturing
• trucking
• any manufacturing competing with China ( ..and India I assume too)
• telecom services

Well that seems to be more then 95% of all Canadian business...I'm assuming that he would give the same advise to entrepreneurs wishing to enter these business sectors too.

He did advise to stay out of any field that India and China is likely to dominate. In the resource sector he recommended diamonds, oil, coal and platinum, all resources that Chindia (China & India) lack or need to buy.

He adds in the book:

"Don't misunderstand me. You may be able to find fulfillment and a rewarding career in the above...[..]...but you are more likely to find satisfaction and superior financial rewards in industries with superior economics."

He didn't mention anything about Nanotechnology in his book or his talk, which could easily become Canada's new resource sector. I'd be interested in what he has to say to Rotman business students and what advise he gives to researchers at MaRS dd at the University of Toronto when he speaks to these groups this term.

Here's an recent industry profit margin chart for several US Industries.

The issue of asymmetrical growth in Specialised Biotechnology Firms in the USA and the UK - UQAM

"There are over 5,000 Specialised Biotechnology Firms (SBFs) in the world, out of which at least 1500 are in the USA, 400 in Canada, and a similar number in the UK.

Within this group of SBFs rapid growth is concentrated in some 10 per cent of the firms. This paper compares the growth patterns of SBFs in the USA and the UK, and with the previous results for Canada. These three countries represent nearly 50 per cent of SBFs in the world. By combining several different databases, the paper reveals the determining factors of SBF growth in the two leading countries. Using correlation and logistic regressions for each country, we found that five factors (patents, the targeting of human health products and processes, the support of venture capital, R&D and marketing corporate alliances, and the search for world markets) explain most of the growth of these firms. "

Source: Int. J. Biotechnology, Vol. 9, No. 1, 2007

Get full paper here >>[...]

© 2005-2007

Walter Derzko -"Changing the world, one idea at a time"©

Walter Derzko teaches at the Certificate Program on Innovation and Entrepreneurship at the University of Toronto, School of Continuing Studies, which starts in the Fall of 2007

Expert, Consultant and Keynote Speaker on Emerging Smart Technologies, Innovation, Entrepreneurship, Strategic Foresight, Business Development, Lateral Creative Thinking and author of an upcoming book on the Smart Economy "

The Smart Technology Blog: The Smart Economy -- Read, enjoy, explore, speculate, comment !!

To arrange for an in house presentation or briefing on smart technology see here

To explore the opportunities and threats of any new smart technology in your industry - Contact Me or explore how we can work together

• ".....Strategy without action is a day-dream; action without strategy is a nightmare"-old Japanese proverb
• ".......Ours is the age that is proud of machines that think and suspicious of men who try to." -- H. Mumford Jones
• ".......Without changing our patterns of thought, we will not be able to solve the problems we created with our current pattern of thought."  --A. Einstein
• ".......Change is difficult, but complacency and stagnation are surefire showstoppers..." --Walter Derzko"
• .......Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it's the only thing that ever has."  -- Margaret Mead
• ".......Small minds discuss people; Average minds discuss events; Great minds discuss ideas; --Anon

P. S. if this is your first visit to my blog, please go to our Welcome page

Mompreneurship: New name, old idea. growing trend

Women are increasingly turning away from corporate employment toward family-embracing entrepreneurship.

Here's a story from Halifax, Nova Scotia from the thechronicleherald.ca

"When Cynthia Melnick had her baby, returning to work was not an option.  Her new family and her job - following the Canadian Forces to hotspots like Afghanistan, booking leave for soldiers - just didn't mix.

Now Melnick owns a consignment shop for kids in Kingston called Storks Landing Consignment, and says she couldn't be happier.

The business, while forcing her to work far more hours than the traditional nine-to-five corporate job, gives her the freedom to choose her hours and her lifestyle, allowing extra time at home with her one year old daughter, Kailey..

Melnick is part of a growing trend in Atlantic Canada and across the country.  Women are turning away from the corporate world and looking to entrepreneurship as a way to blur the line between work and family.

"It definitely is a trend," says Jennifer O'Quinn of Mount Saint Vincent's centre for women in business."

Full story here>>[...]

© 2005-2007 

Walter Derzko -"Changing the world, one idea at a time"©

Walter Derzko teaches at the Certificate Program on Innovation and Entrepreneurship at the University of Toronto, School of Continuing Studies, which starts in the Fall of 2007

Expert, Consultant and Keynote Speaker on Emerging Smart Technologies, Innovation, Entrepreneurship, Strategic Foresight, Business Development, Lateral Creative Thinking and author of an upcoming book on the Smart Economy "

The Smart Technology Blog: The Smart Economy -- Read, enjoy, explore, speculate, comment !!

To arrange for an in house presentation or briefing on smart technology see here

To explore the opportunities and threats of any new smart technology in your industry - Contact Me or explore how we can work together

• ".....Strategy without action is a day-dream; action without strategy is a nightmare"-old Japanese proverb
• ".......Ours is the age that is proud of machines that think and suspicious of men who try to." -- H. Mumford Jones
• ".......Without changing our patterns of thought, we will not be able to solve the problems we created with our current pattern of thought."  --A. Einstein
• ".......Change is difficult, but complacency and stagnation are surefire showstoppers..." --Walter Derzko"
• .......Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it's the only thing that ever has."  -- Margaret Mead
• ".......Small minds discuss people; Average minds discuss events; Great minds discuss ideas; --Anon

P. S. if this is your first visit to my blog, please go to our Welcome page

Smart computerized measures of "executive intelligence" to predict who will excel in a managerial role

Predicting Managerial Success

Psychologists from the University of Toronto, Harvard University, the University of Hawaii and McGill University have used new computerized measures of "executive intelligence" to predict who will excel in a managerial role or in a competitive academic environment.

The research findings, published in the last issue of Journal of Personality and Social Psychology (August 2007), demonstrate that men and women who do exceptionally well at tasks assessing the cognitive functions of the prefrontal cortex - often described as the "executive" of the brain - obtain high ratings of managerial competence from their supervisors or high grades in a competitive university environment.

Study authors note that good prefrontal or executive function allows individuals to:

• manipulate many ideas simultaneously,
• to plan for the future,
• to avoid impulsive actions and
• to react thoughtfully to novel situations. 

"These abilities, described for decades by neuroscientists as 'executive functions', are clearly relevant to managerial and high-level academic performance," says Jordan Peterson, psychology professor at the University of Toronto and senior author of the paper.

"We took the description literally and started to apply executive function tests to normal people in practical environments."

"In the past, psychologists have used IQ and personality tests to predict managerial and academic performance, with real success," notes Peterson.  "However, this is the first demonstration of the unique potential of prefrontal or executive function tests to more accurately determine who will and who will not excel." 

Previously, such tests have been used strictly for experimental purposes by neuropsychologists and cognitive scientists.

Peterson and co-author Robert Pihl of McGill University first started using tests of executive function in the late 1980s to assess impulse control and decision-making among aggressive and alcohol-abusing teenagers.  Harvard Ph.D. candidate and lead author Daniel Higgins, who is also an engineer, realized the potential of these tests for more general applications and developed computer technology to make their administration efficient and cost-effective, partnering with physician Alice Lee of the University of Hawaii. 

"After the tasks were programmed, we started predicting academic achievement at Harvard, replicated those findings at the University of Toronto and then moved into the business environment," states Peterson.

Using formulas derived by Frank Schmidt (Iowa U) and John Hunter of (Michigan State), the studies' authors were able to estimate the potential productivity gain associated with using executive function tests as predictors of performance.  Peterson says that because people differ widely in their individual abilities, even a small degree of accuracy in testing can produce significant economic gains.  In the present study, the tests were accurate beyond that small degree.  In fact, Schmidt and Hunter's formulas indicate that the addition of executive function tests to unstandardized interviews would result in productivity gain of 33 per cent per hired employee ($25,000/year per $75,000 of salary). 

"Obviously, gains of this magnitude cannot be easily ignored," says Peterson.  "Neuroscience has revolutionized our understanding of the brain in recent years.  Perhaps this is the beginning of the neuroscience revolution in management."

© 2005-2007 

Walter Derzko -"Changing the world, one idea at a time"©

Walter Derzko teaches at the Certificate Program on Innovation and Entrepreneurship at the University of Toronto, School of Continuing Studies, which starts in the Fall of 2007

Expert, Consultant and Keynote Speaker on Emerging Smart Technologies, Innovation, Entrepreneurship, Strategic Foresight, Business Development, Lateral Creative Thinking and author of an upcoming book on the Smart Economy "

The Smart Technology Blog: The Smart Economy -- Read, enjoy, explore, speculate, comment !!

To arrange for an in house presentation or briefing on smart technology see here

To explore the opportunities and threats of any new smart technology in your industry - Contact Me or explore how we can work together

• ".....Strategy without action is a day-dream; action without strategy is a nightmare"-old Japanese proverb
• ".......Ours is the age that is proud of machines that think and suspicious of men who try to." -- H. Mumford Jones
• ".......Without changing our patterns of thought, we will not be able to solve the problems we created with our current pattern of thought."  --A. Einstein
• ".......Change is difficult, but complacency and stagnation are surefire showstoppers..." --Walter Derzko"
• .......Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it's the only thing that ever has."  -- Margaret Mead
• ".......Small minds discuss people; Average minds discuss events; Great minds discuss ideas; --Anon

P. S. if this is your first visit to my blog, please go to our Welcome page

More on the !ndigo Books Entrepreneur Series

From the !ndigo Books Entrepreneur Series:

Are you an aspiring entrepreneur?  Join us for an exclusive series as Heather Reisman, CEO of Indigo Books & Music, interviews Canada's most successful entrepreneurs.

All !ndigo Entrepreneur events will be held at Indigo Bay & Bloor, Toronto, and will start at 7:30 pm.

Http://www.chapters.indigo.ca/indigo-entrepreneur-series/entrepreneur_events-promonb.html

• Ted Rogers President & CEO, Rogers Communications Inc. September 18 Edward S. (Ted) Rogers' start in the communications industry began in 1960 with the purchase of Toronto FM radio station CHFI.  While FM was a new technology, Ted Rogers worked to popularize the superior service.  Mr. Rogers has been involved at the start-up stage with numerous ventures in broadcasting, cable television and telecommunications.
• Sandra Wilson Founder, Robeez September 20 Since 1994, Sandra Wilson has grown Robeez Footwear from a home basement operation into a multi-million dollar international company with regional offices and local websites in the UK and Australia and sales representatives in the UK, Ireland, Western Europe, Japan and Australia.  Robeez now offers over 60 different styles and is sold in over 4,000 stores worldwide.
• Robert Lantos Producer, Serendipity Point Films September 24 As the former Chairman and CEO of the country's largest film and television production company, Alliance Communications, Robert Lantos has greatly enhanced the visibility and viability of Canadian film and television productions both nationally and internationally.
• Seymour Schulich Chairman, Nevada Capital Corporation Ltd.  September 25 Seymour Schulich is a self-made billionaire whose career has spanned financial markets to the mining and oil industries.  He is among Canada's greatest philanthropists having donated in excess of $200 million to universities, libraries, medical health centres, and lecture and music halls.
• Jim Pattison Chairman & CEO, The Jim Pattison Group September 26 This Vancouverite has an exceptional record of community service and, most recently, has devoted a great deal of time and effort as President and Chairman of the EXPO '86 Corporation to ensure the smooth running and success of EXPO '86, which has been a major economic and cultural boost for British Columbia.
• Gerry Schwartz Chairman & CEO, Onex Corporation September 27 Blending vision with pragmatism, Gerald Schwartz stands out as one of Canada's best examples of contemporary entrepreneurship.  President and CEO of Onex Corporation, he has grown his company into a diversified, Canadian-based financial success story.  Engaged in the community, he is an active volunteer and quiet benefactor.
• Peter Munk Chairman, Barrick Gold Corporation October 9 A well-known Canadian business leader and philanthropist, Mr. Munk has built several enterprises that have achieved outstanding performances.  Starting in 1983, Mr. Munk and his management team have developed Barrick into one of the world's most successful gold producers.

© 2005-2007 

Walter Derzko -"Changing the world, one idea at a time"©

Walter Derzko teaches at the Certificate Program on Innovation and Entrepreneurship at the University of Toronto, School of Continuing Studies, which starts in the Fall of 2007

Expert, Consultant and Keynote Speaker on Emerging Smart Technologies, Innovation, Entrepreneurship, Strategic Foresight, Business Development, Lateral Creative Thinking and author of an upcoming book on the Smart Economy "

The Smart Technology Blog: The Smart Economy -- Read, enjoy, explore, speculate, comment !!

To arrange for an in house presentation or briefing on smart technology see here

To explore the opportunities and threats of any new smart technology in your industry - Contact Me or explore how we can work together

• ".....Strategy without action is a day-dream; action without strategy is a nightmare"-old Japanese proverb
• ".......Ours is the age that is proud of machines that think and suspicious of men who try to." -- H. Mumford Jones
• ".......Without changing our patterns of thought, we will not be able to solve the problems we created with our current pattern of thought."  --A. Einstein
• ".......Change is difficult, but complacency and stagnation are surefire showstoppers..." --Walter Derzko"
• .......Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it's the only thing that ever has."  -- Margaret Mead
• ".......Small minds discuss people; Average minds discuss events; Great minds discuss ideas; --Anon

P. S. if this is your first visit to my blog, please go to our Welcome page

Quote of the Day-Training new staff-the process sherpa

"I advocate for the creation of a new position: the process sherpa.  This person would master the nuances of all of a company's processes and walk employees through them whenever they need help, repeatedly if necessary." 

Leigh Buchanan | Editor-at-large | Inc. The Office: Train in Vain, April 2007

CfP's Family entrepreneurship

Call for Papers: Review : International Management

Family Entrepreneurship;  Review and Prospects for Research

Guest Editors : - Alain Bloch, CNAM et HEC Paris;   Louise Cadieux, Université du Québec à Trois-Rivières;  Alain Fayolle, EM Lyon; Olivier Germain, Normandy Business School

In the fall of 2009, a special theme issue of the journal Management International will be devoted to the subject of family entrepreneurship.  This issue continues the tradition the journal has established of opening its pages to work in the area of entrepreneurship.  We can just mention, by way of example, the special issue published in 2001, “Entrepreneurship: an international perspective”, coordinated by our colleagues Louis Jacques Filon and Thierry Verstraete.  This present call for papers is associated with a call for papers for the 2nd Georges Doriot Conference (www.journeesgeorgesdoriot.org) organized by HEC Paris and the Ecole de Management de Normandie on the 15 and 16 May 2008.  Researchers and other experts who are interested in this topic are invited to submit their papers by 15 September 2008.

From firm to family firm

The place of family firms in the world economic fabric is important, regardless of the criteria used to define them.  To give just one illustration of this observation, the statistics compiled by the Family Firm Institute reveal that their contribution to the GNP of a sample of European countries varies between 45% and 65%.  The lowest level is in Portugal and the highest in Italy.  In the USA, 33% of Fortune 500 companies are under family influence.  In Canada, it was estimated in 2003 that family firms generated an annual turnover of 1.3 billion Canadian dollars and employed more than half of the active workforce.

This no doubt explains why the family firm is the object of such sustained attention, as shown by the organization and development of practices based around professional and academic communities (Family Firm Institute, Family Business Network, International Family Enterprise Research Academy, Hénokiens, ASMEP, etc.) or the establishment of publications totally given over to the subject, such as the Family Business Review.  However, many questions remain about family firms and researchers from increasingly diverse disciplines (Bird et al., 2002; Sharma, 2004) are not short of problems and prospects for research, which, combined with the necessary multidisciplinary approach of the area, gives it a real specificity.

A brief look at research in the field shows first of all the increasing importance of concerns relating to the specificity of family governance (notably Catry and Buff, 1996; Carlock & Ward, 2001; Hirigoyen, 2002), including questions linked to the process by which the legitimacy of the family director is constructed, to the performance of this type of firm, but also the “synchronisation” of family and company life cycles (Gersick & al., 1997).  Moreover, the management of human resources has, on several occasions, been described as specific to this type of firm (Dyer and Handler, 1994; Geliner, 1996; Fredy-Planchot, 2002; Kenyon-Rouvirez and Ward, 2004), which connects family values with company culture.  More unexpectedly, the marketing of family firms has also been considered as specific (Trinquecoste, 2002), notably due to the use of patronymic brands.  The financial management of family firms has also given rise to an abundant body of literature, of which a part concurs with that previously mentioned in relation to the governance of family firms.  Finally, some research work deals with the transversal processes at work in family firms.  In particular, some researchers (Habbershon, 2004; Block & Jouini, 2006) have focused on the innovation processes in family firms and have already obtained a certain number of counter-intuitive results.  For example, the traditional aversion to risk in family firms, by nature patrimonial, is a paradoxical source of success in the management of innovation.

From family firm to family entrepreneurship

The work carried out in the field of the family firm has not, however, exhausted the subject of the role of the family unit in decisions inherent in the development of the firm from its very conception.  Thus, much remains to be done with regard to the study of behaviors and orientations at the junction of entrepreneurship and the family firm.  Special issues of review such as Journal of Business Venturing (2003) and Entrepreneurship Theory and Practice (2006) open up a great number of research paths.  They place particular emphasis on “the understanding of the family as a major source of oxygen for the combustion of entrepreneurship” (Edito, JBV, 2003, p. 559).

Recently two approaches have tried to consolidate the link between the field of entrepreneurship proper and that of family firms.  The first, North American in origin, deals with “transgenerational” entrepreneurship (Habbershon, 2005), understood as all the practices favoring the transmission of the spirit of enterprise from one generation to the next.  The second, European in origin (Saporta, 2002), has suggested integrating the family dimension more widely in the study of entrepreneurial processes in general, drawing inspiration from founding work which describes the family environment of the entrepreneur as a sort of “incubator” of their inspiration and action (Filion, 1991).  This current suggests breaking the field of entrepreneurship into three major components and giving more attention to the family variable at each of these levels.  At the first level, that of the actor-entrepreneur, it seems obvious that the family dimension could have a much bigger place (influence of parental models, roles of parents and spouses, etc.) At the second level, that of action and behaviors, the role of the family could make it possible to better understand how the establishment of a durable organization is progressively structured.  At the final level, that of context, the very nature of the questioning suggests integrating the family environment as a contextual structuring factor.  Moreover, this is why it has been possible to consider family resources in the widest sense as the principal source of the entrepreneur’s “social capital” (Boutillier & Uzinidis, 1999).

At this prospect, we invite you to develop new and original reflections based on the non-exclusive list of topics given below:

• Characterizing family entrepreneurship
• Transmission, acquisition and family entrepreneurship
• Family entrepreneurship and support systems
• Sociological approaches to family entrepreneurship
• International convergences and divergences around family entrepreneurship
• Entrepreneurship and family influences
• Collective entrepreneurship vs. family entrepreneurship
• Performance and family entrepreneurship
• Family entrepreneurship and gender
• Organisational entrepreneurship and family strategies
• Innovation and family entrepreneurship
• The psychological dimension and family entrepreneurship
• Family entrepreneurship and social networks
• Company time and family time
• Systems of governance and family entrepreneurship
• Family entrepreneurship and the economic ethos

The editors wish to point out that only work explicitly situated in the area of family entrepreneurship will be considered.

Manuscripts must be submitted by 15 September 2008 at the latest for planned publication in Fall 2009.  They should be sent by e-mail to Management International (mi-cetai@hec.ca). The editorial policy of the journal must be rigorously respected with regard to the presentation of the documents submitted.  Manuscripts chosen for possible publication will be peer-assessed on the basis of double anonymity.

Basic bibliography

Bird, B., Welsh, H., Astrachan, J.-H., Pistrui, D. (2002), « Family Business Research: the evolution of an academic field », Family Business Review, XV(4), pp.  337-350.

Dyer, G. et Handler, W.-C. (1994), « Entrepreneurship and family business: exploring the connections », Entrepreneurship Theory and Practice, 19(1), pp.  71-83.

Entrepreneurship Theory and Practice (2006), « Theory of the Family Enterprise », Vol.  30, n° 6.  FFI (2007).  Facts and Perspectives on family business around the world, Family Firm Institute, www.ffi.org

Gersick, K.-E., Davis, J.-A., McCollom Hampton, M. et Lansberg, I. (1997), Generation to Generation : Life Cycles of the Family Business.  Boston : Harvard Business School Press.

Journal of Business Venturing (2003), « The Evolving Family / Entrepreneurship Business Relationship », Vol.  18, n°5.

Kenyon-Rouvinez, D. et Ward, J.-L. (2004), Les entreprises familiales, Collection Que Sais-je?  Presses Universitaires de France, Paris, France.

Miller, D. et Le Breton-Miller, I. (2005), Managing for the Long Run: Lessons in Competitive Advantage for Great Family Businesses, Harvard Business School Press, Boston, États-Unis.

Sharma, P. (2004), « An overview of the field of family business studies: Current status and directions for the future », Family Business Review, XVII(1), pp.  1-34.