The 'Eight Courtesies' of effective enterprise.

These posts have consistently tried to advocate for sustainable, repeatable business practices.

This brings me back often to Tom Peters. I am thrilled to see Tom has a new book coming out in early 2010. Tom Peters is at the top of my list of transformative business thinkers.

His new book is called "The Little BIG Things". Sounds like Tom at his best. He is building his current presentations around what he calls "The Eight Courtesies". I'll highlight them below. Buy the book.

Yes, the economy is awful and people are getting hurt badly, but it doesn't mean that we can't explore options for finding a way forward. There are opportunities for 'the rest of us' to start and grow new and emerging enterprises. I have a powerful sense that new kinds of local and regional trade will continue to emerge worldwide for the foreseeable future. It's happening from Australia to the West Bank, to Avoca, WI, and to China (hello Yongchao!).

There are deep and fruitful opportunities here. I am increasingly seeing my immediate contribution to the subject being enterprise creation through local foods.

Individually, these new enterprises may not seem Wall Street worthy, but in aggregate they represent a lot of positive, sustainable, long-term value for economic development on Main Streets and across regions.

So how do you participate? Think you've got to be some kind of uber-trained CEO type to run a new enterprise effectively? Think again.

It's nothing of the sort. You can do it. You DO do it now in other areas of your life. After 35+ years of entrepreneurship I couldn't have described effective entrepreneurship any better than Tom Peters is doing right now.

Here are the eight most important management tools Tom prescribes in The Little BIG Things.

"Epigraph:

Courtesies of a small and trivial character are the ones which strike deepest in the grateful and appreciating heart.—Henry Clay

The 'Eight Courtesies'

1. Stay in touch. (MBWA: Management By Wandering Around)

2. Invest in relationships. (Make friends. Obsess.)

3. Listen. (Respect. Learn. Student. PROFESSIONAL. Sustainable Competitive Advantage #1)

4. Ask. (Engage. Inspire. Consult. React.)

5. Thank. (Appreciate. Acknowledge.)

6. Network......

7. Apologize. (Unequivocal. Rectify. Over-react. Forgive.)

8. Practice thoughtfulness. (Kindness is free. This is ... STRATEGIC.)"


You heard it here: The Renaissance age of entrepreneurship is just beginning. Remember Tom's 'Eight Courtesies' as you journey.

You can do this friend. Start. Engage. Be courteous. Enjoy.


Eight Courtesies: From TP blog 11/24/09

I'm going to buy this book: The Little BIG Things. New book by Tom Peters out February 2010

Happy Thanksgiving 2009

"If you have an apple and I have an apple and we exchange these apples then you and I will still each have one apple. But if you have an idea and I have an idea and we exchange these ideas, then each of us will have two ideas."

-- George Bernard Shaw

Much, much to be thankful for. Happy Thanksgiving!






Plant kaleidoscope at Olbrich Gardens in Madison, WI

Regional Food Systems

My friend Mark Olson and I, with a scary-smart group of emerging friends, have been working out possibilities for our Iowa County initiative. This is an economic development prototype to build interrelated local food processing clusters, operated at a scale to meet institutional demand. These facilities will be located strategically across rural economies and organized in a way that is mutually self-supportive. The design of this system moves the bulk of the revenue through the management and production levels, delivering it to the producers and their communities. There is a link at the end to the summary white paper about this initiative that we presented at the Slow Money Institute in Madison this summer.

To me, creating experiments in all kinds of regional food systems is needed. This is a startup effort and startups are not straight-line endeavors. Stuff needs to get learned. Policies and procedures need to get worked out. That doesn't mean go slow. It means to hurry up. Let's make our mistakes early, often, and inexpensively. Our Iowa County / Driftless Foods initiative is a startup designed to to develop and document the knowledge needed take the next steps.

With that base in place, our goal is replication elsewhere: finding ways to deploy successful regional food systems models in other places and at bigger scales.

I had a great meeting this week with a nearby multi-state region of 10 to 15 counties. This may become an opportunity to replicate the Iowa County prototype in a larger, more diverse region sooner than later. I've got some great new friends across this area. I am not only confident, but flat-out excited that we could knit together a world-changing leadership team for this project. Our goal is to create a reproducible regional food system, this time at a bigger scale. The idea is that a successful multi-county (and especially multi-state) model would be one that could be replicated nationally in short order.

Of course, every area will have its own ag (and non ag) resources to contribute to these regional systems. However, I believe the process of organizing and deploying regional food systems is what's critical for making them successful and reproducible. That's at the heart of what is valuable here.

And, to walk-the-walk, I had a chance this week to say what I thought local food processing clusters most needed right now in response to a question from people who could make my answer happen. I had a chance to ask for a lot of money but (per last week's post) I actually said enabling legislation.

On first review I was sure I should have said money, mostly because it's likely true. However, if regional food systems are to be made replicable, they really need some meta support, like enabling legislation, that will give people working on local food initiatives some actual tools to help them move the discussion forward. We need to quit talking about this and take some action steps. We need to create opportunities, enable infrastructure, build markets, create jobs and jump start economic development by nurturing market demand and giving our entrepreneurs a stable platform to grow from.

I remember the early days of recycled paper. It was a good idea that everyone talked about but was stuck in kind of a niche market of early adopters. When the Wisconsin government decided to emphasize the use of recycled paper in its purchasing, that business took off and we've never looked back.

I would suggest that we don't need more requirements, but if the enabling legislation were to just say that opportunities to utilize locally grown and locally processed foods should be explored, it would be huge. The locally processed language would give permission and support to people within local institutions - schools, hospitals, etc. - to see what they can do with local foods. Their buying power will ultimately most enable the success of this process. I would not make these institutions buy locally grown and locally processed foods. I would make it easier for them to do.

If the enabling legislation just indicated that locally grown and locally processed foods were included as a recommendation, but not a requirement, many valuable interests could be served, bypassing potential battle lines.

So, a really wonderful week for local foods processing. Future's so bright… I gotta wear shades. Based on what we learned this week we're planning on ramping up the pace of the rollout of our Iowa County initiative.

As my friend Mark always signs off, be well.


Download PDF white paper on our local food processing initiative first presented to the Slow Money Institute gathering in Madison this summer.

A great interview with Salli Martyniak of Forward Community Investments and Wally Orzechowski of Southwest Wisconsin Community Action Program about community investing. Wally is a friend and is a leader in our team rolling out the Driftless Foods / Iowa County initiative. Salli is a new friend who leads one of the most valuable enterprises I've come across in any field, Forward Community Investments

An interview with Mark Olson about his wonderful Renaissance Farm and adding value to agriculture.

Enabling Entrepreneurs

First, a great day this week meeting with the Speaker of the Wisconsin Assembly, Mike Sheridan. The Speaker is on my left in the photo. On my right is my friend and our State Representative Steve Hilgenberg.

Next, I thoroughly enjoyed my presentation to the Wisconsin Economic Development Association gathering this past Monday.

The discussion at the end of these talks is always the best part. I was asked a long-standing question that is universal: Are entrepreneurs born or can they be made?

I took the obvious route and said yes.

Too easy. I also didn't get the answer right.

Entrepreneurs are not born or made. Entrepreneurs are enabled.

We can't make people do this stuff, but we certainly can make it easier for those that want to.

It's my opinion that we need better entrepreneurship infrastructure of all kinds. That's why I'm so excited about the almost endless possibilities for new business platforms that our Innovation Kitchen in Mineral Point will enable. Ditto for the local foods processing cluster we're designing and building across Iowa County and beyond. New platforms for creating value. Easier ways for people to know their farmers and food processors. Easier paths to value for all involved.

Entrepreneurs are not born or made. Entrepreneurs are enabled.

So, what does that mean in the trenches?

I learned a new term of art (for me anyway) that is one key tool for enabling entrepreneurs: enabling legislation. Enabling legislation isn't a tool like a hammer or a food processing plant. It's language used in law and regulation that helps something desirable happen.

I've got 3 words that I think could change economic development in rural areas dramatically. These three words could be inserted into (enabling) legislation so that it would create an outcome everyone wants. Such as enabling entrepreneurship and local foods.

In many states, including Wisconsin, there is legislation in the works that would guide institutional buying to build in a preference for locally grown food. I applaud that but I would insert my three words: a preference for locally grown and locally processed food.

You've seen this broken model in other business sectors… You produce a product. You ship it out of the region at low prices for value to be added. Then you buy your own stuff back at high prices. Haven't we heard this story long enough?

So, if you are a person out there who is working on local foods initiatives, think about adding one more layer to the equation. Include 'and locally processed' into your descriptions. Three simple words could lead to wonderful rural economic development possibilities. How anyone defines 'local' is up to them, of course, but there needn't be one answer. Different communities at local, state and regional levels can define what's right for them, and we can all have a good food experience figuring it out.

Creating appropriate scale economic infrastructure to support agriculture and rural economies benefits all people in a region. If regions are to prosper, rural communities must be included. Thriving rural economies support and enrich urban economies. Without both, regions stagnate.

We need to enable our local growers and food entrepreneurs a launch path to join the Know Your Farmer, Know Your Food (KYF2) movement, sponsored by the White House (Thank you Mrs. Obama!) and the USDA.

We need to enable entrepreneurship of all flavors with as many tools as we can muster.

There is always economic chaos and we are entering an era of even faster change, but I'm a person who believes that, in general, humanity will continue to re-emerge into better lives with increasing value and dignity for continuously-increasing numbers of us.

Entrepreneurs are not born or made. Entrepreneurs are enabled.

You can do it. Wherever you are personally in this discussion, I urge you to enable and to be enabled by the possibilities of entrepreneurship. Let's go. The world needs you!



Know Your Farmer, Know Your Food (KYF2)

Economic development. Learning from action steps

I am really looking forward to a presentation I get to share with the Wisconsin Economic Development Association (WEDA) this coming Monday evening, Nov. 9. They have asked me to discuss opening a new economic development organization.

I am coming up on my first anniversary as an economic developer in rural Wisconsin.

On my first day on the job, Dec. 1, 2008, I was sitting in a vacant conference room in Dodgeville, WI. I had been shoveling info into a newly cloned database as fast as I could all day. I turned on the radio that evening as I set up to leave. I learned that a recession was officially declared to be underway. That day the Dow Jones fell almost 700 points, the 4th biggest drop in its history. To welcome me to my new gig, there was a whopper snowstorm clogging up all of the upper Midwest. Welcome to economic development.

For my talk on Monday I have limited expertise to share about economic development theory but I certainly can share what its like to take on this kind of opportunity as a working entrepreneur.

In short, there are deep and profound opportunities available in our rural and urban economies right now. What's needed now are small, measurable action steps. If we're to create a new and better economy we need to launch as many intelligent experiments as possible, learn from them, and repeat.

I'm convinced our Iowa County initiative is a valuable experiment in this mix. All around us there are big, amorphous, meta discussions underway about improving economic development. But that's all they typically are. Discussions.

Mark Olson and I had a wonderful meeting this week with a gentleman who helps lead USDA Rural Development in Wisconsin. He shared with us a really compelling story about his early work in community development that involved red lining in poor neighborhoods. Their team was most successful when they restricted their organizing and development efforts to a geographically limited footprint. When they did that, their efforts succeeded. They could impose timelines, measurement metrics and then get on with it. When problems arose, they had a manageable scope to deal with. When their peers and managers tried to design 'more efficient' experiments in larger geographic areas, valuable data was lost and the efforts to make things better inevitably failed.

That's why I'm so pumped up about this county scale experiment Mark and I are working on. If it leaks into neighboring counties as we roll it out, all the better. Regions should be knit together by this kind of work.

What's valuable is that we will have a geography in which real experiments can be run and real meaning can be extracted. I want something that works and that's reproducible.

If something like this can't be made to work in one county, it can't be made to work in 5 or 20 or 72 counties. We're preparing a small, smart action step to help take those first steps.

Let the studies follow (informed) action. I want to make well-reasoned, inexpensive mistakes and learn. One foot in front of the other stuff, but for goodness sake, let's do something. Let's put economic development in service to the people who need it, not those who just want to talk about it.

I am very impressed by the potential for USDA Rural Development in Wisconsin to make a national impact. Their interest in our experiment is exciting.




USDA Rural Development, Wisconsin

I made new friends this week who work with Forward Community Investments. This is a wonderful organization that works with nonprofits in Wisconsin to help them make strategic financial decisions and build their financial capacity for greater success. They are holding a cool looking community investing conference on November 19th, in Madison.

I've also made new friends in the Austin, TX area bootstrapping group. I am delighted to be included in their doings. If you are in the Austin area there is a good looking gathering on Monday evening 11/9.

Slow startups. Find the information you'll need

As time allows, I'm going to continue posting about the six steps I think people need to take for launching their own slow startup enterprise.

This post is about the second of the six steps, gathering information in a way that adds value to your idea and sustainability to the platforms you will work from.

In other words, this is about business planning and slow startup enterprises.

A slow startup focuses on creating a new enterprise with limited time and funds. These enterprises are meant to bring increasing sustainability into people's lives and the communities they live in.

The common thread among all types of enterprise, rural or urban, is the need for a map of where you're headed. In the case of a slow startup that map doesn't represent a straight line to an unchangeable goal. A slow startup map, like all great tools, offers many alternate ways of getting somewhere valuable.

The subject of business planning and creating business plans can be presented as a daunting, jargon-laden realm where only experts dwell. There are certainly some kinds of business plans that require that kind of sophistication, but they represent a small slice of the business creation pie.

A slow startup would look at three main areas of focus when building their road map:

Learn what business planning is about and how it can be used for your own personal benefit.

Learn how to find resources for your business planning.

Learn how to create a business planning map, start, then learn from what happens next.

Business planning for slow startups is not an exercise in creating a document for outside investors or approaching banks and funding agencies for loans, though it can certainly be the basis for such efforts in the future. For now, it is a process of gathering information to help make you and your enterprise competent and sustainable.

From my Business Diligence and teaching work I developed a slow startup business plan I can put online. The entrepreneurs complete it as time allows and I can jump in as needed. I've begun using it in my rural economic development work.

Slow startup planning specifically can benefit small food enterprises (SFEs) such as those we hope to nurture at the new Innovation Kitchen and other slow startups that people grow from their kitchen tables.

This isn't the place to go into all the particulars, but a slow startup business plan is meant to work in service to the entrepreneur, not outside funders. It is meant to be a roadmap that includes your specific goals, acknowledging the specific assets and hurdles you face. Great business plans are not cookie-cutter templates. They are working, living documents that entrepreneurs can use to grow personally and to grow their enterprises.

Importantly, there is a strong, wonderful movement emerging of micro-lending investment platforms focusing on person-to-person business relationships in the Kiva style. Kiva has created a transparent, highly ethical model that empowers me and hundreds of thousands of micro investors to invest and loan small amounts to innovators worldwide.

New funding/micro-loan platforms are emerging that will focus on specific types of enterprise, such as eco-tech and sustainable foods. For new and emerging entrepreneurs to benefit from this opportunity, they won't necessarily need a fixed-in-stone business plan but they will need to be able to produce and demonstrate a competent planning map.

Dwight Eisenhower said, "Plans are nothing; planning is everything." If that approach was good enough for the largest military invasion in world history, then I would suggest it's a safe approach for your slow startup.

You need to plan, act, revise, repeat. That's the essence of a great slow startup business plan.

Don't let that process dissuade you from starting. Start and build. Search out the information you'll need to know to grow. Make it personal. Make it your own. Business planning is an iterative process. One foot in front of the other on a march planned to include alternate routes. If you don't start you'll never have a map. Without a map you'll just continue to wander, or worse, never start your journey.

This isn't hard. You can do it. If you start now you can build something valuable into your life and into the fabric of the communities you live in.

Slow startups are designed to fit into your life as it's lived now. Take advantage of the help, support and tools available and begin.

Entrepreneurship represents the core of the emerging economy of the 21st century. Join that revolution and see where it takes you.

Acknowledge the time needed. Plan your map. Map your plan. Start. You can do it.


Kiva

Northern Water Snake

"Find Heroes. Do Demos. Tell Stories."

As anyone who has read these post for a while knows, I am a really big fan of Tom Peters and his work in designing management structures and work policies that achieve results.

I have been reading Tom Peters for decades now. Tom writes for a more urban crowd I think. What I find really interesting is that as I move into rural economic development work I am finding many farmers and rural entrepreneurs who also embrace Tom's work.

Busy weekend doing economic development budgets. Lost the time for a proper post so I thought I would share a quote from Tom Peters that I read recently.

Here is a short summary of how to effectively approach enterprise. You don't need glitz, you need truth. Here it is:

"Find Heroes. Do Demos. Tell Stories."
--Tom Peters

You want to get into enterprise? You want to explore small business? You want to know what to do next? Do that.



Tom Peters site

Photo is from the really fun plant kaleidoscopes at Olbrich Botanical Gardens, one of my favorite board rooms

Slow startups. Get a realistic understanding.

Slow startups allow people to fit a small business into their lives in sustainable ways. You get to decide how much time and money you can spend. Both can be small but if you act on your small business during the time set aside, you can come out the other end with something valuable to you, financially and culturally.

At that point you have a real enterprise. You'll have a base of unique skills and knowledge that will allow you to take your enterprise in any direction you want. You will have customers, cash flow and a track record. You will have learned to control your data. These are the pieces required to jump to the next stages, if that's what you want to do.

This is NOT an approach for people who need immediate relief. That's a different story. This story is about slowly building a platform that can support your life and your dreams for the long term.

However, this does not advocate dreaming only. This idea is about doing. Making mistakes, pulling/learning yourself up. Becoming a professional entrepreneur. Spending as little money as as possible. Getting a realistic understanding of your market.

How do you do that? It means going slowly, with time and money allocated as you have available, but once allocated that plan is executed.

It means trying. Learning. Capturing the data. Try, learn, repeat.

Our new Innovation Kitchen in Mineral Point (they've poured concrete!) will be a great platform for testing this idea. People will be able to try out different models of food entrepreneurship at radical-cheap price points due to wonderful public/private partnerships in our region.

I'm very specifically designing paths into the Innovation Kitchen in such a way that it makes its easy for new startup entrepreneurs to say 'no'. This will help create better, smarter and more sustainable entrepreneurs.

Entrepreneurs need clear paths for easily and inexpensively testing their ideas. However, at any point in the learning process the entrepreneur should be celebrated for saying 'no' and supported when switching directions as markets dictate.

Giving up on your preferred, stated direction - saying 'no I don't want to do THAT'- is not a sign of business weakness it is a sign of enterprise (and personal) strength. Learning to say no is perhaps the most important skill to develop while gaining a realistic understanding of your ideas.

So, back to the new Innovation Kitchen for examples. This is a unique opportunity to put these slow startup ideas in play.

Anyone who wants to launch a new food business by working in the kitchen will be offered the opportunity to do a low budget shakedown cruise with their idea.

New entrepreneurs can first meet with the foodservice staff at the Innovation Kitchen to discuss their recipes and processes. Our staff can help with everything from business planning to vendor sourcing to cooking tips to nutrition labeling to packaging and everything in between. The entrepreneurs can take a dry run through all the steps in the process. Innovation Kitchen staff can also help prepare custom production plans to match the needs of the entrepreneur and prepare cost estimates for production runs.

The entrepreneur can plunge in or change plans at this point. They can evaluate the demands on their time and money and may choose to launch their enterprise using a different model. Fine! Good to learn early and inexpensively. First ideas are rarely the best. Changing isn't failure. It's success.

If they get this far and still want to proceed, the new food entrepreneur will be offered free slow startup business plans to start filling in and help to launch their enterprise.

This shakedown cruise can also include a production run of the food entrepreneur's recipe. The entrepreneur will get to cook in a professional, state-certified kitchen under production conditions. The learning opportunities will be invaluable.

They will come out the end of this process with plans probably modified from those they entered with. Importantly they will have a production run of their recipe, professionally processed and packaged, ready to commercially market. They will have created their own product that they can use to test market and launch their new businesses or product lines with. The thrill of getting to this point with a unique product of your own creation and taking it into the public space is exhilarating.

As an economic developer I see my role as giving as many people as possible as many opportunities as possible for testing entrepreneurship. The next step is to provide as many alternatives as possible for those who want to switch directions. They have self-selected as emerging entrepreneurs. They are a seam of gold. The next thing to do is provide as many enabling paths as possible for smelting that gold into value.

The slow startup entrepreneur trades their time for knowledge.

Slow startup entrepreneurs pull themselves through the early learning curve utilizing the best help and the best tools available to them.

The slow startup entrepreneur carefully builds a realistic understanding of what it takes to wake up an idea, as well as the risks and rewards of entrepreneurship and how to plan for both.

One foot in front of the other. Try, learn, repeat.

That's how you gain a realistic understanding of your entrepreneurial idea.

This is not a doom-and-gloom scenario. Just the opposite. Slow startups are a path to an achievable solution that can make your life better. Every mistake you make, every bit of wisdom, every new digit of data puts you ahead of potential competitors. It's your intellectual property. You are earning your 'patents'.

How do you get a realistic understanding of the process? Start now. Get smart. Go slow.

You can do it.


Driftless Appetite. One of my favorite food blogs, celebrating life and local foods in Southwest Wisconsin. Also new friends!

Slow Startups. What to do first.

The economy is rebuilding, but I don't know anyone who feels relaxed about their future economic security.

People want to put some stability and meaning back into their economic lives. There are certainly many paths to get there.

I've been writing about slow startups as a viable path for creating smart new enterprises that can make significant financial and cultural improvements in people's lives.

We've got slow food, and now slow money. Why not slow startups? Everyone wants viable new solutions and the emerging model is competence and sustainability, not speed.

Just as there is great honor in slow foods and what that idea brings to commerce, there is also great honor and long-term value in creating slow enterprise models.

We need to make entrepreneurship simpler and more accessible. We need to nurture entrepreneurship that builds and sustains our communities and our regions. We need to help people create and build their own enterprises in ways that fit into their lives appropriately.

Slow startups take into account whatever your personal and financial status is. This model allows you to build and test your own enterprise at your own pace, so that in the end you will have a service or a product that you're passionate about and a sustainable business model supporting it.

Slow startups certainly match up well with my own boomer demographic. I also think these kind of slow launches will fit in well with the wonderful artisinal young people doing so many cool things out there. And if you're in the middle, what's wrong with trying to create a long-term job for yourself by slowly starting your own business now?

So, here's my news: Most startups take far longer than the people think. This is especially true for small, self-funded startups. That's not a bad thing, it just is. What this should be saying to you is to start creating your own small business ASAP. It will take longer than you think to get underway. Start one while you have a day job. Start one in your spare time. I know, this is not easy, but the time is there. Find what time you can and put it to work.

By taking the process slowly, you will learn far more than by rushing through it. You will learn to enjoy the journey.

If you REALLY love this process after trying it out, you can circle back and do startups over and over - a perfectly viable and compelling career path in the 21st century.

In trying to help some new enterprises through our economic development office, I've been re-using the Micro-Enterprise courses I wrote and taught through the Small Business Center at WCTC in Waukesha. It's my slow startup manual.

Slow startups perfectly suit micro-enterprise and vice versa.

What do I really mean? I mean you can invest a few hundred dollars and a year or two of part time effort and come out the other end with a viable enterprise that's making money and building greater security and independence into your life. From there you can nurture and grow it in any direction you want.

If you have more time and money to invest, you can shorten your timeline to launch. This also makes it possible to make expensive mistakes. Careful.

So, start now. Start slow. Take some time to think about this and explore the possibilities. Here is my outline:

Slow startups. What to do first.

There are six fairly simple, but critically important steps to launching a slow startup. These make slow startups sustainable:

- Get a realistic understanding of what it takes to wake up an idea, as well as the risks and rewards of entrepreneurship and how to plan for both.

- Learn what information you'll need, how to find it, and how to use that information once you find it.

- Learn how become a professional at what you do, and where to turn for help.

- Create a management structure that builds your own confidence, deals with the details, and creates peace of mind for all involved.

- Learn how to market and sell in your niche.

- Learn to capture your data and turn it into commerce.

These six approaches to slow startups were the core of the six courses I wrote and taught through the Small Business Center.

They are my roadmap for creating slow startup enterprises. Each one of these topics unfolded into a 90+ minute discussion in my Micro-Enterprise courses when we dug into all the how-to stuff. There are multiple, discreet steps behind each of these major categories. I really loved sharing these ideas in depth.

I want you to know that it's not complicated. It just takes time. Take informed, measured steps. Develop mastery in small valuable steps. Make as many inexpensive mistakes as you can as quickly as you can. Execute. Innovate. Repeat.

It is not hard, but it does take time. Slow startups. Start one now and you'll thank yourself down the road.

As Tom Peters says, "Everyone has a chance to learn, improve, and build up their skills. Everyone has a chance to be a brand worthy of remark."

This is the Renaissance Age of entrepreneurship, and its just beginning.

Welcome friend. Now get going.


Tom Peters site

Creative Birthing

In most discussions about entrepreneurship, the talk usually comes around to 'creative destruction'. This is a term created by economist Joseph Schumpeter. It describes the inevitable loss of value in enterprises that do not innovate.

Wikipedia's description: "In Schumpeter's vision of capitalism, innovative entry by entrepreneurs was the force that sustained long-term economic growth, even as it destroyed the value of established companies that enjoyed some degree of monopoly power."

If you are on the losing side, it is painful and sad when the market share of older companies is eaten by younger more innovative enterprises.

What's useful here is that innovation is available to everyone. Innovation does not have to equal high, unmanaged growth. Innovation can be increased value and service to your stakeholders (think of the excellent book, Small Giants). Indeed, innovation is limitless and never-ending by its nature. So yes, there will be creative destruction.

The next step is to build platforms for 'creative birthing'. I see 'creative birthing' as a way to prosper through the inevitable destruction by allowing ever-increasing numbers of individuals and groups to participate in innovation and entrepreneurship. Even as creative destruction overtakes the less nimble, people involved in those dying companies will have the advantage of easily participating in new, more creative and innovative launches.

Hybrid entity/governance models will likely emerge. New kinds of stakeholders will likely emerge (think of the great new work forming within the Slow Money Alliance). By supporting 'creative birthing' processes and platforms, I think economic regions can prosper. Those that don't help enable easier 'creative birthing' processes will eventually suffer.

In a previous post I linked to a study showing that regions with the highest business 'birth rates' (startups, which everyone celebrates) also had the highest 'death rates' of companies going under. Many places treat these business closures as failures, while the most successful places (highest birth rates) celebrate the culture of entrepreneurship and make pathways into that model easier.

Working in a social profit (non-profit) organization that is neither private or government, I feel a wonderful nimbleness to work on models to make entrepreneurship easier. Governments shouldn't do this stuff. Too often, private enterprise is locked in to their own form of 'creative destruction' and not interested in new options. The best enterprises don't do this, but they are typically a minority.

I think the local food processing cluster we are trying to build is a worthy experiment in 'creative birthing'. However, this is not 'The' experiment, it's 'an' experiment. There are countless other experiments possible across all types of enterprises and geographies.

There is no other way to deal with creative destruction than acknowledge it and build systems to temper and even utilize that destruction: creative birthing is here to stay.

I greatly enjoyed sharing some of these ideas with many new friends in the Regional Food Systems Working Group at the Leopold Center this week. The meeting was held at the beautiful Iowa Arboretum in Madrid, IA. I highly recommend a visit!



Wikipedia, 'Creative Destruction'

Prior post on birth rates / death rates

Slow Money Alliance

Regional Food Systems Working Group

Small Giants, by Bo Burlingham

Iowa Arboretum