Who is the Number One exporter in the world?
Who has (probably) the highest wages in the world (not CEO "wages"!)?

If you answered that it was a nation of 83 million folks in Western Europe—namely Germany—you'd be correct.

Why?
If you answered Siemens you'd be wrong.
So, too, BASF—wrong.
Or Commerzbank—wrong again.

If you answered "Mittelstand firms" you would be spot on!

But I'm getting ahead of myself ...

Last week's BusinessWeek featured the best companies to go to work for as a fresh-caught college grad. Deloitte was #1 (I'm a Deloitte fan, especially their program for retaining women and getting them into senior leadership roles, but best in the U.S.?). The likes of Google was on the list, too. But, to me, personally, not a damn company on the list ought to be on the list—that's a little heavy-handed, but not by much.

Why, oh frigging why, is it always the Gargantuan Companies (because they are the magazines' advertisers??) on such lists (repeat, this week's Fortune has a biggie on the best leader development programs—100% monster institutions again) and not any of America's wonderful middle-sized companies?

About a year after In Search of Excellence appeared (October 15, 1982), my partners, Bob LeDuc and Nancy Austin (my coauthor on A Passion for Excellence) and I decided to launch a series of 4-day intensive workshops on implementing the main ideas in Search. We called them "Skunks Camps" (after Lockheed's renegade "Skunkworks"—look it up in Passion, or on the Web), and held them 100 miles south of home (Palo Alto), at a lovely spot on the Pacific called Pajaro Dunes.

Considering the firms in Search, 100% Big Dudes (who else would McKinsey guys feature?), it was obvious to us that our participants would be, say, VPs or EVPs of Fortune 500 companies.

Nope!

We had a few F500 denizens—mostly from Search companies such as 3M and J&J. The rest? American "Mittlestand":

Frank Perdue, and son Jimmy, of Perdue Farms. ("It takes a tough man to make a tender chicken.")
Tom Malone, president of the stellar textile firm (and, arguably, inarguably to me, America's quality leader) Milliken & Company.
Don Burr, founder of People Express.
Tom Monaghan, founder of Domino's Pizza.
Stew Leonard, and son Stew Jr, of Stew Leonard's.
Hal Rosenbluth of Rosenbluth International, the pathbreaking travel services firm.
John Fisher, the acclaimed IT guru from a much smaller Bank One of Columbus.
John McConnell of the steel's Mittelstand star, Worthington Industries.
Bob Buckman of the Memphis specialty chemical firm, Buckman Labs—Bob almost single-handedly invented what we now call (and genuflect to) "knowledge management."

And so on.* (*Some "troubles," for sure, at Stew Leonard's and People Express—but absolute pathbreakers at the time, 1984.)

Me?
I fell in love with these guys!!

Talk about a tough audience! No bullshit tolerated—and if they heard something good, it was launched 3,000 miles away in the likes of Salisbury, MD (home of Perdue), the day after it was discussed at Pajaro Dunes. E.g., Frank P liked Tom Malone's description of Milliken University, about the first of the corporate "universities," and got up the next day at 4 a.m. PST, called Salisbury, and launched Perdue University.

Hence, I've had a soft spot for the likes of these folks since 1984—and as time has passed I have come to appreciate the likes of them, and the likes of the techie start-ups from "the Valley," too, as the true engines of our economy.

And, to this day they are unsung!

I was so taken, that on the advice of the fellow who headed our European operations, Lennart Arvedson, I decided to explore this odd German phenomenon, called the Mittelstand. To make a long story as painless as possible, a year or so later I could be found in Germany on a three week TV shoot—for a program on this "Mittelstand phenomenon." It was by far the best show I've ever done, among a dozen or so, though the "obscure" topic meant less attention than for most of the others.* (*You'll find the stories in print in my Liberation Management.)

These Mittelstand firms tend to ... DOMINATE (exactly the right word) ... high-end niche markets. The three we featured in our show "The Mighty Mittelstand: The 'Secret' to Germany's Leadership of the World in Exports" (yes, they led then, too—including, amazingly, textile exports!) were:

Playmobil (part of Brandstatter Enterprises), the peerless toy makers; Trumpf, the high-end machine tool superstar; and Rationale, supplier of tippy-top high-end cooking equipment (the "combi-cooker") to most of the high-end restaurants in the U.S. and Europe.

Each tallied a few hundred million dollars in revenue, and all three were growing nicely. Oddly enough, to this day I think I'm the only American "management guru," prominent or otherwise, who has studied these firms—I guess when people see the astounding German export figures, they assume it was Siemens or BMW or the tooth fairy, and leave it at that.

The point of all this is to insist that there are thousands of Fab Firms out there that are really worth working for when one exits university—focused on product, surviving only by continuous innovation, manageable in size, meritocratic to a fault (they can't afford not to be), and providing incredible opportunities to get ahead quickly. The chief problem is, the youngster has to find 'em; they aren't among the Gargantuans who make it easy by showing up with donuts at the college employment center.

Oh dear, I do love, love, love Canada's London Drugs (beating the hell out of their new opponent, Wal*Mart, with 4X Wal*Mart's sales per square foot) and Canada's Cirque du Soleil; Connecticut's $50 million+ Basement Systems (the basement mold and dampness removal superstar; founder Larry Janesky's book, Dry Basement Science, is edging up to 150,000 copies sold—no kidding, I carry it around with me as an icon to what's possible, anywhere and everywhere); Ralph Stayer's Johnsonville Foods; David Kelley's IDEO, the premier product design and innovation consulting firm; the late Harry Quadracci's Quad/Graphics; Dennis Littky's exciting The Met/Big Picture schools; Maxine Clark's supercalifragilisticexpialidocious Build-A-Bear; Rick Semler's seriously cool Brazilian powerhouse, Semco; Derby CT's Griffin Hospital (home of the fantastic, patient-centric Planetree Alliance); and every damn one of the firms featured in Bo Burlingham's Small Giants: Companies That Choose To Be Great Instead of Big.

Yup, these are my stars, home to many of the best leaders I've met in business, unsung engines of German and American economic prowess—and noticeably, to me, AWOL from the likes of the BizWeek and Fortune "bests" lists.

Publisher Rich Karlgaard took me over the top on this in his "Digital Rules" commentary in the current issue of Forbes (October 1). He beats up Michigan ("Tackling the Michigan Problem" is his title) and praises to the sky the likes of Minnesota and Washington. Consider Spokane:

"Spokane, like Minneapolis-St Paul, refuses to bet the economy on one or two industries. Rather, it practices what one city booster calls 'Ichironomics.' Like the Seattle Mariners' center fielder, Ichiro Suzuki, we try to hit singles and doubles. We want to improve the overall conditions for small businesses, not chase the large employer."

"Ichironomics"—love it. Wonder how you translate that into German?

(NB: Mr Suzuki has 227 base hits, and he's batting a stratospheric .351, going into the last week of MLB's regular season—in 2004 he broke the all-time record for hits in a single season, with a staggering 262.)

(Above: bougainvillea, blooming right outside my hotel—what's not to love about my spiritual home, California?)

Jim (Jim Penman) sports a Ph.D. in cross-cultural anthropology. While working toward the degree in 1984, he did some odd jobs mowing lawns. Found he had a knack for it—and started Jim's Mowing.

To make a long and glorious story short, "Jim's Mowing" morphed into Jim's Group. It now provides an array of home services for busy families—including mowing, cleaning, handyman jobs, fencing, paving, pool care, and even dog walking. It also "morphed" from Jim to 2,600 franchisees in Australia, New Zealand, and the United Kingdom.

In an "industry" not exactly marked by standout people practices, Jim has shined as much with management skills as with his overall business concept. For instance, in a huge departure from standard practice, a franchisee can leave the fold and start a competing business—at will with no restrictions attached. Penman's contrarian reasoning is that he can't imagine having unhappy franchisees in the fold. But there's also a tough side, and it involves client service. His franchisees typically have zero or one customer complaint per year. (Ye gads.) Every complaint is investigated, and franchisees who don't get with the program get the boot.

Though I lifted this story from Australia's Management Today (Jan-Feb 2006), I confirmed it with Aussie execs at a recent seminar in Adelaide.

"Wallop Wal*Mart" is one of my persistent themes. I'm a great fan of Wal*Mart, but the point is that there is, in any arena, invariably room for someone who does it differently. ("Dramatic Difference," swiped from our pal, Doug Hall, is the term I prefer.) Superb, focused Community Banks can "compete effectively against" (beat the crap out of) BankAmerica. Inspired retailers can "own" a community—even with a Wal*Mart right down the road. And Jim Penman can cobble together a 2,600 unit franchise operation, almost flawlessly performing mundane tasks that others ignore.

Good on you, Mate.

(Attached you'll find a brief Special Presentation, "Jim's Plus," that includes the PPT slides associated with this Post.)

Karl's headquarters for Viking is located in his home town of Greenwood, Mississippi. Karl has restored old buildings to house his operations, so not only does his product, the Viking range, generate income for the small Mississippi town, Karl is revitalizing the town through his restoration work. He remembered a bustling place in the '60s that had "gone way downhill" by the time he returned there after a tour of duty in Vietnam. The little town of Greenwood, previously sustained by the cotton industry, wasn't ever going to be the same. But Fred Karl saw the possibilities and brought all his talents to bear to create a new Greenwood.

Fred Karl designed the first Viking range for his wife and hoped that he would sell 1,000 a year; now he sells that many in a week. Just like most startups today, he had little money. Fred Karl bartered his building design skills to obtain office space to work in. The local people called the new range Fred was designing his "Stove Project." What kept his spirit going was the encouragement from the town—support he knew he wouldn't get if he moved to a big city. That little "Stove Project" eventually became the big business of Viking Range.

Feeling a little weird lately? Take time to see where your passion and entrepreneurial spirit is calling you. Even in corporate America, the entrepreneurial spirit must remain alive. That spirit can solve the toughest of corporate problems, if only we let it.

See the article in INC about the entrepreneurial spirit of Fred Karl.

How horrid of me. But you know the zeal of us "born agains." I was a staunch Galbraith fan in the sixties—I reluctantly admit that JKG's New Industrial State was to me what Ayn Rand's Fountainhead apparently was to Alan Greenspan. I now think that Galbraith got absolutely everything dead wrong—and was even a dangerous man, especially because he wrote so well. To this point the historian Robert Conquest, called "the greatest living historian" by one of his prominent peers, muses about how one might respond to a Galbraithian tome: "'This is a beautifully printed and finely bound railway timetable'—but, unfortunately, its train times are wrong." (Robert Conquest, The Dragons of Expectation: Reality and Delusion in the Course of History.)

In summary: Galbraith thought entrepreneurship was passé-DOA. (Ironic that on the occasion of his memorial service the combined net worth of Google's two young founders more or less exceeded the value of the Harvard endowment, 370 years in the making.) Galbraith insisted that the U.S. and Soviet industrial systems were rapidly converging; according to him, we had both perfected (more or less his word) "technocratic management," and the elitist technocrat class would noiselessly run giant, built-to-last-forever enterprises ... enabling the common citizenry to invest in and spend enormous sums on "social goods."

What a fool. (And what a fool I was to be fooled—prior to my arrival in young Silicon Valley in 1970. To be perfectly honest, it took me until about '80 to get the entrepreneurial religion—after all, for most of that time I was at McKinsey, home to worshipers of huge enterprise, who believed in the perfectibility of such enterprises.)

Also, I was very curious as to what people thought would be innovative. It came as no surprise that innovation ran the gamut from very cool to seriously strange. Ideas ranged from a new way to create sandbags (thumbs up), portable gyms (thumbs up), to a "Beddie Pouch" (thumbs down), and a "tizzy tube" (thumbs down). People of all ages came up with ideas.

Continued reading Innovation TV...

Posted by Val Willis | Comments?

[Tomesque = Word coined by Geoff Thatcher, now Creative Director at Carat Brand Experience, who got Coudal Partners to start our blog, way back when.]

It's a fact.

I'm sure I'd been asked the same thing before, but the repetitiveness of the question got me searching for a repeatable answer. And I homed in on "D-squared MP."

D-squared, or Dramatic Difference: Too many people risk their life savings on a not very original idea. No, I don't mean that you have to start a Google, but I do mean that you must be clear, very very clear, about how your new Italian restaurant or real estate agency will be "dramatically different" from the current offerings in your locale-market. Far too many folks "bet the farm" on, in effect, a "me too" proposition—too sad.

M, or Money: And far too many people with a genuinely rippin' idea forget to get the "money guy," the "businessperson," on board from, more or less, day one. I'm less talking about the funds raiser here (for the moment, I assume you'll use your carefully squirreled away war chest of $175,000, and another $50,000 borrowed from Aunt Matilda), and more focused on the person who "gets off on business" as much as you get off on your genuinely better-startling idea for a financial-planning boutique in Upper Podunk. Decent, if simple, systems for doing business, for instance, must be in place pretty much from the start. Bottom line: "Business sense" is as "cool" as "it" (the prime idea).

P, or People: Obvious? Of course! Not so fast! That inspired dreamer, that finance aficionado ... are often wretches when it comes to hiring and inspiring, day in and day out, the waiters and waitresses or receptionists who will "Wow" the clientele—or not.

I contend, or at least I contended to the folks I talked to yesterday, that all three pieces are imperative to solving the entrepreneurial puzzle—and that almost no one combines them in one head. In fact, the three disciplines are so intellectually and emotionally different that they can't spring from the same soul.

So that's my nickel, the product of years of observation, as well as too much time and money spent as an inattentive student at the University of Hard Knocks.

But I did spend 30 years in Silicon Valley, home to the IS/IT mega-revolution. And I now have a home in Boston, home to (along with California et al.) the life sciences revolution. Announcement: We're doing pretty damned okay, and losing scant ground on the truly new, game-changer industries. For example, the Boston Globe on November 28 had an Op-ed piece on nanotechnology. It's already a multi-billion industry, and the quoted projection for 2014 is the emergence of a $2,600,000,000,000 ($2.6 TRILLION) industry. And the leader, by a country mile: the U.S.A.

Will China, Korea and others challenge us here? Of course! We'll doubtless give ground (hey, we're virtually it right now), but (1) the total pie will keep growing and (2) by 2014 there will doubtless (sure as shit) be new nanotech-like mega-industries on the drawing boards, and I'd not bet a farthing against the U.S. as lead pony.

Many lament (correctly, in the main) our declining share of engineering graduates and science majors. True enough, but I contend there is (still, for the foreseeable future) a Magic American Potion of: Lotsa smart, motivated people + New immigrant blood (never discount this) + Incredible research universities (and Gov't R&D infrastructure) + A generic/genetic entrepreneurial "instinct" to die for (including an almost unique American desire to make-a-ton before 40) + Wide and deep financial entrepreneurship (VCs, Angels, etc, etc) to die for + A deep-seated competitive (genetic again) urge to be/stay #1 + A generic capitalist "spirit" 300 years in the making and nurturing + Genetic openness (called "freedom" and "democracy" in the U.S.A. and the West in general) + Etc. (Or some such.)

Do I think China can be "stopped"? Of course not, save for the "democracy-openness problem" (major). Do I think Kmart and GM can be resurrected? Never. Do I expect as many Googles-Amgens in the future as in the past? Much as I'm fearful of going way out on a limb, I will anyway: Count on it!

(The argument above is a good accompaniment to the KURZWEIL Cool Friend interview. While Mr K may be wrong in the particulars, there's little doubt that a parade of Extreme Makeovers is our lot. Those ready to lead/pounce upon such Makeovers will stay atop the heap. An open, entrepreneurial society with a propensity for risktaking, and an infrastructure to support it, are as well positioned as possible. Frankly, I think the raw quantity of engineering degrees produced is pretty close to irrelevant.)

[Check out her books:
Business as Unusual: My Entrepreneurial Journey
Body and Soul: Profits with Principles]

Hard work? No! Insanely hard work! And Energy! And Passion! And Daring! And Will! And Imagination! (And a little bit of luck doesn't hurt.) A lack of money is rarely the issue. Sure you'd like a premier address or an uncle who owns a bank (or at least robbed one); but the dough is probably yours if you first create a gem-of-local-renown in your current "B" space.

Middle managers from "prestigious companies"? [Motto: "Nice ideas, Tom, but here are the 17 immutable reasons why we can't do any of 'em!"] Or 1,000 owner-entrepreneurs? [Motto: "I gotta start on some of this stuff today! Right now! You damn well better be right!"] Give me the self-directed "owners" ... it ain't a close race!

From their publicity:

On November 18th, 20-25 women entrepreneurs will take the stage at the Harvard Business School to present their businesses to over 200 of the most influential venture capital and private investors in the New England and New York areas. The Springboard Venture Capital Forum is a national program designed to increase investments in women-led firms and facilitate new deal flow to investors. ...

CWE-Springboard targets high-growth businesses in the technology and life sciences industries that seek seed, first, or later stage funding. Women entrepreneurs who apply must have a senior leadership position in the company (e.g. CEO, President, Founder, CFO, COO, VP, etc.) and hold a parity equity stake in their company relative to other members of senior management. To apply, please submit an online application at www.springboardenterprises.org. There is a $50 application fee. The application deadline is September 7, 2005.

So, if there are any women entrepreneurs reading this who fit those criteria, here's an opportunity for you. Nationwide, the participants have raised over $2B!

So when Baidu (pronounced "by-doo")—China's leading internet search engine—quadrupled in price today, as their ADSs (American Depositary Shares) were offered on the Nasdaq, I guess no one should have been surprised.

Still, is it one more bullish indicator that we're starting a new dotcom-like cycle? I keep hearing it's happening, but I'm very skeptical. I heard it from a venture capitalist two weeks ago over lunch near Harvard Square in Cambridge. I heard it last week in San Francisco. Most of us who lived through the dotcom boom and bust are rather prudent about calling it anything yet, but today had to make you wonder.

This amazing conference had 100% women speakers and 80% women attendees, all focusing on Women and Blogging. Check out these pictures.

There were so many good break-out sessions, but I wanted to mention the feeling in the room when Mary Hodder, Denise Howells, and Patricia Nakache led a session on women starting businesses and getting funding. The feeling was like one of those noisy starting gates where thoroughbreds are waiting in their slots to run the Kentucky Derby, ready to kick up their heels. Believe me, we were all chomping at the bit.

Sara Blakely, a local Atlantan, started the company Spanx out of her apartment. After several failed attempts to find the right undergarment to hide imperfections and panty lines when wearing white pants with open-toed shoes, she decided to cut the feet off her pantyhose. This worked beautifully! So, she wondered, why doesn't this already exist? Rather than wait for someone else to get the credit, she decided to research it, patent it, manufacture it, and distribute it, all on her own, since everyone she pitched the idea to thought it was laughable. (Not surprising ... can you imagine ... she was pitching the idea to men.) After 2 years of effort, including research, cold calls, door to door sales, and a prototype, she got her first distribution contract with Neiman Marcus and a spotlight on the Oprah Winfrey Show. (You might even have seen her on The Rebel Billionaire, the reality TV show with Richard Branson.)

Currently, with over 40 different products, Sarah is well on her way to a $30M (solely owned) company. Her biggest challenge right now is how to stay innovative and ahead of her competition as her company continues to grow. So, my question to readers is this: How do you keep the entrepreneurial, innovative, risk-taking spirit alive as you expand from a small to a large company?

Continued reading Tools for Women...

Posted by Cathy Mosca | Comments?

Gary Zamchick has innovation galore to offer. And diversity (tho' not in the traditional sense): He's a cartoonist!
OnePageBusinessPlan.com. Tom loved the book by Jim Horan; now it's a system.
Vermillion.com.au in Australia. They only want to work with people who give a damn. With a motto like that ...
Finally, constructiondurable.com. In French, but beautiful to look at no matter what language you speak.