Ladies and Gentlemen:
I want to express my deep appreciation for your warm welcome. Thank you for your hospitality.
Thank you Kelly for inviting me to deliver this address. I am humbled and honored.
It is a pleasure to be here today with those of you from small businesses as part of Montgomery County’s Small Business University. I wish that this program had been in place when I started my own small business twenty years ago. It might have helped me avoid a few of the bumps in the road on my own entrepreneurial journey.
As those of you in this audience know from your own small business involvement, the entrepreneurial journey is not always a straight line. Indeed, there were numerous twists and turns in my journey. I hope some of what I have learned along the way will help you in your journey.
I have titled my talk “The Entrepreneurial Leader.” Before I share my thoughts on the entrepreneurial leader, however, I would like to say a few words about the entrepreneur.
What and who is an entrepreneur? There are various definitions, the one that appeals the most to me is the entrepreneur is “a person who organizes and manages any enterprise, especially a business, usually with considerable initiative and risk.”
I like that definition because it emphasizes “any enterprise” and extends the definition beyond just the business owner. A person can be entrepreneurial in any type of organization as long as he or she is willing to step up to the plate and take a leadership role in shaping the direction of the enterprise or the portion which he or she controls.
In that regard, let me share one other definition that is relevant. That definition is of entrepreneurship. It was provided Professor Howard Stevenson of the Harvard Business School almost 40 years ago. Professor Stevenson said “Entrepreneurship is the pursuit of opportunity without regard to resources currently controlled.” In other words, entrepreneur are not constrained in their thinking.
Now, let me combine those two definitions into my own definition. Entrepreneurs are dreamers who dare. They are risk takers that seize the moment and take calculated risks to create the enterprises and jobs of the future.
Working within that construct, in my opinion, the entrepreneurial leader is a person who:
- Recognizes that leaders are made and not born
- Thinks small to win big
- Sees opportunities where others see problems
- Does the right thing
- Does well but also does good
Let me address each of these characteristics in turn.
It all begins with the person who wants to be an entrepreneurial leader. An old saying goes leaders are born and not made.
I stand before you as living proof that adage is incorrect. Leaders are made and not born.
I was not born with a silver spoon in my mouth. The keys to the kingdom were not handed down to me when I reached adulthood.
I’ve mentioned my journey. Let me tell you a little bit about it.
I came to the United States from India at the age of fifteen to pursue the American dream. At that young age, I wasn’t quite sure how I would achieve that dream.
But, I knew even then that being a business owner would be part of it.
I also knew that it would mean being apart from my family and developing my own career track with little parental or professional guidance.
For those of you in the audience who have followed similar paths, I know you recognize this was a daunting challenge. But, it was also an opportunity. That’s the way I saw it – an opportunity to define myself in America, the land of opportunity.
That process of defining myself here in America had six stages:
- Getting a good education
- Learning how business works
- Becoming an entrepreneur
- Building a strong and talented team
- Staying the course
I got my bachelor and master degrees in computer science at the University of Colorado. That gave me the knowledge that I needed to go into business.
When I graduated with my advanced degree, I was not prepared to go directly to owning a business. That’s because I didn’t know how businesses operated. I had no real exposure to business prior to starting college.
I knew I needed experience before launching my own venture. So, I worked with two major information technology firms in the Washington DC area for about a decade to learn the ropes and the ins and outs of doing business with the government. That gave me the skills and real world grounding that I needed to start my own business.
After doing my apprenticeship, in 1994, I purchased the QSS Group for $45,000. Within thirteen years, along with my key management team, we took that firm from a workforce of 1 employee – me – to more than 2,000 employees and approximately $300 million in revenue. In 2007, I sold my company to Perot Systems.
That was a good trajectory for the business. I had a role to play in that success.
But, when people ask me how I became successful, I respond that it was not me, but we who made it happen. My team of talented senior managers was central to everything. Success in business is a team sport. I’ll come back to that team concept again in the next section of my speech.
Before I close this section, though let me talk about passion and persistence. Those are the ingredients for “stick-to-it”. They were essential because as I said earlier, my journey was not a straight line.
It was not always easy. And, the final destination was not certain.
During the early years, there were several issues to be dealt with that I’m assuming most of you have confronted: will we win the contract, will I get the bank loan, will I be able to make payroll.
There were some 24 hour days and many sleepless nights. I’m assuming that most of you have been there and done that as well.
What enabled me to prevail on my journey was a belief in myself and those around me and the opportunity presented by the American dream. Success taught me to move forward. As importantly, failure taught me to never go backward. From the time I started my business, I knew implicitly that you needed to move ahead and that if you did not you would be left behind.
Enough about my journey. I hope that it is instructive. I share it not because I expect your journey to be like mine but because I believe that we can learn from each other’s journeys.
While each of our journeys should and must be different, I think that there is a common approach that an entrepreneurial leader can employ as a general guideline for achieving success. That is – think small to win big.
Woody Allen said, “90% of life is just showing up.” I became successful, and I believe you can as business owners as well, by concentrating on the 10%. That means focusing and paying careful attention to the critical few areas that make a difference for business success. For me in my business they were:
- Developing a distinctive core competence
- Establishing a laser beam customer focus
- Creating niche differentiation
- Ensuring perfection in performance
Let me address each of these areas in turn.
First, core competence: when I started my business, IT firms in DC were a dime a dozen. Nothing set them apart. I decided that my firm could stand alone through an integrated blend of engineering, science and information technology skills. The IT skills were the basic requirements, the science and engineering skills separated us from the pack.
Second, laser beam customer focus. I am sure most of you followed Jeff Bezos, founder of Amazon, purchase of The Washington Post. Bezos has promised to bring his obsessive commitment to the customer to turning around the Post. I am certain that will pay off big time as did our obsessive commitment to the customer at my company QSS Group.
We got our first assignment from NASA because of my scientific background and executive experience at Raytheon. We treated NASA extremely well, exceeded their expectations, and as a result got significant add-on business. From 1994 to 1997, NASA was our only client. We used our track record there as the basis to expand our business.
That brings me to the third area, niche differentiation. We didn’t expand willy-nilly. We expanded outward from our core client business to those with similar characteristics and needs. QSS’ first work outside NASA was with NOAA (the National Oceanic and Atmospheric Administration) and the FDIC. After that we added the Department of Defense and other agencies.
We were able to expand and grow quickly because of our perfection in performance. Past performance is critical in getting governmental contracts. I knew that many IT firms were late on deliverables and sometimes did poor project management and shoddy technical work.
I vowed that my firm would stand apart from other firms in this competitive arena and established “Performance as Promised” as QSS’ corporate motto. It was more than a motto. It was the way we did business and a springboard for getting additional business.
Those are the four areas in which I thought small to win big at QSS. While your strategies and tactics will differ given the nature of your organization, I think the core management principles of core competence, customer focus, niche differentiation and perfection in performance are cross cutting and can be used to be successful in any enterprise.
I would add to these four areas one that I mentioned earlier. That is building the right top management team through recruitment, selection and sharing the wealth as part of the formula for business success. Your core group – the 4 to 6 individuals closest to you- can make the difference between an organization that is moderately successful.
This brings me to the third characteristic of the entrepreneurial leader which I will address briefly. The entrepreneurial leader sees opportunities where others see problems.
Some people refer to that as vision. I call it identifying an unfilled need and satisfying it.
Sometimes, as was the case of Steve Jobs with the I-phone or Jeff Bezos at Amazon it includes creating and shaping customer expectations for a type or quality of product or service that doesn’t exist in the market place currently. It’s what we see occurring now with the trend toward additive or 3-d manufacturing.
No matter what it is, the entrepreneurial leader is never satisfied with the status quo. She or he is always pushing the outer edge of the envelope to do things faster, better and differently in a manner that matters to the customer.
As I noted near the outset of this speech, the entrepreneur does this by finding the resources required to exploit opportunities when they present themselves. As Professor Stevenson from Harvard puts it, “They see an opportunity and don’t feel constrained from pursuing because they lack resources. They are used to making do without resources.”
To put it another way, the entrepreneur sees the pursuit of possibilities as doing the right thing. And, it is one way of doing that.
This brings to my fourth characteristic. The entrepreneurial leader does the right thing.
Doing the right thing is the essence of leadership.
It is said that managers do things right. Leaders do the right thing.
Leaders do the right thing. That should be true in all fields – business, politics, religion, health care, education to name just a few.
The problem is we have too many people in leadership positions today in large enterprises that do not do the right thing. They are executives at the top of the organizational food chain whose sole purpose is to advance their own careers and earnings with little to no concern for customers, employees, or the communities they should serve.
I see those of you in small enterprises as a counterbalance to this disturbing trend.
If you’ve been reading the Wall Street Journal, Financial Times or any of the business journals, these days, you’ve probably seen reference to the need to create an economic virtuous cycle – a condition in which positive results engender more positive results and help to grow the economy.
Today, the economy should be moving toward a virtuous cycle because many large corporations have been and are reaping record profits. Instead we have been stuck in a variable cycle.
That’s because those corporations are doing nothing to little to nothing to create new jobs or to raise wages or reward line level employees appropriately for their increased productivity and contributions to stellar business performance. As a result, these positive results are not reinforcing and extending themselves.
To my mind, the reason for this is simple and straightforward. The virtuous cycle may be fine as an abstract economic principle or concept. But, for the virtuous cycle to come into play in the real world you need “virtuous organizations.”
What is a virtuous organization? Here’s my definition. The virtuous organization is one that has a strong moral compass and a compelling mission that creates value for customers, employees and the community. Virtuous organizations do the right thing.
In my opinion, those of you from smaller enterprises have a special challenge and opportunity to be entrepreneurial leaders in helping to jump start the virtuous cycle here in America by the way in which you build and manage your enterprises to make them virtuous organizations.
To build the virtuous organization, you will have to play three roles:
- Capital creator; and
- Value generator
As a navigator, you must chart the course and shape the way your enterprise sails the seas. You must make sure it does the right things and does them right.
You must build both organization’s core competence and its core consciousness. Core consciousness brings the organization’s beliefs such as integrity, quality and excellence front and center in the organization’s psyche and mode of operations.
When I said capital creator, probably the first thing that came to mind was “financial capital”. Financial capital, however, is a dependent variable. It requires the right business model and other forms of capital creation in order to yield the appropriate return on investment.
Let me highlight two of those other forms of capital creation where you as the leader of a virtuous organization should concentrate. They are intellectual capital development and spiritual capital development.
In terms of intellectual capital, every organization has what I call its organizational IQ. That is the combination of all of the IQ’s of the employees in the company.
Your challenge is to ensure that the organization is structured and operated to allow the employees to use all of their individual brain power in order to achieve its minimum IQ. Your opportunity is to create collaboration and teamwork that results in synergy thus creating intellectual capital that exceeds the total of all of the individuals in the business.
Spiritual capital is the invisible force that moves organizations and individuals. Your challenge and opportunity here is to create the positive motivational force field that causes all of the associates in your business to want to bring their “A” game into play day in and day out in order to achieve the organization’s business and mission.
Finally, there is your role as value generator. Michael Porter of Harvard developed a business management concept called the value chain. The chain is comprised of primary activities such as inbound logistics, operations and outbound logistics and support activities such as human resource management and technology. Porter said that each element in the chain should add value and when they all did it gives the business a competitive advantage.
An “added value” chain is definitely essential for business success. In the virtuous organization, there is a matching concept and that is “value circles”. These are concentric circles that emanate outward from the organization’s leaders to employees, to customers and ultimately to the community.
That brings me to the final topic for my talk today: The entrepreneurial leader does well but also does good. She or he understands that their vision and values shape and define the organization’s culture.
If those values include concern, caring, compassion and commitment to making a positive difference in society – they are reflected in everything that the organization does – from the manner in which it operates, treats employees and customers, to its community involvement and philanthropic initiatives. Think of it this way, the entrepreneurial leader is the person who drops a rock in a pond and as the circles ripple out they reflect his or her image and likeness.
I understood that concept both when I was a small business owner and since the sale of my company to Perot Systems in 2007. That sale allowed me to establish a private foundation that supports educational, cultural and artistic causes in the United States and around the world. I firmly believe that to whom much is given, much is expected. I am always reminded and guided by this phrase.
That is why I am focusing today on sharing and giving back. In many ways that process of sharing and giving back is as – and even more rewarding – than any of the money that I earned throughout my business career.
I believe that those of us who are in and come from smaller organizations are inclined to do well and t1o do good. So, I was heartened to read the results of a recent national study by PNC Financial Services which showed 37 % of small business owners were optimistic about their company’s prospects over the next six months, 32% plan to give out raises, and 22% plan to hire new employees this year.
That’s a start and an indication that just as I expected, entrepreneurs in small enterprises are beginning to take the lead in moving the American economy out of the doldrums. In my opinion, that is a very, very good thing.
That’s because when small businesses work America works and Americans are put to work. More importantly, small businesses and enterprises make the community connection.
Small businesses are of the community. In contrast, large businesses may be in a community but they are not part of it.
We are living in trying and troubling times. We are at a critical pivot point for America.
Our citizens have lost trust in most of our institutions. Research shows, however, they still respect and trust small businesses and entrepreneurs. That’s why as I look at those of you in this audience today I see the best hope for renewing America and the belief in the American dream.
I believe that the respect and trust that the citizens confide in small business people and those leaders from smaller organizations is well-deserved. That’s because you’ve done it the old fashioned way. You’ve earned it.
In closing, if you continue to stay the course as an entrepreneurial leader by: recognizing that leaders are made and not born; thinking small to win big: seeing opportunities where others see problems; doing the right thing; and, doing well and also good – you will continue to earn it.
In closing, I hope that the thoughts that I have shared with you today have made a modest contribution to increasing your personal earning power and that in return you will use that power to share the wealth and to give back to those communities you call home.
I wish all of you continued success in the future, look forward to when our paths cross again. I am confident you will achieve your goals.
Thank you for this opportunity to share my ideas and thoughts with. It has been a privilege to be here.
God bless you