Entrepreneurs top common skills (1) – Passionate Leadership

It is commonly assumed that successful entrepreneurs are driven by money. Nevertheless in my opinion, most of them would tell you that they are motivated by a passion for their product or service. They are passionate about the opportunity to solve a problem and make life easier, better, or cheaper. They will end up making money in due course, but it is not the main objective in their lives.

When talking to successful entrepreneurs you quickly realize that they all share a common trait: an intense and compelling emotion, a strong desire, a deep enthusiasm for their projects. And you know what? - This is contagious. They start leading with passion from the word go when talking about their endeavors. This is how passion works amongst entrepreneurs.

This passionate vision about the future allows them to naturally create a mission for their projects and mobilize others to contribute in many different fashions. It creates a sense of belonging, a shared belief, a shared passion.

I can tell you that I haven´t met a single entrepreneur up to now who wasn´t fueled with a powerful passion about what he was doing.

Let me share with you a couple of the examples that I found inspiring:

Henry Ford was indeed a “passionate leader”: he just kept going, despite business failure (the Ford Motor company was actually his third attempt to start an automobile manufacturing company), and others’ dismissal of his ideas. His passion finally led him to achieve his dream.

Another great example of passionate entrepreneur is the African-American Oprah Winfrey. She is well known by “The Oprah Winfrey Show” which was the highest rated program of its kind (talk show) in history. It rated number one in the US from 1986 to 2011. She is considered one of the most influential women in the world. Today she continues driving her business with the same passion that she showed in the early years. We have to admit that over 25 years of constant passion is something remarkable.

And to finalize this post let me introduce two quotes about the subject that I found brilliant:

“There is no passion to be found playing small - in settling for a life that is less than the one you are capable of living.” - Nelson Mandela

“Passion is energy. Feel the power that comes from focusing on what excites you.”- Oprah Winfrey

Next week something about sales…

Entrepreneurs top common skills – Introduction

Now that we have seen some of the greatest examples of entrepreneurs in modern times I am going to introduce the next cycle of my blog, which consists of five posts describing those skills that are commonly present in successful entrepreneurs.

Each entrepreneur is truly unique. Each one has his own particular set of skills and attributes. Nevertheless, there are some skills that always play a major role in the entrepreneurial success. This is my “top five” selection:

1. Passionate Leadership

Entrepreneurship is about passion: Passion for your vision; passion for your goals; passion for driving your business to the next level. Leading a project with passion definitely makes a difference.

2. Excellence in Sales

All successful entrepreneurs excel in selling. They are always selling. Every single occasion is adequate for it. They are always either selling their ideas, products or services to customers, investors or employees. Excellence in selling may be the most critical skill in entrepreneurship.

3. Team building

As soon as the new venture takes off, the entrepreneur needs to find the right people to manage the business. Finding, hiring and getting the loyalty of the best professionals is not an easy task. It takes an enormous effort and dedication but is always worth it. Successful entrepreneurs will systematically create strong teams around them.

4. Creativity and Adaptability

Perhaps one of the most unique characteristics that entrepreneurs possess is the ability to recognize opportunities that others do not. They will perceive a problem that exists and they will create a solution.

Adapting to different circumstances is often necessary to be able to operate, especially as a new startup. This flexibility also includes the ability to incorporate feedback effectively and to learn from setbacks.

5. Persistence and Resilience

Every startup will inevitably have ups and downs. Nothing usually works as expected first time round. In fact, a lot of things will not work out at all. Entrepreneurs cannot get discouraged if an idea fails. It’s just the nature of the game. They just get up and keep trying again and again. This skill enables the entrepreneur to keep going when the outlook is bleak.

In the next five posts we will dig deeper into each of these skills and we will learn more using some good examples.

Keep up with the reading…

Those who stood out (5): Herbert D. Kellenher

The entrepreneur

Kellenher was born on March 12, 1931, in Camden, New Jersey. He received his bachelor’s degree from Wesleyan and his law degree from New York University. He started his career practicing law before relocating to Texas with the idea of starting his own law firm.

In 1967, Kellenher along with one of his clients, Rollin King, co-founded Southwest Airlines. They envisioned a revolutionary business model for an airline company at that time: eliminating all the unnecessary services and utilizing secondary airports in order to offer the lowest fares in the industry.

In 1981, Kelleher became president and CEO of the company. He was a charismatic and dynamic leader boasting a great reputation among the company's employees and media.

In 2007, Kelleher announced his decision to step down as chairman and resign from the board of directors. He remained a full-time employee until 2012.

Herbert Kellenher has received numerous awards in recognition of his impressive professional career. He has been considered one of the most influential leaders in the airline industry.

The Company: Southwest Airlines

Southwest Airlines Co. headquartered in Dallas, Texas, is a major U.S. airline and the world's largest low-cost carrier. The airline was established in 1967 and adopted their current name in 1971. The airline has 44,831 employees as of December 2013 and operates more than 3,400 flights per day, carrying the highest number of domestic passengers of any U.S. airline. Southwest has scheduled services to 89 destinations in 42 states in the US and Puerto Rico.

Southwest Airlines mainly operates Boeing 737’s becoming the largest operator of this Boeing model worldwide with over 550 aircrafts in service. Each of these 550 aircrafts operates an average of six flights per day.

In May 2011, Southwest acquired AirTran Airways. The integration of the two carriers is expected to be completed by 2014.

Southwest Airlines is the fifth-largest airline in the United States and the only one to turn a profit for 40 consecutive years.

The financial statements of the company in 2012 presented $17 billion USD of revenues with $421 million USD of net income.

Key takeaways

What does Southwest do better than anyone else? It keeps things simple and consistent.

Let’s summarize the factors that have been considered essential to the company success:

1. One Plane Fits All

Southwest flies almost just one plane type, the Boeing 737 series. That simplifies maintenance, reducing significantly the cost—spare-parts inventories, mechanic training, etc

2. Point-to-Point Flying

Most of Southwest flying is nonstop between two points. That minimizes the time that planes sit on the ground and allows the average Southwest aircraft to be in the air for more than an hour longer each day than a similarly sized jet flown by a carrier using the existing network hubs.

3. Simple In-Flight Service

There is just one class of service, a decent coach cabin that is slightly more spacious than those of Southwest's competitors. There are no assigned seats. There are just beverages and snacks available. Keeping it basic allows Southwest to decrease costs and offer more competitive tariffs.

4. No Frills, No Fees

The airline only sells one-way fares and only in a few price levels. Prices are all-inclusive too: Southwest doesn't have fuel surcharges, doesn't charge for ticket changes, and continues to permit travelers to check two pieces of luggage for free.

5. Strong Management

Despite the non-executive image that Kelleher offered to the public, the company is built over strong and disciplined foundations. Management ranks are lean, but well compensated and extremely productive.

6. A Happy Workforce

Southwest has never had a strike. The company is offering one of the highest salary and benefit packages in the industry. Since Southwest has about 30 percent fewer employees per aircraft than its network competitors, it has the lowest cost per mile of any of the major carriers.

7. Aggressive Fuel Hedging

Fuel prices now represent around 40 percent of an airline's costs. Southwest Airlines has implemented an aggressive fuel-hedging program that has saved the company an estimated of $3.5 billion in an environment of rampaging fuel prices.

Amazing innovation within a mature and developed industry...

Those who stood out (4): Muhammad Yunus

The entrepreneur

Yunus was born in June 1940 within a Muslim family, in the village of Bathua, which today is part of modern Bangladesh (INDIA).

In 1944, his family moved to the city of Chittagong, and he attended Lamabazar Primary School. In 1957, he enrolled at the Department of Economics at Dhaka University and completed his Bachelor’s degree in 1960 and his Master’s degree in 1961.

He started working as a lecturer in economics in Chittagong College just after his graduation and he was able to start up a profitable packaging factory at the same time.

In 1965, he received a Fulbright scholarship to study in the United States that allowed him to obtain his PhD in Economic Development from the Vanderbilt University in Nashville, TN, in 1971.

When he returned to India he observed the devastating effects of the famine of 1974. He became involved in poverty reduction at that time and established a rural economic program as a research project. He discovered that very small loans could make a tremendous difference to a poor person. He envisioned a new business model based on tiny loans with a reasonable interest rate for poor people. Ultimately the model became extremely successful proving that the microcredit concept is able to help poor people to create a better future for themselves and their families.

In October 1983, the pilot project grew into a fully operational bank for poor Bangladeshis. It was renamed Grameen Bank, (meaning “Village Bank”). The bank has demonstrated to be a useful instrument to provide opportunities for the poor people in India.

Muhammad Yunus was awarded the 2006 Nobel Peace Prize, along with Grameen Bank, for their efforts to create economic and social development.

The Company: GRAMEEN BANK

The Grameen Bank is a microfinance organization and community development bank founded in Bangladesh. It offers small loans (known as “microcredit”) to the impoverished.

Grameen’s objective has been to promote financial independence among the poor. Yunus encourages all borrowers to become savers, so that their local capital can be converted into new loans for others. Since 1995, Grameen has funded 90 percent of its loans with interest income and collected deposits. Grameen converts the deposits made in the villages into loans for other people in the same villages.

Grameen has diversified the types of loans it offers. It supports hand-powered wells and loans to support the projects of Grameen members' immediate relatives. It has also expanded into seasonal agricultural loans and lease-to-own agreements for equipment and livestock.

The bank has set a new goal: to make each of its branch locations free of poverty, as defined by benchmarks such as having adequate food and access to clean water and latrines.

Grameen Bank is best known for its solidarity lending system. Each borrower must belong to a five-member group. The group is not required to give any guarantee for a loan to its members. Repayment responsibility rests solely on the individual borrower. The group oversees that everyone behaves responsibly and no one gets into a repayment problem. There is no default liability therefore the group members are not obliged to pay on behalf of a defaulting member. In practice the group members often contribute the defaulted amount with the confidence of collecting the money from the defaulted member at a later time. Such behavior is encouraged by the bank as it does not extend further credit to a group that has a member in default. The system has expanded quickly and now is used in more than 43 countries.

As of October 2007, the total number of borrowers reached 7.34 million; the Bank had a staff of more than 24,703 employees; its 2,468 branches provided services to 80,257 villages; the bank distributed $11.35 billion USD in loans, The global number of potential micro-borrowers is estimated to be 1 billion, with a total loan demand of $250 billion. The present microfinance model is serving 100 million people with $25 billion of loans.

Key takeaways

Yunus was not the first one that came up with the idea of small loans to the poor, but he was the first one who showed to the world that it could work on a large scale.

Let me list the principles that Yunus has embraced during his career and which today are source of inspiration for most of his followers:

1. Set forth an inspiring vision and stick with it.

2. Innovate. Challenge the prevailing wisdom.

3. Build a team that owns the dream.

4. Communicate. Relentlessly communicate within and beyond the organization.

5. Be Flexible. Change strategies, goals, and tactics as needed.

6. Be patient and persevere. Sometimes you have to wait.

7. Embed your values into the organizational culture.

8. Brand yourself and your organization.

Yunus continues actively launching new initiatives. You can check his last one following this link:

Yunus center Social Business. http://www.muhammadyunus.org/

This man has truly made an impact on our world.

Those who stood out (3): Ken Iverson

The entrepreneur

Kenneth Iverson was born in September 1925 in Downers Grove, IL. He received a Bachelor of Science degree in Aeronautical Engineering from Cornell University and later on he earned a master’s degree in Mechanical Engineering at Purdue University. He worked for several companies before he was hired in 1962 by Nuclear Corporation of America to run its steel production business. Despite the good results that Iverson was able to achieve in his division over the following three years, the Corporation was destined toward bankruptcy, due to the fact that all the other divisions were losing a significant amount of money.

In 1965, in a desperate attempt to save the company, Iverson was appointed CEO and President of the Corporation. He accepted the challenge and was able to build, almost from scratch, one of the most successful manufacturing businesses in modern US history.

The Company: NUCOR CORPORATION

Nucor is headquartered in Charlotte, NC. The Company became known worldwide as one of the most audacious and innovative in the manufacturing industry. Iverson was able to develop a new steel production system based on the “mini-mills” concept. As opposed to companies operating integrated steel production with blast furnaces, Nucor started using electric arc furnaces to melt recycled steel scrap. The company installed its first electric arc furnace in a new plant in Darlington, SC in 1968 and Iverson was able to rapidly expand the business across the country. Today the company operates 23 steel production mills, with a capacity of up to 25 million tons a year.

With $19.4 billion USD of revenues, $510 million USD of net income and 20,400 employees, Nucor is currently the largest steel producer in the USA.

Key takeaways

Iverson has been credited for establishing a set of values that were essential to succeed. Let me present those which I consider to be the most relevant:

Lean corporate staff. While most big companies end up bearing heavy corporate structures, Nucor sets up new standards and manages the whole company with no more than 50 corporate staff. It is one of the leanest corporate set ups of any of the fortune 500 companies.

Decentralized leadership. Each Nucor facility operates with significant autonomy. Each plant is accountable for its own results with minimum interference from the corporate head office.

Compensation - highly dependent on performance. This concept is implemented at all levels with top executives having the highest percentage of their pay at risk. If the company performs far beyond the industry standard, employees, from top to bottom, get paid accordingly. Historically speaking, the company has been able to attain an incredibly high productivity ratio (tons of steel produced by employee), leading to the employees receiving an incredibly high compensations for reaching the objective.

No privileges for anyone. No executive dining room, no parking spaces, no company cars, no special treatment… Everyone is in the same boat, rowing in the same direction, at the same pace with the same goals.

These guys are a worldwide reference. I have to admit, that coming from the manufacturing industry, I cannot feel anything but admiration for this company and particularly for the entrepreneur who thought up a utopian vision and was able to make it real.

I invite you to visit its web page and enjoy learning a little more about it: www.nucor.com