June 2004
"The marketplace changes dramatically and rapidly; strategies that worked for 20 years don’t work anymore.
With the opportunity to shop on web sites, customers have access to far more information and are far more expert than they once were. We need to change how we do business so we can continue to be the supplier of choice; we have to meet the world price; we have to be good listeners to our customers.
Change is difficult. It’s very challenging. It’s very scary. It’s often costly. Lifelong learning is crucial – we have to keep learning because the rules change quickly. We have to have agility in our thinking, and we have to continually innovate."
William H. Braun
Custom Rubber Corporation
ExecutiveVolunteer, B-W Entrepreneurship Center
"Innovators and entrepreneurs play a key role in regional growth for Northeast Ohio.
In light of the vital need to compete on a global standard, it is imperative that Northeast Ohio companies become increasingly entrepreneurial. Specific data are difficult to track regarding the loss of local jobs to overseas competition (see related story on Globalization, page 6). It is clear that declines in employment can also be attributed to technology, productivity improvement and other factors. The region’s prosperity depends on economic growth that often involves international business development, the nurturing and retention of leadership and of bright, well-educated workers, and on innovation and entrepreneurship.
Over the past three years, The Plain Dealer and Ideastream/WVIZ Channel 25, in their “Quiet Crisis” series, have explored the region’s loss of jobs, the “brain drain” of young people and the potential for taking off our “Rust Belt” and donning some sexier jobs, for example in biomedicine.
Thomas S. Campanella, Director of the Health Care MBA program at Baldwin-Wallace College, said the region should be cautious in hanging its hopes on biotechnology. Many jobs in that sector require special skills; a worker who loses a job at a bearings factory or an auto engine plant will not be qualified for a biotech job without extensive re-training and education.
“The growth in the biotechnology sector is one piece of the puzzle,” he said. “We need to have simultaneous economic development strategies for a number of growth sectors.”
One growth sector is small business. Just as this sector is one of the drivers of the national economy, so it is in our region as well. While employment at Fortune 500 companies is on the decrease, it is rising in small businesses, which today employ about half of the U.S. workforce.
At Baldwin-Wallace College, Sandra Stark, Director of the Entrepreneurship Center, is teaching undergraduate and graduate students to think like entrepreneurs – to focus on opportunities, embrace the skills of the creative risk-taker and implement a nimble, purposeful approach for finding solutions.
“When they hear the word ‘innovation,’ people often think it’s random, but Peter Drucker says innovation is a purposeful search that can be managed and organized,” Stark said. “Innovation results from an analytical, disciplined effort. It can be a way to improve efficiency, or eliminate paperwork, or enhance a design.”
One out of every two graduates who go into the private sector will work in small business, Stark said, and many who take advantage of the center’s services, seminars and programs are small business owners.
But the entrepreneurial philosophy works at large corporations as well. Stark has developed a brown-bag road show – a presentation for small groups at large companies. She teaches the fundamentals of “intrapreneurship,” or how to incorporate the venture process in a large organization.
Regional business growth is going to be driven significantly by small businesses; they provide employment, and support the tax base of the region. Many of today’s small businesses will stay on in this area and become good, solid, small- to medium-sized companies or, in some cases, even become large companies.
Creating a new company can be difficult. Small business owners start with a product, a service, an idea or a dream, but often don’t have a clearly defined, realistic plan. What we do at the Business Plan Clinic is facilitate their dreams.
The students help them structure the plan, and guys like me apologize, then ask them the hard questions in order to help them define their goals: Do you want to do something worthwhile for the community – create jobs; develop a product that will improve the world? What are the financial goals – do you plan to make a lot of money, or simply make a good living for yourself and your family? When they seek financing and grants, these are questions that banks and investors are going to ask them, so they have to be prepared with the answers. The business owner may be trying to build a legacy for his family, but if I’m an investor, I want to know my exit strategy: As an investor, I’m not necessarily in for the long haul.
The help we provide to the would-be entrepreneur is a big benefit to the economic health of Northeast Ohio."
Gabe Rosica, Executive Vice President
Keithley Instruments Inc.
Executive Volunteer,
B-W Business Plan Clinic
The concept resonates with employees, she said. They enjoy learning to innovate on a small scale, in their own departments, to help their companies thrive.
With Phil Bessler, Stark educates people in how to grow businesses.
Bessler, Herzog Chair in Free Enterprise and faculty leader of the Entrepreneurship Center’s Business Plan Clinic, helps small business owners and entrepreneurs focus their passion and energy on guiding their businesses. A good business plan is realistic, but optimistic, he said.
The Business Plan Clinic provides hands-on experience, as student consultants and volunteer executives help individual companies hone their business plans.
Bessler said that often, innovation involves taking an existing product one step further, for example, packaging cheese with crackers or Cheerios cereal with strawberries. One brilliant innovator is the person who found a way to make an electric toothbrush for $5.99 instead of $99.99.
Stark said the first steps in creating a vibrant entrepreneurial culture involve placing value on innovative thinking, rewarding creativity and fostering new ideas.
She believes it’s vital to teach companies to embrace the innovative process and entrepreneurial spirit so that when students seek jobs at these companies, their ideas will be welcome and they will prosper. This environment helps encourage bright young people to stay in the region, she said.
Campanella said entrepreneurship can benefit the health care sector, which is a key player in the regional economy; as of January 2002, health services (including hospitals and nursing facilities) accounted for 10 percent of the 1.13 million workers in the Primary Metropolitan Statistical Area including Cuyahoga, Lorain, Medina, Lake, Geauga and Ashtabula Counties (Greater Cleveland Growth Association). Today, the Cleveland Clinic Health System is the largest employer in Cuyahoga County, with about 29,000 workers (Plain Dealer), and University Hospitals Health System is second with 14,000+ (Crain’s). Add insurers, managed care organizations, pharmaceutical sales offices and retail pharmacies, doctors and nurses, companies that make medical devices or systems, biotech and research firms, extended-care and other ancillary facilities: The region’s employment in this sector is substantial.
With health care and insurance costs continuing to rise, Campanella would like to see some innovative teamwork between health care professionals who normally don’t get together to discuss mutual challenges: hospitals, doctors and insurers, for example.
Campanella said that ironically, while the medical field is research-intensive and while innovation occurs regularly in the lab, hospitals and other health care organizations need to become more aggressive in integrating technological innovations. For example, recent advances in electronic medical record-keeping facilitate enhanced communication between health care providers, which translates to better care for the patient.
“The rest of the health care industry might take a page from the biotech book,” he said. “As organizations in the health care sector become more entrepreneurial, we will see greater opportunities.”
He cited some past health care innovations, such as freestanding outpatient surgery centers, and, more recently, senior citizen housing adjacent to college campuses. These senior communities promote good mental health for elders who attend classes and mingle with younger students. They also provide students with career development opportunities caring for the exploding senior population – just as baby boomers reach retirement.
Works Cited
“Nonagricultural Wage and Salary Employment: Cleveland-Lorain-Elyria Primary Metropolitan Statistical Area,” brochure, 2002, Greater Cleveland Growth Association (now called Greater Cleveland Tomorrow).
“Cosgrove is Selected as Clinic’s Next Chief”, The Plain Dealer, June 2, 2004, 1-A
“Largest Cuyahoga County Employers By FTE Employees,” Crain’s Cleveland Business, March 15, 2004.
"Small businesses represent the biggest growth potential in these economic times.
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