1995-10-00: People vs profits: Esprit winners' views - October 1995

http://bcn.boulder.co.us/business/BCBR/1995/oct/esprit2.html

People vs profits: Esprit winners' views
By Caron Schwartz Ellis

A lot of very well-known business leaders say there's an entrepreneurial renaissance going on.

Folks like Tom Chappell, founder of Tom's of Maine, and Anita Roddick of The Body Shop think that a spirit of harmony, trust and cooperation is replacing the traditional rigid, competitive business climate.

Maybe it's the dawning of the Age of Aquarius, the long-awaited astrological movement expected to usher in universal harmony and understanding, sympathy and trust.

On a less cosmic note, maybe it's simply that some of the typical ways of doing business haven't been reaping the expected rewards, and that some forward-looking entrepreneurs are trying out different ways of doing things.

What do Boulder's finest entrepreneurs think? We turned to the Esprit Entrepreneur '95 winners to see if they perceive a new paradigm sweeping the business world.

Entrepreneur of Distinction John Ramsey, president and CEO of Access Graphics, sees a movement from a single vision to group dynamics.

"There's a shift from a business person where the results are individually driven and tightly controlled to one that leverages people a lot more," Ramsey says. "For any business to grow today, people are a key aspect of it, and this requires an adaptable culture."

Entrepreneurs of Distinction Mary Ellen Vernon and Thomas Vernon of Fresh Produce Sportswear agree that people are the key and focus strongly on their employees.

"Years ago, the 8-to-5 day and a shirt and tie standardized everything," Thom Vernon says. "If you were female and had kids, I don't think employers were really too concerned about that. We've broken that mold and offer much more flexibility. We realize that people have lives."

The Vernons also value employee empowerment through profit sharing. "The old way of doing things was to hire people and put them in their corner and have them do their job," Thom Vernon says. "With profit sharing everyone is going to benefit and they can see how it directly affects them."

Entrepreneur of Distinction Jeffrey Cohn, chairman of Allegro Coffee, believes the business world reflects society as a whole. For him, business is a "mixed bag."

On the one hand I see an ever-greater materialism. That's the downside," Cohn says. "The positive side is that there's a much greater growth today in trends that reflect values such as cooperation and concern for the health of society and the planet altogether."

Cohn sees both sides of the equation in Boulder County. "I see Boulder as reflecting society as a whole to a large degree, but I also see Boulder having leadership in positive ways far beyond what's proportional to simply its size. Given that quality of a highly educated population and the type of people that are attracted to Boulder for quality of life, there's a strong forward-thinking component to our population."

Entrepreneur of Distinction Phillip Wiland, chairman and chief executive officer of Concepts Direct, doesn't think the paradigm is completely new.

"Some businesses have always considered caring about people and caring about customers important," Wiland says. But he does notice a growing emphasis on their importance.

"People expect more," Wiland says. "We're more and more a service economy, and, if you want to stay in business, you'd better do what your customer wants."

Although he believes that area companies might be leading the way in developing innovative programs, Wiland does not think Boulder is unique. "I don't think you can draw a circle around Boulder County and say that inside the county they are making progress and outside they aren't," he says. "That would be excessive egotism."

Entrepreneur of Distinction Mark Crossen, president and chief executive officer of Amrion, doesn't believe that a cooperative culture exists in the business world, yet.

"Many of the universal principles of the free enterprise system will always be relevant and applicable because they originate from fundamental aspects of human nature," Crossen says. "Many of these traditions are antiquated, but I fear these antiquated practices will die a slow death because of the conservative fear of change."

Crossen does envision a company of the future with "new flexibility and responsiveness of purpose, whereby real human values are fulfilled in the course of building a successful business enterprise," he says. And, he continues, Boulder County will lead the way.

Lifetime Achievement Award winners John Hill and Carl Carman of Hill, Carman Ventures have very different perspectives.

Carman believes that business culture is becoming somewhat more focused on the individual. He ascribes this to a number of trends reducing "homogenization" of the workplace.

One is the downfall of unions. "Many companies would look at employees as a monolith of the union, which they can't do anymore," Carman says.

Another is the increasing mixing of men and women at work. "Everybody has to look at groups as individuals," he says.

But Carman doesn't believe the pendulum will swing completely. "You'll see a spectrum, but public companies will continue to be driven by the quarterly report. We expect things to be increasing quarter by quarter."

But for John Hill, the notion of a cooperative, compassionate business paradigm is "a lot of utopic wishful thinking."

"In our world of high-tech, early-stage companies, the fact of the matter is that competition is so brutally intense, it's survival of the fittest," Hill says.

"I think a lot of this mushy stuff is nice to think about, but the fact is you've got to be tough as nails to survive, and if you think otherwise, you're probably going to have some rough awakenings."

While Boulder's premier entrepreneurs agree that risk-taking is part of the entrepreneurial makeup, they differ on how risk-taking ties in with the so-called new business paradigm.

For Allegro Coffee's Cohn, entrepreneurism is more a matter of creativity than risk-taking. "I believe the entrepreneur often gravitates toward appreciating the qualities of cooperating and sharing the responsibilities and challenges of creating," he says. All of this fits the new mode.

For Wiland of Concepts Direct, the whole point of entrepreneurism is to have fun, and his idea of a good time fits the new paradigm as well. "For me, the fun of business is not so much the money that gets made, but the fun of building something," Wiland says. "I think the new thinking about caring about customers, caring about people and building teams, really all that is an important methodology for building a great organization, and that's what entrepreneurism is all about."

The new business paradigm is said to involve a shift from a regional to a global emphasis, bringing with it an increased sense of social responsibility. Boulder Esprit winners see social responsibility in different ways.

Success has to come first, insist Carman and Hill. "I always think that the best way to be socially responsible is to be successful," Carman says. "If you're in total survival mode, it's very seldom that you're very responsible.

"I think all corporations have that responsibility, but not at the expense of healthy organization," Hill continues. "It can't be at the expense of return on investment, because, if so, the enterprise won't survive."

For Thom and Mary Ellen Vernon of Fresh Produce and John Ramsey of Access Graphics, social responsibility revolves around commitment to their employees.

The Vernons acknowledge it would be easy for them lay off and rehire seasonally. But, says Thom Vernon, "we decided years ago that it's better to bite the bullet in slow times. We realize that our employees have (to pay for)rent and food, and those things aren't seasonal. It's real satisfying to see employees with the ability to buy homes and cars and things like that."

Ramsey feels "an obligation to provide employees with secure employment and the challenge and opportunity to grow not only financially but professionally," he says.

Cohn and Wiland see social responsibility as an obligation to the community.

To Cohn this has meant a strategic business decision to target a niche market -- the natural foods industry -- rather than the mass market supermarket chains. "The decision was partially going against the options to make money because it eliminated us out of the vast majority of retail food outlets," Cohn says, "but we still feel that we chose a very viable economic path. I suspect that some companies that do focus on making money don't have much sense of social responsibility."

"I believe we should care about communities," Wiland says. "Communities are made up of individuals, and I believe the best way to be socially responsible is to be responsible to everyone you have a relationship with --customers, employees, vendors, families of employees -- whoever it may be."

For Crossen, true social responsibility is still in the future. "When our business culture is filled with caring people who understand the value of serving others with our products or service, socially responsible behavior is an integral part of what we do everyday," he says. "And, this group attitude propels the company to great levels of customer/community service, which, in turn, creates greater prosperity."

Whether or not they buy the new paradigm, each Esprit Entrepreneur agrees on one thing -- the importance of business ethics. As Wiland puts it, "business ethics and personal ethics are the same thing. Be honest, tell the truth, care about other people."

Hill concurs. "Don't confuse tough business management with solid fundamental ethics," he says. "You can run a very tight ship with very tough discipline and yet be honest and ethical and fair to employees and investors on a day-to-day basis."