Clever Geek Handbook
14 December 2025

Force of Nature

Recommendation

In 2004, while news stories portrayed Walmart as an unthinking despoiler of the natural world, CEO Lee Scott teamed up with Blu Skye Sustainability Consulting to make the retailing giant greener. Pulitzer Prize-winning journalist Edward Humes describes Walmart’s voyage to environmental enlightenment. He recounts Walmart’s well-known dark side – for instance, its often-criticized employment policies – and wonders if any business so large can be sustainable. But Humes illuminates Walmart’s worldwide leadership and innovation regarding sustainability and proves that green business can be a fiscal plus. Initially, Walmart became notably more green not necessarily because it was the right thing to do, but because it was profitable. And like the Grinch that stole Christmas, Walmart’s actions appear to have made its heart grow a few sizes. Sustainability has become a foundation of how the retail giant does business; it earns profits and good press, and the planet benefits. BooksInShort recommends this quick, uplifting read about an international giant getting green to face the future.

Take-Aways

  • Sustainability can offer businesses vast opportunities for profit.
  • Walmart examined every product on its shelves for environmental and monetary waste.
  • The company used “appreciative inquiry” to solve problems by building on methods that already worked.
  • Walmart saved millions by reducing product packaging.
  • The retailer adds $3.5 million to its annual bottom line by recycling waste.
  • Its new policies drove revolutionary changes in the cotton and dairy industries.
  • Walmart found nontoxic substitutes for manufacturing chemicals without adding cost.
  • The Walmart “Index” provides consumers with information on sustainability for all Walmart products.
  • Walmart invited suppliers and critics to join its “Sustainability Value Networks” to ensure transparency and inclusion.
  • Doing good can be cost efficient, and the public loves it.

Summary

The Walmart Way

Propelled by its core mission of serving up savings, Walmart grew from a “pile it high, sell it cheap” department store in Arkansas to a multinational powerhouse dominating several retail categories. Determined to offer customers the best deals, Walmart routinely undercuts competitors’ prices by 15%. Within a decade of its entry into the grocery business, Walmart drove 29 supermarket chains into bankruptcy. Walmart mercilessly squeezes profit out of everything it stocks by demanding that suppliers figure out how to do more for less.

Introducing Sustainability

In 2004, sustainability consultant Jib Ellison suggested that business leaders should make the corporate case for sustainability in the US. They should walk the walk instead of relegating environmental issues to “greenwashing” under the heading of “Corporate Social Responsibility.” Peter Seligmann, founder of Conservation International, introduced Ellison to S. Robson Walton, Walmart’s chairman of the board, who was committed to environmental issues. Walton set up a meeting between Ellison and Walmart CEO Lee Scott to discuss the profits in going green.

“A rapidly accelerating worldwide demand for the same energy-intensive, carbon-spewing creature comforts Americans have so long enjoyed...cannot be sustained.”

Throughout the 1990s, Walmart’s reputation declined due to various high-profile court cases. Lee Scott rose through the trucking and distribution arm of the company to become vice president of merchandising. He was Walmart’s spokesman during the 1996 sweatshop scandal involving the Kathy Lee Gifford clothing line. Scott handled the job impressively, taking public responsibility for ensuring that no child laborers were involved in making Walmart products.

Fighting Negative Press

When Scott became CEO in 2000, negative stories emerged regarding Walmart’s predatory pricing, monopolistic practices, dishonest legal maneuvers and unfair labor tactics. Leaked internal reports showed that as many as 46% of the children of Walmart employees lacked medical coverage or relied on welfare programs, and that when Walmart entered a new territory, it depressed local wages by 5%. Those reports revealed the hidden costs of saving money at Walmart. Scott worked to improve health plans and supported minimum wage laws, an unprecedented position for Walmart. Bad reports about its water and air pollution added to these woes. From 2000 to 2005, Walmart stock fell 27%.

“Walmart unthinkingly set this scenario into motion decades ago with its outsourced, low-price, buy-more imperative.”

Enter Jib Ellison. An outdoorsman, Ellison once dreamed of changing the world through rafting. In the 1980s, he started an exchange program between the US and the Soviet Union in which students bonded through rafting. Inspired by the principles of The Natural Step, a Swedish sustainability group advocating waste reduction and resource efficiency, Ellison founded Blu Skye Sustainability Consulting, which promotes the business case for sustainability.

A New Route

Ellison’s meeting with Scott was well-timed. Walmart had been getting skewered for building stores on environmentally sensitive lands and not properly handling water runoff. Walmart’s wasteful practices, pollution and environmental degradation caused municipal governments to wonder whether they really needed a Walmart in their towns. Scott needed a quick fix to bolster Walmart’s image with the public.

“Tough economic times demand more sustainability, not less.”

Ellison urged Scott to view his “green problem” as a business opportunity. He argued that Walmart could realize profitable efficiencies by cleaning up waste and pollution. Ellison knew that Walmart, as an industry leader, could (once again) revolutionize the retail business. Scott and Ellison agreed that climate change regulation was inevitable and that being out in front of it would give Walmart a competitive advantage. Walmart had the potential to change the game for entire industries.

Streamlining

Ellison insisted that, under Scott’s leadership, sustainability had to be “baked in” at every level of the company. Each employee had to assess his or her responsibilities with an eye to sustainable streamlining. Progress would never occur without Scott’s direct, steadfast involvement. Scott saw the value of Ellison’s thinking when the consultant identified a toy that had outsized packaging. Reducing the size of the package meant Walmart realized millions in savings as well as reducing greenhouse gases and the number of trees cut down for cardboard. As Walmart analyzed the packaging on every item it stocked, savings grew. “Scott... accepted the scientific case that human-caused greenhouse gas emissions were contributing to climate change... and that Walmart needed to behave accordingly.”

“Fourteen million shoppers...turned to competitors every week because they were upset by Walmart’s reputation.”

Adam Werbach, former Sierra Club president and sustainability executive at advertising agency Saatchi & Saatchi, kicked off “Personal Sustainability Projects” for Walmart employees. These programs led 19,000 employees to quit smoking by 2008, and helped the workforce lose 180,000 pounds.

Doing Well by Doing Good

Walmart had contained its green problem. Scott didn’t need to do more; stockholders and the Walmart old guard didn’t want him to do more. Then came August 2005 and Hurricane Katrina. Anticipating the storm, Walmart stocked its area stores with extra batteries, water, canned goods and other supplies. When the storm hit, Scott committed $2 million to relief efforts. By the time the waters receded, Walmart had donated nearly $30 million and had given away food and other goods. Incredibly, the press was singing Walmart’s praises. Scott understood that doing genuine good had helped his brand in every way.

“If U.S. beef cattle ranches, pig farms, and chicken farms made a similar investment in digesters – and these industries are all following the dairy sustainability initiative – manure could provide more than 3% of the country’s total electricity needs”

Scott knew that by committing Walmart to environmental sustainability, he could use its worldwide reach and size to change retail business on the planet for the better. Scott took on three ambitious sustainability goals: to have renewable energy sources completely supply Walmart, to create no waste and to stock only sustainable products. Environmentalists took a wait-and-see position, while the business press decried the move as pandering to political correctness at the expense of share price and revenues. But Scott understood that waste anywhere along the line meant someone bore the cost.

“Appreciative Inquiry”

Scott gathered executives and managers, supplier representatives, and even outsiders like academics and environmentalists to form “Sustainable Value Networks.” These groups focused on 14 areas of product lines or business categories, such as seafood, textiles, energy and waste. Ellison argued that making Walmart’s operations transparent would prove its earnestness and ensure that team leaders arrived at the best decisions. In-house, Scott’s and Ellison’s proposed changes met with distrust, skepticism and cultural resistance. Ellison urged Network team leaders to notice what was working well and to build on that through a process called appreciative inquiry.

“The Index seeks to measure...the true impact of our consumer culture while giving manufacturers, retailers and shoppers a tool and an incentive to lower that impact.”

Blu Skye asked the team assigned to make Walmart products less toxic, “What would success look like when it comes to chemicals in products?” They agreed the ultimate win would be a store full of products without warning labels. The team discovered cost-neutral chemical substitutes for toxic compounds. Walmart induced manufacturers to change the chemicals they used by promising more prominent displays of their products. This took chemicals harmful to humans and wildlife off Walmart’s shelves.

Cotton

Farmers using traditional practices treat cotton with nearly 16% of all the insecticides used on crops in the world; some of these chemicals are toxic and known carcinogens. Less than 1% of these compounds actually kills pests. The other 99% ends up in the earth, the water and the air. Farmers apply nitrogen-rich fertilizers to grow cotton and other crops year round. Excess nitrogen washes into water runoff, sapping oxygen and choking marine life. To help its textile Sustainability Value Network find areas of improvement, Walmart reconstructed the production cycle of its cotton products, aggregating information never before compiled. This analysis showed ways to reduce cotton’s carbon footprint, including using organically grown crops.

[Walmart] “laid out its five-year plan to buy less food from factory farms and more food – $1 billion worth – from a million small and midsize farmers around the world.”

Traditionally, Walmart made annual buying agreements with cotton suppliers, demanding lower prices each year. To encourage the three-year transition to organic cotton farming, Walmart took the unprecedented step of offering suppliers multiyear contracts. Executives felt that a guaranteed supply of organic cotton would reduce textile producers’ dependence on oil and water, leading to less price volatility, which served Walmart’s interests. By 2010, Walmart became the largest purchaser of organic cotton and textiles. To reduce the environmental hazards of conventionally farmed cotton, Walmart asks potential suppliers for detailed information about their cotton, including what chemicals, if any, they used.

A Dairy Revolution

The dairy industry faced seemingly intractable obstacles to sustainability. Walmart started with Blu Skye’s “system in a room” meeting, a face-to-face summit of the principals from every phase of milk production, each with the authority to hash out issues and change procedures in their own businesses on the spot. Blu Skye’s consultants challenged participants to design a maximally sustainable system. Soon everyone engaged in practical problem solving, such as transforming manure into electricity and compost. Walmart became the catalyst for historic change in the dairy industry.

Unexpected Savings

Utilizing the Sustainability Value Networks’ analyses and recommendations, Walmart recycles its trash and saves $3.5 million per year. Redesigning the trucking fleet, delivery routes and loading process aided profits. Additional savings came through sustainable stores, reduced packaging and better handling of food waste.

“The Index”

Walmart’s Energy Services Director Jim Stanway led the greenhouse gas Sustainability Value Network with this mantra: “Carbon equals energy. Energy equals money. Cutting carbon saves money.” Stanway knew that if he could compute the carbon footprint of every Walmart product, he would find savings. He devised a pilot program to focus first on products such as toothpaste, DVDs and soda. He asked vendors to share information. None dared say no to Walmart.

“We pretend that nature has no dollar value. Until that pretense is swept aside, our best efforts at sustainability will always be too little, too late.”

Walmart’s goal for the Index is to have each product’s tag state whether an item scores better or worse than average in three areas: sustainability, healthfulness and ethical practices. A smartphone could scan the product’s bar code to obtain more information. Normally concealed data would become transparent. Walmart asked suppliers for analyses of their products according to sustainability, health and ethics criteria. The Index provides Walmart suppliers with incentives to improve their scores. Walmart’s “Sustainability Consortium” independently analyzes the goods that make up the database. Walmart hopes other businesses, even its competitors, will use the Index to drive sustainability improvements in whole industries. This project is ongoing.

Corporate Social Responsibility

Market purists criticize corporate social responsibility (CSR), arguing that corporations must focus first and solely on profits, and that green initiatives are nothing more than public relations ploys. Some critics suggest Walmart’s sustainability drive took money from stockholders. But CSR projects cost a fraction of what companies typically pay lawyers, lobbyists and marketers to hide the environmental costs of their businesses. Lax safety protocols and oversight, and money spent on a fake green image, cost BP stockholders, for example, millions in the wake of its recent massive Gulf of Mexico oil spill. Walmart can point to its bottom line to prove that pursuing greater sustainability delivers solid profits while also doing good.

About the Author

Pulitzer Prize-winning journalist Edward Humes is the author of the bestseller Mississippi Mud.

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Force of Nature

Book Force of Nature

The Unlikely Story of Wal-Mart's Green Revolution

HarperBusiness,
 


14 December 2025

The Distance Manager

Recommendation

Kimball Fisher and Mareen Duncan Fisher document the special skills needed for the new but increasingly common task of managing far-flung work groups. The approaches that they examine are becoming increasingly essential for all managers. Although they explore relevant technologies carefully, their human relations advice is probably more important. The Fishers emphasize the interpersonal and leadership skills that a manager needs to head a virtual team. If you read this book cover to cover, it can seem repetitive, since many of the rules and tips offered in one area overlap with those in other areas. However, the book is designed to allow you to review specific management challenges and technologies, and to ignore areas that are irrelevant to your situation. BooksInShort recommends this clear, practical work to anyone who leads virtual teams and to the telecommuters and freelance workers who report to them.

Take-Aways

  • Distance management - managing teams of people who do not work in the same place at the same time - presents a difficult management challenge.
  • Good distance managers aren’t traditional supervisors; they work ’on’ the system, not ’in’ the system.
  • The distance manager’s primary job is providing consistent, visionary leadership.
  • Instead of commanding their workers, distance managers should lead by example.
  • Occasional face-to-face meetings, including a kick-off meeting, are critical.
  • Distance managers should develop clear missions for their team and establish rules and boundaries for group interaction.
  • Home employees need technological competence and strong interpersonal skills.
  • Give your team e-mail, cell phones and pagers, but establish clear protocols and boundaries for their use.
  • Used properly, Web teleconferencing and videoconferencing can help team members share what they learn.
  • To build teams and share information, distance managers should facilitate the social and informal side of team interactions.

Summary

Managing a Far-flung Team

More and more managers today are distance managers, asked to lead people who usually do not work in the same place at the same time. The advantages of these virtual teams come packaged with enormous managerial challenges. Technologies - such as e-mail, teleconferencing and file sharing - can help a distance manager communicate, coordinate and coach more effectively. But technology alone is not enough. Some tasks can only be done effectively in face-to-face meetings. Clearly, to succeed as a distance manager, you’ll need new competencies and some additional tools for managing people who aren’t close at hand.

Distance Managing: Foundation Principles

Distance managers aren’t supervisors; it’s impossible to supervise a far-flung group. Instead, they are boundary managers. They focus on the ways their work group interacts with its environment. They teach their team members the skills they need to turn information from their individual environments into the output the company expects. Instead of managing that process, distance managers focus on interfacing with other teams, interacting with customers and vendors, and assessing competitors and market opportunities. The boundary manager helps manage these elements in the team’s environment. A successful distance manager must master seven critical competencies to succeed. These roles are:

  1. Leader - Unleash energy and enthusiasm by inspiring and motivating others with vision.
  2. Results catalyst - Focus people on getting good results. Help boost performance without being authoritarian, manage by principle not policy and use boundaries not directives.
  3. Facilitator - Assemble necessary tools, data and resources, and facilitate group efforts.
  4. Barrier buster - Challenge the status quo, run interference for the team, open doors and break down artificial barriers that block the team’s performance.
  5. Business analyst - Grasp the big picture, translate changes in the business environment into opportunities and act as a customer advocate.
  6. Coach - Teach others, help them develop and ensure their accountability.
  7. Living example - Serve as a role model by demonstrating the behaviors you want team members to practice. This gives you moral authority.

Five things can cripple your performance as a distance manager:

  1. Never be an autocrat or an abdicator - Develop your moral authority and find a balance between autocracy and abdication.
  2. Never allow a poor start-up - A good start-up requires team building, developing goals and measurements, and clarifying roles and responsibilities.
  3. Avoid unclear roles and responsibilities - Lack of clarity in this realm is confusing. You may need to renegotiate roles twice a year.
  4. Never starve your team - Discuss how to allocate scarce resources.
  5. Don’t rely on traditional hierarchies - Create a social and a technical infrastructure.
“Good distance managers tell us that even the perception of autocracy can torpedo your effectiveness.”

As a distance manager, you can’t exercise control over workers. Instead, you need to coordinate them. Stay well connected and accessible, but don’t impose too many policies. Give them information, but don’t overload them. Show them that you’re concerned for their development. Provide feedback in person, when possible.

“Team members don’t want intrusive supervision, but they don’t want you to be among the missing, either.”

Treat your team members fairly and avoid even the appearance of favoritism. Be honest. Don’t try to manipulate them. Respect them, and don’t be paternalistic or condescending. Help team members overcome their sense of isolation by building a sense of community. Teams that work in the same space can communicate by bulletin boards and posted charts, and use shift overlap for face-to-face meetings. A virtual team must find another way.

The types of virtual teams are defined by several variables, including whether team members work at the same time, work in the same space or share the same work culture. For instance, a team whose members work at different times, in difference places and amid different cultures must become skillful with asynchronous technologies like e-mail and voice mail, and must use teleconferencing for meetings.

“Your work should dictate your tools rather than your tools dictating your work.”

By contrast, team members who work at the same time can connect easily by phone and teleconference, and can meet often. Teams whose members work in the same culture, but share neither time (work hours) nor space (work places) are the most difficult to lead. Face to face meetings are essential.

“Those who use teleconferences regularly and successfully will testify that these meetings require greater amounts of preparation than a face-to-face session.”

Try to carve out some kind of virtual shared space for your team, starting with a team Web site. Use a Web page to share and distribute knowledge. Organize the page in a way that makes sense to users, and encourage and reward employee contributions.

Staying Connected and Coordinated

To create peak performance as a distance manager, you need to develop long-distance coaching skills, including establishing clear goals and measurements, encouraging good communication and getting employees involved. Coach proactively through each of a project’s stages. Setting specific, measurable, realistic and challenging goals with shared accountability systems will empower your team. That requires setting clear responsibilities with metrics that gauge progress and success. Step in when needed to help, but also establish regular, one-on-one coaching sessions with each employee. This builds rapport and creates an expectation that your discussions with team members are meant to help them succeed.

To build your team, start with a charter that defines a mission. Your team should develop and agree upon operating guidelines that will govern its interactions. Pay special attention to the team’s social structure. Teach and show ways to give and receive feedback and to deal with conflict, since conflict, managed well, can generate strength and creativity. Listen with empathy, paying special attention to the emotion in what you hear. Help the team develop good decision-making processes and help it integrate new members smoothly.

“If you are a leader, you can no longer avoid distance management. You can only choose to do it well or do it poorly.”

These tips might sound simple, but they are very powerful: To build trust at a distance, start by giving trust. Establish strong business ethics and stand by them. Your team will be more productive if you do. Keep your commitments; make your actions visible. Keep your interactions with the team predictable and consistent, since they set the tone for future interactions. Keep confidences and watch your language. Create ’cyber cafes’ where virtual employees can talk informally. Encourage them to find opportunities to meet.

“Ironically, the best control of the off-site office is the control imposed from within (self-control) rather than from outside (manager-imposed).”

Even among virtual teams, some face-to-face meetings are vital. Besides strong kick-off meetings, milepost and wrap-up meetings are important. Take the time to celebrate accomplishments along the way, even if you must celebrate at a distance. Hold an annual or semi-annual meeting to review the goals you’ve achieved. Observe personal milestones like birthdays, new babies and weddings. Ask your team members how they’d like to celebrate and respect their personal preferences. Set aside social time for the team.

Employees in satellite offices need technological competence and good judgment. Good interpersonal skills are even more critical for satellite workers, because an inability to work well with others can be magnified over a distance. Help distance workers overcome the isolation of a home or satellite office by training them to work outside the central office. Home office workers should delineate their core work hours and have a clearly defined office space with a door they can close when they are working. Make sure they get the right technologies for their work.

“If a leader can’t use position power, he or she can still influence through moral authority.”

As a distance manager, you’ll have to manage people who do not report to you in the traditional sense. Learn to use persuasion and influence instead of commands. Respect the expertise of your team. Find ways to get them involved. To be effective, maintain your conscientiousness and integrity. The personal example you set is crucial.

The Distance Technology Handbook

Distance workers need to accomplish five basic tasks:

  1. Create effective virtual teams.
  2. Get the information they need.
  3. Share what they’ve learned with each other.
  4. Facilitate technology transfer.
  5. Cut down production cycle time.
“Constructive feedback is more likely to be helpful in person than virtually.”

The key to meeting team goals isn’t the technologies distance workers use, but how the workers use them. Choose the software you need first, and then get the hardware to run it. Get the whole team on PCs and standardized software versions. Make sure everyone uses the same e-mail program. When you can, use teamware, which is designed to allow multiple team members to work on the same project.

Examine the way technological components fit into your entire system, not only how they work as stand-alone components. You’ll need a computer network, plus a reliable phone system with voice mail, good teleconferencing and sufficient capacity for all of your team members to be on the phone together. Provide your staffers with tools that help them get out into the field, including pagers, cell phones and satellite phones. However, when you issue these tools, establish agreements setting boundaries about usage and cost.

“Ideal team members are not only technically but socially competent.”

As a distance manager, you need to use the phone carefully and courteously. Pay attention, watch your volume, minimize interruptions and, if you call unannounced, ask if this is a good time to talk. Respect time zone differences and avoid routinely scheduling calls at times that require people to come in early or stay late. Don’t address performance issues on the phone. These telephone rules also apply to Web teleconferencing, which requires extra advance planning. Assign roles for the teleconference. Use people’s names. Be careful about background noise. Electronic whiteboards can add a nice visual dimension to these meetings.

“As difficult as it is to master technology (the so-called hard stuff of business), mastering interpersonal relationships (the so-called soft stuff of business) is even harder - especially from a distance.”

If you use video-conferencing, consult an expert to get the most appropriate technology. You can chose between an internal conference-room system and a desktop PC-based system. Either way, understand your system’s limits. A teleconference should be no longer than two hours, but remember that you’re on camera all the time. Don’t do anything you wouldn’t do on live television. Respect your team’s privacy.

E-mail is one of the most popular technologies for virtual teams. Limit messages to one page. Avoid group replies and keep your mailing lists current. Check e-mail regularly. Keep your in-box small and use e-mail filters to sort incoming messages. Remember that e-mail isn’t private and shouldn’t be used for sensitive information. Don’t use e-mail for performance evaluation, interpersonal issues or emotional content.

Overall, the most important thing a distance manager can give a team is consistent leadership. Teams need effective, stable leadership. Technology is a useful tool but there is no substitute for a visionary, committed leader.

About the Authors

Kimball Fisher and Mareen Duncan Fisher , co-founders of The Fisher Group, have worked with many Fortune 100 companies to implement high-performance management systems and to train managers. Their consulting clients include Amoco, Apple Computer, PepsiCo, NBC, Weyerhauser and Motorola. They are popular speakers about teams, leadership and organization design. Kimball Fisher is author of Leading Self-Directed Work Teams and co-author of Tips for Teams.

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The Distance Manager

Book The Distance Manager

A Hands-On Guide to Managing Off-Site Employees and Virtual Teams

McGraw-Hill,
 


14 December 2025

The Guru Guide to Entrepreneurship

Recommendation

This is entrepreneur advice straight from the horses’ mouths. In this case, the horses are 70 well-known entrepreneurs who reveal their success secrets on everything from identifying a good business concept to raising money, getting and keeping customers and managing people. Authors Joseph H. Boyett and Jimmie T. Boyett draw on material written by and about these start-up monarchs and end each chapter with a concise summary of the lessons that a reader should glean from their stories. In addition, they include a useful appendix with summary bios of each of the men and women cited or quoted in the book. BooksInShort invites budding entrepreneurs to enjoy this book while picking up some invaluable pointers, while more experienced businesspeople are encouraged to browse its pages and collect some dandy quotes to throw around the conference table.

Take-Aways

  • To be an entrepreneur you need certain qualities, including passion about your chosen field and willingness to work hard.
  • Entrepreneurs must take cautious risks and be ready to face and overcome failure.
  • Entrepreneurs look for ideas anywhere and everywhere.
  • A business must be able to fulfill a need economically and efficiently.
  • Start with a unique idea so you can compete effectively in the marketplace.
  • Increase your chances for success by linking your new idea to other business ventures.
  • Estimate your start-up costs and arrange for funding before you begin.
  • A start-up can attract customers with promotions, gimmicks and publicity.
  • Work on keeping your customers, since it costs more to acquire new customers than to satisfy and retain existing ones.
  • Inspire your employees with a larger sense of purpose, share information with them and empower them to do the right thing.

Summary

Selecting the Top Gurus

Individuals who have created their own successful businesses have wisdom to share and are generous about sharing it. The world’s greatest entrepreneurs cited here include some familiar names, such as Paul Allen and Bill Gates (Microsoft cofounders), Marc Andreesen and James L. Barksale (Netscape cofounders), Roy and Walt Disney (you know what they co-founded), and Ben Cohen and Jerry Greenfield (Ben & Jerry’s Ice Cream, of course). Other "gurus" cited include Mary Kay Ash (Mary Kay Cosmetics founder), Arthur Blank (Home Depot co-founder), Richard Branson (Virgin Group founder), uber-investor Warren Buffett, Michael Dell (Dell Computers founder), Debbi Fields (Mrs. Fields Cookies), Jeffrey P. Bezos (Amazon founder) and even P.T. Barnum (founder of the circus touted as "The Greatest Show on Earth").

“Successful entrepreneurs are the eternal optimists.”

These gurus were selected by defining the term entrepreneur broadly to include not only those who started a business, but those who took it over and successfully built it up. Here, an entrepreneur is someone who enters a business - any business - in time to form or change substantially that business’ nerve center.

Should You Become an Entrepreneur?

To decide if you have what it takes to become an entrepreneur, ask yourself some candid questions. The answers will tell you if you have the necessary attributes or characteristics. Lillian Vernon, founder of the $258 million direct-marketing company named after her, suggests asking: "Do you have the necessary commitment? Are your prepared to work extremely hard? Are you an optimist by nature?" Other questions suggested by Dave Thomas, the founder of the Wendy’s fast food chain, are: "After you achieve something do you like to go ahead and do something new? Do you want to be an innovator or a creator? Are you always trying to learn from others?"

“Why do entrepreneurs work so hard? Because they have to. During the first years, in particular, there’s no one else to do all of the things that have to be done.”

The reason for asking such questions is that to be a successful entrepreneur, you must feel truly passionate about your chosen field and be prepared to put in long hours of work. You have to be willing to make leaps, but to be cautious too, and you have to be a natural leader, who is flexible and adaptable. You must be very excited about developing a new company.

“Successful entrepreneurs are not afraid to make leaps, but they look first.” [Earl Graves]

As an entrepreneur, you need to be ready to face and overcome failure, dubbed "Club Terror," by Wilson Harrell, founder of almost 100 companies and past publisher of Inc. Magazine. He likens the feeling of failure to his fighter pilot experience during World War II. He was shot down behind enemy lines and had to stay buried in a cornfield for 11 days breathing through a hose in his mouth. After conquering the fear he felt, he gained a sense of being truly alive. Likewise, successful entrepreneurs are able to overcome their fears of failure. This courage enables you to take risks, persevere after problems erupt and learn from your failures.

“Entrepreneurs respond to the negativism they meet by becoming even more committed to their idea - more convinced they are right.”

To be an enterpreneur, you also need to reject money as a goal, be extremely determined and make sacrifices in your personal life. Debbi Fields says you must believe passionately in your idea, even in the face of negative thinking and ridicule, which is what she faced when she decided to create a cookie business. Have fun with what you do, since you need to enjoy your work to remain committed to your idea. Be willing to work hard, especially at first, because you probably won’t have much help until you get off the ground.

Finding the Perfect Idea for You

To find the perfect idea, follow these enterpreneurs’ examples and look for ideas anywhere and everywhere. The gurus advise always being open to new ideas, and thinking about possible products or services. Consider ways to improve what’s already on the market and write down ideas as they come to you. Richard Branson, founder of the Virgin Companies, carries around a notebook to record notes on his observations, conversations and ideas. These experts say you should be open to new possibilities, but exercise caution, too. Check into the real truth and don’t let your excitement about a new venture blind you. Keep track of what your competition is doing. Particularly, as Warren Buffet warns, carefully avoid the temptation to jump on the latest rumor. The following tips from various gurus cover some ways to select a good idea, perform a reality check, and sharpen the idea:

  • Make sure your idea meets a need - It should be practical and useful, and fulfill the need economically and efficiently, according to Dave Packard, co-founder of Hewlett-Packard.
  • Look to your customers as your guide - Listen to them by getting out into the marketplace and observing and talking to them. Show them your product or explain your service and ask them what they think.
  • Be unique or at least better than the competition - If you aren’t new, you can clone, but only if you enhance the idea you have cloned.
  • Stay focused on a single market or type of product - Being in a market niche will help you succeed; straying from it and spreading yourself too thin will undermine you, cautions Netscape cofounder Jim Barksdale.
  • Link your new idea to your other business ventures - Limit your downside risk by linking, joint venturing or arranging financing so that your other funds won’t be in jeopardy if your new business has a downturn.
  • Establish a good foundation for your business - Be led by strong values, have a proprietary idea or technology, execute it better by getting both the big picture and the little things right, and be the first in the field if you can.
“To succeed, you must feel passionate about the work you have chosen.” [Lillian Vernon]

Once you have selected your idea and sharpened it, create your business plan. It should include an executive summary, market analysis, management summary and financial analysis. If you can’t find a perfect idea yourself, consider buying a franchise or an existing business, but check the prospect out carefully to make sure you are getting a solid enterprise that doesn’t have any problems and that the team is made up of people you like.

Getting the Money to Get Started

Of all they activities they have to pursue, entrepreneurs hate raising money the most, but it is critical to get your start-up funding in place. First, estimate the start-up costs. Ben Cohen and Jerry Greenfield used an instinctive approach and borrowed $8,000 from themselves and from Ben’s father, and they succeeded, but it is better to have a good budget estimate.

“You’d better know if you’re prepared to be single-minded about something. The best way to find out is to look at your past. Have you done it before? Did you like doing it?” [Dave Thomas]

In The Field Guide to Starting a Business, Stephen Pollan and Mark Levin suggest that you begin by preparing a personal austerity budget. Then, determine your initial cash outlay, working capital-requirements, monthly fixed costs and monthly variable costs. Additionally, estimate the price you can charge per item, determine your contribution margin and the volume of sales needed to break even. Estimate your cash flow and working capital requirements. By adding together all of your initial cash outlay and working capital requirements, you can determine the amount of money you need to start your business.

“Successful entrepreneurs persevere. They do the following in response to their fears: Take the risk out of the risks, persevere through their failures and learn from their failures.”

Once you know what you need, you have to raise it. Individuals and institutions will often turn down your request, but keep going. The major groups to approach include friends and relatives, bankers and venture capitalists. After you allocate your own funds, start with friends and relatives, since people you know are most likely to give you money based on emotion rather than a hard-nosed financial rationale.

“First and foremost, say our gurus, success means doing something you find to be fun.”

Having a good relationship with your banker is crucial, since all potential creditors will check with your bankers and a favorable response can help open other doors. Generally, a start-up bank loan will be to you, not to your company, which is how Debbi Fields got her first loan from a banker she and her husband knew at the Bank of America.

“Our gurus preach caution when exploring ideas for businesses. The gurus warn you not to let the excitement you feel at hearing about a great new business opportunity blind you to the truth.”

Generally, making contact with a venture capitalist is hard, and getting early funding is even harder. Typically, you need an introduction and an expensive presentation. VCs will want to know your pre-money valuation, which can be hard to determine. Be cautious of terms that could cost you control of your firm, since VCs drive a hard bargain.

“Be unique, or at least a little bit better.”

Once you do get money, the gurus’ major recommendation is to be a miser. Spend on necessities, not stylish furnishings. Follow the numbers carefully, so you know how you are doing, and continue to reinvest in your business to make it grow.

Getting and Maintaining Customers

Once you are ready to open your business, promotions and gimmicks can help you attract customers’ attention. Debbi Fields began by giving cookies away when hours passed during her first day at her initial store with no customers or sales. Sam Walton of Wal-Mart stores particularly liked using contests or games. One favorite is a hidden item game, where an expensive item is hidden in the store and the person who finds it can buy it for a low price. Try special holiday celebrations, too. Or, you could try something mysterious like circus entrepreneur P.T. Barnum, who hung signs and banners on building walls and projected strange images on them at night to get attention.

Contact the press to seek news coverage, which amounts to free publicity. Handle your own media contacts to keep expenses down. The key is finding a news angle so you can offer a legitimate news story. Richard Branson, the CEO of Virgin Airways, suggests that you should always be available to the press, plan meetings with them and treat reporters well. Doing market research and creating a marketing plan will help you get customers, since you will know the most effective way to develop, package, price, distribute and promote your product or service. Effective advertising can help as well.

Once you have customers, working to keep them may be the most important thing you can do to make your business succeed. Acquiring new customers costs more than pleasing and retaining existing ones. Thus, the care and attention you give current customers is vital, says Tom Monaghan, a Domino’s Pizzas co-founder. To avoid losing customers, heed these rules for customer retention:

  • Be a tough boss, but put your employees first and treat them well.
  • Get the small things right.
  • Be nice, and become a trusted advisor to your customers.
  • Exceed your customer’s expectations and guarantee their 100% satisfaction.
  • Spend personal time with your customers.
  • Identify problems and look for bad news so you can fix these problems.

Managing People

Finally, you need to be skilled in managing people. Hire smart people who have the potential to grow. They should be confident and be in tune with your company’s culture. Inspire people by informing them of your company’s larger purpose and making the workplace enjoyable. Demand excellence of them and treat them as equals, such as by sharing information and getting rid of exclusive executive areas. Promote team spirit, listen to your employees and empower them to do the right things. Learn to trust your people, praise them for success and share the financial rewards of your success with them. But fire people, as necessary, when they don’t perform, learn fast enough or fit into your company’s culture.

About the Authors

Joseph H. Boyett is a cofounder of Boyett & Associates, a consulting and research firm that specializes in helping companies implement state-of-the-art management and organizational practices. He has been a consultant to a number of Fortune 500 companies, including IBM, British Petroleum, Merck, EDS and Bell South. He is the author of ten books, including Workplace 2000, Beyond Workplace 2000 and The Guru Guide. Jimmie T. Boyett is a cofounder of Boyett and Associates and co-author of six books, including Beyond Workplace 2000 and The Guru Guide. She is a recognized expert on business-process reengineering and the application of leading-edge information systems technology.

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The Guru Guide to Entrepreneurship

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