between the lines
pointed perspectives and penetrating punditry

Opportunity Knocks at Kauffman
by Jack Cashill

In the waning days of the Carter administration, I launched what may have been the most unpopular Ph.D. dissertation in the recent history of the Big Ten.

I titled the dissertation, “The Capitalist as Hero in the American Novel.” At first, my colleagues and professors thought the proposal some form of comic relief. In the world of academia, certainly in that era, capitalists were thought of as brigands and knaves, “evil-doers” of the highest order.

Unlike my profs, however, I had been at work in the real world for a few years and had a model in mind. His name was Ewing Marion Kauffman. Kauffman had created a pharmaceutical empire from the basement of his Brookside home, saved major league baseball in Kansas City, and set about single-handedly to rescue a generation of young Kansas Citians from their own schools and damn near succeeded.

“If he is to be heroic,” I wrote of my entrepreneurial subjects, “the capitalist must actively work not merely to increase his own wealth, but to sustain the well-being of his community.” Above all, American authors expected their capitalist to be productive, to keep working, to avoid dissipation or idleness or drift.

Jack Welch, the former CEO of GE and the eponymous “Jack” of the current best seller, summed up the capitalist’s essential virtue in a word, “focus.” For Ewing Kauffman, focus was critical as well. It was “focus,” more than any given talent, that enabled Kauffman to escape the basement and become the Horatio Alger hero of our time and place.

To renew that sense of focus at the foundation that bears Kauffman’s name, the Kauffman board reached into the ranks of the entrepreneurial and appointed Carl J. Schramm of Baltimore its next president and CEO. Schramm has an extraordinary opportunity awaiting him. And an extraordinary challenge too.

Unlike, say, the Ford Foundation or the Carnegie Foundation, which have been more or less hijacked by people hostile to the spirit of their founders, the Kauffman Foundation has a clearly defined mission that keeps it on the straight and narrow. Schramm has nicely caught the gist of it. “I was intrigued,” he observed, “by Ewing Kauffman's understanding of the link between youth development and entrepreneurship.”

This is not an easy link to maintain, even with the resources of the Kauffman Foundation. The foundation’s various PR photos reveal the difficulty. Images of youth development almost inevitably show inner-city black children in some form of public-school setting. Images from the entrepreneurial leadership program just as inevitably show well-dressed people, almost always white, in some business setting. The task at hand for Schramm and the Foundation is to show kids the way from photo op A to photo op B.

For Mr. K, the “link” was altogether achievable. As he understood, one could not restore the entrepreneurial culture of the inner city from the top down. Revival would start with tailors and restaurateurs and florists and travel agents and the proprietors of food shops and book stores and newsstands, the kind of grass roots enterprise on which civilizations are built and from which MBAs and eventually CEOs are grown.

One problem that the the Foundation has faced is that its educational “partners”—most notably the school districts of Kansas City, Kan., and, with some prudent restrictions, Kansas City, Mo.—do not have a real instinct for entrepreneurialsm. Lord knows these educators have a better appreciation of it than my profs back in grad school; they just don’t have much experience.

Not fully understanding the nature of free enterprise, they tend not to understand the nature of the problems that undermine it. Last year, 49 percent of the children born in Kansas City were born into fatherless homes. In the inner city, that figure approaches 80 percent. These children—especially the boys—will learn no crafts from their fathers, no work habits, no business skills.

At some point, some Kauffman program will shine a bright light on a given academic year or two. But to rescue these kids will take a light of incredible clarity and focus. Right now, alas, I do not know of a public educational environment of that kind anywhere capable of producing it.

I have, however, seen such light in the world of—where else?—free enterprise. A few months back I spent a day with the most successful plumber in North America. Never fond of school, he started at 18 out of his parent’s garage. His mother took his service calls. His father, who ran a struggling furniture store, taught him the basics of business. Today, in his early 40s, this entrepreneur pockets a few million dollars a year in profits from his dozen or so impressively well-run Southern California service centers. Working for him are a few hundred nicely-paid people, many of them aspiring entrepreneurs themselves, nearly half of whom speak English as a second language.

More to the point, this plumber heads up a for-profit enterprise that teaches other plumbing and HVAC proprietors all across North America how to manage their businesses. The instructors are exceptional. The course work is rigorous (and expensive.) The distance-learning follow-up programs are meticulous. And the enterprise has converted literally hundreds of struggling mom and pop operators into millionaires.

This enterprise also started an “academy” for “technicians,” the craftsmen themselves, few of whom have ever been to college. It teaches them things like language skills, etiquette, ethics, sales techniques, and basic business fundamentals. They love it.

I have not seen teaching this engaging and effective on any college campus. After a few years of instruction, the average such technician is making more than the average college professor—justifiably so—and many launch businesses of their own. What drives the program, of course, is profit. When you ask working adults to part with their hard-earned money, you damn well better give them their money’s worth.

And here is the real conundrum at the Kauffman Foundation: how to maintain the entrepreneurial spirit in a not-for-profit environment? Schramm knows the difficulty. He knows too that if the Kauffman Foundation itself does not offer real-world business skills to the people who need them most, no one else will.

The responsibility is great. But then again, so is the opportunity. With the right leadership, the Kauffman Foundation can do for entrepreneurialism what Stowers is poised to do for the life sciences.

All it takes is focus. A few billion dollars doesn’t hurt either..

The views expressed in this column are the writer's own and do not necessarily reflect those of Ingram's Magazine.