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Is there a ‘secret’ to entrepreneurship?

Angelo Mastrangelo worked as a stock boy before becoming a beverage salesman and eventually the owner of Adirondack Beverages. He earned an executive MBA from Harvard University while running his company, and received a PhD from the University at Albany in 2000, years after he sold the multimillion-dollar business. With his wife, Mastrangelo established a successful scholarship program for students who didn’t attend or finish college right after high school. He has taught leadership and entrepreneurship at Binghamton University for 10 years.

Q: What gave you your start in entrepreneurship?

A: I have been a rebel all my life, and the reason is that I have found fault with the system all my life. I had to learn how to deal with the system because I couldn’t fight it. The answer was to learn how to be entrepreneurial — a creative problem-solver. I was entrepreneurial long before I became an entrepreneur.

My problem was finding an organization that would allow me to do this and not restrict me. I had one boss who did this, but once he left, my career was in jeopardy. The answer was to buy my own business. This doesn’t have to be the answer, though. It would be better if more organizations learned how to give their people freedom and maintain some control.

The best thing about entrepreneurship is the ability to create commerce or new solutions. That’s being entrepreneurial. As for being an entrepreneur, anyone can do it. It is especially easy if you inherit the business or money to buy it. I know a lot of entrepreneurs who are not very entrepreneurial.

But being entrepreneurial is not enough, nor is creating an organization that thrives on allowing people to be entrepreneurial. Effective personal leadership is also essential. In fact, I’d go so far as to say that entrepreneurship and entrepreneurs are not the answer. They are just the latest silver bullet.

Q: Why do you see personal leadership as so vital?

A: The underlying cause of many problems we face in our society is the Big Bad Bureaucracy. Bureaucracy’s weakness is that it focuses on professional leadership with little attention given to personal leadership.

In my experience, bureaucracy exists in companies and organizations of all sizes. It exists where it is next to impossible to get to the decision-makers. It exists where rules and layers of management confine people.

Q: Can you give an example?

A: Years ago, I worked for a large company. What I found most surprising was how many rules there were — and how everyone knew how to break them. In fact, your boss would tell you how to break them. For example, I had to make an unexpected trip, and I needed some cash. I needed $150, but the rule was that to get more than $100 you had to submit a request to headquarters and wait about a week to get it. My boss told me to make out two requests for $75, and they gave me the money on the spot.

The rules were more important than doing the right thing. Actually, it was difficult to know what the right thing was. There was no discussion about mission and vision, customers or employee welfare, just rules. This method of operating has destroyed a lot of once-successful companies.

When I returned to school as a graduate student, I was amazed at how much the university and that company had in common. That’s when I realized that the problem was bureaucracy and not business, government or the size of an organization.

Q: How can these issues of bureaucracy be overcome?

A: The real solution lies in freedom with reasonable control. Give people the freedom to create but do not allow them to take advantage of the system, a system that has to have some moral structure. And this is the difficult part of good leadership: allowing freedom but maintaining overall control.

I have always said that I could never control our people at Adirondack Beverages, regardless of how hard I tried or which methods I employed. My partner used to say, “No one has enough money to watch their people all the time.” I would add that I don’t want to, nor do I have the time to do so.

Q: If people really can’t be controlled, how can a leader maintain order?

A: The key is buy-in. The way to get it is a win-win philosophy with a moral basis. The people win — financially and otherwise — when the organization wins and operates ethically and morally. What we did was focus on the right thing to do — our mission, vision, ethics, morals and our budget in time and money — and we gave our people a lot of leeway in the process. That’s the opposite of what so many large organizations do.

Business writer Tom Peters calls this “hard and soft” leadership. It’s hard on the organization’s values and soft on the process. The large organizations are soft on the values and hard on the process, which is what led to the recent disaster on Wall Street.

What we have right now in the United States, both in politics and in the corporate world, is a focus on doing things right with short-term goals and not on doing the right thing. All of this leads to a sort of reverse anarchy. We have a society in which the leaders are out of control and out of touch, and not the people. Effective personal leadership is the missing link.

 

Mastrangelo’s Opportunity Model of Entrepreneurship

The key to making a problem an opportunity is to find a commercially viable problem. This five-step process developed by Angelo Mastrangelo will help you find and develop an opportunity.

1. Find a “commercially viable problem” (one that needs to be solved and is ready to be solved).

2. Create a solution to this commercially viable problem: a product and/or service that is unique (a strong competitive advantage). It must also include an effective method of distribution (the selection of a distribution channel is second in importance to positioning the product and or service) and creating awareness (making your potential customers aware of your product and or service and why it is special is critical and can be expensive and challenging).

3. The solution must be sustainable (patents, trademarks and first-mover advantage are all helpful).

4. The solution must be profitable (in the long term).

5. Build an effective team.

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