Risky Business : Professor Has Unique Outlook on Entrepreneurship
One of the first things Fred Kiesner asks his classes in entrepreneurship to do is write their own obituaries.
Why ask students to imagine what will be said about them at their deaths? As the Loyola Marymount University professor of management explains, writing their obituaries forces them to project themselves into the future, something every successful entrepreneur must be able to do.
“I want them to think about what they can do and what they can be,” he said.
Kiesner, 53, is known internationally for his work on entrepreneurship, or the establishment of new enterprises. Two years ago, he won $25,000 in a nationwide competition by developing a model course on the subject, which he later taught at the University of Michigan.
At Loyola Marymount, Kiesner’s classes are often full a few minutes after they open for registration. Elsewhere, he has taught members of the Los Angeles Kings hockey team and prison inmates on how to develop successful small businesses. He also consults around the world. His most ambitious current project had been helping create a free enterprise economy on Sakhalin Island in the Soviet Pacific, a project now uncertain because of the takeover in the Soviet Union by Kremlin hard-liners.
“He’s got this tremendous capacity to be innovative, to decide what needs to be done and to do it,” said Merle Crawford, the University of Michigan professor of marketing who headed the committee that chose Kiesner’s application from a pool of 150 for the university’s grant. “He’s a walking, talking example of what entrepreneurship is all about.”
As Kiesner is the first to admit, he is not your typical college professor. He lives far from campus in a house in Kern County that he built himself. His route to the top of his profession has been a circuitous one. He is one of the few professors in America who can claim to have flunked out of college twice.
Then there is his attitude. Kiesner makes a clear distinction between being serious and taking himself seriously. On a wall in his crowded campus office hangs not an Ivy League diploma, but a photo of himself in a chicken suit.
“If you can’t hang a picture of yourself looking like a damned fool up on your wall, then there’s something wrong with you,” he said.
Kiesner’s classes are just as unorthodox as his office decor. Until a decade or so ago, he says, schools of management acted as if small businesses were just like big businesses, only smaller. Not so, he says. Small companies are different from big corporations, and so are the people who run them. There is relative safety in the corporate world, where risks and rewards are shared. But to make it as an entrepreneur, an individual has to be willing to shoulder all responsibility for the success or failure of the enterprise. Entrepreneurs must tolerate, even revel in, taking risks, he says.
Kiesner forces his students to experience risk in the classroom, just as they will in business. Each student in Kiesner’s entrepreneurship class must create his or her own small business on paper. The students’ plans are evaluated by a team of experts on the last day of class. The student’s entire grade for the course is up in the air until the end.
Kiesner loves this atmosphere of uncertainty because it mimics what an entrepreneur must endure. “The day you start your business, you don’t know if you are going to be rich in six months or broke,” he said.
Some students thrive in Kiesner’s high-pressure classes, while others run for the door. “I suspect I scare a few people off,” he said. “I’m glad I do. It’s much better to scare them away now. That keeps them from going out and starting their own business and losing their shirt.”
Kiesner successfully ran several small businesses, including a country newspaper, before he began teaching at Loyola Marymount in 1974. At that time he was working for the federal Small Business Administration, consulting with universities in Southern California. The dean of the Loyola Marymount School of Management asked Kiesner if he knew anyone who could offer a course in the then little-taught field of entrepreneurship. “I gave them a hell of pitch for a guy I knew, and they hired me,” Kiesner said. He later earned a Ph.D. at the Claremont Graduate School, working with management guru Peter F. Drucker.
According to Kiesner, one of the most important lessons he teaches his students is that failure is an invaluable “growth stage.” Like Shakespeare, Kiesner believes that the uses of adversity are sweet. “You learn so much more when it’s hard than when it’s easy,” he said.
He cites as his most educational failure his experience during the early 1970s as head of a small import-export business that was devastated by a five-month dock strike. Kiesner had to close the business but regards his avoiding bankruptcy as a major triumph. Among the lessons he learned, he said: how to street fight and “how to deal with bankers when you owe them $7 million.” Most important, he said, “you learn that you can survive.”
In Kiesner’s view, tolerance of failure is a major strength of American business, one that gives it a decided edge over other cultures, including the Japanese, who are unwilling to risk public humiliation.
Kiesner had hoped entrepreneurship would transform Soviet Sakhalin Island, which is rich in natural resources but mired in the disastrous economy of the Soviet Union as a whole.
His plan was to help start a business training center on the island as well as an “incubator” for small businesses that would supply centralized expertise and support services.
Two San Pedro fishermen had agreed to establish a fleet of six boats on the island and to teach local fishermen how to harvest a species of fish popular in Japan, where the catch could be sold for hard currency that could be pumped back into the Sakhalin economy.
Whenever he travels abroad, Kiesner said, people always comment on the non-elitist American tradition of letting anyone go to college. They usually mean it as a criticism. Kiesner invariably responds: “Yes, isn’t it grand?”
As he likes to tell foreign critics: “You don’t give people a second chance. So you lose all the late bloomers. Look at me. I flunked out of college twice!”
