Berkonomics – Business Insights from Dave Berkus

All other board functions are secondary.

Even venture capitalists who sit on boards where they have significant investments often forget this point.  They write into their investment documents that they will occupy a seat on the board for as long as they are invested in the company, thinking of this as a protection for their investment and tool for them to influence growth.

Actually, there are two legal duties of board members.  They are: the duty of care, and the duty of loyalty.  Everything else is a self-imposed duty or responsibility.  The duty of care is to care for the corporation asset itself, not the shareholders whom they represent.  Each corporation when chartered becomes a live person in the eyes of the law, independent and subject to the care of its board of directors.  Shareholders such as the investors are granted few rights by law. They can elect directors for their class of stock, approve mergers and acquisitions; approve increases or changes to the capital structure of the company and other more minor actions.

It is the board, made up of individual members, that is responsible for the care and maintenance of the corporate person.  Sometimes, there will be a conflict of interest between the people representing the various shareholder classes on a board.  This happens often when one class would be quite satisfied with the outcome of a sale of the corporation because it has lower expectations of exit value and a lower cost of shares, while another later investor class would see little relative gain in a sale and veto’s the proposed transaction.    The duty of care is a legal responsibility of each board member and cannot be shed because the member was elected to protect a particular class of shareholder.

[Email readers continue here...] Second is the duty of loyalty – loyalty to the corporate person, not to the shareholders who elected the board member.  Once again, there is a need to educate board members that in conflict of interest cases, the corporation comes first.  Some investor board members are also member of boards for companies that may overlap in markets or even compete directly, although rare.  Either way, I have seen many instances over the years of my board service with VC’s on the board, which the VC’s have had information about other firms that would be classified as confidential – that they offered at least piecemeal in a board meeting of another company where they serve.  There are issues that stress the loyalty of board members such as placement of employees or recruiting of executives from firms where the VC or board member has inside knowledge.  These are rare, but each stresses the duty of loyalty to the corporation on whose board they sit.

Should board members therefore withdraw and not participate in corporate planning, coaching the CEO and other issues not related to the duty of care or duty of loyalty?  Of course they should not.  A board, in exercising its duty of care, must do everything it can as an entity and each member as an individual to become acquainted with the issues, problems, opportunities and threats that overhang the corporation.  In fact, there is a legal concept (not a duty) of “reasonable care” that board members must meet in order to be protected by the insurance carried by a company for directors and officers. Reasonable care means that members deliberate issues in depth, attract expert advice when appropriate, attend meetings regularly, stay current on corporate issues and hold regular sessions of the outside directors without management present. None of these requirements are by law, but the sum of these add to a powerful statement of commitment by board members and therefore a protection under the law when a group of shareholders sue boards or members for irresponsible actions.  Most every court will side with the members of the board under the rule of reasonable care when these behaviors are in evidence.

                An amazing transformation is taking place in the work place.  As the new generation of digital natives enters the work force, management is being pressed to open their networks and their thinking to allow social networking inside the firewall, workers who are more productive and comfortable anywhere but in a cubicle, and management of a virtual workforce.  Mobile workers are quickly overtaking the fixed desk worker in developed countries, quickly catching up with Japan, where this has been the majority behavior for several years.

                To enable these new nomadic workers to be productive, developers have created over 120,000 applications for the iPhone alone, and over 100,000 applications for Facebook users.  These applications enable desktop connectivity from smartphones, netbooks or iPads, list the latest airport delays, provide  GPS traffic and route guidance and so  much more.

                Which brings us to my personal list of the ten most important – essential – things we digital natives need to un-tether from our cubicles and desks and be at least as productive home or anywhere.  You may have a different list, but here is mine…  [Email readers continue here...]

1.           A great smartphone.  More than half of the people on the planet now have cell phones, and the smartphone with Internet and enterprise system access is the fastest growing segment, approaching 25% of all phones sold.   Most any of these models work well for a digital native who can then state with passion, “I have an office in my pocket.” 

2.          Collaboration tools:  GoToMeeting, WebEx, FreeConference.com, Skype, Google Docs, and others:   Some are now available on the smartphone as well as desktop and even built into some newer HD-TV’s.  Skype provides the infrastructure for cost-free video and audio conferencing and long distance dialing with sound quality often exceeding that of normal communication channels. 

3.          Internet access via cellular networks:  If the theme is “un-tethering” from a fixed broadband land line, then a great wireless card is a must.   Variations on the theme include cards that broadcast WIFI signals to a small area, built-in cards in netbooks and tablets and more.

 4.        Wireless desk phone system:  I discovered the power of this one recently when installing the new Plantronics Calista system, allowing me to walk up to 300 feet from my desk with a belt-clipped remote and up to 30 feet from that remote with the included Bluetooth earpiece.  The Calista seamlessly receives calls from my desk phone, my cell phone and my desktop Skype with equal ease as I roam the office environment.  

5.        A follow-me account :  Although many digital natives have cut the cord literally and done away with landlines (21% at latest measure), the rest of us would like to have up to five phones ring simultaneously, and roll over to a single voicemail if we do not answer any of them in a set time.  Vonage, Google Voice and YouMail are services providing this great feature at minimal cost for the freedom it provides. 

6.       A compact all-in-one:  When we are at home with our limited space and resources, a great all-in-one printer, scanner, fax is a necessity.  I prefer a black and white laser unit with a small footprint for low cost pages and quiet operation, delivering quiet inexpensive pages when needed, and color scanning to the computer. I prefer the Brother MFC7840W, but lots are available for under $230.00. 

7.        A netbook or tablet:  I no longer carry a large notebook, but rather a mini-note (or netbook or tablet). All in the name of longer battery life, less space and less weight.   The arrival of the iPad and competing devices add both complexity and simplicity at the same time. I will carry both my netbook and an iPad wherever I travel, combining the book reader and application-friendly iPad with the workhorse netbook for office work and presentations.  

8.        A portable scanner and / or portable printer:  If you haven’t seen or worked with a pencil-thin portable scanner such as PlanOn’s Docupen Xtreme, you haven’t experienced the ability to digitize at will anything you run across in your travels.  Only ½ inch by 9 inches in size, you will forget you have this in your bag or pocket until you need an instant copy of a news article, a document or an invoice. And sometimes, we just have to give in to the fact that the paperless office is not going to be a reality soon, especially when we are away from our desks for more than a few days.  PlanOn produces the ultra-portable Printstik PS905, a mobile printer with a 20 page self-contained roll of paper (or plain paper printing) from a smartphone or computer through Bluetooth or USB.  It weighs only 1.5 pounds and measures 1” by 2” by 11” in size. 

9.         The small resource bag:  All of us need an extra USB memory stick, chargers, cables and even a second battery.  Some of us add a wireless remote for presentations, a laser pointer and a few small screwdrivers.  

10.       The wild card:  Here is your chance to add that tool relevant to your needs. I would split the wild card into two items if I could:  a docking station with keyboard and monitor … and a portable projector, which is not for everyone, but for most of us who make presentations on the road and sometimes on the spot. There is a new generation of tiny projectors hitting the market to allow the mobile worker to share without notice.  For full room size presentations, I carry the slim Casio XJ-S38 XGA projector, only 1.7” high and 8×10” in size, weighing 4 pounds and able to fill a large room with a beautiful picture.   For smaller projections, the Aiptek PJT21X PocketCinema can be carried in your pocket.  New cell phones with digital projectors built-in were shown at this year’s Consumer Electronics Show and will soon be available. 

                So that’s my list of things I cannot do without as I work from anywhere and at any time.  Yes, I understand that any list becomes obsolete before it is published.  You’ll have your own “must have” list.  Whatever our disagreement, let’s celebrate our personal digital empowerment and collective un-tethering from a fixed business desk.  And sure, add your comment with your “indespensible” road warrior or SOHO technology…

I am happy to announce the availability of BERKONOMICS in book channels worldwide, including the eBook edition from Amazon.

Purchase either for yourself or for an entrepreneur, board member or executive of a growing business. This book and workbook contain all the material from the BERKONOMICS emails and blogs and much more.

Organized into eleven chapters from start-up through a sale of the company with focus upon growth of the enterprise, the unique combination of book and workbook helps ensure the success of a growing business by providing insights and tools to those who are responsible for building business value. The workbook becomes a personal journal for entrepreneurs and executives to apply the lessons of BERKONOMICS for their own business enterprise, helping business-builders sharpen their message, create value and avoid pitfalls. The book contains over fifty stories of entrepreneurs who have done it right or from whose mistakes we can learn.

Here are easy-to-folow links to find more information and order copies in the form just right for your use, or as gifts to others:

BERKONOMICS hard cover with author signature ($30.00 your cost, $37.50 list)
- Hard cover is available only from the Berkonomics crew

Soft cover book ($20.00 your cost, $24.95 list) direct from the crew

Workbook direct from the crew ($15.00 your cost, $19.95 list)

Soft cover from the Amazon bookstore ($24.95)

Workbook from the Amazon bookstore ($19.95)

Amazon KINDLE eBook edition ($9.95)

Soft cover from Barnes & Noble Booksellers ($24.95, members $22.45)

Workbook from Barnes & Noble Booksellers ($19.95, members $17.95)

(All editions subject to tax and/or postage as appropriate)

 This blog is more than a labor of love. It is the result of insights gained in over fifty years as an entrepreneur, fifteen of them investing in other entrepreneurs with world-changing ideas and passion enough to move mountains.  Over seventy times I’ve bet on one or a group of those entrepreneurs, each time finding new stories and new insights to add to my caldron of entrepreneurial goop. When I speak as a keynoter at entrepreneurial or investor conferences, or when I conduct one of my half day seminars in early stage corporate governance, I weave some of these epoch stories of entrepreneurs good and bad into my presentations (of course leaving the names out the stories).   And universally, my audiences come back to me with comments that they remember and internalize the stories – and these short insights.   

Along came the social networks and the tolerance for a story-in-a-second, or if not in a second, then in 140 characters or less.  The entrepreneurial success stories didn’t get shorter, but the insights became sharper.  Is this the new communication norm?  Should all professors of business now find ways to communicate in the verbal shorthand of the Twitter generation?  Can a teacher push out enough information and expressed passion for a subject in such a short burst? 

I thought it was worth a try.  And so Berkonomics was born, partly of necessity to adapt to the shortened attention span of a young generation of entrepreneurs, and partly in an attempt to create memorable, repeatable, viral transfers of insight to this new audience of easily distracted but completely dedicated business professionals. 

Like a small stream feeds the rivers into an ocean, these short bursts have been parsed into arbitrary, random groups of 101 insights further divided into eleven stages of a business from ignition to liquidity (startup to sale).  The sum of these, the ocean of insight, is Berkonomics.    How do we feed the streams into the rivers that roll into the ocean of content?  We start with a tweet, a Facebook posting, a Plaxo or LinkedIn post.  Each leads to a link to www.Berkonomics.com, where a bit more space is devoted to each burst for those with the time and inclination to explore more.  The ocean in this case is my book,  Berkonomics, containing the same 101 compact ideas further expanded with stories about entrepreneurs and their businesses that have embraced or violated these rules, these insights, and created an opportunity to tell yet another story to reinforce one of the lessons in business insight represented by the whole of this effort. 

Every one of us has a story to add to this mix, one of passionate entrepreneurism, sometimes inside an existing larger corporation, sometimes alone on a kitchen table or back room desk.   And it is a sure thing that many of us will have cogent, insightful additions to this caldron, culled from their own experiences.  There’s a place for these in the blog, and I welcome any and all for others to read and learn.  This adventure we call Berkonomics should be fun and informative.  Let’s all try to add a bit of each and stir the brew in the process.