The Inaugural Cozad Lecture:
"ENTREPRENEURS ARE PEOPLE WHO TAKE ADVANTAGE OF OPPORTUNITIES."
"This lecture series is a fitting memorial to
That was one of many insights Franklin A. Jacobs, chairman of the board and chief executive officer of Falcon Products, Inc., shared with an overflow crowd at the inaugural V. Dale Cozad Lecture in Entrepreneurship (see sidebar), presented on April 6th at the university's Levis Faculty Center.
Frank Jacobs with the table that launched a multimillion dollar business. With 75 percent of the market, these tables are everywhere including Levis Faculty Center.
|Jacobs entertained, instructed, and inspired his enthusiastic audience of students, faculty,
and businesspersons by telling his story how in
1959 he came out of the U.S. Air Force, where he had served as a pilot and
achieved the rank of captain, to become a
self-employed entrepreneur, distributing table bases to
hospital cafeterias and restaurants. With a bankroll of
$1,000, he and a cousin went into business. The
partnership didn't last long, but Jacobs persevered
and grew a business. At the end of his first year
he had racked up sales totaling $5,000. By 1998, St. Louis-based Falcon Products, Inc.,
had grown to 2,000 employees, $140 million in
sales, and two million square feet of manufacturing
space. Falcon designs, manufactures, and markets
furniture products for the foodservice, office furnishings, hospitality, and healthcare industries
throughout the world. Its products are sold through 3,000 distributors on
To make salient points about entrepreneurship and entrepreneurs, Jacobs used examples from his own very eventful career. For example, to illustrate his first point, that "Entrepreneurs are people who take advantage of opportunities," he regaled us with the tale of how he shifted from being simply a distributor of table bases that he bought from someone else, to becoming a manufacturer of tables. One day Jacobs delivered bases to a customer who was fuming because his supplier couldn't deliver the table tops on time. Jacobs saw an opportunity. He promised to deliver the missing tops, thinking "How hard can it be to make a round table top?" So he bought a saw, hired someone to make the tabletops, and delivered the product on time. From this humble beginning, the manufacturing side of the business grew. This story also illustrates another one of Jacobs' important observations, that successful entrepreneurs must cater to the customer. In 1959, he said, American business was not as customer-oriented as it is today. But a basic tenet for him, right from the beginning, was always to serve the needs of the customer.
Jacobs also observed that he had a lot of luck in his life, which contributed to his success. That's another trait entrepreneurs must have luck. "Being in the right place at the right time helps too." So he chalked it up, partly to luck, that when he started his business in 1959 people were just beginning to eat out in great numbers at fast-food restaurants, which were springing up everywhere. He became a supplier of tables to many of these establishments just as they were getting started. His business and theirs grew up together, one might say. But, he also made a lot of his own luck by reacting quickly and intelligently to situations. For instance, while on a sales call in 1960 he heard about a new motel chain that was being established, called Holiday Inn. The concept sounded so exciting to him that he packed his table bases in his car and drove 700 miles to talk with the founder/owner of the company, Kemmons Wilson. Wilson and Jacobs hit it off, each impressed with the other's initiative and, as a result of that call, Falcon received a huge order to supply the table bases Holiday Inn used in its enterprises. Jacobs recalls thinking that now he had really gotten himself into trouble. How could he deliver on such a huge order? He had just entered the manufacturing business and he knew that failure here would mean ruin. Never one to ignore an opportunity, Jacobs found a way to make the products and deliver them on time. "In fact," he noted, "what is really special about our products is that they are delivered on time and work as they are supposed to when they get there."
Another belief he shared with his audience: "People are your best asset in everything you do, no matter what the business is." In his career he has consistently "put people first." And by so doing he has inspired incredible loyalty among his workers. With a loan from the state of Tennessee, he built a factory, in a rural area of the state, which originally employed fourteen people. This factory has now grown to be the largest employer in the county. On a visit to the plant, he was asked to preside over an "employee of the month" ceremony. When he learned that the winner couldn't read, Jacobs was astounded. He thought, "To excel at your job without being able to read, a person must really be smart." Then he had a brainstorm why not bring a literacy program into the factory? The resulting literacy and GED programs improved the lives of his workers, and also improved the quality of the work at his factory. Using the same philosophy, "when you help others improve, you help yourself," he found an in-house solution to a serious problem. Because the plant was located in a remote spot, it was difficult to attract top management. So, he educated his current employees, provided job training, and elevated the best to management positions. This factory is now managed from within by happy and loyal managers.
|He has built similar loyalty in a grey-iron foundry in Juarez, Mexico, where 80 percent of employees have been with his company for fifteen or more years. The current managers in this factory are the sons of the original workers, many of whom were sent to college by the company. Large as it is, Falcon seems to consider its employees as an extended family. He told one delightful story to illustrate the many areas "business" must accommodate. In his Juarez factory, many of the older employees lived together as families but without being married. Because unmarried employees lost out on many social services offered by the government, one of his managers urged that something be done about this situation. So, Jacobs went to Juarez and the company staged a wedding fiesta for thirty-six couples, attended by a huge crowd of friends and family, including children and grandchildren of the wedding couples. All the brides wore the same style dress, which Falcon provided, and Jacobs gave away each bride. As you might expect, Jacobs has many, many godchildren.|
Cindy Cozad Norris, Kristie and Greg Cozad, and Frank Jacobs
In conclusion he advised that to succeed as an entrepreneur you must be willing to hire people who are better than yourself. You must know what every person does, even if you can't do the job yourself. And you must be willing to do things you don't like. On the plus side, "entrepreneurship is very satisfying." But, the life is very difficult and at the beginning can be lonely. Today, with a profusion of information available through the Internet, opportunities abound. "Your task is to identify a product the world wants and then make it more attractive to your customers than your competitors do."
On the subject of education his advice to would-be entrepreneurs is "to get a good, broad-based education and to read widely, especially literature." While at Illinois (B.S. Economics 1954), Jacobs claims he was sometimes an "indifferent" student. Today he recognizes that the "University of Illinois was an important part of my life. On reflection, through the years, it has come to mean even more."
In 1973 Jacobs took his company public. It was named one of the top 200 small companies in America by Forbes Magazine and Business Week in 1992, 1994, and 1995. Jacobs was appointed to the Advisory Commission for trade negotiations by President Carter in 1982_84 and was named Entrepreneur of the Year by Inc. Magazine, Ernst & Young, and Merrill Lynch in 1992. Falcon Products, Inc., with 75 percent of the world market for tables in the food service industry, has had ten consecutive years of 23 percent growth. Falcon's net worth is $85 million and he expects the company to grow to over $1 billion with its current employees.