Underdog Entrepreneurs

A Framework of Success for Marginalized and Minority Innovators

Horatio M. Morgan

• Publisher: Palgrave Macmillan
• Year: 2019
• Print ISBN: 9783030204075
• eBook ISBN: 9783030204082
• Topic: Business
• Subtopic: Entrepreneurship
• Index: Business

Entrepreneurship is challenging, whatever your background, in the current science- and technology-driven Western world. However, unlike traditionally dominant, native-born, white male entrepreneurs in Silicon Valley and elsewhere, those who face greater hurdles blocking their path to success primarily come from marginalized and minority groups, both real and self-perceived—including immigrants, refugees, women, blacks, Hispanics, and Asians. Despite their potential to innovate and add value in the global marketplace, they persistently struggle, or fail, because they lack the requisite code-breaking skills. This book helps these underdog entrepreneurs acquire those skills with actionable advice to achieve and sustain success.

It proposes a framework that pinpoints what the author calls the outsider problem—that is, situations in which individuals are primarily disadvantaged because they lack access to networks that facilitate superior learning and performance outcomes. He completes the framework by incorporating personal qualities and strategies that can solve this problem.

Along the way, Morgan distills insights and evidence from multiple fields, combined with a fresh look at the familiar stories of initially marginalized business leaders, such as Indra Nooyi, Jack Ma, Hilary Devey and Mike Lazaridis. He also shares the less known, but equally inspiring stories of others.

This book will help readers thrive while transcending their underdog status.

© The Author(s) 2020

H. M. MorganUnderdog Entrepreneurshttps://doi.org/10.1007/978-3-030-20408-2_1

Begin Abstract

1. Introduction: Underdog Entrepreneurs Are Everywhere

Horatio M. Morgan¹

(1)

Ryerson University, Toronto, ON, Canada

Horatio M. Morgan

Email: [email protected]

End Abstract

Another frantic day at PepsiCo’s corporate headquarters had ended. With the parking lots almost vacant, its Purchase, New York grounds and gardens appeared to cover a much wider area than the estimated 150 acres of land. It was after 9 p.m., but light and movements could be seen from an office: Indra Nooyi’s.¹

She was seated in a black leather chair at a rectangular desk with a wood-like finish. As she reached for a yellow jacketed binder, bulging with papers, other binders vied for her attention. About an arm’s length to her left, an Aquafina brand of bottled water also sat on her desk and patiently waited. Behind her, framed pictures of her two daughters, Preetha and Tara, and her husband, Raj, sat on another matching desk against a wall.

On this particular night, Indra was reviewing files on Quaker Oats, PepsiCo’s recent acquisition at a whopping price of roughly $13 billion. Combining the operations of both companies was a challenge, and she wanted to get it right.

The ring of the phone gave her a well-deserved break.

When Indra answered, she immediately recognized the voice of Steven Reinemund, PepsiCo’s CEO at the time.

“Indra, we’re gonna announce you as the new CEO and put you on the board of directors of PepsiCo,” said Steven.²

Although the year was 2006, news of Indra’s promotion was a remarkable development in corporate America: she had become one of only 11 female CEOs who headed Fortune 500 companies—America’s 500 largest private and public companies based on reported revenues.³ Her appointment as PepsiCo’s CEO was particularly extraordinary because there was only one non-white Fortune 500 female CEO before her—Avon Products’ Andrea Jung, a Chinese-American.

Like the rest of corporate America, Indra needed time to come to terms with her phenomenal accomplishment. Although she had good reasons to be optimistic about landing the top-manager job before Steven confirmed it, nothing was guaranteed. Several years earlier, he had made it clear that PepsiCo’s entry into fast-growing urban and ethnic communities across the United States was a priority.⁴ He pursued this goal by promoting a diversified senior management team that these communities could identify with. Such a management team began to take shape as Steven intensified PepsiCo’s commitment to hire, promote and retain more senior executives from marginalized groups.

Indra could have interpreted these developments to mean that she and her minority peers had a better chance of getting to the CEO level. At the same time, she might have felt that it was still difficult to get there. After all, she had previously suggested that she faced more barriers than her peers: “If you are a woman and especially a person of colour, there are two strikes against you … Immigrant, person of colour and woman—that is three strikes against you. So I have to work extra hard. More hours, yes. More sacrifices and trade-offs, yes. That has been my journey.”⁵

But when Steven broke the news about her promotion that night, she had other things to think about.

I imagine she reflected on her humble beginnings in Chennai, India. Perhaps she remembered the many times she saw her mother, Shantha, praying for the family up to five hours a day; or the majestic Tirupati temple.

Since her father was away on business most of the time, Shantha had picked up the slack. And she did so zealously. Like others of South Indian, Tamil-speaking, Brahmin heritage, Shantha demanded academic excellence from her children; something Indra, her sister, Chandrika, and brother, Narayan, had all come to see as a normal way of life. It didn’t bother Indra that she was expected to get 100 percent in Math. And she especially liked the challenge of debating Chandrika in imaginary presidential races at dinner time. A single vote by Shantha would decide the winner.

Perhaps she recalled that her mother had wanted her to get married by 18. But any stress induced by this memory would have been short-lived because her father and grandfather had protested. That was all the cover she needed to freely pursue her dreams.

These dreams would take her all the way to the United States in 1978. At 23 years old, Indra was ready to chart her course as a new immigrant with $500 in her pocket and a scholarship from Yale University. She worked part time and boldly took on graduate studies in management at Yale School of Management.

Two years later, she was ready to take on corporate America, a journey that eventually led her to PepsiCo in 1994.

She had already worked there for 12 years when Steven called that night. But after she hung up the phone, she knew her time had come to lead an iconic American company.

There were still untouched binders to keep her at the office past midnight. But she left shortly after the call, feeling much better than when she first arrived there.

Much of what we know about Indra tells us that she is a minority-female-immigrant senior executive who is worthy of admiration.

By her own admission, she had faced multiple barriers as a woman, a person of color and an immigrant. Throughout her career, she tried to cope by adhering to a strong work ethic, fueled by an “immigrant mentality.”⁶

In other words, she was pressed to work harder and deliver better results than others because she always felt insecure about her job as an immigrant: “the job can be taken away at any time, so make sure you earn it every day … when immigrants come here, they have no safety net—zero. I landed here with $500 in my pocket. I had no one here to pay for me,” she once said.⁷

It is clear that marginalized and minority senior executives can identify with, and learn from, Indra. However, it is much less clear what she adds to a discourse on the common obstacles faced by marginalized and minority entrepreneurs , and how to solve them. To begin to see why, we need to first establish a common understanding of entrepreneurship.

It might come as a surprise to some people, but there is no general agreement on what counts as entrepreneurship, or who should be considered entrepreneurs. However, the late Austrian economist Joseph Schumpeter provided a good starting point when he portrayed entrepreneurs as innovators.⁸ In this role, they are expected to do well at two basic things: recombining existing knowledge or ideas in ways that lead to novel ideas; and then converting such ideas in new or improved products, services, technologies or processes that create value for their companies.

When they perform these tasks very well, they may produce radical innovations that disrupt entire industries. This disruption is often manifested in the re-ordering of established ways of doing business, patterns of resource flows and consumer demand, and the mix of winners and losers.⁹ For example, when Uber introduced its new digital, ride-sharing business model, it rapidly transformed the transport industry by virtually displacing traditional taxi operators, and enabling passengers to switch places with transport service providers when they want to do so.¹⁰

If we accept the view that innovation is the essence of entrepreneurship, then those who excel at it are entrepreneurs, independent of whether they create a new venture, or lead an established company. This means that CEOs at Fortune 500 companies who drive innovation can be viewed as entrepreneurs, or more precisely as intrapreneurs—since they enact innovative ideas that create value for large corporations rather than new ventures.

This brings us back to Indra. She would easily qualify as an intrapreneur during her tenure at PepsiCo. Faced with declining demand for soda with high sugar content, she could have fallen for a quiet life by merely trying to slow down the decline—possibly by ramping up the advertising budget for the existing portfolio of sugar-laden beverages.¹¹ This move might have been sufficient to deliver satisfactory results, appease skeptical investors and secure rock-solid support from PepsiCo’s board of directors. But Indra went for a more demanding and riskier move by acting on her entrepreneurial orientation.

She had anticipated and sought to meet consumers’ demand for healthier food and drink choices by promoting paradigm-shifting innovations in these areas.¹² At the time, impressive results weren’t expected to materialize soon. This made her a target for disgruntled activist investors and other members of the top management team who had disagreed with her strategy.¹³ She would also put the patience of PepsiCo’s supportive board to the test.

The decision to boldly explore new possibilities, rather than go with proven products, could have ended badly for Indra. She had moved from middle management into top management faster than her peers.¹⁴ But she was now at risk of joining a growing list of female CEOs who were forced to prematurely leave their companies.¹⁵ Fortunately, the risk paid off for everyone. PepsiCo’s growing portfolio of healthy offerings has substantially strengthened its competitive position in the food and beverage industry on a global scale.¹⁶ When Indra stepped down as PepsiCo’s CEO in 2018, she may have lasted longer at the top of a global company than most of her peers ever will.¹⁷

Going beyond her demonstrated entrepreneurial orientation, Indra deserves special attention because her appeal to the immigrant mentality as a motivating force isn’t an isolated experience. On the contrary, it is at work in many foreign-born entrepreneurs in advanced Western countries.

Consider Tahani Aburaneh, a leading expert on real estate investing and entrepreneur in Canada.¹⁸ When her Palestinian parents sent her off to Canada in 1981, she was a 15-year-...

Table of contents

• Cover
• Front Matter
• 1. Introduction: Underdog Entrepreneurs Are Everywhere
• Part I. The Outsider Problem
• Part II. Code-Breaking Skills
• Part III. Putting It All Together and Drawing Lessons
• Back Matter