Banking on KC – Dr. Jeff Hornsby of the Regnier Institute
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Kelly Scanlon:
Welcome to Banking on KC. I'm your host Kelly Scanlon, thank you for joining us. With us on this episode is Dr. Jeffrey Hornsby, the director of the Regnier Institute for Entrepreneurship and Innovation at UMKC, and chair of the Department of Entrepreneurship and Management at the UMKC Bloch School. Dr. Hornsby has authored seven books on entrepreneurship, innovation and human resources, authored or coauthored 81 journal articles on those topics, and is the co-editor of The Journal of Small Business Management.
Kelly Scanlon:
Welcome, Dr. Hornsby.
Dr. Jeff Hornsby:
Thank you, good to be here.
Kelly Scanlon:
The Regnier Institute for Entrepreneurship and Innovation is housed within the Henry W. Bloch School of Management there at UMKC. Why was the institute itself established?
Dr. Jeff Hornsby:
Well, the institute, it was established over 11 years ago to really spur entrepreneurial growth and the entrepreneurial mindset across the UMKC campus and into the community. There was a lot of entrepreneur activities going on. We have a sister organization, the UMKC Innovation Center, headed up by Maria Myers, who a lot of people know. She was basically working in the community, doing a lot of different types of programs. And we were, in the Bloch School, starting to launch entrepreneurship classes and there was a big wave of that growth across the United States at universities.
Dr. Jeff Hornsby:
I came eight years ago, so the initial development of the Regnier Institute, which used to be called the Institute for Entrepreneurship, happened before my time. Maria Meyers was actually one of the instigators of the institute, along with Patti Green who went from UMKC onto Babson, to teach and be an administrator in the entrepreneurship realm.
Kelly Scanlon:
I know both of those women very well, and really have done a lot to promote entrepreneurship here in Kansas City and across the country.
Kelly Scanlon:
One of the things that you said that I found very interesting just now is that, to spread entrepreneurship, entrepreneurism across UMKC. And it's interdisciplinary, if I'm picking up on that correctly, that you weave entrepreneurship into some of your other courses as well. Is that correct?
Dr. Jeff Hornsby:
We do. We have a full undergraduate compliment of entrepreneurship courses. We call them emphases not majors. But you can get an emphasis in entrepreneurship, an interest area in entrepreneurship, a minor in entrepreneurship. And we have, in our MBA program, a four-course concentration and technology management and entrepreneurship. Those are the formal curriculum that we offer and we got a lot of students outside the Bloch School taking those classes. One of the reasons, seven years ago, we initiated our entrepreneurship classes online was to help the engineering students get access to our courses, and they became very popular with the engineering students.
Dr. Jeff Hornsby:
The other thing we do is our co-curricular activities. We call them First Wednesdays, it's our monthly speaker series where we bring in entrepreneurs from the greater Kansas City area to tell their story, sometimes national entrepreneurs.
Dr. Jeff Hornsby:
But, we planted several seeds several years ago when we started what we call our Cross Campus Advisory Board. We have two boards in the Regnier Institute. An advisory board of very successful business and entrepreneurship individuals, chaired by Anne St. Peter and Mary Bloch. But, we also have a cross-campus faculty board that has been instrumental in allowing us to grow our cross-campus. Some of the things we just recently achieved, there's a new undergraduate certificate in arts entrepreneurship, partnered with the Conservatory of Music. We're really proud of that, that rolls out this year. We also offer a minor in entrepreneurship at the Kansas City Art Institute, in a partnership with the Bloch School and the Art Institute.
Kelly Scanlon:
It does sound as if you are cross-pollinating entrepreneurial thinking. Not just entrepreneurship, but entrepreneurial thinking so that, even if you don't go on to become an entrepreneur whose launching businesses, you still bring that kind of mindset to whatever you're doing. Why is that so important?
Dr. Jeff Hornsby:
Business students are really good at implementation, they're really good at the financial calculations, the planning and launching. But, from coming up with the technology or the product development and those types of things, business students aren't trained to do that. It's really important that we plant entrepreneurship across the campus, whether it's engineering, the arts, the medical school, pharmacy, where there's a lot of activity going on.
Dr. Jeff Hornsby:
One of the things we're fortunate to do this year, we just received a grant from the Kaufman Foundation, and a major part of that grant was what we call the Innovation Grant Program, where we're able to take proposals from faculty and professional staff from across campus, to work on entrepreneurial ideas. It could be product development, it could be a new program within their school or department, it could be a new course. And, we just launched our first round of that and got 31 proposals that are being reviewed as we speak.
Kelly Scanlon:
That's incredible.
Dr. Jeff Hornsby:
We got funding to do that for two years. So we're real thrilled about that, because we really do want to cross-pollinate.
Dr. Jeff Hornsby:
To your mindset question, that term is used in many different ways. But the idea is, how do you think entrepreneurially, in terms of opportunity recognition, and then implementation. In academic terms, we call that exploration and exploitation. So how do you explore and discover new things, and then how do you exploit it, and I mean that in a positive way, in terms of turning it into a venture. That mentality of looking and seeking for opportunity, seeking not only for ways to do major things and start new things, but also improve the things we're currently doing, and to exploit that, that's the mindset.
Dr. Jeff Hornsby:
A lot of my research and writing is in the area of corporate entrepreneurship and innovation, and that's the MBA course I teach. We need more people with that mindset in our corporations, both public and private, in public organizations and government. We need people looking for ways to do things differently, looking for new pathways. The history of the last 30, 40 years, companies that don't adapt die.
Kelly Scanlon:
Right.
Dr. Jeff Hornsby:
Those companies that really are good at adapting, and coming up with new products, and new pathways are the ones that are still around today.
Kelly Scanlon:
Yes, and things are moving so much faster. Every year, it seems like they move faster so that ability to adapt requires a faster response as well.
Kelly Scanlon:
With all of these programs and the various approaches that you are using, do they serve as models for entrepreneurial education in other parts of the country?
Dr. Jeff Hornsby:
We were really pleased, a few years ago. Our undergraduate program was named the model program for entrepreneurship by the United States Association of Small Business and Entrepreneurship. We also get asked to give talks and work with universities across the country in helping them with their entrepreneurship programs, and we're always glad to do that. Our E-Scholar program and the mentorship piece, that's what everybody is really hot on when they hear about our mentor program, they want us to help them.
Dr. Jeff Hornsby:
Developing and maintaining a mentor base as large as ours to serve in so many capacities, because they not only mentor and coach our ventures in our programs, they serve as guest speakers, they serve as entrepreneurs in residence so they keep office hours and any student or anybody can drop in and see them, they judge our competitions, they give a lot of their time. But, to be able to keep them and keep them involved is a good network for our ventures is probably the key thing that we do, and the thing that people key in the most when they look at our programs.
Kelly Scanlon:
I read recently that, in the year since COVID had first emerged, there's been roughly a half million new businesses formed, so there's good news there. We keep reading about all the negative impacts on businesses. But still, that's below the annual average for business formation, that half million even.
Kelly Scanlon:
How as COVID impacted entrepreneurship? Do you see it rebounding?
Dr. Jeff Hornsby:
I think there's a lot of different avenues you can go with that question. Obviously, COVID's been a major disruption, and that causes what we call necessity entrepreneurs. Where, "Okay, I've lost my job, and I'm getting unemployment. I've always had this idea, I'm going to go do it."
Kelly Scanlon:
Yeah. That happens in every downturn and major depression like this, yeah.
Dr. Jeff Hornsby:
It does. Out of disruption usually comes innovation, I think that's where you're seeing some of that growth. In the hospitality and restaurant sector, not so much. That's a struggle. All you have to do is look around Brookside, Waldo, go down Main Street, even downtown, there's a lot of empty restaurant fronts, storefronts out there. And a lot of those restaurants, their leases came up to be renewed and you've got to sign for a five-year lease, other businesses are the same way. And in the middle of COVID when it wasn't looking so good, they had to make some tough decisions there. Then others, just you can financially hold on for a year.
Dr. Jeff Hornsby:
Most small businesses are cash flow businesses. Most small businesses, they bring in funds, they pay their employees and then there's a little leftover for the owners to live on and they're keeping it pretty close to the vest. It doesn't take much, in terms of the disruption in business operations, to take them down a path that can lead to closure.
Kelly Scanlon:
Yeah. It's the business version of living paycheck-to-paycheck for so many small businesses. Yeah.
Dr. Jeff Hornsby:
Exactly. The issue is, is how many of those can come back. It'll be interesting to see, because commercial real estate is starting to struggle, especially in office space and retail space. Some of that was happening before COVID, and just accelerated because of COVID. There will be a lot of real estate out there, available. It can be an opportunity for a startup that needs office space or retail space, to get it at a really good price and at a better arrangement, a better deal, in terms of time terms and rent, than they would have gotten, say, a year ago when things were bustling in Kansas City. There will be a lot of real estate available, and it'll be interesting to see what happens, new and innovative ways for people to exploit that opportunity of having real estate at a more reasonable price.
Kelly Scanlon:
You're a current board member of the Global Consortium of Entrepreneurship Centers, and the US Association of Small Business and Entrepreneurship, which you mentioned or referenced a little bit earlier. From your perspective, how do startup trends in the US compare globally? Both historically, and currently with the impact of COVID.
Dr. Jeff Hornsby:
I can speak more expertly from the university side and what students are want to do, and there is a heightened interest in entrepreneurship by college students at all levels, and students wanting to take a chance and do their own thing, and grow their own business.
Dr. Jeff Hornsby:
Probably 20 to 25 percent of the students that want to start a business really should be starting that business. We teach, and we want them to practice, and we want them to learn, but they just don't have the right idea or the right team. A good group of our students do, and they really work at it through their educational experience over the four years or so, and they launch and they do very well. What we want to do is build the competencies of our students so that when they have the right idea and the right team of people, they are ready to launch. We see that, by tracking our students. For university students, and even in the high school, you can just look at Blue Valley CAPs and Northland CAPs, you see a lot of interest in entrepreneurial activity.
Dr. Jeff Hornsby:
You also see a lot of interest in corporate entrepreneurship as well, we hit on that a little bit before. But, we need our employees to learn how to think entrepreneurially, how to identify an opportunity, put that into a plan, convince senior management and the C-suite to invest in it, and to deliver that. Whether it spins off into a new business, or becomes a new product line or whatever the innovation is, we need that drastically. You're seeing a lot of interest in innovation and entrepreneurship, at all different levels.
Dr. Jeff Hornsby:
In terms of the startup community, as you said, there's been a lot of startups coming out of the disruption, but it's lower than it has been. Part of that is COVID freezes people. If you were thinking about leaving your job and starting a venture, probably did not do it yet because you had the opportunity to keep earning an income. People aren't changing jobs as readily because of COVID. Until things break loose a little bit more, then you'll see the job markets opening up, you'll see people leaving their jobs, starting ventures.
Dr. Jeff Hornsby:
The other issue that we see in early-stage entrepreneurship, from ideation to launch, we need to find more funding, especially in underserved populations, for that entrepreneurial activity. For proof-of-concept, product design and development, and those types of activities, that's a big need. Some of that's been addressed with some programs, but Kansas City as whole needs to continue to work on that, and most major cities need to do that more and more, to really spur on entrepreneurship in the community.
Kelly Scanlon:
I know here in Kansas City, there is a large focus on it, and that KC Source Link does an annual report on the state of funding for entrepreneurship in Kansas City.
Kelly Scanlon:
You know, another interesting trend that has been evolving is that changing student profile. That traditional student whose fresh out of high school puts in four years of study and then graduates around the ages 20, 21. And then, they go off and start a career. We're not seeing so much of that anymore. It still exists, obviously, but we're starting to see that evolve. Talk to us about what you're witnessing now, in terms of that student profile. And, what are the drivers? And then, what also are the implications of that trend?
Dr. Jeff Hornsby:
I think, one, students are getting more specific in what they want to do. It'll be interesting to see what comes out of this COVID disruption in terms of how many students jump right into a four-year university. There are other trends, too, because of the expense of going to university, there's people taking a year off to work, or going to junior college. The traditional, once you go to university, graduating and getting a job ... I'm very pleased, the Bloch School's increased their placement rates dramatically since I've been here, which is always a good thing that employers in the greater Kansas City community want to hire our students. Students are looking for more socially-oriented activities to get involved in, we call it social entrepreneurship, entrepreneurship for the greater good.
Kelly Scanlon:
Right, conscious capitalism.
Dr. Jeff Hornsby:
We have an organization that is run by Ben Williams and Aaron Blocker out of the institute called Enactus. Enactus is an international organization that focuses in on social entrepreneurship. Our Enactus team came in second in the country last year. They work on social programming that has an entrepreneurial bend to it. And, every Enactus chapter has to come up with three, four projects a year, where they do social ventures.
Dr. Jeff Hornsby:
When we look at our social entrepreneurship classes, when we look at the amount in our business plan and pitch competitions, the amount of social ventures that we're getting is increasing every year. We're real pleased by that, only good comes from that. You can have a great social venture that also makes money.
Kelly Scanlon:
How can Kansas City businesses work collaboratively with the Regnier Institute to create a better business environment, a stronger workforce and ultimately, a more vibrant Kansas City?
Dr. Jeff Hornsby:
That's another thing I've witnessed in my eight years at UMKC and the Bloch School, is the amount of partnership that have been able to be built since I got here. Not only to develop our new MBA program that rolled out a few years ago, but with the Regnier Institute. Our faculty are funded to teach courses, so we get money from tuition and there's state support there. We have to raise all our money, the soft money, to run our entrepreneurship programming that is non-tuition driven, so that clearest path to help us is through supporting our programming.
Dr. Jeff Hornsby:
We're going to roll out, with our First Wednesday, we're going to start looking for sponsors of those speaking events that happen the first Wednesday of every month. We want to start a high school program, we're going to start looking for funders for that. Obviously, that serves the university in many ways. One, we get students turned on to entrepreneurship earlier, we get students interested in UMKC earlier. The idea is that if they start, in a sense, practicing and doing entrepreneurship in high school, when we get them to college, a lot of them are really sharp. We've seen that with some of the CAP students we've had. That kind of support could be really helpful.
Dr. Jeff Hornsby:
But, the other type is the more not just treasure, it's time and talent as well, that we can use. Our mentor base, we lose probably 20 mentors a year for one reason or another, and we're constantly rebuilding that. We're trying to build a mentor base that's more representative of the students and the people we serve, so we would love to have more female mentors, more people of color mentoring, and that have a skillset or an experience set that we could utilize to help our students. That time would be invaluable to the Regnier Institute, and the talent they would bring with that.
Dr. Jeff Hornsby:
Another thing we're doing in the Bloch School is a year from this summer, in 2022, we'll be finishing the renovation of the Bloch Heritage Hall, the older building right next to Bloch Executive Hall, which was built about six years ago, seven years ago. And, we're going to celebrate Henry Bloch's 100th birthday.
Kelly Scanlon:
Oh, that'll be fantastic.
Dr. Jeff Hornsby:
We want to celebrate Henry Bloch's version of entrepreneurship, and his view on entrepreneurship at that time as well.
Kelly Scanlon:
There are so many good things going on there, and so many ways to get involved, as you just described. For someone who would like to reach out to you or to the Regnier Institute because they're interested in some of the things that you've said today, what's the best way to do that?
Dr. Jeff Hornsby:
Well, they can reach out to me and they can reach out to Laura Moore, is our program manager. She's the Elmer's Glue of the unit. You can go onto the Regnier Institute website, at UMKC. From there, you can reach any of us, our names and emails are all there. We'd love to hear from you. If people have ideas, thoughts, or any way they can support us, we would love to hear from them. If they're thinking about starting a venture, we're always glad to route you to the right pathway for what you're trying to do.
Kelly Scanlon:
Umkc.edu, go out there and you'll be able to search and find Dr. Hornsby's name and get in touch from there. You are doing such great things, building a future, building the next generation of business leaders. Thank you so much for all that you do, Dr. Hornsby, and we appreciate your time today.
Dr. Jeff Hornsby:
Thank you, glad to be with you.
Joe Close:
This is Joe Close, president of Country Club Bank. Thank you to Dr. Jeff Hornsby for being our guest on this episode of Banking on KC.
Joe Close:
A decade ago, in 2011, Kansas City set a goal to become America's most entrepreneurial city. Truth be told, entrepreneurship is ingrained in Kansas City, dating back 200 years to 1821, when Francois Chouteau established a trading post here. That entrepreneurial spirit has persisted throughout our history and is what will carry us into the future. As Jeff pointed out, you don't have to launch a venture to possess an entrepreneurial mindset. To think entrepreneurially means to seek out and recognize opportunities, and then act upon them, whether it's launching a new company, moving an existing company forward, or improving conditions within a community.
Joe Close:
Country Club Bank was founded with an entrepreneurial mindset and spirit. We understand the excitement that follows the birth of new ideas, and we understand and have experienced hard work and happy fatigue that's part of bringing those ideas to life. In short, we understand entrepreneurs and we welcome the opportunity to discuss your entrepreneurial vision with you. Thanks for tuning in this week, we're banking on you Kansas City. Country Club Bank, member FDIC.