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Leadership Can Be Learned

Thomas M. Nies, CEO, Cincom Systems, Inc.

A University of Cincinnati undergraduate and MBA alum, Tom Nies hosted the inaugural UC Spirit of Enterprise MBA Business Plan Competition and awards reception in February 2005 at Cincom’s World Headquarters in Springdale, Ohio. In addition, Cincom furnished the $10,000 first place "Cincom Spirit of Enterprise Champion Award."

The longest-serving CEO in the computer industry, Nies left IBM in 1968 to found Cincom Systems, Inc., based on the radical idea of selling software as a product rather than bundling it "for free" with the hardware. Starting with $600 in his basement, the company has generated more than $3 billion in revenues, $5 million for every dollar of capital invested.

During the competition, Cincom Public Relations Manager Steve Kayser conducted a tour of Cincom World Headquarters for the group of professors who were serving as judges. As they walked into Nies's office, their eyes grew wide.

"They couldn’t believe he had more books than they do," said Kayser.

A Passion for Advocacy

If they knew Nies, they wouldn’t have been surprised. Nies is a man with big ideas—particularly about business—and a passion for advocacy. He believes, for example, that the future of America depends on small to intermediate-sized businesses. Ninety-five percent of those businesses that survive beyond the "mom and pop" stage can't grow, he says, because taxes consume way too much of the earned capital necessary to grow. At a recent luncheon held at the Washington Center in Washington, D.C., Nies made a plea for changes in these tax policies in what he refers to as the "Everybody Wins" corporate tax plan.

"The government has to do all it can without hurting big business or individual taxpayers to stimulate growth of small and intermediate business," says Nies. "We know this model works. Just look at Ireland. Twenty-five years ago, it was one of the poorest countries in Europe. Today, through smarter corporate tax policies, Ireland’s per capita income is great than that of the UK."

Nies shares his ideas on a large stage today, but his commitment to doing for others what others have done for him—and encouraging his employees to do likewise—has been part of Cincom culture since the early years when employees raised funds for needy families.

"It would have been cheaper to write a check at times," admits Nies, who has one of the lowest employee turnover rates in the industry, "but the idea was to encourage participation by every one of our staff members. We have to do the right things to gain the support of right-thinking people. Doing the right things extends beyond looking out for your own selfish interests. I believe a large number of people buy into that."

Encouraging Entrepreneurs

For Nies, giving to entrepreneurship followed naturally from this mindset.

"Once you begin to say, 'How can I help the community,'" says Nies, "you begin to want to help emerging businesses – people trying their best who can use good advice, ideas and support."

In the 1970s, Cincom worked with colleges and universities, providing software and encouraging students to join the upstart $100 million computer information systems business, then poised to grow to $1.5 billion by 1980.

"Miami University of Ohio had quite a few students that came to work for Cincom in later years," says Nies, "but that wasn’t the objective. Our goal was to help universities help their students to better participate in the then high-growth-high-tech IT industry."

Over the years, Cincom has continued to give employee time, expertise and company resources to entrepreneurship programs at colleges and universities, most recently launching CEE –"Cincom: Encouraging Entrepreneurs." Locally through CEE, Cincom is providing $1 million in software, services, mentorships and resources to area colleges and universities in support of their entrepreneurship programs. Internationally, the company is working with an emerging nonprofit foundation to start entrepreneurial pilot programs in Indonesia and India.

Last year, Cincom donated $750,000 in software to the Ohio University College of Business that will help undergraduate students apply business theory to real-life situations, as well as $150,000 to Northern Kentucky University

Nies is eager to expand Cincom’s support of colleges and universities interested in developing entrepreneurship programs. "We will teach, train, provide support, personal service, facilities, computer testing arrangements, anything and everything we can to help these programs get off the ground," he says.

The benefits of such support range from financial to inspirational.

"As the lead person in our business plan competition, Tom helped pave the way for other sponsors to come on board," says Charles Matthews, dean of the University of Cincinnati School of Business.

"But his inspiration was the best part of it all. He invited all the students to his headquarters and met every team. The more entrepreneur success stories you can expose students to the better. In many cases, however, it's a 'wow and now' speaker – someone who just sold their business for $350 million. Not that that's bad; it's perfectly good. But Tom is not a 'wow and now' speaker. His exit strategy was success, not selling the business."

Only in a Healthy America

Nies is particularly supportive of programs that address what he sees as the poorly understood linkage between entrepreneurship and leadership.

"Great leaders are not always entrepreneurs, but great entrepreneurs are always leaders. Fortunately," he adds, "leadership is learnable."

Cincom welcomes opportunities to share its leadership in initiatives that benefit community organizations, such as Children’s Hospital in Cincinnati. Cincom’s $1 million gift to the hospital of software to support genomics research enabled the hospital to leverage a $48 million federal grant.

"In the process," says Nies, "we are not only helping create jobs in the State of Ohio. We are also furthering research that may lead to a cure for cancer and other devastating diseases."

In 1984, President Ronald Reagan cited Nies as "the epitome of the entrepreneurial spirit of American business."

"When his speechwriters heard our story," recalls Nies, "they said, 'Only in America could this happen.' I replied, 'No, only in a healthy America could this happen. We have a lot of other problems, but without wealth and economic strength, everything else falls apart.'"

Nies devotes more than a quarter of his time to building that strength.

"The country I grew up in was built by people who came before me and made sacrifices on my behalf," he says. "Why wait until you’re retired to pitch in?"

© 2006 Ewing Marion Kauffman Foundation. All rights reserved.

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