 |
Issue date:
February 11, 2001eLrd
of Magic Johnson Development
In 1994, Kenneth Lombard, 46, became president of Magic Johnson Development, a black-owned company catering to disadvantaged neighborhoods. Today, MJD is a business empire with $500 million in property. Lombard has secured joint ventures with Starbucks and T.G.I. Fridays and helped build a hugely successful chain of multiplexes. Recently, he spoke with Denita Willoughby, 34, director of business enterprises at Pacific Bell, about the bifurcated position black businesspeople find themselves in today.
Before we begin, I'd just like to get some background information. Ken, can you give me some numbers on how many T.G.I. Fridays and Starbucks and Magic Johnson Theatres?
Ken Lombard: We are in 22 different cities. We have five theaters, in L.A., Atlanta, Houston Cleveland and Harlem. The Starbucks are spread all over, and we have 21 of those. And two T.G.I. Fridays, one in Atlanta and one in LA.
How do the two of you know each other?
D.W.: I've lived in Los Angeles since '89 and I think that's when I met Ken. I would just say we've crossed paths in the community and in business, just being both very active in the community and in business.
Have you worked on anything together?
D.W.: Yes, we are both on the board of an organization called The New Leaders, a non-profit organization targeted at developing the next generation of black leaders. It's kind of a community outreach program, where we are looking to build economic outreach programs in the city. One of the things we are trying to do is build a technology center in Los Angeles where we can teach young blacks to build Web cites and become Cisco-certified engineers and go after some of the high-tech economy. Anything you want to add to that Mr. Lombard?
K.L.: We are both interested in the same causes.
D.W.:
What type of causes?
K.L.: The overall health of the community. We participate in the annual Magic Johnson fund-raiser and a lot of that money goes to AIDS research.
So why don't you open up the discussion by talking about the challenges and rewards of working in corporate America?
D.W.: When I think about the differences in pursuing a job in corporate America vs. a career as an entrepreneur, many of the things are the same. Despite what color you are, you face certain challenges as far as do you possess the talent and do you have the opportunity to be successful? And so, when you strictly look at African Americans, you have to stay focused on things you can control. Because in corporate America at least, if you go out looking for racism you are always going to find it. So my guiding principle is to stay focused on those things you can control and remain clear in your mission. If you compare that to life as an entrepreneur, those same guiding principles exist.
I would say that one difference is that there are few opportunities for failure if you pursue the entrepreneurial route. Definitely higher risk. Do you agree with that Ken?
K.L.: Umm, yeah. I
started my career in corporate America, with IBM. A lot of
people feel like they don't want to work for anybody and that
corporate America is bad. But [that training] is absolutely
imperative. So people like Denita, and some of the successful
minority people who have gained positions, we can't get enough
representation in the corporate ranks because some times the
paths cross. So a company like [Magic Johnson Development],
you look at our various partnerships, our partnership with
Starbucks, for instance, and some of the larger corporations
in the country. Without having a clear understanding of how
companies like that work, without being able to speak the
same language and have the same work ethic and understand
what it truly takes to be successful within that particular
corporate culture. ... Starbucks corporate culture, for instance,
is much different than Loews Cineplex and T.G.I. Fidays. So
there are a lot of benefits one can derive from coming out
of corporate America. That's not to say if the opportunity
is right [for you to start your own business] that you don't
jump. But make sure you've developed the skills to allow yourself
to succeed.
D.W.:
The main difference between pursuing a corporate route and
an entrepreneurial route is financing. T be a successful entrepreneur,
you also need that financing component. And unfortunately,
most African Americans don't come from wealthy families. We
don't have a directory of black venture capital companies
willing to provide seed capital. So that financing piece sometimes
really keeps us from becoming successful in an entrepreneurial
environment. And compounded with that we don't typically have
strong political advocates, I'd say. Typically, I think we
focus too much on the social issues versus some of the economic
issues.
K.L.:
To kind of continue on the point, in a lot of ways this ties
back to my approach and I'm sure many others: You find the
opportunity, and then you try to recognize if it fits the
skills that you have. So when it comes time to look for the
financing hopefully you have developed the expertise, or you
have those skills somewhat around you, whether it's in a partner
or an employee who really knows where those buckets of cash
are that you are going to need.
But, I really think that if you look at the progress we have made as African Americans, and what progress we need to make as we look forward to the next 10 years, we have got to become a lot better in our financial acumen. We've got to be in a position that when we find that opportunity we are no longer going to handicap ourselves by not finding an adequate amount of capital.
The buzzword for years has been venture capital. But for most entrepreneurs, venture capital is essentially the last option, when conventional financing, when investor financing, has not been available. You need to study the [financing] options and look for someone with expertise. There is enough talent and enough skills out there. Nowadays, people like to think it's an original idea. But there's nothing wrong with taking an old idea and just doing it better. There's no need to reinvent the wheel when you can hire someone successful and pick their brain to see if there are ideas you can carry forth.
Are there people who have inspired each of you?
D.W.: When I think of people who have inspired me I think of trailblazers. I'm from Chicago so I tend to think of people like Harold Washington who was the first black mayor of Chicago, or Tom Bradley. People who overcame many challenges and took cities like Chicago and Los Angeles, that were for the most part racially divided, and helped them become the great cities that they are today. And I think from a business perspective, it really makes me proud to know we have an African American heading Fannie Mae. We've got Ken Chenault at American Express. Ray Wilkins as the CEO of Pacific Bell. Sylvia Rhone at Elektra Records. Charles Childers at the head of Nortel. When you have black senior executives leading major corporations, it sets a path.
K.L.: We've got very similar lists. The only person who I would add to this is Reggie Lewis and Bob Johnson. Here are two trailblazers who whether it's in corporate America or in the deal-making universe have been able to pull off what no other African American has been able to on the scale that they have been able to. I love reading about these guys and their experiences. And above all else my hat's off to them because everyone understands how difficult it is and what true trailblazers they are. And another person I have a lot of respect for is Gerrald Busby who used to run Motown. There's so much to learn from these guys. They have made it very easy for us because where they didn't have a road map, they have put together a very clear and visible road map as to how someone can be successful as an entrepreneur or senior executives in corporations around this country.
D.W.: Well I wouldn't say it was easy. I think they clearly identified a path and I think we can learn from the path which they took but I still think there are many challenges out there. You just have to look at the numbers. You look at the data and to a large degree that good old boys network is still very much alive. But clearly I think the future is bright.
-- Moderated by Jeannine Amber, a freelance writer
|
|
