May 30, 2002 | Read Time: 7 minutes
Several weeks into his new job as chief executive officer of the Ewing Marion Kauffman Foundation, Carl J. Schramm was leafing through his copy of The Protestant Ethic and the Spirit of Capitalism, a book by the German political economist and sociologist Max Weber.
Mr. Schramm noticed that at some time when he had read the book before — he guessed about 20 years ago — he had flagged mentions of entrepreneurship, a topic, he says, which is discussed three times in the text.
“It was like meeting a ghost of myself,” says Mr. Schramm, 55, who now, as head of a foundation that focuses on the support and training of entrepreneurs, has immersed himself in the study of the field. Entrepreneurship “was the only theme in the book I noted,” he adds. “I guess it’s not coincidental where I am now.”
With about $2-billion in assets, the Kauffman Foundation, in Kansas City, Mo., runs the Kauffman Center for Entrepreneurial Leadership, which makes grants and operates its own programs to help people start or expand businesses, and teach nonprofit groups to apply entrepreneurial practices to their own organizations. The foundation also supports youth-development programs.
Despite Mr. Schramm’s earlier interest in the study of entrepreneurship, his route to the Kauffman Foundation, which he joined in April, was hardly predictable. He admits that a year ago, he hadn’t even heard of the fund. That’s because Mr. Schramm was a busy entrepreneur himself, running a Baltimore company he had founded to support the creation of health-care and insurance businesses. He had also started more than a handful of other businesses in those areas and had worked as a top official at Fortis, one of the world’s biggest insurance companies. Before his business career, Mr. Schramm, who has a law degree and a doctorate in economics, was a professor at the Johns Hopkins University, in Baltimore. His specialty: inflation and health-care costs.
As a scholar, Mr. Schramm received research and writing grants from 10 foundations, he says, and he worked for a short time as a program consultant for the Robert Wood Johnson Foundation, in Princeton, N.J. After that, he says, his career took him far from the foundation world. Still, he says, he always felt the lure.
“I’ve watched foundations and have always been intrigued by the freedom and liberty they have to investigate new ideas,” says Mr. Schramm. “You can start businesses, make jobs for people,” but being strictly a businessman, he says, would never satisfy what he calls his “intellectual side, the public policy side that wants to investigate, discover, make an impact on the policy that shapes things.”
Mr. Schramm, in an interview, talked about his new job.
Why are you making the switch from a career in business to foundation president?
I’ve been blessed with great education, and it’s probably time to give back and let it pay off. Aristotle said you shouldn’t write until you are 50. Maybe this is the 10-year period in my life that I can consolidate some of that learning and teach outside of a university. I can also learn a lot, too. The best way to learn is to change venue, change responsibility. In the context of policy making, I think you get better at that if you keep switching in and out of different roles. Fundamentally, I am an entrepreneur — an intellectual entrepreneur, a business entrepreneur. Maybe I’ll be a policy entrepreneur.
Does that mean you probably won’t stay in this job?
That’s hard to say. Maybe this is the last job of my career. This is a magical job. I feel extremely lucky being asked to do this. Switching jobs from a job I really loved, and certainly made lots more money in, it would seem it wasn’t easy, but it was. This was right. That said, there’s nothing, nothing like starting a business. Nothing compares to it. I am fearful I will miss that rush.
What could give you a rush in your new job?
Entrepreneurship is a fundamental part of our democracy, the American character, but it is an area where public policy is not developed, an area that economists, whose works I’ve been reading like crazy since I took this job, are unclear, undecided. The Kauffman Foundation, because of its franchise in supporting entrepreneurship, has the opportunity to tend to the neglected discussion about entrepreneurship in our society. If I can be a participant in that dialogue, that study, that enlightenment, that would be a rush.
Did you meet Ewing Marion Kauffman before he died in 1993?
No. I am the first CEO of the foundation not to know him. But I understand and believe in his directive: to run the foundation as an entrepreneur would a business. For us, what may sound like a tired statement has a few clear and different meanings. Running the foundation like a business means looking for opportunities where our money makes a difference. Grants have to connect to very clearly stated organizational objectives. We have to have an exit strategy whether our grant making is successful or not. We have to work with our grantees so they are in the mode of self-correcting or learning behavior, so that if something is not working they have the license from us to stop and make a change. We also want them to have enough money from us so that they can go and ask and study and analyze what is the best change to make. We also have to celebrate our ability to see mistakes, and work with our grantees to learn from them.
Any lessons from the business world that you are bringing with you to the foundation?
One is that an outcomes-based approach works. In medicine, people march to the notion of evidence-based therapies and treatments, and that has made the field of medicine better. I’d like to adopt that approach when we look at what is working, or not working, at the foundation or among our grantees.
Do you anticipate pressing the foundation to consider grant making in areas related to the industries you know best?
There is a brand-new life-sciences facility right near us, and there are other new and growing efforts in medicine and life sciences all around this area. There is a role for us to play in all that activity. I see us addressing the questions of the transfer of technology from the laboratory to the marketplace, the questions around commercialization and science, and how scientific and medical breakthroughs come to market. Perforce of our location here in Kansas City, we will be, hopefully, a leader and participant in the formation of policy around these issues.
Last year you wrote a report cautioning state regulators against allowing a for-profit company to buy a nonprofit health insurer. Will you continue to write on such controversial topics?
I would never do anything that presents a conflict of commitment or interest with regard to my position and the foundation. At the same time, people have to think of themselves as individual intellects. I am going to stay true to my academic interests, being a practitioner of research, of policy research, especially on the scope and scale of business. Before there was a Kauffman Foundation for me, there was a Carl Schramm, and his expertise was health policy.
ABOUT CARL J. SCHRAMM, CHIEF EXECUTIVE OFFICER OF THE EWING MARION KAUFFMAN FOUNDATION
Education: Earned his bachelor’s degree from Le Moyne College, in Syracuse, N.Y.; his doctorate from the University of Wisconsin at Madison; and his law degree from Georgetown University Law Center, in Washington.
Previous employment: Chairman of Greenspring Advisors, a Baltimore consulting company he founded to support business development in health care and insurance. He also started other businesses, including Patient Choice Health Care, a health-insurance company in Minneapolis, and has served as a top official at a health-insurance trade group and an international insurance company. Mr. Schramm began his career as an adjunct professor at the Johns Hopkins University, in Baltimore.
Books he was reading at time of the interview: Michael Novak’s The Fire of Invention: Civil Society and the Future of the Corporation and Howard Gardner’s Creating Minds: An Anatomy of Creativity Seen Through the Lives of Freud, Einstein, Picasso, Stravinsky, Eliot, Graham, and Gandhi.
Book he has read most often: Henry Steele Commager’s The American Mind: An Interpretation of American Thought and Character Since the 1880’s.
