Boundary Exploration: The Entrepreneurial Experiments of Fr. Greg MacLeod

By Harvey Johnstone

Fr. Greg MacLeod gained national and international recognition for his research exploring novel ways of doing business. Over a period of more than forty years he experimented in his local economy (Cape Breton) designing and starting new enterprises and rescuing faltering ones.

This book examines the techniques he developed and compares the

• Language: English
• Publisher: New View Productions Ltd.
• Release date: Dec 2, 2019
• ISBN: 9781999233310

Harvey Johnstone

Harvey Johnstone, PhD, is a Professor Emeritus with the Shannon School of Business at Cape Breton University (CBU). He has a background in business and philosophy and is a former Dean of Research at CBU. Fr. Greg MacLeod, PhD (1936-2017), was a lifelong educator and member of the Order of Canada. MacLeod became involved in community economic development and spent much of his life after that finding ways to combine Christian social teachings with sound business practices, exploring an economy based on human values rather than profit.

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Copyright 2019 Harvey Johnstone

All rights reserved. No part of this work may be reproduced or used in any form or by any means, electronic or mechanical, including photocopying, recording or any information storage or retrieval system, without the prior written permission. Responsibility for the research and permissions obtained for this publication rest with the author.

The author wishes to recognize the support of New View Productions Limited, a not-for-profit company founded in 1990 for the purpose of producing educational materials in the area of social, cultural, and economic development.

The cover features an image of Cape Breton including Mi’kmaw, French, Gaelic and English names for the island. The image was provided by Saltwreck Inc. (Saltwreck.com) a Nova Scotia company specializing in Canadian Heritage Map Prints.

Photo of Fr. Greg MacLeod, courtesy CBC Cape Breton; of Harvey Johnstone, courtesy Cape Breton University.

First printed in Canada

eBook: tikaebooks.com

Library and Archives Canada Cataloguing in Publication

Title: Boundary exploration : the entrepreneurial experiments of Fr. Greg MacLeod / Harvey J. Johnstone.

Names: Johnstone, Harvey J., author.

Description: Includes bibliographical references.

Identifiers: Canadiana (print) 20190186631 | Canadiana (ebook) 20190186674 | ISBN 9781999233303 (softcover) | ISBN 9781999233310 (EPUB) | ISBN 9781999233327 (PDF)

Subjects: LCSH: MacLeod, Greg. | LCSH: Social entrepreneurship—Canada—Case studies. | LCSH: Entrepreneurship—Canada—Case studies. | LCSH: Businesspeople—Canada—Biography.

Classification: LCC HD60.5.C2 J64 2019 | DDC 338/.04—dc23

New View Productions

PO Box 1201

Sydney, NS B1P 6J9

BOUNDARY EXPLORATION

The Entrepreneurial Experiments of Fr. Greg MacLeod

By Harvey Johnstone, PhD

New View Productions

Sydney, Nova Scotia, Canada

Table of Contents

List of Tables & Figures

Preface

Foreword Darryl Reed

Foreword Fr. Greg MacLeod

Chapter One:

Setting Our Course Exceptions and the Nature of Innovation

The Importance of Exceptions

Contexts Giving Rise to Place-based Entrepreneurship

What’s in a name?

Our Aim is to Learn from Business

Chapter Two:

The Entrepreneur and the Context

Introduction: Dispensing with Convention

Fr. Greg MacLeod

Sources of Inspiration

Girroir and Fiset

Tompkins and Coady

Arizmendiarrieta

Three Features of Fr. Greg’s Research Methodology

1. Action Research

2. A Focus on Local Problems and Local Job Creation

3. New Technology

Chapter Three:

Place-based Entrepreneurship

The Critical Importance of Entrepreneurs

The Entrepreneurial Function

Introducing the Concept of Place-based Entrepreneurship

The Place-based Entrepreneurial Function

Doing What Would Otherwise Not Be Done

The Place-based Entrepreneurial Process

Conclusion

Chapter Four:

Place-based Entrepreneurship Through the Innovatory Use of Organizational Structure

Introduction

Organizational Structure as a Tool

The innovatory use of organizational structure: The case of New Dawn Enterprises

The Context: Industrial Cape Breton in 1974

The Tools New Dawn Enterprises

Action Research and The Origins of New Dawn

Conclusion - Some Reflections on New Dawn

A Commentary by the Founder of New Dawn

Chapter Five:

Cases Illustrating Place-based Entrepreneurship Through the Innovatory Use of Organizational Structure

Introduction

Case I - A Shortage of Dentists

The Distribution of Dental Services

A Growing Recognition of Need

The Response

Making the Deal

The Result

Case II - Crowell’s Department Store

Chapter Six:

Place-based Entrepreneurship Through the Innovatory Use of Business Models

Introduction

The Business Model

An overview of conventional Venture Finance

VC in a depleted environment - A different story

Case I The Genesis of BCA Group

BCA Holdings and BCA Group

Other Government Support

The Limits Imposed by Depletion

Comparing Business Models

The Wider Significance of BCA

BCA Today

Conclusion

Chapter Seven:

One of BCA’s Earliest Ventures and Rebuilding a Main Street

Case I – Tompkins Place

Case II – Sydney Mines Renewal: Rebuilding A Main Street

How We Got Here

Taking the Initiative

Organizations as tools

Assembling Land

Attracting Tenants

Raising the Investment

Conclusion

Chapter Eight:

Cases Illustrating Place-based Entrepreneurship Through the Innovatory Use of Business Models

Introduction

Case 1– Northchip Limited

Introduction

The Origins of Northchip Ltd.

The Roles of The Partners

Epilogue

Case II – Bras d’Or Lakes Inn

History

Tourism in Cape Breton

The Problem

A refined business model

Epilogue

Conclusion

Chapter Nine:

Cases Illustrating the Connections Between

Place-based Entrepreneurship and Public Policy

Introduction

Case I – East Coast Rope A

Background

Social-Economic Climate of Cape Breton in the early 1990s

Reaction to Plant Closure

The Problem

Epilogue

Case II – East Coast Rope B

Introduction

Navigating the competitive pressures of a global enterprise

ECR’s Response to Market Pressures

Epilogue

East Coast Rope: Reflections from Greg MacLeod

Chapter Ten:

Taking Stock Some Final Reflections

Is this Social Entrepreneurship?

Do place-based enterprises create social value?

What has inspired the Entrepreneurial experiments – of Fr. Greg MacLeod?

Epilogue

Bibliography

List of Tables & Figures

Table 3.1, p. 38 – Place-based entrepreneurship: techniques, objectives and strategies

Table 4.1, p. 44 – Population changes in communities of Industrial Cape Breton

Figure 4.1, p. 56 – Lifespan of a cohort of firms

Figure 6.1, p. 89 – BCA business clients and community projects

Figure 6.2, p. 90 – BCA Group – list of companies

Figure 7.1, p. 106 – Pro Forma Balance Sheet of Sydney Mines Investment Co-operative

Figure 9. 1, p. 140 – Price per barrel of oil between 2000 and 2016.

Preface

Roger Fry was an art critic who developed a formal language to describe visual art - particularly paintings. Fry was prescient, being one of the first to recognize and to herald the work of Paul Cezanne. When Fry undertook to develop his system of language, he made good use of the existing science of visual perception and he also called upon his knowledge of technique and his experiences as a painter. His language and the methods of analysis he developed are still used today. But Fry cautioned us that any language will fall short of the concrete experience of seeing a painting. There is, so it seems, always something more to a work of art than can be explained.

This book is not about painting or art. It is, however, about creativity, innovation, and a body of work that represents a lifetime of effort. The innovations and the body of work are not mine; they belong to my late colleague, Fr. Greg MacLeod, and are the result of a forty-year program of enquiry that he called action research. This open-ended depiction fails to link his work in any obvious way to an established discipline. Certainly, as a university professor, he was expected to engage in research and experimentation, and he took those responsibilities seriously. But Fr. Greg was a complex and gifted individual capable of functioning on many levels and he preferred not to be tied down. Calling his work action research freed him to use his considerable talents to maximum effect. And so, he undertook a program of investigation that explored new ways of doing business in an economically distressed environment even though he was formally trained as a philosopher! Eventually I came to realize, that to understand this significant dimension of his life’s work, it was best to think of him as an entrepreneur and to think of his program of action research as a series of entrepreneurial experiments. These ground-breaking experiments of his have gained national and international recognition and he is considered a pioneer. But the experiments were all-consuming. There was never enough time for reflection. There was never an adequate opportunity to convert the accumulated tacit knowledge into codified knowledge.

What is most important now is to reflect on the tacit knowledge he created. That is, we need to focus on the approaches he developed and to resist the temptation of settling for mere descriptions of outcomes (as if intentions alone were enough to bring about such results). Like Roger Fry, I have struggled to find a way to unpack creative actions. This struggle has led me to search for an appropriate theoretical framework – a discipline – that could explain the techniques underlying my colleague’s body of action research. Economic geography is that discipline; it has become my science of visual perception. Within its broad boundaries our attention will be confined mostly to what it has to say about local environments and entrepreneurship.

Over the years, in thinking about these matters, my understanding has evolved. These advances have been marked by several abandoned formulations. I am satisfied now that, by describing Fr. Greg’s work as a series of entrepreneurial experiments, his ingenuity will be suitably emphasized, and the significance of his choices around organizational structure, business models, and strategies will be duly highlighted. That is, the entrepreneurial perspective promises to provide us with a useful framework for analyzing Fr. Greg’s techniques. However, like Roger Fry, I must caution you that, the language and analysis contained within these chapters, will fall short of the concrete experience of seeing an entrepreneur in action. There is, so it seems, always something more to an entrepreneurial act than can be explained.

Nevertheless, it is my hope that some of you will learn enough from the coming chapters to be able to replicate these experiments in other localities and other circumstances. That, I am confident, would bring about a great deal of good.

Foreword

By Darryl Reed

Greg MacLeod was many things to many people – a friend, a pastor, a teacher, a colleague, a researcher, a community organizer, a patron of the arts and a public intellectual, among others. He was also a highly effective social entrepreneur, long before this term became popular. Greg differed, however, in substantive ways from many contemporary social entrepreneurs. To appreciate Greg as a social entrepreneur (and how this part of his life related to his other roles), it may be helpful to examine three overlapping questions: (1) Greg’s significance as a particular type of social entrepreneur, (2) what enabled Greg to be an effective social entrepreneur, and (3) what enabled the success of the enterprises that Greg helped to found and incubate.

(1) To understand Greg’s significance as a social entrepreneur, three key features can be highlighted. The first of these was the fact that Greg was a social entrepreneur and not a social entrepreneur. Today, many aspiring entrepreneurs uncritically accept the notion that it is possible to do well by doing good. The good in question can vary, of course, from concerns about environmental sustainability to providing employment for marginalized groups to rural economic development. In recent years, a significant number (but a small percentage) of such starts-ups have grown to such an extent that they become targets of buyouts by large corporations (e.g., The Body Shop, Ben & Jerry’s). Arguably, this success (which resulted in personal fortunes for the entrepreneurs in question) has spawned the growth of a model of social entrepreneurship in which being bought out is the ultimate goal (or at least a very desirable exit option). Doing well was never a consideration for Greg. He was completely fixated on the good. This has made him an inspiration to many, not only in Cape Breton, but around the world. The particular good that Greg was fixated on is the second key feature of his social entrepreneurship.

Greg was a place-based social entrepreneur. This term connotes two important meanings. First, it indicates that Greg was (primarily) focused on doing good in a particular place, his native Cape Breton. More specifically, it was Cape Breton in a period in which the original sources of economic vibrancy were in sharp decline. Starting in the late 1960s, coal mines were becoming exhausted and steel mills were closing, and soon thereafter the economic impact of diminishing fishing stocks would be felt. This Cape Breton has been characterized as a site of depleted communities; that is, a place of tight-knit social networks whose resource-based economies are collapsing. The second connotation entails a commitment to draw upon local resources to promote economic development, especially the social capital and local knowledge available in such communities. Committed to the vision of the Antigonish movement to help local people become masters of their own destiny, Greg took on this challenge in the new context of an emerging, neo-liberal, global economy.

Greg was an institution builder. Greg knew the importance of institutions in local development as vehicles for accessing resources, providing training, shaping policies, ensuring continuity and engaging in long-term strategic planning. In 1976 Greg helped bring to life New Dawn Enterprises, the first community economic development corporation in Canada. It anticipated the waves of government sponsored CED organizations that would emerge in the late 1980s and 1990s but differed significantly from many of them in its philosophy and practice. In the same year, Greg founded the Tompkins Institute at the University College of Cape Breton (later Cape Breton University). This space served not only as a site for (action) research in support of local development, but also as a base for curriculum development (resulting in the MBA program in community economic development, among others). Greg was aware that a constellation of institutions was necessary to guide and sustain his vision of place-based development over the long term. Accordingly, he would later go on to promote New Deal Development Inc. and Banking Community Assets.

(2) Entrepreneurs typically share some broad characteristics. They are always highly driven. They are generally charismatic in ways which allow them to secure the collaboura¬tion of key partners. They know how to amass and process knowledge. They have vision and the insight that allows them to realize their goals. As a social entrepreneur, Greg exhibited all of these features, but in ways that that were not typical of conventional, or many other social, entrepreneurs.

Conventional and social entrepreneurs may be driven by external rewards (money, status, power) and/or internal rewards (personal fulfilment, a sense of obligation or personal bonds). In Greg’s case, external factors were never a consideration. There were two components that comprised his motivation. On the one hand, there was a strong sense of responsibility. Greg believed – in line with his own Christian faith and many other religions and schools of thought – that if we can help our neighbours, then we have a responsibility to do so, and the greater our ability to help, the greater that responsibility. Greg had great abilities, and took on great responsibilities in the cause of helping his neighbours. This was evident in the community, where his work ethic was legendary. On the other hand, Greg was moved by a deep love for his neighbours. He was a proud Cape Bretoner and delighted in working with different communities. He reveled not only in his own Scottish heritage, but had a strong affection for the Mi’kmaw and Acadian communities and all the peoples who called the Island home. As a result, the responsibil¬ities that Greg took on never weighed heavily on his shoulders. It was not a burden for him, but a privilege and an opportunity to express his concern and love for his neighbours.

Greg’s love expressed itself through an effervescent personality. He was warm and generous, attentive and engaging, playful to the point of being a bit impish at times, but always respectful. He knew how to draw people in and how to challenge them. These features made him a great friend, teacher and pastor. They also enabled him to be a charismatic leader. His was a special charism. He would appeal to people’s better selves rather than their narrower interests. In doing so, he was able to effectively mobilize the latent resources inherent in close community bonds. Nearly everyone in Cape Breton, it seems, has a story of Greg encouraging – or cajoling – them to get involved in some community activity, with the vast majority of these entreaties inevitably being successful.

Entrepreneurs need to be able to absorb and process knowledge, both theoretical and practical. Greg was particularly adept on both counts, and drew upon a variety of sources of knowledge. Of the most influential was the tradition of Catholic Social Thought, which Greg knew intimately both from his formal studies in theology and philosophy, as well as from its embodiment in socio-economic movements. Growing up in Cape Breton, Greg was personally familiar with the Antigonish movement and the work of Moses Coady and J.J. Tompkins. Greg also looked to a more contemporary movement in Spain, the complex of co-operatives that emerged around Mondragon in the Basque country. Initiated by another clergy member with tremendous entrepreneurial spirit, J.M. Arizmendiarrieta, Mondragon would come to serve as a model of sorts for Greg’s work. Greg was also influenced by other academic literatures which guided socio-economic movements, including American pragmatism (and the adult education movement), as well as Freire’s pedagogy of the oppressed and liberation theology (which informed various social movements in Latin America). Greg’s strong respect for practical knowledge also extended to the stories and practices of traditional cultures and local communities, as well as the hard-learned skills and lessons of craftspeople, artisans and small-business owners.

While dedication, charisma and the ability to access and process knowledge are key characteristics of entrepreneurs, at the heart of any definition of entrepreneurship is innovation. Entrepreneurs are not just successful businesspeople, but innovators who use these basic traits to change how business is done – by combining resources and knowledge in novel ways to develop new products and services or new ways to produce and supply products and services. This requires a vision of how things can be done differently, insight into how to make this happen and the willingness to take risks. As a social entrepreneur, Greg’s innovation lay in combining local resources (especially social capital) and knowledge (including historical and cultural) in new ways to produce locally goods and services that communities wanted (including cultural products and social services) and, thereby, employment and income that would enable younger generations to remain in (or return to) their communities. Greg was willing to take on the risk involved, not for personal gain, but to reverse a downward economic spiral threatening to decimate local communities.

(3) Understanding what made Greg a successful innovator, however, is not the same thing as understanding how the enterprises that he helped to establish and incubate were able to be successful – or can continue to be successful and replicated. Part of the issue here is the fact that businesses tend to have life cycles. Entrepreneurs have traits and skills that may be essential in start-up phases, but do not necessarily ensure continued success over time. Another side of the issue is that entrepreneurs are concerned with action. Often guided by insight and intuition, they are concerned with making things happen, not with analyzing what allowed them to happen. This is not to say that entrepreneurs act without knowledge. As noted above, they draw upon knowledge from a range of sources. In the process of innovation, however, they also generate new practical knowledge that involves learning by doing. This was Greg. Without formal business training, he acquired a sense of how to proceed in new circumstances, which was accompanied by a sense of urgency to proceed. As a result, much of the practical knowledge that he accrued remained implicit and/or was disseminated only informally with his collabourators. One of Greg’s few regrets was that he was only sporadically able to set aside small periods of time to reflect on his work and write.

This is why this book is