The Idealist: Into the Frying Pan

After nearly three decades at one of the country's most prestigious business schools, Eric van Merkensteijn tried managing in the real world.

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At the start of each semester at the Wharton School, Eric van Merkensteijn would stand before a classroom of M.B.A. students and try to stanch their creeping cynicism with the fervid recitation of his own human-resources philosophy. People are basically trustworthy, honest, and loyal, the associate dean would proclaim, and employers should treat them that way. It was an idealistic assertion, he knew. Still, nothing in his nearly 30-year career at the University of Pennsylvania had convinced him that it was a naïve one.

In 1993 van Merkensteijn retired from the groves of academe and six years later -- in his first-ever act of civilian entrepreneurship -- he opened the eponymous van M's Music Bar & Grille in Philadelphia. Eager to practice what he had so long preached, the novice restaurateur and club owner hired a crew of what he took to be trustworthy, honest, and loyal employees. Then van Merkensteijn discovered that some of those hires were fleecing the business -- through a combination of pilferage and outright theft that added up to tens of thousands of dollars. He felt like a man who had just enjoyed a sumptuous meal, only to be presented with a five-figure reality check. "My basic stance has shifted from assuming all to be honest to assuming all to be dishonest until they prove otherwise," he says. "All you need is to be burned a few times, and you feel much more pessimistic."

Funny thing, though, van Merkensteijn doesn't sound pessimistic. Despite those early travails, he has not abandoned his greater goal: to reform through shining example an industry wormholed with dishonesty and distrust. "One reason I'm doing this is I want to make a difference. I don't want just a good restaurant. I want to have impact," he says, sitting in the dining room of his club, which was formerly the Middle East Restaurant, a 42-year-old nightspot notorious for its belly dancers and for its co-owner, Jimmy Tayoun, a powerful local politician and author. (Tayoun's book, Going to Prison?, a practical guide for new inmates, sprang from his 1991 conviction for bribe taking.) Van Merkensteijn hopes to transform this infamous site into a simply famous one. Changes are already afoot: the stainless-steel-topped tables and aqueous blue backlit bar are his innovations. And so, too, are a series of business practices that bring the clarity of B-school case studies to the borderline bedlam that characterizes the restaurant industry.

Whether van Merkensteijn's experiment will ultimately be deemed "inspirational/effective" or "inspirational/quixotic" is anyone's guess. First the restaurant itself must succeed: its owner projected that it would be profitable in its first year of operation, with sales of $750,000. But the business has taken some substantial hits -- not only from employee waste and theft but also from a millennial New Year's Eve celebration that was more whimper than bang and from the Republican National Convention, which blew in and out of town, leaving van Merkensteijn with thousands of dollars' worth of uneaten food and a handful of souvenir pens. The crowds, too, have been slower to materialize than expected, deterred, perhaps, by van M's novel but oxymoronic market niche as possibly the only smoke-free bar and music venue on the East Coast. In addition, employee turnover in the first 10 months was more than 100%, although the current crew, van Merkensteijn believes, will stick around long enough to grow some moss.

"I think there's a market problem. It's taken him longer to build the customer base than he thought," says Tom Martin, president of ReThink Inc., a consultancy for restaurants and other companies, who has advised van Merkensteijn. "Eric may have to change his business model. But he'll never change his ideals."

A native of the Netherlands, van Merkensteijn, 54, entered the University of Pennsylvania in 1964. Shortly before he graduated, the school hired him to run its language lab and audiovisual center. His aggressive fund-raising for those departments brought him to the attention of Wharton's dean, who invited him to join the business school's administrative staff. After earning an M.B.A. in 1971 and an M.S. in education in 1973, van Merkensteijn parlayed his good grades and relationships with faculty members into teaching assignments. "If you look at the academic ranks in Wharton, 98% of them have Ph.D.'s," says the doctorate-free van Merkensteijn. "This was the back door to an academic career."

In 1993, after having served as both an adjunct full professor and an associate dean, van Merkensteijn finally climbed down from the ivory tower and found himself standing on a plain of possibilities. His bank account was healthy. His children were grown. And his wife urged him to get out there and chase some dreams.

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Leigh Buchanan

Leigh Buchanan is an editor at large for Inc. Magazine. A former editor at Harvard Business Review and founding editor of WebMaster magazine, she writes regular columns on leadership and workplace culture, and she contributes Inc.'s capsule book reviews, "A Skimmer's Guide to the Latest Business Books."

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