We spend most of our lives working for businesses but how many of us actually understand what it takes to run one? Businesses come in different flavors but they are based on one inherent principle – providing value to customers. The main challenge however is getting the people, machines and communications in place to do this effectively. Being profitable is the main goal of many businesses, but these days it does not usually have to be the case. Amazon for example, pumps all the profits it makes back into the company as a form of investment to make sure it stays ahead of the competition.
There are so many components to a business – marketing, operations, production, customer care, growth strategies etc. – which I am still trying to get my head around. Working in a small biotech and thrust with the responsibility of “managing” marketing and product development, I can only approach this the scientific way – research and experimentation. So for now, here goes the research bit. This post contains some notes I took when I read “The Ten Commandments of Business Failure” by Donald R. Keough. In the book, he wrote the advice in the form of negative statements i.e. what you should not be doing. I converted them into positive ones to avoid wearing out my simple brain. The actual commandments are in the brackets. There are actually 11 as he gave one as a bonus… I hope you find them as useful as I did.
1. Take calculated risks (Quit taking risks)
Creating profits in the long-term requires innovation in the now. Business leaders are paid to “be discontented”, to take the calculated risks that will ensure the company’s success in the future. “When you’re comfortable, the temptation to quit taking risks is so great, it’s almost irresistible”, but it is the number one way to seal your fate and fail. Mistakes and miscalculations, even very costly ones, are simply the price of staying in business.
2. Keep improving (Be inflexible)
The “if it ain’t broke, don’t fix it” mentality is the second best way to secure the demise of a business. There is no one formula for success that will continue to work always; leaders must constantly challenge themselves to change. “Flexibility is a continual deeply thoughtful process of examining situations and when warranted, quickly adapting to changing circumstances.” Darwin’s concept natural selection is applicable not just to organic species, but to the survival of businesses as well.
3. Talk to ground staff (Isolate yourself)
Staying in touch with customers, distributors, managers and staff is essential to continued growth and success. It is temptingly easy to physically isolate yourself from “distractions” in the comfort of leather sofas and plush carpets in corner offices on high floors guarded by layers of Personal Assistants. Creating your own “executive bubble” is a great way to be the last to know when anything is going wrong. Answer your own phone, make your own coffee, know the names of your people – walk around and find out how they are doing and what the Company needs to be doing better.
4. Remain humble (Assume Infallability)
Another great way to fail successfully is to never ever admit a problem or a mistake. Develop the artful skill of finger-pointing. Blame external forces such as currency fluctuations or the unusually active hurricane season. Cover up mistakes for as long as possible without admitting that anything is going wrong. It’s best to wait until there is a full-blown crisis and then say “mistakes were made…” (but not by me).
5. Keep your integrity (Play the game close to the foul line)
When you consistently “play it close to the foul line”, your employers will not trust you, and neither will your customers. If you achieve success by destroying your principles in the process, it will not last. Build a reputation for doing the right thing – to be forthright, honest and fair. Build trust. Honor and decency are virtues which never become outdated.
6. Think and plan ahead (Don’t Take Time to Think)
“Thought is hard” ~Goethe. In many ways technology often adds to the complexity of life without providing appreciable advantages. With the steady stream of data constantly bombarding us, it is appealing to believe that being busy is the same as being effective. Base decisions on careful evaluation. Objectively analyze mistakes; they are a powerful opportunity to see what went wrong. Making time to think is essential for success.
7. Take responsibility (Put All Your Faith in Experts and Outside Consultants)
“It is better to know some of the questions than all of the answers.” -James Thurber. Putting too much faith in outside expertise can lead to disastrous consequences. Quite often, managers insecure in their authority blame restructuring, layoffs and other unpleasant decisions on plans drawn up by outside experts. This is just another cowardly way of passing the buck. Good business leaders take responsibility for the future of their businesses, they don’t farm out important strategy decisions to third parties.
8. Streamline processes and avoid red tape (Love Your Bureaucracy)
If you want fail spectacularly, put administrative concerns ahead of everything else. Chains of command, paper pushing, and general red tape can lead to endemic dysfunction. Bureaucracy within organizations causes responsibility to become so diluted that the managers become incapable of making objective decisions. Action becomes impossible. In a crisis, the results can be catastrophic.
9. Communicate clearly and frequently (Send Mixed Messages)
Communication does not occur unless the message is both heard and understood. For example, rewarding employees who have not met performance targets sends the message that the targets really don’t matter. Be consistent in the message you send. Apply accountability and follow through with the consequences.
10. Be optimistic (Be Afraid of the Future)
If you want to paralyze your business, start proceeding with caution all the time, allow pessimism to thrive. Unquenchable optimism is the spirit the engenders achievement and success. Move boldly ahead – approach the future with optimism – especially when the circumstances are unfavorable.
11. Do not settle (Lose Your Passion for Work, for Life)
To fail, just continue to set low expectations for yourself and everyone around you; keep saying “that’s good enough”, or “that’s not my job”. All achievement requires passion. Work is hard, but it is worth the effort to those who are convinced that they are capable of being better. It is the strong desire to do better and solve problems that should drive your passion to work harder. Successful people perform at a higher level, just for the satisfaction of doing it. Passion can be cultivated; form a strong emotional connection with whatever you are doing, and never stop.