A Job Description for the Business Owner
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Once, during a workshop, the owner of a roofing materials manufacturing and retailing business approached me. His company employed around fifty people. They manufactured copper shingles, gutters, and other parts for copper roofing. Our conversation went as follows.
“Our company manufactures a good product and our customers are happy. It is certainly not a cheap product, but the customers who know us usually thank us for our services. But there’s one issue I still can’t understand. When I start my workday, I’m full of energy. I meet with the customers and manage my employees. The window of my office faces the sales department, and since I usually arrive at the office earlier than everybody else, I get to observe my employees as they come in. You know, we try to take care of our employees. Their salaries are high and the working conditions are good, but when they get to work, they look like they have been working hard all night long and can’t wait to finally get some rest. They barely move. And unless they get enough coffee, they cannot even start working. Why is it this way? I am full of energy and desire to work, but why aren’t they?”
“What is the main goal of your business?” I asked him.
“What goal? It is to make money for me, of course!”
“Imagine you just joined a good company as a salesperson. During the orientation period, you are told, ‘The goal of our company is to make another million dollars for the owner!’ Would that inspire you?”
“No. I get it,” he said after giving it some thought.
When the company owner confuses his personal goals with the goals of the company, he creates goals for the company that do not motivate his employees. Imagine a company where during corporate events it is announced, “Our goal is to make our owner rich!” It doesn't seem as if anyone would honestly want to put any effort into achieving this goal. Only when employees want to achieve the company’s goals will you see the spark in their eyes and will they be full of energy and creativity. This does not mean that when you establish goals for the entire group that you must renounce your personal goals. Giving up your own goals can lead to a complete lack of joy and pleasure for you. I personally think that a miserable person will not be able to be particularly useful to other people. Keep your goals. Just take care not to confuse them with the goals you establish for your company.
Think big. Don't waste your time on pseudogoals like “making more money,” “benefiting everybody,” or even “becoming number one in the industry.” Assess what the company can realistically achieve in the long run. If you manufacture furniture, maybe your goal would be “providing comfort and design for people’s lives.” If you are a grocery wholesaler, perhaps it would be “creating high-quality living standards for a wide range of people by providing a fresh and premium-quality range of grocery items.” Of course, these goals need to reflect your own aspirations and talents. One owner will start a company to bring the latest technology to the market. Another owner will start a company to provide satisfying and cheerful service. Ever since he started walking, my nephew, Vasiliy, has amazed the people around him with one particular habit: He cannot walk past an excavator, truck, crane, or tractor without stopping to admire it. The boy can just stand there and admire such machines, enjoying them. As you can imagine, his mother does not share his fascination, and every time he stops to gaze, she tries to pull him away. What kind of company will he start when he grows up? I don’t know, but I do know one thing for sure: If he does become an owner of company that a produces construction machinery, he will be doing what he likes most. What goals will he establish for the company? Perhaps they will be “to provide construction workers with reliable and efficient machinery and contribute to the prosperity of the construction industry.” Companies’ goals are really very distinct, as individual as their owners.
Trying to set up a goal based on the individual goals of the group members is also a common mistake made by business owners. The owner needs to be aware that as the founder as well as a member of the group, he performs a very specific function: He forms the goal for the entire group. An example of this kind of mistake would be to say, “Our company’s goal is to provide customers with a quality product, increase owners’ equity, and create a decent standard of living for our employees.” This is not a goal. It is merely an attempt to please everyone who has something to do with the company—employees, owners, and customers. And this attempt to please is the exact opposite of the manifestation of individuality. A problem with such goal formation is that people are not so na"ive as to believe that this is really the group’s goal.
I am genuinely surprised by what results when some not very clever consultants’ brainstorm about the main goal and purpose of a company with its top management team. They come up with these monstrous ideas that do not inspire anyone—not managers, owners, or employees. Have some fun by reading the goals and mission statements of some of these various companies online.
Occasionally, I help owners to create mission statements for their companies. I first ask them questions that relate to the purpose of the company. I ask what the initial business idea was and whether it had any competitive advantage that distinguished the company from its competitors. I ask the owner to describe the company’s operations in a few words. When the purpose is clear, I help him or her state the main goal by asking questions about what would change in the company’s external environment if it successfully carried out its purpose. Why do I start with the purpose? I do this because the purpose is more concrete to people, as it will determine the company’s course of action. The main goal, however, is less apparent, though in essence it is predetermined by the purpose.
When you create the main goal of the group, don't think about whether employees will like it. The most important thing it should do is inspire. Look around at the leaders of some outstanding companies. As a rule, they dedicate their whole lives to doing their favorite job. They have enough courage to do what inspires them. And they create main goals that attract the right people to their companies and encourage them to stay.
Chapter 5. The Pursuit of Money
The business world is brainwashed by the idea that the goal of any business is to make money. Of course, the people who made this idea popular are not very smart; they do not understand anything about money at all. Money is just a medium of exchange. The amount of money a company makes depends on how useful its products or services are, and how widely available these products or services are. Behind every product, there is a particular person’s dream, as well as a goal that inspires an entire team to overcome any obstacles along the way to creating the product. Long before Mark Zuckerberg became a billionaire, he refused Microsoft’s generous offer to buy the program he’d developed. The reason was simple. When he came up with the idea of Facebook, he was thinking about creating a communication and social-networking platform for university students, not about columns of numbers on a financial statement.
Making lots of money is a great idea, but in reality, the meaning behind business is to create a lot of something that people will consider useful and want to obtain. The main goal of a company should be an exact wording of this aspiration, not the expression of a desire to receive as much money as possible.
“I want to work for a company that contributes to and is part of the community. I want something not just to invest in. I want something to believe in.”—Anita Roddick, The Body Shop
Of course, you do not get paid for your aspirations alone, and rarely do aspirations without tangible results receive support. However, to say that the main goal of a business is to make profits is the same as saying that the goal of a human is to breathe. Without being able to breathe, a person cannot survive for long, because breathing is essential for a person to move, think, and create. Every person has his or her own main goal. Some dream about teaching children, others dream of constructing beautiful buildings, and still others desire to raise talented and independent children. Without breathing for more than just a few minutes, a person would not be able to achieve any of these goals. This is comparable to the important role of money for a business or any other organization.
“Money is like gasoline during a road trip. You don’t want to run out of gas on your trip, but you’re not doing a tour of gas stations.”—Tim O’Reilly, O’Reilly Media founder and CEO
Any good idea can be brought to the point of absurdity. For example, since ancient times there have been practices in which followers try to improve themselves with sophisticated ways of breathing. Likewise, there are business practices that claim that proper money handling and money management are the keys to success. This is only partly true. It is really important to handle money wisely, but good money management alone does not lead to success. That is because money management is simply a tool for managing the exchange process of your product for money.
Increased profits and growth of gross income can be wonderful mid-level goals and important milestones in a company’s growth, but they are never main goals that can lead you to victory. Only a person who has completely lost his or her ideals sees personal needs as the only reason for owning a business and can accept making money as its main goal. Such an viewpoint is acceptable for an unskilled worker, but is not acceptable for someone who has started a company.