It is amazing to me that people raised in a civilized and conformist society still aspire to achieve anything. In my opinion, the desire to achieve is the reason many business owners, while in the process of growing their business, go through an evolving set of goals. Starting with the desire to provide themselves and their families with comfortable living conditions, they eventually discover the desire to achieve something more. I am no exception. Having started a business to create a source of income and opportunities for professional growth, I, too, eventually realized that I wanted to create a really big business game. For whatever reason, it seems that many of us first need to see that we are capable in order to become inspired to create something really worthwhile. From the moment we are born, the world tries to convince us that the only way anybody can become a somebody is by following the rules and being controlled by someone else. It is therefore vital that you come to realize your inner abilities in order to achieve something truly worthwhile.
Take, for example, people who enter the business world right out of school and start successful companies; they all share the same trait. Before going into business, they became experienced and comfortable at managing teams. It's really that simple. A student gets experience as a class president, a member of a student committee, or a project leader; and when the business world becomes accessible, she or he already has a basic understanding of the rules of the game. She knows people need well-defined and achievable goals. She knows peoples activities need to be coordinated, and she also knows a great secret: If you tell a person that something needs to be done and that person supports the groups goal, he will do his best to make it happen.
Steve Jobs is an inspiring example of such a group leader. His subordinates claimed that he asked for the impossiblethat his standards were too high, and that it was technically impossible to make his dreams come true. The engineers thought Jobs was crazy when he asked them to place the Macintosh LC inside a beautiful but tiny case. When Jobs came up with his legendary Macintosh Classic, he was told that nobody needed such a computer. Jobs pushed his employees to work eighty hours a week and did everything possible to help bring his ideas to fruition. He was so difficult to work with that in 1985 the shareholders decided to oust him. As a protest, Jobs sold all of his shares and started other projects. A series of strategically important mistakes for Apple while under the leadership of a CEO who knew about increasing profits but who operated far from the ideology of the company followed, until Jobs returned in 1996 to rescue a failing company.
In most cases, we need to go through a transformation that helps us realize our abilities, talents, and leadership potential. In fact, a person begins to feel the desire to become stronger than others only when he feels strong enough himself, becomes aware of himself as an individual, and recognizes his talents. That is why when we first start a business and build a team of like-minded people, we experience self-doubt and lack confidence in our abilities. The better our results are, and the more strongly we become convinced of our own abilities, the more evident is the desire to do things that will enhance the lives of other people. Therefore, in building a business, generating some revenues, and building a small team, we get confirmation of our own strength and gain the motivation to grow. So in the business owner is born a Kshatriya.
Chapter 2. The First Step to Competency
There is a god I am ready to pray to: the god of competency. Competence is a mixture of knowledge, practical abilities, and creative goals. If one of these elements is lacking, competence does not exist. One can tell whether a person is competent simply by looking at the results of what he has undertaken. If a man is a competent husband and father, his family thrives, his wife is happy, and he is proud of his kids achievements. If a business owner is competent, his company prospers and grows larger without any headaches. If you are interested in knowing just how competent you are as a business owner, look at your results in this area. If you are always busy with urgent problems, if the company drains your energy and time, then you will never have harmonious operations and growth. Therefore you are currently not competent as a business owner.
You could argue that your company works just finebetter than many others doand that people even have good reason to be jealous of your achievements. But do not fool yourself. Quite simply, we all have different standards. It doesn't matter what others dream about or what their level of competency is. If instead of working on strategic planning you work on day-to-day problems, and the companys expansion only creates an extra workload for you, then you are not a competent business owner. You may be very good at day-to-day things, but you are not a competent business owner. If you are starting to realize that this is how things are for you, congratulations! You have taken the first step on the path to competence. The first step to competencealthough not the easiestis to admit that there are things you do not understand and that you lack the needed skills and experience. One must admit to a problem before it can be fixed. If a person does not take this step, he will forever be stuck in the mind-set of a know-it-all.
As the result of a merger between two manufacturing companies in 2000, I became a co-owner and CEO of the Geroldmaster Manufacturing Company.2 Although at first the company was not the most experienced and well-equipped, by 2004 it had left all of its competitors behind, thanks to the implementation of the management tools discussed in this book. I had no choice but to start this implementation. As the company's production volume had grown larger, the organizational chaos had torn my company apart. Interestingly enough, in spite of all our problems, we were manufacturing the best products. This saved us from alienating and losing customers, even though we were consistently behind schedule.
Once the company was functioning smoothly, I left the CEO position to focus on the owners role. I started conducting outside seminars on management, during which I explained in detail the organizational know-how that had allowed us to become industry leaders. To my surprise, I found that none of the owners of Geroldmasters competitors attended my seminars, even though I consistently invited them. It was just unbelievable! Within a few years, Geroldmaster had become the established leader in its field. It was the youngest, most audacious company on the market, with the highest-priced products, which, like a tank, had rolled over the medal-design and -manufacturing industry, making products for government ministries and agencies, the military, and major corporations, as well as for a variety of social and religious organizations. Even though the owners of the competing companies knew that I was providing the answer to the question How did Geroldmaster do it? they still did not attend my seminars. They were stuck in an I know it all attitude.
When a person is stuck in such a mindset, he has tons of excuses as to why the situation should be exactly as lousy as it is. If you talk with him and ask what the problem is, why things are the way they are, the excuse is the market conditions, or We dont have any experts, or some other made-up nonsense. But the truth is, that business owner is simply afraid to face the real situation, because upon facing it, he will have to do something that he has probably never done before. He is like a bad driver who blames other drivers, bad road conditions, and the weather. A man with problems in his personal life will tell you what is wrong with modern women and society in general. They simply do not have enough courage to look and see things as they really are.
When a person is stuck in such a mindset, he has tons of excuses as to why the situation should be exactly as lousy as it is. If you talk with him and ask what the problem is, why things are the way they are, the excuse is the market conditions, or We dont have any experts, or some other made-up nonsense. But the truth is, that business owner is simply afraid to face the real situation, because upon facing it, he will have to do something that he has probably never done before. He is like a bad driver who blames other drivers, bad road conditions, and the weather. A man with problems in his personal life will tell you what is wrong with modern women and society in general. They simply do not have enough courage to look and see things as they really are.
In order to get rid of this know it all attitude, either you need to establish very important goals for yourself, or receive a good kick in the butt. An owner may realize that the results of his hard work are just a weak shadow of the results he desires, or he may find the day-to-day problems become too overwhelming. It is those in the latter group, who want to resolve day-to-day issues, not just cope with them, who most often seek our consulting help.
I wish I could brag that I got out of the I know it all attitude thanks to having important goals, but in truth, it was my clients who helped me with this. In 2002, the business was expanding, and as a result we had an almost completely uncontrollable company. Nearly 80 percent of our medal-manufacturing orders were overdue. Since most of our customers were military or government entities, my tenure as CEO was plagued by unpleasant adventures. My workday started and ended with dealing with unhappy customers. There was no way we could even think about strategic planningI felt as if bullets were whizzing over my head. These unhappy customers were my miraculous kick in the butt. With my feeble attempts to fix things, it took a few months before I realized I had no idea how to run a growing company. That period was a turning point for me. I started looking for answers as to what I should do to make the company more manageable so that I, as the owner, could focus on strategic planning, rather than on fixing small issues.
Unfortunately, not enough literature is available on how well-known companies have handled times like these. The subject of management tools is considered too boring, and often too difficult for most people to comprehend. You can, however, find information on how a particular product was created or how successful manufacturing and retailing companies were started. Interestingly, every prosperous company has its particular management tools, but the general public does not know when and how they were implemented. The reason for this is simple: Only people at the very top of companies are interested in this topic, and their number is limited.
Since you are reading this book, either your goals or your problems have already given you a push, and you are looking for answers to questions related to a business owners role, as well as to the management of a company. In the following chapters, I will discuss the functions of a Kshatriya in a business, as well as how the business owners role differs from that of a manager.
Chapter 3. The Main Goal and Purpose
The widely known concept of a company mission statement is an essential component of management. It should be noted that this concept can be applied to any group of people, and even to a single person. Various management books give different definitions of the mission statement concept; however, my most precise understanding of it came from studying L. Ron Hubbards works, particularly the Administrative Scale of a group described in the article Basic Management Tools.3 In the article, he stated that any organization must have an exact and clear main goal and purpose. An effective mission statement is comprised of two parts: the main goal and the purpose. I will discuss this further.
First, however, I want to share my thoughts about Hubbard. I first became acquainted with L. Ron Hubbards works on management in 1999, and I was surprised to find that in his articles and books he described a set of practical principles that clarifies the foundation for successful management of an organization. The application of these principles in my business yielded excellent results, which enabled us to achieve a new level of expansion for my companies. From 1951 to 1986, Hubbard wrote more than 2,500 articles on various aspects of management, ranging from such topics as rules regarding the relationship between the owner and top executives to the development of marketing strategy and brand positioning. Most of these articles have been published in the nine-volumes The Organization Executive Course. In his articles, Hubbard revealed the laws of classical management, and he published many noteworthy discoveries in the field of management. To my surprise, these works are not yet widely publicized and few people in the business community have heard about Ron Hubbard as a management expert.
The Main Goal
For the purpose of this discussion, the term goal here is not used as more commonly is, as a physical, measurable, achievable thing. What is being discussed here is the main goal, which is the basis for the ideology of a company, something that makes sense for a groups existence.
During a trip to Novosibirsk, I asked an owner of a construction company, What is the main goal of your company? Without any hesitation, he replied, We work so citizens can admire and be proud of modern Novosibirsk buildings. His answer surprised and delighted me, since I had gotten used to the state of confusion this question usually triggers. This answer might seem counterintuitive, given that people usually conduct business in order to make a profit. However, the fact is that the main goal of the most popular, successful companies is targeted to benefit a great number of people. It is usually included in the mission statement. For example:
Apple: To make a contribution to the world by making tools for the mind that advance humankind.
Google: to organize the worlds information and make it universally accessible and useful.
Microsoft: to enable people and businesses throughout the world to realize their full potential.
McDonalds: providing outstanding quality, service, cleanliness, and value, so that we make every customer in every restaurant smile.
It might seem a little strange for people to start businesses if they benefit not just the founders but other people as well. Of course, we all have personal goals in life, things we try to achieve. It can be creative expression, achieving personal comfort, or establishing high living standards for ones family. No matter what your job is, personal goals are equally relevant to a middle manager and to a business owner. One may be dreaming about a sports car, while the other may dream about professional acknowledgment or glory. As a rule the more a person has suffered defeat in the struggle to achieve his goals, the less his desire to achieve goals, and the fewer his personal goals.
When a business owner creates a main goal that does not go beyond his company, but stays inside, the company will not be able to expand and overcome obstacles. It is like trying to climb a mountain while having a goal of chatting with friends, or trying to lead an army while having a goal of looking good in a uniform. Of course, this is as silly as it sounds. That is the reason why a main goal to become number one inspires only an employee who has self-identification issues, for it is vitally important to such an individual to stand out from the crowd, and being an employee of a number-one company is a way of achieving this. But what does this have to do with the main goal of the group? Such a goal would be boring to people with high self-esteem who want to achieve big goals. It doesn't mean that becoming number one is a bad goal; it just cannot be the main goal. It is a good mid-level goal on the way to achieving something more. It is impossible to expand your influence without breaking out of your shell, working only in perfect comfort and coziness inside. I will discuss mid-level goals at greater length in chapter 12.