A Job Description for the Business Owner
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When it comes to leadership, the foundation is very simple. A leader is a person who has found enough courage and persistence to set a main goal and purpose for a group. It is that simple: courage and persistence. Notice that I did not say anything about intelligence. It is desirable but not vital. If this seems incredible to you, just listen to the majority of political leaders who are followed by millions of people and you will be able to see for yourself. When we were kids, we would meet our friends after school in the school yard and then wander from corner to corner, suffering from idleness until someone suggested, “Let’s build a fort”, “Let’s play soccer,” or some other activity. If the boy who made the suggestion was able to advance his idea and get others to be in favor of it, then he would become the leader at that particular time. We then had a very meaningful (at least we thought so) activity to engage in, and our game began. Any game was better than no game, and any leader was better than no leader.
From the viewpoint of experience, we could debate the purposefulness of such games, but boys who wander around aimlessly are happy to engage in any activity. Modern culture often offers people very boring games: wrapping your body in a fashionably branded piece of cloth, buying a shiny car to take you places quickly, and building a house with thick walls. But the most talented people, even if they cannot dream of something really large, respond to an interesting or challenging game offered, even if it goes beyond their usual daily routines. If you create an important goal and attractive purpose, it inspires those who still have a taste for life.
The first role of a business owner is to create an inspiring main goal and a clearly defined purpose. It is the very first thing you need to do, no matter whether you’ve already started out on your journey as a Vaishya or you are one of those rare people who have survived the civilized world as a Kshatriya.
Chapter 4. A Business Owner’s Personal Goals
A business owner, along with all other company employees, is, of course, part of a group. Every group member fulfills his own particular responsibility as a salesperson, an accountant, a process engineer, et cetera. An organization is a system whose members perform specific functions. A salesperson works with customers; an accountant handles financial transactions and maintains records; an engineer develops new processes and monitors their compliance. In this system, the owner plays a special role. His function is to establish goals that will unite the entire group. But in this capacity, he may encounter a trap that is easy to fall into.
As I discussed in the previous chapter, every person has his or her own individual goals. Only people completely disappointed in life do not have goals. Every salesperson and accountant dreams of a new house, a car, a cruise, a special gift for a loved one, and a business owner is no exception. Just like the others, he has his own personal goals that he dreams of achieving. He dreams about amassing personal wealth, about houses and cars, about comfort and vacations, and about opportunities to do something creative. There are as many goals as there are different kinds of people. And the more capable a person is, the more individualistic his or her aspirations will be.
At the same time, the owner is the only person in the company who is responsible for establishing goals for the entire group. He is the only one whose function it is to establish these goals, and then direct the group’s attention to them. That is where the catch is. The owner can confuse his or her personal goals and dreams with the business’s goals and purposes.
Interacting with many business owners, I occasionally meet people who say, “The goal of my company is to make money, increase assets and the company’s market value.” These people have no idea that they are not talking about the company’s goals, but about their personal ones. The owner has a goal of increasing the company’s value and wants his or her “baby” to continually grow. This point of view could be compared to that of a father who wants his child’s only goal to be to serve his parent. This is a completely unnatural point of view. Of course, a child should bring his parents joy, but it should be the joy of his own successes, achievements, and victories on the way to his individual goals. When the owner of a company says that the company’s goal is “to increase the company’s value,” he really means, “My goal is to become rich.” He is not talking about the group’s goal, but about his personal one. A group’s goal cannot be someone's dream of becoming happy and rich.
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.