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Mark My S ETTERS OF A BUSINESSMAN TO HIS SON G

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Mark My S ETTERS OF A BUSINESSMAN TO HIS SON G. Kingsley Ward PRENTICE HALL PRESS New York I I ir i, i i CONTENTS 1 i i t I 1. t. ; a i: I I t,. i. li il ir an fi' 1'. ii Preface, ir' xi i, I I l THE LETTERS i l. 2-. 3. ::, : challenge,3 Education, T On Success, r5 +, Stopping the Momentum, rg 5 First Days in the Real World, e3 C. Integrity, z8 7 What Is an Entrepreneur?3e g. Experience,4a 7. Employees,46 10 - partnership,5r ll. on Delegating,56 l t I CoNrnurs l2-. ll. It. , i li. Business Expansion, Tg 16 . Money,78 l Public Speaking, 36 Manners, Attire, and Deportmenr, 92 ,8. $. 2o . PRE FAC E Marriage,6T lE. \f , \ I The Fine Art of Negotiation,6r Bank Managers, roo "i On Dealing with Government, ro6 On the Principle of Diversification, 21. The Value of Reading, r r5 2L. Teamwork, rz6 23. On Happiness, lgz 2+. On Firing People, r38 2r. Friendship, r43 Zb. On Criticism, r4g 21. Personal Financial Security, r54 ZE. On Being Prepared, 16r 2q. Stress and Your Health, 166 3O, On Being a Leader, r73 31. That Balance in Life, r79 32, You're on Your Own, r86 r ro Having survived two serious operations within four years, I quickly learned that none ofus goes on forever, and it appeared a provident move to me to look at estate plans for my family. In so doing, I decided my businesses should continue under family ownership. Because my son was only fifteen and my daughter only seventeen at the time, and in case I were not around to assist them in person when they were older, an important part of my estate planning became my desire to impart to them some of the lessons I had learned the hard way in the corporate world that might make the road a little less bumpy for them. Toward this end, I started setting a few words down on paper. Our schools and universities teach the minutest details on the widest range of subjects, but almost no assistance is given on many of the topics I believe are of paramount value to any students contemplating business careers. As I began writing, it became increasingly clear to me that a terrible amount of learned information passes away in the night wasted with each soul who leaves this earth. There were and are many others better xl Pnnrecr Pnnrecn equipped than I to write about some of the pitfalls of the business world. Alas, few have chosen to do so. In my view, cornmon sense is probably the best weapon with which to enter the battles of the business world. Regretfully, common sense seems to elude many people during their combats-as so often does its brother, responsibility. Yet these characteristics are the very basics of struggles that still confront every young person attempting to establish himself in this world. Some of the pitfalls seemed more like falling offthe side of a huge mountain at the time, but fortunately I was able to climb my way back up to start over-though often only to a rung of the ladder a good deal lower than the one on which I had lost my footing. Thomas Henry Huxley said, "There is the greatest practical benefit in making a few failures early in life." A few failures, fine-but the trick is to survive those few and not become addicted to failure as some do, largely because of a lack of direction and a will or desire to learn the ground rules of getting ahead. These words are written with the hope that they will help eliminate some of the potholes of life-or at least provide the means of skirting, going around, orjumping over them. To young people entering the business world to some already immersed in it-I would like to -and stress that learning does not stop the day you leave the classroom. In fact, your real lessons are only then beginning, and they will require more emphasis, energy, and study than ever before ifsuccess is to knock at your door. (By the way, I would suggest you bang on its door first, not wait around for it to come knocking at yours.) There are numerous quotations contained hereinwords of many philosophers, poets, writers, leaders, and statesmen whose thoughts have been recorded down through the centuries for posterity. They are in abundance for a simple reason: most agonies orjoys of life or cornmon smse have been contemplated by far greater minds than mine, and in many cases, many of my thoughts or points of view have already been penned and expressed far more succinctly than my mental capacities or writing skills permit. I have therefore borrowed freely from some great minds to strengthen, underscore, or clarify much of what I have to say. Somewhere along the way in life each of us hears that the brain is capable of producing a great deal more than most of us ask of it. Charles Dudley Warner Put it this way: "What small potatoes we all are, compared with what we might be!" I subscribe to Mr. Warner's theory wholeheartedly-and grieve over the wastage wrought through neglect, which we bring upon ourselves by not learning how to expand our brain power. It goes without saying that hard work is essential for achieving success. However, more important is how one channels his work efforts toward success. I have seen many people work extremely long, arduous hours with very limited success. Why? Usually because they have been unable to apply common sense to the harnessing of an effective directional plan and organized methods of application. Attaining success requires the setting of goak in one's life. Set those down for yourself and then carefully map the routes that will lead directly toward them. Plan your career along a realistic path. Perhaps not for you the desire of a fresidency-but surely, are we not all capable of doing a lot more with our lifetimes than what society xll xlll success. I cannot remember when I first showed any promise for the business field, but I can well remember trying to hurdle the many pitfalls that confronted me-the same Pxnrecr seems to demand, request, or require? I heartily believe so. This book has been written in the masculine gender; father to son. However, my words are offered to anyone interested in business-with the sinceresr hope thar they will be found useful. It was written singularly ro my son because at the time of writing, my daughter's interests and intentions for her future were focused outside the business world. Since she has now changed her mind and her course in life, and if I were beginning these letters now, they would be addressed with equal love and enthusiasm to both my daughter and my son. It is to my grear delight that my daughter recenrly decided to enter the world of business. In today's Western society we are continually moving ahead in our quest for knowledge and its application to every facet of our existence.I am delighted that in the course of our search, the realization has begun to dawn that women not only comprise 50 percent of the world's populace, but 5o percent of the world's human capabilities and aspirations. Increasingly, women are participating in business at executive levels and contributing vital perspectives that regretfully-to the detriment of society-have been disregarded or ignored in the past. So it is with great enthusiasm that my wife and I observe our daughter's desire and choice to enter the business field, and we will observe her and our son's progress with great interest, pride, and delight. Dare to dream-dare to try-dare to fail-dare to succeed. xlv I'HE. LE,TTE.RS I Challenge @r^, son' I understand you have just received a letter stating you have been accepted for enrollment at St. Andrew's this fall. It is with some surprise that I learn you are less than eager to join this outstanding and excellent school. I daresay many other young fellows would jump at the chance ofjoining this elite college, and it is unfortunate the great majority never will belong to it, because of the substantial cost involved, geographical restrictions, or inadequate scholastic achievements. Fortunately, none of these pertain to you-and with so much going for you, your negativeness about this opportunity leaves me somewhat shaken and perplexed and more than a little concerned. It is not a father's place to push his son in directions for which the boy has no heart; more sons have had their lives interfered with this way than I care to think about. All I wish to point out to you is this: we all go around this world only once-so make the most of it! Many are the people I know who at the age of thirtyfive, forty-five, fifty-five, say to me, "I really missed out in life." About go percent of them have excuses, rational3 i i i f I Menx Mv Wonos i i CuellnNcn ! izing why life passed them by, why they never accomplished anything; the other ro percent honestly admit theyjust did not accept the chall,enges life placed in front of them during their earlier years. I feel sorry for these people because in many cases they probably had everything going for them when that gauntlet was tossed their v/ay-except the courage to pick it up. Facing new opportunities that involve a change of lifestyle, living patterns, usage of time, is something many people fail to rise up to and accept. The hardest thing I ever did was to leave my home in a small town and go a thousand miles to a big city where there was not one person I knew. But that was the only path to success for me, and as much as I hated it-for it was a terribly lonely path-there was always that goal ahead: the goal I had set Dy myself,/or myself, and I insisted on at least trying for it. Accepting that challenge changed my whole life. The challenge you are facing now-tackling this new school-is a crossroad in your life, and if you cannot even try teshng your footing on this new, statistically proven surer road to success because it might be too demanding, then you have already-at a very young age the pattern that twenty or thirty years from -started now will lead you to say "life passed me by." i : i! Let us examine this challenge. If you decide to try it, how much harm can it do to you? No one is going to cut offyour arm, put you in jail, or take away your motorcy- cle if you do not succeed. On the contrary, if you do get your ass beat off, then welcome to the club, because I have that happen to me in the business world very frequently-to the point now that I never give a failure a second thought. Yesterday is for dreamers. I am too busy thinking about today's battles. Failure is both a funny and a sad thing. We worry so much about it coming our way that we cultivate ulcers, nervous breakdowns, tics, rashes, or hot flashes. Yet on the odd occasion when that dark day of doom does come around, we find it isn't really quite as bad as we thought it would be; for some reason, the way our minds sometimes tend to work overtime building up possible disasters is very often very far off the mark. According to your evaluation of this new school, all the students are expected to pull offstraight A's and do; they are all6'4" tall; they are all z5o-pound athletesand to boot, they all execute dynamic projects in record time and enviable fashion. Let me tell you-no,let me quietly explain to you: the percentage of outstanding students at this school is no higher than that at your present school; the only difference is this group tries harder, therefore it achieves more. You, as most of us mortals in this world do, fall into a middle or average category with respect to brains, abilities, or what have you-and that is not the worst place to be, believe me. However, when you join a school or group of this caliber, your work patterns and efforts automatically move up in such away that you hardly notice because you are going along with the tidc-one that is not going. out. I know you don't know the meaning of the termprocess of osmosis, so I will define it for you: in simple terms, it means that if one becomes totally immersed in any par- 4 5 There is a tide in the affairs of men, Which, taken at the flood, leads on to fortune; Omitted, all the voyage of their life ls bound in shallows and in miseries. -WM. SHAKESPEARE Julius Caesar I t i i i 1 i i i i /) L. Education Menx Mv Wonns ticular facet of life, one cannot help but absorb that facet. Immersion among a group of higher caliber students will result in a higher rate of success for you because knowing you, you are not the type to sit back and let the world pass you by. Instead, you seem to want to get out and keep ahead of it. At least that has been my impression of you to date. Challenge is treated differently by different people. Some people are so afraid of life they accomplish about as much as a cow in pasture does; others thrive on challenges and are constantly looking for new ones. Between the two extremes is the denominator called cornrnon su$e, which should separate the challenges that lead nowhere from those that lead somewhere. After a while you learn that challenge is a part of life-and you learn how to take it in your stride knowing that you will win most of the time, lose some of the time, but become a better man either way for having tried. As Gabriel Biel said in r4g5, "No one conquers who does not fight." But whichever way you accept this or amy challenge of your life, I will remain always, Most faithfully, /'/tu /r*f fiito 6. @ru, son Most people think of education as having only to do with school. Well, that is a good place to starl. In your case, your high school has a particularly good record for turning out fine students, and I expect one reason for its success as such an excellent institution is the emphasis it places on discipline. Of course, lots of good men and women make it without ever having attended this type of school-but the main reason is still the same: discipline. In this case, mostly sely'discipline. That is the key ingredient that separates those who make it from those who do not. But a good school and a good mixture of people to enjoy it with is certainly an advantageous start. Combine these somewhat uncontrollable external forces with some good internal characteristics and it becomes pretty hard to keep a determined fellow down. Within the framework of your formal schooling it is important for you to bring an element of inquisitiveness to the classroom. A dtsire to learn makes the act of studying and learning a delight. Too many of your fellow students are too busy complaining about the teachers I i i I Menx Mv Wonns i to tend to their studies, which, after all, are the primary reason for being in school. The system has not changed in the thirty years since I was at college and it probably won't alter much over the next thirty years (along with most of the educators). So instead of complaining about it, why not just get on with beating "the system"! I applaud your desire to enter the business world. To a young fellow, it looks quite rosy: big car, travel, meals in the best restaurants. I envisage your love of a dollar riding high. Well, it is a good life if-and it is a big "if" find your particular niche in it, for the business -you world is very large and very complex. It is also a world full of bankruptcies and of people who die early due to its stress. To be as prepared as possible for avoiding some of these and the many other pitfalls that business presents daily, map out your next ten years of training and the system I .l : I nou. In the selection of your courses, do not be too eager to pick only those that solely relate to business. A person with a little worldly knowledge is as valuable as he is rare. There are countless subjects to choose from that will give you a wider perspective of this world and make you a better businessman one day-Political Science, History, Geology, Astronomy-to mention but a few. According to the English writerJohn Dryden, everything in the world is good for something, and I believe that wholeheartedly. I would recommend you take one new subject every year that will give you a wider persPective, a new or different outlook on life. You never know what field of industry you might eventually become involved in or how valuable even a little knowledge might be once you're winding your way through those mine fields of the business world. 8 Epucarror.t I I ) University education is designed to expand your brains, train you to work hard, teach you how to organize your'hours and days, meet many people, play sports, chase girls, drink beer, and enjoy life. (Just don't place too much emphasis on the last three "subjects" since these somehow seem to get ample share of one's days [and nights] with very little expenditure of hard work or effort.) Also attainable at university is Francis Bacon's formula for success. He writes, "Reading maketh a full man; conference, a ready man; and writing, an exact man." Now Jfteret a combination of talents; a surefire trio for anyone aiming for the top! The day you can leave university feeling you are well read, you know you can write, and you have a knowledge of people-you are ready to enter the real world. This is the formula I have personally tried to follow and build on. And I hasten to add that at zo stage have I ever found there was not a lot more to learn. One does grow old ever learning. At your age of eighteen, it is imperative to have a aision in front of you of what you want to be doing in ten years'time. That period between twenty and thirty years of age is the most crucial of all learning periods. If you do not get the required study you need for your future work accomplished during these years, you will more than likely not get it done at all. By age thirty, your life becomes one of wife and children, a mortgage, a jobwith precious little time left over for studying for a career. Some even say that at this age the brain does not absorb information as efficiently as it does in earlier years. Your aim or goal in life for age thirty might be termed only a dream or a fantasy right now; nevertheless it must still be kept at the forefront of your mind as your incmttue 9 Manx Mv Wonos EoucerroN or motiuation at this point. Without some goal or other to shoot for, it is almost impossible to keep up long hours of study. Your goal must be kept in front ofyou each new day you put your feet on the floor, for only this will get you through all the rough spots-the arduous work, a failed exam, a poor mark on an essay, a boring professor, or a difficult but compulsory course. Once you have determined your goal, doggedly pursue finding out as much about it as you possibly can. Many people say, "I think I'll be a lawyer," without the foggiest idea what a lawyer does all day, without an inkling of the many facets of law in which he or she might end up involved. Makes far more sense to first talk to someone in the profession-but to someone with a balanced outlook on life; no use talking to a person so caught up in his chosen field that he considers law the one and only topic in the world nor, on the other hand, to one who hates his chosen work. A good "counselor" will recommend a course of study you should pursue and, more importantly, he will tell you what to expect when you get to the finishing line and start practicing law yourself. Neglecting such preliminaries can easily not only result in the loss of valuable time, but, quite conceivably, in a lifetime of feeling entrapped in a profession not as palatable as you might have wished versus one you could have had if you had taken the time and trouble to select it more carefully in the first place. Once you have completed your review and chosen what you want to be-lawyer, certified public accountant, marketing executive, whatever-try to get some work in your chosen field during summer recess. While you have no recourse but to be very deeply immersed in your books during this period of your life, at the same time do not lose sight of this fact: it will still be the practical execution of your future work that will determine the measure of your success within your chosen profession. So pull whatever strings that you, your old man, your uncle, great-uncle, or any friend can arrange for you to help you find summer employment in the same field as your intended future endeavor. Thomas Huxley said, "The great end of life is not knowledge but action." I would add this addendum; "-261ien as dictated by the use of your knowledge." During my summers, I worked in the accounting offices of the local paper mill. It was excellent experience. However, I would like you to especially note the following episode during this period of my life. One summer I could not get the job in accounting and I ended up working in one of the physically toughest, dirtiest jobs in the mill: eight hours a day, six days a week, on shift work. That left me with two major impressions: the work some men had to spend their whole working lifetimes performing, and the tough working conditions under which they were spending such a great portion of their lifetimes. I made certain I would not have to be one of them again. Do not waste that time you get away from your books. Plan ahead and use it getting some on-thejob experience in your chosen field. At your stage in life, most everything is a new experience. Better to learn it sooner than later. While you sit around quaffing a beer or two with your friends, I know the conversation at times turns to talk of taking a year offfrom school to see the world. Coincidentally, these times usually occur just when studying has gotten a little tougher or heavier, or just before a poor a i li i:. I ro I : a lt Eouce'rroN Menx Mv Wonps set of marks is about to land on the old man's desk and hit the fan. There are no newer or more valid grounds for talk of such hiatuses since my college days,I am sure; probably just as large a Percentage of students now as then convince themselves for the same reasons how educational it is to travel around the world with a pack on one's back and no money. On some days it sure does look good. But my personal opinion is that most of the students contemplating such excursions arejust too lazy to study any more and needing a way out, they yield to the belief they could only benefit from such an educational jaunt, so off they go to see the world. The saddest thing is, statistics Prove only a rare bird ever returns to his hallowed halls of learning. Ifyou feel you need a backpack trip around Europe, I suggest you use the time you have off from school between May rst and September rst: ample time for getting this kind of education. And if you are sariotuly entertaining thoughts in your head of this nature, I will offer you a deal: take the year off and travel without any funds-or go in May at r?r) expense. You might call this bribery. I do, but I offer it unabashedly because I know how difficult it is-once that brain has been given too long a holiday-to get it back in gear again for studying four to five hours a day. Plus, I hate to see a house left half built. Assuming your career in university comes to a successful conclusion, per the advice of the senior people in your chosen profession (the best advice you could find), your next five to six years must be devoted to further study and experience. As a prejudiced certified public accountant, I obviously consider my profession a very I I l i i I i I : I tr I I : : l !: 1 i t: ij i t &l !I i I I L i : i t fine training ground for anyone preparing to enter the business world. A Master of Business Administration and several years in a marketing position is a good alternative. With the help of a good tutor during rhese years and lots of hard work on your part, you should be able to progress rapidly and advance right ro rhe top. A poor teacher might sidetrack you and cause you to hit some detours along the way. Should this occur, you would r-nore than likely require a few extra years for getting the hang of it. But either way, remember, if there is a lack of hard work on your part, you will need to update your r6sum6 and send out some applications for a new job. Just don'r bother sending one to rne; I hate sending out rejection notices. Closer to about age thirty, if you are still interested in running the family businesses, I will gladly accept your job application. Should you join our companies at about this stage, you will have another five to ten years of learning-and more learning-before you become an experienced executive. However, there will be no exams to get boned up on, no report cards-only monthly profit-and-loss statements informing you whether you are passing or failing in the real world. It will take you ar leasr five years to get to know the businesses we are in-our customers, suppliers, employees, management staff, the coordinating of external forces (those you cannot do much about), and the coordinating of internal forces (those you can do something about). Now you might be ready to enjoy that big car, travel, and those expensive restaurants. Business is like a fragile vase-beautiful in one piece, t, 1 I r2 t: t ! ,, l3 : ; Menx MY Wonos 3. I t * On Success but once broken, damn hard to put back together again to its original form. So, in the words of Sam Butler: And look before You ere You leaP; For as you sow, Ye are like to reaP! Respectfully, @r^, i r4 son Recently I heard a teacher expounding on the trials and pitfalls facing rhe sons of successful fathers; the tribulations of growing up in the big wakes of high achievers. He stated it was one of a young man's most difficult adjustments because the young man never feels he can be as good as his father. Apparently many boys do not even try. They give up before even starting to rap their own abilities and resources. Sad to hear. It occurred to me that you too might be harboring some notions of this nature and just in case you are, before they take hold of your mind as an excuse for backing off in life, let me tell you a few things that happened to me along the way. In high school I had an average of 6o in the ninth grade, 65 in the..tenth grade, 25 in rhe eleventh grade. I then transferred to university, but as you can see for yourself, it was not because I was any brain; that was just the particular school system in my area. I got rhrough my first two years of university, but with standings that were nothing to shout about despite a lot of studying. And l5 Menx Mv Wonos ON Succr,ss work I did, I assure you, because nothing came into my noggin easily. Then I failed the first exams of my certified public accountant's course. I could not believe it! I was crushed. Here I was with six years of university-finuhed! Through! Needless to say, I breathed one great sigh of relief when I was allowed to rewrite my exams the following year. Having assessed why I had failed the first time, I made certain it would not happen again. It didn't. It had been no big mystery to figure out: I simply had not worked hard enough. I have ever since. The work or study habit is hard to come by. It requires a natural desire to learn, it requires practicing the art of concentration, but most of all, it requires a spirit for hard work. All these positive, productive attitudes can easily be accomplished by go percent of the populace. Few accomplish them. If you think all my endeavors have always been successful, then you are unaware of details concerning a large part of my life. Successful people appear to be traveling along one continual, successful road. What is not apparent is the perseverance it takes following each defeat to keep you on that road. No one I know of has ever experienced one success after another without defeats, failures, disappointments, and frustrations galore along the way. Learning to overcome those times of agony is what separates the winners from the losers. How many times have I talked about the people who are so afraid of failure they never even enter the race? Every failure teaches one something-and some failures teach more than others. Failing my first set of cpa exams has remained with me for the past twenty-five years. The lesson learned? You had better work hard, for you are not going to make it otherwise. With any maxi- mum effort, most things fall into place. But the race is not necessarily won by the swiftest; it is won by people who leam from past races and put those lessons to good choices you must make daily. How you decide to conduct rG r7 use. Remember, people tend to look upon successful people as they appear to be now. They overlook the many years of hard work, failure, frustrations, and problemsall encountered, lots conquered-all along the way. With an objective in sight, one consrantly tries attaining a higher level of achievemenr. So rhose objectives you set for yourself are vitally important. Now the next time you feel inclined to look at dad and think his boots are too big for your feet to ever fill, remember, too, that. you have a big head start on the old man. Your advantages? Your school work for one, with, to date, a much higher academic achievement level than I had. Your exposure to life; at your age, I had hardly ever left my small rown and knew nothing about the big city and its complexities. Your parents; mom and I can steer you toward a few good doors into life. My mother and dad were sixty-five when I was your age and as dear, loving, and wonderful as they were, they knew nothing of the business and social environments in which we exist. At high school you achieved the honor of being selected one of the officers of your school. You were captain of the second basketball ream. Despite three knee operations, you played football for three years. your leadership qualities are all there-all in clear view. Consider. You have already accomplished far more than I had at your srage. Why should the future be any different? Morals, spirit, hard work, and responsibility are + Menx Mv Wonos yourself in society tests your moral fiber; how you perform on the football field or basketball court exemplifies v/hat type of spirit you possess; the amount and quality of time and concentration you devote to your studies establishes diligence or lack thereof. To all of this, bring your mind to bear on each act you perform in daily living and ask yourself, "Is this being responsible?" For in the end, how responsible you are determines how successful you Stopping the Momentum are. Your achievements to date are many-already the accoutrements of a successful young man decidedly on his way up. Think about it. You have only to finish what you have already so well started, only to continue the successes waiting to be continued. The old man? Unbeatable? Hell, eventually you'll run circles round him! Sincerely, /,w 0 ^,l I @ru, son, Your mid term report just arrived and it has some peculiar looking letters on it such as D, D-, and C-. I had not seen these before, so I asked a friend of mine what they meant. From the reply I got, I rather suspect that big smile of self-satisfaction that almost blinded us all following your first-year results has kind of dimmed. However, I assume there were sufficient smiles and adequatejoviality during your first term ro carry you over for a while. I hope. Or did you waste too much of all that spare time you had in sleeping? You have probably noticed that pushing a car uphill is hard work. While you can stop for a rest, you must finish the job or chances are your car will slide all the way back to the bottom of the hill. Then you have to srarr pushing all over again. Work is like that. So is studying. No matter how much you did yesterday, unless you keep chipping away at it, you lose momrnturn. Once your momentum is gone, erosion of all your past efforts starts setting in because you are off the track that finishes the job. In your case, yourjob is getting through university. Although it is a few years back, I do remember some r8 r9 SropprNc rnn Menx Mv Wonos very bright boys in my first-year classes. How I envied them! Their high marks seemed to come so easily, while I had to work like hell for my crummy B-'s. But second year turned out to be another story. For one thing, I learned that some of those bright boys were coasting on the momentum they had built up in high school, where they had worked hard. Still, at the end of this year, it was an enormous amazement to me to learn that our class had lost about 3b percent of its people. Some had flunked, some had just plain quit, some had changed courses to easier ones. And a lot of them were the bright fellows I had started out with! They had just run out of their tremendous high-school momentum. You see, because they had had an easy, lazy first year, they figured second year would be the same: an easy piece of cake. By the time some of them realized what had happened, it was too late. They were no longer able to discipline their minds enough to handle the required concentration that would put them back on their work tracks. In other words, they could not reverse the downward momentum. After you have lived a few more years, you will observe that life is an uphill battle; as soon as one project is accomplished, another looms up. If you are not in stride, ready to take on new efforts, your failure rate in life will be high. That is what separates successful men from those who never make it. At this juncture, I perceive no evidence of your having coasted during your first year. However, what I do perceive is that you have forgotten that life at certain stages is like paddling our canoe up the rivers we have covered. Stop paddling when you are heading upstream and, man, that current sure soon takes you downriver in a hurry! The same currents are there in life, and if you 20 MoTTENTUM wish to rest on your oars or paddles, don't do it in the middle of a strong current such as your second year at university. Remember, the rests you take on the river must be carefully picked to avoid the currenrs. So must be the rests you pick from studying. It would seem to me that an annual seven months of honest endeavor is not too much to ask of anyone. If it is, and all you graduate with from university is a Daverage, then you are in for a rude shock when you come to join our company. We demand eleven-and-a-half months of honest endeavor, and A's only are accepted in all our departments. Of course, our Unemployment Insurance Act allows for the continuance of your five-month annual rest period-but I have not known anyone of your caliber who has ever willingly collected this kind of holiday pay and stayed h"ppy for long. Remember, if you wish to be a future top business executive, it is impossible to "fly like an eagle with the wings of a wren." You now have four months left to get your momentum back in gear to its former satisfactory level. Love, 1.L02/,M P.S. It occurs to me that a hard-nosed appraisal of many of those with whom you spent all that rest time dur- 2r Menx Mv Wonos ing first term might prove beneficial. A few character flaws among this group might be revealed that I hope were all noncontagious. ). First Days in the Real World I would suggest that such an appraisal be made ti.is term, for I doubt if many of these friends will be back next year. I also think it might be prudent to select some new friends this term who will be back. They will make better friends in the long run anyway. @uu, son, Today is a big day in your life. Having accomplished twenty years of schooling, the time has come for you to enter the real world of work. Lots of people do not like the word work, for it immediately evokes images of having to get up in the mornings, the repetition of dull acts, little time for play, headaches, backaches, and other assorted miseries. Others are just a-bustin' to try their turn at the wheel of fortune and they cannot wait to get started. I would prefer to think you are of the latter school of thought. Now that formal education has molded your frame of mind, it is time to apply those years of effort to earning a living and your own space in this crazy world of ours. You have one major advantage going for you in that you hnow what you want to do: be a businessman, and a good one. I feel sorry for the many young people who cannot seem to pin down what they want to do to earn a living even sorrier for those who do know but cannot -and find a job in their chosen fields. Knowing what you want to do and landing ajob in which to do it is a mighty fine start. 22 23 Mlnx Mv Wonos Frnsr Devs IN THE Rner- Wonro Speaking of fine starts, getting to work on time is precisely the right start for your day now. Nothing raises people's eyebrows or tempers faster (including mine), than a person's repeated late arrivals at work. It is hard on the morale of everyone else who has disciplined himself to get out of bed and out to work on time daily. It is particularly hard on the boss's frame of mind-for how is he to feel comfortable about giving you responsibility if you are not responsible enough to get to work on time? Ours is a static starting time. Quitting time-as long as it is after b:oo or 6:oo p.u.-is up to you. Some firms have flexible working hours, and those who cannot handle our fixed time schedule should probably find a job within one of these companies. I do not intend ever trying to find you at 8:r5 a.ur. only to learn you usually saunter in around g:3o. If you are part of and dealing with management, you need to be on the same time clock. You will be joining a group of our employees who have put a lot of their years into moving our companies ahead. (I trust you will be gracious enough to allow a little of their vast experience and knowledge of our operations to permeate your brain.) Although I would see no sense in your trying to reinvent the wheel, I would consider it entirely permissible for you to question any current practices you think could be improved upon or performed in a better way. Just be cautious not to come on ,oo strong. Victory often goes to those who bide their time learning more, who pnfect their ideas before presenting their carefully thought-out plans to management. Should the urge strike you to restructure our policies, bear in mind it need not all be attempted overnight (unless, of course, it happens to be a matr.er of urgent importance).1am for prompt decision making, but untried ideas require careful footing. training program, and since you will be in the marketing end of our services, I suggest you learn as much as possible about our business before you try testing your salesmanship on one of our customers. Some of them have been with us longer than you have been on the face of this earth. And not only is it imperative that you learn everything about our business, you must as well learn as much as it is humanly possible to learn about our customers"and our prospective customers before you even shake hands with them. In a customer's eyes, you only get one chance with your first impressign. Make certain you do your homework so that it is a good one! If it is not, you will have to spend at least the next two years trying to get back on a positive footing with that customer. A woeful start. "silence is golden," someone said. I concur. And in your case, a pound of listening to an ounce of speaking is about the ratio I would recommend you adopt during this initial period of time with us. I once decided against hiring a salesman simply because a couple of the purchasing agents he had called on in his previous job told me their best description of his approach was "a diarrhea of words." The lesson to be learned? Simple: "It is better to keep your mouth shut and be thought a fool, than to open it and remove all doubt." It is hard to dislike a knowledgeable person rather on the quiet side-and purchasing agents especially tend to favor them. Aside from your knowledge of our business-which must be in your briefcase before you set foot off our premises-instilled in your mind must be the conviction that we offer bettn, far better, seruice to our customers than our competition does. Only half of ourjob is selling our services; the other half is saviang our customers to death. 24 25 You will receive excellent guidance through our Manr Mv Wonos Frnsr Deys rN THE Rrel Wonlp Otherwise you have to keep finding new customers to replace the ones leaving you due to lack of service. Most inefficient. (Also so stupid it would drive your old man up the wall and around the bend!) Selling is important, but savice is the name of the game for adding profits to the bottom of our profit-and-loss statement. Servicing our customers well obviously entails a good working relationship between us and our suppliers-and we have some who service us so well I getjealous of their efficiency in this area. No price cuts by other suppliers or wild horses would ever pull me alvay from this kind of loyal supplier. I would like to think some of our customers feel the same way about us. In your early employment days with us, keep this spectrum in mind: at one end, our customer; at the other end, our supplier; and us in between. A perfect spectrum of light, with its colors all blending harmoniously into one another, is a joy to behold. So is a perfect business in its blending of suppliers, employees, and customers. For the time being, walk softly and forget the big stick. People will be looking at you as the new boy the same way you looked at the new boys at school-sometimes with a bit of a jaundiced eye perhaps? If all this sounds rather frightening, not to worry; Rome was not built in a day. Moreover, the primary purpose of this letter is not so much to counsel as it is lo rh"r. with you briefly the pursuit of that oft elusive dream: finding happness in your work. The great writer John Ruskin wrote this in the nineteenth century: Your formal education and desire to be in business certainly should make you fit for our work; my observation of you over the past twenty-five years does not lead me to be too concerned you might be doing too much of it; that leaves your happiness at work solely dependent on your personal sense of success. Ambition, initiative, and responsibility, all carefully developed, will make your career a wonderfully enjoyable part of your life. And think of this: the future giants of industry of some thirty years down the road are all starting their frrstdays at work today, too.Just as you are. Try not to forget that. Oh, yes, one other thing: none of those future giants will be terminating their formal training today either, now that they have entered the real world. They willjust be shifting it-to nights and weekends, with a measure of leisure time thrown in for good balance. There is a secret desire in a father's heart for his son to do well. I guess that is perhaps why George Herbert wrote, "One father is more than a hundred schoolmasters." Welcome to the real world of earning a living. I shall have your r.port card ready at the end ofour first fiscal quarter. Love, ,fu In order for people to be happy in their work, these three not do They must for it. be fit They must things are needed. too much of it. And they must have a sense of success in it. 26 27 6 Integrity INrscnrry contract would be yours, and that you now regret having divulged certain private corporate information. Also, in the aftermath, you have unfortunately become very bitter toward the other party, perhaps with good reason, but you must not allow bitterness to discourage you or divert you from pursuing other contracts with your usual optimism and zeal. As you chalk up a few more years'experience on this planet, you will realize there are few people in whom you can place your trust completely. Therefore, a wise man arms himself with a little ammunition: a little knowledge, or what I call safeguards for those times when he finds himself having to place his trust in another person. Those safeguards can take many forms. First, you should try to obtain some background about a person you do not know. Most people are crea- tures of habit and if they do nor play the game by the rules, no doubt there is sorneone they have burned or stung along the way-and if for no other reason than even some vague revenge factor lurking in the back of the victim's mind, that kind of information is long remembered. So invest a little time enquiring about the person with whom you are going to conduct business. Second, you should direct your efforts toward always selling your services on a pusonal level. Remember, the company is a nonentity as far as customers are concerned. People are not doing business with the company; they are doing business with you, personally. If you always treat it that way, customers come to rely on younot on the company-for the success of their contracts. That is not to say, of course, that you should not single out for special attention your excellent staffand superlative facilities and merhod of operation. Third, you should look on all ventures at this stage of your life as experience. You have forty years to make up the loss of this contract! If you dispassionately examine the events behind this one, you will note one or two things (perhaps more) that you will do differently if you ever again encounter similar circumstances. Wise men learn more from defeat than they do from victory. My fourth and most major point: you have come away from this with no besmirchment of your character. you did not compromise yourself or the company in your efforts. (If you had, then you would have good cause to hold your head in your hands, and I would also be telling you to bend over for a good swift you know what, where.) You see, you have what we call integrity. e,uite obviously, the other guy has none, and I would not give you a plugged nickel for his chances of long-range survival in the business world. Oh, he will sray alive for a while, 28 29 @ru, son, Your report on the loss of the RGM contract was disappointing news. I know how much you counted on it and how hard you had worked for six months to draw it to a successful conclusion. I also know you feel you were falsely and deliberately misled into believing the Manx Mv Wonps INrncnrrv deluding this person and then switching to bait another. But business is a small world. His lack of integrity cannot help but eventually catch up with him. But, as I have often said before, don't worry about the other guy's integrity; worry about Your own! Owning integrity is owning a way of life that is strong in moral principles-characteristics such as sincerity, honesty, and straightforwardness in your daily living patterns. In the business world, ownership of such characteristics is thb lifeblood of any long-term success. In the short run, it is not hard to make a bigger buck by cutting corners on what you promise your customers you will do or deliver. In the long run, though, such tactics are the cornerstones of the big losers in industry-the ones avoided like the plague by the winnns. One of the most important rules is to never give a person cause to say you did not tell the truth, for as Ayub Khan said, "Trust is like a thin thread. Once you break it, it is almost impossible to put it together again." Once someone has shafted you-as you term your recent experience-you might feel like shafting someone else. It is only human. Most of us react the same way at such times-as if a little evening of the scales would help your damaged ego. At this point, however, you are in grave danger of losing. Big! Up to this point, you have lost nothing but a contract that was not yours in the first place. The loss of a lot more is at stake if you allow your anger or an impulsive quest for retribution to get the tirely possible the loss of the contract was no failure, but one wonderful blessing in disguise instead. Chalk one up to experience, to being thankful for discovering beforehand the true nature of a person you might have had to do business with, and all your efforts will have been well worthwhile. Anyway, that was yesterday. What are you doing today, to keep us in business tomorrow? With love, best ofyou. Now stop and think about this. How badly will you miss the problems you inevitably would have had to face down the road had you been successful and won the contract? How much will you miss not having to deal continuously with this man who lacks integrity? It is en3o 3l Z What Is an EntrepreneurP @ru, son While in New York last week, we had an interesting conversation going before Mr. Daniels arrived for din_ ner. Your queries about entrepreneurs were good ones and somewhat tough questions to answer. My first acquaintance with that rare breed of person occurred during my last years as a cpa at price Water_ house. Through your mother, I met i rnun by the name ofJohn Part. He was abour fifty years of age and I about twenty-eight. While attending a few social engagemenrs with him, I found myself intrigued by and drawn to rhis man, for he so obviously possessed a magnificent busi- WHer Is eN ENtnrpnnNnun? he might next set up another business, and could I join him. He finally decided to go back to work, set a date, and I guess he liked my brown eyes, for he invited me to come along with him. It had to be my brown eyes or my winning smile because few young fellows were as green as I at this stage of my life in the Big City, and there had been a choice ofseveral other assistantsJohn could have picked for his team. Anyway, my introduction to the real business world, that of ."making a buck," got started. By the timeJohn died some six years later, I had had sufficient transfusions of entrepreneurial genes to enable me to carry on the business we had started, which I now bought from his estate. I was not what you would call a rapid learner, nor was I always ahead of the average businessman my age at that point, butl had, been exposed toJohn's brilliant creative mind, and I now had a small business to get on John Part only worked when he needed money. He would stoke up the brain power and go our and crank up a new product (mostly in the health-care field), or devise some new method or approach to advertising. He was in one of his retirements when I met him, but although he had some left, money was beginning to run a little short. I wanted badly to see the other side of the business world-see it through a marketing eye instead of a general ledger, so I started badgering this man about when with. The word entrepreneur comes from the French word, mtreprmd.re, meaning "to undertake." The Oxford Dictionary's definition of the word is: "a contractor acting as an intermediary between labor and capital." Well, I think a few more words are in order to describe this fascinating innovator of the business world. To me, entrepreneurs are people with great imaginations. They seem to have answers for everything. No problems cannot be solved, no undertakings cannot be carried out. They are creative in their thinking, always seeking new methods of doing things. Their innate aptitude for avoiding the ordinary, the standard pathways of the business world, is the very crux of their success. Entrepreneurs are great observers and students of human nature.John Part did not miss a thing. One of his little pearls of insight was expressed to me at breakfast 32 33 ness mind. Manx My Wonos Wnar Is aN EN'rnnpnnNnun? one morning as we looked out the windows of a restaurant situated on a busy corner in Montreal. Streams of people were hurrying to work-some on foot, others in packed buses. He mused a little over the panorama before us and said, "Look at all those people running to work to earn money; money which they run to spend after payday; money seeking something ue should be running to bring them in the way of new or improved products or services." I never forgot that. The road to business success is paved by those who continually strive to produce better products or service. It does not have to be a great technological product like television. Ray Kroc of McDonald's fame did it with a simple hamburger. Many of the ideas entrepreneurs successfully exploit are not their own. An amazing number of people in this world have excellent ideas, but few know how to go about merchandising them. For the entrepreneurs, it is a natwal ability. They develop ideas from embryo to consumer stage at the speed of a computer, and that swiftly paced modus operandi is one of the main reasons most of them prefer working on their own. Not for them tedious marketing committees, hordes of consultants, and mile-long boards of directors-unless they happen to be such number-one executives as Lee Iacocca of Chrysler, who brought that company back from the brink of bankruptcy. Big companies have their entrepreneurs, of course, but many more are to be found "doing their own thing" without very much ever being heard about like that illustrates this point. (It has always been one of my favorites.) An old man in a farming area outside a city operates a hot-dog stand. Man, does he operate a hot-dog stand! People from miles around have heard about this old man's delicious hot dogs. They have noticed his great big billboards advertising the best hot dogs in the county, and they flock to his roadside diner to try them. He greets them outside when they come, woos them in with his big smiles andjoviality, and urges them, "Order two, they're real good." And the people do enjoy the very best, most appetizing hot dogs they have ever tasted-nestled in the freshest buns, topped with succulent relish, tangy mustard, onions cooked to a T-and all served by smiling, pleasant attendants. People leave smacking their lips and saying, "I never knew a hot dog could taste so good." As they drive away, the old man waves good'bye and reminds them, "Come back, please. I need the business, and so do the youngsters to get through college." And the people do come back. In droves. mentioned earlier that lots of people have great full remunerative bloom. Here is one story I thought you would One day, the old man's son comes home from Harvard, where he had graduated with an M.B.A. and a Ph.D. in Economics. He takes one look at his father's operation and says, "My God, father, don't you know we're in the middle of a bad recession? You have to cut costs! Dispense with your advertising costs by canceling the billboards. Save labor costs by reducing your staff from six to two, by doing the cooking yourself instead of wasting your time out on the roadside. Get after your suppliers for a cheaper grade of buns and hot dogs. Only serve the inexpensive brands of mustard and relish, and cut the onions out completely. Now, see all the savings you will have for weathering out this recession that's killing businesses left and right?" The father thanked him, and knowing how intelli,geml his son was with all his degrees, he never for a moment doubted 34 35 them. I ideas but are unable to carry them through to Menx My Wonos Wner Is aN ENrnepnrurun? the sound words of advice. Down came the billboards, back went the father into the kitchen, where only the cheapest goods \rere now being used and only one waitress left to serve extent of taping the customers' remarks so he could study them more thoroughly-much the same way some coaches revie'iv their teams' efforts on a video playback. The enrepreneur is shrewdly cognizant that as much as he knows, no one knows it all. He is a firm believer that them. Two months later, the son comes home again and asks his father how things are going in the business. The father looks at his empty hot-dog stand, all the cars that used to stop now whizzing by his door, his empty cash register-and he turns to his son and says, "Son, were you ever right! We sure are in one hell of a recession!" You see, the old man uds an entrepreneur-but only to a point. He knew what people wanted; the only basic component of true entrepreneurship he lacked was the courage of his own convictions. Had he really believed in himself, no one else could have destroyed his business. There has to be that stubborn, tenacious streak in an entrepreneur to ensure his success. The entrepreneur goes with his gutfeeling when there is an absence of solid evidence to direct him. His gut feel may specialize-in packaging, the medium of advertising, or knowing the type of retail outler best suited for reaching the consumer of a particular product. He never forgets, by the way, that mail-order and door-to-door selling have made many millionaires. (Sears and Avon, respectively, are good examples of each.) He will use available marketing assistance to sell, but unlike many now dormant companies, the entrepreneur ensures his success by using them differently. For instance, in a test-market program, he himself mightjourney to the test-market area and personally study the faces, the expressions, the comments-both positive and negative-of the test-market customers exposed to his new product or services. One fellow even went to the 36 only fools, convinced they know best what the consumer wants, bypass the test markets. Many a toddling entrepreneur has probably learned that lesson the hard way, but learned it I'm sure he has, for as strong willed as most entrepreneurs are, they are also flexible_an unusual combination of characteristics, but a vital one for success. Another observation I have made about the entrepreneur is his uncanny ability ro measure his risk. He is by nature a person given to taking risks, for he instinctively knows that "Great deals are usually wrought at great risks" (that was said by Herodotus in 45o B.c.). While keenly aware how quickly and easily rhe most carefully laid of human plans can fail, he does not shirk away from risk. He thrives on the excitement, the tension, the gamble, the fight-and upon conquering them all, spends five minutes relishing his success before charging on to his next hot prospect. Our entrepreneur is a super think tank when it comes to analyzing the risk areas of a new project. He discerns where it is most likely to break down and zeroes in on the soft areas. If a qualified person or company can help, he will employ them to help him narrow down his risk factors. Undoubtedly, he will also develop an alternate plan in case the one he is using does not work; with always a backup, always an out, he is always financially secure enough to walk away from a failure and start a new venture tomorrow. Bankruptcy courts are not for him. He 3l Menx My Wonos WHer Is eN ENrnrpRrNnun? poor too long and detests bread and beans. He has no intention of going back to either ever again. How does he do it? WeIl, in various ways, but mostly he rigidly judges how much he can afford to invest in a project. If it is going to cost more than he can cover or if he feels the odds are long against its success, he will do one of three things: he will procure an investment of other people's money and talents; he will sell the idea outright to someone interested in handling it; or he will, if he must, as a last resort, just forget it. An entrepreneur is eminently aware that "It is possible to fail in many ways . . . while to succeed is possible in only one way" (Aristotle said that in 35o n.c.). Some typical traits of some entrepreneurs frequently "do them in." Not all entrepreneurs are successful. Often they move too swiftly in the planning stages of their projects. In their haste, they cut corners on the quality of their service or product, they neglect to get legal protection for their trademarks or patents or, quite often, they overlook government legislation regarding their new "gold mines." All too often, they do not have sufficient backup for their financial bets, and when they run out of their own funds, bankers refuse to see them, and their investor friends start avoiding them, preferring more stable personalities with whom to conduct busi- tact with the marketplace together with an accurate assessment of it is a winning combination. Entrepreneurship sounds most adventuresome and especially appealing to one's ego. But running against the tide is tricky business. Still, I have yet ro hear one person I have ever considered a true entrepreneur blame circumstances for having caused any of his problems. He is blessed with a short memory for failures and an unquenchable thirst for new ventures. He allows his successes five minutes' worth of crowing and his failures a second's worth of bemoaning. He tends to go his own way, do his own thing, in or outside of business. Claude Hopkins, a great entrepreneurial favorite of mine, describes his propensity for aloneness this way, in his book My Life in Aduer- has been ness. tising: I have met other great emergencies, more important than money or business. I have always had to meet them alone. I have had to decide for myself, and always against tremendous opposition. Every great move I have made in life has been ridiculed and opposed by my friends. The grearest winnings I have made, in happiness, in money, or content, have been accomplished amid almost universal scorn. But I have reasoned in this way: The average man is not successful. We meet few who attain their goal, few who are really happy or content. Then why should we let the majority rule in matters affecting Only a fine line differentiates a successful entrepreneur from a successful businessman. They are somewhat the same, of course, but the entrepreneurial personality evinces more dash, more gambling spirit, more daringand less adherence to the conventional pathways of business. But both must know what buyers want and what trends are occurring in the marketplace. Constant con- I have often paused and reflecred on Claude Hopkins, statement that every great move he had made in life had been ridiculed and opposed by his friends. I srill well remember the many raised eyebrows when, after ten years of studying for it, I left a promising career in ac- 38 39 our lives? Manx Mv Wonos Wuer Is eN ENrnnpnrNnun? counting tojoinJohn Part and his little company with an annual sales volume of only $r4o,ooo. Seemed like a crazy move after having audited some of Canada's largest corporations-but our sales of $25 million this year would, I believe, happily indicate otherwise. You may be interested in^the following poem. It is one I have kept over the years for it manifests quite a spark of entrepreneurialism. It was written by a seventhgrade student. flexibility, brave willingness to bounce back to the fight were all there. Virgil said, about s5 B.c., "Fortune favors the brave." Be brave with our money, but not loo brave. I love financial heroes, but not bankrupt ones They look at me and ask why I tell them I really don't know But every man has a chance to reach for the sky I have my own special way Love, "J )ut lr h n7 d And some day Maybe I'll get there Right now I am on my way With many different thoughts every day have many problems I have to face Some end in good, some in bad But in every one I never really end up mad Sure I have been sad over many of them But never, ever, reallY reallY mad I I will never let myself get really tied up And if I do, I drop it Until I may return, not in a follY But rather quite jolly This may not be your way It definitely is my way I hope you enjoyed that little poem becauselou wrote it. Away back then, your independent spirit, optimism, 4o 4r 7 il,/ 8. T=r Xpeflence ExpnntrNcB To your new position as head of marketing for one of our companies, you bring an assortment of talents. First, you have a good brain capable of competing with the world; your achievements at high school and university and in your other jobs within our company have well proven that. Second, you bring a high degree of enthusiasm to your work. And third, you have a sense of measuring the results of your efforts in an evenhanded fashion. However, there is one basic element you do not at this point in time possess: that of exprimce. Back in your school days, you will recall, experience grew daily by your merely coping with each new day and what it brought until you felt secure enough in what you were doing to measure your results realistically. This new Position will develop the same way, but it is vital at this early stage of yourjob to acknowledge you are light in this key department. What to do about it? How to work around this big hole and gradually close it in? The man who lacks experience and knows it must first make a resolution to himself that he will not allow this missing factor to inhibit him or prevent him from trying ro get the job done. Having done that, it is then crucial for you to take the time to carefully assess each project you are about to undertake it the analysis and solution of any given problem, -be the preparation of a presentation, or anything else on your plate. First, what and how much data have you immediately at hand? What and how much dara is missing? Should you compile more? Once you have all the facts you can possibly obtain, and only at this point, will you be at all ready to start thinking about your possible courses of action. Beware of the pitfall so many people fall intosome over and over again-that of not first gathering all the possible, obrainable facts. Many people arelazy when faced with this aspecr of theirjobs, and they do nor work hard enough acquiring rhe basic data on which their decisions and actions will be founded. you have built enough camps in the woods with me to know that if we fail to provide a firm and level base on which to build, our efforts will certainly fall short of anyrhing resembling a first-class job. Next is the tendency to want to start analyzing the data, to get on with the job, before every conceivably available facet of information has been obtained. Then especially one needs to discipline his mind not to start chugging away in second gear before first obtaining all the benefits of first gear. Think of our camping and canoe trips. Because everyone is always so anxious to get going, are we not apt to leave something behind if we do not-before setting out-check my deplored ,,to do,, lists that I go to all rhat trouble compiling prior ro each trip? And it would certainly not be due to lack of experience only to lack of properly applying our experience. -but At the conclusion of step one, the gathering of infor- 42 43 .E @.u, so* Menx Mv Wonos ExprnrnNcB mation, it is great insurance to look around you for a reliable person with whom you can check whether you have missed anything. A colleague in a similar position in another noncompetitive company or your own president are perhaps the two best people to turn to-but there are other good sounding boards. Now comes the second step, the more exciting one: acting on the information at hand. Here is where the experience factor really counts, because proper interpretation of your data is crucial to your success. As the years pile up and you make your share of mistakes in the business world-as we all do-you will find that 8o Percent err in their decision making because of mistaken interpretation of their data rather than because of a l,ach of data. Experience teaches you to first get all your Pertinent data together and, second, to analyze it properly. The first requires discipline; the second, years of experi- to accept that in certain areas of this business there is still an experience void, still something there to be learned by me through experience-and I remind myself of this each time I tackle a new project. It does not do much for my ego to have to admit to the foregoing, but I rather suspect it helps our profit-and-loss statements considerably. Shall we both remind ourselves ..the woods would be silent if only birds with trained voices did the singing,,? You have all the credentials of a good executive. Ex_ perience will make you an ourstanding one. But that is something no school, no one but you can accrue for yourself. As you win some, be cautious and steel your mind to keep on learning-from your successes, so you repeat them; from your failures, so you never make the same one twlce. Sincerely, ence. How does one go about becoming experienced in interpretation of data? Same as with anything else. By doing. But I must hasten to add, it will occur faster and better via careful and thoughtful analysis than it will by running with a gut fuling. Upon the completion of data gathering and interpretation, comes execution. No problem for you here; you have already had plenty of experience in this department. The follow-through and follow-up exercised in all yourjobs to date as well as during your school years are the experiences you will put to good use now to help you execute your decisions properly. This part of your project therefore should be easy. But never forget: at sixty-two years of dge and with forty years in it, I am still acquiring valuable experience in my field of business. I have simply come to realize and 44 TW ?r//^//,"*'- 45 nr* q Employees @r^, son ajolt to learn Mr. Miller left our firm for other employment. It surprised me because during the time I It was cept perhaps for those living in small towns). Therefore, there has transpired a narrowing of the spectrum: not so many bully employers now-and not so many hapless stuck-in-their-job employees. A prudent employer would take the time to analyze the incentives a person might list as his reasons for working-and most importantly, the order in which he lists them. A recent study disclosed rhat money was number seven on such a list. Topping it was satisfaction in performing the job. Obviously, that good feeling one gets from having accomplished something is still man's best reward for his hard labors. But he also needs to know he is doing his job well, and the major deficiency within management today is the failure of telling him so. of the compan|, I always considered him a valuable-if somewhat eccentric-employee. Obviously, his eccentricities got to you and caused the split. Amazingly, with all the people in this huge world, no two people think exactly alike. As differently as each of us looks, just so differently each of us thinks-which in itself is a fantastic feat on the part of our Maker. And even more amazingly, despite all these differences, we still somehow manage to marry, Procreate loving families, and retain friends and happy, valuable employees. To me, the older, more successful industrialists of the rgoo-rg3o era apPear to have behaved as if they were half crazy in many instances. Perhaps there are as many tyrants today, but I rather think the majority have changed their attitudes-if for no reason other than the fact that there is now a much more fluid labor market, one that allows for easier changes of employment (ex- An earned compliment costs nothing, but its returns are immeasurable. Very humanly, when we are complimented, when our efforts are appreciated, most of us will usually strive to perform even better down the line. What a return on the investment of delivering a few earned words of praise! Now to our case at hand. Unquestionably,John Miller was an honest, hard worker. His few oddball behaviors and opinions certainly never bothered mq andll assure you, I assessed them carefully-whether they mlght even be causing us loss of business. At the same time, as I looked around me to particularly observe, I found it highly interesting how many different, ofren srrange idiosyncrasies m'ost all of us possess-and that despite all of them, we still come together daily, work side by side harmoniously, and constitute a great work force! you see, what we might term oddball characteristics in others, in most cases are nothing more than different views 46 47 was operating the manufacturing functions , .; I Menx Mv Wonns EvrployBns or outlooks, different persPectives than ours about life and living. In short: "different strokes for different folks." It would be fascinating to read the thoughts our then we had better get rhee to a head shrinker fast, before you lose our entire labor force for us. You see, it costs money to train a person for ajob: for some positions within our company, a great deal of money. If we are to operate at maximum efficiency (hap_ pens in theory only), we must maintain a low labor turnover; otherwise all of our profits will go toward training people if those we rrain consisrenrly leave us shortl! thereafter. Hence, high morale is not only a nice, desirable atmosphere to maintain among our staff, it is a fellow workers might be entertaining about your (or my) behavioral patterns or eccentricities-for we do all have them. Q;uite obviously then, molding a work force aroundor in spite of-the peculiarities within us all becomes a necessity. If we do not, there won't De a work force' You must remember, the only perfect employee is not you, yourself alone. Further, it is the output of our business product that counts, not whether someone blows his nose once or twice or a thousand times a day. Unless a person's habits are so offensive or extraordinary that they disrupt others, I see no reason to let that Person go off our payroll. I believe it would be an enlightening exercise for you to evaluate Mr. Miller's reasons for leaving. From what you have told me, his oddball personality finally just got to you. Well, it should be borne in mind that we are in the business of making medicines, not analyzing personalities. The fact Mr. Miller worked with us for ten years and during all that time I heard not one complaint against him from any of the other employees is food for thought. A sufficient allowance of time is often all that is needed for certain personalities to mesh. In this case, you had been working in contact with Mr. Miller for only four months. Perhaps another four months would have given you a much more positive impression of the man and a new perspective of'the situation. My question now is, did we lose a valuable, trained employee possibly only because your criteria for liking or disliking people is off kilter or eccentric? If we did, mu,st. In closing, bear in mind you must continually review staffperformances-particularry of those who have most recently joined us, to determine whether they are mea_ suring up to our standards. However, a sliding or failing performance by any staffmember who has been with uI for a number of years should signal a stop sign for you. Stop and think: Why has this person,s work fallen off.) Are pressing personal reasons perhaps behind the de_ cline, which must be taken into consideration if you are doing your job? Talk to the person and tell him his work is not what it used to be. Is there a problem we can correct or one we can help him solve? What one single hour of time can do toward putting a person back on his efficient feet again is really astounding. And consider this: that one hour of your time and one hour of his time costs us about $5o; on the reverse side of the coin, it will now cost the company $b,ooo to train a suitable replace_ ment for Mr. Miller. Your people are your valuables. Not the bricks. Not the mortar. Not the machinery. protect this major investment we have in our people by doing your utmost to make them feel that top-rated priority, that satisfaction in the performance of their jobs. If you do, you have no : 48 49 i i i Menx Mv Wonps 4o idea what increased feelings of satisfaction you will experience carrying out your own job. And I will smile at the Partnership resultant escalating profits. Sincerely, (IM @ru, son, I hear your friend Harold has approached you with a fantastic money-making idea in another industry-one very different from ours. Also, via the grapevine, I was given to understand you are being invited into the partnership because of the prosperous business you and I happen to be in. That leads me to surmise your friends are counting on some of our profits flowing over their way to support their new enterprise. And having carefully assessed all the logistics, Harold and his friends have found all the positive reasons why this company should go to the very top; not a hitch, not one negative or drawback in their plans, I am sure. Funny thing about human nature and money-making ideas: we summon up all the positive aspects in a matter of a half hour and often live in agony many years for overlooking the negative. Before you start counting your millions of profits from this venture, allow me to intrude and mention a few things that might save you from having to counr your losses in possibly thousands and thousands. I find myself curious as to why Harold and his two 5o 5l Manr My Wonos engineering buddies came to yoz with an invitation to join their expedition. Since theirs is a highly specialized engineering project designed to service heavy construcI am wondering how your particular business acumen is supposed to assist-especially in a field so far removed from ours of making medicines. Without the slightesr intent of any put-down, I musr admit the first thought thar comes to mind is your family's money-because it seems to me that whenever people come up with new business ideas, they are most adept at solving all their production and marketing problems, but their brains go into deep freeze when it comes to finding the money ro ger their projects offthe ground. And after all has been said and done, it is srill money rhar sets their worlds in motion. But assuming the idea is sound, has an excellent chance of succeeding, and you do mortgage your soul to get at those millions out there, who is going to manage the business? Obviously, it cannot be you, since you are not technically qualified for their specific type of operation. As well, it would become very hard to increase our efficiency and profits with you spending a great portion of your enthusiasm and time thinking about another business-indeed, ours would more than likely d,euease in efficiency and profits should you split your talents ar rhis point of time in your business career. So it appears logical ro me that Harold will have ro run the business since your new company cannot afford to hire a qualified professional manager at this juncture. Now what do you have on your hands? Harold spending your money, with you at a distance. It could be a fine arrangement f Harold knows what he is doing. At thirtytwo years of age, he could be one of those rare birds who comes along without the benefit of any business training tion equipment, 52 Penrunnsnlp or experience and instinctively knows how to run a busiI am inclined to think nor. I am afraid the odds are too long against it in this case. If you invest in ten endeavors like this, one might prosper. The exercise is finding out which one will prosper before you lose all your money on the other nine. Aside from the fact that this proposed business is not within our industry (which we know something about and still make mistakes), and that Harold and his boys from engineering school have no business experience, there is the human aspect to partnerships, about which one usually only learns through experience, mosf unfortunately very sad. You will be one of four equal partners, the one putting up the money. Harold will be presidenr, Charlie will sell, and Fred will produce the product. Initially, the efforts of all will be very strong and very dedicated; everyone will be pitching in for all he is worth. Unhappily, as time goes on, most foursomes lose one or two of their members' endeavors to the wayside-even if the business happens to be prospering. It is inevitable. When the going gets tough, those Zo- to 8o-hour work weeks get to somebody-or somebody's wife-and in jumps "the beginning of the end." "That damn Charlie takes $zoo, three-hour lunches daily; and I'm here working my ass ofi'!" "Why should f work tonight? The others aren't! And 75 cenrs of every dollar I make goes into their pockets!" Then will come the classic one about you: "Why should that bum get sb cents out of every dollar we make when he doesn't contribute a darnn thing!" Memories can be very short. your financial contribution to get the company offthe ground will not be very long remembered with robusr graritude. You will discover only too soon that your partners'priness. But 53 Menx My Wonos mary interest is asking, "What are you doing for us today?" Now if you are hell-bent ro go ahead with this partnership, let us assess a few avenues of procedure that might vastly reduce some future agonies. One major advantage you have is knowing each of these fellows very well-their honesty, intelligence, and degrees of diligence. That is a big plus! In my opinion, you should discuss with them all the foregoing negatives; rhe costs, sacrifices, and realities involved in working long tedious hours; the struggles you must be prepared to facebecause, unless this new business is very different from most, only gruelling efforts will see you prosper. Tell them in writing so they will at least respecr you for having warned them if it does all sour down the line. Next,let us give some serious thought to the divvying up of the partners' shares. Harold appears to be the key man, along with yourself. Charlie and Fred are necessary, but not leaders. All will wish to own some of the business. (How else would each count all those millions of profits?) Well, there are prudenr ways of keeping everyone h"ppy. Harold will probably buy the idea rhar you and he should own a majority of shares-say 8o percent, split down the middle. So far so good. Now your hard nose had better harden up even more if it is to avoid getting bloodied later. You must tell Charlie and Fred their ownership is going to be ro percent each. Friendship must nol enter the picture at this stage for in business it can be a devastating investment except in some very rare circumstances. Sweeten the pie by offering 3o percent of the annual profits before tax to the three: ro percent each. Now each partner has taro incentives going for him: a share of ownrship (an ideal that fades fast since it usually does not putmuch money into your hands until 54 PenrNBnsntp you have become prosperous and have repaid your business borrowings, which normally rakes a very long time), and profit-sharing paid out each year, the tangible dollarin-the-hand payments we all look forward to for our expended efforts. To avoid some possible future hassles, sit your three partners down now with your auditor and lawyer, and work out a basis for evaluating your shares annually. Nothing short of a divorce is as messy as trying to dissolve a . business partnership with someone who has taken the view his shares are worth a good deal more than is fair to the remaining partners. So make it a rule that the value of the shares be set out annually in the event someone wishes to sell his shares down the road. This way he will know exacrly where he stands financially if he does entertain ideas of leaving the company. Not so "incidentally," since it is your money fuelling the business, insist on your auditors and lawyers acting on behalf of the business. It will give you some control over your money and over the way the partners handle it. Our business partnership has flourished because of hard work and love. If you proceed with this new venture, I sincerely hope you will find a good measure of both within your new parrnership. And might I add, "Nothing ventured, nothing gained!" Affectionately, fl,W 55 ll. ON DnrncATrNG On Delegating have asked me, "How do you manage to run all these companies and still leave yourself a couple of months' free time to pursue flying and the joys of Mother Na[ure?" My answer has always been the same. "Because I have highly competent executives looking after my businesses on a day-to-day basis." Simple answer, you say? Well, yes, it is simple, but you would be amazed how few people in business train subordinates to higher competency levels so they can turn some of their responsibilities over to them. Why so many avoid delegating to the people working under them is a mystery to me. Is it lack of trust, sheer stupidity, or is the main reason, perhaps, fear that the other person might do a betterjob? Few are brave enough to say it, but I wish our executives knew how much I value being told a job was turned over to someone else because he or she "will probably do it better than I." And if it's "better than yoz or I," (meaning mc),I am even more enthusiastic and impressed. I know of no faster way of improving our businesses' worth than by delegating to every willing and able body as much as he or she can handle-and then some, for as each person's work capabilities grow, so will our business grow. Conversely, stifling any deserving individual's growth is tantamount to stifling your company's growth. Homer, about Zoo 8.c., had this to say about delega- @r^, son, The late hours you put in at the office last week preparing cash-flow projections for our companies was a good piece of work. Considering our banker's short notice of his need of these figures to transact an increase in our bank line of credit, he should indeed be impressed by your swift cooperation and compliancy. However, it bothers me somewhat to see you preparing this work all by yourself. When I asked you about this, your reply was that you could do it three times faster, alone, than with others trying to help you. perhaps this is true, but the hitch in that kind of thinking is that you will still have ro be doing this type of work ren years from now if you do not, at some point, take the trouble to teach someone else on our staff how to do it. As well, of course, should you be sick, or away, or tied up with other pressing business matters when such work needs doing in short order, you will undoubtedly find yourself in a quandary, and more importantly, so will the comPany. tion: You will certainly not be able to take the lead in all things yourself, for to one man a god has given deeds of war, and to another the dance, to another the lyre and song, and in another widesounding Zeus puts a good mind. Which brings me to the subject of this lerrer: delegation. I don't know how many times over the years people Again, "different folks-different strokes." The first precept of sagacious delegation is a careful, 56 5l Manr Mv Wonps ON DBIncATTNG in-depth assessment of your personnel's talents, ambitions, and desires. Given the chance, most people will surprise you with what they are capable of achieving. And you can bet your bottom dollar, the day they're assigned their new responsibilities, they will be walking ten feet tall. With or without a raise in salary, there is no greater thrill in business than being singled out for more challenging and stimulating work-except, perhaps, that of your satisfaction in having delegated the new roles and your observation of each person's success within lecting your pay for what you are supposed, to be doing. You are here to organize, lead, develop, inspire, and visualize new vistas for us to tackle. You are not here to sit around either doing or supervising repetitive chores that require some, but most assuredly not all of a good them. Now for the second precept. Permitting your staff to assume more important duties entails something you probably never thought of doing: teaching. Simply and fundamentally, putting together a set of tough, comPetent executives and a dedicated, strong staff requires teaching. The most successful businessmen are often extremely good teachers. That includes preparing a good format, patiently allowing time for it to be digested, being supportive, and spurring your students' potential to its greatest heights. Once you have made your selection of people and prepared your training program, the results of these efforts should be new people doing at least part of your old jobs. Now your key to ultimate success is the development of a system of control over all the realigned duties. This means establishing a method of communication between you and your personnel whereby you will be kept posted, up to date, and on the alert to spot trouble areas or correct a mistake. Above all, maintain a confidence in your heart that your trainees can and will do their newjobs well. Yow newjob is to help them over the rough spots. When you reach this golden plateau, you will be col- leader's time. Having mulled over the foregoing, I cannot help but conclude that any executive who cannot or will not delegate to those under his supervision must indeed fear his own capabilities of handling his responsibilities. If that executive works for me, he has a good cause to fear for his job! Each time he fails to develop another person, he succeeds in promoting dry rot in the foundation blocks of my business. Undetected dry rot spreads quickly and brings many a fine building toppling down, and I do not intend to allow it a foothold in any of mine! In providing people the opportunity of proving their mettle, you are invoking one of the least understood tenets of effective leadership. One "gf my constant, secret, and burning desires in busineis is to uncover as many bright lights hidden under bushels as I can find; to set loose untried, latent, or repressed talent of any "waiting for a break" who, once associated with me, will try their damnedest to fulfill their aspirations. I know I have said it before, but it is worth saying again: "Build business around people, not people around business." As Virgil said way back in bo 8.c., "We are all not capable of everything." So-no more late nights doing what others can and should be trained to do. It will bolster both your deparrment's strength and morale, make you look good to the boss, and the kids won't be asleep when you get home at night. Building a business is like trying to build a pyramid 58 59 Menx My Wonos reverse. You are the top How many sturdy, -in supportive levels of stone eventually form the foundastone. tion beneath you depends on your ability to select, train, trust, supervise, or promote the members of your work team. It's a pity how many a businessman fails to grasp this, fearing it might jeopardize his own lofty (soon to become shaky) pinriacle. I don't know about you, but I sleep well at night knowing the base of my pyramid is solid (a.base of which, of course, you form a mighty cornerstone). About 26oo B.c., in Egypt, Snefru built the first true pyramid. However, it was left to his son, Khufu, to build the ideal one, the Great Pyramid at Giza. Keep building your pyramid and make it the ideal one, too. Love, I2 The Fine Art of Negotiation @r^, son Thank you for your compliment on my having obtained that new contract for us with the European firm. It was not without its moments of frustration but, all in all, if I may say so myself, it was a rather good example of applying the basic techniques of negotiation. On the way home, I kept thinking to myself how much our businesses depend on our utilizing the tenets of mediation. We perform them routinely, yet seldom do we sit back and assess exactly what they are. We negotiate with customers, employees, suppliers, banks, real-estate agents, and whether we realize it or not, between ourselves. Having experience in business is crucial, but the ability to parley effectively ranks not too far behind. Why are some people more adept than others in this important area of business? I believe I can capsulize my opinion in a simple formula. It is: F-E:S FLEXIBILITY minus EMOTION equals SUCCESS 6o 6r Menx Mv Wonos A person who is inflexible in his business dealings had better have a monopoly on what he sells, for people tire of wrangling ad nauseam and won't, if there are other avenues to Pursue. Flexibility is nothing more than being able to read the intensity of the other fellow's desire and then bending to it as much as one might have to in order to reach a successful conclusion. It's somewhat like a tree in a windstorm; it bends but seldom breaks, then stands taller than ever the day after the storm. Now for part two of this formula: emotion' Often this is much more difficult to harness than flexibility, be it your own emotion or your adversary's. I would like to have a dime for every contract that was lost because of emotion. People so often tend to dig in their heels on the most ridiculous of points-usually only to Prove that they are not going to be pushed around by anyone. Ifyou need proof of this, look at the work load of our courts and lawyers with respect to civil actions. Cases are backed up for months, the courts full of people who cannot negotiate agreements between themselves. One or the other side has remained inflexible, unable to suppress excess emotion or evaluate the other side's position objectively. Thus they must endure the often very high costs involved in securing the "cold neutrality of an impartial judge." There are three rules to follow in practicing the fine art of negotiation. One: conduct a fact-finding mission. Gather all the information you can on the other party's position, and match it with your own data. Many negotiations fail right from the start because of a lack of facts. In the words of Benjamin Disraeli, "Ignorance never settles a question." Do your homework. It will ultimately make or break your case. 6s Tnr FrNn Anr or Nrco'rrerroN Two: study the information you have culled and weigh each point on a scale of one to ten. Try to weigh the points two ways. First, define your assessment of each. Secondly, put on your oPponent's hat and try to weigh each fact from his point of view. Understand where the other guy is coming from. With enough study, you should be able to draft a chart, labeling your facts in the order of their particular importance. For example, delivery of a product might rate a s or an 8; price might range as widely on your graph, depending on the competition, your measurement of the supplier's quality, and any other factors that might come into play. Three: divide a page in two and, from your chart, list all the negotiable points on one side and the points over which you will not budge on the other side. Keep this lattn sid,e short. List too many here, and you will have cornered yourself into an inflexible role. You are now ready for a successful outcome of your negotiations. It might take several meetings to iron out certain issues or to provide required information over which you might want to return to your office to ponder, but nine times out of ten, your careful work will culminate in total success. When it doesn't-that one time out of ten-no doubt the muted mutterings from each side of the desk might very well resemble these sentiments of Heinrich Heine's, long ago: "Ordinarily he is insane, but he has lucid moments when he is only stupid." These are the impasses, by the way, during which emotionalism will want to steal center stage. Make sure yours remains in check, well to the sidelines. Another dogma of successful negotiating is this: do not put two people together to work something out who do not like one another. It portends disaster from 63 Menx My Wonos Tnr FrNr Anr or NrcorrarroN the very start. On many an occasion I have asked the other side to please exclude a particular person from our discussions because, putting it diplomatically, our vibes clashed. People who like one another respect one another's views and opinions-and therein lies the secret to keeping emotionalism where it belongs in business: outsid,e the conference-room will find yourself settling for his biased conditions. Naturally, you will feel you lost the game at such times, and maybe you did-but my experience has been that never, on the next go-round, did that person not try to make amends for what he knew had been an unfair settlement. Funny how even the toughest good businessman usually door. Seldom, if ever, will all of your requesrs be met, so remember to wear your flexibility fatigues on battle day. And when you find yourself entangled in a particularly tough tug-of-war, ffy remembering FranEois, Duc de La Rochefoucauld's words: "Quarrels would not last long if the fault were only on one side." Father Time can lend a hand, too. Sometimes there is every good reason for allowing a span of days, weeks, or even months to pass before attempting a reconciliation or treaty. It lets the dust settle so everyone can view more clearly the issues at stake and perhaps reevaluate original conceptions or misconceptions. A time lapse allows for emotions to subside, too. More than once I have let a problem simmer on the back burner for a while, knowing that my learned colleague was doing the same. On such occasions, though, I have always tried to be the one big enough to pick up the phone first, extend an invitation for lunch, and suggest that togethu we try to break the loggerhead between us. There is one additional thought to store in your mind. Situations do and will arise wherein you find yourself forced to accept the other fellow's inequitable terms. Your back will have been pushed up against a wall, and if for no reason but to clear the matter offyour desk, you 64 has a conscience. A note of caution: however extreme a disparity might arise during any of your negotiations, if it is at all possible, try never, never, neaer to allow the matter to get into the hands of the lawyers. Get all the legal advice you want while gathering your information, but only as a last recourse should you allow the courts to settle your dispute-only when you have utterly and painstakingly exhausted every other conceivable method of settlement. This is one of the toughest lessons to learn because, feeling cheated, it is so human to react impulsively, to want to "take the matter to court and let the law settle ir. " One man owed me $r5,ooo that I could not get out of him, so I sued him. My legal bills rose to $8,ooo, and still I kept after him. I ended up collecting not one red cent for all my efforts. My doggedness cost me $e3,ooo instead of the $r5,ooo loss I should have settled for in the first place. Reason? I had not bothered to do my homework (rule one again) or it would have been clear to me right from the outset that the man just did not have the funds to pay me and was heading for bankruptcy. Emotion made a small man of me in that case. As I look back on the incident, I now can see the even bigger blunder I made in neglecting my businesses while I kept hounding our lawyers to keep after that guy. God 65 M.rnx My Wonos 13. only knows how much it cost me to chase a lost cause instead of getting on with the businesses that were making a buck. Marriage Love, ,""/ J* h/r"rL @"^, Son: I overheard you telling a friend that you were thinking of getting married. I had to chuckle as I wondered who the lucky lady might be, since every time I have seen you with a date, she has usually been a different young lady. (I gave up trying to keep track of your social itinerary a long time ago.) I did not, however, find it a chuckling matter to hear you state, rather computerlike, "Now-is-the-time-forme-to-get-married." Not next summer or next year, you avowed; it was going to take place now. My eavesdropping turned out to be a little more disturbing than I would have expected. It left me wondering what e;actly you think marriage is all about. I rather suspect you feel you should get married now because all your friends are doing it; it is in vogue, so you might as well "take the plunge," too. Well, Martin Luther said there is no more lovely, friendly, charming relationship, communion, or company than a good marriage. I agree. However, it must be viewed as a hellishly serious commitment! Although marriage is, in a sense, primarily an attraction of na- 66 67 Manr My W...