Business Ownership and Management
One of the biggest changes to my professional perspective on business came during the time that I was running my own consulting business. Prior to that, I had worked as an employee for midsize to large companies for ten years, and as one of the first hires at a start-up technology company. I felt that the combination of doing hands-on work, managing, selling, and helping establish a start-up (where I did not have an equity stake) provided everything needed to start my own business.
Well, guess what? I was only partially correct. I was prepared for the activities of running the business but really was not prepared for the responsibility of running a business. While this seems like it should be obvious, what I’ve seen many times is those business owners usually focus the majority of their efforts on growth/upside. That type of optimism is important for entrepreneurs – without it, they would not bother putting so much at risk.
People tend to adopt a different perspective when making decisions once they realize that every action and decision can impact the money moving into and out of their own wallet.
Even in a large business, you can typically spot the people who have taken these risks and run their own business. I was responsible for a Global Business Unit with $50+ million in annual sales and ran it like a “business within a business” because I had P&L responsibilities and the decisions I made mattered to the success of my business unit
It’s more than just striking out on your own as a contractor or sole proprietor. I’m talking about the people who have had employees, invested in capital equipment, and went all-in. These are the people thinking about the big picture.
What do these people do differently than people who have not had this type of experience?
One of the biggest things is they view business in terms of “good business” and “bad business.” Not all business is good business, and not all customers are good customers. There needs to be a fair commercial exchange where both sides receive value, mutual respect, and open communication. You know this is working when your customers treat you like a true partner (a real trusted advisor) instead of just a vendor, or at least do not try to take advantage of you (and vice-versa).
A business is in business to make money, so if your work is not profitable it is very likely that you should not be doing it. And, if you are not delivering value to an organization it is very likely that you would be better off spending your time elsewhere – building your reputation and reference base within an organization that was a better fit. That is true for employees at all levels.
“Bad” salespeople (who may very well regularly exceed their quota) only care about the sale and their commission – not the fit, the customer’s satisfaction, or the effort required to support that customer. Selling products and services that people don’t need, charging too little or too much, and making promises that you know will not be met are typical signs of a person who is not thinking like an owner. Their focus is on the short-term as they are not focused on growing accounts and their compensation plans generally only reward net new business and first-time sales.
How you view and treat employees is another big difference. Unfortunately, even business owners do not always get this. I believe that employees are either viewed as Assets (to be managed for growth and long-term value) or Commodities (to be used up and replaced as needed – usually viewed as fungible and treated as if they are easily replaceable). Your business is usually only as good as your employees, so treating them well and with respect creates loyalty and results in higher customer satisfaction.
Successful business owners usually look for the best person out there, and not just the most affordable person who is “good enough” to do the job. The flipside is that you need to weed out the people who are not a good fit quickly. Making good decisions quickly and decisively is often a hallmark of a successful business owner.
Successful business owners are generally more innovative. They are willing to experiment and take risks. They reward that behavior. They understand the need to find a niche where they can win and provide goods and/or services that are tailored to those specific needs.
Sometimes this means specialization and customization, and sometimes this means more attention and better support. Regardless of what is different, these people are observant of the small details, understand their target market, and are good at defining a message that articulates that difference. These are the people that seem to be able to see around corners and anticipate both problems and opportunities. They do this out of necessity.
Former business owners are usually more conscientious about money, taking a “my money” perspective on sales and expenses. Every dollar in the business provides safety and opportunity for growth. These usually are not the people who routinely spend hundreds or thousands of dollars on business meals, or who take unnecessary or questionable trips to nice places. Money saved on things like unnecessary travel or unnecessary training expenses can be invested in new products, features, or marketing for an organization.
While these are common traits found in successful business owners, it is possible to develop them even if you have never owned a business. Do you understand the big picture vision and mission of the company that you work at? What do you value and what is your culture? Who is your competition and how are they different? How is their messaging different? Does your management style reflect this aspirational vision?
When selling, are you focused on delivering value, developing a positive reputation within that organization, and profiting on the long-term relationship? When delivering services, is your focus on delivering what has been contracted – and doing so on time and within budget? Are your projects used as examples of how things should be done within other organizations? Are you spending money on the right things – not wasteful or extravagant?
These are all things that employees at all levels can do. They will make a difference and will help you stand out. That opens the door to career growth and change. And, it may get you thinking about starting that business you have always dreamed of. Awareness and understanding are the first steps towards change and improvement.
“If you can’t explain it simply, you don’t understand it well enough.” – Albert Einstein
I actually didn’t care much for consultants in the first part of my career. My experience was that people would come in, tell you what to do, and then leave victoriously while we were stuck trying to implement something that just wouldn’t work. It seemed that they made everything seem so complex – often as a way to justify their cost.
Then, I met a really amazing consultant who shared something valuable with me. He explained what he believed differentiated a true consultant from a contractor (something I wrote about a decade later in a Tech Republic article). He then made me aware of the Einstein quote above. This was one of those pivotal moments in my career.
Over the course of many years I have met many interesting people. Some seemed to try to intentionally obfuscate even the easiest things to try making themselves seem brilliant. Others took such a circuitous route that you sometimes forgot about what you were trying to understand and fix. And sometimes explanations were just so tangential that the main point was completely lost. There are likely many reasons for these experiences – some intentional and many not. The real lesson learned is that it wasn’t just consultants who have the ability to be incomprehensible, and that clear and comprehensible communication is key to effectiveness.
Just think about the power of a well crafted “elevator pitch” when you meet someone new, or the ability to quickly explain how your company differentiates itself from the competition (making you the better or safer choice in your prospect’s mind). Or, being able to articulate your business strategy in a way that people not only understand, but also so interests them enough where they want to learn more and be part of making that happen. This goes well beyond just having good communication skills.
The best consultants have this ability to explain something simply, as do the best employees, the best managers, the best executives, and the best business owners. While this is only one attribute of success (likability, powers of persuasion, integrity, luck, etc. are others), it is something that can be taught, developed, and consistently applied.
The power to “explain it simply” is the power to make a difference.