The chief business

In 1925, Calvin Coolidge gave a speech to the American Society of Newspaper Editors about the role of the press in American life in which he famously declared “the chief business of the American people is business.”

Calvin probably had his finger on the pulse of the U.S. pretty well. The stock market was flying, business was booming after World War I, and optimism was the order of the day.

Today it seems that not much has changed. According to a 2014 Gallup poll, 50% of full-time salaried workers and 26% of full-time hourly workers in the U.S. work more than 50 hours a week. Entrepreneurship is booming; every day we are bombarded with advertisements for the latest trendy food truck or hand-made hipster shoes on Kickstarter or the local tech startup looking to make it big.

It’s easy to get caught up in the current enthusiasm for business. If you’re running a business, it’s easy to get caught up in the desire to double your profits or the need to keep your business afloat. It’s easy to find yourself working 50 or 60 hours a week and missing time with your kids or your spouse or your garage band. It’s easy to ask your employees to do the same things you’re doing.

So in the middle of all of this, it’s important to remember something we all know but that Henry Ford said well: “Business is not the reason why the United States was founded. The Declaration of Independence is not a business charter, nor is the Constitution of the United States a commercial schedule. The United States—its land, people, government, and business—are but methods by which the life of the people is made worth while.”

So how can your business make the life of the people it serves worthwhile?

Facts and Philosophy

We live in a world where numbers and statistics and big data rule. Over the weekend a friend of mine reminded me of that fact when I cornered him into a discussion about this blog over dinner with our wives. He’s been working with a venture capital fund and he’s all high right now on business plans, financial models, and return on investment. He’s also right. Especially in business, having a plan with good data and numbers that run the right direction is essential.  Ben Arment, who wrote the book Dream Year, captured the pith of this idea when he said:

A great idea is a spreadsheet with skin on. No dream can be sustained without a profitable financial model. And make no mistake – whether you’re profit or non-profit – the goal is to make a profit. Otherwise, it’s not a dream; it’s a hobby.

Ben’s right on to point out that if your numbers don’t make sense you’ll never get your business off the ground. Period.

The thing is, there are lots of really smart people who have written lots of really smart books, blogs and magazines about how to make your business become profitable and thrive. So while it’s important to learn and share as much of that stuff here, that’s not really what this blog is about.

Instead, I really hope to change the way you think about business. It’s the difference between facts and philosophy; between the data we use and how we use them. Another quote, this time from Henry Ford:

“Being greedy for money is the surest way not to get it, but when one serves for the sake of service—for the satisfaction of doing that which one believes to be right—then money abundantly takes care of itself.”

Now, there’s no question that Henry had a profitable product and a profitable business model. He helped usher in the age of the automobile, he relentlessly cut costs across his organization, and he made tons of money (quite literally). But he held tenaciously to the idea that he would be most successful by enabling his customers (and he viewed his employees as potential customers too) to easily afford his cars. He worked tirelessly to provide the best value to them he could, even if it meant he would take a bit less from every car he sold.

That idea’s at the heart of what I’m doing here. I know that profitability is essential if a business is going to work. But I want to harness the freedom and the power of profitable business so that we can do more with it. And the way to do that is to make sure that business serves owners, customers, and employees as much as it can.

Things that count

Sharing my ideas is only half the reason this blog exists.

Nobody cares what some guy in small-town Utah has to say about business. While I’ve started a few businesses, they’ve all been fairly small affairs. Mostly hobbies really. So I understand that I don’t have a lot of influence when I start talking about how business should be run.

It’s really easy to sit back and say that “capitalists” should just share more of their money with everyone else. Or that it’s not fair when one person has so much money and other people don’t. I’m not here to join either of those choirs.

People listen to Richard Branson and Seth Godin and Marc Andreessen because they’ve proved their ideas. They’ve built things. Things that people wanted. Things that helped other people build other things that people wanted.

So even though I don’t know exactly how I’m going prove my ideas yet, I had to start somewhere. The real proof is yet to come. “Almost anyone can think up an idea. The thing that counts is developing it into a practical product.”1.

  1. Henry Ford, My Life and Work

Being otherish in business

In the final chapters of Give and Take, Adam Grant pulls together all the examples he’s given and briefly turns his attention to being otherish in business.

“In the mind of a giver,” he explains, “the definition of success itself takes on a distinctive meaning. Whereas takers view success as attaining results that are superior to each others’ and matchers see success in terms of balancing individual accomplishments with fairness to others, givers are inclined to . . . characteriz[e] success as individual achievements that have a positive impact on others.”

There’s not much question which approach Adam thinks is the most powerful, and his book has plenty of evidence that he’s right. Having set the stage with his new, otherish definition of success, Adam then crisply expresses the fundamental idea of this blog. He says: “[t]aking this definition of success seriously might require dramatic changes in the way that organizations hire, evaluate, reward, and promote people. It would mean paying attention not only to the productivity of individual people but also to the ripple effects of this productivity on others.”

Adam’s not the first person to have expressed this idea. In his autobiography, My Life and Work, which was published in 1922, Henry Ford said, “It is the function of business to produce for consumption and not for money or speculation. Producing for consumption implies that the quality of the article produced will be high and that the price will be low—that the article be one which serves the people and not merely the producer.”

Henry Ford understood the principle that business could thrive by serving the interests of its employees and customers. At a time when cars regularly sold for nearly $1,000, he slashed the price of his cars to less than $350 and doubled the wages of most of his employees. By the time he died in 1947, his net worth was estimated to be almost $200 billion in today’s dollars.

There’s no question that Henry Ford succeeded because he produced a high-quality product and marketed it well. But he also paid his employees twice what the market told him he had to and gave them back nearly 20% of their work week. In other words, he succeeded by being otherish.

Adam Grant says that by “shifting ever so slightly in the giver direction, we might find our waking hours [at work] marked by greater success, richer meaning, and more lasting impact.” Henry Ford said, “Power and machinery, money and goods, are useful only as they set us free to live. They are but means to an end.”

I think they’re right, and I’m out to prove it.

Being otherish

Over the last few days I’ve talked to several friends and colleagues about this blog. Their responses have been mixed. Two stand out in particular. The first one gently razzed me about about “wanting to change the world,” then questioned why anyone would give up their own interests over the course of a career in order to prioritize someone else’s interests. The other asked how a business could ever operate if it wasn’t motivated by profit.

They were both awesome questions.

I’m about 2/3 of the way through a book called Give and Take, by Adam Grant. (No, I haven’t finished Walden yet; I’ve been itching to read Give and Take since I bought it and Thoreau spent too much time goofing off in the woods so I’ll finish Walden later this week).

Adam is a Wharton professor of management and a really great writer. I wish I knew him well enough to legitimately call him by his first name. His book focuses on the differences between givers, takers, and matchers—three different personalities defined by their approach to interactions with other people—and what sets the successful givers apart from takers and matchers. Roughly speaking, takers are most interested in what any given situation can do for them. Matchers will scratch your back as long as you scratch theirs. And givers (Surprise!) tend to be generous in giving time and means to those around them. He demonstrates that time and time again, the successful givers outperform takers and matchers in just about every industry.

Adam explains that unsuccessful givers are selfless, meaning that they engage in “a form of pathological altruism . . . an unhealthy focus on others to the detriment of [their] own needs.” Successful givers, on the other hand demonstrate otherish behavior: they genuinely care about benefiting others but they have ambitious goals for advancing their own interests. Their success comes strongest when they’re able to harness both their ambition and their interest in others together.

The combination of these two elements is essential. Adam spends an entire chapter of his book explaining how people who are able to combine intense personal ambition with other-oriented behavior succeed against some of the most difficult challenges facing our culture today (volunteer teaching at one of the top-ten most dangerous schools in America, for example).

This otherish orientation is probably the defining aspect of the changes I’m advocating for here. In fact, now that I’ve learned about “otherishness,” I think it’s a better description of what I’m trying to accomplish than “altruism.” Altruism in a business context suggests too much of that unhealthy focus on others that leaves us unable to provide for our own needs. Being otherish is why we can shift our focus away from maximizing profit; succeeding in business supplies the necessary hit for the self-interested part of us, and enabling others to fully participate in that success incorporates the benefits of giving that Adam thoughtfully lays out in the rest of his book.

If Adam’s right about being otherish, changing the world is just a few steps further down the road.