The EQ Journal Blog

Where Should I set the Bar?

Success is something most people seek. I say ‘most people’ because some do not—perhaps they lack the courage to seek it, or they define it so that the bar is set so low that they can’t help but achieve it or they fear success.

Most people have heard of fear of failure but fear of success, what is that? It’s counter intuitive and illogical but very real. Don’t let this happen to you.

Here is how it works:

1. “I won’t really work too hard on this project just in case it fails.” (The project then fails.)
2. “I wasn’t successful because I really didn’t work hard at it.”
3. “If I had worked hard at it, it would have been successful.”

This approach guarantees that: a) your ego is protected and b) that your project fails. Since it must result in failure, it must be that, logically, you sought failure not success in the first place. Therefore, you must have been more afraid of success than failure. Q.E.D.

It’s not logical for people to behave in this way, it just happens to be true in some cases. People aren’t necessarily logical. Understanding this about yourself (self-knowledge) and about others is very important in trying to become more successful and in taking a path that will lead to success.

Why is Business Success Important?

So why is business success important?

A successful business person, Peter Patafie, owner of Patafie’s Packaging and Moving Supplies came to the University to give a speech about entrepreneurship at my invitation.

Peter is an up by the bootstraps kind of guy. At age 45, he got laid off from his sales job selling moving and packing supplies because he was making too much money (more than the President). The job was on a commission basis only—he was paid no salary. The President of the company thought he had hired a sucker—someone he didn’t have to pay unless Peter actually made a sale. Yet Peter had confidence in himself and he was right. The President came to regret his decision. He called Peter into his office one day and asked Peter to take a salary instead, which, of course, would mean a pay cut. Peter refused and was fired. Still, he had a wife and three kids to support. Never having finished high school, Peter was concerned: “What am I going to do?”

Well, he started his own business in the one business he knew and understood: selling moving and packing supplies. He started with less than $5,000 but he had a great reputation, he knew how to sell plus he could get product on credit from his suppliers because they trusted him. Also, in a pretty mundane business, he brought some creativity to it.

He had a great insight. He realized that the salespeople for his clients (mostly moving companies) spent a lot of their time redelivering packing and moving supplies to their clients. In other words, he was worried about his clients’ clients.

He went to the moving companies with an irresistible proposition: “What if instead of delivering moving boxes to your warehouse and then having your salespeople redelivering them to people who are moving, I save them the time and trouble and I deliver the boxes and moving supplies directly to the people who are moving. That way, your salespeople can spend more time selling (moves) and less time delivering boxes?”

Peter ended up with a 97% market share (better even than Microsoft’s OS!) Within six years he had built a business that did $13 million per annum with a gross profit margin of about 30%. He told me he never expected to make that kind of money—twice a year he gets together with his employees and shares part of the profits with them.

He told the attendees that day that he had three priorities in life:

Priority # 1: TAKE CARE OF THE BUSINESS.

Priority # 2: TAKE CARE OF MY FAMILY.

Priority # 3: TAKE CARE OF YOURSELF.

One of the attendees asked Peter: “Surely, you mean TAKE CARE OF THE FAMILY is your number one priority?”

But Peter stood firm. He explained it this way: “What is the number one cause of divorce: a) Alienation of Affection or b) Financial Difficulties? The answer is b). Having creditors call you at home for payment puts tremendous stress on a marriage. Trust me, I know. Sure people may say that they fell out of love but often the root cause is financial pressures.”

So he concluded if you take care of your business, it will take care of your family, not the other way round. And your family will take care of you.

What are the Moral Underpinnings of Success?

Success in business is important not only so that the business can take care of your family and your family can take of you. It also allows you to fulfill your duty to your society.

Adam Smith in the WEALTH OF NATIONS notes that a seemingly simple overcoat is the product of “the joint labour of a great multitude of workmen …without the assistance and co-operation of many thousands the very meanest (poorest, ed.) person in a civilized country could not be provided…”

When individuals pursue their own self-interest, they are, in effect, self-organizing to produce the optimal amount of good and services for the maximum number of persons in their society. This, of course, assumes that a competitive market exists for those goods and services and that individuals are prevented by their competitors from over-charging for their products or services by their desire to maximize individual profits.

Obviously, governments have a role to play in ensuring competitive markets and enforcing laws against fraudulent behaviour. But beyond that, it is clear that governments cannot be counted on to produce goods and services efficiently through any form of direct government action. There is abundant evidence that the private sector can do this much more effectively.

The morality of capitalism is based on the notion that if you, first take care of your family and yourself, then you will not become a burden on your fellow human. That is a moral imperative.

And once you have achieved that, you are in a position to do good works for others, another moral imperative.

The moral underpinnings of capitalism are:

a. Self organization to achieve optimal production of goods and services;
b. Efficiency and environmental sustainability are linked;
c. Private ownership of the commons also means careful husbandry of resources;
d. Take care of your business;
e. Take care of your family;
f. Take care of yourself;
g. Don’t become a burden on society;
h. Look out for the interests of others once you have first taken care of your family and yourself.

What is Business Success?

If you give due regard to the above then, in a successful enterprise, you are also assisting others to do the same—these are your stakeholders.

Your stakeholder group includes:

• your shareholders,
• your employees,
• your suppliers.
• your suppliers’ suppliers,
• your clients,
• your clients’ clients,
• your whole business ecosystem.

Business success means making a profit—‘profit’ is not a dirty word. Yes, it allows you to have material well being for yourself and to acquire things that you could not otherwise afford but it does much more:

• allows you to reinvest in the business,
• allows you to invest in the best technology,
• allows you to pay for the continuing education of your workforce and your suppliers’ too,
• sustains the enterprise in downturns,
• gives all stakeholders confidence in your enterprise—they trust you, a crucial factor in the sustained success of any enterprise,
• allows you to produce the best products and services and, thus, to the create the greatest benefits for your clients and customers.

Can you Summarize that?

Well, from the above we can say simply that business success occurs when you have:

1. Set the bar high for yourself, your colleagues and stakeholder group (your entire enterprise and business ecosystem) in terms of not only your financial goals but also in terms of engendering trust and achieving non-financial goals as well.
2. Used your talents, creativity and energy to the maximum and made each day count.
3. Taken care of the business so that the business could take care of your family and your family could take care of you.
4. Not become a burden on your society.
5. Made a profit.
6. Taken care of your stakeholder group and, to the extent you could, your fellow human beings.
7. Kept what you worked so hard to create and, when it was time, you passed it on successfully.

How do you Achieve Business Success?

I have been asked over the years if I can come up with some ‘rules to live by’ in order to become a successful entrepreneur. I think those ‘rules’ might also apply to anyone in any field of endeavour. So I put together this list which might help guide you in your quest to become successful in business. The list is a mixture of new age philosophy and ideas as old as civilization. I am not claiming originality here.

I believe that to be successful, a person needs to aspire to become some combination of the ‘impeccable warrior’ (from Carlos Casteneda’s The Yacqui Way of Knowledge), Good Samaritan and Atticus Finch (a wise, compassionate, courageous, learned character in Harper Lee’s To Kill a Mockingbird).

1. Be someone others can have trust in. Trust is the foundation of a successful life in business.
2. Under promise and over deliver.
3. Develop some self-knowledge.
4. Be in touch with your gut (instincts) and your subconscious.
5. Be the same person in private as you are in public—don’t be a phony.
6. Behave ethically.
7. Live a healthy lifestyle—all things in moderation. Don’t drink and think. Get some exercise. Don’t take drugs. Don’t smoke. Eat reasonably. Enjoy the life you have been given and enable your body and your mind to work to their full potential unclouded by substance abuse. Exercise some self-discipline. Get enough rest.
8. Give people including yourself, a second chance (but not a third chance).
9. Be a Good Samaritan and a good citizen.
10. Be humble—walk a mile in someone else’s shoes. Be modest. Live modestly.
11. Enhance and embrace your creativity.
12. Be positive.
13. Do not fear success. Fear failure.
14. Don’t be afraid of competition—it will make you better.
15. Don’t engage in self-pity when things go wrong. Look in the mirror first before you blame others for your failures.
16. Don’t get too high or too low. Compartmentalize—try to keep going even if parts of your life are not working well.
17. Be patient. Success takes years of effort. The harder you work, the luckier you get. There are no shortcuts.
18. Lead by example. Be committed. Focus. Be competent. Show up every day for work—the ‘show’ must go on.
19. Do things in parallel. Be a good team member and friend and colleague.
20. Seek out others who share these characteristics—surround yourself with good people. Probably the most important decision you will make is who to select to be on your team. They must trust you. You must be able to trust them.
21. Take responsibility for yourself. Pull yourself up by your bootstraps and help others to do the same. Accept help if offered and seek it when you need it. When something isn’t working, change. Stick together and reach out to others.
22. Learn from your experiences—don’t make the same mistake twice.
23. Get the Business Model Right so the harder you work, the more money you make.
24. Work smarter and harder.
25. Expect a great deal from yourself—use your given skills, creativity and energy fully.
26. Empower those around you. To be a successful entrepreneur, you need to able to lead and co-ordinate your team. Team members are not only your employees but also your suppliers, your clients and customers and your banker, your shareholders, your lawyer, your accountant, the media, the community-at-large, community associations, trade associations, politicians, government ministries, regulators and many others. People make better decisions when they are fully informed; don’t hoard information. A team that is top down directed can only move as fast as the entrepreneur—you, can move. Teams that are networked with you at the centre of an interconnected, communicating web move much faster and are synergistic plus they are learning organizations.
27. You aren’t necessarily in a popularity contest as a leader—your job, rather, is to make your views, positions and goals popular amongst your broadly defined team.
28. Never lead-by-fear. Remember that real power comes from ability, not the organizational chart, not from age, not from title or position.
29. Don’t postpone what you can do today to tomorrow.
30. Have a vision and set goals for yourself and your organization. Communicate your vision in a way that engenders hope in all those around you. Hope is the sine qua non of the human condition.
31. Keep your head when all those about you are losing theirs. (Thanks to Rudyard Kipling for this one.) Be calm in a crisis.
32. Be able to think on your feet.
33. Develop perspective and good judgment.
34. Give everyone (employees, suppliers, customers, shareholders, banks, all stakeholders) feedback both positive and NEGATIVE—communicate. Spread the credit when things go well. Thank people.
35. If you’re not sure about someone, an employee, a supplier, whatever, fire them. If you don’t trust someone, don’t associate with them in any way.
36. Always prepare ahead of time. Have the discipline to write down your analysis and your decisions, verbalize them and check them again. Take 24 hours to think things through. Sleep on it. You will find ways to make MUCH better decisions if you do this.
37. Pay attention to detail.
38. Check everything and everyone three times. Triangulate on people and information.
39. Creditor proof yourself so you can focus on the business or organization and have some peace of mind and a clear mind to deal with the issues and problems of the day.
40. Learn to cope with stress (not by drinking or taking drugs or losing your temper or …). Find a way.
41. Spend as little time as possible on recriminations; focus on the here and now and how to solve the problem. If something isn’t working, admit it and then either stop doing ‘it’ or change ‘it’. Try to avoid litigation which is a soul destroying, time sucking, negative energy type of thing.
42. Never delegate your personal or organization’s core competencies. Be available: problems only get worse if you ignore them.
43. Education is a lifelong process—you never get old as long as you are capable of and open to learning new things.
44. Practice, practice, practice—it takes practice, commitment and preparation to master any field of endeavour.
45. Be able to resist all manner of temptation like the seven deadly sins: pride, envy, gluttony, lust, anger, greed and sloth.

Why is it Important to Resist the Seven Deadly Sins?

To be successful, you must possess power: power to change things, to influence others and to make things happen.

Lord Toranaga (a principal character in James Clavell’s 1976 novel, Shogun) became a successful leader, in part, because he was able to master himself above all else. He learned to resist strong emotions and to think clearly when everyone around him was panicking. Clavell, in my view, understood the nature of individual power—it comes from within.

Let’s look at how resisting the 7 Deadly Sins might help your enterprise:

1. Let’s start with lust. Just think of the difficult circumstances that Tiger Woods is currently facing and you can immediately see what a lack of control over this aspect of your life can do to your career, not to mention your marriage and family. Think back a bit further—Donald Trump’s personal and financial circumstances changed radically (and for the worse) when he installed a mistress in a condo around the corner from his head office and then started to have long, liquid lunches with her. Before (and after) The Donald had been a teetotaler. And he was successful both before and after but not during these events.
2. Pride. This sin prevents people from concluding successful negotiations more often than not. In an essay titled ‘Don’t be Afraid to Make the First Move’ (http://www.eqjournalblog.com/?p=557), you can see how pride gets in the way of deal making.
3. Greed. Let’s face it, lawyers are trained to go into every situation with just three things on their minds: a. how to win on behalf of their client, b. how to game the situation so they can generate more billable hours and c. how they can protect themselves from liability. That’s it. They only understand situations that create one winner and one loser. Deal makers and peace makers understand that you have to leave something on the table for the other party. In a commercial negotiation, if you leave something on the table for the other party, you have a pretty good chance of turning that party into a long term client or loyal supplier.
4. Wrath. When you get angry your IQ drops (by about 10 percentage points). You lose your ability to think around corners, think outside the box or see the other person’s point of view. One thing you have to admire about Barrack Obama, he keeps his cool. If you are going to lose your temper, don’t, just pretend to. That way people will know you are making a point of emphasis and you will know it too.
5. Sloth. I have never known a lazy entrepreneur who was successful. Maclom Gladwell says (in his book, Outliers) that it takes 10,000 hours to master your craft. Sir Terence Matthews (Founder of Mitel, Newbridge and March Networks) says it takes 7 to 12 years to create a great business. For most people, it takes even longer.
6. Envy. There are many attributes about Canadians that are admirable but the desire to tear down the tall poppy is not one of them. Early in his NHL career, Wayne Gretzky was widely unpopular amongst young males. Why? The stated reason was: “He doesn’t fight.” The real reason? He was mega successful and had a cute girlfriend. In the US, when your best buddy, say, Leo DiCaprio, hits it big, Leo brings his whole crew along for the ride (like Vince inEntourage). They celebrate his success together. You can learn from examples of success and then you can focus on what you can do to make your own life better.
7. Gluttony. If you are not fit for life, you won’t be a leader. You need energy and concentration—if you are consuming mass quantities of food and alcohol and other substances, forget about it—you’ll go nowhere.

Now I realize that no one is perfect and that everyone is subject to temptation. We all fall short. So remember to be tolerant of the faults in those around you and in yourself. Most people deserve a second (but not a third) chance. Heed Plato’s words: “Be kind, for everyone you meet is fighting a hard battle.”

Why Should I Bother Practicing?

Ever wonder how Actors get Shakespeare right? How do they memorize all their lines and deliver them so eloquently and profoundly?

They practice. A lot.

I worked for a really tough guy in the 1980s—he was a PhD in Engineering Economic Systems from Stanford and that is one tough degree to get at one of the world’s top universities.
He didn’t brook shoddy performances and, frankly, was no different than the toughest Director—he wanted the best from his employees (actors) and demanded that from everyone, including himself.
Everyone I knew who worked there kind of feared him.

One day, we were expected to make a presentation to a senior member of the GOC (Government of Canada) and he asked me: “Did you practice your presentation?” I told him not to worry, I am a natural, a good presenter and it was in the bag.

Naturally, I flopped badly. I was embarrassed and promised him it would not happen again and it never has.

Ever since that day, I prepare for every meeting, presentation, lecture or speech I give. Always. No exceptions.

In his new book: Outliers: The Story of Success, Maclom Gladwell (Little, Brown) posits a 10,000 hour rule: if you want to be a top performer in anything, you need to put in at least 10,000 hours of practice. That is about five years worth of normal 40 hour work weeks. I suspect that Gladwell is bang on. My PhD Thesis supervisor, Professor Max Neutze (now deceased) was a rather demanding person. He told me one day: “Don’t worry Bruce, the first million words are the toughest.”

It takes me at least two hours to prepare for a three hour lecture and this is for a lecture in which most of the material is original to me. I still need time to prepare, to organize and to ensure that I will give my students full value for their time in my classroom. It is a performance and the students are my paying clients. I respect them, their time and the commitment they have made to come to the University, both financially and in terms of giving up years of their lives to be there.

When I first started teaching at Carleton’s School of Architecture in 1994, I noticed how committed the profs were—if they had a lecture coming up in a couple of hours, they always excused themselves and prepared. They would stop, sometimes mid-sentence, remember what time it is and, poof, they were gone to prepare. They earned my respect, for sure.

That is why I am so concerned about some of the business executives I meet and some of the students I teach who don’t know what it means to be prepared.

Even if it is only gathering my thoughts for five minutes, I know if I scribble down a few questions for an upcoming meeting, that meeting is likely to be far more productive.

Recently, I briefed the VP of a local property management firm on a potential client for his firm. I told him a bit about the client, the five buildings he owned, how many units there are in each building, what the vacancy rate was like, etc. I gave him a thorough briefing and organized a conference call for him to speak with the client who lives out of town.

About an hour before the con call, one of my staff told me that the President of the firm wanted to take the call—he felt that an important new client should have the benefit of speaking with the Pres of the company. So, fine, no problem. Or so I thought.

An hour later, we connect on a 3-way call and the first thing out of the President’s mouth is: “OK, so what’s the deal here?”

He knew NOTHING about the client, the properties and the job at hand. I was embarrassed for him but also for me. I recommended his firm after all and I was looking pretty stupid in the client’s eyes.

Now in my experience, if this was an American firm, he would have known everything he could about the guy on the other end of the line; he would have found out if they had any friends in common, whether they like the same sports, he would have been all over the guy’s website, he would have visited the guy’s five properties and he would have had a specific plan on how to improve the properties, their look, their management, their lease up, their rental rates, their landscaping, their maintenance, etc.

He would have found out ways to improve the guy’s bottom line. He would have convinced the potential client that hiring his firm and paying his management fees would represent a NEGATIVE COST. That is, the cost of hiring his property management firm would be more than offset by: a) reductions in vacancy rates, b) reduction in maintenance costs, c) increases in rents for each apartment, d) finding new revenue streams—like paid parking, paid laundry, maybe telecommunications towers or billboards added to the properties…

He would have had a spreadsheet prepared and ready to send the client. He would know the market and how to market the empty apartments in a cost effective way. He would have projections!

The company did not get the contract; I apologized to the client. I need to spend more of my time finding an alternative and I will never, ever refer anyone to that company again.

This is, I am afraid to say, very typical of Canadian Managers and one of the reasons why we have so few world class firms.

I have a kind of informal score that I keep in my head. On a scale from 1 to 10, firms that I have some familiarity with like, say, the Disney Company operate at around a 9.8 out of 10. That is about as well as you can possibly do. Anyone who has ever been to a Disney run Theme Park can see what they can do. It isn’t as easy as it looks. Trust me. They call their clients ‘guests’ and treat them that way—just like you do when folks come to visit with you in your home—and they call their employees (even their street sweepers and cleaners) ‘performers’, who must go to Central Casting every day to get into ‘costume’ (not ‘uniforms!) If you ask anyone at a Disney Park, even the most menial worker a question, they will know the answer or they will immediately stop what they are doing and help you until your problem is solved.

You know what many Canadian companies think about customer service? It’s a cost centre! That is why they are usually so bad at it. (It is obviously a profit centre, if you know what you are doing.)

In my home town of Ottawa, the organization that probably comes closest to working at a world class level is the Ottawa Senators. Now I founded the Sens so I am biased but the heavy lifting has all been done by others. In a small market like Ottawa, the Sens are in the top five or six in just about every revenue category. (They compete with 29 other National League teams.)

I give the Sens around a 7.5 out of 10 which is about as high as you can achieve in a place like Ottawa. No local company has the depth to compete with a Disney but 7.5 is darn good anyway.

Now in addition to being a Professor at the University of Ottawa, I am a Broker in the real estate industry and I can tell you that most firms in this industry in Ottawa probably operate around .5 to 1.5 based on my informal and completely unscientific scale. In other words, we are terrible.

Sometimes, REALTORS may put commissions ahead of clients’ interests; they may do a lousy job on their information packages and websites; they may hoard information; they may compete with each other in inappropriate ways; they may be lazy and unprepared; they may do little in the way of marketing unless pushed by our clients; they may get a listing and then practically never talk to a client again; they may pick the low hanging fruit; they may try to get the list price down for a fast sale; they may promise to do open houses and then don’t; they make the same mistake over and over again…

Part of my job is to get the folks to do what they should be doing—if you put clients’ interests first, I believe you will come out far ahead. One satisfied client will lead to two more. But trying to get REALTORS to change is proving harder than I thought.

One of my firnds runs Wilderness Tours (he is an expatriate American from Philadelphia) in Beachburg, Ontario. I think WT runs at around a 7.5 level too. It provides a fantastic experience for its guests. My friend told me that he works on “TPO”, Touch Paper Once. He tries to do everything just once—get it right the first time and never, ever have to go back and re-do it. I hope my current organization will get to that level some day. Right now, we do stuff over and over again until we get it right. But it would be a lot better if we could learn to do it right the FIRST time. Since paper is less a factor in today’s world, maybe Joe’s slogan should be “TAO”—Touch Anything Once. I also like the Tao analogy—it will certainly lower my blood pressure if my staff can learn the Tao.

I have told my students that to be successful at ANYTHING, they need to assert control over themselves and they need to develop patience. If you drink too much, stop drinking. Not getting enough exercise, change your personal routine. Smoking and toking interfering with your health, memory and productivity, stop smoking and doping yourself. I like what Jack Dawson (Leo DiCaprio) said in the film Titanic: “Make each day count!” Life is so much richer if you are not hung over or under the influence of other substances…

But I can point to a few things I have done that helped me get closer to the standards set by my heroes (both real, my Dad and my mother-in-law and fictitious, Atticus Finch and possibly fictitious, Sorcerer Don Juan): a) got my PhD, b) had five kids, c) brought back the Ottawa Senators, d) wrote more than two million words of hopefully decent research material, articles and essays, e) taught some great students who have gone on to create some really neat enterprises, f) went back to school in my 50s to get my real estate broker’s license, g) took up Yoga in my 50s after all the sports injuries I suffered took away the things I like to do like play hockey, tennis, go skiing and windsurf, etc, h) stopped biting my fingernails because one day I just decided to stop doing that (it’s really bad for your health (imagine the number of bacteria you transmit from under your fingernails into your digestive system by way of your mouth) and looks like heck) and never did it again.

I have developed a kind of patience too—I can now understand what Don Juan was trying to teach Castaneda by making him push a piece of dung around Juan’s modest desert home with a stick for a day and a night and a day without ever knowing when Juan would tell him to stop. I can pick up a spilled can of peas with chop sticks if I have to. I am not kidding. I could do it.

But the point of all this is: develop some patience. I like to rely on myself, I don’t like free stuff and I have patience and determination to do things, to get things done, to finish and complete things.

When I was a kid and attending McGill University in Montreal, I had my own apartment but I couldn’t afford a vacuum cleaner. I also couldn’t afford any furniture. (I solved this by raiding the Engineering Department for milk crates and Styrofoam (my dining room table and work table) and the Sally Ann for cushions, foam mattress and dishes.)

I happen to believe that being reasonably well organized and living in a clean environment is a good thing. So I re-learned what my mother’s people knew—they came from Russia and if they had to clean their carpets, they swept them with a broom. Not too many Russian peasants had vacuum cleaners, circa 1909. Of course, none of them did but it works just fine. And if the broom couldn’t get all the dirt, I would get done on my knees and pick up lint piece by piece, no problem.

I have never known a lazy, successful entrepreneur.

Prof Bruce