Is Big Ego Bad for Business?

Stories abound of famous entrepreneurs who are known to have huge egos.

How can we forget those reported tantrums of Steve Jobs, oftentimes terrorizing his executives, if they failed to do as he pleased? Yet Apple, under Jobs’ watch, went to become the most valuable company in the world.

Or the centralized, autocratic ways that can be found in the management style of Donald Trump. His extravagant lifestyle and outspoken manner have made him a celebrity for years, a status magnified by the success of his NBC reality show, The Apprentice.

Does it follow then that when the guy on top has a big ego, business is good?

In many instances, yes it is, but not in all.    

In the case of Trump, along with his business triumphs and popularity, he had instances of filing for bankruptcies because he invested in his own ego.  “When your wardrobe malfunctions in front of 10,000 people, make it part of your act”, he said after the failure of Trump Airlines, Trump Vodka, Trump Mortgage, Trump Casinos. 

And then there are others who turned away great business opportunities of a lifetime because their egos got in the way.

When William Orton, President of Western Union, was invited Alexander Graham Bell to buy the patent for the telephone for $100,000, he turned it down saying:  Mr. Bell, after careful consideration of your invention, while it is a very interesting novelty, we have come to the conclusion it has no commercial possibilities…What use could this company have for an electrical toy?”

Robert Uihlein, CEO of Schlitz Brewing Company, discovered a way to cut brewing time from 40 days to 15…to replace most of the barley malt with corn syrup…and to switch from stabilizer to another to circumvent new laws and as a strategy to outsell and outsmart its competitor, Anheuser-Busch.  The beer with the new formulation was cheaper, more profitable and got to the market faster.  The profits increased until customers noticed the terrible taste of the beer.  To top it all, it broke down quickly to form into sediment that looked like mucous.  The famous last words about Schlitz Beer was said in 1981 by a former mayor of Milwaukee: “How could that big of a company go under so fast?”

Steve Jobs, while bragging to former Apple CEO John Scully about the Apple Liza Computer in 1983 said:  “We’re going to blow IBM away.  There’s nothing they can do when this computer comes out.”  The Liza did poorly with only 100,000 units sold.

The founders of WebVan, when they launched their online grocery idea, overlooked some fundamentals of running a grocery business. Their attitude about bringing in those with knowledge of the industry was:  “We’re trying to recreate this industry so we don’t want to tie ourselves down to the old ideas…”

“Success breeds lots of arrogance. Webvan was Exhibit A of how arrogance can result in a high-profile failure.” wrote Eric Jackson, contributor at The Street.

There are more amusing and even sad examples to the list of businesses and their executives whose egos have sent them crashing down from the comfort of their executive suites down Failure Avenue. 

Business history is full of these. 

But is ego really that bad?  Looking at it in a positive way, I believe ego is the spark that made many entrepreneurs dream big dreams and made it.

There’s just got to be a way to rein those who cannot see the difference between positive self-esteem and arrogance.

10 Top Reasons Why Buying A Franchise is a Life-changing Experience

There are lots of reasons why your decision to buy a franchise is one of the best decisions you made in life.  The following will tell you why you made the right decision:

Instant Business
Buying a franchise does away with all the hassles: finding a location, negotiating a lease, hiring reliable contractors and doing all this on-time and within budget. When you buy a franchise you are buying a complete ready-to-operate business.

Photo Credit: www.jtwmediagroup.com

Tested and Proven System
All franchises have an already-established system in place that you must follow. These systems are designed to improve the overall productivity and increase sales of each franchise. Having a proven system in place eliminates the guesswork and errors a common business owner would normally face.

Bigger Chances of Success
Since there is an already established system in place, there is a higher likelihood of success. If you follow the system the franchisor has put in place, you should be on your way to running a very successful business.

Brand Awareness
If you buy into a franchise system that is already established, you will practically own an established brand that takes a long time to build. Customers are usually more comfortable purchasing items they are familiar with and working with companies they already know and trust.

Easy to Get Financing
Banks are usually very comfortable financing the purchase of a franchise because they already have a proven track record. Lenders usually look at successful franchise chains as having a lower risk of repayment default and are more likely to lend money based on that premise.

Training Support
The franchisor trains you how to run your franchise exactly the same way their other franchise locations are run. This will ensure that you are running your business efficiently and will help to eliminate the usual mistakes a new business owner usually faces.

Management Assistance
When you buy a franchise you are never alone. You will always be able to pick up the phone and ask questions to the franchisor or even to other franchisees.

 Advertising and Marketing Program
There is usually no need to worry about advertising your franchise. The franchisor usually takes care of handling all of the marketing and promotions of your franchise.

Exclusive Area
When you buy a franchise you are also buying an exclusive territory in which to do business. You will be entitled to a certain area and no other franchises (within your franchise system) can be open within that area.

Own Multiple Locations
Being a part of a franchise system will always offer you more opportunities to grow within the system. Once you have become a successful franchise owner, the next step is to add more franchises.

Source: The Franchise Show

How to Know If You Have Business Acumen

Do you have what it takes to make it in business?

Let’s face it, not all who tried it, made it. 

Running a business takes a special quality in a person to start and grow a business to a sustainable level.

And it takes business acumen to make it.

Do you have it in you?

Here’s how to find out.  

First you need to know and understand what business acumen is all about. 

Dr. Raymond R. Reilly, Associate Dean and Professor at the University of Michigan, and an expert in the study of business acumen, says that “business acumen is keenness and quickness in understanding and dealing with a business situation in a manner that is likely to lead to a good outcome.”

Doing so requires basic understanding of some aspects of business such as marketing, finance and other business functions while having the ability to make good judgment and quick decisions.

People with business acumen:

• ·         Have deep understanding of the scope of business issues

• ·         Can simplify complex situations

• ·         Can see through an uncertain future

• ·         Are aware of the implications to other people of their decisions

• ·        Are decisive

• ·         Flexible to change if needed in the future

Business acumen operates in the mind and those with it are able to use it effectively without reliance on organizational support and even formal education.

It is the reason why we see the likes of Bill Gates, Steve Jobs, Mark Zuckerberg and many other business greats who, even without the benefits of a college education, achieved outstanding feats in enterprise development. 

They are instinctively aware that they possess business acumen and utilized it to their advantage.

What are the elements of business acumen? 

 

Dr. Reilly says that strengthening business acumen requires understanding and focus in four critical areas:

• Understanding one’s thought processes.  Business acumen provides frameworks and direction to organizing one’s thoughts and deciding how to allocate attention to the most important issues.

• Developing business knowledge.  One’s acumen is developed by constant exposure to business situation partly through case studies provided by business schools as well as actual experience in a real business environment.

• Effective use of management processes.  These are the tools, procedures and ideas that give shape to one’s ability to think, analyze and to communicate.

• Management and leadership skills.  This aspect of business acumen is the ability to manage the various people relationships essential to enterprise success.  This skill must also apply to managing relationships with customers, suppliers, bankers, investors and other key influences. 

Can business acumen be learned?

Certainly it s a learned skill.

There are those who are quick learners and are able to learn easily than others. 

You can learn the basics in school and also through experience working for others.  If you are lucky enough, you develop it by being exposed to it through your family business at an early age. 

Finally, you can work to improve on your business acumen with regular practice and training until it becomes just second nature to you.

Do you know the the 3 Ps of success of outstanding performers in sports, theater or music?

Practice! Practice! Practice!

It makes one perfect. 

Job Description of a Business Owner

So you think you can now run a business? 

Welcome to the club!  You are now a member of that unique brotherhood of start-up business owners who are jumping into the river called entrepreneurship and testing the water, seeing for themselves if they can swim and survive throughout the entire length of the often-tempestuous tributary.

You have great belief in yourself and you think that because you are the top salesman, accountant or manufacturing guy in your previous employment, you now have the license to run an enterprise.

Well I have good news and bad news for you.

Photo Credit:  www.dailyfinance.com

Yes, it is a great asset if you have an extensive background from a line of work that is key to the growth of your former employer. That’s the good news. Congratulations for a job well-done.

The bad news is, a business is not made-up of just one function like sales, nor finance, nor manufacturing neither human resources. It is made up of all of these and more and if you are merely a specialist in any of these and you think that you’ve got what it takes to run a business, you are probably courting trouble, my friend.

Now that you have assumed the role of somebody who’s supposed to be in-charge of several business functions, it would be to your best interest to be appreciate the value that each of these functions contribute to the overall operations of a business.

To do this you have to re-engineer and tweak yourself to the role of a manager of all the affairs of the business. Not one, not two, but all.

I spent my early years in business and “grew up” in the functional areas of sales and marketing. But when I decided to venture in a business of my own, I realized that I need to increase my appreciation of finance and accounting, all the more when I went into business consulting.

As a general manager, you now need to have a bird’s eye view when looking at the business forest, rather than your former level when all you see are the trees of business functions.

Now, you need to learn a new skill set, a new perspective.

To help you do this, you need to develop a job description that fits the new hat of a general manager. You need to write a job specification that will spell out your new duties and responsibilities to guide you in your day-to-day activities as a business owner.

To prepare for your business growth and expansion, here are 4 key areas where you need to spend most of your attention and time, if you are to be effective.

1. Strategic Planning

            Your first job is to be able to see the future of your business. Already, have you developed a mission vision statement for your business?  Have you written a business plan that details every aspect of the business from product development, to sales and marketing, to finance, manufacturing to manpower build-up and development? These are musts that you cannot do without.  The first rule in a journey is do not go without a map and directions.

            During your journey, there are hazards along the way, and the one of the most fatal in business is the hazard of your business being obsolete because of new technological advancements.  If you were making or selling CDs and paraphernalia before, you’ll understand what I mean.

            An important part of strategic planning is being able to spot hazards ahead along the road and make a detour when necessary.

2. Creating a Business Culture and Community

            Nowadays, we often hear of the word “community” in every facet of of business life.  Creating communities are now part of every company’s business strategy in order to have a first-hand feel of the shared values of the community of its customers.

            Likewise, you should create a unique culture in your business where your stakeholders such as employees, suppliers, marketers and investors have the same attachment to what your business stands for, what values they can share as one community so that each of the elements are connected to each other.

3.  Manage Through Others   

Before taking in your first employee and the next, until you build an organization of human beings interacting with you, with your other employees, your customers and your other various other public, you’ve got to be like a  human resource specialist with the aim of getting the best possible employee to fill up vacant positions in your company.

Since nobody but you is responsible and accountable for the performance of your people, one of your most important tasks as a general manager is your ability to recruit, hire, train and develop good people.

These people, especially your key team members, must be hand-selected by you in order to ensure that they will be productive and treat other people the way you would. You need to personally handle their training and development so they perform according to what you expect of them.  The quality of their performance rests on your shoulder.

This way you get results through others by managing, not by doing.


These key people are key pieces in creating the community and culture of your business to maintain its effectiveness.  They need to appreciate and be able to live by your values in order to operate in your stead.

4. You are the Company’s Best “Salesman”
The principles behind the lessons learn from business success, whether of a large or small enterprise are all the same.  Only the magnitude of an organization’s size like Procter and Gamble sometimes give us the idea: “That’s P&G, my situation is different because I am just a small struggling company”.

Reading on the story of A.G. Lafley, the superstar CEO of Procter and Gamble who’s instrumental to bringing the company to one of the world’s most valuable companies, makes me smile in amusement.

I cannot help but be amused by what he asked himself and his employees to do:  Stay close to the customer.     

Having been close to owners of small and medium business owners since 1989, I realized that he is just adopting what the start-up and developing business sector are doing all along. 

Being small and agile, start-up businesses have the greater advantage of keeping their ears on the ground all the time.

As the owner, never lose your grip on the customer.  Personally allocate some time to them, as what Lafley and his executives did, making sure that you continue what others like you in the small business sector are doing, listening and paying close attention to what the customer is saying. 

 

Do this and you’ll never go wrong.

Why Start-up Businesses Need to Have a Mission and Vision Statement Right From Day One

Start-up business owners may think that it is not that important to have a vision/mission statement since they’re just starting out.  To most of them, there are other more pressing issues to think about like how to have the money for payroll next week!

Having a vision/mission statement written or even kept in one’s head has a certain power in it that could drive one to have a renewed sense of purpose.

Photo Credt: www,careerealism.com

I believe that it is something that must be internalized and must serve as sort of a mantra not only for the owner but for the rest of the staff.

It is a kind of recipe or operating procedure that should dictate the daily decisions and actions of everyone in the business, from the owner down to the delivery guy.

What about the big guys like Steve Jobs who founded the most valuable company in the world today? Did he have a sense of vision and mission when he was just starting out as an unknown dreamer in 1976?

Of course he had.  His vision “a computer for the rest us” was so compelling that it sparked the PC revolution and changed the way we work, play and live today.  He said: "We started out to get a computer in the hands of everyday people, and we succeeded beyond our wildest dreams."

Your business may not become another Apple but with a sense of direction, it could be at least a leading company in your chosen industry.

To have a sense of direction, here are some bits of wisdom you may want to consider to help you to be on-course in steering your business towards its destination:

Know exactly where you want to go.  Don’t just utter motherhood statements such as “Company X shall be the leading provider of XYZ Widgets in the market”.  Be more specific. Since it’s supposed to be your guiding star in the wide ocean of widget manufacturers, you may want to say: “Company X shall be among the top 3 leading providers (if not number one) of Widgets in the market in 3 years.  This shall be your battle cry from day one and everyday thereafter until you reach the top 3 slots in 3 years. 

To secure the future, secure today.  Some philosophers say that there is no such thing as the future.  Only today matters. Maybe it’s true because today - the future of yesterday - is the result of actions and events that happened in the past.  Good or bad, the results speak for themselves. So to be among the top 3 widget manufacturers in your market tomorrow, do the activities that need to be done today. 

Create a road map.  You company mission is your road map, with which you’d take your business to your ultimate objective in the years ahead. It is the framework whereby you design the activities that you and your people need to undertake so everybody rows in the same direction.

Make everybody sing the same tune.  Imagine a concert of orchestra players each playing a different note while performing.  Imagine your sales people making delivery commitments which your production cannot fulfill. If this continues, do you think you can make it to your vision of being in the top 3 players in your industry in 3 years? 

Let everybody in the know right from day one. Starting from your first employee, it is critical that every employee you hire know that the company is making XYZ Widgets and what place does the company would want to be in widgets market. To align the entire team in the organization, you create a culture where everybody is aware of the company’s mission and vision.  When Honda was just starting out, a story was told that each and every employee was so committed to its mission of creating quality cars.  Some of them even went out of their way to fix the windshield wipers of Honda cars as they passed by at the parking lot! 

You cannot measure what you do not know.  Every now and then in your journey towards your objective, you need to measure how far you have gone from where you started.  If you have a well-defined mission statement, you will know precisely what to measure and how to measure it. This should apply on every other level of the organization.

Are you ready to sit down and take time to see where you are going and how you intend to go there?  If you haven’t done it yet, today could be your defining moment.