Careers in Family Businesses

There is much confusion in most business families about what to do with non-contributing family members. The only way of ‘taking care’ of family seems to be by keeping them in the business. However negative or incompetent people have a disastrous effect on the morale of others, especially when they are themselves seen as powerful by association with the family. I am not talking about someone who misappropriates funds or does something dishonest. I am talking about someone who is not competent in business and does not produce results. If that person had been a professional, he would have been sacked without question. But if he is a family member he is usually shifted around from one job to another. All that is achieved is that his attitude spreads. The fact that the only reason he still has a job is because of his family’s name on the door, is not lost on anyone. That such a situation will in the long run destroy the whole business and consequently the whole family will suffer, is something that is conveniently ignored, most often because the family has no process to confront each other constructively. Consequently family members have a different status in the business no matter what their designation may be and no matter what the official line on career progression may be. The fact remains that the family member has lifetime employment and his family is looked after, no matter whether he is productive or not. Family members acquire even more significance because they are seen as most ‘loyal’ and ‘trustworthy’ as they are ‘insiders’ while professionals are seen as ‘outsiders’ and so by inference less ‘trustworthy’ and ‘loyal’. The organization collects obedient disciples who may well be great at implementing instructions but not much else. Mistakes are treated as failures at best and crimes at worst and are punished. Consequently all intelligent people avoid making mistakes in the only sure way, by taking no initiative or risk.
Once again social traditions outweigh good business processes with attendant consequences.
Defining 4 Critical Parameters
There are 4 critical parameters that any family business that wishes to transform itself from being person-led to becoming process-driven, must define. It is essential that all these parameters are clearly thought out, defined and the criteria made public. It is the lack of clear definitions that leads to claims of nepotism from one branch of the family and discrimination from another. When these four parameters are clear, it preempts a lot of internal conflict and clears the muddy waters and promotes transparency in all dealings.
1.       Entry
2.       Progress
3.       Succession
4.       Exit
·         What does it take to enter the business?
·         How is success measured and rewarded?
·         How is succession determined?
·         On what conditions can a family member be asked to leave the business?
What does it take to enter the business?
Business success is a skill, not a hereditary trait.
Ask, “Is our business an aspirational place for high potential employees who have multiple choices? Or a parking lot for those who have no choice? Do young professionals in various disciplines who are wooed on campus by major corporations choose your company over others?” GE for example has been ‘Most Preferred Employer’ for decades even though it is not in the top three salary payers in the United States. People join GE with the same state of mind as they go to Graduate School; to get training and experience which will enhance their market value. The working atmosphere, the collegiate partnership and the challenges that working for GE provides are so stimulating that most stay on, many for their entire careers, like Jack Welch did. Those who leave do so after making significant contribution and become ambassadors of GE worldwide. GE gets a huge amount of business from ex-GE people who are working in different companies. It is no accident that GE has provided the highest number of CEOs to American business. Ask, “What value do we add to those who work for us?” That is the key to attracting and retaining the kind of talent that you need achieve your goals. Like most things this is not an accident. Success is never an accident. It is the result of planned, intelligent effort.
Entry criteria for family members
Who can enter? How must they enter? What must they do to prove themselves worthy?
The first challenge is to set entry criteria for family members to enter into the business. In most families it is a default setting that all male members will enter the business. In some countries youngsters in business families seem to be allergic to education and enter the business immediately after leaving high school. Given that they are youngsters with little maturity and often an inflated sense of self importance, the results are not pleasant or useful for anyone, least of all for the youngsters themselves. Some families are more mature in this.
They insist that the youngster first finishes his tertiary education and then joins. In my view the best way to ensure that you get the best is to do the following:
1.       Change the default setting and make a job in the family business an aspirational achievement that has to be won not merely inherited. Make it clear from the outset that the family and the business are two different things. That though family members will naturally enjoy their share of profits as shareholders but for those same profits to keep accruing the business has to be managed well. That is a skill, not a genetic factor. So only those who can prove that they are ready to contribute can enter the business.
2.       For that they need to be able to do two things: the same as anyone else who wants to be hired: get a great education and get some good worthwhile experience in some good place. Insist that the scion of the family goes to a top notch college and gets a great specialist education. Let him stand on his own feet for that. Don’t buy the seat for him. While he is there don’t give him any preferential treatment. Let him stay in the regular college hostel and go around on a bicycle or whatever is the norm with other students. That way he will learn social skills and make some good friends along the way. Many rich fathers give their sons their own apartments and buy them expensive cars and then wonder why the kid fails in the exams.
3.       Keep a tight control on all expenses and focus on studies and hard work. Nobody ever died from working hard and neither will your beloved child. Remember that he has to return and inspire respect. Nobody respects a soft little pussycat that couldn’t make it on its own without holding its father’s hand.
4.       Once his education is over, let him join the biggest, meanest, leanest and toughest multi-national in the world and work for 5 years. 7-10 years is even better. That is the minimum time needed to get some worthwhile experience and learn the business. He will still be under 30 when he comes back. This will give him an idea of market competition, give him a standing on his own merit and if he is smart he will be able to pick up some neat tricks on the way. This way he will get a real-time international experiential education at no expense to you. He will also build a network that will come in very handy later in life when he is working in your company. Once he has his experience then invite him back. Don’t force. Invite. If he does not accept immediately then he is the one you want. Then induct him into the company and give him some real freedom and responsibility.
5.       Another even better way is to challenge him to start a new business. Let him present a business plan to you. Offer to finance him and then help him if he needs any help. If he succeeds you just helped create some more business for your family. If he fails, well that is the fee for his education. Analyze the learning; ensure he learned his lesson and ask him to give you a new business plan.

How is success measured and rewarded?

Success is not a matter of opinion. It is a measurable fact. 
 

           The credibility of any measurement is in its uniformity. Only if everyone is measured on the same standard does the standard become trustworthy. If you have one standard for employees and a lower standard for family members, then you are only lowering the dignity of your own family. People don’t respect those they consider less than themselves. And that is what family members will become if they are rewarded according to a less exacting and rigorous standard of measurement. I am amazed at the number of family business people who actually recommend that family members should have lower standards than professionals that the family employs. I can only assume that they are not thinking when they say these things. For how anyone with even a single digit IQ can say something like this is beyond me. When family members succeed on the same standard as everyone else they acquire high prestige and people will willingly follow them when they become leaders. Create a performance culture of measuring results. Everyone and everything should be measured and the family must set the example. If I had my way, I would set higher standards for family members that for outsiders. My logic is that this is precisely what the original founder did. The founder earned respect because he was clearly superior. Why anyone imagines that this logic changes from the 2ndgeneration onwards is something I can’t understand.
       It is essential to ensure that everyone is measured on the same standard. A rigorous and objective performance appraisal system is essential. In principle this consists of goal setting by mutual dialogue at the beginning of the year. Followed by ongoing measurement as the year progresses. And then assessment and reward at the end of the year. Making it a collaborative process enhances both transparency and trust and people feel empowered to know that they are working to achieve the goals that they set themselves. The feeling of being imposed on from above is eliminated and a high level of commitment is achieved. Rewards must be linked to contribution, in terms of annual bonuses and profit sharing schemes.
      Annual increments must be uniform to take care of inflation. All rewards must be based on current contribution and in relation to it. Senior management including family members must be measured on how they add value to the vision, how they are able to reinvent strategies and how they display structured ways of risk taking. For family and top management this can be a done by peer rating on a 360° basis. This is not about passionate speeches in favor of grandiose schemes. It is about the rigor to convert a dream into a strategic plan that can convince critical peers to commit resources to it.
          It is important to differentiate between the dividend that family members receive as a result of the business doing well and individual performance based rewards. For performance rewards there must not be any differentiation between family and non-family professionals. Performance rewards are for performing. All those who perform and meet the criteria of success must get the same reward. As a family member the individual will also be entitled to whatever dividend the family gives its members at the end of the year. That has no bearing on his or her individual performance.

Family business is more about family than about business

The business and family love are
two different, mutually exclusive issues.
When the two mix, both self-destruct.”
Current Existence & Growth: Who has the power and why?
Performance versus identity: Who are you versus what did you do?
Succession: Family or business: Which comes first?          
Competence versus connection: Which is more important?
Families that understand these two questions and are able to address them succeed in perpetuating their growth, influence and wealth. Others disintegrate in internal strife and are relegated to the pages of PhD thesis on the subject of ‘Family Business.’ I have called this ability to deal with these questions, ‘The Critical Transition from being Person-led to becoming Process-driven’.
In my experience many business families spend far too little time on the upbringing of their children especially in inculcating the value of contribution. Of each generation creating its own legacy and not being content to ride on the back of the earlier generation. They give their children the same education that is given to the children of ordinary people who they employ. They don’t prepare their children for the distinctly different responsibility that they will have to shoulder. This is not about arrogance or about creating a new caste system. It is about merely recognizing the fact that the scions of business families are going to inherit power and wealth entirely out of context of their own effort. It is therefore essential for them to understand the distinctly different responsibility that comes with such wealth and power and for which they will be answerable to their families, their descendants and society at large.
I’ve met many founders who struggled very hard to set up and grow their business and who say to themselves (and to everyone else) with great feeling and tears in their eyes, “I will never allow my children to face the hardship that I had to go through.” When I hear this statement I say to them, “Please change the wording. Say, ‘I will never allow my children to build resilience, character and strength. I will never allow them to have the power that I have, to succeed.’ Say this because in effect that is what you are really saying.” For many of them this statement of mine is a shock. They had never thought about their view on upbringing of children in that light.
They equate expense with quality. They give their children the most expensive education which insulates them from the realities of life and so they never learn to fight the real battles. They give them the most expensive toys which in reality teach them to define human value in terms of material worth (the ‘best’ kids are those who have the best toys). They insulate them from poverty, deprivation, lack of resources and thereby they ‘protect’ them from being exposed to the power of drive, ambition, single minded focus on achieving big, ambitious, scary goals. They build walls between their children and the people who they must in the end, deal with. People who will one day, work in their organizations and decide their fate. People who need to be inspired, led, cared for and supported. And therefore people who must be understood. Not simply in order to do good and be charitable but because the success of the business and family depends on the development of these people; the great multitude. The fond parents forget or ignore the fact that one day the time will come for the soft little molly coddled pussy cat to enter the jungle of the real world without any of the tools it needs to survive, much less to lead others.
Possessions add cost, not value.
Children must be taught that humans have more intrinsic value than anything material which can be bought, sold or junked. That cars, branded clothing, watches, gadgets, material possessions, expensive houses don’t add value to the people who use them. Possessions add cost, not value. Anyone sensible will seek to add value to himself, not cost. People who believe that possessions add value or seek to convince others of this, have no value for themselves. They have low self-esteem and are seeking to lower the value of the human being. Children must be taught that a car, no matter how expensive, is transportation, not a symbol. Except of bad judgment which makes someone put huge amounts of money into a depreciating asset. A shirt is clothing, a watch is meant to tell the time and shoes are meant to walk in. None of these define you, are not statements, nor indicators of what kind of human being you are. It is your character, your actions, what you stand for, your principles and your values, which define you. Not what you possess. What you possess can be stolen or taken away from you. Your character, your values, your principles are the stuff of memories that you leave behind. By these you will be remembered, honorably or otherwise. Live a life such that you will be remembered with honor. Teach children these things by personal example. Because that is the only way to teach them.
Family is Family
There is always a difference between ‘insiders’ who are family members and ‘outsiders’ who are not related. Some of these differences may be overt as in rules applied differently. Some may be covert and under the surface but still clearly visible to everyone, as in forms of address, precedence, who can go to the Chairman’s home uninvited. In many families the business is treated as an extension of the family home and the same roles of elder and younger apply.
Guaranteed career progress and no door marked ‘Exit’
Like employment, career progress is also guaranteed. After all the family rarely promotes an ‘outsider’ over the head of an ‘insider’. So the family member will always get his promotion, even if it means that someone else actually does the work. I have seen many examples of this in the Middle East where the professional manager actually does the work while the family member is busy fulfilling decorative purposes. Needless to say the same logic extends to family members leaving the organization. After all, just as you can’t steal from yourself, you also can’t leave yourself. So no exits for any of the reasons that are guaranteed to send ‘outsiders’ into orbit. Needless to say this encourages complacency. In some families the incompetent member is shifted to some other part of the business where he proceeds to spread his negative influence, only to be moved elsewhere when he has done sufficient damage. The power of the bad apple must never be underestimated.

O! Teacher, stop teaching

Our present methods of teaching which are inflicted on by far the vast majority of children the world over are the single biggest cause for killing the imagination that every child is born with and making them into square blocks which fit our own frightened, constrained and slavish worldview. Those who comply we ‘pass’ and those who challenge it and refuse to succumb, we ‘fail’. The occasional among those we ‘fail’, go on to great fortune. The vast majority disappear, never to be heard from again. Destroyed by the education system they didn’t deserve or ask for.

I recall the story of young Tommy; one of the stories that do the rounds on the internet. It is said that Tommy’s teacher asked the class to write an essay about their dream. Next day all the children brought their essays to class. The teacher read them all. But when she came to Tommy’s essay she was astounded and even angry. She wrote a big 0 at the top of the essay and handed Tommy his book. Naturally poor Tommy’s face fell when he looked at the teacher’s notation. He took back his book and silently walked back to his seat. The teacher saw the look on the little boy’s face and took pity on him. She called him back and said, ‘Tommy, your dream is ridiculous. It is fantasy. It is totally unrealistic. That is why I failed you in the test. However I will give you another chance. If you re-write this dream and bring it back tomorrow, I will give you some marks.’ Tommy listened in silence, nodded agreement and returned to his seat. The eyes and smirks of all those who had ‘passed’ were on his face. They were the ones with realistic dreams which the teacher liked.

Next day Tommy handed in his essay to the teacher. The teacher scanned through it and was astonished to see that there was no change. She called Tommy to her desk in an injured tone and said, ‘Tommy, didn’t you understand what I told you? I said I would give you marks if you changed your dream. You have done nothing here! So I am sorry I can’t give you any marks.’

Tommy looked at her and said, ‘Teacher, I thought about what you said and decided that I will let you keep your marks and I will keep my dream.’

It seems strange to me that if I were asked to define the biggest challenge of the teacher, I would say, ‘It is to teach children how to deal with a world that we know nothing about.’ In such a world, imagination is the key resource that they will need. Without imagination they would be floundering trying to find answers in history or ‘facts’ that they had been taught. But they would never find those answers because they simply aren’t there. Yet the thing that most schools do with amazing efficiency is to kill the child’s imagination as quickly as possible. And sadly they are very successful in doing so.

Take for example how science is taught. It is taught in a way that is no different from history, for example. It is taught as a ‘fact’ course. Whereas science is not about fact at all but about constant discovery. Science is about constantly discovering how little we know. Science is not about answers but about learning to ask the right questions, learning to analyze data with a willingness to be proved wrong, learning to design experiments to disprove our most dearly loved models, knowing that only if the experiment failed could we say that our model is actually correct. Not forever, but until we come to the next discovery.

Teaching is not about answering questions but about raising questions – opening doors for them in places that they could not imagine. Teaching is about teaching them the tools of learning which will enable them to pursue learning all their lives. Not answer questions – end all discussion and pass exams. That is the reason why the vast majority of children never open a science book once they finish with school. That is the reason why there is a serious global shortage of scientists. The whole approach to teaching must change – from teaching solutions and answers to teaching tools to pursue lifelong learning. Even when we teach what we know – the answers – we need to teach them how we arrived at those answers and then ask them , ‘If you faced this issue, what questions would you ask to find an answer.’ We need to focus far more on derivation, problem solving methodology and analytical skills than on actually arriving at some formula or solution.

The same malaise plagues other subjects as well. In history we concentrate on dates and places far more than on lessons learnt and ways of applying them in today’s society. When was the last time you heard a history teacher ask questions like: ‘What did we learn from the history of the Mughals the reflection of which we can see in today’s society? What can we learn from that period of Indian history which we can apply to our lives today? What can we learn from that period which will help us to find solutions to our problems today? Which problem? What is the solution?’ Instead history question papers will ask you for the date on which the first Battle of Panipath was fought; who was fighting whom; not why; not what did that indicate about that society and its implications in today’s society. So children hate history. We don’t relate what we teach to what is happening currently and how learning what happened then can help people in today’s world.

Children hate math, algebra even more. But when did we ever hear of a teacher teaching math as a problem solving tool? Or of teaching algebra as a tool to plan a party? Math enhances ability in reasoning, intelligence, decision making and abstract analysis. But we only teach dry numbers. Math enables budgeting, judging and assessment of business enterprises; it is the basis behind computer programming, music, art, graphic design, aeronautics – and a million other highly interesting things. But the way we teach math – the majority of students hate it, never use it to any advantage and trash 12 years of learning it as soon as they complete their final exam. So why should you study math at all. See the answers of some students to this question which their professor asked them:
http://www.math.uakron.edu/~norfolk/why223f03.pdf
Another very interesting article which turned up on Google on math is here:
http://drkroiss.com/page21.html

Our education system stinks. It is designed to create mechanics – not learned people. So one can become an engineer without reading any book other than his course books and without any understanding of anything except the little machine that he works on – as if the rest of the universe doesn’t matter. All the treasure of human thought, ideas, discoveries, experiments, reflections and imagination are closed to him. He doesn’t even know that they exist. He lives a life of stress, doing his best with his very limited understanding of life, trying to reinvent the wheel, to discover solutions which others, far more gifted and learned than he could ever be, have already discovered and written about. But then how would he know about them when he doesn’t read?

That is why we have idiotic product design because the designer has no concept of relating his design to the actual user. He is thinking in terms of his narrow area of knowledge, not of the vast area of application. That is why Haleem makers in India use washing machines as kitchen mixers. Saves them a lot of labor stirring the pot when they can have the pot stir itself. Ask the washing machine designer what he was thinking of when he designed the machine except dirty clothes? But great opportunity does not lie in customer demand. It lies in areas that the customer didn’t even know he needed.

The biggest problem with teachers is that they teach. That is the root cause of all ignorance. So I titled this essay, O! Teacher, stop teaching. Start discovering, learning, enjoying. Start appreciating that the child is the best thing that happened to you and every single day try to become the best thing that happens to him or her. Teachers must never teach. They must be like ushers in a vast museum, walking quietly with their students tiptoeing behind them, opening one door after another – letting them take a peek – and then handing them the key to the door so that they can come back in their own time and explore in detail. The teacher then takes them to another door for another peek and another key. See?? Imagine how exciting that is for the child! The teacher’s job is to give them the keys.

Teaching is about asking questions – and teaching them to ask questions. The teacher who gives answers has failed. So never do that. Teaching is about keeping the excitement of learning alive all life long. Teaching is about taking the hand of a 4 year old and leading the whole group to a tree. Then sit down under the tree and tell them, ‘Let me see who can get me a perfect leaf of this tree.’ Actually do this and see the fun. When they all come back, brimming with joy at their perfect finds – ask them if all the leaves are the same, even though they came from the same tree? Let them marvel at the fact that they are all leaves from the same tree but each is different. Ask them, ‘Why do you think this happens? What is Allah saying to us?’

Then pull out a seed of the tree you are sitting under from your pocket. No it didn’t grow there, you prepared for the class, remember? Then show them the seed and let them all (every one of them) hold the seed in his hand and explore it, texture, shape, color and so on. Give them crayons and paper and let them draw the seed. Give them a few more so that everyone has his own seed. When they have drawn the seed, tell them, ‘Now look at this tree. Do you realise that this tree was inside this seed? Can you draw the tree inside your seed?’ Let them do that. Every drawing must be made much of and draw breaths of amazement from you – and indeed, if you have ever taught in this way, you will realise that being amazed is the default setting. It is only when we kill the imagination of children that they become like us.

Then tell them about genetics – yes to four year olds – and explain how the tree was inside the seed until Allah ordered it to come out. Explain the whole process of germination and growth. Draw lessons from each step and show them the glory of Allah. Of course that will make your own role as teacher much harder but also much more fun. To be on top of the game you have to read and prepare @ 1:4 – one hour of teaching to 4 hours of preparation. The kids will come back with answers to the questions you planted in their minds. You will need patience and tact and wisdom to deal with some of them. But you will have the joy of learning, of having doors opened for you where you didn’t know there were doors. Teaching is about learning.
I learned some of the best lessons in my life from someone who was knee high to a jack rabbit (as the Americans put it).

Teaching is not a job. Anyone who considers it a job must do one of two things: re-think their vocation or become a cigarette salesman. That is a job. Selling cigarettes to people to hasten their demise. Teaching must be a passion. A teacher is someone who simply can’t imagine doing anything else. A teacher is someone who will teach not only for free but also if they had to pay for it. Only then can you light the lamp of the love of learning in the hearts of others. Teaching is to light the lamp of knowledge and dispel the darkness of ignorance. Do you, Mr. Teacher, consider what you are doing in these terms? I often ask people to think of a role model and then ask for how many of them it is a parent or a teacher. I have never had more than 10% of the population, across nationalities, races and genders, raising their hands. That means that for 90% of people their role model is neither a parent nor a teacher. What a tragedy, seeing that these two roles have the maximum face time with children. Yet they seem to do their roles in such an uninspiring and dull way – if not in a positively harmful way – that most children are glad to be away from them as much as possible.

I ask teachers to consider this. Every morning a strange thing happens at the gate of your school. Parents come and hand over their most precious assets to you without asking for any guarantees for anything; for you to do as you please with them for the next 6 – 8 hours. Are you conscious of this responsibility in quite this way and do you plan for those 6 – 8 to become the best 6 – 8 hours of that child for that day? Do you actively plan this? What would you say if the teacher, who you send your child to, planned to make those hours the best hours of your child’s life? Do you believe this is worth doing? If not, what are you doing here?
So when a child asks a question, ‘Mr. Great Crocodile, what does this mean?’ You say, ‘You tell me.’ And then let him go away and search – watch what he is doing, give him a hint or two but never make it easy for him. If it looks like he is getting too close to an easy answer, bowl a googly. Ask a question which will lead him to dig deeper.’ Then when he comes to you with his answer, listen very carefully and be prepared to be astonished. Don’t put any limits or boundaries on what he can or can’t say, what he can or can’t question. Then listen very carefully and take notes. That will do wonders for his confidence as well as for your own learning.

And another thing – abolish exams. Or at least have only open book exams. Exams are the worst evil that ever happened to learning. They are the final nail in the coffin which ensures that the child hates learning forever.

May you be the one to illuminate the world by igniting minds.

First of all your own.

The Question of Edge

In GE, during the time of Jack Welch, there used to be what were called, ‘The 4 – Es’ of GE Leadership: Energy, Energizer, Edge, Execute. We taught this in Crotonville and focused on them in every GE Leadership Course that we taught anywhere in the world.

The values statement of GE read:

All of us…always with unyielding integrity… Are passionately focused on driving customer success. Live Six Sigma Quality…ensure that the customer is always its first beneficiary…and use it to accelerate growth. Insist on excellence and are intolerant of bureaucracy. Act in a boundaryless fashion…always search for and apply the best ideas regardless of their source. Prize global intellectual capital and the people that provide it…build diverse teams to maximize it. See change for the growth opportunities it brings…e.g., “e-Business”. Create a clear, simple, customer-centered vision…and continually renew and refresh its execution. Create an environment of “stretch,” excitement, informality and trust…reward improvements…and celebrate results. Demonstrate…always with infectious enthusiasm for the customer…the “4-E’s” of GE leadership: the personal Energy to welcome and deal with the speed of change…the ability to create an atmosphere that Energizes others…the Edge to make difficult decisions…and the ability to consistently Execute

I have highlighted the statement in line 4: because I am a beneficiary of that value as it is lived in GE. This is just to underline one simple fact: GE’s success doesn’t depend on what the values say (there are plenty of people in the world who talk about the same things); it depends on the fact that in GE, people live these values.

In GE, the values are not something framed to be hung on the wall of the Chairman’s office. They are daily topics of conversation, they are commonly used nomenclature, they are things that people practice, hold themselves up to, feel empowered and ennobled by and actively demonstrate.

Take the line that I highlighted. How is this lived? Let me describe my first interaction when I went to GE Corporate University at Crotonville for the first time in 1997. I landed in New York and took my suitcase off the belt only to discover that it had been vandalized. My experience with Delta is another story which I won’t go into here – but what do I see as soon as I go outside – a chauffeur with a limousine asking me to hand over my suitcase so that he can carry it to the car. I ask myself, ‘Hello! Did you get off at the right stop? This is New York? People don’t carry anyone’s baggage in New York. So what’s this?’

Anyway, I get into the car – Continental – and off we go. As we near Crotonville – a good while later (JFK to White Plains is not exactly next door), the chauffeur calls Crotonville reception on the car phone (no mobile phones in those days) and gives them our location. As the car drives up, I am received by a young lady at the foot of the flight of stairs leading to the reception. I simply sign on the check-in card and 10 seconds later the lady escorts me to my room – a huge luxurious place with a fabulous bathroom – everything in America is king-size to an Indian – shows me around the room and says, ‘Mr. Baig, the telephone is a direct line with complementary international access. You are welcome to use it to call anyone in the world.’ The fact that I made only one call is another story.

Next day when I go to class, the Course Coordinator, my good friend, Carla Fisher is with me. Takes me to the class. Is there to meet me at the interval to take me to the Crotonville dining hall (refurbished at a cost of $ 2 million in 1996) and then back to the class. I said to her, ‘Carla you need not do this. I know my way around and am perfectly happy going to eat and so on, on my own. You need not take the time out to escort me.’ She says to me, ‘Yawar, it is a pleasure to be with you. But even if it wasn’t, I have no choice. This is how we treat people with knowledge. It is a part of our values.’

That sums it up for me: the issue of living by the values that one espouses. Credibility falls through the gap between what is espoused and what is practiced. Until one is prepared to live by one’s espoused values, one will never be respected for them. There are far too many people who claim to have many lofty values but you don’t see any sign of them in their lives. Values are therefore only as good as practiced. Nothing more. Nothing less.

So why the title of this essay about ‘Edge’. It is because of the definition of ‘Edge’ – the willingness to take hard decisions. To live by one’s values is very often a hard decision. It is much easier to succumb, to compromise. But only when one decides to take the difficult path, does one feel the pleasant cool breeze on one’s face. To enjoy the coolness of the breeze, it is necessary first to sweat.

I believe that this is the key to success. Be it in business or society or personal life. It is the willingness to take hard decisions that spells the difference between success and doom. Hard decisions about yourself, your career, your family members, your team, your choices about any issue and your focus and strategy. Organizations or people don’t go down because of one bad decision. They go down because of insistence on that bad decision which leads to multiple bad decisions – only, that those are now taken by people who have deliberately decided to blind themselves to the consequences of their bad decision making. Ignoring reality only ensures that you perish – because reality doesn’t change for those who choose to ignore it.

In my consulting practice in Family Businesses, I have seen the sad results of lack of Edge, over and over, when families fail to take hard decisions when it comes to the entry, exit or behavior of family members – because they are family members. It is amazing how they don’t see that if one doesn’t stop the one making a hole in the side of the ship, the whole ship will sink. But they don’t and it does.

All great enterprises succeed for three reasons: I have added one of my own.

1. Unyielding integrity in living the values
2. The Edge to take hard decisions
3. Demonstrated willingness to invest time, money, energy and resources in the pursuit of a vision that spans generations.

Let me elaborate my understanding of these from the many histories of great enterprise that I have studied and also personally experienced.

1. Unyielding integrity in living the values

The key word here is ‘unyielding’. The ones who succeed are the ones who refuse to yield to any amount of pressure, logical reasoning, emotional blackmail, any kind of persuasion, personal considerations, changed circumstances and so on. They are those who have espoused the values after deep deliberation, serious consideration and soul searching to find complete acceptance. Only then do they consciously espouse the values. They are not those who sign on after listening to a fiery speech or emotional appeal. They are not those who claim to espouse those values, ‘Because they are the values of GE or Sony or The Constitution or anything else.’ They are those who espouse and commit to those values because they are their own. These are people who give thought to what they are espousing before they espouse them – because they are keenly aware of what espousing means, what they will need to commit to, what it will cost and how it will benefit them. They consciously espouse those values because in their estimation, the benefit far outclasses the cost and is worth all that it will take to live by it.

For some it is money. For others the goal may be social, political or spiritual. The rule is the same: you need to commit to the values and live by them with unyielding integrity. They are your values, you chose to be defined by them, you stand for them, you will be remembered by them and so you are willing to do whatever it takes to demonstrate them to a level of excellence. Interestingly the actual values don’t matter to success. It is their practice which decides whether you succeed or not. Those who win are not those with the best values. They are those who best practice their espoused values.

Let me assure you that there will be many who will argue against this. They will call you rigid – unyielding means rigid, see? They will call you unreasonable – all progress depends on being unreasonable, because the reasonable adapt to the situation, while the unreasonable try to change the situation. They will call you crazy – but it is only those who are crazy enough to think that they can change the world, who do.

So let them bleat – all sheep do. Leadership means to like your own company. The tiger walks alone. Sheep have plenty of company. So make your choice. Consider it carefully. Then commit.

2. The Edge to take hard decisions

GE’s success story under Jack Welch was rooted in Edge. The Edge to take the decision to be # 1 or # 2 in any business that they were in or sell and get out. Just ask yourself, for most of the world, being # 3 globally in a business is not only okay, it is brilliant, fantastic, something you write home about, something you put on your website and brochure – ‘We are # 3 globally in this business.’ But not to GE under Welch. For GE under Welch, being # 3 was the death knell – it meant that you were going to be sold. And you were sold. Even if you were his aunt’s son in law. That was not because he loved you less but because he loved GE more. Edge in GE meant the famous GE Workout. The decision making tool that Welch taught us all: where the CEO was put on the spot and could only say one of three things:

1. Yes.
2. No – giving reasons.
3. Get me more information.

No waiting, no procrastinating, no delaying – no next week, next month, next lifetime. If you wanted to remain the CEO, you had to take a decision. There are a huge number of transformational success stories about the effect of GE Workout and those of us who taught it, did so with full belief in it and commitment to it based on visible results. As I mentioned earlier, I have seen the result of Edge or the lack of it in my consulting practice in the many years since my first Crotonville visit in 1997, across boundaries of nationality, culture and geography. The principle holds true completely.

Edge is to be able to do two things:

1. Get the right people on the bus and the wrong people off the bus (Collin & Porras’s term)
2. Keep driving

Right and wrong people

Who are the ‘right’ people and who are the ‘wrong’ people? The right people are those who believe in the values and practice them with unyielding integrity. They practice them and this is visible in their lives, not because someone is watching. But because the values define them. They do it not because it is good to do but because their values are who they are. The wrong people are those who got onto the bus because they liked the shape or color of the bus. They had no idea where it was going. They just got on because it looked good. So what must you do with them? Stop the bus and ask them to get off. That is Edge.

Great enterprises happen because of players. Not because of passengers. Passengers are deadweight. They are shackles on your ankles, millstones around your neck. They will drag you to the bottom, sap your energy, dampen your enthusiasm and assure you a fate that in the evening of your life, you will gaze back at the road you travelled, with pathetic and futile tears running down your cheeks – at what could have been if only you’d had Edge. You will know then that the reason it didn’t happen was not fate or the stars or anything else. The reason was you, yourself. You had no Edge. Not for nothing do I say, ‘If only’ is the saddest phrase in any language, because only those who have lost it all, are forced to say it. It means that your life is over, even if you remain alive.

Remember that it is kindness to stop the bus and get the wrong people off. It is not kindness to keep them on, leading them to a destination they never wanted to go to in the first place. There is nothing to be hesitant about doing this. No great enterprise happens because of one man or woman. It happens because of those who followed the leader. So it is essential for the leader to ensure that he or she has the right followers. Great leadership is a followership issue.

Keep driving

Once you have the right people on the bus, keep driving. It is an inevitable rule that the right road leads to the right destination. And right people ensure that you remain on the right road. That is the reason to get the right people on the bus and the wrong people off. With the right people there is no confusion. There is no noise in the system to distract you and take the pleasure out of the tune. With the right people you know that no matter who takes the wheel he or she will keep the bus on the right road and will not swerve off into some nice looking deviation. With the right people you know that you don’t have to worry about who will get off to change the wheel or fill gas or anything else that the bus needs to keep going. With the right people you know that you don’t have to ask anyone to do anything. Right people know what to do and do it unasked.

So ask yourself, ‘Do you have the right people on your bus?’ And even more importantly, ‘Are you the ‘Right Person’ for the bus you are on? If not, do yourself a favor – get off. Get off right now.

Keep driving because worthwhile destinations have a way of being far away. Satisfaction is directly proportional to difficulty. But with the right people you will enjoy the drive. It is very necessary to enjoy the drive, to take pleasure in the journey and not wait until you arrive at the destination. The pleasure in the journey is a factor of the company you are traveling in. So once you have the right people on the bus enjoy the drive and keep driving. To arrive at the destination is inevitable. Right people ensure that you go to the right destination. Winning is a habit. So is losing. So choose right or choose to lose.

3. Demonstrated willingness to invest time, money, energy and all resources in the pursuit of a vision that spans generations.

The key word is ‘demonstrated’. You can talk till the cows come home – but until you show it, it doesn’t count. All great enterprises succeed or fail for one reason only; lack of sufficient investment.

That is the reason to have an unyielding commitment to live the values and to have the right people on your bus. Only then will you be assured of the investment that you need in order to succeed. It is essential that those directly involved in the enterprise – those who are on the bus – invest personally, demonstrably and visibly. That is the proof that they are the right people. If they don’t, they should get off the bus. Investment is where the rubber meets the road. Investment is to walk the talk. Investment is what brings other right people on board because people listen with their eyes and are drawn to others who they resonate with; share values with; feel good in the company of.

Investment as I mentioned, is in terms of time, energy, money and in every way that is necessary for the enterprise to succeed. To invest means to put the enterprise and its demands over and above everything else. I mean ‘everything’ in a very literal sense. There is no ‘work-life balance’ with those who eventually succeed in great enterprises. For them, their goal is life. For them and all those who are with them – including and most importantly – their families. There is no great enterprise that I know of which was done in anyone’s spare time or on weekends. All great enterprises demand full time, 24×7 commitment to the exclusion of everything else. You need to walk, talk, think, sleep and dream the goal. You need to do this and find meaning, rest, entertainment, enjoyment and fulfillment in it. It must be something you do when you are paid for it, something you will gladly do free and something that you will pay to do. It must be your legacy. It must be your contribution to life. It must be the reason you live, the reason you die and the reason you are remembered.
All great enterprises also demand that those involved in their founding personally invest significantly in them. Significantly not in terms of the absolute monetary value but the relative value in terms of the individual’s own wealth. So the investment may look small in terms of itself but may represent the individual’s total wealth in the world. That is what makes it significant. It represents the investment which the person is making in terms of how important that person considers the investment – that he puts all he has into it. He doesn’t need encouragement. He is convinced. So he invests. People engaged in great enterprises don’t know the word ‘sacrifice’. They know the word ‘investment’. They are so convinced of the value of the return that they consider it a great opportunity for reward. Others may think that what they are doing is sacrifice. But they do it because for them there is nothing better to do than that.

Investment, as I mentioned, is not only in terms of money, though that is a very significant part of it. Investment is also in terms of time, energy and thought-share all of which are essential for the enterprise to succeed. Investment is also in inspiring and energizing others. Investment is in transferring your dream into their hearts. In making them dream your dream. People engaged in great enterprise are able to do this not because of amazing oratorical skills but because passion is infectious and sincerity is transparent. Hearts speak to hearts and words are immaterial. Without sincerity and passion, no dream can be transferred into the hearts of others.

Investment is in building teams. In spending the time to train others, to support them, to have patience with them and also when required, to part company with those who simply are not going to succeed. All this investment becomes possible for one reason only – and that is – the goal is worth every minute, moment and measure of it. Only when the achievement of the goal is seen as worthy of the effort that it will take to achieve it, does the effort become possible. It is that shining vision in the distance that enables all the difficulties of the path, to pale into insignificance. It is the glow of the vision that lights the dark lonely road in the depth of the night when hope is at a low ebb and fears raise their heads in the darkness. It is the taste of the sweetness of the vision in the mouth that wipes out the bitterness of hard labor and defeat after defeat. It is the pull of the vision that lifts me up every time I fall – again and again.

It is written in the laws of nature, that they will not be changed for anyone. As long as one fulfills their conditions, they produce the same return time after time without change. The difference between free flight and free fall is in the landing. Not in the speed with which the flyer moves through the air. It is the law of gravity which spells the ending – the same one every time. Success, like gravity, is a law of nature. Those who know how it works, achieve it every time. Like the smooth landing of the one who knows how to fly.

An Entrepreneur’s Diary – Interview

http://amzn.to/2kctrRV

1 — Founding story: why this venture, why that particular time, what motivated to make the leap? What were the entrepreneur’s greatest fears and desires?

Need for excitement, challenge, freedom — all these were reasons. I had planned to start something on my own in 1984 when I first attended a self-development workshop which gave me a taste for training and I realized that I have a natural talent for teaching and loved doing it. But it took almost 10 years of planning and preparation before I actually launched my company. The final trigger was when I reached a plateau in my career, the downside of fast growth, and had to make a choice between changing my job or changing my career. I chose the latter and never regretted it. Strangely my greatest fear should have been starving to death but I never did experience it. My logic was that I planned to succeed, so I was not going to think about what to do if I failed. That has always been my logic and it works. Not having contingency plans seems like gambling, but in my experience, contingency plans take the edge off entrepreneurship. Your fears then drive you and you start seeking safety more and more and that is suicidal for the entrepreneurial activity. It is better not to think of the possibility of failure at all. Plan well. Work like hell. Be highly adaptable. Keep eyes and ears open. Listen to feedback and take risks. The greatest complement I ever received in my eyes was when Pradeep Singh, Promoter and MD of Aditi/Talisma said to me, ‘You are a master at brinkmanship.’ I think it is the ability to walk on the edge and not fall off, which is critical to success.

My greatest desire then and now (26 years later — counting from 1984) is to help people. I know what I can do. I see the results and it gives me a big thrill when someone comes up to me at an airport or somewhere in some country and says, ‘Mr. Baig, you changed my life. I remember listening to you in such-and-such course in such-and-such country and I did what you recommended and it worked.’ This has happened to me many times and nothing can beat the thrill of that. I enjoy my work. I am passionate about developing leadership. I enjoy seeing people empowered. I get the greatest satisfaction from knowing that I had something to do with that. I believe that it is absolutely essential to love your work. To be passionate about it. Even if all you do is to make widgets, you must be the most passionate widget maker in the world who lives, walks, talks and dreams about widgets. That is the secret.

2 — What were the most surprising things and most important lessons learned about founding and running a company? What were the greatest difficulties?

Building credibility was the biggest challenge. I was from a hard-core operations background, attempting to enter the area of professors, HR experts and the like. My logic was simple — I do the stuff they talk about. And guess what? I know how it feels to actually make it work, I know the difficulties that you Mr. Practitioner will face and I know how to fix it if it breaks. I didn’t just design strategies to deal with unions; I faced unions on the shop floor. I didn’t just design appraisal systems, I appraised and was appraised. I didn’t talk about team building principles; I built highly diverse teams which created benchmarks in productivity, motivation and working across boundaries. I didn’t teach risk management, I put my money where my dreams were and then stayed up in the night living with the empty feeling in the pit of my belly, waiting to see if my risk was going to pan out or not. And today I am still here and doing well. Risk to me is not a theoretical matter that I talk to others about while taking my own salary home. Risk is something that I live with, enjoy taking, have lost money on and have highly successful rules to deal with which I have invented, tested and practiced with great results. That approach worked and still works because I am from their world — the world of the practitioner who has to take the knowledge from the book and the lecture and actually use it in the field.

My big learning was not to do what is not my expert area. So, I have an operation where everything that does not need my personal intervention is outsourced. Takes a huge load off my back and balance sheet. I don’t have to supervise staff, don’t have overheads and simply pay bills, once a year and everything is in order. Another big learning was about the importance of having an abundance mentality and freely sharing resources, learning from and helping people; even people who others would see as competition. It is a matter of great satisfaction for me that several of my competitors have recommended me to their clients.

Can’t say that I had to face any great difficulties even though in the initial year there were months where until the last couple of days we didn’t know if we would have money to pay the rent for our home. But then I tended (and still do) to seek challenges. A difficulty doesn’t look the same if you went looking for it and found it. Then it is exciting, keeps you awake in the night inventing ways to solve it and gives you a big thrill when you do solve it; which makes you ready for the next one.

3 — What were the key reasons why the venture succeeded or failed?

Four key reasons why this venture succeeded:

1. Human relations: I believe in building relationships and always ensure that I follow the advice that my first boss Nick Adams gave me — Be good to people when you don’t need them. So, I have clients today who are more friends than clients and are my best ambassadors. In 20 years I have not had to make a single cold call. All my new clients are client referrals. That is worth money in the bank, believe me. I am consciously good to everyone I meet from the driver of the car which picks me up from the airport, to the man who deals with the audio-visual stuff in one of my programs, to the go-for young people, to the VPs who come to inaugurate my session. I have always maintained that anyone in the room is my client and their designations have nothing to do with how I treat them. They are all equally important to me.

2. Quality: I have always held myself to the principle that we will always deliver quality whether they want it or not. Because quality is our signature. Not theirs. So, we will always deliver quality and always deliver more than they expect. And we will remember that quality is reflected in the shine on your shoes, the crease of your clothes, the way you open the door for someone, whether you stand up to greet someone who enters the room, whether you ask if the driver or helper has eaten and if he hasn’t whether you invite him to eat at your table. All these are quality indicators with great impact. Far more than you would imagine and interestingly you won’t find them in any book or on any B-school menu of ‘Secrets of Success.’

3. Enjoy: I believe I succeeded because I enjoy my work. I know I have said this before but it is the key to success. You can never do well, something that you don’t enjoy. So, do only what you enjoy. And you will naturally do it better than anyone else. And what’s more you don’t get tired, stressed or bored. You love every minute of it, it energizes you and everyone else around you. And when it comes to doing more than what clients expect, it is easy to do because it only means to do more of what you enjoy.

4. Investing in myself: Every year I spend considerable sums of money and time, training myself. I do my own performance appraisal focused on my learning and contribution — not on my earning. In 2013, I had my 360-degree Appraisal done by Potentia, a company that specializes in this. I am most thankful for the result. I write at least one book per year. I write an article a week and in the last week alone, I had 11, 500 visitors to my website which has free articles and lectures for anyone who is interested. Enthusiasm is not a substitute for competence. Knowledge changes from time to time and unless you are focused on learning, redundancy is your biggest threat.

Investment in yourself is the cutting edge. It is what takes you to the top and keeps you there. The biggest secret of expertise is to continuously improve yourself and to do your work 24×7. I believe seriously that entertainment is for the mentally weak who are involved in daily activity which they don’t enjoy and so it creates stress. They need to get away from their ‘lives’ to live a fantasy for a few hours or a few days before they inevitably have to return to the drag. For people who live a life of purpose and passion, their work is the best entertainment. I thoroughly enjoy teaching and training and I would rather not be playing golf or fishing.

4 — What were the most important personal lessons that an entrepreneur needs to learn?

1. Learn to live with erratic cash flows. That is the downside of not having a salary. Good financial planning is the key; combined with financial discipline.

2. Learn to live with disappointment. You are not the most important thing in your client’s life so they will cancel assignments without notice. Smile and bear it because to cry and bear it is worse.

3. Learn to use spare time effectively — which means, make discipline a way of life.

4. Learn to enjoy uncertainty — you will have a lot of it.

5. Money has no meaning. Money is not the reason to work. Money is a natural consequence of excellent service. Honor, compassion, contribution, concern for quality and an abundance mentality are all more important than money. And guess what? If you do all this, money will come on its own. Only, you don’t do it because of the money.

5 — What would be your advice to someone starting their own business?

1. The world is round — what goes around, comes around.

2. Friends may come and go, but enemies stay with you — so be careful not to make enemies.

3. Build bridges because you will need them when you least expect.

4. Take advantage of opportunities — and remember they don’t come with a label round their necks.

5. Take risk — to wake up every morning is a risk. Without risk there is no growth and that is an absolute law.

6. Don’t look to see what you can do. Do what you can do best. Do what you are most passionate about. Because you will be doing it for a long time and there is nothing intelligent about doing something that you don’t enjoy even if you make money in the process.

7. If something is not working for you, examine your own values, ethics, morals and beliefs. All of what I said above is less about acting and more about being. Acting can’t be sustained. You don’t ask about someone’s welfare or share with someone or do more for a client because you have your eye on some future profit. You do it because that is who you are. Your values drive you and so look at your values and if necessary change them.

8. And last but by no means the least — be grateful. And show it. It is true that we owe our success to our efforts, but it is good to remember that many of those were made standing on someone else’s shoulders. If people had not helped us at critical moments, we would not have achieved what we did. Remember them and what they did because even if you forget they won’t.

I remember all those who helped me no matter how long ago that was. I ensure that I keep in touch with them and let them know that I have not forgotten them. I never will.

Advertising

Advertising is not about selling. It is about influencing; about kindling desire; about fueling passion. Advertising is about converting ‘want’ to ‘need.’ It is about mind steering. Advertising is powerful so it must be used responsibly.

Think of your favorite Ad. What does it seek to do?
Then ask yourself, ‘Is it true?’

Is it true that my value as a human being will increase because I wear a certain brand? Is it true that my possessions are a reflection of my worth?
Or are they a reflection of my character which drives my choices?

Choices that reflect my wisdom with respect to wealth, concern for others, compassion and morals.

What do you call someone who uses expensive products because he thinks they add value to him as a person?

I call him a person who doesn’t understand the basic principle in life – that possessions add cost; not value.

Advertising must be responsible. The foundation of responsibility is truth. Advertisements that seek to promote products which harm life, objectify women, promote drugs and addiction, are irresponsible, false and criminal. Alcohol destroys lives, cigarettes are addictive and cause cancer and you don’t need a naked woman on a couch to sell ice cream or chocolates or biscuits.

We must condemn such advertising which is neither original, nor artistic, nor attractive. It is harmful, corrupt and promotes evil.

Ladies and gentlemen, boys and girls – I call upon you to support responsible, moral advertising and to fight against the irresponsible and the unethical.

Because in the end, it is not about them. It is about us.