Why Business Matters
Why Business Matters
by Rob May
I only need to drink five more beers. I’ve downed twenty-five so far, not all tonight, but over the last two months. Once I drink all thirty that they offer, I get a free T-shirt. That is the deal. Five beers shouldn’t be difficult. I come here once a week. Most of us come every week. You have to if you are a real fan.
I always start off the night with the beer I think I will like the least. I can get a good one later. I grab it as soon as I walk in the door and then head downstairs. We meet downstairs so that we don’t bother any of the restaurant’s other patrons. I chat with my friends as they arrive. We exchange stories about what happened this week and what we think will happen tonight. Sometimes a few fair-weather fans show up here too, and I usually introduce myself to them.
The excitement builds as the meeting gets started because . . . well, we are all just so into this. But the meeting I attend every Tuesday night in downtown Louisville usually has nothing to do with sports, or music, or television. We are a fan club, but an unusual one. The meeting is called Bizjunkies, and it is for people like me—people who like to get together over dinner and a few beers and talk business.
Very few people like business this much, which is strange, because it is a popular field. But business books do not sell as well as most other types of books. Business periodicals do not have the subscription rates one would expect, given how many people are involved in business. And I don’t know about you, but when I’m out and about I rarely hear conversations about business. It’s almost as if people think business doesn’t matter. Nothing could be further from the truth.
Sports fans are easy to find—the bars are filled with them any time there is a game. Business fans, judging from the size of our weekly meeting, number much fewer. Yet we talk with just as much passion—because to us, business is a sport, and so much more. It’s got winners and losers, action and strategy, but unlike sports, it has the power to do good or do harm. At its best, it is metaphor for living well. That is why I feel so strongly that business matters.
Falling In Love
We are shaped and fashioned by what we love.
—Goethe
I remember as a kid that my mother would be in the middle of a conversation and, if she didn’t want us kids to know something she would write it down in cursive. Sometimes, especially if it had to do with a gift she had bought, I would stare and try to make sense of it, but I never could. Then in the third grade I learned how to read and write cursive and this whole new world opened up to me. Things that were hidden had become visible. All these random markings around me suddenly had meaning. They suddenly made sense. It was the first eye-opening experience I remember. It wouldn’t be my last.
I love business. It excites me so much that it’s odd to think that I ended up on this path almost by accident. When I enrolled in the electrical engineering program at the University of Kentucky, I had no intention of pursuing a business degree because, well, to be honest, I wasn’t really sure what I would do with it. I didn’t know many businesspeople and the few I did know were salesmen.
I equated a business degree with sales, and that did not sound like an appealing career path.
The university had just started offering a joint degree program that allowed students to get an undergraduate degree in engineering along with an MBA. I don’t really remember why I applied. I think it was just another way to keep my options open for the future. The country was just coming out of a recession and jobs were scarce. I thought having degrees in two different fields might give me more job opportunities when I graduated. They only took a handful of students each year and whether I made it on merit or because it was new and short of applicants I will never know.
I took the GMAT and scored high enough that I could go ahead and begin my graduate-level business courses without finishing my undergraduate degree. I enjoyed mixing my program with both business and engineering classes. Each gave me a break from the other and kept me from getting bogged down and bored with too much of the same thing. Early on, I had to take a graduate-level economics course. The professor passed out some student discount forms for the Wall Street Journal and it seemed like a good deal, so I signed up. I thought that if the world’s most successful people read this thing daily, maybe I should too. I began reading it reluctantly, mostly for class rather than anything else. I did not have the background to follow much of what was talked about in the various articles, but over time it began to make more and more sense to me. Then a funny thing happened. I began to see business around me—everywhere. It was always there, I’d just never noticed it before. It was like learning cursive all over again.
Once I developed such a strong interest in business, I could not go to the grocery without taking note of product displays, what was on sale, and how the store was laid out. As I shopped, I wondered how and why these decisions were made. I often asked managers questions like “I see those Cheerios are on the middle row now. Have you been selling more of them since you moved them up?” They probably thought I was crazy.
I began to ask my friends about what they did at work. I wanted specifics. We were in college so many of them were just bartenders or retail clerks or delivery drivers, but I pried into the operations of their workplaces. I became fascinated with how and why companies did things, and how consumers were affected by their decisions (including me, which was more important). Some people really didn’t care to talk about it and found it totally uninteresting to discuss such things. It made me wonder why everyone else didn’t like business so much.
Why People Don’t Like Business
I find it rather easy to portray a businessman. Being bland, rather cruel and incompetent comes naturally to me.
—John Cleese
A strange dichotomy surrounds the subject of business. It’s a popular major at most colleges and universities, and it’s a popular profession. But at the same time, it’s rare to hear the average person mention anything positive about business. Why is that?
I see two reasons. The philosophical reason is that profits are not a noble goal. The personal reason is that work sucks.
We believe businesses exist for profit, and we have been taught that profit is bad. But neither statement is true. Businesses exist to serve the needs of a customer. Profit is a requirement to stay in business and continue serving those needs. Peter Drucker puts it eloquently (quoted in The Essential Drucker):
Profit is not the explanation, cause or rationale of business behavior and business decisions, but rather the test of their validity. If archangels instead of businessmen sat in director’s chairs, they would still have to be concerned with profitability, despite their total lack of personal interest in profit.
I won’t defend the handful of companies that manipulate profits with accounting tricks,
and I won’t defend the few companies that manipulate markets and unique situations to take advantage of people. Once you throw out the frauds, I think that overall, profit is a measure of the usefulness of a company to society. Again Peter Drucker sums it up well in The Post Capitalist Society:
A business that does not show a profit at least equal to its cost of capital is irresponsible; it wastes society’s resources. Economic profit performance is the base without which business cannot discharge any other responsibilities, cannot be a good employer, a good citizen, a good neighbor.
The more demand there is for a product or service, the higher the price. The more efficient the company can be in producing the product or service, the cheaper the cost. Profit is the difference between price and cost. So strong profits indicate that as a company, you are producing something consumers want (high demand) and you are doing it efficiently (low cost). I think that is admirable.
The second reason that people don’t like business is that work sucks. Most people I’ve known and worked with only work a fraction of their day. They spend time daydreaming, chatting with colleagues, surfing the Web, anything to avoid work. They avoid work because they find it unstimulating and devoid of meaning. I know I’ve felt that way at many of the jobs that I’ve had.
In college I worked for Radio Shack. One big component of their sales training involved stepping customers up to the next price level. If they were considering a $75 VCR, I was supposed to point them to the $85 VCR and explain all the extra features and benefits it would provide. I did this a few times, and I didn’t think it worked very well, so I stopped. I focused on selling customers what they wanted. My manager was not too pleased and repeatedly pointed out to me the extra money I could make by stepping people up to the next level. But what I found was that when I tried upselling customers to the next price point, they often got upset and left to “think it over.” Other times they might buy it only to regret later that they spent more money than they intended to. While I really enjoyed selling when it consisted of trying to meet customer needs, I hated it when the goal was to maximize the price of a single transaction. Yet that is what I was continually chided about. My manager made a job that I liked into a headache. For me, work sucked.
Basically, many people think that the motives of businesses are bad, and the experience of working for a business is bad too. The only thing positive some of them would say is that business gives them a paycheck.
As someone who is passionate about business for its own sake, I simply don’t believe it has to be like this. Business can be exciting, rewarding, and fulfilling. It can inspire passion, drive progress in both technology and society, and make the world a better place. The first step toward a better vision of business is to realize that the effects of business are everywhere.
The Power Of Business
Nearly all men can stand adversity, but if you want to test a man’s character, give him power.
—Abraham Lincoln
Business influences much of what we do. Through the allocation of both human and financial capital, businesses generate tremendous effects on the economy and society. But might does not make right, and businesses often make poor choices with negative consequences. Remember Enron?
Business And Society
Consumers drive trends with what they buy. Businesses drive trends with what they offer. Business affects society by defining the options from which consumers can choose. You can’t buy mustard-flavored cola. Nobody makes it. While your options for a carbonated beverage may be many, you don’t have an unlimited choice. At some level, a group of executives must decide what flavor combinations are most likely to succeed and therefore are worth pursuing. If you are in the minority that likes mustard-flavored beverages, you lose out if the company thinks more people would prefer their soft drinks flavored with lemon. Companies can only offer a limited assortment of stuff, no matter what the category, and the assortment that exists defines and shapes the future of society.
A friend of mine used to be fascinated by BiorŽ nose strips. These strips are placed on your wet nose and left for several minutes. When they are removed, the dirt in your pores goes with them. He always pointed out that consumers weren’t sitting around clamoring for pore cleaning nose strips. Soaps and cleansers to clean pores on the entire face were already abundant. Yet when BioreŽ released these strips, they were a huge hit. Consumers did not demand them, but once the option was available, consumers embraced it. Skin-cleansing habits were changed forever.
Businesses also create standards. Often these standards continue to exist after the need for them is gone, but no one ever questions them. We get used to it and accept it. The QWERTY keyboard is a great example of this.
In the early days of manual typewriters, if the typist was too fast, the typewriter would jam—the type bars would get tangled up and the typist would have to stop and fix the problem. The solution that typewriter manufacturers devised was the QWERTY keyboard, which is the layout most of us still use. In this layout, commonly used letters are spread out to make typing as slow as possible, so that typewriter jams are minimized. It was a good idea at the time, but we don’t need it today. We only stick with it because we are used to the standard.
Businesses set trends by what they offer. The most prominent examples are the technological innovations they create. Microsoft introduced a standard operating system that made it simple for anyone to use a computer. I remember the days before Windows. My neighbor had a Commodore that we used to play video games. To play a game, we had to spend an hour typing in strange codes out of a book. If we made a single mistake it wouldn’t run and we had to type them all over again. The machine was hard to use, which is why very few people owned computers.
Windows changed all that. Computer users no longer had to navigate a file system using text commands at a C: prompt. Now they could do it visually, just like they navigate a real filing cabinet. They no longer had to remember arcane commands to launch programs—they just clicked on an icon. It made much more sense, and led to a dramatic increase in the acceptance of computers as tools that could increase productivity.
Sony introduced the Walkman and changed the way we listened to music. Apple introduced the iPod and changed the way we listened to music again. Amazon changed the way we buy books. Google changed the way we find information. Technology changes society, and business is a primary driver of new technologies.
Business And Individuals
Management is nothing more than motivating other people.
—Lee Iacocca
Work affects us. That is why business matters. Negative work experiences lead to negative attitudes.
Most of us spend more than a third of our waking hours at work each week. That work environment affects us. Managers in particular can either draw the best out of people or make their lives miserable. Far too often, it is the latter. The negative views of business I held as a teenager were largely shaped by a bad experience with one of my first managers.
I used to work in a restaurant for a guy named Mike. Mike always seemed to have a chip on his shoulder. He also seemed too smart to just be running a fast food restaurant. I think he felt the same way, and took his frustrations with his own life out on the employees he managed. Mike was never concerned with what people wanted, only with what he thought was best for them in his own mind.
New employees were required to have training in five key areas over a period of six months, and I was the trainer. I had done most of the training for quite some time. But Mike thought I was too flexible. I’ve always believed that people learn in many different ways and my goal with training was to ensure certain outcomes. How each person was trained did not matter to me and no two training sessions were alike because no two employees were alike. Mike wouldn’t have it. The training had to be standardized.
By standardized he meant a very specific structure that was not to be broken. At first I thought he just meant I should try to standardize it, and the first time someone struggled with something I skipped it and moved on. I often did that, hoping that once they saw the big picture we could come back to the problem section and it would make more sense. If, for instance, someone struggled to understand the electronic timing system that ran the grill, I would skip that and come back to it later. After they saw the entire grill in operation through a lunch rush, the timing system made more sense. But when Mike found out I almost lost my position as a trainer. The timing system was to be covered first.
So I did what he wanted. It sucked. I think some of the people who completed the training did not really understand it all, but if the training sections could all be checked off, Mike didn’t want to waste any more money on that and put them to work. If you have ever worked in a restaurant, you know it requires a lot of coordination among team members. Nothing is worse than working with people so poorly trained they can’t pull their own weight. I still remember grill attendants who were so perplexed by the timing system that they never successfully mastered the other areas of the grill. Their worry about getting the timing system correct distracted them from understanding how it was really used.
In Mike’s mind he was an excellent manager. He brought consistency to the training and that would improve the restaurant. But all he really did was make it difficult for people to get trained well. And that made it difficult for them to work well. Everybody’s job was harder after three months with Mike.
Bad management can ruin a business. That doesn’t always happen, though. Sometimes bad management keeps a company at a level of acceptable mediocrity so it simply never reaches its full potential. But bad management is a problem because of the negative effects it has on people, and it is at this level—the level of the individual, that the impact of business appears most powerful.
People are the heart and soul of business. Work and life don’t balance, they just become more intertwined. If people are unhappy at work, there is a very good chance that it will carry over to the rest of their lives. Mihaly Csikszentmihalyi, famous for his research on the state of “flow,” sums it up well (in Good Business):
Our jobs determine to a large extent what our lives are like. Is what you do for a living making you ill? Does it keep you from becoming a more fully realized person? Do you feel ashamed of what you have to do at work? All too often, the answer to such questions is yes. Yet it does not have to be like that. Work can be one of the most joyful, most fulfilling aspects of life.
Most of the time people hate their jobs because of bad managers. By making the lives of their subordinates miserable, these managers are making the world worse off. I know I’ve fought with my wife about nothing just because I had a bad day at work and was in a grumpy mood. I’m sure many others have done the same thing. It works both ways, though. I’ve also come home with a huge grin on my face because I had a great day at work.
Why do work generated problems exist? If business has such significant effects on people, why can’t they be positive? I think they can, but it takes a different mind-set. People who treat business as a paycheck producer rarely make great managers. People who treat business as something more can bring out the best in others.
My first job out of college was with a defense contractor. I designed computer chips for graphics processing. I got the chance to work on many different teams, with a vast cast of characters from the digital design department. It taught me the importance of working with people who can bring out the best in me.
For instance, I got a chance to work on a chip with a guy named Dave. He was known for being very, very, very laid back. He seemed so nonchalant about work that if you didn’t know him, you would suspect he was a slacker who never got anything done.
But Dave was actually a very good designer. He hated to do extra work, so as a result he managed to pin down requirements early in the process. (For those of you who have never worked in a design related field, what typically happens is that the requirements keep changing right up until the design is released, making all the designers miserable and causing lots of unnecessary work.) Dave anticipated potential problems and was prepared when they arrived, and he managed upward as much as he managed downward. He let me attack problems in my own way, and he didn’t micromanage. As long as my work got done, I was free to do my own thing. I liked working with Dave. I did my best work on that project. Our final review was the first in the history of the program to go through without a single recommended change. Chalk it up to the fact that we worked well together.
During that time I was happy and satisfied with my job. That translated over to my personal life too. That’s why Fast Company was right when it launched in 1995 and declared that “work is personal.” Work has a powerful effect on individuals. The managers I have worked for have brought out the good and the bad in me. You have the power to do the same in the people you manage. What you do matters. That is why business matters.
Business As The Neighborhood
I’m not sure when the neighborhood began to die. I grew up watching Andy Griffith and had the sense that not too long before my time, life had really been the way it was depicted on that show. They all knew their neighbors. Everyone knew everyone in Mayberry. Was there really a time when life was about community?
My grandmother used to talk about a corner store. You know the kind, where the owner knows every customer and you run into your friends while shopping. You could actually run a tab because if you didn’t pay, well, the owner knew where you lived. She told a lot of stories about things people used to do, back when neighborhoods meant something.
I can still see vestiges of those days here in Louisville. We have lots of neighborhoods, each with its own character. At one time, you went to school with your neighbors. Everyone supported local events because your neighborhood was your community.
But times change and people do too. We get busy. We get lost in TV shows, video games, surfing the Web, and all the stuff that has been made available to keep us occupied. It doesn’t leave much time left for the community.
We are social beings and we need to spend time with other people. Isolation leads to bad things in humans. But that’s what we have become—isolated. We are more connected than ever, yet we are still alone. It isn’t that we can’t talk to people, it’s that we can’t connect with people. Relationships take time to form and a two-minute cell phone call or a few hastily typed words in an instant message won’t get it done. So how can we connect? Through work.
Business is the new neighborhood. It is the way we connect. Connection is about common ground and today that common ground isn’t where you live, it’s where you work. People are increasingly defined by the type of work they do and the companies they work for. Years ago you described yourself by where you lived and went to school, now it’s by where you work and what you do.
The movement is most prominent among younger people. On the weekends they hang out with coworkers. If they need a referral for a service, they ask the people they work with because that is who they trust. I’ve known people to break a lawnmower and borrow one from a coworker on the other side of town instead of asking their next-door neighbor.
The last few years have seen a rise in social networking software. What do people use it for? Most use it to connect to people they want to work with, or previously worked with. I find that surprising. We don’t use it to find romance, friends, or people with similar interests nearly as much as we use it to find people to work with. I think we don’t always realize how much our work relationships mean to us. If business is our neighborhood, it’s important that we like our neighbors.
The unique thing about business as a neighborhood is that unlike a geographic neighborhood, we get to screen our neighbors. It is important that we like the people we work with because we spend a great deal of time with them. To get things done, we have to support them and help them, and they have to support and help us. That is much easier when you like somebody. Screening applicants to see if they are a cultural fit allows companies to build their own cultures and communities. I once hired a guy who didn’t fit in. I have this belief that managers should hire people who are different from them, but as I found out, that can be wrong. It all depends on what you mean by different.
Adam had a great rŽsumŽ for someone his age. He said all the right things in the interview. He was quick-witted, extroverted, and very sociable. We were very different people and I thought he would pick up the slack where I failed. But it turned out that he was not a good fit. His style, mannerisms, and expectations—they were all very different from those of everyone else in the company. He was plenty nice, but he did not fit our community. Adam was like that neighbor that does something to his house. He likes it; everyone else thinks it’s ugly. We could not understand each other. The tensions we sometimes experienced as a result manifested themselves as some tasks fell through the cracks.
Eventually, Adam had to go. He knew it and I knew it. He was not a good cultural fit. Diversity is good, and I still believe in hiring people who view the world and approach problems much differently than I do. But neighborhoods need some common bond to hold them together. Companies do, too. It is difficult to work with people who don’t share a common basic view about the mission of a company.
The experience taught me that the state of a neighborhood depends on the people in it. In our business neighborhoods it is important to have a diversity of talent, skill, and interest, but we need common goals and mutual respect to hold it all together. We have to like our teammates and we have to feel like we have a valuable role to play within the team.
How To Make Business Matter
Community matters. Our neighborhoods matter, just as they always have. That is why business matters. Here’s what to do about it:
See The Big Picture
In The Essential Drucker, Peter Drucker relays a favorite story from management meetings:
Three stonecutters were asked what they were doing. The first replied “I am making a living.” The second kept on hammering while he said “I am doing the best job of stonecutting in the entire county.” The third one looked up with a visionary gleam in his eyes and said, “I am building a cathedral.”
I’ve always viewed business like the third stonecutter. Maybe that’s why I have such a hard time fitting into most modern organizations. I don’t care about a job, I want more than that. Any time I am between projects or businesses, people always try to find me a job. They don’t get it. They ask me, “What do you want to do?” But I never give an answer they expect. I don’t want to manage. I don’t want to program. I don’t want to design products. I want to work toward a larger goal. If those things are steps along the way, then fine, I will do them; some of them I will even enjoy, but I do my best if I understand the greater goal.
Some people believe if you get all the little things right, the big things will take care of themselves. Other people believe that if you get all the big things right, the little things will take care of themselves. I don’t know which is right, but I think in general, the big things are more difficult than the little things.
The big things are hard to see because little things cause all the fires that we have to put out. We become preoccupied with them. That’s dangerous. It’s like a basketball team that is more worried about executing the offense than winning the game. One may lead to another, but don’t get so focused on the offense that you forget the larger goal.
The Reichstag in Berlin is a beautiful building, and like most structures built before the modern architectural era, it is very ornate. The detailed design of certain areas of the building is part of the reason people are attracted to it. But in 1995 two artists named Christo and Jean-Claude covered the entire Reichstag in fabric, hiding the details and exposing the essence of the structure. It was beautiful. The shape of the building, the larger form, had been ignored by people who were in awe of the decoration. With that decoration covered up, they could see and appreciate the beauty of the whole thing. I think many people in business today need to pull out some fabric and do the same thing.
When I ran a small business we had no customer service department, so every employee had to be trained to handle customer inquiries. My staff grew frustrated because I kept giving vague answers as to how to handle certain customer situations. It wasn’t that I was avoiding an answer, I just didn’t want the staff to use cookie-cutter approaches to answering customer questions and solving customer problems.
I resolved the issue by scheduling a meeting. I came into the room and passed out a sheet to each employee with a detailed set of instructions about how to behave when a customer entered the front door. They were relieved. It was exactly what they wanted. Then I asked them to crumple up the paper and throw it in the garbage. They thought it was a joke so I repeated myself. With confused looks on their faces, they complied.
We walked outside the building and I made them go in one by one and take note of their first impression. After that we had a discussion about higher-level goals. We wanted customers to have a great experience no matter what it took. I explained that rules and guidelines might be helpful, but I didn’t want anyone to hide behind them. Solve the problem. Meet the need. See the bigger picture. They finally began to understand.
We forget that business matters when we get so concerned about the little things that we forget the larger impact. We forget that everything we do and say makes a difference. We forget that great companies can change the world and that poor companies can drag it down. We forget that the performance of a team has a lot to do with the situation and with the relationships of those involved. When we take a step back we remember what is really important.
Make It Personal
I’ve been a Meg Ryan fan for as long as I can remember, and one of my favorite movies is You’ve Got Mail. Most people don’t realize how much that movie is about business. Ryan plays Kathleen Kelly, the owner of a small bookstore that is eventually put out of business by Fox Books, a superchain run by Tom Hanks’s character, Joe Fox. In one scene in the movie, Fox tells Kelly that putting her out of business “wasn’t personal.” She responds by asking what that means. “After all,” she says, ”if business is anything, shouldn’t it be personal?”
Why do we try so hard to separate our business and personal lives? Do we hate work that much? Are we just trying to do the minimum it takes to get by? If so, what’s the point? If business can make such an impact on the world, why don’t we take our business more seriously?
My dad used to be director of engineering at the Louisville airport. He’s been off doing other things for more than ten years, but he basically supervised the construction of the new terminal back in the mid-1980s. Several months ago he took me to the airport and as we drove up a ramp to the passenger departure area, he noticed a large crack in the concrete. He slowed down and stared at it. “That shouldn’t have happened yet,” he said. “That concrete isn’t even twenty years old.” I wondered why he cared. He said, “I feel bad.” I laughed, but you have to understand, work is very personal to him. He loves to build things and he takes it personally when they don’t turn out right.
Making it personal changes everything. If it is personal, it becomes more than a job. We come to feel as if our work says something about who we are. It isn’t just something we do for a paycheck, it’s an expression of our skills and abilities. As the old saying goes, “Every job is a self-portrait of those who did it. Autograph your work with quality.” It’s true—and difficult to do without taking your job personally. If business matters, and we take our business personally, good things will happen.
Harness The Power
Some people who want to change the world are anti-business. They blame businesses for the problems they see, and they think the answer is to shut them down, regulate them, or let the government run them. But it’s not. Businesses are complex systems and such simple answers won’t work. These people tend to use protests and advertising campaigns to raise awareness of the issues. They should try harnessing the power of business instead.
Instead of complaining about the way a certain company treats the environment, why not find a way to solve its waste problem in a profitable way? Win-win solutions are out there, but they take hard work and creativity to find.
Whatever your passions, whatever problems you see, whatever needs aren’t being met, those are business opportunities. People often talk about wanting to do noble things like join the Peace Corps, help the homeless, reduce poverty, and save the environment. That is great, but if you want to change the world–start a business. Reduce poverty by employing more people. Help the homeless by designing affordable and functional housing. Improve the environment by helping companies recycle, reduce waste, and conserve energy in a way that translates to their bottom line. It can be done, but it takes people who understand and embrace the power of business to do so.
Ultimately, business is all about human beings–our needs, our wants, and our desires. It is nothing but a vehicle for harnessing our collective power to achieve our goals. Like any other tool, it isn’t good or bad in and of itself–the way we use it is what is important. In that way, business is a reflection of us. It matters because we matter. We all work, but do we all embrace our work to make a difference?