Monthly Archives: May 2016

Number 1 rule in business and life

Number 1 rule in business and life

Choosing the right people

Choosing the right people with whom to associate is the most important rule in business and life in general. It is a rule that can be hard to adhere to consistently, and when ignored, it is a lesson to be learned again and again. This Rule #1 is more important than any business plan, idea, concept, etc., as it will determine with whom you are working, living and dealing with on an ongoing basis. It has been my experience that the best people can take something not so great and make it much better. The wrong people can take something wonderful and pretty much wreck it.

One of my oldest and closest friends was a passive investor in a business and was recently forced to take over the business's management. His son was working as Chief Operations Officer for the company and when they needed an infusion of cash, my friend became an investor based on the best advice he had, his son's opinion, discussion with the corporate CPA and the exciting business concept.

The first problem was that my friend, a smart and capable person, has little experience in business, spending most of his career as a public school teacher. The second problem was that the person in charge of the company, the CEO, turned out to be inept at his job. His behavior was arrogant; narcissistic; there was dishonesty in his communications; and he blamed everyone else for what was failing. This combination of minimal business experience and the wrong person in charge had led to a huge potential financial loss and the possible dissolution of a potentially great business.

My friend sought advice from me in an attempt to resolve their situation. In addition to recommending top legal advice, I offered my perspective on how to hold the entire thing together in the face of the tremendous adversity they were facing. I have been self-employed for my entire adult life, well over 35 years. During those years of experience, I have made many mistakes and, hopefully, have learned from them in order to continually improve and move forward.
The above-mentioned Rule is very important to me because in the past I have put people in a position of leadership, and being an optimistic person, I hoped it would work out. I have then watched as some of the characteristics I mentioned above or other less than stellar traits, came home to roost in my own business. Unfortunately, this has happened more often than I want to admit. I take solace in that the secret to success in business is to be unafraid of failure and in regards to personnel, statistics show you will experience failure more often than success. Because of this, you must fight for and hold onto great talent when you find them.

If you think picking the right people is easy, consider how much money, time and effort professional sports teams place on finding the best coaches and players, only to fail more often than they succeed. Books could be and have probably been written on the multi-million dollar failures and busts. Players that looked like they would go straight to the Hall-of Fame in the end prove to be less than stellar. However, sometimes teams succeed in spite of themselves. Tom Brady was a 6th round draft choice and is arguably the best quarterback of his generation, if not of all time. Joe Montana was a 3rd round pick and is my all-time favorite quarterback.

Staying with the sports metaphors, whether you like them or not, The New England Patriots have created a culture of success and, even more important, a place where players learn to reach their maximum potential. The owner Robert Kraft hired a brilliant coach, who has learned to get the best out of his players. The players either conform to the culture enjoying tremendous success, or they struggle with the culture and end up someplace else or out of the league.
If you are in sales or are running a business, you are most likely optimistic by nature. Optimism is a big key for success. On the other hand, one of my business mentors taught me that "your greatest strength is also your greatest weakness." Optimism allows you to get started, but it also can lead you to think that you can overcome any challenge. As stated earlier, associating with the wrong people for too long can destroy your business and undo all of your hard work.

The area where I am probably the weakest is staying too long with the wrong people. This is true for both employees and financial planning associates as well. Human Resource strategy books say to hire slowly and fire quickly. It makes sense until you are in a position where you need to fill a spot and expediency overwhelms time consuming, analytical good sense. I also have tended to hang onto people long after I knew they need to be replaced out of misplaced loyalty and compassion. Admittedly, the wrong tack in most cases, and I have learned to remedy this by allowing our human resource team to do their job. The wrong person in a position will likely be happier in the long run anyway because they can find something that truly fits them and their needs and desires.

The bottom line is that being constantly aware of Rule #1, knowing that the right people can make you and the wrong people can break you, helps your business be in a position for a greater chance for success. While we know we may continue to make mistakes in this area, at least we can be more thoughtful in recruiting, selling, hiring, personal relationships, etc., to minimize the potential for these mistakes as much as possible.

 

 

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