Five More Rules Of Business That Stand The Test Of Time
In my previous piece, I shared five business rules that I learned from my father. I believe these rules are hugely important for business owners and leaders.
Those who want to have a positive impact on their team and company can't always rely on their gut feelings. Contrary to what many believe, your gut feelings can sometimes be wrong, and it can sink your organization.
I believe that leading a business should be intentional, and rules like my father's can serve as a guiding light. Here are the next five business rules my father taught me.
1. Be a good listener.
My father had this uncanny sixth sense that allowed him to detect, by listening, how authentic and real the other person was. He didn't appreciate phonies or pompous peacocks, and he used listening to detect that. I believe that every leader has to have the ability to home in on what people are really saying.
How can this work in the day to day life of a leader?
There are many different types of listening. One is active listening. This involves repeating what you heard the other person say back to them. Some call it empathic listening, meaning that you reflect back the emotions you heard. This shows that you listened and, more importantly, that you understood the other person.
For example, an employee might complain about something, and you could say, "You sound frustrated or overwhelmed," rather than chastising them for complaining.
2. Focus on profits, not sales.
You can sell a lot without making a profit. If you have salespeople, you likely know exactly what I mean. Many business owners don't properly evaluate how much money they’re making, and their profit is either nonexistent or not enough to cover expenses. They’re focused on sales rather than profits.
But as someone once said, business without profit is like eating soup with a fork — you make a lot of motions, but nothing gets to your mouth. Know your numbers, and make sure you’re making a decent return on your investments. I recommend that my clients aim to make at least a 10% net profit after all expenses and salaries.
Oftentimes, business owners and leaders don't feel empowered to turn down unprofitable clients.
My father used to say, "Only take the profitable business, and send the unprofitable ones to your competition."
3. Do the right thing.
If you’re in a leadership position, think of the impact of doing the right thing. My father had a very strong moral compass. He knew where he wanted to go and how to get there. He had principles that stood the test of time and never wavered in his commitment to those principles.
I believe that great leaders are first and foremost great human beings. If you want to have an impact on people, aim to not only talk the talk of a great leader but also to walk the walk.
Many leaders, when challenged by doing the right thing, fail the test and then get caught, which can cause them to lose their position and their business. It seems like every day we hear about another unethical leader getting fired.
Being a mensch — which Merriam-Webster defines as "a person of integrity and honor" — is not only important for the success of leaders themselves, but it’s also extremely important for the team.
Oftentimes, when I speak to senior managers about faltering leadership, I talk about lack of integrity versus being a mensch. If your people hear you say one thing — such as "Our quality is the best," or "Customers are first" — and then they see you doing something else, they may learn to bend the rules just like you.
4. Don't let fear hold you back.
My father started his business as an immigrant to this country without money or connections. I recall him telling me that his greatest fear was that his business would fail and he wouldn't be able to provide for his family. It wasn't until many years later that he was able to let go of that fear. But he never let fear get in the way of him showing up every day.
One of the four fatal fears, as discussed by Larry and Hersch Wilson in their book, Play to Win! Choosing Growth Over Fear in Work and Life, is fear of failure.
I just finished teaching an advanced leadership course, and the No. 1 issue that was holding people back from achieving their goals was the fear of failure.
There's no shortcut to overcoming your fears. It usually requires confronting them or at least shining a light on them. Therapy or coaching can help you do this.
5. Give back to the community.
My father was always giving back. He helped people find jobs and build their businesses. He helped build communities, synagogues and more. He never tired of being at the forefront of community initiatives.
The reason why I do what I do is that I feel it’s a continuation of his legacy. I’m very passionate about helping leaders and aspiring leaders build their own legacies.
I believe we all need to pay it forward as our price for enjoying what was left to us by those who preceded us. Ask yourself what you can do to make the world a better place for those who come after you.
One of the greatest gifts that successful businesspeople can give is mentoring and encouraging new entrepreneurs. Maybe it's by making connections, sharing customer names or offering introductions to banks, etc. Encourage others to ask you for favors, and make sure to give with a smile.
Remember that being an entrepreneur and business leader often comes with a serious amount of expectations. Your employees count on you to make their living. Your family and your clients all count on you, and the list goes on. I hope these rules will help guide you to success.