Do Businesses Need a Higher Purpose?

The Chocolate Wars is a fascinating story about the history of the chocolate industry; written by Deborah Cadbury. Of course, Mrs. Cadbury’s family business was featured in the story; Nestle, Hershey, Mars and many other companies were are also detailed. This history covers the origins of each of these businesses, the colourful individuals who lead the companies, and the many challenges that chocolate executives face. We now take the basic chocolate bar for granted, yet, the process of solidifying chocolate into bar form, and eliminating the bitter taste was a major scientific achievement.

The Cadbury family, and to a lesser extent, the Hersheys led their businesses based on their religious convictions. The Cadbury’s were Quakers. In the mid-nineteenth century, the roles of owners, management and labourers in capitalistic businesses were hotly debated. The Cadbury’s and the Hershey’s struggled with more than just the operations and profits of their business- they were sensitive to the plight of their workers and sought to find ways that their workers could share in the success of their businesses. They also sought to educate their employees, most of their workers couldn’t read and write.

For Cadbury, their chocolate was originally crafted in a Dickensian factory in Birmingham England.  Cadbury family members were active in volunteer programmes that worked to educate the poor. Yet, for them, that wasn’t enough. Richard and George Cadbury searched for a better way, and ultimately, settled on Bournville, in the English countryside for their new factory. But their new premises was more than a factory, Cadbury built an entire community around the factory. This community included affordable housing, sports facilities, parks and educational institutions. The environment for workers was suddenly transformed from the dirty streets of Birmingham to the ideal country setting in Bournville. The family was satisfied that they could offer more to their workers than just employment.
Milton Hershey did many of the same things in Hershey Pennsylvania. Partially motivated by the Mennonite values on his mother’s side of the family, he built an entire town around his business.  Another key motivator for Hershey was that he had no children of his own. The services in Hershey PA were catered towards young, disadvantaged boys.
Profit alone did not drive these great confectionery families. In fact, George Cadbury thought that money was the root of all evil, and allocated his fortune to a trust for the disadvantaged, rather than giving it to his kids. Mr. Cadbury wanted his children to pave their own way.
Back to present day. My question is whether it is it important that a business provides a greater good than delivering their product or service, and making a profit? My answer is that running a business today contributes to the greater good in more ways than many people realise. Businesses:
  • Create employment for people
  • Deliver a service that customers find valuable
  • Purchase services from suppliers – thereby allowing their suppliers to offer this same value chain
  • Generate income for the owner and their families
  • Pay taxes – lots of them
In the 19th century, businesses were able to run much more profitably. In the US, income taxes were not a permanent fixture of the economy until 1913. Moreover, the cost of regulations was non-existent when these businesses were starting; not so today. In the 1800’s, businesses were making profits that allowed good-hearted business owners to invest significantly in making their communities a better place. Now, it is much more costly to run a business. The government also does a lot more for its citizens these days, especially for the less fortunate. The taxes that businesses pay make up a significant portion of the money used for these programmes.
For businesses making tremendous profits these days,  spending on community improvement and workers welfare is to be applauded. Hats off to the Tom’s Shoes of the world. But for most small businesses, operating costs make altruism impossible. And, because the taxes they pay contribute significantly to the programs that make their communities and their countries a better place, small businesses do indeed contribute significantly to the greater good.
So, do businesses need a higher purpose?

Getting New Employees Off to a Great Start

New Hire nametag on a green shirt worn by a new employee or fres
Even at companies with great products and technologies, employees are invaluable. After all, someone needs to develop those new innovations and maintain your technology. It’s no secret that a company is only as strong as its weakest link.  But even though employers know workers are a business’s most valuable asset, most employees don’t feel particularly valued in the workplace.

Take a look at this article, from the Harvard Business Review. Kevin Ryan, CEO of Gilt Groupe, argues that businesses succeed not because of ideas, but because of people. Mr. Ryan is of the opinion that CEOs should spend most of their time recruiting and managing people.

No argument there, but I would also argue that most companies have a fundamental hiring and training flaw.  This lack of post-hiring skill is especially problematic for small businesses. In larger businesses, a few employees not operating at peak performance is not a major issue. At a small business, it is imperative for every employee to be top notch.

What does the first week – and the first month – look like for an employee in your business? Most businesses provide a good cultural introduction on the first few days. The job responsibilities of the employee are explained, and maybe the new employee someone who will closely supervise them for the first couple weeks. My experience in small businesses is that shortly after a new employee is hired, they are on the front line, doing the job they were hired to do.

This can be done better. How? My experience is that hiring managers do a great job focusing on the WHAT. But they do a poor job focusing on the WHY and the HOW.

In time, a new employee will learn the WHY from doing their job and interacting managers and with their peers. But, they would do a better job initially if they learned the WHY right from day one.

Explaining the HOW is what I see as the truly missed opportunity in new employee training. In fact, my experience is that hiring managers are reluctant to teach the HOW because they are afraid of offending the employee. They picked the new hire because of their experience, right? If the employee has been working on a helpdesk for the last 3 years, they should know how to do it; and could be legitimately offended if their hiring manager gets too basic.

I understand this concern, but there’s a workaround. Establish an upfront agreement with the new employee. This agreement would be done on the new worker’s first day, and would go something like this:

Ann, I’m so happy that you are finally part of the team. You are going to be a great asset to our organisation, and I am hopeful that you will have a long and successful career here. 

We will undertake a comprehensive training program over the next two weeks. The goal of this program is for you to be fully prepared to be as successful as possible.

I’ve hired you because of your significant experience in this area, but we also have some best practices that we’ve developed.  I want to be sure you are fully prepared to execute our company developed practices. 

During this training period, I’m asking your permission to explain things to you very carefully; these explanations will probably include many things that you already know. I’m also asking your permission to accept feedback from me on each task as we go through them. 

Again, the goal is to prepare you to be as successful as possible in your new role. I also expect to learn many things through this training period, and will commit to be open minded regarding your feedback.

In my experience, all employees want to do a great job. Moreover, most employees think that they are doing a good job – even if their managers do not. Yet, without being introduced to the WHY and the HOW from day 1 – they are not fully meeting the owner’s expectations.

By establishing an upfront contract like that outlined above, you will have permission to cover the WHY, WHAT & HOW of the new position; and at the end of the training period, you will have an employee fully ready to be a rock star for your business.

Tips for training new employees?

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Where Great Ideas Come From

The Wall Street Journal published a story in their Small Business Report titled How to Come Up With a Great Idea. There is no cookbook formula to this, however, the writer took an interesting approach in asking prominent business experts & entrepreneurs where inspiration comes from. Here are some of the ideas that jumped out:

  • If you think you’re too old to start a business, twice as many successful entrepreneurs are aged over 50 as under 25, and twice as many over 60 than under 20.
  • Make a note whenever you encounter a service of a customer experience that frustrates you. As one of the experts commented, ask yourself if there’s a better way.
  • There were many comments about seeking inspiration from indirect sources. Follow the arts, research other industries and talk to people you would not normally approach.
  • Find an idea to make the world a better place.  Think big.
  • Listen to customers & to front-line employees.
  • One of my favourites is to pay attention to history. Folks in the 1950s & 60s went overboard with instant coffee and TV dinners. Starbucks & Whole Foods looked back to a better experience. And it may not be profitable, but I’d love to have a domestic flying experience where I didn’t feel like one of the cattle.
  • And to add one of my own ideas to this, look to your data. As I wrote in an earlier blog, there’s gold in Big Data. 

Hopefully, your idea will work out successfully. But if it doesn’t, as Andy Rachleff of Stanford advises: Make sure you can fail fast and cheaply.

Of course, the idea is only part of the mix. As Thomas Edison said, genius is 1% inspiration and 99% perspiration. Nobel Prize-winning economist Daniel Kahneman, author of Thinking, Fast and Slow would probably modify that to something like “success is 1/3 inspiration, 1/3 perspiration, and 1/3 Good Luck. In Thinking, Fast and Slow, Kahnenam, a psychologist who specialises in decision making and behavioural economics, utilises probability extensively in his research. He concludes there is just too much evidence to indicate that plain old luck has a great deal to do with success.

The WSJ also ran an online survey on what entrepreneurs do differently. They concluded that entrepreneurs agree with the following statements more than everyone else.

  • If I have to stop pursuing a goal in my life, I find it difficult stop trying to achieve it; I can’t let it go.
  • Past failure in entrepreneurial endeavours increases the chance that a new business will succeed. 

Entrepreneurs are a tenacious and optimistic lot.


Goodbye Boardroom: Meeting Styles are A-Changin’

Keep the Board, Change the Room

by Jennifer Rosen

It’s probably not every businessperson’s idea of the best part of the workday: the business meeting. It can be boring and long-winded, people might be afraid to express opinions—all sorts of reasons. However, the time of the dry and monotonous business meeting is over.

Nilofer Merchant, who serves on public and private company boards and has worked for major companies such as Apple, tells Wired she conducts one-on-one meetings as walks. So what about taking notes, using a whiteboard and cell phone reception? Technology, Merchant stresses, isn’t the key factor in a successful meeting. Sure, it can help facilitate a meeting, but it’s not what drives a good meeting.

One-on-one interactions, says Merchant, allow people to explore ideas, connect with each other and developed a shared purpose, and for those, nothing beats a side-by-side walk. Merchant also says many people wait until the meeting to share information, which wastes time going over “background” during the actual meeting. She recommends sending information in advance, which facilitates a better discussion by allowing people to form ideas and ask other people their viewpoints.

See how Bob Parsons handled meetings when he ran Parsons founded Go Daddy, the world’s biggest domain name registrar, and was the CEO for many years. The company has annual revenue of about $350 million and manages 32 million domain names for about six million customers around the world. So, you can imagine Parsons was a pretty busy guy. He told, however, that he was almost never behind his desk. Instead, he spent most of his day meeting with his staff. He’d sit at a cafeteria-style conference table, which he bought for $90, and about a dozen chairs. The utilitarian furniture conveys the right attitude, Parsons says: functional and cheap.

Meetings are more than just tables and chairs, though. As GoDaddy’s Bob Parsons says, “You don’t spend your money on office furniture—you spend it where it’s going to impact your customers.” Parsons says he managed everything from a 57-inch monitor hanging from his office ceiling, which he accessed with a wireless mouse and keyboard. Set to Go Daddy’s home page, a program tracks the company’s current market share and how many domain names it registers daily.

The Wall Street Journal also acknowledges more business meetings are literally “stand-up jobs.” For example, Atomic Object, a software-development firm in Grand Rapids, Mich., conducts company meetings first thing in the morning with nonwork chitchat kept to a minimum and everyone standing up. The object of such a meeting, according to the WSJ, is to get rid of long-winded meetings where people pontificate, play Angry Birds on their cell phones or simply tune out.

The meetings rarely last more than five minutes, after which employees perform a quick stretch and get on with their day, Atomic Object vice president, Michael Marsiglia, tells the WSJ. Such meetings have been found to be effective. The WSJ says Allen Bluedorn, a University of Missouri business professor, conducted a study in 1998 that discovered standing meetings were about a third shorter than those that involved sitting, with the quality of decision-making about the same.

So not only can business meetings be shorter, they can be just as effective, and without all the chaff — and the fancy, expensive chairs.

How about you?  If you find yourself leaving the boardroom for board meetings, what’s the preferred venue?

Jennifer Rosen is a cross-country runner, a small business advisor, and freelance writer who lives in Boston.