Saturday, 21 February 2015

Billy's Forty-Third Law: It is important to be a bit ruthless and a touch paranoid

Chances are good there is a psychopath on your management team.
Gardiner Morse, Harvard Business Review

Most of the entrepreneurs I have met throughout the years are great people.  Working with entrepreneurs is the one of the highlights of a career working with business owners. Whether they are pre-start ups, or successful, long term businesses successful entrepreneurs are generally enthusiastic, positive and forward looking people.  There are also two 'negative' characteristics possessed by many successful owners.  In the right measure, these characteristics form an integral part of the entrepreneurial success persona.

As you know I am a geek.  I like useless information, spreadsheets and science fiction.  I recently watched an old episode of Star Trek  called "The Enemy Within." A transporter malfunction splits Captain Kirk into two halves: one meek and indecisive, the other violent and ill tempered. The ‘good’ captain, was indecisive and unsure of himself while the ‘bad’ captain was violent and selfish.    The social premise (and there were several in Star Trek) is that we need both halves of ourselves to survive.  We need both the caring, thinking human being and the cunning violent beast. 


This is a ruthless world, and one must be ruthless to cope with it.
Charlie Chaplin

Most of the successful people I know have a trace of ruthlessness.  At the heart of ruthlessness is the ability to make hard, fast decisions and execute them quickly.  Sometimes, people get hurt when these decisions are made.  Decisions to fire people is a prime example.  We have talked about the importance of firing the wrong people in the ninth law The Dangers of Settling.  On paper (or even on a computer screen) this is easy.  In reality firing people is difficult for most people.  A fellow with whom I worked once joked, “The first time you fire somebody is hard…after that you can start to enjoy it.”

I remember my first fire.  My boss was so concerned that he called me to make sure that I was OK.  (I am not very ruthless.)  Ruthlessness is not confined to human resources.  One of my clients went through a ‘demarketing’ program. He systematically went through his customer list and dropped small and unprofitable customers.  The reactions were amazing.  Some of the customers were really upset, even though he found alternative suppliers for the former clients. He had to be ruthless.  Some of these customers were costing the company money and others were tying up valuable productive capacity with low margin, low volume jobs. 
Sometimes we have to act way outside of our own characters. We have to act in a manner not consistent with our nature.  But that little bit of ruthlessness helps the timely execution of those unpleasant decisions all entrepreneurs make from time to time.


Only the paranoid survive.
Andy Grove, Former Intel CEO
I may not be ruthless, but I am paranoid.  I have always had a knack for picking apart arguments.  (I have often thought that my ideal job would be leader of the opposition, although the frightening part would be the prospect of becoming premier.) That being said, as someone who has trained and coached thousands of people through the business planning process, I am a great believer that the business plan in a start-up business must prove, beyond a reasonable doubt, which the proposed business concept will work.  Some call me paranoid, and others the voice or reason.
Now some may think that this is not paranoia, but rather extreme cautiousness.  OK…it really borders on extreme pessimism.  There is something about paranoia, assuming that your competition is ‘out to get you’ that resonates with many entrepreneurs.

Just as too much ruthlessness can make you too mean for business, too much paranoia can paralyze you.  You want to have just enough paranoia to keep you on your toes, and prevent you from getting too complacent.  In business, it a safe bet that there is someone out there who wants to steal your customers.  There is another company looking to gain on you through better products, better service or more cost effective processes.  A am sure that Blockbuster never even gave Netflix a second thought.  After all, they sent DVDs by mail!  Now, Blockbuster is broke, and Netflix is huge.  So much for a lack of paranoia. (As a friend of mine once said, “Even paranoids have real enemies.”)

The Entrepreneurial Nature

We entrepreneurs are a strange breed to begin with.  I am a third generation self-employed.   My great-grandfather was a blacksmith and farmer.  My grandfather was a wheat farmer in Alberta.  My dad was a self-employed Electrical Engineer and I am a business trainer and consultant and my brother is a self-employed contractor.  My son, is in the film and television business, where everyone is considered self-employed.   This demonstrates beyond any reasonable doubt that insanity is truly genetic.

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