A Job Description for the Business Owner. Александр Александрович Высоцкий
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prices).
When formulating purposes, it is important to take three things into consideration. First, there are products (merchandise or services) that potential customers are ready to pay for, and there are those for which they are not. For example, what can be more important than preschool education for children? Whether a child will be creative, whether he will want to learn and apply his knowledge, and what his values will be all fully depend upon the way he is treated during his preschool years. Essentially, his future, the future of those around him, and that of all mankind will be determined during this time. You would think providing preschool education would be a priceless service, right? But the truth is, for some strange reason many people believe that anyone can take care of children, and therefore they do not like to pay for it. The idea of paying a thousand dollars a month for a child’s preschool seems crazy to some parents, even when that parent is driving an eighty thousand dollars car! There is nothing rational about it. In five years, that piece of metal will not be worth even half of what it cost, and eventually it will fall apart completely. But try to open a kindergarten where kids are taken care of by caring and highly qualified professionals and charge a reasonable price, and you will see that a purpose like this is difficult to bring to life. By the way, start-ups with uncommon purposes very often fail not because they don’t benefit the consumer, but because their purposes are too complicated for most of their potential customers to understand and recognize their benefits. Tremendous effort is required to convey the benefits to them, which is not an easy job for a small company.
Second, in formulating a purpose, you must consider whether it is possible to make the purpose generate large-scale activity. For example, you have a talented craftsman who can create amazing leather bindings for books. A good book with a leather binding could be a wonderful present for any serious reader. You could sell this product all over the world. But there is the question of whether it is possible to create a whole army of such craftsmen and whether it is possible to teach a number of people to create such bindings with the same degree of skill. Also, is there equipment that would allow you to produce the bindings in sufficient quantity? Hamburgers and fries are not difficult to make, yet Ray Kroc still had to open Hamburger University so that those operating his franchisees could do a quality job. IKEA is another great example. That company’s purpose becomes clear if you read a book about its founder, Ingvar Kamprad, entitled Leading by Design: The Ikea Story. I remember one story from the book in which Ingvar was in one of Ikea’s competitor’s stores and saw a drinking glass that was in high demand at the time. He went to his purchasing manager and asked whether it was possible to get the same glasses for a significantly lower price. The manager collected the necessary information and later replied that it was possible to get it much cheaper, but Ikea would have to sell over a million of such glasses. Ingvar gladly accepted the deal and, as a result, the glass was a best-seller, bringing the company good revenues.
Usually we say that a business’s purpose is successful if it allows the company to expand significantly. Expansion requires energy—that is, money—and you can only get a lot of this energy if you provide customers with high volumes of your product. For this reason, companies that make their expertise available to only a limited number of customers never become large and thriving businesses. For example, I like to educate business owners on the subject of strategy, but I do not know how to teach other consultants to do it with the same success. Because I cannot put this product on a “production line,” I would not start a company with the purpose of providing customers with these particular consulting services.
Third, the purpose must provide a company with an advantage over its competitors. For example, McDonald’s purpose is “fast customer service,” which is why, even with relatively low prices, the restaurants can afford to be located in buildings and shops in the most highly trafficked areas, have good-quality kitchen equipment, and still retain their high profit margin. Starbucks’s purpose is to provide the highest-quality coffee; it started as a coffee supplier to various coffee shops and restaurants. Now there are more than seventeen thousand stores operating under the Starbucks name. Starbucks is active in preserving its purpose, which I personally witnessed while visiting their stores in various countries. Without such a purpose, the company would never have been able to retain its quality standards and would not have gained the well-deserved recognition of its customers.
Apple products are always distinguished by their reliability and user-friendliness, thanks to the company’s purpose to develop both the hardware and software themselves. Nobody else in the world has an opportunity to create a similar computer product. Developers of other operating systems are forced to make them versatile so they will run on all types of computers. Hardware manufacturers have to consider the capabilities of these other operating systems. Only Apple can afford to create revolutionary technologies of such quality and with such speed, and this has turned out to be a huge advantage for Apple in the personal computer industry. While Apple still produces and markets desktops and laptops, which are available through resellers and its own many retail stores and the online Apple Store, its greatest volume (unit sales) is accounted for by the iPhone and the iPad.
Thus, a successful purpose must take into consideration the market conditions and potential customers’ viewpoint, existing technology and resources, and an idea that provides a competitive advantage. But there is one more important point. This purpose should reflect the fundamental idea and personality of its founder. In modern society, individuality is valued at a premium. Just consider those professionals who are the highest-paid and get the most publicity. These include certain actors and performers of popular music, writers, scientists, and sports figures. They are either people who have enough courage to show a personal point of view in what they create, or those who have transformed themselves into a product—a pop-culture idol like Miley Cyrus or Beyonce. In a 2010 rating of the most popular people, the first ten positions were taken by such performers and sports figures. These are people who promote their personality traits and talents to the whole world. In our society, things that are considered to be rare become expensive. Why do marketing gurus such as Jack Trout command tens of thousands of dollars per presentation? You don’t think it’s because of the great practical value of the information, do you? You can get significantly more information if you read Trout’s books on marketing and branding. People are eager to touch the revered and profound person who is courageous enough to express his or her opinion during a time when most of the people on this planet deny the very ability to have a point of view of their own. On the one hand, they deny it in themselves, and on the other, they admire it in others. It is not difficult to see that the magically alluring trait that everyone calls charisma is nothing more than the courage to express a personal point of view. Having charisma does not mean people will necessarily agree with you. It is the courage to have and express a personal opinion that attracts people.
When it comes to leadership, the foundation is very simple. A leader is a person who has found enough courage and persistence to set a main goal and purpose for a group. It is that simple: courage and persistence. Notice that I did not say anything about intelligence. It is desirable but not vital. If this seems incredible to you, just listen to the majority of political leaders who are followed by millions of people and you will be able to see for yourself. When we were kids, we would meet our friends after school in the school yard and then wander from corner to corner, suffering from idleness until someone suggested, “Let’s build a fort”, “Let’s play soccer,” or some other activity. If the boy who made the suggestion was able to advance his idea and get others to be in favor of it, then he would become the leader at that particular time. We then had a very meaningful (at least we thought so) activity to engage in, and our game began. Any game was better than no game, and any leader was better than no leader.
From the viewpoint of experience, we could debate the purposefulness of such games, but boys who wander around aimlessly are happy to engage in any activity. Modern culture often offers people very boring games: wrapping your body in a fashionably branded piece of cloth, buying a shiny car to take you places quickly, and building a house with thick walls. But the most talented people, even if they cannot dream of something really large, respond to an interesting or challenging game offered, even if it goes beyond their usual daily routines. If you create an important goal and attractive purpose, it inspires those who still have a taste for life.
The first role of a business owner is to create an inspiring main goal and a clearly defined purpose.