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prosaic:
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All great companies, all well-run organisations, need great managers and great staff.
nepotism
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You just will not have the time to choose who gets to work in which office, where the Christmas party should be held or what company policy should be regarding the provision of in-house tea and coffee facilities. If, as the owner, you do find you have the time to involve yourself in such decisions, then I have news for you. Your organization is in deep trouble.
Most people seek job security, job satisfaction and power over others far more than they seek wealth.
The flea has established to his own satisfaction the elephant’s urgent need. • The flea has learned to ignore flattery. • The flea has learned that an elephant cannot be your friend in negotiations. • The flea has learned he is not a good negotiator. • The flea has learned to “empty” himself and make himself believe he does not care. • The flea has overcome his lack of skill by setting a price he will not deviate from. • The flea has hardened his heart and has walked away when the price was not met. • The flea has introduced a rogue element (the trade magazine) into the negotiations. • The
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Better you are in there on your own, outgunned, outflanked and outmaneuvered, than to have two or three of you silently squabbling.
Francis Bacon. Bacon “negotiated” his way from relative poverty to the very pinnacle of wealth and power in England under King James I. Then lost it all, and spent his last years writing and studying. His Essays are among the wisest, most thought-provoking (and meanest) set of instructions ever published in English. I sleep with them by my bedside.
You have to be fiercely determined, true. But an appreciation of the absurdity of the chase helps enormously.
To become rich you must be an owner.
You must strive with every fiber of your being, while recognizing the idiocy of your behavior, to own and retain control of as near to 100 percent of any company as you can.
To become rich, every single percentage point of anything you own is crucial. It is worth fighting for, tooth and claw. It is worth suing for. It is worth shouting and banging on the table for. It is worth begging for and groveling for. It is worth lying and cheating for. In extremis, it is even worth negotiating
Ownership is not the most important thing. It is the only thing that counts.
Work is of two kinds: first, altering the position of matter at or near the earth’s surface relatively to other such matter; second, telling other people to do so. The first is unpleasant and ill paid; the second is pleasant and highly paid. —BERTRAND RUSSELL, "IN PRAISE OF IDLENESS”
the exercise of delegation, used responsibly, allows you to bring out the best in others and to make yourself rich in the process. It is the nearest thing to a “virtuous circle” imaginable. Just imagine getting rich while you’re helping others to help you get richer and prove their worth in the process. Magic!
in the early days of your company, delegation and promotion are among your most powerful weapons in getting rich.
Do not seek a replica of yourself to delegate to, or to promote. Watch out for this, it is a common error with people setting out to build a company. You have strengths and you have weaknesses in your own character. It makes no sense to increase those strengths your organization already possesses and not address the weaknesses.
good morale, a pervasive feeling of “us against the world,” combined with the promise of responsible delegation and promotion based on achievement, can move mountains.
Your job is merely to lead, perhaps just to point in the right direction. This is advice I suspect will fall on stony ground for the uninitiated.
I don’t run my companies. And I have no desire to.
My vetoes are carefully explained and very well known to all of my executives, who agree to abide by them before they join the board. It’s a short list, but has worked well for many years. Without my express permission: 1. They may not vote anyone on or off the board. 2. They may not physically move the headquarters of the company. 3. They may not dispose of, or shut down, any substantial asset. 4. They may not purchase, or launch, any substantial new product or business. 5. They may not award themselves bonuses or salary increases. That’s it. No more vetoes. Within those guidelines, the
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If things go wrong in a particular part of the business, then I will get involved. When we are about to launch, sell or close something, I am always involved.
It is important to distinguish between delegation and abandonment. Absentee landlords never prosper. I am not absent. But I am not exactly toiling with the troops side by side, every minute of every day.
Because I want to write poetry and plant a forest in the heart of England, and that takes a lot of time.
Despite all my hard words about establishing ownership and caution where partners are concerned, I am a great believer in sharing the annual pie around. That is, I believe in incentives that help concentrate the mind and bring a sense of competition and purpose to management.
But when it comes to a sale, when you cash in your asset for big bucks, then I dispute the necessity (or even the fairness, not that life is fair) of handing over substantial chunks of the big bucks to people who did not risk their cash or livelihoods to create the business.
Your aim, as an owner, is simple: it is to improve management efficiency, productivity and frugality, and thereby improve future profits while still encouraging growth. But the balance is crucial, and many managers attempt to reach their targets simply by cutting costs. This can be fatal.
Economics. Competition is the heart, soul, liver, lungs and kidney of the beast we call Western capitalism. How you react to it, how you face up to it, defines whether you can stay rich, and probably whether you can get rich at all.
I’m a fighter. My natural reaction to provocation in business, as in life, is to attack. But this basic instinct has led me astray many times, and I have learned to think a little more carefully before tearing into the enemy with fangs bared. Let’s take an example.
Too much water under the bridge and wine through the arteries.
If your competitor is smaller, try to hire him or buy him or join with him. If he won’t budge, take drastic action and smash him.
Make annual bonuses generous. If you want your managers to concentrate on improving margin and profitability while growing the business, then they have to feel the light is worth the candle.
not all employees respond well to incentive bonuses or a dangled carrot of any kind. They seek recognition, not bribery.
Fire malingerers, incompetents, toads and glory hounds mercilessly. Not only does firing them make you feel better and contribute to a more pleasant working atmosphere, it cheers up the whole staff.
No intelligence-gathering exercise is ever entirely wasted in business. There is only so much pie. Talent bakes that pie.
Sell early. Real money rarely comes from horsing around running an asset-laden business if you are an entrepreneur . You are not a manager, remember? You are trying to get rich. Whenever the chance comes to sell an asset at the top of its value, do so. Things do not keep increasing in value for ever. Get out while the going is good and move on to the next venture. More money is usually lost holding on to an asset than is made waiting for the zenith of its value. I should know—it’s my own biggest defect.
21. Never miss an opportunity to promote your asset. Try purchasing one (or both) of my books of poetry: A Glass Half Full or Lone Wolf for instance. If they are not in your local bookstore, then go to www.felixdennis.com and check them out. Each contains a spoken-word CD and may well transform your entire life. (Sorry, I just couldn’t resist that.)
Why am I a magazine publisher? Is it because I love magazines? No. It’s because I had a tiny success back in 1967 selling a hippie magazine on London’s fashionable King’s Road. That’s right. I discovered that at two shillings and sixpence a time (half for me, half for the owner, Richard Neville), I could earn more money than I could as an R&B drummer or a high-street-store window dresser.
I even learned that by dressing up one or two girlfriends in the shortest skirts they owned and instructing them to approach every guy under thirty with a big smile and the following words: “Hi! Have you got your copy of OZ this month yet?” I could triple my earnings.
so I became a magazine publisher. That was OK, but I forgot to keep my eye on the ball. The ball was to get rich. Instead, I decided to become one of the world’s best magazine publishers. Not smart.
became a multimillionaire in 1982. By then I was thirty-five years old. Barmy! By thirty-five I was already half dead.
If you wish to become rich, look carefully about you at the prevailing industries where wealth appears to be gravitating. Then go to where the money is! That is where you should focus your efforts.
The magazine business will have faded to a shadow of its former glory within a decade or three. It is a mature business, and few fortunes are made in mature industries, unless you are lucky enough to create a monopoly in one. I was luckier than I knew.
what businesses should I have gravitated toward? Computer software, technology and dot com start-ups, cable and satellite television, property, environmental waste clean-up, alternative energy services...any one of these might have created a much larger fortune for me in less time than I took with magazines.
I had fallen into a trap. I believed I was a biographer. I believed that our biography was a great biography. What nonsense.
When enough people share a short-lived delusion, vast sums of money can be acquired overnight. The “tulip mania” in Holland in the mid-seventeenth century was such a time. Tulips had been imported into Holland for forty years before the madness hit. By 1635, a single tulip bulb was swapped for a collection of valuable articles, which included the following: • four tons of wheat • eight tons of rye • a bed • four oxen • eight pigs • a suit of clothes • two caskets of wine • four tonnes of beer • two tons of butter • one thousand pounds of cheese • a silver drinking cup
the same way, it is almost impossible to build an individual fortune without colleagues, confederates and one or two professionals on board. You will need a lawyer, sooner or later.
Human capital is by far the most important element of your environment, whether you are just starting up or deep into the game. By focusing hard on obtaining that human capital you will vastly increase your chances of becoming rich. Stupid people are easy to hire. The world is full of stupid people.
There are many clever, cunning and adept people who are risk-averse. You are not risk-averse because you are dedicated to becoming rich.
Never choose an important employee or a key supplier alone. Get others to interview them or talk to them as well, either with you or separately. We are all far too fond of choosing those we instinctively like, those we respect or believe are similar to ourselves. This is not a good thing. You need the input of others to choose the right candidate, although the final choice, in the early days, must be yours and yours alone.
