Illustration by Rachel Revilla
There are many famous business leaders in my personal network whom I truly admire. One of them is Stephen Schwarzman, an American self-made billionaire businessman and philanthropist. He is chair and CEO of The Blackstone Group, a global private equity firm he established in 1985.
Why do I mention Stephen? Even though he has achieved a personal net worth of over $32 billion at the time of this writing and built Blackstone into a company that has more than $880.9 billion of assets under management, he still approaches every day as if Blackstone was still a startup.
Why is that so remarkable and what can we learn from it?
Never get comfortable— Nothing is forever
I was advising the owners of an Asian family business group of companies recently. During the work my team and I did with the owners and the top management, a member of the family was calling it “day one mentality.”
It means that you approach every day as if it was the first day of your business: no complacency, no arrogance, even if you are already the market leader in your industry. It means that you keep on your toes, and you are always aware of unforeseen enemies. And most of all, you know that nothing is forever.
The number one mistake CEOs or owners can make is to think that they or their business is invulnerable and will last forever. This attitude is often a lethal mix of short-sightedness, negligence of trends to come, an underestimate of competitors (existing or new), complacency and an utter lack of cutting-edge innovation.
The lethal mix of the famous failures
All companies in the list that follows had some sort of that lethal mix injected into them by top management, which ultimately led to their downfall:
ʎ Blockbuster (1985 – 2010): At its peak, Blockbuster had 84,300 people worldwide and 9,094 stores;
ʎ Toys R Us (1948 – 2017): In its heyday—one of the world’s largest toy store chains;
ʎ Pan Am (1927 – 1991): Once the largest international air carrier in the United States;
ʎ Kodak (1889-2012): At one time the world’s biggest film company;
ʎ General Motors (1908 – 2009): One of the most important car manufacturers of the last century; one of the largest companies in the world that marked one of the largest bankruptcies in history;
ʎ Compaq (1982 – 2002): One of the largest sellers of PCs in the entire world in the 1980s and 1990s
If this list sends chills down your spine, it should! It tells you that nothing lasts forever. Especially if your business has a top market position, it is time to be cautious. Why? Because you, the board, and your top employees may all leave their guard down before they get hit in the face.
Most companies at the top are still only a few major decisions away from failure.
The CEO rarely has the best ideas
I have said this before and it bears repeating: the best ideas rarely come from the top. But that is where the most important decisions are made. This is why the top management, the board, the CEO and the owners need to have a mindset of modesty, humility and leave their egos at the door.
Remember: as a business owner or business leader, your goal is not to be right! Your goal is to make the right decisions. That is fundamentally different.
To do this best, your job is to get at the truth, to assess reality as best and as truthfully as you can. Only then you can make the best decisions.
To do this, it is fundamental that you realize that all of us may think we see 100 percent of reality, but we do not. All owners and top managers I have ever worked with have blind spots. It is natural. Why else do you think that even the CEO of Google and Bill Gates have coaches?
All of us see only a tiny part of reality because we view reality through the lenses of our character, strengths, weaknesses, education, etc. This is why business leaders need to cultivate two habits above all: listening and surrounding themselves with people who are very different in character and opinion.
The blind owner
As an owner, CEO, or top manager, your goal is to design the right machine so that you can produce great outcomes. It is not to have your hands in every little part of the machine.
Let me share a practical example: a conglomerate reaching hundreds of millions of consumers across many different markets approached me and my team with the request to make the group future-proof, put together their strategic plans for the next five years, and take care of their global expansion. Also, part of our assignment was to restructure the entire organization to make it more efficient, create the proper succession plans, and cut the fat, meaning—let go of positions or people who slowed the organization down.
To our surprise, the CEO (who was also the owner) wanted to have his hands in every little operational matter, from marketing to distribution, from creative to product design. It was mind-blowing.
The results were detrimental to the entire business: his actions stifled creativity and innovation, from the board to the lower levels. His people became more focused on devising beautiful reports to impress him than delivering great results. Once your people focus more on “looking good” than “doing great work,” you are in trouble!
The stretch zone
If you cultivate Stephen Schwarzman’s approach that every day is day one, that no matter how successful your business may be today, it is still a startup, and that you have to be vigilant at all times, then you will automatically make better moves in all areas of the business.
You will also make sure that you have just about the right amount of people to produce great results and not blow your organization out of proportion. You will “cut the fat” and focus on the minimum viable size for your business. This will lead to your business becoming agile, flexible, efficient and innovative. All of these attributes are much more important than size for corporate success today and in the years to come.
Action step
Here is a simple but highly powerful daily practice that has two major benefits. First, it will help you become a master communicator, a skill Warren Buffet described as the most important one in his career. Second, it will help you to master the art of being comfortable in the day one mentality, the startup mentality and to be comfortable in being “uncomfortable:”
Once a day, talk to someone you would usually never talk to. Do not worry about what you are going to say; just put yourself out there and start a conversation. You may find this easy to do, or you may find this uncomfortable and a bit challenging, even if you are a famous CEO already.
That is normal because most CEOs live in a bubble. Trust the process. Over time, you can make this more challenging by talking to people who are more and more out of your comfort zone. The important thing is to keep this up daily and push yourself to engage in spontaneous conversation. You will be surprised at the outcomes of this simple but highly effective tool! INQ
Tom Oliver, a “global management guru” (Bloomberg), is the chair of The Tom Oliver Group, the trusted advisor and counselor to many of the world’s most influential family businesses, medium-sized enterprises, market leaders and global conglomerates. For more information and inquiries: www.TomOliverGroup.com or email
Tom.Oliver@inquirer.com.ph.