Question: I am amazed at how some people just seem to get it right with their business. I mean, you hear of all these success stories of how people, who practically had nothing, ventured into something and then just a few years later are raking in the millions. Some of them say, “Who knew this would be the next big thing?” Others say they were just lucky to be in the right place at the right time. Is that true or are many of them downright clairvoyant?—Frustrated Backyard Businessman
Answer: What do Cesar Millan and George Joseph Kresge have in common? Firstly, those are not their business names. Cesar Millan is the Dog Whisperer, an expert dog trainer while George Joseph Kresge is the Amazing Kreskin, a famous mentalist. When you watch them at work it is like watching magic unfold before your very eyes. But they will both be the first ones to tell you that it is not magic but pure hard work.
Time and time again, the Dog Whisperer would transform seemingly vicious and loud barking dogs into the docile man’s best friend creature that we picture them to be. The Amazing Kreskin would perform astounding feats before live audiences. His signature trick is to find his check for a performance. In the trick he instructs the audience to hide his talent fee while he is escorted off stage by other audience members. He then goes back on stage and locates his check. If he is not able to find the check, he forfeits his fee.
The similarity does not end there.
The Dog Whisperer would many times be able to solve a dog owner’s problem simply by reading the actions not only of the dogs but also of their masters. For example, a dog that suddenly becomes hostile at anything that moves, while being taken for a walk together with another dog, was found to be just feeding off the aggression of that other dog and going deeper into aggression as the owner pulled on the leash. So the solution was breaking the buildup of aggression of that other dog through short but crisp taps to the body. At the same time, the owner was trained to recognize such buildups and avoiding counter-aggressive moves.
The Amazing Kreskin is also able to perform his astonishing feats by reading his audience. Drawing from his experience on reading minds since he was a child, the Amazing Kreskin takes cues from various sources ranging from body language and human behavioral tendencies to ESP or what he translated as extremely sensitive perception. He would even use his own definition of ESP to predict future events.
Another important similarity in the success of both the Dog Whisperer and the Amazing Kreskin is that they are not infallible. You need only to log onto the Internet and use any search engine to get a listing. The Amazing Kreskin, for instance, failed to find his check a reported nine times. Both have their fair share of failures, which they use as stepping stones to better their future performance.
So what do these two gentlemen have to do with being successful in business? Everything! But perhaps the lessons are best summed up by the Amazing Kreskin’s four-step approach to making educated guesses or predictions.
Step One—Know the facts. Some people go off to set up a business because they are good in one thing. There is nothing wrong with this. In fact, this is where most businesses start. However, knowing your own strengths and weaknesses is not enough.
For the dog owner to train his dog, he must know his own strengths and weaknesses as well as those of his dog. Similarly, a business owner must know his own strengths and weaknesses as well as those of his business environment, more aptly known as opportunities and threats. In investing in financial securities like stocks, step one is known as studying the fundamentals.
Step Two—Know the psychology. While the “clinical” study of fundamentals of a business may already lead to certain conclusions, this would be incomplete if it is not blended with a study of the psychology of people in the target market.
For example, while it may make absolute sense for people to buy goods at the lowest price, a good number will go for the higher priced ones even though “clinically speaking” the products are of the same quality. In this case, it is the market’s perception (or what marketers call the positioning) of your product that matters.
Step Three—Know the (potential) outcome. Given your knowledge of yourself, your product and the market, play out the potential outcome in your mind. Better yet, do a market test to see how such factors will interact. The recent NBA basketball sensation, Jeremy Lin, does this very well. As Lin dribbles the ball down the court, he masterfully reads the position of players and plays out in his mind how his team’s moves can outmaneuver their opponent.
Step Four—Climb out on a limb. If you had bought this one particular Philippine stock (I will not name the stock so that this is not misunderstood as a recommendation) on December 4, 2008, the value of your investment would be worth more than 14 times its original value today. If you were the first to combine chicken inasal with unlimited rice and rolled out stores through franchising, you could have been the one to have sold that business to a large fast food chain for billions. But these are all hindsight.
By following steps 1 to 3, you would already have increased your chances of success through insight and foresight. And if you fail, build on that failure and try harder to further increase your chances. What is sure is that you would have lost out on the opportunity if you had never tried.
If you want to know more about managing your business as well as effective personal cash, debt, risk and wealth management, attend the EnRich training scheduled on May 16, 2012.Visit www.personalfinance.ph, e-mail info@personalfinance.ph or call (632) 216-1541 for more details.
Remember that magic is nothing but hard work.
(Efren Ll. Cruz is a Registered Financial Planner of RFP Philippines, personal finance coach, investment adviser and bestselling author. Questions about the article may be sent by SMS to 0917-505-0709 or e-mailed to efren@personalfinance.ph. To learn more about the RFP program, visit www.rfp.ph or e-mail info@rfp.ph.)