Why Are You In Business?

Let me tell you an interesting story about a professor who teaches a course in entrepreneurship.

He starts his course by reading the notes from the founding partners meeting from the original meeting of the founders (now about 70 years ago).  It goes something like this:

They said that they were going to do something in the electronics field.

The key was to make a “technical contribution” and only pursue opportunities consistent with this purpose, demand people give superior performance (but otherwise largely get out of their way), contribute to the community, and have great integrity.

But the question of what exactly they were going to manufacture was postponed.

In the meeting they considered:

  • medical devices
  • TV Receivers
  • welding equipment
  • an electronic oscillator
  • and even an electronic jiggle machine to help people lose weight.

He would tell his class this and ask them to rate them on a scale of 1 to 10 for entrepreneurship.

The students would give it at best a 3 – blasting these founders for lack of focus – lack of an idea – lack of a market – and lack of just about everything else.

Then the professor would mention – oh, by the way, the names of the founders were Bill Hewlett and David Packard.

The students are invariably stunned.  Are you a little stunned too?

Let me ask you a question – and throw out a proposition at the same time – if you can answer this question simply and easily and positively and powerfully without a moment of hesitation I suspect that you will very likely be – or already are – successful in your real estate business.  And if you can only hem and haw or burble around, I would like to not say you will fail (as that is not very nice) but I think you have an issue that needs to be addressed and maybe you are struggling in the real estate world.

The question is a simple one …..

Why are you in business?

Please take a moment to ask yourself this question.  Why do you go to work every morning?  Why did you start the company you work for?  If you work for someone else why did they start the company?  Do you know?  Do you have an answer that is exciting and thrilling?

Let me dig into this….

…..

There is a great book by Jim Collins called Built to Last.  The book is about great companies – companies that simply crush their competition – and no matter what happens they reinvent themselves and keep on cooking.  Companies like Merck, like GE, like Hewlett-Packard, like Procter & Gamble, like 3M, like Nordstrom, like Boeing, like Wal-Mart.

The core point that Collins makes in his book is that these companies have something special about them that allows them to always find a way to succeed.

I think it is very simple.  They have a core set of values that tells you “why” they are in business.  For example:

Merck – “We are in the business of preserving and improving human life.”
Boeing – “Being on the leading edge of aviation; being pioneers.”
Walmart  – “Exceed customer expectations.
Nordstrom – “Service to the customer above all else.”

These are all inspirations – these are the “why” of these great businesses.  It makes you maybe want to go work there and join them.  And many people of talent did exactly that.  Ultimately, I think that is what propelled them to great success.

Who would you want to work for…..a plain old “aviation company” or a company that has as its mission to be on the “leading edge of innovation” and to “be pioneers.”

To inspire you about these companies all I told you just now is “why” they are in business.

To complete unfolding the mystery of why I started this article the way I started – the real contribution of HP was not the things – the widgets – that they made, but the famous “HP Way” that the founders had “invented”.   This is because the widgets change over time but the HP Way is timeless.

So I think the students should not have been stunned at all.  The HP Way was an incredible invention.

As Steve Jobs famously said to John Sculley in convincing him into leaving Pepsico many years ago:

“Do you want to spend the rest of your life selling sugared water or do you want a chance to change the world?”     

He got Scully to join him because he did not tell Scully “what” Apple does (i.e. make computers); instead, he told him “why” Apple was in business – to change the world.  And he inspired Scully to join him.

…..

If you are with me so far, that “why” is the critical concept, now let’s try an experiment in the real estate world.

Assume you are a real estate development company and someone asks you “Hey, Toby, what do you do?”

What would you say.  Would you tell them:

“We are in the development business.  We take properties that are underutilized and renovate them into more successful properties.  Most of the time when we do this we create real value for ourselves and our investors.  We have an excellent track record.”

Or would you tell them:

“I am in the development business to take underutilized properties and renovate them into more successful properties.  This is because whenever I see a wrongly used piece of property I get this kind of burning feeling that I could make it better.  I can’t help it.  I immediately see things that could be done.  It is a passion with me.  So a few years ago I started this development company to do exactly that.  Our mission is to find underdeveloped or underutilized properties and turn them from something lousy into something that we are proud of, thrilled with, and excited by.  We have done pretty amazingly well – exceeding whatever I thought would happen – and I am proud of that, but the whole key to my business is finding people who share this dream and get excited about our mission.

I ask you, of the two people who answered the same question, who would you want to work for? Who would you want to do business with?  Who would you want as your partner?  Who would you want to invest with?

…..

Ultimately, in order to succeed in the real estate world – or probably any business – you have to attract talent to your organization – including both those who work for you and those who you do business with – and once you do that, you then have to retain that talent.

And in order to do that you need to be able to inspire people.

And the way to inspire people is to let them understand “why” you are in business.

It really works…..

Before I end here, I need to take a moment to give credit where it is due.  Although I am The  Real Estate Philosopher, often I don’t think of some my ideas.  I read a lot – often about successes in other industries – and I learn from others.  Today’s theme, and credit for this article, comes from a great book I read called “Start With Why” by Simon Sinek.

Reinventing The Law Business: An Introduction

By way of introduction, I am the founder and managing partner of Duval & Stachenfeld LLP. We are a 70-ish lawyer law firm in midtown NYC that focuses strongly on real estate; indeed, we refer to ourselves as “The Pure Play in Real Estate Law.”

As managing partner I have spearheaded numerous unique initiatives that have distinguished us from other law firms. Many of these ideas were very scary when we tried them out — there was always a fear that we would not only fail but, worse yet, be laughed at. Some of these ideas did not work out so well, I admit; however, the ones that succeeded have been the fulcrum to attract both lawyers and clients to our firm and indeed been the bedrock of our success.

As a relatively small firm playing with the big boys and girls, one would think that our size could be a disadvantage. But that would be incorrect. Smaller players can be flexible and move in different directions. We can take risks and seize opportunities that large law firms cannot logically capitalize on….

Unless you live in a cave you have seen a plethora of criticisms of Biglaw, how lawyers practice, and just about everything else. People beat up on us lawyers a lot for just about everything. It doesn’t have to be that way. One can run a law firm where both the lawyers and the clients are really happy and getting what they seek out of the relationships involved.

This column will focus on innovative strategies for successfully running law firms — both large and small firms. Instead of just throwing out ideas because I suspect they may be accurate, I will instead give real-world examples and relate these ideas to things that we did that proved amazing and other things that we did that turned out to be failures.

Also, along the way, I will take the risk of opening our strategies up to our competition and I will give my thoughts on how best to succeed as a law firm in this competitive world.

Ultimately, my goal with this column will be to prove a basic point: That to be successful in the law “business” one must be creative and innovative and not be afraid to try out ideas and, yes, fail sometimes in order to succeed in the end.