The Ten Commandments for Entrepreneurs

Table of Contents

Introduction

Observing others saves a lot of money, time and trouble

It is astonishing how many entrepreneurial mistakes are made time and again. It almost seems as if some people observe the mistakes of others and copy them all over again. The reasons for corporate bankruptcies are always the same: lack of liquidity, wrong market assessments and a lack of implemented ideas. The reason why succession orders do not work properly is mainly due to former owners who are unable to let go of the company or who appoint unsuitable successors.

Observing others is good – provided that we gain the right insights and learn the right lessons from our observations. This book will accomplish precisely that. I invite you on a journey that spans twenty years of experience in business consultancy and development, stretching across several countries and continents. I will tell you about experiences and insights into many company formations and developments that have taken place within various cultures. From this information, principles have been derived that can be appropriately adapted and implemented elsewhere. You may, in fact, put them into practice in your own company.

Even entrepreneurs with a strong social mindset must generate profits with their companies if they want to survive in the long-term. This remains a given. In my profession I have met ordinary working people and also multimillionaires who have climbed far up the success ladder. Yet, amazingly I noticed that only few of them had indeed become truly happy people. These few had some things in common: For example their perspective on what is essential, their love for people, their generous giving, their innovational drive or their persistence in overcoming obstacles. Was this a mere coincidence? No, there is a system at work here, and we want to get to the bottom of it.

It is not by chance that our endeavor should lead us back to the Ten Commandments of the Bible. God has succeeded in summing up behavioral norms for all of humanity in Ten Commandments. Should this not also be sufficient to successfully manage businesses? Yes, it is sufficient. The Ten Commandments regulate the essentials for living together in a large community. These rules hold true for both political and economic systems alike. If economic leaders were to increasingly orient themselves by these rules, our world would most certainly become considerably more just and humane.

At first the correlation between the Ten Commandments of the Bible and professional business management seems only fragmentary. Perhaps the commandments seem hard to understand or radical. Many might view this as a reason not to concern themselves with them. On closer consideration, the commandments make it possible to gain numerous insights, in particular in regard to how professional methods for business management can be applied in a way that is socially compatible. The company goal remains the same: profit. Yet, this profit cannot be accrued at the expense of our fellow human beings or the environment. Only when social, ecological and economical systems profit in a sustainable manner may we speak of having truly generated profit.

Relating the Ten Commandments to daily business life is a challenge: Limits of feasibility become visible and must be respected. We call this discerning responsibility. Furthermore, unimagined possibilities for creative actions open up. This is called entrepreneurial thinking and acting.

This book leaves little room for half measures. It is a book for entrepreneurs, for people who want to take on entrepreneurial freedoms and responsibilities. It offers examples and ideas for a ten-step process to become an effective entrepreneur, an entrepreneur who respects people and the environment.

An honest involvement with the Ten Commandments influences and shapes our thinking and actions, affecting both our private and business lives. The result is a lived business ethic that creates added value without the exploitation of other human beings or nature.

Chapter 1

Business models do not simply fall from the sky – or do they?

“Is it professionalism or a coincidence?” This question inevitably emerges while searching out success factors of outstanding companies. The answer is complex. Many entrepreneurs are highly professional in their work and have been unsuccessful nonetheless. Others get away with all kinds of entrepreneurial mistakes and yet their business model remains successful. However, we are not interested in success stories that are a random one-time occurrence. A great lottery win is rare and most likely not repeatable. We are much more interested in the principles that systematically and repeatedly lead to success. Professional methods as well as opportunities that “present themselves” are part of this. Entrepreneurs must know and master methods. Handling opportunities that present themselves requires more than knowledge and ability, it requires open eyes and a susceptibility for new and unfamiliar things. There is a simple and helpful instrument available to us: the business model.

The business model demands decisions

The business model is a simple illustration of the company’s most important success factors. It answers the central questions of business economics. It provides space for visions, goals, strategies, plans, figures and allows for contingencies. A business model challenges us to make decisions. Successful models are based on a sum of logical, coordinated decisions. These decisions either create or destroy prosperity and values. It is here, at this point, where entrepreneurial freedom and responsibility begins.

The Ten Commandments demand decisions

The Ten Commandments of the Bible also challenge us to decide. Some of these may sound presumptuous and provocative, but they create meaning, and it is worthwhile to reflect on them. “You shall have no other gods before me,” is the first commandment. It is preceded by God claiming his right to power. Ultimately, we have to answer to Him for our decisions. Merely this thought about accountability can decidedly influence the quality of entrepreneurial decisions.

To whom do I want to answer for the decisions I make?

I have the choice. This is entrepreneurial freedom. For the entrepreneur it is both a blessing and a curse. Many entrepreneurs and managers see themselves or the increase of company value as the sole criteria when evaluating decisions. These entrepreneurs are self-made gods. Their viewpoint is both arrogant and limiting at the same time. Entrepreneurs need a competent authority to include in the decision-making process, an instance to which they are accountable. To be accountable in this way automatically increases the quality of ethical actions – provided that proper consultants and partners have been chosen. People who want to influence decisions are lurking everywhere, whispering in the entrepreneur’s ear. Perhaps at times they are valuable consultants, yet often they obstruct and tempt.

How a friend taught me mountain climbing

When you read the following, you will discover what a good consultant is able to achieve. When I was younger, I had a friend who had confidence in certain abilities he saw in me of which I was wholly unaware. I was not athletic and completely untrained as a student and had minimal self-esteem. During my childhood my parents had lost their business and all of their possessions. Then, shortly after, my mother died and I was completely on my own. By taking on weekend and vacation jobs, I paid for my own education. Unfavorable conditions had limited my possibilities. Fortunately, my friend did not see these limitations – or they did not bother him. All the more he perceived my potential and urged me to become a mountaineer. He taught me mountain climbing in a professional way. In small steps I learned to handle rocks, ropes and compass, both theoretically and practically. Nothing was left to chance. While climbing the steep face of a rock, one mistake can lead to the death of an entire roped party. In my training as a rock climber, I learned to look ahead and overcome my fears. These attributes proved themselves to be excellent management tools later on in life. After training on small rocks, we started climbing higher mountains. We often had to cross enormous glaciers to get to the summit. I had to learn dealing with sunshine and fog as well as properly handling pickaxe, rope and compass. The hardest thing was being forced to turn around before we had gotten to the summit if the path was too dangerous or concerns too great. Yet, this as well was part of the training. Most of the time we reached our goal and enjoyed the peak experience. Satisfaction about what we had achieved, enjoying the beauty of nature from a single perspective and a strong sense of community were the rewards for much toil and conquest. And thus, after many years of climbing and completing many small and large tours, we found ourselves on top of the highest mountain in Europe, the Mont Blanc. An unforgettable experience. I had done it. Me – with all my limitations.

The years up in the mountains have brought me many insights and I have interpreted and applied them in many seminars on entrepreneurship and in many consulting sessions. In the mountains I learned the most important lessons to successfully manage a company. I learned to overcome limitations, enjoy beauty and develop a sense of responsibility and reverence.

The learning process also included the necessary danger of descending the mountain, as a mountain tour never ends on the summit. The descent is often more dangerous than the ascent, but it is part of it. Only after completing our work, has our goal been reached, when we are back home in the arms of our loved ones and can joyfully discuss our experiences with trusted friends.

The mountain tour of the entrepreneur

We will now begin an entrepreneurial mountain tour. Where does it begin? With a perfect business plan that convinces every bank employee? With a fascinating idea or vision that inspires the imagination? With a challenging task that propels me to achieve my peak performance? While accompanying countless companies during build-up and expansion, I have come to a different conclusion.

At the start-up of most companies there is a problem that needs to be solved, like unemployment for example. Here I think of a young engineer from Romania who lost his job after the country went through political changes and had trouble putting food on the table for his family of seven. Years later he had become the proprietor of a pasta factory, which employed a staff of over a hundred.

Or I think about a master joiner from a Swiss mountain valley who had to realize that his profit margins were declining dangerously on account of competing businesses with state-of-the-art equipment. Far removed from his competitors – he now works in a market niche in the high-end segment and operates globally.

Or I think about a certain mechanic from Romania who, while travelling on a street in the Carpathian Mountains, was approached by an old acquaintance. “We need you, create jobs for us – in our village.” Today he manages a mechanical workshop in that village, producing metal parts for the North Sea fishery industry and, thereby, offering a livelihood to several employees in this remote village while providing their families with a prospect for the future.

Most people hate problems. They push them to the back of their minds. They hope the problems will solve themselves or others will solve them. Or they evade and try to outrun them. Then they wonder why, time and again, their problems keep catching up with them. They are constantly committing the same mistakes without learning from them. When faced with problems, some people just freeze. They are blocked and no longer able to think logically or even creatively and, therefore, unable to act accordingly. They are like highly developed cars, driving with the emergency brake on. Everything in their lives is wearisome, rough, strength-sapping, discouraging. Then there are those who are afraid of every kind of change, their motto being that it is better to suffer than to make any changes. The unknown paralyzes and overtaxes them.

Problems are opportunities

Sadly, a majority of people has this mindset, which impedes personal and social development. Entrepreneurial thinking is fundamentally different. It views problems as opportunities. It sees change as a fascinating scope for design.

This is the reason why I begin most of my seminars on entrepreneurship by reflecting on this Chinese character:

The meaning of it is “problem”, and there are two sides to it: The first side shows the danger, the crisis. The other side directs our attention toward the possibilities, the opportunities inherent in the problem. It is a metaphor for our mindset.

• Do I belong to the group of people who get tied down in a crisis and are blocked by fears?

• Or do I belong to the super-optimists who do not even perceive any dangers?

• Or do I belong to the group of people who perceive dangers realistically but quickly turn their thoughts to the inherent opportunities?

The entrepreneurial mindset only accepts the third option.

Unfortunately, only few people are born with the ability to seize realistic opportunities. And the few that possess this ability do not use it effectively. There are ten reasons why people refrain from doing something that is absolutely necessary. Let us, at this point, return to the problem thinker and the opportunity thinker. Many serious people are simply natural problem thinkers. By nature they tend to analyze problems and perceive difficulties. This is a reason why many valuable ideas of problem thinkers die prematurely and are never implemented. Only imagining possible problems, paralyzes initial creative energy.

Yet, we are also familiar with another phenomenon: People who are brimming over with creative energy. They are constantly developing new ideas and visions to solve problems. Unfortunately, they lose their energy as they try to pursue too many paths or give in to too many distractions and temptations.

It is worthwhile to take a look in the mirror, to perceive and understand one’s own personality structure. My experience with various personality types led me to the following realization: It is not so important how we are but exceedingly important what we make of ourselves. Sometimes we may be able to change by our own efforts. Much more often, though, we are greatly influenced by others if we let them.

The choice is up to me. Do I perceive myself as unchangeable, as completely developed and as incapable of achieving greater things? Then I should stay clear of entrepreneurship. Entrepreneurship means changing continually, developing further, creating anew. The gaze is set straight ahead. The good news: It can be learned. It is feasible. And it is liberating. Think of my own personal experience, being an unathletic student. My favorite activity was mulling over problems. I retreated into an illusory world in order to be able to endure a harsh reality. There was no room for a Mont Blanc perspective in my mind. Such accomplishments were beyond what I could conceive or achieve. Nonetheless, a change was possible. I allowed it to happen. From a deep desire for community, a longing to escape my loneliness, I allowed my friend to influence my life in a positive way. Perhaps he was not even aware of what he triggered inside of me. Yet, the consequences were radically permanent, life changing, to this very day.

My decision for God

I also have to tell you about the history surrounding this event. Shortly before meeting my friend who taught me mountain climbing, I had met another person. Completely unexpected, a young man approached me on the street. He wanted to talk to me about God. Of course I had known about the existence of God. After all, I had been brought up in a Christian family. However, while talking to this man, I, for the first time in my life, became aware that God was not so much interested in church steeples and much more interested in individual people. And I realized that a personal relationship between man and God was possible – through Jesus Christ. And I also learned that this could only happen voluntarily. Once again I was faced with a decision. Fortunately, I chose to walk in fellowship with God. What did this mean? It meant that, through prayer, I could discuss all questions and problems directly with God and ask Him for help. I have done this many times since then and I still do it today, several decades later. Why? Because it works. God is not dead. He is alive and enjoys accompanying and leading me in all of life’s matters. Often His help cannot be clearly understood or may even remain invisible to us. This was also an important realization for me. God has His own timetable and His own methods for working and intervening. At that time he brought the gift of friendship into my life. This friend subjected me to a therapy that lasted three years – not on a therapeutic couch but out in nature, on countless treks through the mountains. I learned to apply professional methods and, thereby, minimize risks. I learned to deal with fear and overcome it. I learned to solve problems in small steps. I learned to look ahead. When working on an important task, I learned to not allow anyone or anything to distract me. I learned to trust myself, my friend and God. I also learned to enjoy accomplishments and I learned to instruct others. Sometimes we need a friend who will accompany us. Sometimes we must or can be a friend to others.

This dimension of entrepreneurship instilled a deep reverence for the creator in me, and it also gave me the assurance that I was loved by Him. This is how it is even today; every important enterprise begins by talking to God. I do not expect Him to do my work for me, he has given me abilities and possibilities to this end, but I expect Him to give me wisdom to make the right decisions and a perspective for things unseen. I am not so much interested in the obvious as I am interested in the potential, the potential of projects, organizations and people. For me reverence does not mean fear but respect and emotional security.

Ten excuses

Most of the time, great changes are preceded by a problem. This might be a reason for the decline of creative performance in affluent countries. There is too little pressure to develop further and change.

There are ten reasons not to do something that is important or necessary:

1. It will not work anyway.

2. I cannot do it.

3. Others have done it before me – and better than I could.

4. It is too strenuous.

5. It is too risky.

6. It is impossible.

7. The time is not yet ripe for it.

8. I lack the money to do it.

9. What will others think of me?

10. What would the point be anyway?

All these ten reasons are wrong. They are lies. They are dangerous distractions and temptations. If I am truly enthusiastic and convinced about something, the most difficult obstacle becomes a negotiable challenge. Enthusiasm and conviction is much more than an idea: These qualities are formed by the will to eliminate a certain type of distress, to fight an injustice or fulfill a desire. To be touched and inspired in this manner often develops from intense fellowship with God. Most often, it is the result of a communal process of reflection and asking questions. I like to compare this process to a strong piece of woven material which cannot be torn. Is is made up of both horizontal and vertical threads. Functioning visions and tasks are formed like this. The horizontal dimension illustrates our human way of thinking and the application of professional methods; the vertical dimension represents the spiritual dimension, through which we integrate the will of God into our actions. In the following we will mainly focus on professional methods, tools and attitudes.

The renowned business consultant Dr. Rudolf Schnyder von Wartensee has encapsulated the various ways humans think as follows:

The few who make things happen are the true entrepreneurs. They accept problems as normal and as a challenge. They feel the urge to improve, design and implement their ideas. In doing so, they infect others as well and take them along on their way.

Winston Churchill formulated the same idea as follows: “Some think of an entrepreneur as a mangy wolf who needs to be beaten to death, others think of him as a cow that must be continuously milked; only few see him as the horse that is pulling the cart.”

The mass of spectators is dangerous. They find every fault and criticize harshly. They always know why something does not work but offer no help.

The great mass, who does not know what is going on, is lethargic; it must be woken up and provided with information, guidance and leadership.

Again we have to decide. To which group do we want to belong? What am I doing currently that would justify being placed into the desired group?

As you can see, every element of my analysis is immediately followed by a demand to make a decision or perform an action, as this leads to an organic dynamism. I learned this through mountain climbing. The gaze is always focused on the next hold in the face of the wall.

Illustration 1: The decision process

Making right decisions must also be learned. Within the scope of the decision process there is a cowboy and a coward range. Both are equally dangerous. In the cowboy range there is only little reliable information that is available, but there are many possibilities. A decision in this range is often a hasty reaction. Such decisions, in turn, cause new problems and additional expenditures. Much unnecessary stress and frustration is generated. In the coward range there is a lot of available information, but the necessary maneuverability to make a decision has been lost. Thus, we are controlled by others and have lost the capacity to make a decision ourselves. In a good decision process we ensure that we have sufficient, reliable information while not wasting time in making a decision.

Realistically assessing opportunities with the SWOT analysis

The SWOT analysis, put forth by the Boston Consulting Group, is one of the simplest and most effective analysis instruments as a basis for making good decisions (Strengths, Weaknesses, Opportunities, Threats).

Illustration 2: SWOT analysis

The SWOT analysis yields the best results when it is performed as a group. On the one hand, the analysis examines the existing or planned corporation according to its strengths and weaknesses. On the other hand, it takes a look at the environment by looking for new possibilities and associated risks. The acquired information forms a reputable basis for planned measures or a business plan.

And already the entrepreneur is faced with the next danger, deep within his personality structure: the entrepreneur’s selective perception. While performing the SWOT analysis, some entrepreneurs concentrate mainly on strengths and dismiss weaknesses. This leads to over-confident self-assessments, feasibility delusions and wrong decisions.

Others freeze when confronted with their own weaknesses and lack the confidence to think that they can change. These entrepreneurs are always surprised when others successfully implement their ideas.

Then there is also the group of visionaries. They constantly live in the future and try to seize every possible opportunity. In doing so, they generate great stress. They are always jumping back and forth between several projects and, ultimately, do not realize any of them because they allow themselves to become distracted. They lack the focus on essentials.

And finally there is also the group of incessant analysts. They lose so much time in detailed analysis that their options dry up or are implemented by others. In the final analysis, these people know exactly why their project failed.

I take your point. This simplified illustration of various personality types is a caricature, an exaggeration. In reality these types rarely exist in pure form, but they help us recognize tendencies, smirk at ourselves and do what is necessary.

At this point I would advise every entrepreneur to take a look in the mirror and reflect on his own person. Creating a personality profile can be helpful in this regard.

«In order to make it fair, you all get the same task: Climb this tree!»

Illustration 3: Personality Styles

The business model – the compact business plan

For the professional build-up or expansion of a company, a business plan is inevitable. When submitting a loan application, the bank will, of course, demand a detailed plan, substantiated by figures. For the start-up of small and medium-sized companies, a short version of a plan has proven to be effective. We are referring to a business model. In this model we will deal with the ten most important issues:

1. Guiding principle / vision / commission

What do we want? In which geographic markets do we want to operate? Which demand segments do we want to service? Which products or services do we want to offer?

2. Name

What should we call our company? A good company name must be durable and create an association with the product or services. It should be unique, retentive, succinct and (possibly internationally) patentable.

3. Development / growth

How should our company develop?

How many employees will we have at start-up, in five and in ten years?

How will turnover and profit develop?

4. Customer benefit

What is the greatest benefit of our products or services for our customers?

5. Strategic success position / unique selling point

Why do customers buy from us?

6. Market situation

How will the market situation develop in my line of business?

How was the development in the recent past until today?

7. Reasons for the business results up until now

Why and with what have we been successful / unsuccessful so far?

8. Description of competitor/rival

Who are our competitors? What are their strengths? What are their weaknesses?

What do we do better? And why?

9. Human factors

Which human factors are especially important for success in our line of business? Which factors are present in our case? Which do we still lack?

10. Monitoring and reporting

Which facts and indications are especially important for our company? How do we measure them? How, when and to whom do we report these?

Getting the business going

The business model should be a comprehensible description of our commission. At this point I challenge the participants of my seminars to draw an illustration of this business model on a sheet of paper. This creative work aids the retention and communication of the most important elements of the business model. It does not include a precise multi-annual plan but is merely the description of a business idea. It is like a rolled up carpet, which can be clearly identified as a carpet, but the details still remain hidden. Details – and this includes new ideas and possibilities – only become visible incrementally as it is rolled out. Many successful companies have developed this way.

I learned this through sailing. My friend, the mountaineer, also taught me sailing. If you want to win a sailing regatta, you have to be well prepared. You study wind conditions and examine the boat’s condition. At the start of the race, the direction, in which the boat is heading, is not too important; picking up speed is much more important. When a boat is sailing swiftly, it is quite easy to change the course, but when it is standing still at port, navigation becomes impossible.

Implementing a business model works exactly the same way. The business has to pick up speed. Of course, you do not start a business carelessly, but you prepare yourself by asking the ten questions about your business model, but then you get going. While sailing, you gain new experiences, make mistakes and hopefully learn from them. Correcting the course when you are moving becomes easy. However, it is difficult to convince bank employees of such a business model. They want to see plans and figures. They need something tangible in order to justify their lending decisions to their superiors. The “Basel II” owner’s equity regulations are a good example of this. They regulate the minimum requirements for capital, the monitoring process of the bank and the extended disclosure. Fortunately, private investors often have a different opinion and do not merely invest in business plans. Above all, they invest in people who develop and implement business ideas. Therefore, they base their financial decisions on other factors as well, like for example creativity, implementation capabilities and swiftness. I will discuss these entrepreneurial abilities in a more detailed way later on. Private investors want to feel the enthusiasm, dynamism and down-to-earth traction of the young entrepreneurs, and they want to be infected by these qualities.

Let us summarize:

1. I perceive entrepreneurial freedom and the associated responsibility and decide to do something. 2. I view problems as opportunities and challenges that drive me to undertake important changes and improvements. 3. I perform a SWOT analysis. 4. I derive measures from the analysis and create a logical business model.

Applying the first commandment “I am the Lord your God, you shall have no other gods before me” in business life:

1. In my professional work activities I give God an authoritative position. 2. My decision-making process is guided by God’s guidelines. 3. I am prepared to give an account to God and people for my actions.

Chapter 2

Marketing does not have to cost a lot – but it should yield a lot

The marketing business is full of fairy tales. There are quite a few people in advertising who are good storytellers. Using empty words for equally empty content, they make empty promises. With emotional images, exaggerations and false promises they attempt to attract and convince buyers. Marketing must be entertaining, they say. Or customers do not like to read; therefore, they should only be given little information. Or marketing activities must constantly change in order to create a fresh and dynamic impression. Regrettably, they sometimes succeed with these slogans in the short-term. Most of the time, though, their success is limited to charging high professional fees. The customer is left with nothing but costs. Of course, it does not have to and should not be like this. There is another way, with less noise, less exaggeration and less costs and instead with more imagination, more honesty, more substance and more impact. Small and medium-sized companies often have a limited budget for marketing activities. The good news: It is possible to have a great impact even with a small budget!

Let us first take a look at what the second biblical commandment has to say to us: “Do not take the name of the Lord in vain.”

God is not an insurance policy

The second commandment also has to do with our relationship to God. We should not use the name of the Lord in vain. Much damage has already been done in the name of God. Especially business people are in danger of misusing God as a practical insurance in problematic situations. Such people normally do not include God in the decision-making process. In fact, they take no notice of Him in their business. At best, they visit God on Sundays when they go to church. However, as soon as a problem occurs people want to avail themselves of Him or accuse Him on account of impeding obstacles. This is taking the name in vain.

Living values

Bringing glory to God’s name means integrating Him in our daily lives in such a way that our co-workers and customers sense God’s influence in our values and in our actions. This is about the values of respect, modesty, truth, honesty, loyalty and love. Our business model must be based on values that God has prescribed for us. Then we can reconcile these values with our own consciences, His creation and our fellow human beings. It brings the greatest added value to all participants. When a business separates itself from these values, it becomes a curse. Although it is possible to generate great profits while neglecting these values, in the long run this practice leads to human loss. In my consultancy practice I have often met people who have experienced this. Some were even convinced that they were acting in the name of God. And many boasted that they paid church taxes and attended the service on Sundays with their families. The mafia does that as well.

Most of the time, a similar pattern is at work here. The company’s bank account is filled to the brim. The entrepreneur focuses on questions such as: How can I continue to increase my wealth? How can I protect my wealth from damages? These luxury concerns take root in the entrepreneur’s thoughts, and they multiply. Without even realizing it – through a creeping and, thus, not perceptible process – his relationship to close friends changes. People who were once friends are increasingly becoming a threat to him. He distances and isolates himself from them more and more. At the same time, his ability to enjoy the finer things in life diminishes. To him an elegant dinner simply becomes taking in nutrition; a classical symphony feels like something that is stealing his time, a vacation becomes an escape. Is this the will of God for business people? Certainly not.

Our charisma

I like to observe people and, above all, I like to observe how their charisma changes over time. Many people become hardened with age, all knowing and bitter while others become wise, content and generous. I like the latter. Personality development is neither genetically given nor does it occur by chance. It can be substantially influenced. I like these thoughts of a person whose name I do not know: “The face you have at twenty, God gave you. The face you have at forty, you gave yourself. The face you have at sixty, life gave you.“

How do we become wise, content and generous entrepreneurs? By being or becoming real. By liberating ourselves from self-created dependencies. By consciously living out values like respect, modesty, truth, loyalty and love in our private as well as in our professional lives. Then there is no more room for arrogance, lies, half-truths, infidelity and hate. All of these are dependencies, worse than drugs and alcohol.

Two kinds of sellers

I especially enjoy acutely observing sellers. Unfortunately, there are not many sellers who are truly good at their craft, although most would place themselves in this category. Exceptionally good salespeople with above-average success rates have one thing in common: They like people. They have empathy, confidence and serenity. They do not merely sell products or services, but they serve their customers. They know their offerings by heart and vividly explain how the individual customer, in his particular situation, with his particular needs and problems would benefit from the offered products or services.

Average salespeople make a pitch for products, talk about advantages and conceal disadvantages. And yes, they talk instead of listening. Sellers, who love their customers, listen. The seller then begins to understand and show an interest in them. In fact, it could all be quite simple.

Illustration 1: Marketing – all the parts of it

The marketing concept: Simple but comprehensive

This brings us to our next tool for entrepreneurs: the marketing concept. When many people think of marketing, they think of brochures and pitching products. Others think a marke-ting concept is a scientific market analysis. Both are not entirely wrong, but marketing is more than that. Marketing is a crucial instrument for company success. Sadly, many marketing concepts are much too complicated to be implemented and, therefore, ultimately end up gathering dust in drawer somewhere. Yet, they cost a lot of money. It does not have to be this way.

In my consultancy practice, I have learned this: A marketing concept must be comprehensive but simple.

Marketing = customer orientation

By the way: What exactly is marketing anyway? This is the best definition of marketing I have encountered:

“Marketing is aligning the entire company with the market.”

We also call this customer orientation. And already at this point misunderstandings and myths set in. Customer orientation does not mean that we must do everything the customer wants or demands. We would become slaves and true innovation would be impossible. Customer orientation means liking the customer, listening to him, understanding him, perceiving his problems and needs and responding to him intelligently: with products, services and consultations that truly benefit the customer.

Customer orientation implies

a) that we have mastered the art of listening and analyzing,

b) that we have mastered the methods of true innovation,

c) that we can effectively communicate the benefit of our solutions,

d) that we have mastered production and logistics processes and

e) that we are able to turn customers into co-workers who will order from us again and recommend us to others

The art of listening and analyzing

I always begin my consultancy sessions with a blank sheet of paper. This sends out an important signal: I do not sell prefabricated products. I ask questions and listen. I take notes, establish a framework and pose new questions. The customer feels taken seriously. And I am being real. I really do take him seriously. He senses this and trusts me.

Methods of true innovation

True innovation breaks away from what has been established. Time and again, new ideas emerge and fill up the abovementioned blank sheet of paper. These are often new perspectives on familiar things. Previously known information is brought into a new context. Or it is a conscious decision to let go of the familiar and make myself available for new things.

In advertisements the words “innovation” and “true innovation” are often misused to attract attention in order to present trivial adjustments as the next big idea. This is exactly what I do not mean here. True innovation is about improvements that really make a substantial difference.

Communicating benefit

Nobody is interested in products and services. What matters is the resulting benefit. I work as a consultant for companies in Vietnam that produce safes. Safes are heavy and expensive. However, customers do not care about that. They are interested in security and are willing to pay a great deal of money for it. Good entrepreneurs are concerned with the benefit their products and services will bring to the customer, and they also know how to communicate this benefit.

Production and logistics processes

In saturated markets many end products are quite similar. Thus, it becomes difficult to convince customers of our products. In this regard, customer-oriented organization of production and logistics processes can yield enormous market advantages. A globally operating label producer built a balcony in one its production halls. The employees in this production hall produce specialized labels for medications. Quality assurance is a decisive factor in the process. The smallest mistake would have devastating consequences. Only authorized personnel are granted access to these rooms. Yet, customers are allowed to watch the production of “their” labels from the balcony. This gives them a sense of security and it builds trust.

Turning customers into co-workers who will order from us again and recommend us to others

Good customers are the best co-workers when they recommend us to others. However, they only do this if they are enthusiastic about our services. Simply satisfying them is not enough. They must be enthusiastic. This is a great challenge for our staff and us. “What do we have to do to for our customers to be enthusiastic?” This is the central issue we need to deal with on a daily basis.

Quality management

And yet, customer orientation is not everything. If we want to align all departments of the company with the market, we need a vision that captures the entire company and even goes beyond. The European model of total quality management divides the company into departments. Every department is confronted with the task to continuously improve itself so that the company can create the best impact in the market. The success of marketing is the sum of all partial successes. This sounds difficult but is actually quite simple. It is something I also learned through mountain climbing. The way to the summit consists of thousands of little steps. If I perform each individual step well, I will inevitably reach the goal. Small steps can be easily learned and applied. In every part of the company we must ask ourselves the following questions: What can or must we improve in order to benefit the customer? The continuous improvement process CIP describes the fundamental attitude for steady improvement. I will explain this further in Chapter Four.

Communication

The best processes are useless to us if internal and external communication is not functioning well. Good communication must be effective; it must incite people to think and act. It must initiate and cause movement.

Six key questions emerge:

1. Who?

Who is my target audience? Who is the decision maker? Who influences the decision process?

2. Where?

Which advertising vehicle do I use? Brochures? Advert placements? Internet? Radio or TV commercials? Mailings? News mailings? Events? Trade fairs? Posters? Billboards?

3. When?

Point in time, appearance plan?

4. What?

Content of message?

5. How?

Type and style of message?

6. How much?

Budget, number of appearances?

Let us summarize:

1. In my private and business life I cultivate an atmosphere of respect. 2. I regard my customers as valuable people and am willing to serve them. 3. I develop a marketing concept that benefits all participants. 4. I regularly analyze my entire company and continuously improve it.

Applying the second commandment “Do not take the name of the Lord in vain” in business life:

1. I bring glory to the name of God by integrating Him in such a way into my daily life that my co-workers and customers sense His influence. 2. I ensure that my marketing is based on values of respect, modesty, truth, honesty, loyalty and love. 3. My life is unambiguous. It speaks for itself.

Chapter 3

Time is money – and much more

Almost every entrepreneur complains about not having enough time. Apparently this is considered good form. It seems to say something about a person’s importance and success. Thus, entrepreneurs fill their lives with seconds, minutes, hours, days, months and years. They calculate how much they lose with every wasted hour. Time is money! And to a certain extent they are right. There is a certain time that can be bought and sold. This time gains commercial value when it is filled with ideas and accomplishments. Good time management helps to optimize results. Bad time management, however, leads to a hectic rush, strain, inefficiency and losses. We will deal with the issue of time management for entrepreneurs at a later point.

However, there is also a certain time that cannot be bought or sold. To a limited extent, we all have this time at our disposal. It passes us by. We can watch it drift by and are amazed at how the speed of time seems to continually increase. Or we may seize this time and fill it with life. This is the key: either we fill life with time or time with life. This is why we will deal with the issue of time management for entrepreneurs later on.

Let us take one step at a time though. What does the third commandment “Remember the Sabbath day, and keep it holy” teach us? Here, the subject is also time, as is properly dealing with time.

The day of rest is for the benefit of the person

Holidays are particularly challenging for entrepreneurs. In theory, everyone acknowledges the importance of these days and vows to celebrate them. Holidays should be a time for family, for church and, of course, for relaxing. However, the reality is often quite different. There are so many reasons to make exceptions: unfinished work, a lucrative order, a new idea, an unsolved problem – and just like that, the holiday has been sacrificed. There are many more reasons besides these. Perhaps it is an attempt to evade an unpleasant conversation with your marriage partner? Or an attempt to escape a sense of emptiness?

These issues are central for entrepreneurs in business consultancy. Their relationships and quality of life are in danger of deterioration. Relationships and the quality of life can erode gradually and continually, and for a long time this may go on unnoticed. Marriage partners grow apart. Children hardly experience or know their entrepreneurial parents anymore. Business people can – without even realizing it – lose their grip on simple but vital things: on reality. Ultimately, only one thing remains: the business. 12, 16, 18 hours a day; 7 days a week. It is hardly surprising that thoughts of work soon even begin to disrupt them in their sleep.

Why does the danger of erosion go unnoticed? In the beginning the work is fun. And above-average work hours are a necessity; otherwise building up a company or a career as an outstanding manager is not possible. Over time the aspiring entrepreneur perceives this work rhythm as normal. The first signs of exhaustion and, moreover, the guilty conscience follow because the entrepreneur senses that something is amiss. However, escaping from this negative spiral is difficult, even at this stage.

The American scientists Herbert Freudenberger and Gail North define the stages of exhaustion up until the burnout stage in a kind of spiral with twelve steps. (The compulsion to prove oneself, increased effort, neglect of one’s own needs, suppression of conflicts and needs, reinterpretation of values, increased denial of problems, retreat, distinct changes in behavior, loss of feeling for one’s own personality, inner emptiness, depression, total burnout fatigue.

God created the seventh day as a day of rest for the benefit of humankind. And he did this for good reason. This day of rest gives life a certain rhythm. It has a calming as well as a stimulating effect. The purpose of this day is to give people a chance to relax and recharge their batteries. However, not all holidays are the same. Many entrepreneurs have eliminated holidays from their agenda and convinced themselves that a different rhythm applies to them. So far, I have not yet encountered an entrepreneur who has changed the original weekly rhythm over a longer period of time without suffering negative consequences as a result of it.

However, for every rule there are exceptions. And in entrepreneurial management these are especially important. People who create and design new things, often experience phases in which they are compelled to live with a – rather extreme – rhythm. And this is not a problem, provided that the duration of this phase is limited and followed by a stress-free phase. Occasionally I spend my Sundays in airports or on flights as I travel to teach seminars in distant countries. This is bearable.

Let us leave the exceptions behind and return to the normal scenario as we take a closer look at this day called Sunday. This seventh day has 24 hours, just as any other. However, the hours of this day are to be filled differently. Active people prefer to fill this day with even more activity. They have good reasons for doing so. It is healthy, they say, and, after all, they are doers. However, the truth is that they have simply forgotten how to apply the brake. In fact, braking and resting may be more strenuous to them than keeping things going. Braking requires energy: I must prepare myself and adjust to something new, something unfamiliar. Braking takes time: It does not happen abruptly. There is a stopping distance. Braking safely is not the same as stopping abruptly. There is a calmness that ensues, once you have come to a stop. Resting can be dangerous. When I rest, I am all of a sudden confronted with myself. When the machines stop and the sounds of the daily hectic rush at the office recede, a vacuum ensues. This vacuum demands to be filled. Unfortunately, the thoughts that automatically rush in are precisely those thoughts you have successfully suppressed for so long. This can be unpleasant. Moreover, perhaps your spouse is also demanding to have a long overdue talk with you. Just thinking about it is already strenuous and exhausting to you, better to just accelerate and suppress these issues again. This is much easier.

It does not have to be this way; or rather: It should not be this way. The day of rest is intended for the benefit of the person. It should be an enjoyable and constructive day. Perhaps it is worthwhile to reflect on how we prepare for this day and what we do with it.

These rules are helpful:

1) I declare the day of rest is an absolute necessity.

God did not create the day of rest as a possibility but as a prominent day of the week. We need this day to live, just as we need food and oxygen.

2) I look forward to the day of rest.

Anticipating a special event is important. It determines how we prepare for it.

3) I plan the day of rest to be beneficial to me.

There are countless possibilities how to plan this day. Sometimes most of it is spent resting. Sometimes it is filled with activities and building up relationships. Whatever we do, this day needs to be edifying. It should distance us from our workweek. It should help us see thoughts from a different perspective and organize them in a new way. It should inspire us. However, it should also provide us with a space for questioning, for establishing our positions, for beginning anew.

4) I need the day of rest for a special encounter with God

Encountering God should not just happen on Sundays, but it should be a part of every day. These encounters in our daily life are often influenced by current events and decisions. The day of rest provides the opportunity to receive new inspiration and gain a different perspective. The idea for this book came to me in a church service as I was listening to a sermon.

Wisdom as a filling station

Good entrepreneurs need their fill of wisdom and serenity for their daily lives. I am not talking about knowledge here. Naturally, knowledge is a part of it, but the quality of decisions only depends to a small degree on the amount of knowledge a person has. Wisdom plays a much greater role. The usefulness of knowledge is limited. It may even lead to the downfall of some: They give themselves airs, become conceited and obstinate.

Among the thousands of entrepreneurs that I have accompanied in the last twenty years, the highly trained academic business people were, regrettably, vastly underrepresented. Their expert and methodological knowledge was not enough to make them successful entrepreneurs. Many of them were an impediment to themselves.

Wisdom is the application of knowledge: Implementing concepts; realizing visions; establishing values and benefits; being innovative; exerting influence; preventing mistakes and inanity; fighting for good and against evil. If entrepreneurs were truly wise, they would not allow the many excesses of the modern business world to go on. Wisdom also includes responsibility.

Several years ago, as I was engaged in negotiations with a government agency, I expressed my conviction as follows: “When people cease to acknowledge their responsibilities toward God, it is only a matter of time until they rid themselves of their responsibilities toward people.” By making this statement I wanted to emphasize the importance of Christian business ethics for our business development programs. Initially, my warnings fell on deaf ears. In a time of emancipation we do not want to acknowledge that God has the right to demand accountability for our actions. Yet, it is true nonetheless. Today, the results of our projects speak a clear language. The world does not need managers, cashing in on their bonuses. It needs responsible entrepreneurs. This will only work if a basic moral attitude is in place. To a certain extent such an attitude is discussed in schools and universities. Quite tellingly, this attitude is referred to as corporate governance, which either says a lot or nothing at all. It must be practiced and applied in life on a step-by-step basis. This calls for critical questioning and a willingness to change.

Business ethics diminish without a day of rest

The process of erosion – the creeping deterioration – eats away at business ethics. In most cases, entrepreneurs start their business with noble intentions. Moral obliquity, half-truths or corruption are inconceivable and not part of the business plan, as long as these opportunities do not present themselves. However, many do not resist the temptation once they encounter it. In his resignation speech to his people, the former Romanian President Emil Constantinescu expressed this with absolute clarity: [Translation] “Everyone of you complains about the rampant corruption in our country. Yet, as soon as an opportunity to profit from corruption presents itself, you are all onboard!” Constantinescu is talking about human nature, a nature we all share. The way out of this situation requires more than just good intentions and ethical thinking. It requires a changed nature. This, and nothing less, is God’s intention for humankind if we allow him to mold us. This process always requires voluntary consent: A person must want it. Then God will grant success.

The ethical compass

While mountain climbing I had to learn how to use a compass. The compass needle always points north. This is practical. Even in dense fog and dangerous terrain, I am able to find my way, which is essential for survival. As ethically minded and ethically active entrepreneurs we must have a compass and know how to use it. We must decide on a goal and, thereby, on a direction. We must not allow ourselves to become distracted. We must use our ethical compass to periodically check our position.

In the Bible God often uses parables to speak to us. You may simply view these parables as nice stories. Or you may see these stories as a reflection of our behavior. If we choose to do the latter, these stories will prompt us to change our mindset and our behavior. This is what working with a compass is all about.

Fields of interference

A compass can also be disrupted. The build-up of magnetic fields can irritate the compass needle. Fortunately, a compass always remains a compass. Once the interference field is removed, it faithfully points north again.

This also calls for wisdom. Is my compass really pointing north or is there an interference field close by? Recognizing interference fields is important and requires taking time for reflection. Entrepreneurs must especially be on the lookout for these interference fields:

1) Glittering gold

Glittering gold may blind you. The dream of quick and easy success is dangerous. Entrepreneurs are likely to fall into this trap. Once they see large monetary figures, they lose their minds and make rash decisions based on greed. Money quickly becomes a god or an idol. A good example of this is the shareholder-value mindset. People and values are sacrificed on the altar of money in order to increase the value of stocks. This has nothing to do with social entrepreneurship.

2) Broad, enticing paths

Many good speakers come together at business events. Speaking eloquently, they endorse quick and easy ways to get rich. Presenting seemingly perfect models, they publicly present their calculations on how to speculate in stocks and make big money. At some point the sound of their voices fades and disappears – they have left, perhaps taking their money with them. The path to success is often narrow and rocky. It forces us to proceed with caution and to overcome obstacles.

3) Discouraging analyses

Entrepreneurs and entrepreneurially minded managers are always surrounded by doubters and procrastinators who immediately find ten reasons why a new idea is risky and will not work. This is strenuous and paralyzing. Entrepreneurs must surround themselves with people who are able to evaluate their ideas critically and constructively. This also is a part of wisdom.

The Bible teaches extensively about wisdom. In the proverbs of Solomon, we learn that wisdom has a beginning: It begins with the fear of God, i.e. with revering God. Does anyone still wonder why wisdom is so rare? Wisdom assumes that we are ready to integrate God into daily life and be accountable to him for our actions.

This as well is part of the day of rest. We can fill up our spiritual tank with strength and wisdom. It is free of charge and only requires our initiative.

Change requires strength – and yields energy

Entrepreneurs also frequently neglect their emotional reserves or the tank of the joy of life. Which epitaph would you like to have written on your gravestone one day? Would this inscription make you happy: “His life was work”? Life is more than work and business. It is also more than success and wealth. And even more than just physical health.

Managers of retirement homes have been clients of mine now for two decades. Therefore, I often visit these homes and have gained some remarkable insights. In these homes I have observed people as they go through the final stage of life. These people are no longer concerned with starting up companies. Neither do they climb high mountains. They sit or lie in bed and have a lot of time on their hands. And they wait. Some wait for dinner or for children to visit; others are just waiting to die. Some of them watch the leaves on the trees in the park or listen to the lapping of water from the fountain or talk to the parrot in the lobby. Others wait for the next injection to relieve their pain. The most important things for these people are probably the warm hands and friendly smiles of the nursing staff. Such is life in old age. Someday our lives will probably be like this.

Now I take a look at the faces. The lives of these people have etched themselves into their faces. Surprisingly many of them seem hard and bitter. They bicker with the staff, complain about their circumstances, their health, the absence of visitors, the food that always remains the same, about everything. This is how they had previously lived. Hardness and bitterness only intensifies in old age. Thus, the waiting becomes arduous and endless.

Fortunately, there are people who are not like this. Even when their state of health leaves a lot to be desired, they make use of every opportunity to give someone a smile. Their housemates, visitors and staff are enriched by their smiles. They live in the same house, eat the same food, feel the same pains and are happy nonetheless. Their waiting is a different kind of waiting.

We cannot significantly influence how healthy we will be in old age. However, we can very much influence what kind of charisma we will have. In younger years we can influence our thoughts, our behavior and our charisma. From time to time we may need a mirror to see our reflection, to gain wisdom and strength, to change what needs to and what can be changed. Days of rest can help to accomplish this.

And sometimes we just need a little change: Sports, social get-togethers with relatives and friends, excursions, lounging lazily on the deckchair. It is worthwhile to consciously celebrate days of rest.

Let us summarize:

1. I want to become aware of the danger of erosion: My relationships to my fellow human beings diminish and my business ethics erode if I do not cultivate them. 2. I realize the importance for regular days of rest and plan activities according to my life’s compass. 3. I know about possible interference fields and eliminate them. 4. I use days of rest as a filling station for wisdom, strength and the joy of life.

Applying the third commandment “Remember the Sabbath day, and keep it holy” in business life:

1. I plan and implement oases of relaxation in my business and private life after going through tense phases. 2. I fill theses oases of relaxation with experiences that invigorate body, soul and spirit. 3. On my days of rest I make room for encountering God in a special way. 4. I do not allow things that are seemingly more important to interfere with my day of rest.

Chapter 4

Change requires strength – and yields energy

Is it easier to build up an enterprise if one has had previous experiences or not? My opinion is that having experience makes it easier, provided that I have acquired the ability to change continually. Otherwise experience may become an almost insurmountable obstacle. Many entrepreneurs know this to be true. It is difficult to get certain co-workers to change. If we can manage this, we are opening up the refueling station and enabling company growth.

What do we learn from the fourth commandment “Honor your father and your mother”?

The fourth commandment again deals with respect and clear hierarchical relations. This is true for other things than family life as well. Many friction losses and quarrels in companies originate from a lack of mutual respect, unclear structures and work processes. God promises that the keeping of the fourth commandment will result in a long and good life. Is this not precisely what we want for our company? Success and longevity?

Many of the new start-up companies never experience the joy of success and do not survive the first three business years. That is a pity. Much pain and disappointment are the result. In most cases, the build-up of the company has cost the entrepreneur a lot of energy and lifeblood. When it is all over, many dreams and livelihoods lie in ruins. What went wrong? Bad market conditions are rarely to blame. Much more often the reason for failure is products or services that did not conform to market demand. Even more frequent causes are leadership mistakes, bad communication and deficiencies in implementing the business plan.

Most firms and organizations go through a life cycle that has five phases. Every phase has its own dynamics. One factor is that the market presents itself in various forms. And the other is that different entrepreneurial leadership attributes are required for each phase. This five-phase model is an important analysis instrument in business consultancy. It reveals critical positions and aids in the search for strategies.

5 life phases of a company

Phase 1: Build-up phase – unstructured market

This phase requires entrepreneurial pioneers who turn an idea into a profitable reality. Pioneers only need short deliberation times in order to reach decisions, and they are prepared to take risks. Obstacles are only rarely an impediment to them. They work exceptionally fast and prefer practical approaches to theoretical plans. Pioneers communicate their decisions directly and enthusiastically. They expect all participants to act promptly.

Pioneers lead effectively. Their leadership leads to swift and pragmatic actions. When problems arise, they react with lightning speed to fix the issue. The pioneering manager is always present everywhere and all participants communicate directly with each other. There is no time for animosities and unnecessary discussions. However, this type of manager also has his dark sides. Pioneers are often charismatic leaders who do not tolerate other dynamics besides their own. They wish – or rather: they demand – that their ideas be implemented. Co-workers with ideas of their own either leave the company or let their creative abilities go to waste.

Phase 2: Growth phase – unsaturated market

The second phase calls for doers. In the meantime the demand for products but also the number of employees has increased. At this point the leadership style of pioneers has reached its limits. Competences and responsibilities must be clearly assigned. Work processes must be optimized and organized so that, when they are applied repeatedly and by different employees, they lead to the same results. As profits rise, so do costs and thus risks. This calls for professional instruments of calculation and cost control. Several people now participate in the decision-making process. To this end, they need a convincing management information system. The leadership style of the doers requires conceptional, intellectual capacities and the ability to promote a self-reliant mindset in co-workers. Co-workers of all levels must be willing and capable to decide on their level and take on responsibility. Good co-workers would like to see long-term options within the company.

Phase 3: Differentiation phase – the basic demand

of the market is saturated

For this phase, creative strategists are required. They look for attractive market niches and work out effective defense strategies. The protection of intellectual property plays an important role here. However, the speed of the innovation process can also yield great competitive advantages. The leadership style in this phase is characterized by a differentiated intellectual capacity and by creativity. The refined strategies must be convincingly communicated to investors, co-workers and customers. Clear priorities are an absolute prerequisite for success. Time and again, the strategist must make decisions on the capacities still missing in the portfolio and on what can be relinquished so that energies can be focused on essentials. Making the right decisions during this phase leads to innovation and expansion. This phase can be traversed several times and, thus, Phase 4 and 5 may even be postponed; in a best-case scenario these phases even become obsolete.

Phase 4: Consolidation phase – the market niches

are also saturated

When further growth is no longer conceivable, the administrator steps in. He milks the still remaining dairy cows as long as they still produce milk. I.e., he optimizes operational procedures in order to save costs and, thus, holds the profit margins for as long as possible. Depending on the product this phase may be quite short. However, it may also stretch out over many years. The leadership style of the administrator is characterized by consistency and the focus on details.

Phase 5: Liquidation phase – companies and products

are replaced by other market participants

Regrettably, the life cycles of most organizations and firms come to an end at some point. Their entrepreneurial task may simply be complete. Or perhaps they failed to make important decisions and have, thus, fallen behind. Perhaps they became the victim of an unresolved order of succession. Now the restructurers are called in. They are supposed to convert the existing value as best as possible into liquid assets so that debts can be paid and, if possible, new projects attempted. The restructurer should not appear on the scene like the grim reaper. On the contrary, he should generate benefits for all participants in the liquidation phase.

The transition phases

Transitioning between individual phases is crucial and demands special attention. The quality of the transitional solution provides a special opportunity for the company – or it may endanger it. Therefore, some advice will now be offered on how to successfully master these transitions. Most of them address the culture in which management operates. According to the dictionary, culture means a refined way of life. Thus, we need to reflect on the leadership style and attempt to intentionally influence and shape it. Over the last decades many leadership styles have been developed and tested. Only one of them has really proven itself adequate: the situational leadership style. This style adapts itself to the respective situation. Various types of people, who need to be led, and differing life phases in which the company finds itself shape the situation.

Everything is better with a sense of humor

Most certainly there is one cultural element that plays a decisive role: humor. Humorous people cannot work in a humorless company climate. It impedes and frustrates them. Humorless people with the best abilities and the greatest professionalism will at best still only achieve moderate success. Every work step costs them a lot of energy. Even small mistakes can become their downfall. Alternatively, people with a sense of humor may even get away with making a relatively large amount of mistakes. When they do, people forgive them readily. For humorous people work moves along quite easily, and they do not expend as much energy. Unfortunately, humorlessness spreads to other members of a team. Therefore, one should be cautious. In seminars I often hear the expression that having a sense of humor depends on the personality you have. Some have a sense of humor and others simply do not. This is wrong. Of course, I do not mean to say that a humorous person needs to constantly be funny. People who fill their entire days with telling jokes are compensating for a deficit. No, the humor I am referring to is something serious. And it can be learned. I love the definition of humor as stated in the Wahrig German Dictionary: “[Translated] Humor is the ability to view the darker sides of life with a cheerful serenity and intellectual ascendency.”

This definition incorporates much wisdom and intellectual work. Firstly, humor is an ability. Abilities are talents. The Bible teaches us not to bury talents in the ground but to work with them. They need to be developed and enhanced. It is the same way with humor as it is really a mental attitude. Do I regard people and situations around me – or even myself – as adversarial? Then everything seems burdensome to me.

Serenity

However, I can learn to see the darker sides of life with cheerful serenity. Serenity is the key to a high quality of life. Serenity means freedom. Most people are not truly free. They worry about things that they cannot change. They assume responsibility for things that they are not responsible for, for things they neither can nor should carry. They are plagued by justified or unjustified feelings of guilt. They depend upon what others think of them. These issues are self-made dependencies, unhealthy attachments. Breaking free of these bonds often requires more than human strength. The central element of a relationship with God is liberating the individual person from such attachments. People who live in a close relationship with God possess a great sense of serenity. They do not worry unnecessarily. However, they do concern themselves with what has been assigned to them and with those things for which they have strength.

For a long time I thought humorous people were just too simple to understand the world and therefore they laughed. This is profoundly wrong. Humorous people possess an intellectual ascendency. I am not referring to arrogance here. It has to do with wisdom, with the ability to perceive and categorize events according to their actual context. Ultimately, it is about nothing less than seeing things from God’s perspective.

Do you understand the profundity of humor? Do you understand the liberating effect of humor? Do you understand how contagious humor is? Entrepreneurial activities should be enjoyable.

From the zero phase to the pioneering phase

Prior to the founding of a company, the company is a non-entity, an absolute nothing. Then, a thought enters somebody’s mind. A pressing problem, sometimes a spontaneous idea or an impetus from others triggers this thought. Most of these thoughts come and go. Only a few are implemented in a project or evolve into a new company. That is unfortunate. Many of them have the potential for success. True entrepreneurs have developed a sense for perceiving these thoughts as opportunities. They have the ability to see them as unprocessed diamonds and can visualize them as a finished piece of jewelry. They are willing to take risks and invest money, time and their lifeblood into their “new child”. This is how an idea grows to become a project and then a company.

During this phase many advisors and critics appear on the scene. Here it becomes necessary to take good contributions seriously but to clearly recognize distractions and bad advice, and then to pay no heed to it. When promoting his ideas a successful pioneer often has good insights into human nature. He gathers people around him who can support him in some fashion.

Excessive structures and formal organization are obstructive during this phase. Administration and status symbols are reduced to a minimum.

All strength is focused on successfully realizing the idea. This is how jobs are created, which can then take the place of unemployment and hopelessness.

From the pioneering phase to the growth phase

Where there is light, there are also shadows. Thus, a company’s greatest strengths can become their greatest weaknesses when placed into a different context. This is the fate of many pioneers. They had success. They have gained a lot of experience. They know how to do business. However, they do not realize that conditions have changed and that their methods are working less and less successfully. When this happens, they blame ignorant co-workers or unfavorable market conditions. In actual fact, their co-workers are not ignorant but overburdened. And market conditions are not more unfavorable than they have been in the past; they are just more complex. This new situation calls for a new style of leadership. For the pioneer this means letting go. And this may be a problem. I know pioneers who retain a tight grasp on their company far beyond their retirement age. The next generation is only allowed to play a minor role. They execute the will of the pioneer and are not allowed the opportunity to gather experience on their own. When they – most of the time on account of a sudden illness of the pioneer – have to assume leadership of the company, they are hopelessly overburdened. For they only knew the leadership style of their predecessor.

Wise pioneers act differently. In fact, some do exist and they are a glimmer of hope and tremendous role models. They know their strengths and weaknesses. They think about the longer-term and see things from a superior perspective. Thereby, they discover complementary abilities in others. They are willing to delegate certain responsibilities, which allows others to gain their own experiences one step at a time. And they realize that they need new organizational structures and other management tools for their company to grow. It is clear to them that others will have to implement these changes. And thus they initiate the transition to the growth phase early and utilize it as an opportunity.

For the new management it is not easy to change established structures and operational processes and adapt them to new realities. Employees have grown too accustomed to the existing order. Why do so many change processes fail? Most of the time interpersonal problems are the reason. Most people react with fear and uncertainty to change. As executives who are responsible for change, we must take this seriously. Only few employees are enthusiastic about change. This small group needs to be localized and consciously utilized in the change process. A slightly larger group will be more reserved and unemotional in the process of change. This group must be activated and fascinated. Often employees will only support change when they feel a certain pressure to do so. A positive pressure needs to be exerted on this group. Unfortunately, there is also another group that intentionally tries to boycott change. Most often such people leave management no other option but to let them go. This is part of situational leadership.

Compentencies for change

Change compentencies do not simply fall from the sky. They must be built up in four areas:

1. General preconditions

The parties must recognize the need for change. In most cases this does not happen automatically. Many people lack the eye to detect impending danger in time. They have lulled themselves into a false sense of security. Many dangers are erosion processes, i.e. creeping deteriorations of conditions or behaviors. The deterioration creeps in so slowly that most do not realize it for a long time. In this situation dramatic management becomes a necessary tool. It is not necessary to exaggerate but to make the danger visible and tangible. I also learned this through mountain climbing. In this case, as well as everywhere else, fear of danger proves to be a poor consultant. Respect, however, urges us to adapt our behavior. That is why we study weather reports and take note of possible thunderstorms and fog. All of these can be life threatening. Many climbers have lost their lives due to poor preparation and inadequate behavior. Perhaps they were struck by lightning or fell into a glacier crevasse. Did you notice what I just did? I was being dramatic. And why? To demonstrate the dramatic effect. This is how the feeling is created that springs a person into action.

Then, however, taking a calculated risk also requires some courage. Most risks – provided we can see them – are kept in check by appropriate measures. Therefore, any decision process must also include a risk analysis. Do we need new instruments to minimize risks, new knowledge and abilities, more conditions, additional financial means? Do we have a backup plan in case the original one proves impossible?

Of course, we also need creativity. Change requires imagination and openness for new things. Young children discover the world and have an unbridled interest in things that are new to them. As they grow older they have the privilege of participating in our educational system, where their passion for discovery and creativity is systematically curtailed. They are trained to think and act in norms and patterns. They learn what is good and what is improper. Anyone who diverges from this norm is punished. This shapes a person. At some point, creative people will get off this track. Voluntarily and at a time of their choosing. It requires a certain environment for creativity to unfold. This is also a task for management. Can I create an atmosphere in my company that allows for creativity? Are unusual, slightly crazy ideas or criticisms allowed in my environment from time to time? Or is everything that deviates from the norm perceived as negative?

2. Prerequisites for management

Making changes requires much more energy than routine work. It calls for a willingness to perform above average. Changes also require management methods that systematically and with minor frictional losses create a quick and large impact. The speed of change processes has increased enormously in comparison to how it used to be. This makes many people afraid. A manager, who carries the responsibility for change processes, must take these human factors into consideration. One of the most important elements in leadership is recognizing the employees’ fears. Management must understand these fears and take them seriously. We will discuss the phenomenon of fear in greater detail later on in this book.

Communication is a key instrument in dealing with people. Our present generation possesses the best and most effective communication tools in the history of humankind. We can transmit information across the entire globe within seconds. And we can also retrieve information from worldwide sources on any subject through the internet. And yet interpersonal communication has probably never been worse than it is today.

Company surveys on employee satisfaction reveal the same things time and again. Employees always complain about a lack of information. And how does management react? It launches a company journal, fills bulletin boards with current operational data or informs the staff through periodic emails sent to superiors in which they give out worthwhile information and trivialities on daily operations. And what is the result of the next satisfaction survey: “We do not have enough information.” “What is going wrong here?”

The managers have an insufficient understanding of the me-chanisms of communication. They do not distinguish between information and communication. And above all, they cannot read between the lines. They only hear what is being said and are unable to hear or understand what is not explicitly expressed. When an employee complains about a lack of information, he usually is not referring to information at all. What he is saying is: “I want to be acknowledged.” This is an enormous problem for growing companies. While the company is in the pioneer phase, the employee still feels acknowledged and needed. As the number of employees increase, this feeling disappears and gives way to a sense of only being needed as an anonymous work resource who is expendable at any time. This feeling shapes company culture in a negative way.

Good communication sees the person. The employee does not want management to talk at him but to him. Good communication is always a dialogue. There are many managers who do not understand this. They are trained in showering their audience with perfect presentations but do not know how to truly engage people in a dialogue. If we want to resolve the fears of our employees, we must talk to them. Directly. Personally. We need to know and understand their thoughts and reservations. We must show an interest and take them seriously. This is how doors are opened and fears are calmed. This is how willingness for change is formed and energies are set free.

3) Recognizing causes for resistance

We have already addressed the number one cause for resistance to change: fear. All people are afraid of something, even if they would not admit to it at first.

In personality structure analyses personalities are simplified and divided into four groups. Of course, everyone’s personality includes parts from the other groups as well, and each personality is a unique “mixture”. Nonetheless, the system helps to better understand people’s feelings and reactions, and it also helps to respond appropriately to them. We have already discussed the four personality types in the first chapter. We will now deal with the fears associated with each type.

Conscientious personalities

Conscientious people take everything quite seriously and do not want to make any mistakes. They tend to explore every last detail in order to eliminate risks. They are afraid of being personally criticized for any mistakes.

The result: They tend towards indecisiveness.

Consistent personalities

Consistent people need to feel emotionally secure in a community. For the sake of peace they give in and waive their rights. They are afraid of disturbing the peace.

The result: They block any changes.

Proactive personalities

Proactive people need change and inspiration. They move other people and begin many new projects; however, they often do not finish them because they are stimulated by new ideas. They are afraid of losing their freedom.

The result: They are elusive and difficult to lead.

Dominant personalities

Dominant people have a strong sense of duty and are task-oriented. Reaching a goal is more important for them than human feelings. They are afraid of losing control.

The result: They appear harsh and inhumane.

There are, of course, other reasons for resistance to change. Many people want to know the goals, the background information and the motives behind measures; otherwise they feel unsafe and overrun. Often employees understand what the measures are, but they do not believe that these measures are the right ones. Obviously, management was not successful at communicating the changes convincingly. And the employee may be right. Many proposed changes are unnecessary and wrong. They are superficial and do not address the root problem. Many employees have developed a heightened awareness for such pseudo-solutions. Then there is also a group of employees who understand what the measures are and also believe that they should be implemented. However, they do not implement the measures because they do not see any personal or positive gain for themselves. Or they go ahead and implement the measures but do not support them.

4) Overcoming resistance

Resistance to change is normal. If there is no resistance, there probably was no real change to begin with. Resistance is essentially an encrypted message. The causes of resistance are usually emotional. I referred to this in the previous section. If we are not aware of resistance and do not take it seriously, it always leads to impediments. Through skillful communication we must explore the causes of resistance and address the issues. Thus, most of the problems can be solved and employees become willing to support the implementation of change wholeheartedly.

From the growth phase to the differentiation phase

At some point every growth phase comes to an end. And already the next danger lies in wait for the entrepreneur. Management, still spoiled by the success achieved in the growth phase, tries – needlessly – to differentiate and diversify into too many areas: new products, new markets, new marketing methods, preferably all at the same time. The company runs the risk of overextending itself. A lot of money is spent and personal resources become unavailable. Unfortunately, disappointment is often the result. The previous success was not repeatable and the financial resources of the past diminish. Diversification must be approached with caution. When the market’s basic needs are saturated, the solution can often be found in niche strategies. Essentially we remain in the same market and offer the same product, but we adapt it for a specialized market niche.

A niche strategy requires good market knowledge, innovative capacity and quality management. It narrows and deepens the product range.

Sensible innovations must yield benefits. Ethical aspects also have to be considered at this point. Countless innovations are as much unnecessary as they are useless. They merely consume valuable resources. Clever innovations are ecologically sound, socially compatible and also yield material gains. There are different types of innovations.

1) Mock innovations

A mock innovation is a useless pseudo improvement. If we want to gain a good reputation in a specific market niche, we should stay away from these.

2) Imitations

An imitation emulates another company’s solution that is already on the market. One refers to them as “me-too solutions”. If knowledge of these solutions has not been dishonestly acquired, e.g. through industrial espionage, it may be an acceptable form of innovation for certain situations. However, it puts us in danger of becoming lethargic, as we remain a step behind the competition. However, it does force us to open our eyes and take a closer look at the supplier market.

3) Adaptation Innovations

Adaptation innovation is adapting to specific customer demands. It is the classical innovation variant within a niche. It requires good customer relations as well as industry knowledge of the niche. If we do our work well, we become a strategic partner for our client. This is how long-term business relationships are formed.

4) Improvement innovations

Improvement innovations are about improving the quality and the functions of already existing solutions. Improvement innovations are a quantum leap above adaptation innovations. This innovation variant requires that our thinking be years ahead of the customer and the market. We support him with ideas that he has not yet heard of and offer him useful insights, gathered from other sectors. This type of innovation requires our company to be highly educated, to have thorough industry expertise, true innovative capacity and network capabilities. This variant essentially makes us our customer’s partner, and our customer becomes part of our company. This makes things interesting.

5) Basic innovations

Basic innovation is about new principles of operation: completely new techniques and applications, new combinations of known and new techniques, new methods. It is the highest level of innovation. This is where true innovative trendsetters are at work. They must be able to invent something that cannot yet be seen. This type of innovation requires high professionalism and lots of resources. Let us remind ourselves that Edison needed 1500 attempts to finally get his light bulb work. Of course, this type of innovation is pure fascination. The person who succeeds here is truly fortunate.

Innovation in six steps:

1. create an innovation-friendly climate

2. acquire market and industry branch knowledge

3. observe

4. develop creative ideas

5. systematic implementation

6. place on the market with profit

Good and consistent quality honors all involved parties. First the employee, then the company and also the customer. An entire country can build up a worldwide reputation for being a quality nation. The Swiss watch and machine industries are examples of this. Quality management is mostly concerned with mindset and value attitudes. Many people lack the vision to see quality; therefore they cannot evaluate it properly. In a niche strategy, we are almost always dealing with customers who have an extremely well trained eye for quality. Thus, it is worthwhile to improve quality systematically and continuously.

Quality management is not just about our products and services. We must submit all areas of our company to regular quality controls and search out improvement possibilities. For this purpose the European Foundation for Quality Management [Europäische Qualitätsmanagement-Stiftung] has developed a model that makes it possible to evaluate and compare quality across all sectors. This leads to an interesting quality competition.

The continuous improvement process CIP is comparable with the Japanese Kaizen and describes an attitude of continuous improvement that creates a lasting impact. In the so-called total quality wheel the four steps “check”, “act”, “plan” and “do” repeatedly follow the preceding step.

The arrows symbolize the vision that lays out the direction for development. And it begs the question as to what resources and energies will be utilized. A symbolic wedge describes management methods that prevent setbacks in development.

In practice, it goes like this:

1. Develop and communicate the vision

A planned improvement must make sense and create meaning.

2. Provide for energy and also demand it

Requires money, time, willingness to change and power

3. Analysis – comprehensive overview – what has been achieved?

We have to know what we are doing and why we are doing it.

4. Define an intermediate target – what is left to do?

The target must motivate us and be attainable.

5. Implementation plan / project plan – how will it happen?

It must be clear who should do what by when.

6. Implementation – what is being done?

Now it is time to get to work.

7. Ensure sustainability

Success is monitored. What has been learned is documented and multiplied.

From the differentiation phase to the consolidation phase

• Focus on essentials

• The ability to part with baggage

• Taking care of long-term dairy cows

• Never give up

Once all market niches have been occupied, the battle for territory begins here as well. The pressure to innovate increases; innovation becomes more difficult and costly, profit margins diminish. Now is the time to consolidate. We must become leaner but still complement our portfolio in a sensible and sustainable way. What can and what to do we want to relinquish? On what do we want to focus our energies in the future? Managers, who have been spoiled by success, often have a hard time limiting themselves and letting go of attachments, which they have grown fond of. Thus, this phase often requires replacing managers or bringing in external consultants. The changes that occur in this transitional phase are particularly important. If the right decisions are made and the right measures taken, it becomes possible to extend the life of a company or even to revitalize it.

From the consolidation phase to the liquidation phase

• Soberness and humaneness

• There is a time for everything.

• A good finalization can also be a desirable goal.

There is a time for everything. There is also a time for firms and organizations when it becomes appropriate to say goodbye. Liquidating a company, provided the liquidation is conducted well and orderly, may even be a desirable goal. For project management the end of a project is always a natural part of the task catalogue. A company may also be like a project, which for a limited time has certain tasks it needs to fulfill. Both soberness and humaneness are part of a clean company liquidation.

The conscious decision to enter into a liquidation phase and provide the necessary management capacities to do so is part of a liquidation that is done soberly. Humaneness has to do with the manner in which this phase is realized. There are probably employees who have contributed to the success of the company for many years. These achievements need to be taken into account and considered. During this phase employees need to be treated especially compassionately. They want to be valued and taken seriously. Letters or electronic communication cannot replace personal conversations. It is, ultimately, a matter of respect. We must pay our respect to employees both in the higher and lower positions of the company.

Unfortunately, the practical reality is often quite different. Management decides to liquidate the company at the round table and then they inform the staff later on. End of story. Then all the employee is left with is the option to fight for a tolerable redundancy package. This is an undignified way to liquidate a company and testifies to a lousy character of management.

Let us summarize:

1. I create clear structures in my company that are governed by mutual respect, and I exemplify these values. 2. I know the opportunities and risks associated with the various life phases of my company. 3. I see the necessity for constant change and am able to successful realize it. 4. I know the power and danger of communication and can use it effectively.

Applying the fourth commandment “Honor your father and mother” in business life:

1. I treat employees and business partners with dignity and respect. 2. I ensure that my employees do the same. 3. I communicate clearly and respectfully in all situations.

Chapter 5

Fighting is part of the game – but killing is not

What would a soccer game look like without a competitive spirit? It would be a tremendous bore. Only the drive to win makes the game exciting. Too many employees – and at times also entrepreneurs – want to win but refuse to fight. It is a noble and extensive entrepreneurial task to build up a dynamic team spirit that wants to win. We are fighting for customers, market shares, prominence, revenue, growth – and sometimes for survival. We cannot do this if we are half asleep. There are employees who are bored to death or they have left the company before they got too bored. There is a name for this phenomenon: boreout. The symptoms are similar to burnout, which is the result of being overburdened. Boreout, however, occurs when an employee is not challenged enough. Being constantly under challenged leads to frustration, resignation and thus to quitting – if the employee is in a position that allows him to do so.

People do not want to be overburdened but challenged. It gives them dignity and enables personal development. A competitive spirit within a company can be something playful – like a soccer game. One must want to win but also be able to bear a loss. Sometimes people lack the will to win because they associate it with making a strenuous effort, and some lack the ability to lose because they perceive it as an insult. A good entrepreneur is like a motivational trainer and coach who regularly challenges his team and supports it. The team is supposed to fight for customers and orders. However, employees should also be enabled to do so. And they should be able to cope with losses and learn from them.

However, the fighting spirit can also go too far. In a soccer game, the referee pulls out yellow and red cards. In business this intervening authority is often missing.

The fifth commandment “You shall not kill” establishes rules and limitations for the game with authority and power. In the business world people rarely fight with fists or knives. But: Character assassination is also murder. Many murders take place in the business world. Each and every day. Competitors are taken down systematically, people are named and shamed publically, wearisome employees are harassed into depressions. This much is clear: Entrepreneurial activity also means fighting. A person can fight for or against something. Entrepreneurs should fight for good causes and against bad ones. Many just fight for themselves and against others. This formula is too simple and unethical. There is something like an entrepreneurial conscience, provided a person has not silenced it. Companies that comply with the Ten Commandments do not have to compete unfairly. They feel that God is carrying them along. Blessing means: I pay attention to you. I am there for you. We harmonize with each other. I accompany you with good wishes. I support you. We are traveling together. Blessing liberates and strengthens. God wants to bless people if they allow God to do so. People can also bless others. A tangible result ensues when people decide to bless others: An atmosphere emerges in which there is a common sense of well-being.

I am glad to see entrepreneurs who have a sense of serenity as they fight out their battles in their everyday lives. They know what they are fighting for and can feel God’s guidance and support. Their serenity includes an appropriate sense for timing. Modern managers are often impatient and cause unnecessary stress without achieving the desired results.

I also learned this through mountain climbing. There are good and bad times for a mountain tour. It pays to wait in the safety of the mountain cabin until the right time has come. Once it almost cost me my life as our group became impatient and began the tour despite a severe risk of avalanches; in fact, some of us were swept away in an avalanche. Many projects are also started in a hectic rush or at the wrong time. Apples must be picked when they are ripe. Everything else is no good. This often means waiting since we cannot influence the process of ripening. Here we also need wisdom. What can I really influence and when am I simply a powerless spectator? When we handle time wisely, we enter into the calmness of observation, reflection and gathering of strength.

There are certain things in business for which there should never be any time. This includes badmouthing the competition. Competitors are always to be treated respectfully; otherwise our gossip will sooner or later catch up with us. You can kill enemies or respect them. Death leads to more death; life leads to more life, and respect to more respect.

Harassment

Today, many employees suffer from harassment at work. Harassment is murder in installments. It is systematic shaming of an employee with the aim to push the employee out of the unity of the organization. This kind of emotional terrorism has fatal consequences. Unfortunately, harassment is common practice; for the most part it happens in larger corporations where the dismissal of wearisome employees is difficult. Scientific studies have identified 45 types of behavior that perpetrators use. These can be summarized into five main groups:

1. Attacking the ability to express oneself

2. Attacking social relationships

3. Attacking the social status

4. Attacking the quality of the work and life environment

5. Attacking a person’s physical health

Openness prevents workplace harassment

As responsible entrepreneurs, we must ask ourselves the question: What can we do to prevent workplace harassment? What can we do to intervene when it happens? Fortunately, science provides us with some valuable information on this point. Studies have shown that harassment cannot develop in a certain type of climate. A climate of openness. Harassment only takes place in the shadows. For the most part victims are attacked verbally, and, which is much worse, they are also isolated and ostracized. These cruel schemes become visible and recognizable in broad daylight.

How does one create an atmosphere of openness, transparency? Transparency grows in a healthy climate of discussion. We call it an atmosphere of constructive debate. It is an environment that leaves no room for deviousness and concealment. In this climate everyone has the courage and freedom to express his thoughts, even when these thoughts are critical. And everyone is willing to listen to another person’s thoughts and reflect on them. A climate like this does not simply evolve by itself.

Causes of harassment

It is the duty of management to provide a climate that allows for and is conducive to constructive debates. To make this possible, we must deal with the causes of harassment. For the most part the causes lie in the following areas:

1. Long-lasting and increasing stress

For a short time a person is able to bear a great amount of stress. Stress only becomes dangerous when it lasts for a prolonged period of time. The duration is different for each person. As entrepreneurs our vision needs to be focused on recognizing symptoms of stress early and developing a sense for what is appropriate.

2. Uncertainty

In business, changes are necessary. However, if changes are not properly planned and implemented, they produce uncertainty among the involved parties. Changes that are implemented without change management are dangerous. Furthermore, change that is managed well, also takes psychological aspects into consideration.

3. No time for social contacts

Electronic work systems, home office and flexible working hours are extremely popular these days in our individualistic society. Yet, there are also negative aspects to these. Interpersonal contacts are systematically minimized. It is worthwhile to explicitly support social contacts within a company.

4. Increasing egoism

More wealth leads to greater independence. Of course we enjoy this, but there are also negative aspects. The sense of responsibility for others diminishes. People isolate themselves and are increasingly concerned with only themselves. This negative spiral can be halted and also reversed, but someone has to do it.

5. Declining resilience

Fatigue usually accompanies declining resilience. Finding out the causes of fatigue is important. Is the amount of work the problem or is it dwelling on the many unfinished tasks? Managing one’s time well can be a big help. Or is it a lack of recognition? A constructive word at the right moment can release an enormous amount of energy.

6. Oversensitivity

Many people confuse sensitivity with squeamishness. Sensitivity is a valuable virtue. To perceive one’s own emotions and those of others and to react appropriately is a good thing, and it is important for company success. However, squeamishness quickly leads to self-pity and oversensitivity. This ultimately harms everyone. Therefore, squeamishness must be addressed with sensitivity.

7. Degenerating values

Some people have a sensitive conscience. They are sensitive to behavior that deviates from their values. Others seem to have no conscience – and thus no values. Therefore, there are no value deviations. And everything seems to be all right. Yet, it is not. People in an organization need values – shared values – which they can agree upon. Who provides the correct values in an organization and ensures that they are kept?

Let us summarize:

1. I maintain respectful contacts with competitors and ask my staff to do the same. We do not harm anyone. 2. I develop a sense for the proper handling of time; this leads to calmness and serenity. 3. I am aware of the danger of workplace harassment and develop a preventative, transparent atmosphere of conversation. 4. I am committed to fight for good and against evil.

Applying the fifth commandment “You shall not kill” in business life:

1. I refrain from any actions that might cause another person harm. 2. I waive maximum profit if either people or the environment is harmed in the process. 3. I invest myself in life and the fundamentals of life. 4. I venerate and respect all of creation and treat it responsibly. 5. In my actions I am accountable to God, the creator of all life, to myself and to my fellow human beings.

Chapter 6

Leading people is truly an art form – and it can be learned

Dealing with people is the most important thing in company management. People produce, sell and buy our products. These people are not groups but individuals. We do not sign employment contracts with a group of experts. The contracts are always negotiated with individuals. We do not sell products to target groups. The buyer always thinks and feels as an individual. It is worthwhile for the entrepreneur to understand how people function, though this is much more difficult than dealing with machines and systems, A person is more complex, unpredictable, elusive and never fully mature. Yet, people are fascinating and full of untapped potential. The entrepreneur has the opportunity to recognize and utilize this potential.

But there are not only positive sides to human nature. There are also negative aspects. If we do not factor this into our considerations, we will continually be disappointed in people. Great leadership deals with people’s strengths as well as with their weaknesses.

It is probably not a coincidence that the sixth commandment “You shall not commit adultery” incorporates many human weaknesses. What exactly does this have to do with company management? Absolutely nothing, if our company is made up of only machines. Yet, it has a lot to do with it if our company is a place where people come together. This biblical command speaks to human strengths and weaknesses. It addresses fidelity and licentiousness. It speaks to long-term relationships and short adventurous that leave a bitter aftertaste. Fidelity means giving up other possibilities. If one goes on business trips frequently, one encounters many problematic opportunities. It is dangerous if these opportunities take a person by surprise. It is better to be aware of them and prepare oneself accordingly.

Confidence yes, arrogance no

Opportunity makes the thief, as the saying goes. Opportunity tempts a person to all kinds of infidelities. Licentiousness has roots. Initially, these roots remain small and inconspicuous. Yet, they grow and take the form of selfish desires. If these are not recognized in time as weeds and uprooted, they grow rampant and become large scrubs. They develop a dynamic of their own and soon they cannot be controlled anymore.

Why are entrepreneurial personalities especially endangered by licentiousness? Entrepreneurs have many freedoms. Freedom is their natural element. They can and they do what they want. They make decisions on their own and bear the responsibility for their actions. At least in their own minds they are convinced of it. Being responsible and carrying responsibility is not the same thing. Satisfying one’s own desires is often justified by invoking the burden of responsibility. However, great silence ensues when someone has to bear the responsibility for mistakes that have been made. Successful entrepreneurs are in danger of overestimating their own strength: Modesty grows to self-confidence, which then inflates itself and turns into presumption, pride and arrogance.

Conversations between faithful married people

This is the reason why every entrepreneur needs an instrument for reflection and correction. The voice with the greatest effect is often the voice of the spouse. I know this quite well because of my wife. Often she sees a matter in a much more sober and practical way then I do. And most of the time I listen to her, though, of course, I would never admit this to her. It takes great effort to voluntarily and consciously subject oneself to another person’s evaluation. Yet, it is worth it and also necessary.

It does not always have to be the wife. Some of my clients are company proprietors. They do not want me to provide actual business consultancy for them. They want to tell me their thoughts and expect to hear my open and honest opinion. In a sense I act as their coach. They also accept criticism from me, and even pay me a fee for providing it. Perhaps this is precisely the reason why they are successful. They have understood the value of constructive criticism. And they are aware of the danger of overestimating or misjudging themselves.

The higher a manager climbs up the ladder of success, the thinner the air and the lonelier he gets. Soon everyone around him only treats him politely and courteously, confirming him in everything he does and no one dares to contradict him in any way. Initially this may be flattering, but in this environment he will soon lose contact with reality and not even realize it. His thoughts will begin to grow rampant if they are not trimmed. Now everything becomes possible. Small thoughts grow to become an impenetrable thicket.

Some marriages of entrepreneurs have fallen apart on account of this thought jungle. What makes it worse is that building up small and medium-sized companies requires both marriage partners to play a central role. Thus, nurturing the marriage relationship is especially valuable. Fidelity is a prerequisite for this.

However, fidelity also plays an important role in business life. First orders or one-time orders seldom result in great profit. Only repetitive orders are truly profitable. The same is true for supplier and employee relationships. Frequently changing suppliers because of small price differences is not worth the effort. And loyal employees can greatly enhance the value of a company. Yet, there are some issues that need to be considered.

A good marriage is a partnership. It is important to choose the right partner. However, nurturing the relationship is just as important. In this area as well, I have learned a lot through mountain climbing. Back in those days, I was not ready for marriage. In the environment I had grown up I had not learned to properly deal with relationship problems. I used to suppress conflicts or flee from them. And then I started these mountain tours with my friend. His beautiful girlfriend, who later became his wife, frequently accompanied us on these trips. It was beneficial for me to overhear their cheerful and intense conversations, until the ominous day when we hiked up to a certain mountain cabin. On the way they began to fight, shouting loudly and angrily at each other. The harmonious atmosphere was instantly destroyed. The entire weekend seemed ruined. Or so I thought. However, it turned out quite differently. After about a half an hour the fight was over and I observed in silence how the two of them embraced, kissed and spoke certain words to each other that I had been unfamiliar until then: “I apologize, honey. I am sorry.” And all the aggravation disappeared. And we went on our way cheerfully. This is how I learned to view conflicts as resolvable. Years later, I was ready for marriage as well. And I married a wonderful woman. Of course there were – and after 30 years of marriage there sometimes still are – situations that are conflict laden. Yet, we learned to deal with these situations. Such a relationship is more valuable than all the gold in the world. When we overcome conflicts together, it builds and solidifies faithfulness.

The people who are close to us and the way in which we nurture our relationships is therefore important. This is not only true for marriages. Exceptional firms view relationships as important and nurture them in all directions. This includes relationships with suppliers and clients as well as relationships with civil clerks at the revenue office and stockholders. Nurturing relationships requires investing time and energy.

Our co-workers

Let us first take a look at our employees. Not every long-standing employee is also a good employee. In fact, many are spoiled and live under the illusion of being irredeemable. Perhaps they have cheated their way through and gotten by with minimal effort. Over these years their superiors were not able to turn them into valuable employees and neither did they dismiss them. Thus, a customary law has established itself. Step by step the superior lowered his demands on the employee, and the employee became accustomed to minimal expectations. This was convenient. It is up to you as the manager to correct this leadership mistake even if it presents a great challenge. Otherwise the spirit of minimalism will spread throughout the entire company. And this is dangerous. For everyone.

A simple leadership matrix can be a great help for dealing with difficult employees. The same instrument can also be used to discover and shape diamonds in the rough.

Think about your employees and write each of their names into one of the nine fields of the matrix. This will be challenging, but it will help you make strategically important decisions about your employees, decisions that will have enormous consequences for everyone.

Field 1: Minimal competence and minimal effort

These are the minimalists. Give these employees a chance to orient themselves anew in the job market, and let them contribute to their personal development. They have to learn that minimal competence is closely linked to minimal effort.

Field 2: Medium competence and minimal effort

These are also minimalists. These employees should receive an ultimatum and another chance in the company to prove that they are willing to work on themselves. Otherwise the only other option is to dismiss them.

Field 3: High competence and minimal effort

These employees are dangerous. On account of their high level of expertise, they feel entitled to take liberties without bearing the consequences. Thus, they convey an impression of being indispensable. However, they are not. Only after they leave the company, one sees that the gap is not quite as large as previously assumed. Moreover, suddenly other previously unnoticed employees with the same abilities emerge. Before dismissing these highly competent employees, it is worthwhile to demand a greater effort from them and to ask them to act in the interest of the company. Most often this is possible. If they comply, they become valuable diamonds in the company.

Field 4: Fluctuating effort and high competence

These people have untapped potential. For some reason these people sometimes lack motivation and the will to apply themselves. If these knots can be loosened, they become extraordinarily valuable. Management by exceptions, i.e. leading by regulating exceptions, may be the appropriate leadership style in this situation. The employees need certain freedoms in order to learn responsible behavior, but they also need support when confronted with exceptional cases. With the right training they automatically become valuable and independent employees.

Field 5: Fluctuating effort and medium competence

These are the formable ones. They have already proven capable of greater effort and greater expertise. They need consistent leadership in the form of clear instructions and expectations. These also may become company diamonds.

Field 6: Fluctuating effort and minimal competence

These are the unstable ones. They must learn that stability and dependability are also a part of growing up. And both can be learned. If they agree to this maturing process, they develop reasonably well. If they do not comply, the only other option is to let them go since they need to feel the pressure of the job market again.

Field 7: Minimal competence and high effort

In their own way, these employees are diamonds as well. Although they may be intellectually and manually disadvantaged, they put out an enormous effort while acting wholeheartedly in the interest of the company. We must accept their limitations. People like this need a workplace that does not overburden them and gives them a daily structure. For a company that operates on ethical principles, it is a matter of honor to employ a limited number of these people. When other employees notice this caring behavior, they will be grateful for the opportunity to work in a socially active company.

Field 8: Medium competence and high effort

These are also diamonds. They have a certain level of expertise and invest themselves fully. They must be utilized in the right place and selectively promoted in their expertise.

Field 9: High competence and high effort

These employees are loadbearing pillars. Important tasks can be completely delegated to them. They are able to solve problems independently and competently. If I cannot offer these people an opportunity for development, I must let them go and be glad when they are able to pursue their careers in another firm.

You have probably noticed that different employees need different leadership styles in order to develop. Therefore, the entrepreneur and the entire leadership team must take care to systematically develop leadership capabilities. It is almost impossible to invest too much in learning to deal with people constructively.

Yet, already during the hiring phase mistakes are made. Especially proprietors of newly established companies have only minimal or no experience in choosing personnel. Thus, they initially hire friends, relatives and acquaintances without seriously examining their aptitude. This has disastrous consequences. What do you do if these new employees cannot or refuse to perform as required? In such cases it becomes difficult to dismiss employees without endangering friendships and relationships.

Professionally choosing personnel requires the following:

1) A requirement profile

(competence, social competence, methodical competence)

2) A functional specification document or job specification

(main goal, main tasks, responsibility, competences, subordination to)

3) Job advertisement

(adverts, internet, personal talk)

4) The selection process

(application documents, interview, references, report cards, personality profile)

5) The employment contract

6) The introduction plan

Suppliers

You should also invest energy into building up long-term supplier relationships. Good supplier relationships can be a strategic potential for success. Often suppliers are chosen only on the basis of price. The cheapest supplier gets the commission. This only works in special industry branches. In most cases such behavior leads to quality losses and customer disadvantages in the long term.

Supplier management includes three steps:

1) Preselection of possible suppliers

Which criteria should the supplier fulfill?

2) Evaluation of suppliers

To what extent does he fulfill my criteria of demands?

(e.g. price, quality, logistics, delivery reliability, innovation ability, flexibility, communication, transparency, willingness and ability to network)

3) Control and guidance of supplier relationship

How do I ensure that a long-term win-win situation results from the relationship?

Customers

Of course long-term customer relationships are especially important. I am glad about each new customer. Through new customers I gain insight into new industry branches and markets and meet fascinating people in the process. It brings me even more joy if I can work with customers whom I have counseled for decades and who continue to recommend me to others. Throughout these years we have formed a connection on account of many common experiences. We have solved problems together, brooded over ideas, developed concepts, built up firms and ate roast chicken. These common experiences solidify a partnership and the desire for continued cooperation.

What is the precondition for building up a partnership like this? It is not vast knowledge and great abilities. Neither does it involve perfect products or services. Quite simply, it is humaneness, the respectful and humorous interaction with one another.

Exceeding customer expectations

There is one exercise I do on customer satisfaction that always causes distress among students and seminar participants. In this exercise we deal with the three levels of customer satisfaction. The lowest level is the level on which customer expectations have not been fulfilled. This leads to frustration among customers who then talk about us negatively. On the second level the articulated expectations of the customer have been fulfilled as requested. For most seminar participants the task is thereby complete. Far from it. Satisfied customer expectations may, in the short term, lead to satisfied customers, but the customers will not be enthusiastic about us and will hardly recommend us to others. We only have enthusiastic customers who actively recommend us to others, when we exceeded their expectations. This requires much imagination and energy. This is where real partnership and multiplication begins. A recommending customer is much more valuable than the best and prettiest advert.

These are the three decisive questions:

1) How do we avoid unsatisfied customer expectations?

2) What do we do to fulfill customer expectations?

3) What do we do to exceed customer expectations?

In addition to these there is also another fourth question, which is really the most important one: How do we ensure that all of our employees behave appropriately?

On my trips to Asia I like to stopover in Bangkok. There I can recuperate from the strain of traveling and prepare myself for the next leg of the journey. The hotel Marriott is the reason why I choose this location. What happened there? Once after I had checked in, a nice lady led me to my room and asked me a question: “Since you are leaving Bangkok tomorrow, at what time will your flight be leaving?” After I told her that my connecting flight leaves at 11 PM the following night, she offered me a late checkout. “Then you can use your room and the wellness area of the hotel for the entire day until 8 PM tomorrow evening. You will be well rested when you start on your travels again.” This employee did more than the minimum. She not only fulfilled my expectations, she exceeded them. Since then I have frequently stayed at that hotel. And time and again I have noticed the following: Not only this particular woman but all employees think and act the same way. This is not a coincidence. It is house culture. The culture is shaped by management and tirelessly communicated to all employees. And the customer benefits. He feels so comfortable there that he has no qualms about recommending the hotel to friends.

Let us summarize:

1. I arrange for an instrument or person to mirror me so that I can resist selfish thoughts as well as sexual and material licentiousness. 2. I select partners in all areas of business that strengthen me in my company ethics and culture. 3. I invest in these partnership relationships in order to continually deepen them and find orientation for the long-term. 4. I invest myself wholeheartedly to not only fulfill the expectations of customers and partners but to exceed them.

Applying the sixth commandment “You shall not commit adultery” in business life:

1. I am faithful to my spouse. 2. My marriage is sacrosanct and cannot be violated by others. 3. My partnerships are based on deference, respect and loyalty.

Chapter 7

People must have rights – and know what they are

Bureaucracy, efficiency, corruption and illicit competition. I encounter these time and again when building up a new company, especially in developing and emerging nations. Even in highly developed nations it is not much different. Only the forms of manifestation differ. The underlying intentions are the same. They seventh commandment “You shall not steal” addresses this. The commandment is about property rights, about infringing on these rights and about the consequences of doing so. For many entrepreneurs these issues represent insurmountable obstacles.

A successful Romanian entrepreneur addressed Congress as follows: “Ten years ago I believed that it is impossible to conduct business honestly and without corruption. Today I believe that it is impossible for me to conduct my business dishonestly with corrupt methods.” Something happened to this entrepreneur. He could not change his surroundings, but he could change himself. Instead of constantly handing out bribes he had to deal with the law and its possibilities. In the end it paid off. Today he knows more about certain laws then the employees at the government tax office, and thus he can resist them effectively. In some countries that have been notorious for their extreme corruption, there is now an increasing number of officials in lower and middle functions who conduct their duties honestly and professionally. We are not powerless and helpless when it comes to bureaucracy, inefficiency, corruption and illicit competition. We can do something about it. The seventh commandment exhorts us to approach these tasks with a clear understanding, giving them a high priority. Perhaps these concepts must still take form in our minds.

Honesty

It happened in the 1950s. I was a little boy at the time. And it was my lucky day. I found a wallet full of money on the street. Now what? Every child in our village knew what had to happen next. And so it did. I took the wallet to the lost property office. There the find was registered and examined in detail. I also had to leave my name and address behind. And I knew that, if the wallet was not claimed within a year, I would be notified and allowed to keep it. If it was claimed, the person who had lost it would leave an appropriate finder’s fee for me. And this is exactly what happened. After some time I received a letter from the lost property office, asking me to pick up my finder’s fee. I did, feeling proud and pleased with myself.

The same principal is still valid today. There is something like an appropriate finder’s fee or an appropriate salary. There are also inappropriate salaries and finder’s fees. When we were growing up, parents, teachers and pastors taught us to respect the property of other people, to be honest and moderate. Why are so many people excessive? And why is it not common practice to respect another person’s property? Because God’s commandment is no longer the accepted norm. Because God is being more and more crowded out of everyday life. This has negative consequences. Humankind tries to rectify these erroneous developments by instituting ethics chairs at universities. The results are sobering: Ethics must not only be understood but lived. And this cannot be accomplished with an academic formula but with a few simple behavioral norms. These norms were given in the Ten Commandments. Scientists abstract and define. Pragmatists decipher and implement. Both are necessary.

Let us be practical here. We must refrain from stealing, and we must protect ourselves from people who are trying to steal from us. As entrepreneurs we must keep a close eye on how our employees and we deal with our own as well as with other people’s property. For many people deviating from this norm is something completely normal.

Theft traps

Here are some theft traps we need to avoid:

Stealing ideas

For every created idea there are copyrights. In part these rights become effective when the idea is entered into a copyright register. Yet, they may also come into effect through a commonly valid sense of justice. Many cases of indiscriminate copying are, in fact, theft. Copying may be easy, but it limits one’s own creativity.

Stealing rights

Every employee has the right to an appropriate salary. In turn, the employer has the right to an appropriate work performance. The employer ensures that the amount agreed upon is paid on time. And the employee ensures that he is in a good physical condition to accomplish the work he had agreed to.

Stealing property

Theft of objects is hardly an issue in business life, but using unlicensed computer programs is. Taking advantage of thoughtless business partners is theft as well.

Stealing time

Time is a limited resource. One should not steal time but give it. In business there are many ways to steal time. Unnecessary babbling, not listening, negligent work, wearisome order processes, lack of organization, lack of order, these are only a few examples. They all lead to inefficiency and loss. When we start to rectify these deficiencies, we give time. To our customers, employees and to ourselves.

Other forms of theft include theft of partners, knowledge, resources, livelihoods, community, dignity and many more. Let us develop our imaginations and abilities to become, not thieves, but creators of new values in all the above-mentioned areas.

Creating anew is more blessed than stealing

Almost anyone can copy and steal. Creating anew is much more difficult. And this is precisely the task of real entrepreneurs. They create new ideas, new products, new networks, new companies, new markets, new hope. The Swiss watch industry is a shining example of this. Over centuries this industry branch has established a worldwide name for itself, and Switzerland has become the number one nation of watches. This good reputation has also been carried over to other Swiss services and products. Among these are banking services as well as the machine industry and tourism. Swiss quality, reliability, preciseness and functionality were highly esteemed everywhere. Until that fateful day came, the day the quartz clock was invented. Although this invention originated in Switzerland, those responsible did not believe that the idea could be marketed successfully – especially if production was to take place in the high-wage country of Switzerland. Thus, Japanese entrepreneurs quickly took up the opportunity to put the invention into practice and market it worldwide. With tremendous success. As a result the Swiss watch industry suffered greatly. Companies had to cut tens of thousands of positions and several Swiss watch companies had to close down. At an important transition phase, a development was wrongly assessed and neglected. This crisis soon also affected associated industry and supplier branches.

Solving problems

Fortunately – as so often in crisis situations – there were some entrepreneurs who intervened. They did not work in the watch industry, but they grasped the scope of the crisis and took on their entrepreneurial responsibility. A similar situation can be found in the book of Nehemiah in the Bible. Nehemiah lived in exile in Susa, which at that time was Persia, and he had worked his way up to the position of a high government official. One day his brothers and former friends from Jerusalem visited him. After many years in exile they had been allowed to return to their hometown. After they had come back they told Nehemiah about the deplorable situation in Jerusalem. Not one stone was left on another. Everything was destroyed. And what was Nehemiah’s reaction? At first he was shaken and speechless. He sat down. He reflected on it and grew sad. For days he cried and prayed to God. And so he received the command from God to leave his place of residence, to travel to Jerusalem and rebuild the city there. And this he did. He encountered many difficulties on the way. God did not spare him these. However, Nehemiah received wisdom, strength and help to overcome all obstacles, until he had reached his goal.

In the same way the above-mentioned Swiss watchmakers were devastated by the state of the watch industry. They realized the impending loss to their native country Switzerland. The watch industry was a commodity that had been arduously acquired over several generations. At the very last second they had to prevent this loss by any necessary means. And thus, they became entrepreneurially active. I do not know if they, like Nehemiah, begged God for help. In any case, their actions were courageous, creative and obviously blessed. They launched the project for the first Swiss quartz watch, which was supposed to regain the lost market so that Switzerland may once again become the leader of the worldwide watch industry. The Swatch, the Swiss watch, was the result. To this day their success has been tremendous and almost 400 million watches have been sold so far. There are Swatch stores in every country in the world. The Swatch effect has also created a maelstrom of demand for all other Swiss watch brands, including all luxury brands. The energy of the crisis was transformed into opportunities and solutions to problems.

The process of problem solving

Solving problems and creating new realities are part of the entrepreneur’s everyday life. Thus, he must acquire a work method that supports him promptly and effectively. The following model is quite simple but suitable for most problem solving processes.

1) Describing the situation/the problems

We put the problem into words and specify it as best as possible, giving information about its causes and effects.

2) Possible goals

What has to be fulfilled in order for us to view the problem as solved?

3) Develop options

We will not content ourselves with one solution. The creative process considers many possibilities, in which at least one crazy idea should be included. In the next step options are tested and evaluated.

4) Risks

We analyze the possible risks associated with the solution variants.

5) Marginal conditions

Which marginal conditions have to be considered? In this phase we leave the sphere of the actual problem and also consider nearer and wider contexts such as politics, environment and media.

6) Implementation

After selecting the best possibility, we arrange its implementation. In precarious situations it is worthwhile to have an available contingency plan at hand, in case the original plan does not work out.

Solving problems has a tremendous impact: Creating a solution brings honor to the participating parties and gives employees a sense of satisfaction, in stark contrast copying and stealing of solutions.

Problem-solving ability

A person who can solve problems is well equipped to be a successful, socially active entrepreneur. Solving problems means creating new realities and values. Successful problem solving rests upon two pillars: mindset and method. Both can and must be learned. If I see problems as strenuous and unnecessary, I will avoid them as much as possible. Yet, the problems remain unsolved. At some point they will catch up to me again, and most often this happens at an inopportune time. I have to learn to view problems as learning objects in my entrepreneurial training, thereby seeing them as opportunities. For people who have the ability to solve problems it is almost impossible to become unemployed. The world is full of unsolved problems. I have professional problem-solving abilities when I do not have to think about what has to happen next. I simply go through the steps of my training. If applied repeatedly, the above-mentioned model can lead to professionalism. Adapting to specific situations becomes easy.

The process of learning is easiest when we start with our own problems. We then feel the necessary urgency for action, and we are fascinated by a possible solution. Entrepreneurs, who think and act socially, offer their problem-solving abilities to others as well. Their goal is not to make money but to share with others. This is the opposite of stealing. There is much satisfaction and blessing in sharing with others, and there are many forms of sharing.

In my group of entrepreneurs we have a rule that allows all partners to invest 30% of their time in social projects at a greatly reduced rate. Our main goal is to support entrepreneurs in evolving and emerging nations in the build-up and expansion of their businesses. This leads to real win-win situations. We enable the entrepreneurs to develop their businesses quickly and professionally. Consequentially, they create jobs and reduce poverty in their countries. Each time our trainers and consultants return home from their tour, they are completely worn out but deeply satisfied – and full of new ideas.

Of course not all entrepreneurs have the opportunity to share. However, there are numerous other opportunities. The simplest – and yet most effective way to share – is to give donations. I am not referring to almsgiving. I am talking about companies that take a substantial portion of their profits and make it available for social causes. Almsgivers, who want to calm their conscience by donating a few breadcrumbs, most often develop into pompous do-gooders. Socially active entrepreneurs, who are willing to make real sacrifice for others, become increasingly humble over time. Perhaps they sense that their behavior is in compliance with the divine order.

Let us summarize:

1. In my company I do not tolerate theft, and I do not steal myself. 2. I am aware of theft traps and establish effective measures to protect myself. 3. I am committed to creating new values. 4. My staff and I become problem solvers and creative, dignified personalities, who are willing to make sacrifices.

Applying the seventh commandment “You shall not steal” in business life:

1. I respect ownership and property rights. 2. I do not tolerate rights violations in my company. 3. I ensure that injustices are resolved and compensated for.

Chapter 8

Communication is difficult – and opens up doors

Our generation today, more than any other generation in history, has the most advanced technological means of communication at their disposal. And yet: Interpersonal communication has not improved. On the contrary. It has become quite easy to communicate superficially and avoid difficult people and topics. Good communication is based on truth. Sometimes the truth is unbearable. Escaping into superficialities and half-truths is easier and at times even more successful in the short term. The eighth commandment leaves no room for compromise; it states: “You shall not bear false testimony.” This lays the foundation for all good communication and, thereby, for any good relationship. Any deviation from this has negative consequences.

Trust – the foundation of communication

At the most 10% of my commissions are based on signed contracts. Most of the time a simple “Yes” over the phone or a handshake is a sufficiently binding contract. My company has used this approach for twenty years. I have never yet had a judicial dispute. Why? A fundamental climate of trust is at the heart of my business relationships. This is not necessarily a given. Many entrepreneurs have the exact opposite experience.

As I was giving a lecture series at the Griffiths School of Management in Oradea, I was confronted with the reality of life in Romania. I learned that students can be quite annoying, e.g. Bogdan, a Romanian business student. In a seminar on negotiation techniques I was doing my best to show the benefits of win-win situations. In negotiations there can be no losers, only winners. It was to no avail. In a friendly but determined manner Bogdan brought to my attention that such behavior would never work in Romania. It was neither part of the Romanian culture nor was it mathematically logical. We then went on to discuss the effects of the culture of distrust that exists in Romania. Envy and distrust are, among other things, reasons for the economic misery in Romania. This has had a great impact. All students realized that changing and growing trust would make a lot of sense. But how should this happen? Someone would have to start this change. “Who else if not young business students?” I asked them. Everyone was enthusiastic. Everyone except Bogdan. Such a change would take generations, he exclaimed. “Good, then your generation will be a Moses generation,” I interjected. “You yourselves will not reach the promised land, but you will make preparations for the next generation. People such as Caleb will carry out the task of actually implementing the desired change.” All students at the Christian university were familiar with the biblical story of Moses and Caleb. They had learned that, when the time is right, nothing is impossible with the help of God. Caleb was a man who did not focus on obstacles but on the promises of God. Even a difficult task was solvable for him. Now even Bogdan agreed. But the girl beside him did not. During the discussion, she had become increasingly uneasy. And now she could no longer contain herself and blurted out: “No, we do not want to be like Moses. We want to be Caleb. We have understood the new principal of trust and want to practice it. Now.” Students can be quite encouraging. Her statement does not diminish the works of Moses in the least. In their entirety the works of Moses were by far greater than the works of Caleb. Yet, this was not about evaluating works. It was about letting yourself be caught up in the promise-oriented mindset of Caleb.

Establishing trust requires time and serious work. Destroying trust happens in an instant. It only takes one lie. And then it is already too late. Many business people have a somewhat casual and creative way of handling truth. Depending on the situation, they may hold some information back or add to it using their imagination. They would never regard the result as a lie. But it is. God is right when he warns us in the Ten Commandments not to lie. Lying has consequences. Some may achieve short-term success by lying. However, it destroys relationships and eventually everyone loses.

Building up relationships and partnerships is a central task for entrepreneurs. Thus, he must be able to establish and maintain trust. Communication is the instrument for doing this. Some also call communication the science of misunderstandings. And this is accurate. In communication the probability of misunderstanding the other person is substantially higher than the probability that the sent information will actually convey the intended meaning. Misunderstandings have a tendency to be interpreted as half-truths or lies.

Improving the quality of communication

Do you want to improve the quality of your communication? Then these rules will help you:

1) My communication behavior mirrored

The effect of communication is what matters. In certain situations this effect can be measured quite easily. Did the customer buy? Then, obviously, I convinced him. However, it may also be a deception. We often encounter this with e.g. car salesmen? Most car salesmen are actually not salespeople. The real sellers are the cars themselves. Most of the time the salesperson plays only a more or less marginal role. It is the product that sells itself, e.g. on account of the make of the car. Most car owners are extremely loyal to their brand. Or the specifications of the care are the decisive factor. The so-called car salesman only rarely offers an added value to the customer during the sales process. The salesperson deceives himself if he believes that sales, which occur on account of self-effective arguments, are due to his selling abilities. He sees himself in a broken, distorted or tinted mirror and is pleased with himself.

We all need a mirror in order to not fall prey to self-deception. This mirror must be incorruptible. It must show our flattering sides as well as our problem areas. This mirror may take the form of hard facts such as turnover figures or personal feedback. However, this presupposes an ability to take criticism. Only very few people have this ability. Most people would like others to approve of them. Sure, sometimes we need approval and edification. Sometimes we should also face criticism. It will help us in the long run. Is there someone in my life who gives me honest feedback about the way I communicate? If the answer is no, why not?

2) My demands for communication quality

I am always amazed when I think about the occupational group of computer scientists. I like and need them. Many times they have saved me from computer frustration and unresponsive computers. Everyday they deal with the most advanced means of communication. However, most of them do not communicate well. They may repair the computer but see no necessity to explain what went wrong. They also have great difficulty addressing the questions of customers. If the computer is working properly, everything is all right. This is their quality standard for communication, and it is not sufficient. Communication always means dialogue. Its aim is to clear up situations and influence human relationships. What result do I want to achieve with my communication? And what do I really achieve?

3) The four channels and the four ears of communication

Many years ago the communication researcher Thomas Gordon explored the effects of communication and identified four channels through which we affect others. The content of our message only accounts for 7% of the communicated message. The voice has a substantially greater effect reaching 23%. However, facial expressions and gestures have the highest values at 35% each. What does this mean? A person, who employs good rhetoric, may effectively communicate a nonsensical message to others. However, this would be unethical and not in compliance with my viewpoint. I believe we should fill our messages with substance and deliver them with the greatest possible effect. There are only few who are able to do this just like that. But it can be learned. Do I want to learn this?

Using his Four-Ear Model, the psychologist Friedemann Schulz von Thun uncovers further communication dimensions and thereby emphasizes the difficulty of communicating well. His model helps to better understand this complex topic, as it offers an impulse to act with greater effectiveness. Schulz von Thun shows that our messages – whether we send or receive them – incorporate four different dimensions:

a) factual information (what I am giving information about)

This is about data, facts and circumstances. Is the message true? Is it relevant? Is it extensive?

b) a relationship reference (what I think of you and how I relate to you)

These are indications on how I see the other person and what I think of him. How do I feel when the other person speaks to me in a certain manner? What does the other person think of me?

c) a self-disclosure (what I reveal of myself)

These are indications about what is going on inside of me. What are my values? How do I understand my role? What does the other person want to express with this?

d) an appeal (what do I want to obtain from you)?

This is about influence. What do I want to accomplish with the other person? Which wishes, appeals, pieces of advice, behavioral instructions are present? What am I supposed to do?

It becomes increasingly clear why communication is so difficult. And why there are so many misunderstandings. It is normal. Most of the time, when two people do not understand each other, the problem is not ill intent. Let us make it a habit to always assume positive intentions in communicating with others. And let us also make it a habit to examine sent messages in regard to the findings of Schulz von Thun and, if necessary, to clear up misunderstandings. Thus, misunderstandings can be nipped in the bud. This requires empathy and asking further questions for clarification. How did you understand me? Did I understand you correctly?

4) Filters and sources of errors in communication

There is a reason why communication is called the science of misunderstandings. There are many possible mistakes that can occur on the side of the sender as well as on the side of the recipient, and – as we have just seen – these mistakes can lead to misunderstandings. Different filters are yet another reason why communication fails. These filters may differ on account of experience, education, upbringing or ethical standards. Good communication first of all establishes a common frequency between the sender and the recipient before any messages are transferred. This preliminary work is worthwhile. Misunderstandings are the cause of many conflicts. Once the misunderstandings are resolved, a solution most often becomes possible. And how does one discover the right frequency? By asking questions, listening and being interested in the intentions of others. There is a rule called the Hundred-Day Rule. When taking up a new office, one should be quiet for one hundred days and listen. This rule is radical, but it makes good sense. And it works. It reveals fundamental intentions, interests, thought processes and wishes. It is a foundation to build on.

5) Communication adapted to personality

Different personality types communicate in different ways, be it as the sender or the receiver. To which group of communication types do you belong?

Dominant types have a tendency to communicate succinctly, clearly; they are determined and one-sided. Most often they are bad listeners. They want to reach their goal as quickly as possible.

Tip: Acknowledge and accept that emotions are also facts. Take people and feelings more seriously. Ask honest questions.

Proactive types have a tendency to be enthusiastic, stimulating and emotional in their multifaceted manner of communication. Quite often they are bad listeners as well. Most of all they like to hear themselves speak.

Tip: Acknowledge that others have ideas and experience as well. Ask about other people’s experience and show an interest in them. Verify your statements with facts.

Consistent types have a tendency to show an interest in other people, draw out conversations and harmonize with others. They repress confrontations. Their motto is to rather suffer than change.

Tip: Be aware that too much harmony can be dangerous. Develop courage to be confrontational. Say “No” at the right moment.

Conscientious types have a tendency to listen well, to focus on details and read between the lines. They often interpret facts and especially emotions wrongly; they are quiet.

Tip: Get up out of your seat, leave your workplace and talk to other people. Communicate personally and by phone. Only use SMS and emails rarely in addition to speaking with others.

6) Communication and information

Communication and information are not the same thing.

You can feed information to people; in communicating we want to convince them. Both are needed. We live in a time that is saturated with information. The amount of existing information doubles every couple of years. Modern media has made it easy to access this information. Yet, the majority of this information is unnecessary, harmful or wrong. As bearers of responsibility in society, entrepreneurs must have methods and abilities at their disposal to sift out correct and important information from the vast amount of available information. The simplest method is to only focus on a few good sources. Is the source trustworthy? What are their intentions? Is it profound? Does it tell the truth?

Communication is about effectively transporting information. We communicate to affect something. The story of three sieves may be helpful in this context.

One day an acquaintance came running to the Greek philosopher Socrates.

“Listen up, Socrates, I must tell you how your friend...“

“Hold on,” the philosopher interrupted.

“Have you filtered what you aim to tell me through three sieves?“

“Three sieves? Which ones?” the other asked in astonishment.

“Yes! Three sieves! The first sieve is the sieve of truth. Have you tested what you want to tell me to see if it is true?”

“No, I heard someone else tell it, and…“

“Well, then certainly you tested it with the second sieve, the sieve of benevolence. Is that what you want to tell me – even though it may not necessarily be true – at least good?” The other person hesitated.

“No, it is not really good. On the contrary…“

“Well,” Socrates interrupted him, “then let us use the third sieve and ask ourselves if it is necessary to tell me this information that excites you much.“

“It is not exactly necessary, but...“

“So,” the wise man smiled, “if what you aim to tell me is neither true nor good nor necessary, leave it buried where it lies and do not burden yourself nor me with it.”

7) Communication in difficult situations

When our daughter Andrea was nine years old, she had already understood an important lesson in life. Once in a while she fought with her sister, who was two years older; this was quite normal. However, the way she searched for a universally valid method of conflict resolution was quite extraordinary. One day I discovered a note she had written, which was pinned to the wall. I read it with amazement. With her permission I am repeating the text here:

“How does making peace work?

First of all, you must want to do it. At this point you can still say all the bad things you want to say. Then you shake the hand of the other person and do not say anything bad anymore. Then you are nice again to the other person and act as if nothing happened.“

If we compare this insight from a nine-year-old to those of famous professors from Harvard, we see surprising similarities. Andrea describes four phases:

1) First of all, the person must be willing. In difficult situations all participants must see the necessity for resolution. Sometimes other people must first feel the necessity for taking action before a conflict can be resolved.

2) Then we must lay the issue on the table. Everything. Without sugar coating. Of course we should remain decent and respectful, but we must be unambiguous. Everyone must know how the other person feels. This is the only way to make the interests and intentions of everyone visible. And finally these insights lead to a resolution approach.

3) Now we enter into the phase of searching for solutions. Here we look ahead to the future.

4) Then all parties put an end to the conflict and agree to new criteria for living together.

Communication is difficult and can be learned. One must realize that it is necessary. As with many aspects of personality development, communication cannot be simply learned by accumulating knowledge. It results from taking theoretical and practical steps to reach a certain goal.

The following is a short three-step outline to train effectively:

1) I realize the power of communicating effectively, and I realize my own potential.

I observe my own communication behavior and the behavior of people who are close to me. I take note of good and bad examples of communication. I try to understand and interpret these behaviors – using e.g. the above-mentioned models. I draw conclusions.

2) I expose myself to external feedback and accept criticism.

The second step is much more effective and demanding. I gather feedback about my communication behavior from my surroundings. And I do not justify myself but take the criticism seriously and reflect on it.

3) I train and evaluate.

I make use of every opportunity to communicate. I do not merely concentrate on conveying a message, but I ask questions, good questions. I am truly interested in the viewpoints and concerns of others. I learn to be quiet until my thoughts have matured. And I ask myself: Was the conversation beneficial? Was it necessary? What did it achieve?

Let us summarize:

1. I commit myself to truth and to a climate of trust. 2. I am aware of the dangers of misunderstandings and try my best to resolve these. 3. I study the effect of my communication by letting myself be reflected. 4. I ensure that my own and my employees’ communication improves continually.

Applying the eighth commandment “You shall not bear false witness against your neighbor” in business life:

1. I ensure that truth and transparency are a given in my company. 2. I resolve misunderstandings. 3. I do not tolerate half-truths. 4. I clear up deviations from the truth. 5. I waive profit if it is achieved by sacrificing truth.

Chapter 9

Partnerships are risky – and need to be cultivated

Building up and cultivating strategic partnerships are excellent marketing instruments, especially for saturated markets. The concept of a partnership is especially difficult for those organizations that have developed over many years. They believe their status quo is endangered and are afraid to embark on something new. They have no experience with partnerships and see them as a risk. And they may not be entirely wrong. Partnerships are always risky. A partnership always consists of giving and taking. One-sided partnerships are destined to fail.

The ninth commandment “You shall not covet your neighbour’s wife” addresses this topic in a profound way. This issue also speaks to partnerships and boundaries. It places special emphasis on respecting boundaries.

Moderate and harmful covetousness

Coveting is a growing desire, a strong force that drives a person to achieve or possess new things. For entrepreneurs this quality is indispensable. Without it, they remain ineffective or merely carry out the function of an administrator. True entrepreneurs are always somewhat restless and dissatisfied. They strive for change and improvement. And they do not rest until they have reached their goal. Yet, it is precisely these good entrepreneurial qualities that may in the end cause their downfall.

Entrepreneurs readily trip over their own strengths: They tend to have an exaggerated opinion of themselves and are prone to lose their self-control. In fact, quite a few entrepreneurs even become megalomaniacs. Unfortunately, the people surrounding entrepreneurs often choose to ignore these creeping changes. They refuse to believe the truth. Many of them have profited too greatly from the dynamism of the entrepreneur. By not speaking up they even confirm the entrepreneur and share the guilt for the consequences of his actions. There is a time for everything, a time to remain silent and a time to speak. Entrepreneurs must create a climate in which constructive criticism is permitted and allowed to thrive. This makes it possible to prematurely detect negative changes or dangerous tendencies and react to them effectively.

I also learned this through mountain climbing: Not every climber reaches the summit. And not everyone who reaches the summit makes it home safely again. Some even cause the death of an entire roped party. When climbing in the mountains, one of the greatest dangers is having an exaggerated opinion of yourself. The beauty of the mountains seduces climbers; they are tempted by the thought of having a mountaintop experience and by the desire for honor when they return. In situations like this important safety rules are readily neglected and disregarded. Almost all climbing accidents are preventable if people adhere to the rules of professional climbing. Most dangers in the mountains are known and predictable, like changes in weather, covered glacier crevices, avalanches and falling rocks. In most cases it is possible to protect oneself from these dangers by using the appropriate equipment and safeguards, by making preparations in advance and completing the necessary training. But even absolutely professional mountain climbers fall victim to the temptation of taking unnecessary risks. Thus, they consciously accept the possibility of negative consequences.

The ninth commandment addresses this. There are inviolable, fundamental rules that must never be broken – under no circumstances. These fundamental rules are impressed on every apprentice. Interestingly enough many senior executives up on the top floor have somehow convinced themselves that these rules no longer apply to them. The worldwide banking crisis of the last years exemplifies this in a sad way. Rules are in place to protect important things. The ninth commandment aims to protect marriage. It addresses one’s own marriage as well as the marriages of others. God seems to attach prominent significance to marriage; otherwise he would not mention marriage in two of the Ten Commandments.

The partnership of marriage

Marriage is a partnership between two people. It should last not only a limited time but a lifetime. “Till death do us part,” as the marriage vow says. This makes sense. But it is also difficult. I can fully understand the large number of people who, despite their best efforts, cannot make it work, and I distance myself from making harsh accusations against them. And yet – or perhaps precisely because of this – I as a business consultant want to support intact marriages and not endanger marriages in any way. A good marriage is truly something extraordinary, something great, something sacrosanct. Violating a marriage has consequences. Always. No person has the right to disrupt someone else’s marriage.

The grey zone of customs

Entrepreneurs have a tendency to be creative when it comes to interpreting the written law. Indeed, not everything in the legal order is entirely black and white. There are also grey zones. We call these customs. Customs are unwritten laws or law infringements that are not punishable by law. Marriage does not belong in this category. Many other regulations in business life do not either. Customs are dangerous because they can create an individualistic, situational morality in which everything that serves my purposes is ultimately allowed. This leads to the absence of culture, which is, unfortunately, so pervasive in our society today and keeps spreading further. And why is this happening? Because no one opposes it. Because laws are not sacred and viewed merely as a basis for discussion.

Business partnerships

In business there are different kinds of partnerships. Some are limited in duration from the outset, others are established provisionally and others are long-term partnerships similar to a marriage. All forms of partnerships play an increasingly larger role for predatory competition in the market. Management of partnerships has become an important marketing instrument.

Market advantages in rising markets are mainly achieved by offering new products and services. Yet, once the markets have been saturated, marketing plays an increasingly larger role. And relationship management becomes a load-bearing pillar for success in the global market. This addresses the entire chain of business relationships from the producer of raw materials and suppliers to manufacturers and commerce all the way to the consumer.

1) Project partnership

A project has a beginning and a previously determined end. Thus, partnerships can also be established for specific projects.

2) Strategic partnership

Strategic partnerships are based on visions or ideas; they are created and realized in cooperation.

3) Connection

A connection is a financial, personal and legal partnership that is most often established for the long term.

Partnerships extend the entrepreneur’s sphere of influence, yet they also limit his competence in making decisions. A written contract regulates the most important aspects of cooperation in order to avoid conflicts later on.

Having a minimal contractual grid can save the entrepreneur a lot of trouble in the end.

Justification for the contract

(Why should the contract be concluded?)

• Contractual partner
• (Who plays what role in the contract?)
• Goal
• (What is supposed to be achieved?)
• Content
• (What are the detailed regulations?)
• Contractual length
• (including opting-out clause)
• Legal venue
• (Or defined authority in case of disagreements)
• Signatures

Risk management

Today the law demands that executive committees, boards of directors and administrative boards of large companies regularly examine company risks and take appropriate, interventionist action if necessary. Small firms would be well advised to do the same even though they are not under legal obligation. The risk management process has five steps:

1) Determine who is responsible for risk management

Who is supposed to deal with the entrepreneurial risks and in what time period?

Who reports when and what to whom?

2) Recognizing risks – defining risks

What risks could arise from strategy, market, production, employees, procurement, finances, environment?

At what point do risks cross the line and become intolerable?

Which legal standards must be considered?

3) Evaluating risks

How probable is the occurrence of a certain event?

What would the implications be for our company?

What would be a small, medium or large risk for us?

4) Managing risks

What preventative measures can be implemented to avoid the occurrence of an event?

What damage control measures must be implemented if an event occurs?

4) Monitoring risks

What information do we need and at what intervals to prematurely recognize impending occurrences?

What types of monitoring and internal examinations are necessary?

Risk landscape

Crisis management

If critical events occur, we are either threatened by an impending crisis or already in the middle of it. Then we need crisis management. Some crises have taken unprepared entrepreneurs completely by surprise. In the middle of a catastrophe it is too late to build up a professional crisis management. The house is on fire. The media is waiting outside the door, holding up their microphones. They want to speak to the manager in charge.

A simple crisis management model has five steps:

1) Gathering information, grasping the problem;

2) Implement immediate measures – internal instructions about giving out information to the media, establishing a hotline and/or referring the issue to the company spokesperson;

3) Communication – show that risks are being seriously examined, convincingly explain decisions and measures;

4) Initiate measures – act;

5) Verify – examine intermediate and end results and discuss them.

Let us summarize:

1. I am on my guard against unrestrained covetousness and abide by the laws. 2. I create and strengthen sustainable partnerships. 3. I keep an eye on the most important entrepreneurial risks. 4. I am prepared for crises.

Applying the ninth commandment “You shall not covet your neighbour’s wife” in business life:

1. I nip covetousness in the bud and do not allow it to crop up anywhere. 2. I distance myself from situations that arouse covetousness.

Chapter 10

With numbers you play the lottery – and lead a company

Some entrepreneurs are in love with numbers and neglect the market. This is a bad way to do business. Others see only market potential and the need to satisfy that potential, and they neglect the numbers. This is not good either. A good entrepreneur is aware of both. He is agile and close to market events. From time to time he retreats to reflect on potentials and results by analyzing key figures. He draws his conclusions and implements measures. There is also an ethical dimension to numbers. The tenth commandment “You shall not covet thy neighbour’s house” teaches us an important lesson about coveting.

“Yes” to earning money – “No” to greed

Money and greed seems to be an important topic. And it is important, especially for entrepreneurs. Earning money is part of being an entrepreneur. That much is clear. And making profits is good. Greed, however, poses a real danger. And greed closely follows success; at every turn it is just one step behind. A greedy person already has everything and still wants more. And the more he gets, the less satisfied he is with what he has. The greatest mistakes are made when a frustrated entrepreneur acts out of greed. The effects of shareholder value thinking have demonstrated this quite clearly. Money, mammon is crowned the highest God, the sovereign ruler over the company. All entrepreneurial decisions have to serve the overall goal of increasing the stock value. Thus, highly trained managers decide to lay off a large number of employees to save costs and increase short-term profits. They accept the possibility of endangering the long-term existence of the company and clearly show no concern for what might happen after they are gone. When the consequences of their actions come to bear, they have already disappeared, taking their exorbitant compensation sums with them. Greed is the motivation behind such behavior, greed with a continual lust for more.

Nicolas Hayek, the Swiss watch industrialist, described shareholder value thinking as absurd and as a mindset of the last century. And he proved that responsible and sustainable thinking can still lead to success today.

Perhaps I have created the impression that greed only concerns shareholder value thinking and is, therefore, only a problem for larger corporations. Far from it. While it is true that the manifestations of corporate greed are formidable, greed concerns everyone, even managers of small and medium-sized companies. The seed of greed lies dormant in every person. Everyone is in danger of succumbing to it. This is the reason why I am addressing this topic here. Some entrepreneurs in our own development programs have founded their company on strong ethical principles. And at first they remained faithful to these principles, but when they were tempted by the glimmer of gold and saw the opportunity to get more and more, they gave in. Their pursuits did not bring them happiness.

Transparency instead of life lies

Transparency is part of acting responsibly. Transparent personalities love the light, non-transparent people love the darkness. You have seen the dingy atmosphere in old Mafia films. An obvious game of hide and seek is portrayed in a romanticized and playful way. However, non-transparency in real business life looks quite different. It thrives on lies and continuous cover-ups. Most of the time it is hard to see through the fog of deception. Many of the so-called business customs are part of this. The truth is distorted ever so slightly. Yet, it remains a lie nonetheless. The implications are fatal. Sooner or later non-transparency always leads to a loss of trust. It is extremely difficult to regain lost trust; in many cases it is even impossible.

Non-transparency in a person’s private life leads to false information, loss of reality and bad decisions. A person who enters into the culture of non-transparency should not be surprised if he meets like-minded people who, in turn, try to steal from him without hesitation.

Transparency is predominantly about my personal attitude. Do I have something to hide? Do I want to hide something? Why? Am I motivated by greed, a guilty conscience or a complex? All this is only all too human. And yet its effects are harmful. The Ten Commandments, to which I am alluding in this book, can help us tremendously when we view them as a guideline for our lives. They liberate us from many dependencies and life lies.

Life lies

Lie number 1:

“Success and possessions will make me happy.”

Success and possessions will only make a person happy if he is not dependent on them. How do I feel when I do not succeed? When my possessions slowly dwindle away? Some of my clients are under the impression that they possess great riches. In reality the opposite is true. They do not own their riches, but their riches own them! Their everyday life and their well-being depends on the state of their wealth. Their entire lives are consumed by one question: “How can I preserve my wealth?” They begin each day by checking the stock market rates. If the rates are rising, all is well; if they fall, their day is lost and a dark shadow lingers over them. And they constantly renovate their properties. They put up new facades, roofs and bricks. Vast amounts of money are spent on vacations to southern countries in order to recuperate from the strains they place upon themselves. Every day they check the status of their renovations and stock market rates with their cell phones while they are at the beach.… (Here I am obviously not referring to entrepreneurs who deal in real estate or invest in other firms. I am referring to those business people who have not entirely given up entrepreneurialism and who are more concerned with their accumulated wealth than with the business itself.)

Truly happy people are happy regardless of possessions and wealth. They are happy simply because they exist. Because they are content. Because they are loved and are able to love others.

Lie number 2:

“If I do good deeds, all is well.”

Entrepreneurs like to present themselves as benefactors. In principle this is good. However, if their philanthropy is characterized more by the attempt to earn public recognition than by making sacrifices, the favorable mood will soon disappear. Acts of goodness manifest themselves in sharing with others, not by satisfying one’s own wishes and desires. However, a person who has the right motives will certainly also find satisfaction.

Lie number 3:

“I must conform to the expectations of others.”

Always conforming to other people’s expectations can also become an addiction. As entrepreneurs we are often in situations that will not allow us to fulfill other people’s expectations. Because these expectations are wrong or harmful. Or because they are not part of the task assigned to me. Or because the time is not right. The entrepreneur must say “Yes” when the time is right. And sometimes he must also say “No”. This is called being self-assertive.

These were three examples of life lies. Of course there are many more. How can we differentiate between truth and lie, between facts and wishful thinking, between nominal and actual, between necessary and desirable, between important and urgent, between mine and yours? It requires character, information and instruments. Our character monitors the ethical dimension of decision-making. Information must be gathered and filtered. We need instruments to help us filter through the abundance of information so that we can make useful decisions.

Time and plans

Let us talk about time. For what length of time do we want to plan in our company? The era of five or ten-year plans is most definitely over – at least for Western economies. The present era of globalization has greatly increased the rhythm of life. Every plan is influenced by multiple unpredictable events. Therefore, making plans requires even more guidance. We are no longer dealing with the fixed plans of the last century. Today we need a fixed star and many plans within a flexible system. The fixed star always remains the same. The plans, however, continually adapt to new actualities.

I also learned this through mountain climbing: Once a person has decided on which summit to climb, he will usually not change his mind. However, there are always various paths a person can take to the summit. Depending on the weather, his level of fitness or desire he can choose one over another.

Guidance instruments: The cockpit of the company

An entrepreneur needs good instruments to guide his company. Just as a pilot of an airplane, the entrepreneur must always be aware of important influential factors to ensure a successful journey and to be able to react in the event of an emergency. He cannot keep all factors in mind but must focus on the most important ones. The influential factors for a pilot of a wide-body aircraft are the same as those for the pilot of a private, single-engine plane: speed, altitude, flight attitude, position, fuel level. The pilot continually monitors these and other indications from his cockpit.

The entrepreneur also needs a cockpit. Several months after the annual account closes, entrepreneurs receive an abundance of figures and statistics from their trustees. It is rare for an entrepreneur to read these reports. And it is even rarer to find an entrepreneur who actually understands them. Furthermore, the reports arrive too late. Only the revenue office still has use for them. This may be important as well, but it is not the entrepreneur’s main concern.

The most helpful cockpits are developed by entrepreneurs themselves. He knows best which indicators are the most influential for success. Often the following ones suffice:

1) Turnover

In monetary currencies or in quantities (with budget comparison, turnover per month and accumulated since the beginning of the year)

2) Liquidity

Account balance (How can I meet my obligations? For the short term, the medium term, the long term?)

3) Margin

Proceeds with direct costs subtracted (with budget comparison, profit situation)

We can portray this information as a status for a certain cut-off date (end of the month) and as a progressive development. Depending on company size and complexity these indicators can, of course, be expanded into professional systems.

The balanced scorecard, developed by Robert S. Kaplan and David P. Norton, divides the structure of a company into five sections:

1) Vision and strategy

What do we want and how do we want to achieve it?

2) Clients and products

How do we want to present ourselves with our products and services to our customers?

3) Processes / operational sequences

Which operational sequences (processes) do we need in order to meet the expectations of customers and financiers?

4) Employees / know-how

What kind of teams and abilities do we need in order to implement our business strategies?

5) Finances

How do we want to present ourselves to our financiers (shareholders, banks, investors)?

Goals and parameters can be defined for these areas. A cockpit illustrates and monitors them. Thus, the balanced scorecard serves as a differentiated guidance system.

Why do we need a guidance system? Is it really necessary? A participant at a time management seminar once put me in a difficult spot. She asked me with a charming smile: “Does a person really need goals?” This is an explosive question. Indeed, it is dangerous to make too many elaborate plans and formulate too many goals since we do not know what the future holds. An economic crisis, a sudden illness may obliterate our plans in an instant. There are events that we cannot plan for or influence. We cannot ignore this. Some events will most likely occur. And yet, we must plan and set goals for ourselves. However, the plans must be flexible should certain events occur. And the guidance system must promptly notify us of dangerous developments. By employing a guidance system we also consciously set up boundaries to keep the balance between healthy ambition and fatal greed. We define and control what is desirable and undesirable, what is allowed and forbidden in our company.

Then an entrepreneur also needs a cockpit for his private life. Or are you one of the many entrepreneurs who do not even have a private life? Is your company the be-all and end-all for you? Then you are missing out on life. Or you are on the run. If you are missing out on life, you should step on the brakes. And if you are on the run, you should stop and reflect.

I love the story of a girl who wished for a horse as her birthday present. And her wish was granted when she received a beautiful rocking horse made of real wood. The child was not happy and the father asked: “What should the horse be made of if not of wood?” “The horse should be made of horse,” the girl answered. She is quite right. A real horse is made of horse. For life it is the same. Real life is made of life. Not of business. Not of figures. Not of markets. Not of products. Just simply life.

Some people fill their lives with years. Others fill their years with life. This makes a substantial difference. People who decide to ignore the issue altogether have already chosen the first option. If we want to fill our years with life, we have to give it some thought. For example: “What is life?”; “What would I want the inscription on my tombstone to say?”; “Who should play a role in my life?”; “What are my priorities?”; “What am I running from?”; “To whom do I have to prove something?”; “Why do I have to hide?”; “What am I doing to really turn my life around?”

By asking these questions we start to develop our own personal cockpit for life. You cannot make something out of nothing. Great changes start with small thoughts.

I also learned this through mountain climbing. There are situations in which everything else becomes unimportant. Reputation. Wealth. Success. The beauty of nature. Only one thing remains: life.

Let us summarize:

1. I do not allow money, status or lust for power to determine my life and my value. 2. I am committed to transparency. 3. I maintain an entrepreneurial cockpit that allows me to prematurely detect course deviations and react to them. 4. I want to fill my life with life.

Applying the tenth commandment “You shall not covet thy neighbor’s house” in business life:

1. I ensure that contentment and humility are important values in my business life. 2. I surround myself with humble and honest people who can caution and correct me in dangerous situations.

Chapter 11

Case Studies

Zbären: New strategies because of low profit margins

Branch: Upscale kitchen manufacturing

www.zbaeren.ch

Business model

For twenty years the brothers Hans and Erich Zbären have led a successful family business. Their company was situated in a Swiss mountain village and they employed a staff of twelve as they manufactured kitchens and interior furnishings for the local market. Then they encountered a problem: New competitors emerged onto the market and, using state-of-the-art serial production, they undercut their prices and forced the Zbärens to fundamentally change their strategy. The brothers saw this problem as an opportunity and, within just a few years, they transferred their product range to the exclusive luxury segment. Their new clients have the highest demands on product quality and on their business partners as well. Zbären now furnishes villas, luxury and vacation apartments all over the world. Due to size, design and luxurious features the cost for a Zbären kitchen may be twenty times the cost of an average kitchen. Zbären has made a worldwide name for itself in the industry branch of high-end kitchens.

Special characteristics

The brothers Zbären are properly trained master carpenters and entrepreneurs who let their personal relationship with God influence their entire lives in a natural and real way – this includes their business life as well. They want to experience the guidance and blessing of God in their work in a practical way and share this blessing with others. Their decisions are based on intellect, respect and asking for the will of God. This fundamental attitude allows them to solve problems and conflicts although the two of them have very different personality types, and it also opens them up for creative purposes. Extraordinary innovative solutions and the highest quality and harmony are the result.

Special activities

The tense market situation forced the Zbärens to introduce unconventional and radical measures. They saw their problems as challenges and looked for solutions in a systematic way. At first a professional operation analysis brought clarity about their situation. Then they brought the analysis results to God in prayer. From childhood the Zbärens had learned this by reading the Bible and practiced it in many other problematic situations throughout the course of their lives. Could God not also help them here? The Zbärens were well aware of their own limitations. God helped them. He gave the Zbärens what they asked him: ideas, courage and open doors. It is one thing to have the idea to build kitchens for wealthy vacation guests visiting the nearby vacation area of Gstaad, actually selling their products to them is yet another. Yet, in the end they succeeded. Erich Zbären uses his creativity, his flair for design and his communication ability to find customers, to fascinate and convince them. His brother Hans Zbären uses his expertise and his organizational talent to convert these complex ideas into perfect products and, together with his team, installs them in exclusive houses in London, New York and on the Bahamas. The Zbärens’ could not afford a worldwide advertising campaign due to their limited advertising budget. Yet, their endless creativity has opened up doors for them. They established contacts to wealthy, international customers – who were on holiday in the nearby village.

Insights/Lessons learned

1) If problems are viewed as opportunities, they may become the basis for quantum leaps.

2) Professional analyses are required to discover what has to be done and to build up the necessary urgency for action.

3) Including God in small and big decisions protects entrepreneurs from overburdening themselves and releases unimagined potentials.

4) Being courageous pays off in the end. You can only lose what you have. Yet, there is no limit to what you could win.

Autoworld: From backyard to top location

Branch: Auto retail and service

www.autoworld.ro

Business model

The company Autoworld is situated in Cluj, in the middle of Transylvania in Romania. After the political change took place in 1990, Ioan Mezei grew a single, small auto repair shop into a leading Audi and VW location. Currently, his company has almost two hundred employees who sell and service cars. With two modern show rooms, one for Audi the other for VW, Autoworld has a strategically important presence in the town of Cluj.

Special characteristics

1) From simple auto mechanic to manager

Ioan Mezei was not born a manager. He had always been very diligent and greatly fascinated by the inner workings of cars and spent years in his backyard, working underneath or leaning over all makes of car motors. As he was attending a seminar of the ROMCOM organization, which promotes small business entrepreneurs in Romania after the political change, he realized his potential. A desire grew inside of him to make a quantum leap with his company. And this leap started with a letter. A friend at the same seminar facilitated the contact to VW and he was offered a representation. The wheels had been set in motion. Mezei’s workshop was equipped with state-of-the-art equipment; and besides repairing and servicing cars, he also added the sale of new cars to his business program. Thus, began his long-lasting success story.

2) The risks of making major investments

Ioan Mezei had to learn to invest large sums of borrowed capital in the construction of modern buildings with service facilities and showrooms; he also had to invest in the purchase of new cars. For Mezei this was unfamiliar, and, at first, it frightened him. He had to quickly learn to handle large sums of money and evaluate risks.

3) Living with market fluctuations

After years of continuous profit gains, he also experienced times of regression. His company only survived because he had built up considerable resources in the previous years. His 173 employees were his main capital, and yet these employees also accounted for a large block of his fixed costs. A clear financial management was needed.

4) An early succession order

Ioan Mezei addressed the issue of succession early. He ensured that his sons received a good training in mechanics and business administration and placed them in responsible positions at an early stage. Later he even transferred leadership of the company over to them and served them (and still does today) in the background, assisting them with his great wealth of experience.

Special activities

1) When car repairs and services are performed reputably, a bond of trust is established with the customer.

Ioan Mezei started small, but his workmanship was always respectable. His customers were more than satisfied with his mechanical skills. This generated trust and led to returning customers.

2) Choosing the right brands

For Mezei choosing VW and adding AUDI later on were excellent decisions. These German brands are extremely popular with Romanians. German quality and world-renowned brands give the customer a sense of security and status.

3) Visual presence and size

The trade contracts with VW and AUDI included numerous provisions. Among these was the obligation to build two separate auto repair shops and showrooms at strategically important locations in town. For Mezei this meant incurring great expenses. Yet, these new buildings enabled him to gain an optimal visual presence and many new customers.

4) Risks

As the company grew, the necessary investments grew as well. Borrowing money became inevitable. From the outset his success was never guaranteed. He took an entrepreneurial risk.

5) Integrating his family

Autoworld was and still is a family company. His wife Elisabeta has always handled the finances. His sons and adopted sons are trained mechanics and also studied business administration. Thus, they were well equipped to practically contribute to the company.

Insights / Lessons learned

1) Performing reputable work pays off.

Yet, earning money must not be a company’s main priority. It is much more important to have satisfied and returning customers. This requires doing qualitative work and establishing exceptional, personal customer relations.

2) Having a vision and taking risks is part of it.

It is worthwhile to question the existing status quo and discover new potentials. Taking steps into new and unknown territories always involves risk. What are the opposing arguments?

3) Having supportive people who work in the background is essential.

Attention to detail is necessary if a person wants to attain exceptional success. Most of the time quality is monitored in the background and goes unnoticed.

4) Everyone listens when the successful business man speaks.

As an unknown auto mechanic Mezei’s word did not carry a lot of weight with the public. Now as a successful entrepreneur people recognize him and take him seriously.

Arnos: From unemployed to entrepreneur

Branch: Pasta production

www.arnos.ro

Business model

The company Arnos was founded in 1992 as a family company and has grown to become the fourth largest pasta producer in Romania. Employing a staff of about 100, it produces fresh-egg pasta and soup add-ins; it distributes these products in Transylvania through local merchants and warehouses. Arnos was sold to an investor so that the company could make the quantum leap to become one of the third-largest producers in Romania.

Special characteristics

The company history of Arnos begins in 1992. After the political change the economic situation was difficult. The purchasing power of the Romanians was weak. Many positions in state-controlled companies had been cut. Thus, the brothers Arpad (electrical engineer) and John (taxi driver) Gere were facing an uncertain future. They decided to start a private company in order to alleviate their families’ financial hardships. At the time, soup was a dietary staple in Transylvania And thus, a business idea emerged: soup add-ins made from pasta.

Just at this time the Christliche Ostmission from Switzerland started the program ROMCOM to support small and medium-sized companies in Romania by offering loans, training and consultation. The brothers Gere profited from their offer and developed a professional business model. After making a first investment, they were able to produce 150 kg of pasta in a small shed in their backyard. Consequentially, they were able to generate enough income to provide for their families and save up for further investments. Meanwhile they attended seminars and learned professional marketing methods. Step-by-step they expanded their production and market cultivation until they became certified as an ISO company. Their products now complied with West European standards, and they reached a production capacity of 500 metric tons per month.

Special activities

When the brothers Gere founded Arnos, they ventured into uncharted waters. They did not have knowledge of pasta production nor of business administration. All they knew was that they were in great need. They were unemployed, had low purchasing power and their future was uncertain. Yet, they had a vision and wanted to break new ground and attempt something unfamiliar. They took these specific steps:

1) Recognizing the demand for pasta soup add-ins

The idea is quite simple. But someone had to see the opportunity and realize it.

2) Acquiring the necessary knowledge for pasta production

At the time the internet was not yet an issue. Thus, the Gere brothers had to acquire the necessary knowledge from books and by asking foreign producers for advice.

3) Acquiring basic, economical knowledge to establish and manage a company

The ROMCOM program of the Christliche Ostmission provided precisely this kind of support to the Gere brothers in the form of developmental assistance.

4) Financing for production machinery and consumable materials

At the time small it was not possible for small companies in Romania to receive bank loans. Thus, the Christliche Ostmission through the ROMCOM program stepped in and offered the company a credit.

5) Incorporating and training all family members and external employees in production

All family members had to work in production to save salary costs. Not only did this communal work benefit the company financially, but it also created a special kind of family spirit that now exists in the company. From the outset the quality of products had to convince customers and differentiate the company from competitors.

6) Build-up of a distribution network

This was a task for the manager of the company. He was able to convince merchants of the quality of Arnos’ pasta products by making use of his previously established personal contacts. Satisfied end customers soon contacted Arnos to request further deliveries.

7) Handling rapid company growth

On account of a rapidly increasing demand for Arnos’ products, multiple expansions of production areas and facilities became necessary. The growing number of employees required professional management instruments. The maturing market demanded modern product presentation. The increase of financial risks required professional financial management.

Insights / Lessons learned

1) A crisis can bring enormous opportunities with it if these are recognized and utilized as such.

2) One needs open eyes and ears to recognize market opportunities.

3) Problems cannot be waited out. After a time of reflection they must be promptly tackled.

4) The build-up of a family company also requires the build-up and cultivation of personal relationships within the family.

5) Rapid company growth demands adaptability from all participants.

6) When the time comes, an entrepreneur must also be able to let go.

ROMCOM: Stirrup holder for others

Branch: SME support by offering credits,

training and consultation

www.romcom.ro

Business model

The organization ROMCOM in Oradea in Romania originated from a project of the Christliche Ostmission that was intended to support small and medium-sized companies in Romania. This program stands on three pillars: credit, training and consultation. After 20 years the project developed into a professional group of companies.

• The ROMCOM foundation is the parent organization that manages profit and non-profit subsidiary organizations.

• The ROMCOM MFI AG is an officially recognized micro financing organization that makes loans available to entrepreneurs.

• The ROMCOM Invest Ltd. is a consultation firm that helps its clients develop business plans; it gives them access to loans from international credit programs.

• The ROMCOM Training Ltd. offers seminars on business management.

• The COMUNIA foundation is the social arm of ROMCOM. It fights poverty in Romania and abroad.

Special characteristics

1) ROMCOM emerged from the destitution that existed in Romania after the political change.

Georges Dubi, the former project manager of the Christliche Ostmission, recognized the urgent need after the political change and saw the organization as an opportunity to build up small and medium-sized companies. He then formed contacts with partners, who had the necessary means, and started the ROMCOM program.

2) ROMCOM was founded with humanitarian goals.

The initial idea upon which ROMCOM was founded was to help others. Its aim was to demonstrate patience and understanding when clients ran into problems repaying their loans. When ROMCOM realized that its partners must also present themselves professionally on the competitive market, they began to support its partners in this regard. The business owners had to learn to conduct themselves in such a way that they would be able to fully comply with their financial obligations.

3) ROMCOM has grown to become a professional group of companies.

ROMCOM not only had to train its clients to work in a profit-oriented way, but ROMCOM itself had to learn to behave in such a way without losing its social orientation in the process. Thus, ROMCOM was able to operate independently of Western donations.

4) The ROMCOM model is expanding to other countries.

Following the same pattern, similar programs are now emerging in Kirgizstan, Moldavia, Albania and Vietnam.

Special activities

1) Selecting able and willing, local partners

Choosing the right partner is crucial. One needs to invest time and money to be successful. Incompetent partners may ruin everything while competent partners can multiply both concept and success.

2) Training in the basics of business administration

True to the motto: “As little theory as possible and as much as necessary.” The essentials of business administration must be discerned and put into practice.

3) Chaperoning companies while business plans are put into practice

If necessary, professional consultants will support the entrepreneurs.

4) Professorship at the Emanuel University

The “Mario Bruehlmann chair for economical development and poverty eradication” enables management students to profit from the experiences of ROMCOM. They can listen in on lectures from experienced SME experts and analyze ROMCOM case studies. Furthermore, ROMCOM annually offers scholarships to some students from poor circumstances to give them the opportunity to study.

5) Social commitment

Through the COMUNA foundation ROMCOM companies are partly exempt from taxation when supporting domestic and foreign social projects. And they make use of this opportunity. Some entrepreneurs even offer up their time and experience to help colleagues in other countries with the start-up of their companies.

Insights / Lessons learned

1) Someone must recognize the need and find a way to somehow get things going.

In the start-up phase one does not need a lot of concepts but a large supply of empathy and commitment.

2) Experiences are evaluated and programs developed accordingly.

Good results quickly led to other financial sources, thus also to the Swiss government. The government requires a professional project management that establishes clear goals and monitors their progress.

3) Professional work is required to make the transition from humanitarian aid to supplying assistance for self-help.

4) Companies that function properly become multipliers.

They create jobs. They offer hope and perspectives. They motivate others to follow their example.

Adaconi: Entrepreneurs with a natural business sense and ethical orientation

Branch: Stationery supplies

www.adaconi.ro

Business model

Adaconi is a Romanian stationery supply company with 50 employees. It mainly supplies its business customers through a nationwide merchant network. Its product range is extensive and covers all stationery supplies for business and private homes. Adaconi discovered the demand for computer accessories early on and offers the most extensive product range in all of Romania. It purchases its articles on the national and the worldwide market. One of its major purchasing sources is the annual stationery supply trade fair Paperworld in Frankfurt.

Special characteristics

Mircea Neiconi, a machine engineer, is the founder of Adaconi. He has always been a natural businessman. So, together with a friend, he immediately opened up a universal trading business after graduating from university. From coffee to shoes to TVs and chewing gum, they sold whatever they could find on the market. With success. However, his stroke of good fortune came to an end as the rising interest and high inflation rate consumed all of his profits.

Mircea Neiconi learned from this. An extensive market clarification showed him which industry branches were profitable. And he focused his efforts on stationery supplies. The foundation for Adaconi had been laid. As seed capital he brought a car into the company, and his friend paid the rent for their business rooms.

Special activities

1) Customer contact

Mircea Neiconi established essential contacts at the trade fair Paperworld in Frankfurt and was able to incorporate important brands into his product range. Due to good sales results, he later even received exclusive rights for certain brands in Romania.

2) Representative network

Adaconi built up a nationwide representative network and was able to increase his profits year-by-year.

3) Retreat on strategic functions

Mircea Neiconi realized early that he had to retreat in order to perform strategically important tasks. He had to clearly organize his fast-growing company to be able to work as a strategist in the background. All work procedures were organized and described in an efficient manner. This was a big help for recruiting, selecting and orienting new personnel. It allowed him the freedom to delegate and gave him time to conduct a company overview.

4) Work from the heart

Mircea Neiconi not only manages his company with his business sense. His most important business principles come from the heart: For him integrity, excellence and respect for people are not merely empty advertising phrases. He lives these principles and demands the same from his employees. He has already forsaken enormous business opportunities since he refuses to comply with corrupt requests. In retrospect he is glad about his principled behavior. He has realized that his consistent actions have led to the establishment of a clear customer base. For many customers Mircea`s honesty has become the crucial purchasing criterion.

5) Brand orientation

Adaconi works with internationally known brands. This has aided the rapid growth of the company. The company’s own brand “DACO” is also being built up to solidify Adaconi for the long term.

6) Advancement opportunities for employees

Adaconi offers its employees the possibility to grow with the company. Simple employees can eventually advance to management positions.

Insights / Lessons learned

1) Sometimes entering the business world can happen spontaneously without much conceptual work. In this initial phase making the big money is not the primary concern but rather gathering valuable business experience.

2) When things get serious, it is worthwhile to undergo a qualitative market clarification and set down specific goals. This includes a simple business plan. Changing plans does not cost a lot. However, having to correct wrong decisions later on can be very expensive.

3) Besides formulating economic goals, it is worthwhile to define the most important values for the company and its employees, and live them out accordingly.

4) In marketing catchy brand names play an important role. Building up one’s own brand costs a lot of money and takes time. This means that the task needs to be started early.

5) A fast growing company needs flexible structures and work processes that can grow with the company. Decision paths must be short and clear. Important information must be presented in a company cockpit.

6) It is worthwhile to observe and support the personal development of employees. A strong sense of loyalty as well as professional development and character growth of employees are indispensable.

Brothers Mobil: A textbook example of a family company

Branch: Furniture joinery

Business model

Samuel Elekes is a family person. After the political change in Romania he built up a thriving family business in the Romanian city of Zalau. Today his son, who has the same name, is responsible for leading the company. With a staff of roughly 40 employees he produces wood furniture for the domestic as well as for foreign markets.

Special characteristics

At first sight Samuel Elekes Senior hardly looks like a successful entrepreneur. He invests much of his energy in his family; he has four children of his own and two adopted children. And he strives for harmony. He does not want to hurt anyone. He maintains all of his relationships with care and has many long-term friendships. He thinks socially and has a heart for people. In his work as a joiner he is exceptionally precise and reliable. For him earning money is not the overall goal but a necessity that enables him to create a better future. A better future – especially for his children – was also the decisive factor when he chose to start his own company. Before he became an entrepreneur he was employed in a government-run company that produced furniture for the Swedish company IKEA.

He started his company together with three business partners who shared the financial burden. On account of their support he was able to buy the necessary machines and facilities. The company quickly gained momentum. However, after several years the founding partnership became an impediment. It was difficult to develop innovative growth strategies together. The interests and personalities were too different. Thus, their partnership was dissolved peacefully and on the most amicable terms. The family now had to help out even more. A foundation for a true family company had been laid. Today the company is already in its second generation. Father Samuel works in the background and helps out when needed.

Special activities

1) Assuming personal responsibility instead of waiting for changes to happen on their own

After the political change in Romania in 1990 the country was left with nothing. Many unprofitable government-run companies had to close down. The unemployment rate was high and the purchasing power of the Romanian people extremely low. These were unfavorable conditions for starting up a new company. The risk was high. However, waiting and doing nothing would have been even more dangerous. Samuel Elekes realized this and searched for opportunities. Exports seemed to be the answer to his question. Western companies like IKEA and Conforama were interested in profiting from the low Romanian salary levels and the rich Romanian tradition of and expertise in wood processing.

2) Starting up a company with partners

With the help of three friends and money he had saved up, Samuel started a small joinery. As he was already highly respected among his personal acquaintances and in the eye of the public, the previously established trust carried over to his business. Even when he had to dissolve his business partnership several years later, all parties separated on amicable terms. Why? Everyone realized that the decision-making process was too complicated and impeded the growth of the company. The time had come to borrow money from ROMCOM and from the banks to finance expansions. Thus, the company required professional financial management instruments.

3) Transformation into a family company

A family company is not formed by executive decision. Each family member has to decide for himself. This was also the case with Brothers Mobil. In family conferences everyone was allowed to contribute to the discussion; all family members were asked if they wanted to contribute to the communal enterprise and to what extent. Then tasks and responsibilities were assigned. Day by day the family members grew in their entrepreneurial roles. Moreover, Samuel Elekes Junior completed his training as a specialist wood engineer and later on became the head of the company. And step by step Samuel Elekes Senior stepped back and became the company’s advisor and supporter. He had to learn to let go of tasks, competences and responsibilities and delegate these to others. And it worked.

4) Quality and product range as marketing instruments

From the very beginning the most important marketing instruments for Brothers Mobil were quality and the right product range. Only with a high and consistent product and work process quality could the company win over Western clients for long-term cooperations. And a company does not automatically achieve high and consistent quality. The Elekes learned this quickly. They had to invest a lot of time and energy in the systematic training of their employees. The most important aspect was having the right mindset. First of all, every employee had to be able to recognize quality and quality deviations. And then they had to become willing and able to produce quality products consistently. This was a long and arduous path. But it paid off. For Elekes and for each individual employee.

5) Careful and courageous financing of progress

For every step of growth a company takes, it needs capital. Most often the need for additional capital increases with each phase. Brothers Mobil was no exception. Father Elekes as the pioneer had always been quite willing to take risks. Elekes Junior, on the other hand, had learned in his training as an engineer to consider all possible risks and exercise caution when making decisions. Being overly cautious can be dangerous if decisions are prolonged for too long. Discussions between father and son helped to establish a healthy balance. The son works with professional decision-making methods, the father works with intuition and experience. By this process good decisions can be reached within an appropriate time frame.

6) Acting responsibly, even in crises

Brothers Mobil did not only experience good times. The enormous foreign currency fluctuations and economic crisis hit the company very hard. Brother Mobil also could not avoid laying off employees. However, the company – without pressure from unions or laws – offered those employees redundancy packages and helped them find positions with other firms. After separating, personal relationships remained intact. And Elekes developed new company strategies during the crisis. The currency rise of the Romanian lei made exports more expensive. Export figures even collapsed dramatically for a while. Elekes quickly shifted his production in order to make affordable products that still had an appealing quality for the Romanian market. Today the company is financially sound and better able to resist crises.

7) Building up and supporting the successor

Father Elekes never viewed his company solely as a business. For him Brothers Mobil, on the one hand, supplies the livelihood for his family and, on the other, acts as a social entity in which individual family members and employees can develop and evolve. Elekes does not only see products, work and money. He also sees the pleasure of the craft, the possibilities for design and the contentment that may result from it. He allows his family members and employees to grow with their tasks. For him this means stepping back, observing from a quiet place and, if necessary, intervening in a supportive manner. This also can be enjoyable.

Insights / Lessons learned

1) Unspectacular people can also become successful entrepreneurs.

Being an entrepreneur does not require making a lot of noise, even if many modern managers seem to think so. An entrepreneur needs substance: self-initiative, a creative imagination, perseverance and a sense of responsibility.

2) It is not always necessary to fight.

Fighting exerts a lot of energy. Most often this energy is wasted and all participants lose. A person needs diligence to achieve entrepreneurial success. To analyze a situation, to develop strategies and to implement them. Diligence, again and again.

3) Strategies grow with the company.

When founding a company, a practical, implementable basic strategy is required. Most often – provided we interpret the signs correctly – further strategies develop in and from crisis situations. Thus, crises indeed become opportunities.

4) Work can be enjoyable.

Not everyone finds work enjoyable automatically. It is also a matter of attitude, organization and evaluation. If you think of it as torture, it will be torturous. If you think of it as fun, it will be fun. Organize your work in such a way that it is enjoyable. And take time to observe the results, e.g. a finished chair in the case of Brothers Mobil. Find enjoyment in your work.

Karol Tech: A social entrepreneur in a village

Branch: Metal construction

www.caroltech.ro

Business model

In a remote Romanian village the trained metal construction worker Karol Szöcs built up a metal processing company from scratch and now employs a staff of 15. His company produces metal working tools for the salmon fishery industry of the North Sea as well as metal furniture, which is exported to Western Europe. Szöcs produces and mounts products in a medium-sized series for customers who also supply him with design drawings.

Special characteristics

Karol Szöcs did not plan to become self-employed. This father of five gave up his secure workplace because, as he was travelling through the small village of Ghindari, the poverty of the residents made an impression on him. He realized that they desperately needed work. Karol Szöcs always makes important decisions from the heart. He is thankful to God for all He has given him, and he wants to share this blessing with others. He has open eyes for others, open ears for God’s voice and an open wallet for social projects.

Since he is a practically minded person, administrative work is wearisome to him. His enormous expertise as a craftsman and his natural way of dealing with people are his strengths. His heartfelt sociability and his fluency in Romanian, Hungarian, German and English continue to give him access to business partners and customers alike. He quickly learned that it was useless to wait for customers in his village. He had to cultivate his contacts and travel extensively.

Special activities

1) The search for the right business field

Salmon fishery is not an issue in the bear country of Romania. When he met with friends from the Faroe Islands, he did more than eat salmon. He also asked questions about the methods of catching salmon and learned that the process requires a large amount of complicated mechanical tools. Now he just had to convince his friends and future business partners that he was able to produce these tools in Romania and also guarantee the desired quality. On top of this he also offered them an extremely attractive price.

2) The construction of efficient production facilities

For Karol Szöcs producing a single-unit prototype was not a problem. However, keeping the quality consistent in series production required a functional production hall, a modern machine park and logistics that delivered at all times. Karol Szöcs was generous in his initial layout concepts so that expansions could be added later on. He was careful and proceeded step by step in practically implementing his concepts so that he could create the largest possible benefit with the least amount of capital. Thus, his company grew continually and orders continued to come in.

3) Developing a reliable team

When Karol Szöcs arrived in the village of Ghindari, the unemployment rate was very high. Only few applicants had actually had any training in metal processing and none had any professional experience. Thus, the entrepreneur had to take the training of his employees into his own hands. Choosing the right employees played an important role in this process. He had to hire people who had a pronounced willingness to learn, a good character and were able to serve the company in the long term after having completed their training. To make this possible he had to offer good working conditions, like heated fabrication halls in winter, functioning tools and machines, attractive break time facilities and regular as well as adequate remuneration.

4) Networking with strategic partners

Karol Szöcs relies on his strengths. Yet, he is also aware of his weaknesses. For this reason he surrounds himself with people who professionally support him in all fields of business and who are highly competent in business consultation. He is willing to listen. And he heeds criticism and advice and takes appropriate action.

Insights / Lessons learned

1) A person can also make correct decisions from the heart.

Earning profits should not be the primary objective of work but a logical consequence of it. A person can also discover market opportunities with the heart.

2) Following the calling of God results in blessing.

Asking for the will of God also means obeying it. Often many obstacles must first be overcome. Doubts emerge. But persevering is worth it. In the end God will bless the person who obeys – he himself will be blessed and he will bless others by sharing with them.

3) Every great journey begins with a small step.

It is probably good for us that we do not know the difficulties that lie ahead. We would become discouraged and give up too soon. Taking small steps makes tasks manageable and does not overburden us. Many small steps lead to the goal. Seemingly impossible things become possible.

4) Few concepts and lots of practical work

Striking the right balance pays off. Too many premature concepts and theories erode the strength of the will. Thus, many good ideas die before they can be developed. If a company lacks a concept, chaos ensues. In the end this costs the entrepreneur dearly. If a company is managed with the head, the heart and a few good concepts, the entrepreneur saves a lot of money.

Optimedia: No unsatisfied customers allowed

Branch: Manufacturing of PVC windows

www.optimedia.com.ro

Business model

Marius Pantis, the founder and proprietor of Optimedia Ltd. in Oradea (Romania) has high goals and demands. E.g. he does not want to have any unsatisfied customers. This goal is binding and defined in his company model.

Optimedia employs a staff of 200 and produces high-quality PVC windows using state-of-the-art facilities. His company operates with a central production facility in Oradea and 35 showrooms in strategically important cities. Thus, he services all of Romania. On account of his computer-guided production and taut logistics he is able to finish the window installation process within three days of completing production.

Special characteristics

1) The first steps of small companies in the business world

Shortly after having completed his studies, Marius Pantis married . At the time he could not afford the rent for an apartment for him and his wife. Thus, he started his first small company, producing and repairing electronic parts. He gained valuable experience in manufacturing, calculating and marketing products. However, the profit margins remained low and the big money eluded him. He then started his second company, trading coaxial cables from China.

2) The importance of appearances and marketing

He had had no previous experience in marketing. And when he made his first appearance at a trade fair in Bucharest, he came dressed in his work clothes – he did not wear a tie nor did he have any business cards. And he soon had to realize that potential customers paid no attention to him. He quickly went out and bought his first suit and overhauled the appearance of his company to make it look more professional. And: It worked. He received interesting long-term contracts from clients and was soon able to hire seven employees.

3) Predicting the market of high-priced PVC windows

Marius Pantis made his real breakthrough with his next company. His constant observations of the market revealed a new and highly interesting market opportunity: the manufacturing of PVC windows. This marked the beginning of Optimedia. Having little money but valuable experiences in production, cost management and marketing, he opened up his new business with a small manufacturing hall connected to a presentation room. These facilities enabled him to exhibit his products and demonstrate the manufacturing process to customers and, thereby, win their trust.

4) No unsatisfied customers

His first and most important marketing principle was to demand the following from himself and from his employees: “We must never have an unsatisfied customer in our town.” This is easier said than done and putting this principle into practice proved to be difficult. Yet, Pantis made it happen. By setting an example and by continually training his employees, this principle became a reality. The result: His satisfied customers became his most effective advertising agents. They continued to bring in new clients. Company growth was guaranteed.

5) Learning from Solomon: asking for wisdom

Marius Pantis quickly became successful, and his character did not change for the worse. This should not be taken for granted. Many successful business people tend to become arrogant and neglect the ethical principles of their earlier days. For Marius Pantis this was not the case. He always remained deeply connected to the word of God. He had learned early in life to ask God for wisdom in all situations. Today everyone can see that God answered his prayer.

Special activities

1) Market presence in one’s home country

Marius Pantis decided to early on establish a comprehensive market presence in Romania. He opened up a total of ten sales locations with showrooms in all strategically important cities and gave out 25 franchising licenses to partners. Thus, he was able to effectively position his brand “Optimedia” throughout the entire country while making limited financial expenditures.

2) Clean process organization on account of ISO 9001

Marius Pantis also organized production and logistics in the same professional manner in which he had organized his marketing division. He analyzed the needs of customers and organized his operations to satisfy customer needs as best as possible. Simple order processes, quick production, high flexibility, extraordinary quality, timely logistics: These were the goals he aspired to. The ISO certification ensured that all processes were performed with the same consistent quality for all orders.

3) Employee training to ensure customer-oriented behavior

In but a few years the company, including its production and merchant network, had grown to about 300 people. For Pantis this meant ensuring that his entire staff received constant training and advanced training. Most entrepreneurs in Romania avoid investing in employee training because they are afraid of losing their employees to competitors once training is complete. Marius Pantis thinks differently. Besides a reputable training, he also offers his employees a whole package of incentives by which he wants to encourage them to become long-term partners. Several of these incentives do not cost any or hardly any money, but they create a company climate of gratefulness.

4) A convincing management information system

Marius Pantis has also grown personally as his job description changed from manager of a small business to manager of a medium-sized business. When he started his company, he took care of all the details and was always in the know. Later on he was forced to delegate tasks, responsibilities and competences to employees in order to free himself up for strategic tasks and maintain an overall oversight. For this purpose he built up a convincing management information system. This system promptly supplies him with all important and necessary information to make entrepreneurial decisions.

5) Clear company structure with profit centers

Every step of growth also requires adjusting operational structures. Today every production area of Optimedia is also a profit center. Thus, costs and profits can be clearly analyzed and allocated.

Insights / Lessons learned

1) A clear marketing strategy must be simple and effective.

The marketing strategy of Optimedia is simple and logical. It rests on three pillars:

- Precise market observation and analysis by the company proprietor

- Systematically learning from experiences

- Putting theoretical insights into practice by implementing practical and complementing measures

2) The right employee mindset does not develop automatically.

A customer-oriented company must require all employees to think a certain way. Customer needs must be perceived and discovered. Employees must understand and like customers. Problems must be worked out and solved. To achieve this, employees must make an arduous effort. Most shy away from such a task. Thus, an understanding for this kind of behavior must first of all be awakened and promoted. And then employees must be trained systematically. If there are deviations in daily operations, they must be recognized as such and corrected. The process must be smooth, enjoyable and conducted with a sense of humor. Employee training is effective, when it is fun.

3) The blessings and the joy of sharing

There is one issue Marius Pantis rarely mentions: sharing. But he practices it. For him being an entrepreneur also means taking on social responsibility. Pantis does not only have an attentive eye for market opportunities but also for the needs of his fellow human beings on all levels. This comes through in his human resource policy when he gives people from difficult circumstances a second and a third chance or when he secretly gives up a portion of his profits to charitable causes.

GEWA: A socioeconomic company (social business)

Branch: Occupational integration

www.gewa.ch

Business model

GEWA wants to help people with psychological limitations and integrate them anew in workplaces by offering them meaningful long-term jobs. Occupational reintegration follows the path of professionally clarifying possibilities to implementing systematic measures of integration. People are not merely kept busy with long-term occupations, they are entrusted with valuable and marketable tasks that suit their personalities and make their work meaningful.

Special characteristics

1) Perceiving the needs of people with limitations

The founder of GEWA, Martin Ryser, used to be the manager of a workshop in a psychiatric clinic. He spent most of his work time with patients. Thus, he not only discovered the limitations but also the potential of his patients. At the time there were hardly any programs that purposefully developed the potentials of psychologically disabled people. The patients were unable to express their needs. Martin Ryser spoke up for them. With a great deal of imagination and inventiveness he overcame many hurdles and impediments, and today, thanks to his work, many mentally challenged people have new perspectives and a higher quality of life. He has opened up the doors of opportunity for them.

2) Pure innovation

In this field of business there were hardly any functioning models to follow. Thus, innovation was required. And it still is today. The current GEWA manager, Samuel Schmid, is constantly confronted with questions such as: What kind of work is suitable for our employees? How do we find customers for our services? How can therapy goals be combined with entrepreneurial goals? Asking these questions has led to GEWA’s current range of services:

• Gastronomy (restaurant and catering)

• Logistics (storage, administration and conveyance of goods)

• Pharmaceuticals (packaging and repackaging of medication and cosmetics)

• Office services (archiving, accounting, invoicing, phoning and organizing)

• Packaging service

• Horticulture (planning, building and cultivation of gardens and park facilities)

• Assembly of technology (constructing, manufacturing and assembly)

• Property service (upkeep, cleaning and clearing of buildings and apartments)

• Internet shops

• Specialty shops (commerce)

3) Relationship marketing

Marketing for socioeconomic companies has its own rules. It has to oppose preconceived ideas about people with limitations. Can we expect these people to keep deadlines and offer quality? For socioeconomic companies the most effective marketing instrument is relationship marketing. Thus, GEWA invites potential customers and government representatives to their facility. Here they can see for themselves what the company is capable of. Just seeing the highly modern building already amazes potential customers. A presentation of state-of-the-art machinery and management instruments follows. And finally the finished products are shown to the visitors, produced and manufactured by people with psychological disabilities. This removes barriers, changes opinions and generates orders.

4) The joint task of supervisor and patient

Being a supervisor for GEWA is more than just a job. They share their lives with people who have a hard time gaining access to the job market. On the one hand, they want their patients to achieve developmental progress, and, on the other, they want to satisfy the needs of customers.

Special activities

1) Build-up and completion of the pioneering phase

Without the pioneering work of GEWA founder Martin Ryser the organization would not exist today. And if Samuel Schmid had not adapted management style and instruments while transitioning from the pioneering to the growth and then to the differentiation phase, GEWA would be existentially endangered today. Two entrepreneurs with quite different leadership styles – but with the same goals – accomplished this. The transition phases were difficult, even for them. Yet, they succeeded because between the two of them they had the necessary abilities to master each life phase of the company. Martin Ryser, the pioneer, built up the company; Samuel Schmid, the systematic strategist, expanded it.

2) The value process

GEWA’s work is based on the values of Christianity. What are Christian values and how do we live them out practically? Time and again these questions have to be answered anew. Such an attempt was made at a workshop with 40 employees. Nine basic values were emphasized that had been an issue within the company over the last years. The goal was for all employees to personally identify with these values and apply them practically in their daily lives.

3) A comprehensive offer

When working for GEWA, patients are not just simply kept busy. The intent is for them to develop their potential as much as possible. This requires a broad spectrum of available offers. Within this range of offers employees can switch positions, if necessary, and thereby increase their reintegration chances. And if overburdened, they can take on a suitable task in the same organization.

4) Systematic growth

The occupational system of GEWA only works in a company with a certain size. Working with disabled employees demands high flexibility since they cannot always perform the same task consistently. The GEWA customer should not notice this as he expects a timely and qualitatively flawless service. This flexibility is only possible when a sufficient number of qualified employees are available for each service area.

Insights / Lessons learned

1) Pioneers are a necessity.

Real pioneers are rare. We need them. We will even accept their peculiar idiosyncrasies. They see necessities and possibilities and get projects going. They mobilize people and finances. They cross boundaries and abide by their own laws. Therefore, they need sufficient freedom and clear restrictions. Entrepreneurs need committees above and around them to keep them accountable.

2) Transitions in the life cycle of companies are precarious.

It should not come as a surprise if problems arise in the transition between two life cycle phases. This is quite normal. Yet, transitions must be recognized and managed well. Although the new life phase is based on the previous one, it is new and different. New rules apply.

3) There are favorable and unfavorable company sizes.

For most business models there are favorable and less favorable company sizes. This should not be left to chance. Clear indicators such as flexibility and cost structure can help us when making attentive decisions about the ideal company size.

4) Different leadership styles can have the same result.

Naturally, the leadership style of a pioneer differs from the style of a strategist. Both have their advantages and disadvantages. The most important thing is: Managers should never mix leadership styles. The pioneer must be able to let go and find joy in a new – and different – situation.

5) Taking socioeconomic action requires professionalism and sometimes toughness.

Socioeconomic companies are often seen as soft and weak. They are allegedly not resilient and can only function under a protective umbrella. This must and can be different. Socioeconomic actions require professionalism. In certain situations this includes implementing tough measures. Yet, the employees must understand and accept these measures so that the desired effect is achieved.

Joinery Baumann: Creating quality products with socially weaker employees

Branch: Manufacturing of kitchens, doors, beds and floors

www.tuerundraum.ch

Business model

Roland Baumann, the founder of Joinery Baumann, should actually not have become a master carpenter but a social worker; he has great empathy for the socially disadvantaged. However, there is probably no other job in which he could perform such valuable social work as he currently does in his role as a master carpenter. This is how his business model began: With a small group of socially weaker younger men – the majority of them had been drug addicts – he wanted to manufacture professional joinery products and make them available on the market. He wanted to achieve more with his employees than merely keep them busy with arts and crafts – this was usually how workshops in social institutions operated. They were to financially provide for themselves and attain a feeling of self-esteem through their work. And customers were not to notice any of their limitations but receive flawless products. Quite a challenging task!

Special characteristics

1) An idea with consequences

The basic idea for this company was entirely practical: Professional expertise was to be used as a therapeutic instrument for socially weaker people – former drug addicts. First the positives: It works. Throughout the company’s existence, which now spans more than 20 years, roughly half of the socially weaker employees have been successfully reintegrated into society. Many of them now have families and children. Now the negatives: The model requires a lot of energy to overcome frequent obstacles and cope with disappointments.

2) The dilemma of customer satisfaction and therapy success

The customers buy products at a price; they demand high quality and want to receive their orders on time. This requires full concentration and a fast work pace. However, socially weaker employees are unstable and still lack expertise as their training process is not yet complete. This calls for a large measure of understanding and time for therapeutic talks.

3) Specialization in kitchen manufacturing

The company soon had to decide what products they wanted to specialize in. On the one hand, the work could not be too demanding for the employees and, on the other, it had to offer them sufficient variety. Manufacturing kitchens proved to be the ideal solution. However, this decision had enormous financial implications. Manufacturing kitchens requires buying expensive machinery and providing expensive training to employees. Roland Baumann did not have the means for this and had to borrow capital.

4) Trade fairs as a marketing instrument and selling beds as a business expansion

Roland Baumann’s main marketing instrument is exhibiting his products at regional trade fairs. Baumann noticed that 80% of trade fair visitors bought kitchens. Thus, his plan was to find prospective customers at the fair and invite them to his exhibit. As a complimentary product Baumann also incorporated Trinatura beds into his product range. Although till this day the sale of these beds only makes up a small portion of his profits, it does generate contacts with new customers.

5) The quantum leap and its consequences

The actual quantum leap – or wrong strategic decision – took the form of an entrepreneurial temptation. The company Eggimann, which specialized in manufacturing doors, was being sold due to a generational change. At the time Roland Baumann was looking for more production space and saw the purchase of Eggimann as an opportunity. With a large amount of borrowed capital from a private investor, he bought the company and merged Eggimann and Joinery Baumann.

This fusion proved extremely difficult. The employees of the door company had been trained to work quickly, to produce doors in serial production and showed little understanding for the special needs of the kitchen manufacturers. Many talks were necessary to build up mutual trust and understanding. In the end an exceptional idea led to the breakthrough. Roland Baumann introduced a tried and trusted ritual: Everyday he spent some time with his employees during their lunch break. During these times crucial discussions took place.

Special activities

1) A profession as a calling

Roland Baumann has always understood his profession to be a calling. Earning money, though necessary, should never be the top priority. The work time can also be used for more important things. The entrepreneur is confronted with the question as to what the purpose and meaning of his work is. Priorities can shift. At times serving becomes more important than earning money.

2) Making an impact by being an example

Convincing former drug addicts is not easy. Words alone have little effect. Action is needed and being a role model. The leadership style of Roland Baumann is characterized by the tension between showing great understanding for limitations and clearly demanding reliability. It is a mixture of making demands and supporting employees.

3) Overcoming obstacles and coping with disappointments

Roland Baumann had to realize that not all socially weaker people were suitable for his business model. He had to develop criteria to exclude unsuitable candidates during the selection process. Otherwise handling expensive and dangerous machinery would be too great of a risk. And Baumann also had to learn to dismiss employees after some time if therapy goals had not been achieved. To this day these disappointments trouble him.

Another – completely surprising – event hit Roland Baumann even harder. His private investor, giving only very short notice, pulled out of his line of business and sold his company share to a new investor. Roland Baumann did not have the necessary financial means to buy up his share. The new investor now actively manages the company. Roland Baumann, the company founder, is employed as divisional director for marketing and sales.

Insights / Lessons learned

1) Being social requires more than mere talk.

It is easy to talk about social entrepreneurialism. Many books and journal articles are filled with social ideas. Actually being a social entrepreneur is much more difficult. It means serving and sacrificing yourself. It means looking out for others – for the disadvantaged. It means relinquishing.

2) Growth is important – and dangerous

Growing is a part of life. However, the transitional growing phases are precarious. They demand our complete attention. Quantum leaps are tempting and often sensible and necessary, but at times they can also be extremely dangerous.

3) Making a social impact requires a framework

An old, unwritten law also proves true for Joinery Baumann: A healthy company should make 10% of its workplaces available to socially weaker people.

4) Letting go is part of it

People with a calling lead a full life. Their lives are not predictable. They experience joy and disappointment. They build up and let go. They create anew and are never prisoners of their own work.

Grace Softs: Equipped to grow

Branch: Software and website solutions

www.gracesofts.com

Business model

In 2009, Le Vi, a young man in Ho Chi Minh city, together with his two friends established a business called “Grace & Gift” selling souvenirs made by the deaf youths, but soon after that he realized it was hard to make a profit and continue in that business. He thought about his strengths, which are in IT, art and English, then he explored and defined his business plan in the area of web designing. At the same time, Vi and his wife began saving money to invest in this business. In 2010, he launched his new web service business “Grace Softs”, at first working as a sales agent for big international and national agencies for hosting and domains. After just a little more than two years, the business had an income five times as much as when it started – approximately 500 million VND compared to less than 100 million VND. The business investment capital had grown from less than 30 million VND to 1 billion VND, most of which came from the reserved budget within the business’s turnover and some from his sister who wanted to invest in the business. With steadily increasing numbers of customers, “Grace Softs” now has products ranging from software, website designs to domain name service, web hosting (high quality, host unlimited…), server, email server, advertising, selling computer and devices.

Special characteristics

1) Turn a vision into reality

The business has been a real revelation to Vi on how he can have a vision, make a plan and turn it into reality, with proper business training opportunities and with his efforts to learn, reflect and put plan into action. Before, he had just studied and worked in his areas of interest such as IT, while he wanted to help people around him as a way to serve God, he had no interest in doing business. However, he changed his mind completely after attending a seminar on business plan making, offered by a small and medium enterprises development program supported by Swiss Create.

After the first seminar, Vi seriously considered starting his own business, because he realized entrepreneurship can be such a good way to be empowered and also to help others. The unsuccessful nature of his first try with “Grace & Gift” did not stop Vi from moving forward, but he also learned to think and prepare more carefully before making the second try. He remembered what the trainer told him before about searching one’s strengths and relevant opportunities to make a business happen.

2) Good business strategy needs wisdom

The business training seminars that followed after that have enabled Vi to develop and sharpen his business strategies and management practices with wisdom. Vi was impacted strongly by the teaching contents, such as “use your 1.5 kg of brain” – this reminded him to think, because sometimes he would just quickly take action and forget to use his brain, which God has given him with such great potential to imagine and find better ways of doing things. Another time, through a double picture presented – “an old miserable man or a couple in love?” – Vi became deeply aware that for a situation one can often see only the negative things, but there are other things, opportunities, good things that one needs to realize. This can be applied to viewing a staff or a business situation. In his opinion, he does not need to learn everything, just catch the most important keys and then develop from there.

3) Combine intuition with methodics

Vi could apply almost all the contents from the seminars and he saw them work in his business. For examples, after the seminar on leadership, Vi experienced clear changes in his view about himself and his staff, and improved significantly his personnel management. Before he just worked with his intuition and feelings, without much knowledge about personalities, strengths and weaknesses of both himself and his staff. Now he understands, so he could assign the right people to the right tasks that suit the people’s strengths, such as the “ant” typed person is for quality control and analysis, the “monkey” for defining strategies, the “elephant” for making plans, and the “tiger” for taking actions. Vi also knew how to interview and employ the right people. Vi was aware of his weakness and his typical pattern in stressful situation, and found ways to prevent or reduce the negative impacts from those factors. Regarding task delegation, now Vi does not take all the work on himself as before; he can give assignments to his staff, have confidence in them, and be patient in supervising and encouraging them.

As a result, his business is steadily making good progress and profit, and his relationship with staff improves in the process too.

Special activities

1) Sharing ideas

After each business training seminar, firstly Vi shares with his staff, then he applies it to himself. This helps him and the team grow together, and Vi as the leader sets a model for his co-workers.

2) Focus on specialized services

Grace Softs strategically put a focus on providing specialized services such as international domain names, hosting and server, because the market is growing in these areas while not many have suitable technical strengths and networks as Grace Softs does.

3) Understand the customer’s needs

Grace Softs has developed a team to work on software development, and they design customized software for clients in various areas, including business start-up and development. This way of work requires sensitivity and understanding of the customers’ needs, not just technical knowledge. Vi and his team invested their efforts in investigating the concepts behind the tools, therefore they can offer suggestions to develop the product even beyond the expectation of the customers.

As an example Grace Softs was able to develop in a very short time the “Swiss Create Business Manager”, a complex software program that helps consultants to develop business plans, marketing plans, SWOT-Analysis, Business-Analysis, Finance Cockpits, Risk Management instruments and more for worldwide use in different languages.

4) Share with others

In parallel with business development, the company allocates a portion of income and investment for social projects, because this is a part of the vision of the company that Le Vi and his close co-workers have been having, as serving communities through their products and services, and also contribute to the society development at a wider level. The company also directly implements a special project on training and support for youths in remote areas in Mekong Delta region in IT, so that they can access and apply IT to their daily life. After the training, the company offers opportunities of employment through on-line collaboration and working from home with internet support, and those who have potential will receive the support from the company to go to study in national universities in Ho Chi Minh City while having their part-time job.

Insights / Lessons learned

1) “Use the brain” and “do something” should go hand in hand.

2) Finding where the entrepreneur’s strengths can meet the market opportunities helps making a good business plan.

3) Saving money to invest on business, instead of relying heavily on loans, enables steady and confident growth for the enterprise.

4) Practical and relevant training on business knowledge and skills can bring great benefits for the enterprise.

5) A good seed well planted will reap a harvest. Inspiration has been transferred to Vi from his business trainers, and now from Vi to others, for true entrepreneurship as a way to serve God and people, and to realize so much potential for creativities and growth for individuals and organizations. Much effort has been invested along the process, but the results are so worthwhile.

The Magic cake – Café Smile: From a childhood dream to a successful reality

Business Model

In the year of 2010, Ion and Olga Istrati founded a pastry company under the name of “Prajitura magica” LLC. Along with this, they opened a cafeteria (Café Smile) in the district of Stefan-Voda, Moldova where you can find all sorts of pastries and dishes made exclusively from natural ingredients. They enjoy the tremendous success they have because of the number of clients which visit them every day, and also due to the special order cakes.

Everything started with Olga’s dream at the age of 14 when she made a cake in the shape of a heart using her inborn talent and intuition. Everybody was amazed by the design and the wonderful taste of that cake, and since then, she dreamed of becoming a cake baker. This dream stuck with her and soon, she pursued a career in the food industry at the Technical University of Moldova, even though her parents didn’t support her decision. After Olga got married to Ion, she was looking for a job in Chisinau and so she worked in a few cafeterias as well as a cooking teacher. But because the salaries were very small and they were far from home at the encouragement of their parents, they decided to start their own business in their home town, Stefan-Voda. Due to the fact that they didn’t have the required space for producing cakes, Olga made them at home and soon enough she became known to many people in town because of the taste and quality of her cakes. In the meantime, with the help of their parents and relatives, they were able to get a small place in the center of the city where they could develop a cafeteria under the name of Café Smile. At the present time, working together with her husband, Olga enjoys the amount of clients that visit them because of their menus, cakes and delightful dishes they are producing at a very convenient price.

This family is involved in an ever-evolving process of improvement by attending all kinds of seminars and by seeking business consultancy. They have attended all the business seminars offered with the support of Swiss Create and Christliche Ostmission. These things are helping them in achieving a much-sought after objective: business excellence. Following their business development and observing the important things that have to be taken into consideration, the Istrati family plans on expanding their business in other areas.

Specific Activities

1. Products and services of high quality

In the small town of Stefan-Voda as it is with other villages in Moldova, there are not too many decent places where you could take your family after work to enjoy some good food, so Ion and Olga created a pleasant environment where they can serve their clients with delicious food and sweets at a very convenient price. All products are made from natural ingredients without preservatives or other synthetic additives which would alter the unique and delicious taste of their products. This is one of the main factors that bring clients to the cafeteria from Monday to Friday. Most of the raw materials are processed in advance by the staff in order to ensure that their products have the highest quality.

2. Special order products

The activity of Istrati family’s business has started with special order cakes. Each cake can be produced according to the specifications of the client. This branch of their business is a great generator of new clients for the company. Every placed order is carefully analyzed so that the client will get the highest value. Even when a client wants a certain product which cannot be found in-town, Ion will look for it in Chisinau or in other regions in order to satisfy the client’s request for the same price. In the same manner, the company delivers pies and pizzas.

3. Organization of special events

The cafeteria is also available to people who want to organize birthday parties and other special events where the client can order anything he wants from the menu. Even though the place is small, organizing birthday parties for children is a tremendous joy due to the decors and the tasty food of Smile Café. According to Ion, the owner of the company “most of the time, our agenda is fully booked with such sort of events and we have to refuse some clients even though that’s very hard”.

4. By caring for the society, we move forward

When Ion and Olga extended their cafeteria by building an outdoor terrace by the entrance, they faced tremendous, unjustified resistance from the local authorities and some neighbors. They received a lot of support from the community due to their social engagement in arranging the area with a side walk and a playground for kids. This type of engagement can be of tremendous help in overcoming such barriers in the future as well.

Specific Elements

1. Innovative recipes

Another important aspect of the company is related to the recipes and the way the products are cooked. All the recipes are created exclusively by Olga and they are put on special sheets. Furthermore, Olga has a special journal for registering all the ideas which might come up during the day so she could work on them later. In this cafeteria, you will always find something new in terms of taste and look that you can enjoy.

2. Unique design

The products of this company, especially cakes, always stand out from the crowd because they improvise all the time with new shapes, images etc. Every client has a shape or an image in his head and so, the cakes vary from sport cars and toys, all the way up to portraits of people. All of these can be made at a reasonable price with top quality in taste and delivery. Even though some of the other products are served bistro, many times a client will get a pleasant surprise when he finds his name written on a piece of cake that he ordered. The main tendency of the owners of this business is not to refuse any client so that he gets the product he is looking for.

3. Great variety

Besides the poor quality of products, in most of the cafeterias from Moldova you won’t find a big variety of products. This fact was observed by Olga and Ion and so, they came up with a big variety of products in order to satisfy the needs of their clients from the region. In café Smile you can choose from great homemade soups and barbeque all the way up to pies, cakes, chocolate, refreshing drinks and so on, even though their place is small. Even though, at first sight this cafeteria might look like a simple one, it is daily visited by state officials, bank workers, policemen, professors and students who come for a delicious meal.

Insights / Lessons learned

1. When you are engaged in a family business, you benefit from greater unity.

The unity in family, as well as in business is a key factor in overcoming crises and disappointments. Ion and Olga receive encouragement one from another when circumstances aren’t too favorable. Their business would have been closed for a long time now if they didn’t have each other’s encouragement as well as encouragement from their friends and family.

2. When you’re on the edge of disappointment, never give up.

Even if your client is telling you that you have the worst product, local authorities won’t leave you in peace… use this opportunity to grow and overcome these concerns so that you will become unique in your market area.

3. Relatives and friends can encourage us but they can also use us.

The issue of having relatives in a business is very delicate. “Relatives can help, but at the same time, if we don’t pay attention, certain people may use us and our money”. The process of hiring and working with relatives has to be done very professionally and in a well-established setting.

4. Communication within the family and at work can help you overcome huge barriers.

Dealing with business problems can have a huge toll on relationships within a family even if the husband and wife are working together. It is extremely important that communication is balanced and done in a proper way within the family as well as with co-workers. Talking with your staff members is very important if you want to be an efficient manager and avoid certain errors in your business.

5. Understanding you client is very important in sales

Every client has their own perception of things and many times this requires a lot of time and attention to truly understand their need. It is better to spend more time with a qualified employee when placing an order than to have complaints afterwards.

6. Be honest all the time if you want to achieve great things.

Honesty is very important in the relationship with your clients as well as with the authorities. Even if you have failed at fulfilling certain requirements, be honest and admit your mistake. Honesty is an investment in your relationships, and it doesn’t cost you anything. You will gain more trust, and you’ll solve problems which seem unsolvable.

7. An efficient process and financial management can help you in becoming excellent.

Planning and setting objectives is very important in business. Furthermore, financial administration requires additional work in order to stay profitable and have the necessary control tools for your company. This will help you be more confident in what you are doing at the moment and what is to be done in the future. This is also of great value for managing the flow of materials and production in a cafeteria where orders are frequent and varied.

Bibliography