Have you ever heard someone say, in defense of doing things according to the status quo, “This is not a business, we can’t run it like one!”
I have, from the general manager of a local golf club I used to belong to; from elected officials in local government; from my local school board; from a regional hospital going bankrupt. When some folks are confronted with dissatisfied customers (members, citizens, patients, etc.), or they have run out of money, someone will always suggest they “run it like a business!” I have come to the conclusion that they don’t know what a business runs like, and so that inference scares them. I want to explain, because there are times in my life when the best-run thing in my life is my business.
Well-run businesses are keenly aware of who butters their bread, and when those VIPs are unhappy, the people responsible respond like they just sat on a hot stove. As annoying as a complaining customer can be, the thought of them telling two friends is so unnerving that lemons must be made into lemonade. You just can’t send someone out into the world ticked off at your business. It’s acutely painful. It takes a little sliver out of your soul. Think DVM vs. The Apple Store.
Well-run businesses can picture it all coming apart. They focus on success but don’t deny the possibility of failure. They never say never, when it comes to failure. Great businesses look for the Achilles Heel in their operation. They ask “Is there anything…ANYTHING that could take us out?” It’s the polar opposite of believing you are a permanent fixture in the world. Entities that are not run like businesses sometimes ignore signs of decline for so long that it is too late when they realize they are in catastrophic trouble. They wake up well beyond the point of no return. Think US Postal Service VS UPS. Vulnerability leads to responsiveness.
A well-run business exists to generate more revenue than it spends. This sounds simple enough, but look upstream to government, and downstream to individual households, and you see a lot of people with a not-for-profit attitude. Consider how Governor Jerry Brown of California responded this week to the news that his state increased its debt by $7 billion in the last 5 months. He wants to raise taxes to cover it. Now consider a Pizza place on Main Street. The economy stinks, people are eating out less. His revenues are down 30% and he is losing money. Would increasing the price of a pizza pie from $10 to $15 be a good idea? Ludicrous! Ridiculous! People would simply take their business somewhere else, like Arizona.
My conclusion is that a well-run business should be innovative, smart and well organized, but it must be grateful, humble, disciplined and patient. When I have been able to bring those last four qualities to my personal life, it runs like a well-oiled machine.
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