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Secrets from the Farm: On Fear, Honor, and Building Companies
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The second problem with fear is that it leads to inaction. 'Analysis Paralysis" is the phrase most often used to label the state of investors or CEO's that insist on having all the facts before deciding which way to steer the ship. Conversely, the most successful CEO's seem to have a knack for finding their way in the dark. "Any decision is better than no decision," these CEO's are often heard saying – primarily because one learns more from taking action than from endless evaluation of the options. The notion seems so commonsensical that it begs the question, Why are so many executives obsessed with having all the data in the first place? The answer, of course, is fear. Fear of what your staff will say if you make the wrong tactical decision. Fear of what your board will say if you make the wrong strategy decision. Fear of what society will say if you are perceived as having 'failed'.
Which brings me back to Pete's dinner table. Or more precisely, his dinner table law. It occurred to me that perhaps the reason I so often risked getting mixed up with people that I suspected were of low integrity had to do with….Fear. Fear of missing an opportunity. Fear of what might happen if the person I declined to partner with went down the street to a competitor and became successful. (Readers that truly want to know what this feels like are encouraged to ask any venture partner that declined to invest in Yahoo, EBAY, etc.)
I realized all this while Peter continued his rant about the importance of allowing our canine friends to enjoy their short lives. After all, one year to a human is like seven years to a dog. The average large dog lives maybe 8 – 11 years. "You mean to tell me you'd never let Twist off-leash in a field…just because you're scared he might run off?! Fear makes no sense, Angel. Life is too short."
The lesson works for dogs, and perhaps for us humans as well.
"Twist", by the way, is the name of my Labrador retriever. Six months ago, he was kicked out of his doggie day-care for attacking several other dogs that were quite a bit larger than he, including a Pitbull terrier. So Twist, I'm proud to report, is absolutely fearless. Unfortunately, that is more than I can say for his owner. As an entrepreneur and executive recruiter, I confess that I am a chronic worrier. I worry about my candidates…my clients…my employees. The 'what-ifs" never stop – so it is fair to say that I live in perpetual fear. And while Pete's 'power to the puppies" speech reminded me of the dangers of living in fear, it did nothing to explain how to live otherwise.
It wasn't until Peter vomited all over one of my business ideas that the secret to doing away with fear was revealed.
Lesson 3: Where Money Really Comes From
As I mentioned earlier, Peter had long ago attained celebrity status in the same market that was being targeted by an early stage venture that I was about to invest in. I arrived at the ranch in hopes of securing him as a strategic investor and board member. If I could win him over as a partner in the business, the venture would start with immediate credibility.
After completing a few random chores, we walked over to Peter's boardroom - contained in an Amish-built logcabin that sits on the shore of one of his private lakes. I booted up the laptop, and started running through power-point slides, much like an entrepreneur presenting to a venture firm. I pulled out financial projections. I pointed out that the market size was immense, and the potential to enter other verticals was strong. He made some comments about low barriers to entry that I had anticipated. I was not attached to any one plan, I told him. What I wanted was his commitment to going after a particular market – the business model was negotiable. "This idea is based on the biggest wave of change since the internet," I exaggerated, trying to close him. "Maybe this isn't the exact model…but somewhere, somehow, there is money to be made – we just have to figure out the where and how." History shows, I explained, that great business opportunities often arise during times of massive change. "This is one of those times, Peter. We can make money here."
He sat back. "So basically, you're saying this huge trend is going to happen…"
"It's HAPPENING," I corrected.
… "and you want to find a way to exploit it into a money making opportunity?"
"Then you're definitely going to fail," he concluded.
Frustrated but hopelessly curious, I leaned forward and waited for him to explain.
"The problem," he stated calmly, "is that you're starting from bad Karma."
Come again?! I had expected some criticism around typical business issues, e.g. customer adoption, margins, etc. - but a horse ranch in Missouri was the last place I had expected to be discussing new age philosophy. He seemed to sense my disbelief and changed his tone slightly. "Angel, what you've got to understand is that while business opportunities might arise during times of change, great businesses are built when you focus on making people's lives easier."
He continued: "Money is attracted to ideas steeped in genuine concern for others. One can never build a lasting business for the sole purpose of profit. The natural laws of the universe won't sustain it."
I had heard this stuff before, of course, but had always dismissed it as new age idealism. After all, business history is full of case studies that disprove Peter's theory. Some of the wealthiest people I know have hit homeruns by starting from a place of 'bad karma', picking markets that were hot and betting on the winners – with no regard for creating long-term value. Hewlett and Packard themselves confessed that the original goal was just to start a business – any business! And if memory serves, making people's lives easier was ancillary, if a priority at all. (Executives from HP, feel free to advise if I'm off on this point)
So on any normal day, my rational mind would have discarded talk of 'Karma" as flaky and unsubstantiated. But as anyone who has ever had a mentor knows, words of wisdom previously ignored often seem deserving of further consideration when delivered by the right messenger. And so, because Pete was Pete, I decided to attempt the old zen exercise of holding two contradictory ideas in mind at the same time, hoping that an epiphany would eventually arrive. And arrive it did – just not in the way I expected.
Peter's advice, simply stated, was to stop focusing on how to make money for myself, and instead focus on how to create real value for others. Let me state up front that I have no data to show that one path 'attracts money" faster than the other, and so cannot comment on the validity of Peter's statement in that regard (though I do encourage readers to send their anecdotes or refer me to investors and executives that share the same philosophy so that I may probe further). However, what I did discover (quite unexpectedly) is that focusing on creating value for others has an amazing side benefit: it makes fear go away.
Here's why. Fear is directly correlated to the degree of obsession one has with an outcome that is not necessarily within one's control. Things like money, status, and power are all goals that place the focus on oneself. But achievement of such goals is only partially the result of individual effort – external circumstances factor in as well. Is Bill Gates" fortune purely the result of his own hard work and genius? Hardly. Luck and timing played a role in Microsoft's rise, as they do in all great success stories. Even the most successful entrepreneurs and executives will fail to achieve certain wealth or status-related goals from time to time – and therefore, face the same failure-related psychological challenges that all of us do.
When a person is attached to goals that are not entirely within that person's control, fear is inevitable. Ever notice how the best negotiators seem absolutely fearless? Superior negotiators behave as if they have nothing to lose because they have minimized emotional attachment to the outcome of the transaction. Does that imply that to overcome fear, one should simply stop caring about everything? No – because this would be akin to throwing the baby out with the bathwater. Ambition and intense drive are still mandatory for long-term success. The challenge is to retain the same drive and commitment that have always been required to win in business, but change the ingredient that fuels those qualities. Think of yourself as a race car driver who can choose between two types of gasoline for your vehicle. Both allow for the same speed and performance, but one type releases a dangerous by-product that clogs up your car's internal mechanism and causes long-term wear and tear. Which gasoline would you choose? The desire for personal wealth is one type of gasoline, and the desire to create value for others is an alternative. When ambition is fuelled by the desire for personal wealth or personal status, fear is the natural by-product. If the focus shifts to creating value for other people, fear – or at least fear of business failure - seems to dissipate.
The problem for most of us, of course, is that we do not consciously choose what to focus on or value. Rather, we allow our external environments to define these items for us – and in doing so, strive to acquire the status symbols or media accolades that prove to society (and ultimately ourselves) that we have, in fact, achieved something of significance.
Which brings me back, once again, to Peter Leffkowitz. You see, Peter is a man who seems oddly unconcerned with being featured on the cover of 'Fortune Magazine'. The very first thing that he did after picking me up from the hotel that morning was to visit a place where farmers buy stuff, and haggle with the store owner over the price of a used saddle. It occurs to me now that no one who owns a giant ranch yet still cares about spending a few hundred dollars extra on a saddle could possibly be crippled by fear of business failure, or be tempted to work with a person of low integrity for the sake of making money. And I wondered for a moment what my life would be like if I actually cared about things like saddles…or horses…or hay.
Anybody need a farm hand? I have the world's greatest rolodex in enterprise software, and also like dogs a lot.
Angel Mehta is Managing Director at Sterling-Hoffman, a retained Executive Search firm focused on CEO, VP Sales and VP Marketing searches exclusively for enterprise software companies. He can be reached via email at: email@example.com
Peter Leffkowitz is Chairman and founder of the Morgan Consulting Group, and a recognized thought leader in the area of human capital management. He can be reached via email at: paradox_Pete@hotmail.com