Chapter 2. The First Step to Competency

There is a god I am ready to pray to: the god of competency. Competence is a mixture of knowledge, practical abilities, and creative goals. If one of these elements is lacking, competence does not exist. One can tell whether a person is competent simply by looking at the results of what he has undertaken. If a man is a competent husband and father, his family thrives, his wife is happy, and he is proud of his kids’ achievements. If a business owner is competent, his company prospers and grows larger without any headaches. If you are interested in knowing just how competent you are as a business owner, look at your results in this area. If you are always busy with urgent problems, if the company drains your energy and time, then you will never have harmonious operations and growth. Therefore you are currently not competent as a business owner.

You could argue that your company works just fine—better than many others do—and that people even have good reason to be jealous of your achievements. But do not fool yourself. Quite simply, we all have different standards. It doesn't matter what others dream about or what their level of competency is. If instead of working on strategic planning you work on day-to-day problems, and the company’s expansion only creates an extra workload for you, then you are not a competent business owner. You may be very good at day-to-day things, but you are not a competent business owner. If you are starting to realize that this is how things are for you, congratulations! You have taken the first step on the path to competence. The first step to competence—although not the easiest—is to admit that there are things you do not understand and that you lack the needed skills and experience. One must admit to a problem before it can be fixed. If a person does not take this step, he will forever be stuck in the mind-set of a know-it-all.

As the result of a merger between two manufacturing companies in 2000, I became a co-owner and CEO of the Geroldmaster Manufacturing Company.² Although at first the company was not the most experienced and well-equipped, by 2004 it had left all of its competitors behind, thanks to the implementation of the management tools discussed in this book. I had no choice but to start this implementation. As the company's production volume had grown larger, the organizational chaos had torn my company apart. Interestingly enough, in spite of all our problems, we were manufacturing the best products. This saved us from alienating and losing customers, even though we were consistently behind schedule.

Once the company was functioning smoothly, I left the CEO position to focus on the owner’s role. I started conducting outside seminars on management, during which I explained in detail the organizational know-how that had allowed us to become industry leaders. To my surprise, I found that none of the owners of Geroldmaster’s competitors attended my seminars, even though I consistently invited them. It was just unbelievable! Within a few years, Geroldmaster had become the established leader in its field. It was the youngest, most audacious company on the market, with the highest-priced products, which, like a tank, had rolled over the medal-design and -manufacturing industry, making products for government ministries and agencies, the military, and major corporations, as well as for a variety of social and religious organizations. Even though the owners of the competing companies knew that I was providing the answer to the question “How did Geroldmaster do it?” they still did not attend my seminars. They were stuck in an “I know it all” attitude.

When a person is stuck in such a mindset, he has tons of excuses as to why the situation should be exactly as lousy as it is. If you talk with him and ask what the problem is, why things are the way they are, the excuse is “the market conditions,” or “We don’t have any experts,” or some other made-up nonsense. But the truth is, that business owner is simply afraid to face the real situation, because upon facing it, he will have to do something that he has probably never done before. He is like a bad driver who blames other drivers, bad road conditions, and the weather. A man with problems in his personal life will tell you what is wrong with modern women and society in general. They simply do not have enough courage to look and see things as they really are.

In order to get rid of this “know it all” attitude, either you need to establish very important goals for yourself, or receive a good kick in the butt. An owner may realize that the results of his hard work are just a weak shadow of the results he desires, or he may find the day-to-day problems become too overwhelming. It is those in the latter group, who want to resolve day-to-day issues, not just cope with them, who most often seek our consulting help.

I wish I could brag that I got out of the “I know it all” attitude thanks to having important goals, but in truth, it was my clients who helped me with this. In 2002, the business was expanding, and as a result we had an almost completely uncontrollable company. Nearly 80 percent of our medal-manufacturing orders were overdue. Since most of our customers were military or government entities, my tenure as CEO was plagued by unpleasant adventures. My workday started and ended with dealing with unhappy customers. There was no way we could even think about strategic planning—I felt as if bullets were whizzing over my head. These unhappy customers were my miraculous kick in the butt. With my feeble attempts to fix things, it took a few months before I realized I had no idea how to run a growing company. That period was a turning point for me. I started looking for answers as to what I should do to make the company more manageable so that I, as the owner, could focus on strategic planning, rather than on fixing small issues.

Unfortunately, not enough literature is available on how well-known companies have handled times like these. The subject of management tools is considered too boring, and often too difficult for most people to comprehend. You can, however, find information on how a particular product was created or how successful manufacturing and retailing companies were started. Interestingly, every prosperous company has its particular management tools, but the general public does not know when and how they were implemented. The reason for this is simple: Only people at the very top of companies are interested in this topic, and their number is limited.

Since you are reading this book, either your goals or your problems have already given you a push, and you are looking for answers to questions related to a business owner’s role, as well as to the management of a company. In the following chapters, I will discuss the functions of a Kshatriya in a business, as well as how the business owner’s role differs from that of a manager.

Chapter 3. The Main Goal and Purpose

The widely known concept of a company mission statement is an essential component of management. It should be noted that this concept can be applied to any group of people, and even to a single person. Various management books give different definitions of the mission statement concept; however, my most precise understanding of it came from studying L. Ron Hubbard’s works, particularly the Administrative Scale of a group described in the article “Basic Management Tools.”³ In the article, he stated that any organization must have an exact and clear main goal and purpose. An effective mission statement is comprised of two parts: the main goal and the purpose. I will discuss this further.

First, however, I want to share my thoughts about Hubbard. I first became acquainted with L. Ron Hubbard’s works on management in 1999, and I was surprised to find that in his articles and books he described a set of practical principles that clarifies the foundation for successful management of an organization. The application of these principles in my business yielded excellent results, which enabled us to achieve a new level of expansion for my companies. From 1951 to 1986, Hubbard wrote more than 2,500 articles on various aspects of management, ranging from such topics as rules regarding the relationship between the owner and top executives to the development of marketing strategy and brand positioning. Most of these articles have been published in the nine-volumes The Organization Executive Course. In his articles, Hubbard revealed the laws of “classical management,” and he published many noteworthy discoveries in the field of management. To my surprise, these works are not yet widely publicized and few people in the business community have heard about Ron Hubbard as a management expert.

The Main Goal

For the purpose of this discussion, the term goal here is not used as more commonly is, as a physical, measurable, achievable thing. What is being discussed here is the main goal, which is the basis for the ideology of a company, something that makes sense for a group’s existence.

During a trip to Novosibirsk, I asked an owner of a construction company, “What is the main goal of your company?” Without any hesitation, he replied, “We work so citizens can admire and be proud of modern Novosibirsk buildings.” His answer surprised and delighted me, since I had gotten used to the state of confusion this question usually triggers. This answer might seem counterintuitive, given that people usually conduct business in order to make a profit. However, the fact is that the main goal of the most popular, successful companies is targeted to benefit a great number of people. It is usually included in the mission statement. For example:

Apple: “To make a contribution to the world by making tools for the mind that advance humankind.”

Google: “to organize the world’s information and make it universally accessible and useful.”

Microsoft: “to enable people and businesses throughout the world to realize their full potential.”

McDonald’s: “providing outstanding quality, service, cleanliness, and value, so that we make every customer in every restaurant smile.”

It might seem a little strange for people to start businesses if they benefit not just the founders but other people as well. Of course, we all have personal goals in life, things we try to achieve. It can be creative expression, achieving personal comfort, or establishing high living standards for one’s family. No matter what your job is, personal goals are equally relevant to a middle manager and to a business owner. One may be dreaming about a sports car, while the other may dream about professional acknowledgment or glory. As a rule the more a person has suffered defeat in the struggle to achieve his goals, the less his desire to achieve goals, and the fewer his personal goals.

When a business owner creates a main goal that does not go beyond his company, but stays “inside,” the company will not be able to expand and overcome obstacles. It is like trying to climb a mountain while having a goal of chatting with friends, or trying to lead an army while having a goal of looking good in a uniform. Of course, this is as silly as it sounds. That is the reason why a main goal “to become number one” inspires only an employee who has self-identification issues, for it is vitally important to such an individual to stand out from the crowd, and being an employee of a number-one company is a way of achieving this. But what does this have to do with the main goal of the group? Such a goal would be boring to people with high self-esteem who want to achieve big goals. It doesn't mean that “becoming number one” is a bad goal; it just cannot be the main goal. It is a good mid-level goal on the way to achieving something more. It is impossible to expand your influence without breaking out of your shell, working only in perfect comfort and coziness inside. I will discuss mid-level goals at greater length in chapter 12.

The main goal is relatively simple, as truth is simple. Fools are fools only because they cannot accept the truth as it is. Therefore, to perceive something closer to the truth, such people need to add some form of complexity. Only then will they look at the complexity, wrinkle their brows, and discuss it. For example, when somebody says that his personal goal is, “to increase people’s abilities,” others might ask, “What for? What is the sense?” The silliness of these questions is that the goal, on its own, is the basis for the sense. There is no clearer sense than this for the basis of the goal. What is the sense in climbing mountains, or what is the sense of competing in a contest, other than reaching the summit or triumphing in competition? Do not look for any clearer sense to a main goal than the intention to achieve that goal.