The Holy Trinity Of Startup Success: Purpose, Culture, Reward

Management consultants would have you believe that making a ham sandwich requires a PhD. But building a successful business can actually be boiled down to 3 pretty basic concepts.

Last time I looked, there were 19,200 book titles available for purchase at Amazon under the category "Organizational Behavior." I checked out a few of the top sellers and found a familiar pattern. Not one is written by an author who actually founded, built, and managed his or her own enterprise. The authors are academics or management consultants. Their information may be useful, but I wish more books were written by people who have gone through the experience of building a positive work environment while also juggling trying to satisfy shareholder and customer expectations.

I don't consider myself an expert on organizational behavior, but I have built several successful companies from scratch, two of which sold for over $100 million each. Whenever I get together with the various investors, contractors, and personnel to reminisce about those achievements, I am struck by how nostalgic they become. To a person, they describe their involvement in the companies as being the best experiences of their lives. Some investors even went public with those endorsements.

As humans our tendency is usually to over-complicate things. I have known some management consultants who would turn the making of a ham sandwich into a PhD thesis and we would all starve to death in the pursuit of perfection. In business, perfection is not the main aim. Survival comes first, customer satisfaction second, and employee/contractor fulfillment next.

When it comes to success in business, I have taken the approach that anything complex can be broken down into its three main elements. Whether it is the yin-yang tao, sun, moon and earth, or the holy trinity, we have the mental capability of understanding complex concepts in simplistic ways. Think of a TV. To use one I need to understand the on/off switch, the volume control, and the channel change button only. I don't need to grasp the science of plasma technology in order to get the benefit.

The same is true for organizational behavior. All my companies have had the same mission, vision, and values, and they represent the three simple steps of a positive work environment.

  • Make a positive difference in the lives of everyone involved;
  • Have fun doing it and;
  • Enjoy the material rewards of that endeavor.
  • The rest is just detail.
The first step is to find a purpose. Every enterprise needs a purpose. I meet budding entrepreneurs who tell me that they want to build a multimillion-dollar business. I ask them “why?” and usually they can't tell me. I ask them what their contribution to the world is going to be. Again, they have not thought about it that way. They have thought about themselves, and that is okay, but there is more to being a successful business than making profit.

I find when a company has the intention of making a positive difference in the lives of others, everyone galvanizes around a common purpose. Employees and contractors take ownership of issue and problems instead of always trying to make excuses or pass the buck. In my first company I talked the investors into abandoning the traditional board meetings. My experience in a regular career is that board meetings are a drain on resources, unproductive, and risk diminishing company morale. I had a hard battle at first, but over seven years managed to avoid all that nonsense. That attitude of making a positive difference reduces the complaining and gossiping that otherwise can creep into a company environment or any meeting. Anything that does not contribute to making a positive difference naturally dissolves.

Step two is all about creating the right culture. What is the point in going to work if you are not having fun? If you are not enjoying what you do on a daily basis, you are either in the wrong company or wrong job. It is unlikely you can fix your position easily, so have the courage to move on to something that does float your boat. Equally, if you are leading a business, there is no place in your environment for complainers and slackers. I think of all that negativity like passive smoking. If someone smokes indoors, I warn them about it. If they do it again, I fire them. Simple. Same with complainers and gossipers, because they poison the environment for everyone else. The livelihood of my business is at stake and I have no tolerance for it. One warning. Change or leave.

The third step is the one most difficult for some business owners. Sharing the rewards with those who have contributed to the company's success is essential. When those who do the work earn such a tiny fraction compared to the multimillion-dollars-a-year CEO, it is a recipe for resentment. Most employees are fine with the top guy getting those millions so long as they are also able to improve their own lifestyle through bonus plans that are real incentives.

Just as we tend to over-complicate organizational behavior, companies go mad trying to design effective bonus plans. Most I have been involved in, however, are designed from a mentality of saving money and squeezing every last drop of effort out of the employee. It is the wrong mentality. If the company does well, everyone should share in the success. One year a company of mine doubled its profit, so I gave everyone a bonus equal to their remuneration, in effect doubling that year's salary or commission. The investors were not happy with me at the time, but our personnel turnover was zero, and the following year we did even better. That bonus seems excessive to all those academics and consultants, but as a percentage of turnover salaries were small, and the increases hardly noticeable on the P&L. One thing is for sure, everyone enjoyed sharing in the success and worked even harder to make a positive difference afterward.

The combination of having a purpose, creating a fun environment, and sharing the rewards is a recipe for a successful working environment.

Trevor Blake is the author of Three Simple Steps: A Map to Success in Business and Life and the founder and CEO of QOL Medical, a specialty pharmaceutical company, and ANU, a non-profit that develops low side-effect cancer drugs.

[Image: Flickr user Martin Cathrae]

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2 Comments

  • Dennis

    This is refreshingly original.  I am starting up a company and I am reading as much as I can.  I have included this as something that I must do.

  • Bobby Burns

    As a fan of simplicity I have to say this is a wonderful take on an otherwise elusive topic. Great stuff!