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This is the most important quality for entrepreneurs, says How I Built This’s Guy Raz

In his new book, out this week, the popular NPR podcast host explains one very simple rule to creating a company that lasts.

This is the most important quality for entrepreneurs, says How I Built This’s Guy Raz
[Source images: Kumer/iStock; sanchesnet1/iStock]

Starting a business is hard. Growing a business is harder. Sustaining that business for a long time, at or above the standards you set for it at the beginning, for many founders seems hardest of all. That’s mostly because it requires so much buy-in—on the mission, on values, on identity, on dozens of constantly changing things—from every employee who walks through your doors every day as they come to work. Inspiring your employees to exhibit that kind of unity can be incredibly difficult—not because of their lack of interest, but because of your lack of time and know-how. 

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As founder and CEO, you’re going to be busy. So very busy. There are going to be products to launch, strategies to build, meetings to lead, people to hire, fires to put out, investors to woo, and to answer to. Your natural instinct will be to focus the majority of your time on the things you’re good at—the business stuff, the product stuff. You’ll prioritize cultivating the things that add to the bottom line while mitigating those that subtract from it. As you should. That’s your job. But it is not your only job. You are also the mission maker, the values setter, the morale booster. You are responsible for creating an environment in which your employees can thrive, work can get done, customers’ needs can be met, and you can be proud of what your company has accomplished at the end of each day.

There are a thousand management and leadership books out there that will give you advice on how to do all of this. They have systems and multistep plans and case studies with data to back it all up. There is something valuable to be gleaned from each of them. But I honestly don’t think it needs to be that complicated. I don’t believe you need to take a personality inventory of your entire team in order to know what motivates people or to get their buy-in on the business. I think it’s all much, much simpler than that. I didn’t always believe that. 

Before I went into podcasting, I spent my entire career in large media organizations with strong cultures defined by difficult work environments. Whether it was the actual physical place, like the war zones I reported from for a number of years, or the general atmosphere, with its competing personal ambitions, tight deadlines, and even tighter budgets, the only thing you could get a group of journalists to agree on was that they didn’t agree on anything. My opinion began to change on this subject as I interviewed more and more entrepreneurs. Many of them struggled with hiring early in the growth process, but comparatively few struggled with retention once they got their businesses figured out. Initially, the reason for this was hard to pin down. 

These founders came from across the entrepreneurial spectrum, and they had very little in common besides the fact that they all started businesses. They were doing something different, though—that I knew. I just didn’t have the entrepreneurial language to describe it. Eventually, my thinking crystallized when I realized that I didn’t need business jargon to understand them since what they were doing differently wasn’t entrepreneurial at all; it was just quintessentially human.

One of the first opportunities I had to express this idea publicly was, of all places, as a guest on The Tonight Show Starring Jimmy Fallon in the summer of 2019. As he wrapped up our interview, Jimmy asked me if I could offer one piece of advice to aspiring entrepreneurs in the audience—one thing I’d learned from all these amazing people I’d interviewed that I could share with them. What I told Jimmy, the people assembled in Studio 6B, and the viewers at home across the country was to be kind; that kind leaders have kind companies; that kindness is a powerful tool; that kindness is free—it costs nothing!—and that the return on investment for kindness is bigger than that for any financial investment an entrepreneur can make. 

I believe in the truth of that message a little more each day. It doesn’t mean every single person is kind every second of the day. Believe me, I have my moments. So much so, that as I write this, I am looking at a small pennant I bought on Etsy that simply says “Be kind.” I have it up on the wall in my studio to remind me of this message as an aspiration and a daily goal. Sometimes I fall short, but I use it as my North Star nonetheless, and every day that I keep myself pointed in that general direction is a good day.

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Fundamentally, I don’t believe a company can stand the test of time if people will not stand for the company. And I find one of the most reliable ways the vast majority of entrepreneurs inspire people to do that is with kindness. I don’t know any other way to put it. So many of them are just kind! They treat their people well. They do the little things and the big things. They pay their success forward. And with rare exceptions, they are also highly ethical. They act with an integrity that seems to come from a place of deep morality. 

Fundamentally, I don’t believe a company can stand the test of time if people will not stand for the company.”

When I ask founders about how they built their teams or how they managed through tough times, for example, more often than not their answers begin with the words “I believe” or “we believe.” What they believe isn’t always the same, but it always feels profoundly personal. It’s not clinical or calculated. It’s compassionate. There is an empathy present in their decisions that often extends all the way out to the customer. In the late 1980s and early 1990s, when Marcia Kilgore was building the skincare and facial business that would become Bliss out of a tiny studio apartment in Manhattan’s East Village, she developed a reputation as more than just an expert on clearing up bad skin. 

She was also someone you could count on to do whatever it took to get you to that fresh-faced place. “A facial is generally an hour, but I might be in there for two hours with somebody if they really needed it,” Marcia said. “I think it’s really important to be thorough and do the best job you can. And I think you get results when you put the time in.” For Marcia, those results took the shape of a sixteen-month waiting list and a client roster that included Madonna, Nicole Kidman, Uma Thurman, Demi Moore, Annie Leibovitz, and half the models in Manhattan.

When the online eyewear retailer Warby Parker launched in 2010, they were not so excited about their wait list, because it was the result of being utterly unprepared for the onslaught of orders they received, thanks to the attention they got from two magazine features—one in GQ, one in Vogue—that ran just prior to their site going live. They ended up having to put 20,000 potential customers onto a wait list that took them upwards of nine months to clear. It could have been a disaster for the young company. You don’t get too many second chances in entrepreneurship, especially if you’re an online business.

But even more than that, co-founder Neil Blumenthal said, they wanted to “create a business that had a positive impact on the world, and part of that is treating customers fairly.” So the founders reached out to every single person on the wait list who was disappointed or was having a bad experience. “These were early adopters that were excited to place an order from us, and we didn’t have anything to sell them,” Neil’s partner, Dave Gilboa, explained. “We gave people discounts, we would give them free glasses, and we learned a lot of important lessons in terms of being empathetic to customers.” 

Kind founders don’t just make every customer feel valued; they make every employee feel valued as well. They do things that make their employees feel like part of a family. They make it a point to give their employees something to call their own, in recognition of this larger journey they are on together as a business, as a unit. That could mean giving them a piece of the company itself, offering opportunities that help them grow as people, or just doing something as simple as recognizing their basic human dignity by trusting them with the freedom to use their time the way they see fit.

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Excerpted from How I Built This: The Unexpected Paths to Success from the World’s Most Inspiring Entrepreneurs by Guy Raz. Copyright © 2020 by Guy Raz. Published and reprinted by permission of Houghton Mifflin Harcourt. All rights reserved.

Guy Raz is the creator and host of the popular podcasts How I Built This, Wisdom from the Top, and The Rewind on Spotify. He’s also the co-creator of the acclaimed podcasts TED Radio Hour and the children’s program Wow in the World. He’s received the Edward R. Murrow Award, the Daniel Schorr Journalism Prize, the National Headliner Award, and the NABJ Award, among many others, and was a Nieman journalism fellow at Harvard. He lives in the Bay Area.

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