ClearPurpose

The Friedman Doctrine, which says the greatest responsibility of business is to satisfy the business’ owners, has guided how companies operate for more than half a century. There’s some logic to this. The owners are the ones who have taken the greatest financial risk and therefore should reap the greatest financial reward. Especially when the business owner is active in a small business, this mindset is natural. If I’m in control, why would I sacrifice some of the benefit to myself for the benefit of another? From the world’s perspective, that would be foolishness.

But the Bible teaches us that God’s two greatest commands are to love Him and to love our neighbor. Loving our neighbors, in a Christ-like manner, requires an others-first mindset in our businesses. God not only requires this of us, but He promises that our sacrificial love will be rewarded. Those rewards might or might not come in a form that the world values, but they are precious rewards that are beyond measure.

Read my full article here on this tension and how we can deal with it in our businesses.

The definition of the phrase “business owner” is pretty obvious. It means “the person who owns a business”. By the world’s standards it seems foolish for a business owner to have the attitude that God, not them, owns their business. 

As Christians we are called to embrace the “unnatural” way of thinking, even if the world calls us foolish for it. We know that every good thing that we have is a gift from God and that we can accomplish nothing without God’s grace and favor. We publicly acknowledge our dependence on God, knowing that doing otherwise steals glory from God. We recognize that ultimately God owns everything, including our businesses. 

Living the reality that God owns it all, including my business, challenges me (in a good way) to think and act focused on God’s glory and my neighbor’s good. Doing so brings great freedom, peace of mind, and ultimately reward. What business owner could ask for more?

Read the full article here on what it means to embrace the attitude that God owns my business.

As one historic document put it, the chief end of man is to glorify God and enjoy Him forever. As Christians in business, most of the time we enjoy the work that God has given us, but one of the biggest questions we face is how we can glorify Him with our businesses. I believe that we can glorify God through the decisions we make in our work. That includes the big decisions (e.g. what customers to serve and what products to sell) and the seemingly small decisions we make every day (e.g. how do I respond to this e-mail from an unhappy customer?).

Although many business decisions seemingly involve logical analysis, decision making that consistently glorifies God flows from having a Godly character. And that character is developed through a set of habitual behaviors (or disciplines) intentionally focused on glorifying God and growing in Christlikeness. All of these things only happen if we have a mindset (i.e. attitudes) that values Biblical truths.

The article linked below kicks off a new series where I plan to write about the five attitudes, seven behaviors, nine character traits, and twelve impact-defining decisions that business owners can focus on in glorifying God with their business.

Read what these 33 different aspects are and my plans for the series here.

17 Reasons by Zane Tarence is the most practical book I’ve yet read to help business owners prepare for their exit from their business. If you expect to sell your business in the future, then you should understand the factors that drive buyers’ decisions. 17 Reasons explains these factors and tells business owners exactly what they need to do to make their businesses attractive to buyers and likely to successfully complete a transaction.

As a Value Catalyst, my job is to help clients identify and fix issues like these. 17 Reasons can be a very helpful tool in getting my clients to understand the challenges I’m point out to them. Since business owners are busy running their businesses. I bring the skills, tools, processes, and discipline to help them implement fixes like those recommended in this book.

I strongly recommend 17 Reasons to all business owners and their advisors.

Read my full review here.

I’ve been reworking my website to reflect my new focus on helping business owners prepare for their eventual exit. This week I came to the “About Us” page, which is always hard for me. Since the SDG in my company name stands for Soli Deo Gloria, it seems hypocritical to be bragging about my capabilities, but I know I need to explain to potential clients why they can trust me to be able to help them improve the performance, value, and alignment of their business.

Hopefully the video I came up with gives God the glory for the ways He has blessed me so that I can help business owners. You can watch it at my website at https://www.sdgstrategy.com/russ-story or if you’d rather read the script, you can find that here: https://clearpurpose.media/about-sdg-strategy-1dc2d202268a 

BuzzFeed has reportedly been trying to sell First We Feast, the makers of the highly popular YouTube show Hot Ones for $70M. Buyers are interested, but not at that price. Business owners thinking about eventually selling their own businesses could learn some important lessons from the company’s challenges.

BuzzFeed’s experience isn’t unique to big online businesses. According to data from business brokers, only 20–30% of businesses that go to market end up selling. The number one reason that sales fall through is that the business owner has unrealistic expectations of the value of their business. Often a business owner has heard of others selling a business for some multiple of revenues and assumes he can sell his business for a similar valuation. Often those rumored multiples are exaggerated, and every business is unique.

The challenges BuzzFeed faces in selling First We Feast are very similar to those faced by small business owners looking to sell the business they have nurtured and grown. How much a buyer is willing to pay is based on how much cash they think the business will generate in the future and how much risk there is in those forecasts. The three biggest issues facing First We Feast are the same three issues many family businesses face when looking to exit:

– Reliance on the owner and key employees

– Limited growth potential

– Reliability of financial forecasts

It may be too late for BuzzFeed to fix all the issues impacting how much they can get for First They Feast, but it’s not too late for small business owners to take steps to give potential buyers more confidence in the cash generating potential of their businesses. Value Catalysts like myself can help identify the issues that will hurt your valuation and can work with your team to address them one by one. It takes time (typically at least a couple of years) and focus, but the investment is worth it, often dramatically improving how much cash the business generates month after month and significantly increasing the value realized when you are ready to exit.

Let me know if you’d like to talk about how your business can create more value.

Read my full analysis of the BuzzFeed/First We Feast challenges here.

Do you own your business or does your business own you?

It’s essential for business owners to focus on creating independence from your business long before you plan to exit. The keys to achieving this are humility, hiring, and handing-off. Are you ready to celebrate your independence day?

Read the full article here.

Know What Matters tells the story of Panera Bread through the eyes of founder Ron Shaich. Along the way he shares the many lessons learned. He boils down the essence of his and the company’s success to: tell the truth, know what matters, and get the job done. Know What Matters is a fun story to read that happens to teach important lessons for business leaders. It deals with issues from all phases of business life: startup, rapid growth, reigniting growth, and sale/exit.

While Know What Matters is full of business lessons, it is more reflective and philosophical than most. The first chapter begins with the sentence “I learned the most important lesson of my life as my father’s life came to its end.” That lesson, learned from both his parents, is “Take the time now, while you still have a runway into the future, to determine whether you are living a life you will respect. Don’t wait until the end.”

The author is an entrepreneur, and as most entrepreneurs can relate, “living a life you will respect” translates into building a business that makes a difference in the lives of those you serve. Through that process, your business comes to reflect your values and your passions, and your identity and your life are intimately tied up in your business. That’s what makes walking away so hard. As I work with business owners, it is hard, but necessary to prepare the business to survive without them, and for them to build a life beyond the business. Sure, we work to make the business worth as much as possible (probably not the $7.5 billion Panera was acquired for in 2017), but the more important work is helping the business operate well with or without the owner/founder and vice versa.

In between the personal notes in the first and last chapters, the author introduces the philosophy that shaped the many decisions he describes throughout the book. In the preface, he identifies three things as the “secret of [his] success”: 1. Tell the truth. 2. Know what matters. 3. Get the job done. I think of these as acting with integrity, managing strategically, and operating excellently. In the first chapter, the author introduces a theme that he returns to frequently throughout the book which he calls managing future-back, defined as “discover today what will matter tomorrow, and then bring what matters to life.” This approach, strategically managing with the end in mind, served the author and his company well throughout his time at the company that became Panera Bread.

Know What Matters is made up of 31 chapters, a Preface, and an Epilogue over 237 pages. Each chapter is a story and the length of the chapter varies, depending on how long it takes to tell the story. The author breaks these stories into three parts reflecting different phases in the company’s journey: Living the Entrepreneurial Life, Leading a Large Enterprise, and Driving Large-Scale Transformations. The title of the closing chapter in each part reflects the author’s personal/philosophical approach to telling the Panera story: “Business (and Life) Requires Hard Choices”, “Business is Personal”, and “Know When to Sell”.

Know What Matters tells the author’s personal story from his first entrepreneurial venture through completing the largest sale of a restaurant business in history. Along the way, he shares the challenges he faced, the lessons he learned, and the keys to his success. He does so with humility, transparency, and candor. The book is well written, engaging, and helpful. Entrepreneurs and business owners will especially resonate with, and likely learn from the journey. I highly recommend Know What Matters to anyone leading (or wanting to lead) a large business.

Read my full review here.

The AI-Savvy Leader by David De Cremer applies timeless leadership wisdom to the very timely topic of artificial intelligence. Writing about rapidly emerging technologies can be challenging. The author has wisely focused his attention on skills that will continue to be valuable no matter what direction(s) AI takes. Even so, the book provides a timely critique of the mindset dominating many current corporate AI initiatives and explains how companies can avoid the same mistakes in the future.

I could summarize De Cremer’s main critique of business AI initiatives is that they are too focused on efficiency gains, undervaluing the contributions of humans and overemphasizing technology. Too often business (people) leaders are deferring to technology leaders, hurting their people and reducing the potential for the technology to truly help the business. De Cremer explains that instead of focusing on replacing people with AI, companies should focus on helping people do more/better with the help of technology.

To help leaders accomplish this, he proposes nine “leadership actions” they should embrace. He acknowledges that these are not new concepts, unique to the Connected Intelligence era, but rather core leadership activities that they already practice. The AI-Savvy Leader explains how to apply those practices in the context of AI’s introduction to the workforce.

The book is organized around these nine leadership actions. Each gets its own chapter. Each chapter starts by explaining how companies are falling short in applying that chapter’s leadership discipline as they deploy AI and the impact of those failures. The author then explains specifically how leaders need to change their thinking and acting. Most chapters contain at least one section made up of specific ways in which leaders can put the chapter’s concept into practice. 

The book is easy to read. It doesn’t try to make bold controversial statements, but rather engages important topics with rational explanations, even as it often challenges conventional wisdom. It’s relatively short at less than 200 pages, but full of useful wisdom and helpful guidance. I strongly recommend The AI-Savvy Leader for anyone choosing, leading, or merely trying to survive AI initiatives in their business.

Read my full review here.

Welcome to AI by David Shrier provides a past, present, and future perspective on artificial intelligence: the good, the bad, and the scary.

Everyone is talking about AI. For decades I’ve paid attention to how artificial intelligence could impact my work, first as a software engineer and then as a business strategist. And yet, AI is changing so rapidly that even I at times struggle to get my arms around what it is and how it will change our work and our lives. Welcome to AI seeks to step into this gap.

The book is divided into three parts, roughly chronological with the first part more backwards looking, the second focused on decisions we can make today, and the third part focused on different potential futures. Not surprisingly, given the challenges of predicting the future in a rapidly changing discipline, the first part is the strongest and most helpful.

Overall the book is very readable. And yet at times it was very hard to read. The odd combination of the author’s hard criticisms of institutions he doesn’t like, over-confidence in institutions he does, alarmist warnings of coming doom, and rose-colored confidence in humanity and technology to perfectly do what is right challenges his credibility, at least in this reviewer’s eyes. There were several times I just wanted to put the book down without finishing it.

Despite those challenges, the book still has its merits. For those with limited understanding of the technology, Welcome to AI, provides a decent introduction. Perhaps more importantly, the strong positions that the author takes on important topics force readers to think about what each of us believe on those topics. The more the book rests on the author’s shaky future predictions (the AI future at this point in time is just too unpredictable), the harder it is to trust the author’s conclusions, but even his flawed perspectives help us realize how important it is to have a perspective.

If you are worried that your lack of informed perspective on artificial intelligence has kept you on the periphery of important discussions and decisions, Welcome to AI may be a great place to start to change that.

Read my full review here.