Friday, February 02, 2007

Bloomberg by Bloomberg: 3 Simple Lessons for Entrepreneurs and Businessmen

This was first written for SG Entrepreneurs

“Bloomberg by Bloomberg” was written in 1997 by Michael Bloomberg, founder of Bloomberg LP, the financial information service provider that provides financial institutions and media companies with business and financial news and information. Mr. Bloomberg has since gone on to become the Mayor of New York City, but the principles that the banker, entrepreneur and politician espouses in the book that he wrote a decade ago still ring true for entrepreneurs and businessmen today.

Simple Truth No 1: Business is, first and foremost, about people

Many people think that business is about cutting costs, driving innovation, developing a strong brand, or creating efficient supply chains. Or they might think it’s about optimizing cash flow, managing growth, or outmaneuvering the competition. Yes, business is very often about all these things. However, before considering all these operational issues, business is, first and foremost, about people.

“…our main asset is not our technology, our databases, our proprietary communications network, or even our clients.
It is our employees.”
- p.63

It is the business leaders and entrepreneurs who best understand how to identify, motivate and value talent, who will most succeed. It is the managers who best understand that their most valuable asset is the team which works with them, which will get ahead. Hence, it is no surprise that Bloomberg declares:

“The primary function of those at the top is the care and feeding of the company’s most valuable asset, its employees…” - p.180

This is because a business which consists of a well organised team of talented individuals led by an inspirational leader will be the one which can best come up with creative ways to cut costs, drive innovation, develop a strong brand, or create an efficient supply chain. And the businesses which get bogged down by corporate red tape, politicking, and poor morale, will find themselves least likely to outmaneuver the competition.

Bloomberg reiterates the value of having a great team:

“The leverage a great team provides makes management a fantastic investment for a company’s stockholders, but phenomenally overpriced when the executives can’t get the organization to perform.” - p.180

Indeed, the importance of having great people in an organisation cannot be understated. No matter what business you are in, no matter which country you operate, a business will rise and fall according to the quality of its people.

Simple Truth No 2: Entrepreneurial Success is 1% planning, 99% execution

“If you’re going to succeed, you need a vision, one that’s affordable, practical, and fills a customer need. Then, go for it. Don’t worry too much about the details. Don’t second-guess your creativity. Avoid overanalyzing the new project’s potential. Most importantly, don’t strategize about the long term too much.” - p.43

Too often, people with good ideas get bogged down worrying about how their brilliant ideas are going to pan out. Or they get thrown off their paths by ‘advisors’ who tell them to plan months, even years ahead, before jumping into the fray. Or they may get caught in the trap of ‘analysis paralysis,’ where they spend time analysing the potential of their ideas at the expense of getting things done.

The problem with focusing too much on planning is that often, entrepreneurial enterprises are operating in fields where there is much technological change and flux, or where the competitive landscape is uncertain. Planning cannot accurately anticipate or foresee the pitfalls and challenges that lie ahead, neither can it give foreknowledge of the opportunities that will present themselves when an entrepreneur starts getting things done.

Conversely, the entrepreneur who starts working on his project right away jumps into the fray and gets miles ahead of his competitors because he solves problems that his competitors do not foresee and capitalizes on opportunities which are not available to those who are stuck in the planning stage.

Bloomberg mentions,

“Fortunately, our competitors never work this way. They study. They plan. They work toward getting consensus and approval and closure. They try to define it all up front, even specifying the end game from the beginning. Ridiculous!” - p.145

There is much wisdom to the Nike slogan, “Just Do It.” Businesses which focus on execution will get much further than those that wield about grand plans and visions, but are unable to get things done.

Simple Truth No. 3: No Guts, No Go.

In part of his book, Bloomberg narrates an account about a person on his original team who bailed out of the business on day two. The person cited too much risk and too little return as the reason for bailing out of the newly formed enterprise. Years later, that same person has had a mediocre career, while Bloomberg and the original founders have become wealthy beyond their wildest dreams.

This account illustrates that entrepreneurs need guts and courage to take the risks necessary to become successful. It takes a strong stomach and ballsy character to jump into the unknown without the certainty that you will succeed.

This truth is perhaps the most relevant within the Singaporean context, where children are schooled from a very young age to take the safe route of studying hard, getting good grades, getting a high paid job, and retiring at the age of 60. Getting Singaporeans to sacrifice the certainty of the traditional route for the risk and uncertainties of the entrepreneurial lifestyle requires a radical shift in our cultural values and a re-programming of our mindsets.

One thing is for sure, that without taking the risks, you cannot reap the rewards. Bloomberg’s wife commented about the man who jumped ship:

“Don’t feel sorry for him. He didn’t have the guts for it. The others ran risks. They alone deserve the rewards.” - p.47

If and when you decide to take the leap, and do eventually reap what you sow, the rewards will be well deserved and all yours to keep.

Bloomberg, M. (1997) “Bloomberg by Bloomberg,” John Wiley & Sons, Inc., USA

Special thanks to Superurdi for lending me this book

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