October 1973 — VOL. 54, No. 10 —
About being Business-like
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The term "Business-like" is one
of the most expressive in general use. It is a compliment
when applied to manufacturing, trade and commerce, to the
administration of our social institutions, and to an individual's
handling of family and personal affairs. It includes many
attributes such as reliability, integrity, efficiency and
a sense of values.
Business is the supplying of things that have utility, that
meet the needs of people. It is the art of production and
exchange which through the ages has contributed to human comfort.
Business may consist of making goods and selling them, purchasing
goods and selling them, or providing services for which the
users pay. The goals of people in business include profit
and growth. Business is of advantage to seller and buyer,
to producer and distributor and to the consumer. It provides
employment and contributes to social welfare.
The word "business" implies a financial statement in which
the two most important words are "profit" and "loss". If it
is to attract investment capital the enterprise must be capable
of making profit. Earning profit is more than an incident
indicating successful management: it is an essential condition
of success.
Every business has an option: to be routine or to be special.
The excellence that makes a business stand out from others
is derived from clear judgment applied experience, superior
capability and a touch of artistry.
Success is not to be measured solely by the gross amount
of income. The limitations of environment must be taken into
account. It has been pointed out that the business of a city
merchant may expand by a million dollars a year and yet he
may be properly regarded as less successful than a small town
merchant whose business is increasing at the rate often thousand
dollars a year. The merchants are to be judged by the use
they make of the opportunities that exist in the territory
in which they operate.
Take a wide view
The person who would operate a business to the fullest extent
of its trade possibilities must have spacious thoughts. Mental
near-sightedness is not profitable.
It is not reasonable for a firm to expect to relax comfortably
in the midst of the tremendous increase in the extent and
complexity of our social, economic and political activities
and the constantly expanding demands for goods and services.
Only a broad and enlightened and enterprising policy will
hold the markets a company has, and no other policy will add
to them.
Upon reaching this or that frontier in its expansion, a
business will realize that technique and expertise are not
the only qualities it needs if it is to venture into new territory.
It requires a management that has active imagination. This
is not a sleepy, meditative faculty. It looks forward, pictures
new things and conditions, originates ideas, makes plans and
invents. All these are active verbs.
Imagination that is useful operates within the scope of
data. It is rooted in experience, and thrives on facts. It
sets new goals and makes plans to reach them. The goddess
Athene, when she is being her most flattering to Ulysses,
refers to him as a many-coloured mind always framing some
new adventure.
Innovation pays rich returns when it is put in motion after
examining an idea and testing its soundness. To sell the Eskimos
refrigerators to keep food from getting too cold is like creating
a new product. That is imagination leading through initiative
to a new market.
Imagination entertains possibilities, even though the way
to realize them seems crowded with difficulties. It tries
new plans and makes experiments. The arithmetical functions,
multiplication and division, which are short processes of
addition and subtraction, did not just appear on the scene.
They were first of all mental ideas and were then worked out
by people of imagination.
There is no more effectual way of expanding business and
of keeping customers than to be of use, which is the meaning
of "service". As someone said of the business of banking,
"The services we sell are sold by the service we give." A
prosperous business man believes, as Edgar A. Guest wrote
in one of his poems: "The only difference, I believe, is in
the treatment folks receive."
Many persons mention "the little extra" as the secret of
their business-building success. What is this "little extra"?
It seems to be made up of things done without thought of gain
or advantage, of services not strictly within the firm's function,
of courtesies skilfully performed, of a kind word in season,
of just listening sympathetically to a customer's troubles.
Being sure that the customer is satisfied with his purchase
is worthwhile. It is time-consuming, but it can add the little
extra weight that will shift the competitive balance in favour
of the company practising it.
Three preliminary needs
Untrained goodness and unused education do not count for
much in the business world. Business is not so greatly concerned
with the amount that a worker knows as it is with the use
he makes of what he knows.
It is customary to smile indulgently at Samuel Smiles' Self-Help,
published in 1881, and to dismiss as old-fashioned Harrington
Emerson's The Twelve Principles of Efficiency (1919),
and to scoff at Horatio Alger's stories as unbefitting today's
business world, and to belittle Lord Beaverbrook's There's
Plenty of Room at the Top as being "head in the clouds"
stuff; but the teachings of some of the earliest writers about
the way to succeed in business are as pertinent today as they
were at the time they were written. In fact, the student will
find the principles those people expounded enshrined in today's
textbooks, updated as to mechanics and equipment and the size
of operations.
After education, which the worker uses with intelligence,
the next need is enthusiasm. It is earnestness that gives
a person's effort a vital quality and makes him optimistic
and forceful.
Enthusiasm is interest plus energy. People are defeated
in life not because of want of ability but for lack of whole-hearted
effort. A business can keep alive only if it continues to
be lively, if its sponsors and workers are eager to accomplish
things instead of waiting to have action forced upon them.
These three, education, enthusiasm and energy constitute
the vital elements to be developed by anyone seeking to succeed
in business.
Rely upon facts
The effectiveness of doing business rests upon facts first
ascertained and then used. The person doing business must
be ready to recognize a fact when it is presented, to abandon
a pseudo fact for a real one, and to abide by this until further
facts are found.
By research and statistical analysis business people ascertain
facts, remove uncertainties, eliminate guesswork and do away
with haphazard assumptions in their working plans. Accurate
and up-to-date knowledge of what is happening and what is
about to happen rank high in laying out plans.
Intelligent research and clear-headed analysis of pertinent
facts put a business in a favourable position to plan with
certainty. Some sorts of research are: technical research,
to appraise the best ways of making the goods; product research,
to bring out the most forceful appeal of the goods; consumer
research, touching upon size, shape, packaging and other features
which influence buying; and internal research, to determine
productive capacity, financing and management policy.
People in business know the value of forethought and planning.
Ten minutes of directed thinking before signing an order or
giving approval to a project can save a lot of money. To plan
means to see what is needed, analyse the method of doing it,
understand the cost and consequences, and lay out the design.
A business needs people who can foresee difficulty as well
as people whose views of the future are rose-tinted. By looking
at what might happen, a business may save itself from a host
of disasters.
Common sense and restraint must be used by the forecaster
and planner. When the Korean war broke out in 1950 people
in the United States recalled what had happened during the
last war - the shortages, the rationing, the black markets.
The editors of Fortune revealed in 1953 that one hotel announced
that it had laid in a ten-year supply of liquor, and a government
agency bought a 247-year supply of looseleaf binders.
Serve people's needs
Profit results from providing commodities and services that
people want, at prices they are willing to pay. The job of
business development is to ascertain the characteristics of
the merchandise for which there is a potentially profitable
outlet, to produce such goods, to find the market, and to
make plans for promoting sales.
It is not enough for the person in manufacturing or trade
to know all about the product: more important in merchandising
is that he know public desires and attitudes. He must make
allowance for people's caprices, too. He need not approve
of their tastes but he is obliged to pay attention to them.
One of the most certain ways to win customers and keep friends
is by explaining things. Perhaps the prospect does not know
as much as he might about what he requires. The salesman will
be appreciated who can enlighten him.
This requires facility in language. Salesmen need to be
able to tell prospective customers about the merchandise in
language that prospects understand, and what they tell has
to be what the prospect needs to know.
Recall the story of the elderly woman who went shopping
for a stove. It was told by Robert E. Moore in The Human
Side of Selling. The salesman described the construction
features of a stove at great length, and talked about British
Thermal Units, thermostats and automatic damper control. The
customer interrupted him with this wonderfully human question:
"Tell me, mister, will it keep an old lady warm?"
What people want and how much they want it are constantly
changing. One of the most important factors in business is
sensitivity to changes in the popular demand. The Manchester
Guardian said in 1967 that the wants of the average person
had grown in a hundred years from 72 to 464.
One shopkeeper devised a technique. He scanned the "Lost"
advertisements in the newspapers. "If you keep an eye on the
things people are anxious to get back, you know what they
really prize."
Proficiency in marketing often distinguishes the successful
factory or store from the mediocre. Selling must not be undervalued
as a business activity. It has the job of keeping consumption
in balance with increasing productiveness, a balance that
is vital to healthy business.
Selling is not easy
Salesmanship is the skill or art of presenting goods or
services so as to convert neutral or negative attitudes toward
them into positive wants or demands. This is not an easy job.
It requires initiative and imagination and planning and perseverance.
It works on the basic principle: take something attractive
and make it appear necessary; take something necessary and
make it attractive.
Every firm knows the advantages of advertising. It is what
brings prospective customers to the factory or store or office.
These prospects do not form a captive audience. The firm's
representatives must show interest, get attention, offer a
benefit, prove their case, create desire, and motivate people
to take advantage of what the advertisement offers.
The advertising business is not just a matter of listing
things for sale. It must present them in such a way as to
make them appear desirable. Few persons in advertising today
would be so confident as was Samuel Johnson in 1759 when he
said: "The trade of advertising is now so near to perfection
that it is not easy to propose any improvement."
Creative salesmanship, like creative advertising, does not
recognize as salesmen those who merely spread out in cafeteria
style what their firm has to sell, and wait for the customer
to decide whether he can use it, how much he wants, and give
them an order.
The salesman who wins pre-eminence is one who puts his heart
into his work. His analysis of every prospective customer
to determine his wants is evidence of a sincere effort to
solve the prospect's problems. The potential customer needs
to be made to perceive the relation between himself and the
commodity. His opinion about what constitutes value must be
taken into account.
Coping with adversity
People in business need courage and stamina. They cannot
hold back their actions until assured that success will attend
their efforts. Boldness is inherent in every enterprise; a
business man must know how to conduct himself well in dangerous
circumstances.
There is great satisfaction in being able to do so. A game
of golf cannot be enjoyed on a course that is all fairway,
without any rough, any trees, any water hazard or sand traps.
It is the obstacles that make it a game. Similarly, business
becomes a game if the player rejoices in triumphing over obstacles.
Business management must, however big or small its operation,
however easy or tight its equity funds and working capital,
consider the risks involved in its operations and eliminate
or reduce as many risks as can be dealt with by advance planning,
skilful direction and prudent conduct. It must show a healthy
respect for the risks that cannot be reduced or avoided.
Awareness of uncertainties and of their possible consequences
tends to strengthen business judgment, help to avoid blind
blunders, and bring the business nearer to a point of accepting
calculated risk with self-confidence in the hope of realizing
a calculated gain.
Business is not a restful occupation. The professional worker
may find relief from daily work in the reading of great books;
the scientist may spend his evenings exploring theories about
the universe; but the business leader's evening is likely
to be spent in analysis of the stock market reports or in
plans to meet the new competition he heard of that day.
In good times, when money grows on trees, merchants find
it relatively easy to shake some of it down; but in hard times,
when money is valued most for the security it offers, they
must work harder. There are times when the auditor cannot
whittle the point of his pencil fine enough to write the profit.
If business slumps the management will swing quickly into
active investigation. What are competitors doing that puts
their business on top? Has the character of the environment
changed so that a new promotional approach is needed? Are
his goods of the style and quality desired? No matter how
bad the situation may seem, the business leader must keep
his head. Instead of giving in to adverse circumstances, he
will direct his imagination and his skills toward improving
them.
Do things right
Getting ahead in business can be consistent with following
the soundest and most ethical rules for successful living.
To be known for good character and a high sense of commercial
honour is a big help toward building and expanding business.
Ethics is the code of values to guide man's choices and
actions. These determine the course of his business and of
his life. There is no field of human activity in which ideals
applied are of more value than in business. Winning is not
enough: the game must be played right.
A good contract is a transaction which benefits both parties
to it. It is expected to state all the conditions relevant
to a deal. Half-truths, misleading assertions, and statements
made without a foundation of knowledge can do nothing but
harm to a firm.
It is an obligation recognized by business people to keep
advertising and sales representations truthful and fair. They
should give customers a complete understanding of the quality,
quantity, price and function of the commodities or services.
It is not ethical to sell a person a service or a commodity
that he cannot use to advantage any more than it would be
to misrepresent the worth of materials or workmanship. Quite
as many articles are bought because of our faith in the seller
as because of our faith in merchandise.
In business of any sort a person is only as good as his
actual performance proves that he is. Every person selling
goods or services is in a position that law books refer to
as "quasi-public". He has a responsibility to customers as
well as to the firm. People will trust the firm whose officers
always behave in a dependable and foreseeable way. As someone
said: "Virtue has survival value."
One's judgment of what is right is determined by his acquaintance
with the best standards. A business must have standards, and
it must have rules to enforce the standards.
Join the community
Every person requires that the community in which he lives
have the capacity to provide him with an environment in which
to realize a good life. The business world is part of that
community.
Businesses as organizations and business people as individuals
live in a social environment, and business requires an imaginative
understanding of the social effects of its activities. It
shows concern about its civic responsibilities.
Public opinion is a force to be reckoned with, listened
to, and cultivated. Some people look backward with nostalgia
to the old days. They talk about the sociability of handcrafting
as compared with the solitariness of the production line.
They point to the comradeship of early workshops, free from
friction.
That view leaves out of account the advancement made in
the number and variety of things that are produced to meet
new demands. The old-time wagon needed only a little grease
now and then where the wheels turned on their axles; the truck
of today has fifty or more points that need grease or oil.
It is similarly true of business contacts with people: there
are more points where friction may develop.
What is the public reputation of a business? It is the sum
total of its habits of thought and the actions arising out
of those habits.
Public relations does not mean putting up a false front.
It does not mean whistling, like the cook's helpers on the
good ship Bounty, to prove that we are not eating the
raisins. It means doing the right things in a pleasant way,
and making our actions manifest: it means having good qualities
and making them known to the public.
The ideal relationship between a firm and the public exists
in the presence of loyalty, trust and understanding. It is
symbolized by the confidence with which the people accept
the firm's word. Just showing that the firm cares will win
many friends.
In private life
The principles of business operation apply to other life
activities. Every person who carries home a weekly pay envelope
is in business.
In the time of Aristotle, indeed, the word oikonomike
meant "the management of the household," and a dictionary
gives us: "Economics — the science of the management
of a household or domestic concerns."
Business comprises all human activities that are directed
to the acquisition of incomes and their expenditure. In their
book Economics, one of the texts prepared as part of
the Alexander Hamilton Institute Modern Business Program,
Bowden and Carlin say: "Economics is the study of what people
do with the things they have to get the most of what they
want."
Running a home is a business. There are income, expenditure
and profit. The profit is the health and happiness of the
family. An efficient consumer-buyer is one who gets what his
family needs for its wellbeing at the minimum cost.
Every household should apply the purchasing techniques that
are used by business firms. For example, determine what characteristics,
specifications, or properties you require in the furniture
or equipment or supplies you are contemplating buying. If,
in addition, you use budgetary control of income and expenditures
you are systematizing foresight.
Among the forces affecting every business, whether it is
a big company or a household, are world-wide economic fluctuations,
national and provincial political happenings, advances in
technology, and changes in style of everything from a pair
of shoes to a nuclear reactor.
Some of these are easy to deal with, but many of them cannot
be improved over a week-end. The problem of everyone, whether
in a developed country like Canada or in one of the countries
just starting to industrialize, is how to get through the
present change of life into the easier times they see ahead
without in the meantime tearing themselves to pieces.
The economic and social problems Canada faces today, though
heavy, are not burdens, but invitations and incitements to
achievement if Canadians show courage, hope and belief in
the things they want to undertake and to do.
Professor Alfred North Whitehead put businesslike ideals
into words in a lecture at the Harvard Business School: "A
great society is a society in which its men of business think
greatly of their functions."
Published by RBC Financial Group. All editions from the RBC
Letter collection are available on our web site at www.rbc.com/responsibility/letter.
Our e-mail address is: rbcletter@rbc.com.
Publié aussi en francais.
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