Business 300

A business needs to have somebody at the ownership level thinking like an investor and somebody at the ownership level thinking like an operator. That could be 2 or more partners owning a business together. Or, it could be one Owner-Operator, who knows how to think like an investor. 

If, as an operator, you're putting in alot of effort and not getting very much of a return at all, consider if the business is worth it? Does it need to pivot into a different industry? Does it need to be shut down and the equity redeployed elsewhere? These are the sorts of questions an investor needs to answer.

As a business owner - whether you're a passive partner or an owner operator - you need to be able to think like an investor. This means that you evae objectively, without having your emotions and ego tied into your decisions.

So, as a business owner, you need to be able to think like an investor. And, as a business owner, you need to be able to think an an operator.

Whether you're a passive investor or an owner-operator, you're responsible for the results of your business. Which means, you need to be able to assess its condition with a sober mind, apart from emotional entanglement.

You need to think like an investor.

The wonder of business and free enterprise enables this vision and is a necessity without which human flourishing is impossible. The recipient of value is a customer. And the giver of value is a business, or more personally, a business owner.

It's a feedback loop of value upon value, or blessing upon blessing, and it all starts with the business owner's agency. Owning a business is good. That can be, and is to be taken both ways. It's good for the business owner. But, more importantly, it's good for others - for those whom the business owner is serving. That's because a business owner delivers value.

The wonder of business and free enterprise enables this vision and is a necessity without which human flourishing is impossible. The recipient of value is a customer. And the giver of value is a business, or more personally, a business owner.

It's a feedback loop of value upon value, or blessing upon blessing, and it all starts with the business owner's agency. Owning a business is good. That can be, and is to be taken both ways. It's good for the business owner. But, more importantly, it's good for others - for those whom the business owner is serving. That's because a business owner delivers value.

There are fundamentally 3 things that set the owner apart: Risk, Responsibility, and Reward. 

The owner takes a risk to initiate and operate the business, takes responsibility for everything in the business, and is rewarded in return for his risk and responsibility.

Risk, Responsibility, and Reward are what distinguishes the business owner from other stakeholders. Risk, Responsibility, and Reward is Business Ownership.

When the Finance function's job of keeping score turns inward, it forgets about customer value, causing the entire business to neglect it. But, in remembering that it's purpose is to give the business incite into value-delivery, the Finance department aligns the business effort for the customer.

Many business problems arise when finance doesn't serve the customer.

If the purpose of a business - of any business - is to deliver value to a customer, each function revolves around that purpose. Strategy is to create the value, Sales is to promote it, Operations is to deliver it. And Administration is to manage it.

Administration should be serving to help the overall customer experience, not bog it down. Order and control are good, and very much needed, as long as they serve the greater purpose of delivering value to the customer. But order and control exasperate everybody when Administration doesn't serve the customer.

In delivering value, Operations must hold the customer as the definer of what is right - right quantity, right quality, right timing - and then structure the systems accordingly. The customer, the business, and the operations function itself loses when Operations doesn't serve the customer.

In episode 161, I talked about what a self-serving strategy looks like. This time we're going to talk about sales. What does self-serving sales look like? 

When the customer believes that your value-offering is relevant and reliable, revenue growth follows. But when you chase revenue-growth, you win neither the customer nor the sale.