Category 3. Business

The Business Stories, Reposted

Dear Readers: This extended post is a compilation of stories about business that were written as separate posts between November 25, 2018 and January 2, 2019. It is presented in the order in which the original posts were written, but I have added dates to the titles for those who wish to piece together the chronology of the meta story.

1. A Story – 2012 (This story has been permanently taken down).

2. Another Story – 1995

We already had signed a contract to buy the company – or maybe it was a letter of intent, I can’t remember. No great difference – it’s almost always possible to get out of a deal until the money changes hands.

A young salesman who worked for the company we intended to buy had asked to meet with the CEO with whom I, then a banker, was working; he sa...

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Public Companies

Insofar as these posts have a consistent theme (a proposition sometimes questioned by friends), it is that people should almost always be expected to behave as they are incentivized to behave and equally expected to avoid taking actions that are penalized. So if on-the-books work, saving and other broadly responsible/self-reliant/socially contributory behaviors are seriously disadvantaged by our tax and entitlement systems, and they are, we should expect that those who are proportionally most affected by those systems, i.e., the poor, will behave in manners not pleasing to the bourgeois eye. To condemn those so situated for responding rationally to the incentives and disincentives we put before them is ridiculous.

What I have not yet touched upon that is equally true and based on the exact...

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Making Decisions Right

Our sources of sustenance shape our frames of mind and behaviors to a greater extent than we may like to admit.

Last weekend I spent some time getting to know a businessman with whom I serve on a nonprofit board. He told me a bit about his life, and attributed his business successes to lessons that he had learned from his father. He summarized those lessons with a wonderful aphorism:

“Success doesn’t come from making the right decisions; it comes from making the decisions right.”

An entrepreneur is forced to think that way: business is a survival-of-the-fittest contest, so if a principal doesn’t make decisions iteratively, learning from mistakes and adjusting to meet others’ expectations, the business won’t last long. “Making the decisions right” is evidence of a personal...

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Advice about Business

1)      One of the hardest, and most important, things to do is to understand your own strengths and weaknesses as others see them, then find a role that plays to your strengths.

2)      Some fields are known to be highly lucrative – or sexy for other reasons, such as power or prestige; these fields attract the toughest competition. My longtime business partner sometimes jokes that he started our business – in a decidedly prosaic field – “because lots of other people were trying to cure cancer.”

3)      You want a role in which the quality of your efforts is magnified by financial or operating leverage, rather than one in which the only way to make more money is to work longer hours.

4)      If you work for a big company, try to get to the heart of the enterprise; ...

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A Paean to Risk

A former colleague of mine once said something wonderful:

“If you are not making any mistakes, it’s because you’re not making any decisions.”

When I consider the single characteristic that is most vital to the success of an individual, an organization or a society, I conclude that it is a willingness to innovate. Whenever we try to freeze time, and lock in the benefits of now, we consign ourselves to a future failure that will be far more painful for our efforts to avoid the change that is inevitable.

What is this innovation, then, that is so important at every level of society? It is, quite simply, the product of risks that have been taken. Note that I do not assert that it is the result of risks taken successfully, because it is also the end product of all the risks that were ta...

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