Business Fundamentals

[mthomas]

Hello everyone. About a month ago, I read the book "The Art of Learning" by, Josh Waitzkin. Wonderful book and highly recommended.

In the book, Josh strongly recommended that one masters the core fundamentals of any practice in order to gain any solid foundation of your topic of study.

This got me to start thinking about the core fundamentals of business, thinking that if we can identify these core fundamentals and thoroughly understand them and their applications, we can learn a lot more about business just by identifying how these fundamentals are applied in various examples.

To be honest I could only think of one core fundamental, although it has a ton of applications: to turn inputs into more valuable outputs.
Can you think of any examples how this applies? Profit is one obvious example, but there are plenty other ways that this can apply such as the importance of reducing waste and defectives.

One more question: can you think of any other core fundamentals of business, or rules that cannot be broken in order for a business to be considered a business?

Thanks, and I look forward to the discussion!

[Nordstrom]

Whatever is not based on a solid unchangeable foundation will sooner or later fall apart. I cannot speak for people working alone, but the most important thing in my business is the source of "the path and the goal".

You need to envision the same goal, and be ready to take the same path as your collegue. If you do not see the same common goal or/and you are not ready to take the same road, it will sooner or later shatter.

This is un-compromisable - if broken the ticker starts ticking down towards the end. (this just applies on partners/collegues)

[mthomas]

So if I understand you correctly, you are saying it is vital that businesses define a set mission, vision and values and make sure that employees, managers and owners alike ensure that these values are embraced and lived by throughout the entire organization? Further, if your partner or co-owner doesn't have similar goals or espouse similar values as you, this could spell trouble?

That is a very good point in that every business does need a personality and a mission for existence.

You mentioned something else that triggered a thought. You said: "Whatever is not based on a solid unchangeable foundation will sooner or later fall apart". This suggests to me that while you need defined goals and values, certain things cannot be fixed in place. Therefore, would you say that another vital business fundamental would be "the only thing constant in business is change"?

[Nordstrom]

That is a good thought. The strongest person in this world is not the one who sticks to his prior beliefs the most, but the one that has the best adaptability. The same goes with companies.

To explain it more; it is a necessity that only the "persona" of the company, is totally unchangeable. So with that logic adaptability of the ways of the business works also inevitable.

To take it further - Good leader, your thoughts?

(Make it "A good leader/founder")

A good leader is needed not only to found and take the business of the ground. He will also need qualities most random civilians do not possess. He has to be good at social interactions, has to be creative(smart), has to be able to face difficulties, able to handle pressure, able to be a "motivational speaker", able to crush and make dreams and so on.

For me this is what differs the random company with the successful one. (Succesful company> succesful leader/founder/person behind it)

[mthomas]

Interesting. So a business also needs a visionary leader at the helm who possesses qualities that the average person doesn't possess and create a distinct culture and atmosphere. I guess one obvious question that comes from this point is that: are leaders only born or can they be made too?

Your comment on "the strongest person in the world" takes me back to where I got the idea for this post (The Art of Learning). The author also wrote about "the art of non-resistance" (he was referring to martial arts). This is where one can deal with adversity with greater ease if they learn to allow bad things to happen and thrive on the uncertainly rather than resist it. I think this is especially applicable to dealing with change. If a business can not only learn to deal with change, but thrive on it, they are in an especially advantageous position when compared to their competitors.

[Nordstrom]

My perception of the matter of "Or are you born a leader" is that, No you are not born a leader. I have "cured" depressions which a lot of people would like to say is not "just a choice" but it is. One of my friends had a depression for over 2 years before he spoke to me, after 2 months of speaking to me daily it was gone. I am not saying all depressions are "cureable" as I have not been faced with many enough. But the ones I have been faced with the source of depression has always been a lack of "dreams" or confidence to actually bother about those dreams.

It is easy to want to reach the stars when you see them, but it is another matter when the clouds are there confusing you, making you believe they're not really up there.


Certain "situations" in once early life, is far more responsible for ones personality than the genes. If you remove the capitalistic "I am a president because my father was one" George Bush-style, and look at real "leaders"(Not what they stand for just their leadership abilities). You will find a common thing in a lot of the cases - a hard childhood.

It is true that certain genes is negative for the chance to be a leader(Diseases etc) but I am rather confident about it being mostly about the upbring.

I used to be a rather quiet person when I was young. I was then made captain in my sports-team which led to me HAVING to be a "good leader". Which I like to think worked out(at least compared to before)

What is your perception of it?

[ZingerIntl]

Good discussion... I agree with most of what you both said. I have studied myself and my beliefs for nearly 7 years now and come to a few "ever-changing" conclussions.
Leaders are not born, everyone has the exact same abilities. You choose what you do, and do not do, in every second of your life. "Leaders" do not have confidence in all areas. Society describes leaders as the people that can lead others in things that each individual, think are great. Making money, meeting woman, street fighting(they always attract a crowd) In the last ten or so years, a quantum shift has hit humanity to state that "leaders" are the people that can make YOU FEEL BETTER ABOUT YOU, with out showing you anything else. on that note...
Disease does not exist, If your mind is not at ease,(aka... stress which is the #1 killer of all humans) you feel that tense, stressful feeling usually in your stomach. The chemical released by your brain, from one negative feeling, held for five minutes, is enough poison to kill a Guinea pig.(scientifically proven) Feel that negative feeling long enough, and your body will begin to function with out ease or be in a state of DIS-EASE. Like Nordstrom said, a little clarity of the mind and depression (and all other diseases) disappear.
Your physical body is a print out of what is being felt and perceived on the inside. We are 25% physical and 75% non physical.(Emotional, Spiritual, Mental) Yet 90% of humanity ignore there greatest asset. Positive E-MOTIONS (E=Energy in Motion)

Fundamentals of business. Yes a leader (go getter type) is needed. Another leader (the morally uplifting) Another leader (supporter or nurturer) Another leader (the good listener/small task doer) another leader (the fun one) another leader (the logical thinker) another leader (the day to day function doer) another leader ect ect ect

To tell you what I mean in my business of 1 person. MYSELF there is a team of leaders.
I am the logical gogetter, my girlfriend at home is my nuturer/supporter, my brother is the day to day/funny one and my best friend is the morally uplifting. My mother is the advanced knowledge/next step. My puppy is the ect ect ect because he does it all. HAHA its true. When I play or talk to him I become more clear.
Ever wonder why billionaires are commiting suicide lately... because they are missing their support system of leaders. Leaders in areas they are not "leaders" in. People always say, 'i wish I had that much money', but thats because you have a different support system. If you could take exactly what you have now and acquire the wealth and maintain the balance, you would be complete. Would you want the wealth if it resulted in giving up so much of what you have that you think of suicide. NO. If you have it all. you have balance. What am I talking about?

It upsets me when people say Money doesnt buy happiness??? Lets put this into a logical comparison
3 aspects to seperate....

Health (Some healthy people live poor, some unhealthy people live wealthy) So health and money CAN NOT BE DIRECTLY LINKED.

Wealth (Some wealthy people are miserable, some Poor people are very happy) So wealth and happiness CAN NOT BE DIRECTLY LINKED.

Happiness (All Happy people are Happy) And dont lie to yourself. Feeling good is all that matters to you. Everything else can come into your life with hard work, and growth, determination, and knowledge. But nothing matters if you are not happy. NOTHING.

SO WHAT BUYS HAPPINESS..................HAPPINESS
SO WHAT BUYS HEALTH.......................HAPPINESS
SO WHAT BUYS WEALTH......................IT STARTS WITH HAPPINESS.

[Shadesz]

IMO some fundamentals are

1-Value... to the customer, the owner, the employee
2-Contribution... to the customer, the owner, the employee
3-Kaizen... while still maintaining the unchangeable value (#1)

And more technical fundamentals
1-Lead generation and conversion
2-Quality delivery of product or service
3-Systems!
4-Cash Flow... preferably positive
5-Customer retention

I am sure there are more, maybe some of these can be combined... just wanted to get some gears turning...

[Nordstrom]

Great post ZingerIntl, to add about the billionaires who commit suicide. I earlier stated depression=lack of a dream. A person who has a dream and achieves it, and fails at finding a new dream, is, exactly, lacking a dream.

About happiness, you are correct that happiness is the most important aspect of life. What is the opposite of anxiety? Most people would say "Well thats being happy". The real term to be used would be confidence and self-belief.

Self-belief and Confidence is what creates a higher "daily value" of happiness. Whereas the different situations are what creates the "peak-values".

I myself feel that even without doing anything, I feel REALLY good. I can sit and watch a wall for a day and feel really good. Something that was not possible earlier in my life.

A lot of people, in the search for happiness try to actually get it by trying to get in to situations that creates a temporary "positive emotion"(Drinking, socializing etc).
I know this will sound corny, but compare it to organic-traffic and syntetic-traffic, the organic(confidence) is by your side basically forever - whereas being happy by putting yourself in situations which create a positive feeling, has to be done over and over and over.

You will fail, with the syntetic way. This is where you need to have the base of organic happiness(confidence) to rely on.

[mthomas]

I like all of the contributions that everyone has ventured.

Firstly, I would like to agree with the notion that leaders can be made. However, I think that each and every one of us are born with some innate talents--leadership being one of them. So leaders CAN be born, but that doesn't mean the only leaders out there are those that are natural born leaders. Therefore, leaders are born, but they can also be developed.

Zinger, I think you raised some very good points, especially regarding that it is happiness that brings about more happiness, health and wealth. We can not possibly achieve success if we are not happy. Wealth and success are relative terms, and if someone is unhappy, there is no way they will feel wealthy or successful.

I also liked what Zinger said about leaders needing a support system. I am a firm believer in this point. While leaders are great at making others feel good, as zinger said, leaders need others to make themselves feel good, since there is a tremendous amount of pressure for leaders to perform.

Shadez, I like what you said about Kaizen, I think continuous improvement is definitely essential to business building and keeping customers attracted to your product. Systems is also very important, something that Michael Gerber advocates in his books a lot.

So based on your comments so far, I would like to ask you if you agree that these are some additional fundamentals:

-A leader who can make their staff feel good about themselves
-A leader who has their own solid support system to keep them grounded and stable
-Systems in place to minimize the amount of management
-Continuous improvement in all aspects of the organization
-Having a culture of happiness starting from the leader, spreading to every single employee

Have I missed any? Any thoughts or expansions that haven't been mentioned on these thus far?

[Shadesz]

So based on your comments so far, I would like to ask you if you agree that these are some additional fundamentals:

-A leader who can make their staff feel good about themselves
-A leader who has their own solid support system to keep them grounded and stable
-Systems in place to minimize the amount of management
-Continuous improvement in all aspects of the organization
-Having a culture of happiness starting from the leader, spreading to every single employee

Have I missed any? Any thoughts or expansions that haven't been mentioned on these thus far?

I like it, almost gets a drool out of me. I will lightly think through the next day to see if I have more input...

maybe capture a little more on the first one... the leader not only makes his staff feel good about themselves (lends emotional support), he empowers them by providing a clear direction + allowing them the freedom & responsibility required to expand/grow/perform towards that direction/ideal/mission/goal...

just thinking digitally

[Nordstrom]

We are definitely turning the conversation from "essential" to "what would be the best". But I agree about different leader charesteristics, even though I will not state them as essential due to them not being used by major companies on daily basis.

-A leader who can make their staff feel good about themselves
-A leader who has their own solid support system to keep them grounded and stable
-Systems in place to minimize the amount of management
-Continuous improvement in all aspects of the organization
-Having a culture of happiness starting from the leader, spreading to every single employee

The only one I would agree with, being essential is "-A leader who has their own solid support system to keep them grounded and stable". The others are more or less a question of "what is the best way to do it".

[Gopal Dev]

As long as a business has a clear attack plan that is put together by a leader(s) and seen through from beginning to end, your chances of being successful are greatly increased. When employees are excited and focused they become the lifeblood of any company because they genuinely care and feel like an integral part of it. Once things start rolling it becomes nearly impossible for one or a few to do it all. They run the risk of wearing themselves out and lose the fire to keep leading. Then everyone loses. It takes a special kind of leader(s) to rally others and know they will be there through thick and thin. I do believe there are born leaders, but that others can acquire leadership if they truly believe in what they are doing.

I also disagree that money cannot buy happiness. Don't get me wrong, I am by no means saying that money is the most important thing and takes precedence over love, family, friends etc... It is just paper after all. I'm simply saying that those who say that money is the root of all evil either don't have much (and are therefore struggling and unhappy), or have had too much and did not know how to manage it, or are simply afraid of money and do not want to take on the challenge and responsibility of administering it.

A leader (entrepreneur) with some basic financial sense will jump at the chance to make money and hopefully do some good with it for him/herself and others. Having enough money, especially when there's more coming in than going out is a careful balancing act between what you earn, spend, and save. If you are among the minority who are financially free, you have also attained personal freedom which is priceless.

Most people's health problems (many of which are stress-related) come from constant worrying about the lack of money and where their next paycheck will come from to pay off the newset round of insurmountable bills. So, if you are financially free you have much less to worry about, and consequently your health should be considerably better.

Having money can contribute to overall physical and mental well-being so that you can focus on what is truly far more important than money: time with family and friends. This is what will bring happiness and can never have a price tag attached to it.

Money is a means to an end. A tool, no different than a hammer and nail, or computer. Being a leader in business that understands money rather than fearing it will help anyone navigate through the complex financial system that we have in place. We live in a debt-ridden society and years of corruption at the top have left the economy is in tatters. Entrepreneurs will be the leaders who will help rebuild and get things back on track by spearheading new ventures.

That, in conjunction with improved financial education will help more people manage their personal finances and control bad debt, live within their means, and hopefully not fall prey as easily to the Money Masters who are playing chess with the citizens of the world. Stay strong and become financially literate. Take this leadership role for yourself and your family. If you don't look within yourself first how can you expect things to change? How can you educate the person next to you? Best to everyone here in '09 and beyond!

Gopal (The Musical Mad Scientist and Entrepreneur)
The v-Fusion Group

[mthomas]

The only one I would agree with, being essential is "-A leader who has their own solid support system to keep them grounded and stable". The others are more or less a question of "what is the best way to do it".

Agreed. The only fundamental in this list is a stable leader. However, we can utilize these other points of "what is ideal" to identify some fundamentals behind it. Lets think for a moment:

-A leader who makes people feel good about themselves--the fundamental here would be that the business HAS to have a culture that fosters motivation in employees. If the business/leadership cannot motivate employees, it cannot function.
-Systems in place to minimize the amount of management--systems are used to minimize staffing expense, so this would actually fall under the category of "convert inputs into more valuable outputs".
-Continuous improvement in all aspects of the organization--continuing to appear attractive to the customer is essential, so at least having an attractive Selling Proposition would be a fundamental, while a Unique Selling Proposition would be ideal.
-Having a culture of happiness starting from the leader, spreading to every single employee--this would probably fall under the fundamental of motivation.

Could we agree to this so far or can we refine this any further?

those who say that money is the root of all evil either don't have much (and are therefore struggling and unhappy), or have had too much and did not know how to manage it, or are simply afraid of money and do not want to take on the challenge and responsibility of administering it.

Very true. Those with more money often have a greater potential/influence to change the world. As you said, money is just a means to an end, so the good or evil deeds are rooted in the individual and through their use of their money. So to tie this in with business fundamentals, how can we relate responsible use of cash with business fundamentals? Ensuring the culture is free of corruption comes to mind, but that might be too broad to apply to business on its own. Any thoughts?