Do you ever yearn to discover the secrets of the big guys so you could explode your business? I’ve certainly fallen into that trap on and off over the years. And whenever I’ve managed to gain access to the “secrets” of those who appear to be above the fray, I’ll tell you what I’ve usually found to be the case: More often than not, the emperor has no clothes.
If you interact with employees of other companies on a daily basis, you already know that the majority of them are incompetent and negligent. And, above all, not very responsive. So the question is, with foot soldiers like these in charge of day-to-day operations, why are so many companies so successful?
To answer this question, I’m reminded of an anecdote from Sam Walton’s biography. When Walton was still only a little regional guy with about thirty stores, he went to New York in the hopes of learning something from big-city discounters and was granted an audience with an executive at one of the country’s major discount chains.
Walton pulled out some crumpled papers from the breast pocket of his suit and showed them to Mr. Big. On those papers were handwritten sales-and-profit figures for his small-town discount chain — the one with that local-yokel name, Wal-Mart (now “Walmart”).
Mr. Big perused the figures for a few minutes, then shoved the papers back to Walton and urged him not to show his figures to anyone else and not to seek information from any other New York discounters. Instead, he advised him to turn around and go back to Arkansas as fast as he could … and to keep doing whatever it was that he was doing to produce the kind of results his crumpled papers revealed.
The executive assured Walton that none of the big discount operators in New York was even close to achieving the kind of numbers he was producing in his small chain. And the man was obviously correct, because in a relatively short period of time, many of the biggest discounters in New York — including such giants as E. J. Korvette and Alexander’s — began closing their doors. In fact, those old enough to remember know that it was a bloodbath for major discounters throughout the country for a couple of decades.
In retrospect, it’s quite humorous that Sam Walton was trying to find out how the big discounters got so big, considering that most of them went broke and Walmart ended up becoming the largest retailer in the world. What a great Horatio Alger story.
It’s not just the big guys, either. During the prehistoric era of my life, back when I was a real estate broker, I had an acquaintance who many people fondly referred to as “Black Bart.” He was a shoe-shufflin’ good ole boy from Kansas — about six-foot-four — who spoke with one of those disarming cowpoke drawls.
If you didn’t know Black Bart very well, you might have assumed he had succotash between his ears — and your assumption might have cost you your house. We’re talking smart here — country smart.
You may recall that one of the highlights in my book Winning Through Intimidation is the story of my multimillion-dollar real estate closing in Lawrence, Kansas. (Chapters 15 & 16.) The featured characters in that story were two hard-drinking cowboy types I nicknamed the “Booze Brothers.” I mean, these guys brushed their teeth with Scotch and took bourbon enemas.
Many years after I had put millions of dollars in their pockets by selling eight of their apartment complexes, Black Bart blew into town and called me to ask if my wife and I would like to join him and his wife for dinner. I accepted his invitation, and that night we got to talking about the Booze Brothers.
Black Bart said that when he was an apartment developer in Kansas, he never could figure out why the Booze Brothers were able to build apartment units for $X per square foot when it was costing his company $Y per square foot. He constantly chastised his top lieutenants about it, heatedly admonishing them, “If those guys can build an apartment unit for $X per square foot, then we’ve got to figure out how to do it, too. We just have to sharpen our pencils.”
But, guess what? The Booze Brothers went broke a couple of years after I sold their apartment units, while Black Bart — still building his units for $Y per square foot — managed to sell his company for $13 million! He ended the story by saying, “So the answer to my question about how in the heck those guys built their apartment units for so much less than we did turned out to be: They didn’t. That’s why they went broke!”
Moral: Whether it’s a business or personal issue, it’s a good idea to teach your children early in life to take what others say with a grain of salt. Talk really is cheap. It’s been my experience that most people simply like to hear the sound of their own voices.
Worst of all, a high percentage of those people are guilty of nothing more than B.S. And the worst of the worst are those who actually believe their own B.S.
It’s a serious mistake to assume that the other guy knows more than you just because he talks more than you. And that includes people from the highest ranks of corporate America. They may be bigger, but they’re not necessarily smarter.
If you mind your own store, keep up to date on what’s going on in your industry, and focus on opportunities rather than problems, it will give you the security of knowing you’re on the right track. The trick is to have the self-discipline to be selective about what you choose to believe and to not be so quick to assume that the guy who pontificates on “the right way to do things” knows what he’s talking about. More often than not, he doesn’t.