| Proverbs and Ecclesiastes on Business
I enjoy reading. I especially love books that unleash my imagination and inspire ideas. The puritan Richard Baxter once wrote: "It is not the reading of many books which is necessary to make one wise, but the well-reading of a few, could they be sure to have the best." Books like Selling the Invisible by Harry Beckwith make my list of the few best business books that should be read often, and read well. But I reviewed that book in a previous newsletter. This month I'm reaching way back. While the books being reviewed in this newsletter are certainly available at your local Barnes and Noble or Borders, you won't find them in the business section. You'll have to head over to the religion aisle for these - they are the book of Proverbs and the book of Ecclesiastes. The first chapter of Ecclesiastes states that "there is nothing new under the sun." I read business and marketing books for new ideas and perspectives, but while new ways of looking at business realities can be helpful, the realities themselves are always the same. This fundamental truth is reinforced for me when I discover great business wisdom contained in these ancient books. The insights in Proverbs and Ecclesiastes top anything I've ever read off the business best seller lists. A qualification in consideration of agrarian language I hesitate to proceed directly to the insights I've gleaned from these two books of Solomon without first recognizing that their wisdom is written in the business language of their time, that is, the business of agriculture. For example, certain principles related to how one should treat employees or serve clients might use oxen or cattle in place of the helper or helped. Such equations can easily be misconstrued and sound offensive to our non-agrarian ears. I certainly don't want my employees to imagine that I think of them as oxen! But if we can get beyond the imagery we'll find an awesome depth of insight in these old books. Below I've listed passages that have been particularly helpful. I've provided a bit of categorization, some modern business interpolation and my personal commentary about how they have helped me in business. Understanding the nature of business 'Bad, bad,' says the buyer, but when he goes his way, then he boasts. Proverbs 20:14 Business is essentially transaction. It is the exchange of one kind of value for another. Businesses have products or services that customers want or need. Customers have value (money) that businesses want and need. The key to a good business transaction is that both parties benefit. The buyer gets something they could not get on their own, or at least something of greater value than if they produced it themselves, and the seller converts their expertise into profit. In this way skill, expertise, efficiency and hard work translate into mutual benefit for both buyer and seller. Such business transactions, in their pure form, are wonderfully designed for the benefit of society. (This philosophical estimation of the nature of the business transaction was clarified for me by Wayne Grudem in his book Business for the Glory of God.) There is, however, a natural tension as the balance of benefit in such exchanges works itself out. This tension is most observable during the act of negotiation. At the conclusion of a successful negotiation both parties agree on the value of the transaction (defects not withstanding). Tensions in negotiation occur as each party naturally seeks to maximize their own benefit. Proverbs 20:14 describes this dynamic, "'Bad, bad,' says the buyer, but when he goes his way, then he boasts." This proverb highlights that in negotiations, distortions and misrepresentations of value often take place. I don't believe this verse gives buyers or sellers license to make misrepresentations! Rather, it simply observes that negotiation is commonly attended by some degree of distortion. Nevertheless, negotiation is fundamentally a good thing that benefits both parties. This bit of wisdom helps me to be patient as I allow negotiations to complete themselves. It also helps me to avoid the mistake of undervaluing my own time and services in the face of the distortions that sometimes occurs during negotiation. Where no oxen are, the manger is clean; but much revenue comes by the strength of the ox. Proverbs 14:4 I started Newfangled out of my basement. I was the business guy, the designer, the HTML coder, the bookkeeper and the janitor. As the company grew I had to employ others. This was a hard transition and very frustrating at times. I liked being a "doer" and I did not like dealing with employee problems. But in the end, while it may be messier, and more complicated to employ others, it is necessary for profitability. At a certain point I had to make a strategic decision about my goals. Being a one man shop was very clean, but hard to make a profit. Hiring others is less clean, but ultimately established a greater potential for profitability. I have seen that every labor and every skill which is done is the result of rivalry between a man and his neighbor. Ecclesiastes 4:4 Competition can be a very healthy thing. Seeing someone doing something better than me does not have to make me envious, but it should provoke me to improve. Sharpening skills and improving products is a good thing. Who wouldn't want a car with better gas mileage, or a computer with a faster processor and larger hard drive? Competition forces improvements that benefit everybody. Understanding that the "jealousy" I feel when I see someone do something better does not have to be "bad jealousy," instead it frees me to admire a competitor's business success and be spurred on to improve my own. I've been encouraged not to fear competition but value its influence on my business. Dealing with stress and difficulty A gentle answer turns away wrath, but a harsh word stirs up anger. Proverbs 15:1 If you are going to be in business, you will have difficulty! A common source of business conflict comes when one party feels that they have not received the value for which they negotiated. This is especially common (as Harry Beckwith points out in Selling the Invisible) in service industries. How can one definitely measure the value of a service? Evaluating products can be easier. If it won't turn on it fails to meet the conditions of the exchange. But how does one determine whether a brochure has been designed well? If the logo is printed upside down it is clearly flawed. But usually, if there is dissatisfaction with design, the reasons are more subjective. The same design can be loved by one client and hated by another. Sometimes, when design is submitted to a group for evaluation, some people love it while others might not "think it's not there yet." Has the exchange been met? The designer has delivered their time on the project (which is ultimately what they are selling), but the client is not satisfied. Such conflicts, though hopefully rare, are inevitable and we need to be prepared for them. Design, as a subjective service, is particularly prone to such disagreements. Because a designer is selling their time as a skilled artisan they may feel like they've met their obligation, but the buyer is looking for a finished product to their liking. When the buyer is not satisfied, there is an imbalance in the exchange. Anyone who has sold design services knows that such instances are inevitable. While solutions are not always easy, they do always involve further communication and negotiation. If you realize that engaging in business, especially the design business, will have such tensions and conflicts, you can be prepared for them. The best solutions are not found in the fine print regarding kill-fees and rounds of design (though wise to include in your contracts), rather they are found by having a calm spirit when working through problems when they do occur. The best defense I've found against escalation in such conflicts is to always avoid harsh words that stir up anger, and instead seek gentle answers that can assuage the conflict while searching for an agreeable solution for both parties. Not only will gentle answers work better when dealing with conflict, but when successful they will add to your credibility, integrity, trust and reputation with the client. A history of such practice will positively effect your reputation within the business community. For the designer, or any seller of services, a good reputation can be worth much more than gold. A worker's appetite works for him, for his hunger urges him on. Proverbs 16:26 Financial stress is another common difficulty in business. I've yet to meet a business man or woman who has not endured at least one significant season of financial stress. I know I've had my fair share. Proverbs 16:26 provides a helpful piece of wisdom for such times... work hard to get out of it! But realize the times of financial stress can be the perfect time to evaluate and improve all aspects of your business. Hunger urges us on. If I am hungry I desperately want to fix whatever problems are contributing to my hunger. In this way, while never pleasant, financial stress can have a powerful cleansing, priority-setting, and focus-refining effect on your business. Hunger can become something of an ally, if you let it work on you. So, (I say to myself) if you're having financial trouble, stop complaining and get to work! Marketing and business development He who watches the wind will not sow and he who looks at the clouds will not reap. Ecclesiastes 11:4 Sow your seed in the morning and do not be idle in the evening, for you do not know whether morning or evening sowing will succeed, or whether both of them alike will be good. Ecclesiastes 11:6 At a certain point marketing is no fun. I really enjoy certain aspects of marketing. I like strategizing, conceptualizing, planning, creating, refining, etc. But at some point I have to get out there and start sowing. For me this means getting on the phone and making contact with small to mid-sized advertising agencies and design firms to introduce our services. I enjoy this for about 30 minutes and then my brain starts to retreat. After one full day of "sowing" I can't even tell if I'm speaking correctly; I'm on auto pilot. I know I can't make marketing calls all day every day, so I do it in seasons. Usually for a couple weeks, two or three times a year. But when those times draw near I am incredibly good at finding ANY reason not to do it. It's amazing how the wind kicks up and the clouds move in. Any excuse not to make calls right now seems compelling. At such times one negative response following ten positive ones can make me want to stop. It's hard. To help me in these times when I'm inclined to stop (or not even start!) I've written these two verses from Ecclesiastes on a piece of paper near my phone, and I read them when I get tired or faint-hearted about making more calls. When it gets down to the nitty-gritty of marketing it's plain hard work, and I simply need perseverance. If I stick to it and I do not get distracted in the morning or discouraged in the afternoon, sooner or later my efforts pay off. Making just one more call in the afternoon on a day that hasn't been very fruitful might lead to a receptive design firm with a current project to bid on. Don't let the clouds deter you. Keep plugging away. Who knows what you may find With the fruit of a man's mouth his stomach will be satisfied; He will be satisfied with the product of his lips. Proverbs 18:20 When it comes to service marketing sales are always preceded by establishing trust. The buyer has to assure themselves that they will get the value they expect; that you will deliver the goods. There is only so much you can "show" to establish a level of trust needed to incubate a sale. Trust is, in large measure, a relational commodity. The subjective and intuitive elements of establishing trust can't be quantified by showing the client more and more pictures of past work. The buyer does need to see the product, but more importantly they need to trust the person or business behind the service to ensure they will get what they are being shown. Establishing trust is a personal dynamic. The raw material of this dynamic is words. These words include written words, referrals, recommendations, and the words that come out of your mouth when you are on the phone or giving a capabilities presentation. When it comes to marketing the quality and character of your words can't be underestimated. The best six-color fold out brochure will be tossed aside if it's not followed-up with a positive interaction with a personal representative from your company. Marketing has a lot to do with your words, so pay close attention to them! If the axe is dull and he does not sharpen its edge, then he must exert more strength. Wisdom has the advantage of giving success. Ecclesiastes 10:10 The best books on marketing will tell you the same thing - specialize in some way and focus your message. That's what positioning is all about right? In ten years of marketing Newfangled I can quantitatively measure the difference in my efforts from the first half to the second. In the first half I tried to market "website design and development services." Our services were limited to websites, but that was not nearly focused enough. By sharpening my axe and honing our marketing position to "fortifying advertising agencies and design firms to confidently, comfortably, and profitably provide web development services to their clients" I was able to begin effectively marketing our services. Sharpening my axe was essential. With a sharper axe I successfully marketed with significantly less effort. Having found a relatively sharp position I still continue to refine my focus. Based on my experience up to this point, it's my opinion that there is no such a thing as an axe that is too sharp. There is always room to further refine a marketing position. The wise in heart will be called understanding, and sweetness of speech increases persuasiveness. Proverbs 16:21 Marketing is about finding opportunities, selling is turning opportunities into sales. One of the most helpful distinctions I learned in running my small company was the distinction between marketing and sales. I used to group them into the same category. But marketing and sales are very different. I keep the difference straight by thinking of marketing as the stuff I do to make my phone ring with an opportunity and sales as the thing that happens once my phone has rung. As stated before, marketing is about sharpening your axe (refining your position) and persistently sowing your message (finding opportunities). Sales is about establishing trust and persuading a prospective client that your services are best suited for their needs. Therefore the art of sales is the art of persuasion, and persuasion is the ability to provide good, understandable, and reasonable answers to the questions a prospect has about your service. There is a strong tendency in marketing and sales to play off the consumer's fears. The idea is to make them afraid of what might happen if they don't buy your product or service. This can be as subtle as identifying deficiencies in the competition or as overt as blasting spam email to scare people into buying software to protect their computer from the threat of viruses. We think the stronger the words, the more powerful the persuasion. This is why there is so much hyperbole in advertising. But I take my sales and marketing cues from Proverbs 16:21. I believe sweetness of speech is more persuasive then bold overstatement. Now by sweet speech I don't mean fluffy words you'd use to describe puppy dogs and decorative pillows, but rather words that are sweet like good fruit. Sweet words are words that go down easy because they are true and honest. They are words that directly answer questions and provide additional information so a person can make a qualified decision. They are words that don't go beyond what is actual and real, and that answer honestly even when the answer reveals a limitation about the product or service. Such words are rare, but when we hear them they taste sweet. I know when I have to buy a product or service, I'm much more likely to buy from a sales representative who I believe has honestly answered all my questions - even if all the answers weren't exactly what I wanted - than from a salesman who I think is just telling me what I want to hear. Sweet, persuasive, honest speech has wonderful long term benefits. For example, being honest with yourself and your prospect as to whether or not your services really are best suited for their need will force you to improve your marketing and sales! When they are not best suited you may either need to refine the focus of your marketing to get better, more qualified opportunities, or you may need to improve your services to meet your client's needs. Either way an honest evaluation of how your services will meet your client's need will force you to evaluate and improve. Additionally, keeping focused on what you do best will make you sharper and more skilled in your area of expertise. The sharper you get the better and more persuasive you will become. It's an upward spiral. Honesty in working through the sales process also helps avoid conflicts that result when, for the sake of closing a sale, you invite inappropriate work by over selling your services and capabilities. Managing your client base Know well the condition of your flocks, and pay attention to your herds; for riches are not forever, nor does a crown endure to all generations. When the grass disappears, the new growth is seen, and the herbs of the mountains are gathered in, the lambs will be for your clothing, and the goats will bring the price of a field, and there will be goats' milk enough for your food, for the food of your household, and sustenance for your maidens. Proverbs 27:23-27 Since refining Newfangled's focus five years ago we've been blessed with almost 100% client retention. Up until very recently the only clients that left us were ones that, sadly, went out of business. Unfortunately though, we have recently lost two others. This has reminded me of Proverbs 27:23-27 which is about paying attention to the condition of my flocks (a.k.a. my clients). In both recent cases where we lost a customer it was because our original client contact had left and someone new came in and wanted to handle their website differently. This proverb suggests two actions to prepare for such occurrences. One is to pay close attention to the condition of your client relationships (so you won't be caught off guard) and the other is to expect some degree of turnover and be prepared for it. While both losses came from a change in client personnel I might have been able to avert one of them. If I had known about the change over I might have been able to re-demonstrate the benefits of our content management system. It's quite possible that how our content management system works was never passed on to the incoming person. Their decision may have been made without knowing what they already had in terms of control over their website. Because I was unaware of this change - because I did not know the condition of my flocks - I never got this opportunity. The other case however, demonstrates that some clients will leave, and even if you see it coming you won't be able to do anything about it. The second client we lost was because an IT department head decided that he wanted to redo the website himself. In this case it was a technical decision that the marketing person had no control over and so there was really nothing we could have done to prevent it. As it says in this proverb, "riches are not forever... when the grass disappears, the new growth is seen." Change is inevitable and clients - no matter how good your service or product may be - will sometimes come and go. This means that I have to always be marketing. When the grass on the hills my company grazes becomes sparse I need to be looking out for new growth opportunities. And since I have four little maidens and one young squire at home that need sustenance, I should always pay attention to my clients and look for the new growth. The goal of making money A good name is to be more desired than great wealth, favor is better than silver and gold. Proverbs 22:1 It is often said that the only reason for being in business is to make money. Making money is a primary and necessary component of being in business. Evaluating your balance sheet often is helpful not only to make sure you're making money, but also to detect potential problems in the business itself. However, I would suggest that making money, while important, is not the only reason for being in business. Hypothetically, suppose you wanted to sell your business. One aspect in determining its value is called "good will." Good will represents the value your business has in terms of its reputation, renown, and existing satisfied client base. The better the estimation of the good will your company has, the more it would be worth. Now it's true that you can't exactly take your good will to the bank and cash it, but I would suggest that if you're in business for the long haul your good will is ultimately more important than the bottom line of your balance sheet in a given month. A good name for your business and the favor of your clients is both a long term asset, and a thing to be desired in-and-of itself. If you don't get a warm satisfaction in doing a good job for your clients, and making them glad that they did business with you, you probably shouldn't be in the business you're in. In all labor there is profit, but mere talk leads only to poverty. Proverbs 14:23 There is always a temptation to "get rich quick." The impulse is universal, which is probably why there are currently dozens of get rich quick offers jammed into your email's spam folder. The dot com bubble burst of 2000 was due to extremely over inflated technology stocks. They were inflated because prior to the burst any company with a dot com in their name was receiving venture capital and was being quickly pushed to an initial public offering. Before 2000 I was constantly asked whether Newfangled was looking for investors or capitalization. At that point I never understood what my company could possibly produce that would be so valuable that it could pay off such investors. I remember reading Internet Week and Fast Company and wondering how in the world small companies just like mine were getting so much money. Well, as it turns out, most if not all of those companies are long gone, and happily we're still plugging away. One of the things that typified those internet start-ups was the abundance of buzz words. Bo Peabody of Village Ventures recounts in his recent book Lucky or Smart that his original business plan for Tripod was liked because "it mentioned the Internet several hundred times." Business plans were filled with acronyms and technology language. Investors were blinded with buzz and stocks soared like rockets, and crashed just as quickly (though Bo was smart enough about his luck that he cashed out before it all came crashing down). There is a time and a place for investment, even risky high gain venture capital, but it's not for the small service business. But guess what, while the tech stocks climb and crash good ole' fashioned hard work is always profitable. I'll leave the rocketeering to others, give me an honest dollar for a good days work - it's much more dependable. Here is what I have seen to be good and fitting: to eat, to drink and enjoy oneself in all one's labor in which he toils under the sun during the few years of his life which God has given him; for this is his reward. Furthermore, as for every man to whom God has given riches and wealth, He has also empowered him to eat from them and to receive his reward and rejoice in his labor; this is the gift of God. For he will not often consider the years of his life, because God keeps him occupied with the gladness of his heart. Ecclesiastes 5:18 Satisfaction in one's work is among the greatest attainments in life. It's too bad that so many of us waste years seeking more money, more success, and more awards rather than enjoying the work and the rewards we've already received from our labor. I often have to make a concerted effort to pause and enjoy all the benefits I've gained from my toiling in business. Gladness is not automatic; I have to be empowered with the capacity to enjoy my work. This empowering comes through the means of intentionally enjoying the fruit of my labor. How fitting to celebrate a new piece of business by taking my wife out to dinner! Dealing with money Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth. Ecclesiastes 11:2 Here's a practical piece of advice! Read a good book on managing finances and you'll find this nugget restated in words about managing cash flows and keeping a reserve of savings. One way to apply this to a design business it to try to avoid the 50% down, 50% on completion rule. While this is a standard practice it would better to divide up projects into thirds, fourths, or even more portions. Getting 50% upfront is nice, but waiting six months or longer for the other 50% can be excruciating. Spreading out progress invoices can cushion your cash flow and also keep you from depending on just a few big clients or projects, which is in itself a risky thing to do. The generous man will be prosperous, and he who waters will himself be watered. Proverbs 11:25 I've been emboldened by this verse to be very free with my knowledge and expertise. I admit that there is a fine line between being generous and being foolish, and I don't doubt that I've crossed that line more than once. But when it comes down to it, when I'm debating in my mind whether to share information or hold it close, I usually share it. Our March 2004 newsletter recounts the business decision I made to give away free user licenses to our content management system to every one of our clients. Additionally, we decided that we would write newsletters like this one detailing our ideas and strategies concerning everything from our process of grayscreen prototyping to our content and search engine optimization strategy. We also give away our book Client vs. Developer Wars via PDF. Why give away so much research and development and hard earned industry knowledge? Well if all the ancient wisdom from Proverbs and Ecclesiastes has benefited me in my business I figure that Proverbs 11:25, "The generous man will be prosperous, and he who waters will himself be watered," is dependable too. Of making many books there is no end, and much study is a weariness of the flesh. Ecclesiastes 12:12 And so with that I will end this exceptionally long newsletter. If you've made it this far, I thank you for your endurance. There is just so much wisdom in these two books that I just couldn't stop writing. In fact I could write more but I must confess that I am weary and as it is I am just barely getting this out on deadline. Besides, how much better if you dive into these ancient treasures yourself. I can recommend a few other good business books, but none as rich as Proverb and Ecclesiastes.Back |
