Lewis Schiff is the executive director of Inc. Business Owners Council, a membership organization for Inc. Magazine’s top entrepreneurs and owners of closely-held family businesses and maintains a blog about behavioral entrepreneurship on Inc.com.
His new book, Business Brilliant: Surprising Lessons from the Greatest Self-Made Business Icons, which focuses on the wealth-creating behaviors and attitudes that work best in the new economy, was published by Harper Collins in March 2013.
Schiff has co-authored two books: The Influence of Affluence: How The Rich Are Changing America charts the rise of America’s growing affluent middle-class through original research and analysis. The Armchair Millionaire describes a wealth-creation system that leverages Nobel-Prize winning methodologies.
Here is Part 1 of my interview of him.
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Morris: Before discussing Business Brilliant in Part 2, a few general questions. First, who has had the greatest influence on your personal growth? How so?
Schiff: I would have to say that my mother’s entrepreneurial perspective, and that of her father’s, are very evident in my own outlook. I would add a twist to that. As members of a minority, one that was often persecuted, that entrepreneurial perspective was burnished with a sense of “outsider” status–so not only were we committed to finding our own way of achieving success, we also grew up to believe that we’d have to fight to get whatever we wanted.
The thing is, I grew up in a modern business environment and did not experience the kind of prejudice that my mother and grandfather experienced. So, my fighting spirit has often seemed out of place. Still, it formed one of my basic beliefs about success which is this: most of the time, success can be measured in terms of how much more than others you have of something that’s in short supply. This includes money, reputation, respect, etc. So, I’ve always wanted to get my share but, due to my tendency to overcompensate (work harder, push for the win more), I’ve ended up with more than my fair share. These are some of the life lessons I’ve drawn from watching my mother and grandfather struggle in the world compared to my own struggles.
Morris: The greatest impact on your professional development? How so?
Schiff: Harkening back to a story about my grandfather, I was lucky to attend a great high school in New York, Bronx High School of Science, which has produced more Nobel prize winners than any other high school in America. But, I was never going to be one of them. By the time I entered this prestigious high school, my interest in formal education had already been exhausted. In the summer between my freshman and sophomore year, my grandfather got me a job at a local messenger company working on Wall Street. I was lucky enough to have been in the business during a stock market boom but just before the fax machine appeared on the scene, let alone email and the Internet. As a result, the messenger business was booming. I got to carve through the streets of New York’s financial district and discover the awesome feeling of being part of a system where, the harder you worked, the more of those scarce resources you earned! I never looked back. While I did complete high school, I would have to say that it was by the skin of my teeth. My education ever since then has been one that I got “on the job” and I consider myself a very well-educated person at this point!
Morris: Years ago, was there a turning point (if not an epiphany) that set you on the career course you continue to follow? Please explain.
Schiff: OK, so let me reverse course a bit on my last statement. I did in fact take a couple of classes at my local college here in NYC. But I did it unwillingly and without enthusiasm. That is until a protest broke out in the streets around campus against rising tuition costs. Because my college was a local college, it had a historic role in educating minorities and the tuition increase was viewed as an obstacle in creating more opportunity for minorities. I threw myself info the protests with all my heart. Ultimately, a group of us barricaded ourselves in the school for about 3 weeks so we brought the running of the campus to a halt.
During that time, I began writing and designing the propaganda that we distributed to the students who we were trying to convince to join us. I found that I loved producing that kind of propaganda and I loved the power that a few students with a Macintosh computer could wield. I was hooked on communications at that point. I went to work at political consulting firms, graphic design and communications firms and ultimately, magazines. Today, my career is in the media business. And more specifically, I’m in the “words” side of the business as opposed to video or music. There is a direct line between the communications work I did to protest tuition increases at my school and what I do today. Plus it had one other benefit…it got me kicked out of college!
Morris: To what extent has your formal education been invaluable to what you have accomplished in life thus far?
Schiff: See above (Ha!)
Morris: What do you know now about the business world that you wish you knew when you when to work full-time for the first time? Why?
Schiff: The answer to this question is the very same question that I explored in the beginning of my book, Business Brilliant. When done right, working is a series of decisions that you make which allow you to refine and refine and refine your highest and best use. Ultimately, if you are lucky, you will find out where you belong. When I started out, I wanted to have everything solved by the time I was 30. That didn’t happen. Instead, I realized that the journey is the destination, that the work I’m doing today gets me one step closer to the work I should be doing tomorrow. And that the way I learn this is by trying, failing, networking and experimenting. I’ll stop doing that when I’m dead.
Morris: Of all the films that you have seen, which – in your opinion – best dramatizes important business principles? Please explain.
Schiff: I don’t know if you hear this often but I would say The Razor’s Edge (loosely based on a great W. Somerset Maugham novel). This was Bill Murray’s first dramatic role so everyone thought he stunk in this deep character but I thought he and the movie were great. The movie takes place over decades so you see Murray’s character go from goofy playboy all the way to wiser, older person. It’s basically a movie version of the journey I described above in my previous answer. The journey is the destination.
Morris: From which business book have you learned the most valuable lessons about business? Please explain.
Schiff: Because I work with entrepreneurs who own businesses, I have found Doug Tatum’s No Man’s Land to be a really helpful body of working knowledge. It’s very applicable to most businesses that have the usual problems of growing businesses–managing people, capital, markets, etc. On a personal side, I found Bo Burlingham’s Small Giants to be a great window into how business can be an extension of social change and the critical role the entrepreneur plays in creating progress in society.
Morris: Here are several of my favorite quotations to which I ask you to respond. First, from Lao-Tzu’s Tao Te Ching:
“Learn from the people
Plan with the people
Begin with what they have
Build on what they know
Of the best leaders
When the task is accomplished
The people will remark
We have done it ourselves.”
Schiff: I don’t buy it. I believe that only a subset of us is meant to lead. The rest want to follow. That being said, everyone of us can move a big step farther towards determining the direction of our own lives. We can all break free from group think. Some more than others. Most don’t. Finding out who is who is great fun.
Morris: And then, from Oscar Wilde: “Be yourself. Everyone else is taken.”
Schiff: Yes, totally. Thinking like others is ok for things that are not important to you. For example, I wear clothes I buy at trendy shops because I don’t care much about clothing. If someone wants to create a trend around clothing, I’ll happily and blindly follow. I’ve got better things to do than to find my individuality in that particular area. But if it’s important to me, I’ve got to seek my own path.
Morris: From Albert Einstein: “We cannot solve our problems with the same thinking we used when we created them.”
Schiff: Yes and no. One of the easiest ways to solve your problems is to look at how others have solved a similar problem. So, in this regard, we are using the same thinking of others. But, to the extent that I cannot solve MY problem with the same thinking I used when I created it, you’re right. We need the fresh air that comes from others to see things in other ways.
Morris: Finally, from Peter Drucker: “There is surely nothing quite so useless as doing with great efficiency what should not be done at all.”
Schiff: Agreed. One of the things all entrepreneurs struggle with is where their efforts will have the highest impact. Unfortunately, too many of us continue to do the very same things that led to our initial success because we’re good at it and we’ve created and invested in systems to support them. That doesn’t mean we should be doing it, though. We should always be carving back those things that are comfortable and institutionalized but not necessarily impactful.
Morris: In Tom Davenport’s latest book, Judgment Calls, he and co-author Brooke Manville offer “an antidote for the Great Man theory of decision making and organizational performance”: [begin italics] organizational judgment [end italics]. That is, “the collective capacity to make good calls and wise moves when the need for them exceeds the scope of any single leader’s direct control.” What do you think?
Schiff: I think small groups have more collective wisdom than an individual. I also believe that at a critical point (more than six people?), that collective wisdom turns into group think. However, I believe that large groups make markets, so serving the needs of large groups is a simple approach to success in business success. But that’s no reflection on whether or not they’re making wise moves or good calls. It’s just about filling the need.
Morris: Here’s a brief excerpt from Paul Schoemaker’s latest book, Brilliant Mistakes: “The key question companies need to address is not ‘Should we make mistakes?’ but rather ‘Which mistakes should we make in order to test our deeply held assumptions?'” Your response?
Schiff: Of course. Absolutely. The problem is not the sentiment, it’s the execution. When a company makes a mistake, the individual benefits because they’ve learned how NOT to do something while the institution had to pay for the mistake. There are not enough forums where institutions invite their workers to share their failures in a constructive way so the organization can move forward.
Morris: In your opinion, why do so many C-level executives seem to have such a difficult time delegating work to others?
Schiff: It’s the “Success Paradox.” When a set of behaviors has gotten you somewhere, you keep doing them even though the circumstances have changed. As you climb of the organizational ladder, you have to redefine your role in the value chain from player to captain to coach to manager, and for some, to owner. These are different roles and you won’t be able to succeed as a manager when you’re acting like a player.
Morris: The greatest leaders throughout history (with rare exception) were great storytellers. What do you make of that?
Schiff: I’m not sure I agree with that. I know a lot of great success stories of those who were excellent problem-solvers because they had found a need that they could fill well. As a result, they built organizations around them and those organizations had belief systems that could be described as a form of leadership. However, there’s nothing more inspiring than a company that does solve problems and those problems are captured as part of a larger story. Apple made tools that helped people express their creativity and Steve Jobs knew that so he told that story well). But Facebook makes tools that help people connect and Mark Zuckerberg is hardly a story-teller. Nevertheless, he’s become a leader because his products do such a good job of solving a problem.
Morris: Most change initiatives either fail or fall far short of original (perhaps unrealistic) expectations. More often than not, resistance is cultural in nature, the result of what James O’Toole so aptly characterizes as “the ideology of comfort and the tyranny of custom.”
Here’s my question: How best to avoid or overcome such resistance?
Schiff: I believe in labeling things. In companies, there are three activities that should be labeled better. First there is the “CORE” which is the thing the company does that its customers pay it to do. Apple makes computers and they have to be great at providing the product they promised every individual who wants to purchase from them. This is where they should spend the bulk of their energy. Then they should spend a smaller amount of time on innovating so they can participate in the FUTURE evolution of products and customer needs in their sector. Finally, they have LEGACY activities, things that they still do but are neither CORE nor FUTURE. These should be labeled and killed off.
Once we see our activities in these three lights, it’s hard to imagine justifying the continuation of a legacy activity. This is also where people and companies need to work together. If the workers don’t keep themselves current — with some assistance and guidance from their employers — then the workers who are in the legacy roles will have to be removed. That’s what’s so difficult.
Morris: In recent years, there has been criticism, sometimes severe criticism of M.B.A. programs, even those offered by the most prestigious business schools. In your opinion, in which area is there the greatest need for immediate improvement? Any suggestions?
Schiff: MBA programs are underwritten by large companies and they succeed at producing future employees of large companies. In that regard, they are doing exactly what they are supposed to be doing. If the question is, how do we best produce business people who can succeed in the post-Great Recession era, then I think the MBA programs and their connection to large companies remains intact but it’s not the path to a “Business Brilliant” life. It’s a path to a middle-class existence marked by large stretches of security and comfort with occasional eruptions that you’re probably ill-prepared to handle. Do I sound too cynical?
Morris: Looking ahead (let’s say) 3-5 years, what do you think will be the greatest challenge that CEOs will face? Any Advice?
Schiff: The disruption caused by globalization and technology (what Tom Friedman calls hyperconnectedness) will be around for the rest of our professional lives. CEOs are no different than the guy in the mailroom. They all have to learn how to manage better the risk created by our increasingly risk-shifting world.
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Lewis cordially invites you to check out the resources at these websites:
The Inc. Business Owners Council home page
Lewis’ Inc. articles link
His Amazon page
Business Brilliant page