Business Simplified: Serving people, becoming better stewards, creating value

By Michel Bell

In Business Simplified, former business executive, Michel A. Bell de-mystifies business with simple, helpful ideas from his experience and research. Business is about people. The right people unified in the correct positions, headed in the proper direction to delight customers and create value for stakeholders. Straightforward, practical solutions from Michel’s vast global, multi-cultural business experience and research will enable cooperation, pinpoint suitable paths to gain customers for life, and build shareholder value. Further insights to design and implement strategies for a competitive edge appear throughout the book. Michel cautions against so-called five-yearly strategic plans, which usually excludes tough choices—the essence of strategy—necessary to steer the entity to its mission. Business Simplified includes several case studies, explains strategic and operations management, entrepreneurship, governance models, solution-driven marketing, capital and operating budgeting, and proposes a government accountability model, and business and personal tax reforms. As well, Michel offers his easily understood bucket accounting ideas—the layperson’s guide to interpreting financial statements. Whether you are a CEO, student, or a young entrepreneur, you will glean valuable insights from Business Simplified.

• Language: English
• Publisher: Managing God's Money
• Release date: Oct 2, 2022
• ISBN: 9781642558005

Book preview

Introduction

And God saw everything that he had made, and behold, it was very good. …

— Genesis 1:31

I love business. It’s exciting, fun, challenging, creates jobs, provides income for individuals and families, and is the engine for society’s wealth creation. People run businesses, ministries, churches, and they are imperfect. Thus, some leaders exploit employees and others in society for their own and their firm’s benefit, which hurt individuals and families.

Many folks detest business. They saw or experienced poor treatment by organizations, particularly in the Great Recession. I abhor this behavior. However, I assure you that exploiting people is poor stewardship and isn’t business’ usual approach. Ironically, in the long run, poor employee treatment is bad for business.

Are you a skeptic about business? After reading this book, I pray you will reflect on what you absorbed. If you are not skeptical, I pray you find the book helpful and encouraging.

I plan to show what business is, what it isn’t, and how simple it can be when people follow a few truths. Notably, the Golden Rule, which is the second greatest commandment Jesus taught in Matthew 22:39-40: You shall love your neighbor as yourself—treat others as you would like others to treat you. As a business owner or executive, this attitude will free you to trust and empower your employees. It will steer you to do the right thing with all your stakeholders: customers, suppliers, communities, and others. An employee with this mindset will cooperate with co-workers and others, and everyone will benefit.

Business gets a bad rap because of ignorance. People forget business is the only wealth creation entity in society. They don’t realize every dollar in society emanates from a business directly or indirectly. Governments’ only source of income is business, so too is the church and charities’ revenues. I pray you will be open to learning why business is the foundation for productive job creation in society.

Many businesses and nonprofits’ leaders lose focus, become greedy, proud, chase money, and create a poor and false impression of their organizations. Some of these leaders are so insensitive to people they forget they need people to interact with employees, customers, and clients, for the entity to succeed. In good times, they allow money to lead decisions, and they expand irrationally. When the economy turns down every five to seven years on average, they lay off employees abruptly without considering effects on their personal lives and their families.

The foundation of this book is the same as my earlier books and my mission, the GAS Principle,¹ the pillar of Managing God’s Money’s mission. I write extensively about the three truths of the Gas Principle for private households. Here, I will show their application to nonprofit and for-profit businesses. To carry out effective personal and corporate stewardship, apply these truths consistently.

This book is not a Christian book—there is no such thing; Christianity is a relationship. People are Christians; books aren’t. This book is about business—solid, proven, practical business principles and practices. However, you will notice the Bible has sound business principles about strategy, planning, managing, effective people management, operating with integrity, kindness, caring, trustworthiness, empathy, truthfulness. In fact, Bible truths have been the basis for western society’s laws and values. Today, some people challenge and reject these facts, but their validity remains as keys to a successful life and successful business.

Though I refer mostly to business in the book, the principles apply equally to charities, church management, Christian ministries, and non-profits. Christians often refer to a secular and spiritual divide, but that’s not biblical. Followers of Jesus should not live in silos, but apply Bible principles at work, home, school, church, everywhere. Biblical principles we live, define whom we are. The validity of this Noah Webster’s quote transcends time:

The Bible is the chief moral cause of all that is good, and the best corrector of all that is evil, in human society; the best book for regulating the temporal concerns of men, and the only book that can serve as an infallible guide.²

Then again, Aristotle was right when he said, The life of money-making is one undertaken under compulsion, and wealth is evidently not the good we are seeking; for it is merely useful for the sake of something else.³ Business is never about making money but something else: making products and supplying services, while treating people respectfully.

I will take you through the full gamut of business: starting, maintaining, and growing phases.

Chapter one, What is Business, looks at key elements of a business to see what we might glean. It demonstrates that business is merely one person or group supplying goods or services to clients or customers in exchange for something. Business is no different from a charity or ministry. Goals might vary, but basic approaches are similar. Each business, ministry, or charity is a special purpose vehicle. Each is inanimate—people must drive it to a particular destination. That’s why people are vital to the success of business, ministry, or charity.

Chapter two, Hiring, Empowering, Engaging Right People, is where we separate great businesses from the pack. FedEx and Marriott Hotel’s policy of putting people first, customers second, and shareholders third is one main reason for their continuing success. You will see that great businesses never chase money because they know money is merely a result of having the right people in the right place doing the right things, focused on serving clients.

Chapter three, Stewardship in Action, explains elements of stewardship and shows the importance of the follower of Jesus being herself wherever she is. As well, as a business owner or executive, you will see why people must be ahead of profits always. Ironically, when you do, profits soar.

Chapter four, Effective Decision-Making, explains elements of effective decision-making. It stresses that often the process is more important than results produced.

Chapter five, Businesses Create Value, Governments Destroy Value, shows how businesses create wealth, how governments destroy value through corporate welfare and corporate taxation. It shows too how a few greedy CEOs destroy their businesses and ruin many lives.

Chapter six, Organizational Structures and Effective Governance, examines different structures. Models vary slightly depending on the type of organization. But the goal of each is the same: provide transparent oversight over resources entrusted to the organization as it carries out its mission. As with hiring, the key is to appoint board members of character, committed to the entity’s mission.

Chapter seven, Strategic Management, delves into what strategy is and what it isn’t. It discusses the evolution of strategy, and where it is today. It stresses why business leaders must understand strategy and stop spending time developing so-called strategic plans, an oxymoron that lists goals, often unsupported by plans. As well, it explains that strategy is about meaningful choices to create value for the firm and its customers.

Chapter eight, Operations Management, examines implementing strategy, quality management systems, and shows the importance of a firm’s value creation platform, and a successful supply chain.

Chapter nine, Solution Driven Marketing presents a fruitful, non-coercive approach to marketing by developing solutions and providing convenient access to those solutions to satisfy customer’s current and likely future needs and wants. It focuses on educating customers on how they might benefit from developed solutions.

Chapter ten, Dollars and Sense, introduces my bucket accounting ideas, provides an overview of primary sources and uses of company funds, and shows how to interpret financial statements from a non-financial view. As well, it discusses management systems and operating budget preparation and control.

Chapter eleven, Business Capital Budgeting & Project Management, shows the link between these processes and strategic management. Also, it highlights elements in each of these activities and presents a simple approach to using these tools.

Chapter twelve, Entrepreneurship, deals with the origins of entrepreneurship, entrepreneurs, funding sources, and how entrepreneurs prepare business plans to secure funding.

Chapter thirteen, Closing Thoughts shows ten Get-Attitudes encapsulating essential traits that enable cooperation to guide the business in the right direction. These ‘attitudes’ encompass the book’s primary messages and apply to executives, managers, and frontline workers.

I pray you find this book helpful. It is simple, maybe even simplistic. It demonstrates where people complicate business and shows the simpler path. It will help you understand business’ nuances. If you are not in business, I pray the book will help you ask questions of those running entities you invest in or support.

Throughout, instead of referring continually to he or she, him or her, I use male and female references interchangeably. As well, I use the words firm, business, company, corporation, entity, interchangeably.

Finally, I share my extensive and varied business experiences and research about for-profit organizations and nonprofits. I am extremely proud to have worked my entire career, 32 years, with one company only, former Alcan Inc. group, an organization with outstanding values and principles that empowered me and gave me significant opportunities to grow and create value for the business. Mainly, I worked in senior executive positions in Mandeville, Jamaica; Montreal and Vancouver, Canada; and Tokyo, Japan. Today, Alcan is a division of Rio Tinto, a leading global mining group. My comments about my experiences at Alcan do not reflect Alcan or Rio Tinto’s views.

Please join me on this journey to learn how to simplify for-profit businesses and nonprofit entities.

Chapter 1

What is Business

Right People Cooperating in the Right Place

Southwest Airlines’ Ten Organizational Practices

What is the Right Direction

People First

Clear Vision and Mission

Careful Attention to Success Factors

Simple Strategy Understood By The Workforce

Right Vehicle

Delighting Customers

So What?

Chapter 1

What is Business

For every house is built by someone, but the builder of all things is God.

— Hebrews 3:4

Business is one person or group supplying goods or services to clients in exchange for something, using a particular vehicle. It is no different from a charity or Christian ministry (ministry). Goals might vary, but basic approaches are similar. Each business, ministry, or charity is a special purpose vehicle. Each is inanimate—people drive it to a destination. That’s why people are vital to the success of business, ministry, or charity. Executives in each of these vehicles set values, policies, and lead them in the right direction.

I spent 32 pleasant years in business and loved every moment. I cannot believe I visited over 25 countries while traveling over a couple million miles across the Atlantic and Pacific Oceans to work in several different cultures. I bought and sold businesses, negotiated partnerships and other deals, many transactions individually worth several hundred million dollars. And I worked with mainly amazing people. For this great privilege, I give God the glory. During this period, three situations surprised me:

1. Several people at all levels in different businesses hated their jobs;¹ many couldn’t wait to retire.

2. Many folks complicated simple tasks routinely.

3. Several individuals had negative views about business. None saw he could be part of a solution to perceived problems.

I am sure these three attitudes contribute significantly to society’s erroneous view of business.

In my early years, processes and results drove me; I focussed on them, not on working with and guiding people. By God’s grace, I achieved much, but dealt with people poorly; I regret this. I got my wake up call early after dismissing someone for poor performance. My boss shocked me when he suggested another way existed and insisted I re-hire the individual. My boss said I needed to be patient and spend time working with that person’s strengths.

I re-hired the person—a most humbling experience, which started a significant learning period early in my career. The main lesson I took from this incident was to encourage people to apply their skills their way to each assigned task. Approaches other than yours and mine will work; some will work better than ours. This idea is evident to me now, but it wasn’t clear then. Today, I thank God for this early introduction to understanding how to empower and encourage people.

So, what is business? Business is one person or group supplying goods and services to clients in exchange for something, using a distinct vehicle. It involves people working in a formal or informal organizational structure² to produce and distribute goods and services to customers in exchange for goods, services, or money. A business might use sophisticated technology, machines, robots, but it needs people to develop software, operate equipment, review outputs, and to do different activities to supply customers’ needs and wants.

Several functions comprise business: Human Resource Management (People management), research, marketing, sales, production, communications (PR), technology, and more. However, each function needs people to direct it. Therefore, put the right individuals in each section, simplify procedures, eliminate dumb rules, train, develop, and empower employees to work together for the benefit of the business.

A company needs products and services people demand. It needs a visible overall purpose (mission) so people know why it exists, what it’s trying to do, and where it plans to go. But be careful; don’t put the purpose ahead of people. Jim Collins and Morten T. Hansen in their book Good to Great suggests we get the right people first, then figure out the purpose:

The good-to-great leaders understood three simple truths. First, if you begin with ‘who’ rather than ‘what,’ you can more easily adapt to a changing world. If people join the bus, primarily because of where it is going, what happens when you get ten miles down the road and you need to change direction? You’ve got a problem… Second, the right people…will be self motivated…don’t need to be tightly managed… Third, if you have the wrong people, it doesn’t matter whether you discover the right direction; you still won’t have a great company.³

A business needs specific goals to help employees focus on current and long term tasks. Employees will respond positively when they hear these goals regularly, and see corporate values underpinning every decision. Require employees to adhere to these values and never compromise, even when following them will cost more than not following them.

A more precise definition of business is "having the right people cooperating in the right place, heading in the right direction, in the right vehicle, determined to delight customers." It’s all about people—employees, customers, suppliers, and stakeholders.

A charity, ministry, or other nonprofit entity is no different. It’s "having the right people cooperating in the right place, heading in the right direction, in the right vehicle, determined to serve people." It’s the same as a business—all about serving people: employees, clients, donors, and stakeholders.

Overcome these five significant challenges and you will do business right:

1. How does the business get the right people?

2. How does it get people to cooperate?

3. How does it set the right direction?

4. What is the right vehicle?

5. What does it mean to delight customers?

I will expand the first two in chapter two, Hiring, Retaining, Empowering People, the third in chapter seven, Strategic Management, the fourth in chapter six, Organizational Structures and Effective Governance, and the fifth in chapter nine, Solution-Driven Marketing. Meanwhile, a brief synopsis of each follows.

Right People Cooperating in the Right Place

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The chief people officer (CPO) as the principal actor hiring the right people, must educate executives and managers in hiring processes and practices. She knows the right person is someone of good character, highly motivated and willing to do a broadly defined job.

To hire this person, move away from traditional, rigid, job descriptions and focus on a prospective employee’s character before skills. Don’t hire individuals to do specific, unchanging roles for distinct departments. Instead, get people who know their departmental jobs are simply paths, visible or invisible, to creating value for the company. Be flexible—flexibility is the foundation to encourage cooperation in the entity.

Don’t hire a receivable clerk with umpteen years experience in accounting solely to work in the established job in the accounting department. Look for someone of character who works well with people and whose job would be to serve internal customers—such as production, sales, and marketing people—and external customers. Put her in the accounting department, train, develop and empower her. Simultaneously, implement a reward system and include overall company’s goals, and shared metrics to encourage cooperation. Beware, the cost of bad hiring is significant.

Marcus Buckingham and Curt Coffman’s book, First, Break All the Rules: What the World’s Greatest Managers Do Differently⁴ provides excellent advice. Their research indicates we should resist the temptation to hire people whose skills are a good match to do an existing job. Instead, they said, hire folks whose talents will redefine the job.

Firms cannot anticipate significant changes that might affect a job. That’s why many businesses moved away from rigid job specifications and inflexible job descriptions. They know, among other things, job descriptions become outdated quickly, and without a clear indication of flexibility in each role, people tend to build silos. In my 32 years at Alcan, rarely did I have formal job descriptions. I did what I needed to do; often, I saw an area where the company might benefit and went there after discussion with my boss. Happily, I had the latitude to do this.

When you hire people for specific jobs in defined departments with particular departmental goals, they focus on their narrow issues and exclude the overall mission. They create boundaries and silos while focusing narrowly on their prescribed jobs. If cooperating with others won’t result directly in helping them achieve their goals, they won’t cooperate. I see this often.

I recall going to renew my work permit in Tokyo, Japan. Business, religion, and personal windows served the public. The business line was long, probably over ten people, and the other two were vacant. The guys at the two windows with nobody to serve, read books, while the person in the business wicket worked assiduously to deal with us in the business line. I had a similar experience when I renewed my driver’s license In Tokyo. Each person did his job—no doubt, efficiently!

Although we expect this behavior from governments, still, it happens in business. I spoke with four different people on the phone to activate the overseas call content on my Virgin mobile phone plan. Each person forwarded me to my starting source to get the right person. In each case, the new person said it wasn’t her job. Eventually, I gave up and did not activate the feature—recently, I canceled my contract and moved to a different provider.

Southwest Airlines’ Ten Organizational Practices

Southwest Airlines’ ten organizational practices exemplify the profile of the right person, and the circumstances in which she will flourish:⁵

1. Lead with credibility and caring

2. Invest in frontline leadership

3. Hire and train for relational competence

4. Use conflicts to build relationships

5. Bridge the work/family divide

6. Create boundary spammers

7. Measure performance broadly

8. Keep jobs flexible

9. Make unions your partners

10. Build relationships with suppliers

Three themes emerge from these ten practices. First, people matter greatly: care for employees’ well-being, and build relationships with all stakeholders. Second, target hiring, but don’t hire for specific, rigid, jobs. Third, conflicts can build relationships. Embrace them to build and deepen relationships.

What is the Right Direction

What is the right direction? Who sets it? How is it set? The right direction is rooted in the corporate mission. Typically, the board of directors and senior executives establish and refine the direction iteratively over time.

Each business needs a purpose—that’s its mission. Major decisions must comply with it. Sadly, many companies allow circumstances to lead decisions, and they stray from their missions. When situations change permanently, re-examine the purpose, and change direction as needed.

Take traditional book publishers. Today, many will say business is tough. And it is. However, many did not change in line with the significant shift in the industry to e-books. My American publisher emailed in 2014 to say its business was bankrupt. My first Canadian publisher trod a similar path five years earlier. Presently, I see at least one publisher headed in the same direction.

Partial and delayed bill payments for several years preceded the eventual demise of these Christian-led businesses. In each case, I saw the impending collapse. But executives didn’t heed warnings the market was changing rapidly. They tried to get more from existing business models by hiking prices and adding charges for peripheral items. They chased money-driven, unsustainable, quick fixes that never materialized. Thus, they missed opportunities to deal with their systemic challenges. To top it off, they had the wrong people leading those businesses.

Business is simple, but we can complicate it by not doing the right things and not heeding real warning signs. Business executives who focus on relevant success factors will spot threats and opportunities early, and respond appropriately. Typically, adhering to these four ingredients will help a business leader stay on the right direction:

1. People first

2. Clear vision and mission

3. Careful attention to success factors

4. Simple strategy understood by the workforce

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People First

I repeat: people are the greatest asset of any business. Jim Collins and Morten T. Hansen believe it is not people who are the best asset, but the right people. They go further and say, remove the wrong people from the business.⁶ Motivated, passionate workers go beyond what’s needed as they move the company in the right direction. They lift productivity and provide superior services to customers, who in turn freely share their positive experiences with others, thus benefiting the business.

Invest time selecting, training, and encouraging employees. Value employees highly and treat them respectfully as treating yourself. Employees create value in the business, and committed employees lead to satisfied customers.

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Clear Vision and Mission

I tell my students an entity’s vision shows what it wants to be when it grows up, broadly. It defines its purpose in broad strokes, while its mission expands and clarifies it. A Christian-led business needs clear, simple, notable, vision and mission statements to satisfy God-honoring needs or wants. Highly visible and understood organizational vision and mission statements help a workforce focus on the right direction and remain engaged and motivated.

Many organizations either have no explicit mission statements or drift from their missions, head in the wrong direction, and end in bankruptcy or near bankruptcy. Unwittingly, they function like Alice in Wonderland, in this exchange with Cheshire Cat:

Cheshire-Puss, she began rather timidly, …would you tell me, please, which way I ought to go from here?

That depends a good deal on where you want to get to, said the Cat.

I don’t much care where– said Alice.

Then it doesn’t matter which way you go, said the Cat.

"–So long as I get somewhere," Alice added as an explanation.

Oh, you’re sure to do that, said the Cat, if you only walk long enough.⁷

Examples abound of businesses not knowing where they are going: Apple (pre-Steve Jobs return) in 1997, Starbucks in 2008,⁸ Enron.⁹ During boom times, new money-making ventures seem too enticing to pass up. Leaders hire more staff and use loans to grab short-term benefits. But as the new business fades, debt grows, executives lay off workers, and a toxic environment develops. A company with a history of layoffs is unstable.

Never forget the mission is the guiding light pointing in the right direction. Don’t be like Alice. Pursue your missions passionately, methodically, and consistently. Doing so enables you to resist the temptation to follow every business opportunity that crops up. One of Southwest Airlines’ principles is to leave some growth opportunities on the table—have disciplined, steady growth.¹⁰

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Careful Attention to Success Factors

Employees should know how their organizations measure success, not only in their departments but overall. They should understand success’ ingredients and realize they are more than one bottom-line number. Commit to transparency about success factors.

I learned early at business school, If you can’t measure it, you can’t manage it. This statement is partially true. In some critical areas, you won’t have hard data. Therefore, be careful how you apply this phrase. For example, the most important decision in a firm is hiring the right people. Measurements aren’t the best way to get the right person. So, you can’t measure it. Develop emotional intelligence, learn to listen and deal with soft issues.

Business has hard data to identify and measure. Results aren’t manageable; manage items producing results—the drivers of the results. The challenge is to identify it in the above axiom.

Typically, no more than five to seven critical success factors (CSF) need tracking regularly—crucial elements to help achieve the mission. If you