In Good Company

If "a man is known by the company he keeps" I would argue that the same could be said for the companies that an economy keeps.

In my last post, I discussed two types of companies that I have encountered in My Search for a Career(TM pending). I have recently devised a theory - which may already exist, it's pretty difficult to come up with truly original thoughts these days - about different types of companies and how they affect the economy.

I believe there are 3 different types of profitable companies. I use the word "profitable" because profitable companies are the only companies that matter anyway; they are the only companies that will be in existence for excess of five years... barring a government bailout that is. But that's another topic for another day.

1. A Bad Company - Profits are the bottom line. Fails to recognize that, without people, there could be no profits. These companies tell their customers what they want to hear to make sales (cough: APX*), they often use fear tactics to motivate employees (e.g. "if you don't make quota, we will find someone who will" regardless of employees history), and they tend to prey on vulnerable and uninformed (cough: Infamous Utah Pyramid Schemes that somehow still exist even though they aren't all that difficult to detect or avoid... Seriously people, how are we still falling for these?) The attitude of a Bad Company is comparable to a professional athlete who charges fans for autographs or flips off the home crowd after being pulled out of a game.

2. A Good Company - Product quality and public image are important because they directly affect profit. This company understands that reputation does directly contribute to long-term success. The attitude of a Good Company is comparable to citizens who abide by the law because they fear the legal repercussions of failing to do so. They are good because they feel compelled to be.

3. The Best Companies - Think on a higher plane of thought. These companies seek to create a genuine win-win-win environment.
The customer wins by receiving the promised product/service with exceptional delivery (i.e. lack of buyers remorse).
The employees win by earning a competitive wage, excellent benefits, and a positive working environment.
The company wins by finding happy, hard-working employees who do their jobs, which makes happy customers, which results in profits and growth. The attitude of the Best Companies are comparable to good mothers. Good mothers put their children first, they sacrifice their immediate desires and selflessly give everything they have with the hope of all of their sacrifice making a positive difference. For the Best Companies, it's about much more than the money... Or at least that's what Zuckerberg would have us believe.

What's the point of starting a business if not for the profit?
There is nothing wrong with caring about profit. Starting a company without wanting a profit would be the same as starting a career and not wanting a pay check. A responsible person who earns an honest pay check puts some money into investments and savings, some they donate for causes they believe in, most goes towards bills and necessities, and the rest they may spend to bring joy to someone they love such as a spouse, children, or close friends. Whereas an irresponsible person will take their money and spend some on bills and necessities and the rest on self fulfilling immediate desires.

Similarly The Best Companies use their money responsibly and put it towards higher purposes. They care about the organization that has been created and how its existence contributes toward creation; creation of improved relationships, creation of positive influence, creation of long-term economic stability.

The Best Companies understand that the average employee spends about 36% of their day on work related activities and 32% sleeping. This means that the bulk of our time awake is spent at work. What a person does and how a person feels during the 36% of the day is sure to influence the remaining 32% of "free" time. The quality of a persons life and their contribution - positive or negative - to their community is greatly affected by their working environment. The Best Companies recognize that this is a great opportunity to extend their reach of influence within their community.

What ingredients are necessary to create The Best Companies?
First and foremost is a leader with a a lot of character, integrity, and common sense. If an organization takes on the characteristics of its leader, which characteristics promote the best work environments? There are many good characteristics that can be used to answer this question, but I have chosen the top 5 characteristics that I believe make the greatest impact. Many of the characteristics overlap and contain sub-characteristics but all relate to the overall concepts.

Top 5 in no particular order:
1. Selflessness - Members in any organizational unit are much more effective and efficient when they stop worrying about themselves and focus on the bigger picture. If you think of a company like a person, there are companies that are selfish and companies that care about others. Companies that are not overly concerned with their own well being create an atmosphere of giving and sacrifice. Ironically - for whatever reason - the individual benefits of selflessness seem to outweigh those of self-centeredness. Or in other words, if you care about what's in it for you, then stop caring about what's in if for you, you will get more out of the deal.

2. Integrity - AKA unequivocally doing what is right. This creates an environment of honesty, hard work, responsibility, and accountability. In this environment, doing the right thing requires about as much thought as breathing does.

3. Organization - The Best Companies are organized and ready to go to work. There is organized communication so everybody understands the plan, objectives, and mission. Organization leads to superior training, constant determination, and focus.

4. Tolerance - Employees should feel safe to openly express themselves and their ideas. A tolerant environment makes adaptability seamless and promotes confidence, openness, and even humility. This type of environment will ultimately lead to more ambition - which will lead to more hard work and education - which will lead to exchanging of more ideas - which will allow for risk-taking - which will lead to innovation - which will benefit the customer - and in-turn completely benefit the company.

5. Optimism - An optimistic approach on life is important for generating excitement and ideas. Optimism includes focusing on the positive and giving others the benefit of the doubt. This creates an environment of safety, good attitudes, and energy. Some confuse optimism with naivety but they are not the same. An optimistic realist - as I am self declared - doesn't ignore realities to avoid troubling news, he accepts reality and then finds a way to use it to his advantage.

Incorporating these characteristics will not create an environment of perfection, there will still be challenges and issues that arrise, sometimes even as a product of these environments. However, the negative encounters will not come close to the positive affects.

What affect do these companies have on the economy?
The Best Companies are built on a core of important values that will enable a company to adjust when necessary and weather the difficult economic storms. People want to work for these companies giving them the talent, customers will want to buy the companies products/services, making the company profitable, the company will grow and create more jobs for the people who are lining up to get in. These companies contribute to great long-term economic growth and stability. The 2008 housing bubble crash was a result of a small handful of selfish large Bad Companies followed by a panic of a lot of smaller Good Companies and Bad Companies. 2008 is not the only example of economic turmoil caused by Bad Companies either.

In summary, The Best Companies benefit the lives of their employees, the lives of their customers, the good of the community, the growth and stability of the economy, and ultimately millions of people with an influence over the course of multiple generations.

*I am talking about APX prior to their name and image change. I can't speak for the practices of Vivant but I hear they have improved, for what that's worth.