On Running a Company

Illustration of a person climbing a ladder between gears, representing Art Horn’s article On Running a Company, which shares nine key lessons from 25 years of business leadership and management experience.

I run a company. We’ve been in business for 25 years and now have thirty employees. Have I learned anything as a business owner about running a business? Here are my nine main things.

1. You’ve heard before some version of the “customer is king”. I don’t just mean that the customer is always right (though, in some way, it’s true). I mean that everything you do has to be about bringing value to the customer. Be all about the customer. I subscribe to the dictum (actually, I think I simply bastardized somebody else’s dictum) “bring value and they will buy.” Probably it would be more precise to say, “bring a sought-after value that also happens to differentiate you.” You need to be better than your competitors and there needs to be demand for what you have to offer.

2. Generally customers will buy from you if: they trust you, you “get” them, you are better than everybody else, what you sell is worth at least what you are selling it for. If you can’t nail these things, you’ve got a problem.

3. Integrity for integrity’s sake. I used to say, “don’t lie because you’ll just get caught and blah, blah, blah. Now I actually think the key is not to lie, because it’s wrong. Maybe I’m getting old. Of course, it’s tough for some people to be open and true in what they say because, at the core, they have something to hide. For example, if you haven’t actually invented the product you’re trying to sell, then it’s tough. Or if you sell pens and you know your pens are no better than the competitor’s pens, and you know you are, in truth, no better than the other people at moving pens efficiently and lovingly, that’s a problem. Maybe you would be better off confronting the question around HOW you can differentiate yourself, rather than hiding your truth.

4. Data, oh data. Information is central to running a business. There’s a mechanical aspect underneath the surface of a business. A commercial enterprise is like a machine that produces output efficiently, but only if the machine is fueled and maintained. If you don’t have fuel (money) to keep the machine running, then it stops. So you have to keep your eye on fuel levels—both in terms of what’s currently available and what fuel is on its way. You have to make sure the machine is operating efficiently (avoid too many meetings, too many hands, too little getting done), otherwise fuel is just wasted and not available when you need it. Inefficiency can also reduce the quality or purity of output. So, on a weekly basis I look at no less than thirty pieces of fresh data; things like weekly and year-to-date sales, when we would run out of money if sales simply stopped, how much people owe us, and how fast they pay us, how much we’re getting for our services, how much profit we make with each thing we do. In a complicated week, there are hundreds of data points to examine. Without data, and the ability to interpret it, to predict the future with it, a business leader is quite vulnerable.

5. As a boss, it’s tough to forfeit control; so it’s good to be busy at other things, lest you get in people’s way. It’s funny, when things slow down for me, I step out of my office, and see people engaged in meetings, briskly walking in concentration, busy at their desks doing things I don’t even know about. It’s not “ha, ha” funny. Just weird. I’m in control and out of control. A key for me is to rest in that place.

6. It’s important to say “no” to people sometimes. If there is money available to them, they will spend it. Nature fills a vacuum, especially when there is money available. But you have to say no nicely.

7. Perhaps it’s just me, but I think it’s important to pay close attention to culture—how people are feeling about their work and what the organization is up to. It’s important that they get along with one another. A mentally healthy environment lubricates things, optimizes retention, creates happy customers.

8. Anticipating problems and putting them to rest is awfully important. So you have to reserve time to think. That’s really important. Similarly, hiring people who have been around the block (though they do ultimately leave or get tired while still on the job) makes a big difference. Experienced people make educated decisions. Because they have seen things before, they tend to have more mental bandwidth to consider nuance. So they make better judgements.

9. Constantly training people to get better at things is smart. It aids employee retention, it elevates the quality of your output, it brings value to those you lead, it helps in managing succession. So teach people, all the time. Coaching, mentoring, group-based education, in any of many contemporary media—this is the information age, after all.