In his book, Good People: The Only Leadership Decision That Really Matters (Penguin Random House, 2017), entrepreneur Anthony K. Tjan discusses the most value asset of a successful business–its people. In this edited excerpt, Tjan makes the case that lasting relationships and a strong culture must precede the pursuit of profits. Originally published at Inc.com.
In the business world, success traditionally means maximizing profit. This view clearly fails to take into account the wide-reaching and long-term value generated by people like WD-40 CEO Garry Ridge and former partner and Head of People Development at McKinsey & Company Tsun-Yan Hsieh, who improve every aspect of an organization simply by committing to their co-workers for the long-term. Their work extends beyond them. It lives on through the strength of values, lasting relationships, and enduring cultures goodness is indeed bigger than any one of us.
I imagine a new, expanded concept and definition for success that accounts for the power of a good kind of success that’s more purposeful, intentional, and profound than success based solely on profit or shareholder return. There’s nothing wrong with profit and shareholder return, and I’m not arguing that goodness is a flat-out substitute for them. Of course, performance in those areas matters, but we can do better.
In the end, performance and returns are the byproducts of a set of principles, practices, and people. What is certain for me is that the sustainability and longevity of financial results is absolutely more of a function of people, values, and cultures than anything else. The good news is that the pursuit of goodness is not a tradeoff. Even the conventional measures of value eventually catch up, as legendary investor Benjamin Graham has said: in the short run, the market is a voting machine, but in the long run, it is weighing machine. While many stock prices are driven in the short term by a popularity vote, over the long run, value reflects the true underlying quality and performance of a business. It is not an accident that businesses like WD40 that have managed consistent growth over such extended periods are rewarded accordingly by the market.
In and of itself, making money is not enough to serve as a guiding purpose to achieve long-term success. The pursuit of goodness makes us think deeper: What is the purpose of my work, and does it contribute to a greater organization? Do I cultivate my values and positively impact relationships that matter to create a lasting culture of kindness, compassion, and mentorship? Success must include much more than winning the popularity vote, so we must expand the meaning of success to incorporate goodness.
The late John Wooden, a Midwesterner who grew up on a small farm, understood the need to create a bigger, broader definition for success. Wooden is widely viewed as the most successful coach in college basket ball history. With UCLA, Wooden won ten NCAA championships in twelve years, had four seasons where his teams went 300, and had the most astonishing winning streak in NCAA history with eighty-eight straight game victories between 1971 and 1974. Over his twenty-nine year career as a head coach, he held a winning percentage that was over 80 percent. But surprisingly, Wooden eschewed the term “winning” and spent considerable time contemplating what success really meant. He did not like the term “winning” because, as he said, “you can lose when you outscore someone in a game, and you can win when you are outscored.” Success is something else.
Before coaching, Wooden taught English in South Bend, Indiana. In 1934, he coined his own definition of success to use with parents who complained about their child not getting the highest marks without regard to how other students in the class were doing. Wooden’s father taught him to never try to be better than someone else, to learn from others, and yet to still make every effort to be his best. This may seem contradictory to not be better than anyone else and yet do everything to be your best but that is the exact point and lesson. Success must stem from doing your best not only for yourself, but also equally for others. Wooden’s definition of success guided his entire coaching career; for him, success meant “attaining the peace of mind and self-satisfaction of knowing that you made your effort to do the best of what you know you are capable.” It does not include a single word about winning.
This is what I have sought in pursuing goodness. I look to leaders and people who have not only won by the extrinsic and conventional markers of success, be it shareholder results, materialistic markers and possessions, or winning percentages, but I also ask how they achieved their success. And so it has been throughout my career and in the relationships and mentors that I have sought. I’ve always asked myself, would I want to be more like them or less like them in terms of their values and character? In terms of their substance? Wooden is right that there are many people that we might consider “winners” according to conventional definitions of success those that have to do with the attainment of wealth and fame but the truth is that reputational success and the long-term impact of one’s life’s work are far more important. This is the power of good people and goodness: to take what success means for oneself and for an organization to a higher level of meaning, substance, and impact.
CREDIT. Getty Images.