A key element to achieve and maintain long term success is to clearly define a series of principles to which its employees abide. These rules allow us to look for like-minded individuals who would like to collaborate with us, and to guide us when in doubt. The following list is not made of suggestions, but essentials.
1. Be Frugal
Every dollar wasted isn’t just one dollar less that the company has. Every dollar wasted shows investors we don’t respect them. Every dollar wasted is a dollar that doesn’t compound at a very high rate. Every dollar wasted makes investors less interested in buying or keeping their shares. Every dollar wasted is magnified in the company valuation, as the company is valued based on a multiple of earnings.
2. Be Accountable
You will be held accountable: “A man of words and not of deeds is like a garden full of weeds.”
3. Use Data
Use data, not wishful thinking nor arguments from authority. Every statement and every projection must be based on verifiable data, either historical or on some other sensible basis.
4. Focus on the Process
Results, after a reliable enough sample size, are only useful to see how to improve our processes, to see what needs to change, to see in which areas our resources are producing the biggest output. Competent people don’t use results as an excuse to stay complacent, but as just a tool to keep improving. If our process keeps getting better, extraordinary results are inevitable. If we focus on results, extraordinary results are impossible.
5. Stay Hungry
It’s never good enough. Keep looking for ways to work smarter, to increase productivity and efficiency.
6. Get Your Hands Dirty
No job is too “low”, you are failing your team and investors when you are not willing to do what needs to be done. Study the lives of John D. Rockfeller, Henry Ford, Sam Walton, Warren Buffett or Jeff Bezos (some of the richest persons in history) and you will see how humble their origins were and how willing they were to help anywhere it was needed.
7. Think Long Term
Only the long term matters. Decisions based on a long-term approach will positively affect the short-term. Decisions based on a short-term approach will negatively affect both short and long term. A manager that doesn’t work to build something great, no matter who owns the company shares, but instead thinks about exit strategies, should exit the company.
Every time someone fails in any of these things, not only the company is immediately harmed, but its consequences are way more negative and enduring than that. It affects culture, as you are an example to everyone else. It makes it seem like that behaviour is tolerated. It won’t take long for others to copy it and for the most competent ones to leave.