Learning from Ruthlessness

Those of you who attend the School for Social Entrepreneurs will understand the background of this blog. Enough said. 

Ruthlessness is not a pretty quality. It means "without Ruth": without pity. It can mean to be without regret; not sorry for past decisions and actions (neutral). But it often carries the negative meaning of merciless or cruel. 

In the business or enterprise setting, ruthlessness implies "using  people and resources to attain the ultimate goal (profits for the stakeholders) without considering the negative consequences ".  Although we might think (and hope) that ruthless leaders would not be successful in the enterprise arena, this simply is not true. I won't name names but just the word "tycoon" conjures up a list of celebrity business men and women who have accrued fortunes as ruthless leaders in their sector. 

Why discuss ruthlessness in a Social Enterprise blog? Well let's remember that social enterprises are businesses which use people and resources for the attainment of their goals. Because of the social nature of these endeavours, social entrepreneurs tend to be repulsed by ruthlessness in the business sector.   But rather than end it there, to respond in repulsion, I think the social entrepreneur can learn from the ruthless nature of business leaders.  It's not about adopting a ruthless character, it's about asking the right questions, adopting the right principles.  I think we need to be asking this question in relationship to successful, driven entrepreneurs: what is it that actually drives ruthless business leaders to fulfill their entrepreneurial goals at all costs?  and, more importantly, in the journey of their ruthlessness, what are they trying to avoid? 

So here is my attempt to get us to learn something from ruthlessness.  I hope you can read it with an open mind and, perhaps, respond in some way.

Highly driven entrepreneurs set their sights on three things:

success, profit (beyond sustainability) and competence. 

So, what are these same people trying to avoid? The opposites of these are:  

failure, loss (unsustainability) and incompetence. 

Let me speak to each of these paired issues.

Success (vs failure).

Generally speaking, ruthless entrepreneurs clearly define business success in monetary terms (e.g. someone might say that success is to earn enough money to be happy!)  Social entrepreneurs tend to argue against such a definition and avoid the implications of money in their definition of success.  But I think we need to remind ourselves that this is a valid definition for businesses.  Think of it this way, few of us would argue with this statement:  a business which declares bankruptcy or enters voluntary receivership has failed.  Therefore the obverse statement must be somewhat true: a business which turns a profit is successful.  It is valid for businesses to define success in monetary terms. 

What's my point? Ruthless entrepreneurs know why they exist and go at that purpose with all their energies.  Unfortunately, people and resources may be seen more like obstacles than assets for attaining such outcome.  In fact, those who have experienced business failure and have had to recover from such pain tend to develop  a stronger desire to succeed at all costs.

 

Where am I going with this?  Social entrepreneurs will do well to clarify their definition of success.  Further, the social entrepreneur must not shy away from including a monetary aspect to such a definition and allow this definition to drive them.  Social entrepreneurs forget they are in the business world.  It is my opinion that the social entrepreneur distances him or herself from a definition of success which carries any dollar value in order not to be associated with ruthlessness.  I’m not sure this is best for the social enterprise.  Perhaps the next section of discussion will clarify why. 

Profit (vs loss).

Ruthless entrepreneurial leaders are driven by the need to succeed.  Success defined in monetary terms requires their endeavour to become more than financially sustainable but to turn a profit.   Large businesses, to reach beyond sustainability, gain large sums of money. Think of the implications of this.  A $50 million dollar a year business is bringing in about one million dollars a week, $200,000 a day! In my experience I cannot imagine myself getting out of bed this morning and going to bed tonight and saying: my business just earned $200k! When I think of that kind of pressure which these entrepreneurs must face, I think I can forgive a bit of ruthlessness in their behaviour. The entrepreneur in the $50m a year business is held accountable each moment of each day for the income, the profit and loss, he or she is operating. The financial burden must be tremendous.

 

In the social enterprise sector, we tend to define our achievements in the non-accountable realm. I helped people (while losing $500,000!) but I helped people! We seldom hold ourselves in the social enterprise model accountable for anything truly measureable.  If we do, we don't tend to worry about missed goals. After all, the bank doesn't show up and take away our building if we don't reach them.

I am suggesting that the social entrepreneur needs to get a bit more honest about his or her goal setting and a bit more ruthlessness in the pursuit of the fulfilment of those goals.  Social enterprises need to become a bit more driven in the area of profit and more concerned about avoiding loss.  I think we can learn this lesson well from driven, even ruthless, business leaders.

Competence (vs incompetence).

Ruthless business entrepreneurs have a drive to be the best among their peers; to be declared competent. Incompetence in a business which claims the corner on expertise is not tolerated. Reputations depend on consistently displaying a high level of competence. Good reputation means profit, profit means success. Ruthless business leaders demand competence from themselves and from others. Incompetence is not tolerated and employees are fired who harm the company's reputation. 

In the social sector which focuses on the person and his or her contribution no matter how small, competence is measured, many times, in being and not so much doing. As a result, outcomes are not measured in quality or (as we see in the previous section) quantity. Outcomes are measured in a fair-go (to attempt something, no matter what the quality of the attempt, is what counts).  But many businesses have failed in just giving it a go. Quality and quantity, efficiency and durability, are important factors in delivery and service in the social sector.

Again, I am suggesting social entrepreneurs must learn how to raise the bar of quality and quantity of product and expectations on production. My impression is that social enterprises need that kind of ruthless behaviour, “drivenness”, as they lead those serving the community.

Conclusion

Can we learn from ruthless entrepreneurs without becoming ruthless ourselves?  I think we can and must!  Social Entrepreneurs need to work on a definition of success that includes in some significant way the concept of money.  The social entrepreneur must become more driven in the profit-making arena.  The social entrepreneur must work hard at raising the bar of quality and competence in the area of his or her business.  Rather than becoming repulsed by ruthlessness, let’s embrace those principles which will be powerful examples back into the business world. .