MAIN IDEA ABOUT THE BOOK Irrespective of the ethics involved, there can no doubt crime pays. In the 1980s, the President’s Commission on Organized Crime estimated organized crime generates more than $50 billion in revenues each year – more than the U.S. iron, steel, copper and aluminum industries combined. When the legitimate businesses organized crime owns and runs are added in on top of these illegal rackets, it is clear mob-related business activities are genuine multi-billion-dollar operations. Regardless of the ethics of these various revenue streams, organized crime has not become a big business purely by accident. The men who run these operations don’t generally have formal qualifications, only street smarts, ingenuity and tenacity. It’s all too easy to assume they would not be able to function without the intimidation and ruthlessness factors inherent in organized crime, but perhaps that misses the point. Rather than suggesting a life in crime (which obviously would be stupid and doomed to fail), why not try and pick up on what mobsters learn in the school of hard knocks? They just may know something about surviving that would be applicable and useful elsewhere. Ten insider tips from the “Mob Way” of doing business
1. Nail down the basics firstNever forget you’re not in business to make money. You’re in business to take money from your customer’s pockets and get it into your own. Plan how you will achieve that. You’re never going to get anywhere in business unless you get the basics sorted out first. In simple and practical terms, you need to have these elements in place:
- A clear, focused written business plan which details where you want to head and how you will measure your progress.Put your plan on paper then read it and think about it. Is it logical? Is it doable? Have you covered all contingencies?
- A willingness to take what you want to do seriously enough that you will work hard to make it happen rather than sitting back, doing nothing and hoping for the best.
- A serious attempt to clear out all nonessential items from your life so you can concentrate on what you need to make happen with as little friction as possible. Cut to the chase and do what counts, not all the other stuff.
- A good support crew who will help good things happen. Your team needs to be filled with people who are positive, capable, reliable and, most of all, honest.
- A confidant/adviser. Perhaps follow the way the mob organizes itself. Every boss has a “consigliere” which is the Italian word for an adviser or counselor. Have a handpicked, trusted adviser who provides you with an objective opinion before you do something. If you put a consigliere in place and consult with him before you make an executive decision, he will safeguard you from your own shortsightedness.
2. Beware when using Machiavelli’s philosophyMachiavelli suggested the end justifies the means. This is a double-edged sword which can generate internal mistrust. In business, how you win is important. Machiavelli was a sixteenth-century Italian philosopher and diplomat. He is held in high regard by the mob and his philosophy is a cornerstone of their modus operandi. Machiavelli was a central figure of the Italian Renaissance. The way the mob operates is an example of the Machiavellian philosophy taken to an extreme. They create an atmosphere of deceit, mistrust and treachery. Within mob businesses, fear often masquerades as loyalty. By adhering to such a rigid interpretation of Machiavelli’s ideas and philosophies, mob businesses also sow the seeds of their own destruction. When their enemies establish the strength of their organization is based on the fear of its members, then they realize all they need to do to gain the upper hand is become the ones who are feared the most. In a non-mob context, adhering too strictly to Machiavellian’s philosophy can also be a problem. It can allow people to lose sight of what’s genuinely important and what’s truly in the best interests of everyone. A good example of this is the financial market’s trades of credit derivatives known as “credit default swaps” (CDS). In essence, these are bets between two parties as to whether or not a third party will default on its debt. One party bets the lender will meet its obligations while the other party bets the lender will default. There was no requirement for any assets to back the transaction and therefore many bogus financial instruments were created. As these CDSs worked their way through the world’s financial systems, many trillions of dollars were lost, triggering a global economic meltdown.Perhaps this is why famed investor Warren Buffett once described CDSs as “financial weapons of mass destruction”. While there is no doubt Machiavelli’s ideas can be helpful in business, character and integrity are vitally important as well. The philosophy you choose to operate your business can have just as dramatic an impact on your quality of life as does your level of success. Never lose sight of the fact in business, how you win matters. “In the actions of all men, one judges by the result.” – Machiavelli “You’re in business to succeed. For most of you that means the ultimate goal is to improve the quality of your life. What that doesn’t mean is succeeding at all costs by any means. That path will end up destroying your quality of life. Winning is important. Success is important. They provide you with the means to do the things you could not otherwise do in life. Live in a nice home, drive a nice car, enjoy a vacation now and then. You get the picture. But how you win and how you succeed will determine if you get to enjoy the fruits of both with a clear and healthy conscience.” – Michael Franzese “Politics have no relation to morals. A prince should have no objective but war. If he acquires a state he should absorb the surrounding states and identify his enemies.” – Machiavelli
3. Go with Solomon’s approachKing Solomon of ancient Israel suggested honesty, integrity and hard work are the cornerstones of a successful business model. That makes good sense. King Solomon is the author of the book of Proverbs in the Bible. His approach to business can be summed up in this way:
- Managers of businesses should exercise wisdom. They should employ strategies which will be disciplined rather than reckless. They should also be insightful and astute in understanding how current market trends may impact the business in the future.
- Prudent managers don’t gamble on the future and hope for the best. They only take calculated risks when there is a good reason for doing so.
- Dealing with business partners in a just and fair manner is good. If you have a number of allies in place, you are more likely to enjoy long-term success.
- You should always deal with customers in a just and fair way as well. \
- Anyone who engages in dishonest business practices sows the seeds of his or her own’s demise. Sooner or later, shady business practices catch up with people who use them.
4. Lead with your brain and watch what you sayIt’s amazing how many people sabotage their own efforts to excel by talking before they think. Don’t let this happen. Learn before you speak and never put your mouth before your brain. “A fool’s lips bring him strife, and his mouth invites a beating. He who answers before listening – that is his folly and his shame. The wise in heart accept commands, but a chattering fool comes to ruin.” – Solomon What you say can sometimes be a weapon that can be used against you in all sorts of ways. If you aren’t judicious and measured about what you say, you can end up causing yourself and your company all kinds of grief. This is why you need to learn when to speak your mind and when to keep quiet. This is especially important when you’re called on to speak with an unhappy customer. The best approach is usually to be diplomatic and to work towards resolving the matter at hand in a way which keeps the customer happy. You never can forecast completely who else the person you’re dealing with will influence or interact with in the future. Always have the mindset the way you deal with customer complaints should be worthy of public scrutiny at any time and you’ll do fine. Another situation where forethought is highly desirable is in negotiations. Unless you’re in a situation where you genuinely hold all the cards, you’re generally going to be better off accepting less in a negotiation than you’d hoped for rather than coming away with nothing. There are many times a tactical retreat is better than suffering a defeat. Be careful you don’t say things which suggest an all-or-nothing mindset or you may end up empty handed. Being a good listener is important in all business dealings. If you can discipline yourself to always gather all the facts before you respond, make a decision or take any action which can impact your business, you’ll do fine. It’s also true the more information you have on which to base a decision, the sharper your instincts will become. “The most intelligent businesspeople I know are men and women of few, but very insightful and intelligent words. If you want to gain an advantage in life and achieve meaningful success in business, remember to look before you leap, learn before you speak, and never put your mouth before your brain.” – Michael Franzese “Organized crime in America has been thriving for almost a century. It has raked in billions of dollars year after year through a plethora of lucrative endeavors – plenty of them clean as a whistle, or pretty close. The mob has made its formidable presence known everywhere. I assure you none of this has been accomplished by accident. To operate any business successfully, one must possess certain qualities and adhere to a philosophy critical to the success of that business. The men who run the business of organized crime are more than qualified to do so. Law enforcement will have you believe that this is accomplished through fear and intimidation, by using a gun and a lead pipe instead of PowerPoint and a spreadsheet. In most cases it’s just not practical to wave a gun in a boardroom.” – Michael Franzese
5. Replace business meetings with sit-downsConventional business meetings tend to be too inefficient. A much better approach to meetings is to model them after the sit-downs which have been mastered by mobs. Meetings are incredible time wasters for many companies and organizations. It’s not at all unusual for people to sit through a two- or three-hour meetings and then to find:
- Nobody is still sure why the meeting was called in the first place, because the agenda and goals are never explicitly and clearly stated.
- So many different voices clamor for attention from all sides it’s not clear who is in the driver’s seat and who is responsible for making a final decision.
- Ideas get sidetracked, diluted, mixed up and replaced by pointless conversations.
- Everyone is anxious to get out of the meeting and back to responding to all their voicemails and e-mails that have piled up during the time the meeting was held.
- Exactly why everyone is there and what is to be decided.
- What your position is – the decision you would most like to get made – and be able to capably defend your position with materials and evidence.
- The temperament of the people you are meeting with. If you know this, you will have some basic clues on how best to adapt your negotiating tactics so they are most likely to succeed.
- The background facts about the other parties. You want to know who is on their board of executives, what lines of business they are involved in and what their revenues were last year. You also want to know why their stock has been moving up or down in the last six months and what kind of pressures they are under.
6. Don’t roll the dice on your businessAlthough we live in a gambling culture, this can be a real problem for your business. It can drain your resources in a big way. Watch out for any of your people who may get caught up in this. Gambling is a bigger threat to the viability of your business than you may presently realize. There has been a real proliferation of gambling around the world. The slowing economic conditions have only served to heighten the appeal of gambling for some people. You need to treat gambling as a potential threat to your business and pay close attention to what your people are doing. The scary thing about gambling is it can hit you from anywhere. You may not be a gambler yourself but one of your partners may be. Your employees might be gambling and in effect rolling the dice on your business without you even realizing it. That can be a real game breaker for a company. Gambling is very pervasive these days: • You can gamble openly now on the Internet. • You can visit a casino and place bets. • You can bet on the ponies, on sports teams, etc. • Governments everywhere run lotteries. People have been known to do some very extreme things in order to feed their addiction to gambling. Not only can gambling impact your personal life in a bad way, it can also destroy what would otherwise have been a healthy business enterprise. Machiavelli actually recognized gambling is such a danger to society that he advocated using it as a weapon against enemies: “A ruler should encourage gambling among his enemies, and put it down by military force at home.” – Machiavelli To get some idea of how much of a problem gambling has become, keep an eye on your local newspapers. They are filled with stories about trusted employees who embezzle serious amounts of money from their companies in order to feed their gambling obsession. What’s noteworthy is more often than not, these people are considered to be model employees prior to the truth coming out. None of these gamblers tend to engage in any kind of criminal behavior prior to their obsession with gambling. That alone should give business owners food for thought. When one technology company with 175 employees hired a filtering company to scan the Internet activities on all the company’s computers, they determined around 3,800 hours of company time were spent on gambling Web sites in one month alone. Extrapolated to a full year, that meant the company was losing around $1.5 million of company time to gambling, without even taking into account the cost of hiring the monitoring firm at considerable expense. This analysis also did not try and estimate the combined losses to gambling the employees may have suffered, or whether or not any employees had taken inappropriate action to somehow try and compensate for those losses. The bottom line is gambling is bad for business, pure and simple. It is a genuine threat to the survival of any business, even though gambling is woven into the fabric of society. Keep your eyes open and do everything you can to avoid rolling the dice on your business.
7. Lead with your brain and watch what you sayIt might not feel like it at the time but failure is good. It shows the defects in your plans and identifies weaknesses which need to be addressed. Just remember to learn and move on. There is no doubt failure can be a tough and demanding teacher. To its credit, however, failure can teach you lessons you won’t learn from any other source. If you get an education every time you fail, at least you’ll never ever stop learning. The benefits of failing at what you’re trying to do in business are actually quite impressive and somewhat counterintuitive:
- Failure can show you what the defects are in your business plan and what you need to do better at in the future.
- Failure can highlight any execution problems or timing issues in your plans.
- Failure can identify the weakest link which needs to be strengthened before you hit the big time.
- Failure can highlight which factors are at play in your business plan whether you’re aware of them or not.
- Failure can highlight what you need to do better as an organization next time out.
8. Play everything straight and legalDon’t get caught up in fraudulent activities. This kind of success is only fleeting. To have long-term success, you need to have integrity. Always operate ethically and openly. Nobody goes into business to fail and therefore some people come to the conclusion they would rather cheat than lose. The attitude that “anything goes as long as it furthers your interests” is questionable at best and with certainty is an extremely dangerous framework for conducting a business. Those who engage in criminal activity always lose out in the end. It just isn’t worth it. You don’t even have to be engaged in something illegal to have problems. Lost consumer trust can be a huge problem as well. The list of people and companies who have found this out the hard way is long and distinguished. So what does it mean to play everything straight and legal? There are all kinds of ways this can be explained, but in direct terms, to do this you need to follow just a few basic concepts:
- Be aware the government is always watching what you do – so don’t delude yourself that you can get away with a small fraud without anyone noticing. There is no imaginary veil of protection for corporate officers. The government has declared war on corporate fraud and has assembled an impressive team to fight it. The new laws which are on the books for corporate fraud have some real teeth. If you do something illegal, you will get caught so don’t even try to go down that path.
- Don’t give in to the allure of shady business practices – eventually you will be required to pay the price. When corporate executives do these things out of greed or even because of a genuine desire to keep a sinking business afloat, it never works. The facts always come out in the end so make certain those facts won’t embarrass you or get you sent to prison.
- It’s smart to pay your taxes – every cent the law requires. The Internal Revenue Service has an impressive number of collection tools at its disposal. They can keep you so busy fighting their collection efforts that you have no time to do anything else. That’s a total waste of your time. If you aspire to be a success, pay your taxes and be done with it.
- Have integrity and act honestly – because operating without integrity is always bad business. Use your conscience at all times to stop yourself from stepping over the line. Admittedly, the mere fact you act with integrity won’t stop you from struggling but that’s okay. Everyone struggles at one time or another – it’s just the nature of the business cycle. If you have integrity and act accordingly, you will attract the right kind of help. If you don’t have integrity, any success you appear to have will only be fleeting. Do the right thing at all times and in all circumstances.
- Don’t be greedy – because greed can make you do stupid things. When you’re competing against another company, it’s all too easy for your desire to excel to cross over into greed. When that happens, you start being motivated by a desire to beat the other guy rather than a desire to provide your customers with genuine value. Keep greed away because it destroys objectivity and distorts good judgment. Be satisfied with what you’re already achieving. By all means work hard to achieve more but do so with integrity.
- Always do the right thing – have good business ethics. People prefer to do business with companies and people they trust. Have policies, practices and systems which will be noted and appreciated by your customers. If you engage in deceitful practices in any way, shape or form, it will come back to haunt you at some point in time. Do things which will make you proud when they are disclosed.
9. Be consistent in the philosophy you go withYou simply can’t have it both ways. You have to choose whether you’ll use Machiavelli’s or Solomon’s approach. You have to commit fully to one philosophy or the other. Machiavelli and Solomon have two divergent philosophies: The end justifies the means – Machiavelli Success requires integrity and values – Solomon Most businesspeople hope they can straddle the fence and apply Machiavelli’s philosophy some of the time and Solomon’s philosophy the rest of the time. It can’t be done. You have to choose which philosophy you will use and be consistent. To illustrate, consider how you would answer these questions: 1. Do you believe that a solid bottom line result is justified by whatever means are used to attain it?
- Machiavelli completely agrees with this: “And in the actions of all men, and especially of princes, which it is not prudent to challenge, one judges by the results.”
- Solomon says money which is gained by dishonest behavior is tainted and wrong under any circumstances: “A fortune made by a lying tongue is a fleeting vapor and a deadly snare.”
- Machiavelli says any deceitful or otherwise practices which help you gain an edge over your competitors are fair game: “The promise given was a necessity of the past: the word broken is a necessity of the present” and “Men are so simple and yield so readily to the desires of the moment that he who will trick will always find another who will suffer to be tricked.”?
- Solomon disagrees and contends you should never repay an injustice with a further injustice: “A lying tongue hates those it hurts, and a flattering mouth works ruin.”
- Machiavelli agrees completely with a take-no-prisoners mindset: “Men ought either to be well treated or crushed, because they can avenge themselves of lighter injuries, of more serious ones they cannot, therefore the injury that is to be done to a man ought to be of such a kind that one does not stand in fear of revenge.”
- Solomon by contrast suggests plotting evil against the competition is always likely to backfire and therefore aboveboard competition is sufficient: “Do not gloat when your enemy falls; when he stumbles, do not let your heart rejoice, or the Lord will see and disapprove and turn his wrath away from him.”
- Machiavelli is very much in favor of fear as a way to keep people in line: “It is much safer to be feared than to be loved if one of the two has to be lacking.”
- Solomon suggests treating employees with dignity and respect is smart: “He who oppresses the poor shows contempt for their Maker, but whoever is kind to the needy honors God.”
- Machiavelli has no problems whatsoever with using deceit or cunning: “And if, to be sure, sometimes you need to conceal a fact with words, do it in such a way that it does not become known, or if it does become known, that you have a ready and quick defense.”
- Solomon by contrast stresses the need for integrity in everything: “The man of integrity walks securely but he who takes crooked paths will be found out” and “He who pursues righteousness and love finds life, prosperity and honor.”
10. Understand what success truly meansSuccess is always self defined. The term means different things to different people. Just make sure you put the right ingredients in so what you do ultimately achieve means something to you. What does success mean to you?
- In the mob, success is generally determined primarily by the accumulation of wealth and the attainment of a position of power within the organization.
- For most companies, success is determined by the bottom-line profits. The more profit a business generates, the greater its measure of success.
- In the dictionary, success is defined as “the favorable or prosperous termination of attempts or endeavors.”
- King Solomon defined success this way: “He who pursues righteousness and love finds life, prosperity and honor.”
- Machiavelli’s definition of success: “A prince ought, above all things, always to endeavor to gain for himself the reputation of being a great and honorable man.”