There are two different ways to approach managing your business. You can either take a mercenary approach and focus on profits or a missionary approach and focus on trying to build a legacy.
Investors looking to invest in young companies want to understand the type of management approach entrepreneurs bring to their business. Overall, they are looking for an outstanding entrepreneur who can execute ideas into a viable business and who understands the marketplace for both customers and employees.
There are two management styles that every investor is aware of – one concentrating only on the bottom line and the other concentrating equally on making money and doing good. They refer to these two approaches in business as Mercenaries and Missionaries.
Let’s look at the difference; so you can determine which one you are and whether your style applies in your business.
In my research, I found this YouTube video by John Doerr and found it really enlightening. This is what I gleaned from the video.
- Making Money is their sole motivation for being in business and they will be ruthless in achieving their goals. In other words, they are focused on the money and will not rest until they have “made” it.
- They obsess about their financial statements and gauge success by the quality of their bottom line.
- They generally create a working environment that is somewhat hostile. They have an autocratic style of management which means they do not look for ideas from their employees and they generally do not offer any type of mentoring or coaching programs for them.
- Their desire to be successful not only includes making a profit; but also, includes leaving a legacy. They are more interested in building a long-term business; so they value both their customers and their employees equally.
- They make strategic decisions based on their value beliefs.
- They are looking for the best ideas from their employees and they offer mentoring and coaching to get the best out of them.
In 2018 the missionary style of leadership is becoming the more preferred approach. This is driven by two things:
- Our economy is experiencing full employment in many key industries. There are fewer people working today than there was 45 years ago. Therefore, there are lots of quality jobs and a smaller pool of talented people to draw from. As a result, employers are struggling to find quality people to work for them and are finding it more difficult to hold on to them because employees have so many other options. You can recruit and train a person only to have them be poached from you by a competitor.
- The workforce is increasingly dominated my millennials and they have a different view of how they would like to work. They are not as interested in money or status; instead, they want to work for people who will inspire them to do great work. They are looking for certain characteristics in their leaders that make them feel great about working for them.
A Millennial Survey conducted in 2017, indicated that:
- 39 percent of Millennials define leaders as strategic thinkers
- 37 percent of Millennials define leaders as inspirational
- 34 percent of Millennials define leaders as personable
- ·31 percent of Millennials define leaders as visionary
Essentially, it has become an employee-driven market.
The manager of a business or you as a business owner has to be aware of the changes underway and has to be sensitive to its implications going forward.
- A mercenary approach that is shunned by the workforce may backfire going forward. A bottom line focus that worked in the past may not apply in today’s work environment.
You cannot change your style; nonetheless, you may have to modify your approach to business in order to succeed in today’s marketplace.