Building a Business Means Facing the Facts

A while ago, as I was writing, another voice would sometimes pop into my head: Are you just trying to hand in an assignment, or are you actually trying to build a business? I stopped and wondered why I was hearing that voice.

I think the underlying reason is that people like us have always been good at “playing by the rules to our advantage.” Perhaps it’s even a skill Chinese children develop from a young age. At school, we learn to work the rules of exams; once we start working, we learn the rules of the workplace and performance reviews. We know when 60 out of 100 is enough and when we need to turn in something above 90. One incident has stayed with me.

In one of my years in sales, I had pretty much met my annual target by October. I could take or leave additional orders for the rest of the year: the company capped the incentive payout at 120% of target, so exceeding that wouldn’t earn me any more. I might as well hold those orders over until the next year. One day, my boss came over for a chat and asked me a question.

Boss: Are our salespeople not very good at selling services?

Me: What makes you say that?

Boss: Most of what you’ve sold this year has been motor products. Services account for much less of the revenue. We are the Service department, after all. It doesn’t look great.

Me: No, boss. I think our salespeople can sell any of these offerings. It’s not a question of being unable to sell them. We have two products and five services, right? I can sell all of them. The thing is, you only gave us two KPIs this year: revenue and profit. We can hit both numbers, but you didn’t specify what the revenue had to come from. So we focus on the total and sell whatever is easier to deliver.

Just look at how slow our operations team is at delivering work and how overloaded they are. A service job takes far more of my time and energy than selling a product outright. Naturally, salespeople will choose whatever is easier, as long as it gets them to their targets.

If the company really cares about the mix of business, you need to put that requirement into the KPIs. Otherwise, nobody is going to pay attention to it.

My boss walked away looking thoughtful.

Sure enough, the next year the sales KPIs came with more detailed, explicit rules, setting out the required mix of products and services. I thought: all right, a little more hassle. Let the game begin again.

But I have to admit, it did make me immediately categorize all my clients when doing a business review. I put each client’s product and service needs into a table, and a fairly clear plan emerged.

That’s a typical example of “working the rules.” There are probably plenty of similar situations at work. Experienced professionals, particularly senior ones, often know how to do this. But I think it’s also one reason why people who leave big companies don’t necessarily succeed as entrepreneurs: the mindset of “working the rules” and “handing in assignments” doesn’t work when you’re actually building a business.

When you start a business, every decision is real. You have to get personally involved and do the work to obtain the most trustworthy feedback—to find out whether you’ve taken the wrong direction, used the wrong approach, or put your resources in the wrong place. There’s no one to blame, no one to lean on, and no one else you have to answer to. You owe the answer to yourself.

I can also clearly remember critical stages and decision points in past projects where some people were just handing in an assignment while others were doing the real work. Sometimes the difference was merely cutting a corner on a piece of data or an assumption. Yet the outcomes really were worlds apart.

Thinking about this, I suddenly felt that for someone like me—so practiced at knowing what score a given situation requires—the appearance of that voice was a good thing. A wake-up call.

Precisely because the outcome of a business is your own responsibility, and you have to answer to yourself, 小平同志 (Deng Xiaoping)’s phrase “实事求是”—seeking truth from facts—is precious. Living by it is harder still.

Setting out takes courage. Facing the facts takes even more. I hope those of us on this journey can keep “实事求是” in mind: do the work ourselves, and through that work, find answers and work on ourselves too.

To borrow 怡静姐 (Yijing, addressed here with an affectionate, respectful “older sister”)’s words: Keep your feet on the stone path and lift your eyes to the stars. Something for all of us to hold on to.

On the road.