In recent university talks on leadership and cultural change, I have emphasized mental constructions that have become formidable obstacles on the road to economic development.
Some of these concepts are related to a pronounced defeatism and lack of enthusiasm, which is largely associated with a distorted view of the relationship between effort and wealth. This defeatism, which permeates the mindset of many in Latin America, is perverse and to a considerable degree explains our high, permanent, and corrosive levels of material and spiritual poverty.
As an antidote to this defeatist mindset, I highly recommend a book written by the colorful oil tycoon Paul Getty. Getty was once the richest man in the United States and is today known for the cultural and artistic legacy that he bequeathed to his namesake foundation.
The book I am referring is "How to be Rich." The title arouses suspicion if you despise wealth and assume that all fortunes are obtained illegitimately. Getty breaks with this view and shares his opinions.
The millionaire mindset
At one point, Getty recalls a manager, George Miller, who was in charge of operations in Los Angeles. Getty described the man as more than qualified for his position.
However, whenever Getty inspected the LA operations, he always found considerable opportunities for improvement. Among other things, there were slow operating processes, industrial risks, bloated payrolls, and material wastes. Getty’s conclusion was that Miller spent too much time at the company’s head offices and only a few hours a week in the field.
One day, tired of this situation, Paul Getty called the manager into his office and presented an itemized list of hundreds of missed improvement opportunities. When Getty reprimanded Miller for overlooking the details, Miller’s response was: "you’re the owner and have a different perception than I do."
Getty immediately proposed a new compensation package that included direct profit sharing. Sixty days later, Getty thought he had witnessed a miracle. Miller was spending all his time in the field and became extremely impatient if a problem made him go to the central offices. Getty could not find a single problem.
Miller was fully entrenched in direct oversight of operations, constantly seeking improvements and efficiencies. By adopting the mindset of an “owner,” operations flourished and both Getty and Miller were significantly better off. The experience completely changed Getty’s perception and the work culture in his companies, paving the way for him to become the wealthiest man in the United States.
For Getty, there are only four kinds of people and senior managers should to be able to identify them: (1) the businessman, who is a natural individual risk taker, restless, creative, and hardworking; he is unable to take orders or work for someone else; (2) the executive, a person who is equally restless and hardworking. He pays attention to detail, but prefers to work for another person because his risk tolerance is much lower; (3) the employee, who prefers a schedule and a fixed salary, vacation, and methodically obeys instructions but is unable to take risks and (4) the bureaucrat, who doesn’t care whether the company earns or loses money. He creates unnecessary obstacles and inefficiencies and the only thing that matters to him is that his salary is paid on time.
While the third type of individual plays an important role in any organization, the fourth should be avoided at all costs, at the risk of losing everything.
The first two types of people, according to Paul Getty, should have what he calls the Millionaire Mindset and what we in Grupo Salinas term the Winning Mindset. This quality characterizes those who are constantly concerned about the company’s results. They are also seeking improvements and efficiencies, they control costs and expenses, increase sales, and are concerned and aware of their competition.
People with a Winning Mindset generate the highest proportion of business value and should be rewarded for it. Companies that face increasingly competitive environments cannot afford to lose these individuals. They make the difference between a company in constant growth and total collapse.
An ambitious and consistent employee, even though he/she might require precise instructions, is also a key element in business. Successful companies seek committed people, who are attentive to detail, and have a winning mindset and a desire to progress.
The bureaucrat, however, has no place in productive enterprises. Far from seeking value creation, he/she is only interested in a paycheck and is often dishonest. The bureaucrat may hold graduate degrees from the best business school, have an IQ of 180, and a decade of "experience," but does not generate value because in reality ten years of experience amount to almost nothing. These are the employees who do the least and demand everything from the companies in which they "work."
In a modern company, which operates in a globalized world, there is no room for the latter type of individuals. Every successful company will seek committed people, attentive to detail, with the desire to progress, and with a Winning Mindset.