Big Lessons from the Big Three
The other day, my wife and I were shopping for a new car. We stopped by the Cadillac dealership because we wanted to see the new Escalade Hybrid. The lot was filled with new cars. There were at least 10 salespeople ready to help us, but there were only two customers: us. I felt bad for those salespeople and the staff. I wish I could say we purchased a new car, but we didn't.
Many people blame the automakers for the problems that they are facing--and they are to blame, but not completely. As entrepreneurs, we can all learn at least three big lessons from the auto industry mess:
- Leaders should be on the same compensation plan as the sales staff. If Detroit's leaders were paid only for the number of cars sold, they might be better businesspeople. Instead, the leaders have megasalaries, private jets, midweek golf outings and benefits suited for royalty--all unrelated to sales or company health. These corporate leaders have been stealing from the company, workers and investors who gave them so much. To be a great entrepreneur, be a leader who works for those who work for you. As the head of my company, I work for my customers and my workers. If my company is not profitable, I should not get paid.
- Leaders listen to the customer. Never forget: It was the customer that wanted the big SUVs and trucks. An entrepreneur needs to have a crystal ball and prepare for changes in the customer before the customer changes. As my company's leader, I have been preparing for this economic downturn for years. As some of you know, I have spoken out against the financial planning industry, mutual funds and the financial gurus who recommend them. Instead, I have been an advocate of personal financial education and have built my company around it. Today, my company's sales have increased as more and more people realize that a well-diversified portfolio of mutual funds is not a safe investment and investing in a financial education might offer a better return.
- Politicians reward incompetence. Many of the politicians the Big Three automakers were begging for money are the very politicians who protected the inefficient industry. It was the politicians who protected the unions and high wages. Most entrepreneurs do not have the benefits of high-paid lobbyists and friends in high places. I realize President Obama promises change. But never forget: He is a politician, not an entrepreneur. Getting elected takes more than just money. That is why entrepreneurs need to watch what politicians do--more than what they say.