Most students complain about homework. When my MBA students at the Kellogg School of Management grumble about assignments, I tell them that what they’ve called “homework” from elementary school through graduate school isn’t actually homework. It was merely practice to develop tools for them to learn to do real homework. Real homework is the work you do when no one gives you the assignment, tells you how much work is enough, or establishes a deadline. Ultimately real homework is what you have to do yourself to succeed. Real homework really counts.
Successful businesspeople—entrepreneurs, family business founders and managers, and corporate managers—all do high-quality, appropriate amounts of homework. When they stop short on the homework, they almost always come up short on results. If you’re not sure how to do real homework, take a look at my recent book, Invent Reinvent Thrive (McGraw-Hill 2014), which has many excellent examples of the kind of homework that breeds success. In this three-part blog, I present multiple stories of real homework from the book, grouped by the principle they exemplify best.
Learn From Your Customers Starbucks founder Howard Schultz never even worked in a coffeehouse. He was inspired to start Starbucks by the European coffeehouses he observed when working as a coffeemaker salesman. He studied the stores and their practices carefully and saw how much consumers enjoyed premium coffee in a “third place” between home and work. Everything he learned convinced Shultz to persist in finding investors for Starbucks, even when no one, including coffee experts, seemed interested. Later, when highly successful Starbucks faltered amidst the 2008 recession, Schultz again did his homework, this time visiting stores and observing everything they were doing from the customers’ points of view (and ignoring Wall Street’s and analysts’ gloomy opinions). What he saw convinced him the company had lost touch with its original values—its “soul,” according to an internal memo Schultz wrote that was leaked to the press—and he took steps to recapture that spirit, including closing their thousands of stores for a day to replace equipment and to retrain all store employees. All the homework paid off as Starbucks regained strong growth and stock value.
Learn From Your Competitors Charles Schwab reinvented the stock brokerage industry by doing away with unnecessary product/service bundling and sky-high commissions. By studying the competition from the point of view of customers, Schwab was able to introduce highly valuable features through his namesake firm, including simplified transactions and more affordable pricing. The homework Schwab did with his customers, especially those in Silicon Valley, wound up changing the industry and making Chuck Schwab a billionaire. Early in the new millennium, when the company suffered from mounting competition, Chuck returned as CEO and observed the competitors, copycats who decreased commissions and service offerings at the same time that Schwab & Co. was raising commissions to cover increased numbers of managers. Schwab understood that his company had become the type of firm he’d once outmaneuvered: one that offered overpriced services to justify its bloated structure and workforce. He agreed when I likened this situation to Pogo’s lament: “We have met the enemy and he is us.” Schwab used what he learned to cut costs dramatically, improving the pricing he could offer customers and turning the company around.
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These are just two of the homework-related principles I’ve observed in my many interactions with successful entrepreneurs, including the ones featured in Invent Reinvent Thrive. In the second and third parts of the post I will present additional lessons, including how homework helps you learn from mentors, previous associates, naysayers, and your team, as well as the importance of applying your homework-based learning across domains.
© Lloyd Shefsky