by Lewis Schiff
This book is the result. It represents my attempt to lay bare the mysteries of wealth creation in the twenty-first century. By using the Coach Gibbs method, by reverse-engineering the results Prince was achieving with his wealthy clients and testing them against a statistically significant sample of Americans, we were able to identify seven distinct principles that have allowed people who are born into the middle class to become wealthy exemplars of what I call Business Brilliance.
Through these survey results and the accompanying stories and discussions, you will be able to appreciate for the first time the crucial factors essential for financial success in these turbulent times. This book shows that while fortune often smiles on people in ways that seem arbitrary, fortuitous, and unpredictable, it is synergy, not serendipity, that is usually at work behind the scenes. There are elemental factors to account for, and simple replicable steps you can take, in order to steer yourself toward what may only appear at a distance to be a confluence of lucky connections and happy coincidences. Beginning with the way you pursue your livelihood, which of your talents you develop, and how you negotiate the terms of your work, each of these factors and others collude to determine how far you might go.
Do I think that anyone who reads this book can become a millionaire? Of course not. Even Prince has serious doubts about the ability of ordinary people to learn and adopt his wealth-building techniques. But this book is not written for just anyone. It’s written for a very special segment of the population: the millions of educated and intellectually curious people who have made a good living playing by rules that might not be working very well for them anymore.
If you are one such person, I believe that if you master one-half or just one-third of the Business Brilliant techniques described in this book, your income will rise. If you get really good at most or all of them, you just might grow wealthy enough to become one of Prince’s clients.
But first you have to be willing to accept that changing your behavior and following through on a few everyday practices can bring you financial successes you may have only dreamed of. Does that seem too simple? Too obvious? Before you go any farther, I want to tell a story that demonstrates exactly how this mastery of simple, mundane techniques can produce near-miraculous results with far greater certainty than all our more traditional notions of talent, education, and training. The story tells how a Pittsburgh hospital saved lives at an unprecedented rate by modeling its intensive-care-unit procedures on a zero-defect process borrowed from the auto industry. You will see the magic of the mundane in this story, but you will also see why there is resistance to its magic, and why so many secrets of success are doomed to remain just that—secrets.
The Toyota Way of Medical Care
In May 2003, Dr. Richard Shannon took on a project that many deemed utterly impossible. As head of medicine at Allegheny General Hospital in Pittsburgh, Shannon put his intensive-care-unit staff on a mission to completely eradicate life-threatening infections.
Tens of thousands of hospital patients die from infections every year. One estimate puts the number at 250 per day, which is greater than the death toll from breast cancer, air crashes, car crashes, and AIDS combined. Countless medical conferences have been held to address this terrible waste in money and human lives and most hospital administrators insist they do everything humanly possible to limit, treat, and contain infection. But no hospital had ever even tried to attain zero infections.
The previous year, Shannon had taken a five-day training course with a local health consortium that had developed a health-care-delivery process adapted from the Toyota car-making system. He started the week highly skeptical that simple factory methods using standardized parts could translate into providing treatment for patients with an endless array of illnesses. By the end of the week, though, Shannon was a believer. To his mind, Toyota’s quality regime with its zero-defect focus was not only applicable to medicine but absolutely essential in a field dedicated to the preservation of human life.
Intensive-care patients in hospitals are most susceptible to infections at the point where catheters are inserted into their arteries. These infections are called CLABs—central line–associated bloodstream infections. In 2003, there had been 47 documented CLABs at Allegheny General’s two intensive-care units, and 19 of the infected patients had died. Shannon wanted to reconfigure operations of both units using the Toyota factory model. The goal was zero infections and zero deaths within 90 days.
The Toyota Way is a legendary management philosophy built around 14 principles that emphasize quality, efficiency, and continuous improvement. Most of the principles are aspirational in nature (“Become a learning organization” is the thrust of Principle 14) but others emphasize the importance of standardizing every conceivable task, organizing tools and processes so that no problems are hidden, analyzing every error, and, most critically, allowing every member of the team to stop to fix any defect or deviation from standard procedure.
Allegheny General had never studied just how patients acquire infections while under its care. Treatment standards existed, but each doctor and nurse was trusted to use his or her own professional judgment in changing catheters and applying dressings. There was no system for tracking the causes of an infection or even for reporting a suspected cause.
All of that changed under the Toyota Way. The dressing kit for catheters was standardized, as was every step in the prevention, observation, and treatment of infection. Patients transferred from other facilities had to have a fresh catheter inserted under the new standardized procedures. Catheter lines near the femoral artery were to be avoided because a review of past infections revealed that lines in the subclavian artery had much lower rates of infection.
It was the job of every member of the clinical team to enforce the new standards. One day, when the busy radiology department refused to insert a new catheter in a patient according to the standard procedures, a nurse stopped everything and called Shannon on his cell phone. Within two hours, the chief of radiology installed the new line himself.
The effect of the Toyota Way on infection rates was profound and immediate. Within a month, the CLAB rate had plummeted and within 60 days, Allegheny General had achieved the impossible—zero infections for the month. In the first 12 months under the Toyota Way, there were just six infections and one death, compared with 47 infections and 19 deaths the year before. A follow-up study suggested that Allegheny General had averted $500,000 in medical costs and could save $1 million if the same infection controls were extended throughout the entire hospital. In the following three years, infections at Allegheny General’s intensive-care units remained extremely rare. Zero was the new normal.
There are two very interesting things about the Allegheny General experience. The first is that there was no need to bring in new, more experienced, or more talented people to work in intensive care. That’s usually the answer in most workplaces when a department is having problems. Shake up the personnel. Get some new leadership in there. But talent was not the problem. Shannon was able to produce world-class results with the same bright and highly trained people who, one year earlier and under different operating practices, had allowed 19 of their patients to die from infections.
The second interesting point is that the Toyota Way required little, if any, innovation in medical procedures. Shannon didn’t ask the hospital to invest in expensive lasers, cameras, probes, or robotics. He standardized the way catheters would be inserted and dressed, but not in any way that was unfamiliar or required new training.
Think about that for a moment. These highly educated, highly skilled (and, in many cases, very highly paid) medical professionals were accidentally killing their patients at a rate of more than one a month. No amount of increased staffing, advanced training, or superior technology would have changed the death toll. All that was needed was the synergy of best practices, faithfully followed. The system they used in this case, the Toyota Way, is so elemental and easily understood that workers wi
th the equivalent of eighth-grade educations use it to produce zero defect results in auto factories all over the world.
And which of the many steps taken by Allegheny General were the most important in saving lives? No one can say. That’s the magic behind any synergistic system, whether it’s the Toyota Way, Coach Gibbs’s football brilliance, or the Business Brilliant principles in this book. By performing faithfully (not flawlessly) the proper set of everyday, replicable behaviors, the results you produce can be outstanding, unpredictable, and sometimes unimaginable.
The Trouble with What Everyone Knows
In the past six years, household net worth in the United States has fallen by trillions of dollars. The Census Bureau estimates that Americans lost more than one-third of their net worth between 2005 and 2010. White-collar unemployment, meanwhile, has lingered around 6 percent, a number not seen since the 1983 recession, 30 years ago. Standing behind these ranks of unemployed white-collar workers are millions of employed workers who are worried about the stability of their jobs and wondering about the long-term viability of their professions and their chosen careers.
In February 2009, when we ran the Business Brilliant survey, Wall Street was in the midst of a meltdown. (The stock market was headed for what would turn out to be a 14-year low on March 9.) We really didn’t know what to expect from the results, since everyone we knew was talking about how much money they were losing every day. Would such dramatic investment losses have any measurable effects on either group?
When the results came in, it seemed to Russ Prince and me that the two groups had moved even farther apart. The market meltdown of early 2009 seemed to have hardened both groups’ positions and the middle class and self-made millionaires appeared to be more distant from each other than ever before. At the same time, the extraordinary results Prince continued to achieve with his clients through his coaching raised my level of urgency to share the principles of Business Brilliance. But before I could do that, I needed to study the evidence more deeply and test these survey results against reality. I wanted to reveal the signs of Business Brilliance among the greatest success stories of our time. I’ve been doing that for the past three years, and it hasn’t always been easy, because, as you’ll see, highly successful people often try to downplay or conceal the true secrets of their successes.
In the next chapter, I will take the saying “Do what you love and the money will follow” and stand it on its head. The chapter will show how the world’s richest clown, the world’s richest fine artist, and Seinfeld’s most successful bit player have all achieved enormous wealth by doing what they love while always, always following the money. The following chapter will show why self-made millionaires ignore the scrimp-save-and-invest mantra of the financial services industry and why three-quarters of all the people reading this book are underpaid. Subsequent chapters will explore principles of Business Brilliance such as “Know-Who Is Better Than Know-How,” which reveals the virtues of taking a “heads I win, tails I don’t lose” approach to any project, and “Imitate, Don’t Innovate,” which attempts to bury once and for all the myth that success requires a “big idea.”
Every chapter in this book explodes a commonly held myth about creating wealth and reveals success secrets of self-made millionaires and billionaires that they’re not always eager to discuss. Most founders of Inc. magazine’s “Inc. 5000”—their list of the fastest-growing private companies in America—say that the ideas used in their businesses were more or less stolen from their previous employers, though you’ll never see a news release to that effect. For years, eBay lied to the media about the “big idea” that led to its founding because its true origin, as one of many online auction imitators, wasn’t very thrilling. Kinko’s Copies never would have existed if its founder had been any good at holding down a regular job. Adam Mackay might never have produced and directed his movies with Will Ferrell if he hadn’t listened to his manager and driven an impossibly hard bargain with Lorne Michaels at Saturday Night Live.
In the final chapter, I’ll go out on a limb, offering my own four-point program for Business Brilliance, based on my interpretation of the best practices among self-made millionaires. I call this program LEAP, in part because following it requires a certain leap of faith in the Business Brilliant approach. It’s also called LEAP because I believe that if you take all four points to heart and then execute on each of the accompanying 17 steps, you will enjoy a quantum leap in your income. As I wrote earlier, I can’t promise that I know how to mint new millionaires. That’s the stuff of late-night get-rich-quick infomercials. But I can promise that your outlook on making money will change fundamentally and your results will improve if you make the LEAP program a priority in your life.
At the same time, I accept that it’s human nature to resist new information about any subject as familiar and powerful as money. Take, for example, the cold reception the medical establishment has given to the zero-infection phenomenon at Allegheny General. You would think that after Allegheny General produced those amazing results, every hospital administrator in the United States would be begging Richard Shannon to come in and teach their staffs how to stop killing patients.
You would be wrong.
The vast majority of hospitals still regard infections as unfortunate but inevitable events, despite the mounting evidence to the contrary. The Allegheny General example was followed by some other larger-scaled demonstrations of infection reduction through mastery of the mundane. But the medical establishment remains ambivalent about bringing the Toyota Way and similar quality-control systems into its clinics. Despite the dramatic zero-infection-rate examples set by Shannon and a handful of other pioneers, the rate of hospital infections and fatalities nationwide is moving downward very slowly, and only within the past several years.
It could be a question of motivation. Many industrial experts have noted that while the Federal Aviation Administration has a fairly easy time convincing airline pilots to cooperate with mandated checklists and other safety measures, hospitals must beg and cajole doctors to comply with even the simplest measures, such as washing their hands. Why the extreme difference when pilots and surgeons have so much in common? Both professions require quick-thinking, detail-oriented, take-charge personalities. The only obvious distinction between the two professions is motivation.
How can I put this delicately? Pilots are seated in the same planes as their passengers. Surgeons are not under the same knives as their patients. To paraphrase an old joke, surgeons may be interested in safety, but pilots are committed.
Which brings me to your motivation for reading this book.
You’ve probably never heard of Umair Haque, but the Harvard Business Review ranks the young London-based consultant as one of the world’s 50 top management thinkers. In March 2012, Haque posted an unusual blog entry on the Harvard Business Review website. He wrote, “Lately, I’ve been in the middle of a full-blown omg what-the-hell-where-is-it-all-going-and-what’s-the-point-anyways life crisis.” Haque added that many of his colleagues are feeling the same way, which prompted him to wonder if we are living in an era marked by “titanic institutional failure.”
“All around us,” he wrote, “yesterday’s institutions are buckling and breaking, creaking and cracking (markets, governments, universities, corporations).” We count on institutions to provide us with social stability and rules to live by, but Haque says it’s obvious that the rules are all broken: “You know it and I know it. If you play by the rules today, you’re probably going to end up broke, lonely, miserable, exploited and empty.”
Even before the 2008 world economic crisis, it was already clear that the old rules of the baby boom generation were dying and would no longer apply in a new world of global communication and competition. In Haque’s terms, the boomers grew up sheltered by stable workplace institutions that were “highways whose destination is prosperity: get on the highway, take the right exit, and voila.” But now those highways are often roads to nowhere, and
there is mass confusion about where to turn next. Many suspect there is nothing that can be done. For the first time in U.S. history, fewer than half of all adults believe it’s likely that their children will have a better life than their parents. A Gallup poll found that this pessimism is greatest among people with more than $75,000 in annual income, of whom just 37 percent believe that the future will be a better place.
These observations, and many others like it, are why I see such an urgent need for this book. To me, the main issue for decades now has been risk. More and more financial risk has been heaped upon members of the educated middle class in the form of lost pension plans, reduced health-care coverage, skyrocketing tuition costs, and the housing bubble. Big corporations and other institutional employers used to shelter us from these risks in exchange for our diligence, conformity, and loyalty. But that deal, common 50 years ago, is dead. Now the riskiest thing you can do is try to hold up your end of that bargain and hope that your employer will reciprocate. In other words, we are all now free agents. We are all entrepreneurs, whether we want to be or not.
One major theme that runs throughout the Business Brilliant survey results is that self-made millionaires, most of whom are already living entrepreneurial lives, are better suited to thrive in this new, freewheeling economy because they are more comfortable dealing with risk. I don’t mean to say they are big risk-takers. As you’ll see in chapters 5 and 6 in particular, they are much more proficient at controlling risks in their financial dealings than the middle class. But self-made millionaires have lived a long time with risk as a fact of life and a challenge that requires constant attention. As economic risk keeps growing for millions of people who might have thought just a few years ago that they were on that proverbial highway to prosperity, my belief is that the principles of Business Brilliance will provide the best and most attractive new route to affluence for any intelligent, educated person willing to practice them.