7 Dark Roses - Free Audio ebooks

THE MILLIONAIRE

MENTALITY

Luck, knowledge, hard work—especially hard work—a man

needs them all to become a millionaire. But, above all, he

needs what can be called “the millionaire mentality”: that

vitally aware state of mind which harnesses all of an indi-

vidual’s skills and intelligence to the tasks and goals of his

business.

I once hired a’ man—call him George Miller, it’s close

enough—to superintend operations on some oil properties I

owned outside Los Angeles, California. He was an honest,

hardworking individual. He knew the oil business. His sal-

ary was commensurate with the responsibilities of his posi-

tion, and he seemed entirely satisfied with both his job and

the pay he received. Yet, whenever I visited the properties

and inspected the drilling sites

, rigs and producing wells, I

invariably noted things I felt were being done in wrong or

inefficient ways.

There were too many people on the payroll and there

weren’t adequate controls over costs. Certain types of work

were being done too slowly; others were being performed

too rapidly and hence without proper care. Some equipment

items were being overstocked while there were shortages of

others.

As for George Miller himself, I felt he was spending too

much time doing administrative work in the Los Angeles

office and not enough out in the field—on the drilling sites

and rigs. Consequently, he wasn’t able to exercise the

necessary degree of direct personal supervision over the

operations that were his responsibility.

All these things served to keep costs high, to slow pro-

duction and hold down profits. But I liked Miller and was

certain that he possessed all the qualifications of a top-

notch superintendent. After some weeks, I had a man-to-

man talk with him. I informed George bluntly that I

thought there was considerable room for improvement in

the manner in which he was handling his job.

“It’s funny, but I need only to spend an hour on one of

the sites and I spot several things we could do better or

cheaper and increase production and profits,” I told him.

“Frankly, I can’t understand why you don’t see them, too.”

“But you

own

the properties,” the superintendent

declared. “You have a direct personal interest in everything

that happens on or to them. That’s enough to sharpen any

man’s eyes to ways of saving—and thereby making—more

money.”

Truth to tell, I’d never thought of it in quite that way

before. I mulled over what George said for several days and

then decided to try an experiment. I had another talk with

Miller.

“Look, George. Suppose I farm the properties out to you,”

I suggested. “Instead of paying you a salary, I’ll give you a

percent of the profits. The more efficient our operations, the

bigger those profits will be—and the more money you’ll

make.”

Miller gave the proposition some thought and then ac-

cepted the offer enthusiastically.

The change was immediate—and little short of miracu-

lous. As soon as George realized that he, too, had a “direct

personal interest” in the properties he really hit his stride.

No longer merely a salaried employee, the superintendent

became keenly concerned with cutting costs, boosting pro-

duction and increasing the profits in which he was to share.

He viewed operations on the drilling and well sites in an

entirely different light, instantly recognizing—and correct-

ing—faults which had theretofore eluded him. Miller

shucked unnecessary personnel from the payroll, pared

operating expenses to the bone and used his considerable

native ingenuity to devise better methods for getting the

work done. Where he’d previously spent two and sometimes

three days each week in the Los Angeles office, he now

made only brief appearances there once or twice a month

and chafed impatiently until he could return to the drilling

sites.

I inspected my properties again some 60 days after

George Miller took over under the new relationship. I

checked the operations minutely, but could find nothing

wrong. Indeed, I noted little if anything I could have

improved upon personally. Need

less to say, in a very short

time both Miller and I were making far more money than

we had before he started working on a profit-sharing basis.

The incident taught me one of the many lessons which have

led me to believe that most men fall into one of four general

categories.

In the first group are those individuals who work best

when they work entirely for themselves—when they own

and operate their own businesses. Such men do not want to

be employed by anyone. Their desire is to be completely

independent. They care nothing for the security a salaried

job offers. They want to create their own security and build

their own futures entirely on th

eir own. In short, they want

to be their own bosses and are willing to accept the re-

sponsibilities and risk this entails.

Next are the men who, for any of a large number of

reasons, do not want to go into business for themselves, but

who achieve the best, and sometimes spectacular, results

when they are employed by others and share in the profits

of the business. There are many widely different types of

men in this category. They range from topflight salesmen

who prefer working on a commission basis—earning in

proportion to what they produce, with neither floors nor

ceilings on their incomes—to the finest executives in the

business world.

George Miller was one who fit into this category. So— at

the uppermost end of the scale—did the late Charles E.

“Engine Charlie” Wilson. I’m certain that Charles E. Wil-

son would have achieved great success had he gone into

business for himself. But he preferred working for someone

else—first for the Westinghouse Electric Company and

then for the General Motors Corporation. Wilson’s rise from

an 18-cent-an-hour job to the $600,000-a-year presidency of

General Motors is a classic saga of American business.

Charles E. Wilson was always an

employee

—but he

amassed millions through stock-ownership in the

companies for which he worked, thus sharing in the profits

he helped to create.

My third category includes individuals who want only to

be salaried employees, people

who are reluctant to take

risks and who work best when they are employed by others

and enjoy the security of a steady salary. People in this

group are good, conscientious and reliable workers. They

are loyal to their employers, but are content with the lim-

ited incentives of a regular paycheck and hopes for occa-

sional raises in salary. They do not possess the initiative

and independence—and, perhaps, the self-confidence and

drive—of individuals in the first two groups.

Lastly, there are those who work for others but have the

same attitude toward their employers that postal clerks

have toward the Post Office Department. I hasten to make

clear that I intend no slight or slur against postal clerks,

who work hard and well. But they are not motivated by any

need or desire to produce a profit for their employer. Postal

deficits are traditional and they are met regularly by the

Federal Government. I doubt very seriously if there is one

postal clerk in ten who cares whether the Post Office

Department makes a profit or operates at a deficit. This is,

perhaps, as it should be—in the Post Office Department.

But, obviously, such attitudes are fatal to any business op-

erating in a free-enterprise system.

Yet there are far too many men who hold—or would like

to hold—management positions in business whose outlooks

are virtually identical with those of the average postal

clerk. They don’t really care whether the company that

employs them makes a profit or shows a loss as long as

their own paychecks arrive on time.

I’ve encountered countless specimens—graduates of the

nation’s leading schools of business administration among

them—who, incredibly enough, are utterly incapable of

reading a balance sheet and couldn’t even give an intelli-

gent definition of what is me

ant by the term “profits.”

Whatever exalted titles such men may hold, they still

remain nothing more than glorified postal clerks. They feel

little or no sense of responsibility to their employers or the

stockholders of the company for which they work. They are

interested solely in their own personal welfare. Outwardly,

some of these men seem to possess the essential qualifica-

tions for management jobs. They are obviously intelligent

and apparently experienced. But not even a 180 I.Q. will

necessarily make an individual a good businessman or

executive. And, as Roger Falk so correctly points out in his

book,

The Business of Management,

many a man who is

supposed to have, say, ten years’ experience has really had

only one years’ experience repeated ten times over.

Large numbers of these postal clerk types spend years—

even decades—trying to reach the upper rungs of the suc-

cess ladder and wondering why they can’t attain them.

They can’t understand why they aren’t given top jobs or

can’t “get rich.”

The reason they fail? Actually, it’s all in the mind.

Like it or not, there is a thing that can be called The

Millionaire Mentality. There is a frame of mind which puts

an individual a long way ahea

d on the road to success in

business, whether it be in his own or as an executive. In

short, The Millionaire Mentality is one which is always and

above all cost-conscious and profit-minded. It is most likely

to be found among men in the first two categories I have

cited. This Millionaire Mentality is rarely found among

individuals in the third group. But then, they seldom have

ambitions to be anything more than employees in the lower

or middle echelons of a business organization. The

Millionaire Mentality is entirely nonexistent among men in

the fourth category. Unfortunately, however, these are

usually the very people who have the wildest delusions

about their own value —the ones who do the least and

demand the most. They view the company for which they

work as a cornucopia from which good things should flow to

them rather than as something to which they owe loyalty

and which they should strive to build.

There were times in the past when I tried to excuse the

failings of these types on the ground that they hadn’t had

the advantages I’d enjoyed in life. I reasoned that they did

not have the same amount of formal education I’d received,

hadn’t traveled as widely nor had as much business

experience as I. Then I gradually learned that when their

personal interests were involved, these economic illiterates

suddenly became as shrewd as the most successful

financier.

I once took control of a company which had great po-

tentials but a very disappointing earnings record. It didn’t

take me very long to pinpoint the trouble. Three of the

company’s key executives were virtually casebook examples

of the postal clerk, men who were neither cost-conscious

nor profit-minded.

Their monthly salaries ran into four figures. One month,

shortly before payday, I instructed the accounting depart-

ment to “short” each of their paychecks by five dollars—

and, if they complained, to send them directly to me.

As I more or less expected, all three of the executives

concerned presented themselves at my office within an

hour after their checks were delivered on payday. To each,

in turn, I delivered a little speech that was hardly

calculated to brighten his day.

“I’ve been going over the company’s books,” I announced

sourly. “‘I’ve found several examples of what I consider

unnecessary expenditures which have cost this company’s

stockholders many tens of thousands of dollars in the last

year. Apparently, you paid little or no attention to them.

Certainly, I’ve seen no evidence that you tried to reduce the

expenses or correct the situations which caused them to

rise as high as they did. Yet, when your own paycheck is

involved, you instantly notice a five-dollar underpayment

and take immediate steps to have the mistake rectified.”

Two of the executives got the point, took it to heart and

quickly mended their ways. The third did none of these

things—and was soon looking elsewhere for work.

It should go without saying that no business can long

survive unless it makes a profit. It should also go without

saying that businessmen and business executives must be

constantly alert for ways to reduce costs and increase effi-

ciency, production, quality and sales so that the company

he owns—or for which he works—can operate at a profit.

These would appear to be the most basic of all basic

business axioms. Yet it is a sad fact that many

businessmen and executives barely comprehend them—and

there are even those who don’t comprehend them at all!

An all-too-familiar attitude was expressed to me recently

by a young executive who complained bitterly that his de-

partmental budget had been slashed by $20,000.

“Did the cut reduce the efficiency of your department or

curtail any of its productive operations?” I asked him.

“No, I guess not,” he replied after a moment’s thought.

“Then why complain?” I inquired.

“We could have found

something

to spend the money

on!” was this alleged executive’s answer. “After all, you

have to think big and spend money to make money!”

I’m glad this young man wasn’t

on one of my payrolls. I

would have disliked terminating our conversation by firing

him on the spot.

I’ve heard this concept that “you have to think big and

spend money to make money” bandied about ever since I

began my own business career. I doubt if there is any other

business concept more widely misinterpreted. I agree that

anyone who desires to achieve success and wealth in

business must have imagination and be farsighted. He

must also be willing to spend—and risk—money, but only

when the expenditure is justified and the risk is carefully

calculated to be worth it.

In my opinion, it’s more important for the man with The

Millionaire Mentality to be able to think small than to

think big—in the sense that he gives meticulous attention

to even the smallest details and misses no opportunity to

reduce costs in his own or his employer’s business. I

explained my views along these lines not long ago to a

newly graduated aspirant for a junior-executive position.