Maximise value and profits will follow

BEING a leader has never been easy. In today's business world it is increasingly demanding. You are caught between conflicting pressures all happening at the same time.

You must keep your company focused on achieving its purpose - whether developing innovative medicines to save lives, creating tempting foods and drinks to satisfy demanding customers or making complicated processes easy and stress-free. But you must also maintain revenues and profits in an increasingly competitive and unforgiving landscape.

Leaders who do not improve shareholder value get fired. At the same time you must manage your employees, customers and suppliers humanely while striving to make work interesting and fulfilling.

When these different demands are conflicting life gets difficult. What you do to keep rapacious shareholders happy may reduce employees' loyalty to the company. Some businesses have inherently higher margins than others and pressures for improved profits can be at odds with the nature of the products or services.

If the sole purpose of a company was to make money, it would become a money-lender or go into the gambling business, since these tend to have the highest profits. But companies are there for more than simply making money. They want to create something useful to improve the human condition. Maximising profits while building a reputable, ethical company is challenging. Fortunately, it is possible.

Leaders find themselves caught between two styles of management - the stick and the carrot. Usually they employ a bit of both. My approach to business is to focus on making the work place interesting, exciting and - most importantly - fun. When it has achieved these criteria, it seems to be profitable as well.

Here are some of the ways it worked for me:

Humour

Laughter permeated most of our meetings. This does not mean that the work was not demanding. On the contrary, I was an "enthusiastic encourager". It meant that I tried to meet difficulties and failures with a positive learning attitude and a smile. We celebrated every success with great joy. Not all situations are funny but most things can be made fun.

Creativity

The ability to think imaginatively and make creative choices ensures that your business does not get stuck in a rut. For example, when I was running a food supplements business, and was searching for new products, I would ask consumers what dish took them a lot of time and effort to produce for themselves. From their answers I could avoid selling them just another source of food, but instead could sell them convenience. Similarly, when we needed a higher quality tomato paste, shopping around existing suppliers was the obvious thing to do. Instead, we reorganised part of the tomato growing source. Better source material was more profitable than improved processing.

And a little bit of madness

Mad ideas were another way to make the business more interesting. I encouraged outrageous schemes, partially as a source of laughter and also because they sometimes could turn into first-rate ideas. For example, in 1990, to commemorate Singapore's 25th year of independence, one member of my team suggested creating the world's largest pizza. That proved successful on several levels. The technical challenge required 140 chefs to build a pizza 33.6 metres in diameter. The public relations potential meant that the Guinness World Records certified it and we had great publicity in local and foreign media. And food for the hungry - the majority of the pizza was distributed to charities island-wide.

Individuals can benefit from crazy ideas, too. A client could not choose between two job offers, one from an established MNC, the other from a startup. Both were in non-conflicting sales and both were attractive. We suggested that he accept both of them, completely transparently, and seek only 80 per cent of the offered salary from each. It worked and he then had two lively jobs and 160 per cent of the salary he expected.

Today's leaders can choose how they wish to build their businesses. Instead of focusing on maximising profits, they can maximise value - to customers, employees, suppliers and the community. When done consistently and reliably profits follow.