Chapter 6
Wealth comes via enhanced productivity
There are a variety of different areas of productivity to understand, and we'll cover them in this chapter. Before that I want to comment a little on the desire for Christians to change the world for the better.
Since socialism reared its ugly head, the idea of changing the world has come from people deciding productive people owe them their money, and by voting in lawmakers that will create legislation and programs that force excessive taxation and debt in order to provide these entitlements, it has created a growing class of people who believe the world owes them in a way that takes care of them cradle to grave.
This is contrary to God and Biblical teaching, which requires individuals to be responsible for taking care of themselves and their families, and from there sharing to help others that aren't able to help themselves, or suffer a temporary disaster they have no control over. That's the meaning of Galatians 6:2 where it says: Bear ye one another's burdens and fulfill the law of Christ." The word burden there is a reference to overload; something so overwhelming it takes others to help the person through it. That is part of our responsibility as Christian believers for other Christian believers, and in some cases, for those outside of the faith.
What is important there is this is all voluntary and unrelated to the government or state, which forces this upon people. It's also not sustainable, and over time it collapses under its own weight.
With that in mind, what is the best way to change the world then? It's from increasing our productivity. That's the strategy to build wealth and take care of the legitimate needs of those around us.
Saying what I just said is not to suggest I believe saving the world as liberals mean the phrase is legitimate. All I'm saying is there is no better way than improving productivity to make the world a better place economically. If we were to pursue that together, the majority of us would bear our own burden, while being ready to help those that are overcome by a heavy burden they can't bear without help.
A little after Galations 6:2, the scriptures teach that every man should bear his own burden (Gal. 6:5). The apparent contradiction isn't one at all. The words for burden in verses 2 and 5 are two different Greek words. One means the everyday burdens of life we all face. That's where we are to take care of those things ourselves without having others take care of us. The other word means more of a heavy burden beyond the normal, daily things we're to take individual responsibility for.
Changing the world from God's point of view is for each of us to be productive to the point of taking care of our own wants and needs, while having enough left over to help others.
What is being productive?
Next we'll look at what it means to actually be productive.
Most of us have heard the term bootstrapping a business in the past. It basically means taking what you have and leveraging or making the most of it. It makes up for the lack of capital, which is where the majority of people pursuing success start at. What's immensely important is we need to learn the most efficient ways to accomplish our goals because there is never enough money in the sense of doing everything we want with our businesses.
Successful entrepreneurs are those that learn and accept this, and take steps to find the best and most efficient ways to expand and grow.
How this works practically is through trial and error. We must try something after looking at our options in order to know whether it works or not and to what degree. Once we set things in motion, we then measure the results and make adjustments to make improve upon them. That's the simplicity of productivity as far as understanding it. It's much more difficult to implement at high levels.
Those able to do so add a lot of value to their businesses, which gives them a competitive advantage over their peers.
Even if you do have a lot of money available, it's not wise to try to spend your way to success. The reason why is the same as above: eventually you run out of money, and you'll still have to find ways to lower costs and leverage what you have. Money can make things easier in some ways, but it also removes skills we need to develop in order to produce long-term success.
To be productive means to bring the performance of the business to a consistent and sustainable level of growth. The whole idea is to build the best products or services at as low a cost as we can. Businesses doing this the best will be the market leaders and top performers.
Are there exceptions to that rule? Yes. The primary example there is Apple, which commands possibly the highest level of loyalty to a brand in history.
Branding and productivity
Why has Apple been able to be so successful with its branding? I believe it's because the community identifies itself not only with the brand, but as part of the Apple brand. In other words, this is a community built around the Apple brand which has a feverish commitment and loyalty to it. Whether or not a product from a competitor is better or not doesn't matter. This is why it not price at high levels, but has its customers wait until the next upgrade comes.
What this does as far as it relates to productivity is provide a built-in customer base which is so enamored and personally identified with the company, it's only a matter of making decent improvements to existing products, and giving the impression of being on the leading edge of the tech industry. And if you're an Apple fan, I couldn't tell you any different. That's the point.
One of the secrets of business is it's always a lot less expensive to sell to an existing customer than to gain a new one. That's related to being productive, and why building a tribe that is centered around you brand or company is so efficient and valuable.
I want to reiterate this so you get it. The goal of building a community around a brand is to get people to personally identify with it. No one can tell them something that will change their minds, because it would be denying themselves.
Let me use an illustration of a local business I was aware of a long time ago when I lived in northern Minnesota.
Almost everyone in Minnesota fishes at some time during the year, and that means usually going to a bait shop if you're going to use live bait as part of your attempt to catch fish. One of those local bait shops was the leading brand in the area, but it had a cantankerous owner that sometimes rubbed suppliers the wrong way. One year he got them so mad they refused to send him what we called 'suckers' to fish with. These were fish that had a suction-like mouth it would feed and clean off the bottom of a lake with.
So this guy wasn't able to get this live bait fish for the entire year. We went to his closest competitor near our house to get some of these fish, and the owner told us the story of what had happened.
Here's the lesson. When some of the customers of the leading brand came to his shop to see if he had any suckers, he showed them to them and they didn't believe they were suckers. Why not? The owner of the leading brand has basically lied and told them they weren't available from anyone in the area because of a fish kill in Canada, which is where the source the fish came from.
Incredibly, these fisherman looked directly at these sucker bait fish, and refused to believe what their eyes told them. They suspended belief of what their eyes were literally looking at because of what the guy with the strongest brand in the area had told them. That's about as strong as branding as I've ever seen in my life. I'm not saying it was a good thing the man did, but it showed the depth of the community and loyalty he had built around his bait shop business.
Leveraging the key to successful productivity, and branding within the market you serve is the most effective way to build loyalty and commitment from your customers. What this means is through expertise and excellence, developed through learning and trial and error, produces a loyal customer base. That's productivity at its highest level. Once that's in place, an entrepreneur can move beyond being a commodity business to a business that can increase prices without losing customers because of the value it offers to its customers.
If you don't know what a commodity business is, it's reference to offering a product or service without much in the way of perceived or real value, which only can compete on price. This doesn't produce a loyal customer base, and customers will only buy from you when you are the lowest priced competitor. That means they'll leave you for another competitor when that competitor beats your prices.
The goal is to create value which produces a loyal customer base that is not interested in doing business with you only to get the lowest price. To do that there has to be a sense of personal connection with your brand or business. The entire business should be built to that end.
Adding perceived and real value
So how do we add perceived and real value? To me the answer is to add real value. By perceived value I mean something like Apple users feel when people see them carrying around an Apple gadget of some sort. It's a status symbol which comes with the brand, which is part of the personal connection with the brand I've been talking about.
Perceived value comes with the brand and the sense of being part of the community or tribe built around it. In a sense that is real value because of people being social creatures wanting to feel part of something. That can only be accomplished by building products and services people like and identify with, and consequently want to share and spread the news of their great experience with to others. That's how a community is built. It's built from shared interests and experiences, and once that's in place, as long as your integrity and quality is maintained, you can tap into that community time and time again to sell things to that they let you know they want or are interested in.
A good example, using Apple as an example, is the design aspect of some of its mobile products. The late Steve Jobs used to exasperate some of his engineers and designers by not accepting anything from them that wasn't compelling inside and out. The usual response was nobody was going to see the inside of the product. Jobs didn't care. His response was that he would know it, as would those designing it. He wasn't going to lower his standards for any reason, which is part of the reason why he maintained quality to the level of attracting and building such a loyal customer base out of ashes, after the company almost fell apart after he was removed from leadership.
He built real value first, and from that real value there was added the perceived value of a community everyone was part of that bought an Apple product. To this day outsiders just don't get this. They wonder why someone would be that committed to a product or company. It all has to do with value and the emotional connection associated with that value, which produces a loyal community and customer base that ends up finding and being connected with one another; making what is happening much bigger than the products and services offered by it. This is a huge moat that is difficult to overcome.
It's also the reason Apple can enjoy strong margins and earnings on its products, and why it can price them far above their competitors and still outsell them. That is perceived value. In a sense, customers are paying for the privilege of being part of a community that is related to, but outside of the company itself.
Just like Apple, this won't be for everyone in the market being targeted. But for those it is for, you can build a company around them that will be almost impossible to make inroads in. All of this is built on productivity and real and perceived value.
I want to add one more example. Look at Amazon Prime. It was started as a service by Amazon to appeal to those wanting quicker delivery. But since Amazon was competing on price, it meant low margin and earnings, and difficulty finding a way to defend the business if price was the primary factor in what it offered.
Sure, Amazon was a first mover in the online retail space, but that was only a period of time it was considered a novelty. It was obvious its competitors would soon follow in its successful footsteps, making it difficult for Amazon to differentiate itself from its competitors. That's where Prime comes in.
Not only did it offer two-day shipping to those that joined the service, but it has added numerous perks as well. The most well known would be its streaming video service, which comes at no extra cost. There are other valuable perks as well.
It added value and perceived value over time, so when it needed to raise the price of belonging to Prime, it did so with little resistance or churn to its subscriber base. The value or subscribing to Prime was considered high enough to not be concerned about paying an extra $20 a month. Amazon is continually looking for new ways to add value to the service.
Conclusion
As you can see, there's a lot of different ways to measure and view what productivity means. In the end it's easy to define. It's taking what you have and making the most of it. Or to say it another way, it's efficiently and effectively leveraging the ideas and strategy you have to the highest possible level.
To do that we must remain zeroed in on our core business, while trying out different things to see if they improve some part of the business. That can be related to a product, service, costs, added value, etc.
This is why productivity isn't the result of who has the most money, but who does the most with what they do have. The end result has to be customer delight and satisfaction, which will result in a community of people identifying with your brand in such as way as to be loyal to your improvements to existing products and new products or services too.
That leads to customers giving constructive criticism and feedback, which provides more ideas on how to make things more productive and valuable to them.
Once you reach this stage, which should be the goal from the beginning of the business, you can help facilitate the tribe to connect and interact with one another. That way it takes on a life of its own, with only the need to occasionally give a slight push to encourage interaction, and an ongoing communication with them in order to keep them interested and give them something to talk about. This can be related directly to the product or service, or related to a cause people are interested in the business supporting.
What this means is even though our brand and products or services are limited to a specific areas of someones life, when we connect with them and they connect with us and one another, it can expand to other areas of interest beyond what we serve them with, and if and when we connect in that way, the loyalty goes even deeper, and it goes beyond simply a business to customer relationship.
This further enhances productivity, and provides the environment when you need to boost prices, there is little resistance if it's done right. It's done right by accurately measuring and determining our value to our customers.
On a personal basis concerning productivity, as the Bible reveals to us, we need to rest one day a week from our labors. That shows we are trusting God and His sovereignty for our success, and are willing to rest and reflect upon all His goodness He has shown to us.
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