In the wake of the Great Recession, the formula for success in the new economy has changed, according to Lewis Schiff
What exactly is "business brilliance"?
We are all aware of people who seem to be successful in business even though they may not be the most intelligent or worldly people we know. It would be easy to look at them and say “they are lucky” or “they were in the right place at the right time.” But what I’ve discovered through my research is that many of these extremely successful people actually understand the rules of the game at a level that even they can’t explain. They aren’t lucky -- they are behaving in a certain way that leads to wealth and success. They may not be well educated or even smart by conventional standards. But they are gifted when it comes to business--they are Business Brilliant.
How did you go about determining what traits actually lead to wealth creation?
I worked closely with Russ Alan Prince, a sociologist and researcher who has been surveying wealthy people for two decades. Russ has worked very closely with some of the most successful people in America. During that time, he’s observed seven traits that these individuals possess. We created a survey to measure the presence and priority of these seven traits across all different levels of wealth from those with a net worth less than $1 million (which we define as middle-class) to those whose net worth is in the hundreds of millions of dollars, as well as several levels in between. This allowed us to see how the traits we call Business Brilliance appear in different levels of wealth.
Can you give me an example of one of these traits, and how it might make someone “business brilliant”?
Here’s a simple demonstration of one: Ask your boss for more money. Sounds easy, right? The problem is, among our survey respondents, the less affluent were also the least likely to ask for more money and simply accept the salary they’re offered when they start a new job. What’s worse, the prevailing wisdom seems to be that the more frugally you live your life, the closer you can get to true financial independence. It’s not true! People get rich by making more money, not by saving more. There’s a whole psychology to why people do or don’t ask for more money. Business-brilliant people ask for more – and they often get it!
Let me give you another example of how the Business Brilliant behave differently than the rest of us. More than 70% of our middle-class survey respondents said they believe that if you “do what you love, the money follow,” Our wealthier survey respondents said that they follow the money. What does this mean? It means that you must look for opportunity in everything you do and be prepared to alter how you do things in order to attract money. Instead of hoping for a promotion at the big company you work for, for instance, ask yourself if you can do better at the smaller, more nimble competitor that just cropped up. Your office there might not be as fancy, and your expense account might be smaller. But you could end up helping to build a company and sharing in its success. You will still be doing what you love, but you’ll be doing it in a way that offers a greater likelihood of an outsized payback.
Can the traits that make people rich be learned or are they simply innate personality characteristics?
This is the million-dollar question...literally. Even Russ Prince, who has studied the very wealthy for a long time, isn’t so sure. He thinks most people are unwilling to flex their Business Brilliance because success isn’t important enough to them. I think it’s a matter of knowledge at least as much as will. It’s true that most people who don’t naturally possess Business Brilliance are unlikely to become mega-millionaires. But since you find higher levels of Business Brilliance the farther up the wealth scale you go, it appears that even flexing some of your Business Brilliance muscles will improve results. So the family that has a net worth below $1 million can probably change their behavior enough to create a net worth between $1 million and $10 million (what we call “Middle-Class Millionaires”). To do this, they don’t have to change their personalities, but they do need to adopt a few behaviors practiced by the Business Brilliant.
Are there consequences for failing to develop one’s Business Brilliance?
One legacy of the Great Recession will be that the old rules -- get a good education, work hard for a good company, put in your decades of service, and you will be rewarded with a secure future -- are gone. Even if you don’t want to run or own your own business, you have to think of yourself as a free agent, someone who must create his or her own future. One leading thinker called it “a massive institutional failure,” and suggests that if you rely on the old rules, you’ll fall short of your goals. So, developing your Business Brilliance is more than just about creating wealth; it’s about adapting the lessons from those who seem to understand the rules of our new economy better than everyone else. We must adapt to these new rules, or else we’ll be left behind.
Are you suggesting I don’t have to get a good education or work hard?
Let me parse that statement a bit. You do have to work hard—wealthier people work more hours and blend work and personal matters more than their less wealthy counterparts. But they work in ways that reward them the most for their efforts. It’s difficult to create wealth when you’re working for someone else who owns the company. On the other hand, there are many ways to fashion an arrangement where you take on some of the risk and receive a share of the results from your efforts.
With regards to education, here’s the challenge: Most people who get a highly specialized education focus more on the value of their credentials than being flexible in their approach to business. A teacher might say, “I studied for six years, and my education cost $100,000. I’m not going to change fields.” The problem with that approach is that even if they’re successful in their field, it may not offer them opportunities for financial independence. However, there are plenty of ways a teacher could make a lot more money beyond simply taking a job at a local school district. If they also started a tutoring business on the side or developed curricula for other school districts, they might find that there’s plenty of money to be made in the field of education.