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In contrast, profit-generating red-to-black business gets right into the nitty-gritty details. This is seldom pretty and does not win awards. Ray Kroc got out and swept the parking lots of McDonald's restaurants himself. Walter Chrysler worked in the basement of the Chrysler building with his overalls on and covered with grease. Fancy artwork in the workplace often signals a lack of nitty-gritty, red-to-black effort. Such artwork is designed to build self-image, not profits.
With many managements today riding off previously-built foundations, one constantly sees expensive artwork and fancy esthetics used to cover up a lack of nitty-gritty, red-to-black effort. Beware of highly-paid executives in big, beautiful offices, especially those with all kinds of award plaques on their walls. Such self-image building usually masks a lack of real, red-to-black effort. White-collar hoax executives attempt to capture prestige and inflate their importance by surrounding themselves with fancy artwork and awards. But that is just a show.
Esthetically speaking business is seldom beautiful. Business is the struggle for maximum efficiency. It is an ongoing struggle to produce the most value at the lowest cost. To get real, red-to-black work done, one must go out into the fields, or down into the garages, or onto the factory floors, to work and sweat. A working man does not put on his dress clothes and cologne to go to work. If he does, he's probably not really working. Work is for grinding out values.
Consider the example of Jay Gould. In the late 1800s, large railroad companies in America were already well-matured. Many began falling into second-generation managements that sought to avoid the tough, integrated thinking required to continually push forward competitive business dynamics. An over-expansion of railroad capacity occurred at that time, along with several sharp economic downturns. Yet, many railroads began erecting elaborate, show-off offices. Those excessive buildings were self-image enhancers for well-paid executives, most of whom did not build the empires they were now controlling. Instead, those executives merely stepped into their already-established, high-pay/high-prestige positions.
When the over capacity and economic downturn hit, many railroad companies struggled helplessly and went bankrupt. But, Jay Gould, a first-generation empire-builder, did not care about image. Instead, Gould focussed on the essence of his railroad business -- moving transportation as cheaply and timely as possible. During this period Jay Gould sat at his desk for 16 hours a day examining accounting figures to uncover how to cut costs. Gould ran his railroad machinery into the ground. His railroads did not look pretty, but they achieved maximum efficiency. They delivered what the people wanted -- cheap, timely transportation.
Jay Gould's railroads did not focus on building up the image of management. Gould did not promote image-conscious executives who focussed on enhancing their prestigious positions and high pay rather than foundation-building business. Thus, Jay Gould rode out the railroad industry shake-out and flourished. Many other railroads went bankrupt -- all the while clamoring for government regulations against "unfair competitors" like Jay Gould.
Similar dynamics hold true in business today, particularly in international business. For, international business is especially prone to cost hemorrhaging. An entrepreneur's success is directly corollary to his cost discipline. Yet, advertising agencies and so-called marketing experts are always emphasizing expensive, designer image in advertising. Most of that is non-essence, self-image hocus-pocus designed to boost egos. That is not what consumers are interested in. The consumer is interested in the value that a product can deliver to him.
Claude Hopkins, a pioneer of modern advertising, stated that advertising professionals constantly attempt to dress up ads with fancy artwork, colorful pictures, and so on. Hopkins then stated that such dressing up of advertising is almost always an attempt to increase the advertisers self-image and to win awards. Hopkins identified that a successful advertisement is nothing more than a salesman in print. As such, an advertisement should get right to the point in plain language -- no fancy artwork is required. Hopkins learned this through direct-mail tests in the competitive, real-world marketplace.
Eric then showed Neo-Tech's cheap newsprint mail piece to several other executives in the direct-mail industry. Eric even exhibited Neo-Tech's low-cost mail piece at a conference on international direct mail. Every executive to whom Eric showed this newsprint piece balked at it. They would comment something to the effect, "It's too cheap looking for my company's image." Such remarks demonstrated the antithesis of Jay Gould-like efficiency. But, such remarks did not bother Eric. Eric "laughed all the way to the bank." For, the bottom line profit margin is always the ultimate guide for delivering what customers want. The success of Neo-Tech's cheap newsprint brochure demonstrated that a fancy, ego-enhancing advertising piece is not what customers care about.
That catalog company was not even capable of accepting and fulfilling an already existing foreign order. That large and long-established American company was unable to break out of a restricted, one-country mentality. In the long run, that company was missing out on the international market and, consequently, the future.
That major American catalog company was avoiding forward-essence movement into the international market -- just like many other established American companies. And that signals a non-forward-essence-moving, white-collar-hoax management. The management of any large American company today, to be exerting forward-essence movement, must be pushing out into the largest market there is -- the world market. Management that is not pushing out internationally is defaulting on their essence.
Not surprisingly, less than two weeks after that catalog incident, Eric read in a trade publication how that same long-established American catalog company was having financial difficulties and was losing market share.
In contrast to that sad situation, consider the dynamics of a forward-essence-moving business like Honda Motor Company. Honda is the most up-and-coming car company in an extremely competitive industry. While many large and established car companies are shrinking and dying, Honda is recognized as the most dynamic car company in the world. Why? Because Honda has a worldwide, forward-essence push. Honda has been pushing into almost every market of the world. The essence-pushing management of Honda continues to grow and become more dynamic as a result. Honda acquires increasingly competitive knowledge by pushing out into all markets. Other large, white-collar-hoax car companies financially dwarf Honda, but Honda Motor Company will undoubtedly continue to grow while other, much larger car companies will continue to shrink. And Honda will be around long after many of those other car companies have dried up and withered away.
Similarly, the American catalog company just discussed is a giant in the direct-mail industry. It dwarfs Neo-Tech Publishing Company. Yet, that company's market is closed and its market share will continue to shrink. In contrast, little Neo-Tech Publishing is pushing out all over the world. Neo-Tech is planting seeds for generations of business to come. Neo-Tech's competitive learning curve is on a dramatic upswing. As a result of its worldwide push, Neo-Tech Publishing is much more dynamic than that huge American catalog company. That catalog company cannot even fulfill an order from Canada. In contrast, Neo-Tech Publishing is marketing its publications in over a dozen languages. Thus, Neo-Tech Publishing will be around long after that large, established catalog company has vanished. In fact, forward-essence-pushing Neo-Tech will probably be around after many of today's Fortune 500 companies have long since perished.
When Eric arrived in South America, he combed the many magazines published there. He uncovered a fair number of advertisers selling articles by coupon ads in these magazines. Eric then had his interpreter call those advertisers. Most were happy to meet with Eric. Eric vividly recalled one of his first meetings in Argentina. It was a small company that was advertising miscellaneous gadgets and books in Argentina magazines. Eric met with that company's owner and explained that he wanted to rent her mailing list. Eric went on to explain the concept of renting mailing lists. The owner, a middle-aged lady, seemed puzzled at first. She asked a number of questions, then finally responded by walking over to a closet, opening the door and saying, "Is this what you want?" The closet was stuffed with thousands of original order coupons. Her customers had never had any other offers mailed to them. Eric almost fell out of his chair! Any direct-mail person knows that such virgin direct-response names will pull an enormously high response. In a market that at first seemed barren of opportunity, Eric once again opened doors to great opportunity.
Eric realized that the marketing experts were correct in that South American countries were poor and were suffering from severe recessions and inflation at the time. Yet, standing in major South American cities like Buenos Aires, Argentina and Santiago, Chile, Eric observed that those cities contained thousands of cars. Anyone who could afford a car could certainly afford a Neo-Tech bookset. Eric then realized that even the poorest countries on earth contain thousands of well-to-do people. And those people can be successfully marketed to.
After Eric's trip to Argentina and Chile, South America became an important and profitable market for Neo-Tech Publishing. Once again, creative, integrated thinking proved the marketing experts wrong.
Eric made another important discovery during his first trip to South America. As discussed in Chapter XVII, Eric found that a good selection of newspapers and magazines were sold via newsstands throughout South American. Eric realized that Neo-Tech Publishing should capitalize on those well-developed business values. So, Eric studied the numbers and then dictated the terms Neo-Tech needed to make brochure inserts in these magazines go into the black. Suddenly, media inserts in South America opened up a huge market potential. But it all depended on the Dictate-Your-Own-Terms Concept. (See Chapter XVIII.) South America turned into a vast potential market for Neo-Tech Publishing at the very time marketing experts were recommending American companies stay away from South America. "Economic conditions are too adverse," they advised.
During Eric's South American trip, he became very excited about the opportunities that were opening up there. As Eric was flying from Buenos Aires, Argentina to Santiago, Chile, his plane flew over the Andes mountains. It was a magnificent sight. Majestic snow-capped mountain peaks stretched north to south as far as the eye could see. "How wonderful," Eric reflected. "By doing integrated thinking and dictating terms, I'm opening up a huge market for Neo-Tech Publishing in South America at the very time others are saying good opportunity does not exist here."
Young Eric had the whole world at his feet. And it was all because he exerted integrated thinking and forward-essence movement. In the traditional business world, little opportunity existed for Eric. He had not been an exceptional student. In the traditional world of highly-specialized jobs, the average person is simply shut out of real opportunity. Yet, suddenly, an average person like Eric was opening up the opportunity of a world tycoon for himself. This happened because Eric integrated his life with the money-making essence of the company for which he worked. He constantly exerted integrated thinking and forward-essence movement to push whatever he was working on into red-to-black dynamics.
By identifying the money-making essence of your company, and then striving to integrate with that money-making essence, the traditional world is reversed. In the traditional world, only the most specialized professionals rise up quickly. But that high specialization is simply too competitive for the average person. On the other hand, by exerting red-to-black integrated thinking, a person can break out of the over-specialized traditional world to instead integrate with the money-making essence of business. Opportunity will then become wide open. When an individual switches into an integrated-thinking, red-to-black mode, he or she enters another world.
By breaking out of a following mode and into an integrated-thinking mode, Eric began opening up a whole world of opportunity. Yet, Eric did not have the resources of a large, multi-national corporation. Eric was working for a little company on a shoestring budget. But, Eric exerted nitty-gritty, red-to-black integrated thinking.
Thus, as Eric flew over the magnificent Andes mountains, in the midst of opening up a huge new market for Neo-Tech Publishing exactly where the experts declared no opportunity existed, it dawned on Eric that his world of red-to-black integrated thinking was suffering from too much opportunity. An analogy can be made to the first pioneers coming to America. Discovering an entire continent, their greatest difficulty was that too much opportunity existed. No one had developed its potential. The problem with a newly-discovered continent is not struggling against competitors; it is a lack of competitors. The greatest problem pioneers faced in early America was to simply get as many people here as possible in order to begin building an infrastructure. They needed help to tap the enormous potential that lay before them. Those pioneers did not worry about keeping competitors out. They actually needed more competitors to help them develop markets.
While admiring the breathtaking Andes mountains, Eric thought about the pioneering dynamics that lay before him and Neo-Tech Publishing Company. There really were no threatening competitors. What was needed was more global entrepreneurs, more global companies, more global competitors to help open up the vast opportunities of worldwide marketing. Great opportunity exists for everyone. But that opportunity can be topped only by exerting integrated thinking and forward-essence movement.
Eric then contrasted his situation at Neo-Tech Publishing to the traditional world he had just come out of in school. That was a world of stagnation, offering limited opportunity. But, by switching into a worldwide heliocentric mode, Eric found dynamic opportunity abounded everywhere. Not just in the direct-mail business, but in all areas of business. Eric was repeatedly exposed to all kinds of business opportunities during his travels abroad. When traveling and doing business abroad, a person meets dynamic internationalists from the world over. These are people who are capitalizing on worldwide opportunity in countless ways. World business opportunity is essentially unlimited. It is open to anyone who snaps out of a traditional following mode and into a red-to-black, integrated-thinking mode.
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