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Editorial: The Truths That Drive Entrepreneurship and Define Success

By Julie King |

Last month I decided to add the word 'opinion' to an article submitted by a contributor, who was writing about ethics and the 'truth'.

I deeply respect providing diverse viewpoints on CanadaOne and strongly believe in giving people a chance to share their wisdom, even if my own thoughts on the subject may differ slightly, as long as hard facts or processes are not being misrepresented.

There are many experts in business who talk about truths, fundamental principles and hard realities. Quite frankly, as consumers and learners this is something we demand. If an expert claimed to "maybe, hopefully have an insight that might – or might not – be able to help a company…" I think it is obvious that not many people would pay attention or more importantly, buy from that expert. Yet in most cases it is clear that these are the expert's opinion about what is true, so no opinion label is needed.

History shows that 'truths' are often radically overthrown

So just how fixed are the 'truths' we encounter in business and science? The work of Thomas Kuhn, author of The Structure of Scientific Revolutions, offers us good guidance.

In the 1960's Kuhn demonstrated that adoption of new scientific theories science and even the process of experimentation is not done rationally. The idea of the perfectly rational scientist, creating, testing and proving a hypothesis that is then accepted by others in the field is a nice story, but it is a myth.

Consider a bit of scientific history. In 1687 Newton published his book Philosophiæ Naturalis Principia Mathematica and for many generations afterwards Newton's Three Laws were seen as a "truth" by other scientists. Then in the early 1900's Einstein published an alternative theory of gravity as part of his Theory of Relativity that radically transformed the way that scientists viewed the world. Quantum physics emerges as the new "truth". More recently, the work of behavioural scientists who are showing economic markets to be irrational, is another example of a paradigm shift away from the long-held belief that markets and commerce followed rational patterns based on principles like supply and demand.

Kuhn included many more examples in his book. The important thing to understand is that 'truths' are nothing more than dominant paradigms of our times. They provide us with context from which we can work, but are very different from the truth of a mathematical formula, like 1+1=2..

Then there are things like priming to consider. In his book Thinking Fast and Slow, Nobel laureate Daniel Kahneman talks about the concept of priming, in which the very thoughts we have in our society are linked to the way we are raised. He notes that western societies are primed for fame and greed. Ideas about measures of success will be influenced by this priming affect and can be seen in particular in the mainstream media.

Canada's prestigious entrepreneurial experts

"Business is war. I go out there, I want to kill the competitors. I want to make their lives miserable. I want to steal their market share. I want them to fear me and I want everyone on my team thinking we're going to win." - Kevin O'Leary

Where do we look in Canada when we want to find people who can share insights about 'truths' in business? There are a handful of options and topping the list are successful entrepreneurs, authors, speakers, and academics. The most notorious experts, of course, are media personalities.

Kevin O'Leary, one of Canada's most successful business celebrities. He is well known as an investor on CBC's highly rated Dragon's Den, co-host of CBC's The Lang & O'Leary Exchange business show and is now also on the US-based Shark's Tank.

I bring him up specifically for two reasons. First, O'Leary has been very vocal about expressing his belief that in business, money and sales are the only things that matter. Second, this month on CanadaOne a contributor has stated that O'Leary live the 'truth' as an entrepreneur, that his two books on entrepreneurship are about the 'truth,' and that we can only determine how successful we are based on the amount of sales achieved, an idea O'Leary espouses.

This is certainly a strong statement, yet how 'true' is it?

What story does O'Leary's track tell?

If we are being asked to accept advice from O'Leary as a guiding principle entrepreneurs should use as their benchmark for success, shouldn't we at least look beyond the TV personality? It didn't take much research to figure out that if sales and profits are an important 'truth' in business, then this Dragon's Den star has a few questions to answer.

While the company O'Leary co-founded – The Learning Company (originally named SoftKey) – was sold to Mattel for a whopping $3.6 billion, an apparent runaway success, if we probe further we find a very different story. A Time article noted that after the acquisition The Learning Company lost almost $200 million and a subsequent lawsuit by Mattel shareholders alleged "...that under O'Leary and Perik the Learning Company used "accounting manipulations" to gain market share and drive up the company's stock price. According to the suit, a sales manager at the Learning Company at the time of the Mattel merger told employees that he "suspected the 'Learning Company is broke' and is 'cooking the books.' Mattel paid shareholders $122 million to settle the suit. O'Leary and Perik settled as well."

What kind of story do you want your business to tell?

We could off course quibble over many things here. While there are questions to be answered about the things that led O'Leary to achieve his current success, there is little question that he has done a lot of significant things since The Learning Company was sold. Even knowing this about the dubious background of the company that made O'Leary rich, many Canadian entrepreneurs would still agree with his opinion that sales and bottom-line results are what matter in business. (As Kahneman says, we live in a society primed to favour greed and frame.)

My line of thinking on the topic is a bit different.

What I want to know is not whether this is a 'truth' many entrepreneurs are guided by, but whether this is the 'truth' that entrepreneurs should be guided by.

I agree that having a profitable company is a key benchmark that all companies need to strive for. This is, in fact, a requirement of the Canada Revenue Agency to be considered a business.

Yet how much is enough? And should sales and profits trump all other aspects of the business? Should Canadians accept it as a truth in business, driven by a profit motive, when a national bank like RBC that had profits of $7.5 billion in 2012 decides to off-shore jobs?

What's more, an emerging "truth" for employers that need to attract the top talent from Gen-Y hires is that if your company does not incorporate social motives with your business mandate, you will find yourself left with second-string hires because the next generation of workers want more than money as a 'truth' that matters to them.

Personally, I am extremely thankful that amazing entrepreneurs have been willing to develop innovative, disruptive technologies not because they were driven by monetary goals, but rather because they passionately believed in making the world a better place. I salute the people who have created growth-oriented businesses yet that have also been able to balance profit-making with social good.

I would encourage all entrepreneurs to build great companies. But don't let the idea of singular truths get in the way of making it the company you want it to be, rather than the one societal priming tells you it should be.

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