3 Learning to trust yourself
Idealism, vision, and gut-trusting can help you plunge forward in pursuit of your dreams. We have all heard about the American icon: the entrepreneur. He has wild stories about what it was like in the “old days” when he started his now-successful company. A lot of times he will begin his tale with “If I knew then what I know now, I never would have begun.” He might talk about how much he believed in his product and how he went against all the odds to make it happen. But it’s hard to hold on to that kind of optimism and self-reliance in the face of industry naysayers. You might also have to face your own feeling that you should be doing one thing when your intuition is actually leading you to do something else.
This chapter is about learning to trust that intuition. It is about knowing when to move ahead with your core values. It is about finding the balance between being an innovative rule-breaker and making it in the mainstream. In Lisa’s case, everyone told her the product she believed in would fail, yet she continued to trust her mission and open doors for the company to grow. Margot felt she was being compromised at a trade show, and she broke industry rules by slipping out the fire escape, only to find that success followed her home. Gary learned that trusting in yourself and acting impulsively were not the same thing. Carol learned that her love of risk that she inherited from her father did not mean she had to give up her belief in loyalty. And Tom Raffio of Northeast Delta Dental figured out how to stay true to his values by focusing on sufficiency rather than greed.
These stories are about times when entrepreneurs have put self-doubt aside and hoped that their values systems would lead them where they needed to be. Sometimes our intuitive sense can be better than all the business know-how in the world.
One Loaf at a Time
LISA
When I think back to our early days and the crazy things we did, I cringe. But I know if we had listened to the experts, we never would have succeeded. I didn’t actually go to Harvard Business School until I had been in business for many years. In the early years, I didn’t know anything except that I believed in my product and I needed to take each decision one at a time. Everyone in the industry kept telling us it was not possible to make and sell all-natural bread: the dough would be too stiff for the mixers, the loaf would be too dense to be sliced, the bread would mold on the supermarket shelves, and so on. But we were bullheaded about it. We didn’t want to make bread with the chemicals people were telling us about, so we started by selling to local stores and farmers’ markets.
Even though the experts told us it could not be done, we did find our way onto the supermarket shelves because our bread was unique, it tasted great, and, luckily, we were located in a vacation destination. Very early on, a vice president at one of the largest supermarket chains in the Northeast was on vacation in Vermont and bought our bread at a local farmers’ market. He called to talk about having us supply his chain’s stores. We said, “Sure, we can meet you.” In those days everyone did everything. In the early morning hours, we baked the bread, we packaged it, and we made the deliveries. When we came back, we cleaned the bakery and paid bills. At the end of one of those days we went to see the vice president of this huge supermarket chain. He told us he wanted to put our product in 3 test stores. We said, “Great! But you are this huge company, and we are this little bakery. We’ve been learning about cash flow, and if you take thirty days to pay your bill, you will put us out of business.” He laughed and said, “No problem—we will pay you cash.” So we delivered to each store’s back door, took out our returns, stocked the shelf, got the invoice signed, went to the courtesy booth, and received our cash. Fifteen years later we were servicing all of the stores and starting a private label program with the chain. One day our driver came to us and said he no longer felt safe walking around with all of that money in his pocket. I called the buyer and said, “Thanks for all your help in the early days, but you don’t have to pay us cash now. We can bill those 3 original stores along with the other 150.”
As we grew quickly and expanded our territory, my intuition told me I didn’t know enough to run the business alone. I needed help. But I was afraid. We didn’t have a lot of money, and I was worried about our cash flow. I had hired a consultant to come in weekly to help us with correcting our recipes for larger batches. He identified machines that could make the work easier, standardized our production procedures, trained our people to be better bakers, and formulated new products. We needed him or someone like him to be on staff full-time. Even though intuitively I knew this, I was still nervous about spending that kind of money. Finally, I followed my instincts and hired him. He was a general manager with twenty-seven years of industry experience. It was one of my first strategic hires.
Even though my intuition told me to hire him, I had been worried about adding that level of salary to the company, but one decision he made in the first week—to change the type of yeast we used—saved the company two times his yearly salary and expenses. When he came into our company, he was constantly surprised. He still says he can’t believe we grew to be the largest natural bakery east of the Mississippi, and not one person in the company knew how to bake. He used to leave little notes everywhere saying “Lisa, you bake bread you don’t cook it” because we all used to say “cook the bread.”
Learning to trust yourself doesn’t always mean listening to the industry experts and knowing everything. When I started out, I might not have known much, but I did know how to listen to my intuition, and I knew we had a good product I wanted to stand behind. Our bread was made without chemicals and without preservatives. It was healthy and it made great toast. It was different (and I thought better) than anything else that was being sold in stores. I knew that if I protected the core value—healthy bread that was different—then I had a real story to tell. And it was the story that got us shelf space in stores. It was a story of a new type of product that expressed our values. It tasted great and provided good jobs for all of us working at the bakery. Everything else we had to figure out— one piece at a time, one decision at a time, one step at a time, one loaf at a time.
The More You Hold On, the Less You’ll Have
MARGOT
When I started Birkenstock, I was not fixed on traditional ways of running a company. I had no preconceived ideas of what was correct, so I was able to listen to what was happening in the world and follow my own instincts. I was not merely concentrating on a bottom line; I was concentrating on spreading the word about Birkenstock, one pair of shoes at a time. The first ten years of running Birkenstock, I kept thinking that somebody else with this opportunity would have done a better job. I hadn’t gone to business school yet, and I hadn’t really learned how to do things right. But as the years went by, it began to dawn on me that I was precisely the right person in the right place at the right time. Someone else who knew the supposed “right way” would have done things according to business books and probably wouldn’t have understood the spirit of Birkenstock that ultimately sold the shoes.
An early experience reinforced my belief that following my intuition and trusting myself might be one of the best skills available to me. In 1972 we were still selling exclusively to health-food stores. I saw how limited this was and decided it was time to branch out and try a shoe show again. In those days the Western Shoe Retailers Association held shows in a small two-story hotel near the San Francisco airport. We showed the shoes right there in a hotel room on the bed. Since I was a newcomer to the show, I was put on the second floor at the end of the hall. It was the loneliest time I’ve ever had at a show—the only people who came in were other salesmen, and one even tried to get fresh with me. I figured the show wasn’t working and I wanted to leave. It was Sunday; the show lasted two more days; unless we stayed until the end, we wouldn’t be allowed to ever show there again. Well, I decided to follow my own intuition, and I packed up everything and fled by the fire escape. I didn’t care if I ever showed there again. I just wanted to get home. I kept thinking that the very next morning I could be back in the office being productive.
As it turned out, it was good that I followed my instinct to go to the show, but it was also fine that I followed my intuition to leave. That “bad” show gave us one contact that would be pivotal to our development and the starting point of our future success. This is what happened: A young man riding the escalator at the hotel overheard someone say, “Did you see anything new at this show?” The other person answered, “Not really. Only those Birkenstock sandals, and they looked weird!” This intrigued the eavesdropper, but by the time he looked us up in the directory, I had already gone. After the show was over, he came to our office and bought twelve pairs of sandals. He and his brother had a gift shop in Carmel, where they sold handcrafted leather bags, belts, jewelry, and other artistic goods. After about six months, the older brother remarked that the sandals didn’t pay off. The eavesdropper convinced him they just didn’t have enough of them—those few pairs did not create a big impact. He visited us again and bought a whole wall full of sandals. This really kicked off their business, and two years later they decided to start a separate store specializing only in Birkenstocks.
Life acts in surprising ways. The disastrous shoe show turned out to be a great success after all. I learned not to be too quick to judge failed efforts and taught my people to do the same. Who knows what seeds might be sown and when they might sprout and bear fruit?
Experiences like these taught me not to despair when situations don’t work out as first envisioned. They taught me to just keep following my own intuition. I think the necessity of trusting myself came from my experience during the war. With all the destruction I saw as a child, I realized that nothing was permanent. I saw fortunes disappear overnight. Some people survived their losses, and some didn’t. That’s why I tried not to hang on to things. I hoped things I cared about would last, but I didn’t count on it. Instead, I trusted my own sense that most situations wouldn’t turn out exactly the way they were planned. I couldn’t necessarily count on the outcome, so I would just do the best I could every day and take it from there. It might not be optimal, but I came to believe that if I figured out how to adapt and adjust, usually everything turned out to be workable. My biggest truth was this: the more you hold on, the less you’ll have.
The thing that did stay with me throughout the years was my belief in the Birkenstock product. I actually had more trust in the product than I had in myself. It turned out that having faith in our product was exactly what was needed at the time. Young people wanted to look different from their mothers. They wanted to earn their living differently from their fathers. They wanted to do something meaningful. They did not want to give up their values for a paycheck. One of these young people was a student in Seattle. She convinced a friend who owned a health-food store to give her a little space to sell the sandals. Just a few hours a week, she waited for customers while doing her schoolwork. That situation became cumbersome after a while: people trying on shoes always created a mess, and her friend did not appreciate it. The girl coaxed her father into giving her some money to open her own store. Her father wanted assurance that she was not going to waste his money, so I sent her a letter stating that if the store didn’t work out, I would take back her original order and refund the money. She has that letter framed on the wall of her store over thirty years later.
Because I believed in the product and in the spirit of the brand, I was willing to take a chance with unproven concepts and inexperienced retailers. I trusted that the sellers loved the product like I did and could relate this love to consumers. Some of these early folks are still in business many years later. By selling something they believed in, they built a life for themselves, put their kids through college, and felt good about how they were making a living.
Someone who knew how to do things “right” probably would have looked only at the bottom line from the beginning and would not have been able to nurture Birkenstock into what it became over the years. I didn’t create a franchise system because I didn’t like the rules and regulations connected with that. We did not have a strategic plan to create stores. Instead, people searched us out. They came for different reasons, and each had different needs. They were all individuals, living in various communities all over the country, so I couldn’t see tying them down to cookie-cutter designs and making the stores look alike everywhere. I wanted the sellers to be able to express their individuality. We had about two hundred stores that carried the name “Birkenstock” over their doors. We were the envy of the trade. People were asking how such inexperienced folks pulled this off. Several other comfort-shoe brands tried to emulate us. They did it “right,” the way it “should” be done—with marketing and money—but it didn’t work out for them. We never rushed to grow too quickly. We never held on too tight. This approach gave the brand an enduring quality.
Warped Genes and the Internal Wrestling Match
GARY, STONYFIELD FARM
There are two very important things in terms of starting a business, and neither one of them is knowledge. The first is determination. Determination is one of the most undervalued attributes for an entrepreneur, and it can make up for a lot of other things that you may lack. The second attribute is a belief in yourself. When people are starting businesses, I always counsel them that it’s okay not to know everything. Some of the world’s greatest feats have been accomplished by people not smart enough to know those feats were impossible. Sometimes the less you know, the better. When embarking on the road to being an entrepreneur, anybody who thinks it’s going to be easy is (a) in for a big surprise and (b) wrong. It’s never easy. It’s never been easy. If it isn’t torturous, you are probably not going to be successful. A certain amount of transformation will probably happen as your business grows. You will have to let go of certain things, like comfort and sleep, in order to gain new things: success, wisdom, and experience. But you don’t always know this at first, and that’s actually good. I can take no credit for going into my own business knowing what the answers were going to be or what it would be like. None at all. It was an absolute result of holding my nose and jumping in, deciding to swim with the sharks and having them turn into dolphins, or whatever the analogy would be.
But there is a big difference between acting confidently and actually trusting deeply in yourself. The latter took me a while to understand. I would act with confidence, leaping off planks and sailing off cliffs, but I learned that wasn’t necessarily trusting myself. Trusting yourself means you bring some discipline to the process and you don’t just go on your gut. All good entrepreneurs and leaders have an internal wrestling match between intuition and pragmatics. They also know when to stop wrestling and get on with it. It’s a balance, and finding that balance can be difficult.
To some extent, I think entrepreneurs seek to be unbalanced. It’s in our natures, our warped genes. I always used to stand up at Social Venture Network conferences, put up my hand, and say, “My name is Gary, and I’m totally out of balance.” In order to find this balance that might not be inherent to my nature, I go through a mental checklist that aligns with my value system, and I almost always double-check with my wife before I make a decision. This is part of how I have developed trust in myself that I will make good choices. My wife is not an entrepreneur, and she is completely risk averse (except that she married me, which was risky). She is happy to take a loss and move on. She has no problem saying “Okay, that was a dead end. Tomorrow’s another day,” whereas, I don’t like the idea of limits, I don’t like putting up the white flag—it’s just not my way. I don’t like the word “no” very much, but that’s probably true of all entrepreneurs. To find some sort of balance, where balance might be lacking, I have to check in with my wife and hear her commentary. She and I disagree on almost everything when it comes to business. I can reject her suggestions, but it’s on my checklist to run everything by her. I still rely heavily on my gut after going through the checklist, but I always make myself go through that process first, at least with the important decisions.
So knowing how to trust yourself is really about balance: the balance between going with your gut feeling and having the discipline to think about what makes sense, the balance between knowing when to trudge through and when to cut your losses and move on, the balance between making snap decisions and delaying too long, and the balance between trying to please everyone and just getting the job done. It starts with trusting yourself and having determination. It also starts with a great product you can believe in.
Embracing the Bumpy Roads of Business and the Risk Fix
CAROL, PUTNEY PASTA
In order to know how to trust yourself, you first have to know yourself. Knowing yourself starts with understanding where you come from and how your values developed. I am from a family of six kids, so all of us differentiated ourselves to be unique. It was well known in my family that I was my father’s favorite. I was the tough one, physically and emotionally, which helped me tremendously when I went into business later on. I was tough because of where I fell in the pecking order; I was number four. I have an older sister who was pretty difficult. My mother said she wanted to be an only child, but when five more kids came on the scene, she lost her place in the family, especially since I was daddy’s little girl. I had to be tough to deal with her, and I also had to be tough to be the spokesperson for the younger ones. I had two little sisters, and I was their protector. My younger sisters would come to me and say, “Ask Dad if I can do this or that,” and he was not an easy guy at all. Being the protector became my role in business when I was dealing with employees as the president of my company.
I learned a lot from my father in terms of what I valued and did not value about business. He was a true entrepreneur and a very bright guy. He went to the Wharton School of Business, and when he finished school, he bought a few Army/Navy surplus shops in Rhode Island. He then joined the Navy. Before he went off to war he told my mother to run the shops—not that she’s a businesswoman; she just did whatever had to be done. After the war, he bought and developed an industrial park where boats had been built during the war. He always liked to be the first. He had the first bowling lane, the first amusement park, and the first trampoline center in Rhode Island. He also had a beautiful marina right on Narragansett Bay. He built a hotel that he sold to Hilton. I watched him reinvent himself with each new business. I loved being involved in his businesses from the time I was a little girl. Summers I didn’t want to go to camp, I wanted to work for my father. I worked at the amusement park one summer and at the restaurant another summer and on down the line. I loved being part of his businesses. But I also saw that he was never satisfied. He was restless. It was never enough.
My father had his first major heart attack at thirty-eight years old. When he was forty-six the doctor said to him, “If you don’t quit smoking and lose weight, you’ll be dead in five years.” Almost five years to the day, he was dead. He was semi-retired by then, had moved to Florida, and had gotten involved in racehorses. He died at the racetrack. Sometimes I wish he were still alive today, but other times I’m glad he isn’t because I’m not sure he would be supportive of me. I loved my father’s entrepreneurial spirit, yet I did not want to keep reinventing myself. I had a need for speed, but I learned that I was not quite the risk taker he was. I wanted a certain amount of continuity in my life. For me, I can get my risk fix at the racetrack. I went to racing school in Colorado, and I love racing cars.
If you know yourself and learn to embrace your lineage and channel your attributes and strengths, you can do really well at what you choose to do. The core values I learned growing up were staying tough through hard times, being a protector and a spokesperson, and enjoying the speed of business while remaining committed to one company. I trusted in those values, and they led me through my time with Putney Pasta. I never got bored there. I liked being familiar with something, protecting my employees, staying tough through the bumpy times. I was lucky—courage and strong-heartedness were the stock of my family. It’s in my father, it’s in me, and it’s in three out of six of us siblings, who are strong, good businesspeople. We do well in the tumult of business. We don’t mind chaos.
Taking a Hit and Remaining Happy
TOM, NORTHEAST DELTA DENTAL
For me, learning to trust yourself means adhering to your values. I have always tried to be value driven. Before I came to Northeast Delta Dental, I was the number-two person at Delta Dental of Massachusetts. At the beginning, the company was shaky in terms of if it would succeed. It was a start-up company then, but by the time I left it was huge. I hired two hundred people on the values of trust of management, trust of the culture, and trust in the strategy of the company to walk the talk. It was a much bigger company when I left, and it isn’t always easy to hold on to your values when the company is so big, but sticking with our values actually made it prosper.
When I took the position of CEO at Northeast Delta Dental, I wanted to instill the same values there. Northeast Delta Dental had been around for a while. It was small and unknown, just kind of plodding along. However, since we instilled some of these values in it, our growth has been excellent. I have used many of the same success tenets here as I did in Massachusetts. Nowadays, because only 3.2 million people live in Maine, New Hampshire, and Vermont and so many of those people already have Delta Dental coverage, our growth has slowed somewhat. The next step is to start thinking about whether we need to be outside northern New England and offer other lines of coverage.
Even though I have had this sort of success running a values-driven organization, it can still feel difficult to maintain our values and succeed. Obviously, we have to make money. For instance, a few years ago, we put in a brand-new computer system that cost several million dollars. We had to do that to be competitive, but we tried to focus on sufficiency rather than greed. That’s where I think Wall Street comes into play negatively for companies that have to deal with stockholders. It is much tougher for them to maintain values because they have a hard bottom line. In the final analysis, their sole goal is to make more money for the stockholders, whereas our objective is making enough to remain competitive while also giving back to the community.
Our model is successful because it is not about greed; it is about everybody taking a little bit of a hit and winding up generally happy. We really have to protect this model. Looking around, we see that most organizations have given into financial pressure. For instance, Blue Cross organizations used to be not for profit—they were run like we are—but many of them have been bought out by for-profit companies and their stockholders. After consolidation many decisions that in the past were made locally are now made elsewhere. This is true of New Hampshire Blue Cross that was bought out by Anthem of WellPoint, and it’s been to the detriment of the citizens of New Hampshire ever since because the company doesn’t invest as much in the community. Decisions aren’t made locally; they’re made in either Indiana or Connecticut. If you’re running a local Blue Cross, Anthem will give you a budget, and if you use up that budget, you’re done.
In theory, being bought out by a larger national company reduces the cost to the end user. This may be true in the short term, but it’s not true in the long term. For one year administrative costs might be lower and the employers might get a lower price because of economy of scale, but in the long run will the employees be healthier? Will the service be as good if it is done by offshore service reps or a call center in Colorado or India? The feedback I’ve gotten is that the citizens of New Hampshire aren’t as well off now. Thinking only about cost can be a disaster in the long run.
Our bottom line is values rather than finances. Northeast Delta Dental can still write a check for $10,000 for a community fund-raiser, and that’s the end of it because the buck stops here. We are still able to meet the needs and challenges of the people in our community. If an employer comes to us and the company isn’t doing well, I have the authority to help that company. For instance, Easter Seals is one of our customers, and one year it had a tough time because of flooding in Manchester. I was able to present the organization with a better price for that year. I know we will keep Easter Seals as a loyal customer for years to come.
If we were bought out by Delta Dental of California (which is a billion-dollar independent Delta plan and so can’t buy us out, but let’s say somehow it could), Concord Hospital, one of our biggest clients, might get a lower administrative rate, but Delta of California isn’t going to give more than $50,000 in aid that we gave Concord Hospital during its fund-raising campaign for hospital expenses and a cancer center. If you sell out to a larger company, you might be able to cover your expenses today, but in the long run, you could lose your company and your values, and you could be working to the detriment of your community.
What We Learned
In this chapter our entrepreneurs shared stories that pointed to the core values that helped them learn to trust themselves. In order to go against industry norms and beat the odds, we have to learn to ground ourselves. Some of the cornerstones for getting the help we need to deal with the tough stuff are
Understand and be able to articulate your core values. Listing your core values and keeping that list nearby can help you to trust yourself. As Carol points out, in order to trust yourself, you have to know yourself, and one of the ways to do this is to keep a journal or have a person you can talk to about who you are and what you value most in your life.
Turn toward your original mission to get grounded again. Mission statements help to steer the boat when we are getting pulled in a lot of different directions. If someone offers a suggestion and you are not sure whether to take it, you might ask yourself if it meets your mission statement. Would you be adhering to or abandoning your mission by taking this suggestion?
Remember why you are in this business in the first place. Usually we feel excitement when we are starting on a new venture. This excitement can serve to drive us forward in the beginning, but sometimes we lose sight of it as the business grows and we are dealing with various pressures. It can help to remember back to when the business first started and the excitement you felt about bringing your product or service into the world.
Believe in your product. As Margot says, sometimes it is easier to believe in your product than it is to believe in yourself. If you remember the value of the product or service you are selling, you might feel more energy in terms of advocating it to the world and taking the necessary risks to beat the odds.
To paraphrase Mahatma Gandhi, hold on to the vision of the change you want to see in the world. Don’t forget that you aren’t just making money. As Tom says, thinking only about cost can be a disaster in the long run. Remember that you are also doing something courageous: you are using your values-driven business to effect change in the world. If you need a reason to trust yourself, that could be it!
Throughout this book we tell our stories and offer tips to help get through the difficult times, the tough stuff. But we first turn to these core values to remind ourselves what is important.
PRACTICAL TIPHire People in Your Company Who Know More Than You Do
Lisa tells the story of hiring her first general manager, who was the most highly paid employee at her company. She was terrified, but she knew her growing company needed a much higher level of baking and research and development skills than any of the current staff possessed. When he came on board, one of the first decisions he made saved the company an amount equal to more than his yearly salary and benefits. Over time she was relieved to see that he took over more and more of the operations part of the company, allowing her to focus on other areas.