Corporations are people too — so nurture it as you would a child
“Corporations are people, my friend,” said Mitt Romney in 2012, and everyone laughed.
But it’s true and important. Mr Romney knew lots about business and, to him, that was a perfectly reasonable statement and one that I fully subscribe to.
When you create an incorporated company, you are actually creating a separate legal entity. And the entire world of commerce is based on being able to legally separate the corporation from the owners. There is nothing nefarious about this, as no one would be in business if their personal risk is unlimited.
And let’s be clear, a new company is neither good or bad, it’s the people that make it a force for good or a force for bad, not the company itself.
So, if you acknowledge that the corporation is a separate entity then what next? Once you complete that act of creation, you need to consider what relationship you want to have with this new entity that you created.
The spectrum ranges from nurturing the corporation as you would a child, creating a cult right though to using the corporation to facilitate all kinds of bad behaviour. Do you want to look after it and help it grow or is it more disposable? There is no right answer, you should just think about the child, the cult, the scam.
Ask yourself, does the company have any other purpose than to fulfil your wish to be really wealthy in as short a time as possible? If you are planning on the long haul then you may want to consider the nurture route.
To be clear, almost everyone in business dreams of making money and becoming really wealthy. But practically how does that happen? A shout out to Peter Drucker and one of his most important quotes about business point to the right direction: “The Purpose of Business is to Create and Keep a Customer”. To paraphrase this famous saying, making money is a byproduct to creating and keeping customers. Without nurturing your new corporation, it’s going to be a lot harder to create and keep customers and without customers there is no money. Nurture the customers, nurture the corporation and the money will follow.
You also have to consider the personal profile you want in the relationship between you and the corporation; is it going to be such that people think you and the company are the same or will you make it clear that you may have started the corporation but it’s not you, it’s something separate.
Some companies end up fully bound to their founders and that really confuses people. People were recently saying Richard Branson should sell his Caribbean island to help keep Virgin airlines afloat. I believe he understands that he is separate from the company, he created it, nurtured it and it became totally independent. It’s his decision because it’s fully grown and lots of other people are part owners of the company he created. Why should only he sell his island and the other owners not sell theirs? But when you tie yourself so closely to the company you create then this is what happens.
It’s even harder if there are multiple founders as each can have a totally different view as to what relationship they want with the corporation. Iron this out as early as possible.
We should not forget the “lifestyle” corporation, that’s one where you have symbiotic relationship with your creation and you are happy to mosey along, make a good living and nurture the corporation to the extent that it continues to be your own personal bank.
My advice for the long-haul play is simple; you nurture the corporation when its small so it can nurture you when it’s grows and gets strong. That’s when the money kicks in.
Corporations can become monstrous people when they were groomed to be monsters.
Just as every serial killer has some dreadful backstory so too for corporations. If they are nurtured to be meanspirited then they will be meanspirited by the people within them who either start off as meanspirited or learn to be that way. Some companies will always be meanspirited as the markets in which they were created and operate are so toxic; banking, private equity, insurance that it’s impossible to avoid.
Enterprise in the 21st century will not look like enterprise in the 20th century. Who knows what capitalism will end up looking like? But creating and nurturing an enterprise will not change, it’s just human nature.
