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Book review: Why the Amish succeed in business

Why Amish businesses succeed twice as often as the average startup.

Here’s some business advice from a venerable old leader: “He becometh poor that dealeth with a slack hand: But the hand of the diligent maketh rich.” It’s a simple principle, and one almost universally acknowledged. More advice from the same guy: “A good name is rather to be chosen than great riches.” It makes sense: your name, or your brand, is everything. Here’s one more tip from King Solomon: “The way of the slothful man is as a hedge of thorns.” Can’t you just see it on one of those workplace motivational posters?

“I wish I could memorize the whole book of Proverbs,” says one Amish businessman about the Bible book from which the above verses are taken. “There’s a lot of truth in there, about business and about making money, and about using money, and handling people.” He calls it the ultimate guide to marketing. And fair enough; between the bits about avoiding “harlots” and “whorish women,” Solomon offers plenty of useful bullet points. But the question of why anybody in the secular world would turn to the Amish for business advice in the first place is answered right off the top in Erik Wesner’s Success Made Simple: An Inside Look at Why Amish Businesses Thrive (Jossey-Bass).

Statistics from the United States Small Business Administration show that only half of new companies last more than five years, a failure rate that rises above 65% by year seven. Amish businesses, according to academic research, have a failure rate of less than 5% over the same time frame. And though the Amish, whose religion decrees that they reject modern technologies and fashions, are popularly thought of as buggy-driving, pie-baking farmers, a growing number of North America’s roughly 225,000 Amish are getting entrepreneurial. With an average of seven children per family, and with the cost of agricultural land rising in the Amish heartlands of Ohio, Pennsylvania, Indiana and Ontario, not every young Amish will one day farm his own tract of land. There are now more than 9,000 Amish-owned and -operated businesses in North America, and while many depend heavily on family labour, some have dozens of employees, annual sales that exceed US$5 million, and contracts with corporations like Kmart or Ralph Lauren.

Wesner spent years as a travelling book salesman, developing a specialty in Amish communities. He became fascinated with their emerging business community, and how their businesses are thriving despite cultural restrictions against the use of technology, a deep-seated discomfort with self-promotion, and a lack of legal protection (the Amish don’t believe in lawsuits). Success Made Simple is Wesner’s attempt to condense the keys to Amish business success into a set of principles that are applicable in the outside world.

If you’re looking for some earth-shattering secret, something never before imagined, you’ll be disappointed. The key word in the title is “simple,” but while the strategies and management techniques employed by successful Amish businessmen may be literally thousands of years old, they’re often obscured or overlooked. “When it comes to business, the Amish haven’t reinvented the wheel,” Wesner says. Instead, they excel at consistently applying time-honoured principles, from a Golden Rule — based approach to relationship-building and word-of-mouth as the cornerstones of an effective marketing strategy. And because the Amish have limited recourse to legal action, they stress the importance of having an “evil customer radar,” recognizing that some people’s business isn’t necessarily worth taking.

Peter Drucker, the management expert whom some MBAs consider a latter-day Solomon, argued that all businesses have access to more or less the same resources, and that management makes the difference between them. “The first measurement of this crucial factor is productivity, that is, the degree to which resources are utilized and their yield.” Drucker’s claim highlights another cultural principal that the Amish turn to their advantage in the business world: the importance of efficiency.

At breakfast one morning in an Amish household, served after three hours of chores on the farm, Wesner enjoys a bowl of fried eggs, chipped-beef gravy and toast. When a second course arrives of cereal and shoofly pie, the Amish dump both into the same bowl, still smeared with egg yolk and gravy, then pour milk over the whole lot. It’s all going to the same place, Wesner realizes, and without the conveniences of a modern kitchen, setting, clearing, and washing 10 extra place settings represent the kinds of little chores that can add up. Remembering this lesson while observing Amish workplaces, Wesner notices a profusion of modest efficiencies that, combined, save these small workforces time and money.

Most notably, though, the Amish have a different outlook on growth. In their egalitarian society, too much too soon (or at all) can be frowned on; most are culturally attuned to prefer the small-scale. But the prudent management of growth can be a key to modern business success as well. “Carefully managed expansion can mean preserving attributes core to the identity of the firm,” Wesner says. (Think of a dot-com flameout or a car company that expanded beyond its ability to preserve its usual quality control.) “Though it may sound heretical to some, learning to be satisfied with a measure of success is actually an integral part of being successful.”

That speaks to what might be the most pertinent lesson here: have what one Amish calls a “contentment mentality.” As Wesner says, “Long-term business success entails formulating a big-picture vision, a guiding why. … Fulfilling the why is what brings real joy and contentment in the long run.” That may mean conquering the world, or it may mean having more modest goals, but that understanding is crucial. Just ask King Solomon: “Happy is the man that findeth wisdom, And the man that getteth understanding. For the merchandise of it is better than the merchandise of silver, And the gain thereof than fine gold.”

Executive summaries

Sex, bombs and burgers: How War, Porn and Fast Food Created Technology As We Know It (Viking Canada)
Peter Nowak

The American military-industrial complex was created in 10 minutes on June 12, 1940, when FDR looked over a proposal from a group of university science administrators and gave it a quick OK. His signature created the National Defense Research Committee, mandated to liaise between the civilian science community and the military. Among other projects, the NDRC drove the development of radar, but after 1945, demand for the technology plummeted. Raytheon, the private company contracted to develop it, scrambled to find a commercial application for their innovation, accidentally coming up with the microwave oven and, along with other new military-born products like Teflon, revolutionizing the food industry. CBC science and tech reporter Nowak has researched the astounding amount of technology we now take for granted that originated in the last century within the military or food industries, or that owes its propagation to early adoption by the pornography industry. The latter can take credit for the success of everything from home movie cameras and projectors (themselves a military byproduct) to the Internet to advances in robotics. What Nowak calls our “shameful trinity of needs” have proven indispensable in creating the world in which we now live.

13 Bankers: The Wall Street Takeover and the Next Financial Meltdown (Pantheon)
Simon Johnson and James Kwak

With health-care reform on the books, the Obama administration’s focus shifts to financial reform. Don’t count Johnson, a former IMF chief economist and author of the Baseline Scenario blog, among those optimistic that real change is in the offing. He sees Wall Street bankers now entrenched as the new American oligarchy, subtle but surprisingly brazen in their manipulation of political actors and the levers of government power. Johnson expects any measures now introduced to lack bite, because Bush 43, and then Obama, wasted the opportunity to force real reforms on the banks in their moment of post-crisis weakness, because like his predecessor, Obama’s economic gurus are mostly Wall Street insiders, and because Wall Street is pouring hundreds of millions of dollars into a lobbying effort. There’s still a chance to do something effective, Johnson says, but it will require a strong and independent Consumer Financial Protection Agency and the dismantling of the six American banks that have grown too big to fail — and if he isn’t the first to make the argument, 13 Bankers nonetheless lends it a good deal of substance.

The Leader Who Had No Title: A Modern Fable on Real Success in Business and in Life (Free Press)
Robin Sharma

This Nova Scotia — born, Toronto-based leadership guru moved over three million copies of The Monk Who Sold His Ferrari, and his latest effort, too, comes in the form of a parable (not a fable, if we’re picking nits — there are no talking plants or animals). This time the seeker is Blake, an Iraq war veteran who’s spent his 20s meandering through life and who’s now content to offer minimal effort in what seems to be a dead-end job in a bookstore franchise. One day, he’s cornered by a dishevelled and eccentric older co-worker named Tommy, who sees that he’s lost and becomes his shaman figure, introducing Blake to the “Lead Without a Title” philosophy of personal maximization. Blake meets four of Tommy’s friends, each of whom teach him a different aspect of LWT, and equip him with a set of rules and a corresponding acronym (SHINE or HUMAN, for example). Sharma’s idea here is that companies have to grow and develop the leadership talent of all people in their organization to be successful, regardless of their place in the corporate hierarchy, and that as individuals, we’re born into genius but settle for mediocrity. Not a book for the cynical — but then cynics don’t likely spend much of their time reading parables in the first place.