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Business Lessons From The Wizard Of Oz

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If It Is Not Kansas It Must Be Oz

If It Is Not Kansas It Must Be Oz

The original Wizard of Oz is one of my favorite movies and I am surprised that it took me this long to blog about the business lessons to be learned from the movie.  I have not seen the recently released Oz The Great And Powerful but plan on renting it someday.  From a quick scan of critic ratings it seems as though it has more disappointing ratings than positive ratings but making a prequel to a classic will add an extra level to expectations.  I will judge once I have seen it.  Enough about movies, let’s get to business.

The three main characters besides Dorothy each believe that they have a flaw and are trying to remedy it by visiting the wizard.  One lacks courage, one lacks intellect and one lacks a heart.  In the movie, it is clear that the characters possess these qualities and just need encouragement to use what they already have.  As a small business owner you may also have flaws and unfortunately there is no wizard available.  

If you have not read the book The E-Myth I suggest you do so to understand what you have gotten yourself into.  There are three key skills needed to operate a business and if you do not have all three you will struggle.  You must have technical skills, managerial skills and must have entrepreneurial skills.  Most people who start a business do so because they are a good technician.   They can provide “the deliverable” but that is only a small part of running a successful business, especially if you want to grow it beyond a single-person shop.   Having only two out of the three skills is as good as having a stool with 2 legs or having intellect and courage but no heart.

What do you do if you recognize you are lacking in one of the skills?  Depending on the situation, you can try to learn the skill but running a business and devoting time to learning a vital skill is not the best idea.  You may not have time learn the skill because you may be out of business before you are adept at it.  My advice is to do what you are best at and hire good employees or outsource your weak spots. After a while you may develop your missing skill(s) but hopefully by then you will be best at entrepreneurship and will have an empire to manage while you create the vision for your company.

It may be easy for me to say (and self-serving) that you should hire or outsource areas that you cannot do well but I do have a good basis for my reasoning.  That basis is Economist David Ricardo’s Law of Comparative Advantage from his book published in 1817; On the Principles of Political Economy and Taxation.  This law can be explained by using a simple example we can all understand.  For our example let’s say you are a maker of highly fashionable and sought after widgets.  These awesome, industry-leading widgets sell for $100 and you can make your widgets in one hour and cannot keep up with the demand. If all of this is true, why would you waste time cutting your grass when you can pay the polite neighbor boy $20 to do that task which also takes an hour to do?  By cutting your own grass you are losing $80!  This might seem like a no-brainer to you but that is what you doing by handling all of your administrative tasks, social media marketing/website maintenance, Human Resources and, dare I say, your own accounting with QuickBooks?  In a small business it does make sense to wear several hats but choose those hats wisely.  For example, I enjoy writing and I believe and have been told that I have a skill for it so that is why I write my own blog.  If I was terrible at writing and hated doing it, it would make no sense for me to write my own blog. 

Have a great week travelling wisely down the Yellow Brick Road to success.

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Written by pacelinebiz

April 22, 2013 at 8:01 am

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