Excerpt

Some business people intuitively know how to create wealth. They are constantly increasing the value of their business holdings, regardless of industry conditions or economic cycles. It’s more than good luck, since the same people strike gold again and again. These wealth-creators just seem to have the Midas touch. I call them Midas Managers.

Midas Managers are a rare breed: they account for less than 1% of all businesspeople. This, in part, explains the lack of value currently being created by private owners. Less than a quarter of private companies in the U.S. will be worth more in five years than they are today.

Midas Managers are also unusual people. They build substantial wealth based on market knowledge, and the ability, as legendary entrepreneur Ted Turner describes it, to see “just over the horizon.” They are motivated by money, but seek to create both personal and business wealth. They focus on a few critical success factors and use straightforward metrics to measure their progress toward them. They understand the behavior and motives of players around them. They are reflective, but with enough salesmanship to get what they want. They think strategically, but act practically. They usually master only one or two wealth-creating strategies; then they look for situations where they can apply these same strategies over and over. More often than not, they are contrarians. J. Paul Getty, a Midas Manager of the first degree, famously summed up their mindset when he said that “no one can possibly achieve any real and lasting success … by being a conformist.”

Of course, Midas Managers have existed as long as there’s been commercial activity. Their names are very familiar to any student of business: Medici, Rothschild, Morgan, Rockefeller, Buffett, and Gates. Most Midas Managers, however, do not have familiar names. Only their families and community know that they “fell into something.” It is this lesser-known group that interests me, especially their ability to create wealth from relatively small companies even during changing times. This book contains their stories.

New Rules of Wealth Creation

Every so often the rules of business change. In the past 200 years this has occurred several times. First came the Industrial Revolution, which in the early 19th century ushered in the Industrial Age. John Henry may have beaten the mechanical spike-driver in lore, but machines have dominated in every other way for more than 150 years. Next came the Information Age, which began in the 1950’s with the arrival of computers and reached a climax in the 1990’s with the explosion of the Internet. Computers changed the way we work, making complex jobs easy and enabling routine tasks to be performed at ever-lower costs. During this Age, knowledge workers and MBAs reigned supreme.

Now we have entered the Conceptual Age. On September 11, 2001, the United States was thrust into a global war with terrorists. At about the same time, China entered the World Trade Organization. The combination of these events birthed the Conceptual Age and thrust U.S. businesses into a global war of their own. The Conceptual Age marks the intersection of globalization, logistics, and advanced technology. This Age is defined by multi-dimensional thinking. This Age requires business owners to conceptualize their way to success. Operational excellence is no longer enough. In the Conceptual Age, it is merely the starting point. Machines, capital and employees are no longer the main factors in creating business wealth. In the Conceptual Age, the biggest is the manager’s ability to conceptualize solutions. Walt Disney would be proud: our imaginations are now the major constraint on wealth creation.

There are various ways to describe behavior required for creating wealth in the Conceptual Age. But the most important skills center on the human mind, or, more precisely, on the two hemispheres of the brain. The Information Age worked the left side of our brains, where we do heavy analytical lifting; success in the current Age relies on the right side, the source of our creativity. In his book, A Whole New Mind: Moving from the Information Age to the Conceptual Age, author Daniel H. Pink argues that the left brain capabilities that ruled the Information Age, while still necessary, aren’t sufficient in the Conceptual Age. The skill sets required now reflect the imperative placed on design, innovation and market knowledge in the 21st century. As children, many of us were told to avoid artistic careers in favor of a more reliable future in business. In the Conceptual Age, our ability to be “artsy” will in large part determine our success in business. In a world where the major resources are available to everyone, it is the ability to do more with less that separates winners from losers.