MONEY LESSON FROM THE WOLF OF WALL STREET

The Wolf of Wall Street was a hit film. People glorified the movie itself and also Jordan Belfort, the main character. The story and plot were extravagant, wild and fun. One of the craziest parts about this movie is that the story is true. There was also a hit book The Way of the Wolf, which further illustrates how entrepreneurs can be successful at persuasion, influence and successful.

Regardless of whether you have seen the movie or read the book, there are some key takeaways (for good and bad). These are based on what happened to Belfort and his investment company, Stratton Oakmont. Here are seven lessons I’ve learned that you can take away from his story:

1.Being good friends with your employees means they will do anything for your company.

In the movie, the people that work for Jordan Belfort are willing to practically sacrifice their lives for him. One of the reasons is that the culture they created in the office was extremely fraternal.

There were definitely consequences to this, but one benefit was that people would do anything for him. The company felt like an extremely tight-knit community. Belfort had strong individual relationships with his employees, outside of the context of work. This led to more respect for him and a higher willingness for employees to make sacrifices for the company.

2. Do not rule someone out because of past issues.

Jordan Belfort took a chance on a handful of employees that were in dire situations. Despite past misconduct or lack of experience, he looked at personality and work ethic when making decisions.

As a result, he hired many of the “wrong types” of people. These people did great work for him, and felt indebted for the opportunity. It teaches to look beyond a resume or a few key signals when making hiring choices.

3. Social gatherings are a great way to build relationships.

The social gatherings occurring in The Wolf of Wall Street were frequently unhealthy. There was an emphasis on misogynistic attitudes and treating people poorly. That theme is not one that should be replicated, the idea of unique and fun social gatherings should. Stratton Oakmont was extremely creative about the events that they had.

These activities created a stronger bond between people at the company and offered a fun, social outlet. They were not events that the employees just felt an obligation to attend. Company get-togethers do not have to be as morally wrong as Stratton Oakmont’s were to accomplish the same thing. Rather, it takes extra creativity and effort from a company.

4. Be careful about what you are sacrificing for money or success.

Another big takeaway from the movie was the value of sacrifice. Jordan Belfort became an entirely different person once getting involved in Wall Street. His life might have been appeared more “fun” to the naked eye. That said, he made a lot of sacrifices to get there.

He treated people poorly, divorced his first wife and ingested copious amounts of drugs. Ultimately he hurt the very people that he cared about and who cared about him.

It can be tempting to make bad decisions for instant gratification. The most successful entrepreneurs are the ones that are able to avoid these impulses. The goal is to consistently make thoughtful, healthy decisions. Staying consistent with your lifetime values, no matter what, is a truer base for success and happiness.

5. Sometimes it makes sense to quit while you are ahead.

Jordan Belfort had an opportunity to step back and walk away from the negative company culture. He had financial stability and he might have been able to get away with a lot of his illegal activity. Instead, he was tempted back into work. He let the comradery and the instant gratification outweigh the right decision to let someone else take over as CEO. This ended up costing him greatly – everything.

Outside of illegal situations, the Wolf on Wall Street offers important lessons about being aware of your role in your company. Sometimes, the best choice is to take a step back. This could be due to personality clashes or you not being the right fit for the role any longer. It is difficult to have that self-awareness. Doing so, though, will leave you and your company better off. 

6. A competitive or intense company culture has pros and cons.

On one side, Belfort’s employees worked extremely hard due to Stratton Oakmont’s culture. This effort led to high output and a high standard of work.

On the other hand, people made moral sacrifices for achievement. They did illegal things and acted immorally. Belfort did not realize what was going to emerge from the culture that he was trying to create. This made for a toxic situation.

When there is such a high degree of intensity, especially with money involved, people can make poor decisions. Therefore, when thinking about company culture, there is an important balance to try and strike.

7. Take life a little less seriously.

The Wolf on Wall Street is a refresher course on how not to take life too seriously. Belfort and Stratton Oakmont made so many crazy decisions. While they paid the consequences for those choices, and this is by no means worthwhile, they also had a ton of fun.

Running a company is extremely challenging. Therefore, it is crucial to enjoy the journey. Constant stress just makes it more difficult.

We all know and understand that we don’t need illegal activity to put mechanisms in place that allow for more fun and enjoyment at work.

10 Business lessons

1) Get a great business MENTOR

At the beginning of the film when Jordan gets a job in a investment brokerage, he is mentored by Mark Hanna (played by Matthew McConaughey). These two characters have a lunch during which Mark explains the keys to success on Wall Street and the world of stocks.

That talk inspires Jordan to embrace the true essence of what success means on Wall Street. If you want to be really successful in business, you need a mentor who has been there and done that. Mentors can teach you about the pit falls and traps that you would otherwise have to learn the hard way. They can also help reduce the time it takes you to success.

It is easier said than done – getting the right mentor, though. People in the business world rarely ever mentor others – either because they do not want others to succeed or are afraid of giving away their secrets, lest their mystery and aura diminish. The trend is changing these days and more and more successful entrepreneurs are coming forward to share their wisdom. However it is hard to distinguish between the fake mentors (who are pretending to mentor to gain more exposure or traction) and the ones that really and genuinely want to share their insights.

Some good places to look for, engage with and connect to mentors are Quora.com and LinkedIn. Don’t be shy. After you identify the one you think would be the right mentor for you, reach out to them and let them know you want to be their padawan. Think long term and treat them with respect.

2) Put together a LOYAL team

After the 1987 stock market crash, Jordan is back on the streets, so to speak, and is looking for his next job. He then finds a job at a penny stock brokerage. He excels there too and after a little while decides to open a company. At this stage, he starts recruiting a team of misfits from his friends circle, starting with Donnie Azoff (played by funny Jonah Hill). They do have some selling skills but Jordan trains them to be killer salesmen.

The traditional way of putting together a team is to find the best talent out there and hire them. That could be difficult at the best of times and impossible most often than not. Believe me, I have had that challenge in almost every business that I launched.

Entrepreneurial ventures and most businesses can not take off and be successful with out a team of people who are committed to the cause and give it all. Putting together a team that is more loyal than they are talented could be the key in situations like that. Loyalty and commitment can make up for any shortcomings in terms of talent or skill – of course only if you have the talent to train and motivate the team to excel at what you want them to excel at and the team has the potential and interest.

3) Have a solid PROCESS

Jordan creates a script that he trains his team on which leads to the tremendous success that the company enjoys in such a short time. He takes a bunch of ordinary people and turns them into killer sales people with the help of his script.

Having a process and fine turning that periodically is a great recipe for success in any business. Most often you find business owners not really spending time and effort writing down their business processes. This is because they may believe they know the process and the business so well that they do not need to write any thing down.

But the advantage of writing down a “script” of your business process or sales pitch or rules of engagement with your customers is that you can periodically evaluate the effectiveness of that process and then think of ways of improving or fine tuning that process.

The Japanese have a term for this – Kaisen. It is a process of making small but regular changes to a process which leads to big improvements to the overall flow.

When was the last time you thought about your sales process. “Every day!”, I hear you say. But have you really thought about it? Have you analyzed it precisely? Writing it down will make it easy for you to analyze the process and this in turn will help you make improvements to it.

4) MOTIVATE Your Team to do great things

The biggest factor to the success of Jordan and his company was the ever growing hoards of passionate and loyal brokers who made the millions for him and his company. However, it is Jordan’s extraordinary talent of motivating and training people that actually made that possible.

Spend time and effort learning how to motivate people. Read books on coaching, NLP, training and sales. Be obsessed with figuring out how to motive your team and employees. Spend time understanding your team and their psyches. Understand what makes them tick and then come up with rewards that would motivate them.

Organize a team outing once a month or two months or whatever. Spend some money and organize a nice lunch or party. Spend time thinking about and coming up with a brief speech that would motivate and energize your team. Let them know your passion for the company. Treat them like family and do it with your heart.

5) Let your team and employees be FREE

There are several scenes in the movie where the staff engage in over the top behavior including taking drugs and having sex in the office. Jordan seems to be ok with that. But when one of the employees cleans his fish bowl just before they are ready to launch an IPO, this employee gets humiliated and then fired – even though he had completed his work and had a few minutes of spare time.

Let your team members be free to do what they feel is the best (with in the the confines of what is acceptable, ethical and your rules) in conducting their tasks. Do not micro manage them. Give them a responsibility and let them free to do what is necessary to achieve the result.

I can imagine you shaking your head at this and thinking that could be a recipe for disaster. But you would be surprised. Of course I am not condoning drug usage and sex in the office but I am sure you get my point.

Ben Parker tells Peter “With great power comes great responsibility”. When people are given ownership of tasks, they strive to do good by them and achieve success. It is usually when people are micromanaged that they tend to perform poorly and some times even act against the common cause.

6) Hold Your NERVE LIKE A WOLF

One of the pivotal moments in the movie is when Jordan learns that an FBI agent is very keen on his trail and against the advice of his confederates contacts the agent. There is a scene when Jordan invites the investigating FBI agent (played by Kyle Chandler) on to his yacht to try and bribe him. He did it because he could not hold his nerve and wait it out.

In business, you need to learn to hold your nerve. When negotiating deals, contracts, quotes or with vendors, most business owners tend to lose their nerve and become afraid and act hastily. They succumb to pressure and offer discounts. They are afraid of losing the sale and hence take up clients that are not the right fit for them.

You have to think of the other party to be in the same boat. It is very rare that the one you are negotiating with is in control of them selves and know what they are doing. You need to spend time training yourself to be able to hold your ground and walk away if required. Think long term. Yes, we all have bills to pay and when sales are hard to come by, it is only natural to scoop up any crumbs that fall your way.

But RESIST the temptation. Look at the root causes of why you are not getting sales. Which aspect of your business is the bottle neck? You may have a great product or service but do people know about it? If you depend on the search engines, then educate yourself to rank better. Look at where your leads come from and focus your efforts on understanding why they are not coming.

That one single act of haste by Jordan starts the downfall of his empire. Read The Art Of War by Sun Tzu and The Prince by Niccolò Machiavelli to understand these aspects of business.

7) Listen to your ADVICE Counsel

When things were becoming hot and it was more and more likely that Jodan would get into really hot water with the FBI, his Dad and attorney sit him down and talk to him about walking away and protecting himself. Jordan agrees and then arranges for a meeting of his employees to announce his departure. Mid way through his speech, his ego kicks in and he with draws his announcement and he is back in the game!

You should surround yourself with people who can give you sound and impartial advice. You should then evaluate and listen to their advice if it makes sense. Letting your ego run amuck will lead to trouble for your business.

To translate that into a typical business scenario, a few years ago, one of my businesses was at a cross roads and I was advised by my trusted advisors to start shifting into a stance that was being taken by the top dogs in that field. However, my ego got the better of me and I stuck to my guns believing that my sense of ethics were superior to those big competitors and that I did not want to go down that path.

That decision nearly cost me my company. Had I taken the advice and acted on it, my company would have been wildly successful.

8) Take ACTION

What we see in every frame of the movie is that Jordon is taking action and he is empowering people to take action. Of course most of the action was towards a negative sphere but the principle is important.

Watch you industry like hawk. Watch your competitors. I was blind to my competitors, was late to take action and almost lost my business. Be sharp and have your finger on the pulse of your industry and your target market. If you sense that tastes or needs are changing, then MOVE!

Do not be complacent just because “business is doing ok” and you do not want “fix what is not broken” etc. Complacency will wipe out a business when the tides come in. Being average in business means death to your company! And averageness usually comes from no taking the right action at the right time.

Of course to know when to take the right action, having a business mentor, as mentioned in point #1 above, would greatly help.

9) Build a CULTURE

Although the culture that Jordan built in his company involved drugs, hookers and madness, it does illustrate the point that the culture of your company is one of the most important contributing factors for success.

Build a culture in your company that fosters loyalty, innovation, happiness, brotherhood and a sense of working towards a common goal. Your company culture – even if it is just you and your wife running the business, would have a tremendous impact on the growth and success of your business. Be brutal and trim away any one that creates a negative aura or taints the culture. Let the company culture be the focus and profits and success will follow.Do not confuse “caution” with “negativity”. You need caution but negativity will kill your company culture and lead to the death of the company itself.

10) Be ETHICAL

The one single thread through out the film is how Jordan and his band of merry men push the limits of ethics and use their talent and gifts to scam people and the system which ultimately leads to Jordan to jail.

When I started writing this post, I did not want to include the ethical aspects of the file and the moral dilemmas. I felt that if the readers thought I was advocating the unethical and immoral aspects of the life of Jordan as depicted by the film, then so be it, because I am sure anyone with a little bit of intelligence would see that I was trying to exhale the virtues of the film and translate them to business principles.

But as I completed the post, I realized that ethics play an important part of being a successful business and that with out having a strong moral compass, success would not be long lasting and would not mean much. Loss of ethics does not happen over night. It happens in small steps. Each time you step over the line just a step into the dark side and then step back, you move the line a little. Doing this several times can lead to you doing things you never thought you would and lose all perspective of morality and ethics.

If you have not yet watched The Wolf Of Wall Street, I would suggest you go watch it and then come back to read this post because it is full of spoilers and you will enjoy it more once you know what I am talking about!

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