There is general agreement that Jordan Belfort, whose life is depicted as the leading character in "The Wolf of Wall Street", is not a good role model – he revels in his drug addiction, throws dwarves to amuse his staff, and treats almost all the women he meets as commodities to be traded for favours or rewards.
In addition, his business model is based on persuading investors to buy stocks that have little or no chance of delivering any return whilst providing him and his colleagues with a very healthy commission based income.
The film has likely dramatised many aspects of Belfort’s experiences, but he has stated that the film accurately reflects the key moments and general trends of his life. So what, if anything, can this fellow tell the wider business community about how to manage and lead an organisation? Is there any good to learn from amongst the bad? We think there might be four lessons that all good business leaders could learn although, of course, they should be deployed in a more normal business environment.
1.Hire the right people
When he first set up on his own, Belfort hired a small group of like-minded individuals to help him run his new brokerage. He put each of them through a simple test - he got them to sell him a ball-point pen (try it, it’s not so easy). His rationale was that he needed pure sales people who could sell the types of products he was selling to the kind of people who would buy them, and that was all he wanted. He didn’t, however, just look at their technical skills as he also wanted people who shared his vision for the kind of business he wanted to create.
2. Reward people appropriately
If you want people to behave in a certain way in the work place arguably the best way to do it is through reward and recognition. Most commercial businesses pay their staff some combination of salary, and both short and long-term bonus with the mix of the three generally determined by role and hierarchy. Belfort wanted quick results so his mix was focussed on short-term bonus with pay-outs, at least in the early days, made daily or as soon as a sale was completed.
Just as powerful as cash or cash based reward is recognition – the respect and admiration of your peers. It’s a powerful motivator but can’t always work on its own and is often needs to be supported with reward.
3. Share your vision with your staff
All employees should know what the purpose of their job is and how they personally can help meet the overall objectives of the business. This is not the same as sharing the business plan or the current financial position (although these are useful) but it’s the declaration of a much more personal sense of where the business is headed. It can often be simply aspirational without a defined plan and Belfort was very good at that. His regular meetings with staff were full of references to the different type of business he wanted to create and he did this with passion, energy and a sense of shared purpose.
4. Train and develop your staff
Not the sexiest lesson anyone ever learned but absolutely fundamental to a successful organisation. Very few people enter a business fully formed with all the skills they need to do their job and Belfort recognised this and responded to it. Initially, all his new sales people were trained by him before they were able to call clients on their own and all had to reach and maintain the standards that he set them. There was no formal training plan, no feedback mechanism and no ROI on training spend – Belfort understood the value of having top quality sales people who replicated the standards he set. There were no shortcuts, training was principally on the job, learning to do by doing and it worked for him. You need to know what skills and experience you want your staff to have and find the best way of providing it to them.
Don’t do most of what Belfort did or you’ll end up in jail or dead. However, the Wolf of Wall Street was a businessman who tried to run his business according to some basic principles which would work well in most commercial organisations. Pick the right lessons and you’ll be OK.