Blog | Entrepreneurship

Why Corporate Culture Will Never Build a Great Business

Lessons on building great companies from the military’s focus on on spiritual and executive leadership

The world is growing more and more unpredictable and unstable. Global pandemics, political unrest, the divide between the rich and the poor, geopolitical unrest, high inflation, and more—these are all serving to set the stage for what could be massive upheavals in economies and nations.

When the world’s economy is in trouble like it is today, it needs leaders to step up and start great businesses that create great jobs. In short, the world needs entrepreneurs. The world needs entrepreneurs because only real entrepreneurs can create real and sustainable jobs and real, lasting prosperity.

Governments cannot create real jobs. When our government creates jobs our taxes increase. When taxes increase, life becomes more expensive, people suffer, our economy suffers, and our country grows weaker. When entrepreneurs create jobs, those jobs generate taxes, our debt goes down, we export, and our country grows stronger.

The importance of spiritual leadership

When starting a business, you must decide what kind of leader you are and what kind of leader you want to be. The best leaders I know operate on both an executive and spiritual level and know the power of words.

Entering the corporate world in 1974 was quite a shock. I had been in a military environment for nine years: four at the Academy and five in the Marine Corps. It took me about a year to comprehend the difference between the corporate environment and the military environment—as well as the differences in leadership styles.

When I left the military and joined the corporate world, I was shocked to hear people repeatedly saying, “I can’t.” And “I might.” They used words like “I’ll try” and “I might” or “I hope”. Those words are forbidden in the Marine Corps. Those words are forbidden in the Rich Dad offices too.

Words are powerful. They can build your spirit or they can destroy your spirit.

In the military, the words leaders speak are spiritual words, coming from the heart and originating in their souls. Military education begins by teaching everyone to speak spiritual words, words like mission, courage, duty, honor, service, and code.

People who speak words that come from their souls inspire their spirit and become great warriors, entrepreneurs, and leaders in all walks of life.

Now, there are leaders who lead via intimidation and leaders who lead by inspiration. A leader who intimidates his or her followers makes them smaller in experience, in intellect and in spirit. Hitler is the perfect example of such a leader.

A leader who inspires, educates and grows his or her followers until they become leaders themselves. I think of the Dalai Lama, Gandhi, Martin Luther King Jr. and so many more.

The shortfalls of corporate culture

As mentioned earlier, I found moving from the military into corporate culture to be a huge challenge. Most people are surprised to learn that the corporate environment is much more rigid. This is because the corporate world does not set out to create leaders who can think under pressure. Corporate environments want to create robots who will simply follow, no matter what the situation.

Perhaps the biggest shortfall for corporate culture is that they do not really know how to train great leaders. There are many programs they try to put in place, but for the most part, they fail at this miserably. If you have a great leader as an employee, it’s often despite the corporate culture…not because of it.

The military, on the other hand, is a leadership factory. One man or woman cannot guide all the many facets of a military organization. Instead, the military creates great leaders and then trusts those leaders to do what is best for the mission.

Imagine the power of your business if you focused on creating leaders rather than robots.

Hiring vs. growing executive leadership

Another difference between corporate culture and the military is that in the military, executive leadership is internal. In the corporate world, it is almost always external.

In the military, a culture of leadership begins when a new recruit enters boot camp, or a future officer enters officer candidate school or a service academy. The military culture is infused into each person, morning and night, whether an enlisted man or woman or an officer candidate. If the new recruit does not fit into the culture, they are washed out.

When the military promotes new leaders, they come from within, not from the outside. They come from the ranks. In other words, the Marine Corps would never have a Commandant who was not a Marine. This is possible because the military has an active interest in creating and growing leaders.

In the corporate world, leadership often comes from the outside. A new employee is given a brief interview, shown to their desk, and expected to do the job. When a new CEO is hired in the corporate world, they are often hired from the outside rather than promoted from within. Rarely have they been infused with the culture of the organization they are expected to lead. In many cases, the only thing the leaders and the employees have in common is that they all work for the same company.

Building a better culture than corporate culture

Today, as an entrepreneur running my own businesses, I focus on internal leadership. For example, because The Rich Dad Company is an education company, we have a culture that respects education and learning. Every week, the entire company reads, studies, and discusses articles or subjects that keeps us in touch, up to date, and aware of financial events affecting our customers, our families, and our world.

Some of the subjects we study include real estate versus stocks, Keynesian economics, the gold standard versus paper money, taxes, and financial panics. Bottom line: The Rich Dad Company practices what it preaches and what it teaches to those we serve.

You have no idea how difficult this simple cultural event— making and taking time for everyone in The Rich Dad Company to be students—can be. We are, after all, an education company… and that is the culture that must be instilled and supported. But it takes a great deal of time and effort to put this culture into place.

Unfortunately, as The Rich Dad Company grew, I became guilty of forgetting this lesson on leadership. I hired outside people to come in and lead our company.

These outside leaders did not value the culture of creating leaders. They would hold meetings only to tell people what to do. There was no education, no learning, and very little two-way communication. It was leadership from the outside, not from the inside and it was a disaster. Those leaders were asked to change, or leave.

Great executive and spiritual leadership takes education

If you have served in the military, you know that the military branches are educational organizations. Everyone, from enlisted men and women to senior officers, are constantly learning. The military is a culture of education—from day one.

This is not true in most corporate cultures. I remember being disgusted when I went to corporate “educational” events where people came to party or play golf rather than learn.

To become a successful entrepreneur, I strongly suggest you take the military’s culture of constant education and constant training to heart and instill that culture in your business. It may take awhile, since most civilians without military experience may have gone to school, but most have not worked in a culture of constant education and training.

If you can instill this culture inside your company, your company will be led from the inside by the people who actually make the business run, not executives who lead from the outside.

That’s why I wrote 8 Military Lessons in Leadership for Entrepreneurs. What makes this book different from other books for aspiring entrepreneurs is that it focuses on core strengths and leadership skills… because all entrepreneurs must be leaders.