Clever Geek Handbook
12 December 2025

Selling to the Government

Recommendation

The business that government entities in the United States transact represents almost half the nation’s GDP. The breadth and depth of the business-to-government (B2G) sector is extraordinary: trillions of dollars in sales to every government entity imaginable, including nearly 20,000 municipalities, 512 Native American nations and one huge federal government. Selling to the government can be confusing. Expert B2G consultant Mark Amtower offers a comprehensive glossary of government terms and an in-depth list of trade publications, industry associations and helpful online resources. BooksInShort recommends his useful guide to anyone who wants to take the mystery out of selling to the US government and win a share of that enormous market.

Take-Aways

  • United States government agencies – local, state and federal – comprise the biggest market in the world.
  • But selling to the government can be far more challenging than selling to other firms.
  • However, small businesses have a decided advantage when selling to government.
  • Begin a business-to-government (B2G) marketing approach by first targeting one or two government agencies.
  • Focus on a single, specialized niche area.
  • To succeed, read up on government procedures and how those affect purchasing.
  • Numerous publications, associations, websites and experts provide the data you need.
  • Selling in the B2G market requires hard work and persistence.
  • Don’t expect to make your first B2G sale until you’ve spent one to two years at it.
  • Work with a company or a consultant who has already mastered B2G sales.

Summary

The Government: Your Number One Market

Government in the United States, including federal, state and local institutions, departments and agencies, represents the world’s largest aggregate market, with 88,095 different entities. Businesses that sell to government enterprises never worry about getting paid. Another benefit of serving the business-to-government (B2G) sector is that the US government wants to work with small businesses. Small firms run by women, minorities and disabled veterans enjoy an upfront advantage.

“When you are on the outside looking in, the US government market is perhaps the most intimidating market anywhere.”

Government contracting can be a gold mine for the right B2G suppliers. However, due to complex rules to follow, strict government regulations to conform to, red tape, endless forms to fill in and related complicating factors, selling to the government can be far more challenging than selling in the business-to-business (B2B) market. What is perfectly acceptable in B2B can be anathema in B2G. When you sell to the government, you risk getting burned if you do not know exactly what to do, and the incident that can bury you often comes out of left field.

“In good or bad economic times, hundreds of companies look to enter the government market every week.”

To illustrate, a communication-devices manufacturing firm went through the required steps, filled out the needed forms and won a government contract that put one of its high-tech products in Air Force One, the US president’s plane. The firm distributed a press release proudly announcing the sale. Within days, government employees removed the company’s device from the plane. Government forbade a practice that would have been acceptable in the commercial world.

“Most government procurements of any significant value require you to write a proposal, and proposals are often several hundred pages long and must be written in a week.”

A company that targets the B2B and B2G markets sent a beautifully produced brochure and other marketing materials in oversized direct-mail packages to federal Chief Information Officers (CIOs) in the Washington, D.C., area. The company adapted its B2B marketing materials to the B2G market, using the correct government terminology and phrasing. But the company did not know that – due to the past anthrax-by-mail problem – all large mailers sent to headquarters of federal agencies must pass through a special office for irradiation. After irradiation, the company’s magnificent brochures resembled papier-mâché.

“Both [political] parties have claimed to be the friend of small business, but when it comes to government contracting, it is all lip service, regardless of the party in power.”

Another firm put in two years of work before it won its first government contract. It worked hard to meet all the contract terms. Nevertheless, the company could not get any of its invoices paid. When the firm contacted government contracts expert Courtney Fairchild, she discovered that the firm was submitting conventional invoices, which the government office simply ignored. Once Fairchild showed the firm how to submit proper billing forms, the company received its payment.

“Government purchasing regulations are complex, written in gov-speak and often require a lawyer for practical translation.”

The B2G market is impressive and intimidating, but the learning curve takes time and effort with no shortcuts or guarantees. Many would-be vendors learn this the hard way. Some common myths about doing business with the government include:

  • “The government market is too big” – The government represents an aggregate of different markets. Find your niche, and you’ll thrive.
  • “Government contracts are wired” – Government has become especially transparent, but contacts do make a difference, as in every other sort of sales.
  • “The government demands the lowest price, and we can’t afford that” – Government agencies strive for the cheapest prices, and you might win a contract with a low bid that proves unprofitable. However, smart operators do well in B2G.
  • “We have a great product” – Governments only buy proven, saleable commodities.
  • “The government has set-asides for small businesses, so we’re bound to find easy work” – Without quality offerings, no government purchasing agent will care that you meet special requirements for small business, such as being a veteran-, minority- or woman-owned company.

The Right Knowledge

Start by researching the B2G market. The more information you possess, the more successful you will be. The Federal Procurement Data System (www.fpds.gov/fpdsng_cms) is a great place to start your research. Additionally, useful publications include Washington Technology, Federal Computer Week, Government Executive, Computer News, Public Manager, Governing, Government Product News, Government Procurement, American City and County, Government Security and Government Fleet.

“Fads, even trends, outside the government market should not be used as building blocks for penetrating the government market.”

According to government small business officers (government liaisons and advocates for small businesses), most companies seeking to sell to the government do not possess even the most basic knowledge about the agencies they target. Before you try to sell to a government agency, learn everything you can about it. Make sure that your commercial offering represents a good fit for the unit you target.

“Companies entering the government market with high expectations of quick money often end up as chalk outlines on the sidewalk.”

Some worthwhile associations that offer helpful B2G information and contacts are the Armed Forces Communications and Electronics Association (AFCEA), the American Council for Technology and its Industry Advisory Council (ACT/IAC), TechAmerica, the Professional Services Council, the American Small Business Council (ASBC), the International Facilities Management Association, and Women in Technology. Minority-owned firms can consult the National Minority Business Council and the US Hispanic Chamber of Commerce.

“It seems as though GSA lawyers operate in an intellectual vacuum when it comes to understanding how business occurs.”

You can conduct research through Onvia and through Penton Media’s GovPro Group. Visit “Acquisition Central” at acquisition.gov to stay on top of all Federal Acquisition Regulations (FAR). Attend industry events to develop contacts and knowledge, with the GSA Expo first on your list. Learn about special Department of Defense buying regulations (D-FAR), as well as “lines of business” that “integrate common IT and e-gov-related practices across all agencies into a single standard” from the Office of Management and Budget (OMB).

“The oversight in federal contracting is onerous, duplicative and irritating, not to mention expensive.”

For networking, join LinkedIn, the online network for businesspeople. Other worthy networks include GovLoop and The Federal Contactor Network (TFCN). When it comes to B2G research and marketing, target two government agencies, two medium-sized businesses and two prime contractors. Study what and how the agencies buy and what and how the businesses and prime contractors sell.

How Government Purchasing Works

The US General Services Administration furnishes the SmartPay card to 277,000 federal government employees for their purchases. Any purchase of less than $3,000 – called a “micropurchase” – does not require competitive bidding or a contract. Wise companies print the IMPAC logo (International Merchant Purchase Authorization Card, which preceded the SmartPay card) on their print and online marketing materials. In 2009, government employees made some $30 billion in purchases via SmartBuy.

“Anything you are trying to get started in the government market requires a lot of time. The government never moves at your pace.”

The best-known government purchasing method concerns GSA Schedules (popularly known as “having a GSA number”). The GSA Schedule represents an “indefinite-delivery, indefinite-quantity (IDIQ) contract.” Translation: Any governmental agency can purchase from a GSA Schedule, or not, as it prefers. GSA Schedules sort preapproved products and services with prenegotiated prices into more than 40 categories. Merely attaining a GSA Schedule slot provides no guarantee of a sale. It’s a first step. By the second year, you must register a minimum of $25,000 in sales to the government annually to maintain your GSA-Schedule status. GSA Schedules represent more than one-third of all US government procurements, but account for less than one dollar in 10 that the federal government spends annually. Other purchase methods include:

  • “Simplified acquisition procedures (SAP)” – These processes apply to government purchases of more than $3,000 but less than $100,000. Such sales are easier to close than sales valued at more than $100,000 because the documentation is less complicated and acceptance does not require senior level approval.
  • “Sealed bidding” – The government puts out “invitations for bid” (IFB) that precisely detail the specifications for the desired product or service. Most contract awards are made on a price basis to the lowest bidder.
  • “Contract negotiations” – Negotiations are involved in government contracts valued at $100,000 or more, or that are technical in nature. These often involve “requests for proposals” (RFPs). The government uses a “request for quotation” (RFQ) to find out what products or services are available.
  • “Consolidated purchasing programs” – These represent “acquisition vehicles” that buy commonly used goods for a number of agencies. Also known as “multiple award contracts” (MACs), these agreements consolidate purchases to establish economies of scale with fewer vendors.

Set-Asides

These contracts are specifically reserved for small businesses that qualify according to criteria posted at sba.gov. First priority goes to HUBZone companies (those in “historically underutilized business zones”), followed by small businesses whose owners are service-disabled veterans. Next up are 8(a) companies, owned by “socially and economically disadvantaged” people. The government issues requests for information (RFIs) for such set-asides. If the response is inadequate, the government opens up procurement without restrictions.

“When Uncle Sam outlines the rules, it is best to stay inside the boundaries.”

Check out the Federal Business Opportunities website at fbo.com to monitor set-asides and to obtain other useful information. Another valuable information source is setasidealert.com. To learn about available federal-level contracts, sit in on “contract briefings.” Consult the GovPro Buyers’ Guide (govpro.com) as well as FedBizOpps and BidNet. Procurement technical assistance centers can help you secure government contracts. To access them online, go to aptac-us.org/new/Govt_Contracting/find.php.

Selling to the Government

The four primary ways to sell to the government are as an “open market vendor” (non-contract Smart Card sales), a “prime contractor” (a business or individual with a “prime agency contract”), “a subcontractor” or through GSA Schedule sales. Be prepared to spend time on marketing, since government sales success takes time. To shorten the sales cycle, associate with a third-party firm that specializes in government business.

“The government uses its own language...If you don’t speak it, you will have a much harder time entering the market.”

Classify and register your firm with the Dun & Bradstreet database. Register your business at the Central Contractor Registration website (ccr.gov), then bid on federal contracts. Designate an individual or team within your firm to become expert in and run your government marketing and sales efforts. Learn how to subcontract, an essential skill in the B2G marketplace.

“The US government specification describing a chocolate-chip cookie contains 25,600 words.” (Mike Tucker, president, George W. Allen Company)

Secure the assistance of professionals who specialize in B2G, including a lawyer, an accountant and a consultant. Hire business development (BD) professionals who can network and help you locate and secure contracts. You also can operate through manufacturers’ reps or resellers who have established relationships with government buyers. Make sure your marketing and salespeople have the knowledge, skills and crucial contacts to operate successfully in the B2G market. Create a website that attracts government buyers. Have downloadable PDFs available for all products and list the contracts for each item.

“About 90% or more of the companies that try to enter the government market fail.”

Find a niche area – the more distinctive and segmented the better – and differentiate your business so it can become a “Government Market Master,” a company that knows and understands all aspects of the byzantine world of selling to the government. Learn what government buyers in your market segment want simply by asking them. Focus your activities accordingly.

About the Author

Marc Amtower is the founder of Amtower & Company, a B2G advisory firm, and he writes a monthly column on government contracting for WashingtonTechnology.com.

Read summary...
Selling to the Government

Book Selling to the Government

What It Takes to Compete and Win in the World's Largest Market

Wiley,
 


12 December 2025

The Business of Investment Banking

Recommendation

What exactly do the Masters of the Universe do between weekends at their Hamptons estates? While most of us have a vague idea of what investment banking is, businesspeople need a clear understanding of what goes on behind the Wall Street curtain. This book pulls that curtain aside with a systematic explanation of the businesses, strategies and tools of the major investment banks. Parental advisory: The book features a technically complex subject being addressed by a professor in finance. Some colorful anecdotes or engaging examples might have lightened the mood, but this isn’t exactly Oprah territory here, and BooksInShort heartily recommends this solid book. Writing with expertise, Thomas Liaw breaks down the current business of investment banking and examines the changes that are blending the profession with commercial banking and insurance, a process that could reduce the Masters to mere mortal servants of global financial services supermarkets.

Take-Aways

  • Legislation has blurred the lines between commercial and investment banking.
  • Demand for one-source financial services has given rise to multiple-service firms.
  • Investment banking is moving toward one-stop shopping and globalization.
  • The trend toward one-stop shopping eventually will merge banking, insurance, securities and fund management into one integrated industry.
  • Investment banking’s scope now includes underwriting, private placement, mergers and acquisitions, and much more.
  • The investment banking community derives tremendous income from M&A – a bank may get only 1% of the transactions, but the deals are gargantuan.
  • Going public can cost 10% of the funds raised, mostly going to investment banks.
  • Most investment banks now run venture-capital arms, which manage funds, sell companies and take companies public.
  • Investment bankers revolutionized finance with asset securitization.
  • Investment banks are rushing into money management, which provides a steady revenue stream that helps offset the volatility of their other businesses.

Summary

Render Unto Caesar...

The first private equity investor may have been one Marcus Licinius Crassus, a Roman in the time of Julius Caesar. When a dwelling caught fire, Crassus dispatched his agents and firefighters. If they believed the building was worth saving, they offered to buy it at a substantial discount. If the owner accepted, they worked to save the building. If the owner declined, they let it burn to the ground. Clearly, they discovered one sure way to find a motivated seller.

Banking on Investment

Today, thankfully, methodologies have evolved, but investors are still motivated by the same thing that drove Crassus: profits. It’s hard to imagine today’s business world without venture capital, mergers and acquisitions, underwriting, financing, trading and fund management. These vital activities all involve investment banking. As global markets and financial services have grown more integrated, competition has sharpened among investment bankers.

“The lines are blurring between banking and brokerage and between money management and money lending.”

Today’s investment bankers offer one-stop financial services shopping for their clients and provide a major source of revenue for Wall Street firms. The line between commercial and investment banking has blurred, as clients increasingly look for one source that can provide all their lending needs. Since major Wall Street firms all operate in at least one overseas market, international securities activities have grown as well.

“Financial engineering is the investment banker’s creativity successfully put into practice.”

Investment banking firms also provide:

  • Venture capital (VC) – Most investment banks today have venture capital divisions, which typically provide capital and strategic guidance to new companies that may be growing rapidly, but are not yet large enough to gain access to public equity markets. These VC enterprises manage funds, sell companies and take companies public.
  • Securities underwriting – Investment bankers help bring securities to the public market. All major Wall Street firms actively seek fixed-income underwriting opportunities. Investment banks also participate in the government securities market.
  • Asset securitization – This refers to selling securities that are backed by the cash flows from a pool of financial assets, and it has meant a dramatic change in the way businesses are financed. This process began with mortgage pass-throughs, and then moved on to other types of assets. One recent addition to asset-backed securities is collateralized bond obligations, which convert junk bonds to investment-grade instruments.
  • Trading – Many investment banks commit a lot of capital to proprietary trading.
  • Financial engineering – Investment banks use different engineering techniques to match borrowers’ needs with investors, including hedging, funding, arbitrage, yield enhancement and tax initiatives.
  • Money management – When Wall Street firms added fund management operations, they gained a revenue stream that is less cyclical than trading, underwriting, mergers or acquisitions.
  • Clearing and settlement – Clearing is the business of processing a trade and establishing what the two trading parties owe each other. Settlement is the actual transfer of cash and securities that completes the deal.

Venturing to Obtain Capital

Many people don’t understand that a venture capital investment is only recouped when the portfolio company either goes public or sells out to another corporation. Typically, a VC fund’s general partner receives 20% of the profits, and the limited partners receive 80%.

“As global markets have become more integrated, Wall Street firms have moved to establish a local presence in major financial markets around the world and to enhance this presence with broad cross-border capabilities.”

The VC fund has four life-stages:

  • Fundraising – A general partner may spend a year getting investors and raising capital.
  • Investment – When a company has passed muster to receive venture capital, it becomes a portfolio company, a phase that will last from three to seven years.
  • Growth stage – During this prolonged period, the venture capitalist works with the entrepreneur to help the company grow.
  • Exit – A VC firm can liquidate its position in a company by taking it public, by selling the portfolio company to a larger organization, or by going into bankruptcy. The VC firm expects an excellent return on its investment, somewhere in the 20% to 50% range. The bull markets skyrocketed venture capital firms’ returns to 50% in 1995, and higher than 40% in ’96 and ’97. In ’96, the venture capital market funded almost 1,700 firms with a total of $10 billion.

Mergers and Acquisitions

The three types of buyers who purchase companies are strategists, financiers and consolidators:

  • Strategic buyers seek companies that will give them a competitive edge, such as geographic reach, an expanded customer base, or a better market share.
  • A financial player, say a wealthy individual or the investment arm of a financial institution, seeks return on investment.
  • The consolidator accumulates or organizes businesses in industries that once were characterized by independent, mom-and-pop shops.
“A growing number of clients prefer to deal with a single financial advisor for all capital needs. Thus, many investment and commercial banks see the need to combine talents.”

Whatever the reason for buying, mergers and acquisitions are a huge business – $1.719 trillion dollars during the 1980s, when investment bankers earned billions in M&A fees.

M&A Fees

While an investment bank’s fees on a big merger deal are usually negotiable, the most common fee scale is the Lehman 5-4-3-2-1 formula. This means that 5% is paid on the first million dollars of the sale price, 4% on the next million, 3% on the third million, 2% on the fourth million, and 1% on the amount over $4 million dollars. For large transactions, the fees are less than 1% of the deal’s value, still a tremendous amount of money.

Risk Arbitrage

If you owned 1,000 shares of stock in a company that just agreed to be acquired for $25 per share, how would you sell your securities and collect your money? After all, you wouldn’t want to sell on the public exchanges, which would simply reflect the stock’s current market price.

“Rapid advances in information technology and greater cooperation among financial regulators have led to closer links in the international capital markets.”

This is the entry cue for the risk arbitrage gurus. Risk arbitrageurs, or arbs, give shareholders a way to sell the stock at a price near the deal’s announced tender price. When the arbs step forward as the middlemen, however, they essentially take on shareholder’s risk. They naturally expect a handsome return for their exposure, because their risk is not hypothetical. For example, the arbs lost more than $1 billion following a series of failed takeover attempts involving UAL Corp. in 1989 and 1990.

The Price of Going Public

Taking a company public is very expensive. Costs vary, but can be as much as 10% on a $150 million stock issue, not including internal expenses, such as management’s time. Some costs are ongoing, like the cost of Securities and Exchange Commission (SEC) compliance.

“To maintain growth and profitability, and because the U.S. market is mature and, to some extent, over-banked, all major investment banks have expanded abroad.”

The public shell is a financing alternative. A shell is an inactive company whose securities are publicly traded. Merging into a shell, the easiest way to go public, saves time and money and obviates the need for SEC approval of the registration statement. The process is accomplished by purchasing a majority of the shell’s outstanding shares, which is usually less costly than other alternatives. Because some shell brokers have engaged in dubious practices, the SEC may close related loopholes.

Corporate Bonds

Corporate bonds – securities backed by companies, redeemable at maturity – are another source of capital. Large, high-quality borrowers use commercial paper (CP) for short-term credit. Medium term notes (MTN), another alternative, are designed to fill the gap between the short-term CP and long-term bonds. Because corporate debt securities fall under the Trust Indenture Act, a trustee is appointed to act on behalf of bondholders.

Foreign Listings on Wall Street

The advances in information technology mean that international markets are now closely linked. Foreign-based companies want to have Wall Street listings to gain access to large capital markets, while U.S. investors seek additional returns.

“The ideal market is growing rapidly and has the potential to become enormous.”

Over the next few years, U.S. investors are expected to double their non-U.S. investments. Investment abroad is generally performed via an instrument called American Depository Receipts (ADRs), created by J. P. Morgan in 1927 to allow Americans to invest in Selfridge, a British retailer.

When a U.S. institution receives a request to invest abroad, it contacts a trusted broker in the country of the company in question and issues a buy order. The securities are then deposited with the bank’s local custodian. Once the custodian’s receipt of the shares is confirmed, the U.S. depository issues the appropriate number of American Depository Receipts to the investor.

European Markets

You could say that the first Eurodollar issue dates back to the post-World War II era, when Communist countries withdrew their huge reserves of U.S. dollars from U.S. banks because they feared government seizure. Instead, they poured this money into Europe, stimulating investment-banking activity.

“The ideal product has many proprietary features that differentiate it from others offered by competing companies.”

In the late ’70s, spiraling inflation in the U.S. created another flight of capital out of U.S. banks and into European ones. Funds from OPEC oil surpluses flooded the market as well. Blue-chip multinationals turned to the Euromarkets for floating-rate loans. Today, such products include Eurobonds, Euro commercial paper and Euro medium-term notes, and Euromarkets represent an increasingly significant source of world capital.

Japanese Securities

The 1997 reforms that led to the so-called Japanese Big Bang – deregulation of Japanese commerce based on fair market and free entry principles – were expected to reshape its securities markets. The goal of the reforms was to upgrade Japan as an international market, rivaling London and New York. Today, foreign securities firms are becoming serious competitors to Japan’s "Big Three" firms.

Brady Bonds

Brady bonds are a major vehicle for investment in emerging countries. They were first issued in 1990 for Mexico and they involve the exchange of commercial bank loans into new collateralized bonds. To date, no country has defaulted on Brady bonds, which are backed by U.S. Treasury bonds. Investment in emerging markets is expected to grow.

Future Trends

The future of investment banking hinges on two major trends: globalization and one-stop shopping. Investors are trying to cross national borders to diversify and to seize new opportunities. U.S. companies are looking abroad to tap into equity markets and establish their presence overseas. Between 1990 and 1996, total U.S. underwriting of foreign companies rose from $18 billion to $76 billion.

“Venture capital investing, buyouts, mergers and acquisitions are interrelated. They are an integral part of the investment banking business.”

Eventually, banking, insurance, securities and fund management will be a single, united business. Corporate clients want their financial advisers to be able to address any need, rather than being forced to rely on multiple vendors. The lines between various financial services are blurring quickly, and the markets are rapidly becoming more integrated and global, particularly due to the rise in network information technology.

About the Author

K. Thomas Liaw  is a finance professor at St. John’s University, and operates a consulting practice in private equity and securities. He has published numerous articles and is often invited to speak about capital markets at executive business conferences. His principal areas of expertise include capital markets, trading, risk management and investment banking. His most recent book is Foreign Participation in China’s Banking and Securities Markets.

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The Business of Investment Banking

Book The Business of Investment Banking

Wiley,
 


12 December 2025

The Servant Leader

Recommendation

In 1982, Ken Blanchard, co-author of The One-Minute Manager, had a spiritual awakening and embraced Christianity, which he reports immeasurably improved his life. He and co-author Phil Hodges share their spiritual journey through teaching readers about servant leadership. They combine business, self-help and inspirational themes as they explain their approach. The biblical quotations and large text blocks can make the reading experience seem choppy, albeit worthwhile. Blanchard and Hodge’s discussion of applying faith to the work world speaks extensively of Christianity and its beliefs.

Take-Aways

  • The modern world seeks to separate the spiritual from the secular.
  • Spiritual teachings offer guidance on how to lead. 
  • For a basic leadership plan, turn to Jesus’s servant leadership principle that it is better to give than receive.
  • Fight against egoism by following the 12 Steps of EGOs Anonymous, which teach you to keep your ego from sabotaging your leadership.
  • Servant leadership’s four elements are “heart, head, hands and habits.”
  • Leadership’s primary function is serving others.
  • Servant leaders can apply the “directing, coaching, supporting” or “delegating” leadership style.
  • Servant leadership is never easy.
  • Pray for help as you commit to this difficult, yet rewarding path.

Summary

The modern world seeks to separate the spiritual from the secular.

Secular culture tends to address spiritual issues during religious services and ignore them otherwise. But people can live better lives if they are more spiritual. Each religious tradition has its ways of connecting with the divine; for Christians, this means connecting with Jesus. One way to become the best leader you can be is to follow the Bible's teachings that leadership is – before anything else – an “act of service.” Unless you serve others, you will never be a genuine leader.

Spiritual teachings offer guidance on how to lead.

People don’t always think of Jesus in terms of exemplifying leadership skills and demonstrating practices that remain relevant in today’s business world. However, Jesus had extensive experience dealing with issues similar to the ones modern managers confront routinely, including achieving goals while working with flawed peoples, identifying an unequivocal purpose, recruiting and training people to do specific tasks, dealing with those who sabotage and betray you, operating under never-ending scrutiny, avoiding egotism and abuse of power, handling criticism and opposition, and sacrificing for the common good.

For a basic leadership plan, turn to Jesus’s servant leadership principle that it is better to give than receive.

Leaders influence other people’s thoughts, actions and growth. This requires seeing things from your followers’ perspective and having the empathy to walk in their shoes. Empathy depends entirely on developing a generous heart, which is the source of real leadership.

“Servant leadership starts with a vision and ends with a servant heart that helps people live according to that vision.”

Serving others isn’t the natural way people start out in life. Most people start life serving themselves. Babies, for example, demand service from other people with every action. The mature way is to give to others selflessly, not to give merely in order to get in return. Servant leaders take service to heart, a fundamental realignment.

Fight against egoism by following the 12 Steps of EGOs Anonymous, which teach you to keep your ego from sabotaging your leadership.

Psychoanalyst Sigmund Freud taught that ego is all about putting the self first and being overly aware of the self’s desires. Instead, think of ego as an acronym for “Edging God Out” or “Exalting God Only.” To manifest this approach, focus on the present, trust a higher power, and work toward fulfilling a purpose beyond gaining status and importance.

“The journey of life is to move from a self-serving heart to a serving heart. You finally become an adult when you realize that life is about what you give, rather than what you get.”

The Bible repeatedly warns against the sin of pride or ego. To avoid destructive egotism, think about others instead of yourself. Don’t strive to be the center of attention. Prideful people and self-serving leaders can turn away from pride by drawing on the 12 steps or guidelines of EGOs Anonymous:

  1. Never let your ego sabotage your leadership. As a leader, don’t serve yourself; serve others.
  2. Understand that God can motivate you so that your thoughts and actions help you to become a servant leader.
  3. Be willing to become an “apprentice of Jesus.”
  4. Conduct an inventory of your motivation, ideas and actions.
  5. Communicate in prayer and in conversations about how you need to improve to become a better servant leader.
  6. Pray for help to address any character defects that interfere with your servant leadership.
  7. Guard against egotism, avarice, timidity and the quest for power. 
  8. Apologize to everyone you’ve injured by being an egotistical leader.
  9. Offer your amends to people, unless that action might hurt them.
  10. Face any leadership mistakes you have made.
  11. Spend time alone. Pray and study religious texts to learn to become a “servant first and a leader second.”
  12. Practice the principles of servant leadership in your daily life, and communicate them to other leaders.

Servant leadership’s four elements are “heart, head, hands and habits.”

Heart, head, hands and habits are the four essential building blocks of servant leadership. The journey to servant leadership takes both internal and external paths. Internally, you will cover the landscapes of the heart and mind. Externally, you will cover public concerns and work with those you lead. Whether they will follow your lead depends on your external actions (hands) and behaviors (habits). To maximize your organization’s productivity and to build trust and loyalty, align your heart, head, hands and habits.

“All great leaders have a specific leadership point of view that defines how they see their role and their relationships to those they seek to influence.”

Servant leadership originates in the heart and moves directly to the head (the mind) in shaping your particular viewpoint about leadership. Through this shift, servant leaders align what they think and do with their spiritual values by “doing the right thing” and “doing things right.”

“The duty of a servant leader [is] the ongoing investment of the leader’s life into the lives of those who follow.”

Leaders must be visionary and in touch with the future. Vision has three aspects. The first is your purpose and mission, which concern how your organization serves its customers. Your employees must understand and support your organization’s customer service mission. Your organization’s direction, where it will go and where it will be in the future are vital considerations.

“As a servant leader, you have to identify which changes are necessary to implement your vision and then help people move in that direction.”

The second aspect concerns how you define your future vision. Think it through wisely. Take a lesson from Walt Disney, who ranked safety at his theme parks as being more important than entertainment, courteous employees and efficient operations.

The third aspect concerns values – the moral, spiritual and practical standards that matter to you, your followers and your organization. Unfortunately, across the globe, fewer than 10% of organizations write out their values for their employees to read and understand. Values guide behavior, so failure to communicate your company’s values may leave your employees behaving contrary to your wishes. 

“Having truth-tellers in your life is important. It’s probably your greatest opportunity for growth.”

In teaching how to implement servant leadership, Jesus washed the disciples’ feet. Consider the implementation role as fulfilling your vision and mission. The implementation phase always works best when customers are at the top of the company’s hierarchy, directly served by customer-care employees whose leaders offer full support.

“Servant leaders understand that everyone needs to be heard, praised, encouraged, forgiven, accepted and guided back to the right path when they drift off course.”

Once you establish the heart and head phases of servant leadership, the hands-on phase allows your heart and head to produce “good fruit.” The hands phase includes managing transformational change and applying servant leadership principles to achieve your organizational goals and develop your employees. The hands phase calls for deploying three important “situational leadership” skills that trace back to biblical teachings on leadership:

  1. Assessment – Before you can influence employees and help them meet their goals, identify individual workers’ current levels of capability based on their commitment and their competence.
  2. Adaptability – Once you have determined each employee’s status, be flexible enough to tailor your leadership style for each individual employee. An effective leader applies the appropriate leadership style from his or her repertoire of techniques.
  3. Partnership– The leader is responsible for working with his or her employees in productive, efficient ways.

Leadership’s primary function is serving others.

To be an effective servant leader, Jesus built daily habits to support the spiritual mission of serving others. Servant leaders can follow this example by developing five rigorous disciplines:

  1. Being alone – Solitude can be an opportunity for spiritual renewal. Think of your solitude as spending time with a higher power.
  2. Praying – You communicate with the divine through prayer. Make prayer your default option when you face difficult challenges. Besides prayer, consider studying, meditating and fasting. Prayer makes you stronger spiritually and builds your personality. Don’t force prayer. Have easy conversations with your higher power.
  3. Studying scripture – Reading holy writings helps you with current and future challenges. The best way to apply scripture is to memorize it. You can renew your mind – and your entire self – through devotional readings and contemplation of the lessons this process provides. 
  4. Feeling that God loves you – Those who experience this sense of heavenly love find they can move ahead in life with confidence, trusting that things will work out as they should. Demonstrate the same unconditional love for those around you.
  5. Building strong relationships – Create beneficial relationships with objective people you trust to speak honestly without fear. Be vulnerable to their counsel. When you open yourself and graciously accept feedback, you grow in many ways.

Servant leaders can apply the “directing, coaching, supporting” or “delegating” leadership style.

Leaders can chose among four different leadership styles. The directing style involves giving detailed directions on specific roles and goals. The leader using this style closely monitors each person’s work activities. When applying the coaching style, the leader carefully explains to employees precisely what they must do to succeed with their responsibilities. Using the supporting style, the leader supports staff members while providing minimal direction. To embrace the delegating style, a leader emphasizes independence, provides employees with everything they need to do their jobs and delegates the work to them.

Servant leadership is never easy.

Being a servant leader can change your life, but don’t expect learning to practice servant leadership to be effortless. Your life is already full, and you are adding to your responsibilities and challenges by setting yourself the mission of incorporating servant leadership into your life – which could be a major, disruptive change.

Pray for help as you commit to this difficult, yet rewarding path.

Share your commitment to use the lessons of servant leadership as your basic leadership plan in conversations with someone you respect and trust. Develop a game plan to incorporate servant leadership into your life by taking several action steps:

  1. Review the touchstones of servant leadership, particularly those that involve behavioral change on your part.
  2. Share what you have learned with people you lead. You don’t do leadership “to people.” You do it “with people.”
  3. To manage your transformation into a servant leader, develop habits modeled on the life of Jesus. Leave time for solitude, prayer and scriptural study.

As you move forward, follow this checklist of servant leader essentials:

  • Create a personal mission statement.
  • Incorporate faith as the core of your plan for personal success. 
  • Operate according to biblical values.
  • Keep a journal to record your problems, conquests and lessons learned. 
  • Consult with reliable truth-tellers to help you stay on course.
  • Turn to inspirational writings for support when you need help.

About the Authors

Ken Blanchard, PhD, is co-founder and chief spiritual officer of the Ken Blanchard Companies and co-founder, with Phil Hodges, of The Center for FaithWalk Leadership, which does business as Lead Like Jesus. Blanchard co-authored The One-Minute Manager with Spencer Johnson.

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The Servant Leader

Book The Servant Leader

Transforming Your Heart, Head, Hands & Habits

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