You Can Be Small, and Also Be An Industrialist

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Take the Test – Are You An Industrialist?

People think they despise Capitalists, but they’re actually angry at 21st century Industrialists. There are six major values and beliefs of the new Industrialist. You can be a new startup with no employees and get sideways out of the gate with these beliefs. Are you practicing any of the six?

Many of today’s companies, big and small, are simply Industrialists who forgot which century it is. Industrialism is not something that happened in the 1800s. It still dominates a majority of business practices today. Industrialist values can infect a business of any size. Take the test – see if you are an Industrialist.

Value #1 – Motivated to Be Big The number one value of an Industrialist is that they are more motivated by being big than by making a contribution to the world around them. They might talk about adding value, or creating and innovating, but the motivation for doing so would be – to be big. Do you want to create something that adds value to the world around you, or are you more motivated by using existing innovations simply to get big? Capitalists don’t try to be big, they try to be good. And big follows if big is what will help them be even better. If you’re driven by being big instead of being creative and innovative – even if you have no employees, you’re an Industrialist.

Value #2 – Closed Markets The famous Industrialists of the 1800s, did not believe in a Free Market. They believed in a market that would allow them, the elite, to control everything, at the cost of every other business owner’s freedom. The Industrialist’s goal was to destroy everyone else; to be the last man standing in a zero sum game of dog eat dog. Do you invite others into your industry or do you wish they’d stay out? If you’re not welcoming others in with open arms, you’re not about free markets, and you’re in Industrialist.

Value #3 – Resistance to Progress – Status Quo Industrialists are brilliant at creating efficiencies around their present product and their present position in the market. They are fanatically obsessed with squeezing the last dollar of profit out of the present market, and are very aware that the next great invention could likely destroy their power by simply refocusing the consumer on a newer, better product or service. Are you afraid somebody might come up with some new idea that could make your “legacy” system obsolete? If so, you are an Industrialist. Stop running scared and become the guy who creates what destroys your own legacy system.

Value #4 – Destroying Jobs – Industrialists get bigger by acquiring other companies, then stripping them of “redundant” people who the buyer already owns. Capitalists do it more by organic growth based on having been creative, innovative, introducing new products and adding value to their offering, which sells more product and requires that the grow and hire. Are you thinking you’ll grow your way to success by buying up other people’s creativity? If so, you’re an Industrialist. Instead, get creative and innovate your way to “Big”.

Value #5 – Be Users, Not Creators – The Cash Cow Rule
The thing Industrialists are best at is creating cash cows from other people’s inventions. They don’t look for opportunities to create, innovate and push the world forward. They look for a potential cash cow that can be controlled and spun up to great efficiencies, with bigger opportunities to dominate and be powerful. Besides using existing inventions rather than creating new ones, Industrialists also use people, local economies and resources. Are you using the innovation of others and other people to create a cash cow for yourself at the expense of the world around you? If so, you’re an Industrialist (and a really uncreative one at that).

Value #6 – Focus on the Competitor (Destroy, Mimic, or Buy)
Chris Peters, when he was head of Excel Development in the very early years wrote, “We didn’t write Excel to make money, we wrote it for the sheer joy of putting the largest computer software company out of business.” Industrialists worry a lot about what the other guy is doing, because the other guy could end up creating something that will take market share away from their fiefdom. Capitalists are so busy creating and innovating that they have very little time to worry about what the next guy is doing. Are you focused on creating something amazing for the world around you, or are you focused on mimicking, buying, or destroying the “competition”? If so, you’re an Industrialist.

Don’t fool yourself. Industrialists aren’t giant corporations, they are people who have the wrong view of the world around them. How a company starts their journey has a lot to do with their permanent DNA.

How are you starting your journey?

Six Steps To Hiring A Great Stakeholder

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…and on the seventh step, they rested.

We’re 75% of the way through the process of hiring our Chief Connecting Officer (they’re too important to be called a sales person) and only now have we asked for resumes, what we call “tombstones”. We have six things we look at, in order, and looking at the resume early on is not one of them.

People only put on their resumes what makes them look great. Resumes, like tombstones, tell you almost nothing about the real person. If we had looked at tombstones first, we would have tossed out at least five of the seven candidates remaining, maybe all seven, and never looked at them. What a tragedy that would have been. These are great people and a great fit for our business.

Six Steps To The Right Person – In Order Of Importance
Step One – Culture. We hire first for culture. That is the number one criteria. We asked people to NOT send their resume and simply answer seven culture questions.

Doing this cuts down the response “noise” by 80%. Too many are looking for a job, but not for work (the Industrial Age taught them to do this – see this blog post). Answering questions resembles work. Most will just sling fancy tombstones at lazy companies who will hire them for their nicely engraved epitaphs. That’s a nice culture match, too, because the lazy companies who don’t want to do the hard work to hire someone, end up with the lazy applicants who don’t want to work. So everybody wins.

Step Two – Talent. For this position we prize the talent of being able to “connect” with someone quickly via phone or in a personal conversation, so our first talent assessment was a 10 minute phone call to see if they could connect with us. For a different position requiring different skills, we would do a different talent test. Culture and talent are not things you can teach someone. If they have these things, that’s a great foundation.

Step Three – Skills. We’ll take a person who has the intangibles (culture/talent) and teach them the tangibles (skills). This is the step at which we finally ask for their resume, and a list of references. We find their skills from a combination of the other steps above, their resume and their references.

Step Four – References. Never hire anyone for a sales position until you’ve talked to people that have actually bought from them. That is the best way to find out if their skill set is schmoozing, glad-handing, managing sales people, account management (a cousin to sales), or actually selling stuff. Find out what their references say about why they like them, and see if it matches with why you want to hire them. Again, they might have a list of very impressive skills, but if you’re hiring for something not on their list, don’t bite.

Step Five – Experience. Most people look at the resume first and sift for those with the most experience. Bad idea. The fifth thing we hire for is experience and we just don’t give it a lot of weight. Highly experienced people can actually be less likely to learn our particular business. We don’t ding them for it, but it’s not very important to us compared to culture, talent, skills and references.

Step Six – Personal Interviews. Very important. We’ll have the final three or so do 30-45 minute interviews with everyone they will work with in any way. We’ll also ask them to attend some events, then we’ll get feedback from attendees. We’ll also probably take the last couple out for happy hour or something on separate nights to see how we all relate away from the office (we don’t separate work and play). We will likely have them meet with a few existing clients as well and get their feedback.

Never Go To Step Seven!
Can you see something missing from the list? We NEVER hire for education. It’s about as good an indicator of success as what town you were born in. We just ignore education, but if someone makes a big deal out of theirs – that’s a warning sign for us. The more they like to trumpet their education, the more we’re pretty sure they won’t do real well in the trenches where you actually get dirty and learn the good stuff by getting beat up. It also tells us they’ve probably bought off on the lie that the more education you have, the more capable you’ll be, and the more money you will be worth, etc. All fairy tales.

Does This Sound Like Too Much Work?
If this whole process sounds like too much work for you, you need to look at your own culture. You get what you intend, not what you hope for. If you hope to get a great person by doing the traditional, lazy, sit-across-the-table conversation based on a tombstone, then don’t expect to get great people on board. I personally feel the same about farming this process out to someone else to do for you. Any HR pro should have you in the process up to your teeth; it’s your culture and company, not theirs. If you take the lazy traditional approach, you’re process will attract the lazy applicants who are slinging tombstones. Good luck with that.

The good news is we’ve got seven incredible people still in the running (and even some others we dropped earlier that would be great fits elsewhere). The bad news is we’ll have to pick one. The good news is we’ll have a bunch of people to refer to others looking for great sales people.

Anybody need some great sales people? In a few weeks we’ll have some to share. We’ll only share them with companies we already know that have great cultures.

It’s Good To Be The Big

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And Big Wants To Be King.

If a bank was accused of thumbing their nose at regulators for years, systematically breaking the law and knowingly aiding terrorists, they would lose their license, right? Only if they were a small bank. The law doesn’t apply to the Bigs. If this wasn’t happening in America, you would believe these stories were coming out of some corrupt third world kleptocracy.

According to U.S. bank regulators, HSBC (the world’s second largest bank) “spent years committing serious crimes” by knowingly laundering money for terrorists and drug cartels. Regulators said these kinds of crimes should automatically have resulted in the loss of HSBC’s U.S. banking license.

But the bank will not face prosecution. A few weeks ago, Assistant Attorney General Lanny Breuer told the press, “Had the US authorities decided to press criminal charges, HSBC would almost certainly have lost its banking license in the US, the future of the institution would have been under threat and the entire banking system would have been destabilized.”

Smalls Need Not Apply (for special treatment)
But small banks live under a different judicial system. In November 2011, tiny SunFirst Bank in St. George, Utah was put out of business for connections with Internet poker. In 2012, the Feds charged miniscule Abacas bank in Brooklyn with mortgage fraud, after the banks officers themselves proactively reported suspicious activity of one of their loan officers. No bank officers were involved in the problem, and Abacus’ mortgage loans are performing 10xs better the big banks. They’ve been forced out of business by the Feds.

Big Loves Big
One of the illusions is that big business is at odds with big government and vice versa, but more often they recognize the advantage of propping each other up, for the sake of keeping both Bigs large and in charge.

In late 2008, Big Government gifted $850 billion to a very few elite, giant banks without so much as an I.O.U. Free money with no strings attached. Big government said they had to do it because big banks were holding the government and the entire country hostage by virtue of being “too big to fail”. In 2009, the National Security Agency rated our own homegrown giant businesses as our top national security threat, above terrorism.

Let The Show Begin
So the Big politicians huffed and puffed and created Dodd-Frank to ensure they would never be too big to fail again. Within 18 months, those 15 or so giant banks that had been gifted the $850 billion now had a LARGER percentage of the banking industry then before Dodd-Frank. Who did that legislation actually destroy? You guessed it, the small banks.

The Smalls Get the Shaft
A recent report shows the Bigs are buying up the Smalls in 2013 at an accelerating clip. Jim Chessen, of the American Bankers Association, said, “We have seen an avalanche of new regulations, and while the impression was that the legislation was targeted at the largest institutions, the fact is that it’s had a widespread impact on the smallest banks in the country,” Dodd-Frank is making it easier for the Bigs to get bigger by eating the Smalls, who are the roadkill being crushed by the politicians.

This isn’t about banks. GM and decades of other giant failures in many industries have been bailed out of long-term, epically bad management practices, while the Smalls are crushed by big banks and big regulations.

Don’t kid yourself. No one is looking out for Small, regardless of what form it takes. Do you believe all the noise big business makes about hating regulations? (Hint: they help write them to make sure they come out like Dodd-Frank). Or are you a fan of the noise politicians on both sides of the aisle make about loving small business and reining in the Bigs? That rhetoric plays well on the news, and politicians know that most people just don’t check in later to see how it all worked out.

What Can You Do?
1) Stop choosing sides with one or the other of the Bigs. Neither big business or big government (on either side of the aisle) has your best interests at heart.
2) Stop believing them when they say, “we love small business”. They love using it.
3) Become a “Smallist”. There are now two classes of people in America. The Bigs and the Smalls. Those are the two choices left. Which one do you choose?
4) If you choose to be a Small, start demanding that big business and big government stop colluding with each other to get and be Big at the expense of Small.

“Anyone who thinks they are too small to make a difference never went to bed with a mosquito.” Mahatma Ghandi

Your voice matters. Make a difference. Become a Smallist.