The Participation Age and the Importance of the Fourth S

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 Day 21 of 21 days with Chuck’s new book, Why Employees Are ALWAYS a Bad Idea

I sat with the African egg vendor and twenty or so others in a mud brick building with no doors or windows, just openings. The average person in the room made between $30 and $60 a month in U.S. dollars, which was more than a lot of other people there made.

We were discussing business-building principles. I had come from America with notes and handouts, but on the first day, I realized they were worthless and gave them to a small school who were thrilled because they were blank on one side.

I had rarely felt this helpless. Usually, you can just give me a business topic, wind me up, and I’ll interact with a group for as long as the beer or snacks last. Here were a couple dozen business owners waiting to hang on every word and I had nothing.

I turned to the egg vendor, explained “net profit”, and asked her how much she makes each month. We figured out it was about $2.00. I asked her what she did with it, and she said, “I take my children to get a special meal.” She was a single mom with three kids.

We then talked about freedom—that wealth is the freedom to choose what to do with your time and money. Net profit represented freedom, the ability to choose. That made her very proud to know she had $2.00 worth of freedom each month, and the other business owners started to get a little excited about the prospect that they, too, might figure out how to get some net profit. We decided right there to call net profit, “Freedom Money,” because it’s the only money in business with which you actually get to make a fully free choice. The rest of it is spoken for in one way or the other.

Then I challenged her and the rest of them to stop eating their Freedom Money and reinvest it in their business instead, so they would have even more freedom later. I drew blank stares, so everyone huddled around my laptop with a dying battery, and I built a quick spreadsheet to show what might happen if, for eighteen months, the egg vendor reinvested her $2.00 of Freedom Money into buying more eggs every month. The next month she would have $2.50 in Freedom Money. Reinvested in more eggs, the end of the third month she would have $3.50 in Freedom Money, and so on. By the end of eighteen months, she could stop reinvesting and would have $60 every month in Freedom Money after that.

I asked her if that would change some things, and she thought it might change her life. I then told her it won’t happen that way. She’ll break eggs, won’t find buyers, will have to hire someone to help, etc. Life is messy and so is business, and her Freedom Money might be $15 a month, not $60. But it would no longer be $2.00. It was a tough thing to challenge a woman not to take her kids for a special meal, but she got on board immediately.

I never saw her again, but I always assume the best, that she built up enough monthly Freedom Money to build a better life for herself and her children. The most powerful thing she got out of the time was that being an owner allowed her to make decisions. She was in charge of her future, not the world around her. I left her with a thought that has been valuable to me over the years, “Circumstances don’t make me who I am. How I respond to them, does.” She left as a proud business owner, looking forward to creating more Freedom Money with her business. Ownership is a very powerful thing.

The Three S’s of the Industrial Age
My mother was born in 1921. She grew up in the Great Depression and entered the workforce in 1943 after nurse’s training and taught me to pursue three things in life, the three Ss of the Industrial Age:

1. Safety—live in the suburbs, don’t live downtown with the icky people.

2. Security—have a big wad of cash in the bank.

3. Stability—every day should look the same, no surprises.

Her strongest encouragement—get a job with a giant corporation; they are the best prepared to give you a life of safety, security and stability with no surprises.

Just about every mother of that generation was teaching their kids the same things. So, it’s no surprise that at the height of the Industrial Age after World War II, the suburbs exploded with cookie-cutter Cap Cods, white picket fences, men working for Giant Corporation, Inc., who all left for work in unison with their white shirts, ties, suits, and briefcases at 7:30 a.m. and got home at 6 p.m., and who lived as predictable a life as possible.

They came home to a manicured wife and 3.6 freshly scrubbed children. Ozzie and Harriet reigned. That may sound great to some, but as we revealed in the introduction to this book, those people were called The Silent Generation and made very little meaning in the world around them with their balanced lives.

Their manic pursuit of safety, security, and stability made them the best extensions of machines in the history of the Industrial Age. It also dehumanized them to the point of silencing their voices, their creativity, and their legacy. (Remember, no presidents and no Supreme Court justices; the only generation without a number of them.)

Where are these three S’s on Maslow’s hierarchy of needs? They are at or nearer the bottom. So, why did my mother teach me to chase these things that were at or near the bottom of what we as humans need to make life meaningful? Because having gone through the Great Depression and World War II, she was looking up at the bottom. She didn’t have any of the three, and a life with all three would have seemed like Nirvana to her.

Today’s Millennials Are Searching for the Fourth S—Significance
But Millennials who only grew up in the shadow of the Industrial Age do not understand the language of Safety, Security, and Stability. They are one of the first generations in history, at least in the West, to be born with at a modicum of all three of those things provided for them at birth. They aren’t looking up at the bottom, and are instead reaching for the fourth S of the Participation Age—Significance. Making money is no longer enough. Being an extension of a machine to do so is not attractive, and the idea that everyday should look the same and that life should be predictable and without surprises is not challenging to them. They want more. They want to Make Meaning.

As the cultural influence of the Industrial Age and the Factory System fades behind us, we are all waking up to the need to rehumanize the workplace, reintegrate it back into our lives, and build lives that Make Meaning, not just money. To do so, we must eliminate the arcane business practices that we dragged out of the Industrial Age into the Participation Age—those business practices that turned men and women into machines, and silenced our drive for Significance.

You Have a Choice
Addressing the business diseases of the Industrial Age is not complex, it’s simple. But for those who have built businesses and lives around the inherited constructs of a bygone era, it will be both simple and hard.

We should be grateful that the Industrial Age provided us with the first three S’s— Safety, Security, and Stability—on which to build the fourth S—Significance. But we must also recognize that the practices that brought us those three will not bring us the fourth.

We have a choice to make. Stay with what we know and slowly atrophy as the world moves on without us, or join the Participation Age and start sharing together in building companies that Make Meaning, not just money.

Which do you choose?

This is a summary of a chapter from Chuck’s new book, “Why Employees Are ALWAYS a Bad Idea (And Other Business Diseases of the Industrial Age)”. Click here to pre-order this new ground breaking book at a discount on IndieGoGo.com until July 28.

Why Business Plans Are a Business Disease

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Day 19 of 21 days with Chuck’s new book, Why Employees Are ALWAYS a Bad Idea

Not a single Fortune 500 was started with a business plan; not one. They understood that the second worst thing someone starting a business can do is create a business plan, and the worst thing they can do is follow it.

Pre-Planning Is a Disease
Exhaustive pre-planning is a disease of the Industrial Age that became popular as companies grew to giant proportions and as educators began imposing the cognitive world view on an otherwise intuitive business world.

Pre-Planning is a New Thing
Pre-planning wasn’t a hallmark of business before the Factory System of the early 1900s. But when you’re propping up a giant factory or trying to take over an entire industry, it lends itself to a lot of pre-planning.

Business plans really only became popular in the latter days of the Industrial Age (1950 on), and the rest of us have caught the disease. It has become an obsession in business schools and has only picked up steam as the Industrial Age fades behind us. This obsession is a natural (but unhelpful) outcome of an Industrial-based education system that relies more heavily on cognitive and didactic lecturing than on real-world learning.

Pre-Planning Is Unsupported By The Facts
In 2011 a website posted an article about Fortune 500 businesses that had started in a garage or other interesting places. They listed the top five, then gave the seven lessons you should learn from these startups. Number one was “Develop a business plan”. This was a strange conclusion, since there was nothing in the history of these startups that would lead anyone to conclude a business plan was a good idea. It was a giant, illogical and biased leap, and completely ignored the history of these companies. But the obsession with pre-planning that we inherited from the Industrial Age is so ingrained that we see it even where it doesn’t exist.

Pre-Planning Favors Lawyers, Not Business Founders
The roots of this obsession go back to the late 1800s. Judge Lord Esher, an Englishman steeped in the Industrial Age, expressed the need for pre-planning in every facet of life. His teaching has evolved since into what is called the Precautionary Principle, which generally states that if you can think of something that might go wrong, don’t do anything until you can either prove it won’t go wrong, or you have a contingency in place to cover for that possibility. And if you do something without having covered all possible contingencies, according to Judge Esher, you’re liable.

Lawyers, who are largely Industrialists, love the Precautionary Principle. It cost McDonald’s millions of dollars because someone spilled coffee on herself that already had a warning label on it. But the lawyers argued the warning wasn’t big enough or prominent enough. The Precautionary Principle says they should have never served hot coffee without knowing that some judge would find their warning too small, or that someone would try open the cup one-handed in between their legs while driving.

The amazing advances of the Industrial Age have allowed us to focus on levels of safety that would never have been imagined for thousands of years. But the more cleaned up our lives are, the more the we are obsessed with making sure we’re not doing anything that might go wrong.

Pre-Planning Kills Creativity
That all sounds pretty reasonable, except it is sucking the life out of our willingness and ability to create, innovate and take the risks necessary to build great things. The cleaned up world we inherited from the 19th and 20th century Industrialists have nearly sterilized the creativity right out of us. We are becoming so risk-averse that it is a national epidemic. The education system, the government and big business all are teaching us to live by the Precautionary Principle; don’t move until you have it all figured out.

Great Founders Do Very Little Pre-Planning
Great businesses don’t start that way, regardless of how much professors and the education system extol the virtues of pre-planning and the sacred cow called “The Business Plan”. But Bill Hewlett, one of those guys who started in a garage, lived in the real world:

“When I talk to business schools occasionally, the professor of management is devastated when I say we didn’t have any plans when we started. The idea of having a business came before our invention of the audio oscillator. We were just opportunistic. We did anything to bring in a nickel. We made a bowling alley foul-line indicator, a clock drive for a telescope, a thing to make a urinal flush automatically, and a shock machine to make people lose weight. Here we were, with about $500 in capital, trying whatever someone thought we might be able to do. So we got into this thing not by design but because it worked out that way.”

That’s how real businesses start, including virtually every business you can think of today that has been highly successful – they made it up as they went along, and planning was something they did as they moved, not before they moved. While speaking to thousands around the world, I find that somewhere between 3-6% of business owners who did not need a bank loan to start, created a business plan anyway.

Pre-Planning Doesn’t Work
Only 3-6% are obedient to what they are told to do by their professors. But I have yet to find a single business plan at any level that worked out the way the plan said it would three to five years later.

Move, Then Plan.
I’m not against planning – we should be doing it at every step along the way as we are moving. I’m not even against a little bit of pre-planning. But massive pre-planning has a near 0% effectiveness at doing anything but killing innovation.

Massive pre-planning like you see in three to five year business plans is a business disease that has its roots in the Factory System and in the cognitive-based education system that grew up to serve that system. Successful companies do it like the early years at HP. They come up with a very simple idea, get moving, then evaluate and plan as they go. They don’t stop to plan, because successful companies understand that planning never creates movement, but movement can create a good plan. Every Fortune 500 is a testimonial to this. Stop planning. Get moving.

Massive pre-planning is a business disease. The Industrial Age was wrong. Implement now. Perfect as you go. If you do, you have a much higher chance of success than if you plan it all out before you get started.

This is a summary of a chapter from Chuck’s new book, “Why Employees Are ALWAYS a Bad Idea (And Other Business Diseases of the Industrial Age)”. Click here to pre-order this new ground breaking book at a discount on IndieGoGo.com until July 28.

Complexity: A Business Disease of the Industrial Age

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Day 18 of 21 days with Chuck’s new book, Why Employees Are ALWAYS a Bad Idea

Complex things are naturally bigger, shinier, and with more moving parts and blinking lights than simple things. They’re mesmerizing. It’s easy to be fascinated with all the facets, angles and possibilities that come with being complex. But complexity destroys productivity.

We love complexity with nearly the same passion as our infatuation with Being Big. We buy word processing and spreadsheet programs for hundreds of dollars and will never use more than 1-3% of the features. The same programs are free on the Internet and still largely do more than we would ever use, but we’re sure that paying for the big, complex program is the better route. And Giant Corporation, Inc. has made it really difficult to use the simpler versions in compatibility with their versions.

Complexity Resists Progress
Remember, Industrialists don’t want progress that threatens their present market, or other people doing what they do, and will do whatever they can to keep others out and maintain the status quo. Sharing is not one of their attributes. Proprietary complexity helps them keep things as they are.

Complexity Confuses Us
Complexity is a way of modern life. The Factory System brought us daily newspapers, which increased the complexity of information exponentially. One daily issue of the New York Times holds more information than the average person in the Middle Ages learned in their entire lifetime. Couple that with radio, TV, magazines, the internet, billboards, and the advertising in your refrigerators; if you sometimes feel you are on information overload, it’s because you are. We weren’t built to consume and digest the dizzying array of inputs we get every day.

Complexity Makes Us Over-Consume
Physical objects have enjoyed a similar increasing intrusion into our once simple lives. In 1955, Gallup surveys showed that people considered approximately 70 physical objects as “absolutely necessary” for a basic and crude life in America (stove, sink, car, house, clothing, etc.). In 1985, it was 140+. I haven’t looked, but I’m guessing it’s more than double that today.

The Industrial Age brought with it a manufacturing prowess that made more stuff available than at any time in history. As it did, we were taught to need things that were not necessary for centuries before. I love our microwave and have no clue how we got along without one before they were invented. As consumption became normative, the factories were able to produce more goods. Consumption drove the Factory System of the Industrial Age, and that consumption gave rise to a dizzying array of choices.

Pluralization is the fancy word for having multiple choices. The Industrial Age gave us pluralized choices in every facet of our lives, religion (or none), convenient travel, expanded choice on where we live, information sources, cohort groups (bikers, campers, runners, gamers, gamblers, collectors), and a myriad of physical object choices with which to fill our houses and garages.

In the late 1800s advertisements read something like this “We have sinks for sale.” You just needed to know where to go to buy one, and they likely only had one. Today, there are dozens of manufacturers with thousands of choices for every type of sink. The Industrial Age gave us pluralization. For the first time in the history of man, we have a myriad of choices in just about every category of life,

Complexity Consumes Our Precious Time
As a result, by the end of the Industrial Age, in the early 80s the most popular bumper sticker read, “He who dies with the most toys wins.” My Irish friend says, “You Americans are a culture of maintainers. Rather then rent a condo, boat, RV or horse when you need one, you buy them and then spend all your time maintaining them.” All those consumer products and other effects of pluralization make life much more complex than it was in the days of the front porch and the rocking chair.

Complexity Makes Life Harder
Complexity in education, business, home life, society, religious options and throughout our culture grew exponentially during the Industrial Age. Before the Industrial Age, life was simpler. It was also in many ways much, much harder. But it isn’t complexity that made life easier. If anything, complexity makes life harder. Almost all the great ideas in business have been simple. The simpler an idea or product is, the more likely the world is to be able to advance the idea easily and organically.

Complexity Obscures Simplicity
Occam’s Razor (“rule” or “principle”), attributed to William Ockham, 13th century) states that given two equally plausible answers, the simpler one is likely the better choice or right answer. The developed world is coming around to this, and has begun to wonder if dying with the most toys is the height of human existence, or if the simpler answer might be the right one: Making Meaning. My grandpa told me when I was young, “Son, if you’ve got the choice between buying a car and going on vacation with your family, go on vacation. Build memories, they’ll last a lot longer than the car.” He was born in 1896, in a simpler time.

The Next Generation is Rejecting Complexity
Baby Boomers stacked toys and consumed wildly, where Millennials are more inclined to stack experiences and eat quinoa (my kids helped me learn how to pronounce it – keen-wa). Whether that is a return to a simpler view of the world remains to be seen. But what is clear is that the younger generation, which did not grow up in the Industrial Age, but only in the shadow of it, is rejecting the complexities of the Factory System with all it’s constraining and complex hierarchy, rules and regulations, for the freedom of a simpler relationship with the company as Stakeholders, so they are freer Make Meaning with their lives, not just money.

Occam’s razor seems to point to simplicity over complexity as the right answer in just about every business situation. The Factory System, with all its management layers, big words, fancy titles, and built-in segmentation of the workforce was built for another time. In the Participation Age, the companies that embrace and provide flatter structures and simpler cultures will attract those who are the most productive.

Choose Simplicity
Choose the simple answer. It’s almost always the right one.

This is a summary of a chapter from Chuck’s new book, “Why Employees Are ALWAYS a Bad Idea (And Other Business Diseases of the Industrial Age)”. Click here to pre-order this new ground breaking book at a discount on IndieGoGo.com until July 28.

Your Competition, Isn’t

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Day 16 of 21 days with Chuck’s new book, Why Employees Are ALWAYS a Bad Idea

I’ve personally landed millions in contracts from small companies to giant technology and pharmaceutical corporations, and I’ve never once thought about “competition.” It has never been a factor. I actually don’t think I have any, and I don’t believe you do, either. If you think you do, you just might be thinking like an Industrialist.

Stop Watching the Competition
Competition is a business disease of the Industrial Age which is very closely related to scarcity disease. In the Participation Age there are a lot of reasons why you shouldn’t be worried about people entering your market, coming up with great ideas you haven’t had, or improving on yours.

People who focus on trying to figure out what makes their competition successful don’t have enough good ideas of their own.

General Motors wasn’t created as a car company, but as a holding company. It didn’t create anything, but for decades watched the rest of the car market closely and bought car lines that others had created and worked to destroy those they couldn’t acquire. Their DNA was Industrial – find somebody else’s good idea, capture it and keep anyone else from coming up with an idea that might threaten that status quo product.

GM is not alone. United Airlines carefully watched Southwest grow and draw their customers away, then tried to mimic their success by repainting some of their airplanes and calling the new thing TED. Most long-term United Airlines passengers saw it as what it was, a bad clone of Southwest. United was too busy watching Southwest to come up with any great ideas of its own. Many in the market, in reference to a mule’s behind, simply starting calling TED “the back half of UniTED.” As with GM, United’s DNA is not creativity or innovation. Their DNA is dominating the world by maintaining the status quo, a futile exercise in a rapidly changing world, as they have found out.

In contrast, for years Apple was well known for focusing internally for its competition, and regularly destroyed not only the status quo in the market, but their own products which were still selling very well. When you live in a world of abundance you know you have a great idea inside you, and your responsibility is to uncover it, not steal the other guy’s great idea.

Mimicking Your Customer’s Products and Services
Imitation is the sincerest form of flattery, but it’s a lousy business strategy. The two last words of a dying marketing program are, “Me. too.” Again, United’s TED experiment is a grand example of this kind of tom-foolery. They took the facade of Southwest’s secret sauce and made a movie prop out of it with no building behind the facade. The result was a transparent attempt to mimic another company without the dedication to their core principles, strategies or infrastructure.

Great companies are too busy fleshing out their own ideas to follow others around their industry like mimes at a busker festival.

Focus on your client’s needs, not your competition’s products.
In general, companies that are doing it right are
1) focused internally on their own creativity and
2) on what their customers want.
Never one or the other – always both. Henry Ford said, “If I had asked my clients what they wanted, I would have made a faster horse”. Ray Kroc and others had to invent an entire industry (fast food) in order to sell their products. Their customers did not tell them they needed that. We should be in front of what our customer even knows they need, and working to get them that before they realize it’s potential.

In some cases we get our best ideas from our clients, and not listening to them carefully would be lazy and or arrogant on our part. In other cases our offerings are a combination of our own ideas and something our customers demonstrated they need (even if they didn’t express it). And in all cases our customers help us refine our products and make them better.

If you focus first on coming up with good ideas of your own, and then on meeting the needs of your clients, you won’t have time to focus on what other providers are doing.

You’re a terrible guesser, anyway.
I’ve seen companies dissect the products, services or marketing of other companies and copy them, only to find out they were mimicking the worst part of what the others were doing. The copycat thought that “X” made the other company successful. The other company might even believe it. But quite often whatever they copied doesn’t work because it’s out of context or some small condition is missing that made it successful.

But worse yet, mimicking others speaks of a culture that has little or no foundation of its own. Copycats make cheesy Industrial Age products that never lead them to the next great idea. The two last words of a dying company are “Me, Too.”

Explorers and pioneers don’t mimic others. One of the best ways to ensure you are irrelevant is to mimic other people’s successes rather than create your own. That mimicking strategy is fundamental to a world of scarcity, and shows a lack of originality, passion, cause, mission, or joy in what you do.

They won, good for them.
If someone “beats” you, they simply have something the customer needs that you don’t. Rejoice for the customer. If, in turn, you sometimes have things other customers want, you’ll attract those relationships and the other guy won’t.

Wandering Generalities
“Are you a wandering generality or a meaningful specific?” – Zig Ziglar Companies that focus on their competition are wandering generalities , built on a mimicking other company’s successes instead of creating their own. They’re just building cash cows.

The bottom line
In the Participation Age, companies don’t focus on competition, or even the recently popular term “coopetition”. They focus on getting better, making their industry better and making the world a better place to live both through creating more useful products and by their value to society.

Get the idea of competition out of your head and focus on being the best at whatever great idea you’ve birthed. And while you’re at it, try to figure out how to make the other guy successful, too. You’ll make a lot more money and have a lot more fun. And Stakeholders will come running to you work for you.

Scarcity Disease, The Plague of the Industrialist

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Day 15 of 21 days with Chuck’s new book, Why Employees Are ALWAYS a Bad Idea

“You will get all you want in life if you help enough other people get what they want.” Zig Ziglar. You either live in a world of abundance or in a world of scarcity, and whichever one you choose effects every decision you make.

Companies that live in a world of abundance will flourish in the Participation Age.

Conquest Destroys the Conqueror
The 21st century Industrialists are wrong. Business is not a zero sum game. They believe there is only so much to go around, so the game is to get yours before the next guy gets his. And in its worst form, the objective is to get it all and leave none for anyone else, as the early Industrial Age monopolies demonstrated.

Industrialists also believe there are only so many good ideas or great potential products out there, and after that, it’s over. So if we have to buy out or destroy the other guy who invented something cool, we’ll do it.

Cash Cows, Not Creativity
Rather than being built to create, innovate, and move us all forward to the next great thing, Industrialists build companies to take over the world by living off the creativity of others. To do so they build incredible cash cows that squeeze every last dime out of existing products and services.

And because they are so heavily invested in the present, they naturally resist change. They work hard to maintain the status quo, especially if innovation threatens their status quo products. It’s no wonder that people don’t like Industrialists, they just need to stop mistaking them for Capitalists.

Crony Industrialists, Not Crony Capitalists
Banks and most financial institutions on Wall Street suffer from the attributes of an Industrialist. Scarcity is a powerful driving force amongst them. They are not “crony Capitalists”, but “crony Industrialists.” Nobody hates Capitalism, which has driven local economies for centuries. They despise the scarcity-minded Industrialists who abuse Capitalism for their own gain.

It is unusual for one Industrialist to learn from the downfall of another, and the fact that the publishing industry has not yet seen their future in the demise of the music industry or similar Industrial giants being dismantled in front of them is not at all surprising. The drive for world domination, eliminating competition, and maintaining the status quo are so ingrained in some industries that they will be arranging the chairs on their various Titanics even after the water is over their heads.

For the Capitalist, Big is a Result of Great
True Capitalists live in a world of abundance. They focus first and foremost on creating, innovating, solving problems and moving the world forward through their creativity. They get big if that serves them in being creative and making a contribution. But for a Participation Age Capitalist, getting big is a RESULT of being driven to create, it is not the main motivation, as it is with an Industrialist. Capitalists have no fear of destroying the present for the future, and regularly introduce advances that make existing products and services obsolete.

Where You Start is Where You End Up
GM, which at one time was the largest company in the world, almost all through Industrialist acquisitions, has struggled to find an innovative way to move into the future and would have gone bankrupt if it were not rescued by another Big, the government. At the same time Ford reached back into it’s creative Capitalist DNA and innovated its way to profitability without outside assistance.

The lesson is that companies which focus on being creative and innovative (two attributes of abundance) are much more likely to build a lasting presence than those whose founding DNA is scarcity. GM, whose DNA is more Industrialist than most other modern companies, has been stuck like a fly in a spider trap, while Ford has moved on ahead.

Scarcity is a Mirage
Most Industrialists truly believe they sell in a limited market with finite boundaries, and that since there is not enough to go around, they have to get theirs before the greedy people do. It’s a Darwinian world, and the scarcity-minded intend to be the last man standing. It has to be that way. If someone else is left standing, their presence might destroy ours. It’s a zero sum game.

But the scarce world the 21st century Industrialists are so afraid of doesn’t exist. The markets are always expanding and new products and services are being created at a dizzying pace. Scarcity thinking is just a lousy excuse for being lazy, uncreative and boorish in a world constantly expanding with new ideas, new markets and new generations of people.

The slow and long-term decline of companies like GM, United Airlines, and other stolidly Industrialist companies is a direct result of this scarcity thinking. It causes them to focus on acquiring the other guy’s creativity, eliminating him, and then maintaining the status quo so they can milk the existing market, instead of creating the next market. When you think about it, it’s actually a lot more childish than macho. The “great Industrialists” were doing a lot of compensating.

Abundance – Hard-core Capitalism
Abundance isn’t kum-bah-ya stuff. It is a hard-core Capitalist success habit. It builds a culture of trust, credibility and service to the world around us. People want to work with those companies, and will go out of their way to find them.

Do you live in a world of abundance? Are you committed to helping others in your industry get to their goals so you can get to yours? Whichever one you choose, scarcity or abundance, effects every decision you make.

Which do you choose?

This is a summary of a chapter from Chuck’s new book, “Why Employees Are ALWAYS a Bad Idea (And Other Business Diseases of the Industrial Age)”. Click here to pre-order this new ground breaking book at a discount on IndieGoGo.com until July 28.

Education: One of the Business Diseases of the Industrial Age

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Day 14 of 21 days with Chuck’s new book, Why Employees Are ALWAYS a Bad Idea

The uneducated (those who learn without school) are, by almost every measure, doing much better than their mortar-boarded friends. Our Industrial Age education system would like you to believe it’s not true, but the fox is guarding the hen house.

Before the education system, us uneducated folk were doing just fine. In the early 1800s Noah Webster (spelling book), Walter Scott (novels) and James Fenimore Cooper (novels) sold five million or more copies each to a population of only 20 million, a staggering 80 million books each in today’s numbers. Even though their prose was complex and highly allusive, this makes them the three best selling authors in history by far.

In 1840, before compulsory education, 90% of northerners and 81% of free southerners were literate. By 1850, it was closer to 97%. In 1852, Massachusetts passed the first compulsory education act, requiring everyone to attend public schools. Nearly 80% resisted. The Barnstable parents were over run by militia who marched the children off to school under guard. The education elite justified it by saying, ” In too many instances the parents are unfit guardians of their own children. The children must be gathered up and forced into school”. Industrialists always believe people are stupid and lazy.

At the time, literacy in Massachusetts was 98%. Today national literacy fluctuates between 60% to generously 80%, depending on whose statistics you follow.

Get a High School Degree – Become a Fortune 500 CEO
A recent survey said “the school of hard knocks”, featuring CEOs who dropped out or never even attended college, was the number one source of CEOs of S&P 500 companies; not Harvard.

Drop Out of High School Or College – Get Rich
Forrester says a stunning one out of five of America’s millionaires never attended college at all, and a much higher percentage never finished. 63 of the top 400 richest Americans never finished college and half of those never bothered to start. With Bill Gates out of the equation, billionaires with only a high school diploma are worth an average $5.3 billion, while billionaires with a PHD are worth $3.2 billion, and those with a bachelor’s, $2.9 billion. Dropouts and non-attenders do the best by far, even without Bill Gates.

Beware – Finishing College Will Make You Miserable
If you measure success by personal well-being or happiness instead of money, a study has found that completing a university degree leads to lower levels of happiness for 23 to 25 year olds, compared to those 23 to 25 year olds who instead got an apprenticeship or vocational training.

Good Luck Learning Something In College
If you measure success by sheer learning, a third of college graduates gain no measurable skills during their four years in college.

High Schoolers Work The Hardest
If you measure success by productivity, only 59% of high school graduates waste time at work, compared to 66% of those with a bachelors, 65% with a masters, and taking the top spot, PHDs at 67%.

But College Grads Make a Million More…
And finally, if you measure it by salaries, high schoolers win there, too. “College graduates make a million dollars more in their lifetime than non-college graduates.” It’s an urban myth perpetuated by education junkies and an education system that needs your money to keep it afloat.

In a classic “fox watching the hen house” study, Georgetown University released a study in 2011 that the media intelligentsia loved. But the college junkies didn’t bother to look closely at the facts and how Georgetown avoided them.

Let’s Leave Out The First Seven Years
The report didn’t measure any earnings before 25 years old, lopping off seven years of earnings for high schoolers while their college counterparts are going backwards into debt. Let’s not start the clock at the beginning of the race; we won’t look as good; a ridiculous omission that invalidates the results right out of the gate.

Let’s Use Bad Math
The study also just piled up this year’s earnings 40 years in a row on top of each other, which skews the numbers in the favor of what they are selling. But after lying about the $1million number, in small print at the end, they tell you if you use the actual accumulated net worth number that any bank or financial planner uses, the lifetime gap between a college grad and a high school grad isn’t a million, it’s $593,000. Add back in the seven unreported years of income at, say, $45,000, and the gap shrinks to $224,000 in raw numbers.

Let’s Not Mention That College Costs Money
Georgetown also didn’t bother to include the cost of the education itself or the living expenses while there, or the $24,000 in average debt students are stuck with after it’s all over. Include all these and the high schoolers now make more. But we’re not done.

Let’s Assume No High Schooler Saves
The study also doesn’t bother to compute in the money saved by those not attending college. If the high schooler or their parents put even half of it in the bank instead of spending it on college, 40 years later it puts the high schooler way ahead, by hundreds of thousands.

Let’s Ignore That The Product Is Not Delivered 33% Of The Time
And then there is the rest of the untold cost story. The Georgetown study doesn’t address the inconvenient fact that 30 percent of college students who get loans drop out, with only the debt and no degree. At for-profit universities, it’s a staggering 50 percent. Any other product would be under federal investigation for non-delivery at these rates.

College is a cost in search of a benefit.

Let’s Ignore That The Highest Growth Jobs Don’t Require a Degree
And finally, Georgetown conveniently left this out – you don’t need a degree to get hired. 18 of the top 24 occupations with the largest expected job growth through 2018 will require no four-year college degree, including the top seven occupations on the list. This doesn’t even include the idea of starting your own company or working for yourself – that’s #21. Most of the remaining six highest-growth occupations, which are at the bottom of the list, will still accept people without degrees who have learned the necessary skills in other ways.

Industrialists Run The Schools
Industrialists run our school systems. Just like Wall Street titans, these are people who want to dominate and be the only players in town. They want to keep a closed market, they resist change and progress, and they see innovators as a “competition” and a threat. Educators fulfill at least four of the six attributes of an Industrialist, and you only need to fulfill one of them to wear the label “Industrialist”.

Fortunately Their Time is Very Limited
I predict the university system and the compulsory education system, as we know them today, will largely be dismantled in the next five decades, and replaced with “education technology”, locally, in the homes, and online. It could even happen well inside 15 years. It’s already well on its way.

The Industrial Age is receding behind us like water receding behind a broken dam. And as it does, the legacy school systems that were developed specifically to feed the Factory System are being exposed below the water line. They are rusty and full of holes, and in most cases simply resting on the bottom, unable to move.

The compulsory education system and most of the universities were boats built for another time, and the farther we get from the Industrial Age, the more obvious it becomes. As it does, the pressure on one of the last giant monopolies of the Industrial Age will grow, until once again the small and local learners take over and rebuild the great learning opportunities that have alluded us ever since we made education mandatory.

This is a summary of a chapter from Chuck’s new book, “Why Employees Are ALWAYS a Bad Idea (And Other Business Diseases of the Industrial Age)”. Click here to pre-order this new ground breaking book at a discount on IndieGoGo.com until July 28.

The Participation Age Company – Is Yours?

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Day 13 of 21 days with Chuck’s new book, Why Employees Are ALWAYS a Bad Idea

The Participation Age isn’t futuristic. Companies in all industries have escaped the core business diseases of the Industrial Age to Make Meaning, not just money. And they make a lot more of both. Can you?

A Big That Figured It Out Decades Ago
Some people are pioneers. Bill Gore was just that. In 1958, at the height of the Industrial Age Factory System, he created a company that foretold the Participation Age. It is a magnificent example of a big manufacturing company ($3billion 10,000 employees) that gets it and ignored the Industrial Age altogether. They are named one of the best places to work every year. Following are reasons for their success.

What Is Gore’s Secret Sauce?
Leaders as Servants; No Managers – “Eschewing hierarchy and bosses, W. L. Gore encourages a team-based environment— and there are no executive perks. “At Gore, we don’t manage people,” wrote founder Bill Gore. “We expect people to manage themselves.”

In 1967, Bill Gore described their culture in a paper as a “Lattice Structure”. This wasn’t a paper he wrote; it was a life he lived out through his company. Here are some quotes from that paper that show how W. L. Gore lives as a Participation Age company:

“A lattice organization involves self-commitment and natural leadership, and lacks assigned or assumed authority… It is through these lattice organizations that things get done, and most of us delight in going around the formal procedures and doing things the straight forward and easy way.” Bill Gore

Attributes of the Lattice
• No fixed or assigned authority
• Sponsors (mentors) not bosses
• Natural leadership defined by followership [Not titles]
• Objectives set by those who must make things happen
• Tasks and functions organized through commitments – Each person in the Lattice interacts directly with every other person with no intermediary. [Not through managers]

Leader Different leaders guide associates in different activities. The title “leader” is earned only by gaining followers. No managers.

Sponsors [mentor newer associates]
• Engage in a one-on-one relationship
• Focus on the development and growth of the associate

Work Teams and Leadership
Leadership evolves based on knowledge, skill, experience or capability in the particular activity in which a team is involved. Leaders are associates who have developed followers. Teams or groups formulate their own plans of action rather than having them dictated to them. Each associate self-commits to projects or responsibilities.

Communications – Direct, Not Through Managers
There is no hierarchy of communication, no need to go through one associate to reach another. Associates are free to go directly to whomever they believe has an answer.

Salaries Set By Peers
Associates rank each other twice a year on contribution to the success of the enterprise, and functional teams assign pay according to the rankings.

A Traditional Manufacturer Escapes the Industrial Age
Semco has 3,000 employees and makes things like washing machines, meat slicers, and heavy industrial machinery. They practice everything W. L. Gore practices, and more. The message here is if the most traditional of manufacturing companies can escape the Industrial Age, it leaves the rest of us without an excuse.

At Semco, the two ruling assumptions are the opposite of Fredrick Taylor’s two “stupid and lazy” assumptions:

– “trust in adult behavior” — assume that the basic human drive is to be productive, to build something lasting, and to contribute to something bigger than themselves, and

– as adults, every person’s rhythm is different when it comes to when, where, and how they do their best work.

Some of the practical out workings of these two ruling assumption:

1) No HR department – the leaders at Semco do not abdicate their responsibility to the Stakeholders so they could focus on operations and making more money in the short term. They see operations and people in an integrated way, and not a function to be segmented out to HR professionals.

2) No policy documents – none anywhere in the company. Adults will figure out together what matters.

3) No headquarters – There are various facilities in many locations. None of them reports to a flagpole at some “most important” location.

4) Six or more leaders take on the function of “CEO” – and pass it around every six months

5) No job titles – everyone is just an associate – no senior, junior or part-time labels.

6) Stakeholders all decide their own working hours, including all manufacturing associates, and find teams of people to work with that share those life rhythms. Ricardo Semler says, “We want people to work on a structure of their own,” says Semler. “The day that we measured people by time clocked is long gone. We don’t want to know when or how you’re working, but only if you’re fulfilling your commitment.”

7) All 3,000+ regularly receive the company’s financial statements – There are classes to help them understand how to make senses of them.

8) Each small team is fully self-governing and has to figure out how to best contribute to the larger picture at Semco. You can be voted out of Semco every six months by the people who work with you. In my opinion, this is one of the key reasons Semco’s model works – no one can brown-nose or BS their way to safety. W. L. Gore uses this same model.

9) All meetings are voluntary and the first two people there become “board members” with a bigger say during the meeting.

10) The responsibility for reviewing and setting targets falls squarely on every employee for themselves – No one else sets their targets or reviews them.
As you can see, there is a remarkable level of independence, inter-dependence and responsibility placed on each person. People can even start their own businesses using company resources, and many have.

Others Are Already Doing It
We have mentioned many times that size, age of company or type of industry has no bearing on whether a company can escape the Industrial Age and become a Participation Age company. The above are only two examples. We have found dozens of companies in almost any industry and all sizes that are building Participation Age companies in which the hallmark of the company is “sharing”, including TD Industries, Whole Foods, Wegmans, Zappos, 37Signals, Trader Joes, Container Store, Stonyfield Yogurt and hundreds of others.

Making It Work For You
Building a post-Industrial front office isn’t easy, but it isn’t complex either. If you love the idea of building a company that will last for generations and leave a fabulous legacy, this process will be a joy for you, even if you still find it hard. This is not a size-based model, it’s the model that companies of any size who want escape the gravitational pull of the Industrial Age will have to employ in order to be successful in the 21st century.

As the Industrial Age fades and the Participation Age grows, there are more Stakeholders than ever out there looking for you, just as much as you are looking for them. For the next decade you will do a lot of weeding out of “employees”. But more and more you will find people coming in prepared to be Stakeholders who will hit the ground running with you to build a lasting business with a great legacy.

This is a summary of a chapter from Chuck’s new book, “Why Employees Are ALWAYS a Bad Idea (And Other Business Diseases of the Industrial Age)”. Click here to pre-order this new ground breaking book at a discount on IndieGoGo.com until July 28.

The Results-Based Culture and What It Will Do For You

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Day 12 of 21 days with Chuck’s new book, Why Employees Are ALWAYS a Bad Idea

There is a growing wave of companies rejecting the front office practices of the 21st century Industrialist. Here’s what a Participation Age company looks like. They come in in all sizes and industries, and are showing us the future of business is already here.

Our company, Crankset Group, has grown 409% in the last five years by building a company on the following business practices:

– Culture is King – Culture is the most important asset in our business. It is who we are at our very core and oozes out of our products and services into every relationship we build. As Peter Drucker said, “Culture eats strategy for lunch.” Great companies do not “have” a company culture. The leadership lives out their beliefs and life principles in their business, and that IS their culture. If our culture is right, we will attract the right people who want to work in that kind of environment. Culture comes from our written beliefs and principles, on which we run our business.

– Vision and Mission – A Participation Age company has a well-defined vision and mission. Our vision: To Live Well By Doing Good. Our mission: To provide tools for business owners to make more money in less time, get off the treadmill, and get back to the passion that brought them into business in the first place.

– Everyone is a leader – Whoever is most effected by a decision should make that decision whenever possible.

– No Promotions – everyone comes in as a “Chief” – Chief Results Officer, Chief Connecting Officer, Chief Relationship Officer, etc. Promotions are time-based constructs of the Industrial Age. Instead of promotions, as people increase their influence in our business, they make more money.

– No management – None of the people at Crankset Group are stupid or lazy, so there is no need for smart and motivated managers. We’re all smart and motivated. Everyone is self-motivated and self-managed.

– Results Based model – We don’t have office hours. People are measured by results, not time spent in a chair. Get your work done and go home. Pay increases are based on the same thing.

– No Vacation Time or Sick Days – Again, get your work done, and go on vacation. We’re all adults and are all owners of our responsibilities, so we can also own our time. We expect people to get more time off than they would in a typical 21st century Industrialist company.

– No Annual Bonuses – Bonuses are “time-based” rewards for occupying a chair for another year. We do “Ad hoc” rewards to reward performance throughout the year. They add up to a lot more than an a bonus and actually mean something to those being rewarded.

– No Annual Reviews – we review each other and how things are going all the time. It makes no sense to store it up to dump it on somebody once a year. We all know how we’re doing throughout the year – no surprises.

– No Annual Raises – As people raise their level of influence and responsibility in the business (they do this, we don’t), we recognize that because raises come ad hoc throughout the years, sometimes a couple months in a row.

– No Departments – people don’t “belong” to someone or some artificial group.

– Direct Communications – without departments, people don’t have to go through gatekeepers to talk to someone. People who need to talk, do so, and stuff gets done a lot faster as a result.

– Profit-Sharing – within 20 months of joining Crankset Group, people begin to receive profit-sharing. They help make the money, they share in the profits, not just a salary (which the owners also get).

The Bottom Line
Ownership is the most powerful motivator we have in business. Stakeholders are treated like owners and expected to act that way. (Note: Because of that, profit-sharing is non-negotiable in a Participation Age company.)

This is a glimpse into our Committed Community business model. If you don’t work for a company like this, start looking for one. Companies everywhere, in every industry, are leaving the Industrial Age, entering the Participation Age, and embracing similar models. We’ll look at a few of those in the next blog post.

This is a summary of a chapter from Chuck’s new book, “Why Employees Are ALWAYS a Bad Idea (And Other Business Diseases of the Industrial Age)”. Click here to pre-order this new ground breaking book at a discount on IndieGoGo.com until July 28.

The Seven Business Cultures – Which One Is Yours?

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Day 11 of 21 days with Chuck’s new book, Why Employees Are ALWAYS a Bad Idea

“Culture eats strategy for lunch.” – Peter Drucker. What You Believe Determines Your Culture. A company with two people in it has a culture, and that culture is simply what you believe and value. Those beliefs and values determine how you make every decision. The outcome of those decisions is your culture. Which of these seven identifies your company?

Business owners complain all the time about lousy customers, or difficult employees and vendors. If you have customers, employees or vendors you don’t like, look in the mirror. The problem is almost always that you aren’t running your company on your culture, but on an addiction to shiny objects, or short-term decision-making (the need to get the money flowing quickly right now).

If you don’t like what you see in your company, your clients, or your Stakeholders, take a look in the mirror. It is very likely you aren’t running your company on what you believe, but are just taking clients, employees and vendors based on impulse. The revenue generated by violating your beliefs will not compensate for dissonance it creates in your business and more importantly, in your life.

Pick a Company Culture
In working with companies on four continents, we have seen seven common types of company culture. Which one is yours?

1) The Inmate Culture – people are stupid and lazy. They are boxed in, with no ability to make decisions and are at the mercy of the tyrants for which they work. This was the Carnegie culture.

2) Axle and Spokes Culture. It’s more like a cult than a workplace. He makes all communication and decisions. He divides the people against each other and forces everything to come through them, without interacting on their own. The guy at the top of this culture is usually very insecure, or has a giant ego. The “boss” is the center of everything.

3) Hired Hand Culture – People are a necessary annoyance in the business. The objective is to only give away the tasks the owner hates, and no others. They don’t want to hear from the employees. Go ride the fence and leave me alone.

4) Family Culture – I’m the adult, you’re the children. I will take care of you and protect you and burn myself out doing things that you can’t seem to get done. You will depend on me for everything. It makes me feel valuable. My door is always open for you to come to solve your problems for you.

We see this in everything from mom and pops to fairly large companies where the department heads function as the only adult in the department. Do you really want more kids? Some business owners and company leaders apparently do. People rarely get fired from this type of day care center.

5) The Allies Culture – The most predominant Industrial Age culture model still in practice in today. Like World War II alliances, the focus is largely on the task, and relationships are only a necessary inconvenience to help us get the task done. You don’t have to like each other; just need to focus on the task at hand. The overwhelming majority of big corporations have Allies cultures

6) Friends Culture – This “hippie” culture is a 1960s reaction to the Industrial Age and its Factory System. All authority is bad because the Industrialists abused it. We see The Friends Culture a lot in smaller companies that have been bought out by employees, or one employee who has worked there a long time. We also see it in larger but very new companies started by Millennials who are reacting to Industrial Age companies they have been around.

But the Friends Model is actually an unintentional extension of Industrial Age employment, because nobody wants to be the adult Stakeholder and make decisions on their own. They need to get everybody involved and the group makes the decisions. Kum ba yah – can’t we all just get along? Good luck with that. Consensus eventually, if not quickly, leads to something unremarkable that pleases everyone and stretches no one. The hallmark of the Participation Age is sharing, not consensus.

7) The Community Culture – This is the Participation Age model and works in companies from 2 people to 10,000 who are practicing it today. The Community culture, in its structure, looks a lot like the workings of a town. Every town has clear hierarchy; it’s not a “Friends/Hippie Culture”. Every town has a mayor (or other top decision-maker or makers), city council (leadership team), functional group leads and many others who all have some kind of accountability relationship, whether with a team or a single individual.

Clear hierarchy does not mean a heavily top-down hierarchy. A satellite dish to demonstrates the Community model that is taking hold in companies of all sizes. In this model, leaders are on the bottom as servants, not a privileged class. Hierarchy is de-emphasized by giving most leadership and decision-making to a much broader group of individuals; really to everyone. The satellite dish allows for leadership and decision-making to move from one person to the next as needed to accomplish the objective.

Sometimes the head honcho of the company finds themselves way out on the edge of the satellite dish, with someone else dead center in the middle of it, making some decision. Great leaders know when to get out of the way, and do it as often as they can.

Another good image of a Community culture is a soccer team, basketball team, or hockey team. Whoever has the ball/puck is the leader and they have to be trusted to know what to do with and who to pass it to next. There is a coach (leader), but they don’t run out on the field, grab the ball from each soccer player and kick it around themselves. If the players can’t be trusted to make good decisions, the coach needs other players.

In the Community culture model, giving this kind of ownership and responsibility is one of the most powerful ways to provide people the ability to Make Meaning, which is a much higher motivation for Stakeholders than just making money.

A few short years from now this will be a big duh, as the younger generation builds businesses in the Participation Age that encourage people to share in the creation of great companies.

If you don’t have a Participation Age Community culture right now, what one thing can you do today to begin to move in that direction?

This is a summary of a chapter from Chuck’s new book, “Why Employees Are ALWAYS a Bad Idea (And Other Business Diseases of the Industrial Age)”. Click here to pre-order this new ground breaking book at a discount on IndieGoGo.com until July 28.