Stakeholders – A New Model for the Participation Age

The Industrial Age created the modern employee on such bad assumptions (you’re stupid and lazy) that the whole concept is simply broken. Both the word and the concept of “employee” are not redeemable. The Participation Age requires Stakeholders.

“Pick yourself. Don’t wait for someone to pick you. The shift is that it doesn’t matter if you own a company. You can make an impact if you want to.” Seth Godin, Linchpin

Employees Are Replaced by Stakeholders
Our company doesn’t hire employees; we have replaced them with Stakeholders, and we are working with hundreds of early-adopter companies who have decided to do the same thing. It’s not woo-woo crap. It is hard core Capitalist intention to be the best company in the long-term, making great profits, and adding tremendous value to the world around us.

Stakeholders are Self-Managed
Stakeholders are first and foremost self-motivated and SELF–MANAGED adults who can think, take initiative and make decisions, carry responsibility, take ownership, be creative and solve problems. Stakeholders can be left home alone. Employees (children) can’t.

Stakeholders are Adults
Our Stakeholders are all adults. “Employee” is a four-letter word for us. Adults don’t need someone to keep them from running into the streets or ruining the carpets. Adults ask questions, most importantly, “Why?” Unlike the Silent Generation, they don’t live passively but are self-motivated, self-managed, creative, and problem solvers. They don’t shut up; they make waves. They don’t sit down; they are highly visible. And they don’t expect the company or other adults to take care of them.

Stakeholders Are Owners
Stakeholders are owners. It is a requirement of being a Stakeholder. Adults own stuff, and they own their work as a natural part of being an adult. Most importantly, they own their result, something employees/children rarely think about. The most powerful motivator in business is ownership, and when you find someone who views life as an owner/Stakeholder, they will rock your business.

Stakeholders Bring the Whole Person To Work
Stakeholders bring the whole messy person to work, not just the extension of the machine. That sounds counter-productive except the messy parts are what help us think, ask why, create, solve problems, innovate, and inspire others to do the same. If you want people who will regularly bring great ideas, creativity, problem-solving and innovation to work, you have to not just ALLOW the whole person to show up, you have to REQUIRE it.

A Stakeholder would never think about dividing themselves into “Work Bob” and “Play Bob”. It’s unnatural and keeps us from contributing like we are required in the Participation Age.

Stakeholders Require Leadership, not Adult Supervision
If you hire Stakeholders (adults) instead of employees (children), it changes the way you direct people.

Stakeholders don’t need management; they need leadership, which as we showed in an earlier chapter, is a radically different thing. Simply put, Stakeholders need a leader who will give them vision, give them the tools they need, train them and point them in the right direction, and the Stakeholder will take it from there. Employees need to be hovered over during the whole process to make sure they get it done.

Stakeholders Don’t Report to the Day Care Center
There is nothing wrong with an office. We have one for our clients (not our Stakeholders). Our Stakeholders work where they can be most productive. If it served them to have an office desk, we would get them one. But employees are different. They need to be herded daily into an office day care center. They can’t be trusted to work as adults on their own without direct and close supervision. We don’t have any managers. We don’t need them – we have Stakeholders.

Stakeholders Focus on Work, not Promotion to the Next Title
In our company, upward mobility is not even available. Every adult who works with us has a title that includes the word Chief; Chief Results Officer, Chief Connecting Officer, Chief Transformation Officer, Chief of MIH (Making it Happen), etc.

None of us will ever need to be promoted; we all came in at the top. The only place to grow is laterally. As our influence and impact grows, that will be recognized and somebody might change our title (there is no centralized title giver). Owners don’t get promoted; they just make more money because they expanded their value to the world around them.

Stakeholders Participate in Profit-Creation and Profit-Sharing
Stakeholders are owners, who own their jobs, processes, systems and their results. They function as if they have actual equity ownership in the business, which means they need to be rewarded like one. Every full-time Stakeholder with us takes part in profit-sharing starting in their second full year. Why wouldn’t they? They’re all adults who own their work, so they should own some of the profits from their work as well. No equity owner would work harder just to see the profits given to someone else. Stakeholders will find another place to work if you do that to them.

Stakeholders Never Get Bonuses, Only Rewards
Stakeholders do not receive year-end bonuses for having occupied a chair for another twelve months (time-based). They get rewarded when they do things well (results-based). People get gifts, money, gift cards weekends away, pay raises and other rewards for having performed well. It’s ad hoc and requires that we pay attention to people. And that’s a good thing, because then we see their great value.

Nothing irks a Stakeholders like the 2.5% across the board bonus that goes to both disengaged employees and Stakeholders, regardless of their contribution. Any equity owner would reject a system that paid every business owner in their industry the same amount regardless of how well they had grown their businesses. Stakeholders are no different.

Stakeholders Make You and Themselves More Money
Do Stakeholders make a difference? We believe they do. Only thirteen companies have made the Fortune 500 “Best Places To Work” list every year it has come out. All of them are more profitable than the average for their industry; most of them wildly more profitable. We’ve grown over 560% in the last five years with Stakeholders.

We Didn’t Invent Stakeholders
Stakeholders isn’t a new concept. There is a fast growing tidal wave of businesses in every industry, of every size and age, that have already cashed out of the Industrial Age, and are fully embracing the Participation Age. To do so, they proactively create company cultures that are conducive to celebrating Stakeholders, while 21st century Industrialists create cultures that mirror the Factory System of the mid 1900s.

Do You Have Stakeholders? Are you one?
If you are treated like an employee and don’t like it, start looking for a Participation Age company that will invite the whole person to come to work. If you are a company that has ongoing employee issues, it’s not the employees that are the problem. It’s your belief that they need to be managed, or your unwillingness to move the children along and replace them with adults. We know companies with 10,000 Stakeholders and no employees. You can find them, too.

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.