One Learned Skill Contributes To Success More Than Any Other

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The CEOs of the fastest growing companies in America have a single, learned attribute that makes them more successful than anyone else. You can learn it too.

For decades while helping founders build their businesses, we have told them the number one attribute of success is Speed of Execution, which is the practical outcome of being willing to take risks.

Entrepreneurs and founders who exhibit Speed of Execution are able to do so because they move on an idea without having enough information to know for certain the idea will work. While others are researching and doing case studies, they are already turning the idea into reality. They can do this because they have learned by experience that the only way to perfect an idea is with movement, not planning.

Planning never creates movement, but movement can create a great plan.

The Data Is In—Moving Fast Works

New research confirms this is the path to success. Gallup, which built the popular StrengthsFinder assessment, recently developed an online version specifically for entrepreneurs—the Entrepreneurial StrengthsFinder evaluation. They invited the founders of the 2014 Inc. 500 fastest growing companies to take the assessment, and discovered that the number one attribute, shared by a whopping 85 percent of the founders, was the willingness to take risks.

Our Beliefs Determine Our Behavior

Risk-taking is the belief system, the mindset. Speed of Execution is the practical outcome of that belief system. Risk takers believe that moving quickly with all the information will work better than trying to get it all figured out before you move. They understand that you don’t get comprehensive information in an ivory tower, but from experience. Those who move on an idea quickly in the trenches, always get information not available by analysis.

The number one indicator of success in an early stage business is not how good your product is, or how smart your marketing is, or your uniqueness, or your funding, or any of those traditional ideas of what makes for success. The number one indicator of success in early stage business is simply Speed of Execution. Get an idea and get moving on it. You will find out if it’s a good idea or not much more quickly and reliably by moving on it than by musing on it.

Steering Your Business

How do you steer a ship? The logical answer is with a wheel and a rudder—that’s wrong. The intuitive answer is, “Get it moving.” Movement steers a business in the same way. Moving the rudder on a ship dead in the water does nothing to change the direction. Only movement will affect change.

Planning is your rudder. I would never advocate putting a boat in the water without a rudder. But most people are sitting around building hand-carved, silver inlaid, 100 foot tall rudders to stick on the back of their 12 foot dinghies, and wondering why their idea sinks before its launched. Get a simple piece of metal (a basic idea), stick it on the back of your boat, and get out of the harbor.

Move Fast. Break Things.

The faster you move, the less rudder you need. Bill Hewlett famously said, “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. We were just opportunistic. 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.”

For HP, considered by most to be the founders of Silicon Valley, movement created the plan.

For the first ten years of Facebook’s existence, Mark Zuckerberg echoed Bill Hewlett, and led the company with the mantra, “Move Fast. Break Things. If you’re not breaking things, you’re not moving fast enough.”

Stop thinking. Stop planning. Your plan, like Bill Hewlett’s, will form as you move, not while you’re reading case studies. Get a nice little rudder, stick it on the back of your business, and get moving as quickly as you can. It’s counter-logical, but to the most successful entrepreneurs in the world, it’s very intuitive.

Implement now. Perfect as you go.

Article as seen on Inc.com

The Two Most Important Business Words You’ve Never Heard

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These two obscure words just might help you and your business more than anything else you’ve ever learned.

For years we have shared that anyone can be successful with just a few things: 1) Speed of execution—get enough information and take the risk to get moving quickly, 2) Be the bulldog—never give up. In shorthand, get moving and stay moving.

There are two words that go along with these that I personally have found more important, transformative, and practical than any other two words in business. They are two of the 1,000 most obscure words in the English language, and I think they ought to be on the tip of our tongues every day:

Conation.

Oxford’s in-the-box definition: The mental faculty of purpose, desire, or will to perform an action; volition. A better in-the-trenches definition, which John McCormack used in his wonderful book Self-Made in America (where I found the word 10 years ago): “The will to succeed that shows up in single-minded pursuit of a goal.” Or in other words, “Get out of my way; I have somewhere I need to be.”

Conative people don’t even have to say that. You see them coming and you just step aside. They’re the ones who move on an idea while others are studying it. They understand that planning never creates movement, but movement creates the plan. They know clearly where they want to end up, and will do whatever they have to between here and there to make it happen. For the conative person, the process is completely negotiable, but the end result is never negotiable.

A stream is a great example of conation—running relentlessly to the ocean and willing to do whatever it has to do to get there.

In his book, Shift, Peter Arnel described how he went from a weight of 406 pounds to 150 pounds. First, he decided to. Second, and much more important, he said, that from that moment on, he saw the world through the eyes of a 150-pound man, and made all of his decisions accordingly. That’s conation. How do you know you want something? You’re already doing it.

We use a shorthand definition with four key elements—Committed Movement in a Purposeful Direction. 1) Purpose is the long-term goal, 2) Commitment is recognizing the costs and moving ahead anyway, 3) Direction is figuring out the next one thing to do to accomplish the Purpose, and 4) Movement is the key to whether I actually want to reach the objective. Which leads us to the second-most important business word you’ve never heard.

Velleity

Oxford calls it: A wish or inclination not strong enough to lead to action. Our in-the-trenches definition: The desire, with no intention of doing anything.

“Wouldn’t it be great if…?” “Someday I’m going to…” “I sure hope that…” It’s all just velleity. You can have a great Purpose, chant at your vision board all day to demonstrate Commitment, and know exactly what one thing you’ll do next to establish your Direction. But until you have Movement, it’s all just wishful thinking.

Doing vs. Knowing

The way we’ve been taught to learn is unfortunately cognitive, not conative. But the education system is wrong. We do not think our way to a new way of acting. We act our way to a new way of thinking. Want to change something in your life? Do something different. Otherwise it’s just a bunch of velleity.

Just once my mother had to say to me, “Chuck, there is no such thing as an excuse, there aren’t even reasons, there are only priorities.” She never had to say it again. It describes the difference between conation and velleity perfectly. The conative person figures out what is important and does that first.

It affects us in the big picture even more than in day-to-day tasks. Visionaries are conative, dreamers are velletious. A visionary is already doing what they desire (conation), and a dreamer is talking about how nice it would if… (velleity). Dreamer’s talk, visionaries walk.

You get what you intend, not what you hope for. If we stop hoping to build a great business and decide we want it bad enough, we have a much better shot at getting there.

Conate.

Article as seen on Inc.com

Business Ownership Is Normal, Being An Employee Is Historically the Exception

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Here’s the historical perspective on why no one wants to be an executive and why 65% want to own their own business. We are going back where we came from – business ownership.

For Thousands of Years We Did It Differently

Before 1850 when the Factory System of the Industrial Age took over production, on the low side 80% of adults owned their own business. Almost no one worked for someone else. Owning your own business has always been the norm, and I believe we’ll return to it.

Employment is For Children Only—Adults Need Not Apply

Adults were repulsed by the Factory System concept. The prevailing mindset for thousands of years was pride in ownership, the ability to control your own destiny, freedom to call your own shots, and the desire to master something difficult. People focused on Making Meaning, not just money.

The result? In 1820, 50% of factory workers were under the age of 9, and 86% were under the age of 14, all of them orphans and poor children. Only children would put up with the dehumanizing and controlling work world we have since resigned ourselves to in cartoons like Dilbert, movies like Office Space, and TV sitcoms like The Office.

People Still Don’t Want to Be Employed

An Intelligent Office Work IQ Survey gives us a window into the past before “employment”, and also into our future. Zero percent of respondents to the survey aspired to be corporate executives, while nearly 65 percent said they aspired to be an independent business person. They cited a desire for freedom, reflecting their ancestor’s repulsion to employment.

Employees Take More Risks

Perspective is everything. Before the Factory System, working for someone else was seen as a very risky proposition where you lost control of both your present and your future. It was clear to the 80% that employees could only hope the company would follow through on their promise to help them make it to old age. Their fears were well-founded. A lot of modern employees have lost a lifetime of retirement benefits as companies like United Airlines and others make the retirement promise, then regularly reorganize and leave employees out in the cold.

Owning Your Own Business Only Seems More Risky
So why have the numbers flip-flopped from 80% working for themselves, to 85% working for others? Very simply—corporate America sells short-term security. If you go to work for a corporation, a check starts arriving two weeks later—guaranteed income, of sorts. But to gain that quick fix, the employee gives up all other control over their work, and jeopardizes being fired two weeks later or losing their retirement to bankruptcy.

In contrast, when someone starts his or her own business, all the risk is on the front end. It could be months or much longer before they start taking home money. To secure control over their future, they take the shorter-term risk to strike out on their own, knowing that 90% of life is what you make happen, and 10% is what happens to you.

Own a Business, or Work For Someone Who Will Encourage You to Own

The Participation Age is making it easier to start your own business. It is also creating a hybrid where people may not own the actual company, but who get to bring the whole, messy, creative person to work, make decisions, and be treated like equal adults at work. In a Participation Age company, people can have ideas and actually start new product lines as if they owned the business. At DEG Corporation an employee had an idea and created a $9mlllion division she now runs.

Back To The Future

We’ve got a few thousand years of seeing business ownership as the norm, and only 170 years of being told by corporations that owning your own business is too risky. But younger generations aren’t growing up in the shadow of the Industrial Age and are showing a healthy disdain for employment. I have high hopes they will reignite business ownership as the norm.

article as seen on Inc.com

81% of Adults Would Work Better Without a Manager: Are You One of Them?

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More and more companies are eliminating managers altogether. Would you be one of the four out of five that would thrive there?

The Gallup Employee Engagement Index shows that 29% of people could be self-managed without being encouraged to do so. Another 52% will take charge and be contributors if they were in the right environment that encourages participation. And 19% are incorrigible – they won’t step up no matter how hard you encourage it. The good news is that if a company creates the right culture and a managerless structure, 81% of people will get on board.

Why is this important?

I hear it every week – “We can’t find good people.” – Good – meaning someone who will take the bull by the horns, get things done well and on time, and not require babysitting to do it. But the fact is I only hear that from companies with managers. I’m aware of 100-ish companies that don’t have managers (and there are easily a few thousand that I’m not aware of), and I’ve never heard them say they can’t find good people.

Just a Few Companies Without Managers
These businesses and many more like them, have been able to staff their entire companies with people who don’t need to be managed. Here are just a few:

Whole Foods – 60,000 Stakeholders
W. L. Gore – 10,500 Stakeholders
Barry-Wehmiller – 7,500 Stakeholders
Menlo Innovations – 300 Stakeholders
Valve Corporation – 100 Stakeholders
Crankset Group (our company) – 21 Stakeholders (6 full-time)

Let’s be clear. These are companies where no one works for anyone else – there are no bosses or managers. Leaders become leaders because people are following them, and they stop being leaders when people stop following. A healthy Participation Age company needs the management function, but never needs managers. Teams manage themselves by dividing up the management functions between team members. In doing so, they find that the overwhelming majority of what managers do just isn’t necessary, and that the position of manager is irrelevant.

These companies, and many more like them, have been able to do this when others “can’t find good people”, for one simple reason; they’ve created organizations that don’t have managers. This attracts the 81% who don’t want to live in an Office Day Care Center, but want to function as decision-making adults both at home and at work.

Conversely, when you build a company around managers, you actively attract the 19% who don’t want to grow up at work and love being told what to do. And you make it clear to the 52% in the middle that if they want to keep their job, they’ll stop asking why, do what they are told, and focus solely on production. In these companies, the 29% who are natural Stakeholders will be considered annoying because they keep asking questions like, “Why?”, and suggesting better ways to do things. Managers are threatened by these people and expend a lot of energy putting them in their “place”.

This is why great people leave companies. When people are managed, you destroy their desire or even ability to bring the whole, messy, creative person to work. And that is the part of the person that will be the most valuable to any company in the long run, not the part that is simply “productive”.

Could you make it in one of these managerless companies? Are you one of the 29% who are joyfully annoying, or maybe part of the 52% who would love to have a brain at work if they were only allowed? If so, welcome to the Participation Age. Now go find one of those companies that will welcome you with open arms. They’re all around us, and becoming more common all the time.

article as seen on Inc.com

Richard Branson Is Right: Time Is the New Money

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In the Participation Age, A New Form Of Payment Is Emerging: Time.

Richard Branson just announced he would be giving Virgin employees unlimited vacation. He’s either nuts or knows something others have yet to discover: You’ll make more money if you give people their time back.

 

Why We Trade Time for Money
The Industrial Age taught us the only way to make money was to trade time for it. The deal was clear, and always the same: You give me eight to 10 hours of your day, and I’ll give you some money. But in the Participation Age, something new is emerging. Companies are realizing that when you give people back their time, they will make you more money. It seems counter-logical, but it’s really quite intuitive. As usual, Branson is moving on an idea that traditionalists will only discover by watching him and the other early adapters in action.

Why Would Unlimited Vacation Work?
Why give up on a vacation system that’s been in place for 170-plus years? Because it was a bad idea then, and with a work force that did not grow up in the shadow of the Industrial Age, it’s an even worse idea today. Almost no one under 40 can relate to a time-based system that makes no sense in a results-based work world.

Branson didn’t figure this out; he’s actually a late adapter, which makes a lot of the work world archaic and completely out of touch with how to make money today. Fewer than 1% of U.S. companies give unlimited vacation. In fact, America gives the second-lowest amount in the world, behind only South Korea.

The data is in: When you give people control of their time, they make you more money. W. L. Gore Inc., the pioneer in rejecting the Industrial Age, is a $3 billion company with 10,000 stakeholders. They’ve had unlimited vacation since the 1960s and continue to grow exponentially.

Semco, another great example of a Participation Age company, started making pumps in 1951. It was taken over by Ricardo Semler in 1981 and transformed into a great workplace, including unlimited vacation as just one of many principles that brought humanity back to the workplace. In 1981, it was a $4 million company. Today it’s a $1 billion company and growing, and is in a myriad of industries that Semler could have never imagined. Stakeholder turnover is less than 1% per year.

Some technology companies have been operating this way for years as well, and a growing number of traditional as well as new industries are adopting unlimited vacation. Evernote and NetFlix are just two examples. They are all learning that anything that gives people back control of their lives is proving to be better for the company. Just the opposite of what our Industrial Age forefathers believed.

Pay Raises That Encourage More Vacation
Stakeholders become deeply invested in your company as you bring humanity back to the workplace. The downside? They can start acting like old-style business owners and have to be heavily encouraged to take time off. To combat this and put teeth into our unlimited vacation position, our company, Crankset Group, gives all of our stakeholders $1,500 a year in vacation money (Evernote gives $1,000 in vacation money and FullContact gives $7,500). But you only get it when you turn in receipts that prove you’re using it for vacation.

There are Industrial Age detractors. Articles likes those recently in Time magazine view this cynically. But they are like listening to someone who drew the short straw in a high school debate and had to argue the positive effects of indentured servitude. The arguments against unlimited vacation are tortured at best.

The reality is simple. Give people control over their time, and they will build a great company, not for you, but with you.

In the Participation Age, time is the new money.

Article as seen on Inc.com

Traditional Education: The Sacred Cow Is Slain

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The last great monopoly of the Industrial Age is dying. None too soon.

Our traditional education system is the last great monopoly of the Industrial Age and is awkwardly out of synch with the Participation Age in which we live.

 

Education Won’t Make You Successful
The present system was designed in the mid 1800s specifically to feed the Factory System, for the benefit of a few Industrialists, and to the detriment of the rest of us. It’s still stuck there, focused on churning out employees who are taught two things: a specific skill, and that they should never challenge the teacher’s brilliant and finished view of the world. This sets them up very well to be cogs in a corporate machine, but not to be learners, owners, Stakeholders, or self-managed adults in the Participation Age.

Education Is Not Correlated to Success
There are many reasons why we should not rely on a formal education system that, a century and a half later, is still deeply committed to closed markets and the status quo:

1. Top CEOs—People who never attended or never graduated from college are the number one source of CEOs for S&P 500 companies. (Harvard was number three.)

2. Wealth—One out of five of America’s millionaires never attended or finished college. Many of the rest would say college didn’t help. Almost none could show a clear correlation between school and wealth.

3. Personal well-being or happiness—A college degree leads to lower levels of happiness for twenty-three to twenty-five-year-olds, compared to those twenty-three to twenty-five-year-olds who got an apprenticeship or vocational training.

4. Learning—A full third of college graduates gain no measurable skills during their four years in college.

5. Productivity—High school graduates waste the least amount of time, followed by those with a bachelor’s and MBAs, with PhDs being the least productive.

6. Annual income—Millions of nonattendees and nongraduates make significantly more money than college graduates.

7. Lifetime income—The idea that college graduates make an extra million dollars in their lifetime is an urban myth perpetuated by a system that needs your money to keep it afloat. It has been debunked many times. High school grads can regularly make as much or even more, and with much less debt.

If Not Traditional Education, Then What?
For most of us there are other, better ways: become an apprentice, be a doer, not a thinker, or chase your dream and start a business. Before the education system was formalized in the 1850s, 80% of adults owned their own business. Today it’s reversed. This should not be surprising, since the education system was designed specifically to churn out highly skilled employees taught not strike out on their own. It worked.

But the giant is dead on it’s feet. It just hasn’t fallen yet. Here are just a few of the myriad of better education options emerging in the Participation Age.

The Sudbury Valley School is a K-12 model, with students coming from the full economic strata. There are no classrooms and no syllabus. The adults function as facilitators, not teachers, and learning happens in the context of doing, which research regularly shows is one of the best ways to learn. A staggering 42 percent of Sudbury graduates are involved in entrepreneurial pursuits.

Sudbury is only one example of Participation Age primary learning that ranges from charter schools, to homeschooling, to a myriad of cocreation initiatives.

The online world is also helping break the mold. Research shows that kids being educated online are as social or more so than their traditional counterparts. KhanAcademy.com , an online learning phenomenon, is attracting millions who are rejecting the didactic preaching/teaching model for a learn-by-doing model. And ColoradoConnectionsAcademy.com is one of many like it springing up online across the nation. Coursera.com , started in 2012, is now offering hundreds of free online classes from dozens of elite universities, giving anyone in the world free access to a great education.

Faster, Please
The traditional Industrialist Age education system works hard to maintain a closed market, and is focused more on destroying the competition than getting better. But the Participation Age and its hallmark of sharing are encouraging the development of a myriad of new learning models that are replacing the old standard. It can’t happen soon enough.

As seen on Inc.com

Balance Doesn’t Work – You Really Can’t Have it All – At Once

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Doing anything remarkable almost always requires that something else gets ignored.

“Having it all” is an Industrial Age charade. Starting a successful business isn’t something you can do while living a “balanced” life. The bucolic suburban life of the 1950s was missing one thing – significance. People who live remarkable lives don’t live balanced ones. They don’t want one, either. Do you want a successful life? Then stop seeking balance.

 

Teeter-Totters rule.
When a teeter-totter is perfectly balanced, nothing is happening. The family sitcoms of the 50s, like Ozzie and Harriet, taught us to seek “balance” so we could live highly predictable, secure, safe, and unremarkable lives. But think of anyone who has accomplished great things in business, spiritual life, justice, etc – the more remarkable their impact, the less balanced their lives.

Integration, Not Balance
In the Participation Age, we bring our whole self to work, and we dissolve the lines between work and play. We leave at 10 a.m. to see our kids in the only fifth-grade play in which they will ever be the lead raccoon. We take bike rides or go for walks at 3 p.m., and work in the evenings or “weekends”.

Full Engagement, Not Balance
Fifteen years ago I was offered a great salary and significant ownership to run a company in Napa Valley. But we were fully out of balance, focusing on kids at the time. It was an offer of a lifetime, but it was easy to say no. Imbalance required it.

During the first year of building the Crankset Group (and earlier businesses), I worked seven days a week. There was no balance at all. Seven years later, I have every Friday off, every other Monday off, the last week of every month off, and a month a year – 60% of the year. My wife and I get to choose to ride a bike, build businesses in Africa, visit a 3to5 Club in Ireland, or go on a vacation. People on teeter-totters are always intentionally out of balance. It’s how the fun happens.

Get More Done in Less Time
Here’s the rub for startups. Too many business owners go into business looking for an immediate Ozzie and Harriet “lifestyle business”–assuming that they can step right in working four or five days a week. Success almost never comes that way. It was the willingness to go all in and be completely imbalanced on the front end that allows me to be imbalanced now in the direction of free time.

Momentum doesn’t come from balance, but from giving it your all up front. An airplane burns up to 50 percent of its fuel just getting to its cruise altitude. Most businesses do, too.

Shoot for Next Year, Not Tomorrow
Full engagement is tied directly to wanting the best in the long term, not right now, and wanting it badly enough to go all in—abandoning anything that the Balanced Life folks would recommend.

Find something to throw yourself at and do it with everything you have. Then take a break from that and throw yourself at something else just as hard (playing with your kids, another business, writing a book, etc.). I love my teeter-totter life. If you don’t have one, don’t expect to live a remarkable life.

Is Your Job a Balance Trap?
The Industrial Age company you work for might want you to live a balanced life and leave your personal stuff at home. It’s a trap. Find another company to work for—there are plenty of Participation Age companies out there who invite you to live an unbalanced, fully engaged, fully integrated, and remarkable life, and the number is growing fast.

Choose the Unbalanced Life
Live out your highest priorities – everything else should play second fiddle to those. And yes, you’ve got to choose. You can’t have it all – right now. Go all in on the front end and reap the rewards down the road.

As Margaret Thatcher, who lived an imbalanced life, said, “One’s life should matter.” If you live a balanced one, yours won’t.

Article as seen on Inc.com

Why Did The SBA Just Gift Millions To For-Profit Businesses?

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The SBA just gave away millions in corporate welfare with no strings attached, to venture- capitalists accelerators. This is wrong on multiple levels.

The Small Business Administration just announced the award of millions of dollars in grants to “accelerators”, which are designed for venture capitalists to sift through countless startups to find the few they think can make them the most money. But the rationale, efficacy, and fairness of this program needs to be challenged.

The Rationale – Accelerators Produce More Jobs (NOT)
Over the last decade, the SBA has shifted its focus away from the 98% of small businesses with 1-19 employees, to work with larger corporations with up to $36.5 million in revenue and/or 1,500 employees. This accelerator grant program is another example of that shift.

The SBA says accelerators produce more jobs, but the evidence suggests the opposite. Over the last five years, the approximately 200 accelerators in the U.S. have created between “3,300 and 4,800 jobs,”http://onforb.es/1rPy92j or a measly 700 to 960 jobs a year, at a cost of $130,000 per job created. During that same period, small businesses started around 600,000 businesses every year, creating three million jobs over five years, all without handouts from the government.

The Efficacy – The Product High-Growth Companies (NOT)
The SBA says accelerators produce high-growth companies. The evidence suggests otherwise.

The best data on job creation from the Kauffman Foundation shows 100% of net new jobs are created in the first twelve months of a new business. 98% of those will never have more than 19 employees (and don’t want more), and less than 00.06% have more than 500. And nobody can figure out which freak will actually grow quickly. Not a single graduate of an accelerator program over the last couple decades has become “high-growth” and generated tens of thousands of jobs.

In contrast, McDonalds started as a hot dog stand in 1937, and didn’t start growing until eighteen years later. It was not built to be big, “high-growth”, or even make hamburgers. Accelerator owners would have laughed at it.

Sara Blakely designed and started selling panty hose from her apartment because she didn’t like the way her panty hose fit. In a few years Spanx became a billion dollar company, without any accelerators or even a single penny of outside investment. And no one, including Sara Blakely could have guessed it would become huge.

In 1996, two college kids started a company called Backrub on their college campus server. Three years later they moved out of their garage and renamed it Google, which lived in obscurity in the backwaters of the Internet for another couple years. These kids would have never survived the “pitch deck” process to get into an accelerator.

The venture capitalists never recognized these or any others like them, and the overwhelming evidence is that they never do. The fact is, good ideas don’t need to be coddled. 81% of the fastest growing businesses in America never took a dime of venture capital, and those that achieved the highest financial return also took no VC money. Not one of the thousands of fastest growing businesses in America have come through an accelerator.

Throwing free money at accelerators in not an effective use of SBA funds. They would be better off lending it to small business owners with interest.

The Fairness Issue
The SBA was formed to help small business owners get interest-bearing loans, not to give free money to wealthy VCs. One recipient of the handout, the Arizona Center for Innovation, is owned by Tech Parks Arizona, which owns 5.2 million square feet of office space producing over $100 million a year in revenue. Do they really need a government handout to make more money? Just as questionable, many other grant recipients were just formed in the last few months. Some haven’t even opened yet. With no track record at all, the SBA is throwing money at them, no strings attached. It’s simply mind-boggling.

How does any of this giveaway make sense? This is crony-Industrialism, and an affront to the millions of small businesses slugging it out in the trenches, whom are more deserving, but won’t see a dime of this money. The SBA has a lot of explaining to do.

Article as seen on Inc.com

Why ’Participation Age’ Leaders Will Beat Old-School Managers, Every Time

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Mayer manages to the Lowest Common Denominator. Semler leads to the Highest Common Denominator. The difference is dramatic.

Last year, the CEO of Yahoo, Marissa Mayer, created shock waves throughout the tech world by dictating that “work from home” was no longer permitted. She summarily herded everyone back into the Office Day Care Center to be closely supervised like seven year olds. A few years earlier, a large multi-national company headquartered in Brazil named Semco, threw a party for their leader, Ricardo Semler, to commemorate his 10th anniversary of not making a decision.

 

Managing to The Worst vs. Expecting the Best
LCD Management (lowest common denominator) asks, “What’s the most incompetent or laziest thing somebody could do?”, and then creates an environment to make it hard to get away with it. In contrast, HCD Leadership asks, “If given a clear vision, what is the best possible thing people could do without being managed?” HCD leaders then create the kind of environment that will attract self-motivated, self-managed achievers. Both of them are self-fulfilling prophecies.

LCD Managers create an environment where people will live down to our worst expectations of them. HCD leaders understand that the art of leadership is to know how few decisions the leader should make.

Ricardo Semler is perhaps the best, low-profile CEO leader in business today. Mayer is a high-profile CEO manager, using personal superpowers to hold everything together – for now. As a result, the futures of Yahoo and Semco are going in dramatically different directions.

Centralized Decision-making vs. Everyone is Capable
LCD managers assume they are the most motivated, qualified, committed, invested, and experienced. With all those superstar qualities, it would be foolish to have others making decisions. That’s why they are paid the big bucks. Mayer is infamous for regularly having a few dozen people waiting outside her office for hours, as she solves problems and makes decisions for them one at a time.

HCD Leadership believes most people are inherently motivated, qualified, committed, and invested, and that they make better decisions than someone in a hierarchy. Semler doesn’t make decisions anymore because decisions are made where they will be lived out. Stakeholders throughout the company are responsible for Semco entering a variety of industries and growing dramatically year after year, from $4 million 29 years ago to $1billion+ today. As an HCD leader, instead of making decisions others can make, Semler is free to ask questions, cast vision, and work with others to build the future of the company.

Superpowers vs. Delegation
Mayer is a supermanager – which allows her to get away with a lot in the short term. But it is not sustainable. When she goes, the energy goes. She has entrenched herself in decision-making, making her nearly indispensable. While at Google, Mayer pulled 250 all-nighters in five years and held up to 70 meetings a week. She sleeps four hours a night. In contrast, Semler trained others to make decisions. There are now six co-CEOs who rotate leadership every six months, allowing Semler to function at the highest levels of leadership and not make decisions. As with any great leader, he has worked hard to get out of the way. He is fully dispensable, while nobody could replace Mayer.

The Results Are In
Semco gets hundreds of unsolicited resumes every month, and no one leaves. In the worst 10-year recession in Brazil’s history, revenues grew 600%, profits were up 500%, and productivity rose 700%. Innovative Stakeholders have taken them into profitable industries they could have never dreamed of entering, and they continue to grow exponentially. And unlike Yahoo, Semco hasn’t told people how or where to work for over three decades.

LCD management may get quick, short-term results, but Yahoo’s future will never look like Semco’s – it’s too reliant on a very high-profile, LCD superhuman manager. Very impressive in the short-term, but very old school.

article as seen on Inc.com

Unmotivated Employees Won’t Like Where The Work World Is Headed

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The world continues to shift in favor of those who want to do something, contribute, create, innovate, make meaning, and own their lives.

The time is ripe for entrepreneurs, but will employees survive the next evolution? Maybe, but they’re going to have to change, now.

The work world is shifting in favor of those who want to do something, contribute, create, innovate, make meaning, and own their lives. Recent studies show the workplace is headed in a participatory direction that will not accommodate traditional employees stuck in Industrial Age management structures.

The Evolving Workplace: Expert Insights is one such study. They identify seven trends. We’ll look at four of them that do a great job of identifying where “work” and the “workplace” are headed.

Trend #1: Crowdsourcing and Crowdsource services. People will work everywhere and some will never meet. Just-in-time labor will reduce the number of permanent employees. Productivity will become more important than hanging around the boss. Thirty percent of Japan’s workforce is already crowd-sourced.

Participation Age implication: The big elephant in the room is that kissing up to cover up for lousy productivity will be much harder for employees to do remotely. The lazy guy with a great personality might actually have to start working.

Trend #2: Productivity measured in outputs, not hours. This study says the whole world is moving in that direction.

Participation Age implication: This a results-based culture, replacing the traditional time-based culture. In our company, we have no office hours, and no vacation or sick time. We expect people to produce, and then go play with their dog (or vice versa). The Industrial Age taught us to trade time for money, but in the post-modern economy, time is the new money. People want freedom from the 9-5 and will produce more if treated like adults who are in charge of their productivity.

Trend #3: Values vs. rules. Values, which guide and encourage personal initiative, will be more prevalent than rules, which box people in, dull their thinking, and keep them from innovating.

Participation Age implication: This trend highlights the importance of hiring people who reflect your values and who you can trust (since you’re no longer measuring time, but results). Stephen Covey’s research showed that employer/employee trust is one of the most valuable factors in someone being productive. Going forward, hiring for culture, which cannot be taught, will replace hiring for skills, which can be taught. Skilled employees will have to learn to live in business community, not just produce in a vacuum.

Trend #4: Employee-led innovation. The best innovation will come from the “bottom up,” not from management or R&D departments.

Participation Age implication: When we lead with values and not rules, we turn employees (supervised children) into Stakeholders (self-managed adults). Stakeholders take responsibility for their time and produce results without being monitored. More importantly, they will come up with great ideas on how to move the company forward. Management won’t have to tell employees what to do; the Stakeholders will be the innovators that move the company forward.

Most revealing line from the report: “Strong resistance is expected from many parts of the labor force [to measuring output instead of hours]…. The gap will widen between the best workers and the worst in terms of opportunities and earnings, contributing to greater income inequality and therefore potential social unrest.”

In other words, a time-based culture lets people appear productive by simply having a car in the parking lot, and they will protest having been exposed as a drain on the company.

Having a job vs. working; Time-Based vs. Results-Based
 The future doesn’t bode well for Industrial Age employees who don’t mind going to work (time-based job), but don’t want to actually work while they are there (results-based work). But it looks very bright for Stakeholders who want to “make meaning”, not just money, to take ownership, and get a life at the same time.

The work world continues to shift in favor of those who want to do something, contribute, create, innovate, make meaning not money, and own their lives. It should encourage all of us to move from being employees to Stakeholders.