Hourly Wages and Overtime Pay Are The Wrong Discussion In The Participation Age

Why are we talking about the hourly wage, or overtime pay for lower-paid managers? Those are Industrial Age discussions in a post-Industrial world.

Let’s have the right discussion. In the emerging work world of the Participation Age, great companies are racing out in front of these archaic ideas, and instead turning everybody into capitalists.

For the last few months there has been a renewed debate over raising the minimum wage, and this week the news is all about the push to provide over time pay for salaried managers who make less than $52,000, but work more than 40 hours in any given week.

The heart that drives this discussion is rightly motivated—don’t take advantage of people. But the solution is archaic and backward-looking. It is focused on time spent at work instead of participation, contribution to the business, and most importantly, results. Time-Based pay comes from the Industrial Age Factory System that dehumanized people and recreated them as extensions of machines. Hourly wage and overtime conversations are simply putting lipstick on the pig.

The Right Discussion—Results-Based Pay
For thousands of years people were paid for how many shoes, pelts, candles, or chairs they produced, not how long they spent producing them. For as long as there has been work we have lived in a world where people were compensated for results, not time. If you made ten shoes during a week, you got paid for ten shoes. If you made thirty, you got paid for thirty. This worked because 80%-90% of all adults owned their own businesses and got paid directly by their customer for results delivered.

In a short 150 years these ownership numbers were reversed, with around 85% of people now working for someone else. As the Factory System developed, it made the fatal mistake of assuming that people would now work harder for Time-Based pay than for Results-Based pay. They were wrong.

Peter Piper Packed…
For three years in the mid 1980s, we led a summer leadership program for students. We got a Massachusetts pickle packing plant to give them jobs and agree to pay them for results delivered. Within a couple weeks they were packing twice as many pickles as Peter had been able to pack for many decades. In subsequent summers the company shut down a packing plant in California and shipped all their pickles to Massachusetts. People were paid for their results, not their time. They made a lot more money and so did the company.

Cut My Salary in Half, Please
A friend of mine, Alan Wyngarden, owns a small mortgage company. His loan processor made $55,000/yr and processed eight to ten loans a month; better than the industry average. They agreed together to reduce her salary to only $25,000/yr, but added an incentive for each mortgage completed with speed and quality. Within a year she was making over $125,000/yr and processing an unheard of twenty to thirty mortgages a month, with better attention to customers than before.

Alan has built four assisted living centers on the same Results-Based pay concepts, with higher than normal profit, salaries, retention, and staff advancement.

Everybody Is a Capitalist
Our company, Crankset Group, also employs Results-Based pay. One person got a substantial raise every month for thirteen months, doubling her pay because she kept adding more value.

The pickle packers, the Stakeholders at Alan’s two companies, and our people all perform better because they are paid for their results, not their time. We turned them all into capitalists—the more value they add, the more money they make. We’ve done this with printing pressman, call centers, law offices, small and large construction companies, medical practices and others in just about every industry.

Time Based Pay is Degrading
Those clamoring for tweaks to the broken Time-Based pay model are perpetuating a system that degrades people. When employees are turned into Stakeholders, and invited to play the same Results-Based game as business owners, the overwhelming majority will perform better, just like they did for thousands of years.

Time is the New Money
One final reason to change the discussion. Results-Based pay allows people to finish their work by 3pm and go home, or stay until 5pm and make more money by producing more results than required. Many would like the extra money, but an overwhelming minority of people would rather be paid with extra time away from work.

Time-Based pay doesn’t allow for that. You need to be at your desk for all eight hours, even if you were done at noon. In fact, you just might work slower so you can get overtime. At our company, if you are done getting your result for the day, we don’t care where you are or when you are. It works. We’ve grown 709% in the last five years.

Industrialists Won’t Like This
Those attempting to prop up the stale, exhausted Time-Based system won’t like this. While smart companies are racing to embrace the Participation Age, the laggards are ignoring the clear data in favor of Results-Based pay. This also includes union bosses, who would be put out of work if their members could make more money or time without their advocacy.

Capitalism works best when everybody gets to play. Time-Based pay isn’t capitalism, it’s industrialism. Let’s bury Time-Based pay with the Industrialists who invented it, and let’s re-direct the discussion to accommodate the emerging work world:

How do we turn everyone into a capitalist so both the company and the people who work there benefit more? Results-Based pay is one of the core answers.

Article as seen on Inc.com

Square CEO Jack Dorsey Says If You’re Making Decisions, You’re Not Leading

It’s counter-logical, but leaders rarely make decisions for others. Managers make decisions for others (and dehumanize them in the process). Most people who think they are leading are only managing. Great leaders know the difference.

The Manager—How Not to Do It
Marissa Mayer, CEO of Yahoo, is famous for having up to 70 meetings, and receiving 3,500 to 4,000 emails, each week. She has joked about having people in line outside her office and needing a “take-a-number” machine to manage the traffic.

This is not leadership, it’s management, two very different things. Managers solve and decide; leaders train others to solve and decide, and then get out of the way. As with most control freaks, Mayer is probably learning, as I did, that her future effectiveness will be directly related to her ability to leave command and control behind, so everyone around her can start making the decisions they will have to carry out.

Leaders who figure out they shouldn’t make decisions can lead wildly successful companies devoid of command-and-control management. Here are just three of many who have done it over the past 60 years.

The Pioneer
Bill Gore was so far ahead of his time in 1958 that he was ignored. He built W. L. Gore, Inc., with no managers—nobody worked for anybody. Leaders were chosen because people naturally followed them. Even today’s CEO, Terri Kelly, was chosen after a survey revealed she was the most respected leader at Gore. She wasn’t on the radar until then.

Today, W. L. Gore is a $3 billion company with 10,000 employees. At Gore and other successfully led companies, leaders exist to ask questions, not make decisions, and to serve, champion, guide, train, and then get out of the way.

With almost 60 years behind it, W. L. Gore has been a great example of how leadership builds a great company, where command-and-control management would have failed to do so. With no bosses anywhere in the company, Gore has made every Top 100 Best Places to Work list every year since the inception of such lists.

The Maverick
In 1981, at the age of 21, Ricardo Semler replaced his father at Semco, a tiny manufacturing company. His first action was to fire the managers. He rebuilt the company à la Bill Gore—no managers, no bosses, just a few natural leaders who attract followers without any ability to control or fire them.

Ricardo Semler celebrated his 10th anniversary of not making a decision many years ago. All decisions are made by the self-managed teams who have to carry them out. He is the majority owner and leads by asking questions, creating vision, guiding, training, championing others, but mostly by getting out of the way.

Devoid of managers who solve and decide for others, Semco has grown to more than $1 billion a year in revenue and multiples of that in assets, with employee retention at an unheard of 98 percent. Everybody has a brain at Semco, not just special people. In his book, Maverick, Semler tells how he built a company where he doesn’t make decisions.

The New Leader
Nearly 60 years after Gore and 34 years after Semler, Jack Dorsey, co-founder of Twitter and present CEO of Square, has the same approach. He believes it’s an organizational failure if he has to make a decision. He says his role is to see that decisions are being made, not to make them:

“If I have to make a decision, we have an organizational failure. I can help provide context of what’s happening in the industry. But I definitely see the organization and the people in it as the ones to make the decisions, because they have the greatest context for what needs to be done.”

Leading Versus Managing
These guys represent three generations of great leadership. They aren’t freaks but part of a fast-growing trend in the Participation Age toward leadership and away from management. There are countless great leaders who have learned the basic principle that training others to make decisions allows the leaders to truly lead. They have all learned the simple axiom of leadership that my company uses to advise CEOs:

The art of leadership is to know how few decisions the leader needs to make.

Give People Their Brains Back
Ownership is the most powerful motivator in business, and the ability to make decisions is at the core of ownership. Stop solving and deciding for others. They are adults. They can do it themselves, and better than you could. Instead, ask questions, train others to make great decisions, and then get out of the way and let them do it. You, your company, and everyone who works there will all be better off if you do.

Give people their brains back. Stop managing (making decisions). Start leading, and get out of the way.

Article as seen on Inc.com

Why Most Mission Statements Suck So Bad

We aim to be the #1 pencil manufacturer by proactively enhancing our viability with the highest profit, while visualizing a world where we own everything. Blecchh…

This month in our 3to5Clubs around the world, we’ve been covering how to develop a 2pg Strategic Plan, with a focus on the Vision and Mission statements (two very different things). We advise biz leadership, “When constructing a Mission Statement, be suspicious of any word with three or more syllables, especially those containing the letters U through Z.” Weird Al Yankovich’s song, “Mission Statement” demonstrates this perfectly.

Following are some of the lyrics – notice the “plethora” of fancy three-syllable words containing U through Z. Most corporate Mission Statements sound just like his song—sanitized, arrogant, and completely out of touch with the real world. For contrast, here’s one great Mission Statement by Fairmont Hotels.

“Turning moments into memories.”

Simple, elegant, emotional, down to earth, and focused on the RESULT the customer will get from engaging with them. They are not playing Business Buzzword Bingo like most companies do when constructing their Mission Statements.

There are tons of 3-6 syllable buzzwords in the song containing U through Z- fancy words, not useful ones. Play the song itself while you read the lyrics, below.

We must all efficiently
Operationalize our strategies
Invest in world-class technology
And leverage our core competencies
In order to holistically administrate
Exceptional synergy
We’ll set a brand trajectory
Using management’s philosophy
Advance our market share vis—vis
Our proven methodology
With strong commitment to quality
Effectively enhancing corporate synergy
Transitioning our company
By awareness of functionality
Promoting viability
Providing our supply chain with diversity (versity, ooooh)
We will distill our identity
Through client-centric solutions and synergy (oooooh oooh oooh)

If you don’t think this is funny, you need to take a good, long look at your Mission Statement and get someone outside your organization to help you reconstruct it.

Our Mission Statement:

We provide tools for business leaders to a) make more money in less time, b) get off the treadmill, and c) get back to the passion that brought them into business in the first place.

Not a single three syllable word containing U through Z (actually no three syllable words at all). We’re in good company – the New York Times is written at the fifth grade level because it makes it easy to read.

Take another look at ours and Fairmont’s mission statements. Good mission statements:

1) Don’t talk about the company

2) Never include a mention of “process” – how you do stuff (nobody cares how you make your chair)

3) Focus solely on the RESULT the customer will get from working with you

4) Share the result as an “Outcome” – an authentic result expressed emotionally. Everybody buys emotionally – everybody.

Is your Mission Statement about you or your customer? Are you trying to sound smart, sophisticated and complex? You are more likely to get there by working hard to be simple, unpretentious, and “plain”, and by focusing on the result you will get your customer – nothing else.
The profound things are always simple. If your Mission Statement isn’t simple, it’s probably not profound, either. Give it another go!

Article as seen on Inc.com

Why The F-Word Is the Right Response in Every Circumstance–No Exceptions

In the early 2000s, Rosamund and Benjamin Zander wrote a great little book called The Art of Possibility. They taught me to use the F-word as a response to everything. You should, too.

In his famous poem, “If,” Rudyard Kipling referred to victory and defeat (or, as he put it, “Triumph and Disaster”) as imposters. He was right. We need to treat victory and defeat as the imposters that they are. Here’s how I’ve learned to do it using the F-word. No, not that F-word.

Even though it’s ingrained in western thought, thinking in terms of victory and defeat is largely unhelpful. When we feel we’ve lost, we go get drunk. When we think we’ve won, we go get drunk. But there is a third alternative: I work hard to see seemingly great outcomes and perceived lousy ones through a single lens—practice.

It’s All Just Practice
If you decide to learn how to run a seven minute mile, but your first attempt is nine minutes, you didn’t fail, it’s just practice. And when you finally get to six minutes, if you regard that as victory, you’ll likely stop getting better. So, following advice offered by Rosamund and Benjamin Zander in their book The Art of Possibility, in every circumstance I find myself in, whether I perceive it to be bad or good, they all deserve only one response:

“Fascinating! How did that happen?”
Sometimes you’ll use the other F-word first, but get to “Fascinating” as fast as you can.

Always Getting Better
When I respond to both victory and defeat this way, I set myself up to learn from both of them. If something goes “wrong,” I need to be deeply fascinated by it to learn how to not repeat it. And if something goes “well,” that same deep fascination will help me learn how to repeat it regularly. It saves me so much emotional energy once I get past the wrong F-word and start being “Fascinated.”

I always ask the whole question—“Fascinating! How did that happen?”—because I want to remind myself why I should go through life fascinated; so I can learn, grow, and perfect as I go. Any other response to either of these perceived extremes is just wasted emotion that will keep us from learning and getting better.

Life Is Full of Seminars
A successful friend of mine, Alan Wyngarden, gave me an expanded view of how to be fascinated by the hard lessons. He calls them “seminars.” Some seminars are more expensive than others, and some go on for months or even years. But if we see them as seminars instead of bad experiences, we’re much more likely to learn from them. Alan has built a number of highly successful businesses and has a balanced personal life as well. He has shared a lot of seminars with me, and he has definitely been fascinated a lot.

I didn’t grow up making lemonade from lemons. When dumb stuff happened, I saw it that way and focused on feeling bad. I’ve invested many years in learning to be fascinated, regardless of the circumstance, and it has saved me a lot of time and energy. It has also helped me to see that, more often than not, it’s the perceived tough stuff that has taught me the most valuable lessons, but only when I’ve decided to be fascinated enough to learn.

Which Mental Muscle Are You Developing?
I spent a few decades developing the victimology muscle that made it reflexively easy to whine and go into a slump when things went “wrong.” So it took a lot of focus to build the new mental muscle to turn everything into a learning opportunity.

Every day we are faced with opportunities cleverly disguised as obstacles. Build the right mental muscle; learn to live fascinated. And yes, sometimes we’ll use a different F-word before we get to “Fascinating!” But we should get there as fast as we can, so we can learn and get better.

It took years, but I have embraced this “fascination” axiom for a couple decades now: Circumstances don’t make me who I am. How I respond, does. Responding with fascination only makes sense.

“Fascinating! How did that happen?”

Article as seen on Inc.com