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Why You Can Never Empower People, but You Absolutely Must Engage Them

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Leaders have wasted a lot of time and money on two of our favorite Business Buzzword Bingo terms for the last three years: empowerment and engagement. Here’s the real skinny.

Gallup says a whopping 70% of people are disengaged from their work. That’s critical because the very few companies with high engagement enjoy much higher net profit margins and five times the shareholder return.

Engage People By Empowering Them?

The standard answer is that if you empower them, they will become engaged. But that is an answer developed within a command and control mindset, which is not the place to find out how people are empowered. As Einstein said, “Problems cannot be solved with the same mindset that created them.”

In a recent discussion with an elderly billionaire who had made his money in the 80’s and 90’s, he was convinced that, “It is the job of the CEO to empower people.” He bristled dismissively when I suggested people might not need him to empower them. Einstein’s quote came to mind, and I realized he was trying to solve the problem from the mindset that had created it. He was well known as a top-down, command and control manager, and he was taking special delight in having the power to empower people, by sharing a little of his power with them.

Thank You, But I’m Already Fully Empowered

But empowering someone this way is a subtle way of communicating, “I’m still in power, and the only reason you have any power at all is because I granted a little of mine” – a patronizing and perhaps even belittling view of empowerment. The message is, “You don’t show up fully equipped to contribute – without me, your personal empowerment is insufficient.”

The reality is, we can’t empower people. They show up empowered and all we can do is suffocate their innate ability and desire to contribute, innovate, make decisions and generally be self-managed adults. Empowerment is the absence of the heavy hand, just like an apple seed only grows where you don’t put down plastic. The seed shows up empowered and ready to sprout. I can’t add anything. All I can do is smother it and keep it from sprouting.

But Give Me a Reason I Should Engage With You

Engagement, however, is all on us. While people show up empowered – it’s who they are, the seed is complete – they are likely to show up not engaged in any way. The apple seed can remain just a seed for a very long time if the conditions aren’t right to grow. In the same way, people will be in neutral until you give them a reason to use their empowerment to make the company better. Engagement is the addition of leadership, principles, resources, guidance, training, community, teams and incentives – like the addition of water, sun, fertilizer, and good soil are to growing the apple seed. The seed shows up fully complete and ready to grow, but won’t until it sees the right conditions to do so.

How To Engage People

Engagement requires that we do a very few things right. We must engage everyone in building a clear vision of where we are going, and require that they play a part in creating a plan to live it out.

Engagement also requires that we build an organizational model that encourages distributed decision-making and other forms of participation formerly reserved only for hierarchical managers. And if we expect people to be fully engaged, we need to invite them to have more control over their time, and to be treated like self-managed adults. We also need to be more deliberate about recognition, rewards, relationship-building experiences, and participation in incentives programs directly related to agreed upon results.

The Bottom Line

Empowerment is the absence of the heavy hand; the absence of black plastic over the seed. Engagement is the addition of reasons to get involved – leadership, vision, tools, values, resources, guidance, training, metrics, and relationships. Get out of the way and people will show you how empowered they already are.

Don’t waste time trying to empower people. They already are. Just give them a reason to be engaged, give them the resources they need to grow, and get out of the way. And watch your company take off.

Article as seen on Inc.com

Pivotal Labs Finds Success With Self-Managed Teams

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Pivotal Labs doesn’t talk about not having managers or use the term “self-management”. They just do things this way because it works so much better.

For Pivotal Labs, the only reason to have a process is to get a result. Productivity is the mantra, and it’s all based on three simple, core values: “Do what works,” “Do the right thing,” and “Be kind.” But wait, where are the managers? Oh, that’s right, there are none.

Addition, Not Subtraction

Pivotal Labs never tried to reduce or get rid of managers or create “self-managed teams.” Instead, CEO Rob Mee, who co-founded Pivotal in 1989, based his culture on extreme programming, and designed the most efficient project team structure for getting things done fast and well. It’s focused on “balanced teams,” and managers were never part of the mix. And it worked.

Today, Pivotal has over 2,000 staff members in nearly 20 locations around the globe. Clients like Twitter, Mercedes, GE, Philips, Humana, and Southwest Airlines lead a Who’s-Who list of companies that have benefited from Pivotal’s commitment to results over process. And their technologies and tools touch billions of users every day.

Pairs, Teams, and Generalists

Pivotal Labs structures their workplace very simply, with teams of people working on projects together. Pairs of programmers switch out almost daily to work with other people and on other projects. Cross-functional pairs can also be comprised of user experience (UX) and user interface (UI) designers, product managers, and engineers. Rejecting the specialized assembly line method, there is an emphasis on everyone learning how to do everything. Mee says, “At Pivotal, every developer works on every level of the system, from HTML and JavaScript to Ruby and down to the database. The argument that specialists will be better at a particular layer of the system if they’re allowed to focus on it doesn’t really hold water.”

Shaping Cultures, Not Just Building Apps

The company’s success speaks loudly to that belief, and others have taken notice. Pivotal has been credited for shaping the cultures of some of Silicon Valley’s most influential and valuable companies. This is a result of their own belief that building better software is as much about creating a better culture as it is about creating new products. So companies regularly reach out to Pivotal not just to build an app but also to get help with rebuilding their own software development cultures.

Productivity Drives the Absence of Managers

Pivotal Vice President Drew McManus says, “Few software companies truly operate as self-managed workplaces. Putting agile development principles into practice is harder than it looks. It’s not about Ping-Pong tables in the break room, but about productivity. Rather than providing Ping-Pong or other games as a ‘perk,’ they are used as strategic breaks from staring at computers by employing other motor skills. People are happiest when they are being productive, and productivity drives everything we do here.” Which is why they don’t have managers.

The idea isn’t new. In the late 1950s, Bill Gore created his company, W. L. Gore and Associates, to produce Gore-Tex fabrics and other great products. Today, Gore’s revenue is north of $3 billion annually, and it has over 10,000 staff members. Gore called it the “Lattice Organization”-if you need something from someone, go get it. Pivotal Labs didn’t study Gore, or any of the thousands of other companies running without managers. They focused on getting the best result as fast as possible, and simply arrived at the same conclusion: most corporate layers slow things down without adding value.

Empathy-Based Teamwork

But Pivotal isn’t a rugged individualist culture, either. They don’t hire programming “unicorns,” working in the middle of the night propped up by caffeine, headphones, and Doritos. If you can’t program in pairs and work as part of a team, Pivotal won’t hire you. Again, Rob Mee addresses this myth. He says the most important thing they hire for is “empathy.” “Collaboration is the most important thing we do, and it doesn’t matter how smart you are if you can’t relate to how other people think.”

Janice Fraser, director of innovation practice, says a group of people built the concept of balanced teams together in 2010. “For the best outcome, ownership should be with the team, not with one person,” she notes. As a result of the work environment they’ve built, McManus says, “Pivotal’s best sales tool is the tour, because they see people working without managers. Large corporations say, ‘I want this. Come show us how to do this.'” They’re not just writing software, they’re helping change organizational structures from traditional top-down hierarchy to teams without managers.

Conversations, Not Communications

Every company struggles with communications, but Pivotal approaches it differently. Fraser says, “Our organization is built to create conversations, not just communications. Word of mouth is the best way to communicate. So we give people lots of landing spaces and encourage interaction.” To put feet to creating conversations, Pivotal provides free breakfast every morning and everyone takes lunch at exactly the same time. They also work from “stories,” not architecture, which also facilitates conversations. “Our office sounds like an bustling caf,” says McManus. “Face to face conversations are encouraged. Pivotal Tracker also triggers conversation. Live interaction saves us a lot of time. It happens ad hoc, so we have very few meetings.”

Part of building a culture of conversation is ongoing “AMA” (ask me anything) sessions with leadership. And sideways communication is facilitated by software they developed called Feedback, short tweet-like shout-outs with timely responses. All of it is designed to eliminate latency between identifying an action item and completing it.

Trust Is Everything

Fraser sums up Pivotal’s unique culture, “Think about who else will be affected and get them involved. We all strive to act like grownups. Balanced teams works on the principle that the right decision is made by the right person who has the right information at the right time. It’s all about trust.”

That’s real leadership. And all without managers.

Article as seen on Inc.com

Why Correcting Stakeholders Can Make Things Worse

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Mistakes vs. Patterns

Too often we correct or admonish people when we shouldn’t, and plenty of times we let things slide when we should jump right in. Here’s a very simple principle for figuring out when to get involved.

When someone does something we consider close-but-no-cigar, not close, or downright goofy, we usually do one of two things, depending on our own tolerance for confrontation.

1) We jump right in – and either a) walk them gently through the right way, b) blow them up with quick anger, or c) something in between. or

2) We ignore it.

In most cases, the surprisingly right thing to do is #2 – ignore it.

The simple question we forgot to ask ourselves before we jumped in can be one of the most valuable leadership questions we never ask:

“Was this a mistake or a pattern?”

A Mistake
A mistake is something we do once and learn from, so we don’t do it again. The only way we all got to where we could recognize other people’s mistakes is because we made them first.

A Pattern
A pattern is a habit of doing the same lackluster, lame or outrageously stupid thing regularly. We do these things over and over because we’re not learning from them. Every leader has good patterns and bad patterns. And so does every Stakeholder who works in our company.

Know the Difference
Most managers never ask which is which, they just jump in so they can show they “add value” (which is partly why they are managers, not leaders). Great leaders will always ask the question first, “Is this a mistake or a pattern”?

And honestly, if it’s a mistake, does it really help for me to jump in, either gently or angrily, and tell you all about it?

Jump in when…
The ONLY time we should jump in is:
1) if it is blatantly obvious that the person will never be able to figure it out themselves, and wants to, or
2) It is clearly a pattern and they can’t or won’t deal with it.

Patterns of doing things less then great or just plain wrong always need our attention. But mistakes almost always need to be ignored. If you hired right, your Stakeholders want to do great work. And one of the best ways for them to get there is the same way you did, by learning from their mistakes. Beating them up or fawning over them and “coaching” them every time they do something less than great simply makes them feel like children.

Never Ignore The Patterns
Ignore the mistakes until they become patterns. But never ignore the patterns – they will sink the Stakeholder, if not your business.

Managers correct everybody for everything. Leaders take the time to figure out if they are dealing with a one-off mistake or a pattern, and then they help people with the patterns and ignore the mistakes.

Stop managing and be a Leader – ignore the mistakes and address the patterns.

Take the Test; Are you an Employee or a Stakeholder?

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(hint: employees drool)

We believe employees are always a bad idea, and that people at work should all be Stakeholders instead. Read through the side by side comparisons and see how see how you stack up as a Stakeholder or as an employee.

If you look at the above and say, “I can’t trust my company to compensate me like a stakeholder”, you’re in the wrong company. Leave and find one that rewards performance and results, not growing mold sitting in your chair. You’ll have a lot more fun.

If you’re an employer and you think it would be great to do have Stakeholders but most people aren’t like that, take a look at your own leadership style and/or your belief system. Most people actually want to make a contribution to the world around them and be adults. Are you letting them be, or are you assuming they can’t be adults? If you believe people are most likely to be employees, you’ll treat them that way and they will respond that way.

The Industrial Age is over. Stakeholders rule. Employees drool.

How to Stop Managing & Be Productive Instead

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Toddlers, teens or adults?

We’ve already said WHY Management Is a Bad Idea. Here we identify HOW to stop managing so you and everyone else is more productive.

The art of leadership is to know how few times the leader should actually make the decision.

Managers make decisions. Leaders get others to do it as often as they can because none of us is as smart as all of us.

We could virtually do away with managers if they would just lead instead. I believe we could replace at least every five managers with one leader, and possibly ten to one in many businesses. 15 of the top 20 reasons people leave their job involves middle managers. Think how much more profitable (and fun) it would be to eliminate middle management all together.

Modern management is traced back to Frederick Winslow Taylor’s Scientific Management Principle from 1903 and 1911, that assumes employees are a) stupid and b) lazy, and therefore we need smart and motivated people to manage the stupid and lazy ones. In a good business you don’t need managers because the leader doesn’t believe people are stupid and lazy.

Leaders get out of the way. Here’s how to move from managing to leading. As you are having a conversation with a Stakeholder, ask yourself these questions, which move from Problem through Question to Solution:

Chasing Three Years Olds Around the Store – Did I have to come find out they had a PROBLEM? That’s the lowest level of management – running around finding out other people’s problems. If you do that, you have a bunch of toddlers working for you, and you’re the one who made them that way by chasing them around. Stop it.

Managing Eight Year Olds – Did they come find me with a PROBLEM? Not much better. Children come whining to their parents that Johnny hit them. You’ve trained them to do it. Stop it.

Managing 13 Year Olds – Did I have to figure out the right QUESTION? Asking the right question is 90% of getting the right answer. Anybody can identify problems, but if they aren’t asking the right questions to fix them, they aren’t adding much value. If you have to form the right questions, you’re not leading, you’re managing. Stop it and get others to form the questions.

Manager High Schoolers – Did they bring me the right QUESTION with no solution? You’ve taught others to not think; you’re the only one bright enough to solve things. Require that they come up with solutions.

Managing College Kids – Did they bring some possible SOLUTIONS for me to pick from? We’re getting there, but still you’ve taught them to not take risks and actually solve things. They’re afraid to fix things because you’ve taught them only you can do it, because you’re more experienced and less likely to do something stupid. You forget that you had to make mistakes. If you are ever going to have someone else in your business that can lighten the load, they need to take risks and make mistakes, too. Stop being a control freak and teach others to lead by letting them solve problems WITHOUT YOU.

Managing Adults – Did they bring me a report on how they SOLVED something? Guess what, you’re a leader. You can now focus on the business of building a great business instead of creating stupid and lazy people by all your managing.

Moving From Manager to Leader
You should be asking these questions every time you talk to someone, with the objective of getting to “Managing Adults” as quickly as possible (might take a year or more, depending on how long you’ve been chasing the toddlers).

If you want to run a day care center, it’s your option. People aren’t stupid and lazy and they aren’t children. You make them that way by managing them. Stop it. And if some of them decide to not grow up, kick them out of the house and get others who will be adults. You’ll all have a lot more fun, and make a lot more money – with no managers.

You should lead no matter what the size of your business.

Industrialists Are Not Capitalists

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but they’re all over the place, even today.

People love to throw stones at Capitalists, but it’s the Industrialists who are the problem. And they are a very different animal. I’m a fire-breathing Capitalist, and I don’t relate to these guys. Let’s throw stones in the right direction.

I’ve been working on and blogging about my next book on the Industrial Age for 18 months. The production area of the modern company has changed radically, having left the Industrial Age forty+ years ago. It’s full of clean suits and nano-technology. But the front office is still dragging its knuckles through practices developed in the 1800s for the Industrial Age.

Dilbert still reigns in the front office. And it’s largely because old-fashioned Industrialists are still in charge of the businesses.

Following is a chart from one of the chapters in the upcoming book showing the stark difference between true Capitalists, who are regularly doing great stuff, and Industrialists, who are more often up to no good. I can only find one thing they do in common (take risks), and even that is driven by entirely different motivations.

Do you work for the Industrialist on the left, or the Capitalist on the right?

If you want to work with the guy on the right, but you’re working for one on the left, get moving. Start aggressively looking for the company on the right, because they’re looking just as hard for you. They’re out there – don’t settle for less!

Employees are Always a Bad Idea.

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Children or Adults

This Industrial Age concept was never a good idea for companies, and was worse for the “employees”. Today, companies that move forward without employees will thrive. Those that don’t will fall behind.

The Industrial Age gave us cool toys and a cushy life, but it also came with some Business Diseases. One of the most rabid of the Business Diseases is the concept of an employee, which is a very new idea in the history of man, and one that needs to go away.

When machines took over most production, they couldn’t run themselves, and so the Industrial Age re-created people in the image of machines in order to run them.

“Employees are “Silent”
Over time companies made it clear they only wanted the productive part of the person to show up. They required people to leave the human being (the messy part) at home. As a result, the generation which entered the work force at the very peak of the Industrial Age (1945-1960-ish) was given the worst generational label ever – The Silent Generation. If you had a “Silent” as a parent, you learned to live life the way they had been taught – “Be loyal to the company. Do what you’re told. Show up early, leave late. Shut up, sit down, don’t make waves, live invisibly, go out quietly. The company will take care of you.”

Employees are Children
This view of work (and life) turned adults back into children. You were taught that the most mature person was one who obediently took orders, did what they were told, didn’t question authority, was blindly loyal to those in charge, and lived passively as others directed their lives. Pretty much what we want a four year old to do.

In order to keep the children from ruining the house, and to make them extensions of machines, the Industrial Age boxed people in with extremely clear and narrow limitations on what they could do, the hours in which they could do them, and endless limitations on being human and “adult” at work. It stripped them of their need to think, create and solve because the machine didn’t need them to think, create and solve. It just needed them to do.

Employees Are a Disease, not a Cure
We reject the business culture of the Industrial Age as a bad idea that needs to be corrected. Employees are one of those Business Diseases that should be eradicated. Because of the Industrial Age, the word “employee” has become synonymous with “child”. We can’t even use the word anymore. We don’t want to hire children who need to be told what to do and managed closely so they don’t run into the street.

Employees are Replaced by Stakeholders
So we don’t hire employees, but have replaced them with Stakeholders. Our Stakeholders are sold out to living well by doing good, and are not employees who punch clocks. Stakeholders are first and foremost adults who can think, take initiative and make decisions, carry responsibility, take ownership, be creative and solve problems.

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. They don’t live passively but are self-directed, creative, and solve problems. They don’t shut up; they make waves, they are highly visible and they don’t expect the company or other adults to take care of them. Adults own stuff, and they own their work as a natural part of being an adult. And the whole messy person comes to work, not just the extension of the machine.

Stakeholders Require Leadership, not Adult Supervision
If you hire Stakeholders (adults) instead of employees (children), it changes the way you direct people. We don’t have office hours, vacation time or personal days. We’re not interested in whose car was in the parking lot first or who left last. We believe office politics is a waste of time, so no one will ever be promoted.

Stakeholders Focus on Work, not Promotion to the Next Title
Every adult who works with us (over 20 full and part-time and growing) has a title that includes the word Chief; Chief Results Officer, Chief Connecting Officer, Chief Transformation Officer, Chief Operations Officer, Chief Development Officer, Chief of MIH (Making it Happen).

We don’t have supervisors or managers or directors or VPs – just Chiefs. None of us will ever need to be promoted, we’re already all at the top. We’ll just grow into more responsibilities as we become better at things. As we do them, they will be recognized and somebody might change our title (there is no centralized title giver).

Stakeholders Create Better Teams
We believe in working together as Committed Community (adults live in community) to get results for each other and for other business owners. Every full-time Stakeholder will take part in profit-sharing. Why wouldn’t they? They’re all adults who own their work, they should own profits from their work as well. That’s what adults do.

Stakeholders are Self-Motivated
Although we lease 1,500sf of office space for training and rent other spaces around the city, none of us have an office there – we all work from our homes and places like breakfast joints and coffee shops. If it helps somebody to get things done better, we’ll get them an office.

Stakeholders Make You and Themselves More Money
Our business grew 61% in 2010, 41% in 2011, 75% in 2012 and projected at 50% in 2013. Why? Because every Stakeholder is an adult, taking responsibility, creating, problem solving, making it happen, and taking ownership of whatever needs to be done to bring our clients the best experience and the most tangible results possible. And everyone is a lot happier because they all work with adults who pull their own weight.

Employees are a bad idea. Stakeholders rock.

How to Get Your Business to Grow Up and Run Itself

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Ray Kroc, the founder of McDonald’s, understood that to have his business grow up and run itself, he would need to pay attention to all of the Seven Elements of a Business – so he did.

Kids need to grow up and stand on their own two feet without leaning on you – that is maturity. Your company should do the same thing.

We assume we should wait until we’re big enough before we figure out how to make the business run itself, but – where we start is where we end up. No matter what size your business is, you should be manically focused on getting yourself out from behind the steering wheel from the gitgo. Pay attention to all Seven Elements of a Business, like Kroc did, and watch your business grow up.

Element 1: Vision and Leadership

“I was 52 years old,” recalled Kroc. “I had diabetes and incipient arthritis. I had lost my gall bladder and most of my thyroid gland in earlier campaigns, but I was convinced that the best was ahead of me.” And when he first saw the McDonald’s brothers’ restaurant, he saw what they didn’t, an opportunity to create an international business, not just a restaurant.

“If you’re not a risk taker, you should get the hell out of business,” said Kroc. What risk is holding you back? Get clarity on your vision to take more risk.

Element 2: Business Development

Kroc had to create the need for his product! Fast food was not an existing market – tough job! He clearly knew his niche, learned how to communicate that niche, and stuck to his knitting – he didn’t get sidetracked trying to make great food. And he didn’t let ego get in the way of making money – a very common disease.

Element 3: Operations/Delivery

Work from the result desired. “I didn’t invent the hamburger,” said Kroc. “I just took it more seriously than anyone else…We take the hamburger business more seriously than anyone else.” He built a small business into an international empire by focusing on the operational details and the desired result.

Element 4: Financial Management

When Kroc was asked “What’s the #1 priority for McDonald’s?”, he responded, “The bottom line!” To Kroc, efficient meant most profitable. He didn’t want the best hamburger in the world, he wanted the one that would make him the most profit per fat molecule.

Element 5: Customer Satisfaction

CONSISTENCY of EXPERIENCE was key, not QUALITY of EXPERIENCE. He didn’t need the best food, just the most consistent presentation of it. And if there was trash in the parking lot, that was “a gross affront to me.” A great customer experience was everything.

Element 6: Employee Satisfaction

“None of us is as good as all of us,” Kroc said. A strong believer in teamwork, Kroc knew his growing company could only grow if he had dedicated people. Kroc treated everyone with respect. Every new employee got a badge with the title “Management Trainee” to let them know they all needed to participate in making McDonalds great. His Suggestion Box was legendary.

Element 7: Community/Family/Self

Kroc was an astute businessman who understood that community involvement was a key part of an effective marketing strategy. This tradition of giving back that Kroc initiated so many years ago remains an integral part of the McDonald’s corporate philosophy. Through community contributions, Kroc also established a corporate tradition of creating a positive presence in society.

What did McDonald’s have going for it? Kroc paid attention to all Seven Elements from the gitgo. As small business owners, we’re usually good at a few of the above, and have big holes in a few. Which are you really good at? Whatever you answered, you’re business probably needs help in the opposite ones.

Your business may not be running itself yet. That’s not the question. Are you setting it up to be able to do that at the earliest possible opportunity? If not, you’ll be babysitting it for years to come, and won’t know why every time you come home, your business is there waiting for you!

Let’s learn how to wean our businesses – pay attention to all Seven Elements of a Business. We deserve an empty nest at some point, with a business that can run itself.

Guidelines vs. Rules – Creating Wildly Successful Employees

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Employees have changed. Rules don’t cut it anymore. The newer generation isn’t sure it even wants to go to work and has in some ways decided to retire BEFORE working. They’re out there “gigging” instead of working. How do you as a Business Owner respond to this new world?

How is the new world different than the old industrial age employee world? The old world had rules the employee needed to live by. The new world has guidelines that create ownership, freedom, teamwork, and creative involvement for the employe:

Employee Guidelines (principles) → → Employee Rules (laws)

  • Provide Framework → → → → → → → → → Box to live in.
  • Gives you a “floor”-minimum → → → → → Gives you a ceiling – “maximum”
  • Encourages innovation → → → → → → → →Encourages conformity/sameness
  • Frees up employees to win → → → → → → →Creates fear of losing
  • Emphasis on effective result → → → → → →Emphasis on process/procedure
  • Emphasis on employee ownership → → → Emphasis on we/they blame games
  • Encourages participation/innovation → → Encourages hiding/work-arounds.
    Examples of each:
    Apple Computers → → → → → → → → → → U.S. Government

A Key Objective in creating happy employees: Create “ownership” of their job, and help them see how it fits into the bigger picture (process mapping is a great way to do this.)

How do you lead in the new world? By becoming a Servant Leader. The best leaders have always led this way, but if you don’t lead this way in the new employer world, you won’t keep your employees.

Leaders do not exist to be served by those “under” them. They do not have the right to have others make them look good. Having a title on a door does not make you a leader. Leaders are focused on how they can make everyone else around them more successful (the servant leader). Employees are very clear that the leader’s job is to champion them and give them the vision, environment, resources, training, and connections to be wildly successful. The smart leader knows that if everyone around them is successful, they won’t have to worry about their own visibility or success.

Be a servant leader – create ownership among your employees for their positions, and focus your energies on making them wildly successful. You’ll have a great business and make more money in less time as a result.

Deciding when your Business is Mature, and How To Pick a Date to get there.

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As a business owner, Business Maturity isn’t about how big your business gets or how much revenue it generates. It’s about 1) your own ability to choose what to do with your time, and 2) the ability to walk away from your business for weeks or longer and have it still make money while you’re not there.

You could decide that it means that the leadership is completely turned over to others and the business is ready to be sold. But at a minimum, a business is not Mature if you are still necessary to the daily production of products/services (there is a difference between being necessary and being able to choose to personally produce.)

Here’s how to paint a good picture of what your Mature Business looks like:

  1. Know your Lifetime Goals. (Why are you doing this? To what end??)
  2. Calculate the cost of the Ideal Situation for living out those Lifetime Goals.
  3. Decide WHEN you want to be in that Ideal Situation. Stop reading here if you don’t want to put a date on when you get to your Ideal Situation. Growing a Mature Business won’t matter enough to you to actually do it.
  4. Decide what salary/cash you need to support your Ideal Situation.
  5. Make your best prediction of how much revenue your business will need to generate to allow you to pull the salary/cash you need to support your Ideal Situation.
  6. Make your best guess at how your business will do this. There are three ways to make money when you’re not around.
    1. Talent – The painter Renoir bought his massive French villa w/ two paintings, and his car with a pencil sketch. If you have unique talents then you can charge enough per hour to work very few hours. The problem with this approach is that it’s a crapshoot to have your talent recognized at this level, and your business really never matures because it still relies on you to produce. If you get sick or injured or worse, the revenue stream stops.
    2. Employees – this is the most common way to make money when you’re on vacation – buy someone else’s 40 hours a week at a discount, and resell it to your customers at a premium. The difference creates profit for you even when you’re not there.
    3. Products/Services – If you don’t want employees and you’re not über-talented, you can create products or services that you can license to others to produce. Or you can franchise your services for others to deliver, or create online software, products, or services that need very little maintenance.
  7. Paint as clear a picture as you can of what your Mature Business looks like in terms of the salary/cash it provides you, the time it allows you to use in other ways, and how the what will produce the revenue (Talent, Employees, or Products/Services), then
  8. Pick a Business Maturity Date – the single most important step in the process. If you don’t want to do this, don’t bother with Steps 1-7.

Don’t torture this – you’ll know you have a good enough picture when you’re excitement level for getting there has gone way up. If you have an Objective that is motivating enough, you will figure out the steps required along the way to get there.

Do you know what Business Maturity looks like for your business? Are you completely committed to a Business Maturity Date that you’ve gone public with? If so, welcome to the 3to5Club (see earlier posts)! Describe your Mature Business and your Business Maturity Date here – let’s get moving together!