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A Stunning 92% of Companies Want to Reorganize This Year. Here’s Why You Need to Be One of Them.

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92% of companies recognize it is time to do something about the dusty old Factory System hierarchy we’re still clinging to. Some amazingly successful companies have already left it behind.

In a 2016 paper predicting the focus of company leaders this year, Deloitte University Press shares this eye-opening conclusion,

“After three years of struggling to drive employee engagement and retention, improve leadership, and build a meaningful culture, executives see a need to redesign the organization itself, with 92 percent of survey participants rating this as a critical priority. The “new organization,” as we call it, is built around highly empowered teams.”

The Factory System Still Reigns

The corporate organizational positions we inherited from the Factory System of the Industrial Age exist whether there is a human being attached to them or not. They are power slots in a hierarchy that are to be reached for and accumulated under you.

This model reflects a direct military heritage, communicating exactly which role has more power, command and control than the role below it–CEO (4-Star General), President (1-3 Star General), Vice President (Colonel), Director (Major), Manager (Captain), and Supervisor (Lieutenant).

Giving Everyone Their Brain Back

The Participation Age organization model is quite different. It is based on the idea that people are smart and motivated and don’t need to be managed. Therefore we can flatten the hierarchy, distribute decision-making, and get rid of unnecessary layers of command and control, such as managers:

Factory vs Participation

We know intuitively that this tired old Factory System model we dragged into the 21st century is broken. Our first attempts have been to tweak it, attempting to solve its inherent problems by nibbling around the edges and focusing on red herrings like “empowerment” and “engagement”. But while we’re treating these symptoms, the cause, a medieval military model, remains intact.

The good news is that the early adopters of the Participation Age organization smashed the military model decades ago, and the long-term data is now indisputable. In the emerging work world, those who dissolve the traditional hierarchy and give everyone their brain back will thrive, and those that don’t, will be left behind.

They’re Everywhere

Hundreds of very large companies with 5,000 to 65,000 Stakeholders and thousands of smaller ones have been operating without a military model for 60 or more years. And their numbers are growing quickly. These companies are identified by a rejection of command and control hierarchy, and by distributing decisions to the levels at which they will have to be carried out.

Leading Without Managing

Such organizations don’t have any people who manage other people. Instead, they organize around teams of people who, in the absence of a manager over them, take over all the traditional functions of management, and distribute them to members of the team.

These teams decide who they will hire and fire, how to discipline themselves, and their metrics for success. They agree with leadership on the result needed, then design their own processes to get that done, something a manager used to do. In many cases they even determine how to distribute pay amongst the team members.

Old Eyes, New Eyes

Anyone looking at this through the lens of a traditional business hierarchy sees chaos and anarchy. Yet every example of it in the real world results in faster growth, better margins, higher productivity, exponentially lower staff turnover, tighter processes, and better products. And yes, people with no business education, such as dock workers at The Morning Star Company, can manage themselves to higher levels of success than if they had a supervisor. There is no data on the side of the traditional military hierarchy in a business setting (even the military is questioning it these days).

So why do companies still do it?

First, because they don’t know what else to do. For over a hundred years, colleges have taught the Factory System model as if it was the only and best way to do business. It is neither. Rehumanizing the workplace and giving everyone their brains back works better.

Second, those who love command and control fear losing it, even though the result would be undeniably better for the companies they run (it’s not about the company, it’s about me).

Third, leaders fear a big dip in performance on the way to cleaning up the hierarchical mess. They are thinking, “It may not be optimal, but it’s working well enough as is, and we have pressure to perform this quarter.” The reality is that it doesn’t have to be disruptive at all. In most cases, if implemented correctly, a Participation Age model can result in immediate upticks in all the traditional metrics of success.

A Better, Simpler Way

The Deloitte research has revealed the obvious; we know that hanging on to the tired Factory System hierarchy isn’t working. It isn’t the only, or the best way to organize. There is decades of data that proves a flatter, more distributed model of power, decision-making and leadership works better, for both the organization and the people who work there.

There is a tidal wave of companies moving in this direction. Will you be one of them? The data is in–those who adopt the Participation Age model will thrive, and those that don’t will be left behind.

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

Barry-Wehmiller – Another Great Participation Age Company

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They’re Everywhere.

Participation Age companies make higher profits, are more stable, have more cross-trained people, exponentially higher Stakeholder satisfaction and retention, and great longevity. Are you looking to join one, or become one? Here’s another great example:

Most companies are still mired in the front-office business practices of the Industrial Age. But the Participation Age is a tidal wave breaking over the workplace. Those that embrace it will thrive. Those that don’t will be left behind.

Hallmarks of most Participation Age Companies:
1) Leaders, not managers. Stakeholders, not employees.
2) PARTICIPATION in building a great company. SHARING in the rewards.
3) Decisions made by those who will carry them out.
4) Results-based (not the traditional time-based workplace)
5) Profit-sharing (includes time-sharing – extra time off for good results)

Barry-Wehmiller – Embracing The Participation Age and Thriving
Company Name: Barry-Wehmiller
Industry: Diversified manufacturing technology and consulting
Revenue: $1.7 billion a year
Headquarters: St. Louis, MO
Founded: 1885
Growth: 20% compound growth every year since 1987
Ownership: Privately Held

Key Culture Belief
Leaders shouldn’t manage people; they should steward them. Who in your life do you “manage”? Your spouse? Your children? No, you care for them. You acknowledge the deep responsibility you have for them. They wanted to be sure Truly Human Leadership becomes permanently embedded in their culture. So they taught leaders to become good stewards of the lives entrusted to them.

Key Leadership Practice
THL – Truly Human Leadership

Key Moment
1997 – Bob Chapman, CEO, had “an epiphany” while visiting a company B-W had acquired. He was hanging out in the kitchen before work watching people have fun talking, but noticing the closer it got to the start of the workday, you could see the “joy went out of their bodies.” He asked himself, “Why should people have to leave work to have fun?” And that was the beginning of a new way of doing business at B-W.

Key Mindset
Bob Chapman decided and the company’s Guiding Principles of Leadership cultural vision statement needed to be lived out, not in employee handbooks or on posters – “we’re going to put this in people’s heads and hearts, not just on the walls.”

Key Participation Age Practices
(an extension of their Key Beliefs (no managing):
1) No managers, just leaders who seek how to make others successful
2) No timecards, even in their manufacturing area
3) Free phones for line workers to call out any time
4) Take breaks when needed, not at prescribed times
5) A multitude of other things based on the principle of de-emphasizing hierarchy and elevating equal voices in building a great company
6) Results-based rewards: “Measurables allow individuals and teams to relate their contribution to the realization of the vision”
7) A deep commitment to their Stakeholders personal growth

Key Results
1) Exponential revenue growth (20% compounded annually since 1987) and overall company expansion
2) 88% of employees of Industrial Age companies feel they work for an organization that doesn’t care for them. At Barry-Wehmiller, 79% surveyed by an outside organization said they believe BW cares about them – 180 degrees from “normal”.

One Fun Thing They Do
Guiding Principles of Leadership SSR Award Program. Team members nominate their peers as great examples of leadership in our culture, celebrating the everyday greatness in those that they work with day in and day out.

The entire organization gathers for elaborately planned celebrations designed to make the winner feel honored for his or her contributions to our culture. Winners are awarded the keys to a unique sports car, which they can drive for a week. Unlike a plaque for your desk, winners get the chance to drive their “trophy” for a week, inviting questions from family, friends and neighbors about why they have this unusual car.

They’re Everywhere
Companies of every size, in every industry, are embracing the Participation Age to be more successful. If you are a Stakeholder and want to Make Meaning, not just money, leave your Industrial Age company and go find one (see other examples on this blog). If you’re looking to build one, read Why Employees Are Always a Bad Idea

Story confirmed with Barry-Wehmiller. Click here for more information on Barry-Wehmiller’s Participation Age culture

Why It Isn’t Hard to Find Self-Managed Stakeholders

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If you believe you can’t…

We regularly highlight companies in every sector with a few dozen to tens of thousands of Stakeholders who all function without managers. How can they find thousands of Stakeholders, when others seem to have trouble finding just a few?

Gallup and some others claim around 20% of the workforce is actively disengaged – you ask them to do X, and they will work hard to do X minus. They also claim around 20-30% of the workforce is actively engaged – they will do X plus, when you only ask for X.

That leaves 50-60% of the workforce that Gallup says aren’t actively engaged or actively disengaged. They call them simply, “not engaged”; bumping along.

So these stats show 70-80% of the workforce is, at best, “not engaged” in their work. Yet our experience is that it is very easy to find actively engaged, fully committed, self-managed Stakeholders who don’t need to be managed, just led. W. L. Gore has 10,000 and Semco has 3,000, both with no managers. Scores of other companies, including our own have a few to tens of thousands, all with nobody managing them. And nobody goofs off. How can that be? Won’t people take advantage of that freedom and turn it into a license to ease off the gas?

No. And here’s why.

LCD Management MAKES People Disengaged
The 50-60% that everyone claims are “not engaged” are followers, and are simply responding to the work world you created for them to live in. If you believe people need to be managed, and don’t have the motivation to take care of their commitments at work, then you will create a workplace structure that is designed to “manage” them into productivity.

LCD Rules vs. HCD Values
This mindset results in a common leadership mistake – LCD Management. Over time (or right away), managers create “lowest common denominator” rules. In response to a few people doing stupid or lazy things, managers create rules to ensure no one can repeat it. The result is a workplace designed around preventing people from being stupid and lazy. People hired into these workplaces work to the lowest common denominator, exactly what you expected of them.

The answer is HCD leadership – decide what would free people up to be as smart, motivated and responsible as possible, and design a workplace to that “highest common denominator”. People hired into that workplace will understand that by being a self-motivated, self-managed adult, they will have ownership over their lives at work, and make more money. It’s motivating to reach up to attain something (HCD Leadership), not to just work a little harder than necessary (LCD Management).

Values, not Rules
An LCD workplace is full of rules to keep people from doing something stupid or lazy. An HCD workplace is nearly void of rules and is instead full of values that guide and drive people to be and do their best when no one else is watching. If your workplace is built around values, you will attract Stakeholders, not employees.

When you build an HCD workplace, you attract the 20-30% of the workforce that wants to be “fully engaged” – natural Stakeholders; AND the 50-60% that will play whatever game is presented, will reach for the stars because that is the game you’re playing.

Attract the 70-80%, not the 20-30%
Build an LCD workplace and you can expect 70-80% to act like employees who need to be managed and told what to do (children). Build an HCD workplace and you’ll find that 70-80% of the workforce will jump right on board. The 20-30% that are fully disengaged will find your workplace uninviting and will either not apply, or will leave.

W. L. Gore found 10,000 Stakeholders and no employees. With HCD Leadership, you should do just as well finding all the Stakeholders you want.

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.

BLOCK is a Participation Age Company

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Founder Jon Pickering gets it.

Read this great blog post from the co-founder of London-based Block, Jon Pickering.

Block was just named a Cisco Gold Partner on October 3. They have experienced phenomenal growth since they were founded in 2006, for good reason. Jon Pickering and his co-founder, Marc Chang are building a Participation Age company that pushes past the still common business practices of the Factory System and the Industrial Age. They are building a Participation Age company that attracts the best of the best.

Jon’s post is about people who want to be employees (not a good idea) and people who want to be Stakeholders (great idea), and how to build a company like his that is welcoming Stakeholders.

I met with Jon in London a couple weeks ago. He was introduced to me by Kate Warren, founder of Brightlife, another great Participation Age company we’ll highlight in the coming weeks. Jon has a great vision for where his company is going. More importantly, Jon is moving forward on his vision – not sitting on it.

Dreamers talk; visionaries walk – Jon is walking it out. Read how he and Block are doing it here.

The Participation Age Company – Is Yours?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Manage Stuff. Lead People.

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The end of management.

Management is good. Managers are bad. There is no room for them in a Participation Age business. People don’t need to be managed; they need to be led. The difference is not semantic, it is gigantic.

The Industrialists did their dead level best to re-make people into simple extensions of machines. When people are extensions of machines, they are “stuff” to be managed. But if they are fully human, they require leadership, not management.

In our business, we only manage stuff; processes, systems, delivery of goods and services, accounting, marketing, sales, etc. These are all “things” to be managed. Everyone in the business manages stuff of some sort or another. But none of us needs someone with the title of “manager” to hover over us to ensure the stuff will get managed.

Manage Stuff
Stuff definitely needs to be managed. Unlike people, stuff is inherently stupid and lazy. It needs to be told what to do; it doesn’t have a brain of its own or any motivation to assemble itself. The packaging material and the product just sit on the counter until someone picks both of them up and puts them in the box. Someone who is smarter and more motivated than the stuff needs to manage that process, but the smart and motivated person doing the packing does not need managing – they need to be led.

Accounting numbers are also stupid and lazy. They just sit on spreadsheets until a smart and motivated person comes along to update, organize and report on them. That process needs to be managed, but not the person doing the accounting – they need to be led.

Every process, system, product, and service in a business is inherently stupid and lazy and needs to be managed. Unfortunately, managers don’t see much difference between the people, and the stuff or processes in the business. To a manager, people are extensions of machines or processes, and both of them need the hovering involvement of a third party to force them to work. That other person, called “manager”, doesn’t actually pack the box.

The manager assumes the person is as inert as the packing materials, and must be “managed” to ensure they will actually pick up the packing materials and put them in the box. The manager exists to ensure the person doesn’t just sit there like the packing materials. It’s a waste of two good lives; the life of the manager who does nothing, and the packer, who is treated like a nine-year old incapable of being responsible.

Lead People
A leader will do it quite differently. They will not hover over or manage the adult Stakeholders. They will impart vision and guidance, including why we do what we do, metrics for success and metrics for exceeding the objective. A leader will train and provide the necessary infrastructure, and they will create a process that requires the packing person or the process itself to proactively report to the leader regularly how things are going.

Then the leader will do something extraordinary that the manager would rarely do – they will GO AWAY AND BE PRODUCTIVE, TOO. Instead of hovering over the children in the day care center, they will go somewhere and do something themselves that adds to the bottom line. Or they might just be one of the packers or one of the accountants, and join right in being productive; leading and motivating by example, not by threat, persuasion, cajoling or hovering.

A manager justifies their existence by making other people productive more than by being productive themselves. Managers “feel” productive – they have tons of monitoring on their plate. But a leader will lead by example, get in the trenches and be one of the productive people.

Leaders can afford to do this because they hire Stakeholders, not employees, and don’t need to live in a day care center where they are watched like nine year olds. Most of the work of the manager disappears or gets dispersed among all the adult Stakeholders.

Everyone is a Leader
Stakeholders are adult leaders, too, and understand that if they have all the training and equipment they need, and clearly understand the objective required, they will gladly take the bull by the horns and “own” their tasks, job, process and result. Why? Because they also know they own part of the compensation (profit-sharing) that will come from that level of ownership. Taking on the former tasks of the manager is one more way for them to Make Meaning, not just money.

Adults Without Managers – An Old Idea
The idea of managing stuff but leading people is not a new concept. A store owner prior to the Industrial Age hired someone else to stock shelves, trained them and gave them the tools they needed to do it. Then that leader went back to being productive themselves. If the stocker wasn’t productive, they were let go and the leader got someone who could self-manage. After training the new person, the leader went back to being productive again. Managers hang on to employees who need to be managed because it justifies their existence. A leader fires them and finds a Stakeholder.

In a great modern business, as before the Industrial Age, everyone produces something, whether it is maintenance, accounting, packing, new product development, or vision and leadership. No one stagnates around watching other people do the work. Stakeholders are all leaders, and all of the manage stuff.

Fire All The Managers – All of Them (Including Yourself)
You can replace five or ten managers with one leader, easily. It’s a great money saver and you’ll find out real fast who are the chidren (employees) who need to be moved along, and who are your adult Stakeholders who will take over the very few things the manager was doing that were of any value.

Keep Only The Stakeholders
Are you managing employees/children? If you are, my guess is you’re really tired of it. Stop it. Tell the nine-year olds it’s time to grow up and be adult Stakeholders. Show them the stuff that needs to be managed, then tell them everyone is responsible to lead in their area of expertise. Then go get a job and be productive yourself. If you have employees who don’t want to grow up and at least lead themselves, find someone who will. There are plenty of Stakeholders out there.

Managers – A Business Disease of the Industrial Age
Managing people (not stuff) is a disease of the Industrial Age. It’s a recently invented construct and is a dead end process that maintains people at the nine year old level. And it dehumanizes them as if they were an extension of a stupid and lazy machine.

Leaders – What People Have Always Needed
Leading has been around since the dawn of man. It was not invented, and is the time proven method for motivating people. Everyone in your business should do it in their area of expertise. It’s rewarding and humanizing.

Get out of the Industrial Age into the Participation Age. Manage stuff. Lead people.

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.

Yahoo’s CEO Marissa Mayer Is Officially An Industrialist

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Home Alone.

After I wrote my last post on why working 9-5 is a bad idea, I found out Yahoo’s CEO Mayer was killing telecommuting. It’s a classic failure of leadership and will get her the opposite result than she hopes.

This last week, Marissa Mayer ended telecommuting for all Yahoo employees. The few retro voices in the archaic wilderness trumpeting this move as “good”, say it will make Yahoo more “innovative” and “collaborative”. Uh…cubes. They’re being stuffed back into cubes.

More Productive?…No.
This definitely won’t make them more productive. All the data old and new confirms this. Until after 1850, the majority of all manufacturing and other productivity was done at home. Salary.com research shows people waste an average of 25% of their day in the office doing nothing. Other research shows that people in an office waste up to 50% of their time “managing up” (brown nosing). Telecommuting is proven to increase productivity.

More Innovative and Collaborative?…No.
And there is no data that suggests that putting people back in cubes makes them more innovative or collaborative. Mayer’s decision was lazy and lacked any innovation on her own part. There are a hundred better ways to make sure telecommuters are touching base in an innovative and collaborative way with each other and the company, but that would have taken some energy to figure out. Reintroducing the brass steam whistle and the time clock was much easier, but is a short-sighted decision.

Yahoo Employees Are Now Stupid and Lazy
But the worst reason for doing this is that it reinforces the traditional understanding of the “employee”. In 1903, Frederick Winslow Taylor wrote his views of work that became the foundation for Scientific Management theory, which governs our view of work today. He said there are two basic assumptions you must make about employees, 1) they are lazy (he called it soldiering – doing as little as possible to keep from being fired), and 2) they are stupid “the average employee is so stupid that they more nearly resemble the ox than any other type.”

If employees are stupid and lazy (a view not common until well after the 1850s and convenient for Industrialists to believe as they treated them like indentured servants), than you need smart and motivated people to manage them – thus the modern separation between “employees” (stupid and lazy), and “management” (smart and motivated).

Mayer Is An Industrialist
Mayer’s move is a confirmation that she is a modern Industrialist (click to see my post defining this), and believes her people are definitely lazy, and almost certainly stupid (can’t figure out how to be productive on their own). But the problem isn’t with her employees; it’s with her leadership. Great leaders inspire and motivate people to be owners or “Stakeholders”; self-managed and proactive adults who take ownership of their jobs and the company’s future, and are consistently creative and innovative, always working to make the whole “system” better.

Mayer lacks leadership. She can’t inspire and motivate adults, so she has gone to the fetal position of Industrialism, requiring that all the stupid and lazy children now check themselves into the day care center that is the office so that managers can keep them from running into the street or messing on the carpets.

The Opposite Result
Yahoo needs engaged Stakeholders – adults who can work with her to pull Yahoo out of the morass. Instead she is creating employees – children who will be managed and told what to do. Innovative and collaborative, my eye.

A classic failure of leadership, made worse because her actions blame the Stakeholders for her own lack of vision. This is nothing more than calling all the elephants to the graveyard for Yahoo’s last rites.