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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

Participation Age Practices: DEG Invites Everyone to Start Something

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Stakeholders as Entrepreneurs

Most companies are mired in the front-office business practices of the Industrial Age. But the Participation Age is a tidal wave breaking over the workplace. How are P-Age companies different? Here’s another example:

We Dig DEG
DEG in Overland Park, Kansas have developed Participation Age Stakeholders, people who can make decisions, take ownership, innovate, and are even encouraged to create entirely new products and services.

Neal Sharma, CEO of DEG, a $20 million digital marketing company with 140 Stakeholders – http://www.degdigital.com/about/, wants everyone to be creating. If you think there is a service the company should add, and they agree, you don’t just get credit for the idea, you’ll end up being the one who builds it.

Let’s Try That
Cara Olson was a Web Strategist who thought the company should expand into email marketing. Sharma told her to go for it. Cara put together a plan and found clients, and today, email marketing at DEG is a $9 million product line, almost half of the company’s revenue. Other Stakeholders followed suit, building social media, copywriting, and other revenue streams and services.

Not all of them succeed – as with any entrepreneurial initiative. But Neal Sharma and DEG understand the value of having people bring the whole, creative person to work, and the company has grown exponentially as a result.

Stakeholders Dig DEG, Too
Following are things the Stakeholders say about DEG as a result of being treated like adults who have great ideas:

– “Our voice is always heard. In our culture, the best idea wins no matter where it comes from.”

– “We have a career lattice instead of a traditional career ladder, which translates to a high degree of internal mobility for us.”

– “If there is something you’re interested in doing and you think there is a market for it, they want you to make the case and go do it. That’s pretty much the story of how we’ve grown.”

– “Everyone receives credit for their work and contributions. We don’t like to have our heroes unsung.”

– “We are given autonomy and the opportunity to make meaningful decisions that affect our business and our clients.”

– “In addition to coffee, our awesome coffeehouse has flat screen TVs, an Xbox, and a fridge full of soda, juice, and more.”

– “Beer:30. How have I not mentioned this yet?”

Participation Age Stakeholders are empowered and encouraged to create, innovate, and take charge. Most importantly, whenever possible, decisions are made by those will have to carry them out. Why would they be made at any other level? DEG gets it, and as a result, they are growing fast and creating a workplace that was voted at the top of best places to work in Kansas City.

Read 124 Reasons to work at DEG – http://bit.ly/1jTSl1t
and some other great quotes by DEG Stakeholders here – http://bit.ly/1hTwz9b*

Don’t Settle – Find One Yourself
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 want to prepare to do that, or even build one yourself, read “Why Employees Are Always a Bad Idea” – http://amzn.to/1n4l1rB

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 and the Importance of the Fourth S

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

I sat with the African egg vendor and twenty or so others in a mud brick building with no doors or windows, just openings. The average person in the room made between $30 and $60 a month in U.S. dollars, which was more than a lot of other people there made.

We were discussing business-building principles. I had come from America with notes and handouts, but on the first day, I realized they were worthless and gave them to a small school who were thrilled because they were blank on one side.

I had rarely felt this helpless. Usually, you can just give me a business topic, wind me up, and I’ll interact with a group for as long as the beer or snacks last. Here were a couple dozen business owners waiting to hang on every word and I had nothing.

I turned to the egg vendor, explained “net profit”, and asked her how much she makes each month. We figured out it was about $2.00. I asked her what she did with it, and she said, “I take my children to get a special meal.” She was a single mom with three kids.

We then talked about freedom—that wealth is the freedom to choose what to do with your time and money. Net profit represented freedom, the ability to choose. That made her very proud to know she had $2.00 worth of freedom each month, and the other business owners started to get a little excited about the prospect that they, too, might figure out how to get some net profit. We decided right there to call net profit, “Freedom Money,” because it’s the only money in business with which you actually get to make a fully free choice. The rest of it is spoken for in one way or the other.

Then I challenged her and the rest of them to stop eating their Freedom Money and reinvest it in their business instead, so they would have even more freedom later. I drew blank stares, so everyone huddled around my laptop with a dying battery, and I built a quick spreadsheet to show what might happen if, for eighteen months, the egg vendor reinvested her $2.00 of Freedom Money into buying more eggs every month. The next month she would have $2.50 in Freedom Money. Reinvested in more eggs, the end of the third month she would have $3.50 in Freedom Money, and so on. By the end of eighteen months, she could stop reinvesting and would have $60 every month in Freedom Money after that.

I asked her if that would change some things, and she thought it might change her life. I then told her it won’t happen that way. She’ll break eggs, won’t find buyers, will have to hire someone to help, etc. Life is messy and so is business, and her Freedom Money might be $15 a month, not $60. But it would no longer be $2.00. It was a tough thing to challenge a woman not to take her kids for a special meal, but she got on board immediately.

I never saw her again, but I always assume the best, that she built up enough monthly Freedom Money to build a better life for herself and her children. The most powerful thing she got out of the time was that being an owner allowed her to make decisions. She was in charge of her future, not the world around her. I left her with a thought that has been valuable to me over the years, “Circumstances don’t make me who I am. How I respond to them, does.” She left as a proud business owner, looking forward to creating more Freedom Money with her business. Ownership is a very powerful thing.

The Three S’s of the Industrial Age
My mother was born in 1921. She grew up in the Great Depression and entered the workforce in 1943 after nurse’s training and taught me to pursue three things in life, the three Ss of the Industrial Age:

1. Safety—live in the suburbs, don’t live downtown with the icky people.

2. Security—have a big wad of cash in the bank.

3. Stability—every day should look the same, no surprises.

Her strongest encouragement—get a job with a giant corporation; they are the best prepared to give you a life of safety, security and stability with no surprises.

Just about every mother of that generation was teaching their kids the same things. So, it’s no surprise that at the height of the Industrial Age after World War II, the suburbs exploded with cookie-cutter Cap Cods, white picket fences, men working for Giant Corporation, Inc., who all left for work in unison with their white shirts, ties, suits, and briefcases at 7:30 a.m. and got home at 6 p.m., and who lived as predictable a life as possible.

They came home to a manicured wife and 3.6 freshly scrubbed children. Ozzie and Harriet reigned. That may sound great to some, but as we revealed in the introduction to this book, those people were called The Silent Generation and made very little meaning in the world around them with their balanced lives.

Their manic pursuit of safety, security, and stability made them the best extensions of machines in the history of the Industrial Age. It also dehumanized them to the point of silencing their voices, their creativity, and their legacy. (Remember, no presidents and no Supreme Court justices; the only generation without a number of them.)

Where are these three S’s on Maslow’s hierarchy of needs? They are at or nearer the bottom. So, why did my mother teach me to chase these things that were at or near the bottom of what we as humans need to make life meaningful? Because having gone through the Great Depression and World War II, she was looking up at the bottom. She didn’t have any of the three, and a life with all three would have seemed like Nirvana to her.

Today’s Millennials Are Searching for the Fourth S—Significance
But Millennials who only grew up in the shadow of the Industrial Age do not understand the language of Safety, Security, and Stability. They are one of the first generations in history, at least in the West, to be born with at a modicum of all three of those things provided for them at birth. They aren’t looking up at the bottom, and are instead reaching for the fourth S of the Participation Age—Significance. Making money is no longer enough. Being an extension of a machine to do so is not attractive, and the idea that everyday should look the same and that life should be predictable and without surprises is not challenging to them. They want more. They want to Make Meaning.

As the cultural influence of the Industrial Age and the Factory System fades behind us, we are all waking up to the need to rehumanize the workplace, reintegrate it back into our lives, and build lives that Make Meaning, not just money. To do so, we must eliminate the arcane business practices that we dragged out of the Industrial Age into the Participation Age—those business practices that turned men and women into machines, and silenced our drive for Significance.

You Have a Choice
Addressing the business diseases of the Industrial Age is not complex, it’s simple. But for those who have built businesses and lives around the inherited constructs of a bygone era, it will be both simple and hard.

We should be grateful that the Industrial Age provided us with the first three S’s— Safety, Security, and Stability—on which to build the fourth S—Significance. But we must also recognize that the practices that brought us those three will not bring us the fourth.

We have a choice to make. Stay with what we know and slowly atrophy as the world moves on without us, or join the Participation Age and start sharing together in building companies that Make Meaning, not just money.

Which do you choose?

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.

Why Business Plans Are a Business Disease

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Day 19 of 21 days with Chuck’s new book, Why Employees Are ALWAYS a Bad Idea

Not a single Fortune 500 was started with a business plan; not one. They understood that the second worst thing someone starting a business can do is create a business plan, and the worst thing they can do is follow it.

Pre-Planning Is a Disease
Exhaustive pre-planning is a disease of the Industrial Age that became popular as companies grew to giant proportions and as educators began imposing the cognitive world view on an otherwise intuitive business world.

Pre-Planning is a New Thing
Pre-planning wasn’t a hallmark of business before the Factory System of the early 1900s. But when you’re propping up a giant factory or trying to take over an entire industry, it lends itself to a lot of pre-planning.

Business plans really only became popular in the latter days of the Industrial Age (1950 on), and the rest of us have caught the disease. It has become an obsession in business schools and has only picked up steam as the Industrial Age fades behind us. This obsession is a natural (but unhelpful) outcome of an Industrial-based education system that relies more heavily on cognitive and didactic lecturing than on real-world learning.

Pre-Planning Is Unsupported By The Facts
In 2011 a website posted an article about Fortune 500 businesses that had started in a garage or other interesting places. They listed the top five, then gave the seven lessons you should learn from these startups. Number one was “Develop a business plan”. This was a strange conclusion, since there was nothing in the history of these startups that would lead anyone to conclude a business plan was a good idea. It was a giant, illogical and biased leap, and completely ignored the history of these companies. But the obsession with pre-planning that we inherited from the Industrial Age is so ingrained that we see it even where it doesn’t exist.

Pre-Planning Favors Lawyers, Not Business Founders
The roots of this obsession go back to the late 1800s. Judge Lord Esher, an Englishman steeped in the Industrial Age, expressed the need for pre-planning in every facet of life. His teaching has evolved since into what is called the Precautionary Principle, which generally states that if you can think of something that might go wrong, don’t do anything until you can either prove it won’t go wrong, or you have a contingency in place to cover for that possibility. And if you do something without having covered all possible contingencies, according to Judge Esher, you’re liable.

Lawyers, who are largely Industrialists, love the Precautionary Principle. It cost McDonald’s millions of dollars because someone spilled coffee on herself that already had a warning label on it. But the lawyers argued the warning wasn’t big enough or prominent enough. The Precautionary Principle says they should have never served hot coffee without knowing that some judge would find their warning too small, or that someone would try open the cup one-handed in between their legs while driving.

The amazing advances of the Industrial Age have allowed us to focus on levels of safety that would never have been imagined for thousands of years. But the more cleaned up our lives are, the more the we are obsessed with making sure we’re not doing anything that might go wrong.

Pre-Planning Kills Creativity
That all sounds pretty reasonable, except it is sucking the life out of our willingness and ability to create, innovate and take the risks necessary to build great things. The cleaned up world we inherited from the 19th and 20th century Industrialists have nearly sterilized the creativity right out of us. We are becoming so risk-averse that it is a national epidemic. The education system, the government and big business all are teaching us to live by the Precautionary Principle; don’t move until you have it all figured out.

Great Founders Do Very Little Pre-Planning
Great businesses don’t start that way, regardless of how much professors and the education system extol the virtues of pre-planning and the sacred cow called “The Business Plan”. But Bill Hewlett, one of those guys who started in a garage, lived in the real world:

“When I talk to business schools occasionally, the professor of management is devastated when I say we didn’t have any plans when we started. The idea of having a business came before our invention of the audio oscillator. We were just opportunistic. We did anything to bring in a nickel. We made a bowling alley foul-line indicator, a clock drive for a telescope, a thing to make a urinal flush automatically, and a shock machine to make people lose weight. Here we were, with about $500 in capital, trying whatever someone thought we might be able to do. So we got into this thing not by design but because it worked out that way.”

That’s how real businesses start, including virtually every business you can think of today that has been highly successful – they made it up as they went along, and planning was something they did as they moved, not before they moved. While speaking to thousands around the world, I find that somewhere between 3-6% of business owners who did not need a bank loan to start, created a business plan anyway.

Pre-Planning Doesn’t Work
Only 3-6% are obedient to what they are told to do by their professors. But I have yet to find a single business plan at any level that worked out the way the plan said it would three to five years later.

Move, Then Plan.
I’m not against planning – we should be doing it at every step along the way as we are moving. I’m not even against a little bit of pre-planning. But massive pre-planning has a near 0% effectiveness at doing anything but killing innovation.

Massive pre-planning like you see in three to five year business plans is a business disease that has its roots in the Factory System and in the cognitive-based education system that grew up to serve that system. Successful companies do it like the early years at HP. They come up with a very simple idea, get moving, then evaluate and plan as they go. They don’t stop to plan, because successful companies understand that planning never creates movement, but movement can create a good plan. Every Fortune 500 is a testimonial to this. Stop planning. Get moving.

Massive pre-planning is a business disease. The Industrial Age was wrong. Implement now. Perfect as you go. If you do, you have a much higher chance of success than if you plan it all out before you get started.

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.

Complexity: A Business Disease of the Industrial Age

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Day 18 of 21 days with Chuck’s new book, Why Employees Are ALWAYS a Bad Idea

Complex things are naturally bigger, shinier, and with more moving parts and blinking lights than simple things. They’re mesmerizing. It’s easy to be fascinated with all the facets, angles and possibilities that come with being complex. But complexity destroys productivity.

We love complexity with nearly the same passion as our infatuation with Being Big. We buy word processing and spreadsheet programs for hundreds of dollars and will never use more than 1-3% of the features. The same programs are free on the Internet and still largely do more than we would ever use, but we’re sure that paying for the big, complex program is the better route. And Giant Corporation, Inc. has made it really difficult to use the simpler versions in compatibility with their versions.

Complexity Resists Progress
Remember, Industrialists don’t want progress that threatens their present market, or other people doing what they do, and will do whatever they can to keep others out and maintain the status quo. Sharing is not one of their attributes. Proprietary complexity helps them keep things as they are.

Complexity Confuses Us
Complexity is a way of modern life. The Factory System brought us daily newspapers, which increased the complexity of information exponentially. One daily issue of the New York Times holds more information than the average person in the Middle Ages learned in their entire lifetime. Couple that with radio, TV, magazines, the internet, billboards, and the advertising in your refrigerators; if you sometimes feel you are on information overload, it’s because you are. We weren’t built to consume and digest the dizzying array of inputs we get every day.

Complexity Makes Us Over-Consume
Physical objects have enjoyed a similar increasing intrusion into our once simple lives. In 1955, Gallup surveys showed that people considered approximately 70 physical objects as “absolutely necessary” for a basic and crude life in America (stove, sink, car, house, clothing, etc.). In 1985, it was 140+. I haven’t looked, but I’m guessing it’s more than double that today.

The Industrial Age brought with it a manufacturing prowess that made more stuff available than at any time in history. As it did, we were taught to need things that were not necessary for centuries before. I love our microwave and have no clue how we got along without one before they were invented. As consumption became normative, the factories were able to produce more goods. Consumption drove the Factory System of the Industrial Age, and that consumption gave rise to a dizzying array of choices.

Pluralization is the fancy word for having multiple choices. The Industrial Age gave us pluralized choices in every facet of our lives, religion (or none), convenient travel, expanded choice on where we live, information sources, cohort groups (bikers, campers, runners, gamers, gamblers, collectors), and a myriad of physical object choices with which to fill our houses and garages.

In the late 1800s advertisements read something like this “We have sinks for sale.” You just needed to know where to go to buy one, and they likely only had one. Today, there are dozens of manufacturers with thousands of choices for every type of sink. The Industrial Age gave us pluralization. For the first time in the history of man, we have a myriad of choices in just about every category of life,

Complexity Consumes Our Precious Time
As a result, by the end of the Industrial Age, in the early 80s the most popular bumper sticker read, “He who dies with the most toys wins.” My Irish friend says, “You Americans are a culture of maintainers. Rather then rent a condo, boat, RV or horse when you need one, you buy them and then spend all your time maintaining them.” All those consumer products and other effects of pluralization make life much more complex than it was in the days of the front porch and the rocking chair.

Complexity Makes Life Harder
Complexity in education, business, home life, society, religious options and throughout our culture grew exponentially during the Industrial Age. Before the Industrial Age, life was simpler. It was also in many ways much, much harder. But it isn’t complexity that made life easier. If anything, complexity makes life harder. Almost all the great ideas in business have been simple. The simpler an idea or product is, the more likely the world is to be able to advance the idea easily and organically.

Complexity Obscures Simplicity
Occam’s Razor (“rule” or “principle”), attributed to William Ockham, 13th century) states that given two equally plausible answers, the simpler one is likely the better choice or right answer. The developed world is coming around to this, and has begun to wonder if dying with the most toys is the height of human existence, or if the simpler answer might be the right one: Making Meaning. My grandpa told me when I was young, “Son, if you’ve got the choice between buying a car and going on vacation with your family, go on vacation. Build memories, they’ll last a lot longer than the car.” He was born in 1896, in a simpler time.

The Next Generation is Rejecting Complexity
Baby Boomers stacked toys and consumed wildly, where Millennials are more inclined to stack experiences and eat quinoa (my kids helped me learn how to pronounce it – keen-wa). Whether that is a return to a simpler view of the world remains to be seen. But what is clear is that the younger generation, which did not grow up in the Industrial Age, but only in the shadow of it, is rejecting the complexities of the Factory System with all it’s constraining and complex hierarchy, rules and regulations, for the freedom of a simpler relationship with the company as Stakeholders, so they are freer Make Meaning with their lives, not just money.

Occam’s razor seems to point to simplicity over complexity as the right answer in just about every business situation. The Factory System, with all its management layers, big words, fancy titles, and built-in segmentation of the workforce was built for another time. In the Participation Age, the companies that embrace and provide flatter structures and simpler cultures will attract those who are the most productive.

Choose Simplicity
Choose the simple answer. It’s almost always the right one.

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.

Your Competition, Isn’t

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Day 16 of 21 days with Chuck’s new book, Why Employees Are ALWAYS a Bad Idea

I’ve personally landed millions in contracts from small companies to giant technology and pharmaceutical corporations, and I’ve never once thought about “competition.” It has never been a factor. I actually don’t think I have any, and I don’t believe you do, either. If you think you do, you just might be thinking like an Industrialist.

Stop Watching the Competition
Competition is a business disease of the Industrial Age which is very closely related to scarcity disease. In the Participation Age there are a lot of reasons why you shouldn’t be worried about people entering your market, coming up with great ideas you haven’t had, or improving on yours.

People who focus on trying to figure out what makes their competition successful don’t have enough good ideas of their own.

General Motors wasn’t created as a car company, but as a holding company. It didn’t create anything, but for decades watched the rest of the car market closely and bought car lines that others had created and worked to destroy those they couldn’t acquire. Their DNA was Industrial – find somebody else’s good idea, capture it and keep anyone else from coming up with an idea that might threaten that status quo product.

GM is not alone. United Airlines carefully watched Southwest grow and draw their customers away, then tried to mimic their success by repainting some of their airplanes and calling the new thing TED. Most long-term United Airlines passengers saw it as what it was, a bad clone of Southwest. United was too busy watching Southwest to come up with any great ideas of its own. Many in the market, in reference to a mule’s behind, simply starting calling TED “the back half of UniTED.” As with GM, United’s DNA is not creativity or innovation. Their DNA is dominating the world by maintaining the status quo, a futile exercise in a rapidly changing world, as they have found out.

In contrast, for years Apple was well known for focusing internally for its competition, and regularly destroyed not only the status quo in the market, but their own products which were still selling very well. When you live in a world of abundance you know you have a great idea inside you, and your responsibility is to uncover it, not steal the other guy’s great idea.

Mimicking Your Customer’s Products and Services
Imitation is the sincerest form of flattery, but it’s a lousy business strategy. The two last words of a dying marketing program are, “Me. too.” Again, United’s TED experiment is a grand example of this kind of tom-foolery. They took the facade of Southwest’s secret sauce and made a movie prop out of it with no building behind the facade. The result was a transparent attempt to mimic another company without the dedication to their core principles, strategies or infrastructure.

Great companies are too busy fleshing out their own ideas to follow others around their industry like mimes at a busker festival.

Focus on your client’s needs, not your competition’s products.
In general, companies that are doing it right are
1) focused internally on their own creativity and
2) on what their customers want.
Never one or the other – always both. Henry Ford said, “If I had asked my clients what they wanted, I would have made a faster horse”. Ray Kroc and others had to invent an entire industry (fast food) in order to sell their products. Their customers did not tell them they needed that. We should be in front of what our customer even knows they need, and working to get them that before they realize it’s potential.

In some cases we get our best ideas from our clients, and not listening to them carefully would be lazy and or arrogant on our part. In other cases our offerings are a combination of our own ideas and something our customers demonstrated they need (even if they didn’t express it). And in all cases our customers help us refine our products and make them better.

If you focus first on coming up with good ideas of your own, and then on meeting the needs of your clients, you won’t have time to focus on what other providers are doing.

You’re a terrible guesser, anyway.
I’ve seen companies dissect the products, services or marketing of other companies and copy them, only to find out they were mimicking the worst part of what the others were doing. The copycat thought that “X” made the other company successful. The other company might even believe it. But quite often whatever they copied doesn’t work because it’s out of context or some small condition is missing that made it successful.

But worse yet, mimicking others speaks of a culture that has little or no foundation of its own. Copycats make cheesy Industrial Age products that never lead them to the next great idea. The two last words of a dying company are “Me, Too.”

Explorers and pioneers don’t mimic others. One of the best ways to ensure you are irrelevant is to mimic other people’s successes rather than create your own. That mimicking strategy is fundamental to a world of scarcity, and shows a lack of originality, passion, cause, mission, or joy in what you do.

They won, good for them.
If someone “beats” you, they simply have something the customer needs that you don’t. Rejoice for the customer. If, in turn, you sometimes have things other customers want, you’ll attract those relationships and the other guy won’t.

Wandering Generalities
“Are you a wandering generality or a meaningful specific?” – Zig Ziglar Companies that focus on their competition are wandering generalities , built on a mimicking other company’s successes instead of creating their own. They’re just building cash cows.

The bottom line
In the Participation Age, companies don’t focus on competition, or even the recently popular term “coopetition”. They focus on getting better, making their industry better and making the world a better place to live both through creating more useful products and by their value to society.

Get the idea of competition out of your head and focus on being the best at whatever great idea you’ve birthed. And while you’re at it, try to figure out how to make the other guy successful, too. You’ll make a lot more money and have a lot more fun. And Stakeholders will come running to you work for you.