Posts

Want Exponentially Better Production? Focus on People Instead

/in /by

Traditional business training focuses the leaders on production. But research shows that focusing on the people instead is more likely to help your production.

95% of companies are still organized around the outdated Industrial Age factory system model that taught a focus on production. People were an ancillary, necessary evil to be managed, but the message of MBA courses and the factory system model was clear: production equals profit, and people are just overhead.

People Are Profit, Not Overhead

It’s easy to make a correlation between the speed of the assembly line and the number of widgets produced. We like direct correlations; it’s easier for the human brain to comprehend.

But research is now consistently showing that when you focus on the people, all the production numbers that command and control businesses mistakenly focus on get better. Capitalism, it turns out, works a lot better when you build great relationships, have a great culture, and encourage community at work than when you focus on trying to get your assembly line to run faster. Focus on the people, and they will make your assembly line run faster.

Focus on People and Grow Well

James Heskett and John Kotter, Harvard Business School professors, did a decade long study of companies focused on performance-enhancing culture, and companies with more traditional focuses. Their findings, published in a book called Corporate Culture and Performance, are shown in the graph below:

Performance-Enhancing Cultures Graph

Look at the stunning differences: companies focused on culture grew six times faster, increased their value over ten times faster, and had 756% faster income growth. Data like this sadly highlights the fact that most executives don’t like facts. They want to keep doing what they’ve always done because it’s what they know, not what will help the company succeed. Any leader looking at the above graph should immediately focus every resource they have on getting their culture right. Instead, they will go right back to oiling the machinery and trying to make a better deal with a shipper. Nero fiddles while Rome burns.

Here’s another angle showing similar results. Raj Sisodia, in his book, Firms of Endearment, found twenty-eight Fortune 500 companies, what we call Participation Age companies, that valued purpose and making meaning, over production and simply making money. Here are the results:

Firms of E graph

Again, stunning. These companies focus on something bigger than making money that coalesces their people around a vision of how they can each individually make a difference inside their companies and in the world around them. This emphasis on getting people motivated to make meaning resulted in these twenty-eight companies growing four times faster than Jim Collins’ oft-referenced Good to Great companies, and ten times faster than the norm.

The Emerging Work World Executive

These are just two of a long line of studies showing that when you take care of people, they take care of the company’s numbers. It’s tempting to find this interesting and then just go make another widget. But what this means to the emerging work world is that the most valuable leaders going forward will be those who know more about how to take care of people than how to take care of production.

It also means that HR will likely no longer be a department; it is already extinct in many Participation Age companies. Instead it will be a core responsibility of executives throughout the company to care for people more than machines. Experts will focus on production, and leaders will be chosen not because of their production expertise, but because of their people expertise.

Companies like Davita, with 65,000 Stakeholders are shining examples of this focus on people. Their story of rags to riches is one small proof that if you take care of people, they will take care of production. Davita went from near bankruptcy in 1999 to 1,200% growth through 2015, by moving away from command and control hierarchy to an emphasis on great culture and distributed decision-making. Read their story and get motivated to leave the factory system behind.

The bottom line: Focus on your people even more than your production, and your production numbers will jump off the charts.

Article as seen on Inc.com

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

/in /by

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

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

Engage People By Empowering Them?

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

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

Thank You, But I’m Already Fully Empowered

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

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

But Give Me a Reason I Should Engage With You

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

How To Engage People

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

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

The Bottom Line

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

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

Article as seen on Inc.com

Pivotal Labs Finds Success With Self-Managed Teams

/in /by

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

Giving Responsibility vs. Giving Tasks

/in /by

How to get people on board

I just finished a whirlwind trip to Ireland, California, Ohio and Virginia. In each of those places I had discussions with business owners around how to get people to take initiative. One thing that came out was that a lot of us think we’re giving people responsibility when we’re really just giving tasks. The results are very different from one to the other.

The Main Difference
When we give people responsibility, they will take ownership.
When we give them a task, they will feel used.

Responsibility Leads to Ownership
The difference matters because giving people ownership creates Stakeholders, while making them feel used creates employees. Too often we give tasks when we think we’re giving responsibility and are inadvertently making people into employees when what we really want are Stakeholders.

The Difference Between a Task and a Responsibility?
Responsibility always includes the ability to make decisions at multiple levels:
1) Am I free to come up with a better way to do it?
2) Can I question the validity of the task altogether (ask why)?
3) Am I responsible to get it done without someone checking up on me?, and others.

Tasks usually involve one decision:
“Am I going to do what they told me, or not?” Someone else has figured out all the other “hard” questions” (especially why). I just need to decide whether I will obey. Pretty much what we expect of a five-year old.

Children are given tasks. Adults are given responsibility. Stakeholders are Adults. Employees are children. Which do you want?

BLOCK is a Participation Age Company

/in /by

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 Results-Based Culture and What It Will Do For You

/in /by

Day 12 of 21 days with Chuck’s new book, Why Employees Are ALWAYS a Bad Idea

There is a growing wave of companies rejecting the front office practices of the 21st century Industrialist. Here’s what a Participation Age company looks like. They come in in all sizes and industries, and are showing us the future of business is already here.

Our company, Crankset Group, has grown 409% in the last five years by building a company on the following business practices:

– Culture is King – Culture is the most important asset in our business. It is who we are at our very core and oozes out of our products and services into every relationship we build. As Peter Drucker said, “Culture eats strategy for lunch.” Great companies do not “have” a company culture. The leadership lives out their beliefs and life principles in their business, and that IS their culture. If our culture is right, we will attract the right people who want to work in that kind of environment. Culture comes from our written beliefs and principles, on which we run our business.

– Vision and Mission – A Participation Age company has a well-defined vision and mission. Our vision: To Live Well By Doing Good. Our mission: To provide tools for business owners to make more money in less time, get off the treadmill, and get back to the passion that brought them into business in the first place.

– Everyone is a leader – Whoever is most effected by a decision should make that decision whenever possible.

– No Promotions – everyone comes in as a “Chief” – Chief Results Officer, Chief Connecting Officer, Chief Relationship Officer, etc. Promotions are time-based constructs of the Industrial Age. Instead of promotions, as people increase their influence in our business, they make more money.

– No management – None of the people at Crankset Group are stupid or lazy, so there is no need for smart and motivated managers. We’re all smart and motivated. Everyone is self-motivated and self-managed.

– Results Based model – We don’t have office hours. People are measured by results, not time spent in a chair. Get your work done and go home. Pay increases are based on the same thing.

– No Vacation Time or Sick Days – Again, get your work done, and go on vacation. We’re all adults and are all owners of our responsibilities, so we can also own our time. We expect people to get more time off than they would in a typical 21st century Industrialist company.

– No Annual Bonuses – Bonuses are “time-based” rewards for occupying a chair for another year. We do “Ad hoc” rewards to reward performance throughout the year. They add up to a lot more than an a bonus and actually mean something to those being rewarded.

– No Annual Reviews – we review each other and how things are going all the time. It makes no sense to store it up to dump it on somebody once a year. We all know how we’re doing throughout the year – no surprises.

– No Annual Raises – As people raise their level of influence and responsibility in the business (they do this, we don’t), we recognize that because raises come ad hoc throughout the years, sometimes a couple months in a row.

– No Departments – people don’t “belong” to someone or some artificial group.

– Direct Communications – without departments, people don’t have to go through gatekeepers to talk to someone. People who need to talk, do so, and stuff gets done a lot faster as a result.

– Profit-Sharing – within 20 months of joining Crankset Group, people begin to receive profit-sharing. They help make the money, they share in the profits, not just a salary (which the owners also get).

The Bottom Line
Ownership is the most powerful motivator we have in business. Stakeholders are treated like owners and expected to act that way. (Note: Because of that, profit-sharing is non-negotiable in a Participation Age company.)

This is a glimpse into our Committed Community business model. If you don’t work for a company like this, start looking for one. Companies everywhere, in every industry, are leaving the Industrial Age, entering the Participation Age, and embracing similar models. We’ll look at a few of those in the next blog post.

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.

Stakeholders – A New Model for the Participation Age

/in /by

Day 10 of 21 days with Chuck’s new book, Why Employees Are ALWAYS a Bad Idea

The Industrial Age created the modern employee on such bad assumptions (you’re stupid and lazy) that the whole concept is simply broken. Both the word and the concept of “employee” are not redeemable. The Participation Age requires Stakeholders.

“Pick yourself. Don’t wait for someone to pick you. The shift is that it doesn’t matter if you own a company. You can make an impact if you want to.” Seth Godin, Linchpin

Employees Are Replaced by Stakeholders
Our company doesn’t hire employees; we have replaced them with Stakeholders, and we are working with hundreds of early-adopter companies who have decided to do the same thing. It’s not woo-woo crap. It is hard core Capitalist intention to be the best company in the long-term, making great profits, and adding tremendous value to the world around us.

Stakeholders are Self-Managed
Stakeholders are first and foremost self-motivated and SELF–MANAGED adults who can think, take initiative and make decisions, carry responsibility, take ownership, be creative and solve problems. Stakeholders can be left home alone. Employees (children) can’t.

Stakeholders are Adults
Our Stakeholders are all adults. “Employee” is a four-letter word for us. Adults don’t need someone to keep them from running into the streets or ruining the carpets. Adults ask questions, most importantly, “Why?” Unlike the Silent Generation, they don’t live passively but are self-motivated, self-managed, creative, and problem solvers. They don’t shut up; they make waves. They don’t sit down; they are highly visible. And they don’t expect the company or other adults to take care of them.

Stakeholders Are Owners
Stakeholders are owners. It is a requirement of being a Stakeholder. Adults own stuff, and they own their work as a natural part of being an adult. Most importantly, they own their result, something employees/children rarely think about. The most powerful motivator in business is ownership, and when you find someone who views life as an owner/Stakeholder, they will rock your business.

Stakeholders Bring the Whole Person To Work
Stakeholders bring the whole messy person to work, not just the extension of the machine. That sounds counter-productive except the messy parts are what help us think, ask why, create, solve problems, innovate, and inspire others to do the same. If you want people who will regularly bring great ideas, creativity, problem-solving and innovation to work, you have to not just ALLOW the whole person to show up, you have to REQUIRE it.

A Stakeholder would never think about dividing themselves into “Work Bob” and “Play Bob”. It’s unnatural and keeps us from contributing like we are required in the Participation Age.

Stakeholders Require Leadership, not Adult Supervision
If you hire Stakeholders (adults) instead of employees (children), it changes the way you direct people.

Stakeholders don’t need management; they need leadership, which as we showed in an earlier chapter, is a radically different thing. Simply put, Stakeholders need a leader who will give them vision, give them the tools they need, train them and point them in the right direction, and the Stakeholder will take it from there. Employees need to be hovered over during the whole process to make sure they get it done.

Stakeholders Don’t Report to the Day Care Center
There is nothing wrong with an office. We have one for our clients (not our Stakeholders). Our Stakeholders work where they can be most productive. If it served them to have an office desk, we would get them one. But employees are different. They need to be herded daily into an office day care center. They can’t be trusted to work as adults on their own without direct and close supervision. We don’t have any managers. We don’t need them – we have Stakeholders.

Stakeholders Focus on Work, not Promotion to the Next Title
In our company, upward mobility is not even available. Every adult who works with us has a title that includes the word Chief; Chief Results Officer, Chief Connecting Officer, Chief Transformation Officer, Chief of MIH (Making it Happen), etc.

None of us will ever need to be promoted; we all came in at the top. The only place to grow is laterally. As our influence and impact grows, that will be recognized and somebody might change our title (there is no centralized title giver). Owners don’t get promoted; they just make more money because they expanded their value to the world around them.

Stakeholders Participate in Profit-Creation and Profit-Sharing
Stakeholders are owners, who own their jobs, processes, systems and their results. They function as if they have actual equity ownership in the business, which means they need to be rewarded like one. Every full-time Stakeholder with us takes part in profit-sharing starting in their second full year. Why wouldn’t they? They’re all adults who own their work, so they should own some of the profits from their work as well. No equity owner would work harder just to see the profits given to someone else. Stakeholders will find another place to work if you do that to them.

Stakeholders Never Get Bonuses, Only Rewards
Stakeholders do not receive year-end bonuses for having occupied a chair for another twelve months (time-based). They get rewarded when they do things well (results-based). People get gifts, money, gift cards weekends away, pay raises and other rewards for having performed well. It’s ad hoc and requires that we pay attention to people. And that’s a good thing, because then we see their great value.

Nothing irks a Stakeholders like the 2.5% across the board bonus that goes to both disengaged employees and Stakeholders, regardless of their contribution. Any equity owner would reject a system that paid every business owner in their industry the same amount regardless of how well they had grown their businesses. Stakeholders are no different.

Stakeholders Make You and Themselves More Money
Do Stakeholders make a difference? We believe they do. Only thirteen companies have made the Fortune 500 “Best Places To Work” list every year it has come out. All of them are more profitable than the average for their industry; most of them wildly more profitable. We’ve grown over 560% in the last five years with Stakeholders.

We Didn’t Invent Stakeholders
Stakeholders isn’t a new concept. There is a fast growing tidal wave of businesses in every industry, of every size and age, that have already cashed out of the Industrial Age, and are fully embracing the Participation Age. To do so, they proactively create company cultures that are conducive to celebrating Stakeholders, while 21st century Industrialists create cultures that mirror the Factory System of the mid 1900s.

Do You Have Stakeholders? Are you one?
If you are treated like an employee and don’t like it, start looking for a Participation Age company that will invite the whole person to come to work. If you are a company that has ongoing employee issues, it’s not the employees that are the problem. It’s your belief that they need to be managed, or your unwillingness to move the children along and replace them with adults. We know companies with 10,000 Stakeholders and no employees. You can find them, too.

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 Employees are Always a Bad Idea

/in /by

Day 5 of 21 days with Chuck’s new book, Why Employees Are ALWAYS a Bad Idea

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

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

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

Employees are “Silent”

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

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

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

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

Employees are Replaced by Stakeholders

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

Stakeholders are Adults

Our Stakeholders are all adults. “Employee” is a four-letter word for us. Adults don’t need someone to keep them from running into the streets or ruining the carpets. Adults ask questions. They don’t live passively but are self-directed, creative, and solve problems. They don’t shut up; they make waves, they are highly visible and they don’t expect the company or other adults to take care of them. Adults own stuff, and they own their work as a natural part of being an adult. And the whole messy person comes to work, not just the extension of the machine.

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

Stakeholders Focus on Work, Not Promotion to the Next Title

Every adult who works with us (over 20 full and part-time and growing) has a title that includes the word Chief; Chief Results Officer, Chief Connecting Officer, Chief Transformation Officer, Chief Operations Officer, Chief Development Officer, Chief of MIH (Making it Happen).

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

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

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

Stakeholders Make You and Themselves More Money
Our business grew 61% in 2010, 41% in 2011, 66% in 2012 and projected at 150% in 2013. Why? Because every Stakeholder is an adult, taking responsibility, creating, problem solving, making it happen, and taking ownership of whatever needs to be done to bring our clients the best experience and the most tangible results possible. And everyone is a lot happier because they all work with adults who pull their own weight.

Employees are a alway bad idea. Stakeholders will replace them.

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.

Six Steps To Hiring A Great Stakeholder

/in /by

…and on the seventh step, they rested.

We’re 75% of the way through the process of hiring our Chief Connecting Officer (they’re too important to be called a sales person) and only now have we asked for resumes, what we call “tombstones”. We have six things we look at, in order, and looking at the resume early on is not one of them.

People only put on their resumes what makes them look great. Resumes, like tombstones, tell you almost nothing about the real person. If we had looked at tombstones first, we would have tossed out at least five of the seven candidates remaining, maybe all seven, and never looked at them. What a tragedy that would have been. These are great people and a great fit for our business.

Six Steps To The Right Person – In Order Of Importance
Step One – Culture. We hire first for culture. That is the number one criteria. We asked people to NOT send their resume and simply answer seven culture questions.

Doing this cuts down the response “noise” by 80%. Too many are looking for a job, but not for work (the Industrial Age taught them to do this – see this blog post). Answering questions resembles work. Most will just sling fancy tombstones at lazy companies who will hire them for their nicely engraved epitaphs. That’s a nice culture match, too, because the lazy companies who don’t want to do the hard work to hire someone, end up with the lazy applicants who don’t want to work. So everybody wins.

Step Two – Talent. For this position we prize the talent of being able to “connect” with someone quickly via phone or in a personal conversation, so our first talent assessment was a 10 minute phone call to see if they could connect with us. For a different position requiring different skills, we would do a different talent test. Culture and talent are not things you can teach someone. If they have these things, that’s a great foundation.

Step Three – Skills. We’ll take a person who has the intangibles (culture/talent) and teach them the tangibles (skills). This is the step at which we finally ask for their resume, and a list of references. We find their skills from a combination of the other steps above, their resume and their references.

Step Four – References. Never hire anyone for a sales position until you’ve talked to people that have actually bought from them. That is the best way to find out if their skill set is schmoozing, glad-handing, managing sales people, account management (a cousin to sales), or actually selling stuff. Find out what their references say about why they like them, and see if it matches with why you want to hire them. Again, they might have a list of very impressive skills, but if you’re hiring for something not on their list, don’t bite.

Step Five – Experience. Most people look at the resume first and sift for those with the most experience. Bad idea. The fifth thing we hire for is experience and we just don’t give it a lot of weight. Highly experienced people can actually be less likely to learn our particular business. We don’t ding them for it, but it’s not very important to us compared to culture, talent, skills and references.

Step Six – Personal Interviews. Very important. We’ll have the final three or so do 30-45 minute interviews with everyone they will work with in any way. We’ll also ask them to attend some events, then we’ll get feedback from attendees. We’ll also probably take the last couple out for happy hour or something on separate nights to see how we all relate away from the office (we don’t separate work and play). We will likely have them meet with a few existing clients as well and get their feedback.

Never Go To Step Seven!
Can you see something missing from the list? We NEVER hire for education. It’s about as good an indicator of success as what town you were born in. We just ignore education, but if someone makes a big deal out of theirs – that’s a warning sign for us. The more they like to trumpet their education, the more we’re pretty sure they won’t do real well in the trenches where you actually get dirty and learn the good stuff by getting beat up. It also tells us they’ve probably bought off on the lie that the more education you have, the more capable you’ll be, and the more money you will be worth, etc. All fairy tales.

Does This Sound Like Too Much Work?
If this whole process sounds like too much work for you, you need to look at your own culture. You get what you intend, not what you hope for. If you hope to get a great person by doing the traditional, lazy, sit-across-the-table conversation based on a tombstone, then don’t expect to get great people on board. I personally feel the same about farming this process out to someone else to do for you. Any HR pro should have you in the process up to your teeth; it’s your culture and company, not theirs. If you take the lazy traditional approach, you’re process will attract the lazy applicants who are slinging tombstones. Good luck with that.

The good news is we’ve got seven incredible people still in the running (and even some others we dropped earlier that would be great fits elsewhere). The bad news is we’ll have to pick one. The good news is we’ll have a bunch of people to refer to others looking for great sales people.

Anybody need some great sales people? In a few weeks we’ll have some to share. We’ll only share them with companies we already know that have great cultures.

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

/in /by

(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.