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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Article as seen on Inc.com

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Article as seen on Inc.com

Why Most Mission Statements Suck So Bad

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

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

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

“Turning moments into memories.”

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

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

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

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

Our Mission Statement:

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

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

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

1) Don’t talk about the company

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

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

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

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

Article as seen on Inc.com

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

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

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

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

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

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

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

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

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

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

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

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

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

“Fascinating! How did that happen?”

Article as seen on Inc.com

Local Business Is Better For Your Health Than Big Business

Every town salivates when a giant corporation glances in their direction to maybe build a facility there. It turns out those giants are not good for the health of the people who live there.

Big is not healthy in business, either.
A comprehensive study of all 3,007 counties in America shows a direct and consistent correlation between a higher density of locally owned businesses, and the health of everyone living there. Want to be healthy? Ask your city counsel to stop chasing giant corporations to come to your town, and ask them to promote local small businesses instead.

It turns out the health benefits of Giant Corporation, Inc. aren’t anywhere near as helpful as a high density of locally owned and very small businesses. Research now confirms that the counties with the fewest locally owned businesses have the highest mortality, obesity, diabetes and other bad health indicators, and those with the most locally owned businesses have the best health rates in America.

Isn’t big, better, though?
One of the many assumptions of the Industrial Age was that Giant Corporation, Inc. could provide better for your family and your community than a bunch of local-yocal small businesses. So why doesn’t it work out that way?

Giant corporations are the best at talking a good game. They point to better individual health benefits as proof they take better care of you than the locals. But what they don’t point to is where their heart is, and it’s not in the local community. It’s not even where their corporate headquarters is. It’s with their investors.

Where is the heart of the local business owner? Right where they live. They are much more inclined to build a community infrastructure that makes life better for all of us than Giant Corporation, Inc. And everyone who lives there is healthier as a result.

Ownership is Powerful Voodoo
We all understand that locals take pride in their communities. But it’s much deeper than that worn phrase. They take ownership. Everyone who lives there takes ownership, not just the business owners. They all “own” the local community in a very real way. It’s their brand, their identity, their view of the world, their “team”. People who live locally give back to their local communities.

Local Business is the Benefactor
Why does little Toledo, Ohio have the #1 zoo Releases/2014/TZ_best_zoo_in_US.pdf in the entire U.S.? Why are there such fantastic world-class museums in Kansas City, Missouri? What makes one county in Colorado the healthiest community in America, with no giant corporations? All of these have come about because of locally involved business owners, not big companies with headquarters somewhere else.

With rare exceptions, the new wing on a local hospital is going to be named after some local business owner or doctor who donated their personal wealth to make it happen. The same is true of countless parks, museums, playhouses, live theaters, and soup kitchens. And service oriented clubs like Rotary, Kiwanis, Elks, Lions, the farmers market and the local flower club are all started and led by people who have a deep commitment to the health and beauty of their local communities.

The research also shows small businesses with fewer than five employees are more likely to promote great local hospitals, recruit physicians, promote community health programs/activities and support local farmers’ markets.

Not so much
Your mother told you to work for Giant Corporation, Inc. so you could have great health benefits and a pension plan. But benefits, salaries and pension plans from large companies have dropped 33% in the last 30 years and the LSU research says there isn’t much of a gap anymore between big and small businesses. Professional Employment Organizations—PEOs, who provide benefits to small businesses, have done a lot to fill that gap.

Challenge your local government
Do you want a healthy community? Make sure your local government isn’t worshiping at the altar of big business tax breaks, special land deals and exceptions to rules that local business owners will never see. The study shows all that only hurts your community in the long run.

We’re made to live locally. It’s great to see research proving it. Again.

Article as seen on Inc.com

College Grads Forego MBAs To Pay a Company $25,000 To Work For Them

In 2010, Peter Thiel, co-founder and former CEO of Paypal, made headlines by paying some college kids $100,000 to leave school. Starting next month, students will be doing just the opposite – skipping MBAs to pay our company $25,000 as Apprentices, to lea

Phil Randazzo, an Nevada native who will graduate from Elmhurst College in a few weeks, has opted to pay to learn from me for one year instead of getting a traditional MBA. This may be the first time since the end of the apprentice system in the 19thcentury that someone paid a company to go to work for them. I believe we’re just going back where we came from.

 

Phil is the first student to choose Crankset Group’s new Mastery of Business Application program, which encourages students to learn in-the-trenches, directly from a businessperson, instead of from professors. There isn’t a whit of correlation between MBAs and success, and the data backs that up. Only 29 of the top 100 CEOs in America have an MBA, and an exponentially lower percentage of successful entrepreneurs have MBAs, or even finished college. The correlation isn’t between education and success, but life-long learning and success – two very different things.

Randazzo found out about our program listening to an interview where I challenged students to do it. Phil had to decide whether it made sense to pay a lot more than $25,000 for an MBA from a traditional college. He told me, “In the end it seemed to be a lot better investment to spend a year shadowing an actual entrepreneur and learn how it’s really done, and also benefit from a great network of relationships.”

There is a growing debate on whether higher education is giving students the return on investment that colleges claim. I’ve never been a fan of it for anyone with an entrepreneurial spirit. I believe if you want to learn to start, build and run a business, you’ll have to unlearn most of what you would learn from an MBA, which, with some very notable exceptions (like Kennesaw State), just teaches people to be cogs in giant corporations. We decided Crankset Group, which helps businesses grow on three continents, needed to develop an alternative MBA in the trenches.

Our Mastery of Business Application focuses on learning while doing, and from those doing it, not those theorizing about it. It’s not an accredited MBA, it’s much more valuable than that to someone learning how to start and build a business. As with the books I’ve written on starting and growing businesses, our stuff isn’t created to work in theory, it only works in practice. The program is a twelve-month, rigorous apprenticeship including meaningful work and a formal syllabus of business fundamentals the Apprentice will learn while applying them.

We didn’t invent this. Before the Factory System of the late 1800s interrupted meaningful work, for centuries English families paid a master craftsperson to place a family member under their tutelage, who then paid them a small stipend for adding value to his business while they learned from him. We’re just closing the loop and going back where we came from.

Crankset Group Apprentices will be encouraged to create a permanent position for themselves or figure out how to extend Crankset Group’s business products and services. Everyone who works here is challenged to find something they could start and maybe lead, and in the process, create ownership for themselves in the venture. We have a new ecommerce initiative Phil will probably help start up. If it flies as we expect, it could be a permanent position with equity for Phil. As with all startups, no promises—just a lot of promise of world-class experience and learning.

Crankset Group will offer similar financial terms as traditional MBA programs. If there is any hardship, we will defer payments on the $25,000 apprenticeship fee until after the end of the twelve-month period, similar to most education loans. We will also help our Apprentices secure meaningful, above minimum wage employment with others if we don’t have a place for them in our business. They’re paying us $25,000 for the learning experience, but as with pre-Factory System Apprentices, they’ll also get paid for any value they bring to our business while they learn how to start and run one.

For every ten Apprentices that go through the program, we intend to take on two without payment. “This won’t be an elitist program”, says Krista Valentine, our Chief Relationship Officer. “We’re in the trenches and we expect to take some kids with proven ambition but no means, and help them become entrepreneurs, too. Being able to learn directly from Chuck, other Crankset Group leaders, and our strategic alliance partners is a tremendous alternative to an MBA. And they really can’t put a price on the network of relationships they can build during the program.”

Phil’s apprenticeship starts June 22, but others will join the program for their own customized twelve-month rotation at any time. He is the first of many we believe will forego traditional MBAs and pay for real-life learning experiences like this. We’re excited to build an alternative that teaches everything someone will need to start, build and lead the business of their dreams. My life vision is To Live Well By Doing Good, and this is right in line with living that out.

This is disruptive to the traditional approach to education. Let the disruption begin.

Article as seen on Inc.com

What Zappos’ Self-Managed Teams Should Look Like When They’re Done

Traditionalists dismiss self-managed teams as woo-woo crap. But they are a central strategy for the emerging work world of the Participation Age. How do you know you have self-managed teams? The test is simple.

Why Self-Managed Teams?
The data is in — companies built around self-managed teams grow faster, have higher profit, higher productivity, and exponentially higher employee retention. I’ll be highlighting one in the coming weeks that went from less than 50% retention to 98% retention within months of instituting self-managed teams. This isn’t a fringe idea, a new idea, or an industry-specific idea. Going forward, companies that adopt self-management will thrive. Those that don’t will be left behind.

What Do They Look Like?
Self-managed teams look a lot like teams in sports such as soccer, hockey, lacrosse, or basketball. As you look at the following picture, ask yourself, “Who’s in charge here?”

The answer, of course, is the guy with the ball. And who is in charge here?

Whoever gets to the ball first is in charge.

Where’s The Ball?
Self-managed people are always looking for the ball and taking the lead with any ball that is near them. In self-managed companies, leadership isn’t a top-down thing, it’s a “where’s the ball?” thing. There might be four or five balls on the field at once, but everyone is taking the lead to grab each ball and make the right decision as to where it should go next. Self-management results in much less chaos than in a traditional top-down hierarchy full of managers telling people what to do at every step.

These two pictures are perfect examples of what a self-managed team should look like. Companies in all industries are racing to embrace this vital emerging work world concept, and are forming their self-managed teams around the above pictures. Zappos is among the most recent adopters of self-management who have announced they are headed in this direction.

Where’s The Coach?
One of the most telling indicators of self-management lies in the answer to this question. When you look at the above pictures, ask yourself, “Where is the coach?” If the answer in your company is, “On the field,” you do not have self-managed teams. Imagine a soccer game where the players stand in their positions and the coach runs out onto the field, kicks the ball from player 1 to player 2, then runs over, grabs the ball from player 2 and kicks it to player 3, etc. What would that communicate about the coach’s confidence in the players?

The more savvy managers don’t actually kick the ball, they just tell every player exactly where to kick the ball, and then the player pretends to have the freedom to kick it there.

A key principle of self-managed teams is at play here: When you give people tasks (Kick this ball from here to there), they feel used. But when you give them responsibility (Win the game), they take ownership.

Self-managed people take ownership. Traditional employees understandably simply complete the task, and feel more like characters tied to a foosball table than autonomous players in a meaningful game.

Tasks = Feeling Used
Responsibility = Taking Ownership
The Coach’s Role
Is the coach important? Yes, but in a very different way than a manager. Managers direct the ball-kicking, and are deeply involved in managing the process itself. But coaches are focused on the end result, not the process. They train, guide, encourage, provide resources and champion the success of others. Then they get out of the way. Managers never get out of the way.

Managers focus on making decisions and managing the process,
and they stay intimately involved.
Coaches focus on training, and on the result,
then they get out of the way.More Confirmation
In his book, Drive, Daniel Pink identified the three main motivations people want to express at work; autonomy, mastery, and purpose. People who are self-managed have autonomy. They are empowered to make progress with the ability to make meaningful decisions on a regular basis about how, what and when they do things at work. Mastery is found in teamwork that is always challenging but not overwhelming, where people find themselves living stretched out, not stressed out. And purpose is about connecting teamwork and self to a cause that is much bigger than accomplishing simplistic tasks, that drives our deepest motivations.

There is no other entity structure that accommodates autonomy, mastery and purpose better than self-managed teams. Zappos is focused on getting there as fast as they can, with coaches on the sidelines supporting the players, and everyone making good decisions with whatever ball is nearest to them.

No Room For Ego
When building self-managed teams in the emerging work world, there is no place for big egos. Leaders who want to make others successful and then get out of the way are building remarkable companies everywhere. Those who want to use people to make themselves look better will be left behind. Zappos will know they have arrived when people at Zappos see themselves in the pictures above, and there are no managers in sight.

Do you have foosball figurines, or real players? Let everyone play the game in self-managed teams, and watch your company grow.

Article as seen on Inc.com

Why You Need to Eliminate All of Your Company’s Managers

Companies without managers are the present and future of work. In the emerging work world of the Participation Age, the most successful ones will do away with managers completely. That’s right – completely.

Managers are the core problem in business

People don’t leave companies. They leave managers—it’s their number one reason to leave. The U.S. Department of Labor says the average tenure of an employee is now only 1.5 years. Salary.com says 75 percent of the reasons workers give for leaving a company have to do with their manager. Eliminate managers and you do away with almost all of the reasons why people leave. Zappos is just one company that has figured that out.

 

Managers were invented
There’s a good reason why people are so manager-averse. We’re not built to be managed. For thousands of years, 80 to 90 percent of all adults in the world owned their own businesses. Managers were invented for the Industrial Age factory system. They were a bad idea then and a worse one today.

One man, Frederick Winslow Taylor, had more to do with the invention of managers than any other. Peter Drucker says Taylor had as much impact on the 20th century as Darwin, Freud, and Marx. Taylor proposed a fatally flawed definition of the modern employee that Industrialists found very convenient. In his paper Scientific Management, published in 1911, Taylor defined employees as 1) stupid and 2) lazy.

So if people were, for the first time in history, all of a sudden widely stupid and lazy, how did you solve that? Taylor made it easy. You simply find the very few smart and motivated people and place them “over” the stupid and lazy ones to make them productive. In this way management was born.

Modern business structures are built on a fundamental system of mistrust, division, and antagonism I call LCD management to the lowest common denominator. Taylor’s definition required that companies ask, “What’s the stupidest and laziest thing a person could do here, and how do I create a system where they can’t act that stupid and lazy?”

Of course no modern manager would say the people who work “under” them are stupid and lazy. But the fact is managers exist because they are assumed to somehow be smarter and more motivated—better at creating solutions, leading, motivating, monitoring processes, communicating, etc.

If they can do it, so can you

Yet all of these assumptions have been proved wrong time and again by companies of all sizes, in every industry, that have operated without managers for decades, including our own, Crankset Group. Huge tomato processors like the Morning Star Company, medical device companies like Davita, manufacturers like Semco, GE Aviation, and W. L. Gore, service companies like Buurtzorg and Precision Nutrition, and scores of newer and technology-oriented companies like Zappos, Menlo Innovations, Valve Software, and Appster—all of them are highly profitable with lower turnover because they have self-managed people who don’t report to managers.

How to build a company without managers

In short, replace every five to 10 managers with one leader, to whom no one reports directly, and who exists to serve, champion, guide, train and connect others with the resources they need to be successful.

Remember, managers were invented just over a century ago. Leaders have been around for thousands of years. We conflate the two, when in fact they are radically different. Businesses that run without managers have great leaders, and a lot fewer of them. They don’t hire, fire, or solve problems like managers. And they lead only because people are following, not because they have a title that demands people follow them. Here are a few clear distinctions between managers and leaders.

If you want great creativity, leadership that serves the team, higher profitability, the highest employee retention in your industry, and the most tightly run processes, you just need to give everyone their brains back. They will create a better system that runs without managers.

Dispelling the myths

1. This isn’t new or a fad—many companies, of every size, have been doing it with smashing success since the 1950s.

2. It isn’t chaotic—every managerless company I know runs with tighter processes, better communication, and greater stability and longevity than their managed competition, which only makes sense since they have more committed and engaged people at every level.

3. It isn’t for specific industries—there isn’t an industry out there that hasn’t been doing it for decades.

4. Management still exists—self-managed people manage themselves.

Why your company isn’t doing this yet

So why aren’t all companies running without managers? Because the only ones who have anything to lose in the transition are the managers, the ones with the power to make it happen. They fear they will lose control and be shown to be unnecessary. And because they are presently in control, it is the managers who must either make the transition, or get out of the way. And it is not in their nature to get out of the way.

Tony Hsieh has recognized that managers have been holding back his company. On its way to being managerless, Zappos has just offered all its managers a severance package if they leave by the end of April. Hsieh says the company should have done this sooner. The nature of managers is to build fiefdoms to demonstrate their value and to justify their promotion to bigger fiefdoms. In contrast, the nature of leadership is to serve and train others, then get out of the way.

It’s inevitable

The data is too compelling not to join the emerging managerless work world. But it threatens a 150-year-old legacy system that won’t go down without a fight. Those who want control and authority will continue to resist this, even though it’s better for everyone, including them. But managers who want to become leaders will run to, and embrace the emerging work world of the Participation Age, and thrive. Those who don’t will be left behind. Your choice.

Article as seen on Inc.com

The 2 Driving Forces in Life

Both are powerful, but only one will help you build a great life.

There are really only two fundamental driving forces in life. One of them can be helpful, but is short lived. The other one can make you very successful.

1) Running away from something (survival)
2) Running toward something (your Big Why—purpose)

Only the second one creates lasting success. The first one might even create failure.

 

Survival—Running Away

Moving away from something is a survival tactic. Survival is a very strong instinct, but the negative nature of it will not help you get to great places. It will only help you escape unhelpful ones. Running from something gets tiring.

There are legitimate reasons to run from something—a bear in the woods, a mudslide, that guy who won’t stop talking. Many people look for a new job or start a businesses because they are fed up with the boss or the company they work for. Others do it because they were let go and didn’t want to ever be that vulnerable again. All of these are legitimate reasons to run from something unhelpful.

A negative driving force can be a good incentive to get something started. But the problem with running from things is that it isn’t sustainable. The gravitational pull of that thing chasing you, will eventually slow you down and wear you out. We aren’t built to find long term sustainable motivation from running away from things, but by running toward them.

Purpose—Running Toward

When you find something to run toward you’re much more likely to create a sustainable motivation and succeed. A positive driving force is something that you don’t have, but it has you. It grips you and compels you forward—you can’t help but go in that direction because the gravitation pull in front of you is strong and always getting stronger as you get closer to it.

What drives your life? What compels you to get up in the morning even when you’re not making money and when you’re tired of the struggle? What helps you see the struggle as the road to success rather than the road to nowhere? I call that my Big Why—the big reason to be in business or in life that is so much bigger than just the trivial need to make some money.

If you have a Big Why, a positive driving force that is compelling you forward, you are unlikely to wear out, slow down or give up.

The Paralyzing Middle—Neutral

But there is one other condition that won’t get us anywhere, and is paralyzing—living in neutral. When we’re living in neutral, we’re neither moving away from something or toward something, but simply not going anywhere—dead in the water of life—just treading to keep our head above it all. People who live in neutral many times have reasonably safe, comfortable and predictable lives, but rarely have a story to tell. Movement of some kind is critical. Moving away from the earth might help us eventually find the gravitational pull of the moon. Running away can help us find something to run toward, but neutral doesn’t help us find anything.

Get A Big Why—Your Blue Flame

Get out of neutral if you’re in it—wake up, get a Big Why and run toward it. We call it the blue flame that drives you forward, like the afterburner of a fighter jet.

Do you have a blue flame coming out your back side that is driving you forward? It’s the best way to ensure you’ll build a life you’ll love.

Some day your life may flash before you. If it does, make sure it’s worth watching.

Carpe freaking diem, already.

Article as seen on Inc.com

Everybody Should Play the Business Owner’s Game, Not Just Owners

There is a game every person at work should be playing every minute of every day, with every decision they make. It’s called The Business Owner’s Game, and is at the core of building a successful business or career. It transforms your relationship to work

The objective of the Business Owner’s Game is simple: More money in less time.

Successful business leaders play this game all the time to increase their revenue (or income) and reduce the amount of time they have to personally spend increasing it. The smart leaders have everyone at work playing the same game. The objective is to discover the “highest and best use” of everyone’s time, and get them focused on doing those things.

 

More Money in Less Time

Anybody can make more money in more time; it’s easy—just work more hours. Except you only have 168 hours in a week. So the better idea is to discover how to make more money in less time.
A lot of people intend to make more money every year, but how many of them intend to do it in less time?

Why do we all have the first graph, but not the second one? Because we’re stuck in Industrial Age thinking about how money is made, by trading time for money.

A traditional employee thinks that way as well, but shouldn’t. The Industrial Age was wrong. Everyone working in every business should be on a manic pursuit to answer the question, “How do I make more money in less time?” Your business would make more money if all your people thought this way. And if you, as a business owner, want to build a successful business, you can’t afford to succumb to this old Industrial Age habit. Let’s learn the Business Owner’s Game.

The Game: Two Simple Questions

The good news is that the Business Owner’s Game is very simple. There are only two questions:

1. Is this (whatever I’m doing right now) the highest and best use of my time?

The answer to at least seventy-five percent of what we’re doing will be, “No.” Whatever we’re doing is rarely the highest and best use of our time. We just haven’t bothered to get it off our plate (short-term decision-making).

If the answer is no, and it almost always is, then move on to question number two:

2. If this is not the highest and best use of my time, then how do I do it for the last time?

The answer to that question will lead you to freedom.

If you are serious about getting things off your plate, you’ll come up with a number of ways to offload things that don’t belong there. Freedom Mapping is just one common answer to the question. But if you’re afraid, distracted, believe your business is unique (it never is), have a big ego, believe you’re indispensable (you almost never are), or a dozen other excuses, you will find 1,000 ways to not get things off your plate.

Business Owner vs. Income Producer

This is the most important game a business owner and everyone in your business can play. We waste more time and money doing things others should be doing than just about any other way.

If you are playing this game, you are a Business Owner (even if you don’t own the business, you own your destiny). If you aren’t, you are only an Income Producer, the fatal mindset of the “employee” (yes, Business Owners can be employees of themselves!) You may think you own a business, but all you really own is a job.

How Staff Members Should Play The Game

When Krista first came to work with us, we asked her to create a Freedom Map of the processes she ran. A year later we had her go back over this with the two questions in the Business Owner’s Game, to discover the highest and best use of her time. She circled everything in the process that did not qualify, and we hired Lauren who loved doing those things and was great at them. Both of them were firing on all cylinders now. As she gained experienced and the job changed, we had Lauren re-draw her Freedom Maps another year later, and hired Donna to do the things that were not the highest and best use of Lauren’s time. As Donna gains experience we will have her do the same thing.

Don’t Hire For Jobs; Hire For Effectiveness

We never hire someone for “a job”, but instead, we hire them to take over things that aren’t the highest and best use of someone else’s time. Does anyone ever get to 100% ideal use of their time? Of course not, but everyone in our company is always closer to it than they would be working anywhere else. And they all have more freedom and more meaning in their work as a result.

Get Off The Treadmill

What is the highest and best use of your time? How do you the other things for the last time?

Apply the two simple questions in the Business Owner’s Game to everything you do for one month and see what happens. It will transform your business if you are an owner, or your job if you are a Stakeholder. It will begin to give you the answers that allow you to make more money in less time, get off the treadmill and get a life.

Article as seen on Inc.com