The Death of Corporate America

Remember the old days?

Our fathers and grandfathers worked for the same company for 20, 30 or even 40 years. Generations of sons and daughters toiling under the protective arms of the “COMPANY.” 

Today it’s more likely that we will outlive any organization that we work for. 

It has snuck up on us. We turned our head and all of a sudden Corporate America is dying. 

It is the result of a powerful force that has emerged in our society. Not a company or a new technology or even a new industry. It is the evolution of workers themselves. For the first time in history, there are more workers operating as “free agents” than there are people working for Corporate America. Fortune 500 companies no longer form the bedrock of our workforce. 

How Has This Happened?
This evolution has been rapid and decisive. It has occurred for a number of reasons. First, the social contract of job security has long been broken. Jobs are no longer sacrosanct at Fortune 500 companies. One day these firms are in expansion mode and the next they’re “laying off” 35,000 workers. Second, e-commerce and automation technologies have leveled the playing field so that smaller companies with less people could provide the same benefits as larger multi-national firms. This resulted in corporate re-structuring and downsizing. And finally the loyalty/security pact of the previous five decades has been broken. This was evidenced in the mid nineties when IBM broke it’s “full employment policy” by reducing it’s payroll by a whopping 120,000 employees. In this century, being loyal to a company does not guarantee job security.

What Does The Future Hold?
Today the largest private employer in America is not Ford, General Motors, or even Microsoft. It’s Milwaukee’s Manpower Inc., a temporary help agency with over 1,100 office throughout the United States employing over a million workers. Temporary staffing has grown from a $1 billion industry to more than $80 billion while employing over ten million temps nationwide. It is estimated that there are over 33 million solo, self-employed workers. And there is an emergence of a new category called micro businesses. These are small businesses employing just 2 or 3 people to drive particular initiatives on either a full or part time basis. In fact, more than half of today’s companies have fewer than 5 employees! Don’t look to our government to reconcile this societal evolution. They’re a full century behind. The Bureau of Labor and Statistics still divides all workers into two categories: farm and “non-farm.” Figure that out. 

What Free Agents Love
The work ethic of free agent entrepreneurs is considerably different than corporate employees. These entrepreneurs crave, freedom, control, security, and loyalty. If you think about it, these are the very job benefits lacking in Corporate America. Today free agents come in a variety of forms, entrepreneurs, independent contractors, consultants, advisors, 1099ers, hired guns, nomads, etc. But their focus is on producing a measurable result for an organization rather than performing a specific role within it. Free agents tend to provide a higher return on investment for organizations because of their accountability to themselves rather than to a hierarchy.

Freedom
Freedom is the ability to exercise one’s own will. Within the corporate cocoon freedom takes on the meaning that the company as a whole projects. Some companies smother their employees in affection others try to purchase individual freedom with stock options and incentives. Free agents can choose to follow their own work ethic. This extends not only to what they believe, what they do and where they do it but also WHEN they do it. Free agents have succeeded in melding work time with home time. Gone is the Monday through Friday 9am to 5pm ritual. Today they balance a full time home life with a full time work life.

Control
Life in Corporate America is about lining up behind the company culture and philosophy. Free agents can control their own destiny. Consequently they develop skills in areas which they desire to excel. They build relationships with those that match their business culture and paradigm. They focus on selling insight, talent, expertise, ideas, creativity and solutions rather than just performing tasks. They realize that what matters in the course of a day is what is accomplished not how many hours are worked.

Security
The last decade has been one of prosperity. Members of Corporate America had job security but that prospect is diminishing. While a high standard of living has reached deep into middle class many members of Corporate America do not feel that their lives have improved. This dichotomy has altered our expectations of comfort and prosperity. People are looking forward to more than just a comfortable retirement after four or five decades of “work.” People are realizing that it’s not good enough to work to make money and survive. They desire to work to make meaning for themselves and their families. 

Loyalty
With free agents loyalty does not run up and down an organizational chart. It runs from side-to-side in allegiance to clients, colleagues, teams, projects, vendors and industries. In this sense free agents are far more loyal than company men and women. Companies can also afford to be more loyal to free agents because they lack the overhead that employees bring. Both benefit from the free agent structure because whereas vertical loyalty within an organization depended on one connection (boss and employee) this new horizontal loyalty depends on many connections.

How It Impacts YOU!
In the end I believe that we will see the free agent philosophy infiltrate every industry, profession and area of expertise. Those that are most prepared for this transition will benefit the greatest. Think about your own business. How could you use the “free agent mentality” to bring efficiencies to your business? If you’re an employer, how could you increase productivity and reduce overhead by employing free agents? If you’re an employee, how could you deliver greater production to your employer and increase your earning capacity by utilizing the above free agent infrastructure?

Team Innovation

Today, businesses large and small like to say they are “team oriented” (whatever that means). I guess it means they work in teams. Big deal. Does that improve their performance? Does that mean that the quality of their product or service is better than the competition? Does that allow them to complete a project more timely, profitably or effectively? Is teamwork really a better way to go about solving problems than say the “hermit” approach? What about Thomas Edison or Leonardo DaVinci or Alexander Graham Bell?

If you’ve ever worked on a team you know there is one thing that can not be avoided: CONFLICT. At some point someone is going to disagree with somebody else and then, look out! Getting to a simple solution can take hours or days while these two “team-members” fight over minutia. Sound familiar?Let’s face it, often times, teams can hit roadblocks that can sabotage their success. There are a number of things that can be done to ensure good teamwork:Conflict is GoodAs team leaders we must not allow ourselves to think that we solely carry the burden of resolving conflict. I see so may managers, owners and team leaders rush to squish the most subtle sign of conflict within their team. Without conflict we can not reach the best solution. This also places us in a patronizing, parental position that encourages your team members to abdicate personal responsibility for resolving conflict. It keeps them from developing the skills to necessary to grow, mature and hold each other accountable. Allow the team to detect conflict and manage only those that escalate.Guidelines for Managing ConflictAs leaders we need to model guidelines that set the tone for resolving conflict. In this way we will be educating our team members to take responsibility. These should include:

  • No personal attacks
  • No heated outbursts
  • No backbiting
  • No hostile assumptions

Establishing Expectations
Over the years I have noticed that communicating expectations to the team is paramount in achieving exceptional team performance. The following are areas that team leaders should develop clear expectations for members:1. Work methods – Make sure your team knows the methods and procedures you expect them to follow when completing the job. If they do not they may frustrate themselves by taking the “long route” and end up disillusioned.2. Deadlines – Make sure that the team fully understands the time frame for completion. This should include non-negotiable dates as opposed to to dates that can slip.3. Responsibilities – Ensure that every team member understands their role in the team process. This should be communicated one-on-one with each team member prior to establishing the team. Also ensure that the team members responsibilities are consistent with the teams responsibilities.4. Priorities – It is critical that team members know the proper priorities. What’s to be done first, second and so on.5. Performance – Paint a picture of the outcome for the team. Show them a vision of a “good” job vs. a “bad” job. Make sure they understand the degree of effort that you expect them to each contribute to the successful solution.6. Measurement – Establish a system to measure performance in small increments.7. Communication – Establish a format for consistent communication with the team. This forum will give you the ability to ask the right kind of questions to determine whether the team is “on-track.” At this pint you can provide feedback to the team and make suggestions on course correction.8. Resources – Make sure that your team members understand the resources that are available to them. This could include staff, facilities, technology, equipment, outside consultants and so on. Encourage them to use the resources to their best advantage but in a cost effective way in order to achieve their goals.As leaders it’s our job to foster innovation. Team members look to us for confidence, guidance, direction and innovation. What can you do to set the stage for creative thinking in the teams that you lead? How can you get your team to discover the best solutions in the most cost effective manner. Remember teams are not just resources, they are people. As I have said many times, we line in an age of relationships. How can you create relationships that go beyond just getting the job done. How can you create relationships that can produce the kind of Edison, Bell and DaVinci innovation.

Selflessness

Over the last few weeks I’ve been talking about some of the intangible traits that define “who we are” or “who our company is.” We’ve been looking at Rule #11 from my Rules of Attraction: Who we are is more important that what we do.

In my last few Business Updates I wrote about Integrity, Vision and Enthusiasm. Today I’d like to look at another trait that makes up “who” we are – selflessness.

Henry Stimson, Secretary of War during World War II once said, “no one who is thinking of himself can rise to great heights.” It sounds nice. It looks good in quotes. But the reality is that this statement runs counter to what most people truly believe and how we live our lives. In fact it is the opposite of what most of us are taught as children. That is, we must FIGHT for what is ours. Even in school we teach our children evolution. We beat into their little heads – the survival of the fittest. Only the very best make it to the top. We make no bones about the fact that we live in a dog-eat-dog world. Where is selflessness in all of this? Don’t get me wrong I am in no way saying that I live up to this trait. I am ashamed to say that I often fail miserably at being selfless. I do think it is necessary that we illuminate the fact that those who have molded their character to a selfless mindset ultimately create attraction and bring about change.

There has already been much written on the lives of those famous selfless individuals who have changed the world. People like Gandhi, Mother Teresa and Nelson Mandela. I will not dedicate extensive discussion to their accomplishments in this book but as point of illustration allow me to touch on them briefly. I think you will see that their selfless actions did in fact create massive attraction. I will attempt to demonstrate that this type of character-based attraction, like integrity, vision and enthusiasm can be implemented in a powerful and genuine way by regular folks like you and I.

In his youth Gandhi was a regular guy. In fact the name Gandhi means “grocer.” Educated as a lawyer in England he ultimately managed to lead his people to freedom from British rule by practicing nothing BUT selflessness. He never wavered in his unshakable belief in nonviolent protest and religious tolerance. When Muslim and Hindu compatriots committed acts of violence, whether against the British, or against each other, he fasted until the fighting ceased. Independence, when it came in 1947, was not a military victory, but a triumph of human will. 

Mother Teresa taught at St. Mary’s High School in Calcutta from 1931 to 1948. However the suffering and poverty she saw outside the convent made a profound impression on her. She asked for permission from her superiors to leave the school and devote herself to working with the destitute and dying in the slums of Calcutta. Although she did not have a single penny, she relied on Divine Providence, and began the first school for slum children without even a building. Her selflessness attracted volunteers and eventually financial support. By the 1990s there were over one million Co-Workers in more than 40 countries.

While selflessness is indeed a rare commodity today, I think we can all give a bit of ourselves for someone else. We don’t have to be Gandhi or Mother Teresa to help another person. I think this is as relevant in business as it is in our personal lives. How often do we place our own interests before the clients? How often do we let our egos get in the way just because we can? If I had to answer that I’d have to say, TOO OFTEN!

What would happen if we took the long view, overlooking a confrontation in favor of a selfless approach? Do you think it would create attraction? I’d be willing to bet my bottom dollar on that. In a society that focuses on gratifying ourselves, imagine the impact we can create with our clients, shareholders and team members when we take our eyes off ourselves and look to a brighter future.

Selfish or Selfless?

Happy Holidays to all. I thought I’d take just a moment to look at a popular concept this time of year from a unique angle – the idea of giving. At Christmas we focus on giving, making others happy, showing our appreciation, blah, blah. Yet during the other 364 days of the year we focus on “getting” and make no bones about it. Its “dog eat dog, eat or be eaten, get it while the getting’s good, and nice guys (or gals) finish last.”
Just look at our heroes: Donald Trump, Sam Walton, John D. Rockefeller and Warren Buffet – ruthless billionaires. We admire ruthlessness, tough-mindedness and persistence. In fact, we try to emulate these qualities. Hey, I don’t exclude myself. I can be as self absorbed as the next person.

Many have said that selfishness is in our blood. They say that as humans we have had to cultivate a form of selfishness in order to thrive. Many have drawn the correlation to Darwin’s theory of evolution linking selfishness to the genetic evolution of a “selfish gene”. After all, even a school child knows that only the strong survive. Surely this connects nicely with Darwin’s theory of natural selection and the survival of the fittest.
But our world is changing. Just ask Martha Stewart, WorldCom and Enron.Even the tobacco manufacturers are becoming altruistic today. You would be hard pressed to find a leader in business who isn’t focused on some type of charitable endowment. Ethics is the watchword of the day. According to Amazon.com there have been over 122 books written about corporate responsibility in just the last 12 months.
It’s a shame we need such a wake-up call. For more about this, check out Richard Dawkins book, The Selfish Gene. But for now, how about this? Let’s let it begin with you and me. I have found when I give it comes back to me 100 fold. In fact, it is the 14th rule of attraction: Be a giver.

So let’s make that read, “Be a giver…the other 364 days of the year too!”

Happy Holidays to all. It is an honor to have you as my subscribers.
Have a great week!
I hope that this “Business Update” has been helpful in assisting you to improve the performance of your organization. For more information on how the Small Business Advisory Network assists companies in improving their performance, please feel free to contact us at 310-320-8190 or email mark@markdeo.com 

Mark Deo

Personal Internal Vision

In 1961 John F. Kennedy put forth the idea of sending a man to the moon and bringing him back safely before the end of the decade. The American people were no doubt moved by this vision. But frankly he received much opposition from Congress due to the Cold War and the fear of technological failure.

A team of legislators were sent to Cape Canaveral to determine whether the funding should be allocated for the project. One day Florida Senator George Smathers, a member of this team, was touring the facility. He slipped away from the group of dignitaries for a moment to get a drink of water. Attempting to rejoin his group he became lost and found himself wandering the halls. The place was immaculate. It looked to be sanitized. Suddenly he came upon a woman sweeping-up and he explained his situation to her. She seemed to know her way around the complex and quickly told him how to rejoin his party. Smathers, impressed with the woman’s knowledge asked her, “What is it that you do here?” He was astounded by what she told him: “Why sir, I am part of a team helping to put a man on the moon and bring him back safely.”Smathers went back to Washington with a renewed fervor in his heart for the lunar project. He told his colleagues, “If the janitor at Cape Canaveral has this kind of sense of mission, what might the scientists and astronauts be like?”This simple cleaning women understood her humble job of sweeping-up to be far more than it appeared to an outsider. She was an important part of the Apollo project. Do you think that, as a result she was far more committed to her job? Do you think she went out of her way to do an extra great job of cleaning up? You bet she did. Her answer showed her deep understanding of her “personal internal vision.”Please understand I am not talking about a corporate vision or mission. Not that a corporate vision/mission is not necessary. On the contrary it is the first step in organizations developing their personal internal visions. But today many corporate visions or missions have become more like slogans than anything else. A PIV, or “Personal Internal Vision”, is a one-on-one relationship between you and your job. For that cleaning women that might have meant having the floors shine, the porcelain gleam and the corridors sparkle. What is it for you? Or if you’re a business owner or manager what does it mean for each one of your people?The purpose of a PIV is to give people the freedom they need to succeed. It allows them to take full responsibility for their choices. This is really the only way to create an environment of accountability. When a company asks their people to develop their own personal internal visions, they also give them the freedom to break the bonds of authority and excel beyond what might be expected from management.The fact is that accountability and responsibility lies with those closest to the task. Owning their job and future allows someone to let go of the idea that they need someone to look to for direction or control. It allows people to be responsible to the entire organization and the customers rather than their manager or supervisor. It takes the focus off of doing things right or by the book. It puts the focus on doing the RIGHT things. This improves decision making, performance and productivity.Improved performance and increased productivity aren’t the only benefits of a PIV program. Implementing PIV allows people to improve their skills by taking personal risks that will benefit the organization. They become more trustworthy and more trusting of others. They tend to hold themselves to higher standards and operate with greater integrity. They are often willing to put the interests of others above their own. This makes sense if you think about it. When their OWN success is at stake rather than some stranger’s company, do you think they will make better decisions and operate with greater commitment? Of course.In fact, in the coming economy, the only alternative to implementing a PIV program will be increased employee turnover, continuing resentment and ultimate stagnation. Don’t take my word for it. Ask the folks at Southwest Airlines, Harley Davidson, Nordstrom, Dell Computers and the list goes on. The bottom-line is that having a PIV program can be the difference between achieving your company’s goals in terms of financial growth, manpower development and customer satisfaction.If not for that cleaning women’s PIV, might there be a Russian flag on the moon today?I hope that this “Business Update” has been helpful in assisting you to improve the performance of your organization. For more information on how the Small Business Advisory Network assists companies in improving their performance, please feel free to contact us at 310-320-8190 or email mark@markdeo.comMark Deo

Office Politics

Someone asked me the other day: “Mark what do think is the biggest challenge for small businesses today?”

I didn’t have to think about this very long. I know they were expecting me to say something about: the affects of the economy or the stock market or the impact of technology or the lack of funding or resources or even the breakneck speed which we are expected to operate at.But the reality is that these are relatively minor forces when compared with the most powerful force of all:Office Politics!If you could walk with my consultants and I, in and out of businesses we each see everyday you would see the obvious yet devastating result of office politics. I believe it is by far the biggest obstacle to change and growth for companies today. Not that this is new. Office politics has been with us for decades. But the changing financial, political and social landscape makes it more insidious than ever and literally threatens the survival of many small businesses and even larger organizations.Why? Because of the exorbitant cost associated with office politics.The cost of office politics is a kind of activity-based cost. It includes time lost, waste of resources, low staff morale and ineffective delegation. Some of these costs are tangible but not accountable. Often time this kind of loss is ignored or neglected. Since many political activities are cross-departmental, office politics can render an organization completely dysfunctional in a very short period of time. While it is usually unwise to let office politics freely develop, unfortunately many companies cannot tackle such a political problem and let it erode their productivity and profitability and sometimes even endanger their survival.Office politics is about the application, distribution and negotiation of power and resources in an organization. This power includes authority (formal power) and influence (informal power). Politics is basically the application of that power. The desire for power is determined by one’s personality. Leaders can affect this principal in every organization. Strong, ethical leadership regulates the application of informal power (i.e. influence) to avoid the overuse and abuse of authority. Abuse of authority will lead to a chain of negative effects such as low staff morale, conflict, bias, bad image, poor communication, dishonesty and social conflict.When ethical leadership exists, office politics will abate. This is because ethical leadership is essentially self-management and self-control as an example for subordinates to follow. It is the strongest influence for change in any relationship. As I’ve said before, leaders act the way they want their team members to act. Cultural actions cannot be ordered or commanded. Most political office issues are symptoms of weakness at the senior management and organization level.While every organization is different, most have some type of definable culture. Some call this the organization design. It is essentially referring to the general distribution and structure of authority, responsibilities and resources in the organization. Poor organizational design is a common cause of office politics because ineffective organizational structure allows too much room for the negotiation for authority and resources.The organization chart in the business leader’s mind is far more important than the official one. Ricky W.O. Lau, author of Politics in Business calls it the “hidden organization chart.” Often times this means that the leader has bias and personal favor to individual members but does not act openly and his delegation is based on the hidden organizational chart rather than the official one. This is a common yet unfair and very detrimental management practice.While delegation is the distribution of specific work, responsibilities and authority, in an effective organization, delegation must be based on the organizational structure. Otherwise, there would be structural overlap, confusion, conflict and politics. Conflict usually involves different interests of different people (especially in different departments). Conflict may be minimized if the focus is on the whole organization rather than individual department or individuals. Some management styles may easily lead to office politics because the focus is on the performance of individuals and departments rather than the organization as a whole.Certainly interdepartmental conflict cannot be completely eliminated. Nor should we attempt to do so. It is important to remember that disagreement is not equivalent to conflict. People may disagree or criticize others if:

  1. They view the matter from another viewpoint
  2. They have misunderstood other’s meaning
  3. They want improvement
  4. They want to challenge others’ position or power.

Out of the above four motives of disagreement, only the last one is the result of conflict and is a political motive. However, when a manager is too politically sensitive, he may mistakenly treat the first three motives as political motives, and interpret the conflict as an intention to challenge his position or power.Desire of power may be a strong motive to perform, but it may also lead to a negative and destructive result. An effective manager should apply his influential power rather than authority because abuse and overuse of authority can lead to poor relations, distrust, misunderstanding and disorganization.Are office politics an issue in your business? If any of these symptoms are present in your business, its time to think about making some core changes to your business culture. At the Small Business Advisory Network we like to say that we influence decisions, improve performance and inspire change. That’s what our consulting, workshops, web site, weekly articles and The Small Business Hour Radio Show are all about.

Love In Business

The biggest disease this day and age is that of people feeling unloved.–Author Unknown

 The software engineer put on Nirvana’s “In Utero” as he did every evening when he got home from work, took his gun out, loaded it, and tried to garner enough courage to put it in his mouth and squeeze the trigger.  This was a ritual he had played out every night or the past year.  While successful at work, he was miserable.  He felt no one cared about him as a person- he was just another programmer, doing what programmers did, living a solitary life with no friends.  Then one day, out of the blue, his boss sent him a personal e-mail- not related to code revisions, interface changes, or other work related items.  But one that expressed his thanks and sincere appreciation for the work he had accomplished in the time he had worked there, and how he was valuable to the team not as just a programmer, but as a person.  He told this employee that he was glad he knew him as a human being, not just as someone who typed away at his computer all day.  That night the software engineer went through his daily ritual of putting on Nirvana, loading his gun, and for the first time- he was scared that he might actually go through with it.  He sold the gun, and with the proceeds bought his boss a gift- and told him the story of how that simple gesture had saved his life. This story was related to Mark Deo and I on the small business hour this week by Tim Sanders, author of Love is the Killer App.  He is at the forefront of a new wave of business thinking- not one focused on numbers, but one focused on people.  His philosophy is that one must share three things in order to have a successful business relationship: knowledge, networks and compassion.   By doing so you can not only help your business, but you can help others as human beings, much as in the story above. How does one share their knowledge?  By staying informed reading about the latest trends in business reading about things that interest other people and then sharing that knowledge with people who are interested in it.  How do you know what you should be reading?  A great place to start is the list of books on our website www.smallbusinesshour.com.  Tim Sanders also maintains a reading list on his web site at www.timsanders.com.  Some publications that are excellent are business magazines such as Fast Company, Entrepreneur, Business Week, and Business 2.0.  By reading these books and publications you’re making yourself valuable as a walking library to people that you speak with.  This allows you to become a personal resource to others- someone who they can trust and count on for information.  This in turn makes you as a person more valuable. What do we mean by sharing your networks?  This is not some reference to computers and internet access- To share your networks you must take your personal contacts and instead of protecting them and hiding them in secrecy open them up to the world.  Share your contacts with others who might find them to be of use.  This can be a simple matter such as simply passing a phone number on to someone, or giving a referral.  Better still is personally introducing two people who can both gain some value from establishing a new relationship.  By doing so you become a business “matchmaker” of sorts- someone who helps others to achieve their goals through communication with people to which you introduce them.  How does someone show compassion in business?  It comes back to one of Dale Carnegie’s principles, “Become genuinely interested in other people.” Only by being interested in someone and showing that interest can you demonstrate that you care about them as people and not just as tangible resources.  People respond to being cared for- you never know how making a small gesture can profoundly impact someone’s life.  I encourage you to think of someone in your business life who you can show your love to this week.  Become genuinely interested in them as a person- not to try and gain something from them, but to find common ground you share.  Then discover what it is that interests them, and find some information about that topic that you can share with them.  Find someone in your network of contacts who also has interest in the same topics, and introduce the two.  You will be amazed at how that will endear you to both contacts, turning them from business relationships into personal friends.  I’d love to hear your success stories at mwalker@sbanetwork.org.  Have a great week! This Business Update was written by SBA Network Business Advisor Matthew Walker- for more information, please contact him at 310-320-8190 or mwalker@sbanetwork.org.

Interdependence Day

Small business represents more than 99 percent of all American employers, employs more than half of the American workforce, provides just a little less than half of this country’s sales, and represents 96 percent of all U.S. exporters. Yet fewer than 5% of all small businesses survive to see their fifth birthday.

Why?

Some say its due to a lack of knowledge, a missing skill-set or hyper-specialization. I agree that skills and knowledge are critical but sometimes I think this huge failure rate has a bit to do with overconfidence.

Let’s face it, making the transition from “employee” to “employer” is not as easy as it looks. As an employee we had it pretty good. The owners took all the risk. True, when business was good they bought themselves a new Mercedes but if business was bad, they took the hit and I still got my salary. I didn”t have to worry about workers comp, insurance, OSHA, labor laws, lawsuits, competition, soft-sales, rising expenses and a plethora of other issues.

As employees we were “dependent” on the owner to absorb the risk and compensate for any losses or downside. Some owners may feel this “dependence” translates to a form of employee entitlement. Yet the owner takes the risk and the owner enjoys the reward.

Many employees on the other hand have come to believe that they are owed more money, more health care, more retirement benefits-more of everything that is costly to the owner of a business. Business owners often feel as though they deserve to take as much out of their companies as they wish sometimes not fully funding initiatives which can create a difficult working environment for employees. How can this dichotomy be reconciled?

I think it is deeper than simply saying we all need to take responsibility. I think we need to change our mindset about independence and entitlement. And I think we need to teach our employees to think like owners. Some have gone so far as to actually make their employees owners.ESOP (Employee Stock Ownership Plans)

In 1994 United Airlines became the largest employee majority-owned enterprise in the United States, with various groups of employees mostly represented by unions – having purchased 55% of its stock in exchange for various concessions. The employees accepted pay cuts and made other concessions, but were also granted representation on the company’s board of directors. The case represents the potential of an Employee Stock Ownership Plan (ESOP), but not the full realization of that potential. It shows that an ESOP may be a necessary condition but certainly is not a sufficient condition for substantial changes in labor-management relations leading to improvements in company performance.

It requires more than just giving an employee some stock to get them to think like an owner. It all starts with the mindset of the owner themselves. For small businesses it is critical that they not allow overconfidence to overshadow their decision-making ability. This is the danger of becoming too independent.

Becoming Too Independent
Sure, I’m the first to admit that entrepreneurs have to make the move from dependence to independence. But Stephen Covey says in his book, The Seven Habits of Highly Effective People, that entrepreneurs “must move from dependence to independence and ultimately to interdependence.”

If you are one of these small business owners you might be saying, “Hey isn’t it great? I’m finally independent! No more working for the MAN!”
But independence is not enough. In fact, that “independent attitude” may be the very reason that many small businesses fail. When we feel we have all the answers we disempower others not to mention the fact that we can alienate them. When we become “interdependent” we allow ourselves to be seen as vulnerable and let others into our personal space. We give them a “fine reputation to live up to” as Dale Carnegie said. And we motivate them to think on our behalf. This isn’t easy for hard-driving entrepreneurial types like me, but I have found that it is incredibly powerful.
Often times this opens the door for greater collaboration with other business partners as well. I’m talking about alliances with non-competitive organizations and affiliate relationships. I also find that when entrepreneurs mature to the level of “interdependent leaders” they are also open to receiving coaching and consultation.

Coaching Re-enforces Interdependence
Business coaching has become one of the most effective ways to bring about organizational improvement both for self-employed entrepreneurs as well as leaders of larger organizations. Coaching has proven that it produces results in a variety of forums. For example, Fast Company magazine reported in a recent article that nearly 40% of Fortune 500 companies retained coaches to improve their business performance. In addition a study by the Manchester Review stated that the output of executives involved in coaching programs averaged nearly 5.7 times higher than the initial investment. There is strong evidence showing that external coaches can add substantial value in building new skills, conceiving new strategies, making better decisions as well as building a culture of interdependence.

Growth for even the most successful organizations can be hindered by a resistance to change and an attitude of fierce independence. This can happen externally among customers as well as internally with employees. Business coaches help owners, managers and key team members to set specific goals and break them down into manageable pieces and to effectively collaborate. Coaches hold team members accountable but they also ensure that there is a high level of interdependence. 

Interdependence Breeds Attraction
In fact our Attract More Business Program incorporates an interdependent structure. Not only in the content that it provides but in the way the program is delivered. Every program includes a coaching element both in the form of our interactive email based “skill builders” as well as in the one-on-one tele-coaching that is included in every program. Now we’ve introduced the “Masters Version” of the Attract More Business Program which includes 12 weeks of one-on-one coaching as well as the 9CDs, 150 page manual and a complete evaluation of all of your marketing material.

I’d love to hear how you’ve become more interdependent in your organization. Email me at mark@markdeo.com. And remember to make Tuesday morning, “Interdependence Day.”

Have a great week!
I hope that this “Business Update” has been helpful in assisting you to improve the performance of your organization. For more information on how the Small Business Advisory Network assists companies in improving their performance, please feel free to contact us at 310-320-8190 or email mark@markdeo.com 

Mark Deo

Integrity

Rule #11 from my Rules of Attraction: Who we are is more important that what we do.

Last week we looked some of the intangible traits that define “who we are” or “who our company is.” We said the most critical are: Integrity, Vision, Enthusiasm, Selflessness and Identity. We spent some time examining the importance of genuine “Enthusiasm” and how it affects how we are perceived. Another trait that exemplifies who we are is “integrity.”

It has been said that our “character” is displayed by what we do when no one is looking. I believe that character is; “who we are – defined.” It is the values that we adhere to. Similarly the concept of “character” extends beyond a trait that defines a person’s temperament or disposition. What does character have to do with marketing, you may ask? I believe in this new era, character or “who we are” is more important than ever before in the marketing arena. In fact I would submit that character is far more important than what we actually do or say about our company, product or service. It is the evidence of our most persuasive claims. Who can deny that all types of products and services are becoming more homogeneous? Differentiating oneself is getting more and more difficult. Competition in every industry and profession is accelerating daily. Therefore “character” in many cases may be the deciding factor in attracting better clients, more committed team members and healthier relationships.

Integrity is at the core of our character or who we are. When we think of someone as having “integrity” we tend to think of them as being honest, loyal, fair-minded, trustworthy and respectful. Having integrity means that you do what you say you’re going to do, you try to do the RIGHT thing and you do it consistently.

When we think of the greatest military leaders of all time, we think of Patton, Eisenhower, and MacArthur. The name George C. Marshall has faded into the mist. Marshall, however, was the leader that made it possible for these men to dominate the history books. The fact is that Marshall was their boss! He was the Chief of Staff of the United States Armed Forces during World War II. He forfeited his chance to go down in history as the hero of the war and ultimately position himself as an almost certain a shoe-in for the White House top job. 

In late 1943, at the height of World War II, Marshall had convinced both President Roosevelt and Winston Churchill that the best way to turn the tide of the war was to plan a cross-channel attack on Germany via France. The only question was… Who would lead the operation? Roosevelt knew that Marshall wanted to be the commander of the D-Day invasion. It would virtually guarantee Marshall’s place in history. Yet just as Roosevelt knew that Marshall deserved this honor, he also was aware that the man was so humble he would never ask for the job. The President’s problem was that he felt that Marshall was more greatly needed as the high commander of the entire war effort than he was as leader of the D-Day invasion.

So what did the President do? Like any good politician he hedged his bet. He sent a message to Marshall telling him that if the general wanted the position then he just needed to ask for it. What was Marshall’s reply? He sent a one line message back to Roosevelt saying:

“I will serve wherever you order me, Mr. President.”

In the end, the Normandy invasion, a virtual guarantee of glory, slipped from the hands of Marshall into those of Eisenhower who used it to make his successful play for the Presidency. Marshall demonstrated his integrity by having the courage and conviction to make the “right decision” for the country. Marshall knew that in fact he WAS more greatly needed in the role of overseer for the entire war effort than he was as D-Day invasion commander. Later when asked why he made such a decision, he told the media, “The issue was just too great for personal feelings to be considered.”

This is the kind of integrity that creates attraction. While many of today’s business leaders are shifting blame, slamming competitors and whining about fair treatment, those with integrity are willing to tell the truth, make sacrifices, do the right thing and do it consistently. Imagine the reputation your company can build in a marketplace hungry for products, services, companies and people with integrity.

Failing to Fail

Are you doing the same things you did a year ago? Are you doing things the same WAY you did them a year ago? If so you’re bound to fail. Not that failure is bad mind you. The sooner you fail in fact, the better off you’ll be. So raise a glass with me and let’s toast all of our failures past, present and future! Ahhhh drink deep. Now wasn’t that thirst quenching? No?

Let’s face it, our culture doesn’t reward failure. We condemn it. Our condemnation is so prolific that most folks do whatever they can NOT to fail. They shudder to even speak of a failure to associates. They train themselves in fact to not even THINK about failing. It’s not an option! We walk around telling everyone who will listen to us about all of the great successful things we have accomplished in our lives. We have convinced ourselves that we must continue to succeed and more so, that we must become innovators.

Innovate or Die 
In fact innovation has become kind of a buzz-word in our society. We hear, “innovate or die.” What about “innovate AND die?” All the excitement about all things new has obscured the fact that most new ideas fail while most old ideas are still with us. With hundreds of breakfast cereals introduced every year how could it be that Cheerios and Wheaties still outsell them all? Why are Beanie Babies a faint memory yet Play-Doh is still a best seller? Evolution? Survival of the fittest? Maybe.Is there a way to combine innovation with proven methods? We’re all familiar with the old Rudyard Kipling quote: “the definition of insanity is doing the same thing the same way time after time and expecting a different result.” In this shrinking economy, it stands to reason that we need to do things differently. We all know we have to get creative, but how? How can we harness our creativity to create success rather than failure? Or better yet how can we train ourselves to endure our failures yet remain focused on the hope of a successful outcome?Not Creativity but Productivity 
The truth is that creativity is less about wild talent and more about productivity. To find a few ideas that work you need to try a lot that don’t. Successful people don’t have a higher success rate. They just do more and they do a range of DIFFERENT things. Research shows that the success of individual geniuses like Mozart, Shakespeare, Picasso, Einstein, and Darwin himself, is best understood from an evolutionary perspective, where excellence results from “a range of differences.” These famous creators generated a wider range of ideas and completed more products than their contemporaries. They also followed proven methods in order to accomplish them. They didn’t succeed at a higher rate than others. They simply did more. So they had both more successes and more failures.An Example 
A similar philosophy helps explain the success of Capital One, which has been called the most innovative credit-card company in the world. Just a few years ago, all credit cards were pretty much the same; you could have whatever you wanted as long it cost $20 per year and had an interest rate of 19.8 percent! Capital One has been the leader in offering thousands of different credit cards, with varying rates, and limits, which are targeted at people with different beliefs, hobbies, and affiliations: “They tinkered with credit lines, mileage awards, with the design of the cards, and with the color of the envelopes of their mailings. They tried different ways of retaining customers and pursuing deadbeats. Essentially they made Capital One an endless experiment.” The company tried about 45,000 experiments in the year 2000, for example. Capital One has succeeded by targeting smaller and smaller audiences for these experiments, like a “platinum MasterCard for middle-income hikers who drive Saturn automobiles.” Most of these ideas fail, but the constant experimentation with one variant after another, and constant learning, are big reasons why Capital One has over 30 million credit-card accounts.Repackaging the Old 
The other thing about innovation and creativity is that success is not usually the result of totally new ideas as it is the repackaging of old ideas in new ways, places and combinations. IDEO which is probably one of the most innovative companies in the world, has developed more than 4,000 products for firms in all kinds of industries. Their designers are constantly mixing and matching technologies to produce creative new solutions. One IDEO development group got the idea to create a “slit valve” for a bicycle water bottle out of a heart valve that was made for a medical products company. Henry David Thoreau said, “The question is not what you look at, but what you see.” When you look at your product or service offerings what do you see? What do your customers see? Better yet what should they see?Challenge Accepted Practices 
Often times ideas that are born from this kind of haphazard creativity are diametrically opposed to “accepted” practices. Entrepreneurs start new companies partly because they are purported to be more innovative, free from the pressures in established firms to follow ingrained precedents. Yet entrepreneurs can fall prey to ingrained habits just like managers in big firms. Don’t be afraid to challenge accepted practices. I’m not talking about a free-for-all but rather controlled experimentation in order to cultivate innovation. Some of the greatest inventions in the world were a result of an extra component here and there pieced together. Thomas Edison said, “To invent, you need a good imagination and a pile of junk.”Here’s some advice that will help to promote creativity and innovation:

  1. Expose yourself to new ideas. Increase the variance of your available knowledge. Study other industries that face the kind of challenges you face.
  2. See old things in new ways. Don’t just get OUT of the box. Walk around it. Look at the top. Don’t be afraid to pick it up and look at the bottom.
  3. Break from the past. Stop talking about your past successes and hoping the history will repeat itself. We stand in a new place today a place we have never been and will never be again.
  4. Understand that creativity as all about productivity. Be willing to turn the focus to more rather than better at times.
  5. Embrace failures. Reward failures. Plan to fail – knowing that success in just one more failure away.
  6. Challenge accepted practices. Become a tinkerer.

Play with these ideas in your mind and experiment with a few in your company. Treat them like toys that you might buy to mess around with: Try to break them, try to take apart the pieces to see how they work, try to improve them, and mix them (or parts of them) with your other toys. I offer these ideas not as immutable truths, but as methods that have helped other companies produce beautiful and profitable mutations, and that just might help your company as well.