I’ll say something about what I observe about business.
People starting out for the first time with little business history of their own or in their family believe they have to do it themselves. That they can’t trust anyone. And they are frequently trying to prove something to an often dead father, or other close relative.
Successful business – you define your own measures of success – is not like this. It’s about the exact opposite.
It’s About Freedom
Successful business builds a quality team as thoroughly and deeply as possible. Trust is given first, allowing the mistrustful go elsewhere. And they appreciate and recognize their family’s contribution to their lives and go about to lead their own. It’s a heck of a lot more fun that way too!
How do you improve human group dynamics, and allow people be more productive, business to be more profitable, groups to be more self reliant, whilst at the same time have it be more satisfying, more rewarding and straight out more enjoyable for the individuals involved?
The solution: Develop a self organising, collaborative workplace (also known as “Sociocracy“).
Many big companies have worked out how to do it: parts of GE, most of BMW, all of Semco (a Brazilian manufacturing company). Many more practicing it can be found here at Worldblu. While Worldblu calls it “democratic workplace”, it’s really more likely to be collaborative one, since when you have a flexible organisation, it is more likely that 100% consent is necessary to achieve anything, and not merely majority rules – what a democracy is. The key word here is consent.
How to achieve great success, with great results, rewards and satisfaction in a manner which is harmonious to the group, to other participants, and to the world in general? It is not through competition. It is through collaboration.
Much of the presently accepted models in many organisations are competition based, and competition is a poor use of human potential. Autocratic leadership methods necessary lead to almost total staff disconnection. Poor performance, and whip-like management mentality becomes the norm. Such a culture is easy to start, and success may be evident and easy to measure, but it soon grows into a dismal forgotten failure as any long term success measures are applied – staff turnover rates soar, production efficiency, product quality, and eventual profits plummet. It’s simply a dismal failure at humanity, at being human even. Even for those directly measured to have “succeeded” they experience high stress, poor health and eventual a short, and ultimately an unsatisfying life.
One of the most successful examples of collaboration has been documented by Ricardo Semler with his company Semco. His two books “Maverick” and “7 Day Weekend” explain everything in succinct terms. How a small family run company grew to an international corporation with its principal, Ricardo ceasing his involvement a long time ago.
“Semco has no official structure. It has no organizational chart. There’s no business plan or company strategy, no two-year or five-year plan, no goal or mission statement, no long-term budget. The company often does not have a fixed CEO. There are no vice presidents or chief officers for information technology or operations. There are no standards or practices. There’s no human resources department. There are no career plans, no job descriptions or employee contracts. No one approves reports or expense accounts. Supervision or monitoring of workers is rare indeed… Most important, success is not measured only in profit and growth.” – Ricardo Semler
Personally I have applied Semler’s processes (actually they evolved naturally from Semco employees) to great success in my own endeavors. For example I’ve taken totally disconnected and non-performing employees, and turned them into stars, “fought” over within the office for new assignments. One of the very useful Semler tools I used was upward feedback.
However amongst all of this, I’ve been searching for a methodical system to describe Semlers approach, and for a long time I called it “democratic” as he and many others have done. But I’ve never liked that, that word “democracy”. It is essentially a competitive system. Here’s why:
Demo-ns!
Dubbed “the worst form of government” by Winston Churchill, democratic environments automatically and immediately lead to the oppression of the minority. And oppression of any kind is never a good thing.
“Many forms of Government have been tried, and will be tried in this world of sin and woe. No one pretends that democracy is perfect or all-wise. Indeed, it has been said that democracy is the worst form of government except all those other forms that have been tried from time to time.” Sir Winston Churchill, Hansard, November 11, 1947
Democracy, by it’s very design, is an oppression regime: the oppression of a few by the many. “This is fair. It’s only natural”, I hear you say, but do you really think so? Is any oppression fair? Of anyone? It is quite plain to see that any minority oppression in a social group no matter how large or small, has an ultimately negative consequence. Suppressed negative thoughts, feelings, and emotions harboured by the minority can only grow and manifest in other forms. The costs – both social and financial, short term and long term – to control, pacify, down-right-openly-oppress increases for the majority. Then something curious happens: the majority find themselves the minority, the minority becomes the majority and the cycle is repeated. Back and forth, back and forth. Those once-were-majority of course hang onto their once-granted-power with great enthusiasm and vigor, as long as they are able. The majority learnt what to do while in power. They learnt the rules of the game. The still-ongoing Occupy Wall Street or “99% protests” (yes, still ongoing since 17 September 2011) are a good example of a majority now being controlled by a minority that has a much better understanding of the rules. Still resilience and perseverance can be a good thing.
“Consent” a better thing.
An another example is a recent US election with Obama and McCain running against each other: it was 53%/46%. Is that a “democracy” when almost half of the people have to yield their desires for the other half? This is more like a society close to reorganisation as the majority may soon become the minority. Such a shifting of power will occur either violently (like has been seen in many Arabic countries recently) or passively, as with not-even-newsworthy Iceland recently. In Iceland the people rejected the debt burden of the banks their brethren in government attempted to impose upon them. They arrested a number of bankers and changed their laws so it cannot happen again!
So, what is it? What is the magic that means a group of people will be inspired to performance, all by themselves, with little external influence, other than maybe “Go!”
This video clearly shows it is not the money. In fact the study shows that for complex, creative projects, monetary incentives actually STOPS performance! It’s not carrot and stick that works best where creative thinking is required.
Much has been done on the subject and reading Semler’s “Maverick” and “7 Day Weekend” you’ll understand that it is an evolutionary process, and it occurs by consent of the individuals of the group.
This is the important word: consent.
Work that recent came to me by the Dutch thinker Gerard Endenburg offers very substantial physical elements to this evolutionary process. A good short summary of this thinking is in “Sociocracy: The Creative Forces of Self-Organization”, by Gerard Endenburg and John A Buck. You can find this on the web in pdf.
These two resources: Semler’s dual mini-tomes and Edenburg’s principles combined results in a very harmonious outcome: the flexibility of the benefits, and the basic parameters on how to get there.
Endenburg defines four basic concepts for a self-organising group:
Four Principles of Sociocracy
1. Consent: The principle of consent governs decision-making. Consent means no argued and paramount objection. In other words, a policy decision can only be made if nobody has a reasoned and paramount objection to it. Day-to-day decisions don’t require consent, but there must be consent about the use of other forms of decision-making, for example, for day-to-day operations.
2. Election of Persons: Election of persons for functions and/or tasks takes place in accordance with the principle of consent and after open argumentation.
3. Circle: The organisation maintains a structure for decision making, consisting of semi-autonomous circles (i.e. groups of individuals). Each circle has it’s own aim and organises the three functions of leading, doing, and measuring/feedback. A circle makes its own policy decisions by consent, maintains it’s own memory system, and develops itself through integral research, teaching and learning. A circle makes consent decisions only in special circle meetings (also called round table meetings).
4. Double-linking: A circle is connection to the next higher circle in the organisation with a double link. This means that at least two persons, one being the functional leader of the circle and at least one delegate from the circle, are full members of the next higher circle.
With these four principles in place, more specific actions can occur. Here’s an example of a Sociocratic Circle Meeting:
Sociocratic Circle Meeting
1. Opening round: a time to tune into the members. Like an orchestra just before a concert. 2. Administrative concerns: such as announcements, time available for the meeting, consent to minutes of last meeting, date of next meeting, acceptance of the agenda. 3. Content: Agenda item, second agenda item, etc 4. Closing Round: a time to measure the meeting process. E.g. use of time, did the facilitator maintain equivalence, how could the decision-making have been more efficient, did everyone arrive prepared. Also this is a time to mention agenda items that should be on the agenda for the next meeting.
During the Circle Meeting there will be times to appoint a leader or a task or role or job to an individual. Here’s how it’s done:
Template for Sociocratic Elections
1. Task: establish the job description and the period of time the person will perform the job. 2. Ballots: Fill our ballots and hand to the election leader 3. “Public Gossip”: each person says why they made their nomination 4. Changes: Election leader asks each person if they want to change their votes based on the arguments they heard. 5. Discussion: Election leader usually proposes a name after step 4. However they may ask for discussion if the arguments are very unclear – i.e. informal consent has not been reached. 6. Consent round: Election leader asks each person if he of she consents to the proposed person, asking the person proposed last. If there is an objection, the election leader takes everyone back to step five before trying another consent round.
For making decisions by consent, a sociocratic organisation will operate in the following manner:
Template for making policy decisions by consent
1. Consent to the issue(s) to be decided. “What’s the concern, problem or challenge?”
2. Generate a proposal. “What’s our opinion?” Often a person or persons may be asked to prepare a proposal and bring it to the next meeting.
3. Consent to the proposal. “What is our decision?”
a. Present proposal – questions and discussion is for clarification only
b. Quick reactions round – quick feedback about the proposal (intended to illicit the “feeling response”, and not the “thinking response”)
c. Amendments – proposer amends proposal, if needed, based on the questions, discussions and quick reactions
d. Consent round – collect and record any objections on a flip chart. No discussion at this time
e. Discussion – improve proposal to deal with the objections if any
f. Consent round – Each person indicates their consent to the proposal, with the proposer speaking last. If there are remaining objections, they are recorded (no discussion), everyone goes back to e. Discussion, before trying another consent round.
Implementing a self-organising group requires consent from the people who exert power over the group. Simply stated this means that senior management and/or organisation owners must support Sociocracy. Full stop. No “ifs” or “buts” or even “veto rights”. Otherwise internal fractures will be created when the a circle’s “assumed power” confronts the more senior “declared power”. If that happens, growth is stymied and a slide back to pseudo-autocratic or totalitarianism will follow.
The great thing about this Sociocratic process as described by Endenburg, is that it’s an excellent way to get self-organisation into an existing organisation without changing or upsetting the existing power structure. The magic then begins to happen and once the system is running well, initiatives and improvements emerge organically and naturally. There is no revolution, only evolution.
All companies and groups that utilise such or similar systems experience better performance, better products, innovation, higher moral, lower turnover, lower loss, lower costs.
Semler advocates this because, after all, he invented the 7 day weekend!
I changed a tyre today. It wasn’t my tyre. It belonged to an Egyptian vet, well he said he was egyptian and the back of his car was full of needles and drugs for camels so I assumed that was his occupation. He waved me down on the road, 1 hour from the border with Iraq . When I stopped and asked what the problem was the message that got transferred to me in a mix of Arabic and English was that he had a flat tyre and had no jack or tools to change it. No problems. I could help. So I reversed up and proceeded to take my jack and wheel wrench from my car and together we set about to change his tyre. Then I discovered that his wheel nuts where smaller than the wrench I had… problem. I thought to myself: “This is a new car. Why is there no jack and wrench?” So I went around the back and sure enough, in a side panel was the requred tools my friend thought was missing, with of course the correct size wheel lug. In a matter of minutes the tyre was changed and all was good. Driving away I looked at the outside temperature – 42 degrees C – and it occurred to me how valuable a little knowledge was: something that I took for granted could save another man’s life. Assuming that there was no one else on the road, he would have died simple because he didn’t know where to look. And I did. What is that worth? How much does someone know that is given away, without the acknowledgement of that value. It was a valuable lesson.
Business is a system. People working in the system have a “job”. Many solo runners in “business” operate in a “craft”, which is neither job nor system, but somewhere in between. Rather like a hobby they enjoy doing, but this hobby impacts little more than themselves and their family. If the soloist is doing the same thing over and over, then they have a job not a business, nor a craft for that matter. I doubt if they will like it.
The best business operates as a tribe – a large group of people (up to 150) working in a harmonious, contiguous unit. After all, we are humans, animals, and working together is what we enjoy the most.
Gerber is 100% correct – his wider world experience gives him that view point. His purpose is to touch as many people as possible, and help others to achieve the same, not just 1 or 2 (or the nuclear family) as Robert Gerrish promotes.
Gerrish has a kind of “screw the corporation, we can do it on our own” approach. Which, coincidently – based on tribal research – is about 48% of the population (stage 3 – See the TED talk [David Logan on tribal leadership] for what stage 3 is). (David Logan on Tribal Leadership).
This is probably why Gerrish feels right in what he believes: because he can find a lot of people to agree with him. Gerber is talking about the top 2% (stage 1) of the population who are already there, as well as the next 22% (stage 4) who know they can do it better.
So in summary, it’s horses for courses, each to their own, et alii. It’s being clear with your true feelings inside yourself, and why-you-are-really-doing-that-which-you-are-doing. Are you truly enjoying it? Yes? Then keep going, keep doing it. No? Then stop as soon as you can and find what makes your heart sing. A bunch of happy folk is a heck lot more enjoyable to be around than sad, hard-done-by folk. Besides, life for youself is a whole lot betterer!
Once you have decided that you want to do business and you have what you think is a customer, then a business is 4 steps:
1) Find out what they want
2) Go and get it
3) Give it to them
4) Make a profit from doing 1, 2 and 3
If you are doing this yourself, it’s not a business, it’s a job – you just have many bosses. And you are probably very busy. ;o)
Many folk are like this, but don’t get me wrong: there is nothing wrong with it at all. Just be clear about what you are doing all the work for that’s all.
If you have a system (website, robots, people/employees) then you have a business.
How to test if you have one or the other? Firstly you’ll know. You’ll just know. If you’re not sure, or you want to be really reminded of it… then leave for 6 months. Go to the other side of the world. Stay out of contact with it. If the business does better then when you where there, do something else! You have a business.
I’m just about finished a great book called the “Assent of Money” by Niall Ferguson. An excellent read if you want to understand how the financial system works – including your credit card, your home mortgage and your pension – if you have one.
It’s a history of money, how it works, what it means and really what it is! He paints a very straight forward explanation for why the current shifting in economic power is from the west (in particular the USA) to the East (in particular China).
He also identifies key fractures in the current financial system (particularly credit default swaps – a notional USD 62 trillion worth presently in the market – that’s 78 times the size of the TARP bail out package released last year by the Obama government, and about the same as the entire World’s production, our GDP)
The origins of the financial system, in one place. No such book exists previously to this book.
4,000 years of the What and Why and When and How and Where and Who on money.
Don’t miss it!
Watch the video (where did they get that music?!! I remember that music from the games on the Commodore 64 from the early 80’s!!)
Here’s more of Niall speaking on the net: Niall Videos
Jeremiah Josey's Blog 