Excerpted from the book on enlightened business, Business Black Belt
“Come to the edge,” he said.
“We are afraid,” they said.
“Come to the edge,” he said.
He pushed them
…and they flew.
Here’s a possible way to think of your business structure, regardless of the structure you actually have, and have what you want done the way you want it while still empowering your employees to be creative.
This has been my most difficult chapter to write. I’ve read a variety of books on management, listened to a lot of advice, and learned quite a bit in seminars. As a manager of others in a large corporation, I saw myself as an intermediary between my employees and upper management. Policies came down from up high. These weren’t my ideas—I just had to facilitate their implementation. When money had to be spent, it wasn’t my money, it belonged to a ubiquitous corporate owner. Talking about management is easy (Theory X, Y, and Z). But managing your own company seems to be something else entirely.
Having no upper management to blame from time to time for “stupid policies” removes the safety net. Being emotionally involved as the head of your own company makes it difficult to simply be a textbook manager. As the boss, you are in charge and as such, you are the source of these policies and ultimately responsible for developing good ones as well as enforcing them. Let’s start here: from the March 18, 1996 issue of Fortune magazine, Hubert Saint Onge says it best when he identifies nine dilemmas leaders face (I added my own experience beneath his headings):
1) Broad–based leadership vs. high-visibility leaders
Should top executives lead with their own charisma or should they foster leadership throughout the company with middle managers, team members, and others?
2) Independence vs. interdependence
How do you promote entrepreneurship, a sense of ownership, and P&L responsibility while at the same time encouraging managers to give up some of their turf in order to work together?
3) Long term vs. short term
We have both a five-year vision and a sales goal for this month. Quarterly numbers mean little to me—how much did we sell today, this week, this month? By the way, how are we coming on those projects that will build our business to $100 million?
4) Creativity vs. discipline
My employees encourage me to empower them to do things their way. I ask them to measure everything they do and analyze the results, so we follow-up and expand on what’s working and stop doing what doesn’t work.
5) Trust vs. change
I feel it’s my job to maintain the vision and watch the landscape for opportunities to build our business. Just when people get settled in, we often see a need to shuffle people around and change our priorities. It causes problems and the explanations aren’t always clear, but I feel I’m doing the right things.
6) Bureaucracy busting vs. economies of scale
Our CFO needs to know who is buying what so she can allocate cash and make sure we pay our vendors on time—this begets a process of budgeting and POs that slows things down.
7) People vs. productivity
How many people do we really need? What can we outsource and will the contractors do a better job for less (less headaches too)? Do we hire a great manager and a bunch of doers or do we look for player-coach types?
8) Leadership vs. capability
At what point do we stop discussing strategy and go do something? As a visionary and strategist myself, I have a hard time staying put long enough to get any one thing done. I have capable people, but their projects need to be prioritized and coordinated with each other.
9) Revenue growth vs. cost containment
How much money must you spend to make money? How much energy goes into saving a marginal expense when that same creativity and effort could generate ten times the sales?
There seems to be a profound difference between managing a company and leading one. As I write this chapter, I have 28 employees, with a management team of 6. Here are some practical things you can do as your company’s leader that will help you get done what you want to get done and preserve your sanity, as well as make your employees happy. The first step is in how you conceptualize your organization.
Management: The Concentric Circles Model
Look around you at Nature. The universe is organized in circles. Round planets orbit stars, and stars orbit in our galaxy.
What if we said management should flow with the universe? The physical translation of circular management works for people in a nicer way. Employees can feel buried under a pyramid structure; information flows (or trickles) down, and the physical perception of gravity can have a negative effect on the employees’ thinking. “It’s a long way to the top. I’ve got to work my way up.” Gravity is heavy, serious, and no fun.
What happens as a company grows? I’ve seen communication deteriorate the further it travels from the source (top management), and I’ve seen it accelerate. The employees who greet the customers can actually be more intense than the company president! In a top-down, pyramid structure, gravity fights against information flowing back up. If it’s circular and flat, things go out, but things can also come back in.
The concentric structure has a low center of gravity allowing it to move and respond to the marketplace with greater agility. Information is managed at a central location (like a file server), marketing goals emanate from one place (where consistency and quality can be maintained), and communication can flow in and out easily. In this way, energy is conserved. The goals and direction of the company are set by the central leadership while perimeter employees meeting the public have more flexibility to adapt to their individual markets. Most companies can be viewed this way, but this point of view must be genuinely endorsed if not originated by central leadership for it to be widely adopted throughout your organization. When everyone—employees and management—shares the picture of this new structure (a right-brain spatial perception), everyone can enjoy a new level comfort in communicating throughout the organization.
Communication by centrifugal force
Let’s say I have an idea and I give it to my VP of R&D who adds his thoughts. The VP of Sales is there and he has some ideas to add. The original idea has picked up speed and mass and is swirling around me. As these VPs leave the meeting, they begin to discuss it with others—the idea picks up more speed, is further refined, and is carried along with even more intensity.
I visualize how my company is set up, and I don’t see a pyramid or a matrix. I see people around me in a circle with others beyond them. There is no rigid hierarchy. Many are at the same level and we can all relate to each other as human beings. We are all in the middle of our own circles with each other orbiting around.
This seems to emulate more how the universe works instead of the ineffective way humans have concocted things.
At JIAN, we think in terms of people around us. We don’t have people below us. I look at my salespeople, at people in their universe, at the people in my controller’s universe. My salespeople and my controller are certainly in my universe, their planets circle around the sun (me) and we all have our own little moons.
I think we create a healthier perspective when we do business from this point of view. It’s a more humane style of management.
At first, in my own organization, I felt uncomfortable behaving in an “I’m from a higher level and therefore better at what you do than you.” If you see yourself in a hierarchy looking down, then you must be better than everyone else. From there, how can you hire people who can do their job better than you? In a concentric style, you can handle looking out and seeing people who are at your same level but are experts in their own field.
I’m able to see and respect others for who they are and what they do. I don’t have to worry about how I’m going to convince them to work under me. That’s always a tall order. It’s also another reason many people avoid leadership positions. They don’t want to be “up on a pedestal” because it seems to make them a target.
It took me a while to complete this book because I needed to include a section on management. I sucked as a manager. A visionary, yes, an entrepreneur, yes. But as a manager, I wasn’t accomplished at anything and my employees weren’t doing what I wanted them to do the way I wanted it done. Allow yourself to be an explorer. If you’re a know-it-all, everything must go through you. If you lead the expedition into the unknown, point out the possibilities, and let people respond to the opportunities, they will feel compelled to jump on the opportunities and solve the problems.
The method behind the madness
I wrongly expect people to see things immediately the way I see them. After I quickly explain what we’re doing and where we’re going, I expect people to grab the ball and run with it. That doesn’t always happen.
You need to figure out how to communicate your vision and paint the picture. The problem with entrepreneurs and visionaries is that often they are so far ahead of everyone else. They’re not leading just one step ahead, they’re leading ten steps ahead. They’ve already gone over the horizon and everyone is left wondering where to go.
Show them what it all means
My CFO recently sent me an e-mail suggesting that I’d lost my marbles. I wrote back a two-page e-mail explaining my whole strategy behind our program to have a database on our Web site where our customers could look up professional business advisors in their area at the push of a button. I realized that her note was also a little message to me that I needed to explain my vision. And when I did that, she and everyone else could understand what I wanted to do. What she and everyone else needed to understand, perhaps, was the method behind my madness. I needed to invest some time in explaining my logic. In the process, my logic became clearer to me as well.
I’ve spelled out in writing the long-term vision of the company, where we’re going, the big picture, and where each person’s job fits into that picture. They need to see their jobs in the context of everything else. This process works well when you include your key management people and guide them to come up with the words to articulate the vision, strategies and priorities they will be responsible for.
Everyone has a right to understand the purpose of his actions
~ Russ Varian, Varian Associates
Often, a visionary entrepreneur will think he or she is doing this grandiose thing with tremendous importance for everyone on our planet, but they gloss over it very fast. They expect everyone around them to immediately grasp the importance of their dream. In the visionary’s mind, the picture is in color and perfectly clear. It’s so obvious, and such a no-brainer because they see how it fits into the big picture. But those around them must also fully understand their vision and see it as vividly as the visionary does. You cannot over communicate your vision. With the big picture in place, you can get on with the details.
If you ever want to take a vacation, work on different projects, or simply enable yourself to grow your business, you must have some smart people around to take on the business. “If you want it done right, then you have to do it yourself.” I had nothing to do with building the Golden Gate Bridge, designing the Boeing 747, or any advances in medicine. Other people on the planet must be smart and even smarter than me!
It may be better to get something done their way
than nothing done your way.
Set limits and ingredients of doing it my way
It’s sometimes disturbing to watch someone do something in a way that I would never do it. Their way isn’t going to work. Or is it? I have talked about spelling out the big picture. Now, the employees are supposed to grab the ball and run with it. In the interest of getting results without doing all the work myself, and trying to reconcile doing things my way or allowing them to do it their way, I’ve discovered there’s some latitude as to how things can be done.
First, give the outside boundaries that the person cannot go beyond. For example, you can discount the product, but you cannot go more than 20%. This discount is your limit. Period. The salesperson has some flexibility; because they’re being paid a commission, it’s up to them how flexible they are.
Next, there are some specific ingredients: For example, you must always mention the fact that our software works with any Windows and Macintosh word-processing and spreadsheet applications. You must always mention that we have a 60-day money-back guarantee. However you pitch it beyond that, go for it, but you must mention those two things, and you can’t sell it for anything less than 20% off. With those key ingredients, the sales person can go pitch it, and I know my key requirements have been met.
Things that go without saying,
often go without doing.
I can’t afford to let employees learn from their mistakes
My style has been to see a problem and immediately begin throwing potential solutions at it. What about this? What if we did that? I pride myself on my creativity, my ability to solve problems. As the company president, I also enjoy a vantage point where I can see all the areas of the business. As a visionary (i.e., I can hallucinate how the company might do things in the future and what it might look like), I think I see the problem differently. I see more facets to the problem even after asking people to more fully explain their perspective, therefore I must come up with the solution or therefore I come up with the best solution… And since I don’t think my people have the full perspective, how can I let them figure it out on their own? You’re probably wondering how long I can do this. How big can the company get if I have to be in on every problem? I wonder too.
The management books say to let the employees figure it out, let them make mistakes, let them learn. At whose expense?! This is a problem, especially when you think you have the answers. And your employees [will] resent you for always jumping in. You may think your behavior teaches them to solve problems… why can’t/don’t they learn from you? Actually, you’re training them to wait. Wait for you to solve the problem because you always do. Why should they even try? By shot-gunning solutions, you also confuse them. Which one are you going to go with? What are you really thinking? Rather than solving the problems, I’ve created chaos.
Here’s my new method that has been working: Using my perceptions and perspective of a problem, I restrict my input to asking questions. I guide the problem-solving session by asking employees how certain criteria can be met. By asking questions, I guide them around or toward problems that must be addressed and I ask them for the solutions. My premise is that if they fully understand the problem like I feel I do, then they will come up with a better answer. And it’s their answer.
We were discussing “advertising specialties,” promotional giveaways for trade shows and for the salespeople in the retail stores. Items included hats, T-shirts, luggage tags, business card holders, chocolate, plastic shopping/literature bags, etc. We all had a lot of good ideas, but certain criteria needed to be met. I could exercise my authority as president to dictate what we should do, but I wanted the team to come up with something they all felt good about. Rather than throw out a few ideas of my own that I knew would address some issues I was concerned about, I explained the issue and asked that they come up with ideas which addressed my concerns. Our T-shirts needed to say something our customers wanted to express (not what we wanted to promote). Our giveaways had to be things our customers would keep and use, as well as prefer over other similar items given away by other companies. The group eliminated the chocolate and the cheap plastic shopping bags.
Leading by asking questions and setting certain parameters has them thinking about more things. They understand what concerns me and can make better decisions on their own in the future. Do not make suggestions—use your knowledge and experience to ask questions to lead your employees to solutions.
You probably come up with solutions to problems fairly quickly. You’ve got your answer, why keep talking about it? Depending on the magnitude of your problem, you may need to engage your management team in further discussion. Besides, you pay them to manage certain parts of your business and their input is valuable. Sitting through a meeting when you think you’ve already made up your mind is difficult. The trick is allowing others to arrive at the answer so they feel the credit for it and will drive it through to completion. If you present your solution and make your stand, to accept a better solution requires backing down and possibly losing face. Not taking a stand too quickly or too soon enables you to objectively evaluate the possibilities first, develop consensus and then take a stand as a team. Few egos engage and the process flows more smoothly. And you won’t be the only one driving the project forward.
Opinion vs. point-of-view
I’ve discovered a semantic phenomenon. I ask for a lot of input before I make a decision. I ask, “What do you think about X?” And I often get a wide range of answers with an equally wide range of emotional attachment to those answers. When my decision goes contrary to someone’s input, they sometimes get upset. “You didn’t listen to me,” they say. The problem I’ve found is that I’ve asked for their opinion rather than positioned my questions as asking for their point-of-view. Opinions carry more emotional baggage than do points-of-view. Asking for a person’s point-of-view leaves open the possibility of asking for more points of view. Opinions can be argued. Points-of-view can’t. If you enjoy lengthy debates that can never be resolved, engage people’s opinions. And the battle will still rage after a decision has been made. I don’t have time for that. I ask, “What’s your point-of-view on this? And what else should I consider?” People know their issues have been included and they understand that you will be soliciting others as well. A decision can be made without a raging debate, especially when I use the issues as guidelines to let the team come up with the course of action. I step in to break a deadlock or when it’s clearly my call.
What if we moved the company to Hawaii?
For the longest time, I wanted people to take me seriously, take my advice, do what I wanted them to do, and give me what I wanted. Maybe this has never been a problem for you, but as a CEO, business owner, or successful businessperson, you must be careful of what you say more than ever.
I sometimes forget that I am in a position of authority. I’m excited to run my ideas by whomever is in front of me at the time. When I think out loud, people wonder if I’m really going to act on what I’m thinking. Is the company really going to move to Hawaii? Are we going to launch a new HR product? Be careful when you ask what you think are harmless “what if” questions—your employees will wonder what if you really went ahead and did what you’re asking “what if” about. Rumors start and pretty soon the whole company is distracted. Then you have to reassure each person of what you are really thinking and doing.
Now, when I want to brainstorm or ask a “what if” question, I first look around at who my audience is and who else is within earshot. Where might their minds go if I ask a theoretical “what if” question? It takes a lot of self-control to contain my idea if my audience isn’t right. Even when it is, I preface loudly that, “this is just a ‘what if’ question, a loose thought, and I’m only doing research” and “I’m not making any decisions right now.” I wait a moment for their minds to clear and then I ask, “What do you think of X?” I find that the feedback is excellent. Afterwards, I ask them what they would recommend. This is also an excellent way to involve people and to prevent unwarranted rumors.
Yikes! You’ve built your company from scratch, but it’s reaching a point where you just can’t do it all anymore and people around you are muttering something about you needing to “let go.” Yeah, you’d like to, but what will happen? Your worst fears—certainly everything will go wrong. Or… maybe others will pick up the ball and run with it.
Often when building our companies we have something to prove. We feel we are smart, competent, can do it better than the other guy, or our previous boss didn’t get it—just watch me. If you have something to prove, go ahead and prove it—it’s productive motivation to work from. Temporarily. At some point, you will have proved your point. If you continue proving yourself for any of the above reasons, it’s like continuing a sales pitch long after the customer wants to buy. It’s annoying. When you realize that you have established your proof, this is a time when you can begin to “let go”—allow others to come into being, allow them to prove themselves in the way you once did.
I can’t die. It would be bad for my image.
Jack Lalanne, legendary exercise personality
I have so much juice built up on proving my point that it’s become a habit. You do this for ten years or longer and proving your point becomes your way of life. But when you realize you’ve proved your point, then you can let go of it and move on and do something you really wanted to do. What is the next step for you?
Business Black Belt Notes
- The old pyramid structure of management may not work for you.
- When you structure your business like the universe—in a circle or a sphere —information can flow in and out easily.
- You don’t put people above or below you—you put them around you.
- Inform and include your team from the beginning if you want to maintain their support for your project.
- Differentiate between personal opinions and points of view.
- Introduce an idea, but let it float until all the ideas have been introduced—then you can more objectively choose the best idea.
- Use your perspective to guide your people to solve problems, so you don’t have to pay for their mistakes or train them to wait for you to figure it out.
- Consider your audience before asking “what if” questions.
- Have you proved the point you set out to prove? Perhaps it’s time to move on to the next thing. How can you set up your company to support you in doing that?