Yesterday I Met a Rich, Self-Made Hostage. Are You Becoming One?

I was stunned when I heard it: "It's our 30th anniversary, and I'm finally planning a full two weeks off work to celebrate." This proud declaration from a man who owns a $30 million company is just sad. This is a man who lives in abject poverty, with no freedom and no clue he's been doing it wrong for 30 years. I see it all the time. Business owners whose personal lives are train wrecks, with no time to invest in their kids, spouse, or non-existent hobbies, and no time to even think about creating meaning in their own lives. They are hostages to their businesses with no end in sight for their incarceration.

People think this guy is a great business owner because he works all the time and has a lot of toys he doesn't have time to use. I think he lives in abject poverty.

Riches vs. Wealth

Riches is just money. Wealth is freedom. Freedom is the ability to choose what to do with my time. Time is more valuable than money. It usually takes money to buy time, but unless the specific goal is to buy time, money can make us hostages.

Money does not bring freedom. Time brings freedom. This man has millions and has no freedom. He readily admits that if he is gone from his business for a few days things begin to go awry. He has built a $30 million business that depends on him personally being there every day! He is not a business owner; his business owns him. He lives in abject "time poverty".

Intending to receive time, not just money

You get what you intend, not what you hope for. You can just hear this man starting his business. He intended to do two things:

1. "I'm going to workreally hard" and

2. "I'm going to make me some money."

He got exactly what he intended - hard work and some money. And he is trapped by the hard work. He did not go into business intending to get both time and money from his business, just money. He hoped that getting money would give him time and create freedom, but we don't get what we hope (wish) for; we get what we intend to get.

A Day a Week, a Week a Month, a Month a Year

I built five businesses like he did and was trapped as a hostage every time. With Crankset Group I intended to do something different - I decided this next business was going to give me both money and time, and everything I did from the beginning was driven by forcing my business to produce both.

As a result, I now have every Monday and every Friday off, the last week of every month off, and a month in the summer - it adds up to 73% of the work week.

I use only a few weeks for vacation, and choose (freedom) to invest the rest helping others build businesses around the world, including for-profit businesses to solve poverty in central Africa.

Vacation? What Vacation?

A recent American Express OPEN survey found 66% of business owners haven't taken time off in several years. And of those few who do take vacation, 68% of them check in daily to try to run things from their beach chair (we don't call in at all during our month off).

It's important to get away from your business. The famous Framingham Heart Study found those who took regular vacation are 32% less likely to die from heart disease and 20% less likely to die from anything else. Besides  being healthier, time away from the day to day grind will help you see the big picture and make you a better leader. And you'll be more productive when you return.

The objective of your business should be to build your Ideal Lifestyle. If you're proud that you finally get two weeks off, you need to reassess how you are running your business and your life, and refocus on wealth (time/freedom), not just riches (money).

Is this just for special people? No. I built five businesses and never got off the treadmill. The sixth time I simply decided/intended to do it differently, and - what a surprise - it turned out different.

You get what you intend, not what you hope for.

What are you intending to do with your business and your life?

Article as seen on Inc.com

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

Leaders have wasted a lot of time and money on two of our favorite Business Buzzword Bingo terms for the last three years: empowerment and engagement. Here's the real skinny. Gallup says a whopping 70% of people are disengaged from their work. That's critical because the very few companies with high engagement enjoy much higher net profit margins and five times the shareholder return.

Engage People By Empowering Them?

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

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

Thank You, But I'm Already Fully Empowered

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

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

But Give Me a Reason I Should Engage With You

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

How To Engage People

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

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

The Bottom Line

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

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

Article as seen on Inc.com

4 Steps to Fixing Your Weaknesses by Focusing on Your Strengths

In business, one of the worst things you can do is spend a lot of energy on fixing weaknesses. You can actually fix them better by getting better at your strengths. Here's how. In my first five businesses I spent a lot of time trying to get everyone focused on what we were lousy at, and how to get better. It didn't work. We just wasted a lot of time and energy, and demotivated people in the process. I'm a slow learner, but in our sixth business I finally tried something else that ignored our weaknesses, but ironically worked much better to fix them. I started focusing on our strengths.

The simple principle is that we're good at things that we love doing. We're highly motivated to get better at our good stuff, and completely demotivated to fix our messes. And we found out that focusing on getting a lot better at our good stuff helped us fix our bad stuff. Here's a four-step process you can use to do the same.

Take a few hours or even a whole day (2-3 hours is usually enough) as a team and answer these simple questions. This applies to teams of any type, anywhere in a company, not just leadership teams. But certainly leaders will benefit from answering these questions:

1) What are we really good at?

List 10-15 things or so in 10-15 minutes. You shouldn't need a lot of time to pull out the few things that make you stand out. They are things you love doing, and make you different than anybody else out there. It could be your products, customer service, relationships, teamwork, processes, passion, solid culture, etc. Once you have the list, pare it down to the top 3-4 things you are best at doing.

2) Why are we good at it?

It's really important to ask and answer this question. It's at the core of what motivates you as people, teams, and as a whole company. And that motivation about your good stuff will help you fix the bad stuff.

3) How can we get even better at the good stuff?

Come up with anything you think can help you get better at each one of the 3-4 things you think make you shine. Pare it down to 1-2 things that you could do to get better at each of the 3-4 good things.

At this point in the process, you might begin to see some of the negatives being addressed. If you think being a fast boat is your biggest asset, you might decide that one thing that could make you even faster is making sure the anchor isn't in the water. Pulling up the anchor is boring and nobody wants to do it. But if you connect it directly to getting better at being fast, people can be very motivated to do it. A negative should only be addressed in light of how it will make you better at the good things. Otherwise, no one wants to tackle it. That's how it became a bad thing in the first place - it was isolated from what makes you great.

Develop one simple, practical, measurable strategy you can employ to get better at your 3-4 good things, and make sure you put a date on when you expect to complete them.

3a) What outside forces could get in the way of getting better at our strengths?

Sometimes the challenges aren't internal, many times they are both internal and external. Think about the external challenges that could keep you from getting even better at your good stuff, and develop a simple, measurable strategy to tackle these.

4) What resources do we need to get even better?

This is critical to help you understand that if you're going to get better at your good stuff, you've got to allocate the resources to doing that. Too often we're throwing resources at every loud weakness that comes at us, which just perpetuates the problem of focusing on weaknesses. It's a downward spiral.

So, figure out the good stuff and what will make you even better at the good stuff, and throw your resources at becoming that. In the process, you will have to fix some bad stuff, but your motivation for doing so will be infinitely better than just "fixing bad stuff".

By the way, I believe this works for us as individuals as well.

Article as seen on Inc.com

3 Reasons Why One Company’s $70,000 Minimum Wage Hurt Everyone Who Got It

There are three big reasons why this is destructive, and such a bad idea for the people who work there.

Dan Price, the CEO, thought he was giving everybody a great gift great four months ago. Everybody loved it up front. But big cracks are appearing in the idea, because giving everyone a $70,000 minimum wage simply continues the archaic wage practices of the Industrial Age. And it has the same effect—destroying the human spirit. Here’s why.

Reason #1—People Want to Make Meaning, Not Money In her research on Generational Differences in Work Values, Jean Twenge found that Millennials to Baby Boomers are all motivated by the same thing—Making Meaning. A recent Salary.com survey also found that people who are focused on the size of the paycheck are less motivated.

Semco is a billion dollar company with 3,000 Stakeholders. They require people to determine their own pay. Every six months you go to a computer and plug it in. You would think chaos would ensue. But the company regularly has to adjust pay UP as people fall behind the industry average. Why? Because Semco leadership is focused on ensuring everyone finds their work extremely meaningful. For the last 30 years, Semco’s retention has hovered around an unheard of 99% per year. And almost no one makes more than the industry average. Meaning trumps money every time.

Another study by Sylvia Ann Hewlett, on attracting and keeping the best people, shows that at least three things motivate people more than money; flexible work schedules, praise and recognition, and breaking up the work day with walks, bike rides, swims or other non-work activities. A simplistic $70,000 pay raise addresses none of these more important meaning-oriented motivations.

Reason #2—Meaningful Work is Results-Based, not Time-based This $70k minimum wage is a throwback to an archaic system.

For thousands of years people got paid for how many shoes they made, and how well they were made. The better the shoe, and the faster they made it, the more money they made. They were solving problems and Making Meaning, and money came to them as proof.

Along came the Industrial Age Factory System and all that changed. For the last 175 years, and for the first time in human history, we have paid people simply for time spent working. How dumb is that? Gravity Payments fell victim to the Industrialist’s mindset—paying people without regard to production.

In an interview with the New York Times, Price said, “I want to fight for the idea that if someone is intelligent, hard-working and does a good job, then they are entitled to live a middle-class lifestyle.” Interesting quote, because his solution does not reward people for that hard work or for doing a good job.

Alan Wyngarden owns a mortgage company and went results-based. He reduced his loan processor’s base pay from $55,000 to $24,000, then incentivized her for how many high-quality mortgages she produced each month. Within a year she was producing three times as many mortgages at a higher quality, and making $135,000 or more per year. When pay is disconnected from results, people find it hard to be motivated to do great work. It’s basic capitalism.

You can see the angst creeping in. People know that getting paid without regard to performance is a bad idea. Stephanie Brooks, an administrative assistant, said, “Am I doing my job well enough to deserve this? I didn’t earn it.”

Reason #3—Raising Everyone’s Pay to $70,000 is LCD Management Lowest Common Denominator Management levels everyone with broad, sweeping policies that ignore individual performance and team contributions. Everyone “gets an A” (or an F) no matter how they perform.

Marisa Mayer, CEO of Yahoo, found some people not working well from home. So she just herded everyone back into the office day care center to be supervised. In this case, she gave everyone an “F”, even those who deserved an “A”. Motivated people got the same “reward” as the lowest common denominator.

Dan Price at Payment Systems has given everyone a de facto “A”, which treats lazy people the same as top performers. Grant Moran, a web developer who got a $20,000 pay raise but quit after the $70k minimum wage was enacted said, “Now the people who are just clocking in and out are making the same as me, It shackles high performers to less motivated team members.” LCD Management—the great leveler.

Maisey McMaster quit because, as she put it, “He gave raises to people who have the least skills and are the least equipped to do the job, and the ones who were taking on the most didn’t get much of a bump.” Everyone gets an “A”.

How to Fix This People are motivated differently, and one size does not fit all. Great incentives include a variety of rewards and take into account individual motivations. Bad incentives are simplistic, focused solely on money, and imposed by a top-down hierarchy (Industrial Age LCD management) which assumes it knows better what you need, without including you in the solution.

Tying income directly to production helps people love their jobs. At our company, nobody will ever get a pay raise because they hung around another year. They get them because they add more value than they used to—a very capitalist idea. As a result, people are more motivated to work, create, solve, and innovate, and get pay raises that reflect those results. We’ve had zero voluntary turnover in nine years. Why would people leave a results-based system that focuses on making meaning, and doesn’t shackle them to people who aren’t as motivated?

Great companies focus first on:

a) building meaning into their work,

b) tying pay to results, and

c) creating a Highest Common Denominator workplace that celebrates great contributions and reaching for the stars.

People will raise themselves to our lowest expectation of them. The most motivated achievers with brains are leaving Price’s company, and over time, only the least motivated will stay. Play a game that motivated adults want to play, and great achievers will rise to your greatest expectations of them.

Making meaning, and results-based incentives always attract great people. LCDManagement makes them leave. Your choice.

Article as seen on Inc.com

Riding a Bike In Tuscany Taught Me Why People Don’t Set Goals

I learn a lot riding my bike. We’re in Tuscany for a month and today was the sixth day of riding. Twenty glorious days to go. The first day, and every day since, I simply decided which direction I was going (north, south, toward the hills, away from them, etc.), then got on my bike and went.

Living For The Moment I have spent hours each day blissfully unaware of where I am, just riding through the countryside, impulsively going left, right or straight as it seemed right for the moment. The future and the past don’t play into the decision. I’m just “living for the moment.” But each day I have to find my way back to our fairly remote, countryside villa south of Lucca. The first day it took an hour to find home on these winding roads (even with a digital map), where I could easily have done it in 20 minutes if I knew the area. Each day since it has gotten easier.

“I Just Don’t Know Where I Am” Every day my wife, Diane, and daughter, Laura have asked me, “Were you lost?”, to which I always reply, “I’m never lost, I just don’t know where I am.” Today, I was going through the process of finding my way home, and on an unusually straight stretch of road with time to think, I realized that I get a little perturbed right around this time in every ride, because now I’m actually trying to get somewhere.

That’s when I figured out why people don’t set goals. Because they answer the question the way I did—“I’m not lost, I just don’t know where I am.” On that same late stretch today where I was now trying to hone in on the villa, I realized that I actually do get lost, and I do it once on every ride; when I’m trying to get home; when I finally have a goal.

Measuring Progress Requires a Goal In Alice in Wonderland, Alice asks the Cheshire Cat which direction she should go. He responds wisely with the question, “Where are you going?” Alice says, “I don’t know”, to which the Cat replies, “Then either road will do.” And off she goes, enjoying her adventure.

When I have nowhere I need to be, I’m simply on a glorious adventure with no constraints, no rules, no timelines, and no pressure to perform. Nothing to measure in the long run. I truly am not lost, I just don’t know where I am. But that’s okay, because I have nowhere I need to be.

But as soon as I ask, “Where is home?”, I’m immediately lost, because now I have somewhere I need to be, and at first I don’t know how to get there. My stress level goes up a bit, and I start getting frustrated that I missed a turn, or have to backtrack, when minutes before, I would not have seen any of those activities as missteps. I’m now “failing” (we should call it practice or learning) where I used to have no measure of such a thing.

Too often we see that kind of pressure as negative stuff. But something else comes into focus as soon as I ask, “Where is home?” Instead of just wandering around, for the first time, I’m immediately measuring progress toward some potentially positive future goal.

Living On Purpose All six bike rides getting home have come with a big sense of accomplishment by just finding our remote villa. The same is true on a grander scale with chasing my own personal Big Why, which is To Live Well By Doing Good. Things worth accomplishing always involve a challenge, some stress, and clear measurement of progress.

But utter clarity on where you are going and what it looks like when you get there, makes all that worth it. We can live reactively and any road will do, or we can live on purpose, design our future, and become intentional about getting somewhere. We get what we intend, not what we hope for.

“Where Are You Going?” Nobody’s lost until they have a destination in mind. We shouldn’t ask people if they are lost. It’s a negative question that assumes incompetence. We should instead ask them if they know where they are going; where they want to end up. That’s an interesting challenge that just might change their lives.

Some people work hard at being confused because when they are confused, they are not responsible. “There are so many good choices of where I could end up, I just don’t know which road to take.” The ability to measure progress is sometimes threatening, but a man still finds his destiny on the path he chose to avoid it. You will end up somewhere, the question is whether by default or by choice.

He who aims at nothing, hits it every time.

Off to bed before a big ride tomorrow. Getting home is the biggest challenge I expect to face.

Where are you going?

Article as seen on Inc.com