Corporations, our Psychopathic Citizens
Psychopathy is a personality disorder characterized by an abnormal lack of empathy combined with strongly amoral conduct, masked by an ability to appear outwardly normal.
In the US, corporations, limited liability corporations, and other types of a business have a clear common goal, to make a profit. That is their primary and in many cases their sole purpose. While corporations have been assigned many of the rights given to US citizens, such as first and fourteenth amendment rights, they are certainly lacking in empathy and I think it’s fair to say that many corporations act amorally. That is to say that they operate without morals, good or bad. Corporations have been around since the mid-14th Century and up until the 18th century they were mainly chartered companies that governments used to do their biddings like the British East India Company or educational institutions.
Before the industrial revolution, most businesses were sole proprietorships or partnerships. In both cases, the owners were liable for the debts and the actions of their businesses. Business owners paid the price for their failures and reaped the benefits of their success. Starting in the 19th century, with the advent of the industrial revolution, corporations started becoming more popular, their main feature is that the owners were not liable for their debts and their investors could only be held responsible for the level of their investments.
So let’s say you have $10,000 in your personal bank account, and you own ABZ Corporation, which has $1000 in its bank account. You order 5000 widgets monthly on credit, every month for a year. Widgets cost you $1 each, and you sell them for $3 each. On the 13th month, your widget order gets eaten by your pit bull. Widgets-R-Us want their money. You tell them that the company only has $1000; they can take it or take you to court. Even if they took you to court, they’d not get more than the $1000(I’m not a lawyer, and don’t pretend to know the law, don’t let your dog eat your widgets). You, as the business owner, are not liable. The corporation is liable. If you had a partnership, you and your partners would be liable.
Which one of these business models sounds like it would promote empathy and morality? The one that makes people responsible for their actions or the one that isolates them from their actions?
Corporations have enabled moral ambiguity that has contributed to many of the problems the world is experiencing. From the global financial crisis to BP’s oil rig disaster in the gulf, focusing on short-term profits at the cost of long-term goals sounds like something you’d expect from a toddler, not from educated adults. What can we do?
As employees, we can influence our corporate cultures and move towards creating transparency at our workplaces. It’s hard to make backroom deals and perpetuate shady practices when most people in the company know what’s going on and you have a corporate culture that’s moral and empathetic. As a people, we can embrace motivation 3.0. Self-directed employees who are allowed to develop mastery/optimum performance and be a part of something bigger than themselves are thoroughly engaged and unbelievably dedicated to their work. They stop being cogs and become innovators and collaborators. They also increase profits and productivity.
As business owners, we can look at new corporate structures like L3C, or B Corps. An L3C is a low-profit limited liability company. It’s a cross between an LLC and a nonprofit. A B Corp or Beneficial Corporation has to go through a certification process to ensure that the work they are doing or products they are selling are beneficial to society. It also covers environmental practices, employment practices, and purchasing policies. Currently, there are over 300 B Corps in the US, including Seventh Generation household products and King Arthur Flour.
It’s time we embraced the needed changes to make our companies more sustainable and responsible and our citizens happier and more productive.
Zappos: Happy People, Delivering Happiness and Shoes.
Tony Sheih, CEO of Zappos, has just written his first book,‘Delivering Happiness, a Path to Profits, Passion and Happiness.’ It chronicles Tony’s life, from childhood entrepreneurial efforts to college and his time at LinkExchange. In some ways, it reads like Ricardo Semler’s‘Maverick, The Success Story Behind the World’s Most Unusual Workplace,’ Both books talk about lessons learned, mistakes made, and happy coincidences that lead them to success.
What is Zappos? It’s not a ROWE (Results Only Work Environment). It’s not democratically run, like Semco. Zappos does manage to keep its employees very engaged. Engaged employees result in growth and profits by way of creativity and innovation. The management, led by Tony Sheih focuses on the company culture and delivering happiness.
Zappos has a Culture Book it publishes every year. Everyone who works with or for Zappos is encouraged to contribute to the book describing Zappos culture. They publish all comments and only edit for typos, so the good, the bad, everything gets published.
Zappos does use carrots and sticks, though in a way that employees can control. You can take classes that will bring you to the next career level, and after taking them, you get a small raise. You can take them at whatever speed you like or not at all. Employees are empowered to do their jobs in whatever way works best. There does seem to be a large amount of autonomy. If you look at the Zappos Core Value Document, it’s obvious that they focus on mastery as well:
Create a fun, creative work environment where people are largely self-directed, are encouraged to get better at what they do, and acquire new skills, combined with being a part of something larger than themselves and the result is growth and profit. While Zappos may not be a new business model like ROWE, Results Only Work Environment, it is game-changing.
Their purpose is their culture and delivering happiness. They’ve put most, if not all, of their marketing dollars into customer service, letting their customers be Zappos marketers. This approach is one of the cornerstones of Zappos’ success sounds like it came out of Seth Godin’s playbook. Check out www.deliveringhappinessbook.com. Tony is trying to start a movement.
Uncle Sam Goes ROWE!
The US Office of Personnel Management (OPM) is launching a Results Only Work Environment pilot program for 400 of its workers. Currently, there is only one government entity running under ROWE: Hennepin County, Minnesota. Imagine letting government workers work when they want, how they want, and with whom they want. What’s a ROWE, you ask? From the book, ‘Why Work Sucks And How To Fix It.’
13 Guideposts of a ROWE:
People at all levels stop doing any activity that is a waste of their time, the customer’s time or the company’s time.
Employees have the freedom to work any way they want.
Every day feels like Saturday.
People have an unlimited amount of “paid time off” as long as the work gets done.
Work isn’t a place that you go — it’s something you do.
Arriving at the workplace at 2 p.m. is not considered coming in late. Leaving the workplace at 2 p.m. is not considered leaving early.
Nobody talks about how many hours they work.
Every meeting is optional.
It’s OK to grocery shop on a Wednesday morning, catch a movie on a Tuesday afternoon or take a nap on a Thursday afternoon.
There are no work schedules.
Nobody feels guilty, overworked or stressed out.
There aren’t any last-minute fire drills.
There is no judgment about how you spend your time.
Two former Best Buy employees created this work model. The Best Buy corporate office has been running this way since 2004. Voluntary turnover decreased by as much as 90%, and productivity went up by 35%. This is an international company with 140,000 employees. I’s not a new idea, SEMCO has been working like this in Brazil for more than 20 years.
For me, this is a dream come true! I have a goal of bringing motivation 3.0 to governments and institutions. It’s fair to say that the workplaces that would benefit the most from empowerment and productivity are government workplaces.
Are you a stone cutter or do you build cathedrals?
Ricardo Semler took his company SEMCO from a four million-dollar-a-year venture with one division to 212 million yearly with 15 divisions. From 1982 to 2003, I couldn’t find any newer numbers, but at that time, his staff was aiming for 1 billion dollars by 2008. Sales have an average growth of 24% a year and SEMCO has less than a 1% turnover. Beat that Wall Street!
Ricardo has some very unconventional ideas about how to run a company. Things are run democratically. Everyone gets one vote, even Ricardo himself. If someone calls a meeting on a new idea or business proposition and no one shows up, or the people that do show up think it’s a bad idea, that’s it. Regardless of whose idea it is. All SEMCO employees are taught how to read financials and are invited to participate in the twice-yearly budget process. Employees set their hours and salaries. Then there’s the board of directors: they keep two open seats that any employee can sign up for, and they are board members with a vote for that meeting.
SEMCO doesn’t have rules, Standard Operating Procedures, or many policies. It’s left up to employees to use their common sense. This is the closest thing they have to an HR manual: SEMCO Group Survival Manual. It aims to create a common language and help people go in the same direction. From Maverick, “There is another less obvious dividend to the banishing of rulebooks: people begin to make more decisions on their own, decisions they are better qualified to make than their supervisors.” That’s something I learned while working for Xerox, let the people closest to the customer make decisions that affect the customer.
In his book Maverick, Ricardo says, “We simply do not believe our employees have an interest in coming in late, leaving early, and doing as little as possible for as much money as their union can wheedle out of us. After all, these same people raise children; join the PTA, and elect mayors, governors, senators, and presidents. They are adults. At SEMCO, we treat them like adults. We trust them. We don’t ask for permission to go to the bathroom or have security guards search them as they leave for the day. We get out of their way and let them do their jobs.“
He tells the parable of the stonecutters in Maverick:
Three stone cutters were asked about their jobs.
The first one replied, “I’m paid to cut stones.”
The second replied, “I use special techniques to shape stones in an exceptional way. Here, let me show you.” He proceeded to demonstrate.
The third just smiled and said, “I build cathedrals.”
Ricardo wants a whole company of cathedral builders. He says, “The purpose of work is not to make money. The purpose of work is to make the workers, whether working stiffs or top executives feel good about life.”
Where do I sign up?
Autonomy, Mastery and Purpose, Oh My!
Dan Pink’s new book, Drive brings together 50 years of research and 25 years of practical experience from companies using these ideas successfully and profitably. He says that economists and psychologists agree: carrots and sticks are only good for a narrow band of tasks that don’t require creativity. As soon as a creative task is tied to a reward or punishment, it will most likely have a long-term adverse effect on that task.
These ideas are not new to the world, but it’s the first time anyone has brought them all together in one place and made them easy to understand. Part One – A New Operating System talks about the failure of carrots and sticks, the exceptional cases they work in, and the differences between people who are intrinsically motivated, “Type I,” and extrinsically motivated, “Type E,” and starts with the history of motivation. Part Two – The Three Elements discusses autonomy, Mastery, and Purpose. “(1) Autonomy—the desire to direct our own lives; (2) Mastery—the urge to get better and better at something that matters; and (3) Purpose—the yearning to do what we do in the service of something larger than ourselves.” Part Three – The Type I Toolkit is dedicated to helping us learn more about these topics and on how to integrate them.
I continue to find this book a source of inspiration. It’s well written and easy to read, it’s meant to be a seed rather than a tree, but it’s a seed that, once planted in the fertile ground of our minds, takes root. The Type I Toolkit tells us how to water and fertilize our seed. The booklist is particularly helpful.
I’ve listened to the audiobook and read both the ebook and the print version. Dan Pink masterfully reads the audiobook. The other versions are easy on the eyes and have illustrative pictures and quotes. Whichever version you pick, you’ll be pleased.
